THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS
COVERING SECURITIES THAT HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933.
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TANDYCRAFTS, INC.
SUMMARY PLAN DESCRIPTION AND PROSPECTUS
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TANDYCRAFTS. INC. EMPLOYEE STOCK OWNERSHIP PLAN
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1,200,000 Tandycrafts, Inc. Shares
Common Stock, $1.00 par value
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Effective January 30, 1995
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
SUMMARY PLAN DESCRIPTION AND PROSPECTUS
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TANDYCRAFTS. INC. EMPLOYEE STOCK OWNERSHIP PLAN
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TABLE OF CONTENTS
I. INTRODUCTION 1
II. PLAN DESCRIPTION 1
III. IDENTIFICATION OF THE PLAN, THE, PLAN SPONSOR. AND THOSE 1
RESPONSIBLE FOR PLAN OPERATIONS
A. Important Information About the Plan 1
B. Inquiries Concerning the Plan 2
C. Plan Administration 2
D. Investment Of Funds 3
IV. PARTICIPATION IN THE PLAN - ELIGIBILITY REQUIREMENTS 3
A. General Rule 3
B. How You Enroll 4
V. PARTICIPATION IN THE PLAN - CONTRIBUTIONS 4
A. Employee Contributions 4
B. Company Contributions 5
C. Limitations on Your Contributions 5
D. Suspension of Contributions 6
E. Trust Accounts 7
1. Participant Accounts 7
a. Participant Tandycrafts Stock Account 7
b. Participant Other Investment Account 8
c. Rollover Accounts 8
2. Allocation of Company Contributions 8
3. Allocation of Income From Accounts 9
a. Income from your Other Investment Account 9
b. Income from your Tandycrafts Stock Account 9
4. Forfeitures 9
5. Quarterly Valuations: Quarterly Statement 9
F. Vesting and Forfeiture Issues 10
1. Vesting 10
2. Forfeiture 10
3 . Break In Service 10
G. Benefits are not Insured by the PBGC 11
VI. DISTRIBUTIONS AND WITHDRAWALS FROM THE PLAN 11
A. General 11
B. Form And Time Of Payment 11
1. Installments 12
2. Immediate Lump Sum 12
3. Deferred Lump Sum 12
4. Death Benefit 12
C. Claims for Benefits 12
1. General 12
2. Beneficiary Designations 13
a. General 13
b. Automatic Designation of Surviving Spouse 13
D. Distributions Under Domestic Relations Orders 14
E. Assignment 14
VII. TOP HEAVY PLAN RULES 14
A. General 14
B. Special Rules 14
VIII. MISCELLANEOUS 15
A. Voting Of Common Stock 15
B. Termination And Amendment Of The Plan 15
C. Payment of Expenses 15
D. Deemed Consents 15
E. Participating Companies 16
IX. CLAIMS PROCEDURES 16
X. STATEMENT OF ERISA RIGHTS 16
XI. ERISA REGULATION 17
XII. DISCUSSION OF FEDERAL INCOME TAX CONSEQUENCES 17
XIII. SECURITIES INFORMATION 21
A. General 21
B. Information Concerning Tandycrafts Stock 21
1. Legality 21
2. Restrictions On Resale Of Common Stock 21
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN AS CONTAINED HEREIN, IN THIS PROSPECTUS, AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THESE SECURITIES IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION IN SUCH STATE. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE MATTERS DESCRIBED HEREIN AFTER
THE DATE HEREOF.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
A. Financial Statements And Other Reports
The Company incorporates herein by reference, as of the respective dates of
filing, its Annual Report on Form 10-K for the fiscal year ending June 30, 1994,
and the Plan's latest Annual Report on Form 11-K and all other reports
thereafter or hereafter filed by the Company or the Plan pursuant to Sections
13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended, prior to the
termination of the offering made by this Prospectus.
B. Experts
The consolidated financial statements of the Company and its subsidiaries
incorporated by reference in this Prospectus have been so incorporated in
reliance on the reports of PRICE WATERHOUSE LLP, given on the authority of such
firm as experts in auditing and accounting.
I. INTRODUCTION
Tandycrafts, Inc. ("Tandycrafts") and certain affiliated companies (the
"Participating Companies") (collectively referred to as the "Company"), have
established the Tandycrafts, Inc. Employee Stock Ownership Plan (the "Plan") to
reward our employees for their loyal and faithful service with an opportunity to
share in the ownership of Tandycrafts. The benefits provided by this Plan are
in addition to the benefits you are entitled to receive under any other
announced programs of Tandycrafts.
The following pages summarize the principal provisions of the Plan in non-
technical language. This summary is intended to comply with the requirements of
the Employee Retirement Income Security Act of 1974 ("ERISA") and also serves as
a prospectus for the Plan under the Securities Act of 1933. However, it is only
a summary and does not contain all the terms of the Plan. THE FULL TEXT OF THE
PLAN DOCUMENTS CONTAIN ADDITIONAL DETAILS THAT COULD AFFECT AN EMPLOYEE'S
BENEFITS. Copies of the plan documents are available from the ESOP Department,
Tandycrafts, Inc., 1400 Everman Parkway, Fort Worth, Texas 76140 for a
reasonable copying charge, and will be provided to any employee upon written
request.
II. PLAN DESCRIPTION
The Plan allows you to invest in Tandycrafts common stock ("Common Stock")
through salary reduction contributions ("Employee Contributions"), and matching
contributions from the Company ("Company Contributions"). Once you are eligible
to participate, as described below, you will not receive Company Contributions
unless you: (i) elect to become a Participant in the Plan, and (ii) make
Employee Contributions to the Plan. In order to receive Company Contributions
for a Plan year, you must also: (i) be employed by the Company as of the last
day of the Plan year, quarter, or other period for which Company Contributions
are made and (ii) complete 1,000 or more "hours of service" during the Plan year
if Company Contributions are made annually.
III. IDENTIFICATION OF THE PLAN, THE, PLAN SPONSOR. AND THOSE RESPONSIBLE FOR
PLAN OPERATIONS
A. Important Information About the Plan
Name of Plan: Tandycrafts, Inc. Employee Stock
Ownership Plan (the "Plan")
Name and Address of Tandycrafts, Inc.
the Employer: 1400 Everman Parkway
Fort Worth, Texas 76140
(In addition, certain affiliates and subsidiaries of
Tandycrafts, Inc. have adopted the Plan. See page
16 below. A complete list of these entities is
available from the ESOP Department).
I.R.S. Employer
Identification Number: 75-1475224
Plan Number: 003
Type of Plan: Stock Bonus Plan/ESOP
Type of Plan
Administration: Committee
Name, Address and ESOP Committee
Telephone Number of Tandycrafts, Inc.
the Plan Administrator: 1400 Everman Parkway
Fort Worth, Texas 76140
Agent for Service of Process may be served on the Plan Administrator or on
Process: the Trustee at the address given in this section.
Name and Address of Bank One of Texas, N.A.
Trustee: P.O. Box 2080
Fort Worth, Texas 76101
Attn: Mr. J.C. White, Trust Officer
Plan Year: June 30
B. Inquiries Concerning the Plan
Inquiries and questions concerning details of the Plan may be
addressed to the ESOP Department. The ESOP Department performs the
administrative and record keeping duties which relate to the Plan. A copy
of the Plan is also maintained at that office
C. Plan Administration
The Plan is administered by a committee appointed by the Board of
Directors of Tandycrafts (the "Administrative Committee"). The
Administrative Committee is responsible for overseeing the administration
of the Plan and the operation of the ESOP Department. The Board of
Directors may from time to time remove members and designate new members.
The present members of the Administrative Committee are:
Name Position with Tandycrafts
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Jerry L. Roy President and Chief Executive Officer
Michael J. Walsh Executive Vice President and Chief
Financial Officer
Jim D. Schultz Senior Vice President and Chief
Accounting Officer
Carol Smith Operations Manager, Joshua's Christian Stores
The address and telephone number of the members of the Administrative
Committee is the same as the Plan Administrator's above.
D. Investment Of Funds
All assets of the Plan must be invested in Common Stock, except as the
Administrative Committee may otherwise direct. Participants may not direct
these investments. The Administrative Committee's policy is to invest
primarily in Common Stock. From time to time, cash equivalent investments
may be made on a short-term or medium-term basis during periods of downward
market trends or indications, either generally or with respect to Common
Stock specifically, with a view to long-term investment at a later date at
prices more advantageous to the Plan. A portion of the Plan's assets may
also be kept in cash or cash equivalents to meet liquidity needs.
There is no load or commission charged when Company stock is purchased
for your account under the Plan. There is no charge when you receive a
distribution from, the Plan (see pages 11-14 below). Trustee fees are paid
by the Company. Administrative expenses of the Plan are paid by the
Company.
Financial information about Company stock for the last three years is
as follows:
Price
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High Low
Year Ending 6-30-94 $19.25 $10.38
Year Ending 6-30-93 $27.63 $ 5.25
Year Ending 6-30-92 $ 5.28 $ 3.38
These prices have been adjusted to reflect the two-for-one stock splits to
stockholders of record on September 18, 1992 and February 5,1993. The
Company presently does not declare dividends on its Common Stock.
IV. PARTICIPATION IN THE PLAN - ELIGIBILITY REQUIREMENTS
A. General Rule
Employees of the Company who are hired on or after July 1, 1994, are
eligible to participate in the Plan after working for the Company for six
months. However, the following individuals are generally not eligible to
participate in the Plan: certain members of collective bargaining units,
non-residential aliens, non-employee Directors, and individuals who are not
actually on the Company's payroll. If you are ineligible to participate in
the Plan after six months employment and are later hired in an eligible
position, you may begin participating in the Plan at the time your
employment status changes. If you are a former employee and had not
completed a Year of Service and have been reemployed, you must work at
least one year following reemployment to be eligible to participate in the
Plan. If you had a Year of Service before terminating and are subsequently
rehired, you are automatically eligible for participation upon
reemployment.
B. How You Enroll
Eligible employees may participate in the Plan as of the first payroll
period after six months after their date of hire by submitting a Salary
Reduction Agreement to ESOP Department. If you decide not to participate,
you should still complete and return the form, indicating your wish to
decline participation. If you choose not to participate in the Plan when
you are first eligible, you may join the Plan at any later time while you
are an eligible employee by submitting a Salary Reduction Agreement to ESOP
Department.
Your enrollment is effective as soon as administratively possible
after your form is received. Employee Contributions will be deducted from
your pay beginning the next full payroll period after your enrollment.
In addition, you should complete a Beneficiary Designation Form when
you enroll in the Plan. This form tells the Administrative Committee whom
you want to receive your Account balance in the event of your death. Refer
to page 13 for more information about your beneficiary designation.
V. PARTICIPATION IN THE PLAN - CONTRIBUTIONS
A. Employee Contributions
Your Salary Reduction Agreement will instruct the Company to reduce
your compensation by five (5%) percent. The Company will pay this amount
directly into the Plan as an "Employee Contribution" for your Account.
Employee Contributions are withheld and deducted on each regular payday
from your compensation, commencing the next full payroll period following
your execution of a Salary Reduction Agreement. For purposes of this Plan,
"compensation" means your total compensation paid by the Company as
reportable on Internal Revenue Service Form W-2, Wage and Tax Statement and
excluding any extraordinary items such as reimbursement of moving expenses,
taxable income resulting from the use of an employer provided automobile,
certain non-cash prizes or payments, or long term disability payments, plus
your Employee Contributions to the Plan. Effective for the Plan year
beginning July 1, 1993, the Tax Code only allowed $235,840 of compensation
to be counted. For the Plan year beginning July 1, 1994, tax legislation
dropped this limit to $150,000. This limit may be adjusted upward by the
IRS in the future.
EXAMPLE: Employee has worked for the Company for six months. After
completing six months of service, employee executes a Salary
Reduction Agreement. Beginning with the next full payroll
period, the Company will reduce Employee's salary by 5% and pay
this amount to the Plan. This amount will be used to purchase
Common Stock from the Plan to be held as a retirement
investment.
Your Employee Contributions are invested in the Plan within thirty
(30) days following the calendar month in which your compensation has been
reduced. In general, the Plan Administrator will use your Employee
Contributions to purchase Common Stock from stock available within the Plan
(i.e., from participants who are selling Common Stock upon withdrawing from
the Plan). In the event your Employee Contributions to be invested in
Common Stock are netted against cash distributions payable with respect to
Common Stock in other Participants' accounts, so that the Trust does not
actually sell stock to any third party in order to fund any cash
distribution, Common Stock shall be treated as having been sold at the
average of the high and low prices reported with respect to sales on the
New York Stock Exchange for the date in question. If Common stock is not
available within the Plan it will be purchased from the corporate treasury
of Tandycrafts. Purchases of Common Stock from the corporate treasury for
your individual account will be valued at the average of the purchase
prices of the Common Stock during the month of purchase. Each purchase
from the treasury will be at the then prevailing market price.
B. Company Contributions
The Company will contribute to the Plan cash or Common Stock having a
value equal to Two Hundred (200%) Percent of your Employee Contribution for
each Plan Year as a "Company Contribution", plus such additional amounts as
the Board of Directors of the Company may direct.
EXAMPLE: If Employee made a $500 Employee Contribution during the
year, the Company would make a $1,000 Company Contribution to
the Employee's Account in the Plan, if Employee was employed by
the Company at the end of the year and worked 1,000 hours
during the year if Company Contributions are made annually.
Note: The Company may elect to make Company Contributions more
frequently (e.g., quarterly) in which case you would need to be
employed on the last day of the contribution period (e.g.,
quarter) and have worked the proper pro rata amount of hours
(e.g., 250 hours per quarter) in order to receive such Company
Contribution.
C. Limitations on Your Contributions
The Internal Revenue Service ("IRS") allows the Plan special tax
advantages as long as it complies with certain IRS rules. First, your
total Employee Contributions per calendar year are limited to $9,240 (for
calendar year 1994, adjusted each year for inflation). If you make
Employee Contributions of more than $9,240 (for calendar year 1994,
adjusted for inflation), the excess will be distributed to you as soon as
practical after the end of the calendar year. For example, if you are
compensated at a high enough rate that your 5% Employee Contribution will
reduce your salary by more than $9,240 (for 1994, adjusted for inflation)
and the Company accidentally reduces your salary by more than this amount,
the excess will be distributed to you after the end of the calendar year.
Second, the IRS limits the total Employee Contributions, Company
Contributions and Forfeitures (discussed below) allocated to you in a
single Plan year to the lesser of $30,000 or 25% of your Compensation. For
this purpose, Compensation generally means your total compensation from the
Company, less Employee Contributions. Note: contributions and benefits
under any other qualified plan maintained by the Company are counted in
calculating these limits.
The IRS also requires the Plan to be periodically tested to ensure it
does not unfairly favor highly compensated employees. Your Employee
Contributions and Company Contributions may be reduced if you are a highly
compensated employee. "Highly compensated employees" are defined under a
complicated set of IRS rules as generally including persons who are either
(1) 5% owners of the Company, (2) who have annual compensation from the
Company in excess of $99,000 (for calendar year 1994, adjusted for
inflation), (3) who receive annual compensation from the Company in excess
of $66,000 (for calendar year 1994, adjusted for inflation) and are in the
top 20% of all employees of the Company ranked by compensation, or (4) who
are or were officers of the Company and receive annual compensation of more
than $59,400 (for calendar year 1994, adjusted for inflation). Highly
compensated employees may have their Employee Contributions or Company
Contributions, or both, reduced in the event that the amount of Employee
Contributions or Company Contributions for all non-highly compensated
employees eligible to participate in the Plan are less than a specified
percentage of the amount of such contributions made by the highly
compensated employees as a group. In the event these limitations are
exceeded, highly compensated employees who are affected will be notified.
D. Suspension of Contributions
You may, without withdrawing from the Plan, suspend your Employee
Contributions by giving two weeks' prior written notice to the
Administrative Committee. This suspension must be effective for at least
six (6) months. Employee Contributions will be suspended automatically
during any period of time in which you receive no compensation or during
any period of temporary layoff. You will not be entitled to make up any
suspended contributions. You will automatically resume Employee
Contributions as of the payroll period next following the expiration of the
six-month period unless you provide two weeks prior written request to the
Administrative Committee to extend your suspension for another six-months,
which shall be subject to the Administrative Committee's approval. You are
only entitled to two six-month suspensions during your Participation in the
Plan. At the end of the second six-month suspension, the Participant must
decide whether to continue participation or terminate permanently.
Your account will not receive Company Contributions during any period
when your Employee Contributions have been suspended.
EXAMPLE: Participant decides to temporarily suspend her contributions to
the Plan. On February 1, 1995, Participant delivers notice to
the Administrative Committee. The Administrative Committee
would instruct the Company to cease making Employee
Contributions from Participant's paychecks as of February 15,
1994. This suspension would be effective until at least August
15, 1995. Participant would automatically reenter the Plan on
the next payroll period following August 15, 1995. If
Participant wished to continue the suspension, she would have to
deliver notice of her intent to the Administrative Committee two
weeks before the beginning of the payroll period.
E. Trust Accounts
All contributions to the Plan are placed in a Trust Fund for
investment. The Plan Administrator maintains accounts to record each
participant's interest in the Trust Fund.
1. Participant Accounts
The Plan has established two accounts for each Participant. A
Participant Tandycrafts Stock Account holds your investment in Common
Stock and a Participant Other Investment Account holds your Employee
Contributions and Company Contributions which have not been used to
purchase Common Stock (these two accounts are collectively referred to
as an "Account"). Common Stock acquired with funds from your
Participant Other Investment Account will be held in your Participant
Tandycrafts Stock Account.
a. Participant Tandycrafts Stock Account
Your Participant Tandycrafts Stock Account is further
subdivided into two accounts: an Employee Contribution Account
and a Company Contribution Account. These accounts hold your
investment in Common Stock acquired through Employee
Contributions and Company Contributions, respectively.
Each account is increased by your share of (i) Common Stock
purchased and paid for by the Trust or contributed in kind by the
Company; ii) forfeited Common Stock; and (iii) stock (or in kind)
dividends on Common Stock held in your Participant Tandycrafts
Stock Account.
Your Participant Tandycrafts Stock Account will be credited
shares of Common Stock equal to the combined value of your
Employee Contributions, Company Contributions and Rollover
Contributions (if applicable). BECAUSE COMMON STOCK IS TRADED ON
THE NEW YORK STOCK EXCHANGE, THE VALUE OF THE SHARES IN YOUR
PARTICIPANT TANDYCRAFTS STOCK ACCOUNT MAY FLUCTUATE FROM TIME TO
TIME. THEREFORE, THE VALUE OF YOUR PARTICIPANT TANDYCRAFTS STOCK
ACCOUNT MAY INCREASE OR DECREASE IN VALUE ACCORDING TO MARKET
FLUCTUATION. You will receive an annual statement of your
Participant Tandycrafts Stock Account showing the number of
shares of Common Stock in the account. In the event that you
elect to receive a distribution of your Account balance in cash
rather than in shares of Common Stock upon termination of
employment (or other event entitling you to distribution), the
shares of Common Stock in your Account will be converted to cash
based on the average sales price (net of commissions) of the
shares for sales occurring during the forty-five day period prior
to any distribution.
b. Participant Other Investment Account
Your Participant Other Investment Account is credited with
cash contributions, dividends, and earnings that have not been
invested in Common Stock. The value of the investments in the
Participant Other Investment Account will be determined as of
each Valuation Date, and on such other dates as the
Administrative Committee may prescribe. The value of this
account, if any, will be shown on your annual statement. In the
event you become entitled to a distribution, you will receive
cash equal to the value of your Participant Other Investment
Account based on the value of that account as of the last
Valuation Date prior to distribution.
Your Participant Other Investment Account is further
subdivided into two accounts: an Employee Contribution Account
and a Company Contribution Account. These accounts hold your
investments acquired through Employee Contributions and Company
Contributions, respectively. Employee Contributions are
allocated to your Participant Other Investments Account on a
monthly basis.
Each account is increased by the dollar value of your share
of (i) net income (or loss) attributable to your Account; (ii)
cash dividends or other property received on the Common Stock;
(iii) Employee Contributions, Company Contributions and
Forfeitures in other than Common Stock and (iv) appreciation (or
depreciation) on fair market value of the Trust (other than
Common Stock) attributable to your Account. Your Account's value
will be decreased by the amount of any payments or purchases of
Common Stock incurred for the purchase of Common Stock
attributable to the Account. For example, when the Plan
purchases Common Stock for your Participant Common Stock Account,
it will pay for this stock by withdrawing funds from your
Participant Other Investment Account.
c. Rollover Accounts
If you are a Plan participant or an employee who has not met
the service requirements but who is otherwise eligible to
participate in the Plan, you may make a cash contribution of
certain eligible contributions (a "rollover contribution") from
another tax-qualified plan. Any rollover contributions must meet
special Tax Code requirements. Any rollover contribution will be
credited to your Rollover Account. All rollover contributions,
are subject to approval by the Administrative Committee. You
should contact the ESOP Department if you have any questions
concerning rollover contributions to the Plan.
2. Allocation of Company Contributions
Company Contributions to the Plan will be allocated to your
Participant Other Investments Account at the end of each Plan year (if
the Company contributes Common Stock to the Plan, this allocation will
be to your Participant Tandycrafts Common Stock Account). (Note: The
Company may elect to contribute more frequently.)
3. Allocation of Income From Accounts
a. Income from your Other Investment Account
The income of your Participant Other Investment Account will
be allocated to your Account as of the preceding quarterly
Valuation Date, after first reducing your Account balance by any
distributions or charges from the Account since the preceding
Valuation Date. These amounts are allocated among the Company
Contributions, Employee Contributions and Rollover (if any)
components of your Participant Other Investments Account in such
uniform and reasonable manner as the Administrative Committee may
prescribe.
b. Income from your Tandycrafts Stock Account
The income (except stock dividends) of your Participant
Tandycrafts Stock Account is allocated to your Participant Other
Investments Account as of the last Valuation Date. This
allocation is made after first reducing your Account balance by
any distributions or charges from the Account since the last
Valuation Date. Stock dividends, if any, with respect to Common
Stock in your Account will be allocated to your Participants
Tandycrafts Stock Account.
The income of your Participant Tandycrafts Stock Account is
allocated to your Participant Other Investments Account, but
after first reducing each Account balance by any distributions or
charges from such Account since the last quarterly Valuation
Date. Stock dividends (if any) with respect to Common Stock in
your Account are allocated to the Common Stock that generated the
stock dividend.
4. Forfeitures
As of the Valuation Date at the end of each Plan year, any net
forfeitures occurring during such Plan year (see page 10 below) shall
be allocated to the Account of each active Participant who is employed
as of year end and entitled to a matching contribution as of the year
end. Forfeitures shall be allocated according to the ratio that the
compensation for the Plan year of each such active Participant bears
to the total compensation of all such active Participants for the Plan
year.
5. Quarterly Valuations: Quarterly Statement
Your Account will be valued as of the end of each calendar
quarter (the "Valuation Date"). You will be mailed a quarterly
statement showing your Employee Contributions to date, Company
Contributions to date, total contributions to date, and the market
value of your Account as of the end of the quarter. The market value
of your account assumes you are vested.
F. Vesting and Forfeiture Issues
1. Vesting
Upon termination of employment, the Employee Contributions
portion of your Account and your Rollover Account, if any, are always
fully vested and non-forfeitable, ALTHOUGH THE VALUE OF THESE
ACCOUNTS, IF INVESTED IN COMPANY STOCK, ARE SUBJECT TO MARKET
FLUCTUATION AND THEREFORE MAY INCREASE OR DECREASE. The Company
Contribution portion of your Account will be one hundred (100%)
percent vested and non-forfeitable upon your completion of five (5)
years of "credited service." You are credited with one year of
credited service for each year beginning with your hiring date, or an
anniversary of your hiring date, in which you have at least 1,000
hours of service with the Company. You are credited with one hour of
service for every hour you are paid or entitled to payment for
rendering services to the Company or for paid vacation, holidays, sick
leave or jury duty. Hours of service are not credited for periods of
time when you are receiving only worker's compensation, unemployment
compensation or medical benefits.
Notwithstanding the above, if you terminate service due to
retirement at or after "normal retirement age" (age 65 or after five
years in the Plan, whichever is later), or on account of total and
permanent disability or death, you (or your beneficiary) will be
entitled to the full amount of Company Contribution to your Account as
of the Valuation Date coinciding with or next preceding your
retirement, disability or death. These amounts will be fully vested
and non-forfeitable. Company Contributions to your Account may also
become 100% vested if you are affected by a termination or partial
termination of the Plan.
2. Forfeiture
If you terminate employment and are not vested in the Company
Contributions to your Account, these Company Contributions will be
forfeited and reallocated to the remaining Participants (see page 10
above). Company Contributions to your Account may be reinstated if
you are reemployed prior to incurring five consecutive "one year
breaks in service" as described below and if you recontribute the
amount of your Employee Contributions Account at the time of
termination within five (5) years of your reemployment date.
3 . Break In Service
In some cases, a Participant who terminates employment with the
Company and is later reemployed will lose credit for his or her prior
employment. If you have no vested benefits under the Plan when you
leave the Company, and are later reemployed by the Company after
incurring at least five consecutive "one year breaks in service", you
may not be entitled to credit for your prior service. A "one year
break in service" means an anniversary year in which you do not have
at least 501 hours of service.
G. Benefits are not Insured by the PBGC
Benefits under the Plan are not insured by the Pension Benefit
Guaranty Corporation ("PBGC"). Because the Plan is a "defined contribution
plan" (i.e., a plan under which all contributions, earnings, losses and
forfeitures are allocated to participant's accounts), the Plan is not
eligible for PBGC insurance.
VI. DISTRIBUTIONS AND WITHDRAWALS FROM THE PLAN
A. General
Generally, distributions or withdrawals from the Plan are not
permitted until your termination of employment. Notwithstanding the above,
the Plan may be required to make distributions from your Account:
1. If you attain age seventy and one-half (70 1/2) prior to your
termination of employment.
2. If you attain age fifty-five (55), have completed ten (10) or
more years of participation in the Plan and make an election to
diversify a portion of the assets in your Account. You are
allowed to make this election during the ninety (90) day election
period at the beginning of each of the six (6) consecutive years
after the year in which you become eligible to receive this
distribution. If you make this election, the Plan will
distribute up to a total of twenty-five (25) percent of your
account balance (taking into account any prior "diversification"
distributions) to you. You will be allowed to receive a
distribution of up to fifty (50) percent of your account balance
during the final election year. If you make this election, such
assets shall be distributed to you no later than ninety (90) days
after the end of the election period during which such election
was made.
3. Upon termination of the Plan (to the extent distribution is
permitted by the Code).
B. Form And Time Of Payment
All distributions from the Plan shall be in form of cash except that
you may demand distribution of the Common Stock in your Account in lieu of
cash (with cash distributed in lieu of any fractional shares). For
purposes of determining the amount of any cash distribution, Common Stock
shall be valued at the average of the net sales prices (net of commissions)
for Common Stock actually obtained by the Trust during the forty-five (45)
consecutive day period ending the day before actual distribution. Cash
distributions will be made sixty (60) days after the end of the calendar
quarter in which a Participant has terminated his or her participation in
the Plan unless the Participant elects a later distribution option set
forth below.
Payment of an amount distributable from the Plan will be made
according to one of the following forms of payment and at the times set
forth below, subject to the approval of the Administrative Committee
pursuant to the terms of the Plan.
1. Installments
Except as stated below, you may elect to have your vested account
balance distributed to you or to your beneficiary in installments over
a period not longer than five (5) years, plus one (1) year for each
one hundred thousand ($100,000) dollars or fraction thereof by which
the value of your Account exceeds five hundred thousand ($500,000)
dollars, with distributions beginning no later than one (1) year after
the Plan year in which you reach retirement age, die or become
disabled or the end of the fifth (5th) Plan year following the Plan
year in which you terminate employment.
2. Immediate Lump Sum
You may elect to receive an immediate single lump sum payment of
your vested Account balance no later than the end of the Plan year
following the Plan Year in which you terminate employment.
3. Deferred Lump Sum
You may elect to have your Account distributed in a lump sum
payment not later than the sixtieth (60) day after the close of the
Plan year in which the latest of the following events occur: you
attain retirement age of sixty five (65) years, you experience your
tenth (10th) anniversary of participation in the Plan, or you
terminate employment.
4. Death Benefit
In the event of your death, any vested, undistributed balance in
your Account will be distributed to your beneficiary. Your vested
Account balance will be paid to your beneficiary in the form of a
series of annual payments ending within five (5) years of your death,
or in a lump sum.
NOTWITHSTANDING ANY OF THE ABOVE, IF THE VALUE OF THE VESTED
PORTION OF YOUR ACCOUNT IS EQUAL TO OR LESS THAN THREE THOUSAND FIVE
HUNDRED ($3,500) DOLLARS, YOUR ACCOUNT WILL BE DISTRIBUTED IN A LUMP
SUM CASH PAYMENT AS SET FORTH IN ITEM (2) WITHOUT YOUR CONSENT.
C. Claims for Benefits
1. General
You, or your beneficiary, must file a claim form with the
Administrative Committee prior to the date any benefits are to begin.
This assumes that the necessary beneficiary designation forms have
been properly filed and that you or your beneficiary can be located;
otherwise, payment of benefits may be delayed.
2. Beneficiary Designations
a. General
You may, on a form provided for that purpose, signed and
filed with the Administrative Committee at any time prior to
complete distribution of your Account, designate a beneficiary or
beneficiaries, including your estate, to receive the benefit, if
any, which may be payable, in event of your death, pursuant to
any of the provisions of the Plan. A beneficiary designation may
be revoked by signing and filing a new beneficiary designation
with the Administrative Committee prior to the complete
distribution of your Account.
If you die and you have failed to designate a beneficiary,
or the beneficiary or beneficiaries you named predecease you,
then your Account will be paid, in the discretion of the
Administrative Committee, to (i) your spouse, or if none (ii) all
or any one of your lineal descendants, ancestors, or heirs at
law; the Administrative Committee may pay the entire amount to
any member of such group or apportion such amount among any two
or more of them in such shares as the Administrative Committee,
in its sole discretion, shall determine, or (iii) your estate.
Any payment made to any person pursuant to the power and
discretion conferred upon the Administrative Committee by the
preceding sentence will operate as a complete discharge of all
obligations under the Plan in respect of such deceased
Participant and shall not be subject to review by anyone, but
shall be final, binding and conclusive on all persons ever
interested hereunder.
b. Automatic Designation of Surviving Spouse
Notwithstanding the above, if you are married at the time of
your death and are survived by your spouse, the amount payable
with respect to your death shall be paid to your surviving
spouse, unless the surviving spouse has irrevocably consented to
the designation of a beneficiary other than the spouse (and to
any change in the designation of beneficiary involving a
beneficiary other than the spouse, unless the spouse's consent
expressly permits the Participant to change the designation of
beneficiary without further consent of the spouse) in a writing
which acknowledges the effect of the consent and which is
witnessed by a Plan representative or a notary public. If such
spousal consent is obtained, if such spousal consent may not be
obtained because the spouse cannot be located, or if such spouse
does not survive you, then the provisions set forth above shall
apply.
D. Distributions Under Domestic Relations Orders
In the event of your divorce or legal separation, the Code provides
that a ''Qualified Domestic Relations Order" may designate that withdrawals
and payments under the Plan be made in accordance with the terms of such
court order. Upon the Administrative Committee determining that such court
order is a Qualified Domestic Relations Order, the Administrative Committee
will direct the Trustee to distribute any account segregated because of
such order in accordance with that order.
E. Assignment
The benefits provided hereunder are intended for the personal security
of persons entitled to payment under the Plan, and are not subject in any
manner to the debts or other obligations of the persons to whom they are
payable. The interest of any individual described in this document may not
be sold, transferred, assigned or encumbered in any manner, either
voluntarily or involuntarily, and any attempt so to anticipate, alienate,
sell, transfer, assign, pledge, encumber or change the same shall be null
and void; neither shall the Trust nor any benefits thereunder be liable for
or subject to the debts, contracts, liabilities, engagements or torts of
any person to whom such benefits or funds are payable nor shall they be
considered an asset in bankruptcy, nor shall they be subject to
garnishment, attachment or other legal or equitable process except to the
extent benefits are transferable or assignable pursuant to a qualified
domestic relations order.
VII. TOP HEAVY PLAN RULES
A. General
The Code provides for certain provisions to take effect in the event
the Plan becomes "top heavy". The Plan is top heavy for a Plan year if the
top heavy ratio exceeds sixty (60%) percent. The top heavy ratio is a
fraction, the numerator of which is the account value of all "key
employees" in the Plan and the denominator is the similar sum of all
Participants in the Plan. Key employees are generally officers, employees
owning the ten largest interests in the Company, more than five (5%)
percent owners of the Company, or more than one (1%) percent owners of the
Company who have annual compensation of more than $150,000. In the unlikely
event the Plan becomes top heavy, the Company might be required to make a
minimum contribution by the Plan of three (3%) percent of compensation for
each non-key employee who is eligible to become a participant without
regard to hours of service completed during the Plan year.
B. Special Rules
In addition, for any Plan year in which the Plan is top heavy, your
non-forfeitable right to benefits or contributions derived from Company
Contributions made to the Plan would be determined according to the
following vesting schedule, which would be in lieu of five (5) years of
credited service:
Years of Credited Service Percentage
------------------------- ----------
Less than 3 years 0%
3 years or more 100%
VIII. MISCELLANEOUS
A. Voting Of Common Stock
All assets of the Plan, including Common Stock acquired by the Plan,
are held in a trust fund by the Trustee. You may direct the Trustee with
respect to the voting of Common Stock allocated your Account. In the event
of a tender offer or exchange offer for Common Stock, you are also entitled
to direct the Trustee with respect to whether to tender or exchange the
shares allocated to your Account. If you do not direct the Trustee with
respect to the voting, tendering, or exchanging of the shares in your
Account, the shares in your Account will not be voted, tendered or
exchanged. Except in the event of a tender offer or exchange offer, the
Trustee can generally only dispose of Common Stock held by the Plan on
instructions of the Administrative Committee. HOWEVER, COMMON STOCK
ALLOCATED TO YOUR ACCOUNT MAY NOT BE PLEDGED AS SECURITY UNDER THE PLAN.
B. Termination And Amendment Of The Plan
Although Tandycrafts' current intention is to continue the Plan
indefinitely, Tandycrafts has the right to change, amend, suspend or
terminate, either fully or partially, the Plan at any time, without
approval or consent of the Participants. All amendments must be in writing
and must be approved by Tandycrafts' Board of Directors or other party
authorized by the Board. Each Participating Company may also elect to
withdraw from the Plan at any time. In the event of termination of the
Plan, all assets of the Plan allocated to affected Participants' Accounts
will be vested in the Participants, and no part thereof may revert to
Tandycrafts. Participants will receive notice from time to time of
amendments made to the Plan as required by law.
C. Payment of Expenses
Costs incurred in purchasing and selling Common Stock or other assets
for the Plan are paid from the Plan's assets, including any advisory fees
incurred in connection with the purchase of such securities (except that no
commission is charged when Common Stock is purchased from Tandycrafts or
any other party in interest). All other expenses, including accounting,
clerical, reporting, printing and postage, are paid by Tandycrafts.
D. Deemed Consents
All Participants, by enrolling in the Plan, shall be deemed
conclusively to have consented for themselves and all persons claiming
through them, to all of the terms and conditions thereof, including the
finality of all interpretations there of by the Tandycrafts in its
administration and operation of the Plan.
E. Participating Companies
The Companies, in addition to Tandycrafts and its divisions, whose
employees are presently eligible to participate in the Plan are listed
below:
Casual Concepts, Inc.
Development Association, Inc.
College Flags, Inc.
Art Image, Inc.
Nocona Belt Company
Sav-On, Inc.
David James Manufacturing, Inc.
Brand Name Apparel, Inc.
IX. CLAIMS PROCEDURES
Normally, whenever a Participant or beneficiary becomes entitled to receive
benefits under the Plan, procedures will automatically be initiated to provide
for the payment of such benefits.
If you are not contacted when you become entitled to benefits, or if you
have any questions or complaints about action taken by the Plan Administrator,
you may file a written claim with the Plan Administrator for the benefits to
which you (or your beneficiary) feel entitled.
If the Plan Administrator denies the claim, in whole or in part, it will
give a written notice and an explanation to the claimant. This will be no later
than ninety (90) days after the claim is filed (one hundred eighty (180) days if
additional time is needed). A claimant who disputes the Plan Administrator's
findings, in whole or in part, or the representative of such a claimant, may
request that the decision be reviewed. A request for review by the Plan
Administrator must be made in writing within sixty (60) days from the receipt of
the Plan Administrator's initial disposition of his claim. The decision of the
Plan Administrator on a claim review is binding on all parties. It will be
provided in writing within sixty (60) days (one hundred twenty (120) days under
special circumstances) after receipt of the claimant's request for review.
X. STATEMENT OF ERISA RIGHTS
As a participant in the Plan you are entitled to certain rights and
protections under ERISA. ERISA provides that all Plan participants shall be
entitled to:
Examine, without charge, at the Plan Administrator's office and at
other specified locations, such as worksites, all Plan documents,
including copies of all documents filed by the Plan Administrator with
the U. S. Department of Labor, such as detailed annual reports and Plan
descriptions.
Obtain copies of all Plan documents and other Plan information upon
written request to the Plan Administrator. The Plan Administrator may
make a reasonable charge for the copies.
Receive a summary of the Plan's annual financial report. The Plan
Administrator is required by law to furnish each participant with a copy
of this summary annual report each year.
Obtain a statement telling you whether you have a right to receive
benefits under the Plan and if so, what your benefits would be if you
stop working under the Plan now. If you do not have a right to
benefits, the statement will tell you how many more years you have to
work to get a right to benefits. This statement must be requested in
writing and is not required to be given more than once a year. The Plan
must provide the statement free of charge.
In addition to creating rights for Plan participants, ERISA imposes duties
upon the people who are responsible for the operation of the employee benefit
plan. The people who operate the Plan, called "fiduciaries" of the Plan, have a
duty to do so prudently and in the interest of you and other Plan participants
and beneficiaries. No one, including your employer, your union, or any other
person, may fire you or otherwise discriminate against you in any way to prevent
you from obtaining a pension benefit or exercising your rights under ERISA. If
your claim for a benefit is denied, in whole or in part, you must receive a
written explanation of the reason for the denial. You have the right to have
the Plan review and reconsider your claim.
Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request materials from the Plan and do not receive them within
30 days, you may file suit in a federal court. In such a case, the court may
require the Plan Administrator to provide the materials and pay you up to $100 a
day until you receive the materials, unless the materials were not sent because
of reasons beyond the control of the Plan Administrator. If you have a claim
for benefits which is denied or ignored, in whole or in part, you may file suit
in a state or federal court. If it should happen that Plan fiduciaries misuse
the Plan's money, or if you are discriminated against for asserting your rights,
you may seek assistance from the U. S. Department of Labor, or you may file suit
in a federal court. The court will decide who should pay court costs and legal
fees. If you are successful the court may order the person you have sued to pay
these costs and fees. If you lose, the court may order you to pay these costs
and fees, for example, if it finds your claim is frivolous. If you have any
questions about your Plan, you should contact the Plan Administrator. If you
have any questions about this statement or about your rights under ERISA, you
should contact the nearest Area Office of the U. S. Labor-Management Services
Administration, Department of Labor.
XI. ERISA REGULATION
The Plan is subject to Titles I, II and III of ERISA relating to the
protection of employee benefit rights and amendments to the Internal Revenue
Code, respectively, but is not subject to Title IV, relating to plan termination
insurance coverage, and such insurance will not be extended to Participants in
the Plan in the future. The Plan is intended to be tax-qualified as described
in Part XII below.
XII. DISCUSSION OF FEDERAL INCOME TAX CONSEQUENCES
The general summary of applicable federal income tax laws set forth below
is provided solely for your general information. It is neither intended nor
offered as a complete summary or as a legal interpretation. You should consult
with your individual tax advisor concerning all aspects of your participation in
the Plan.
The Plan and the Trust are intended to satisfy the requirements for a
qualified stock ownership plan under the provisions of Sections 401(a), 401(k),
501(a) and 4975(e)(7) of the Internal Revenue Code of 1986, as amended (the
"Code"). Tandycrafts received a determination letter from the Internal Revenue
Service that the Plan and related Trust were so qualified in 1989. Tandycrafts
intends to submit the latest version of the Plan to the IRS for an updated
determination letter by June 30, 1995.
Tandycrafts and the Trustee are advised that, from your viewpoint, the Plan
is expected to have the following federal income tax effects, provided that the
Plan remains qualified under Sections 401(a), 401(k) and 4975(e)(7) of the Code.
It should be noted that new laws may require amendment of the Plan in the future
in order to maintain the qualified status of the Plan after the provisions of
such new laws become effective.
Taxation of Contributions
-------------------------
Company Contributions and Employee Contributions credited to your Account
are generally taxable to you in the taxable year when distributed and not when
such contributions are made. However, Employee Contributions are subject to tax
under the Federal Insurance Contributions Act (FICA) at the time such
contributions are made. Company Contributions and Employee Contributions are
deductible by the Company when made. Earnings of the Trust generally are not
taxable to the Trust and are not taxable to you until distributed.
If the total amount of your Employee Contributions made under the Plan plus
similar contributions made under the other plans exceeds $9,240 in a calendar
year (for calendar year 1994, adjusted each year for inflation), the amount in
excess of $9,240 (adjusted for inflation), will be taxable when contributed.
The excess must be distributed to you by April 15 of the next year.
The Plan offers you three types of special tax advantages:
(a) First, it allows you to make tax deferred Employee Contributions;
(b) Next, investment earnings on all Plan investments accumulate before
you pay any taxes on them; and
(c) Finally, Company Contributions are not taxable at the time they are
credited to your Account.
Because of these special tax advantages, you will generally owe taxes on
some or all of your money in the Plan if you receive a distribution from the
Plan (unless you roll the funds over into an IRA or another qualified plan).
Participation in the Plan may reduce or eliminate the ability of you and your
spouse to make tax-deductible contributions to an individual retirement account
or annuity.
Taxation of Distributions
-------------------------
If you take a distribution from the Plan after your employment with the
Company ends, the distribution is generally taxable income to you unless you
make a rollover into an Individual Retirement Account (IRA) or another tax-
qualified plan. In addition, if you are under 55 at the time you receive a
taxable distribution, you may also be subject to a 10 percent tax penalty,
discussed below. There are certain additional exceptions to this tax penalty.
You should consult a tax advisor to find out if they apply.
If you receive a lump sum distribution after you are age 59 1/2 and after
participating in the Plan for at least five years, you may be eligible to reduce
the federal income tax on the distribution by electing "five-year averaging," or
if you were born before January 1, 1936, by electing "ten-year averaging."
Numerous special rules apply to these elections, and you should consult your tax
advisor for more information.
If you have attained age 55 and have completed 10 years of participation in
the plan and elect to receive in-service distribution of a portion of your
Account for purposes of diversification of investments, such distribution will
also be eligible to be rolled over. If such a transfer is made, any portion of
a distribution that is not so transferred will not be eligible for the five- or
ten-year averaging tax treatment discussed above. In addition, if such a
transfer is made, the portion not so transferred and any later distributions
from your Account will not be eligible for the exclusion of net unrealized
appreciation described below.
Distributions of Common Stock
-----------------------------
If you choose to receive a lump sum distribution of your Account in shares
of Common Stock, rather than cash, the net unrealized appreciation, if any, on
Common Stock which is so distributed will not be includible in your income at
the time of receipt, but will be taxed as described below. However, you will be
subject to tax on the value of shares when they were originally purchased by the
Trustee. You may elect not to have this rule apply.
Taxation On Sale Of Common Stock
--------------------------------
If you receive Common Stock from the Trust and the net appreciation is not
included in the your income at the time of receipt as described above, you will
realize gain or loss with respect to such stock in the event of a subsequent
sale or exchange by you of such Common Stock to the extent that the amount
realized on the sale or exchange exceeds, or is less than, the cost or other
basis to the Trustee of the Common Stock distributed to you.
Withholding and Rollovers
-------------------------
At the time you receive your distribution, in most cases, federal income
tax equal to 20 percent of the distribution will automatically be withheld
unless you have your distribution transferred directly to your IRA or your new
employer's tax-qualified retirement plan. Generally, the taxable part of your
distribution can be "rolled over" or transferred to an IRA or another qualified
plan, thereby deferring federal income tax, unless you are over age 70 1/2. You
will receive more detailed information regarding rollovers and withholding when
a distribution is payable to you.
Similar rules permit the transfer to an individual retirement plan of a
lump sum distribution received by your spouse on account of your death.
Penalty Taxes
-------------
You may also have to pay an excise tax on certain distributions.
Generally, if a distribution is made from the Plan before you attain age 59-1/2
(unless you take the distribution due to early retirement after age 55 or have
become severely disabled) you will have to pay a 10% excise tax on the taxable
portion of the distribution in addition to any other tax owed. This 10% excise
tax does not apply to distributions made on account of severe disability or to a
beneficiary after your death. In addition, the tax does not apply to any
portion of the distribution that is non-taxable (for example amounts "rolled
over" as described above).
If you or your estate receive distributions from IRAs and qualified plans
(including the Plan) totaling more than $150,000 in one year ($750,000 in the
case of a lump sum), an additional 15% federal excise or estate tax may apply.
You should seek competent tax advice if distributions of this magnitude are
payable to you.
Mandatory Distributions
-----------------------
The Plan is required to begin distributing benefits if you have attained
age 70 1/2, even if you continue to be employed by the Company past age 70 1/2,
and is also required to distribute benefits to your beneficiary within a
specified period after your death. To the extent you or your beneficiary do not
receive the minimum required distributions, you or your beneficiary may be
subject to a 50% excise tax on the amount that should have been distributed but
was not.
Death Benefits
--------------
In the case of the Participant's death, amounts which constitute a lump sum
distribution can be excluded from income by the recipient up to $5,000, less any
other death benefit to which such exclusion is applied.
QDROs
-----
There are numerous special tax rules that apply if benefits are Paid to
your spouse, ex-spouse, child or other dependent pursuant to a qualified
domestic relations order (e.g., a divorce decree or child support order);
competent tax advice should be sought in such cases.
The tax information described in this section is provided to you for your
general information and is based on present federal income tax laws and
regulations and is subject to change if the laws and regulations, or
interpretations of the laws and regulations, are changed. State, local and
foreign tax treatment are not covered. You should consult your personal
professional tax advisor about any specific tax question you might have.
XIII. SECURITIES INFORMATION
A. General
Tandycrafts is subject to the information requirements of the
Securities Exchange Act of 1934 and in accordance therewith files reports
and other information with the Securities and Exchange Commission (the
"Commission"). Certain information, as of the particular dates, concerning
directors and officers, their remuneration, the principal holders of
securities of Tandycrafts and any material interest of such persons in
transactions with Tandycrafts is disclosed in proxy statements distributed
to stockholders and filed with the Commission. Such reports, proxy
statements and other information may be inspected and obtained at the
offices of the Commission at Room 1024, 450 Fifth Street, Washington, D.C.;
Room 1028, Jacob K. Javits Federal Building, 26 Federal Plaza, New York,
NY; and Room 1204, Everett McKinley Dirkson Building, 219 South Dearborn
Street, Chicago, IL. Copies of this material can also be obtained at
prescribed rates from the Public Reference Section of the Commission at its
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. Common
Stock is listed on the New York Stock Exchange, and reports, proxy
statements and other information concerning Tandycrafts can be inspected at
the offices of the Exchange, Room 401, 20 Broad Street, New York, NY 10005.
Additional updating information with respect to the securities and Plan
covered herein may be provided in the future to participants in the Plan by
means of Supplements or Appendices to this SPD and Amendments thereto.
Certain reports filed by Tandycrafts with the Commission are
incorporated herein by reference. Except as specified herein, no other
portions of such reports are incorporated herein by reference and such
other portions are not part of this SPD. The Company will provide without
charge to each person to whom a SPD is delivered, upon written or oral
request, a copy of any and all of the information that has been
incorporated by reference in the registration statement of which this SPD
is a part (not including exhibits unless such exhibits are specifically
incorporated by reference into the information that the registration
statement incorporates). This SPD omits certain information contained in
the registration statement. Requests should be addressed to Tandycrafts,
Inc., Administrative Department, 1400 Everman Parkway, Fort Worth, Texas
76140 (Telephone number 817-551-9603).
B. Information Concerning Tandycrafts Stock
1. Legality
The legality of the shares of Common Stock to which this
Prospectus relates has been passed upon by Messrs. Hughes & Luce,
L.L.P., 1717 Main Street, Ste. 2800, Dallas, Texas 75201, as counsel
for Tandycrafts.
2. Restrictions On Resale Of Common Stock
Participants in the Plan (other than "affiliates" of Tandycrafts
within the meaning of Rule 405 under the Securities Act of 1933) may
freely resell shares of Common Stock received upon distribution
pursuant to the Plan. Affiliates may, however, utilize Rule 144 under
that Act if the requirements of the Rule are met in connection with
such resale. Affiliation, for this purpose, would normally include
directors of Tandycrafts, executive officers and others who may be
deemed to control Tandycrafts.