Fossil Group, Inc.

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(1)

Includes shares to be issued upon the vesting of outstanding RSUs and PSUs (assuming target performance levels) and the exercise of outstanding stock options, including those stock options that are out of the money. All SARs, as of December 31, 2023, are out of the money based on the closing price of our Common Stock on the Nasdaq on December 29, 2023, which was $1.46 per share.

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(2)

Excludes RSUs and PSUs.

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Description of the 2024 Plan

The following is a brief description of the 2024 Plan. A copy of the 2024 Plan is attached as Appendix A to this Proxy Statement, and the following description is qualified in its entirety by reference to the 2024 Plan.

Purpose. The purpose of the 2024 Plan is to enable the Company to remain competitive and innovative in our ability to attract and retain the services of key employees, key contractors, and outside directors of the Company and our subsidiaries. The 2024 Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other awards which may be granted singly, in combination, or in tandem, and which may be paid in cash, shares of common stock, or a combination of cash and shares of common stock. The 2024 Plan is expected to provide flexibility to our compensation methods in order to adapt the compensation of our employees, contractors, and outside directors to a changing business environment, after giving due consideration to competitive conditions and the impact of federal tax laws.

Effective Date and Expiration. The 2024 Plan will become effective on the Effective Date, and will terminate on the tenth anniversary of the Effective Date. No award may be made under the 2024 Plan after its termination date, but awards made prior thereto may extend beyond that date.

Share Authorization. Subject to certain adjustments, the maximum number of shares of our common stock that may be delivered pursuant to awards under the 2024 Plan is 7,000,000, subject to increase by any awards under Prior Plan (the “Prior Plan Awards”) (i) that are outstanding on the Effective Date, and that, on or after the Effective Date, are forfeited, expire or are canceled; and (ii) any shares subject to awards relating to our common stock under the Prior Plan that are settled in cash on or after the Effective Date, but solely to the extent that such awards, by their terms, could have been settled in common stock. One hundred percent (100%) of the shares authorized for issuance under the 2024 Plan may be delivered pursuant to incentive stock options. In

addition, no outside director may be granted any award or awards denominated in shares that exceed in the aggregate $130,000 in fair market value (such fair market value computed as of the date of grant) in any calendar year period. However, the foregoing limit shall not apply to any Award made pursuant to deferred compensation arrangements in lieu of all or a portion of cash retainers. The 2024 Plan also provides that no more than 5% of the shares of common stock that may be issued pursuant to an award under the 2024 Plan may be designated as “Exempt Shares” ​(as defined in the 2024 Plan). The Committee has greater flexibility to accelerate the vesting for shares designated as Exempt Shares.

Shares to be issued may be made available from our authorized but unissued shares of common stock, shares held by the Company in its treasury, or shares purchased by the Company on the open market or otherwise. During the term of the 2024 Plan, we will at all times reserve and keep enough shares available to satisfy the requirements of the 2024 Plan. If an award under the 2024 Plan or any Prior Plan Award is cancelled, forfeited, or expires, in whole or in part, the shares subject to such forfeited, expired, or cancelled award may again be awarded under the 2024 Plan. Awards that may be satisfied either by the issuance of common stock or by cash or other consideration shall be counted against the maximum number of shares that may be issued under the 2024 Plan only during the period that the award is outstanding or to the extent the award is ultimately satisfied by the issuance of shares. Shares of common stock otherwise deliverable pursuant to an award that are withheld upon exercise or vesting of an award for purposes of paying the exercise price or tax withholdings shall be treated as delivered to the participant and shall be counted against the maximum number of shares of common stock that may be issued under the 2024 Plan. An award will not reduce the number of shares that may be issued pursuant to the 2024 Plan if the settlement of the award will not require the issuance of shares, as, for example, a stock appreciation right that can be satisfied only by the payment of cash. Only shares forfeited back to the Company or shares cancelled on account of termination, expiration, or lapse of an award shall again be available for grant of incentive stock options under the 2024

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Plan, but shall not increase the maximum number of shares described above as the maximum number of shares that may be delivered pursuant to incentive stock options.

Administration. The 2024 Plan will be administered by the Compensation and Talent Management Committee of our board of directors (the “Committee”). At any time there is no Committee to administer the 2024 Plan, any reference to the Committee is a reference to our board of directors. The Committee will determine the persons to whom awards are to be made, determine the type, size, and terms of awards, interpret the 2024 Plan and award agreements granted thereunder, establish and revise rules, regulations, and sub-plans (including sub-plans for awards made to participants who are not resident in the United States) relating to the 2024 Plan and make any other determinations that it believes necessary for the administration of the 2024 Plan. To assure the viability of awards granted to participants employed in foreign countries, the Committee may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, or custom. Moreover, the Committee may approve such supplements to, or amendments, restatements, or alternative versions of, the 2024 Plan as the Committee determines is necessary or appropriate for such purposes. Any such amendment, restatement or alternative versions that the Committee approves for purposes of using the 2024 Plan in a foreign country will not affect the terms of the 2024 Plan for any other country. The Committee may delegate certain duties to one or more officers of the Company as provided in the 2024 Plan.

Eligibility. Employees (including any employee who is also a director or an officer), contractors, and outside directors of the Company whose judgment, initiative, and efforts contributed to or may be expected to contribute to the successful performance of the Company are eligible to participate in the 2024 Plan. As of April 24, 2024, there were approximately 5,970 employees, 10 directors, and 100 contractors who would be eligible for awards under the 2024 Plan.

Stock Options. The Committee may grant either incentive stock options (“ISOs”) qualifying under Section 422 of the Code or nonqualified stock options, provided that only employees of the Company and its subsidiaries (excluding subsidiaries that are not corporations) are eligible to receive ISOs. For purposes of clarity, employees of Fossil Partners, L.P., outside directors and independent contractors are not eligible to receive ISOs. Stock options may not be granted with an option

price less than 100% of the fair market value of a share of common stock on the date the stock option is granted. If an ISO is granted to an employee who owns or is deemed to own more than 10% of the combined voting power of all classes of stock of the Company (or any parent or subsidiary), the option price shall be at least 110% of the fair market value of a share of common stock on the date of grant. No dividends or dividend equivalent rights may be paid or granted with respect to any stock option granted under the 2024 Plan. The Committee will determine the terms of each stock option at the time of grant, including without limitation, the methods by or forms in which shares will be delivered to participants. The maximum term of each option, the times at which each option will be exercisable, and provisions requiring forfeiture of unexercised options at or following termination of employment or service generally are fixed by the Committee, except that the Committee may not grant stock options with a term exceeding ten years, or in the case of an ISO granted to an employee who owns or is deemed to own 10% or more of the combined voting power of all classes of our stock (or any parent or subsidiary), a term exceeding five years.

Recipients of stock options may pay the option price (i) in cash, check, bank draft, or money order payable to the order of the Company and in U.S. dollars; (ii) by delivering to us shares of our common stock (including restricted stock) already owned by the participant having a fair market value equal to the aggregate option price; (iii) by delivering to us or our designated agent (including by FAX or electronic transmission) an executed irrevocable option exercise form (or, to the extent permitted by the Company, exercise instructions that may be communicated in writing, telephonically, or electronically) together with irrevocable instructions from the participant to a broker or dealer, reasonably acceptable to us, to sell certain of the shares purchased upon the exercise of the option or to pledge such shares to the broker as collateral for a loan from the broker and to deliver to us the amount of sale or loan proceeds necessary to pay the purchase price; and/or (iv) by any other form of valid consideration that is acceptable to the Committee in its sole discretion.

Stock Appreciation Rights. The Committee is authorized to grant stock appreciation rights (“SARs”) as a stand-alone award, or freestanding SARs, or in conjunction with options granted under the 2024 Plan, or tandem SARs. SARs entitle a participant to receive an amount, in cash and/or common stock, equal to the excess of the fair market value of a share

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of common stock on the date of exercise (or, as provided in the award agreement, converted) over the fair market value of a share of common stock on the date of grant. The grant price of a SAR cannot be less than 100% of the fair market value of a share on the date of grant. The Committee will determine the terms of each SAR at the time of the grant, including without limitation, the methods by or forms in which shares will be delivered to participants. The maximum term of each SAR, the times at which each SAR will be exercisable, and provisions requiring forfeiture of unexercised SARs at or following termination of employment or service generally are fixed by the Committee, except that no freestanding SAR may have a term exceeding ten years and no tandem SAR may have a term exceeding the term of the option granted in conjunction with the tandem SAR. The Committee, in its sole discretion, may place a ceiling on the amount payable upon exercise of a SAR, but any such limitation shall be specified at the time that the SAR is granted. No dividends or dividend equivalent rights may be paid or granted with respect to any SAR granted under the 2024 Plan.

Restricted Stock and Restricted Stock Units. The Committee is authorized to grant restricted stock and restricted stock units. Restricted stock consists of shares of common stock that may not be sold, transferred, pledged, assigned, or otherwise disposed of, and that may be forfeited in the event of certain terminations of employment or service prior to the end of a restricted period as specified by the Committee. Restricted stock units are the right to receive shares of common stock at a future date in accordance with the terms of such grant upon the attainment of certain conditions specified by the Committee, which include substantial risk of forfeiture and restrictions on their sale or other transfer by the participant. The Committee determines the eligible participants to whom, and the time or times at which, grants of restricted stock or restricted stock units will be made, the number of shares or units to be granted, the price to be paid, if any, the time or times within which the shares covered by such grants will be subject to forfeiture, the time or times at which the restrictions will terminate, and all other terms and conditions of the grants. Restrictions or conditions could include, but are not limited to, the attainment of performance goals (as described below), continuous service with us, the passage of time, or other restrictions and conditions. The value of restricted stock units may be paid in shares of common stock, cash, or a combination of both, as determined by the Committee.

Dividend Equivalent Rights. The Committee is authorized to grant a dividend equivalent right to any participant, either as a component of another award or as a separate award, conferring on participants the right to receive credits based on the cash dividends that would have been paid on the shares of our common stock specified in the award if such shares were held by the participant to whom the award is made. The terms and conditions of the dividend equivalent right shall be specified by the grant. Dividend equivalents credited to the holder of a dividend equivalent right shall be paid only as the applicable Award vests or may be deemed to be reinvested in additional shares (which may thereafter accrue additional dividend equivalents), which shares of common stock shall be subject to the same vesting conditions as the Award to which they relate. Any such reinvestment shall be at the fair market value at the time thereof. A dividend equivalent right may be settled in cash, shares, or a combination thereof in a single payment or in installments.

Performance Awards. The Committee may grant performance awards payable in cash, shares of common stock, or other consideration, or a combination thereof, at the end of a specified performance period. Payment will be contingent upon achieving pre-established performance goals (as described below) by the end of the performance period. The Committee will determine the length of the performance period, the maximum payment value of an award, and the minimum performance goals required before payment will be made, so long as such provisions are not inconsistent with the terms of the 2024 Plan, and to the extent an award is subject to Section 409A of the Code, are in compliance with the applicable requirements of Section 409A of the Code and any applicable regulations or guidance. If the Committee determines, in its sole discretion, that the established performance measures or objectives are no longer suitable because of a change in our business, operations, corporate structure, or for other reasons that the Committee deems satisfactory, the Committee may modify the performance measures or objectives and/or the performance period.

Performance Goals. Awards (whether relating to cash or shares of common stock) under the 2024 Plan may be made subject to the attainment of performance goals relating to one or more business criteria which may consist of one or more, or any combination of, the following criteria (“Performance Criteria”): operating income; net income; cash flow; cost; revenues, revenue growth, revenue ratios; sales; ratio of debt

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to debt plus equity; net borrowing, credit quality or debt ratings; profit before tax; economic profit; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization or other measures of cash flow; gross margin; operating margins; earnings per share (whether on a pre-tax, after-tax, operational or other basis); operating earnings; capital expenditures; aggregate product price and other product measures; expenses or cost levels; economic value added; ratio of operating earnings to capital spending or any other operating ratios; free cash flow; operating profit; net profit; net sales or changes in net sales; net earnings; growth in operating earnings or growth in earnings per share; value of assets; net asset value per share; the accomplishment of mergers, acquisitions, dispositions, public offerings or similar extraordinary business transactions; sales growth; price of the Company’s common stock, stockholder value, or total market value; return on net assets, return on invested capital or other return measures, including return or net return on working assets, equity, capital, or net sales; market share or market penetration with respect to specific designated products or product groups and/or specific geographic areas; inventory and/or receivables control, inventory levels, inventory turn or shrinkage; total return to stockholders, stockholders return based on growth measures or the attainment by the shares of a specified value for a specified period of time, share price or share price appreciation; reduction of losses, loss ratios or expense ratios; reduction in fixed assets; operating cost management; management of capital structure; debt reduction; productivity improvements; satisfaction of specified business expansion goals or goals relating to acquisitions or divestitures; customer satisfaction based on specified objective goals or a Company-sponsored customer survey; customer growth; employee diversity goals; employee turnover; specified objective social goals; safety record; or store sales or productivity or any other criteria determined by the Committee. Any Performance Criteria may be used to measure the performance of the Company as a whole or any business unit of the Company and may be measured relative to a peer group or index. Any Performance Criteria may include or exclude (i) events that are of an unusual nature or indicate infrequency of occurrence, (ii) gains or losses on the disposition of a business, (iii) changes in tax or accounting regulations or laws, (iv) the effect of a merger or acquisition, as identified in the Company’s quarterly and annual earnings releases, or (v) other similar occurrences. In all other respects, Performance Criteria shall be calculated in

accordance with our financial statements, under generally accepted accounting principles, or under a methodology established by the Committee prior to the issuance of an award, which is consistently applied and identified in the audited financial statements, including footnotes, or the Compensation Discussion and Analysis section of the Company’s annual report.

Other Awards. The Committee may grant other forms of awards based upon, payable in, or otherwise related to, in whole or in part, shares of our common stock, if the Committee determines that such other form of award is consistent with the purpose and restrictions of the 2024 Plan. The terms and conditions of such other form of award shall be specified by the grant. Such other awards may be granted for no cash consideration, for such minimum consideration as may be required by applicable law, or for such other consideration as may be specified by the grant.

Annual Outside Director Awards. The 2024 Plan provides for annual grants of restricted stock units to our outside directors on the date of the Company’s annual stockholders meetings in an amount determined by our board of directors, provided that the value of such amount cannot exceed $130,000, so long as such outside director has not suffered a termination of service as an outside director prior to such date. In addition, each individual who first becomes an outside director (other than at any annual stockholders meeting), shall automatically be granted, as of the effective date of his or her appointment as an outside director, a portion of the restricted stock units that would have been granted to such individual if he or she had been elected as an outside director during the immediately preceding annual stockholders meeting, pro-rated based on the number of days between the date such individual first became an outside director and the date that is one year from the date of the immediately preceding annual stockholders meeting. Annual awards of restricted stock units to outside directors become 100% fully vested as follows: (i) for grants made on the date of an annual stockholders meeting, on the earlier of the first anniversary of the date of grant or the first annual stockholders meeting following the date of grant that is held at least 50 weeks following the date of grant, and (ii) for grants made to an individual first appointed as an outside director other than on the date of an annual stockholders meeting, one year from the date of grant, in either case, provided the outside director is providing services to the Company or a subsidiary on such vesting date. Notwithstanding the foregoing, in the event of

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an outside director’s termination of service due to his or her death, all unvested restricted stock units shall immediately become 100% fully vested and convertible into shares of common stock.

Repricing of Stock Options or SARs Not Permitted. The Committee may not, without approval of our stockholders, “reprice” any stock option or SAR. For purposes of the 2024 Plan, “reprice” means any of the following or any other action that has the same effect as any of the following: (i) amending a stock option or SAR to reduce its exercise price or base price; (ii) canceling a stock option or SAR at a time when its exercise price or base price exceeds the fair market value of a share of our common stock in exchange for cash or a stock option, SAR, award of restricted stock, or other equity award with an exercise price or base price less than the exercise price or base price of the original stock option or SAR; or (iii) taking any other action that is treated as a repricing under generally accepted accounting principles, provided that nothing shall prevent the Committee from (x) making adjustments to awards upon changes in capitalization; (y) exchanging or cancelling awards upon a merger, consolidation, or recapitalization; or (z) substituting awards for awards granted by other entities, to the extent permitted by the 2024 Plan.

Vesting, Forfeiture, Assignment. The Committee, in its sole discretion, shall establish the vesting terms applicable to an award, provided that any such vesting terms shall not be inconsistent with the terms of the 2024 Plan. Except as otherwise provided in the 2024 Plan, no award (nor any portion of an award, even on a pro rata basis) that would result in the issuance of our common stock may vest earlier than one year after the date of grant (other than substitute awards) other than in the event of a participant’s death, total and permanent disability, or the occurrence of a change in control. Notwithstanding the foregoing, the Committee may, in its sole discretion, grant awards with more favorable vesting provisions than set forth in the 2024 Plan, or accelerate the vesting or waive the restriction period for awards at any time, provided that the shares of our common stock subject to such awards shall be “Exempt Shares” ​(as defined in the 2024 Plan). The number of Exempt Shares is limited to 5% of the number of shares available for issuance under the 2024 Plan.

The Committee may impose on any award at the time of grant or thereafter, such additional terms and conditions as the Committee determines, including, without limitation, terms

requiring forfeiture of awards in the event of a participant’s termination of service. The Committee will specify the circumstances on which performance awards may be forfeited in the event of a termination of service by a participant prior to the end of a performance period or settlement of awards. Except as otherwise determined by the Committee, restricted stock will be forfeited upon a participant’s termination of service during the applicable restriction period.

Awards granted under the 2024 Plan generally are not assignable or transferable except by will or by the laws of descent and distribution, except that the Committee may, in its discretion and pursuant to the terms of an award agreement, permit certain transfers of an award (other than an incentive stock option) to (i) the spouse, former spouse, children, or grandchildren of the participant (“Immediate Family Members”); (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members; (iii) a partnership in which the only partners are (1) such Immediate Family Members and/or (2) entities which are controlled by Immediate Family Members; (iv) an entity exempt from federal income tax pursuant to Section 501(c)(3) of the Code or any successor provision; or (v) a split interest trust or pooled income fund described in Section 2522(c)(2) of the Code or any successor provision, provided that (x) there shall be no consideration for any such transfer, (y) the applicable award agreement pursuant to which such award is granted must be approved by the Committee and must expressly provide for such transferability, and (z) subsequent transfers of transferred awards shall be prohibited except those by will or the laws of descent and distribution.

Adjustments Upon Changes in Capitalization. In the event that any dividend or other distribution (whether in the form of cash, common stock, other securities, or other property), recapitalization, stock split, reverse stock split, rights offering, reorganization, merger, consolidation, split-up, spin-off, split-off, combination, subdivision, repurchase, or exchange of shares of common stock or other securities of the Company, issuance of warrants or other rights to purchase shares of common stock or other securities of the Company, or other similar corporate transaction or event affects the fair value of an award, then the Committee shall adjust any or all of the following so that the fair value of the award immediately after the transaction or event is equal to the fair value of the award immediately prior to the transaction or event: (i) the number of shares and type of common stock (or the securities or

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property) which thereafter may be made the subject of awards; (ii) the number of shares and type of common stock (or other securities or property) subject to outstanding awards; (iii) the option price of each outstanding award; (iv) the amount, if any, we pay for forfeited shares in accordance with the terms of the 2024 Plan; and (v) the number of or exercise price of shares then subject to outstanding SARs previously granted and unexercised under the 2024 Plan to the end that the same proportion of our issued and outstanding shares common stock in each instance shall remain subject to exercise at the same aggregate exercise price; provided however, that the number of shares of common stock (or other securities or property) subject to any award shall always be a whole number. Notwithstanding the foregoing, no such adjustment shall be made or authorized to the extent that such adjustment would cause the 2024 Plan or any stock option to violate Section 422 of the Code or Section 409A of the Code. All such adjustments must be made in accordance with the rules of any securities exchange, stock market, or stock quotation system to which we are subject.

Amendment or Discontinuance of the 2024 Plan. The board of directors may at any time and from time to time, without the consent of the participants, alter, amend, revise, suspend, or discontinue the 2024 Plan in whole or in part, except, that no amendment for which stockholder approval is required either (i) by any securities exchange or inter-dealer quotation system on which the common stock is listed or traded, or (ii) in order for the 2024 Plan and incentives awarded under the 2024 Plan to continue to comply with Sections 421 and 422 of the Code, including any successors to such Sections, or other applicable law, shall be effective unless such amendment is approved by the requisite vote of our stockholders entitled to vote thereon. In addition, no amendment to the 2024 Plan that increases the benefits accrued to participants, increases the maximum number of shares of common stock that may be issued under the 2024 Plan, reprices any stock options, or modifies the requirements for participation in the 2024 Plan shall be effective unless such amendment is approved by the stockholders of the Company entitled to vote thereon in the manner set forth in the Company’s articles of incorporation and bylaws. Any amendments made shall, to the extent deemed necessary or advisable by the Committee, be applicable to any outstanding awards theretofore granted under the 2024 Plan, notwithstanding any contrary provisions contained in any award agreement. In the event of any such amendment to the 2024 Plan, the holder of any award

outstanding under the 2024 Plan shall, upon request of the Committee and as a condition to the exercisability thereof, execute a conforming amendment in the form prescribed by the Committee to any award agreement relating thereto. Notwithstanding anything contained in the 2024 Plan to the contrary, unless required by law, no action regarding amendment or discontinuance of the 2024 Plan shall adversely affect any rights of participants or obligations of the Company to participants with respect to any awards granted under the 2024 Plan without the consent of the affected participant.

Federal Income Tax Consequences

The following is a brief summary of certain federal income tax consequences relating to the transactions described under the 2024 Plan as set forth below. This summary does not purport to address all aspects of federal income taxation and does not describe state, local, or foreign tax consequences. This discussion is based upon provisions of the Code and the Treasury Regulations issued thereunder, and judicial and administrative interpretations under the Code and Treasury Regulations, all as in effect as of the date hereof, and all of which are subject to change (possibly on a retroactive basis) or different interpretation.

Law Affecting Deferred Compensation. In 2004, Section 409A was added to the Code to regulate all types of deferred compensation. If the requirements of Section 409A of the Code are not satisfied, deferred compensation and earnings thereon will be subject to tax as it vests, plus an interest charge at the underpayment rate plus 1% and a 20% penalty tax. Certain performance awards, stock options, SARs, restricted stock units, and certain types of restricted stock are subject to Section 409A of the Code.

Incentive Stock Options. A participant will not recognize income at the time an ISO is granted. When a participant exercises an ISO, a participant also generally will not be required to recognize income (either as ordinary income or capital gain). However, to the extent that the fair market value (determined as of the date of grant) of the shares with respect to which the participant’s ISOs are exercisable for the first time during any year exceeds $100,000, the ISOs for the shares over $100,000 will be treated as nonqualified stock options, and not ISOs, for federal tax purposes, and the participant will recognize income as if the ISOs were nonqualified stock options. In addition to the foregoing, if the fair market value of the shares received upon exercise of an

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ISO exceeds the exercise price, then the excess may be deemed a tax preference adjustment for purposes of the federal alternative minimum tax calculation. The federal alternative minimum tax may produce significant tax repercussions depending upon the participant’s particular tax status.

The tax treatment of any shares acquired by exercise of an ISO will depend upon whether the participant disposes of his or her shares prior to two years after the date the ISO was granted or one year after the shares were transferred to the participant (referred to as the “Holding Period”). If a participant disposes of shares acquired by exercise of an ISO after the expiration of the Holding Period, any amount received in excess of the participant’s tax basis for such shares will be treated as short-term or long-term capital gain, depending upon how long the participant has held the shares. If the amount received is less than the participant’s tax basis for such shares, the loss will be treated as short-term or long-term capital loss, depending upon how long the participant has held the shares.

If the participant disposes of shares acquired by exercise of an ISO prior to the expiration of the Holding Period, the disposition will be considered a “disqualifying disposition.” If the amount received for the shares is greater than the fair market value of the shares on the exercise date, then the difference between the ISO’s exercise price and the fair market value of the shares at the time of exercise will be treated as ordinary income for the tax year in which the “disqualifying disposition” occurs. The participant’s basis in the shares will be increased by an amount equal to the amount treated as ordinary income due to such “disqualifying disposition.” In addition, the amount received in such “disqualifying disposition” over the participant’s increased basis in the shares will be treated as capital gain. However, if the price received for shares acquired by exercise of an ISO is less than the fair market value of the shares on the exercise date and the disposition is a transaction in which the participant sustains a loss which otherwise would be recognizable under the Code, then the amount of ordinary income that the participant will recognize is the excess, if any, of the amount realized on the “disqualifying disposition” over the basis of the shares.

Nonqualified Stock Options. A participant generally will not recognize income at the time a nonqualified stock option is granted. When a participant exercises a nonqualified stock option, the difference between the option price and any higher

market value of the shares of common stock on the date of exercise will be treated as compensation taxable as ordinary income to the participant. The participant’s tax basis for the shares acquired under a nonqualified stock option will be equal to the option price paid for such shares, plus any amounts included in the participant’s income as compensation. When a participant disposes of shares acquired by exercise of a nonqualified stock option, any amount received in excess of the participant’s tax basis for such shares will be treated as short-term or long-term capital gain, depending upon how long the participant has held the shares. If the amount received is less than the participant’s tax basis for such shares, the loss will be treated as short-term or long-term capital loss, depending upon how long the participant has held the shares.

Special Rule if Option Price is Paid for in Shares. If a participant pays the option price of a nonqualified stock option with previously-owned shares of our common stock and the transaction is not a disqualifying disposition of shares previously acquired under an ISO, the shares received equal to the number of shares surrendered are treated as having been received in a tax-free exchange. The participant’s tax basis and holding period for these shares received will be equal to the participant’s tax basis and holding period for the shares surrendered. The shares received in excess of the number of shares surrendered will be treated as compensation taxable as ordinary income to the participant to the extent of such shares’ fair market value. The participant’s tax basis in such shares will be equal to their fair market value on the date of exercise, and the participant’s holding period for such shares will begin on the date of exercise.

If the use of previously acquired shares to pay the exercise price of a nonqualified stock option constitutes a disqualifying disposition of shares previously acquired under an ISO, the participant will have ordinary income as a result of the disqualifying disposition in an amount equal to the excess of the fair market value of the shares surrendered, determined at the time such shares were originally acquired on exercise of the ISO, over the aggregate option price paid for such shares. As discussed above, a disqualifying disposition of shares previously acquired under an ISO occurs when the participant disposes of such shares before the end of the Holding Period. The other tax results from paying the exercise price with previously-owned shares are as described above, except that the participant’s tax basis in the shares that are

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treated as having been received in a tax-free exchange will be increased by the amount of ordinary income recognized by the participant as a result of the disqualifying disposition.

Restricted Stock. A participant who receives a grant of restricted stock generally will recognize as ordinary income the excess, if any, of the fair market value of the shares granted as restricted stock at such time as the shares are no longer subject to forfeiture or restrictions, over the amount paid, if any, by the participant for such shares. However, a participant who receives restricted stock may make an election under Section 83(b) of the Code within 30 days of the date of transfer of the shares to recognize ordinary income on the date of transfer of the shares equal to the excess of the fair market value of such shares (determined without regard to the restrictions on such shares) over the purchase price, if any, of such shares. If a participant does not make an election under Section 83(b) of the Code, then the participant will recognize as ordinary income any dividends received with respect to such shares. At the time of the sale of such shares, any gain or loss realized by the participant will be treated as either short-term or long-term capital gain (or loss) depending on the holding period. For purposes of determining any gain or loss realized, the participant’s tax basis will be the amount previously taxable as ordinary income, plus the purchase price paid by the participant, if any, for such shares.

Stock Appreciation Rights. Generally, a participant who receives a stand-alone SAR will not recognize taxable income at the time the stand-alone SAR is granted, provided that the SAR is exempt from or complies with Section 409A of the Code. If an employee receives the appreciation inherent in the SARs in cash, the cash will be taxed as ordinary income to the recipient at the time it is received. If a recipient receives the appreciation inherent in the SARs in stock, the spread between the then current market value and the grant price, if any, will be taxed as ordinary income to the employee at the time it is received. In general, there will be no federal income tax deduction allowed to us upon the grant or termination of SARs. However, upon the exercise of a SAR, we will be entitled to a deduction equal to the amount of ordinary income the recipient is required to recognize as a result of the exercise.

Other Awards. In the case of an award of restricted stock units, performance awards, dividend equivalent rights, or other stock or cash awards, the recipient will generally recognize ordinary income in an amount equal to any cash received and the fair market value of any shares received on the date of payment or delivery, provided that the award is

exempt from or complies with Section 409A of the Code. In that taxable year, we will receive a federal income tax deduction in an amount equal to the ordinary income that the participant has recognized.

Federal Tax Withholding. Any ordinary income realized by a participant upon the exercise of an award under the 2024 Plan is subject to withholding of federal, state, and local income tax and to withholding of the participant’s share of tax under the Federal Insurance Contribution Act and the Federal Unemployment Tax Act. To satisfy federal income tax withholding requirements, we will have the right to require that, as a condition to the registration of the shares in the participant’s name or, if requested by the participant in writing in accordance with the terms of the 2024 Plan, to the delivery of any certificate for shares of common stock, the participant remit to us an amount sufficient to satisfy the withholding requirements. Such payment may be made (i) by the delivery of cash to the Company in an amount that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding obligations of the Company; (ii) if the Company, in its sole discretion, so consents in writing, the actual delivery by the participant to the Company of shares of common stock, which shares so delivered have an aggregate fair market value that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding obligations of the Company; (iii) if the Company, in its sole discretion, so consents in writing, the Company’s withholding of a number of shares to be delivered upon the exercise of a stock option, which shares so withheld have an aggregate fair market value that equals or exceeds the required tax withholding obligations of the Company; or (iv) any combination of (i), (ii), or (iii). To the extent the number of shares delivered in satisfaction of the tax withholding requirements exceeds the required tax withholding due, the Company shall make a cash payment to the participant equal to the excess amount as soon as administratively practicable thereafter.

Withholding does not represent an increase in the participant’s total income tax obligation, since it is fully credited toward his or her tax liability for the year. Additionally, withholding does not affect the participant’s tax basis in the shares. Compensation income realized and tax withheld will be reflected on Forms W-2 supplied by us to employees by January 31 of the succeeding year. Deferred compensation that is subject to Section 409A of the Code will

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be subject to certain federal income tax withholding and reporting requirements.

Tax Consequences to the Company. To the extent that a participant recognizes ordinary income in the circumstances described above, we will be entitled to a corresponding deduction provided that, among other things, the income meets the test of reasonableness, is an ordinary and necessary business expense, is not an “excess parachute payment” within the meaning of Section 280G of the Code, and is not disallowed by the $1,000,000 limitation on certain executive compensation under Section 162(m) of the Code.

Million Dollar Deduction Limit and Other Tax Matters. We may not deduct compensation of more than $1,000,000 that is paid to “covered employees” ​(as defined in Section 162(m) of the Code), which include an individual (or, in certain circumstances, his or her beneficiaries) who, at any time during the taxable year, is our principal executive officer, principal financial officer, an individual who is among the three highest compensated officers for the taxable year (other than an individual who was either our principal executive officer or our principal financial officer at any time during the taxable year), or anyone who was a covered employee for purposes of Section 162(m) of the Code for any tax year beginning on or after January 1, 2017. This limitation on deductions only applies to compensation paid by a publicly-traded corporation (and not compensation paid by non-corporate entities) and may not apply to certain types of compensation, such as qualified performance-based compensation, that is payable pursuant to a written, binding contract (such as an award agreement corresponding to a Prior Plan Award or an award granted under the 2024 Plan) that was in place as of November 2, 2017, so long as the contract is not materially modified after that date. To the extent that compensation is payable pursuant to a Prior Plan Award granted on or before November 2, 2017, and if we determine that Section 162(m) of the Code will apply to any such awards, we intend that the terms of those awards will

not be materially modified and will be constructed so as to constitute qualified performance-based compensation and, as such, will be exempt from the $1,000,000 limitation on deductible compensation.

If an individual’s rights under the 2024 Plan are accelerated as a result of a change in control and the individual is a “disqualified individual” under Section 280G of the Code, the value of any such accelerated rights received by such individual may be included in determining whether or not such individual has received an “excess parachute payment” under Section 280G of the Code, which could result in (i) the imposition of a 20% federal excise tax (in addition to federal income tax) payable by the individual on the value of such accelerated rights; and (ii) the loss by us of a compensation deduction.

New Plan Benefits

We cannot currently determine the benefits or number of shares subject to awards that may be granted in the future to eligible participants under the 2024 Plan because the grant of awards and terms of such awards are to be determined in the sole discretion of the Committee. Therefore, we have omitted the tabular disclosure of the benefits or amounts allocated under the 2024 Plan.

The market value of our common stock is $0.81 per share based on the closing price of our common stock on April 24, 2024.

Vote Required

The affirmative vote of the holders of a majority of the shares of our voting securities represented in person or by proxy at the Annual Meeting entitled to vote on such proposal that vote for or against such proposal is required for the approval of the 2024 Plan. All members of the Board of Directors are eligible for awards under the 2024 Plan and thus, have a personal interest in approval of the 2024 Plan.

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TABLE OF CONTENTS​

General

Our Board approved and is hereby soliciting stockholder approval of an amendment to Article IV of our Third Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) to effect a reverse stock split of the Company’s issued and outstanding shares of Common Stock by a ratio of between 1-for-2 and 1-for-50, inclusive, to be determined by the Company’s Board, in its sole discretion, along with a proportionate reduction in the total number of shares of Common Stock that the Company is authorized to issue (the “Reverse Stock Split”, and the amendment of the Certificate of Incorporation the “Reverse Stock Split Amendment”). A vote “FOR” Proposal 4 will constitute approval of the Reverse Stock Split Amendment and will grant the Board the authority to determine in its sole discretion, whether to implement the Reverse Stock Split.

If the stockholders approve Proposal 4, the Board will have the authority, but not the obligation, in its sole discretion, and without further action on the part of the stockholders, to select a Reverse Stock Split exchange ratio within the approved range and effect the Reverse Stock Split by filing the Reverse Stock Split Amendment with the Secretary of State of the State of Delaware at any time after its approval by the stockholders. If the Reverse Stock Split Amendment has not been filed with the Secretary of State of the State of Delaware within one year after stockholder approval of Proposal 4, the Board will abandon the Reverse Stock Split. Our Board reserves the right to elect not to proceed, and abandon, the Reverse Stock Split if it determines, in its sole discretion, that implementing Proposal 4 is not in the best interests of the Company and its stockholders.

The Board believes that enabling it to set the ratio within the stated range will provide us with the flexibility to implement the Reverse Stock Split in a manner designed to maximize the anticipated benefits for our stockholders. In determining a ratio, if any, following the receipt of stockholder approval, the Board may consider, among other things, factors such as:

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the historical trading price and trading volume of our Common Stock;

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the number of shares of our Common Stock outstanding;

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the then-prevailing trading price and trading volume of our Common Stock and the anticipated impact of the Reverse Stock Split on the trading market for our Common Stock;

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the anticipated impact of a particular ratio on our ability to reduce administrative and transactional costs; and

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the general market and economic conditions prevailing.

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Depending on the ratio for the Reverse Stock Split determined by the Board, no less than 2 and no more than 50 shares of existing Common Stock, as determined by the Board, will be combined into each share of Common Stock. No fractional shares of Common Stock will be issued in connection with the Reverse Stock Split. See “— Fractional Shares.” The Reverse Stock Split Amendment, if any, will include only the exchange ratio determined by the Board to be in the best interests of our stockholders and all of the other proposed amendments at different ratios will be abandoned.

Purpose and Background for Stockholder Approval

The primary purpose of the Reverse Stock Split is to increase the trading price of the Company’s Common Stock and decrease the number of outstanding shares of our Common Stock, which our Board believes would help (i) our Common Stock comply with the $1.00 minimum bid price requirement set forth in the Nasdaq continued listing requirements and (ii) improve the marketability and liquidity of the Company’s Common Stock by attracting new investors who are reluctant to invest in shares with low prices and attracting investment from certain institutional investors and investment funds who are presently prevented under their guidelines from investing in our Common Stock at its current price levels.

The Reverse Stock Split may also reduce the relatively high transaction costs and commissions incurred by our stockholders due to our currently low per share trading price. The structure of trading commissions, when they are set at a

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fixed price per share, can have an adverse impact on holders of lower-priced securities because the brokerage commissions generally represent a higher percentage of the sales prices of lower-priced securities than they do on higher-priced issues, which may discourage trading in such lower-priced securities. If the price of our shares is higher, then the adverse impact of these commissions could be reduced.

There can be no assurance that the Reverse Stock Split, if implemented, will achieve any of the desired results. There also can be no assurance that the price per Common Stock immediately after the Reverse Stock Split, if implemented, will increase proportionately with the Reverse Stock Split ratio, or that any increase will be sustained for any period of time.

After considering the foregoing factors, included those described below, the Board determined that having the flexibility to implement a Reverse Stock Split is in our best interests and that of our stockholders. The Board reserves the right not to implement the Reverse Stock Split if it deems the Reverse Stock Split not to be in our best interests or that of our stockholders.

Our Board in its sole discretion, may elect to effect any one (but not more than one) of the Reverse Stock Split ratios within the range indicated after receipt of stockholder approval, or none of them if our Board determines in its sole discretion not to proceed with the Reverse Stock Split. We believe that the availability of the alternative Reverse Stock Split ratios will provide our Board with the flexibility to implement the Reverse Stock Split in a manner designed to maximize the anticipated benefits for the Company and its stockholders. In determining which of the alternative Reverse Stock Split ratios to implement, if any, following the receipt of stockholder approval, our Board may consider, among other things, factors such as the trading price and trading volume of our Common Stock and the anticipated impact of the Reverse Stock Split on the trading market for our Common Stock.

The Board reserves the right to elect to abandon the Reverse Stock Split if our Board, in its sole discretion, determines that this proposal is no longer in the best interests of the Company and our stockholders.

The Reverse Stock Split Amendment

Approval of Proposal 4 would be implemented amending and restating Article IV of the Certificate of Incorporation with the following:

“The aggregate number of shares of all classes of stock which the Corporation shall have authority to issue is [ ] shares, consisting of 1,000,000 shares of preferred stock, par value $0.01 per share (“Preferred Stock”), and [ ] shares of common stock, par value $0.01 per share (“Common Stock”).

The Preferred Stock may be issued, from time to time, in one or more series as authorized by the Board of Directors. The Board of Directors, by resolution, shall designate that series to distinguish it from other series and classes of stock of the Corporation, shall specify the number of shares to be included in the series, and shall fix the terms, rights, restrictions, and qualifications of, the shares of the series, including any preferences, voting power, dividend rights and redemption, sinking fund and conversion rights. The relative powers, preferences and rights of each series of Preferred Stock in relation to the powers, preferences and rights of each other series of Preferred Stock shall be as fixed from time to time by the Board of Directors in the resolution or resolutions authorizing the issuance of each series adopted by the Board of Directors.

Except as otherwise required by law, this Certificate of Incorporation or the provisions of any resolutions adopted by the Board of Directors authorizing the issuance of Preferred Stock, each holder of shares of Common Stock shall be entitled to one vote in respect of each share of Common Stock held in his name on the books of the Corporation on each matter voted upon by the stockholders. Cumulative voting of shares of Common Stock is expressly prohibited.

2024 Reverse Stock Split. Upon the filing and effectiveness pursuant to the DGCL of the certificate of amendment adding this paragraph to Article IV of this Third Amended and Restated Certificate of Incorporation (the “2024 Reverse Stock Split Effective Date”), each [ ] shares of Common Stock issued and outstanding immediately prior to the 2024 Reverse Stock Split Effective Date either issued and outstanding or held by the Corporation as treasury stock shall be combined into one (1) validly issued, fully paid and non-assessable share of Common

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Stock without any further action by the Corporation or the holder thereof (the “2024 Reverse Stock Split”); provided that no fractional shares shall be issued to any holder and that in lieu of issuing any such fractional shares, fractional shares resulting from the 2024 Reverse Stock Split will be rounded down to the nearest whole share and provided, further, that stockholders who would otherwise be entitled to receive fractional shares because they hold a number of shares not evenly divisible by the ratio of the 2024 Reverse Stock Split will receive a cash payment (without interest and subject to applicable withholding taxes) in an amount per share equal to the closing price per share on The Nasdaq Stock Market on the trading day immediately preceding the 2024 Reverse Stock Split Effective Date. Each certificate, if any, that immediately prior to the 2024 Reverse Stock Split Effective Date represented shares of Common Stock (“2024 Old Certificates”), shall thereafter represent that number of shares of Common Stock into which the shares of Common Stock represented by the 2024 Old Certificate shall have been combined, subject to the elimination of fractional shares as described above.”

Effective Date

The Reverse Stock Split, if approved at the Annual Meeting and implemented by the Board, would become effective as of the first business day after the date the Reverse Stock Split Amendment is filed with the Delaware secretary of state (the “Reverse Stock Split Effective Date”). Except as explained below with respect to fractional shares, on the Reverse Stock Split Effective Date, shares of Common Stock issued and outstanding immediately prior thereto will be, automatically and without any action on the part of the stockholders, combined, converted and changed into new shares of Common Stock in accordance with the exchange ratio selected by the Board from the approved exchange ratio range.

Reasons for a Reduction in Authorized Shares

Our Board believes that effecting the proportionate reduction in the number of authorized shares of Common Stock (the “Authorized Share Reduction”) as part of the Reverse Stock Split would provide benefits to the Company and our stockholders by maintaining alignment with market expectations regarding the number of authorized shares of

our Common Stock in comparison to the number of shares issued or reserved for issuance following the Reverse Stock Split.

Potential Effects of Approving Proposal 4

The immediate anticipated effect of the Reverse Stock Split would be to reduce the number of shares of our Common Stock outstanding and to increase the trading price of our Common Stock. However, we cannot predict the effect of any reverse stock split upon the market price of our Common Stock over an extended period, and in many cases, the market value of a company’s common stock following a reverse split declines. We cannot assure you that the trading price of our Common Stock after the Reverse Stock Split will rise in inverse proportion to the reduction in the number of shares of our Common Stock outstanding as a result of the Reverse Stock Split. Also, we cannot assure you that the Reverse Stock Split would lead to a sustained increase in the trading price of our Common Stock. The trading price of our Common Stock may change due to a variety of other factors, including our operating results and other factors related to our business and general market conditions. In addition, a reduction in number of shares outstanding may impair the liquidity for our Common Stock, which may reduce the value of our Common Stock.

In the event the Reverse Stock Split is affected, it will be affected simultaneously for all outstanding shares of our Common Stock. The Reverse Stock Split will affect all of our stockholders uniformly and will not affect any stockholder’s percentage ownership interest in the Company, except to the extent that the Reverse Stock Split results in any of our stockholders owning a fractional share, in which case such fractional shares will treated as described under “— Fractional Shares.” Shares of our Common Stock issued pursuant to the Reverse Stock Split will remain fully paid and non-assessable.

Under our Certificate of Incorporation, our authorized capital stock currently consists of 101,000,000 shares, consisting of 1,000,000 shares of preferred stock, par value $0.01 per share (“Preferred Stock”), and 100,000,000 shares of Common Stock. As of the Record Date, we had 52,933,239 shares of Common Stock issued and outstanding and approximately 47.1 million shares of Common Stock available for issuance, without taking into account shares of Common Stock reserved for the issuance of shares of Common Stock

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in connection with the vesting of restricted stock units and performance restricted stock units. Pursuant to the anti-dilution provisions of our equity incentive plans and related agreements, the equity securities and related per share exercise prices of such equity securities will similarly be adjusted.

The Authorized Stock Reduction will reduce the number of authorized shares of Common Stock by the same ratio as the Reverse Stock Split. Assuming a Reverse Stock Split exchange ratio of 1-for-50, the maximum ratio for which the Board is seeking approval, and not taking into account any shares reserved for issuance upon vesting of restricted stock units or performance restricted stock units, we expect that we will have approximately 0.9 million shares of Common Stock available for issuance.

The Reverse Stock Split will affect all holders of our Common Stock uniformly and will not affect any stockholder’s percentage ownership interest in the Company, subject to the treatment of fractional shares. See “— Fractional Shares.”

The Reverse Stock Split may result in some stockholders owning “odd lots” of less than 100 shares of Common Stock. Odd lot shares may be more difficult to sell, and brokerage commissions and other costs of transactions in odd lots are generally somewhat higher than the costs of transactions in “round lots” of even multiples of 100 shares.

In addition, because no fractional shares will be issued, fractional shares of less than one share of Common Stock after the Reverse Stock Split will be cashed out and canceled, and therefore, holders that own less than one share after giving effect to the Reverse Stock Split will not be able to participate in our future earnings or growth, if any. See “— Fractional Shares.” It also will not be possible for cashed out stockholders, if any, to re-acquire an equity interest in the Company unless they purchase an interest from a remaining stockholder or in a future equity offering by the Company. However, the Board does not intend to use the Reverse Stock Split as a part of or a first step in a “going private” transaction within the meaning of Rule 13e-3 of the Exchange Act. There is no plan or contemplated plan by the Company to take itself private at the date of this proxy statement, but we cannot assure you that the Company will not take steps in the future to do so.

If approved by stockholders and our Board moves forward with the Reverse Stock Split, then on the Reverse Stock Split

Effective Date, our Common Stock will have a new CUSIP number, which is a number used to identify our equity securities, and stock certificates with the older CUSIP numbers will need to be exchanged for stock certificates, if any, with the new CUSIP numbers by following the procedures described below. After the Reverse Stock Split, we will continue to be subject to the periodic reporting and other requirements of the Exchange Act. Our Common Stock will continue to be listed on the Nasdaq Global Select Market under the symbol “FOSL.”

Potential Anti-Takeover Implications of the Reverse Stock Split

SEC rules require disclosure and discussion of the effects of any proposal that could be used as an anti-takeover device. If approved, the Certificate of Amendment, through the Authorized Share Reduction, would reduce the number of authorized shares of Common Stock by the same ratio as the Reverse Stock Split. Accordingly, this proposal is not expected to have an anti-takeover effect as it would if our authorized shares were not being proportionately reduced.

Effect on Beneficial Holders of Common Stock

Upon the implementation of the Reverse Stock Split, we intend to treat shares held by stockholders through a bank, broker, custodian or other nominee (i.e., stockholders who hold in “street name”) in the same manner as registered stockholders whose shares are registered in their names. Banks, brokers, custodians or other nominees will be instructed to affect the Reverse Stock Split for their beneficial holders holding our Common Stock in “street name.” However, these banks, brokers, custodians or other nominees may have different procedures than registered stockholders for processing the Reverse Stock Split. Stockholders who hold shares of our Common Stock with a bank, broker, custodian or other nominee and who have any questions in this regard are encouraged to contact their banks, brokers, custodians or other nominees.

Effect on Registered “Book-Entry” Holders of Common Stock

Certain of our registered holders of Common Stock may hold some or all of their shares electronically in book-entry form with Computershare (i.e. stockholders that are registered on Computershare’s books and records but do not hold stock certificates). These stockholders do not have stock

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certificates evidencing their ownership of our Common Stock. They are, however, provided with a statement reflecting the number of shares registered in their accounts.

Stockholders who hold shares electronically in book-entry form with Computershare will not need to take action (the exchange will be automatic) to receive whole shares of post-Reverse Stock Split Common Stock, subject to adjustment for treatment of fractional shares.

Fractional Shares

No fractional shares of Common Stock will be issued in connection with the Reverse Stock Split. If as a result of the Reverse Stock Split, a stockholder of record would otherwise hold a fractional share, the fractional share resulting from the Reverse Stock Split will be rounded down to the nearest whole share. For example, if a stockholder presently holds 1,000 shares of Common Stock, such a stockholder will hold 20 shares of Common Stock following a 1-for-50 reverse split. Similarly, if a stockholder presently holds 1,015 shares of Common Stock, such a stockholder will also hold 20 shares of Common Stock following a 1-for-50 reverse split. This is because the 20.3 shares of Common Stock such a stockholder would otherwise hold following a 1-for-50 reverse split will be rounded down from 20.3 shares of Common Stock to 20 shares of Common Stock.

Furthermore, if a stockholder holds a number of shares not evenly divisible by the ratio of the Reverse Stock Split, then such stockholder will receive in lieu of fractional shares a cash payment (without interest and subject to applicable withholding taxes) in an amount per share equal to the closing price per share on Nasdaq on the trading day immediately preceding the Reverse Stock Split Effective Date. For example, if (i) a stockholder presently holds 49 shares of Common Stock, (ii) the Reverse Stock Split was effected at a 1-for-50 exchange ratio and (iii) the closing trading price of the Company’s Common Stock on the trading day immediately before the Reverse Stock Split Effective Date is $1.00 a share, such a stockholder will receive $49.00 following a 1-for-50 reverse split. This is because the 0.98 shares of Common Stock such stockholder would otherwise hold following a 1-for-50 reverse split would be exchanged for a cash payment equal to the 49 shares of Common Stock held prior to the reverse split multiplied by $1.00 per share, the hypothetical closing trading price of the Company’s Common Stock on the trading day immediately before the

Reverse Stock Split Effective Date. The ownership of a fractional interest will not give the holder thereof any voting, dividend or other right except to receive the cash payment therefor, as applicable, as described above.

Under the escheat laws of various jurisdictions, sums due for fractional interests that are not timely claimed after the Reverse Stock Split Effective Date may be required to be paid to the designated agent for each such jurisdiction, unless correspondence has been received by the Company or Computershare concerning ownership of such funds within the time permitted in such jurisdiction. Thereafter, if applicable, stockholders otherwise entitled to receive such funds, but who do not receive them due to, for example, their failure to timely comply with Computershare’s instructions, will have to seek to obtain such funds directly from the state to which they were paid.

Accounting Consequences

The par value per share of our Common Stock will remain unchanged at $0.01 per share after the Reverse Stock Split, if implemented. As a result, on the Reverse Stock Split Effective Date, the stated capital on our balance sheet attributable to Common Stock will be reduced proportionately based on the exchange ratio selected by the Board from the approved range, from its present amount, and the additional paid-in capital account shall be credited with the amount by which the stated capital is reduced. Any shares of our Common Stock held in treasury will also be reduced proportionately based on the exchange ratio. After the Reverse Stock Split, net income or loss per share, and other per share amounts will be increased because there will be fewer shares of our Common Stock outstanding. In future financial statements, net income or loss per share and other per share amounts for periods ending before the Reverse Stock Split would be recast to give retroactive effect to the Reverse Stock Split. In addition, the per share exercise price of outstanding option awards would increase proportionately, and the number of shares of our Common Stock issuable upon the vesting of unvested restricted stock units and performance restricted stock units would decrease proportionately, in each case based on the exchange ratio selected by the Board. The Company does not anticipate that any other accounting consequences would arise as a result of the Reverse Stock Split.

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Certain Material U.S. Federal Income Tax Consequences of the Reverse Stock Split

The following is a summary of certain material U.S. federal income tax consequences of the proposed Reverse Stock Split to a beneficial owner of our Common Stock. This summary deals only with Common Stock held as “capital assets” within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”) (generally, property held for investment) for U.S. federal income tax purposes. This summary is based upon the Code, U.S. Treasury Regulations thereunder, rulings and judicial decisions as of the date hereof. Such authorities may be repealed, revoked or modified, possibly with retroactive effect, or may be subject to different interpretations, so as to produce U.S. federal income tax consequences different from those discussed below. We have not sought and will not seek any rulings from the Internal Revenue Service (the “IRS”) regarding the matters discussed below. There can be no assurance that the IRS will not challenge the statements and conclusions set forth below or that a court would not sustain any such challenge. This summary does not address all tax considerations that may be important to a particular stockholder in light of such stockholder’s circumstances, or to certain categories of stockholders that may be subject to special rules, such as, but not limited to, stockholders who own, or are deemed to own, more than 5% of our Common Stock, partnerships and other pass through entities and holders of interests therein, dealers in securities, insurance companies, tax-exempt entities, persons that hold Common Stock in connection with an arrangement that completely or partially hedges the Common Stock, securities traders that use a mark-to-market method of accounting, banks and other financial institutions, regulated investment companies, real estate investment trusts, brokers and dealers in securities or commodities, stockholders who hold Common Stock as part of a hedging transaction, straddle, conversion transaction, constructive sale, or other risk reduction transaction, stockholders whose functional currency is not the U.S. dollar, persons subject to the alternative minimum tax and certain former citizens or residents of the United States. In addition, this summary does not describe any tax consequences arising under U.S. federal gift and estate tax laws or other U.S. federal tax laws or under the tax laws of any state, local or non-U.S. jurisdiction. If an entity treated as a partnership for U.S. federal income tax purposes holds Common Stock, the U.S. federal income tax treatment of a partner in the partnership generally will

depend on the status of the partner and the activities of the partnership. A partner of a partnership that holds Common Stock should consult its own tax advisors about the U.S. federal income tax consequences of the proposed Reverse Stock Split. Stockholders holding Common Stock should consult their own tax advisors concerning the U.S. federal income, estate and gift tax consequences, and any state or local income or franchise tax consequences applicable to their particular situations, as well as any consequences under the laws of any other applicable taxing jurisdiction.

Tax Consequences to U.S. Holders

For purposes of this discussion, a “U.S. holder” means a beneficial owner of our Common Stock that is for U.S. federal income tax purposes any of the following (i) an individual citizen or resident alien of the United States, (ii) a corporation or other entity treated as a corporation for U.S. federal income tax purposes that was created or organized in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income tax regardless of its source and (iv) a trust (A) if a court within the United States is able to exercise primary supervision over the administration of the trust, and one or more United States persons have the authority to control all substantial decisions of the trust or (B) that has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a United States person.

The proposed Reverse Stock Split is expected to constitute a “recapitalization” for U.S. federal income tax purposes pursuant to Section 368(a)(1)(E) of the Code. Therefore, except as described below with respect to cash received in lieu of fractional shares, no gain or loss will be recognized upon the proposed Reverse Stock Split. Accordingly, the aggregate tax basis of the U.S. holder in the new shares should equal the U.S. holder’s aggregate tax basis in its old shares of Common Stock (excluding the portion of the tax basis that is allocable to any fractional share), and the holding period for the new shares should include the holding period for the old shares.

A U.S. holder who receives cash in lieu of a fractional share of our Common Stock pursuant to the proposed Reverse Stock Split and whose proportionate interest in us is reduced (after taking into account certain constructive ownership rules) should generally recognize capital gain or loss in an amount equal to the difference between the amount of cash received and the portion of the U.S. holder’s tax basis in the old shares that is allocated to such fractional share of our Common

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Stock. Such capital gain or loss will be long-term capital gain or loss if the U.S. holder has held the old shares for more than one year as of the effective date of the proposed Reverse Stock Split. The deductibility of capital losses is subject to limitations.

Tax Consequences to Non-U.S. Holders

A “non-U.S. holder” is, for U.S. federal income tax purposes, a beneficial owner of shares of Common Stock that is not a U.S. holder or a partnership for U.S. federal income tax purposes.

Generally, a non-U.S. holder will not recognize any gain or loss upon the proposed Reverse Stock Split. In particular, gain or loss will not be recognized with respect to a non-U.S. holder that receives cash in lieu of a fractional share of our Common Stock provided that (a) such gain or loss is not effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States (or, if certain income tax treaties apply, is not attributable to a non-U.S. holder’s permanent establishment in the United States), (b) with respect to a non-U.S. holder who is an individual, such non-U.S. holder is present in the United States for less than 183 days in the taxable year of the proposed Reverse Stock Split and other conditions are met, and (c) such non-U.S. holder complies with certain certification requirements. If such gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States, and if an applicable income tax treaty so provides, the gain is attributable to a permanent establishment or fixed base maintained by the non-U.S. holder in the United States, the non-U.S. holder will be taxed on a net income basis at the regular tax rates and in the manner applicable to U.S. holders, and if the non-U.S. holder is a corporation, an additional branch profits tax at a rate of 30%, or a lower rate as may be specified by an applicable income tax treaty, may also apply. If the non-U.S. holder is an individual present in the United States for 183 days or more in the taxable year of the proposed Reverse Stock Split and certain other requirements are met, the non-U.S. holder will be subject to a 30% tax (or

such lower rate as may be specified by an applicable income tax treaty between the United States and such holder’s country of residence) on the net gain from the exchange of the shares of our Common Stock, which may be offset by certain United States-source capital losses of the non-U.S. holder, if any.

Information Reporting and Backup Withholding

Payments of cash made in lieu of a fractional share of our Common Stock may, under certain circumstances, be subject to information reporting and U.S. backup withholding unless such stockholder provides proof of an applicable exemption or a correct taxpayer identification number and otherwise complies with the applicable requirements of the backup withholding rules. Any amount withheld under the U.S. backup withholding rules is not an additional tax and will generally be allowed as a refund or credit against the holder’s U.S. federal income tax liability provided that the required information is timely furnished to the IRS.

The preceding discussion of certain U.S. federal income tax considerations is for general information only and is not tax advice. Each stockholder of our Common Stock should consult its own tax advisor regarding the particular U.S. federal, state, local and non-U.S. tax consequences of the proposed Reverse Stock Split.

Impact of Potential Reverse Stock Split Upon Other Data Contained in this Proxy Statement

Unless indicated to the contrary, the data contained in this proxy statement does not reflect the impact of any Reverse Stock Split that may be affected pursuant to the terms of Proposal 4.

No Appraisal Rights

Under the DGCL, our stockholders are not entitled to dissenters’ rights or appraisal rights with respect to the Reverse Stock Split, and we will not independently provide stockholders with any such right.

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