Document:

Exhibit 10.61

 

Restricted
Stock Unit Award

 

under the
Fossil, Inc. 2008 Long-Term Incentive Plan

 

This RESTRICTED STOCK UNIT
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 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 advancing the
best interests of the Company, its Subsidiaries and its stockholders in order
to attract, retain and motivate Outside Directors (as defined in the Long-Term
Incentive Plan) with additional incentives through the award of Restricted
Stock Units; and

 

WHEREAS, the Long-Term Incentive Plan provides that
Outside Directors of the Company shall automatically be granted an Award which
consists of restricted units of common stock, par value $.01 per share (“Common
Stock”), of the Company;

 

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

 

1.                                       Grant of Award; Restricted Stock Units.  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 an award of those Restricted Stock
Units specified in the Notice of Grant, subject to adjustment from time to time
as provided in Articles 12, 13 and 14 of the Long-Term Incentive Plan.  Each Restricted Stock Unit shall consist of
the right to receive, upon the Vesting Date (set forth in the Notice of Grant),
a share of Common Stock for each vested Restricted Stock Unit, which shall be delivered
by the Company to an account in the name of the Participant as promptly as
practicable following the Vesting Date.

 

2.                                       Vesting.  If the
Participant continuously provides services to the Company or a Subsidiary
through the Vesting Date, all of the Restricted Stock Units shall vest and the
Company shall  deliver one share of
Common Stock to an account in the Participant’s name for each vested Restricted
Stock Unit.

 

Notwithstanding
the vesting conditions set forth in the Notice of Grant, all of the Restricted
Stock Units shall vest upon the death of the Participant.

 

3.                                       Termination of Service.  In the event that the Participant incurs a
Termination of Service (as defined in the Long-Term Incentive Plan) before the
Vesting Date for any reason other than death, the unvested Restricted Stock
Units granted pursuant to this Agreement shall be forfeited.

 

4.                                       Stock Certificates.  Shares of Common Stock evidencing the
conversion of Restricted Stock Units into shares of Common Stock shall be delivered
to an account in the Participant’s name as of (or as promptly as practicable
after) the Vesting Date.  No stock
certificate or certificates shall be issued with respect to such shares of
Common Stock, unless, the Participant requests delivery of the certificate or
certificates by submitting a written request to the General Counsel requesting
deliver of the certificates.  Subject to Section 5
of this Award, the Company shall deliver the certificates requested by the
Participant to the Participant as soon as administratively practicable
following the Company’s receipt of such request. 

 

1

 

Upon registration (or 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 the Notice of Grant.

 

5.                                       Tax Withholding Obligations.  The Participant, as an Outside Director,
shall be solely responsible for withholding taxes or any necessary payments to
any taxing authority in connection with the award or settlement of the
Restricted Stock Units.  Notwithstanding
the foregoing, in the event the Participant is an Employee as of the Vesting
Date (and thus, is not longer an Outside Director), 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
under any federal, state, or local statute, ordinance, rule, or regulation in
connection with the award or settlement of the Restricted Stock Units.  Alternatively, the Company may, at its sole
election, 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 vesting or settlement of the Restricted Stock
Units.  The Company shall not deliver any
of the shares of Common Stock until and unless the Participant has made the
deposit required herein or proper provision for required withholding has been
made.

 

6.                                       Assignability. 
Until the Restricted Stock Units are vested as provided above, they may
not be sold, transferred, pledged, assigned, or otherwise alienated  other than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined by
the 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 Restricted Stock Units 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 Restricted Stock Units unless and until
shares of Common Stock evidencing the conversion of Restricted Stock Units into
shares of Common Stock have been delivered into an account in the Participant’s
name or certificates evidencing such 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, 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 shares of Common Stock have been delivered
to an account in the Participant’s name or 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.

 

2

 

9.                                       Restrictions and Related Representations. Upon the acquisition of any shares of Common Stock pursuant to the
vesting of the Restricted Stock Units 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, to the extent a
certificate or certificates are issued representing any shares, 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.

 

10.                                 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 by the Participant hereunder
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 shall be effective to bind any other person who shall acquire
rights hereunder.  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.

 

11.                                 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 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. Unless otherwise indicated,
defined terms herein shall have the meaning ascribed to them in the Long-Term
Incentive Plan.

 

12.                                 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.

 

13.                                 Adjustments for Changes in Capitalization.  The number of Restricted Stock Units covered
by this Award shall be subject to adjustment in accordance with Articles 12-14
of the Long-Term Incentive Plan.

 

14.                                 No Right to
Continue Services.  Neither the granting of the Restricted Stock
Units, the exercise of any part hereof, nor any provision of the Long-Term
Incentive Plan or this Award shall 

 

3

 

constitute or be evidence of
any understanding, express or implied, on the part of the Company or any
Subsidiary to continue the services of the Participant for any specified
period.

 

15.                                 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 Restricted Stock Units 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 Restricted Stock Units which are then subject to
restrictions as provided herein.

 

16.                                 Precondition
of Legality.  Notwithstanding anything to the contrary
contained herein, the Participant agrees that the Company will not be obligated
to issue any shares pursuant to this Award, if 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.

 

17.                                 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.

 

18.                                 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.

 

19.                                 Construction.  The
Restricted Stock Units are being issued pursuant to Section 6.6 and Section 7.1
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.

 

20.                                 Governing
Law.  The Restricted
Stock Unit grant and the provisions of this Award are governed by, and subject
to, the laws of the State of Delaware, as provided in the Long-Term Incentive
Plan.

 

4Exhibit 10.62

 

FOSSIL, INC.

 

STOCK OPTION AWARD AGREEMENT

International Terms and Conditions

For Non-US Optionees

 

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 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 stock 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 Articles 12-14 of the Long-Term Incentive Plan.

 

The grant of this Award to
the Optionee shall not confer any contractual or other right to such Optionee
(or any other Optionee) to be granted any Option or Award in the future, or
benefits in lieu of Options under the Long-Term Incentive Plan, even if options
have been granted repeatedly 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 and any Tax-Related Items (as defined in Paragraph
4 below) 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 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.                                       Tax
Withholding. Regardless of any action the Company or Optionee’s
employer (the “Employer”) takes with respect to any or all income tax
(including U.S. federal, state and local tax and/or non-U.S. tax), social
insurance, payroll tax, payment on account or other tax-related items related
to Optionee’s participation in the Long-Term Incentive Plan and legally
applicable to him or her (“Tax-Related Items”), Optionee acknowledges that the
ultimate liability for all Tax-Related Items is and remains Optionee’s responsibility
and may exceed the amount actually withheld by the Company and/or the
Employer.  Optionee further acknowledges
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, but not limited to, 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 and are under no obligation to structure the terms of the grant
or any aspect of the Option to reduce or eliminate Optionee’s liability for
Tax-Related Items or achieve any particular tax result.  Further, if Optionee has become subject to
tax in more than one jurisdiction between the Grant Date and the date of any
relevant taxable event, Optionee acknowledges that the Company and/or the
Employer (or former employer, as applicable) may be required to withhold or
account for Tax-Related Items in more than one jurisdiction.

 

Prior to any relevant
taxable event or tax withholding event, Optionee will pay or make adequate
arrangements satisfactory to the Company and/or the Employer to satisfy all
Tax-Related Items.  In this regard,
Optionee authorizes the Company and/or the Employer, or their respective
agents, at their discretion, to satisfy the obligations with regard to all
Tax-Related Items by one or a combination of the following: (1) withholding
from Optionee’s wages or other cash compensation paid to Optionee by the
Company and/or the Employer; (2) withholding from proceeds of the sale of
shares of Common Stock acquired upon exercise of the Option either through a
voluntary sale or through a mandatory sale arranged by the Company (on Optionee’s
behalf pursuant to this authorization); (3) withholding from cash received
from the Optionee in the form of cash, check or money order; or (4) withholding
in shares of Common Stock to be delivered upon exercise of the Option.  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.

 

To avoid negative accounting
treatment, the Company may withhold or account for Tax-Related Items by
considering applicable minimum statutory withholding amounts or other
applicable withholding rates.  If the
obligation for Tax-Related Items is satisfied by withholding in shares of
Common Stock, for tax purposes, Optionee is deemed to have been issued the full
number of shares of Common Stock subject to the Option, notwithstanding that a
number of the shares of Common Stock is held back solely for the purpose of
paying the Tax-Related Items due as a result of any aspect of Optionee’s
participation in the Long-Term Incentive Plan.

 

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 or account for 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 issue or
deliver the shares of Common Stock or the proceeds of the sale of shares of 

 

 

Common
Stock if Optionee fails to comply with his or her obligations in connection
with the Tax-Related Items.

 

5.                                       Nature
of Grant. In accepting the grant, Optionee acknowledges,
understands and agrees 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;

 

(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 Committee;

 

(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;

 

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

 

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

 

(g)                                 the Option and
the Option Shares are not intended to replace any pension rights or
compensation;

 

(h)                                 the Option and
the Option Shares are not part of normal or expected compensation or salary for
any purposes, including, but not limited to, calculating any severance,
resignation, termination, redundancy, dismissal, end of service payments,
bonuses, long-service awards, pension, retirement or welfare 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, the Employer or any
Subsidiary or Affiliate of the Company;

 

(i)                                     the Option
grant and Optionee’s participation in the Long-Term Incentive Plan will not be
interpreted to form an employment contract or relationship with the Company,
the Employer or any Subsidiary or Affiliate of the Company;

 

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

 

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

 

(l)                                     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;

 

(m)                               no claim or
entitlement to compensation or damages shall arise from the forfeiture of the
Option resulting from Termination of Service by the Company or the Employer
(for any 

 

 

reason
whatsoever and whether or not in breach of local labor laws) and in
consideration of the Option grant to which Optionee is otherwise not entitled,
Optionee irrevocably agrees never to institute any claim against the Company
and/or the Employer, waives Optionee’s ability, if any, to bring any such
claim, and releases the Company and/or the Employer from any such claim; if,
notwithstanding the foregoing, any such claim is allowed by a court of
competent jurisdiction, then, by participating in the Plan, Optionee shall be
deemed irrevocably to have agreed not to pursue such claim and agree to execute
any and all documents necessary to request dismissal or withdrawal of such
claims;

 

(n) in the event that
the Optionee ceases to be actively employed by the Company, the Employer or any
Subsidiary of the Company (whether or not in breach of local labor laws),
Optionee’s right to vest in the Option under the Long-Term Incentive Plan, if any,
will 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 would
not include a period of “garden leave” or similar period pursuant to local
law); the Committee shall have the exclusive discretion to determine when
Optionee is no longer actively employed for purposes of the Option grant; and

 

(o) the Option and the
benefits under the Long-Term Incentive Plan, if any, will not automatically
transfer to another company in the case of a merger, take-over or transfer of
liability.

 

6.                                       No
Advice Regarding Grant.  Optionee
acknowledges that the Company is not providing any tax, legal or financial
advice, or making any recommendations regarding Optionee’s participation in the
Long-Term Incentive Plan, or Optionee’s acquisition or sale of the underlying
shares of Common Stock.  Optionee is
hereby advised to consult with his or her own personal tax, legal and financial
advisors regarding participation in the Long-Term Incentive Plan before taking
any action related to the Long-Term Incentive Plan.

 

7.                                      Data Privacy. The 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 Agreement and any
other Option grant materials by and among, as applicable, the Employer, and the
Company and its Subsidiaries and Affiliates for the exclusive purpose of
implementing, administering and managing the Optionee’s participation in the
Long-Term Incentive Plan.

 

The 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 exclusive 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 Company and any other
possible recipients which may assist the Company (presently or in the future)
with implementing, administering and managing the Long-Term Incentive Plan 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.

 

8.                                       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. 
The Committee shall have the exclusive discretion to determine when the
Optionee is no longer actively employed for purposes of the Option grant.

 

9.                                       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 Section 16.7 of the Long-Term
Incentive Plan during the 12-month period beginning on such date but shall
terminate at the end of such period.

 

10.                                 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.

 

11.                                 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
Optionee requests delivery of the certificate or certificates by submitting a
written request to the General 

 

 

Counsel
requesting deliver of the certificates. 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.

 

12.                                 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.

 

13.                                 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.

 

14.                                 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 current or future participation in the Long-Term Incentive Plan or to
request Optionee’s consent to participate in the Long-Term Incentive Plan by
electronic means. Optionee hereby consents to receive such documents by
electronic delivery and 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 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.

 

15.                                 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 10 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.

 

16.                                 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.

 

17.                                 Adjustments
for Changes in Capitalization. The number of shares
subject to this Award and the price per share set forth in the Award Letter
shall be subject to adjustment in accordance with the provisions of Articles
12-14 of the Long-Term Incentive Plan.

 

18.                                 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.

 

19.                                 Governing
Law. The Option grant and the provisions of this Agreement are governed by,
and subject to, the laws of the State of Delaware in the United States of
America, without regard to the conflict of laws provisions, as provided in the
Long-Term Incentive Plan.

 

For purposes of litigating
any dispute that arises under this Option or this Agreement, the parties hereby
submit to and consent to the jurisdiction of the State of Delaware, and agree
that such litigation shall be conducted in the courts of New Castle County in
the State of Delaware, or the federal courts of the United States of America
for the District of Delaware, where this grant is made and/or to be performed,
and no other courts.

 

20.                                 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 Optionee for any
specified period.

 

21.                                 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.

 

22.                                 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.

 

 

23.                                 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 meaning of the translated version is different than the English version,
the English version will control.

 

24.                                 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.

 

25.                                 Construction. The Option is
being granted pursuant to Article 6 of the Long-Term Incentive Plan and is
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.

 

26.                                 Appendix
A.  The Option grant shall be
subject to any special terms and conditions for Optionee’s country of residence
set forth in Appendix A, if any. 
Moreover, if Optionee relocates to one of the countries included in
Appendix A during the Option Period, the special terms and conditions for such
country will apply to Optionee, to the extent the Company determines in its
sole discretion that the application of such terms and conditions is necessary
or advisable in order to comply with local law or facilitate the administration
of the Long-Term Incentive Plan. 
Appendix A constitutes part of this Agreement.

 

27.                                 Imposition
of Other Requirements.  The
Company reserves the right to impose other requirements on Optionee’s
participation in the Long-Term Incentive Plan, on the Option and on any shares
of Common Stock acquired under the Long-Term Incentive Plan, to the extent the
Company determines in its sole discretion that it is necessary or advisable
(including, but not limited to, in order to comply with local law or facilitate
the administration of the Long-Term Incentive Plan), and to require Optionee to
sign any additional agreements or undertakings that may be necessary to
accomplish the foregoing.

 

*                                         *                                         *

 

 

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 that govern the Options granted to the
Optionee if he or she resides in one of the countries listed below.  This Appendix A is part of the
Agreement.  Unless otherwise provided
below, capitalized terms used but not defined herein shall have the same
meanings assigned to them in the Long-Term Incentive Plan, the Agreement and
the Award Letter.

 

This Appendix A also includes information regarding
exchange controls and certain other tax or legal issues of which the Optionee
should be aware with respect to his or her participation in the Long-Term
Incentive Plan.  The information is based
on the securities, exchange control and other laws in effect in the respective
countries as of March 2009.  Such
laws are often complex and change frequently. 
As a result, the Company strongly recommends that the Optionee not rely
on the information in this Appendix A as the only source of information
relating to the consequences of his or her participation in the Long-Term
Incentive Plan because the information may be out of date at the time that he
or she exercises the Option or sells shares of Common Stock acquired pursuant
to the exercise of the Option.

 

In addition, the information contained herein is
general in nature and may not apply to the Optionee’s particular situation, and
the Company is not in a position to assure the Optionee of a particular
result.  Accordingly, the Optionee is
advised to seek appropriate professional advice as to how the relevant laws in
his or her country may apply to his or her situation.

 

Finally, if the Optionee is a citizen or resident of
a country other than the one in which he or she is currently residing, the
information contained herein may not be applicable to him or her.

 

Australia

 

Exercise Restriction

 

The Optionee may not exercise
vested Options unless and until the Fair Market Value of the shares of Common
Stock underlying the vested Options on the date of exercise equals or exceeds
the exercise price for the Options.

 

Option Period

 

Notwithstanding anything to the
contrary in Paragraph 2 of the Agreement, the Option Period for the Options granted
pursuant to the Agreement shall be the seven-year period beginning on the Grant
Date specified in the Award Letter.

 

Securities Law Notice

 

If the Optionee exercises the
Option and subsequently offers the shares of Common Stock acquired upon
exercise for sale to a person or entity resident in Australia, the offer may be
subject to disclosure requirements under Australian law.  The Optionee should obtain legal advice
regarding any applicable disclosure obligations prior to making any such offer.

 

 

Austria

 

Consumer
Protection Information

 

The
Optionee may be entitled to revoke acceptance of the Agreement on the basis of
the Austrian Consumer Protection Act (the “Act”) under the conditions listed
below, if the Act is considered to be applicable to the Agreement and the Plan:

 

(i)  The revocation must be
made within one (1) week after acceptance of the Agreement.

 

(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 which can be understood as a refusal to conclude
or honor the Agreement, provided the revocation is sent within the period
discussed above.

 

Exchange
Control Notification

 

If the
Optionee holds shares of Common Stock acquired under the Plan outside of
Austria, the Optionee must submit a report to the Austrian National Bank.  An exemption applies if the value of the
Option Shares as of any given quarter does not exceed €30,000,000 or as of December 31
does not exceed €5,000,000.  If the
former threshold is exceeded, quarterly obligations are imposed, whereas if the
latter threshold is exceeded, annual reports must be given.  The annual reporting date is December 31
and the deadline for filing the annual report is March 31 of the following
year.

 

When the Optionee sells shares of
Common Stock acquired under the Plan, there may be exchange control obligations
if the cash proceeds are held outside of Austria.  If the transaction volume of all accounts
abroad exceeds €3,000,000, the movements and balances of all accounts must be
reported monthly, as of the last day of the month, on or before the fifteenth
day of the following month, on the prescribed form (Meldungen SI-Forderungen und/oder SI-Verpflichtungen).

 

Belgium

 

Tax Considerations

 

The Option is deemed rejected for
Belgian tax purposes if the Optionee does not accept the Option within 60 days
of the offer.  The Optionee will receive
a separate offer letter, acceptance form and undertaking form in addition to
the Agreement.  He or she should refer to
the offer letter for a more detailed description of the tax consequences of
choosing to accept the Option.  The
Optionee should consult a personal tax advisor with respect to the acceptance
of the Option.

 

Tax Reporting

 

The Optionee is required to
report any taxable income attributable to the Option on his or her annual tax
return.  In addition, the Optionee is
also required to report any bank accounts opened and maintained outside Belgium
on his or her annual tax return.

 

 

Canada

 

Method of
Exercise

 

The Optionee is prohibited
from tendering shares of Common Stock that the Optionee already owns or from
attesting to the ownership of shares of Common Stock to pay the exercise price
or any Tax-Related Items in connection with the Option.

 

Termination in Event of Nonemployment

 

The following section replaces Paragraph 8 the
Agreement:

 

In the event of that the Optionee
ceases to be actively employed by the Company, the Employer or any of
Subsidiary of the Company (whether or not in breach of local labor laws) during
the Option Period for any reason other than death, the Options granted pursuant
to the Agreement and the Optionee’s right to vest in this Option, if any, will
terminate effective as of the date that is the earlier of:  (1) the date the Optionee receives
notice of termination of employment from the Company or the Employer, or (2) the
date the Optionee is no longer actively employed by the Company or the Employer
regardless of any notice period or period of pay in lieu of such notice
required under local law (including, but not limited to, statutory law,
regulatory law and/or common law); the Committee shall have the exclusive
discretion to determine when the Optionee is no longer actively employed for
purposes of the Option grant.

 

Data Privacy

 

The following section supplements Paragraph 7 of the
Agreement:

 

The Optionee hereby authorizes
the Company and the Company’s representatives to discuss and obtain all
relevant information from all personnel, professional or non-professional,
involved in the administration of the Long-Term Incentive Plan.  The Optionee further authorizes the Employer,
the Company, and its Subsidiaries to disclose and discuss such information with
their advisors.  The Optionee also
authorizes the Employer, Company and its Subsidiaries to record such
information and to keep such information in the Optionee’s employee file.

 

China

 

Method of Exercise

 

The following section replaces Paragraph 3 of the
Agreement:

 

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 the full amount of the exercise price and any Tax-Related Items
(as defined in Paragraph 4 below) solely by means of a cashless exercise
procedure through the use of a brokerage arrangement approved by the
Company.  To the extent that regulatory
requirements change, the Company 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.  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.

 

 

The Optionee understands that the
Employer is not a party to the Long-Term Incentive  Plan, and thus, it is not required to make any payments to the Optionee
or on the Optionee’s behalf under the Long-Term Incentive Plan.

 

Exchange Control Information for Optionees who are
Residents of the People’s Republic of China

 

The Optionee understands and
agrees that, due to exchange control laws in China, the Optionee may be
required to immediately repatriate the proceeds from the cashless exercise to
China.  The Optionee further understands
that such repatriation of the proceeds may need to be effected through a
special exchange control account established by the Employer, the Company or
any of its Subsidiaries in China and the Optionee hereby consents and agrees
that the proceeds from the cashless exercise may be transferred to such special
account prior to being delivered to the Optionee’s personal account.

 

France

 

Language Consent

 

By accepting the Option, the Optionee confirms
having read and understood the Long-Term Incentive Plan and Agreement,
including all terms and conditions included therein, which were provided in the
English language.  The Optionee accepts
the terms of those documents accordingly.

 

En acceptant cette Option, le
Optionee confirme avoir lu et compris le Plan et le Contrat y relatifs,
incluant tous leurs termes et conditions, qui ont été transmis en langue
anglaise.  Le Optionee accepte les
dispositions de ces documents en connaissance de cause.

 

Exchange Control Information

 

If the Optionee maintains a foreign bank account, he
or she is required to report such to the French tax authorities when filing his
or her annual tax return.

 

Germany

 

No special provisions.

 

Hong
Kong

 

Securities Law Notice

 

The Option grant and the
shares of Common Stock to be issued pursuant to the exercise of the Option is
not a public offer of securities and is available only for employees of the
Company or any of its Subsidiaries participating in the Long-Term Incentive
Plan.

 

Please note that the Award
Letter, the Agreement, this Appendix A, the Long-Term Incentive Plan and any
other Option grant documents have not been reviewed by any regulatory authority
in Hong Kong.  The Optionee is cautioned
to review the documents related to the Option carefully as it may not include
the same information as an offer made by a Hong Kong issuer.  If the Optionee is in any doubt about the
contents of the Award Letter, the Agreement, this Appendix A, the Long-Term
Incentive Plan and any other Option grant documents, the Optionee should obtain
independent legal advice.

 

 

India

 

Method of
Exercise

 

The
following section supplements Paragraph 3 of the Agreement:

 

Due to
exchange control restrictions in India, payment of the exercise price and any
Tax-Related Items (as defined in Paragraph 4) may not be made by means of a
cashless sell-to-cover exercise procedure, whereby the Optionee delivers a
written notice of exercise to the Secretary of the Company together with
irrevocable instructions to the broker approved by the Company to sell some
(but not all) of the Option Shares with respect to which Options are being
exercised and deliver promptly to the Company the amount of sale proceeds to
pay the exercise price and any Tax-Related Items (as defined in Paragraph
4).  However, payment of the exercise
price may be made by a cashless sell-all exercise, whereby the Optionee
delivers a a written notice of exercise to the Secretary of the Company
together with irrevocable instructions to a broker approved by the Company to
sell all of the Option Shares with respect to which Options are being exercised
and deliver promptly to the Company the amount of sale proceeds to pay the
exercise price and any Tax-Related Items (as defined in Paragraph 4), as well
as by any other method of payment set forth in Paragraph 3 of the Agreement.  To the extent that regulatory requirements
change, the Company reserves the right to permit the cashless sell-to-cover
method of exercise.

 

Exchange Control Notification

 

If the Optionee remits funds out
of India to purchase shares of Common Stock, it is the Optionee’s
responsibility to comply with applicable exchange control laws.  Regardless of what method of exercise is used
to purchase Option Shares, the Optionee must repatriate the proceeds from the
sale of Option Shares and any dividends received in relation to the Option
Shares to India within 90 days after receipt. 
The Optionee must maintain the foreign inward remittance certificate
received from the bank where the foreign currency is deposited in the event
that the Reserve Bank of India or the Employer requests proof of repatriation.

 

Italy

 

Method of Exercise

 

The
following section replaces Paragraph 3 of the Agreement:

 

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 the full amount of the exercise price and any
Tax-Related Items (as defined in Paragraph 4 below) solely by means of a
cashless sell-all exercise procedure through the use of a brokerage arrangement
approved by the Company.  To the extent
that regulatory requirements change, the Company 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.  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.

 

 

Exchange Controls

 

Optionees must report on their annual tax return: (i) any
transfer of cash or shares of Common Stock to or from Italy exceeding €10,000
or the equivalent amount in U.S. dollars; and (ii) any foreign investment
or investments held outside of Italy (including proceeds from the sale of
shares of Common Stock in a cashless-sell all exercise of Options) exceeding
€10,000 or the equivalent amount in U.S. dollars , if such investment may give
rise to income in Italy.  The Optionee is
exempt from the formalities in (i) if the investments are made through an
authorized broker resident in Italy, as the broker will comply with reporting
obligation on the Optionee’s behalf.

 

Plan Document Acknowledgement

 

By accepting the Option grant, the Optionee
acknowledges that he or she has received a copy of the Long-Term Incentive
Plan, has review the Long-Term Incentive Plan and the Agreement in their
entirety and fully understands and accepts all provisions of the Long-Term
Incentive 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: Tax Withholding; Paragraph 5: Nature of Grant;
Paragraph 6: No Advice Regarding Grant; Paragraph 8: Termination in Event of
Nonemployment; Paragraph 10: Assignability; Paragraph 14: Notices and
Electronic Delivery; Paragraph 19: Governing Law; Paragraph 20: No Right of
Employment; Paragraph 22: Incorporation of Long-Term Incentive Plan; Paragraph
23: Language; Paragraph 25: Construction; Paragraph 26: Appendix A; Paragraph
27: Imposition of Other Requirements; and the Data Privacy Consent below.

 

Data Privacy
Consent

 

Notwithstanding
Paragraph 7 or any other provision of the Agreement, the Optionee agrees that
the following shall apply with regard to data privacy in Italy:

 

The 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 the Optionee’s participation in the Long-Term
Incentive Plan.

 

The Optionee
understands that the Employer, the Company and any of its Subsidiaries may hold
certain personal information about the Optionee, including, the 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 Common Stock awarded, canceled, exercised, vested,
unvested or outstanding in the Optionee’s favor, for the exclusive purpose of
managing and administering the Long-Term Incentive Plan (“Data”).

 

The Optionee also
understands that providing the Company with the Optionee’s Data is necessary
for the performance of the Long-Term Incentive Plan and that the Optionee’s
denial to provide such Data would make it impossible for the Company to perform
its contractual obligations and may affect the Optionee’s ability to
participate in the Long-Term Incentive 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 1-36100 Vicenza, Italia.  The Optionee understands that the 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 Long-Term
Incentive Plan.  The 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 the Optionee’s participation in the Long-Term Incentive 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 Long-Term Incentive Plan, including any requisite transfer to
Citi Smith Barney or another third party with whom the Optionee may elect to
deposit any shares of Common Stock acquired under the Long-Term Incentive 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 the Optionee’s participation in the Long-Term Incentive Plan.  The Optionee understands that these
recipients may be located in the European Economic Area, or elsewhere, such as
the United States or Asia.  Should the
Company exercise its discretion in suspending all necessary legal obligations
connected with the management and administration of the Long-Term Incentive
Plan, it will delete the Optionee’s Data as soon as it has accomplished all the
necessary legal obligations connected with the management and administration of
the Long-Term Incentive Plan.

 

The 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 the Optionee’s Data abroad,
including outside of the European Union, as herein specified and pursuant to
applicable laws and regulations, does not require the Optionee’s consent
thereto as the processing is necessary to performance of contractual
obligations related to implementation, administration and management of the
Long-Term Incentive Plan.  The Optionee
understands that, pursuant to Section 7 of the Legislative Decree no.
196/2003, the Optionee has the right to, including, but not limited to, access,
delete, update, ask for rectification of the Optionee’s Data and estop, for
legitimate reason, the Data processing. 
Furthermore, the Optionee is aware that the 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 the Optionee’s
local human resources department.

 

Japan

 

No special provisions.

 

Korea

 

Exchange Control Notification

 

If the Optionee remits funds out of Korea to
purchase shares of Common Stock under the Plan, the remittance must be “confirmed”
by a foreign exchange bank in Korea. 
This is an automatic procedure, i.e.,
the bank does not need to “approve” the remittance, and it should take no more
than a single day to process.  The
following supporting documents evidencing the nature of the remittance must be
submitted to the bank together with the confirmation application: (i) the
Agreement; (ii) the Plan; (iii) a document evidencing the type of
shares to be acquired and the amount (e.g.,
the Award Letter); and (iv) the Optionee’s certificate of employment.  This confirmation is not necessary for
broker-assisted cashless same-day sale since there is no remittance out of
Korea.

 

 

Additionally, exchange control laws require Korean
residents who realize US$500,000 or more from the sale of shares of Common
Stock to repatriate the proceeds to Korea within 18 months of the sale.

 

Mexico

 

Labor Law Acknowledgement and Policy Statement

 

By accepting the Option, the Optionee acknowledges
that the Company, with registered offices at 2280 N. Greenville Ave.,
Richardson, Texas 75082, United States of America, is solely responsible for
the administration of the Long-Term Incentive Plan.  The Optionee further acknowledges that his or
her participation in the Long-Term Incentive Plan, the grant of the Option and
any acquisition of shares of Common Stock under the Long-Term Incentive Plan do
not constitute an employment relationship between the Optionee and the Company
because the Optionee is participating in the Long-Term Incentive Plan on a
wholly commercial basis and his or her sole employer is Servicios Fossil
Mexico, S.A. de C.V. (“Fossil Mexico”), located at Calle IV #1214, 3rd Piso, Col. San Jéronimo, Monterrey, Nuevo
Léon, Mexico 64640.  Based on the foregoing,
the Optionee expressly acknowledges that the Long-Term Incentive Plan and the
benefits that he or she may derive from participation in the Long-Term
Incentive Plan do not establish any rights between the Optionee and his or her
employer, Fossil Mexico, and do not form part of the employment conditions
and/or benefits provided by Fossil Mexico, and any modification of the
Long-Term Incentive Plan or its termination shall not constitute a change or
impairment of the terms and conditions of the Optionee’s employment.

 

The Optionee further understands that his or her
participation in the Long-Term Incentive Plan is the result of a unilateral and
discretionary decision of the Company; therefore, the Company reserves the
absolute right to amend and/or discontinue the Optionee’s participation in the
Long-Term Incentive Plan at any time, without any liability to the Optionee.

 

Finally, the Optionee hereby declares that he or she
does not reserve to himself or herself any action or right to bring any claim
against the Company for any compensation or damages regarding any provision of
the Long-Term Incentive Plan or the benefits derived under the Long-Term
Incentive Plan, and that he or she therefore grants a full and broad release to
the Company, its Subsidiaries, branches, representation offices, shareholders,
officers, agents or legal representatives, with respect to any claim that may
arise.

 

Spanish
Translation

 

Reconocimiento de la Ley Laboral y Declaración de la Política

 

Al aceptar la Opción,
el titular del derecho a la Opción reconoce que la Compañía, con domicilio
social registrado localizado en 2280 N.
Greenville Ave., Richardson, Texas 75082, en los Estados Unidos de América, es el único responsable de la
administración del Plan de Incentivos a Largo Plazo.  Además, el titular del derecho a la Opción
acepta que su participación en el Plan de Incentivos a Largo Plazo, la
concesión la Opción y cualquier adquisición de acciones en el marco del Plan de
Incentivos a Largo Plazo no constituyen una relación laboral entre el titular
del derecho a la Opción y la Compañía porque el titular del derecho a la Opción
está participando en el Plan de Incentivos a Largo Plazo en su totalidad sobre
una base comercial y su único empleador es Servicios Fossil Mexico, S.A. de C.V. (“Fossil Mexico”), ubicado en Calle
IV #1214, 3rd Piso, Col. San Jerónimo, Monterrey, Nuevo
León, México 64640.  Derivado de lo anterior, el titular del
derecho a la Opción reconoce expresamente que el Plan de Incentivos a Largo
Plazo y los beneficios que pudieran derivar a su favor de la participación en
el Plan de Incentivos a Largo Plazo no establece ningún derecho entre el
titular del derecho a la Opción y su Empleador, Fossil Mexico y que no forman
parte de las condiciones de empleo ni / o prestaciones previstas por Fossil
Mexico y cualquier modificación del Plan de Incentivos a Largo Plazo o la

 

 

terminación del mismo
no constituirá un cambio o deterioro de los términos y condiciones de empleo
del titular del derecho a la Opción.

 

Además, el titular
del derecho a la Opción comprende que su participación en el Plan de Incentivos
a Largo Plazo es el resultado de una decisión discrecional y unilateral de la
Compañía, por lo que dicha Compañía se reserva el derecho absoluto a modificar
y / o discontinuar la participación del titular del derecho a la Opción en el
Plan de Incentivos a Largo Plazo en cualquier momento, sin responsabilidad
alguna para con el titular del derecho a la Opción.

 

Finalmente, el
titular del derecho a la Opción manifiesta que no se reserva ninguna acción o
derecho que origine una demanda en contra de la Compañía, por cualquier
compensación o daños y perjuicios en relación con cualquier disposición del
Plan de Incentivos a Largo Plazo o de los beneficios derivados del mismo, y en
consecuencia el titular del derecho a la Opción exime amplia y completamente de
toda responsabilidad a la Compañía, sus Subsidiarias, sucursales, oficinas de
representación, accionistas, administradores, agentes o representantes legales,
con respecto a cualquier demanda que pudiera surgir.

 

Netherlands

 

Notification For Dutch
Optionees

 

The Optionee has been granted Options under the
Long-Term Incentive Plan, pursuant to which the Optionee may acquire shares of
the Company’s shares of Common Stock. 
The Optionees that are residents of the Netherlands should be aware of
the Dutch insider trading rules, which may impact the sale of such shares of
Common Stock 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 before
taking any action.  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 Long-Term Incentive 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.

 

New Zealand

 

No special provisions.

 

Norway

 

No special provisions.

 

Singapore

 

Securities Law Notification

 

The grant of Options under the Long-Term Incentive
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 the Optionees 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,
regardless of whether the Optionee is a Singapore resident or employed in
Singapore. Among these requirements is an obligation to notify the Singapore
Subsidiary in writing when the Optionee receives an interest (e.g., Options, shares of Common Stock) in
the Company or any related companies.  In
addition, the Optionee must notify the Singapore Subsidiary or affiliate when
the Optionee sells shares of Common Stock of the Company or any related company
(including when the Optionee sells shares of Common Stock acquired under the
Long-Term Incentive Plan). 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,
associate director or shadow director.

 

Spain

 

Labor Law Acknowledgment

 

This provision supplements Paragraph 5 of the
Agreement:

 

In accepting the Option grant, the Optionee acknowledges
that he or she consents to participation in the Long-Term Incentive Plan and
has received a copy of the Long-Term Incentive Plan and the Agreement.

 

The Optionee understands that the Company has
unilaterally, gratuitously and discretionally decided to grant Options under
the Long-Term Incentive Plan to individuals who may be employees of the Company
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 the Company or any of its

 

 

Subsidiaries on an ongoing basis.
Consequently, the Optionee understands that the Option are granted on the
assumption and condition that the Options and the shares of Common Stock
acquired upon exercise shall not become a part of any employment contract
(either with the Company 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.

 

Exchange Control Notification

 

To participate in the Long-Term Incentive Plan, the
Optionee must comply with exchange control regulations in Spain.  The purchase of shares of Common Stock under
the Long-Term Incentive Plan must be declared for statistical purposes to the
Spanish Dirección General de Política Comercial e Inversiones Exteriores (the “DGPCIE”)
(i.e., the Bureau for Commercial
Policy and Foreign Investments, which is a department of the Ministry of the
Economy).  If the Optionee purchases the
shares of Common Stock through the use of a Spanish financial institution, that
institution will automatically make the declaration to the DGPCIE for the
Optionee.  Otherwise, the Optionee must
make the declaration himself or herself by filing a form with the DGPCIE.

 

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 financial institution with the following information: (i) the
Optionee’s name, address, and fiscal identification number; (ii) the name
and corporate domicile of the Company (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 Long-Term Incentive
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 DGPCIE.

 

Securities Law Notification

 

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

 

Securities Law Notification

 

The Option grant is considered a
private offering in Switzerland and is, therefore, not subject to registration
in Switzerland.

 

 

Taiwan

 

Exchange
Control Notification

 

The
Optionee may acquire and remit foreign currency (including proceeds from the
sale of shares of Common Stock) up to US$5,000,000 per year without
justification.

 

If the transaction amount is
TWD500,000 or more in a single transaction, the Optionee must submit a Foreign
Exchange Transaction Form.  If the
transaction amount is US$500,000 or more in a single transaction, the Optionee
must also provide supporting documentation to the satisfaction of the remitting
bank.

 

United Kingdom

 

Tax Withholding Obligations

 

The following supplements Paragraph 4 of the
Agreement:

 

If payment or withholding of the Tax-Related Items
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 as of the Due Date. the Optionee agrees that the loan
will bear interest at the then current official rate of HM Revenue and Customs
(“HMRC”), it will be immediately due and repayable, and the Company or the
Employer may recover it at any time thereafter by any of the means referred to
in Paragraph 4 of the Agreement. 
Notwithstanding the foregoing, if the Optionee is a director or
executive officer of the Company (within the meaning of Section 13(k) of
the U.S. Securities and Exchange Act of 1934, as amended), he or she shall not
be eligible for a loan from the Company to cover the Tax-Related Items.  In the event that the Optionee is a director
or executive officer and Tax-Related Items are not collected from or paid by
him or her by the Due Date, the amount of any uncollected Tax-Related Items
will constitute a benefit to the Optionee on which additional income tax and
national insurance contributions (“NICs”) will be payable.  The Optionee will be responsible for
reporting any income tax and NICs due on this additional benefit directly to
HMRC under the self-assessment regime. 
The Optionee agrees that the Company and/or the Employer may collect any
income tax and NICs due on this additional benefit from the Optionee by any of
the means set forth in Paragraph 4 of the Agreement.

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