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, 2003
[ ] TRANSITIONAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
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 Audits of Financial Statements
As of and for the Years Ended December 31, 2003 and 2002
and Supplemental Schedule
As of December 31, 2003
CONTENTS
Report of Independent Auditors................................ 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
-1-
REPORT OF INDEPENDENT AUDITORS
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,
2003 and 2002, 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 standards of the Public Company
Accounting Oversight Board (United States). 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, 2003 and 2002, 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, 2003, 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 18, 2004
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TOO, INC. SAVINGS AND RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2003 AND 2002
2003 2002
----------- -----------
ASSETS:
Investments $22,565,800 $18,021,740
Cash 37 -
Receivable for contributions:
Employer 1,980,665 2,325,396
Participants 65,390 62,843
----------- -----------
Total contributions receivable 2,046,055 2,388,239
----------- -----------
Due from brokers 51,565 -
----------- -----------
Total assets 24,663,457 20,409,979
----------- -----------
LIABILITIES:
Due to brokers 278 -
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $24,663,179 $20,409,979
=========== ===========
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, 2003 AND 2002
2003 2002
------------ ------------
ADDITIONS:
Investment income (loss):
Net appreciation (depreciation) in
fair value of investments $ 2,301,411 $ (1,748,937)
Earnings from mutual funds 45,355 73,220
Dividends from common stock 33,952 28,436
Earnings from common collective trusts - 653
------------ ------------
Total investment income (loss) 2,380,718 (1,646,628)
------------ ------------
Contributions:
Employer 2,679,374 2,896,298
Participants 1,350,775 1,151,282
Rollovers 82,080 113,973
------------ ------------
Total contributions 4,112,229 4,161,553
------------ ------------
Total additions 6,492,947 2,514,925
------------ ------------
DEDUCTIONS:
Distributions to participants 2,078,808 1,676,116
Administrative expenses 160,939 87,669
------------ ------------
Total deductions 2,239,747 1,763,785
------------ ------------
Net increase 4,253,200 751,140
Net assets available for benefits:
Beginning of year 20,409,979 19,658,839
------------ ------------
End of year $ 24,663,179 $ 20,409,979
============ ============
The accompanying notes are an integral part of these financial statements.
-4-
TOO, INC. SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
(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, 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, 2003 and 2002,
was $200,000.
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 ($12,000 at December
31, 2003). This voluntary tax-deferred contribution may be limited by
Section 401(k) of the Code.
-5-
TOO, INC. SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
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 five mutual funds, five 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.
-6-
TOO, INC. SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
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 $51,938 and $38,558 as of
December 31, 2003 and 2002, respectively.
FORFEITURES
Forfeitures are used to reduce the Employer's required contributions.
Forfeitures of $680,430 and $248,397 were used to reduce Employer's
contributions for the plan years ended December 31, 2003 and 2002,
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.
-7-
TOO, INC. SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
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.
-8-
TOO, INC. SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
(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 at in directed custodial trusts with Delaware Charter Guarantee &
Trust Company and Bankers Trust Company. The following table presents
investments. Investments that represent 5 percent or more of the Plan's
net assets are separately identified.
2003 2002
----------- -----------
Investments at fair value as determined by:
QUOTED MARKET PRICE
Common stock:
Too, Inc. $ 1,217,396 $ 1,538,302
Limited Brands, Inc. 1,381,075 1,263,562
----------- -----------
2,598,471 2,801,864
----------- -----------
Mutual funds:
T. Rowe Price Capital
Appreciation Fund 1,954,754 1,392,218
Other 2,467,848 1,231,038
----------- -----------
4,422,602 2,623,256
----------- -----------
7,021,073 5,425,120
----------- -----------
ESTIMATED FAIR VALUE
Common collective trusts:
Gartmore Trust Company Stable
Value Fund 7,716,310 6,664,751
----------- -----------
Principal Life Insurance Company
pooled separate accounts:
Principal Partners Large-Cap Blend 4,821,552 4,365,747
Principal Bond & Mortgage 1,448,759 967,267
Other 1,558,106 598,855
----------- -----------
7,828,417 5,931,869
----------- -----------
15,544,727 12,596,620
----------- -----------
Total investments at fair value $22,565,800 $18,021,740
=========== ===========
-9-
TOO, INC. SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
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, 2003 and 2002, are set forth below:
2003 2002
----------- -----------
Investments at fair value as determined by:
QUOTED MARKET PRICE
Common stock $ (81,693) $ (273,521)
Mutual funds 906,296 (583,962)
----------- -----------
824,603 (857,483)
----------- -----------
ESTIMATED FAIR VALUE
Common collective trusts 269,115 67,054
Pooled separate accounts 1,207,693 (958,508)
----------- -----------
1,476,808 (891,454)
----------- -----------
Net appreciation (depreciation)
in fair value $ 2,301,411 $(1,748,937)
=========== ===========
(4) TAX STATUS
The Internal Revenue Service has determined and informed the Employer by a
letter dated September 9, 2003, that the Plan and related trust are
designed in accordance with applicable sections of the 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.
-10-
TOO, INC. SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
(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:
2003 2002
------------ ------------
Net assets available for benefits per the
financial statements $ 24,663,179 $ 20,409,979
Amounts allocated to withdrawing participants (51,938) (38,558)
------------ ------------
Net assets available for benefits per
Form 5500 $ 24,611,241 $ 20,371,421
============ ============
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 $ 2,078,808
Amounts allocated to withdrawing participants:
At December 31, 2003 51,938
At December 31, 2002 (38,558)
-----------
Benefits Paid to Participants Per Form 5500 $ 2,092,188
===========
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.
-11-
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, 2003
(a) (b) (c) (d) (e)
Description of investment
including maturity date, (1)
Identity of issue, rate of interest,
borrower, lessor, or collateral, par or maturity Current
similar party value Cost Value
---------------------- ---------------------------- ---- ------------
* Too, Inc. Common stock - 72,121 shares $ 1,217,396
Limited Brands, Inc. Common stock - 76,599 shares 1,381,075
T. Rowe Price Capital Mutual fund - 111,700 shares 1,954,754
Appreciation Fund
American Funds New Mutual fund - 37,132 shares 903,425
Perspective R3 Fund
Vanguard Health Care Mutual fund - 4,517 shares 544,578
Fund
Fidelity Advisor Mutual fund - 11,272 shares 524,508
Equity Growth Fund
Vanguard Explorer Fund Mutual fund - 7,424 shares 487,146
Northern Institutional Mutual fund - 8,191 shares 8,191
Government Select
Gartmore Trust Common collective trust - 7,716,310
Principal Stable Value 540,296 units
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 accompanying notes are an integral part of this schedule.
-12-
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, 2003
(a) (b) (c) (d) (e)
Description of investment
including maturity date, (1)
Identity of issue, rate of interest,
borrower, lessor, or collateral, par or maturity Current
similar party value Cost Value
---------------------- --------------------------- ---- ---------
Investments under
Principal Life
Insurance Flexible
Investment Annuity
Group Contract 4-48602
* Principal Partners Pooled separate account - 4,821,552
Large-Cap Blend 500,453 units
Separate Account
* Principal Bond and Pooled separate account - 1,448,759
Mortgage Separate 2,116 units
Account
* Principal Partners Pooled separate account - 666,387
Large-Cap Value 57,327 units
Separate Account
* Principal Real Estate Pooled separate account - 522,699
Separate Account 1,261 units
* Principal Partners Pooled separate account -
Mid-Cap Growth 36,430 units 369,020
Separate Account
The accompanying notes are an integral part of this schedule.
-13-
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 25, 2004
TOO, INC. SAVINGS AND RETIREMENT PLAN
(registrant)
By /s/ WILLIAM E. MAY
-------------------------------------------
William E. May
Executive Vice President
Chief Operating Officer
(Principal Financial Officer)
Too, Inc.
-14-
Exhibit Index
Exhibit No.
-----------
23 Consent of Ary, Roepcke & Mulchaey, P.C.
-15-