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(Proposal 4)
Calvert Index Social Fund and Calvert Index VP S&P Mid Cap 400 Index Portfolio, each a beneficial owner
of 859 shares and 8,926 shares, respectively, of Common Stock as of December 21, 2011, have notified us that
they intend to present the following proposal at the Annual Meeting:
Stockholder Proposal
RESOLVED: Shareholders request that the Board of Directors issue a report describing the company's
supply chain standards related to environmental impacts--particularly water use and related pollution. This
report, prepared at reasonable cost and omitting proprietary information, shall be released by November 1, 2012.
SUPPORTING STATEMENT: Companies that rely heavily on water or other resources in their supply
chains are vulnerable to resource scarcity and reputational damage. Investors increasingly seek disclosure of how
companies manage this risk and maximize opportunities for brand enhancement through reputable supply chain
Leading companies in apparel and accessories publish sustainability policies and reports that describe
vendor standards and sustainable business practices. They gather and disclose information about key
environmental impacts throughout the value chain of their products. Nine West, Adidas, Clarks, Dr. Martens,
Deckers, K-Swiss, New Balance, Nike, Puma, Timberland, Wolverine all participate in the Leather Working
Group (LWG), a multi-stakeholder initiative that maintains an environmental auditing protocol and promotes
sustainable business practices among companies that produce leather and leather goods.
In 2010, Nike committed to have all leather suppliers join LWG and actively worked with their suppliers
toward that goal. Nike also took a leading role in developing the auditing protocol to strengthen the voluntary
program. Timberland was a founding member of LWG and has continued to work closely with tanners to reduce
environmental impacts.
While leather goods are a growing segment in Fossil's product line up, the company is not a member of the
LWG and does not disclose information about an alternative supplier environmental audit program. Furthermore,
Fossil does not disclose corporate environmental policies, nor does Fossil communicate to stakeholders and
shareholders important information about long-term sustainability performance such as water and energy use and
pollution reduction strategies related to the production of leather goods.
As a global company, Fossil's supply chains employ energy-intensive processes and create significant water
demands and detrimental effects, particularly in leather tanning and finishing. Producing leather goods such as
belts, shoes, handbags and gloves is a water intensive process. According to the Water Footprint Network, on
average it takes 4,400 gallons of water to make one pair of leather shoes, depending on the type of animal used.
Furthermore, leather tanning and finishing are polluting processes that use and discharge heavy metals,
chemicals, organic matter, salts and acids. Untreated effluent is a serious problem in developing countries where
leather production is growing. With suppliers located throughout the world, Fossil is well positioned to work
with third party manufactures to improve sustainability practices and disclosure. In addition, the business risks
associated with water scarcity and declining water quality are likely to be worsened by climate change in certain
regions. It is imperative that Fossil address these long-term business risks. There are significant opportunities for
Fossil Inc. to adopt practices that reduce supply chain environmental impacts.
THEREFORE, please vote FOR this common-sense proposal for improved environmental performance,
transparency and success of Fossil Inc's long-term operations.