<SEC-DOCUMENT>0001193125-11-146552.txt : 20110520
<SEC-HEADER>0001193125-11-146552.hdr.sgml : 20110520
<ACCEPTANCE-DATETIME>20110520154437
ACCESSION NUMBER:		0001193125-11-146552
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20110520
ITEM INFORMATION:		Other Events
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20110520
DATE AS OF CHANGE:		20110520

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			FOSSIL INC
		CENTRAL INDEX KEY:			0000883569
		STANDARD INDUSTRIAL CLASSIFICATION:	WATCHES, CLOCKS, CLOCKWORK OPERATED DEVICES/PARTS [3873]
		IRS NUMBER:				752018505
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-19848
		FILM NUMBER:		11861467

	BUSINESS ADDRESS:	
		STREET 1:		2280 NORTH GREENVILLE AVE
		CITY:			RICHARDSON
		STATE:			TX
		ZIP:			75082
		BUSINESS PHONE:		9722342525

	MAIL ADDRESS:	
		STREET 1:		2280 N GREENVILLE
		CITY:			RICHARDSON
		STATE:			TX
		ZIP:			75082
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>d8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML><HEAD>
<TITLE>Form 8-K</TITLE>
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 <P STYLE="line-height:0px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P>
<P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="margin-top:4px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>UNITED STATES </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>SECURITIES AND EXCHANGE COMMISSION </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="3"><B>Washington, D.C. 20549 </B></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>FORM 8-K
</B></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="4"><B>CURRENT REPORT </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="3"><B>Pursuant to Section&nbsp;13 or 15(d) of the </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B>Securities Exchange Act of
1934 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B>Date of Report (Date of earliest event reported): May&nbsp;20, 2011 </B></FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="6"><B>FOSSIL, INC. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(Exact name of registrant as specified in its charter) </B></FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Delaware</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>0-19848</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>75-2018505</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(State or other jurisdiction</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>of incorporation)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(Commission</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>File Number)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(IRS Employer</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>Identification No.)</B></FONT></P></TD></TR>
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<TD VALIGN="top" COLSPAN="3" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2280 N. Greenville Avenue</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Richardson, Texas</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>75082</B></FONT></TD></TR>
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<TD VALIGN="top" COLSPAN="3" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(Address of principal executive offices)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(Zip Code)</B></FONT></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Registrant&#146;s telephone number, including area code: (972)&nbsp;234-2525 </B></FONT></P>
<P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(Former name or former address, if changed since last report) </B></FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </FONT></TD></TR></TABLE>
<P STYLE="font-size:8px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="line-height:0px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P>
<P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;8.01 Other Events. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">As previously announced, in 2006, three shareholder derivative lawsuits were filed in the United States District Court for the Northern District of Texas, Dallas Division (the &#147;Court&#148;), naming
Fossil, Inc. (the &#147;Company&#148;) as a nominal defendant and naming all of its then current directors and certain of its current and former officers and directors as defendants. In May 2011, a Stipulation and Agreement of Settlement was filed
with the Court. The Stipulation and Agreement of Settlement was given preliminary approval by the Court on May&nbsp;9, 2011, and on May&nbsp;10, 2011, the Court issued an order preliminarily approving the derivative settlement and providing for
notice (the &#147;Order&#148;). Pursuant to the terms of the Order, the Company is filing the Notice of Proposed Settlement of Shareholder Derivative Action and the Stipulation and Agreement of Settlement as Exhibits 99.1 and 99.2, respectively, to
this Current Report on Form 8-K. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;9.01 Financial Statements and Exhibits. </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>(d) Exhibits.</I> </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="bottom" NOWRAP ALIGN="center"> <P STYLE="border-bottom:1px solid #000000;width:25pt" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Exhibit<BR>No.</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP> <P STYLE="border-bottom:1px solid #000000;width:75pt"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Description of Exhibit</B></FONT></P></TD></TR>
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<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">99.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Notice of Proposed Settlement of Shareholder Derivative Action</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">99.2</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Stipulation and Agreement of Settlement</FONT></TD></TR></TABLE>

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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SIGNATURES </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dated: May&nbsp;20, 2011 </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>FOSSIL, INC.</B></FONT></TD></TR>
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<TD HEIGHT="16" COLSPAN="2"></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Mike L. Kovar</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Mike L. Kovar</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Executive Vice President and Chief Financial Officer</FONT></TD></TR></TABLE></DIV>

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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>EXHIBIT INDEX </B></FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="bottom" NOWRAP ALIGN="center"> <P STYLE="border-bottom:1px solid #000000;width:25pt" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Exhibit<BR>No.</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP> <P STYLE="border-bottom:1px solid #000000;width:75pt"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Description of Exhibit</B></FONT></P></TD></TR>
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<TD HEIGHT="8" COLSPAN="2"></TD></TR>
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<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">99.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Notice of Proposed Settlement of Shareholder Derivative Action</FONT></TD></TR>
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<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
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<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">99.2</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Stipulation and Agreement of Settlement</FONT></TD></TR></TABLE>
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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>dex991.htm
<DESCRIPTION>NOTICE OF PROPOSED SETTLEMENT OF SHAREHOLDER DERIVATIVE ACTION
<TEXT>
<HTML><HEAD>
<TITLE>Notice of Proposed Settlement of Shareholder Derivative Action</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 99.1 </B></FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>TO:</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ALL CURRENT RECORD HOLDERS AND BENEFICIAL OWNERS OF COMMON STOCK OF FOSSIL, INC. (&#147;FOSSIL&#148; OR THE &#147;COMPANY&#148;) AS OF MAY 4, 2011 (THE &#147;RECORD
DATE&#148;) (&#147;CURRENT FOSSIL SHAREHOLDERS&#148;) </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>PLEASE READ THIS NOTICE CAREFULLY AND IN ITS
ENTIRETY. THIS NOTICE RELATES TO A PROPOSED SETTLEMENT AND DISMISSAL OF THE ABOVE-CAPTIONED SHAREHOLDER DERIVATIVE ACTION AND CONTAINS IMPORTANT INFORMATION REGARDING YOUR RIGHTS. YOUR RIGHTS MAY BE AFFECTED BY THESE LEGAL PROCEEDINGS. IF THE COURT
APPROVES THE SETTLEMENT, YOU WILL BE FOREVER BARRED FROM CONTESTING THE APPROVAL OF THE PROPOSED SETTLEMENT AND FROM PURSUING THE RELEASED CLAIMS. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>IF YOU HOLD FOSSIL COMMON STOCK FOR THE BENEFIT OF ANOTHER, PLEASE PROMPTLY TRANSMIT THIS DOCUMENT TO SUCH BENEFICIAL OWNER. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>THE COURT HAS MADE NO FINDINGS OR DETERMINATIONS CONCERNING THE MERITS OF THE ACTION. THE RECITATION OF THE BACKGROUND AND CIRCUMSTANCES OF THE SETTLEMENT CONTAINED HEREIN DOES NOT CONSTITUTE THE
FINDINGS OF THE COURT. IT IS BASED ON REPRESENTATIONS MADE TO THE COURT BY COUNSEL FOR THE PARTIES. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Notice is hereby
provided to you of the proposed settlement (the &#147;Settlement&#148;) of this shareholder derivative lawsuit. This Notice is provided by Order of the United States District Court for the Northern District of Texas, Dallas Division (the
&#147;Court&#148;). It is not an expression of any opinion by the Court. It is to notify you of the terms of the proposed Settlement, and your rights related thereto. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>I.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>WHY THE COMPANY HAS ISSUED THIS NOTICE </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Your rights may be affected by the Settlement of the derivative action styled <I>In re Fossil, Inc. Derivative Litigation</I>, Civil Action No.&nbsp;3:06-cv-01672-F. City of Pontiac Policeman&#146;s and
Fireman&#146;s Retirement System and Robert B. Minich (&#147;Plaintiffs&#148;); Tom Kartsotis, Kosta N. Kartsotis, Michael W. Barnes, Jal S. Shroff, Alan J. Gold, Kenneth W. Anderson, Donald J. Stone, Michael Steinberg, Caden Wang, Richard H. Gundy,
Mark D. Quick, Randy S. Kercho, Michael L. Kovar, Thomas R. Tunnell, Randy S. Hyne, Stephen Bock, and Junichi Hattori (&#147;Individual Defendants&#148;); and nominal party Fossil (Fossil and the Individual Defendants collectively,
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">- 1 -
</FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
&#147;Defendants&#148;), have agreed upon terms to settle the Action on the terms set forth in the Stipulation and Agreement of Settlement dated May&nbsp;4, 2011 (&#147;Stipulation&#148;) which
can be viewed and/or downloaded at www.fossil.com. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On June&nbsp;30, 2011, at 4:00 p.m., the Court will hold a hearing (the
&#147;Final Hearing&#148;) in the Action. The purpose of the Final Hearing is (1)&nbsp;to determine: (i)&nbsp;whether the terms of the Settlement are fair, reasonable, and adequate and should be approved; (ii)&nbsp;whether a final judgment should be
entered; and (iii)&nbsp;such other matters as may be necessary or proper under the circumstances and (2)&nbsp;to approve the issuance of shares of Fossil common stock and options to acquire shares of Fossil common stock as payment of
Plaintiffs&#146; Counsel&#146;s attorneys&#146; fees and expenses under Section&nbsp;3(a)(10) (&#147;Section 3(a)(10)&#148;) of the Securities Act of 1933, as amended. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>

<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>II.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SUMMARY OF THE ACTION </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On
September&nbsp;13, 2006, plaintiff City of Pontiac Policeman&#146;s and Fireman&#146;s Retirement System filed a complaint in the United States District Court for the Northern District of Texas under the caption <I>City of Pontiac Policeman&#146;s
and Fireman&#146;s Retirement System v. Kartsotis, et al.</I>, Case No.&nbsp;3:06-cv-01672-P. On October&nbsp;26, 2006, plaintiff Robert B. Minich filed a complaint under the caption <I>Minich v. Kartsotis, et al.</I>, Case No.&nbsp;3:06-cv-01977-M,
in the same Court. The two complaints were consolidated by order dated November&nbsp;29, 2006, under the caption <I>In re Fossil, Inc. Derivative Litigation</I>, Case No.&nbsp;3:06-cv-01672 (the &#147;Action&#148;). On December&nbsp;13, 2006, the
City of Pontiac Policeman&#146;s and Fireman&#146;s Retirement System and Robert B. Minich were appointed by the Court as Co-Lead Plaintiffs, and the law firms of Robbins Geller Rudman&nbsp;&amp; Dowd LLP and Robbins Umeda LLP were appointed as
Co-Lead Counsel. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On February&nbsp;12, 2007, Plaintiffs filed their Consolidated Verified Shareholder Derivative Complaint.
Plaintiffs bring derivative claims on behalf of Fossil and against certain of its current and former officers and directors for alleged violations of &#167;&#167;10(b) and 14(a) of the Securities
</FONT></P>
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Exchange Act of 1934 (&#147;Exchange Act&#148;), breaches of fiduciary duty, abuse of control, constructive fraud, corporate waste, unjust enrichment, and gross mismanagement. Plaintiffs allege
that the Individual Defendants engaged in the backdating of stock option grants, received backdated options and/or were otherwise aware of the backdating of stock options to dates when the Company&#146;s shares were trading at or near the lowest
price for the relevant period in breach of their fiduciary duties to Fossil and its shareholders. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On May&nbsp;7, 2007, Fossil
issued a final report announcing the findings of its &#147;Special Committee&#148; of Fossil directors with respect to their investigation of the Company&#146;s historical equity granting practices. The Special Committee determined that option
grants between at least 1999 and the second quarter of 2006 used incorrect measurement dates and that, with respect to certain option grants up to and including 2002, &#147;favorable grant dates were selected with the benefit of hindsight.&#148;
Fossil issued restatements for 2004 through 2006 to account for understated compensation expenses and overstated income, net income, and earnings per share for a non-cash charge with total financial impact of approximately $16 million. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On June&nbsp;29, 2007, Plaintiffs filed their First Amended Consolidated Verified Shareholder Derivative Complaint (&#147;First Amended
Complaint&#148;), which included allegations based upon the final report issued by Fossil&#146;s Special Committee. On July&nbsp;6, 2007,&nbsp;August&nbsp;6, 2007, and August&nbsp;21, 2007 respectively, the Company and certain Individual Defendants,
Thomas R. Tunnell, and Randy S. Kercho filed three separate motions to dismiss the First Amended Complaint (the &#147;Motions to Dismiss&#148;) pursuant to Federal Rules of Civil Procedure 9(b), 12(b)(6), and 23.1 and the Private Securities
Litigation Reform Act of 1995 (&#147;PSLRA&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">For several months thereafter, while the Motions to Dismiss were still
pending, the Parties to the Action and their respective counsel engaged in good faith, arm&#146;s-length negotiations in an effort to resolve the claims alleged in the Action. On July&nbsp;29, 2008, the Parties and their respective counsel attended
their first full-day mediation session before the Honorable Edward A. Infante (Ret.). The Parties&#146; first attempt at mediation and settlement was unsuccessful. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">- 3 -
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On July&nbsp;15, 2009, after the Motions to Dismiss were fully briefed, the Court held a
hearing to consider arguments from the Parties and their respective counsel. On July&nbsp;17, 2009, the Court denied all three Motions to Dismiss and issued an order requiring Plaintiffs to partially re-plead their Rule 10b-5 and Section&nbsp;14(a)
claims. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On August&nbsp;3, 2009, the Court issued an order referring the Parties to a second mediation. On October&nbsp;22,
2009, the Parties attended a mediation before Antonio Piazza. The Parties&#146; second attempt at mediation and settlement was unsuccessful. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">On October&nbsp;13, 2009, Plaintiffs filed their Second Amended Consolidated Verified Shareholder Derivative Complaint (&#147;Second Amended Complaint&#148;). On December&nbsp;9, 2009, Defendants moved to
dismiss the Second Amended Complaint (the &#147;Second Motion to Dismiss&#148;). Plaintiffs filed their opposition to the Second Motion to Dismiss on January&nbsp;7, 2010, and the Defendants filed their reply on January&nbsp;14, 2010. On
January&nbsp;19, 2010, the Court held a hearing to consider arguments from the Parties and their respective counsel. On May&nbsp;19, 2010, the Court denied Defendants&#146; Second Motion to Dismiss in its entirety. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On August&nbsp;15, 2010, the parties and their respective counsel attended a three-day long mediation before the Honorable Howard B.
Wiener (Ret.), a highly experienced securities mediator (&#147;August 15 Mediation&#148;). Although the Action did not settle at the August&nbsp;15 Mediation, as a result of the foregoing and continued good-faith negotiations among the Parties and
their respective counsel, the Parties reached an agreement-in-principle to settle the Action. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">All Parties to the Action have
agreed to a resolution of the claims asserted therein and any and all claims which could have been asserted therein, as set forth in the Stipulation. Plaintiffs, Fossil, and their counsel concur that the Settlement described in the Stipulation
provides substantial benefits to Fossil and its shareholders. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">- 4 -
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>III.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>TERMS OF THE PROPOSED DERIVATIVE SETTLEMENT </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The principal terms, conditions, and other matters that are part of the Settlement, are summarized below. This summary should be read in conjunction with, and is qualified in its entirety by reference to,
the text of the Stipulation, which has been filed with the Court and can be viewed and/or downloaded at www.fossil.com. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The
Parties, with the substantial assistance of the mediator, the Honorable Howard B. Wiener, Justice of the California Court of Appeal (Ret.), have reached an agreement to globally resolve the Action. The Settlement includes valuable financial and
corporate governance benefits for Fossil and its shareholders, as detailed below. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1. Financial Benefits. As a result of the
filing, prosecution, and settlement of the Action, the Individual Defendants&#146; insurance carriers shall pay the Company $8,666,666.66 in cash. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">2. Corporate Governance Measures. Fossil and Plaintiffs have conducted extensive, arm&#146;s-length negotiations and have reached agreement regarding various corporate governance issues, including
internal controls and procedures at the Company. As a result of the filing, prosecution, and settlement of the Action, the Company will or has, among other things, revised option measurement dates, reprimanded certain officers and directors,
improved internal controls, changed its board composition and practices, established &#147;majority voting&#148; for election of directors, changed compensation practices, including stock option plans and option granting practices and procedures,
adopted a policy regarding forfeiture of profits from the exercise of options, and established enhanced director independence standards and director and stock ownership requirements. Fossil and the Individual Defendants acknowledge and agree that
the Action was a material causal factor in the Company&#146;s decision to implement these measures. Fossil further </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">- 5 -
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acknowledges and agrees that these measures are significant and extensive and confer substantial benefits upon Fossil and its shareholders by, among other things, helping to prevent the
manipulation of stock options and other equity awards in the future. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3. The Stipulation also provides for the entry of
judgment dismissing the Action against Fossil and the Individual Defendants with prejudice and, as explained in more detail in the Stipulation, barring and releasing certain known or unknown claims that have been or could have been brought in any
court by the Plaintiffs in the Action or by Fossil, or any of its shareholders, derivatively against Fossil and the Individual Defendants relating to any of the claims or matters that were or could have been alleged concerning Fossil&#146;s stock
option granting practices, disclosures or any other matter related to the allegations in the Action. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>IV.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>PLAINTIFFS&#146; ATTORNEYS&#146; FEES AND EXPENSES </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">After negotiating the financial benefits to Fossil and the corporate governance measures, counsel for the Plaintiffs and the Company, with the substantial assistance of the mediator, the Honorable Howard
B. Wiener (Ret.), negotiated the attorneys&#146; fees that Fossil would pay to Plaintiffs&#146; Counsel. As a result of these negotiations, and in light of the substantial benefit conferred, Fossil has agreed to pay Plaintiffs&#146; Counsel for
their attorneys&#146; fees and expenses 85,423 shares of Fossil common stock, as of May&nbsp;4, 2011 and stock options for the right to acquire up to 32,000 shares of Fossil common stock pursuant to Section&nbsp;3(a)(10) subject to certain
conditions, adjustments and modifications contained in the Stipulation (&#147;Fee Award&#148;). To date, Plaintiffs&#146; Counsel have not received any payments for their efforts. The Fee Award will compensate Plaintiffs&#146; Counsel for their
efforts in prosecuting this Action and the substantial benefits achieved for Fossil and its shareholders. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">- 6 -
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>V.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>REASONS FOR THE SETTLEMENT </B></FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Court did not decide in favor of the Plaintiffs or the Defendants. The proposed Settlement was negotiated at length by attorneys for
the Parties with the substantial assistance of Judge Wiener. The attorneys for all of the Parties have extensive experience in shareholder derivative cases, and they all believe the Settlement is in the best interest of their clients. Fossil and
Plaintiffs believe that the Settlement provides substantial benefits upon Fossil and its shareholders. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>A.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Why Did Plaintiffs Agree to Settle? </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Plaintiffs&#146; Counsel conducted an extensive investigation relating to the claims and the underlying events and transactions alleged in the Action. Plaintiffs&#146; Counsel have analyzed the evidence
adduced during their investigation, and have researched the applicable law with respect to the claims of Plaintiffs, and Fossil and its shareholders against the Defendants and the potential defenses thereto. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Based upon their investigation as set forth above, Plaintiffs and their counsel have concluded that the terms and conditions of the
Stipulation are fair, reasonable, and adequate to Plaintiffs, Current Fossil Shareholders, and Fossil, and in their best interests, and have agreed to settle the claims raised in the Action pursuant to the terms and provisions of the Stipulation
after considering, among other things: (a)&nbsp;the substantial benefits that Fossil and its shareholders have received or will receive from the Settlement, (b)&nbsp;the attendant risks of continued litigation of the Action, (c)&nbsp;actions taken
by the Company and its Board of Directors in response to alleged options dating issues at Fossil, and (d)&nbsp;the desirability of permitting the Settlement to be consummated. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">In particular, Plaintiffs and their counsel considered the significant litigation risk inherent in this shareholder derivative action. The law imposes significant burdens on plaintiffs for pleading and
proving a shareholder derivative claim. While Plaintiffs believe their claims are meritorious, Plaintiffs acknowledge that there is a substantial risk that the Action may not succeed in producing a
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">- 7 -
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recovery in light of the applicable legal standards and possible defenses. Plaintiffs and their counsel believe that, under the circumstances, they have obtained the best possible relief for
Fossil and its shareholders. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>B.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Why Did the Defendants Agree to Settle? </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Individual Defendants have strenuously denied, and continue strenuously to deny, each and every allegation of liability made against them or that could have been made against them in the Action, and
assert that they have meritorious defenses to those claims and that judgment should be entered dismissing all claims against them with prejudice. The Individual Defendants have thus entered into the Stipulation solely to avoid the continuing
additional expense, inconvenience, and distraction of this burdensome litigation and to avoid the risks inherent in any lawsuit, and without admitting any wrongdoing or liability whatsoever. </FONT></P>
<P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>VI.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>FINAL HEARING </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On
June&nbsp;30, 2011, at 4:00 p.m., the Court will hold the Final Hearing at 1100 Commerce Street, Dallas, Texas. At the Final Hearing, the Court will consider whether the terms of the Settlement are fair, reasonable, and adequate and thus should be
finally approved and whether the Action should be dismissed with prejudice pursuant to the Stipulation. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>VII.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>RIGHT TO ATTEND FINAL HEARING </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Any Current Fossil Shareholder may, but is not required to, appear in person at the Final Hearing. If you want to be heard at the Final Hearing, then you must first comply with the procedures for
objecting, which are set forth below. The Court has the right to change the hearing dates or times without further notice. Thus, if you are planning to attend the Final Hearing, you should confirm the date and time before going to the Court.
<B><I>CURRENT FOSSIL SHAREHOLDERS WHO HAVE NO OBJECTION TO THE SETTLEMENT DO NOT NEED TO APPEAR AT THE FINAL HEARING OR TAKE ANY OTHER ACTION.</I></B> </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">- 8 -
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<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>VIII.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>RIGHT TO OBJECT TO THE SETTLEMENT AND PROCEDURES FOR DOING SO </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">You have the right to object to any aspect of the Settlement. You must object in writing, and you may request to be heard at the Final Hearing. If you choose to object, then you must follow these
procedures. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>A.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>You Must Make Detailed Objections in Writing </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Any objection must be presented in writing and must contain the following information: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">1. Your name, legal address, and telephone number; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2. Proof of being a Current
Fossil Shareholder as of the Record Date; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3. The date(s) you purchased your Fossil shares; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4. A statement of your position with respect to the matters to be heard at the Final Hearing, including a statement of each objection
being made; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5. The grounds for each objection or the reasons for your desiring to appear and to be heard; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">6. Notice of whether you intend to appear at the Final Hearing (this is not required if you have lodged your objection with the Court);
and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">7. Copies of any papers you intend to submit to the Court, along with the names of any witness(es) you intend to call to
testify at the Final Hearing and the subject(s) of their testimony. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8. The Court may not consider any objection that does not
substantially comply with these requirements. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>B.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>You Must Timely Deliver Written Objections to the Court, Plaintiffs&#146; Counsel, and Defendants&#146; Counsel </B></FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">YOUR WRITTEN OBJECTIONS MUST BE ON FILE WITH THE CLERK OF THE COURT NO LATER THAN JUNE 16, 2011. The Court Clerk&#146;s address is:
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Clerk of the Court </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">United States District Court </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Northern District of Texas </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1100 Commerce Street, Room 1452 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Dallas, TX 75242 </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">- 9 -
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">YOU ALSO MUST DELIVER COPIES OF THE MATERIALS TO PLAINTIFFS&#146; COUNSEL AND COUNSEL FOR
DEFENDANTS SO THEY ARE RECEIVED NO LATER THAN JUNE 16, 2011. Counsel&#146;s addresses are: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Counsel for Plaintiffs
</I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Jeffrey D. Light </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">ROBBINS GELLER RUDMAN&nbsp;&amp; DOWD LLP </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">655 West Broadway, Suite 1900
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">San Diego, CA 92101 </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Shane P. Sanders </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">ROBBINS UMEDA LLP </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">600 B Street, Suite 1900 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">San Diego, CA 92101 </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Counsel for certain of the Individual Defendants
</I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Geoffrey S. Harper </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">FISH&nbsp;&amp; RICHARDSON </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1717 Main Street, Suite 5000 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dallas, TX 75201 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Unless the
Court orders otherwise, your objection will not be considered unless it is timely filed with the Court and delivered to Plaintiffs&#146; Counsel and counsel for the Individual Defendants. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Any Person or entity who fails to object or otherwise request to be heard in the manner prescribed above will be deemed to have waived
the right to object to any aspect of the Settlement or otherwise request to be heard (including the right to appeal) and will be forever barred from raising such objection or request to be heard in this or any other action or proceeding, unless
otherwise ordered by the Court. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>IX.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>HOW TO OBTAIN ADDITIONAL INFORMATION </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">This Notice summarizes the Stipulation. It is not a complete statement of the events of the Action or the Stipulation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">You may inspect the Stipulation and other papers in the Action at the United States District Clerk&#146;s office at any time during regular business hours of each business day. The Clerk&#146;s office is
located at the United States District Court for the Northern District of Texas, 1100 Commerce Street, Dallas, Texas. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">- 10 -
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">PLEASE DO NOT CALL, WRITE, OR OTHERWISE DIRECT QUESTIONS TO EITHER THE COURT OR THE
CLERK&#146;S OFFICE. Any questions you have about matters in this Notice should be directed by telephone to 800/449-4900 or in writing to Rick Nelson, c/o Shareholder Relations, Robbins Geller Rudman&nbsp;&amp; Dowd LLP, 655 West Broadway, Suite
1900, San Diego, CA 92101. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">DATED: May&nbsp;9, 2011</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">BY ORDER OF THE COURT</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">UNITED STATES DISTRICT COURT</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">NORTHERN DISTRICT
OF TEXAS</FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">- 11 -
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<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>dex992.htm
<DESCRIPTION>STIPULATION AND AGREEMENT OF SETTLEMENT
<TEXT>
<HTML><HEAD>
<TITLE>Stipulation and Agreement of Settlement</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 99.2 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>STIPULATION AND AGREEMENT OF SETTLEMENT </B></FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This Stipulation and Agreement of Settlement (&#147;Stipulation&#148;) dated May&nbsp;4,
2011, is made and entered into by and among the following Parties: (i)&nbsp;City of Pontiac Policeman&#146;s and Fireman&#146;s Retirement System and Robert B. Minich (&#147;Plaintiffs&#148;), individually and derivatively on behalf of Fossil, Inc.
(&#147;Fossil&#148; or the &#147;Company&#148;); (ii)&nbsp;Tom Kartsotis, Kosta N. Kartsotis, Michael W. Barnes, Jal S. Shroff, Alan J. Gold, Kenneth W. Anderson, Donald J. Stone, Michael Steinberg, Caden Wang, Richard H. Gundy, Mark D. Quick, Randy
S. Kercho, Michael L. Kovar, Thomas R. Tunnell, Randy S. Hyne, Stephen Bock, and Junichi Hattori (the &#147;Individual Defendants&#148;); and (iii)&nbsp;Fossil, by and through its counsel of record in the Action. This Stipulation is intended by the
Parties to fully, finally, and forever compromise, resolve, discharge, and settle the Released Claims and dismiss the Action with prejudice, upon the terms and subject to the conditions set forth herein. </FONT></P>
<P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>I.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SUMMARY OF THE ACTION AND SETTLEMENT NEGOTIATIONS </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">On September&nbsp;13, 2006, plaintiff City of Pontiac Policeman&#146;s and Fireman&#146;s Retirement System filed a complaint in the United States District Court for the Northern District of Texas (the
&#147;Court&#148;) under the caption <I>City of Pontiac Policeman&#146;s and Fireman&#146;s Retirement System v. Kartsotis, et. al.</I>, Case No.&nbsp;3:06-cv-01672-P. On October&nbsp;26, 2006, plaintiff Robert B. Minich filed a complaint under the
caption <I>Minich v. Kartsotis, et al.</I>, Case No.&nbsp;3:06-cv-01977-M, in the same Court. The two complaints were consolidated by order dated November&nbsp;29, 2006, under the caption <I>In re Fossil, Inc. Derivative Litigation</I>, Case
No.&nbsp;3:06-cv-01672 (&#147;Action&#148;). On December&nbsp;13, 2006, the City of Pontiac Policeman&#146;s and Fireman&#146;s Retirement System and Robert B. Minich were appointed by the Court as Co-Lead Plaintiffs, and the law firms of Robbins
Geller Rudman&nbsp;&amp; Dowd LLP (formerly known as Lerach Coughlin Stoia Geller Rudman&nbsp;&amp; Robbins LLP) and Robbins Umeda LLP (formerly known as Robbins Umeda&nbsp;&amp; Fink LLP) were appointed as Co-Lead Counsel. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On February&nbsp;12, 2007, Plaintiffs filed their Consolidated Verified Shareholder Derivative Complaint. Plaintiffs bring derivative
claims on behalf of Fossil and against certain of its current and former officers and directors for alleged violations of &#167;&#167;10(b) and 14(a) of the Securities </FONT></P>

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Exchange Act of 1934 (&#147;Exchange Act&#148;), breaches of fiduciary duty, abuse of control, constructive fraud, corporate waste, unjust enrichment, and gross mismanagement. Plaintiffs allege
that the Individual Defendants engaged in the backdating of stock option grants, received backdated options and/or were otherwise aware of the backdating of stock options to dates when the Company&#146;s shares were trading at or near the lowest
price for the relevant period in breach of their fiduciary duties to Fossil and its shareholders. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On May&nbsp;7, 2007, Fossil
issued a final report announcing the findings of its &#147;Special Committee&#148; of Fossil directors with respect to their investigation of the Company&#146;s historical equity granting practices. The Special Committee determined that option
grants between at least 1999 and the second quarter of 2006 used incorrect measurement dates and that, with respect to certain option grants up to and including 2002, &#147;favorable grant dates were selected with the benefit of hindsight.&#148;
Fossil was forced to issue restatements for 2004 through 2006 to account for understated compensation expenses and overstated income, net income, and earnings per share for a non-cash charge with total financial impact of approximately $16 million.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On June&nbsp;29, 2007, Plaintiffs filed their First Amended Consolidated Verified Shareholder Derivative Complaint
(&#147;First Amended Complaint&#148;), which included allegations based upon the final report issued by Fossil&#146;s Special Committee. On July&nbsp;6, 2007,&nbsp;August&nbsp;6, 2007, and August&nbsp;21, 2007 respectively, the Company and certain
Individual Defendants, Thomas R. Tunnell, and Randy S. Kercho (collectively, the &#147;Defendants&#148;) filed three separate motions to dismiss the First Amended Complaint (the &#147;Motions to Dismiss&#148;) pursuant to Federal Rules of Civil
Procedure 9(b), 12(b)(6), and 23.1 and the Private Securities Litigation Reform Act of 1995 (&#147;PSLRA&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">For several
months thereafter, while the Motions to Dismiss were still pending, the Parties to the Action and their respective counsel engaged in good faith, arm&#146;s-length negotiations in an effort to resolve the claims alleged in the Action. On
July&nbsp;29, 2008, the Parties and their respective counsel attended their first full-day mediation session before the Honorable Edward A. Infante (Ret.). The Parties&#146; first attempt at mediation and settlement was unsuccessful. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On July&nbsp;15, 2009, after the Motions to Dismiss were fully briefed, the Court held a
hearing to consider arguments from the Parties and their respective counsel. On July&nbsp;17, 2009, the Court denied all three Motions to Dismiss and issued an order requiring Plaintiffs to partially re-plead their Rule 10b-5 and Section&nbsp;14(a)
claims. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On August&nbsp;3, 2009, the Court issued an order referring the Parties to a second mediation. On October&nbsp;22,
2009, the Parties attended a mediation before Antonio Piazza. The Parties&#146; second attempt at mediation and settlement was unsuccessful. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">On October&nbsp;13, 2009, Plaintiffs filed their Second Amended Consolidated Verified Shareholder Derivative Complaint (&#147;Second Amended Complaint&#148;). On December&nbsp;9, 2009, Defendants moved to
dismiss the Second Amended Complaint (the &#147;Second Motion to Dismiss&#148;). Plaintiffs filed their opposition to the Second Motion to Dismiss on January&nbsp;7, 2010, and the Defendants filed their reply on January&nbsp;14, 2010. On
January&nbsp;19, 2010, the Court held a hearing to consider arguments from the Parties and their respective counsel. On May&nbsp;19, 2010, the Court denied Defendants&#146; Second Motion to Dismiss in its entirety. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On August&nbsp;15, 2010, the parties and their respective counsel attended a three-day-long mediation before the Honorable Howard B.
Wiener (Ret.), a highly experienced securities mediator (&#147;August 15 Mediation&#148;). Although the Action did not settle at the August&nbsp;15 Mediation, as a result of the foregoing and continued good-faith negotiations among the Parties and
their respective counsel, the Parties reached an agreement-in-principle to settle the Action upon the terms and subject to the conditions set forth in this Stipulation. </FONT></P>
<P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>II.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>PLAINTIFFS&#146; CLAIMS AND THE BENEFITS OF SETTLEMENT </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Plaintiffs believe the Action has substantial merit. Nonetheless, Plaintiffs and Plaintiffs&#146; Counsel recognize and acknowledge the significant risk, expense, and length of continued
</FONT></P>

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proceedings necessary to prosecute the Action against the Individual Defendants through trial and through possible appeals. Plaintiffs&#146; Counsel also have taken into account the uncertain
outcome and the risk of any litigation, especially in complex cases such as the Action, as well as the difficulties and delays inherent in such litigation. Plaintiffs&#146; Counsel also are mindful of the inherent problems of proof and possible
defenses to the claims alleged in such actions. Plaintiffs&#146; Counsel have conducted a thorough review and analysis of the relevant facts, allegations, defenses, and controlling legal principles, and believe that the Settlement set forth in the
Stipulation confers substantial benefits upon Fossil and its shareholders. Based upon Plaintiffs&#146; Counsel&#146;s evaluation, Plaintiffs have determined that the Settlement is in the best interests of Fossil and its Current Fossil Shareholders
and have agreed to settle the Action upon the terms and subject to the conditions set forth herein. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>III.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>DEFENDANTS&#146; DENIALS OF WRONGDOING AND LIABILITY </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Individual Defendants have denied and continue to deny they have committed, threatened, or attempted to commit, any violations of law, or breached any duty owed to Plaintiffs, Fossil, or its
shareholders. Without admitting the validity of any allegations made in the Action, or any liability with respect thereto, the Individual Defendants have concluded that it is desirable that the claims against them be settled on the terms reflected
in the Stipulation. The Individual Defendants are entering into this Settlement solely because it will eliminate the uncertainty, distraction, disruption, burden, risk, and expense of further litigation. Further, the Individual Defendants and Fossil
acknowledge that the Settlement provides substantial benefits to Fossil and its shareholders. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Neither this Stipulation, nor
any of its terms or provisions, nor entry of the Judgment, nor any document or exhibit referred or attached to this Stipulation, nor any action taken to carry out this Stipulation, is, may be construed as, or may be used as evidence of the validity
of any of the Released Claims or an admission by or against the Individual Defendants of any fault, wrongdoing, or concession of liability whatsoever. </FONT></P>

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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>IV.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among Plaintiffs (on behalf of themselves and derivatively on behalf of Fossil), the Individual Defendants, and Fossil, by and through their
respective counsel or attorneys of record, that, subject to Court approval, the Action and the Released Claims shall be finally and fully compromised, settled, and released, and the Action shall be dismissed with prejudice, as to all Parties, upon
the terms and subject to the conditions set forth herein as follows: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1. Definitions </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">As used in this Stipulation, the following terms have the meanings specified below: </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.1 &#147;Action&#148; means the shareholder derivative action pending in the United States District Court, Northern District of Texas,
captioned <I>In re Fossil, Inc. Derivative Litigation</I>, Case No.&nbsp;3:06-cv-01672-F. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.2 &#147;Co-Lead Counsel&#148;
means collectively Robbins Geller Rudman&nbsp;&amp; Dowd LLP, 655 West Broadway, Suite 1900, San Diego, CA 92101 and Robbins Umeda LLP, 600 B Street, Suite 1900, San Diego, CA 92101. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.3 &#147;Current Fossil Shareholders&#148; means any Persons who owned Fossil common stock as of the date of the execution of the
Stipulation and who continue to hold their Fossil common stock as of the date of the final settlement approval hearing, excluding the Individual Defendants, the officers and directors of Fossil, members of their immediate families, and their legal
representatives, heirs, successors, or assigns, and any entity in which Individual Defendants have or had a controlling interest. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">1.4 &#147;Defendants&#148; means collectively, Tom Kartsotis, Kosta N. Kartsotis, Michael W. Barnes, Jal S. Shroff, Alan J. Gold, Kenneth W. Anderson, Donald J. Stone, Michael Steinberg, Caden Wang,
Richard H. Gundy, Mark D. Quick, Randy S. Kercho, Michael L. Kovar, Thomas R. Tunnell, Randy S. Hyne, Stephen Bock, Junichi Hattori, and Fossil, Inc. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.5 &#147;Defendants&#146; Counsel&#148; means collectively Fish&nbsp;&amp; Richardson,
P.C., 1717 Main Street, Suite 5000, Dallas, TX 75201; Law Offices of Joe Staley, Jr., P.C., 3100 Monticello Avenue, Suite 850, Dallas, TX 75205; Bracewell Giuliani LLP, 1445 Ross Avenue, Suite 3800, Dallas, TX 75202; and Scott Yung, 208 N Market
Street, Suite 200, Dallas, TX 75202. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.6 &#147;Defendants&#146; Released Claims&#148; means any and all claims, debts,
rights, or causes of action or liabilities, including Unknown Claims, that could be asserted in any forum by the Released Parties or their successors and assigns against the Plaintiffs, Plaintiffs&#146; Counsel, or Fossil which arise out of or
relate in any way to the institution, prosecution, or settlement of the Action (except for any claims to enforce the Settlement). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">1.7 &#147;Effective Date&#148; means the first date by which all of the events and conditions specified in &para;6.1 herein have been met and have occurred. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.8 &#147;Final&#148; means (i)&nbsp;the date of final affirmance on an appeal of the Judgment; (ii)&nbsp;the date of final dismissal of
any appeal from the Judgment; or (iii)&nbsp;if no appeal is filed, the expiration date of the time for filing or noticing any appeal from the Judgment. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">1.9 &#147;Fossil&#148; or the &#147;Company&#148; means Fossil, Inc. and any of its successors, predecessors, parents, subsidiaries, divisions or affiliates. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.10 &#147;Individual Defendants&#148; means collectively, Tom Kartsotis, Kosta N. Kartsotis, Michael W. Barnes, Jal S. Shroff, Alan J.
Gold, Kenneth W. Anderson, Donald J. Stone, Michael Steinberg, Caden Wang, Richard H. Gundy, Mark D. Quick, Randy S. Kercho, Michael L. Kovar, Thomas R. Tunnell, Randy S. Hyne, Stephen Bock, and Junichi Hattori. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.11 &#147;Judgment&#148; means the Final Judgment and Order of Dismissal With Prejudice to be rendered by the Court, substantially in
the form of Exhibit B attached hereto. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.12 &#147;Parties&#148; means collectively, Plaintiffs, the Individual Defendants, and
Fossil. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.13 &#147;Person&#148; means an individual, corporation, limited liability corporation, professional corporation,
partnership, limited partnership, limited liability partnership, association, joint stock company, estate, legal representative, trust, unincorporated association, government or any political subdivision or agency thereof, and any business or legal
entity and their spouses, heirs, predecessors, successors, representatives, or assignees. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.14 &#147;Plaintiffs&#148; means
collectively the City of Pontiac Policeman&#146;s and Fireman&#146;s Retirement System and Robert B. Minich, individually and derivatively on behalf of Fossil. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">1.15 &#147;Plaintiffs&#146; Counsel&#148; means collectively Robbins Geller Rudman&nbsp;&amp; Dowd LLP, 655 West Broadway, Suite 1900, San Diego, CA 92101; Robbins Umeda LLP, 600 B Street, Suite 1900, San
Diego, CA 92101; Kendall Law Group, LLP, 3232 McKinney Avenue, Suite 700, Dallas, TX 75204; and The Shuman Law Firm, 885 Arapahoe Boulevard, Boulder, CO 80302. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">1.16 &#147;Related Persons&#148; means each of an Individual Defendant&#146;s past or present subsidiaries, parents, successors and predecessors, insurers, officers, directors, agents, employees,
attorneys, advisors, investment advisors, auditors, accountants, and any firm, trust, corporation, officer, director, or other individual or entity in which any Defendant has a controlling interest, and the legal representatives, heirs,
successors-in-interest, or assigns of any Defendant. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.17 &#147;Released Claims&#148; means any and all claims, debts,
demands, rights, or causes of action or liabilities whatsoever, asserted or unasserted, including Unknown Claims, existing derivatively on behalf of Fossil, against any of the Released Parties which arise out of/or relate to the facts, transactions,
events, acts, disclosure statements which were alleged or could have been alleged concerning Fossil&#146;s stock option practices, disclosures, or any other matter related to the allegations made in the Action. Notwithstanding the foregoing,
Released Claims shall not include any claims to enforce the Stipulation. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B></B><B></B><B></B><B></B>1.18 &#147;Released Parties&#148; means collectively each of the
Individual Defendants and each of their Related Persons. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.19 &#147;Settlement Hearing&#148; means the hearing set by the
Court to consider final approval of the Settlement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.20 &#147;Unknown Claims&#148; means any of the Released Claims and any
of the Defendants&#146; Released Claims that any Party does not know or suspect exists in his, her, or its favor at the time of the Settlement including, without limitation, those claims which, if known, might have affected the decision to enter
into, or not object to, this Settlement. The Parties expressly waive, relinquish, and release any and all provisions, rights, and benefits conferred by or under California Civil Code Section&nbsp;1542 (&#147;&#167;1542&#148;) or any other law of the
United States or any state or territory of the United States, or principle of common law, which is similar, comparable, or equivalent to &#167;1542, which provides: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at
the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The
Parties acknowledge that they may discover facts in addition to or different from those now known or believed to be true by them, with respect to the Released Claims and Defendants&#146; Released Claims in the Settlement, as the case may be, but it
is the intention of the Parties to completely, fully, finally, and forever compromise, settle, release, discharge, and extinguish any and all Released Claims and Defendants&#146; Released Claims known or unknown, suspect or unsuspected, contingent
or absolute, accrued or unaccrued, apparent or unapparent, which do not exist, or heretofore existed, or may hereafter exist, and without regard to the subsequent discovery of additional or different facts. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2. Settlement Consideration</B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">2.1 Financial Benefits. As a result of the filing, prosecution, and settlement of the Action, the Individual Defendants&#146; insurance carriers shall pay the Company $8,666,666.66 within
</FONT></P>

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10 business days of the occurrence of the Effective Date provided that if a Judgment is entered but there is any appeal from the Judgment, the insurance carriers and the Company will work in good
faith to have the $8,666,666.66 paid into an escrow account with an escrow agent and form of agreement acceptable to both the insurance carriers and the Company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">2.2 Corporate Governance Measures; Revised Option Measurement Dates; Reprimands; and, Improvements to Internal Controls. As a result of the filing, prosecution, and settlement of the Action, the Company
also revised option measurement dates, reprimanded certain officers and directors, improved internal controls, changed its board composition and practices, established &#147;majority voting&#148; for election of directors, and changed compensation
practices, including stock option plans and option granting practices and procedures. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.3 The Fossil Board has agreed to
adopt, or to maintain where already implemented, the corporate governance measures set forth in paragraphs 2.4 to 2.9 below within 10 days from the entry of this Stipulation and will keep such measures in force and effect for a period of no less
than 6 years. Fossil and the Individual Defendants acknowledge and agree that the Action was a material causal factor in the Company&#146;s decision to implement these measures, including changes to corporate governance, internal controls and option
granting practices, procedures and plans since the filing of the Action. Fossil further acknowledges and agrees that these measures are significant and extensive and confer substantial benefits upon Fossil and its shareholders by, among other
things, helping to prevent the manipulation of stock options and other equity awards in the future. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.4 Repricing; Revised
Option Measurement Dates; Reprimands; Improvements to Internal Controls:</B> The Company has: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) Instituted internal audit
procedures relating to the equity-based compensation awards approval and documentation process; </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) Engaged an independent compensation consultant and independent counsel to improve the
Compensation Committee approval and oversight process; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) Designated specific members of in-house legal, accounting, and
human resources staffs to oversee documentation, accounting and disclosure of all equity-based compensation awards; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d)
Widely distributed and explained enhanced equity grant processes and documentation requirements; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) Adopted and improved
incentive plans designed to prevent the backdating of stock options; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(f) Increased automation of the equity grant record
keeping process; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(g) Improved process and controls regarding delegated grant authority; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(h) Improved training and education designed to ensure that all relevant personnel involved in the administration of equity-based
compensation awards understand relevant policies and requirements </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) Reprimanded Messrs. Tom and Kosta Kartsotis, and
Mr.&nbsp;Randy Kercho who is no longer employed by the Company; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(j) Evaluated and revised accounting measurement dates,
amounts of compensation charges, classification of stock options, and related tax effects, identified material weaknesses in internal controls over financial reporting related to deficiencies in stock option granting practices, identified errors in
financial reporting related to stock-based compensation, and restated previously-reported financial statements, including, but not limited to: compensation expense; pre-tax income; income and retained earnings. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(k) Repriced over 1.5&nbsp;million improperly dated and/or improperly priced options so they
carry the exercise prices they should have carried if they were priced at fair market value on the actual date of grant. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.5 Board Composition and Practices.</B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) Board Structure. The Company has amended its Corporate Governance Guidelines as follows: When the Chairman is a member of Company management, the Chairman of the Nominating and Corporate Governance
Committee, who shall be an independent director meeting the guidelines specified herein, shall also act ex officio as the Lead Independent Director of the Board, with responsibility for coordinating the activities of the other non-management
directors and for performing the duties specified herein and such other duties as are assigned by the Board. The Company shall maintain the position of Lead Independent Director so long as any member of management occupies a position on the Board.
The Lead Independent Director&#146;s responsibilities include the following: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) setting the Board&#146;s agenda in
collaboration with the CEO and/or Chairman; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii) acting as a regular communication channel among the Board, the CEO and
other management, the Chairman and the independent directors and the Board; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii) assessing and discussing with other
independent board members the quality, quantity and timeliness of the flow of information from the Company&#146;s management to the independent board members; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(iv) organizing and presiding over executive sessions to review the Company&#146;s performance and management effectiveness (including scheduling and setting the agenda for these sessions); </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(v) organizing exit interviews with resigning senior managers to determine whether their
departure reflects problems with the CEO or other Company issues; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vi) serving as an independent point of contact for
shareholders wishing to communicate with the Board, other than through the CEO or chairman; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vii) meeting with shareholders
to discuss their concerns and expectations; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(viii) calling special meetings of the Board or of the independent directors;
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ix) recommending or assigning tasks to the appropriate committees; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(x) being a member of or otherwise involved with the committees; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(xi) chairing the Nominating and Corporate Governance Committee (or another key committee); </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(xii) coordinating and/or overseeing committee, Board and other corporate governance assessments; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(xiii) coordinating and/or overseeing the performance evaluation of the CEO and/or Chairman; and </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(xiv) identifying and recommending appropriate independent advisors or consultants as needed. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) <U>Standing Committees; Addition of Finance Committee</U>. Fossil has added a Finance Committee, which will have the power and
authority to approve on behalf of the Board any and all strategies, plans, policies and actions related to corporate finance, including but not limited to prudent and appropriate repurchases of the Company&#146;s common stock. Each standing
Committee of the Board shall maintain a written charter, which is made available to the public on the Company&#146;s website, and requires that the Committee meet no fewer than four times per year. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) <U>Declassified Director Elections; Increase of Board Independence; Addition of New Independent Directors</U>. The Company has
amended its Bylaws and Corporate Governance </FONT></P>

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Guidelines to provide for the declassification of elected Board members. Three directors have retired from the Board, and since that time the Company has added five new independent directors The
Company has established and will endeavor to maintain a Board that is composed of two-thirds or more independent directors as defined by the requirements attached as Exhibit C. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) <U>Director Stock Ownership</U>. The Company shall pay in equity (to fully vest not less than within one year or the date of the next
annual meeting of stockholders) not less than between 1/2 and 2/3 of directors&#146; annual fees. Each year the Company will assess the average amount of annual fees paid in stock by Fossil&#146;s peers to ensure the amount of stock compensation to
directors at Fossil is competitive with that average. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.6 <U>Shareholder &#147;Majority Voting&#148; Election of
Directors</U>.</B> The Company has established and will maintain Corporate Governance Guidelines providing director nominees shall be elected by the affirmative vote of the majority of votes case at the annual meeting of shareholders, as follows:
&#147;In an uncontested election, any nominee for director who receives a greater number of votes &#145;withheld&#146; from his or her election than votes &#145;for&#146; such election (a &#145;Majority Withheld Vote&#146;) shall promptly tender his
or her resignation following certification of the stockholder vote.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.7 Compensation Practices.</B> </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) <U>Lapse of Unvested Equity Awards</U>. The Company will in good faith endeavor to implement in all future executive hiring,
severance or change-of-control agreements and retirement agreements, requirements that all unvested equity awards lapse not later than one year from termination. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(b) <U>Clawback Upon Violation of Equity Incentive Plan Terms</U>. Any officers, directors, or employees having responsibilities involving plan administration, who violate the terms of the 2008 Long Term
Incentive plan, or any subsequent plans, shall be subject to disciplinary action as determined by the Compensation Committee or Board, or pursuant to delegated authority. </FONT></P>

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Disciplinary action may include, reprimand or termination in the case of an employee, reprimand or removal from the Compensation Committee and/or Board in the case of a director, and forfeiture
or repricing of options or the repayment of profits received from the exercise of options granted in connection with a knowing violation of the plan. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>2.8 <U>Stock Option Plans; Granting Practices, Procedures; and, Internal Controls</U>. </B>Stock options granted to all officers, directors, employees and new hires, shall be granted only on pre-set
dates, which shall be set by the Compensation Committee or Board prior to the beginning of the fiscal year in which the options are to be granted. All grants to officers and employees (except annual merit grants that have their own preset date) are
made on the 15th of the month following the calendar quarter in which they are approved. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) <U>Authority for Grants</U>. The
Compensation Committee (the &#147;Committee&#148;) of the Board of Directors of the Company has the authority under the Company&#146;s plans to determine and designate from time to time the eligible persons to whom equity-based incentives will be
granted and shall set forth in each applicable grant, the date of grant, the exercise price, if applicable, and all other such terms, provisions, limitations, and performance requirements, as are approved by the Committee, but not inconsistent with
the terms herein. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) <U>Granting of Equity-Based Incentive Grants</U>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) <U>Annual Merit Grants</U>. Equity-based grants may be made annually by the Committee to eligible employees or independent
contractors in conjunction with the performance review process. The Committee may grant any amount to an eligible employee or independent contractor that it deems appropriate and may consider any factors it deems appropriate, including, without
limitation, the individual&#146;s performance, level of responsibility held within the organization, job grade and company performance. With respect to such annual merit grants: </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1) Each year the Corporate Human Resources Department shall create an Equity Grant Matrix that proposes the number of shares subject to
equity-based incentives that it recommends awarding, organized by performance rating, management level and grade. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:17%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2) Following completion of the Equity Grant Matrix, the Corporate Human Resources
Department will prepare a summary of the proposed annual merit grants for the Committee&#146;s approval. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3) If the Committee
desires to make the proposed annual merit grants, the Committee shall formally approve the grants in accordance with the terms herein concerning &#147;Determination of the Date of Grant.&#148; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii) <U>Special One-Time Grants</U>. In addition to the annual merit grants, from time to time, a special one time equity grant of stock
options, stock appreciation rights (&#147;SARs&#148;), restricted stock or restricted stock units (&#147;RSUs&#148;) may be offered for new hires or independent contractors, or for retention or promotion purposes. These grants may be made to other
employees or independent contractors only as follows: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1) in the case of restricted stock or RSUs, at the discretion of the
Committee; or </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2) in the case of stock options or SARs, at the discretion of the Committee or, if amounts remain under a
grant pool, by an Authorized Officer specified by the Committee. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii) All special one time grants must be approved in
writing prior to the Date of Grant (as defined herein) as follows: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1) in the case of restricted stock or RSUs, by the
Committee; or </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2) in the case of stock options or SARs, by the Committee or, if amounts remain under a grant pool, by an
Authorized Officer specified by the Committee. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv) Special One-Time grants are to be aggregated during each quarter and approved on a
quarterly basis by the Committee. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) <U>Determination of the &#147;Date of Grant</U>.&#148; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) <I>Annual Merit Grants</I>. Unless otherwise determined by the Committee, the &#147;Date of Grant&#148; for any annual merit grants
shall be as follows: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">March&nbsp;15th for all grants to executive officers of the Company and to all employees and independent
contractors of the Company and its Subsidiaries. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">provided that, on or prior to such date, the Committee&#146;s approval sets forth the
maximum number of shares subject to each grant; the exercise price (to the extent applicable) for each grant and the identity of the individual (either by job title or name) who is receiving each grant. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Any individual or group of individuals whose annual merit grant is not finalized prior to the date of approval of the annual merit grants
by the Committee shall be excluded from the annual merit grant, but may be eligible to receive a special one time grant, as set forth in subsection (ii)&nbsp;below, or other Committee grant, as set forth in subsection (iii)&nbsp;below, in the amount
that such individual or group of individuals would have received as an annual merit grant had such grant been made on a timely basis. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%;padding-bottom:0px;"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(ii) <I>Special One-Time Grants</I>. The &#147;Date of Grant&#148; for any special one time grant(s) shall be (i)&nbsp;the fifteenth day of the month following the date of written approval of the
Authorized Officer or the recipient&#146;s first day of employment, whichever is later, (ii)&nbsp;the fifteenth day of the month following the date of formal Committee approval or the recipient&#146;s first day of employment, whichever is later or
(iii)&nbsp;such other date on or after the date of formal Committee approval as specified by the Committee; provided that each approval sets forth the maximum number of shares subject to each grant; the exercise price (to the extent applicable) for
each grant and the identity of the individual (either by job title or name) who is receiving each grant.</FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">1</SUP></FONT><FONT
STYLE="font-family:Times New Roman" SIZE="2"> </FONT></P> <P STYLE="line-height:8px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000;width:10%">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"></FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">1</SUP>&nbsp;</FONT><FONT
STYLE="font-family:Times New Roman" SIZE="2"></FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The &#147;fifteenth day of the month&#148; shall mean the fifteenth day of the month that follows the end of any calendar quarter. For example, the
fifteenth day of the month for a grant that is approved in the first quarter in accordance with the terms herein would be April&nbsp;15. </FONT></P></TD></TR></TABLE>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii) <I>Committee Grants</I>. The &#147;Date of Grant&#148; for any grants other than
special one time grants or annual merit grants shall be the date selected by the Committee for the Date of Grant, provided that (i)&nbsp;in no event shall such date be prior to the date of formal Committee approval and (ii)&nbsp;each approval sets
forth the maximum number of shares subject to each grant; the exercise price (to the extent applicable) for each grant and the identity of the individual (either by job title or name) who is receiving each grant. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv) <I>Date of Formal Committee Approval</I>. For the purposes of the practices and procedures set forth herein, the date of formal
Committee approval means, in the case of a meeting, the date that the Committee meets to approve the grants or, in the case of a unanimous written consent, the date that the last member of the Committee executes and delivers such consent to the
Secretary of the Company. With respect to any option grants made by unanimous written consent rather than at a meeting of the Board or the Compensation Committee, an internal exception report shall be generated detailing grant, when it was
authorized and entered into the Company&#146;s option tracking system, and the reasons the grant was made by unanimous written consent. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(d) <U>Determination of the Exercise Prices for Grants</U>. To the extent an equity-based incentive grant has an exercise price, such exercise price shall always be equal to or greater than the Fair
Market Value of the Common Stock, which shall be the mean between the highest and lowest sales price per share of the Common Stock on the Date of Grant (or, if the particular date is not a trading day, the mean of the high and low prices per share
of the Common Stock immediately </FONT></P>

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preceding such particular date), and shall be determined in accordance with the requirements of Section&nbsp;422 (to the extent incentive stock options are granted) and/or Section&nbsp;409A of
the Code and the regulations and other guidance issued thereunder. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) <U>Notification Procedures</U>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) In accordance with the terms of the Company&#146;s plans, each grant shall be evidenced by a written or electronic award agreement,
containing such terms, conditions and limitations applicable to such grant and, if written, shall be signed by the CEO, the Chief Operating Officer or any Vice President of the Company for and on behalf of the Company. All executed agreements or
electronic acknowledgements shall be sent to the Vice President of Human Resources for filing. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii) As soon as
administratively practicable following approval of the grants and in accordance with the provisions of Statement of Financial Accounting Standards No.&nbsp;123R and, with respect to incentive stock options, Section&nbsp;422 of the Code, the Equity
Administrator shall notify the recipients of the grants, either via U.S. mail or electronically, of the type of grant, the Date of Grant, the exercise price (if applicable) and the number of shares subject to the grant. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii) Each written or electronic award agreement delivered by the Company in connection with an equity based compensation award subject
to this Policy shall be accompanied by such information and documentation, including a Section&nbsp;10(a) prospectus that meets the requirements of Rule 428(a) promulgated under the Securities Act of 1933, as amended (the &#147;Securities
Act&#148;), as shall be required to be delivered or made available by applicable state and federal securities laws and regulations, including the rules associated with the use of Form S-8 under the Securities Act. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(f) <U>Education&nbsp;&amp; Training</U>. Any person responsible for administering any stock option plan and the guidelines therein shall
be trained to understand the requirements of the plan and </FONT></P>

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guidelines, which training shall include methods of identifying prohibited practices, including retrospective dating of option grants and any option granting practices hereafter expressly
prohibited by the Securities and Exchange Commission. In addition, the training shall include how to appropriately administer the Company&#146;s stock option plans. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>2.9 <U>Audit Engagement Partner Rotation; Outside Audit Firm Review</U>. </B>The Company&#146;s outside audit engagement partner has been rotated. Subject to SEC rules and regulations and any future
amendments thereto, the audit engagement partner shall be rotated every five years. The Company&#146;s outside auditor shall review and assess the Company&#146;s internal controls and internal audit function and report the results of that review to
the Audit Committee each year. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>3. PRELIMINARY APPROVAL AND NOTICE</B> </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.1 Promptly after execution of the Stipulation, Co-Lead Counsel shall submit the Stipulation together with its Exhibits to the Court and
shall jointly apply for entry of an order (the &#147;Notice Order&#148;), substantially in the form of Exhibit A attached hereto, requesting: (i)&nbsp;preliminary approval of the Settlement set forth in this Stipulation; (ii)&nbsp;approval of the
form and content of the Summary Notice of Proposed Settlement of Shareholder Derivative Action (&#147;Summary Notice&#148;) and the Notice of Proposed Settlement of Shareholder Derivative Action (&#147;Notice&#148;); and (iii)&nbsp;a date for the
Settlement Hearing. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.2 Plaintiffs will move the Court to approve the form and content of notice of the Settlement to Fossil
shareholders. Specifically, Plaintiffs will seek approval of the Summary Notice, substantially in the form attached hereto as Exhibit A-2, and the Notice, substantially in the form attached hereto as Exhibit A-1. The Summary Notice shall be
published once in <I>Investor&#146;s Business Daily</I> and shall refer shareholders to the website of Fossil to view and/or download the detailed Notice and this Stipulation. In addition, Fossil shall cause a copy of the Notice and the Stipulation
to be filed with the United States Securities and Exchange Commission (&#147;SEC&#148;) via a Form 8-K. Fossil shall be responsible for all costs associated with the Notice. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.3 Plaintiffs&#146; Counsel shall request that the Court hold the Settlement Hearing after
notice as described above is given to Fossil shareholders to consider and determine whether to approve the settlement of the Action on the terms as set forth herein as fair, reasonable and adequate, including the payment of attorneys&#146; fees and
expenses in the amount negotiated by the parties and apply for entry of the Judgment. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>4. RELEASES</B> </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.1 Upon the Effective Date, Plaintiffs (acting derivatively on behalf of Fossil), Fossil, and its shareholders, shall be deemed to have
and by operation of the Judgment in the Action shall have released, waived, discharged, and dismissed any and all Released Claims, and shall forever be barred and enjoined from instituting, commencing, or prosecuting any and all Released Claims,
against any Released Parties. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.2 Upon the Effective Date, Defendants and each of their Released Parties, shall be deemed to
have and by operation of the Judgment in the Action shall have released, waived, discharged, and dismissed any and all Defendants&#146; Released Claims, and shall forever be barred and enjoined from instituting, commencing, or prosecuting any and
all Defendants&#146; Released Claims, against Plaintiffs, Plaintiffs&#146; Counsel and Fossil. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>5. ATTORNEYS&#146; FEES AND
EXPENSES</B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.1 As a result of the substantial benefits conferred upon Fossil and its shareholders, Fossil has agreed to pay
to Plaintiffs&#146; Counsel for their reasonable attorneys&#146; fees and expenses, subject to the Court&#146;s determination at the Settlement Hearing. Fossil has agreed to pay Plaintiffs&#146; Counsel (i)&nbsp;the &#147;Defined Amount of
Stock&#148; (defined below) (referred to as the &#147;Stock Award&#148;) and (ii)&nbsp;the &#147;Option Award&#148; (as defined below), subject to Court approval. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">5.2 The Option Award means a stock option to acquire up to 32,000 shares of Fossil common stock with an exercise price equal to the volume weighted average closing price of Fossil common stock on the
Nasdaq stock market for the five trading days immediately preceding the </FONT></P>

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Effective Date (the &#147;Option&#148;). The Option Award shall (i)&nbsp;be non-transferrable, (ii)&nbsp;expire one year from the Effective Date, (iii)&nbsp;only be exercisable in a cashless
exercise, and (iv)&nbsp;provide for proportionate adjustment in the event of a stock split or other reorganization. The Option Award shall be pursuant to a form of stock option agreement to be entered into on the Effective Date. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.3 The Defined Amount of Stock means 131,963 shares of Fossil common stock which amount shall be adjusted as set forth below and in
paragraphs 5.5 and 5.6. The shares constituting the Stock Award shall be issued by Fossil and delivered to Robbins Geller Rudman&nbsp;&amp; Dowd LLP, as receiving agent for Plaintiffs&#146; Counsel pursuant to instructions provided by Co-Lead
Counsel within two (2)&nbsp;business days after the Effective Date (&#147;Delivery Date&#148;). On the Delivery Date, the Defined Amount of Stock shall be adjusted. Should the closing sales price of Fossil&#146;s common stock on the NASDAQ
marketplace on the trading day immediately prior to the Delivery Date (the &#147;Adjustment Reference Price&#148;) be $0.01 more or less than the closing sale price of Fossil&#146;s common stock on October&nbsp;28, 2010 (the &#147;Initial Reference
Price&#148;), then the Defined Amount of Stock shall be adjusted upward or downward to the nearest whole share pursuant to the following formula: Initial Reference Price less Adjustment Reference Price, which amount is then divided by the Adjustment
Reference Price. The product of the calculation in the immediately preceding sentence is then multiplied by 131,963 to generate the number of shares by which the Defined Amount of Stock will be adjusted upward if the result is a positive number or
downward if the result is a negative number. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.4 The shares constituting the Stock Award and the Option Award shall be
registered or exempt from registration provided by &#167;3(a)(10) of the Securities Act of 1933. Fossil and Co-Lead Counsel shall take all necessary and appropriate action to perfect the exemption of the shares represented by the Stock Award and
Option Award from registration under the Federal Securities laws by reason of &#167;3(a)(10) of the Securities Act of 1933. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.5 Agreement to the Defined Amount of Stock and Option Award is based upon the assumption
there will be no stock splits in Fossil&#146;s common stock that would affect the Defined Amount of Stock or Option Award. If a stock split occurs before the date of distribution of the Stock Award and Option Award, the Defined Amount of Stock,
Initial Reference Price and Adjustment Reference Price shall be adjusted to reflect the stock split. The shares constituting the Stock Award and any shares issued under the Option Award shall be fully paid, non-assessable and freely tradable, except
as provided herein. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.6 In the event of a merger or acquisition or sale of Fossil which results in the conversion of Fossil
common stock into the stock of another entity (the &#147;Other Entity Shares&#148;) before the Delivery Date, the shares constituting the Stock Award and the shares underlying the Option Award shall be converted into the Other Entity Shares on the
same basis that the shares of Fossil common stock that were outstanding prior to the merger or acquisition were converted into the Other Entity Shares. In addition, the exercise price of the Option shall be appropriately adjusted to reflect such
Merger, acquisition or sale shall be converted in accordance with the same formula. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.7 The Parties&#146; counsel shall
obtain Court approval of the issuance of the shares of Fossil common stock as part of the Stock Award and for the issuance of the Option and do such other things as are required to exempt such shares and the Option from the registration requirements
of the Securities Act of 1933 under Section&nbsp;3(a)(10) thereof (&#147;Section 3(a)(10)&#148;), including, but not limited, to (i)&nbsp;advising the Court that the shares of Fossil common stock constituting the Stock Award and the Option Award
will be issued in reliance upon the Section&nbsp;3(a)(10) exemption based on the Court&#146;s approval of the transaction, (ii)&nbsp;causing the Court to hold a hearing on the fairness of the terms and conditions of the issuance of the Stock Award
and the Option Award (the &#147;Fairness Hearing&#148;), (iii)&nbsp;providing to Plaintiffs, Plaintiffs&#146; counsel and all current stockholders of Fossil with notice of the Fairness Hearing, and (iv)&nbsp;ensuring that there are no improper
impediments to the </FONT></P>

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appearance by the persons identified in (iii)&nbsp;above to appear at the Fairness Hearing. The issuance of the Stock Award and Option Award under Section&nbsp;3(a)(10) is expressly conditioned
upon and subject to the Court finding at the Fairness Hearing that the issuance of the Stock Award and Option Award as attorneys&#146; fees is fair, both substantively and procedurally, to the persons to whom the shares of Fossil common stock
constituting the Stock Award and the Option Award are to be issued. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.8 The Parties recognize that the Stock Award and/or
Option Award may be adjusted or modified by court order. Such adjustment or modification will serve only to modify the terms of this Stipulation and shall not render it null or void. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.9 The Stock Award and Option Award shall constitute full, complete, and exclusive compensation for all of Plaintiffs&#146;
Counsel&#146;s efforts, fees, services and expenses, whether before or after the date of this Stipulation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>6. Conditions
of Settlement, Effect of Disapproval, Cancellation, or Termination</B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">6.1 The Effective Date of this Stipulation shall be
conditioned on the occurrence of all of the following events: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) Fossil&#146;s Board of Directors has approved the
Settlement; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) the Court has entered the Judgment; and </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) the Judgment in the Action has become Final. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">6.2 If any of the conditions listed in &para;6.1 are not met, the Stipulation and any settlement documentation shall be null and void and of no force and effect, unless Plaintiffs&#146; Counsel and
Defendants&#146; Counsel mutually agree in writing to proceed with the Stipulation. In the event that any of the conditions listed in &para;6.1 are not met, the Parties shall be restored to their positions on the date immediately prior to the
execution date of the Stipulation, and the Stipulation shall not be deemed to constitute an admission of fact by any Party, and neither the existence of the Stipulation nor its contents, shall be admissible in evidence or be referred to for any
purposes in the Action or in any litigation or judicial proceeding. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7. Bankruptcy</B> </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">7.1 In the event any proceedings by or on behalf of Fossil, whether voluntary or involuntary, are initiated under any chapter of the
United States Bankruptcy Code, including any act of receivership, asset seizure, or similar federal or state law action (&#147;Bankruptcy Proceedings&#148;), the Parties agree to use their reasonable best efforts to obtain all necessary orders,
consents, releases, and approvals for effectuation of this Stipulation in a timely and expeditious manner. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">7.2 In the event
of any Bankruptcy Proceedings on or on behalf of Fossil, the Parties agree that all dates and deadlines set forth herein will be extended for such periods of time as are necessary to obtain necessary orders, consents, releases and approvals from the
Bankruptcy Court to carry out the terms and conditions of the Stipulation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8. Miscellaneous Provisions</B> </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.1 The Parties: (a)&nbsp;acknowledge that it is their intent to consummate this Stipulation; and (b)&nbsp;agree to cooperate to the
extent reasonably necessary to effectuate and implement all terms and conditions of the Stipulation and to exercise their best efforts to accomplish the foregoing terms and conditions of the Stipulation. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.2 The Parties agree that terms of the Settlement were negotiated in good faith by the Parties, and reflect a settlement that was
reached voluntarily after consultation with competent legal counsel. The Parties will request that the Judgment in the Derivative Action will contain a finding that during the course of the litigation, the Parties and their respective counsel at all
times complied with the requirements of Rule 11 of the Federal Rules of Civil Procedure and all other similar rules of professional conduct. The Parties reserve their right to rebut, in a manner that such party determines to be appropriate, any
contention made in any public forum that the Action were brought or defended in bad faith or without a reasonable basis. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.3 Neither the Stipulation nor the Settlement, nor any act performed or document executed
pursuant to or in furtherance of the Stipulation or the settlement: (a)&nbsp;is or may be deemed to be or may be used as an admission of, or evidence of, the validity of any Released Claim, or of any wrongdoing or liability of the Individual
Defendants and/or the Related Persons; or (b)&nbsp;is or may be deemed to be or may be used as an admission of, or evidence of, any fault or omission of any of the Individual Defendants and/or the Related Persons in any civil, criminal, or
administrative proceeding in any court, administrative agency, or other tribunal. Fossil, the Individual Defendants, and/or the Related Persons may file the Stipulation and/or the Judgment in any action that may be brought against them in order to
support a defense or counterclaim based on principles of <I>res judicata</I>, collateral estoppel, release, good faith settlement, judgment bar or reduction, or any other theory of claim preclusion or issue preclusion or similar defense or
counterclaim. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.4 The Exhibits to the Stipulation are material and integral parts hereof and are fully incorporated herein by
this reference. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.5 The Stipulation may be amended or modified only by a written instrument signed by or on behalf of all
Parties or their respective successors-in-interest. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.6 The Stipulation and the Exhibits attached hereto represent the
complete and final resolution of all disputes between the Parties with respect to the Action, constitute the entire agreement among the Parties, and supersede any and all prior negotiations, discussions, agreements, or undertakings, whether oral or
written, with respect to such matters. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.7 The Stipulation shall be deemed drafted equally by all Parties hereto. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.8 The Stipulation and the Exhibits attached hereto shall be considered to have been negotiated, executed, and delivered, and to be
wholly performed, in the State of Texas and the rights and obligations of the Parties to the Stipulation shall be construed and enforced in accordance with, and governed by, the internal, substantive laws of the State of Texas without giving effect
to that State&#146;s choice of law principles. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.9 No representations, warranties, or inducements have been made to any party concerning
the Stipulation or its Exhibits other than the representations, warranties, and covenants contained and memorialized in such documents. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">8.10 Except as otherwise provided herein, each of the Parties shall bear his, her, or its own costs. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">8.11 Each counsel or other Person executing the Stipulation or its Exhibits on behalf of any Party hereby warrants that such Person has the full authority to do so. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.12 The Stipulation shall be binding upon, and inure to the benefit of, the successors and assigns of the Parties and the Released
Persons hereto. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.13 The Stipulation may be executed by facsimile and in one or more counterparts. All executed counterparts
and each of them shall be deemed to be one and the same instrument. A complete set of original executed counterparts shall be filed with the Court. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">IN WITNESS WHEREOF, the Parties hereto have caused the Stipulation to be executed, by their duly authorized attorneys, dated as of May&nbsp;4, 2011. </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="bottom" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">ROBBINS GELLER RUDMAN &amp; DOWD LLP</FONT></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">TRAVIS E. DOWNS III (travisd@rgrdlaw.com)</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">JAMES I. JACONETTE (jamesj@rgrdlaw.com)</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">JEFFREY D. LIGHT (jeffl@rgrdlaw.com)</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px; margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">ROBERT R. HENSSLER JR. (bhenssler@rgrdlaw.com)</FONT></P></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ James I. Jaconette</FONT></P></TD></TR>
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<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">JAMES I. JACONETTE</FONT></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">655&nbsp;West Broadway, Suite&nbsp;1900</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">San Diego, CA 92101</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Telephone: 619/231-1058</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">619/231-7423 (fax)</FONT></P></TD></TR></TABLE></DIV>

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<TD VALIGN="bottom" NOWRAP> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">ROBBINS UMEDA LLP</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">BRIAN J. ROBBINS</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(brobbins@robbinsumeda.com)</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">KEVIN A.
SEELY</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(kseely@robbinsumeda.com)</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">SHANE
P. SANDERS</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ssanders@robbinsumeda.com)</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">600 B Street, Suite 1900</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">San Diego, CA
92101</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Telephone: 619/525-3990</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">619/525-3991 (fax)</FONT></P></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Co-Lead Counsel for Plaintiffs</FONT></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">KENDALL LAW GROUP, LLP</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">JOE
KENDALL (jkendall@kendalllawgroup.com)</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">State Bar No.&nbsp;11260700</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">3232 McKinney Avenue, Suite 700</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dallas, TX 75204</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Telephone: 214/744-3000</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">214/744-3015
(fax)</FONT></P></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Liaison Counsel</FONT></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">SULLIVAN, WARD, ASHER&nbsp;&amp; PATTON, P.C.</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">CYNTHIA J. BILLINGS (cbillings@swappc.com)</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">25800 Northwestern Highway</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">1000 Maccabees Center</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Southfield, MI
48075-1000</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Telephone: 248/746-0700</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">248/746-2760 (fax)</FONT></P></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">THE SHUMAN LAW FIRM</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">KIP B.
SHUMAN (kip@schumanlawfirm.com)</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">885 Arapahoe Blvd.</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Boulder, CO 80302</FONT></P></TD></TR>
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<TD VALIGN="bottom" NOWRAP> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Telephone: 303/861-3003</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">303/830-6920 (fax)</FONT></P></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Additional Counsel for Plaintiffs</FONT></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">FISH&nbsp;&amp; RICHARDSON</FONT></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">GEOFFREY S. HARPER</FONT></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">ANDREW R. GRABEN</FONT></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">SCOTT C. THOMAS</FONT></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">STEVEN H. STODGHILL</FONT></TD></TR></TABLE></DIV>

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<TD VALIGN="bottom" NOWRAP> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Geoffrey S. Harper with permission</FONT></P></TD></TR>
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<TD VALIGN="bottom" NOWRAP ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">GEOFFREY S. HARPER</FONT></TD></TR>
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<TD VALIGN="bottom" NOWRAP> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">1717 Main Street, Suite 5000</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Dallas, TX 75201</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Telephone: (214) 747-5070</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(214) 747-2091 (fax)</FONT></P></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Attorneys for Defendants Tom Kartsotis, Kosta N. Kartsotis, Michael L. Kovar, Michael W. Barnes, Mark D. Quick, Jal S. Shroff, Randy S. Hyne, Richard H. Gundy, Kenneth W. Anderson,
Alan J. Gold, Michael Steinberg, Donald J. Stone, Caden Wang, Stephen Bock</FONT></TD></TR>
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<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">LAW OFFICES OF JOE STALEY, JR., P.C.</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">E. LAWRENCE VINCENT</FONT></P></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ E. Lawrence Vincent with permission</FONT></P></TD></TR>
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<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">E. LAWRENCE VINCENT</FONT></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">3100 Monticello Avenue, Suite 850</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Dallas, TX 75205</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Telephone: (214)&nbsp;739-3700</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(214) 739-1919 (fax)</FONT></P></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Attorneys for Nominal Defendant Fossil, Inc.</FONT></TD></TR>
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<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">BRACEWELL GIULIANAI LLP</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">TERENCE J. HART</FONT></P></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Terence J. Hart with permission</FONT></P></TD></TR>
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<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">TERENCE J. HART</FONT></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">1445 Ross Avenue, Suite 3800</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dallas, TX 75202</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Telephone:
(214)&nbsp;468-3800</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(214) 468-3800 (fax)</FONT></P></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Attorneys for Defendant Randy S. Kercho</FONT></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">SCOTT YUNG</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">ANDREW W.
YUNG</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">JOHN B. SCOTT</FONT></P></TD></TR></TABLE></DIV>

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<TD VALIGN="bottom" NOWRAP> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Andrew W. Yung with permission</FONT></P></TD></TR>
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<TD VALIGN="bottom" NOWRAP ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">ANDREW W. YUNG</FONT></TD></TR>
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<TD VALIGN="bottom" NOWRAP> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">208 N. Market Street, Suite 200</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Dallas, TX 75202</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Telephone: (214) 220-0422</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(214) 220-9932 (fax)</FONT></P></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Attorneys for Defendant Thomas R. Tunnell</FONT></TD></TR></TABLE></DIV>

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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>CERTIFICATE OF SERVICE </U></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">I hereby certify that on May&nbsp;5, 2011, I authorized the electronic filing of the foregoing with the Clerk of the Court using the
CM/ECF system which will send notification of such filing to the e-mail addresses denoted on the attached Electronic Mail Notice List, and I hereby certify that I caused to be mailed the foregoing document or paper via the United States Postal
Service to the non-CM/ECF participants indicated on the attached Manual Notice List. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">I certify under penalty of perjury under
the laws of the United States of America that the foregoing is true and correct. Executed on May&nbsp;5, 2011. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="bottom" NOWRAP> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ James I. Jaconette</FONT></P></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">JAMES I. JACONETTE</FONT></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">ROBBINS GELLER RUDMAN &amp; DOWD LLP</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">655 West Broadway, Suite 1900</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">San Diego, CA 92101-3301</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Telephone: 619/231-1058</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">619/231-7423
(fax)</FONT></P></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">E-mail: jamesj@rgrdlaw.com</FONT></TD></TR></TABLE></DIV>
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