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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO
SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2002
Commission File Number 0-18927
TANDY BRANDS ACCESSORIES, INC.
STOCK PURCHASE PLAN
(full title of Plan)
TANDY BRANDS ACCESSORIES, INC.
690 East Lamar Blvd., Suite 200
Arlington, Texas 76011
(Name of issuer of the securities held pursuant to
the Plan and address of its principal
executive office.)
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CONTENTS
<Table>
<Caption>
Page
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TABLE OF CONTENTS ....................................................... 2
CERTIFIED PUBLIC ACCOUNTANT'S REPORT .................................... 5
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS ......................... 6
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS .............. 7
NOTES TO FINANCIAL STATEMENTS ........................................... 8-10
SIGNATURE PAGE .......................................................... 11
CONSENT OF INDEPENDENT ACCOUNTANTS ...................................... 12
</Table>
2
TANDY BRANDS ACCESSORIES, INC.
STOCK PURCHASE PROGRAM
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002 AND 2001
(WP LOGO)
3
TANDY BRANDS ACCESSORIES, INC.
STOCK PURCHASE PROGRAM
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002 AND 2001
TABLE OF CONTENTS
<Table>
Report of Independent Auditors ........................................... 5
Financial Statements:
Statements of Net Assets Available for Benefits ..................... 6
Statements of Changes in Net Assets Available for Benefits .......... 7
Notes to Financial Statements ............................................ 8
</Table>
(WP LOGO)
4
(WHITLEY PENN LETTERHEAD)
(WHITLEY PENN LOGO)
REPORT OF INDEPENDENT AUDITORS
To the Administrative Committee and Participants of
Tandy Brands Accessories, Inc. Stock Purchase Program
We have audited the accompanying statements of net assets available for benefits
of Tandy Brands Accessories, Inc. Stock Purchase Program as of December 31, 2002
and 2001, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of Tandy Brands
Accessories, Inc. Stock Purchase Program as of December 31, 2002 and 2001, and
the changes in its net assets available for benefits for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
/s/ WHITLEY PENN
Fort Worth, Texas
March 5, 2003
5
TANDY BRANDS ACCESSORIES, INC.
STOCK PURCHASE PROGRAM
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<Table>
<Caption>
DECEMBER 31,
2002 2001
---------- ---------
ASSETS
Cash and cash equivalents $ 865,822 $ 747,338
Employer contribution receivables 430,164 371,173
---------- ----------
Total assets 1,295,986 1,118,511
LIABILITIES -- --
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $1,295,986 $1,118,511
========== ==========
</Table>
See accompanying notes.
6
TANDY BRANDS ACCESSORIES, INC.
STOCK PURCHASE PROGRAM
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
2002 2001
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ADDITIONS TO NET ASSETS
Contributions:
Employee contributions $ 865,822 $747,338
Employer contributions 430,164 371,173
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Total additions to net assets 1,295,986 1,118,511
DEDUCTIONS FROM NET ASSETS
Benefit distributions 1,118,511 1,262,966
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Net increase (decrease) 177,475 (144,455)
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 1,118,511 1,262,966
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End of year $1,295,986 $1,118,511
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</Table>
See accompanying notes.
7
TANDY BRANDS ACCESSORIES, INC. STOCK PURCHASE PROGRAM
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002
A. DESCRIPTION OF PLAN
The following description of the Tandy Brands Accessories, Inc. Stock Purchase
Program (the "Plan") sponsored by Tandy Brands Accessories, Inc. (the "Company")
provides only general information. Participants should refer to the Plan
document for a more complete description of the Plan's provisions.
GENERAL
The purpose of the Plan is to assist the employees of the Company in building
personal net worth and to encourage ownership in the Company by providing a
Plan for regular investment in the Company's common stock.
Employees who are of legal age, continuously employed for six months or more,
and work a minimum of twenty hours per week are eligible to participate in the
Plan. Once an eligible employee reaches two years of continuous service,
participation in the Tandy Brands Accessories, Inc. Employees Investment Plan is
required to continue participation in the Plan.
CONTRIBUTIONS
A participant may contribute to the Plan through authorized payroll deduction
of 5% or 10% of their qualifying compensation.
The Company matches 25% of the participant contributions for eligible employees
with less than two years of continuous employment with the Company. Eligible
employees with two years of continuous employment that participate in the Tandy
Brands Accessories, Inc. Employees Investment Plan receive a 50% matching
contribution from the Company.
The employee payroll deduction is accumulated and the Company contribution is
determined and accrued monthly. The total contributions for each month are
credited to the participants' accounts as stock on the basis of a price equal to
the average of the closing market price of the stock for the month.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution and
the Company's contribution for each month. Participant accounts are valued on a
monthly basis in accordance with the Plan's provisions.
VESTING
Participants are immediately vested in all contributions plus actual earnings
thereon.
8
TANDY BRANDS ACCESSORIES, INC. STOCK PURCHASE PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
A. DESCRIPTION OF PLAN - CONTINUED
PAYMENT OF BENEFITS
Each participant's account is distributed by approximately February 15
following the end of each calendar year. Fractional shares are retained;
however, fractional shares pertaining to former employees may be paid in cash in
accordance with the Plan's provisions.
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared using the accrual method of
accounting.
ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires the Plan
Administrator to make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results may differ from these
estimates.
INVESTMENT VALUATION
The Company stock is valued at its quoted market price. This investment is
subject to market risks customarily associated with equity investments.
PAYMENT OF BENEFITS
Benefits are recorded when paid. Benefits payable at December 31, 2002 and 2001,
were $1,295,986 and $1,118,511, respectively.
C. ADMINISTRATION OF PLAN ASSETS
The Plan's assets, which consist principally of cash, are held by the Company.
Contributions are held and managed by the Company, which invests cash received,
and makes distributions to participants.
Officers and employees of the Company perform certain administrative functions
for the Plan with no compensation from the Plan. Administrative expenses related
to the Plan are paid directly by the Company.
9
TANDY BRANDS ACCESSORIES, INC. STOCK PURCHASE PROGRAM
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
D. AVERAGE SHARE PRICE
The average share prices by month for the Company's common stock for the year
ended December 31, 2002, were as follows:
<Table>
<Caption>
AVERAGE
MONTH SHARE PRICE
- ----- -----------
January $ 7.9567
February 7.9647
March 9.1055
April 9.9691
May 11.1523
June 11.7565
July 11.0099
August 9.4787
September 9.1909
October 9.0753
November 9.3349
December 9.6166
</Table>
E. TAX STATUS
The Plan is not a qualified plan as determined by the Internal Revenue Code.
10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
TANDY BRANDS ACCESSORIES, INC.
STOCK PURCHASE PLAN
/s/ J.S.B. Jenkins
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J.S.B. Jenkins
Administrative Committee Member
Date: March 28, 2003
11
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation of our report dated March 5, 2003, accompanying
the financial statements included in this annual report on Form 11-K, in the
registration statement of Form S-8 (Registration No 33-41262) pertaining to the
Tandy Brands Accessories, Inc. Stock Purchase Program.
Fort Worth, Texas
March 5, 2003
12