Document:

Unassociated Document

    
      

    

    Exhibit
      10.41

     

    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.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    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.

    

    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.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    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 here in 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.Unassociated Document

    
      

    

    Exhibit
      10.42

    

    STOCK
      OPTION AWARD AGREEMENT

    International
      Terms and Conditions

    For
      Non-US Optionees

    

    

    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 (as defined in the Long-Term Incentive Plan).

    

    The
      Long-Term Incentive Plan provides that an employee of the Company or its
      Subsidiaries (the “Optionee”) may be granted an Award (as defined in the
      Long-Term Incentive Plan), which may consist of right to purchase a specified
      number of shares of common stock, par value $.01 per share (“Common Stock”), of
      the Company at a specified price.

    

    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 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.  Subject to the terms and conditions set forth herein,
      the Company hereby grants to the Optionee an Award consisting of U.S.
      non-statutory 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, such number
      of shares and such price per share being subject to adjustment from time to
      time
      as provided in Paragraph 14 of the Long-Term Incentive Plan.

    

    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.  The Options granted pursuant to this
      agreement, together with the attached Appendix A (the “Agreement”) may be
      exercised by the Optionee at any time during the ten-year period beginning
      on
      the Grant Date specified in the Award Letter (“Option Period”), subject to the
      limitation that such Options shall vest and become exercisable in accordance
      with the Vesting Schedule set forth in the Award Letter (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).

    

    Notwithstanding
      the Vesting Schedule set forth in the Award Letter: (i) the Committee may in
      its
      discretion at any time accelerate the vesting of the Options; and (ii) all
      of
      the Options granted hereunder shall vest upon a Change in Control of the
      Company.

    

    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, 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).  As promptly as practicable following the receipt of such
      written notification and payment, the Company shall deliver to the Optionee
      a
      certificate or certificates for the number of Option Shares with respect to
      which the Options have been exercised.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    4.           Tax
      Withholding.  Regardless of any action the
      Company or Optionee’s employer (the “Employer”) takes with
      respect to any or all income tax, social insurance, payroll tax, payment on
      account or other tax-related withholding (“Tax-Related Items”), Optionee
      acknowledges that the ultimate liability for all Tax-Related Items legally
      due
      by him or her is and remains Optionee’s responsibility and that the Company
      and/or the Employer (a) make no representations or undertakings regarding
      the treatment of any Tax-Related Items in connection with any aspect of the
      Option grant, including the grant, vesting or exercise of the Option, the
      subsequent sale of shares of Common Stock acquired pursuant to such exercise
      and
      the receipt of any dividends; and (b) do not commit to structure the terms
      of the grant or any aspect of the Option to reduce or eliminate Optionee’s
      liability for Tax-Related Items.

    

    Prior
      to
      exercise of the Option, Optionee will pay or make adequate arrangements
      satisfactory to the Company and/or the Employer to satisfy all Tax-Related
      Items
      withholding obligations of the Company and/or the Employer.  In this
      regard, Optionee authorizes the Company and/or the Employer to withhold all
      applicable Tax-Related Items legally payable by Optionee from his or her wages
      or other cash compensation paid to Optionee by the Company and/or the
      Employer.  Alternatively, or in addition thereto, the Company may
      withhold Tax-Related Items from all or any portion of such Options by
      withholding a portion of the Option Shares or selling or arranging for the
      sale
      of Option Shares having a Fair Market Value on the date of exercise, as
      determined in accordance with Paragraphs 2 and 9 of the Long Term Incentive
      Plan, equal to the amount required to be withheld or paid.  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”),
      the Company may impose such additional restrictions as may be necessary to
      ensure that the satisfaction of withholding requirements by the withholding
      of a
      portion of the Option Shares shall be exempt from the short swing profits
      recapture provisions of Section 16(b) of the Exchange Act.  If the
      Company withholds in Option Shares, the Company will withhold the amount of
      shares of Common Stock necessary to satisfy the minimum withholding
      amount.  Finally, Optionee will pay to the Company or the Employer any
      amount of Tax-Related Items that the Company or the Employer may be required
      to
      withhold as a result of Optionee’s participation in the Long-Term Incentive Plan
      or Optionee’s purchase of shares of Common Stock that cannot be satisfied by the
      means previously described.  The Company may refuse to honor the
      exercise and refuse to deliver the shares of Common Stock if Optionee fails
      to
      comply with his or her obligations in connection with the Tax-Related Items
      as
      described in this section.

    

    5.           Nature
      of Grant.  In accepting the grant, Optionee acknowledges
      that:

    

    (a)           the
      Long-Term Incentive Plan is established voluntarily by the Company, it is
      discretionary in nature and it may be modified, amended, suspended or terminated
      by the Company at any time, unless otherwise provided in the Long-Term Incentive
      Plan and this Agreement;

    

    (b)           the
      grant of the Option is voluntary and occasional;

    

    (c)           all
      decisions with respect to future option grants, if any, will be at the sole
      discretion of the Company;

    

    (d)           the
      Optionee’s participation in the Long-Term Incentive Plan will not create a right
      to further employment with the Employer and shall not interfere with the ability
      of the Employer to terminate Optionee’s employment relationship at any time with
      or without cause;

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    (e)           the
      Optionee is voluntarily participating in the Long-Term Incentive
      Plan;

    

    (f)           the
      Option is an extraordinary item that does not constitute compensation of any
      kind for services of any kind rendered to the Company or the Employer, and
      which
      is outside the scope of Optionee’s employment contract, if any;

    

    (g)           the
      Option is not part of normal or expected compensation or salary for any
      purposes, including, but not limited to, calculating any severance, resignation,
      termination, redundancy, end of service payments, bonuses, long-service awards,
      pension or retirement benefits or similar payments and in no event should be
      considered as compensation for, or relating in any way to, past services for
      the
      Company or the Employer;

    

    (h)           in
      the event that Optionee is not an employee of the Company, the Option grant
      will
      not be interpreted to form an employment contract or relationship with the
      Company; and furthermore, the Option grant will not be interpreted to form
      an
      employment contract with the Employer or any subsidiary or affiliate of the
      Company;

    

    (i)           the
      future value of the underlying shares of Common Stock is unknown and cannot
      be
      predicted with certainty;

    

    (j)           if
      the underlying shares of Common Stock do not increase in value, the Option
      will
      have no value;

    

    (k)           if
      Optionee exercises his or her Option and obtain shares of Common Stock, the
      value of those shares of Common Stock acquired upon exercise may increase or
      decrease in value, even below the exercise price; and

    

    (l)           in
      consideration of the grant of the Option, no claim or entitlement to
      compensation or damages shall arise from termination of the Option or diminution
      in value of the Option or shares of Common Stock purchased through exercise
      of
      the Option resulting from termination of Optionee’s employment by the Company or
      the Employer (for any reason whatsoever and whether or not in breach of local
      labor laws) and Optionee irrevocably releases the Company and the Employer
      from
      any such claim that may arise; if, notwithstanding the foregoing, any such
      claim
      is found by a court of competent jurisdiction to have arisen, then, by signing
      this Agreement, Optionee will be deemed irrevocably to have waived his or her
      entitlement to pursue such claim.

    

    6.           Data
      Privacy.   Optionee hereby explicitly and unambiguously consents
      to the collection, use and transfer, in electronic or other form, of his or
      her
      personal data as described in this document by and among, as applicable, the
      Employer, and the Company and its subsidiaries and affiliates for the exclusive
      purpose of implementing, administering and managing Optionee’s participation in
      the Long-Term Incentive Plan.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Optionee
      understands that the Company and the Employer may hold certain personal
      information about Optionee, including, but not limited to, Optionee’s name, home
      address and telephone number, date of birth, social insurance number or other
      identification number, salary, nationality, job title, any shares of stock
      or
      directorships held in the Company, details of all options or any other
      entitlement to shares of stock awarded, canceled, exercised, vested, unvested
      or
      outstanding in Optionee’s favor, for the purpose of implementing, administering
      and managing the Long-Term Incentive Plan (“Data”).  Optionee
      understands that Data may be transferred to any third parties assisting in
      the
      implementation, administration and management of the Long-Term Incentive Plan,
      that these recipients may be located in Optionee’s country or elsewhere, and
      that the recipients’ country (e.g., the United States) may have different data
      privacy laws and protections than Optionee’s country.  Optionee
      understands that he or she may request a list with the names and addresses
      of
      any potential recipients of the Data by contacting Optionee’s local human
      resources representative.  Optionee authorizes the recipients to
      receive, possess, use, retain and transfer the Data, in electronic or other
      form, for the sole purpose of implementing, administering and managing
      Optionee’s participation in the Long-Term Incentive Plan, including any
      requisite transfer of such Data as may be required to a broker or other third
      party with whom Optionee may elect to deposit any shares of stock acquired
      upon
      exercise of the Option.  Optionee understands that Data will be held
      only as long as is necessary to implement, administer and manage Optionee’s
      participation in the Long-Term Incentive Plan.  Optionee understands
      that he or she may, at any time, view Data, request additional information
      about
      the storage and processing of Data, require any necessary amendments to Data
      or
      refuse or withdraw the consents herein, in any case without cost, by contacting
      in writing Optionee’s local human resources representative.  Optionee
      understands, however, that refusing or withdrawing his or her consent may affect
      Optionee’s ability to participate in the Long-Term Incentive
      Plan.  For more information on the consequences of Optionee’s refusal
      to consent or withdrawal of consent, Optionee understands that he or she may
      contact his or her local human resources
      representative.

    

    7.           Termination
      in Event of Nonemployment.  In the event that the Optionee ceases
      to be actively employed by the Company or any of its Subsidiaries (whether
      or
      not in breach of local labor laws) during the Option Period for any reason
      other
      than death, the Options granted pursuant to this Agreement shall terminate
      effective as of the date that Optionee is no longer actively employed and will
      not be extended by any notice period mandated under local law (e.g.,
      active employment does not include a period of “garden leave” or a similar
      period pursuant to local law), except to the extent that the Options are
      exercisable on the date the Optionee ceases to be so employed.  To the
      extent that such Options are exercisable on the date that the Optionee ceases
      to
      be actively employed by the Company or any of its Subsidiaries for any reason
      other than death, such Options may be exercised by the Optionee during the
      three
      month period beginning on such date but shall terminate and be of no further
      force or effect at the end of such three-month period.

    

    8.           Acceleration
      in Event of Death.  In the event that the Optionee ceases to be
      employed by the Company or any of its Subsidiaries 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 Paragraph
      13 of the Long-Term Incentive Plan during the 12-month period beginning on
      such
      date but shall terminate at the end of such period.

    

    9.           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.  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.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    10.           No
      Stockholder Rights.  The Optionee shall have no rights as a
      stockholder of the Company with respect to the Option Shares unless and until
      certificates evidencing such Option Shares shall have been issued by the Company
      to the Optionee.  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 certificates evidencing such Option Shares
      shall have been issued by the Company.

    

    11.           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.

    

    12.           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, the certificate or certificates representing
      any Option Shares purchased upon the exercise of the Options 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.

    

    13.           Notices
      and Electronic Delivery.  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
      related to the Option or future options that may be granted under the Plan
      by
      electronic means or to request Optionee’s consent to participate in the Plan by
      electronic means.  Optionee hereby consents to receive such documents
      by electronic delivery and, if requested, to agree to participate in the 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 directs Optionee otherwise. Any notice given by
      the
      Company to the Optionee directed to him at his address on file with the Company
      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 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.

    

    14.           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 9 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 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 Paragraph 5
      of
      such plan.

    

    15.           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.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    16.  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.

    

    17.  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.

    

    18.  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 Plan.

    

    19.  
      No Right of
      Employment. 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
      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.

    

    20.  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
      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.

    

    21.  Incorporation
      of 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 here in 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.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    22.  Language.  If
      the Optionee has received this Agreement or any other document related to the
      Long-Term Incentive Plan translated into a language other than English and
      if
      the translated version is different than the English version, the English
      version will control.

    

    23.  Severability.  The
      provisions of this Agreement are severable and if any one or more provisions
      are
      determined to be illegal or otherwise unenforceable, in whole or in part, the
      remaining provisions shall nevertheless be binding and enforceable.

    

    24.  Construction.  The
      Option is being granted 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 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.

    

    *   *   *

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      APPENDIX
        A

      TO
        TERMS AND CONDITIONS OF OPTIONS

      SPECIAL
        PROVISIONS FOR OPTIONEES OUTSIDE THE UNITED STATES

      

      This
        Appendix A, which is part of the Agreement, includes additional terms and
        conditions of the award of Options that will apply to Optionees in the countries
        listed below.  Please note that the exchange control information
        provided below is current as of May 2007.  However, exchange controls
        are subject to change and the Optionee should consult his or her personal
        advisor(s) with respect to the applicable exchange controls (if any) which
        may
        apply to the vesting and exercise of Options and/or sale of the
        Shares.  Capitalized terms used but not defined herein shall have the
        same meanings assigned to them in the Plan, the Agreement and the Award
        Letter.

      

      Australia

      

      No
        special provisions.

      

      Austria

      

      Consumer
        Protection Act Notice

      

      The
        Optionee acknowledges that he or she may be entitled to revoke the Agreement
        on
        the basis of the Austrian Consumer Protection Act according the following
        rules:

      

      
        	
                 

              	
                (i)

              	
                If
                  the Optionee receives the award of Options under the Plan outside
                  the
                  business premises of the Company, the Optionee may be entitled
                  to revoke
                  his or her acceptance of the Agreement.  The revocation must be
                  made within one week after the Optionee has signed the Award
                  Letter.

              

      

      

      
        	
                 

              	
                (ii)

              	
                The
                  revocation must be in written form to be valid.  It is
                  sufficient if the Optionee returns the Agreement to the Company
                  or the
                  Company’s representative with language that can be understood as his or
                  her refusal to conclude or honor the Agreement.  It is
                  sufficient if the revocation is sent within the period discussed
                  above.

              

      

      

      Canada

      

      No
        special provisions because no Optionees in Quebec.

      

      France

      

      No
        special provisions.

      

      Germany

      

      No
        special provisions.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      APPENDIX
        A

      

      Hong
        Kong

      

      Securities
        Law Notice

      

      Neither
        this Agreement, nor other incidental communication materials, have been prepared
        in accordance with or intended to constitute a ‘prospectus’ for a public
        offering of securities under the applicable companies and securities legislation
        in Hong Kong.  This Agreement and the incidental communication
        materials are intended only for the personal use of each eligible Fossil
        employee and not for distribution to any other persons.

      

      Italy

      

      Exchange
        Controls

      

      Optionees
        must report on their annual
        tax return the transfer of cash or shares of Common Stock exceeding EU12,500
        to
        or from Italy, any foreign investment held abroad at the end of the calendar
        year in excess of EU12,500 (including shares of Common Stock), and the amount
        of
        the transfers to and from abroad which have had an impact during the calendar
        year on foreign investments outside of Italy.

      

      Plan
        Document Acknowledgement

      

      By
        accepting the award of Options, the Optionee acknowledges that he or she
        has
        received a copy of the Plan, has review the Plan and the Agreement in their
        entirety and fully understands and accepts all provisions of the Plan and
        the
        Agreement.

      

      The
        Optionee further acknowledges that he or she has read and specifically and
        expressly approves the following clauses in the Agreement:  Paragraph
        4:  Withholding of Taxes; Paragraph 5:  Nature of Grant;
        Paragraph 9:  Assignability; Paragraph 13: Notices and Electronic
        Delivery; Paragraph 18: Governing Law; and the Data Privacy Consent
        below.

      

      Data
        Privacy Consent

      

      Notwithstanding
        Paragraph 6 or any other provision of the Agreement, Optionee agrees that
        the
        following shall apply with regard to data privacy in
        Italy:

      

      Optionee
        hereby explicitly and unambiguously consents to the collection, use, processing
        and transfer, in electronic or other form, of personal data as described
        in this
        section of Appendix A by and among, as applicable, the Employer
        and the Company and any of its Subsidiaries for the exclusive purpose of
        implementing, administering and managing Optionee’s participation in the
        Plan.

      

      Optionee
        understands that the Employer, the Company and any of its Subsidiaries may
        hold
        certain personal information about Optionee, including, Optionee’s name, home
        address and telephone number, date of birth, social insurance number or other
        identification number, salary, nationality, job title, any Shares or
        directorships held in the Company, details of the award of Restricted Stock
        Units or any other entitlement to Shares awarded, canceled, exercised, vested,
        unvested or outstanding in Optionee’s favor, for the exclusive purpose of
        managing and administering the Plan (“Data”).

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      APPENDIX
        A

      

      Optionee
        also understands that providing the Company with Optionee’s Data is necessary
        for the performance of the Plan and that Optionee’s denial to provide such Data
        would make it impossible for the Company to perform its contractual obligations
        and may affect Optionee’s ability to participate in the Plan.  The
        Controller of personal data processing is Fossil, Inc., with registered offices
        at 2280 N. Greenville Ave., Richardson, Texas 75082, United States of America,
        and, pursuant to Legislative Decree no. 196/2003, its representative in Italy
        is
        Fossil Italia, S.r.l. with registered offices at Via Vecchia Ferriera, 4
        I-36100
        Vicenza, Italy.  Optionee understands that Optionee’s Data will not be
        publicized, but it may be transferred to Citi Smith Barney or other third parties, banks,
        other financial institutions or brokers involved in the management and
        administration of the Plan.  Optionee further understands that the
        Company and/or its Subsidiaries will transfer Data amongst themselves as
        necessary for the purpose of implementation, administration and management
        of
        Optionee’s participation in the Plan, and that the Company and/or its
        Subsidiaries may each further transfer Data to third parties assisting the
        Company in the implementation, administration and management of the Plan,
        including any requisite transfer to Citi Smith Barney or another third party with
        whom Optionee may elect to deposit any Shares acquired under the
        Plan.  Such recipients may receive, possess, use, retain and transfer
        the Data in electronic or other form, for the purposes of implementing,
        administering and managing Optionee’s participation in the
        Plan.  Optionee understands that these recipients may be located in
        the European Economic Area, or elsewhere, such as the U.S. or
        Asia.  Should the Company exercise its discretion in suspending all
        necessary legal obligations connected with the management and administration
        of
        the Plan, it will delete Optionee’s Data as soon as it has accomplished all the
        necessary legal obligations connected with the management and administration
        of
        the Plan.

      

      Optionee
        understands that Data processing related to the purposes specified above
        shall
        take place under automated or non-automated conditions, anonymously when
        possible, that comply with the purposes for which Data are collected and
        with
        confidentiality and security provisions as set forth by applicable laws and
        regulations, with specific reference to Legislative Decree no.
        196/2003.

      

      The
        processing activity, including communication, the transfer of Optionee’s Data
        abroad, including outside of the European Union, as herein specified and
        pursuant to applicable laws and regulations, does not require Optionee’s consent
        thereto as the processing is necessary to performance of contractual obligations
        related to implementation, administration and management of the
        Plan.  Optionee understands that, pursuant to Section 7 of the
        Legislative Decree no. 196/2003, Optionee has the right to, including but
        not
        limited to, access, delete, update, ask for rectification of Optionee’s Data and
        estop, for legitimate reason, the Data processing.  Furthermore,
        Optionee is aware that Optionee’s Data will not be used for direct marketing
        purposes.  In addition, the Data provided can be reviewed and
        questions or complaints can be addressed by contacting Optionee’s local human
        resources department.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      APPENDIX
        A

      

      Method
        of Exercise

      

      Not
        withstanding paragraph 3 of the Agreement, Optionee agrees that that following
        requirements apply to Option exercises for Italian Optionees.  Due to
        regulatory requirements, Optionees residing in Italy will be restricted to
        the
        cashless sell-all method of exercise with respect to their
        Options.  To complete a cashless sell-all exercise, Optionee should
        instruct the broker to: (i) sell all of the shares of Common Stock to be
        issued
        upon exercise; (ii) use the proceeds to pay the Option Price, brokerage fees
        and
        any applicable Tax-Related Items; and (iii) remit the balance in cash to
        the
        Optionee.  To the extent that regulatory requirements change, Fossil
        reserves the right to eliminate the cashless sell-all method of exercise
        restriction and, in its sole discretion, to permit exercises with cash, check,
        money orders or cashless sell-to-cover exercise.

      

      Japan

      

      No
        special provisions.

      

      Mexico

      

      Labor
        Law Policy Statement

      

      This
        provision supplements Paragraph 5 of the Agreement:

      

      In
        accepting the Options, Optionee acknowledges that he or she understands and
        agrees that: (i) the Options are not related to the salary and other contractual
        benefits granted to the Optionee by the Employer; and (ii) any modification
        of
        the Plan or its termination shall not constitute a change or impairment of
        the
        terms and conditions of Optionee’s employment.

      

      Policy
        Statement:

      

      La
        invitación que la Compañía hace en relación con el Plan es unilateral y
        discrecional, por lo tanto, la Compañía se reserva el derecho absoluto para
        modificar o terminar el mismo en cualquier momento, sin ninguna responsabilidad
        para el Otorgario.

      

      Esta
        invitación y, en el caso del  Otorgario, la adquisición de acciones,
        de ninguna manera establecen relación laboral alguna entre el
        Otorgario  y la Compañía.  Tampoco establece derecho alguno
        entre el Otorgario y su empleador

      

      English
        Translation:

      

      The
        offering the Company is making under the Plan is unilateral and discretionary
        and, therefore, the Company reserves the absolute right to amend it and
        discontinue it at any time without any liability to the Optionee.

      

      This
        offering and, in Optionee’s case, the purchase of shares does not, in any way,
        establish a labor relationship between the Optionee and the Company and it
        does
        not establish any rights between Optionee and the Employer.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      APPENDIX
        A

      

      Netherlands

      

      Notification
        For Dutch Optionees

      

      The
        Optionee has been granted Options under the Plan, pursuant to which the Optionee
        may acquire shares of the Company’s shares of Common Stock.  Optionees
        that are residents of the Netherlands should be aware of the Dutch insider
        trading rules, which may impact the sale of such shares issued upon exercise
        of
        the Option.  In particular, the Optionee may be prohibited from
        effecting certain share transactions if he or she has insider information
        regarding the Company.

      

      Below
        is
        a discussion of the applicable restrictions.  The Optionee is advised
        to read the discussion carefully to determine whether the insider rules could
        apply to him or her.  If it is uncertain whether the insider rules
        apply, we recommend that the Optionee consults with his or her legal
        advisor.  Please note that the Company cannot be held liable if an
        Optionee violates the Dutch insider rules.  The Optionee is
        responsible for ensuring his or her compliance with these rules.

      

      By
        entering into the Agreement and participating in the Plan, the Optionee
        acknowledges having read and understood the Notification below and acknowledges
        that it is his or her responsibility to comply with the Dutch insider trading
        rules, as discussed herein.

      

      Prohibition
        Against Insider Trading

      

      Dutch
        securities laws prohibit insider trading.  Under Article 46 of the Act
        on the Supervision of the Securities Trade 1995, anyone who has “inside
        information” related to the Company is prohibited from effectuating a
        transaction in securities in or from the Netherlands.  “Inside
        information” is knowledge of a detail concerning the issuer to which the
        securities relate that is not public and which, if published, would reasonably
        be expected to affect the stock price, regardless of the development of the
        price.  The insider could be any employee of the Company or its Dutch
        Subsidiary who has inside information as described above.

      

      Given
        the
        broad scope of the definition of inside information, certain employees of
        the
        Company working at its Dutch Subsidiary may have inside information and thus,
        would be prohibited from effectuating a transaction in securities in the
        Netherlands at a time when he or she had such inside information.

      

      Exchange
        Controls

      

      The
        Dutch Central Bank may require that
        certain reporting requirements be complied with  in connection with
        payments sent to and from abroad.  The Optionee should check with his
        or her financial institution before transferring funds to the Netherlands
        from
        the exercise of Options, sale of the shares of Common Stock or receipt of
        dividends.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      APPENDIX
        A

      

      Singapore

      

      Securities
        Law Notification

      

      The
        grant
        of Options under the Plan is being made on a private basis and is, therefore,
        exempt from registration in Singapore.  Shares of Common Stock are
        traded on a U.S. exchange and Participants are not able to resell shares
        on a
        Singapore exchange.

      

      Director
        Notification

      

      If
        the
        Optionee is a director, associate director or shadow director of a Singapore
        Subsidiary of the Company, the Optionee is subject to certain notification
        requirements under the Singapore Companies Act.  Among these
        requirements is an obligation to notify the Singapore Subsidiary in writing
        when
        the Optionee receives an interest (e.g., Options, Shares) in the
        Company or any related companies.  Please contact the Company to
        obtain a copy of the notification form.  In addition, the Optionee
        must notify the Singapore Subsidiary when the Optionee sells Shares of the
        Company or any related company (including when the Optionee sells Shares
        acquired pursuant to this award).  These notifications must be made
        within two days of acquiring or disposing of any interest in the Company
        or any
        related company.  In addition, a notification must be made of the
        Optionee’s interests in the Company or any related company within two days of
        becoming a director.

      

      Spain

      

      Labor
        Law Acknowledgment

      

      This
        provision supplements Paragraph 5 of the Agreement:

      

      In
        accepting the grant of Options the Optionee acknowledges that he or she consents
        to participation in the Plan and has received a copy of the Plan and
        Agreement.

      

      The
        Optionee understands that Fossil has unilaterally, gratuitously and
        discretionally decided to grant Options under the Plan to individuals who
        may be
        employees of Fossil or its Subsidiaries throughout the world.  The
        decision is a limited decision that is entered into upon the express assumption
        and condition that any grant will not bind Fossil or any of its
        Subsidiaries.  Consequently, the Optionee understands that the Option
        are granted on the assumption and condition that the Options and the shares
        of
        Common Stock purchased a result thereof shall not become a part of any
        employment contract (either with Fossil or any of its Subsidiaries) and shall
        not be considered a mandatory benefit, salary for any purposes (including
        severance compensation) or any other right whatsoever.  In addition,
        the Optionee understands that this grant would not be made to the Optionee
        but
        for the assumptions and conditions referred to above; thus, the Optionee
        acknowledges and freely accepts that should any or all of the assumptions
        be
        mistaken or should any of the conditions not be met for any reason, then
        any
        grant of or right to Options shall be null and void.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      APPENDIX
        A

      

      Exchange
        Control Notification

      

      To
        participate in the Plan, the Optionee must comply with exchange control
        regulations in Spain.  When the Optionee sells shares of Common Stock
        received upon exercise of the Option or receive dividends on such shares
        and
        transfers the cash proceeds from these transactions into Spain, the Optionee
        must inform the financial institution receiving the payment of the basis
        upon
        which such payment is made.  The Optionee will need to provide the
        institution with the following information: (i) Optionee’s name, address, and
        fiscal identification number; (ii) the name and corporate domicile of Fossil
        (i.e., Richardson, Texas, USA); (iii) the amount of the payment; (iv) the
        currency used; (v) the country of origin; (vi) the reasons for the payment;
        and
        (vii) further information that may be required.

      

      If
        the
        Optionee wishes to have certificates representing the shares of Common Stock
        obtained under the Plan transferred to him or her into Spain, rather than
        held
        in a brokerage account outside of Spain, the Optionee must declare the
        importation of such securities to the Dirección General de Política Comercial e
        Inversiones Exteriores (i.e., the Bureau for Commercial Policy and Foreign
        Investments, which is a department of the Ministry of Economy).

      

      Securities
        Law Notice

      

      The
        grant
        of Options and the shares of Common Stock issued pursuant to the award are
        considered a private placement outside of the scope of Spanish laws on public
        offerings and issuances.

      

      Sweden

      

      No
        special provisions.

      

      Switzerland

      

      No
        special provisions.

      

      United
        Kingdom

      

      Tax
        Withholding Obligations

      

      The
        following supplements Paragraph 4 of the Agreement:

      

      If
        payment or withholding of the income tax due is not made within 90 days of
        the
        event giving rise to the Tax-Related Items (the “Due Date”) or such other period
        specified in Section 222(1)(c) of the U.K. Income Tax (Earnings and Pensions)
        Act 2003, the amount of any uncollected Tax-Related Items shall constitute
        a
        loan owed by the Optionee to the Employer, effective on the Due
        Date.  The Optionee agrees that the loan will bear interest at the
        then-current HM Revenue and Customs Official Rate, it will be immediately
        due
        and repayable, and Fossil or the Employer may recover it at any time thereafter
        by any of the means referred to in Paragraph 3 of the
        Agreement.  Notwithstanding the foregoing, if the Optionee is an
“Officer” (as defined in Rule 16a-1(f) of the U.S. Securities Exchange Act of
        1934), the terms of this provision will not apply to the Optionee.  In
        the event that Tax-Related Items are not collected from or paid by an Officer
        Optionee by the Due Date, the amount of any uncollected Tax-Related Items
        may
        constitute a benefit to the Optionee on which additional income tax and National
        Insurance Contributions may be payable.  The Optionee agrees that
        Fossil and/or the Employer may collect any income tax and National Insurance
        Contributions due on this additional benefit from the Optionee by any of
        the
        means set forth in Paragraph 3 of the Agreement.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      APPENDIX
        A

      

      Director
        Notification

      

      If
        the
        Optionee is a director or shadow director of a UK Subsidiary of Fossil and
        the
        UK Subsidiary is not wholly owned by Fossil, the Optionee is subject to certain
        notification requirements under the Companies Act.  Specifically, the
        Optionee must notify the UK Subsidiary in writing of the Optionee’s interest in
        Fossil and the number and class of shares or rights to which the interest
        relates.  The Optionee must also notify the UK Subsidiary when the
        Optionee exercises the Option or sells shares of Common Stock acquired through
        exercise.  This disclosure requirement also applies to any rights or
        shares acquired by the Optionee’s spouse or children (under the age of
        18).

      

      

      *
        * * *
        *

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