-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A9MqZOHqRjb3og0Qx8Pg/J5KKDdQ7OrPY4p4zUSRH5rp6og9P/ggSfuTPgt6Rygx vSAFHPkoTwrwJc0fvnKdaw== 0000950134-06-006268.txt : 20060330 0000950134-06-006268.hdr.sgml : 20060330 20060330154013 ACCESSION NUMBER: 0000950134-06-006268 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20051231 FILED AS OF DATE: 20060330 DATE AS OF CHANGE: 20060330 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TANDY BRANDS ACCESSORIES INC CENTRAL INDEX KEY: 0000869487 STANDARD INDUSTRIAL CLASSIFICATION: APPAREL & OTHER FINISHED PRODS OF FABRICS & SIMILAR MATERIAL [2300] IRS NUMBER: 752349915 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-18927 FILM NUMBER: 06723069 BUSINESS ADDRESS: STREET 1: 690 E LAMAR BLVD STE 200 CITY: ARLINGTON STATE: TX ZIP: 76011 BUSINESS PHONE: 8172654113 MAIL ADDRESS: STREET 1: 690 E LAMAR BLVD CITY: ARLINGTON STATE: TX ZIP: 76011 11-K 1 d34625be11vk.htm FORM 11-K e11vk
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UNITED STATES 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, 2005
Commission File Number 0-18927
TANDY BRANDS ACCESSORIES, INC.
STOCK PURCHASE PROGRAM
(full title of plan)
TANDY BRANDS ACCESSORIES, INC.
690 East Lamar Boulevard, Suite 200
Arlington, Texas 76011
(name of issuer of the securities held pursuant to the plan and
the address of its principal executive office)
 
 

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Administrative Committee and Participants of the
Tandy Brands Accessories, Inc. Stock Purchase Program
We have audited the accompanying statements of net assets available for benefits of the Tandy Brands Accessories, Inc. Stock Purchase Program as of December 31, 2005 and 2004, and the related statements of changes in net assets available for benefits for each of the years in the three-year period ended December 31, 2005. These financial statements are the responsibility of the Program’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Program’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
As discussed in the notes to financial statements, certain errors resulting in the understatement of payables to participants for the years ended December 31, 2004 and 2003 were discovered by the Program’s management during the year ended December 31, 2005. Accordingly, the 2004 and 2003 financial statements have been restated and adjustments have been made to reflect benefit payments recorded on the accrual basis of accounting.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Tandy Brands Accessories, Inc. Stock Purchase Program as of December 31, 2005 and 2004, and the changes in its net assets available for benefits for each of the years in the three-year period ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.
/s/ Whitley Penn LLP
Fort Worth, Texas
March 17, 2006

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TANDY BRANDS ACCESSORIES, INC.
STOCK PURCHASE PROGRAM
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
                 
    December 31,  
    2005     2004  
            (As Restated)  
Assets
                
Receivables:
                
Participants’ contributions
   $ 861,962     $ 1,065,863  
Company contributions
     428,428       528,619  
 
            
 
     1,290,390       1,594,482  
 
                
Payable To Participants
     1,290,390       1,594,482  
 
            
Net Assets Available For Benefits
   $ —     $ —  
 
            
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
                         
    Year Ended December 31,  
    2005     2004     2003  
            (As Restated)  
Additions
                        
Contributions:
                        
Participants
   $ 971,601     $ 1,115,432     $ 1,044,953  
Company
     483,189       552,144       515,688  
 
                  
Total Additions
     1,454,790       1,667,576       1,560,641  
 
                        
Deductions
                        
Payable to participants
     1,290,390       1,594,482       1,553,956  
Participant withdrawals
     164,400       73,094       6,685  
 
                  
Total Deductions
     1,454,790       1,667,576       1,560,641  
 
                  
 
                        
Net Change
     —       —       —  
 
                        
Net Assets Available For Benefits
                        
Beginning of year
     —       —       —  
 
                  
End of year
   $ —     $ —     $ —  
 
                  
See accompanying notes to financial statements.

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TANDY BRANDS ACCESSORIES, INC.
STOCK PURCHASE PROGRAM
NOTES TO FINANCIAL STATEMENTS
Program Description
General
The following description of the Tandy Brands Accessories, Inc. Stock Purchase Program (the “Program”) sponsored by Tandy Brands Accessories, Inc. (the “Company”) provides only general information. Participants should refer to the Program document for a more complete description of the Program’s provisions. The Program was initially effective January 1, 1991 and amended and restated effective December 1, 2005.
The purpose of the Program is to provide employees of the Company and its participating affiliates with the opportunity for convenient and regular personal investments in the Company’s common stock. The Program is not subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”) and is not qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended.
Eligibility
Employees who are of legal age, have been continuously employed for at least six months, and work a minimum of twenty hours per week are eligible to participate in the Program if they are participating in the Tandy Brands Accessories, Inc. Employees Investment Plan.
Contributions
A participant may contribute to the Program through an authorized payroll deduction of 5% or 10% of their qualifying compensation. The Company matches 25% of participant contributions for eligible employees with less than two years of continuous employment with the Company. Eligible employees with two years or more of continuous employment receive a 50% matching contribution from the Company. The Company’s Board of Directors may allow immediate participation in the Program by any employee with 50% Company matching contributions.
Participant Accounts
Each participant’s account is credited monthly with the equivalent number of shares of the Company’s common stock that their payroll deductions and the Company’s contributions would acquire using the average of the daily closing market prices of the stock during the month.
The Company, as custodian, holds the stock until it is distributed to participants. Whole numbers of shares are distributed as soon as practicable after each December 31, but not later than the following February 15. Fractional shares and funds remaining in participants’ accounts may either be retained in their accounts or, at the Company’s option, distributed in cash.
A participant’s account may be withdrawn in the event of the participant’s death, employment termination, retirement at age 65 or older, or full withdrawal from participation in the Program.

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TANDY BRANDS ACCESSORIES, INC.
STOCK PURCHASE PROGRAM
NOTES TO FINANCIAL STATEMENTS
Program Description (continued)
Vesting
Participants immediately vest in all contributions to their accounts. Excluding the right to assign, alienate, pledge, or otherwise encumber their accounts, participants have full rights of ownership of the Company common stock held for their accounts, including voting and dividend rights.
Program Amendment or Termination
The Company’s Board of Directors may amend, suspend, or terminate the Program at any time, or from time to time, but no such action shall increase any participant’s payroll deductions without consent or adversely affect any participants’ rights to their accounts.
Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Program are presented on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America.
Prior to 2005 the financial statements presented net participant and Company contributions as receivables from the Company and net asset additions that were to be distributed following the Program’s year end with the corresponding amount presented as net assets available for benefits, rather than as payables to participants. Net asset deductions were the prior year receivable amounts distributed in the current year. The 2003 and 2004 financial statements have been restated to conform to the 2005 presentation in the statements of net assets available for benefits and changes in net assets available for benefits.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Program Administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates.
Contributions
Participants’ and Company contributions are accrued in the period in which participants’ contributions are deducted from their pay.
Receivables
The receivables are the cost basis of the Company’s common stock credited to participants’ accounts (2005 – 105,317.97 shares; 2004 – 115,984.35 shares). The stock, which is subject to market risks customarily associated with equity securities, is distributed to participants following the Program’s fiscal year end.

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TANDY BRANDS ACCESSORIES, INC.
STOCK PURCHASE PROGRAM
NOTES TO FINANCIAL STATEMENTS
Summary of Significant Accounting Policies (continued)
Available Common Stock
The Company had on reserve for the Program 481,387 shares of registered common stock following the distribution to participants for the 2005 Program year.
Average Share Prices
The average daily closing share prices by month for the Company’s common stock were:
                         
Month   2005   2004   2003
January
   $ 14.4545     $ 14.6440     $ 9.7042  
February
     14.3953       13.2779       10.0831  
March
     14.4001       13.2330       10.0560  
April
     13.8426       13.2342       10.1591  
May
     13.0081       13.2380       10.6012  
June
     11.8691       13.4680       11.7321  
July
     11.3115       13.5682       12.4925  
August
     11.1243       13.7245       13.8006  
September
     11.0419       13.7896       14.7228  
October
     11.4990       14.3942       15.1657  
November
     11.7253       14.1386       15.0537  
December
     12.0700       14.2623       15.4577  
Program Administration
The Company holds and manages the Program’s assets. The Program’s administrative expenses are paid by the Company.
Tax Status
Participants’ contributions are deducted from after-tax earnings and the Company’s contributions are participant taxable income in the month accrued; consequently, the Program is not subject to income tax under the Internal Revenue Code.

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SIGNATURE
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 PROGRAM    
 
        
 
  /s/ J.S.B. Jenkins    
 
       
 
  J.S.B. Jenkins    
 
  Administrative Committee Member    
Date: March 30, 2006

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CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation of our report dated March 17, 2006, accompanying the financial statements included in this annual report on Form 11-K, in the registration statement on Form S-8 (Registration No. 333-131218) pertaining to the Tandy Brands Accessories, Inc. Stock Purchase Program.
/s/ Whitley Penn LLP
Fort Worth, Texas
March 29, 2006

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