SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
[ ] TRANSITIONAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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COMMISSION FILE NUMBER: 1-14987
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
TOO, INC. SAVINGS AND RETIREMENT PLAN
B. Name and issuer of the securities held pursuant to the plan and the address
of its principal executive office:
TOO, INC.
8323 WALTON PARKWAY
NEW ALBANY, OHIO 43054
Too, Inc. Savings and Retirement Plan
Report on Audit of Financial Statements
As of and for the Years Ended December 31, 2002 and 2001
and Supplemental Schedule
As of December 31, 2002
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CONTENTS
Report of Independent Accountants.................................. .....2
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits.................... .....3
Statements of Changes in Net Assets Available for Benefits......... .....4
Notes to Financial Statements...........................................5
SUPPLEMENTAL SCHEDULE
Schedule of Assets Held at End of Year.................................12
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Too, Inc. and the
Plan Administrator of the Too, Inc.
Savings and Retirement Plan:
We have audited the accompanying statements of net assets available for benefits
of the Too, Inc. Savings and Retirement Plan (the "Plan") as of December 31,
2002 and 2001, and the related statements of changes in net assets available for
benefits for the year 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 audits 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 the Plan as of
December 31, 2002 and 2001, and the changes in net assets available for benefits
for the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
at end of year as of December 31, 2002, is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Ary, Roepcke & Mulchaey, P.C.
Columbus, Ohio
June 23, 2003
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TOO, INC. SAVINGS AND RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2002 AND 2001
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2002 2001
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ASSETS:
Investments $18,021,740 $18,049,760
Cash -- 38,871
Receivable for contributions:
Employer 2,325,396 1,570,654
Participants 62,843 28,640
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Total contributions receivable 2,388,239 1,599,294
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Accrued interest and dividends -- 113
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Total assets 20,409,979 19,688,038
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LIABILITIES:
Administrative fees payable -- 10,741
Due to brokers -- 18,458
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Total liabilities -- 29,199
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NET ASSETS AVAILABLE FOR BENEFITS $20,409,979 $19,658,839
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The accompanying notes are an integral part of these financial statements.
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TOO, INC. SAVINGS AND RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
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2002 2001
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ADDITIONS:
Investment income (loss):
Net depreciation in fair
value of investments $ (1,748,937) $ (150,364)
Earnings from mutual funds 73,220 40,932
Dividends from common stock 28,436 30,583
Earnings from common collective trusts 653 4,494
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Total investment loss (1,646,628) (74,355)
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Contributions:
Employer 2,896,298 1,869,360
Participants 1,151,282 635,049
Rollovers 113,973 203,839
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Total contributions 4,161,553 2,708,248
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Total additions 2,514,925 2,633,893
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DEDUCTIONS:
Distributions to participants 1,676,116 2,184,942
Administrative expenses 87,669 53,836
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Total deductions 1,763,785 2,238,778
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Net increase 751,140 395,115
Net assets available for benefits:
Beginning of year 19,658,839 19,263,724
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End of year $ 20,409,979 $ 19,658,839
============ ============
The accompanying notes are an integral part of these financial statements.
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TOO, INC. SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
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(1) DESCRIPTION OF THE PLAN
GENERAL
The Too, Inc. Savings and Retirement Plan (the "Plan") is a defined
contribution plan covering substantially all employees of Too, Inc.
(the "Employer", the "Company", or "Too"), who are at least 21 years of
age and have completed a year of employment with 1,000 or more hours of
service. Employees who are considered to be a highly compensated
associate under the Internal Revenue code of 1986 (the "Code") and have
met the eligibility requirements, described above, are eligible to
receive the non-service and service related retirement contribution,
but may not elect to make voluntary contributions.
During 2002 and 2001, the Plan was amended to among other things 1)
change the vesting schedule as noted under vesting below, and 2) no
longer give prior service credit after August 22, 2002, to participants
who transfer directly from Limited Brands, Inc. and its affiliates,
which were former affiliates of Too, Inc.
The following description of the Plan provides only general
information. Participants should refer to the Plan document for a more
complete description of the Plan's provisions. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974
(ERISA) as amended.
CONTRIBUTIONS
EMPLOYER CONTRIBUTIONS:
The Company may provide a non-service related retirement contribution
of 4% of annual compensation up to the Social Security wage base and 7%
of annual compensation thereafter, and a service related retirement
contribution of 1% of annual compensation for participants who have
completed five or more years of vesting service as of the last day of
the Plan year. Participants who complete 500 hours of service during
the Plan year and are participants on the last day of the Plan year are
eligible. The annual compensation of each participant taken into
account under the Plan is limited to the maximum amount permitted under
Section 401(a)(17) of the Code, which for the Plan years ended December
31, 2002 and 2001, was $200,000 and $170,000, respectively.
The Company may also provide a matching contribution of 100% of the
participant's voluntary contributions up to 3% of the participant's
total annual compensation.
PARTICIPANT'S VOLUNTARY CONTRIBUTIONS:
A participant may elect to make a voluntary tax-deferred contribution
of 1% to 12% of his or her annual compensation up to the maximum
permitted under Section 402(g) of the Code adjusted annually ($11,000
at December 31, 2002). This voluntary tax-deferred contribution may be
limited by Section 401(k) of the Code.
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TOO, INC. SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
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INVESTMENT OPTIONS
The participants direct the investment of both their own and the
Employer's contributions by utilizing various investment options
offered by the Plan. The Plan currently offers six mutual funds, four
insurance company pooled separate accounts, one common collective
trust, an Employer's stock fund, and a common stock fund of a former
affiliate to which no additional investments are allowed.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's and
Employer's contributions and allocated investment earnings and
administrative expenses. Allocations are based on the participant's
account balances or earnings. The benefit to which a participant is
entitled is equal to the vested balance in the participant's account.
VESTING
A participant is fully and immediately vested for voluntary and
rollover contributions and is credited with a year of vesting service
for Employer's contributions for each Plan year that they are credited
with at least 500 hours of service.
A summary of vesting percentages for Employer's retirement
contributions is as follows:
Years of vested service Percentage
----------------------- ----------
Less than 3 years 0%
3 years 20
4 years 40
5 years 60
6 years 80
7 years 100
A summary of vesting percentages for Employer's matching contributions
after January 1, 2002 is as follows:
Years of vested service Percentage
----------------------- ----------
Less than 2 years 0%
2 years 20
3 years 40
4 years 60
5 years 80
6 years 100
Employer's matching contributions prior to January 1, 2002, are vested
at the same percentage as the Employer's retirement contributions.
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TOO, INC. SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
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PAYMENT OF BENEFITS
The full value of participants' accounts becomes payable upon
retirement, disability, or death. Upon termination of employment for
any other reason, participants' accounts, to the extent vested, become
payable. Those participants with vested account balances greater than
$5,000 have the option of leaving their accounts invested in the Plan
until age 65. All benefits will be paid as a lump-sum distribution.
Those participants holding shares of Too common stock will have the
option of receiving such amounts in whole shares of Too and cash for
any fractional shares. Participants have the option of having their
benefit paid directly to an eligible retirement plan specified by the
participant.
A participant who is fully vested in his or her account and who has
participated in the Plan for at least seven years may obtain an
in-service withdrawal from their account based on the percentage
amounts designated by the Plan. A participant may also request a
hardship distribution due to an immediate and heavy financial need
based on the terms of the Plan.
AMOUNTS ALLOCATED TO PARTICIPANTS WITHDRAWN FROM THE PLAN
The vested portion of net assets available for benefits allocated to
participants withdrawn from the plan was $38,558 and $2,337 as of
December 31, 2002 and 2001, respectively.
FORFEITURES
Forfeitures are used to reduce the Employer's required contributions.
Forfeitures of $248,397 and $239,676 were used to reduce Employer's
contributions for the plan years ended December 31, 2002 and 2001,
respectively.
EXPENSES
Expenses of the Plan are deducted from participants' accounts.
Brokerage fees, transfer taxes, and other expenses incurred in
connection with the investment of the Plans assets will be added to the
cost of such investments or deducted from the proceeds thereof, as the
case may be.
(2) SUMMARY OF ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying financial statements have been prepared on the accrual
basis of accounting, including investment valuation and income
recognition.
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TOO, INC. SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
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ESTIMATES
The Plan prepares its financial statements in conformity with
accounting principles generally accepted in the United States of
America, which requires management to make estimates and assumptions
that affect the reported amounts of net assets available for plan
benefits at the date of the financial statements and the changes in net
assets available for plan benefits during the reporting period and,
when applicable, disclosures of contingent assets and liabilities at
the date of the financial statements. Actual results could differ from
these estimates.
RISKS
The Plan provides for the various investment options as described in
Note 1. Any investment is exposed to various risks, such as interest
rate, market and credit. These risks could result in a material effect
on participants' account balances and the amounts reported in the
statements of net assets available for benefits and the statements of
changes in net assets available for benefits.
INCOME RECOGNITION
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.
INVESTMENT VALUATION
Mutual funds are stated at fair value as determined by quoted market
price, which represents the net asset value of shares held by the Plan
at year-end. Common stocks are valued as determined by quoted market
price. The common collective trusts are valued on a daily basis. The
value of each unit is determined by subtracting total liabilities from
the total value of the assets, including accrued income, and dividing
the amount remaining by the number of units outstanding on the
valuation date. Pooled separate account values are generally determined
based on the market values of the securities included in the underlying
funds.
NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS
Net realized and unrealized appreciation (depreciation) is recorded in
the accompanying statements of changes in net assets available for
benefits as net appreciation (depreciation) in fair value of
investments.
BENEFIT PAYMENTS
Benefits are recorded when paid.
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TOO, INC. SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
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(3) INVESTMENTS
During April of 2002, American Express Trust, former trustee, as
instructed by the Employer, liquidated all of the investments of the
Plan and transferred the assets to Principal Life Insurance Company who
in turn reinvested the assets, based on participant investment
direction. Except for the investments in pooled separate accounts under
a group annuity contract with Principal Life Insurance Company, the
Plan's investments are held in directed custodial trusts with Delaware
Charter Guarantee & Trust Company and Bankers Trust Company at
bank-administered trust funds. The following table presents
investments. Investments that represent 5 percent or more of the Plan's
net assets are separately identified.
2002 2001
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Investments at fair value as determined by:
QUOTED MARKET PRICE
Common stock:
Too, Inc. $ 1,538,302 $ 1,686,960
Limited Brands, Inc. 1,263,562 1,488,766
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2,801,864 3,175,726
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Mutual funds:
T. Rowe Price Capital Appreciation
Appreciation Fund 1,392,218 --
AXP New Dimensions Fund, Class Y -- 3,666,789
Other 1,231,038 1,977,860
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2,623,256 5,644,649
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5,425,120 8,820,375
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ESTIMATED FAIR VALUE
Common collective trusts:
Gartmore Trust Company Stable
Value Fund 6,664,751 --
American Express Trust Income II -- 5,491,897
American Express Trust Equity
Index II -- 3,169,073
Other -- 568,415
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6,664,751 9,229,385
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Principal Life Insurance Company
pooled separate accounts:
Principal Partners Large-Cap Blend 4,365,747 --
Other 1,566,122 --
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5,931,869 --
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12,596,620 9,229,385
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Total investments at fair value $18,021,740 $18,049,760
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TOO, INC. SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
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INVESTMENTS (CONTINUED)
The Plan's investments, (including investments bought, sold, and held
during the year) appreciation (depreciation) in value for the periods
ended December 31, 2002 and 2001, are set forth below:
2002 2001
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Investments at fair value as determined by:
QUOTED MARKET PRICE
Common stock $ (273,521) $ 1,061,676
Mutual funds (583,962) (988,960)
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(857,483) 72,716
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ESTIMATED FAIR VALUE
Common collective trusts 67,054 (223,080)
Pooled separate accounts (958,508) --
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(891,454) (223,080)
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Net depreciation in fair value $(1,748,937) $ (150,364)
=========== ===========
(4) TAX STATUS
The Plan has requested a determination letter from the Internal Revenue
Service. The Plan administrator and the Plan's tax counsel believe that
the Plan is designed and is currently being operated in compliance with
the applicable requirements of the Internal Revenue Code. Therefore, no
provision for income taxes has been included in the Plan's financial
statements.
(5) PLAN ADMINISTRATION
A Committee comprised of members appointed by the Board of Directors of
the Employer administers the Plan.
(6) PLAN TERMINATION
Although the Company has not expressed any intent to do so, the Company
has the right under the Plan to discontinue their contributions at any
time. The Company has the right at any time, by action of its Board of
Directors, to terminate the Plan subject to provisions of ERISA. Upon
Plan termination or partial termination, participants will become fully
vested in their accounts.
(7) PARTIES-IN-INTEREST
Principal Life Insurance Company, under the group annuity contract,
provides third party administrative services to the Plan for which the
Plan is charged. In addition Principal Life Insurance Company receives
1) 32 basis points annually of the value of the Plan's units held in
the Principal Stable Value Fund, 2) a management fee based on the value
of Plan assets invested in pooled separate accounts, and 3) a fee from
certain investments in mutual funds.
American Express Trust Company, the former trustee of the Plan, its
subsidiaries and affiliates maintained and managed certain of the prior
investments of the Plan for which the Plan was charged.
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TOO, INC. SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
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(8) RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits
per the financial statements to Form 5500:
2002 2001
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Net assets available for benefits per the
financial statements $20,409,979 $19,658,839
Amounts allocated to withdrawing participants (38,558) (2,337)
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Net assets available for benefits per
Form 5500 $20,371,421 $19,656,502
=========== ===========
The following is a reconciliation of benefits paid to participants per
the financial statements to Form 5500:
Benefits paid to participants per the financial statements $ 1,676,116
Amounts allocated to withdrawing participants:
At December 31, 2002 38,558
At December 31, 2001 (2,337)
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Benefits Paid to Participants Per Form 5500 $ 1,712,337
===========
Amounts allocated to withdrawing participants are recorded on Form 5500
for benefit claims that have been processed and approved for payment
prior to December 31 but not yet paid as of that date.
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TOO, INC. SAVINGS AND RETIREMENT PLAN
EIN #31-1333930 PLAN #001
SCHEDULE H LINE 4I
SUPPLEMENTAL SCHEDULE OF ASSETS HELD AT END OF YEAR
DECEMBER 31, 2002
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(a) (b) (c) (d) (e)
Description of investment including (1)
Identity of issue, borrower, maturity date, rate of interest,
lessor, or similar party collateral, par or maturity value Cost Current Value
----------------------------------- ------------------------------------------ --------- ---------------
* Too, Inc. Common stock - 65,404 shares $ 1,538,302
Limited Brands, Inc. Common stock - 90,708 shares 1,263,562
T. Rowe Price Capital Mutual fund - 97,975 shares 1,392,218
Appreciation Fund
Putnam International Growth and Mutual fund - 33,955 shares 557,209
Income Fund, Class A
Fidelity Advisor Equity Growth Mutual fund - 5,518 shares 193,628
Fund, Class institutional shares
Vanguard Health Care Fund, Class Mutual fund - 1,970 share 189,444
investor shares
Vanguard Explorer Fund, Class Mutual fund - 3,677 share 167,270
investor shares
Strong Advisor Common Stock Fund, Mutual fund - 7,731 shares 123,459
Class Z
Northern Institutional Government Mutual fund - 28 shares 28
Select
Gartmore Trust Principal Stable Common collective trust - 483,338 units 6,664,751
Value Fund
* Represents a party-in-interest
(1) Cost information omitted - investment is part of individual account plan
that participants or beneficiary directed with respect to assets allocated
to his or her account.
The notes to the financial statements are an integral part of this schedule.
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TOO, INC. SAVINGS AND RETIREMENT PLAN
EIN #31-1333930 PLAN #001
SCHEDULE H LINE 4I
SUPPLEMENTAL SCHEDULE OF ASSETS HELD AT END OF YEAR
DECEMBER 31, 2002
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(a) (b) (c) (d) (e)
Description of investment including (1)
Identity of issue, borrower, maturity date, rate of interest,
lessor, or similar party collateral, par or maturity value Cost Current Value
----------------------------------- ------------------------------------------ --------- ---------------
Investments under Principal Life
Insurance Flexible Investment
Annuity Group Contract 4-48602
* Principal Partners Large-Cap Pooled separate account - 561,562 units 4,365,747
Blend Separate Account
* Principal Bond and Mortgage Pooled separate account - 1,484 units 967,267
Separate Account
* Principal Partners Large-Cap Pooled separate account - 41,269 units 376,302
Value Separate Account
* Principal Real Estate Separate Pooled separate account - 581 units 222,553
Account
The notes to the financial statements are an integral part of this schedule.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Too, Inc.
has duly caused this annual report to be signed by the undersigned thereunto
duly authorized.
Date: June 30, 2003
TOO, INC. SAVINGS AND RETIREMENT PLAN
(registrant)
By /s/ KENT A. KLEEBERGER
-------------------------------------
Kent A. Kleeberger
Executive Vice President
Chief Operating Officer
Chief Financial Officer
Too, Inc.
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Exhibit Index
Exhibit No.
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23 Consent of Ary, Roepcke & Mulchaey, P.C.
99.1 Certification pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
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