Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This AGREEMENT is entered into by and between Fossil, Inc., a Delaware
corporation (the “Company”), and Harold S. Brooks (the “Executive”), dated as of
the 31st day of October 2004 (the “Effective Date”).

 

WHEREAS, the Company has determined that it is in the best interests of the
Company to employ the Executive as the President, Watch Division of the Company
and the Executive desires to serve the Company in that capacity pursuant to the
terms set forth herein.

 

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

 

1.             Employment Period.  The Company shall employ the Executive, and
the Executive shall serve the Company, on the terms and conditions set forth in
this Agreement, during the employment period which shall begin on the Effective
Date and continue for two (2) years from the Effective Date unless terminated
earlier pursuant to the terms of this Agreement (the “Employment Period”).  Upon
the expiration of the Employment Period, Executive’s continued employment by the
Company, if any, shall be as an employee-at-will.

 

2.             Position and Duties. The Executive shall serve as President,
Watch Division of the Company and in appropriate positions in the subsidiaries
and affiliates of the Company, with the duties, functions, responsibilities and
authority customarily associated with such positions. The Executive will devote
all of his working attention and time to the business and affairs of the
Company, excluding any periods of vacation and sick leave to which Executive is
entitled; provided, however, that Executive may devote a reasonable amount of
time to service in respect to charitable and/or community service organizations
and projects, to the extent that such service does not materially interfere with
Executive’s fulfillment of his duties hereunder or otherwise violate this
Agreement.

 

3.             Compensation.

 

(a)  Salary.  From the Effective Date through the end of the Employment Period,
the Executive shall receive an annual base salary (the “Salary”) of $390,000,
less lawful withholding, payable in accordance with the Company’s normal payroll
practices for executives. Executive will receive an annual performance review in
accordance with the Company’s standard practice and may receive a corresponding
Salary increase at such time, as well as additional stock options and restricted
stock, all in the Company’s sole discretion. Any new salary due to any such
increase will thereafter be deemed the “Salary” for purposes of this Agreement.

 

(b)  Signing Bonus.  Executive shall receive a signing bonus in the amount of
$125,000 payable on or about the Effective Date.

 

(c)  Options.  On the Effective Date, the Executive shall be granted an option
(the “Options) to acquire up to 60,000 shares of common stock of the Company
(the “Common Stock”) with a strike price equal to the closing price of the
Common Stock on the date of the grant.  The Options shall vest with respect to
20% of the Options per year over a five year period, cumulatively, subject,
however, to the terms and conditions of the 2004 Fossil Long-Term

 

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Incentive Plan, attached hereto as Exhibit A, and the stock option award
agreement with respect to such Options substantially in the form attached hereto
as Exhibit B.

 

(d)  Restricted Stock.  On the Effective Date, the Executive shall receive a
grant of 30,000 shares of Common Stock (the “Restricted Stock”).  The Restricted
Stock shall bear a legend restricting transfer of the certificate until the
Restricted Stock has vested.  The Restricted Shares granted pursuant to this
Agreement shall vest and become transferable with respect to 20% of the total
number of Restricted Shares as of each of the first through the fifth
anniversaries of the date of the grant, cumulatively, subject, however, to the
terms and conditions of the the 2002 Restricted Stock Plan, attached hereto as
Exhibit C, and the Restricted Stock Award Agreement substantially in the form
attached hereto as Exhibit D.

 

(e)           Other Benefits.  Executive shall be entitled to participate in the
Company’s 401-k Plan, applicable fringe benefit programs and other benefit
plans, policies and programs of the Company applicable to Executive, as may be
amended in the sole discretion of the Company from time to time. Executive shall
be entitled to four weeks of vacation, effective and vested immediately, and
four weeks of vacation effective and vested as of each anniversary of the
Effective Date.

 

(f)            Relocation Expenses.  Relocation expenses shall be governed by
the Relocation Agreement between Company and Executive attached hereto as
Exhibit E.

 

(g)           Cobra Reimbursement.  The Company shall reimburse the Executive
the cost of COBRA less the cost of the Company’s health plan selection until the
Executive is eligible to participate in the Company’s health plan.

 

(h)           Programs, Procedures and Policies.   Executive will comply with
and be bound by the Company’s applicable current and future programs,
procedures, plans and policies, including the 2002 Restricted Stock Plan and
2004 Long- Term Incentive Plan, all of which may be amended in the sole
discretion of the Company from time to time, except to the extent such programs,
procedures, plans or policies are contrary to the terms and conditions of this
Agreement.

 

4.             Termination of Employment.

 

(a)  By the Company with Cause.  The Company may terminate the Executive’s
employment during the Employment Period with Cause at any time, upon written
notice to the Executive setting forth in reasonable detail the nature of such
Cause.  For purposes of this Agreement, “Cause” means:

 

(i)  the willful and continued failure by Executive substantially to perform his
duties with the Company (other than any such failure resulting from disability
or other causes beyond Executive’s reasonable control) or willful and continued
violation,  disregard or failure to carry out reasonable instructions or
policies established by the CEO and/or Board of Directors of Company with
respect to the operation of the

 

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Company’s business and affairs after 30 days written notice and reasonable
opportunity to cure such matter; or

 

(ii)  the willful engaging by Executive in conduct that is demonstrably and
materially injurious to the Company, monetarily or otherwise or intentional
dishonesty, including, but not limited to, fraud or falsification of records, or
dishonesty in dealing with Company’s customers or vendors that is demonstrably
and materially injurious to the Company.  To the extent such matters are capable
of being cured, the Company shall first give the Executive notice and a
reasonable opportunity to cure; provided, however, the repayment of embezzled
funds shall not be considered a cure; or

 

(iii)  the material failure of Executive to comply with the terms and conditions
of this Agreement after notice and a reasonable opportunity to cure such matter;
or

 

 (iv)  the breach of Executive’s fiduciary duty and/or duty of loyalty to
Company, after notice and a reasonable opportunity to cure such matter, which is
demonstrably and materially injurious to the Company.

 

(b)           Termination by the Company Without Cause.  The Company may
terminate the Executive’s employment without Cause upon 30 days’ written notice
provided; however, if the Company terminates the Executive’s employment without
Cause, the Company shall have the obligations set forth in Section 5 of this
Agreement.

 

(c)           Voluntarily by the Executive.  The Executive may voluntarily
terminate his employment at any time during the Employment Period by giving not
less than 90 days prior written notice thereof to the Company.  The Executive
may also terminate his employment hereunder after giving the Company written
notice of not less than 90 days after an occurrence or an event which
constitutes Good Reason.  Good Reason shall mean:

 

(i)  a reduction in annual base salary;

 

(ii)  a failure by the Company to provide fringe benefits comparable to those
offered the Executive’s peer executives at the Company;

 

(iii)  the failure of the Company to obtain by operation of law or otherwise the
assumption of its obligations to perform this Agreement from any successor to
the Company or to all or substantially all of the assets of the Company; or

 

(iv)  a relocation of the Executive’s worksite by the Company to a location
which increases the distance from the Executive’s home to his worksite by more
than 50 miles.

 

(d)           Noncompetition Agreement.  Without the prior written consent of
the Company, Executive shall not, for so long as he is employed by Employer and
thereafter for a period of two (2) years, directly or indirectly, either as an
individual, a partner or a joint venturer, or in any other capacity, in the
continental United States, (i) invest (other than investments in publicly-owned
companies which constitute not more than 1% of the voting securities of any such
company) or engage in any business that is competitive with the business of
Company, (ii) accept

 

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employment with or render services to a competitor of Company as a director,
officer, agent, employee or consultant, (iii) contact, solicit or attempt to
solicit or accept business from any (a) customers of Company with respect to
products that Company offers now or anytime during the Executive’s employment
with the Company or (b) person or entity whose business Company is soliciting
with respect to products that Company offers now or anytime during the
Executive’s employment with the Company, or (iv) take any action inconsistent
with the fiduciary relationship of Executive and Company.  Executive expressly
agrees that the scope of Company’s trade area presently encompasses the
continental United States and that the restrictions contained herein are
reasonable under the circumstances.  A business shall be competitive with that
of Company if such business involves primarily the design, manufacturing or
marketing of any fashion accessories, including but not limited to, watches,
handbags, belts, sunglasses, small leather goods, or any other product that is
designed, manufactured or marketed by Company at the time of termination of
Executive’s employment by the Company.

 

The Company and Executive agree and stipulate that the agreements and covenants
not to compete contained in this Section 4 hereof are fair and reasonable in
light of all of the facts and circumstances of the relationship between
Executive and the Company; however, Executive and the Company are aware that in
certain circumstances courts have refused to enforce certain terms of agreements
not to compete.  Therefore, in furtherance of, and not in derogation of the
provisions of this Section 4, the Company and Executive agree that in the event
a court should decline to enforce any terms of any of the provisions of this
Section 4, that Section 4 shall be deemed to be modified or reformed to restrict
Executive’s competition with the Company to the maximum extent, as to time,
geography and business scope, which the court shall find enforceable; provided,
however, in no event shall the provisions of this Section 4 be deemed to be more
restrictive to Executive than those contained herein.

 

5.             Obligations of the Company on Termination.

 

(a)  If the Executive’s employment is terminated during the Employment Period
(i) by the Company without Cause, or (ii) due to Executive resigning because of
Good Reason or (iii) the Company materially fails to comply with the terms and
conditions of this Agreement after notice from Executive and a reasonable
opportunity to cure such matter, upon execution by Executive of the Company’s
settlement agreement and general release, (A) the Company shall pay to the
Executive within 10 days after the Date of Termination (“Date of Termination”
shall be defined as the date on which Executive’s employment with the Company is
terminated by Executive or Company), an amount equal to the sum of any portion
of the Salary and any other compensation earned for the period up to the Date of
Termination that has not yet been paid and the cash equivalent of any accrued
but unused vacation, (B) the Company shall continue to pay the Executive Salary
on regular Company pay dates for the balance of the two year Employment Period
or one year from Date of Termination, whichever period is greater and provide
medical, life and disability coverage, under the same conditions as exist at the
time of termination, for a six (6) month period beginning on the Date of
Termination, (C) notwithstanding anything set forth in any Restricted Stock Plan
or Restricted Stock Award Agreement, ownership in the 30,000 shares of
Restricted Stock described in this Agreement, shall vest only to the extent such
ownership is vested on the Date of Termination or shall vest 20% , whichever
amount is greater,

 

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and (D) notwithstanding anything to the contrary in any stock option agreement,
plan or Stock Option Award Agreement, the stock options to acquire 60,000 shares
granted to the Executive described in this Agreement shall vest only to the
extent such ownership is vested on the Date of Termination or shall vest 20% ,
whichever amount is greater.

 

(b)           Cause; Voluntary Termination.  If the Executive’s employment is
terminated (i) for Cause by the Company, or (ii) by the Executive voluntarily
during the Employment Period, the Company shall pay the Executive, within 10
days after the Date of Termination, only a lump-sum cash amount equal to the sum
of any portion of the Salary and any other compensation earned for the period up
to the Date of Termination that has not yet been paid, plus the cash equivalent
of any accrued but unused vacation, and the Options and Restricted Stock shall
cease to vest upon such termination under this Section 5(b).

 

(c)           In addition to the payments and benefits to which the Executive or
the Executive’s estate may be entitled hereunder, the Executive shall be
entitled to receive any vested or other benefits to which he may be entitled
pursuant to the terms and conditions of the Company’s 401-k Plan and any Company
Life, Disability or Health Insurance Plan in which he may participate, and any
other amounts due under this Agreement.

 

(d)           Death or Disability.  In the event the Executive’s employment is
terminated due to the Executive’s Death or Disability (Disability shall be occur
if Executive shall become, because of illness or incapacity, unable to perform
the essential functions of his job under this Agreement with or without
reasonable accommodation for a continuous period of ninety (90) days during the
Employment Period), (i) the Company shall pay the Executive or Executive’s
estate 10 days after the Date of Termination a lump-sum cash amount equal to the
sum of any portion of the Salary and any other compensation earned for the
period up to the Date of Termination that has not yet been paid, plus the cash
equivalent of any accrued but unused vacation; (ii) the Executive’s interest in
the Company’s 2002 Restricted Stock Plan, 2004 Long-Term Incentive Plan and
other plans, if any, shall be governed by the respective plan documents and/or
award agreements then in effect as appropriate. In addition to the foregoing, in
the event of termination of employment due to Disability, the Company shall
continue to pay the Executive Salary for one year from the Date of Termination
under this Section 5(d) and provide medical, life, and disability coverage,
under the same conditions as exist at the time of termination, for a 6 month
period beginning on the Date of Termination;

 

6.             CONFIDENTIAL INFORMATION.

(A)           COMPANY INFORMATION, TRAINING AND GOODWILL.  CONCURRENTLY UPON THE
COMMENCEMENT OF EXECUTIVE’S EMPLOYMENT, THE COMPANY AGREES AND COVENANTS TO: 
(1) PROVIDE TO EXECUTIVE CONFIDENTIAL INFORMATION OF THE COMPANY THAT WILL
ENABLE EXECUTIVE TO OPTIMIZE THE PERFORMANCE OF EXECUTIVE’S DUTIES TO THE
COMPANY; (2) PROVIDE EXECUTIVE WITH SPECIALIZED TRAINING; AND (3) PROVIDE
EXECUTIVE WITH GOODWILL SUPPORT SUCH AS EXPENSE REIMBURSEMENTS IN ACCORDANCE
WITH COMPANY POLICY LIMITS, CONFIDENTIAL INFORMATION, AND/OR CONTACT WITH
CLIENTS, CUSTOMERS OR BUSINESS ASSOCIATES, IN ORDER TO HELP EXECUTIVE DEVELOP
GOODWILL FOR THE COMPANY.  THE FOREGOING IS NOT CONTINGENT UPON EXECUTIVE’S
CONTINUED EMPLOYMENT FOR ANY LENGTH OF TIME, BUT IS CONTINGENT UPON EXECUTIVE’S
FULL COMPLIANCE WITH THE RESTRICTIONS CONTAINED HEREIN. 

 

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EXECUTIVE AGREES AT ALL TIMES DURING THE TERM OF EXECUTIVE’S EMPLOYMENT AND
THEREAFTER TO HOLD IN STRICTEST CONFIDENCE, AND NOT TO USE, EXCEPT FOR THE
BENEFIT OF THE COMPANY, OR TO DISCLOSE TO ANY PERSON, FIRM OR CORPORATION
WITHOUT WRITTEN AUTHORIZATION OF THE COMPANY’S BOARD OF DIRECTORS, ANY OF THE
COMPANY’S CONFIDENTIAL INFORMATION.  EXECUTIVE UNDERSTANDS THAT “CONFIDENTIAL
INFORMATION” MEANS ANY INFORMATION THAT RELATES TO THE COMPANY’S ACTUAL OR
ANTICIPATED BUSINESS OR RESEARCH AND DEVELOPMENT, TECHNICAL DATA, TRADE SECRETS
OR KNOW-HOW, INCLUDING, BUT NOT LIMITED TO, RESEARCH, PRODUCT PLANS OR OTHER
INFORMATION REGARDING THE COMPANY’S PRODUCTS OR SERVICES AND MARKETS THEREFOR,
CUSTOMER LISTS AND CUSTOMERS (INCLUDING, BUT NOT LIMITED TO, THE COMPANY’S
CUSTOMERS ON WHOM EXECUTIVE CALLED OR WITH WHOM EXECUTIVE BECAME ACQUAINTED
DURING THE TERM OF EXECUTIVE’S EMPLOYMENT), SOFTWARE, DEVELOPMENTS, INVENTIONS,
PROCESSES, FORMULAS, TECHNOLOGY, DESIGNS, DRAWINGS, ENGINEERING, HARDWARE
CONFIGURATION INFORMATION, MARKETING, FINANCES OR OTHER BUSINESS INFORMATION. 
EXECUTIVE FURTHER UNDERSTANDS THAT CONFIDENTIAL INFORMATION DOES NOT INCLUDE ANY
OF THE FOREGOING ITEMS THAT IS OR BECOMES PUBLICLY KNOWN THROUGH NO WRONGFUL ACT
OR OMISSION OF EXECUTIVE OR OF OTHERS WHO WERE UNDER CONFIDENTIALITY OBLIGATIONS
AS TO THE ITEM OR ITEMS INVOLVED.  EXECUTIVE ACKNOWLEDGES THAT THE COMPANY WOULD
NOT EMPLOY HIM OR PROVIDE HIM WITH ACCESS TO ITS CONFIDENTIAL INFORMATION BUT
FOR HIS COVENANTS OR PROMISES CONTAINED IN THIS SECTION.

 

(B)           THIRD-PARTY INFORMATION.  EXECUTIVE ACKNOWLEDGES THAT COMPANY HAS
RECEIVED AND IN THE FUTURE WILL RECEIVE FROM THIRD PARTIES THEIR CONFIDENTIAL
INFORMATION SUBJECT TO A DUTY ON COMPANY’S PART TO MAINTAIN THE CONFIDENTIALITY
OF THIS INFORMATION AND TO USE IT ONLY FOR CERTAIN LIMITED PURPOSES.  EXECUTIVE
AGREES THAT HE OWES COMPANY AND THESE THIRD PARTIES, DURING HIS MPLOYMENT WITH
THE COMPANY AND THEREAFTER, A DUTY TO HOLD ALL SUCH CONFIDENTIAL INFORMATION IN
THE STRICTEST CONFIDENCE AND NOT TO DISCLOSE OR USE IT, EXCEPT AS NECESSARY TO
PERFORM HIS OBLIGATIONS HEREUNDER AND AS IS CONSISTENT WITH COMPANY’S AGREEMENT
WITH THIRD PARTIES.

 

7.             INVENTIONS.

(A)           INVENTIONS RETAINED AND LICENSED.  EXECUTIVE HAS ATTACHED HERETO
AS EXHIBIT F A LIST DESCRIBING ALL INVENTIONS, ORIGINAL WORKS OF AUTHORSHIP,
DEVELOPMENTS, IMPROVEMENTS AND TRADE SECRETS THAT (I) WERE MADE BY EXECUTIVE
PRIOR TO HIS EMPLOYMENT WITH THE COMPANY, (II) BELONG TO EXECUTIVE, (III) RELATE
TO THE COMPANY’S PROPOSED BUSINESS, PRODUCTS OR RESEARCH AND DEVELOPMENT, AND
(IV) ARE NOT ASSIGNED TO THE COMPANY HEREUNDER (COLLECTIVELY, “PRIOR
INVENTIONS”); OR, IF NO SUCH LIST IS ATTACHED, EXECUTIVE REPRESENTS THAT THERE
ARE NO SUCH PRIOR INVENTIONS.  EXECUTIVE AGREES THAT HE WILL NOT INCORPORATE, OR
PERMIT TO BE INCORPORATED, ANY PRIOR INVENTION OWNED BY EXECUTIVE OR IN WHICH HE
HAS AN INTEREST INTO A COMPANY PRODUCT, PROCESS OR SERVICE WITHOUT THE COMPANY’S
PRIOR WRITTEN CONSENT.  NOTWITHSTANDING THE FOREGOING SENTENCE, IF, IN THE
COURSE OF EXECUTIVE’S EMPLOYMENT WITH THE COMPANY, EXECUTIVE INCORPORATES INTO A
COMPANY PRODUCT, PROCESS OR SERVICE A PRIOR INVENTION OWNED BY EXECUTIVE OR IN
WHICH EXECUTIVE HAS AN INTEREST, EXECUTIVE HEREBY GRANTS TO THE COMPANY A
NONEXCLUSIVE, ROYALTY-FREE, FULLY PAID-UP, IRREVOCABLE, PERPETUAL, WORLDWIDE
LICENSE TO MAKE, HAVE MADE, MODIFY, USE AND SELL SUCH PRIOR INVENTION AS PART OF
OR IN CONNECTION WITH SUCH PRODUCT, PROCESS OR SERVICE, AND TO PRACTICE ANY
METHOD RELATED THERETO.

 

(B)           ASSIGNMENT OF INVENTIONS.  EXECUTIVE AGREES THAT HE WILL PROMPTLY
MAKE FULL WRITTEN DISCLOSURE TO THE COMPANY, WILL HOLD IN TRUST FOR THE SOLE
RIGHT AND BENEFIT OF THE COMPANY, AND HEREBY ASSIGN TO THE COMPANY, OR ITS
DESIGNEE, ALL HIS RIGHT, TITLE, AND INTEREST IN

 

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AND TO ANY AND ALL INVENTIONS, ORIGINAL WORKS OF AUTHORSHIP, DEVELOPMENTS,
CONCEPTS, IMPROVEMENTS, DESIGNS, DISCOVERIES, IDEAS, TRADEMARKS OR TRADE
SECRETS, WHETHER OR NOT PATENTABLE OR REGISTRABLE UNDER COPYRIGHT OR SIMILAR
LAWS, WHICH EXECUTIVE MAY SOLELY OR JOINTLY CONCEIVE OR DEVELOP OR REDUCE TO
PRACTICE, OR CAUSE TO BE CONCEIVED OR DEVELOPED OR REDUCED TO PRACTICE, DURING
THE PERIOD OF TIME HE IS IN THE EMPLOY OF THE COMPANY (COLLECTIVELY,
“INVENTIONS”), EXCEPT AS PROVIDED IN SECTION 7(F) BELOW.  EXECUTIVE FURTHER
ACKNOWLEDGES THAT ALL ORIGINAL WORKS OF AUTHORSHIP WHICH ARE MADE BY EXECUTIVE
(SOLELY OR JOINTLY WITH OTHERS) WITHIN THE SCOPE OF AND DURING THE PERIOD OF HIS
EMPLOYMENT WITH THE COMPANY AND WHICH ARE PROTECTABLE BY COPYRIGHT ARE “WORKS
MADE FOR HIRE” AS THAT TERM IS DEFINED IN THE UNITED STATES COPYRIGHT ACT. 
EXECUTIVE UNDERSTANDS AND AGREES THAT THE DECISION WHETHER OR NOT TO
COMMERCIALIZE OR MARKET ANY INVENTION IS WITHIN THE COMPANY’S SOLE DISCRETION
AND FOR THE COMPANY’S SOLE BENEFIT AND THAT NO ROYALTY WILL BE DUE TO EXECUTIVE
AS A RESULT OF THE COMPANY’S EFFORTS TO COMMERCIALIZE OR MARKET ANY SUCH
INVENTION.

 

(C)           INVENTIONS ASSIGNED TO THE UNITED STATES.  EXECUTIVE AGREES TO
ASSIGN TO THE UNITED STATES GOVERNMENT ALL HIS RIGHT, TITLE, AND INTEREST IN AND
TO ANY AND ALL INVENTIONS WHENEVER SUCH FULL TITLE IS REQUIRED TO BE IN THE
UNITED STATES BY A CONTRACT BETWEEN THE COMPANY AND THE UNITED STATES OR ANY OF
ITS AGENCIES.

 

(D)           MAINTENANCE OF RECORDS.  EXECUTIVE AGREES TO KEEP AND MAINTAIN
ADEQUATE AND CURRENT WRITTEN RECORDS OF ALL INVENTIONS DURING THE TERM OF HIS
EMPLOYMENT WITH THE COMPANY.  THE RECORDS WILL BE IN THE FORM OF NOTES,
SKETCHES, DRAWINGS AND ANY OTHER FORMAT THAT MAY BE SPECIFIED BY THE COMPANY. 
THE RECORDS WILL BE AVAILABLE TO AND REMAIN THE COMPANY’S SOLE PROPERTY AT ALL
TIMES.

 

(E)           PATENT AND COPYRIGHT REGISTRATIONS.  EXECUTIVE AGREES TO ASSIST
THE COMPANY, OR ITS DESIGNEE, AT THE COMPANY’S EXPENSE, IN EVERY PROPER WAY TO
SECURE THE COMPANY’S RIGHTS IN ANY INVENTIONS AND ANY COPYRIGHTS, PATENTS, MASK
WORK RIGHTS OR OTHER INTELLECTUAL PROPERTY RIGHTS RELATING THERETO IN ANY AND
ALL COUNTRIES, INCLUDING, BUT NOT LIMITED TO, THE DISCLOSURE TO THE COMPANY OF
ALL PERTINENT INFORMATION AND DATA WITH RESPECT THERETO, THE EXECUTION OF ALL
APPLICATIONS, SPECIFICATIONS, OATHS, ASSIGNMENTS AND ALL OTHER INSTRUMENTS THAT
THE COMPANY DEEMS NECESSARY IN ORDER TO APPLY FOR AND OBTAIN SUCH RIGHTS AND IN
ORDER TO ASSIGN AND CONVEY TO THE COMPANY, ITS SUCCESSORS, ASSIGNS, AND NOMINEES
THE SOLE AND EXCLUSIVE RIGHTS, TITLE AND INTEREST IN AND TO SUCH INVENTIONS, AND
ANY COPYRIGHTS, PATENTS, MASK WORK RIGHTS OR OTHER INTELLECTUAL PROPERTY RIGHTS
RELATING THERETO.  EXECUTIVE FURTHER AGREES THAT HIS OBLIGATION TO EXECUTE OR
CAUSE TO BE EXECUTED, WHEN IT IS IN EXECUTIVE’S POWER TO DO SO, ANY SUCH
INSTRUMENT OR PAPERS SHALL CONTINUE AFTER THE TERMINATION OF THIS AGREEMENT.  IF
THE COMPANY IS UNABLE BECAUSE OF EXECUTIVE’S MENTAL OR PHYSICAL INCAPACITY OR
FOR ANY OTHER REASON AFTER A REASONABLE ATTEMPT TO OBTAIN HIS SIGNATURE TO APPLY
FOR OR TO PURSUE ANY APPLICATION FOR ANY UNITED STATES OR FOREIGN PATENTS OR
COPYRIGHT REGISTRATIONS COVERING ANY INVENTIONS OR ORIGINAL WORKS OF AUTHORSHIP
ASSIGNED TO THE COMPANY AS ABOVE, THEN EXECUTIVE HEREBY IRREVOCABLY DESIGNATES
AND APPOINTS THE COMPANY AND ITS DULY AUTHORIZED OFFICERS AND AGENTS AS
EXECUTIVE’S AGENT AND ATTORNEY IN FACT, TO ACT FOR AND IN HIS BEHALF AND STEAD
TO EXECUTE AND FILE ANY SUCH APPLICATIONS AND TO DO ALL OTHER LAWFULLY PERMITTED
ACTS TO FURTHER THE PROSECUTION AND ISSUANCE OF LETTERS PATENT OR COPYRIGHT
REGISTRATIONS THEREON WITH THE SAME LEGAL FORCE AND EFFECT AS IF EXECUTED BY
EXECUTIVE.

 

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(F)            EXCEPTION TO ASSIGNMENTS.  EXECUTIVE UNDERSTANDS THAT THE
PROVISIONS OF THIS AGREEMENT REQUIRING ASSIGNMENT OF INVENTIONS TO THE COMPANY
DO NOT APPLY TO ANY INVENTION THAT EXECUTIVE HAS DEVELOPED ENTIRELY ON HIS OWN
TIME WITHOUT USING THE COMPANY’S EQUIPMENT, SUPPLIES, FACILITIES, TRADE SECRET
INFORMATION OR CONFIDENTIAL INFORMATION (AN “OTHER INVENTION”) EXCEPT FOR THOSE
OTHER INVENTIONS THAT EITHER (I) RELATE AT THE TIME OF CONCEPTION OR REDUCTION
TO PRACTICE OF SUCH OTHER INVENTION TO THE COMPANY’S BUSINESS, OR ACTUAL OR
DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT OF THE COMPANY, OR (II) RESULT
FROM ANY WORK THAT EXECUTIVE PERFORMED FOR THE COMPANY.  EXECUTIVE WILL ADVISE
THE COMPANY PROMPTLY IN WRITING OF ANY INVENTION THAT EXECUTIVE BELIEVES
CONSTITUTES AN OTHER INVENTION AND IS NOT OTHERWISE DISCLOSED ON EXHIBIT F. 
EXECUTIVE AGREES THAT HE WILL NOT INCORPORATE, OR PERMIT TO BE INCORPORATED, ANY
OTHER INVENTION OWNED BY EXECUTIVE OR IN WHICH EXECUTIVE HAS AN INTEREST INTO A
COMPANY PRODUCT, PROCESS OR SERVICE WITHOUT THE COMPANY’S PRIOR WRITTEN
CONSENT.  NOTWITHSTANDING THE FOREGOING SENTENCE, IF, IN THE COURSE OF
EXECUTIVE’S EMPLOYMENT WITH THE COMPANY, EXECUTIVE INCORPORATES INTO A COMPANY
PRODUCT, PROCESS OR SERVICE AN OTHER INVENTION OWNED BY EXECUTIVE OR IN WHICH
EXECUTIVE HAS AN INTEREST, EXECUTIVE HEREBY GRANTS TO THE COMPANY A
NONEXCLUSIVE, ROYALTY-FREE, FULLY PAID-UP, IRREVOCABLE, PERPETUAL, WORLDWIDE
LICENSE TO MAKE, HAVE MADE, MODIFY, USE AND SELL SUCH OTHER INVENTION AS PART OF
OR IN CONNECTION WITH SUCH PRODUCT, PROCESS OR SERVICE, AND TO PRACTICE ANY
METHOD RELATED THERETO.

 

8.             Solicitation of Executives.  Executive agrees that for a period
of twelve (12) months immediately following the termination of Executive’s
relationship with the Company for any reason (whether with or without Cause, for
Good Reason, at the option either of the Company or Executive, with or without
notice), Executive will not, either directly or indirectly, solicit, induce,
recruit or encourage any of the Company’s Executives to leave their employment
or contractors to terminate their relationship with the Company, or hire or take
away such Executives or contractors, or attempt to solicit, induce, recruit,
encourage, hire or take away Executives or contractors of the Company, either
for Executive or for any other person or entity.

 

9.             Miscellaneous.

 

(a)           The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.  This Agreement may not be amended or
modified except by a written agreement executed by the parties hereto or their
respective successors and legal representatives.

 

(b)           This Agreement is personal to the Executive and, without the prior
written consent of the Company, shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive’s legal
representatives.  This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns. The Company shall not assign
this Agreement, except to a successor, without the prior written consent of the
Executive, which consent shall not be unreasonably withheld.

 

(c)           The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such

 

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provision, together with all other provisions of this Agreement, shall remain
valid and enforceable and continue in full force and effect to the fullest
extent consistent with law.

 

(d)           Notwithstanding any other provision of this Agreement, the Company
may withhold from amounts payable under this Agreement all federal, state, local
and foreign taxes that are required to be withheld by applicable laws or
regulations.

 

(e)           The Executive’s or the Company’s failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
shall not be deemed to be a waiver of such provision or right or of any other
provision of or right under this Agreement.

 

(f)            The Executive and the Company acknowledge that this Agreement,
the Restricted Stock Award Agreement and the Stock Option Award Agreement
supersede any other agreement, whether written or oral, between them concerning
the subject matter hereof, including any prior employment agreement, severance
agreement or plan, and change of control agreement or plan.

 

(g)           This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument.

 

(h)           GOVERNING LAWS AND VENUE.  THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE INTERPRETED, CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO ITS CHOICE OF LAW
PRINCIPLES.  ALL MATTERS LITIGATED BY, AMONG OR BETWEEN ANY OF THE PARTIES THAT
INVOLVE THIS AGREEMENT OR ANY RELATED MATTER HEREUNDER SHALL BE BROUGHT ONLY IN
A COURT OF COMPETENT JURISDICTION IN DALLAS COUNTY, TEXAS.

 

(i)            This Agreement constitutes the entire agreement between the
parties with respect to the matters contained herein.

 

(j)            Executive represents and warrants that he has not as of the
execution of this Agreement assumed any obligations inconsistent with those
contained herein.

 

(k)           Executive Acknowledgment.  Executive acknowledges that he has had
the opportunity to consult legal counsel in regard to this Agreement, that he
has read and understands this Agreement, that he is fully aware of its legal
effect, and that he has entered into it freely and voluntarily and based on his
own judgment and not on any representations or promises other than those
contained in this Agreement.

 

(L)            NOTICES.  ANY NOTICE OR OTHER COMMUNICATION UNDER THIS AGREEMENT
MUST BE IN WRITING AND SHALL BE EFFECTIVE UPON DELIVERY BY HAND OR THREE (3)
BUSINESS DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL, POSTAGE PREPAID,
CERTIFIED OR REGISTERED, AND ADDRESSED TO COMPANY OR TO EXECUTIVE AT THE
CORRESPONDING ADDRESS BELOW.  EXECUTIVE SHALL BE OBLIGATED TO NOTIFY COMPANY

 

9

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IN WRITING OF ANY CHANGE IN HIS ADDRESS.  NOTICE OF CHANGE OF ADDRESS SHALL BE
EFFECTIVE ONLY WHEN DONE IN ACCORDANCE WITH THIS SECTION 9.

 

 

COMPANY’S NOTICE ADDRESS:

 

 

Fossil

 

 

2280 N. Greenville Ave.

 

 

Richardson, Texas 75082

 

 

Attention: General Counsel

 

 

 

 

Executive’s Notice Address:

 

 

 

 

 

At the address listed in Company’s payroll records

 

 

 

 

With a copy to:

 

Ronald A. Dweck, Esquire

 

Paley, Rothman, Goldstein, Rosenberg, Eig & Cooper, Chtd.

 

4800 Hampden Lane, Seventh Floor

 

Bethesda, Maryland 20814

 

(m)          This Agreement shall not be construed for or against either party
as a result of the initial preparation or drafting by a party of any provision
hereof.

 

IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand, and the
Company has caused this Agreement to be executed in its name on its behalf, all
as of the day and year first above written.

 

 

 

 

 

Harold S. Brooks, Executive

 

 

 

 

 

FOSSIL, INC.

 

 

 

 

 

By:

 

 

 

 

Kosta Kartsotis, President and CEO

 

 

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Exhibit “A”

 

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Exhibit “B”

 

12

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Exhibit “C”

 

13

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Exhibit “D”

 

14

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Exhibit “E”

 

15

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Exhibit “F”

 

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