Exhibit 10.1


 


[date]


 


[name]


[address]


 


Dear [name]:


 


Pursuant to Article 7 of the 2008
Long-Term Incentive Plan of Fossil, Inc. (the “Long- Term Incentive Plan”),
and subject to the terms and conditions of the Long-Term Incentive Plan and the
attached Stock Option Award Agreement, you have been granted a nonqualified
stock option to purchase [number] shares (the “Option”) of Fossil stock as
outlined below.


 


	
   

  	
  Granted
  To:

  	
   

  
	
   

  	
  SSN/Global
  ID:

  	
   

  
	
   

  	
  Grant
  Date:

  	
   

  
	
   

  	
  Option
  Price per Share:

  	
   

  
	
   

  	
  Total
  Cost to Exercise:

  	
   

  
	
   

  	
  Expiration
  Date:

  	
   

  



 


By my signature below, I hereby acknowledge
receipt of this Option granted on the date shown above, which has been issued
to me under the terms and conditions of the Long-Term Incentive Plan.  I further acknowledge that this Option shall
be subject to the Stock Option Award Agreement Standard Terms and Conditions,
which are incorporated herein by reference, and the terms and conditions of
this Option and the Plan.


 


 


	
  Signature:

  	
   

  	
   

  	
  Date:

  	
   

  



 

















 


STOCK
OPTION AWARD AGREEMENT


Standard Terms And Conditions


For
Outside Directors


 


Fossil, Inc., a Delaware corporation (the “Company”) has adopted
the Fossil, Inc. 2008 Long-Term Incentive Plan (the “Long-Term Incentive
Plan”) effective as of the Effective Date (as defined in the Long-Term
Incentive Plan) with the objective of retaining Outside Directors (as defined
in the Long-Term Incentive Plan), and rewarding them for making major
contributions to the success of the Company and its Subsidiaries (as defined in
the Long-Term Incentive Plan).


 


The Long-Term Incentive Plan provides that an Outside Director of the
Company or its Subsidiaries (the “Optionee”) automatically shall be granted a
nonqualified stock option, which shall consist of right to purchase a specified
number of shares of common stock, par value $.01 per share (“Common Stock”), of
the Company at an exercise price equal to Fair Market Value (as defined in the
Long-Term Incentive Plan) of the Common Stock on the Grant Date.


 


In consideration of the premises, the terms and conditions set forth
herein, the terms of the Stock Option Award Letter Agreement (the “Award Letter”)
between the Company and the Optionee, 
the mutual benefits to be gained by the performance thereof and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:


 


1.    Grant of Award; Nonqualified Stock Options.  Subject to the terms and conditions set forth
herein, the Company hereby grants to the Optionee an Award consisting of
options (the “Options”) to purchase an aggregate of up to but not
exceeding  the number of shares of Common
Stock (the “Option Shares”) from the Company and at a price per share as set
forth in the Award Letter (which is the Fair Market Value of the Common Stock
on the Grant Date), such number of shares and such price per share being
subject to adjustment from time to time as provided in Articles 12-14 of the
Long-Term Incentive Plan.  The Options
are intended to comply with the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) and the regulations and other
guidance issued thereunder, so that the Options shall be exempt from such
requirements and this Agreement shall be interpreted to give effect to such
intention; provided, however, that nothing contained herein shall be construed
as a representation, guarantee or other undertaking on the part of the Company
that the Options are or will be found to be exempt from and not subject to the
requirements of Section 409A of the Code or any other regulations or
guidance issued thereunder.  The Options
shall not be treated as “incentive stock options” under Section 422 of the
Code.


 


The grant of this Award to the Optionee shall not confer any right to
such Optionee (or any other Optionee) to be granted any Option or Award in the
future under the Long-Term Incentive Plan, even if options have been granted in
the past.


 


2.    Option Period and Vesting.  Except as otherwise provided below, the Options
granted pursuant to this agreement (the “Agreement”) may be exercised by the
Optionee at any time during the ten (10) year period beginning on the
Grant Date specified in the Award Letter (“Option Period”).  The Options shall vest and become exercisable
in accordance with the following vesting schedule (it being understood that the
right to purchase the Option Shares shall be cumulative, so that the Optionee
may purchase on or after any anniversary and during the remainder of the Option
Period that number of Option Shares which the Optionee was entitled to purchase
but did not purchase during any preceding period or periods): (i) fifty
percent (50%) of the Option Shares shall vest and become exercisable on the
first anniversary of the Grant Date, provided that the Optionee is providing
services to the Company or a Subsidiary on such date; (ii) an additional
twenty-five percent (25%) of the Option Shares shall vest and become
exercisable on the second anniversary of the Grant Date, provided that the
Optionee is providing services to the Company or a Subsidiary on such date; and
(iii) the remaining 


 


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twenty-five percent (25%) of the Option
Shares shall vest and become exercisable on the third anniversary of the Grant
Date, provided that the Optionee is providing services to the Company or a
Subsidiary on such date.


 


3.    Method of
Exercise.  The Options granted
pursuant to this Agreement may be exercised by the Optionee by giving written
notice of exercise to the Secretary of the Company, which notice shall (i) state
the number of Option Shares with respect to which such Options are being
exercised and (ii) be accompanied by  a check, cash or money order payable to the
Company in the full amount of the exercise price for such Options or, at the
option of the Company, by means of a cashless exercise procedure through the
use of a brokerage arrangement approved by the Company (or any combination of
cash, check, money order or cashless exercise procedure).  Any shares of Common Stock delivered in
satisfaction of all or a portion of the exercise price shall be appropriately
endorsed for transfer to the Company or shall be accompanied by appropriate
stock powers duly executed for transfer to the Company.  As promptly as practicable following the
receipt of such written notification and payment, the Company shall
electronically register one share of Common Stock in the Optionee’s name for
each Option Share with respect to which the Options have been exercised.


 


4.    Termination
of Service.  In the event that
the Optionee incurs a Termination of Service (as defined in the Long-Term
Incentive Plan) during the Option Period for any reason other than death, the
Options granted pursuant to this Agreement shall terminate, except to the
extent that they are vested on the date the Optionee incurs such Termination of
Service.  To the extent that such Options
are vested on the date that the Optionee incurs the Termination of Service for
any reason other than death, such Options may be exercised by the Optionee
during the twelve (12) month period beginning on such date but shall terminate
and be of no further force or effect at the end of such period.


 


5.    Acceleration in Event of Death.  In the event that the Optionee incurs a
Termination of Service during the Option Period by reason of death at a time
when the Options granted pursuant hereto are still in force and unexpired, such
unmatured Options shall be accelerated. 
Such acceleration shall be effective as of the date of death of the
Optionee, and each Option so accelerated may be exercised by the person or
persons to whom the Optionee’s rights shall pass pursuant to Section 16.7 of
the Long-Term Incentive Plan until 5 p.m. on the date immediately
preceding the tenth (10th) anniversary of the Grant Date.


 


6.    Assignability.  The Options granted pursuant hereto shall not
be assignable or transferable by the Optionee 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 Options 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 and No Stock
Certificates.  The Optionee
shall have no rights as a stockholder of the Company with respect to the Option
Shares unless and until such Option Shares shall have been electronically
registered by the Company in the Optionee’s name.  Until such time, the Optionee shall not be
entitled to dividends or distributions in respect of any Option 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, 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 Option Shares for which the
record date for such payment, distribution or grant is prior to the date upon
which such Option Shares shall have been electronically registered by the Company
in the Optionee’s name.


 


No stock certificate or certificates shall be
issued with respect to any Option Shares unless, the 


 


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Optionee requests delivery of the certificate or certificates by
submitting a written request to the Secretary of the Company requesting
delivery of the certificate.  The Company
shall deliver the certificates requested by the Optionee to the Optionee as
soon as administratively practicable following the Company’s receipt of such
request.


 


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 Optionee, 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.  The Company may make such provision as it may
deem appropriate for the withholding of any taxes that it determines is
required in connection with the Options granted pursuant to this
Agreement.  However, the Optionee may pay
all or any portion of the taxes required to be withheld by the Company or paid
by the Optionee in connection with the exercise of all or any portion of such
Options by electing to have the Company withhold a portion of the Option Shares
or by delivering shares of Common Stock theretofore owned by the Optionee
having a Fair Market Value on the date of exercise, as determined in accordance
with Section 2.17 of the Long-Term Incentive Plan, equal to the amount
required to be withheld or paid.  The
Optionee must make the foregoing election on or before the date upon which the
amount of the taxes to be withheld is determined. If the Optionee is subject to
the short-swing profits recapture provisions of Section 16(b) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), any such
election shall be subject to such additional restrictions as may be imposed by
the Committee to ensure that the satisfaction of withholding requirements by
the withholding of a portion of the Option Shares or by delivery of shares of
Common Stock theretofore owned by the Optionee shall be exempt from the short-swing
profits recapture provisions of Section 16(b) of the Exchange Act.


 


10.    Restrictions and Related Representations.
Upon the acquisition of any Option Shares pursuant to the exercise of the
Options granted pursuant hereto, the Optionee 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 Agreement. 
In addition, to the extent a certificate or certificates representing
any Option Shares purchased upon the exercise of the Options are  issued, the certificate or certificates 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 Option or future options that
may be granted under the Long-Term Incentive Plan by electronic means to
request the Optionee’s consent to participate in the Long-Term Incentive Plan
by electronic means.  The Optionee 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 Optionee of the Options 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
Optionee otherwise.  Any notice given by
the Company to the Optionee 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 Optionee of the
existence, maturity or termination of any rights hereunder and the Optionee
shall be 


 


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deemed to have familiarized himself with all
matters contained herein and in the Long-Term Incentive Plan which may affect
any of the Optionee’s rights or privileges hereunder.


 


12.   Scope of
Certain Terms.  Whenever the
term “Optionee” 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 of this Agreement, the term “Optionee” shall be
deemed to include such person or persons. 
The term “Long-Term Incentive Plan” as used herein shall be deemed to
include the Long-Term Incentive Plan and any subsequent amendments thereto,
together with any administrative interpretations which have been adopted
thereunder by the Committee pursuant to Section 3.3 of 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.


 


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.  Precondition
of Legality.  Notwithstanding
anything to the contrary contained herein, the Optionee agrees that he will not
exercise the Options granted pursuant hereto, and that the Company will not be
obligated to issue any Option Shares pursuant to this Agreement, if the
exercise of the Options or the issuance of such shares would constitute a
violation by the Optionee 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.


 


16.   Governing
Law.  The Option 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.


 


17.   No Right to Continue Service.  Neither the granting of this Option, the
exercise of any part hereof, nor any provision of the Long-Term Incentive Plan
or this Award shall be construed to confer upon the Optionee the right to
provide services to the Company or any Subsidiary, or interfere with or
restrict in any way the right of the Company or any Subsidiary to discharge the
Optionee at any time.


 


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18.  Amendment.  This Award
may be amended only by a writing executed by the Company and the Optionee 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 Optionee, and provided that no such amendment adversely affecting the
rights of the Optionee hereunder may be made without the Optionee’s written
consent.  Without limiting the foregoing,
the Committee reserves the right to change, by written notice to the Optionee,
the provisions of the Option 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
Option which are then subject to restrictions as provided herein.


 


19.  Incorporation
of the Long-Term Incentive Plan. This Agreement is subject to the
Long-Term Incentive Plan, a copy of which has been furnished to the Optionee
and for which the Optionee 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 apply the intent of this Award and the Long-Term
Incentive Plan.


 


21.   Construction.  The Options are being granted
pursuant to Article 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 Optionee,
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.


 


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