Fossil, Inc-Notice and Proxy Statement-2012 Page 11

The Board of Directors has established four standing committees: the Audit Committee, the Compensation

Committee, the Finance Committee and the Nominating and Corporate Governance Committee. Ms. Agather and
Messrs. Boyer (Chairman) and Skinner serve on the Audit Committee; Ms. Agather (Chairperson), Ms. Neal,
Ms. Ragusa and Mr. Steinberg serve on the Compensation Committee; Messrs. Boyer, Kusin, Skinner
(Chairman) and Zimmerman serve on the Finance Committee and Ms. Ragusa (Chairperson) and Messrs. Kusin,
Steinberg, Stone and Zimmerman serve on the Nominating and Corporate Governance Committee.

Audit Committee. The functions of the Audit Committee are to:

appoint the Company's independent registered public accounting firm;

review the plan and scope of any audit of the Company's consolidated financial statements;

review the Company's significant accounting policies and other related matters; and

review the Company's annual and quarterly reports and earnings releases.

Deloitte & Touche LLP, the Company's principal independent registered public accounting firm, reports

directly to the Audit Committee. The Audit Committee, consistent with the Sarbanes-Oxley Act of 2002 and the
rules adopted thereunder, meets with management and the Company's independent registered public accounting
firm prior to the filing of officers' certifications with the SEC to receive information concerning, among other
things, significant deficiencies in the design or operation of internal control over financial reporting. The Audit
Committee has adopted a procedure that enables confidential and anonymous reporting to the Audit Committee
of concerns regarding questionable accounting or auditing matters. The Company's internal audit group reports
directly to the Audit Committee on a quarterly basis. The Audit Committee held a total of thirteen meetings
during the fiscal year ended December 31, 2011.

All members of the Audit Committee have been determined to be financially literate and to meet the

appropriate Nasdaq and SEC standards for independence. See "Director Independence." The Audit Committee
includes two independent directors, Messrs. Boyer and Skinner, who have been determined by the Board of
Directors to meet the qualifications of an "audit committee financial expert" in accordance with SEC rules. The
Audit Committee operates under a formal charter adopted by the Board of Directors that governs its duties and
conduct. Copies of the charter can be obtained free of charge from the Company's web site, www.fossil.com, by
contacting the Company at the address appearing on the first page of this proxy statement to the attention of
Investor Relations, or by telephone at (972) 234-2525.

Compensation Committee. The functions of the Compensation Committee are to:

make recommendations to the Board of Directors regarding the compensation of Company executives;

produce annual reports on executive compensation for inclusion in the Company's proxy statement;
and

oversee and advise the Board of Directors on the adoption of policies that govern the Company's
compensation programs, including stock and benefit plans, and to administer the 2004 Long-Term
Incentive Plan (the "2004 Incentive Plan"), which terminated on May 21, 2008, the 2008 Long-Term
Incentive Plan (the "2008 Incentive Plan") and the 2002 Restricted Stock Plan (the "Restricted Stock
Plan"), which was terminated on August 29, 2007.

The Compensation Committee held five meetings during the fiscal year ended December 31, 2011. All

members of the Compensation Committee have been determined to meet the appropriate Nasdaq standards for
independence. See "Director Independence." Further, each member of the Compensation Committee is a "Non-
Employee Director" as defined in Rule 16b-3 under the Exchange Act and an "outside director" as defined for
purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). The Compensation
Committee operates under a formal charter adopted by the Board of Directors that governs its duties and conduct.