UNITED STATES
SECURITIES AND EXCHANGE COMISSION
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, 1996
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, 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, INC.
2280 N. GREENVILLE
RICHARDSON, TEXAS 75082
REQUIRED INFORMATION
The following financial statements shall be furnished for the plan:
1. An audited statement of financial condition as of the end of the
latest two fiscal years of the plan (or such lesser period as the plan has been
in existence).
2. An audited statement of income and changes in plan equity for each
of the latest three fiscal years of the plan (or such lesser period as the plan
has been in existence).
3. The statements required by Items 1 and 2 shall be prepared in
accordance with the applicable provisions of Article 6A of Regulation S-X (17
CFR 210.6A-01-6A-05).
4. In lieu of the requirements of Item 1-3 above, plans subject to
ERISA may file plan financial statements and schedules prepared in accordance
with the financial reporting requirements of ERISA. To the extent required by
ERISA, the plan financial statements shall be examined by an independent
accountant, except the the "limited scope exemption" contained in Section
103(a)(3)(C) of ERISA shall not be available.
Note: A written consent of the accountant is required with respect to
the plan annual financial statements which have been incorporated by reference
in a registration statement on Form S-8 under the Securities Act of 1933. The
consent should be filed as an exhibit to this annual report. Such consent shall
be currently dated and manually signed.
<PAGE>
FOSSIL, INC. SAVINGS AND RETIREMENT PLAN
Financial Statements as of and for the Years Ended
December 31, 1996 and 1995, Supplemental Schedules as of
December 31, 1996, and for the year then ended and
Independent Auditors' Report
<PAGE>
FOSSIL, INC. SAVINGS AND RETIREMENT PLAN
Pages
-----
Independent Auditors' Report 2
Financial Statements:
Statements of Net Assets Available for Benefits as
of December 31, 1996 and 1995 3
Statements of Changes in Net Assets Available for
Benefits for the Years Ended December 31, 1996 and
1995 4-5
Notes to Financial Statements 6-10
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment
Purposes as of December 31, 1996 11
Item 27d - Schedule of Reportable Transactions for the
Year ended December 31, 1996 12
Independent Auditors' Consent 13
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Advisory Committee
Fossil, Inc.
We have audited the accompanying statements of net assets available for benefits
of the Fossil, Inc. Savings and Retirement Plan (the "Plan") as of December 31,
1996 and 1995, 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 generally accepted accounting
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 1996
and 1995, and the changes in net assets available for benefits for the years
then ended, in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information by fund is
presented for the purpose of additional analysis of the basic financial
statements rather than to present information regarding the net assets available
for benefits and changes in net assets available for benefits of the individual
funds, and the accompanying supplemental schedules of (1) assets held for
investment purposes at December 31, 1996, and (2) reportable transactions for
the year ended December 31, 1996, and are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements. The supplemental schedules are 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 information and schedules are the
responsibility of the Plan's management. Such supplemental information and
schedules have been subjected to the auditing procedures applied in our audit of
the basic financial statements and, in our opinion, are fairly stated in all
material respects when considered in relation to the basic financial statements
taken as a whole.
/s/Deloitte & Touche LLP
- ------------------------
June 13, 1997
-2-
<PAGE>
FOSSIL, INC. SAVINGS AND RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
December 31,
1996 1995
---- ----
ASSETS
Investments, at Fair Value
Fidelity Mutual Funds:
<S> <C> <C>
Retirement Gov't Money Market Fund $ 153,397 $ 164,358
Intermediate Bond Fund 84,445 68,671
Growth and Income Fund 640,941 506,666
Blue Chip Growth Fund 726,910 686,429
Fossil Common Stock 182,929 114,730
------------- -------------
Total Investments 1,788,622 1,540,854
------------- -------------
Contributions Receivable 30,797 0
------------- -------------
NET ASSETS AVAILABLE FOR BENEFITS $ 1,819,419 $ 1,540,854
============= =============
</TABLE>
See notes to financial statements.
-3-
<PAGE>
FOSSIL, INC. SAVINGS AND RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION BY FUND
--------------------------------
Retirement
Government Growth Blue Chip Fossil
Money Market Intermediate and Income Growth Common
Fund Bond Fund Fund Fund Stock Total
------------- ------------ ------------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net Assets Available for Benefits,
December 31, 1995 $ 164,358 $ 68,671 $ 506,666 $ 686,429 $ 114,730 $ 1,540,854
------------- ------------ ------------ ------------ ----------- -------------
Investment Income:
Net Appreciation/(Depreciation)
in Fair Value of Investments 0 (2,021) 76,360 45,674 65,882 185,895
Interest and Dividends 7,740 4,954 31,767 52,741 0 97,202
------------- ------------ ------------ ------------ ----------- -------------
7,740 2,933 108,127 98,415 65,882 283,097
------------- ------------ ------------ ------------ ----------- -------------
Additions:
Rollover Transfers 5,725 4,409 13,409 13,995 2,548 40,086
Contributions:
Employer 15,410 8,724 42,145 47,182 15,574 129,035
Employee 39,208 25,512 114,129 136,885 42,906 358,640
------------- ------------ ------------ ------------ ----------- -------------
Total Contributions 54,618 34,236 156,274 184,067 58,480 487,675
------------- ------------ ------------ ------------ ----------- -------------
Total Additions 60,343 38,645 169,683 198,062 61,028 527,761
------------- ------------ ------------ ------------ ----------- -------------
Deductions:
Benefits Paid (113,796) (15,803) (149,153) (206,835) (48,372) (533,959)
Transfers Within Funds/
Forfeitures Released 38,427 (7,443) 18,413 (37,729) (10,002) 1,666
------------- ------------ ------------ ------------ ----------- -------------
(75,369) (23,246) (130,740) (244,564) (58,374) (532,293)
------------- ------------ ------------ ------------ ----------- -------------
Net Assets Available for Benefits,
December 31, 1996 $ 157,072 $ 87,003 $ 653,736 $ 738,342 $ 183,266 $ 1,819,419
============= ============ ============ =========== =========== =============
</TABLE>
See notes to financial statements.
-4-
<PAGE>
FOSSIL, INC. SAVINGS AND RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION BY FUND
--------------------------------
Retirement
Government Growth Blue Chip Fossil
Money Market Intermediate and Income Growth Common
Fund Bond Fund Fund Fund Stock Total
------------- ------------ ------------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net Assets Available for Benefits,
December 31, 1994 $ 199,715 $ 46,491 $ 259,639 $ 315,736 $ 101,469 $ 923,050
------------- ------------ ------------ ------------ ----------- -------------
Investment Income:
Net Appreciation /(Depreciation)
in Fair Value of Investments - 3,192 89,337 65,921 (59,278) 99,172
Interest and Dividends 11,161 3,669 22,532 51,555 7 88,924
------------- ------------ ------------ ------------ ----------- -------------
11,161 6,861 111,869 117,476 (59,271) 188,096
------------- ------------ ------------ ------------ ----------- -------------
Additions:
Rollover Transfers 3,239 4,164 8,720 32,930 7,612 56,665
Contributions:
Employer 13,092 7,160 30,805 39,698 17,418 108,173
Employee 33,945 21,320 82,838 120,750 51,449 310,302
------------- ------------ ------------ ------------ ----------- -------------
Total Contributions 47,037 28,480 113,643 160,448 68,867 418,475
------------- ------------ ------------ ------------ ----------- -------------
Total Additions 50,276 32,644 122,363 193,378 76,479 475,140
------------- ------------ ------------ ------------ ----------- -------------
Deductions:
Benefits Paid (3,716) (3,677) (7,863) (24,946) (5,275) (45,477)
Transfers Within Funds/
Forfeitures Released (93,078) (13,648) 20,658 84,785 1,328 45
------------- ------------ ------------ ------------ ----------- -------------
(96,794) (17,325) 12,795 59,839 (3,947) (45,432)
------------- ------------ ------------ ------------ ----------- -------------
Net Assets Available for Benefits,
December 31, 1995 $ 164,358 $ 68,671 $ 506,666 $ 686,429 $ 114,730 $ 1,540,854
------------- ------------ ------------ ------------ ----------- -------------
</TABLE>
See notes to financial statements.
-5-
<PAGE>
FOSSIL, INC. SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting: The accounting records of the Fossil, Inc. Savings and
Retirement Plan (the "Plan"), sponsored by Fossil, Inc. ("Fossil"), are
maintained on the accrual basis of accounting.
Use of Estimate: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Investments: Investments are presented in the financial statements at fair value
determined by quoted market prices at the close of business on December 31. The
change in the difference between fair value and the cost of investments,
including realized gains or losses, is reflected in the statement of changes in
net assets available for benefits as net appreciation (depreciation) in fair
value of investments during the year. Interest and dividend income is recorded
on an accrual basis.
Expenses: Expenses incurred by the Plan are paid by Fossil.
Payment of Benefits: Benefits are recorded when paid.
NOTE 2 - DESCRIPTION OF THE PLAN
The following brief 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.
Plan Organization, Amendments and General Provisions: The Plan is a defined
contribution plan covering eligible employees of Fossil. The purpose of the Plan
is to encourage employees to accumulate savings for their retirement. The Plan
is administered by Fossil.
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA").
Contributions and Vesting: The Plan is qualified under Section 401(k) of the
Internal Revenue Code (the "Code"). Employees are eligible to make
contributions, after having been employed by Fossil for at least 12 months, from
amounts subject to income tax and such amounts are characterized as salary
deferral contributions by Fossil. The maximum salary deferral contribution is
the lesser of 15% of gross pay or, according to the Code, $9,500 for 1996 and
$9,240 for 1995. The Plan document provides for limitations on salary deferral
contributions in the event of a hardship withdrawal. Fossil generally makes a
matching contribution at the rate of 50% of the first 3% and 25% of the next 3%
of the participant's salary deferral contribution. Fossil may also make
additional profit sharing contributions at the discretion of the Plan's Advisory
Committee. No such additional discretionary contributions were made during the
years ended December 31, 1996 or 1995. Vesting in salary deferral
-6-
<PAGE>
NOTE 2 - DESCRIPTION OF THE PLAN (CON'T.)
contributions is 100%. Vesting in matching contributions is 20% per year of
service. An employee is credited with a year of service when 1000 actual hours
of service have been attained during a plan year (the 12 consecutive month
period ending December 31).
Currently, participants can elect to have their contributions invested in any of
several investment options which are described in Note 3. The participant can
change elections and can also reallocate those funds already invested between
available investment options quarterly. The Plan also allows rollover transfers
from other qualified plans. The Plan limits the participant's purchase of Fossil
Common Stock to 25% of deferral contributions and in the case of a rollover or
transfer, up to 25% of the participant's total balance may be allocated to
Fossil Common Stock.
In addition, hardship withdrawals for certain expenses including medical,
tuition, funeral, purchase of or possible eviction from a primary residence, and
the participant's disability are permitted.
Forfeitures of nonvested employer contribution account balances are generally
reallocated each year to the remaining participants based upon the participant's
matching contribution for that quarter. The plan additionally allows for
forfeitures to be used to lower future employer contributions.
Distribution of Benefits: Distributions of vested benefits may be made to a
participant upon retirement, disability, death or termination of employment.
Prior to age 65, a participant, while employed, may make a withdrawal from his
salary deferral contributions account in the event that the participant has an
immediate and substantial financial need, as defined in Section 401 (k) of the
Code, subject to certain conditions contained in the Plan document.
Distributions of vested benefits under the Plan are paid to the participant or a
beneficiary in the form of a lump sum or partial distribution.
Any withdrawals from the Plan will generally be subject to federal income tax.
Taxes may be postponed by "rolling over" the proceeds to an individual
retirement plan or to another qualified plan. An additional 10% excise tax may
be imposed on the taxable portion of distributions and withdrawals before
attaining age 65. The additional tax is not imposed for distributions on death,
disability, termination of employment after age 59 1/2, pursuant to a qualified
domestic order, and for other reasons enumerated in the Code.
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 nor is aware
of any occurrences that could result in the termination of the Plan.
NOTE 3 - PLAN INVESTMENTS
The Plan's investments are held by Fidelity Institutional Retirement Services
Company (several of Fidelity's mutual funds) and Montgomery Securities (Fossil
Common Stock). The initial purchase of Fossil Common Stock by the Plan was
through a stock issuance by Fossil and is in the Plan's name and on record at
the transfer agent.
-7-
<PAGE>
NOTE 3 - PLAN INVESTMENTS (CON'T.)
Fidelity Retirement Government Money Market Fund - A money market fund which
seeks as high a level of current income as is consistent with the preservation
of capital and liquidity by investing in U.S. government and its agencies
obligations.
Fidelity Intermediate Bond Fund - A fund which seeks a high level of income by
investing in high quality, fixed income obligations with a dollar weighted
average portfolio maturing in three to five years.
Fidelity Growth and Income Fund - A fund which seeks long-term capital growth,
current income and growth of income consistent with reasonable investment risk
by investing in securities of companies that offer growth of earnings potential
while paying current dividends. Invests in any combination of common stock,
convertible securities, preferred stock, and corporate bonds. Securities may be
of foreign and domestic issuers.
Fidelity Blue Chip Growth Fund - A fund which seeks growth of capital over the
long term by investing primarily in a diversified portfolio of common stocks of
well-known and established companies with at least 65% of these securities
issued by "blue-chip" companies.
Fossil Common Stock - A fund which invests in the common stock of Fossil.
-8-
<PAGE>
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Number of Number of
Plan Units Held
Participants in
Unit with Participant Market
Fund Valuation Balances Accounts Value
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fidelity Mutual Funds:
Retirement Gov't Money Mkt $ 1.00 97 153,397 $ 153,397
Intermediate Bond 10.08 89 8,377 84,445
Growth and Income 30.73 175 20,857 640,941
Blue Chip Growth 32.69 180 22,236 726,910
- -------------------------------------------------------------------------------------
Fossil Common Stock 13.50 118 13,550 182,929
- -------------------------------------------------------------------------------------
</TABLE>
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number of Number of
Plan Units Held
Participants in
Unit with Participant Market
Fund Valuation Balances Accounts Value
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fidelity Mutual Funds:
Retirement Gov't Money Mkt $ 1.00 86 164,358 $ 164,358
Intermediate Bond 10.41 87 6,597 68,671
Growth and Income 27.05 143 18,731 506,666
Blue Chip Growth 30.77 160 22,308 686,429
- -----------------------------------------------------------------------------------
Fossil Common Stock 8.38 123 13,699 114,730
- -----------------------------------------------------------------------------------
</TABLE>
-9-
<PAGE>
NOTE 4 - INCOME TAX STATUS
The Internal Revenue Service has issued a determination letter that the Plan
qualifies under 401a of the Internal Revenue Code of 1986, as amended, and is
exempt from federal income tax under section 50la thereof.
Elective contributions made by participants, matching employer contributions,
interest, dividends and profit from the sale of securities need not be reported
by participants for federal income tax purposes until their account is withdrawn
or distributed, wholly or partially.
NOTE 5 - NET APPRECIATION IN FAIR VALUE OF INVESTMENTS
The following table details the net change in fair value by type of investment:
<TABLE>
<CAPTION>
December 31,
1996 1995
---- ----
<S> <C> <C>
Fidelity Mutual Funds $ 120,013 $ 158,450
Fossil Common Stock 65,882 (59,278)
--------- ---------
Net appreciation (depreciation) in fair value of investments $ 185,895 $ 99,172
--------- ---------
</TABLE>
NOTE 6 - WITHDRAWALS
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31,
1996 1995
---- ----
<S> <C> <C>
Net assets available for benefits per the financial statements $ 1,819,419 $ 1,540,854
Amounts allocated to withdrawing participants (8,936) (7,883)
----------- -----------
Net assets available for benefits per the Form 5500 $ 1,810,483 $ 1,532,971
----------- -----------
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
Year Ended
December 31, 1996
-----------------
<S> <C>
Benefits paid to participants per the financial statements $ 533,959
Add: Amounts allocated to withdrawing participants at
December 31, 1996 8,936
Deduct: Amounts allocated to withdrawing participants at
December 31, 1995 (7,883)
-------
Benefits paid to participants per the Form 5500 $ 535,0l2
--------
</TABLE>
Amounts allocated to withdrawing participants are recorded on the 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.
-10-
<PAGE>
FOSSIL, INC. SAVINGS AND RETIREMENT PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
Year Ended December 31, 1996
<TABLE>
<CAPTION>
Identity of Description of Current
issue investment Cost Value
- ------------------------- ---------------------- ---------- ----------
<S> <C> <C> <C>
Fidelity Mutual Retirement Government
Money Market Fund $ 157,072 $ 153,397
Fidelity Mutual Intermediate Bond Fund 89,204 84,445
Fidelity Mutual Growth and Income Fund 496,154 640,941
Fidelity Mutual Blue Chip Growth Fund 614,345 726,910
Fossil, Inc. Common Stock, $.01 Par 206,955 182,929
</TABLE>
-11-
<PAGE>
FOSSIL, INC. SAVINGS AND RETIREMENT PLAN
Item 27d - Schedule of Reportable Transactions
Year Ended December 31, 1996
<TABLE>
<CAPTION>
(a) Identity of (b) Description (c) Purchase (d) Selling (e) Lease (f) Expense (h) Current value
party involved of asset Price Price rental incurred with (g) Cost of asset on (i) Net gain
transaction of asset transaction date or (loss)
- --------------- ---------------------- ------------ ----------- --------- ------------- -------- ----------------- ------------
Series
- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fidelity Mutual Retirement Government
Money Market Fund $ 109,612 $ 120,894 - - 120,894 120,894 0
Fidelity Mutual Growth and Income Fund 233,780 175,633 - - 163,494 175,633 12,139
Fidelity Mutual Blue Chip Growth Fund 258,013 263,651 - - 258,822 263,651 4,829
Single
Fidelity Mutual Retirement Government
Money Market Fund 91,807 - - 91,807 91,807 0
</TABLE>
-12-
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-65980 of Fossil, Inc. on Form S-8 of our report dated June 13, 1997, included
in this Annual Report on Form 11-K of the Fossil, Inc. Savings and Retirement
Plan for the year ended December 31, 1996.
/s/ Delloitte & Touche LLP
- ---------------------------
Dallas, Texas
June 26, 1997
-13-
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of Securities Exchange Act of
1934, the Advisory Committee which administers the Plan has duly caused this
annual report to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Dallas, State of Texas, on June 30, 1997.
FOSSIL, INC. SAVINGS AND RETIREMENT PLAN
/s/ Randy S. Kercho
-------------------
Randy S. Kercho, Member of the Advisory Committee
Pursuant to the requirements of the Securities Exchange Act of 1934,
this annual report has been signed below by the following persons in their
capacities as members of the Advisory Committee of the Fossil, Inc. Savings and
Retirement Plan and on the dates indicated.
SIGNATURE DATE
- --------- ----
/s/ Randy S. Kercho June 30, 1997
- -----------------------
Randy S. Kercho
/s/ Monica Nicholson June 30, 1997
- -----------------------
Monica Nicholson
/s/ Michael W. Barnes June 30, 1997
- -----------------------
Michael W. Barnes
-14-
<PAGE>
EXHIBIT INDEX
Exhibit Page
Number Document Description Number
- ------- -------------------- ------
23(b) Consent of Deloitte & Touche (as contained on page 13 hereof)
-15-
