DocumentUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
| | | | | |
| x | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended December 31, 2020
or
| | | | | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number: 0-19848
A. Full title of the plan and the address of the plan, if different from that of the issuer named below:
Fossil Group, Inc. Savings and Retirement Plan
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
Fossil Group, Inc.
901 S. Central Expressway
Richardson, Texas 75080
FOSSIL GROUP, INC. SAVINGS AND RETIREMENT PLAN
Financial Statements as of December 31, 2020 and 2019 and for the
Year Ended December 31, 2020, Supplemental Schedule as of
December 31, 2020, and
Report of Independent Registered Public Accounting
Firm
FOSSIL GROUP, INC. SAVINGS AND RETIREMENT PLAN
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| | Page |
| | |
| Report of Independent Registered Public Accounting Firm | |
| | |
| Financial Statements: | |
| | |
| Statements of Net Assets Available for Benefits as of December 31, 2020 and 2019 | |
| | |
| Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2020 | |
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| Notes to Financial Statements as of December 31, 2020 and 2019 and for the Year Ended December 31, 2020 | |
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| Supplemental Schedule: | |
| | |
| Schedule H, Part IV, Line 4i Schedule of Assets (Held at End of Year) as of December 31, 2020 | |
NOTE: The accompanying financial statements have been prepared in part for the purpose of filing with the Department of Labor’s Form 5500. Supplemental schedules required by 29 CFR 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, other than the schedule listed above, are omitted because of the absence of the conditions under which they are required.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Plan Participants and Plan Administrator of
Fossil Group, Inc. Savings and Retirement Plan
Opinion on the Financial Statements
We have audited the accompanying statements of net assets available for benefits of Fossil Group, Inc. Savings and Retirement Plan (the “Plan”) as of December 31, 2020 and 2019, the related statement of changes in net assets available for benefits for the year ended December 31, 2020, and the related notes (collectively the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2020 and 2019, and the changes in net assets available for benefits for the year ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on the Plan's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Report on Supplemental Schedules
The supplemental schedule of assets (held at end of year) as of December 31, 2020, has been subjected to audit procedures performed in conjunction with the audit of the Plan's financial statements. The supplemental schedule is the responsibility of the Plan's management. Our audit procedures included determining whether the supplemental schedule reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental schedule. In forming our opinion on the supplemental schedule, we evaluated whether the supplemental schedule, including its form and content, is presented in compliance with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, such schedule is fairly stated, in all material respects, in relation to the financial statements as a whole.
/s/ Deloitte & Touche LLP
Dallas, Texas
June 23, 2021
We have served as the auditor of the Plan since 1993.
FOSSIL GROUP, INC. SAVINGS AND RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2020 AND 2019
| | | | | | | | | | | | | | |
| | | 2020 | | 2019 |
| ASSETS | | | | |
| Participant-Directed investments, at Fair Value | | $ | 117,716,480 | | | $ | 116,261,726 | |
| Receivables: | | | | |
| Notes Receivable from Participants | | 1,478,063 | | | 1,703,364 | |
| Employer Contributions | | — | | | — | |
| Employee Contributions | | — | | | — | |
| TOTAL RECEIVABLES | | 1,478,063 | | | 1,703,364 | |
| | | | |
| TOTAL ASSETS | | 119,194,543 | | | 117,965,090 | |
| | | | |
| LIABILITY | | | | |
| Excess Contributions Refundable | | 439,748 | | | 607,702 | |
| | | | |
| NET ASSETS AVAILABLE FOR BENEFITS | | $ | 118,754,795 | | | $ | 117,357,388 | |
See notes to financial statements.
FOSSIL GROUP, INC. SAVINGS AND RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2020
| | | | | |
| Net Assets Available for Benefits, Beginning of Year | $ | 117,357,388 | |
| | |
| Investment Income (Expense): | |
| Net Appreciation/ (Depreciation) in Fair Value of Investments | 15,780,392 | |
| Interest and Dividends | 897,609 | |
| | |
| Net Investment Income (Expense) | 16,678,001 | |
| | |
| Contributions: | |
| Employer | 797,797 | |
| Employee | 4,951,815 | |
| Rollover | 165,265 | |
| | |
| Total Contributions | 5,914,877 | |
| | |
| Interest from Notes Receivable from Participants | 74,532 | |
| | |
| Total Additions | 22,667,410 | |
| | |
| Deductions: | |
| Benefits Paid | (21,164,157) | |
| Administrative Fees | (105,846) | |
| | |
| Total Deductions | (21,270,003) | |
| | |
| Net Increase (Decrease) in Net Assets Available for Benefits | 1,397,407 | |
| | |
| Net Assets Available for Benefits, End of Year | $ | 118,754,795 | |
See notes to financial statements.
FOSSIL GROUP, INC. SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2020 AND 2019 AND FOR THE YEAR ENDED DECEMBER 31, 2020
1. DESCRIPTION OF THE PLAN
The following description of the Fossil Group, Inc. Savings and Retirement Plan, which was most recently amended and restated on April 27, 2016, effective January 1, 2016, and as further amended (the “Plan”) is provided for general information purposes only. Participants should refer to the Plan document for more complete information.
Plan Organization, Amendments and General Provisions — The Plan is a defined contribution plan covering eligible employees of certain eligible U.S. Fossil Group, Inc. subsidiaries. The purpose of the Plan is to encourage employees to accumulate savings for their retirement. The Plan is sponsored and administered by Fossil Group, Inc. (the “Employer” or “Fossil”). The Plan’s trustee is Wells Fargo Bank, N.A. (the “Trustee”). Principal Financial Group acquired Wells Fargo Company Institutional Retirement and Trust business on July 1, 2019. The Plan transitioned to the Principal Financial Group in 2021.
The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA).
In response to the 2019 Novel Coronavirus ("COVID-19") outbreak, on March 7, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES" Act) was passed by Congress. The Plan has implemented certain provisions provided by the CARES Act related to participant loans and distributions.
Eligibility and Contributions — The Plan is administered and documented in a manner intended to be qualified under Section 401(a) of the Internal Revenue Code (the “Code”) and permits elective contributions in accordance with Section 401(k) of the Code. Except as provided below with respect to temporary and seasonal employees, employees become eligible to make salary deferrals as of their date of employment.
Non-highly compensated employees are able to defer up to 100% of annual compensation into the Plan, on a pre-tax basis and/or an after-tax (Roth) basis subject to Code limitations of $19,500 in 2020. Highly compensated employees’ contributions are capped at 5% of annual compensation for the 2020 Plan year. Participants who reach the age of 50 by the end of the Plan year are eligible to contribute catch-up contributions up to $6,500 for 2020. Participants may also contribute amounts representing eligible rollover distributions from certain other retirement plans. Under the terms of the Plan, certain types of compensation (e.g., income from stock based programs and fringe benefits, including but not limited to, tuition reimbursements, housing and care allowances, COBRA reimbursements, international compensation and cost of living adjustments, etc.), along with deferred compensation and certain other severance payments, are excluded in determining “gross pay” for contribution purposes.
Fossil may make a discretionary matching contribution and may make additional discretionary profit sharing contributions. In general, participants are eligible to receive the discretionary matching contributions after completing three months of continuous service, provided they have completed 250 hours of service during that time. Temporary and seasonal employees are eligible to participate in the Plan for match and deferral purposes on the first day of the year after such employees actually work 750 hours. Generally, participants are eligible for discretionary profit sharing contributions after completing one year of service (generally, upon completing 1,000 hours of service during an initial or subsequent eligibility computation period). As a result of the uncertainty caused by COVID-19, Fossil suspended employer matching contributions effective April 6, 2020. No discretionary profit sharing contributions were made for 2020.
Participant Accounts — Individual accounts are maintained for each Plan participant. Each participant’s account is credited with the participant’s contribution, the Employer’s discretionary matching contribution, and allocations of the Employer’s discretionary contributions and Plan earnings, and charged with withdrawals and an allocation of Plan losses and administrative expenses. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
The participants can change elections and can also reallocate existing funds between available investment options on a daily basis. Notwithstanding the foregoing, in accordance with and by application of applicable securities laws and the Fossil Insider Trading Policy, along with the corresponding Addendum to Insider Trading Policy for Executive Officers, Directors and Designated Employees (“Policy and Addendum”), executive officers subject to Section 16 of the Securities Exchange Act of 1934, as amended, and certain designated employees of Fossil and its subsidiaries (collectively, “Covered Persons”) who have access to material nonpublic information about Fossil will be required to obtain pre-clearance from the General Counsel of Fossil or other designated officers of Fossil before engaging in any transaction involving Fossil securities, and Covered Persons will not be cleared to trade in Fossil securities in accordance with the Policy and Addendum during certain quarterly blackout periods and during certain blackout periods that may arise from time to time out of the occurrence of material nonpublic events, subject to certain exceptions as explained further in the Policy and Addendum. Each Covered Person receives a copy of the Policy and Addendum and, thus, was notified and understood that he/she should not make any elections under the Plan involving the Fossil stock fund or otherwise trade his/her shares of Fossil stock under the Plan in violation of the Policy and Addendum.
Investments — Participants direct the investment of their contributions into various investment options offered by the Plan. The Plan currently offers a variety of mutual funds, shares of Fossil Group, Inc. Common Stock, and two common collective trusts as investment options for participants. Participants may only elect to contribute a maximum of 25% of their Account or contributions to their Account (i.e. current balance or future contributions) to the Fossil Group, Inc. Common Stock.
Vesting — Participants are 100% vested in their salary deferral and rollover contributions. Vesting in the Employer’s matching contributions is 20% per year of vesting service. An employee is credited with a year of vesting service for each calendar year in which the participant completes at least 1,000 hours of service. Participants are fully vested after five years of service. For purposes of calculating hours of vesting and eligibility service, salaried employees are credited with 45 hours of service for each week during which they are employed by Fossil, and hourly employees are credited with their actual hours of service.
Participant Loans — Loans are available to all participants at the current prime lending rate of the Trustee, plus 1%, with required repayments through biweekly payroll deductions over no more than five years except in the event that loans are used to acquire the participant’s principal residence, in which case the loan term may not exceed 15 years. A participant may pay off any remaining loan balance at any time directly to the Trustee. Loan issuances must be at least $1,000 and are limited to the lesser of $50,000 or 50% of the participant’s vested account balance. Fossil exercises sole discretion over making loans to participants. Loan balances for active participants that have not had payments within a cure period (which shall be the last day of the calendar quarter following the calendar quarter in which the default occurs, unless a shorter cure period is provided by Fossil) are considered defaulted loans and are recorded as deemed distributions to the participant. Interest rates range from 4.25% to 6.50% and maturity dates range from 2021 to 2034.
The Plan implemented the loan relief provisions of the CARES act to (a) delay certain required loan repayments for one year and (b) increase loan limits to the lesser of $100,000 or 100% of the participant's vested balance for COVID-19 related loans.
Distribution of Benefits — Participants are entitled to receive a distribution of the vested portion of their account upon age 59 ½, termination of employment, disability, death, or in the event of financial hardship. On termination of service due to death, disability, or retirement, a participant may generally elect to receive a lump-sum amount equal to the value of the participant’s vested interest in his or her account (or installments in the case of certain required minimum distributions) subject to certain conditions contained in the Plan document.
A participant who has terminated employment may defer benefit payments until reaching the normal retirement age defined by the Plan, provided his or her vested account balance is greater than $5,000. If the participant’s vested account balance is $1,000 or less following such termination, the Plan will issue the participant a full distribution in the form of a lump sum cash payment. If the participant's vested account balance is between $1,000 and $5,000 following such termination, the vested account balance will be rolled over into an individual retirement account (“IRA”) or another qualified plan per the conditions contained in the Plan document.
The Plan allows for in-service withdrawals to participants under the age of 59 ½ in the case of financial hardship as defined in Section 401(k) of the Code, subject to certain conditions contained in the Plan document. Subsequent to age 59 ½, the participant may withdraw all or any portion of his/her vested accounts at any time. Rollover contributions can also be withdrawn at any time.
In accordance with the CARES Act, the Plan permitted eligible Plan participants to request penalty-free distributions of up to $100,000 for qualifying COVID-19 related reasons.
Forfeited Accounts — When certain terminations of participation in the Plan occur, the non-vested portion of the participant’s account as defined by the Plan, represents a forfeiture. The Plan document permits the use of forfeitures to either reduce future matching employer contributions or Plan administrative expenses for the Plan year. However, if a participant is reemployed and fulfills certain requirements, as defined in the Plan document, the account will be reinstated. At December 31, 2020 and 2019, forfeited non-vested accounts totaled $105,149 and $102,120, respectively. During the year ended December 31, 2020, forfeitures of non-vested employer matching contributions were used to pay Plan expenses of $79,420 and $101,471 was offset against Employer contributions.
Amendment or Termination — Fossil has reserved the right to amend, modify, or terminate the Plan at any time, subject to the Plan document and applicable laws and regulations. Fossil has no intentions of terminating the Plan and is not aware of any occurrences that could reasonably result in the termination of the Plan. In the event of Plan termination, participants will become 100% vested in their entire account balance.
During 2020, the Plan Sponsor reduced its workforce in large part due to the impact of COVID-19. Plan management is currently evaluating the potential impact of these layoffs. In the event of a partial plan termination, all affected employees will become fully vested in their account balances, inclusive of the employer match component, as of the date of the partial plan termination.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting — The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).
Use of Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
Risks and Uncertainties — The Plan utilizes various investment instruments including common stock, mutual funds, and common collective trusts. Investment securities, in general, are exposed to various risks, such as interest rate risk, credit risk, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such change could materially affect the amounts reported in the financial statements. As of December 31, 2020 and December 31, 2019, no individual investments account for more than 20% of total investments.
COVID-19 was first reported in late 2019 and has since dramatically impacted the global health and economic environment, including millions of confirmed cases, business slowdowns or shutdowns, government challenges and market volatility. While Plan operations have not been significantly impacted by COVID-19, the Plan Sponsor and our global community continue to face tremendous challenges and we cannot predict how this dynamic situation will evolve or the impact it will have on the Plan’s financial statements.
Investment Valuation and Income Recognition — The Plan’s investments are stated at fair value. Fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note 3 for discussion on fair value measurements and the valuation methodologies used for assets measured at fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
Net appreciation (depreciation) includes the Plan's gains and losses on investments bought and sold as well as held during the year.
Management fees and operating expenses charged to the Plan for investments in the mutual funds and common trust funds, are deducted from income earned on a daily basis and are not separately reflected. Consequently, management fees and operating expenses are reflected as a reduction of investment return for such investments.
Notes Receivable from Participants — Notes receivable from participants are measured at their unpaid principal balance plus any accrued interest. Delinquent participant loans are recorded as distributions based on the terms of the Plan document.
Administrative Expenses — Administrative expenses of the Plan may be paid directly by Plan participants, from funds from forfeited accounts or by Fossil, consistent with the Plan document. Participants pay certain administrative expenses including costs for loans and distributions.
Payment of Benefits — Benefit payments to participants are recorded upon distribution. At December 31, 2020 there were no unpaid amounts for persons who elected to withdraw from the plan. Amounts allocated to accounts of persons who have elected to withdraw from the Plan, but had not yet been paid, were $11,880 and $394,814 at December 31, 2020 and December 31, 2019, respectively.
Excess Contributions Refundable — The Plan is required to return contributions received during the Plan year in excess of the Code limits.
Recently Adopted Accounting Standards — In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"). ASU 2018-13 (i) eliminates certain disclosure requirements related to the fair value hierarchy, (ii) adds new disclosure requirements related to the changes in unrealized gains and losses for recurring Level 3 fair value measurements and the range and weighted average of significant observable inputs used to develop Level 3 fair value measurements and (iii) modifies certain disclosure requirements related to measurement uncertainty for fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Plan adopted ASU 2018-13 on January 1, 2020 and such adoption did not have a material impact on the Plan's financial statements.
3. FAIR VALUE MEASUREMENTS
ASC 820, Fair Value Measurements and Disclosures, provides a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value, as follows: Level 1, which refers to securities valued using unadjusted quoted prices from active markets for identical assets; Level 2, which refers to securities not traded on an active market but for which observable market inputs are readily available; and Level 3, which refers to securities valued based on significant unobservable inputs. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
Asset Valuation Techniques — Valuation technologies maximize the use of relevant observable inputs and minimize the use of unobservable inputs. The description of the valuation methodologies used for assets measured at fair value are discussed below. There have been no changes in the methodologies used on December 31, 2020 and 2019.
Fossil Group Inc.’s Common Stock is valued at the closing price reported on the NASDAQ Stock Market on the last business day of the Plan year.
Mutual funds are valued at the daily closing price as reported by the fund. Mutual funds held by the Plan are open-ended mutual funds that are registered with the SEC. These funds are required to publish their daily net asset value and to transact at that price. The mutual funds held by the Plan are deemed to be actively traded.
Wells Fargo Enhanced Stock Market Fund N - A collective trust fund that is valued at the net asset value ("NAV") of units of a bank collective trust. The NAV, as provided by the trustee of the collective trust fund, is used as a practical expedient to estimate fair value. The NAV is based on the fair value of the underlying investments held by the fund less its liabilities. This practical expedient is not used when it is determined to be probable that the fund will sell the investment for an amount different than the reported NAV. Participant transactions (purchased and sales) may occur daily. There are no redemption notifications required or other significant redemption restrictions.
Wells Fargo Stable Value Fund N - A collective trust fund that is composed primarily of fully benefit-responsive investment contracts is valued at the NAV of units of the bank collective trust. The NAV is used as a practical expedient to estimate fair value. This practical expedient would not be used if it is determined to be probable that the fund will sell the investment for an amount different from the reported NAV. Participant transactions (purchases and sales) may occur daily If the Plan initiates a full redemption, the issuer reserves the right to require 12 months’ notification in order to confirm that securities liquidations will be carried out in an orderly business manner. There are no other significant redemption restrictions.
The following tables set forth by level within the fair value hierarchy a summary of the Plan’s investments measured at fair value on a recurring basis at December 31, 2020 and 2019.
| | | | | | | | | | | | | | |
| | Active Markets
for Identical
Assets (Level 1) | | 2020
Total |
| Common Stock - Fossil Group Inc. | | $ | 1,896,554 | | | $ | 1,896,554 | |
| Mutual Funds | | 95,562,493 | | | 95,562,493 | |
| Investments measured at NAV | | — | | | 20,257,433 | |
| Total | | $ | 97,459,047 | | | $ | 117,716,480 | |
| | | | | | | | | | | | | | |
| | Active Markets
for Identical
Assets (Level 1) | | 2019
Total |
| Common Stock - Fossil Group Inc. | | $ | 1,410,812 | | | $ | 1,410,812 | |
| Mutual Funds | | 92,757,094 | | | 92,757,094 | |
| Investments measured at NAV | | — | | | 22,093,820 | |
| Total | | $ | 94,167,906 | | | $ | 116,261,726 | |
4. STABLE VALUE FUND
The Fund is a common collective trust fund sponsored by the Trustee. The beneficial interest of each participant is represented by units. Units are issued and redeemed daily at the Fund’s constant NAV. Distribution to the Fund’s unit holders is declared daily from the net investment income and automatically reinvested in the Fund, when paid. It is the policy of the Fund to use its best efforts to preserve principal and achieve competitive returns by selecting investments not expected to experience price fluctuation in most economic environments, although there is no guarantee that the Fund will achieve these objectives.
Participants ordinarily may direct either the withdrawal or transfer of all or a portion of their investment at NAV. NAV represents contributions made to the Fund, plus earnings, less participant withdrawals and administrative expenses. The occurrence of events that would cause the Fund to transact at less than NAV of $1 per unit is not expected to be probable.
5. EXEMPT PARTY-IN-INTEREST TRANSACTIONS
Certain Plan investments are shares of mutual funds and common collective trust funds managed by the Trustee and meet certain applicable requirements, which, therefore allow these transactions to qualify as exempt party-in-interest transactions. Fees paid by the Plan for investment management services were included as a reduction of the return earned on each fund.
The Plan has a revenue-sharing agreement whereby certain investment managers return a portion of the investment fees to offset Participants' administrative expenses, and thereafter, to be allocated as additional earnings. For the year ended December 31, 2020, $44,051 was used to offset expenses for Plan participants.
At December 31, 2020 and 2019, the Plan held 218,749 and 179,037 shares, respectively, of Fossil Group, Inc. Common Stock (“Common Stock”), the sponsoring employer. There were no dividends earned during 2020 on the Common Stock.
6. FEDERAL INCOME TAX STATUS
The Plan uses a prototype plan document sponsored by the Trustee, who received an opinion letter from the Internal Revenue Service (IRS), dated March 31, 2014, which states that the prototype Plan document satisfies the applicable provisions of the Code. The current version of the Plan itself has not received a determination letter from the IRS, but the last determination letter on a prior version of the Plan was received on August 1, 2004. However, the Plan’s management believes that the Plan is currently designed and being operated in material compliance with the applicable requirements of the Code, except for any operational and administrative failures which have been, or will be, corrected in all material respects in accordance with the methods and principles of the Employee Plans Compliance Resolution System (EPCRS) and/or ERISA.
Subject to the directly preceding sentence, the Plan Sponsor (a) has no information to suggest that the Plan has been disqualified, (b) believes the Plan has maintained its tax-exempt status, (c) has operated the Plan to be in compliance in all material respects under the appropriate section of the Code, and (d) intends to continue operating the Plan as a qualified plan.
7. NET ASSET VALUE (NAV) PER SHARE
The following tables for December 31, 2020 and 2019 set forth a summary of the Plan’s investments with a reported NAV.
| | | | | | | | | | | | | | | | | | | | | | | |
| Fair Value Estimated Using Net Asset Value Per Share
at December 31, 2020 |
| | Fair | | Unfunded | | Redemption | |
| Investment | | Value * | | Commitment | | Frequency | |
| Wells Fargo Stable Return Fund N | | $ | 15,662,226 | | | $ | — | | | Immediate | |
| Wells Fargo Enhanced Stock Market Fund N | | 4,595,207 | | | — | | | Immediate | |
| Total | | $ | 20,257,433 | | | $ | — | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Fair Value Estimated Using Net Asset Value Per Share
at December 31, 2019 |
| | Fair | | Unfunded | | Redemption | |
| Investment | | Value * | | Commitment | | Frequency | |
| Wells Fargo Stable Return Fund N | | $ | 16,682,777 | | | $ | — | | | Immediate | |
| Wells Fargo Enhanced Stock Market Fund N | | 5,411,043 | | | — | | | Immediate | |
| Total | | $ | 22,093,820 | | | $ | — | | | | |
* The fair values of the investments have been estimated using the NAV of the investment as the practical expedient.
8. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
A reconciliation of net assets available for benefits per the financial statements to the total net assets per the Form 5500 as of December 31, 2020 and 2019 is as follows:
| | | | | | | | | | | | | | |
| | December 31,
2020 | | December 31,
2019 |
| Net assets available for benefits per the financial statements | | $ | 118,754,795 | | | $ | 117,357,388 | |
| Less: Employer contribution receivable at end of year | | — | | | — | |
| Less: Employee contribution receivable at end of year | | — | | | — | |
| Net assets available for benefits per Form 5500 | | $ | 118,754,795 | | | $ | 117,357,388 | |
For the year ended December 31, 2020, the following is a reconciliation of contributions per the financial statements to the Form 5500:
| | | | | | | | | | | | | | |
| | | Employer | | Employee |
| Contributions per the financial statements | | $ | 797,797 | | | $ | 4,951,815 | |
| Less: Contributions receivable at end of year | | — | | | — | |
| Add: Contributions receivable at beginning of year | | — | | | — | |
| Contributions per Form 5500 | | $ | 797,797 | | | $ | 4,951,815 | |
9. SUBSEQUENT EVENTS
Fossil reinstated the discretionary employer matching contribution in 2021.
Principal Financial Group acquired the Wells Fargo Company Institutional Retirement and Trust business on July 1, 2019. The Plan transitioned to the Principal Financial Group in 2021.
FOSSIL GROUP, INC. SAVINGS AND RETIREMENT PLAN
Plan Number: 002
Employer Number: 75-2018505
SCHEDULE H, PART IV, LINE 4i
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2020
| | | | | | | | | | | | | | | | | | | | |
| (a) | | (b) Identity of Issue | | (c) Description of Investment | | (d) Current Value |
| | | Mutual Funds: | | | | |
| | | Fidelity Contrafund | | Mutual Fund | | $ | 6,663,325 | |
| | American US Govt Secs Fund | | Mutual Fund | | 850,202 | |
| | | Dodge and Cox Income Fund | | Mutual Fund | | 2,791,729 | |
| | Conestoga Small Cap | | Mutual Fund | | 351,531 | |
| | | BLCKRCK Hi Yield Bond | | Mutual Fund | | 1,581,395 | |
| | Fidelity Real Estate Investment | | Mutual Fund | | 169,015 | |
| | | Fidelity Small Cap Index | | Mutual Fund | | 298,682 | |
| | | JPMorgan Mid Cap Growth R6 | | Mutual Fund | | 5,719,228 | |
| | MFS Mid Cap Value Fund | | Mutual Fund | | 167,241 | |
| | | I Shares-MSCI EAFE Intl | | Mutual Fund | | 569,159 | |
| | JH III Int'l Growth R6 | | Mutual Fund | | 5,732,961 | |
| | | T. Rowe Price Blue Chip | | Mutual Fund | | 13,948,569 | |
| | Vanguard Mid Cap Index | | Mutual Fund | | 791,400 | |
| | Vanguard Equity Income | | Mutual Fund | | 2,565,177 | |
| | American Balanced Fund | | Mutual Fund | | 6,244,902 | |
| | | T. Rowe Price Retire 2010 | | Mutual Fund | | 914,329 | |
| | | T. Rowe Price Retire 2020 | | Mutual Fund | | 2,042,538 | |
| | T. Rowe Price Retire 2025 | | Mutual Fund | | 98,674 | |
| | | T. Rowe Price Retire 2030 | | Mutual Fund | | 8,768,440 | |
| | T. Rowe Price Retire 2035 | | Mutual Fund | | 393,018 | |
| | | T. Rowe Price Retire 2040 | | Mutual Fund | | 10,606,318 | |
| | T. Rowe Price Retire 2045 | | Mutual Fund | | 765,218 | |
| | | T. Rowe Price Retire 2050 | | Mutual Fund | | 17,092,603 | |
| | T. Rowe Price Retire 2055 | | Mutual Fund | | 437,106 | |
| | T. Rowe Price Retire 2060 | | Mutual Fund | | 1,442,876 | |
| * | | Wells Fargo Adv. Spec Small Cap Value I | | Mutual Fund | | 4,556,857 | |
| | | Common Stock: | | | | |
| * | | Fossil Group, Inc. | | Common Stock | | 1,896,554 | |
| | | Common Collective Trusts: | | | | |
| * | | Wells Fargo Stable Return Fund N | | Common Collective Trust Fund | | 15,662,226 | |
| * | | WF Enhanced Stock Market Fund N | | Common Collective Trust Fund | | 4,595,207 | |
| | | Notes Receivable from Participants: | | | | |
| * | | Plan Participants | | Loans to participants with interest rates ranging from 4.25% to 6.50% and maturity dates ranging from 2021 to 2034 | | 1,478,063 | |
| | | | | | |
| | | Total Investments | | | | $ | 119,194,543 | |
| | | | | | |
| * | | Party-in-interest | | | | |
See independent registered public accounting firm's report.
SIGNATURES
The Plan. Pursuant to the requirements of Securities Exchange Act of 1934, Fossil Group, Inc. (which administers the Plan) has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | | | | |
| | FOSSIL GROUP, INC. SAVINGS AND |
| RETIREMENT PLAN |
| | |
| | /S/ JEFFREY N. BOYER |
| | Jeffrey N. Boyer, Member of the Retirement Plan Committee |
Date: June 23, 2021
EXHIBIT INDEX
| | | | | |
| Exhibit No. | Description |
| 23.1 | |