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2002 RESTRICTED STOCK PLAN
OF
FOSSIL, INC.

ARTICLE I. GENERAL

        WHEREAS, the 2002 Restricted Stock Plan of Fossil, Inc. is being fully
funded with treasury shares contributed to the Company from a shareholder; and

        WHEREAS, the Company has received a determination letter from NASDAQ
that, consequently, no stockholder approval of the Plan is required;

        NOW, THEREFORE, the Plan is as follows:

        SECTION 1.1.    Purpose of the Plan.    The Plan is intended to advance
the best interests of the Company, its Subsidiaries and its stockholders in
order to attract, retain and motivate key employees by providing them with
additional incentives through the award of shares of Restricted Stock.

        SECTION 1.2.    Definitions.    For purposes of this Plan, the following
definitions shall apply:

        "1934 Act" means the Securities Exchange Act of 1934, as amended.

        "Award" means a grant under this Plan in the form of Restricted Stock.

        "Award Agreement" means an agreement governing the Award entered into
between the Company and the Participant pursuant to Section 1.8.

        "Board" means the Board of Directors of the Company.

        "Change in Control" means the occurrence of any of the following events:

          (i)  Any "person" (as such term is used in Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934, as amended) becomes the beneficial
owner, directly or indirectly, of voting securities representing thirty percent
(30%) or more of the combined voting power of the Company's then outstanding
voting securities or, if a person is the beneficial owner, directly or
indirectly, of voting securities representing thirty percent (30%) or more of
the combined voting power of the Company's outstanding voting securities as of
the date the particular Award is granted, such person becomes the beneficial
owner, directly or indirectly, of additional voting securities representing ten
percent (10%) or more of the combined voting power of the Company's then
outstanding voting securities;

        (ii)  During any period of twelve (12) months, individuals who at the
beginning of such period constitute the Board cease for any reason to constitute
a majority of the Directors unless the election, or the nomination for election
by the Company's stockholders, of each new Director was approved by a vote of at
least a majority of the Directors then still in office who were Directors at the
beginning of the period;

        (iii)  The stockholders of the Company approve (A) any consolidation or
merger of the Company or any Subsidiary that results in the holders of the
Company's voting securities immediately prior to the consolidation or merger
having (directly or indirectly) less than a majority ownership interest in the
outstanding voting securities of the surviving entity immediately after the
consolidation or merger, (B) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company or (C) any plan or proposal for the liquidation or
dissolution of the Company;

        (iv)  The stockholders of the Company accept a share exchange, with the
result that stockholders of the Company immediately before such share exchange
do not own, immediately following such share exchange, at least a majority of
the voting securities of the entity resulting from such share exchange in

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substantially the same proportion as their ownership of the voting securities
outstanding immediately before such share exchange; or

        (v)  Any tender or exchange offer is made to acquire thirty percent
(30%) or more of the voting securities of the Company, other than an offer made
by the Company, and shares are acquired pursuant to that offer.

        For purposes of this definition, the term "voting securities" means
equity securities, or securities that are convertible or exchangeable into
equity securities, that have the right to vote generally in the election of
Directors.

        "Code" means the Internal Revenue Code of 1986, as amended.

        "Committee" means a committee of at least two (2) members of the Board.
If it is intended that the Committee satisfy the requirements of Rule 16b-3
under the 1934 Act and Section 162(m) of the Code, then all of the members of
the Committee, at the time of service on the Committee hereunder, should be
"Non-Employee Directors," as defined in Rule 16b-3(b)(3) under the 1934 Act and
"Outside Directors," as defined in Treasury Regulation Section 162-27(e)(3),
under the Code. If no Committee has been designated to administer the Plan,
references to the Committee shall be deemed to be references to the Board, whose
members shall not be required to meet the qualifications of this definition.

        "Common Stock" means the common stock, par value $0.01 per share, of the
Company.

        "Company" means Fossil, Inc. and its successors and assigns.

        "Date of Termination" of a Participant means the first day occurring on
or after the date on which a Participant is granted an Award on which the
Participant is not employed by the Company or any Subsidiary, regardless of the
reason for the termination of employment; provided, however, that a termination
of employment shall not be deemed to occur by reason of a transfer of the
Participant between the Company and a Subsidiary or between two Subsidiaries;
and, further, provided, that the Participant's employment shall not be
considered terminated while the Participant is on a leave of absence from the
Company or a Subsidiary approved by the Participant's employer. If, as a result
of a sale or other transaction, the Participant's employer ceases to be a
Subsidiary (and the Participant's employer is or becomes an entity that is
separate from the Company), the occurrence of such transaction shall be treated
as the Participant's Date of Termination caused by the Participant being
discharged by the employer.

        "Disability" with respect to any Participant has the meaning given that
term or any substantially comparable term or usage in any employment or
severance arrangement applicable to the Participant and approved by the Board or
the Committee, or in the absence of any such arrangement or term, means, except
as otherwise determined by the Committee, a condition that renders the
Participant unable, by reason of a medically determinable physical or mental
impairment, to engage in any substantial gainful activity, which condition, in
the opinion of a physician selected by the Committee, is expected to have a
duration of not less than one hundred twenty (120) days.

        "Eligible Participant" has the meaning given in Section 1.4.

        "Expiration Date" with respect to an Award means the date established as
the Expiration Date by the Committee at the time of the grant; provided,
however, that the Expiration Date shall not be later than the earliest to occur
of: (a) if the Participant's Date of Termination occurs by reason of death or
Disability, the one-year anniversary of such Date of Termination; or (b) if the
Participant's Date of Termination occurs for reasons other than death or
Disability, ninety (90) days after such Date of Termination.

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        "Fair Market Value" of a share of Common Stock on any date of reference
means the closing price on the business day immediately preceding such date,
unless the Committee in its sole discretion shall determine otherwise in a fair
and uniform manner. For purposes of this Plan, the "Closing Price" of the Common
Stock on any business day shall be: (a) if the Common Stock is listed or
admitted for trading on any United States national securities exchange or
included in the National Market System of the National Association of Securities
Dealers Automated Quotation System ("NASDAQ"), the last reported sale price of
Common Stock on such exchange or system, as reported in any newspaper of general
circulation; (b) if the Common Stock is quoted on NASDAQ, or any similar system
of automated dissemination of quotations of securities prices in common use, the
mean between the closing high bid and low asked quotations for such day of the
Common Stock on such system; (c) if neither clause (a) nor (b) is applicable,
the mean between the high bid and low asked quotations for Common Stock as
reported by the National Quotation Bureau, Incorporated if at least two
(2) securities dealers have inserted both bid and asked quotations for Common
Stock on at least five (5) of the ten (10) preceding days; or, (d) in lieu of
the above, if actual transactions in the Common Stock are reported on a
consolidated transaction reporting system, the last sale price of the Common
Stock for such day and on such system.

        "Participant" means any Eligible Participant that is granted an Award
under the Plan.

        "Plan" means this 2002 Restricted Stock Plan of Fossil, Inc.

        "Restricted Stock Award" means an Award of stock of the Company that is
granted pursuant to Article II that is subject to the restrictions imposed by
Article II.

        "Subsidiary" of the Company means any corporation, partnership or other
entity that is designated by the Board as a participating employer under the
Plan, provided that the Company directly or indirectly owns at least twenty
percent (20%) of the combined voting power of all classes of stock of such
entity or at least twenty percent (20%) of the ownership interests in such
entity.

        "Withholding Tax" means any federal, state or local withholding tax
liability.

        SECTION 1.3.    Administration of the Plan.

        (a)  The Plan shall be administered by the Committee. The Committee
shall have authority to interpret conclusively the provisions of the Plan, to
adopt such rules and regulations for carrying out the Plan as it may deem
advisable, to decide conclusively all questions of fact arising in the
application of the Plan, to establish performance criteria in respect of Awards
under the Plan, to certify that Plan requirements have been met for any
Participant in the Plan, to submit such matters as it may deem advisable to the
Company's stockholders for their approval, and to make all other determinations
and take all other actions necessary or desirable for the administration of the
Plan. The Committee is expressly authorized to adopt rules and regulations
limiting or eliminating its discretion with respect to certain matters as it may
deem advisable to comply with, or obtain preferential treatment under, any
applicable tax or other law, rule, or regulation. All decisions and acts of the
Committee shall be final and binding upon all affected Eligible Participants.

        (b)  The Committee shall designate the Eligible Participants, if any, to
be granted Awards and the amount of such Awards and the time when Awards will be
granted. All Awards granted under the Plan shall be on the terms and subject to
the conditions determined by the Committee consistent with the Plan.

        SECTION 1.4.    Eligible Participants.    Key employees of the Company
and its Subsidiaries shall be eligible for Awards under the Plan.

        SECTION 1.5.    Awards Under the Plan.    Awards to Eligible
Participants shall be in the form of shares of Restricted Stock.

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        SECTION 1.6.    Shares Subject to the Plan.

        (a)  General Limitation.    The aggregate number of shares of Common
Stock that may be issued under the Plan shall be Five Hundred Thousand (500,000)
shares. If any Award under the Plan shall expire, terminate or be canceled for
any reason without having been vested in full, or if any Award shall be
forfeited to the Company, the unexercised or forfeited Award shall not count
against the above limits and shall again become available for grants under the
Plan (unless the holder of such Award received dividends or other economic
benefits with respect to such Award, which dividends or other economic benefits
are not forfeited, in which case the Award shall count against the above
limits). Shares of Common Stock that are withheld in order to satisfy federal,
state or local tax liability, shall not count against the above limits.

        (b)  Additional Limitations.    No more than Five Hundred Thousand
(500,000) shares of Common Stock may be subject to Restricted Stock Awards that
are intended to be "performance based compensation" (as that term is used in
Section 162(m) of the Code) may be granted.

        SECTION 1.7.    Other Compensation Programs.    Nothing contained in the
Plan shall be construed to preempt or limit the authority of the Board to
exercise its corporate rights and powers, including, but not by way of
limitation, the right of the Board (a) to grant incentive awards for proper
corporate purposes otherwise than under the Plan to any employee, officer,
director or other person or entity; or (b) to grant incentive awards to, or
assume incentive awards of, any person or entity in connection a change of
control of the Company.

        SECTION 1.8.    Award Agreements.    Each Award shall be evidenced by an
agreement that may contain any term deemed necessary or desirable by the
Committee, provided such terms are not inconsistent with this Plan or applicable
law. Each Award Agreement shall contain the agreement of the Participant not to
compete with the business of the Company during the term of the Participant's
employment with the Company and for a period of two years thereafter.

ARTICLE II. RESTRICTED STOCK

        SECTION 2.1.    Terms and Conditions of Restricted Stock
Awards.    Subject to the following provisions, all Awards of Restricted Stock
under the Plan to an Eligible Participant shall be in such form and shall have
such terms and conditions as the Committee, in its discretion, may from time to
time determine consistent with the Plan.

        (a)  Restricted Stock Award.    The Restricted Stock Award shall specify
the number of shares of Restricted Stock subject to the Award, the price, if
any, to be paid by the Participant receiving the Restricted Stock Award, and the
date or dates on which the Restricted Stock will vest. The vesting and number of
shares of Restricted Stock may be conditioned upon the completion of a specified
period of service with the Company or its Subsidiaries. Unless otherwise
provided in the grant relating to the Restricted Stock Award, the shares of
Restricted Stock shall fully vest on the fifth anniversary of the date of the
Award.

        (b)  Restrictions on Transfer.    Unless otherwise provided in the grant
relating to the Restricted Stock Award, stock certificates representing the
Restricted Stock granted to a Participant shall be registered in the
Participant's name. Prior to the shares of Restricted Stock becoming vested,
such certificates shall either be held by the Company on behalf of the
Participant, or delivered to the Participant bearing a legend to restrict
transfer of the certificate until the Restricted Stock has vested, as determined
by the Committee. The Participant shall have the right to vote and/or receive
dividends on the Restricted Stock before it has vested. Except as may otherwise
be expressly permitted by the Committee, no share of Restricted Stock may be
sold, transferred, assigned, or pledged by the Participant until such share has
vested in accordance with the terms of the Restricted Stock Award. Unless the
grant of a Restricted Stock Award specifies otherwise, in the event of a
Participant's

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termination of employment before all the Participant's Restricted Stock has
vested, or in the event other conditions to the vesting of Restricted Stock have
not been satisfied prior to any deadline for the satisfaction of such conditions
set forth in the Award, the shares of Restricted Stock that have not vested
shall be forfeited and any purchase price paid by the employee shall be returned
to the Participant. At the time Restricted Stock vests (and upon the return of
such certificates to the Company), a certificate for such vested shares shall be
delivered to the Participant (or the beneficiary designated by the Participant
in the event of death), free of all restrictions.

        (c)  Accelerated Vesting.    Notwithstanding the vesting conditions set
forth in the Restricted Stock Award, unless the Restricted Stock Award grant or
other agreement with the Participant thereof specifies otherwise:

          (i)  the Committee may in its discretion at any time accelerate the
vesting of Restricted Stock or otherwise waive or amend any conditions of a
grant of a Restricted Stock Award;

        (ii)  all the shares of Restricted Stock shall vest upon a Change of
Control of the Company; and

        (iii)  all the shares of Restricted Stock shall rest upon the death of
the Participant.

        SECTION 2.2.    Section 83(b) Election.    If a Participant receives
Restricted Stock that is subject to a "substantial risk of forfeiture," such
Participant may elect under Section 83(b) of the Code to include in his or her
gross income, for the taxable year in which the Restricted Stock is received,
the excess of the Fair Market Value of such Restricted Stock on the Date of
Grant (determined without regard to any restriction other than one which by its
terms will never lapse), over the amount paid for the Restricted Stock. If the
Participant makes the Section 83(b) election, the Participant shall (a) make
such election in a manner that is satisfactory to the Committee, (b) provide the
Company with a copy of such election, (c) agree to promptly notify the Company
if any Internal Revenue Service or state tax agent, on audit or otherwise,
questions the validity or correctness of such election or of the amount of
income reportable on account of such election and (d) agree to such federal and
state income tax withholding as the Committee may reasonably require in its sole
discretion.

ARTICLE III. ADDITIONAL PROVISIONS

        SECTION 3.1.    General Restrictions.    Each Award under the Plan shall
be 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.

        SECTION 3.2.    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

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of such shares, the Committee shall make appropriate adjustment in the number
and kind of shares authorized by the Plan, in the number, price or kind of
shares covered by the Awards and in any outstanding Awards under the 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.

        SECTION 3.3.    Amendments.    The Committee shall have the authority to
amend any Award to include any provision that, at the time of such amendment, is
authorized under the terms of the Plan; provided, however, no outstanding Award
may be revoked or altered in a manner unfavorable to the holder without the
written consent of the holder.

        SECTION 3.4.    Cancellation of Awards.    Any Award granted under the
Plan may be canceled at any time with the consent of the holder and a new Award
may be granted to such holder in lieu thereof, which award may, in the
discretion of the Committee, be on more favorable terms and conditions than the
canceled Award.

        SECTION 3.5.    Beneficiary.    A Participant may file with the Company
a written designation of beneficiary, on such form as may be prescribed by the
Committee, to receive any shares of Restricted Stock that become deliverable to
the Participant pursuant to the Plan after the Participant's death. A
Participant may, from time to time, amend or revoke a designation of
beneficiary. If no designated beneficiary survives the Participant, the executor
or administrator of the Participant's estate shall be deemed to be the
Participant's beneficiary.

        SECTION 3.6.    Withholding.    Whenever the Company proposes or is
required to issue or transfer shares of Common Stock under the Plan, the Company
shall have the right to require the holder to pay an amount in cash or to retain
or sell without notice, or demand surrender of, shares of Common Stock in value
sufficient to satisfy any Withholding Tax prior to the delivery of any
certificate for such shares (or remainder of shares if Common Stock is retained
to satisfy such Withholding Tax). Whenever Common Stock is so retained, sold or
surrendered to satisfy Withholding Tax, the value of shares of Common Stock so
retained, sold or surrendered shall be determined by the Committee, and the
value of shares of Common Stock so sold shall be the net proceeds (after
deduction of commissions) received by the Company from such sale, as determined
by the Committee.

        SECTION 3.7.    Transferability.    Except as expressly provided in the
Plan or as may be permitted by the Committee, no Award under the Plan shall be
assignable or transferable by the holder thereof except by will or by the laws
of descent and distribution. Except as expressly provided in the Plan or as may
be permitted by the Committee, during the life of the holder, Awards under the
Plan shall be exercisable only by such holder or by the guardian or legal
representative of such holder.

        SECTION 3.8.    Non-uniform Determinations.    Determinations by the
Committee under the Plan (including, without limitation, determinations of the
persons to receive Awards; the form, amount and timing of such Awards; the terms
and provisions of such Awards and the agreements evidencing same; and provisions
with respect to termination of employment) need not be uniform and may be made
by it selectively among persons who receive, or are eligible to receive, Awards
under the Plan, whether or not such persons are similarly situated.

        SECTION 3.9.    No Guarantee of Employment.    The grant of an Award
under the Plan shall not constitute an assurance of continued employment for any
period.

        SECTION 3.10.    Deferred Compensation and Trust Agreements.    The
Committee may authorize and establish deferred compensation agreements and
arrangements in connection with Awards under the Plan and may establish trusts
and other arrangements, including "rabbi trusts," with respect to such
agreements and appoint one or more trustees for such trusts. Shares of Common
Stock under the Plan may also be acquired by one or more trustees from the
Company, in the open market or otherwise.

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        SECTION 3.11.    Duration and Termination.

        (a)  The Plan shall terminate on December 31, 2011. Notwithstanding the
foregoing, Awards granted prior to such date may extend beyond such date, and
the terms of this Plan shall continue to apply to all Awards granted hereunder.

        (b)  The Board may suspend, discontinue or terminate the Plan at any
time. Such action shall not impair any of the rights of any holder of any Award
outstanding on the date of the Plan's suspension, discontinuance or termination
without the holder's written consent.

        SECTION 3.12.    Effective Date.    The Plan shall be effective as of
January 1, 2002.

        Executed to evidence the Plan and the adoption thereof by the Board of
Directors.

    FOSSIL, INC.
 
 
By:
 
         

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    Print Name:            

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    Title:            

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2002 RESTRICTED STOCK PLAN OF FOSSIL, INC.
ARTICLE I. GENERAL
ARTICLE II. RESTRICTED STOCK
ARTICLE III. ADDITIONAL PROVISIONS