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Employee Benefit Plans | 12 Months Ended
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Dec. 28, 2013
Employee Benefit Plans |
Employee Benefit Plans | 16. Employee Benefit Plans Deferred Compensation and Savings Plans. The Company has a defined contribution savings plan (the "401(k) Plan") for substantially all U.S.-based full-time employees of the Company. The Company's common stock is one of several investment alternatives available under the 401(k) Plan. Effective January 1, 2012, the Company added a Roth 401(k) option to the 401(k) Plan. The Company has a discretionary match for the 401(k) Plan. After one year of service (minimum of 1,000 hours worked), the Company matches 50% of employee contributions up to 3% of their compensation and 25% of employee contributions between 4% and 6% of their compensation. Effective January 1, 2012, after ninety 90 days of service (minimum of 250 hours worked), the Company increased its match to 50% of employee contributions up to 6% of their compensation. Matching contributions made by the Company to the 401(k) Plan totaled approximately $2.7 million, $2.7 million and $1.6 million for fiscal years 2013, 2012 and 2011, respectively. The Company also has the right to make additional matching contributions not to exceed 15% of employee compensation. The Company did not make any additional matching contributions during fiscal years 2013, 2012 and 2011. In December 1998, the Company adopted the Fossil Group, Inc. and Affiliates Deferred Compensation Plan (the "Deferred Plan"). Eligible participants may elect to defer up to 50% of their salary or up to 100% of any bonuses paid pursuant to the terms and conditions of the Deferred Plan. In addition, the Company may make employer contributions to participants under the Deferred Plan from time to time. The Company made no contributions to the Deferred Plan during fiscal years 2013, 2012 and 2011. In prior periods, the Company made payments pursuant to the Deferred Plan into a Rabbi Trust. The funds held in the Rabbi Trust are directed to certain investments available through life insurance products and accounted for in accordance with ASC 710, Compensation—General ("ASC 710"). As of December 28, 2013, the Company had an asset of $2.4 million related to the Company's invested balances recorded in intangible and other assets—net and a liability of $2.8 million related to the participants' invested balances recorded in accrued expenses—other, each on the Company's consolidated balance sheets. Stock-Based Compensation Plans. The Company accounts for stock-based compensation in accordance with the provisions of ASC 718, using the Black-Scholes option pricing model to determine the fair value of stock options and stock appreciation rights at the date of grant. The Company's grants under its current stock-based compensation plans generally include: (i) stock options and restricted stock units for its international employees, (ii) restricted stock units for its nonemployee directors and (iii) stock appreciation rights, restricted stock and restricted stock units for its U.S.-based employees. As of December 28, 2013, the Company had approximately $21.6 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Company's stock-based compensation plans. This cost is expected to be recognized over a weighted-average period of approximately 1.5 years. Long-Term Incentive Plans. An aggregate of 4,685,030 shares of the Company's common stock were reserved for issuance pursuant to the Company's 2008 Long-Term Incentive Plan ("2008 LTIP"), adopted in March 2008. Under the 2008 LTIP, designated employees of the Company, including officers, certain contractors, and outside directors of the Company, are eligible to receive (i) stock options, (ii) stock appreciation rights, (iii) restricted or non-restricted stock awards, (iv) restricted stock units, (v) cash awards, or (vi) any combination of the foregoing. The 2008 LTIP is administered by the Compensation Committee of the Company's Board of Directors (the "Compensation Committee"). Each award issued under the 2008 LTIP terminates at the time designated by the Compensation Committee, not to exceed ten years. The current outstanding stock options, stock appreciation rights, restricted stock and restricted stock units issued under the 2008 LTIP predominantly have original vesting periods of three years. All stock appreciation rights and restricted stock units are settled in shares of the Company's common stock. The exercise prices of stock options granted under the 2008 LTIP were not less than the fair market value of the Company's common stock at the date of grant. Effective January 1, 2012, the Company's Board of Directors approved changes to the equity compensation package for nonemployee directors. Each nonemployee director receives restricted stock units valued at $120,000 on the date of the Company's annual stockholders' meeting. These grants vest on the earlier of one year from the date of grant or the Company's next annual stockholders' meeting date. Prior to the Company establishing the 2008 LTIP, stock-based compensation awards were made to employees and nonemployee directors pursuant to the Company's initial Long-Term Incentive Plan ("LTIP") and Nonemployee Director Stock Option Plan ("Nonemployee Plan"), respectively. Each award issued under the LTIP terminates at the time designated by the Compensation Committee, not to exceed ten years. The currently outstanding stock options, stock appreciation rights, restricted stock and restricted stock units issued under the LTIP and Nonemployee Plan have original vesting periods that predominately range from three to five years. All stock appreciation rights and restricted stock units are settled in shares of the Company's common stock. The exercise prices of stock options granted under the Nonemployee Plan were not less than the fair market value of the Company's common stock at the date of grant. Pursuant to the Nonemployee Plan, 50% of the stock options granted became exercisable on the first anniversary of the date of grant and in two additional installments of 25% each on the second and third anniversaries. On March 26, 2008, the Company's Board of Directors elected to terminate these prior plans. The termination of the LTIP and the Nonemployee Plan did not impair outstanding awards representing 87,955 shares and 24,750 shares, respectively, of the Company's common stock at December 28, 2013 which continued in accordance with their original terms. Stock Options and Stock Appreciation Rights. The fair value of stock options and stock appreciation rights granted under the Company's stock-based compensation plans was estimated on the date of grant using the Black-Scholes option pricing model. The table below outlines the weighted average assumptions for these award grants:
Fiscal Year |  | 2013 |  | 2012 |  | 2011 |
--- | --- | --- | --- | --- | --- | --- | ---
Risk-free interest rate |  |  | 0.8 | % |  | 1.1 | % |  | 1.1 | %
Expected term (in years) |  |  | 4.7 |  |  | 5.1 |  |  | 4.7 |
Expected volatility |  |  | 55.1 | % |  | 51.1 | % |  | 45.2 | %
Expected dividend yield |  |  | 0.0 | % |  | 0.0 | % |  | 0.0 | %
Estimated fair value per stock option/stock appreciation right granted |  | $ | 48.19 |  | $ | 56.08 |  | $ | 33.10 |
The expected term of the stock options represent the estimated period of time until exercise and is based on historical experience of similar awards. Expected stock price volatility is based on the historical volatility of the Company's common stock. The risk-free interest rate is based on the implied yield available on U.S. Treasury securities with an equivalent remaining term. The Company generally receives a tax deduction when stock options are exercised or when restricted stock vests. Generally for stock options, the tax deduction is related to the excess of the stock price at the time the stock options are exercised over the exercise price of the stock options. For restricted stock, the tax deduction is equal to the fair market value of the Company's common stock on the date the restricted stock vests multiplied by the number of shares of restricted stock. Excess tax benefits from stock-based compensation on the Company's consolidated statements of cash flows for fiscal years 2013, 2012 and 2011 amounted to approximately $8.4 million, $11.7 million and $10.0 million, respectively. The following table summarizes stock option and stock appreciation rights activity:
Stock Options and Stock Appreciation Rights |  | Shares |  | Weighted-Average Exercise Price |  | Weighted-Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value |
--- | --- | --- | --- | --- | --- | --- | --- | --- | ---
|  | in thousands |  |  |  |  |  | in thousands |
Outstanding at January 1, 2011 |  |  | 1,400 |  | $ | 25.55 |  |  | 5.8 |  | $ | 62,889 |
Granted |  |  | 303 |  |  | 87.73 |  |  |  |  |  |  |
Exercised |  |  | (461 | ) |  | 23.95 |  |  |  |  |  | 33,267 |
Forfeited or expired |  |  | (22 | ) |  | 47.44 |  |  |  |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Outstanding at December 31, 2011 |  |  | 1,220 |  |  | 41.20 |  |  | 5.8 |  |  | 49,125 |
Granted |  |  | 279 |  |  | 124.61 |  |  |  |  |  |  |
Exercised |  |  | (386 | ) |  | 30.28 |  |  |  |  |  | 32,201 |
Forfeited or expired |  |  | (74 | ) |  | 98.53 |  |  |  |  |  |  |
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Outstanding at December 29, 2012 |  |  | 1,039 |  |  | 63.56 |  |  | 6.4 |  |  | 36,708 |
Granted |  |  | 41 |  |  | 104.62 |  |  |  |  |  |  |
Exercised |  |  | (332 | ) |  | 35.64 |  |  |  |  |  | 24,820 |
Forfeited or expired |  |  | (70 | ) |  | 97.62 |  |  |  |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Outstanding at December 28, 2013 |  |  | 678 |  |  | 76.15 |  |  | 6.2 |  |  | 31,794 |
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Exercisable at December 28, 2013 |  |  | 391 |  | $ | 59.59 |  |  | 5.5 |  | $ | 24,457 |
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The aggregate intrinsic value in the table above is before income taxes and is based on the exercise price for outstanding and exercisable options/rights at December 28, 2013 and based on the fair market value of the Company's common stock on the exercise date for options/rights that were exercised during the fiscal year. Stock Options and Stock Appreciation Rights Outstanding and Exercisable. The following table summarizes information with respect to stock options and stock appreciation rights outstanding and exercisable at December 28, 2013:
Stock Options Outstanding |  | Stock Options Exercisable |
--- | --- | --- | ---
Range of Exercise Prices |  | Number of Shares |  | Weighted-Average Exercise Price |  | Weighted-Average Remaining Contractual Term (Years) |  | Number of Shares |  | Weighted-Average Exercise Price |
|  | in thousands |  |  |  |  |  | in thousands |  |  |
$13.65 - $21.51 |  |  | 85 |  | $ | 15.41 |  |  | 4.4 |  |  | 64 |  | $ | 15.98 |
$21.51 - $34.59 |  |  | 64 |  |  | 29.13 |  |  | 3.0 |  |  | 64 |  |  | 29.13 |
$34.59 - $67.10 |  |  | 81 |  |  | 39.73 |  |  | 5.6 |  |  | 81 |  |  | 39.73 |
$67.10 - $106.40 |  |  | 116 |  |  | 80.92 |  |  | 7.3 |  |  | 65 |  |  | 80.72 |
$106.40 - $131.46 |  |  | 178 |  |  | 128.08 |  |  | 8.1 |  |  | 63 |  |  | 128.09 |
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Total |  |  | 524 |  | $ | 73.70 |  |  | 6.3 |  |  | 337 |  | $ | 57.59 |
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Stock Appreciation Rights Outstanding |  | Stock Appreciation Rights Exercisable |
--- | --- | --- | ---
Range of Exercise Prices |  | Number of Shares |  | Weighted-Average Exercise Price |  | Weighted-Average Remaining Contractual Term (Years) |  | Number of Shares |  | Weighted-Average Exercise Price |
|  | in thousands |  |  |  |  |  | in thousands |  |  |
$13.65 - $21.51 |  |  | 20 |  | $ | 13.65 |  |  | 3.2 |  |  | 6 |  | $ | 13.65 |
$21.51 - $34.59 |  |  | 6 |  |  | 30.71 |  |  | 2.2 |  |  | 6 |  |  | 30.71 |
$34.59 - $67.10 |  |  | 16 |  |  | 42.68 |  |  | 4.6 |  |  | 13 |  |  | 40.07 |
$67.10 - $106.40 |  |  | 67 |  |  | 92.67 |  |  | 6.5 |  |  | 13 |  |  | 82.01 |
$106.40 - $131.46 |  |  | 45 |  |  | 126.34 |  |  | 6.2 |  |  | 16 |  |  | 127.96 |
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Total |  |  | 154 |  | $ | 84.50 |  |  | 5.6 |  |  | 54 |  | $ | 72.05 |
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Restricted Stock and Restricted Stock Units. The following table summarizes restricted stock and restricted stock unit activity:
Restricted Stock and Restricted Stock Units |  | Number of Shares |  | Weighted-Average Grant-Date Fair Value |
--- | --- | --- | --- | --- | ---
|  | in thousands |  |  |
Nonvested at January 1, 2011 |  |  | 430 |  | $ | 29.03 |
Granted |  |  | 105 |  |  | 86.80 |
Vested |  |  | (172 | ) |  | 29.29 |
Forfeited |  |  | (11 | ) |  | 42.98 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Nonvested at December 31, 2011 |  |  | 352 |  |  | 45.70 |
Granted |  |  | 102 |  |  | 110.72 |
Vested |  |  | (161 | ) |  | 45.14 |
Forfeited |  |  | (16 | ) |  | 67.62 |
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Nonvested at December 29, 2012 |  |  | 277 |  |  | 68.69 |
Granted |  |  | 140 |  |  | 106.76 |
Vested |  |  | (171 | ) |  | 57.83 |
Forfeited |  |  | (27 | ) |  | 86.51 |
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Nonvested at December 28, 2013 |  |  | 219 |  | $ | 99.27 |
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The total fair value of shares/units vested during fiscal years 2013, 2012 and 2011 was $18.1 million, $19.1 million and $14.7 million, respectively. The Company maintains a defined contribution employee benefit plan for its employees located in Switzerland. The plan is funded through payments to an insurance company. The payments are determined by periodic actuarial calculations. During fiscal years 2013 and 2012, the Company recorded pension expense of $6.2 million and $2.8 million, respectively, related to this plan. The liability for the Company's defined contribution employee benefit plan was $8.6 million and $2.8 million at the end of fiscal years 2013 and 2012, respectively. This liability is recorded in other long-term liabilities on the Company's consolidated balance sheets. Under French law, the Company is required to maintain a defined benefit plan for its employees located in France, which is referred to as a "retirement indemnity". The amount of the retirement indemnity is based on the employee's last salary and duration of employment with the Company. The employee's right to receive the retirement indemnity is subject to the employee remaining with the Company until retirement. During fiscal years 2013 and 2012, the Company recorded pension expense of $0.3 million and $0.3 million, respectively, for its retirement indemnity obligations. The liability for the Company's retirement indemnity was $1.5 million and $1.1 million at the end of fiscal years 2013 and 2012, respectively. This liability is recorded in other long-term liabilities on the Company's consolidated balance sheets.

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