Exhibit 10.16

STOCK APPRECIATION RIGHTS AWARD

under the 2004 Long-Term Incentive Plan of Fossil, Inc.

This STOCK APPRECIATION RIGHTS AWARD (the “Award”), is entered into effect as of
the date of the grant (the “Effective Date”).

W  I  T  N  E  S  S  E  T  H:

WHEREAS, Fossil, Inc., a Delaware corporation (the “Company”) has adopted the
2004 Long-Term Incentive Plan of Fossil, Inc. (the “Long-Term Incentive Plan”)
effective as of the Effective Date (as defined in the Long-Term Incentive Plan)
with the objective of retaining key executives and other selected employees and
of rewarding them for making major contributions to the success of the Company
and its Subsidiaries; and

WHEREAS, the Long-Term Incentive Plan provides that an employee of the Company
or its Subsidiaries may be granted a Stock Appreciation Right Award, which may
consist of the right to receive a payment, in cash or shares of common stock,
par value $.01 per share (“Common Stock”), of the Company, equal to the excess
of the Fair Market Value of a specified number of shares of Common Stock on the
date the Stock Appreciation Right (“SAR”) is exercised over a specified strike
price as set forth in the Award;

NOW, THEREFORE, the Participant identified in the Notice of Grant is hereby
awarded Stock Appreciation Rights in accordance with the following terms:

1. Grant of Award; Stock Appreciation Rights. Subject to the terms and
conditions set forth in the Long-Term Incentive Plan, this Award and in the
Notice of Grant, the Company hereby grants to the Participant that number of
SARs set forth in the Notice of Grant, consisting of the right to receive, upon
exercise of each SAR, shares of Common Stock with a Fair Market Value equal to
the excess of the Fair Market Value of each share of Common Stock on the date of
exercise minus the Fair Market Value of each share of Common Stock on the date
of this Award, subject to any adjustments that may be made pursuant to the terms
of the Long-Term Incentive Plan (the “SAR Payment Value”).

2. SAR Exercise Period and Vesting. The SARs granted pursuant to this Award may
be exercised by the Participant at any time prior to the Expiration Date set
forth in the Notice of Grant (the “Exercise Period”), subject to the limitation
that such SARs shall vest and become exercisable only if the Participant remains
continuously employed by the Company or its Subsidiaries through each Vesting
Date set forth in the Notice of Grant (it being understood that the right to
exercise the SARs shall be cumulative, so that the Participant may exercise on
or after any Vesting Date and during the remainder of the Exercise Period that
number of SARs which the Participant was entitled to exercise but did not
exercise during any preceding period or periods). Notwithstanding the vesting
conditions set forth herein, (i) the Committee may in its discretion at any time
accelerate the vesting of SARs; and (ii) all of the SARs shall vest upon a
Change in Control of the Company or upon the death of the Participant.

3. Method of Exercise. The Participant (or his representative, guardian, devisee
or heir, as applicable) may exercise any portion of this SAR that has become
exercisable in accordance with the terms hereof as to all or any of the SARs by
giving written notice of exercise to the Company, in form satisfactory to the
Board, specifying the number of SARs to be exercised. The SAR Payment Value
shall be paid to the Participant in shares of Common Stock This SAR may not be
exercised for less than one (1) SAR or the number of whole SARs remaining under
this Award, whichever is smaller. As promptly as practicable following the
receipt of such written notification, the Company shall deliver to the
Participant a certificate or certificates for the number of shares of Common
Stock having a Fair Market Value (as of the date of the Company’s receipt of the
Participant’s notice of exercise) equal to the SAR Payment Value with respect to
those SARs which have been exercised. Upon the issuance of any shares hereunder,
the Participant may be required to enter into such written representations,
warranties and agreements as the Company may reasonably request in order to
comply with applicable securities laws, the Long-Term Incentive Plan or with
this Notice of Grant.

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4. Termination in Event of Nonemployment. In the event that the Participant
ceases to be employed by the Company or any of its Subsidiaries during the
Exercise Period for any reason other than death, at a time which the SARs
granted pursuant hereto are still in force and unexpired, the SARs granted
pursuant to this Award shall terminate, except to the extent that they are
vested on the date of termination of employment, and exercised on or prior to
the date that is ninety (90) days following termination of employment (or, if
earlier, on the expiration date of the SARs).

5. Death. In the event that the Participant ceases to be employed by the Company
or any of its Subsidiaries during the Exercise Period by reason of death at a
time when the SARs granted pursuant hereto are still in force and unexpired, any
unvested SARs shall be accelerated and 100% vested. Such acceleration shall be
effective as of the date of death of the Participant. The Participant’s
representatives, devises or heirs, as applicable, shall have a period of one
(1) year following the date of death in which to exercise the SARs (or, if
earlier, on the expiration date of the SARs).

6. Assignability. The SARs granted pursuant hereto shall not be assignable or
transferable by the Participant other than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined by
Code or Title I of the Employee Retirement Income Security Act of 1974, as
amended. Any attempt to do so contrary to the provisions hereof shall be null
and void. No assignment of the SARs herein granted shall be effective to bind
the Company unless the Company shall have been furnished with written notice
thereof and a copy of such documents and evidence as the Company may deem
necessary to establish the validity of the assignment and the acceptance by the
assignee or assignees of the terms and conditions hereof.

7. No Stockholder Rights. The Participant shall have no rights as a stockholder
of the Company with respect to the SARs unless and until certificates evidencing
shares of Common Stock shall have been issued by the Company to the Participant.
Until such time, the Participant shall not be entitled to dividends or
distributions in respect of any shares or to vote such shares on any matter
submitted to the stockholders of the Company. In addition, except as to
adjustments that may from time to time be made by the Committee in accordance
with the Long-Term Incentive Plan (and Paragraph 14 below), no adjustment shall
be made or required to be made in respect of dividends (ordinary or
extraordinary, whether in cash, securities or any other property) or
distributions paid or made by the Company or any other rights granted in respect
of any shares for which the record date for such payment, distribution or grant
is prior to the date upon which certificates evidencing such shares shall have
been issued by the Company.

8. Administration. The Committee shall have the power to interpret the Long-Term
Incentive Plan, the Notice of Grant and this Award, and to adopt such rules for
the administration, interpretation, and application of the Long-Term Incentive
Plan as are consistent therewith and to interpret or revoke any such rules. All
actions taken and all interpretations and determinations made by the Committee
shall be final and binding upon the Participant, the Company, and all other
interested persons. No member of the Committee shall be personally liable for
any action, determination, or interpretation made in good faith with respect to
the Long-Term Incentive Plan or this Award.

9. Tax Withholding Obligations. The Participant shall be required to deposit
with the Company an amount of cash equal to the amount determined by the Company
to be required with respect to any withholding taxes, FICA contributions, or the
like under any federal, state, or local statute, ordinance, rule, or regulation
in connection with the issuance of shares of Common Stock for the SAR Payment
Value. Alternatively, the Company may, at its sole election, (i) withhold the
required amounts from the Participant’s pay during the pay periods next
following the date on which any such applicable tax liability otherwise arises,
or (ii) withhold a number of shares of Common Stock otherwise deliverable having
a Fair Market Value sufficient to satisfy the statutory minimum of all or part
of the Participant’s estimated total federal, state, and local tax obligations
associated with payment of the SAR Payment Value. The Company shall not deliver
any of the shares of Company Stock until and unless the Participant has made the
deposit required herein or proper provision for required withholding has been
made.

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10. Restrictions and Related Representations. Upon the acquisition of any shares
of Common Stock pursuant to the exercise of the SARs granted pursuant hereto,
the Participant may be required to enter into such written representations,
warranties and agreements as the Company may reasonably request in order to
comply with applicable securities laws, the Long-Term Incentive Plan or with
this Award. In addition, the certificate or certificates representing any shares
will be stamped or otherwise imprinted with a legend in such form as the Company
may require with respect to any applicable restrictions on sale or transfer, and
the stock transfer records of the Company will reflect stop-transfer
instructions, as appropriate, with respect to such shares.

11. Notices and Electronic Delivery. Unless otherwise provided herein, any
notice or other communication hereunder shall be in writing and shall be given
by registered or certified mail unless the Company, in its sole discretion,
decides to deliver any documents relating to the Award or future awards that may
be granted under the Long-Term Incentive Plan by electronic means or to request
the Participant’s consent to participate in the Long-Term Incentive Plan by
electronic means. The Participant hereby consents to receive such documents by
electronic delivery and, if requested, to agree to participate in the Long-Term
Incentive Plan through an on-line or electronic system established and
maintained by the Company or another third party designated by the Company. All
notices of the exercise by the Participant of the SARs granted pursuant hereto
shall be directed to Fossil, Inc., Attention: Secretary, at the Company’s then
current address unless the Company, in writing or electronically, directs the
Participant otherwise. Any notice given by the Company to the Participant
directed to him at his address on file with the Company and shall be effective
to bind any other person who shall acquire rights hereunder. The Company shall
be under no obligation whatsoever to advise or notify the Participant of the
existence, maturity or termination of any rights hereunder and the Participant
shall be deemed to have familiarized himself with all matters contained herein
and in the Long-Term Incentive Plan which may affect any of the Participant’s
rights or privileges hereunder.

12. Scope of Certain Terms. Whenever the term “Participant” is used herein under
circumstances applicable to any other person or persons to whom this Award may
be assigned in accordance with the provisions of Paragraph 6 (Assignability) of
this Agreement, it shall be deemed to include such person or persons. The term
“Long-Term Incentive Plan” as used herein shall be deemed to include the 2004
Long-Term Incentive Plan of Fossil, Inc. and any subsequent amendments thereto,
together with any administrative interpretations which have been adopted
thereunder by the Committee pursuant to Section 5 of the Long-Term Incentive
Plan. Unless otherwise indicated, defined terms herein shall have the meaning
ascribed to them in the Long-Term Incentive Plan.

13. General Restrictions. This Award is subject to the requirement that, if at
any time the Committee shall determine that (a) the listing, registration or
qualification of the shares of Common Stock subject or related thereto upon any
securities exchange or under any state or federal law; (b) the consent or
approval of any government regulatory body; or (c) an agreement by the recipient
of an Award with respect to the disposition of shares of Common Stock, is
necessary or desirable (in connection with any requirement or interpretation of
any federal or state securities law, rule or regulation) as a condition of, or
in connection with, the granting of such Award or the issuance, purchase or
delivery of shares of Common Stock thereunder, such Award may not be consummated
in whole or in part unless such listing, registration, qualification, consent,
approval or agreement shall have been effected or obtained free of any
conditions not acceptable to the Committee.

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14. Adjustments for Changes in Capitalization. In the event of any stock
dividends, stock splits, recapitalizations, combinations, exchanges of shares,
mergers, consolidations, liquidations, split-ups, split-offs, spin-offs or other
similar changes in capitalization, or any distributions to stockholders,
including a rights offering, other than regular cash dividends, changes in the
outstanding stock of the Company by reason of any increase or decrease in the
number of issued shares of Common Stock resulting from a split-up or
consolidation of shares or any similar capital adjustment or the payment of any
stock dividend, any share repurchase at a price in excess of the market price of
the Common Stock at the time such repurchase is announced or other increase or
decrease in the number of such shares, the Committee shall make appropriate
adjustment in the number and kind of shares authorized by the Long-Term
Incentive Plan, in the number, price or kind of shares covered by the Awards and
in any outstanding Awards under the Long-Term Incentive Plan. In the event of
any adjustment in the number of shares covered by any Award, any fractional
shares resulting from such adjustment shall be disregarded and each such Award
shall cover only the number of full shares resulting from such adjustment.

15. No Right of Employment. Neither the granting of this SAR, the exercise of
any part hereof, nor any provision of the Long-Term Incentive Plan or this Award
shall constitute or be evidence of any understanding, express or implied, on the
part of the Company or any Subsidiary to employ the Participant for any
specified period.

16. Amendment. This Award may be amended only by a writing executed by the
Company and the Participant which specifically states that it is amending this
Award. Notwithstanding the foregoing, this Award may be amended solely by the
Committee by a writing which specifically states that it is amending this Award,
so long as a copy of such amendment is delivered to the Participant, and
provided that no such amendment adversely affecting the rights of the
Participant hereunder may be made without the Participant’s written consent.
Without limiting the foregoing, the Committee reserves the right to change, by
written notice to the Participant, the provisions of the SARs or this Award in
any way it may deem necessary or advisable to carry out the purpose of the grant
as a result of any change in applicable laws or regulations or any future law,
regulation, ruling, or judicial decision, provided that any such change shall be
applicable only to SARs which have not been exercised as provided herein.

17. Precondition of Legality. Notwithstanding anything to the contrary contained
herein, the Participant agrees that he will not exercise the SARs granted
pursuant hereto, and that the Company will not be obligated to issue any shares
pursuant to this Award, if the exercise of the SARs or the issuance of such
shares would constitute a violation by the Participant or by the Company of any
provision of any law or regulation of any governmental authority or any national
securities exchange or transaction quotation system.

18. Governing Law. This Award grant and the provisions of this Agreement are
governed by, and subject to, the laws of the State of Delaware, as provided in
the Long-Term Incentive Plan.

19. Incorporation of the Long-Term Incentive Plan. This Award is subject to the
Long-Term Incentive Plan, a copy of which has been furnished to the Participant
and for which the Participant acknowledges receipt. The terms and provisions of
the Long-Term Incentive Plan are incorporated by reference herein. In the event
of a conflict between any term or provision contained herein and a term or
provision of the Long-Term Incentive Plan, the applicable terms and provisions
of the Long-Term Incentive Plan shall govern and prevail.

20. Severability. If one or more of the provisions of this Award shall be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby and the invalid, illegal or unenforceable provisions shall be
deemed null and void; however, to the extent permissible by law, any provisions
which could be deemed null and void shall first be construed, interpreted or
revised retroactively to permit this Award to be construed so as to first the
intent of this Award and the Long-Term Incentive Plan.

21. Construction. The SAR is being issued pursuant to Section 7 of the Long-Term
Incentive Plan and are subject to the terms of the Long-Term Incentive Plan. A
copy of the Long-Term Incentive Plan has been given to the Participant, and
additional copies of the Long-Term Incentive Plan are available upon request
during normal business hours at the principal executive offices of the Company.
To the extent that any provision of this Award violates or is inconsistent with
an express provision of the Long-Term Incentive Plan, the Long-Term Incentive
Plan provision shall govern and any inconsistent provision in this Award shall
be of no force or effect.

Enclosure: 2004 Long-Term Incentive Plan of Fossil, Inc.