10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant To Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the Quarterly Period Ended September 30, 2008

Commission File Number 0-18927

TANDY BRANDS ACCESSORIES, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 75-2349915
(I.R.S. Employer
Identification No.)

690 East Lamar Boulevard, Suite 200, Arlington, TX 76011
(Address of principal executive offices and zip code)

817-548-0090
(Registrant’s telephone number, including area code)

Former name, former address and former fiscal year, if changed since last report:
Not Applicable

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

þ Yes                 o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer o	Non-accelerated filer o	Smaller reporting company þ
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes                 þ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

Class
Common stock, $1.00 par value Number of shares outstanding
at November 7, 2008
6,990,821

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
Item 1 Financial Statements	4 - 9
Item 2 Management’s Discussion And Analysis Of Financial Condition And Results Of Operations	10-12
Item 4T Controls And Procedures	12
PART II — OTHER INFORMATION
Item 1A Risk Factors	12
Item 2 Unregistered Sales Of Equity Securities And Use Of Proceeds	13
Item 4 Submission Of Matters To A Vote Of Security Holders	13
Item 6 Exhibits	13
SIGNATURES	14
EX-10.1
EX-10.2
EX-31.1
EX-31.2
EX-32.1

2

This Form 10-Q contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” variations of such words, and similar expressions are intended to identify forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our business, and other characterizations of future events or circumstances are forward-looking statements. We have based these forward-looking statements on our current expectations about future events, estimates and projections about the industry in which we operate. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Our actual results may differ materially from those suggested by these forward-looking statements for various reasons, including those identified under “Risk Factors” included in our 2008 Annual Report on Form 10-K. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. The forward-looking statements included in this report are made only as of the date hereof. Except as required under federal securities laws and the rules and regulations of the United States Securities and Exchange Commission, we do not undertake, and specifically decline, any obligation to update any of these statements or to publicly announce the results of any revisions to any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions, or otherwise.

References in this Quarterly Report on Form 10-Q to “we”, “our”, “us”, or the “Company” refer to Tandy Brands Accessories, Inc. and its subsidiaries unless the context requires otherwise.

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PART I — FINANCIAL INFORMATION

ITEM 1 — FINANCIAL STATEMENTS

Tandy Brands Accessories, Inc. And Subsidiaries
Consolidated Statements Of Operations
(in thousands except per share amounts)
(unaudited)

	Three Months Ended
	September 30
	2008			2007
Net sales	$	34,617		$	39,464
Cost of goods sold		22,607			26,634
Gross margin		12,010			12,830
Selling, general and administrative expenses		12,401			14,441
Depreciation and amortization		569			976
Total operating expenses		12,970			15,417
Operating loss		(960	)		(2,587	)
Interest expense		(148	)		(280	)
Other income		61			45
Loss before income taxes		(1,047	)		(2,822	)
Income taxes (benefit)		233			(1,087	)
Net loss	$	(1,280	)	$	(1,735	)
Loss per common share	$	(0.18	)	$	(0.25	)
Loss per common share assuming dilution	$	(0.18	)	$	(0.25	)
Cash dividends declared per common share	$	0.04		$	0.04
Common shares outstanding		6,988			6,826
Common shares outstanding assuming dilution		6,988			6,826

The accompanying notes are an integral part of these consolidated financial statements.

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Tandy Brands Accessories, Inc. And Subsidiaries
Consolidated Balance Sheets
(in thousands)
(unaudited)

	September 30			June 30
	2008			2008
Assets
Current assets:
Cash and cash equivalents	$	2,102		$	2,855
Accounts receivable		26,411			22,147
Inventories		48,489			35,535
Other current assets		7,246			8,783
Total current assets		84,248			69,320
Property and equipment		4,911			5,382
Other assets:
Intangibles		2,986			3,069
Other assets		2,571			1,617
Total other assets		5,557			4,686
	$	94,716		$	79,388
Liabilities And Stockholders’ Equity
Current liabilities:
Accounts payable	$	12,498		$	10,312
Accrued expenses		5,317			5,361
Note payable		15,441			363
Total current liabilities		33,256			16,036
Other liabilities:
Supplemental executive retirement obligation		1,813			1,893
Other liabilities		3,620			3,581
Total other liabilities		5,433			5,474
Stockholders’ equity:
Preferred stock, $1.00 par value, 1,000 shares authorized, none issued		—			—
Common stock, $1.00 par value, 10,000 shares authorized, 7,048 shares and 7,049 shares issued and outstanding		7,048			7,049
Additional paid-in capital		34,819			34,840
Retained earnings		13,775			15,337
Other comprehensive income		1,435			1,666
Shares held by Benefit Restoration Plan Trust		(1,050	)		(1,014	)
Total stockholders’ equity		56,027			57,878
	$	94,716		$	79,388

The accompanying notes are an integral part of these consolidated financial statements.

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Tandy Brands Accessories, Inc. And Subsidiaries
Consolidated Statements Of Cash Flows
(in thousands)
(unaudited)

	Three Months Ended
	September 30
	2008			2007
Cash used by operating activities:
Net loss	$	(1,280	)	$	(1,735	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		577			976
Share-based compensation expense		90			234
Amortization of debt origination costs		42			35
Excess income tax benefit from stock option exercises		—			(9	)
Deferred income taxes		—			(295	)
Other		(270	)		510
Changes in assets and liabilities:
Accounts receivable		(4,264	)		(1,869	)
Inventories		(12,954	)		(3,699	)
Other assets		1,583			588
Accounts payable		2,185			(1,126	)
Accrued expenses		(29	)		(1,175	)
Net cash used by operating activities		(14,320	)		(7,565	)
Cash used for investing activities:
Purchases of property and equipment		(81	)		(184	)
Funding supplemental executive retirement plan trust		(1,060	)		—
Net cash used for investing activities		(1,141	)		(184	)
Cash provided by financing activities:
Stock purchase program (withdrawals)		(89	)		318
Stock options exercised		—			66
Dividends paid		(282	)		(276	)
Change in cash overdrafts		1			207
Net note borrowings		15,078			6,931
Net cash provided by financing activities		14,708			7,246
Net decrease in cash and cash equivalents		(753	)		(503	)
Cash and cash equivalents beginning of year		2,855			4,076
Cash and cash equivalents end of period	$	2,102		$	3,573
Supplemental cash flow information:
Interest paid	$	52		$	217
Income taxes paid	$	121		$	80

The accompanying notes are an integral part of these consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Accounting Principles

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

The preparation of our consolidated financial statements requires the use of estimates that affect the reported value of assets, liabilities, revenues, and expenses. These estimates are based on historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for our conclusions. We continually evaluate the information used to make these estimates as the business and economic environment changes. Actual results may differ from these estimates under different assumptions or conditions. Such differences could have a material impact on our future financial position, results of operations, and cash flows.

The consolidated balance sheet at June 30, 2008 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These interim unaudited consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in our 2008 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Historically our first and second quarter sales and operating results reflect a seasonal increase compared to the third and fourth quarters of our fiscal year. Sales for the first quarter of fiscal 2009 and 2008 were not consistent with historical patterns due to the very difficult retail environment in both years, deliveries to customers shifting from the first to the second quarter this year, and curtailed replenishment orders by one of our largest customers last year. Consequently, operating results for the three-month period ended September 30, 2008 are not necessarily indicative of the results that may be expected for the year ended June 30, 2009.

Note 2 — Recent Accounting Pronouncements

Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” (“SFAS 159”) permits choosing to measure certain financial assets and liabilities at fair value. We have not elected to measure any assets or liabilities at fair value which were not being so measured prior to our adopting SFAS 159 on July 1, 2008.

Effective July 1, 2008, we adopted the disclosure requirements of SFAS No. 157, “Fair Value Measurements,” (“SFAS 157”), issued by the FASB in September 2006, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements required under other accounting pronouncements, but does not change existing guidance for carrying instruments at fair value. FASB Staff Position No. 157-2 issued in February 2008 allows us to delay application of SFAS 157 for nonfinancial assets and liabilities until the first quarter of fiscal 2010.

Note 3 — Credit Arrangements

We have a $35 million credit facility for borrowings and letters of credit based on accounts receivable and inventory levels. At September 30, 2008 we had outstanding borrowings under the facility of $15.4 million bearing interest at 5.25%, outstanding letters of credit totaling $2.5 million, and $12.2 million borrowing availability. Borrowings under the facility, which are due on the facility’s expiration date in February 2010, bear interest at the lender’s prime rate plus 0.25% or LIBOR plus 2.75% as designated by the Company. The effect of a 1% increase or decrease in the interest rate on the amount borrowed at September 30, 2008 could lower or increase our annual pretax operating results by $154,000.

The credit facility is guaranteed by substantially all of our subsidiaries and is secured by substantially all of our assets and those of our subsidiaries. It requires the maintenance of a tangible net worth financial ratio which, if not met, could adversely impact our liquidity. The facility contains customary representations and warranties and we have agreed to certain affirmative covenants, including reporting requirements. The facility also limits our ability to engage in certain actions without the lender’s consent, including, repurchasing our common stock, entering into certain mergers or consolidations, guaranteeing or incurring certain debt, engaging in certain stock or asset

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acquisitions, paying dividends without the lender’s approval, making certain investments in other entities, prepaying debt, and making certain property transfers.

Our Canadian subsidiary has a CAD $1 million credit facility (direct advances limited to US $830,000) secured by its cash, credit balances, and deposit instruments with interest at the lender’s prime or US base rates. There have been no borrowings under this line of credit.

We may need to request modifications to the eligible inventory and accounts receivable borrowing limitations under our credit facility for part of fiscal 2009 if our sales expectations are not met and accounts receivable are not timely collected due to customers conserving their cash by delaying payments to us. Before the end of fiscal 2009, we also may have to request a waiver of the credit agreement tangible net worth financial ratio covenant if we incur more than a minimal net loss for the fiscal year.

Note 4 — Business Segments And Related Information

We sell our products through all major retail distribution channels throughout North America, including mass merchants, national chain stores, department stores, men’s and women’s specialty stores, catalog retailers, grocery stores, drug stores, golf pro shops, sporting goods stores, automobile and tire stores, and the retail exchange operations of the United States military. We and our corresponding customer relationships are organized along men’s and women’s product lines. As a result we have two reportable segments: (1) men’s accessories, consisting of belts, gifts, wallets and other small leather goods, suspenders, and sporting goods; and (2) women’s accessories, consisting of belts, small leather goods, and gifts. General corporate expenses and depreciation and amortization related to assets recorded in our corporate accounting records are allocated to each segment based on the respective segment’s asset base. Management measures each segment based upon income or loss before income taxes utilizing accounting policies consistent in all material respects with those described in Note 2 of the notes to consolidated financial statements included in our 2008 Annual Report of Form 10-K filed with the Securities and Exchange Commission. No inter-segment revenue is recorded.

The following presents operating and asset information by reportable segment (in thousands).

	Three Months Ended
	September 30
	2008			2007
Net sales:
Men’s accessories	$	26,405		$	30,212
Women’s accessories		8,212			9,252
	$	34,617		$	39,464
Operating loss: (1)
Men’s accessories	$	(873	)	$	(2,033	)
Women’s accessories		(87	)		(554	)
		(960	)		(2,587	)
Interest expense		(148	)		(280	)
Other income		61			45
Loss before income taxes	$	(1,047	)	$	(2,822	)
Depreciation and amortization:
Men’s accessories	$	376		$	707
Women’s accessories		193			269
	$	569		$	976
Capital expenditures:
Men’s accessories	$	48		$	33
Women’s accessories		—			—
Corporate		33			151
	$	81		$	184

⁽¹⁾ Operating loss consists of net sales less cost of goods sold and specifically identifiable and allocated selling, general and administrative expenses.

8

Note 5 — Fair Value Measurements

The only account we measure at fair value is the rabbi trust established to set aside amounts to assist in satisfying our supplemental executive retirement obligation. The trust’s assets (September 30, 2008 — $1.8 million) are measured at their quoted prices in active markets (Level 1 of the SFAS 157 fair value hierarchy).

Note 6 — Income Taxes

The approximately $500,000 fiscal 2009 deferred tax benefit of our pretax loss was offset by a valuation allowance provision as our operating results over the past three years and projections of future operating results do not currently indicate it is more likely than not the deferred tax benefits will ultimately be realized. The $233,000 income tax provision in the current quarter relates to the earnings of our Canadian subsidiary ($140,000) and taxes, interest, and penalties for uncertain tax positions ($93,000). No deferred tax valuation allowance provision was recognized in the first quarter of fiscal 2008 and the tax benefit of the pretax loss was reduced $38,000, net of income taxes, for interest on unrecognized tax benefits of uncertain tax positions.

Note 7 — Comprehensive Loss

The following presents the components of comprehensive loss (in thousands).

	Three Months Ended
	September 30
	2008			2007
Net loss	$	(1,280	)	$	(1,735	)
Currency translation adjustments		(231	)		528
Comprehensive loss	$	(1,511	)	$	(1,207	)

Note 8 — Earnings Per Share

The following presents the computation of basic and diluted earnings per share (in thousands except per share amounts).

	Three Months Ended
	September 30
	2008			2007
Numerator for basic and diluted earnings per share:
Net loss	$	(1,280	)	$	(1,735	)
Denominator:
Weighted-average shares outstanding		6,986			6,822
Contingently issuable shares		2			4
Denominator for basic and diluted earnings per share		6,988			6,826
Loss per common share	$	(0.18	)	$	(0.25	)
Loss per common share assuming dilution	$	(0.18	)	$	(0.25	)

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ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Item 2 should be read in the context of the information included in our 2008 Annual Report on Form 10-K filed with the Securities and Exchange Commission and elsewhere in this Quarterly Report, including our consolidated financial statements and accompanying notes in Item 1 of this Quarterly Report.

BUSINESS

We are a leading designer and marketer of branded men’s, women’s and children’s accessories, including belts, small leather goods, and gift accessories. Our product line also includes handbags and sporting goods. Our merchandise is marketed under a broad portfolio of nationally recognized licensed and proprietary brand names, including DOCKERS®, LEVI’S®, LEVI STRAUSS SIGNATURE™, TOTES®, ROLFS®, WOOLRICH®, CANTERBURY®, PRINCE GARDNER®, PRINCESS GARDNER®, AMITY®, COLETTA®, STAGG®, ACCESSORY DESIGN GROUP®, TIGER®, ETON®, SURPLUS®, EILEEN WEST™, GOODYEAR™, GENO D’LUCCA™, DR. MARTENS®, and DR. MARTENS AIRWAIR®, as well as private brands for major retail customers. We sell our products through all major retail distribution channels throughout North America, including mass merchants, national chain stores, department stores, men’s and women’s specialty stores, catalog retailers, grocery stores, drug stores, golf pro shops, sporting goods stores, automobile and tire stores, and the retail exchange operations of the United States military.

FISCAL 2009 COMPARED TO FISCAL 2008

Net Sales And Gross Margin

The following presents sales and gross margin data for our reportable segments (in thousands).

	Three Months Ended
	September 30
	2008			2007
Net sales:
Men’s accessories	$	26,405		$	30,212
Women’s accessories		8,212			9,252
	$	34,617		$	39,464
Gross margin:
Men’s accessories	$	8,919		$	9,309
Women’s accessories		3,091			3,521
	$	12,010		$	12,830
Gross margin percent of sales:
Men’s accessories		33.8	%		30.8	%
Women’s accessories		37.6			38.1
Total		34.7			32.5

Net sales for the first quarter (2009 — $34.6 million; 2008 — $39.5 million) were lower this year (men’s accessories — $3.8 million; women’s accessories — $1.0 million) as the difficult retail environment, which began to affect our sales over a year ago, accelerated its decline and some deliveries of belts and small leather goods to customers shifted from the first to the second quarter this year. Approximately $3.4 million of the men’s accessories sales decline was partly offset by lower discounts and allowances for returns primarily for our gift products. The first quarter last year included more than $2.5 million in men’s belt and small leather goods sales to two customers as part of their closeout programs as they shifted to new private labels, one of which we replaced with a new program.

Our overall gross margin percentage of net sales (2009 — 34.7%; 2008 — 32.5%) in the current year included a 1.9 percentage point benefit from sales of out-of-program inventory at prices exceeding the inventory’s previously reduced carrying value; however, a significant portion of the benefit was offset by repackaging costs included in selling, general and administrative expenses. The men’s accessories 2009 margin percentage was 3.0 percentage points higher than the margin in the prior year which was depressed primarily by clearance sales of belts and small leather goods. The margin percentage for men’s accessories products, other than gifts, improved 4.4 percentage points primarily due to lower product costs from overseas suppliers and 1.5 percentage points from out-of-program inventory sales. Increased costs together with lower discounts and allowances compared to last year reduced the

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men’s gift accessories margins by 9.7 percentage points which was offset by 3.1 percentage points from out-of-program inventory sales. A 3.2 percentage point lower women’s accessories 2009 margin resulting from increased costs was largely mitigated by sales of out-of-program inventory.

Expenses And Taxes

The following presents expense data by reportable segment (in thousands).

	Three Months Ended
	September 30
	2008		2007
Selling, general and administrative expenses:
Men’s accessories	$	9,416	$	10,635
Women’s accessories		2,985		3,806
	$	12,401	$	14,441
Depreciation and amortization:
Men’s accessories	$	376	$	707
Women’s accessories		193		269
	$	569	$	976
Interest expense	$	148	$	280
Income taxes (benefit)	$	233	$	(1,087	)

Selling, general and administrative expenses (“SG&A”) in the first quarter of fiscal 2009 were more than $2 million less than the prior year. The major changes were derived from reduced distribution costs ($873,000), including closing our men’s accessories distribution facility in West Bend, Wisconsin, lower employment expenses ($826,000) resulting from workforce reductions, and fewer costs being incurred for product samples, advertising and travel (each in the $100,000 to $150,000 range). Other cost saving initiatives were offset by increases in such things as professional services and recruiting.

Depreciation and amortization (2009 — $569,000; 2008 — $976,000) was lower this year primarily as the result of equipment and software reaching the end of their estimated depreciable lives and a $158,000 reduction attributable to last year’s closing of the West Bend facility and writing off customer lists.

Interest expense in the first quarter of fiscal 2009 was 47% less than our debt costs in the same quarter of fiscal 2008 as both our borrowings and the interest rates were lower in the current year.

Information about our fiscal 2009 income tax provision and the tax benefit recognized in fiscal 2008 is incorporated herein by reference to Note 6 of the notes to consolidated financial statements in Item 1 of this Quarterly Report.

SEASONALITY

Historically our first and second quarter sales and operating results reflect a seasonal increase compared to the third and fourth quarters of our fiscal year. Sales for the first quarter of fiscal 2009 and 2008 were not consistent with historical patterns due to the very difficult retail environment in both years, deliveries to customers shifting from the first to the second quarter this year, and curtailed replenishment orders by one of our largest customers last year.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity, which we believe will provide adequate financial resources for our foreseeable working capital needs, are cash flows from operating activities and our credit facilities ($12.2 million borrowing availability at September 30, 2008). Historically our first quarter operating activities result in net cash outflows due to procurement of holiday inventory shipped in the second quarter. Information about our credit facilities is incorporated herein by reference to Note 3 of the notes to consolidated financial statements included in Item 1 of this Quarterly Report.

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Operating cash flows for the first quarter of both fiscal years were negative (2009 — $14.3 million; 2008 — $7.6 million) as inventories increased (2009 — $13.0 million; 2008 — $3.7 million) in advance of shipments in the second quarter and accounts receivable increased (2009 — $4.3 million; 2008 — $1.9 million) from sales in the latter part of the first quarter which are not collected until later in the year. The larger increase in inventories compared to last year was primarily the result of deliveries to customers shifting from the first to the second quarter (including an approximately $4 million first-time sale of gift products to one of our largest customers) and approximately $3 million of the early procurement occurring before the beginning of fiscal 2008. Seasonal borrowings funded a substantial part of the operating cash outflows in both years together with a $2.2 million increase in accounts payable this year and the receipt of a $1.2 million tax refund included in other current assets at June 30, 2008.

Investing activities included nominal amounts of capital expenditures in the first quarter of both years and $1.1 million funding in fiscal 2009 of the rabbi trust established to set aside amounts to assist in satisfying our supplemental executive retirement obligation. Financing activities included the payment of dividends (2009 — $282,000; 2008 — $276,000) and stock purchase program transactions (2009 — $89,000 net cash distributions in lieu of issuing shares as the result of the program being suspended; 2008 — $318,000 net contributions).

During fiscal 2009 we declared the following cash dividend:

Declaration Date	Record Date	Payable Date	Per Share
August 19, 2008	September 30, 2008	October 17, 2008	$	0.04

Our board of directors has deferred consideration of declaring a quarterly dividend for payment in January 2009.

CRITICAL ACCOUNTING POLICIES

There have been no significant changes in the critical accounting policies disclosed in our Annual Report on Form 10-K for the year ended June 30, 2008.

ITEM 4T — CONTROLS AND PROCEDURES

Disclosure Controls And Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of September 30, 2008 in alerting them in a timely manner to material information required to be disclosed by us in the reports we file with or submit to the Securities and Exchange Commission under the Securities Exchange Act of 1934.

Changes In Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the first quarter of fiscal 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Our Principal Accounting Officer and Controller accepted a position with another company and resigned effective August 5, 2008. Our Chief Financial Officer assumed the Principal Accounting Officer responsibilities.

PART II — OTHER INFORMATION

ITEM 1A — RISK FACTORS

In addition to the information in this Quarterly Report on Form 10-Q, consideration should be given to the risk factors in Part I, “Item 1A — Risk Factors” in our Annual Report on Form 10-K for the year ended June 30, 2008 which could materially and adversely affect our business, results of operations, and financial condition. There have been no significant changes in the risk factors disclosed in that Annual Report on Form 10-K.

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ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases Of Equity Securities

The following provides information about repurchases of shares of common stock made by us during the quarter ended September 30, 2008. Of the total shares purchased, 8,031 were withheld from employees’ restricted stock awards for employment taxes due when the stock vested. The remaining shares were purchased in the open market and are held in a rabbi trust established under our Benefit Restoration Plan.

					Total Number Of		Maximum Number
	Total				Shares Purchased		Of Shares That May
	Number		Average		As Part Of Publicly		Yet Be Purchased As
	Of Shares		Price Paid		Announced Plans		Part Of The Plans
Period	Purchased		Per Share		Or Programs		Or Programs
July 1, 2008 to July 31, 2008		5,383	$	5.50		N/A		N/A
August 1, 2008 to August 31, 2008		702		5.71		N/A		N/A
September 1, 2008 to September 30, 2008		8,414		5.20		N/A		N/A
Total		14,499		5.34		N/A		N/A

ITEM 4 — SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At our 2008 Annual Meeting of Stockholders on October 30, 2008, our stockholders voted on proposals to (1) elect two directors to our board of directors, and (2) ratify the appointment of Ernst & Young LLP as our independent auditor for fiscal 2009. NSL Capital Management, LLC (“NSL”) initiated a proxy contest and solicited proxies from our stockholders to elect Nicholas S. Levis and Evan Kagan to our board of directors instead of our Company’s nominees. No representatives of NSL attended the Annual Meeting and, as a result, no proxies for NSL’s nominees were voted.

Mr. J.S.B. Jenkins and Mr. George C. Lake were re-elected to our board of directors to serve until the 2009 annual meeting of stockholders, or until their successors are elected and qualified. The number of votes cast for and withheld for each nominee was as follows:

Nominee	For		Withheld
J.S.B. Jenkins		3,740,711		1,417,257
George C. Lake		5,052,948		105,020

Votes on the proposal to ratify the appointment of Ernst & Young LLP as our independent auditor for fiscal 2009 were as follows:

For 5,136,485 Against 15,014 Abstain 6,469

Continuing members of our board of directors are: Dr. James F. Gaertner, Roger R. Hemminghaus, and Gene Stallings having terms expiring in 2009; and Colombe M. Nicholas, W. Grady Rosier, and William D. Summitt having terms expiring in 2010.

Following the Annual Meeting, our directors increased the size of our board of directors from eight to nine members and appointed Mr. N. Roderick McGeachy, III, our President and Chief Executive Officer, as a director to serve until the 2009 annual meeting of stockholders, or until his successor is elected and qualified.

ITEM 6 — EXHIBITS

The Exhibit Index immediately preceding the exhibits required to be filed is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TANDY BRANDS ACCESSORIES, INC.
	(Registrant)
November 10, 2008	/s/ N. Roderick McGeachy, III
	N. Roderick McGeachy, III
	President and Chief Executive Officer
	(principal executive officer)
	/s/ M.C. Mackey
	M.C. Mackey
	Chief Financial Officer
	(principal financial officer and principal accounting officer)

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TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES
EXHIBIT INDEX

				Incorporated by Reference
				(if applicable)
Exhibit Number and Description				Form	Date	File No.	Exhibit
(3)	Articles of Incorporation and Bylaws
		3.1	Certificate of Incorporation of Tandy Brands Accessories, Inc.	S-1	11/02/90	33-37588		3.1
		3.2	Certificate of Amendment of the Certificate of Incorporation of Tandy Brands Accessories, Inc.	8-K	11/02/07	0-18927		3.1
		3.3	Amended and Restated Bylaws of Tandy Brands Accessories, Inc., effective July 2007	8-K	7/13/07	0-18927		3.01
		3.4	Amendment No. 1 to Amended and Restated Bylaws of Tandy Brands Accessories, Inc.	8-K	11/02/07	0-18927		3.2
(4)	Instruments Defining the Rights of Security Holders, Including Indentures
		4.1	Form of Common Stock Certificate of Tandy Brands Accessories, Inc.	S-1	12/17/90	33-37588		4.2
		4.2	Certificate of Elimination of Series A Junior Participating Cumulative Preferred Stock of Tandy Brands Accessories, Inc.	8-K	10/24/07	01-18927		3.1
		4.3	Credit Agreement by and between Tandy Brands Accessories, Inc. and Comerica Bank dated as of February 12, 2008	10-Q	2/14/08	0-18927		4.3
(10)	Material Contracts
		10.1	Employment Agreement by and between Tandy Brands Accessories, Inc. and N. Roderick McGeachy, III effective as of October 1, 2008* **	N/A	N/A	N/A		N/A
		10.2	Nonqualified Stock Option Agreement pursuant to the Tandy Brands Accessories, Inc. 2002 Omnibus Plan with N. Roderick McGeachy, III dated October 1, 2008* **	N/A	N/A	N/A		N/A
(31)	Rule 13a-14(a)/15d-14(a) Certifications
		31.1	Certification Pursuant to Rule 13a-14(a)/15d-14(a) (Chief Executive Officer)**	N/A	N/A	N/A		N/A
		31.2	Certification Pursuant to Rule 13a-14(a)/15d-14(a) (Chief Financial Officer)**	N/A	N/A	N/A		N/A

TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES
EXHIBIT INDEX

				Incorporated by Reference
				(if applicable)
Exhibit Number and Description				Form	Date	File No.	Exhibit
(32)	Section 1350 Certifications
		32.1	Section 1350 Certifications (Chief Executive Officer and Chief Financial Officer)**	N/A	N/A	N/A		N/A

*	Management contract or compensatory plan
**	Filed herewith

EX-10.1

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

     This Employment Agreement (the “Agreement”) by and between Tandy Brands Accessories, Inc., a Delaware corporation (the “Company” or “Tandy Brands”), and N. Roderick McGeachy, III (“Executive”) is hereby entered into effective as of October 1, 2008 (“Effective Date”).

RECITALS

     Whereas, as of the Effective Date, the Company and the subsidiaries of the Company (the Company and such subsidiaries being collectively, the “TBAC Companies”) designs and markets fashion accessories and gifts for men, women and children; and

     Whereas, the Company wishes to employ Executive, and Executive wishes to be employed by the Company, on the terms set forth herein; and

     Whereas, in the course of his employment with the Company, Executive will become familiar with and aware of information as to the TBAC Companies’ customers and specific manner of doing business, including the processes, techniques and trade secrets used by the TBAC Companies, and future plans with respect thereto, all of which have been and will be established and maintained at great expense to the TBAC Companies and which constitute trade secrets and the valuable goodwill of the TBAC Companies.

     Therefore, in consideration of the mutual promises, terms, covenants and conditions set forth herein and the performance of each, it is hereby agreed as follows:

AGREEMENTS

1. Employment and Duties.

a.

The Company hereby employs Executive as the President and Chief Executive Officer of Tandy Brands Accessories, Inc. As such, Executive shall have the responsibilities, duties and authority customarily appertaining to such offices and such other duties as may be reasonably assigned to Executive by the Board of Directors of the Company and which are consistent with such position. Executive shall report to the Board of Directors of the Company (the “Board” or the “Board of Directors”). Executive hereby accepts this employment upon the terms and conditions herein contained and, subject to paragraph 1(c), agrees to devote substantially all of his time, attention and efforts during normal business hours, excluding any periods of vacation, sick leave or personal leave, to promote and further the business and interests of the Company and its affiliates.

b.

Executive shall faithfully adhere to, execute and fulfill all reasonable and lawful policies established by the Company, to the extent such policies have been communicated to Executive in writing or the Executive is otherwise aware of such policies, and such policies are not inconsistent with any of the terms of this Agreement or with any federal, state or local law or regulation.

c.

Except as authorized by the Company’s Board of Directors, Executive shall not, during the term of his employment hereunder, engage in any other business activity pursued for gain, profit or other pecuniary advantage to the extent such activity materially interferes with Executive’s duties and responsibilities hereunder. The foregoing limitations shall not prohibit Executive from making personal investments in such form or manner as will not materially interfere with Executive’s performance of his duties under this Agreement.

d.

During the Initial Term and any Extended Term, Executive shall be entitled to fifteen (15) days of personal time off in accordance with the policies of the Company.

2. Compensation. For all services rendered by Executive, the Company shall compensate Executive as follows:

a.	Base Salary. The base salary payable to Executive from the Effective Date through June 30, 2009 (the “2009 Fiscal Period”) will be $300,000 per year (“Base Salary”) payable in accordance with the Company’s payroll procedures for officers. For the period from July 1, 2009 to June 30, 2010 (the “2010 Fiscal Period”), Executive’s Base Salary will be $330,000. For any periods after June 30, 2010, on an annual basis such Base Salary shall be reviewed by the Board of Directors, and may be adjusted at its discretion in light of the Executive’s position, responsibilities, performance and such other reasonable, job-related factors that the Board deems appropriate.
b.	Annual Bonus. During the Initial Term and any Extended Term, Executive shall be entitled to participate in any incentive bonus plan maintained by the Company for its executive officers. For the 2009 Fiscal Period, Executive’s target bonus will be set at seventy-five percent (75%) of the 2009 Fiscal Period Base Salary and Executive will be entitled to receive at least fifty-five percent (55%) as a guaranteed bonus payment. For the 2010 Fiscal Period, Executive’s target bonus will be set at seventy-five percent (75%) of the 2010 Fiscal Period Base Salary and Executive will be entitled to receive at least thirty-five percent (35%) as a guaranteed bonus payment.
c.	Sign-On Bonus. In consideration of the benefits foregone from Executive’s previous employer, the Company will pay to Executive a sign-on bonus of $210,000 (the “Sign-On Bonus”). One-half of the Sign-On Bonus will be paid as of the Effective Date and the remaining one-half of the Sign-On Bonus will be paid sixty days following the Effective Date.
d.	Executive Perquisites and Benefits. During the Term, Executive shall be entitled to receive additional benefits and compensation from the Company in the form and to the extent specified below:

i. Executive shall be reimbursed for all business travel and other out-of-pocket expenses reasonably incurred by Executive in the performance of his duties pursuant to this Agreement and in accordance with the

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	Company’s policy for its officers. All such expenses shall be appropriately documented in reasonable detail by Executive upon submission of any request for reimbursement, and in a format and manner consistent with the Company’s expense reporting policy.
ii.	Executive shall be entitled to participate in the various employee benefit plans or programs provided to the other comparable officers (in terms of position) of the Company in general, subject to the regular eligibility requirements with respect to each of such benefit plans or programs, and such other benefits or perquisites as may be approved for Executive by the Board during the term of this Agreement. The preceding sentence shall not require the Company to establish or maintain any particular employee benefit plan, program, or arrangement, or in any way limit the Company’s right to amend, modify or revoke any such employee benefit plan, program, or arrangement without Executive’s consent.
iii.	The Company will pay certain annual insurance premiums for term life coverage of $700,000 ($400,000 automatically approved and the balance based on verification of health) and disability coverage of $15,000 per month.
iv.	The relocation benefits described on Schedule 1 attached hereto.

3. Non-Competition Agreement.

a. Executive acknowledges that as a consequence of his employment with the Company, he will be furnished or have access to Confidential Information (as defined below). Executive further recognizes that the Company’s willingness to enter into this Agreement is based in material part on Executive’s agreement to the provisions of this paragraph 3 and that Executive’s breach of the provisions of this paragraph 3 could materially damage the Company. Subject to the further provisions of this Agreement, Executive will not, during his actual employment with the Company and, following the termination of such employment for any reason for a period that shall expire on the later of (I) the expiration of the Initial Term, or (ii) twelve months after the termination of such employment (the “Non-competition Period”), directly or indirectly, for himself or on behalf of or in conjunction with any other person, company, partnership, corporation or business of whatever nature:

i. engage, as an officer, director, shareholder, owner, partner, joint venture, or in a managerial capacity, whether as an employee, independent contractor, consultant or advisor, or as a sales representative, whether paid or unpaid, in any gift or accessories business directly related thereto (such business and operations referred to herein as the “Accessories Business”), in direct competition with any of the TBAC Companies within the United States (the “Territory”);

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ii.	call upon any person who is at that time or was within the preceding 6 months an employee of the TBAC Companies for the purpose or with the intent of enticing such employee away from or out of the employ of the TBAC Companies; or
iii.	call upon any person or entity which is, at that time, or which has been, within one year prior to that time, a customer of the TBAC Companies within the Territory for the purpose of soliciting customers, orders or contracts for any Accessories Business within the Territory; (other than the TBAC Companies during Executive’s actual employment with the Company).
	Notwithstanding the above, the foregoing covenant shall not be deemed to prohibit Executive from acquiring as an investment (i) 1% of the capital stock of a company engaged in the Accessories Business, whose stock is traded on a national securities exchange or on an over-the-counter or similar market or (ii) 1% of the capital stock of a competing business whose stock is not publicly traded, if the Board consents to such acquisition; provided that Executive, neither alone nor in conjunction with other affiliated parties, has any power or authority to manage, operate, advise, consult with or control such entity, or to select a director, manager, general partner, or similar governing official of such entity, other than in connection with the normal and customary voting powers afforded Executive in connection with any permissible equity ownership. Any ownership interest in any business which is in competition in any material regard and which is known to Executive with the TBAC Companies shall immediately be disclosed to the Board by Executive.

b.

Because of the difficulty of measuring economic losses to the Company as a result of a breach of the foregoing covenant, and because of the immediate and irreparable damage that could be caused to the Company for which they would have no other adequate remedy, Executive agrees that the foregoing covenant may be enforced by the Company, in the event that a court of competent jurisdiction determines that he has breached, or has attempted or threatened to breach, the foregoing covenant, by injunctions, restraining orders, and orders of specific performance issued by a court of competent jurisdiction. This relief is in addition to all other remedies that are available at law.

c.

It is agreed by the parties that the foregoing covenants in this paragraph 3 impose a reasonable restraint on Executive in light of the activities and business of the TBAC Companies on the date of the execution of this Agreement and the current plans of the TBAC Companies; but it is also the intent of the Company and Executive that, subject to paragraph 3.d. hereof, such covenants be construed and enforced in accordance with the changing activities, business and locations of the TBAC Companies throughout the term of this covenant, whether before or, to the extent reasonably contemplated by the Board, after the date of termination of the employment of Executive, unless the Executive was conducting such new business prior to the TBAC Companies’ conducting such new business.

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d.	It is further agreed by the parties hereto that, in the event that Executive shall cease to be employed hereunder and shall enter into a business or pursue other activities not in competition with the Accessories Business of the TBAC Companies or related activities or business in locations the operation of which, under such circumstances, does not violate clause (a)(i) of this paragraph 3, and in any event such new business, activities or location are not in violation of this paragraph 3 or of Executive’s obligations under this paragraph 3, if any, Executive shall not be chargeable with a violation of this paragraph 3 if the TBAC Companies shall at any time after the termination of Executive’s employment enter the same, similar or a competitive (i) business, (ii) course of activities or (iii) location, as applicable.
e.	The covenants in this paragraph 3 are severable and separate, and the non-enforceability of any specific covenant shall not affect the provisions of any other covenant. Moreover, in the event any court of competent jurisdiction shall determine that the scope, time or territorial restrictions set forth are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent which the court deems reasonable, and the Agreement shall thereby be reformed.
f.	It is specifically agreed that the portion of the Non-competition Period following termination of employment stated at the beginning of this paragraph 3, during which the agreements and covenants of Executive made in this paragraph 3 shall be effective, may be computed by excluding from such computation any time during which Executive is in material violation of any provision of this paragraph 3.
g.	The Company and the Executive hereby agree that this covenant is a material and substantial part of this Agreement.

4. Term; Termination; Rights on Termination. The term of this Agreement shall begin on the Effective Date and continue to October 1, 2010 (the “Initial Term”), unless terminated sooner as herein provided; however, beginning on the second anniversary of the Effective Date and on each anniversary thereafter the term shall automatically continue for one year on the same terms and conditions contained herein in effect as of the time of renewal (the “Extended Term”) unless not less than thirty (30) days prior to any such anniversary either party shall give written notice to the other party that the term shall not be so extended. This Agreement and Executive’s employment may be terminated in any one of the followings ways:

a. Death. The death of Executive shall immediately terminate this Agreement with no severance compensation due Executive’s estate; provided, however, for the 90-day period following Executive’s death, the Company, at its sole cost and expense, shall continue to provide Executive’s then qualified beneficiaries with coverage under the Company’s group health plan in which Executive or such beneficiaries participated immediately prior to Executive’s death or a successor plan thereto, subject to the terms of such plan as it may be amended (“Company

5

	Health Plan”). Thereafter, the Company shall provide continuation of coverage elections to such qualified beneficiaries as required by law.
b.	Disability. If Executive becomes entitled to and receives benefits under an insured long term disability plan of the TBAC Companies (incurs a “Disability”), the Company, with the approval of the Board (excluding for this purpose Executive if he is a member of the Board), may terminate this Agreement and Executive’s employment hereunder. In the event this Agreement is terminated as a result of Executive’s Disability, Executive shall have no right to any severance compensation; provided, however, (i) Executive shall be entitled to any benefits payable to Executive under such long term disability plan, and (ii) the Company, at its sole cost and expense, shall continue the coverage of Executive and his qualified beneficiaries (for as long as they are qualified beneficiaries thereunder) under the Company Health Plan, subject to the terms of the Company Health Plan, for as long as Executive continues to qualify for and receive benefits under such long term disability plan, but not to exceed two years. Thereafter, the Company shall provide continuation of coverage elections to Executive and his qualified beneficiaries as required by law.
	In the event Executive ceases to be disabled, the provisions of paragraph 3 shall not apply unless the Company shall offer to reinstate Executive under an agreement containing terms and provisions no less beneficial to Executive than those set forth in this Agreement.
c.	Cause. The Company may terminate this Agreement and Executive’s employment for “Cause,” which shall be: (1) Executive’s breach of this Agreement (which remains uncured at the end of a 10-day period after receipt of written notice of the breach); (2) Executive’s malfeasance, negligence in the performance or intentional nonperformance (in either case continuing for 10 days after receipt of written notice of need to cure) of any of Executive’s material duties and responsibilities hereunder; (3) Executive’s dishonesty or fraud with respect to the business, reputation or affairs of the TBAC Companies; (4) fraud, misappropriation or embezzlement of funds or other property of the TBAC Companies, (5) Executive’s conviction of a felony crime which, in the opinion of the Board, brings Executive or the TBAC Companies into disrepute or causes harm to the TBAC Companies’ business, customer relations, financial condition or prospects, or (6) violation of any statutory or common law duty of loyalty to the TBAC Companies. Any termination for Cause must be approved by the Board (excluding for this purpose Executive if he is a member of the Board). In the event of a termination for Cause, Executive shall have no right to any severance compensation.
d.	Without Cause or For Good Reason. Executive may be terminated without Cause and other than due to Disability by the Company during either the Initial Term or Extended Term only if such termination is approved by the Board (excluding for this purpose Executive if he is a member of the Board). Should Executive be terminated by the Company without Cause and other than due to Disability or should Executive terminate with Good Reason during the Initial Term, Executive

6

	shall receive from the Company, in addition to any accrued but unpaid salary, bonus and benefits, in a lump sum payment due on the effective date of termination, an amount equivalent to Executive’s Base Salary (then in effect) for (i) whatever time period is remaining under the Initial Term or (ii) for one year, whichever amount is greater. If Executive resigns or otherwise terminates his employment without Good Reason, rather than the Company terminating his employment pursuant to this paragraph 4.d., Executive shall receive no severance compensation.
e.	Executive shall have “Good Reason” to terminate his employment hereunder as a consequence of any of the following events, unless such event is agreed to in writing by Executive: (i) a material reduction in his authority, titles, responsibilities or duties; (ii) the relocation of the Company’s principal executive offices or Executive’s principal office to a location outside the state of Texas without a commensurate adjustment in Executive’s Base Annual Salary to reflect any increase in cost of living as measured by comparing the applicable regional or local consumer price indices; (iii) the request by the Board that Executive perform any illegal act to which criminal sanctions might apply; (iv) the failure of the Company to obtain a satisfactory agreement from any successor or assign of the Company to assume and agree to perform this Agreement, as contemplated in paragraph 11; or (v) a material breach of this Agreement by the Company (including failure of the Company to pay Executive on a timely basis the amounts to which Executive is entitled under this Agreement); provided, however, Good Reason shall exist with respect to a matter only if such matter is not corrected by the Company within 30 days of its receipt of written notice of such matter from Executive.
f.	If termination of Executive’s employment arises out of the events set forth in paragraph 4.e.(iii) or 4.e.(v) as determined by a court of competent jurisdiction or pursuant to the provisions of paragraph 17 below, the Company shall pay all amounts and damages to which Executive may be entitled as a result of such breach, including interest thereon and all reasonable legal fees and expenses and other costs incurred by Executive to enforce his rights hereunder. Further, none of the provisions of paragraph 3 shall apply in the event the Company breaches its payment obligations under Paragraphs 2 or 4.d. and such breach is not corrected within 20 business days after the date Executive delivers written notice of such breach to the Company.
g.	Resignation Without Good Reason. Executive may, without Good Reason, terminate this Agreement and Executive’s employment, effective 30 days after written notice is provided to the Company. If Executive resigns or otherwise terminates his employment without Good Reason, rather than the Company terminating his employment pursuant to paragraph 4.d., Executive shall receive all accrued but unpaid salary, bonus and benefits. Under no circumstances where Executive terminates Executive’s employment without Good Reason, shall Executive be entitled to any pro rata share or payment of any bonus or other compensation which requires employment at the time of the determination or award for eligibility.

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h. Upon termination of this Agreement for any reason provided above, in addition to the above payments, if any, Executive shall be entitled to receive all compensation earned (including but not limited to any bonus with respect to which Executive has fulfilled all of the requirements for payment of the bonus, as set forth in the terms of such bonus plan or arrangement, but which has not yet been paid as of the termination of employment, accrued vacation, sick leave and personal leave, and reimbursements due through the effective date of termination, paid to Executive in a lump sum on the next regularly scheduled payday following the effective date of termination. Unless specifically provided herein, under no circumstance where Executive’s employment terminates shall Executive be entitled to any pro rata share or payment of any bonus or other compensation which requires employment at the time of the determination or award for eligibility. In addition, a termination of this Agreement for any reason provided above shall not alter or impair any of Executive’s vested rights or benefits, if any, under any (i) employee benefit plan of the TBAC Companies or (ii) deferred compensation plan, including, without limitation, any stock option plan, of the TBAC Companies. All other rights and obligations of the Company and Executive under this Agreement shall cease as of the effective date of termination, except that Executive’s obligations under paragraphs 3, 5, 6, 7, and 8 herein shall survive such termination in accordance with their terms, unless or except as expressly provided otherwise in this Agreement.

5. Return of Company Property. All records, designs, patents, business plans, financial statements, manuals, memoranda, lists and other property delivered to or compiled by Executive by or on behalf of any of the TBAC Companies or their representatives, vendors or customers which pertain to the business of any TBAC Companies shall be and remain the property of the TBAC Companies, as the case may be, and be subject at all times to their discretion and control. Likewise, all correspondence, reports, records, charts, advertising materials and other similar data pertaining to the business, activities or future plans of the TBAC Companies which is collected by Executive shall be delivered promptly to the Company without request by it upon termination of Executive’s employment for any reason and Executive shall not retain any copies of the same. The foregoing shall not apply to any personnel, compensation, or benefits information regarding Executive.

6. Intellectual Property. During the term of Executive’s employment and at any time thereafter, Executive shall disclose promptly to the Company any and all conceptions, ideas, designs, plans, know-how, processes, improvements and other discoveries, whether patentable or not, which (i) are conceived or made by Executive, solely or jointly with another, during the period of employment, (ii) are directly related to business or activities of the TBAC Companies, and (iii) Executive conceives as a result of his employment by the Company (collectively, the “Intellectual Property”). Executive hereby assigns and agrees to assign all his interests therein to the Company or its nominee. Whenever requested to do so by the Company, Executive shall execute any and all applications, assignments or other instruments that the Company shall deem necessary to apply for and obtain Letters Patent of the United States or any foreign country or to otherwise protect the Company’s interest therein. Executive must also render to the Company, at the

8

Company’s expense, reasonable assistance in the perfection, enforcement and defense of any Intellectual Property.

7. Trade Secrets. Executive agrees that he will not, during Executive’s actual employment and, following the termination of such employment for any reason, directly or indirectly, disclose any trade secrets of the TBAC Companies, except as required by law and prior to any such disclosure Executive shall give the Company prior written notice thereof and the opportunity to contest such disclosure.

8. Confidentiality.

a.	Executive acknowledges and agrees that all Confidential Information (as defined below) of the Company is confidential and a valuable, special and unique asset of the Company that gives the Company an advantage over its actual and potential, current and future competitors. Executive further acknowledges and agrees that Executive owes the Company a fiduciary duty to preserve and protect all Confidential Information from unauthorized disclosure or unauthorized use, that certain Confidential Information constitutes “trade secrets” under applicable laws and that unauthorized disclosure or unauthorized use of the Confidential Information would irreparably injure the Company. During Executive’s actual employment and, following the termination of such employment for any reason, for a period that shall expire three years after the termination of such employment, Executive shall: (a) hold all Confidential Information in strict confidence, and (b) not use any Confidential Information except for the benefit of the Company, in accordance with the duties assigned to Executive, and (c) not disclose any Confidential Information to any person or entity (except other employees of the Company who have a need to know the information in connection with the performance of their employment duties, and who have been informed of the confidential nature of the confidential information and have agreed to keep it confidential), or copy, reproduce, modify, transmit, including electronic transmission, decompile or reverse engineer any Confidential Information. Executive shall take reasonable precautions to protect the physical security of all documents and other material containing Confidential Information (regardless of the medium on which the Confidential Information is stored). This Agreement applies to all Confidential Information, whether now known or later to become known to Executive.
b.	Upon the termination of Executive’s employment with the Company for any reason, and upon written request of the Company at any other time, Executive shall promptly surrender and deliver to the Company all documents and other written material of any nature containing or pertaining to any Confidential Information and shall not retain any such document or other material. Within ten days of a written request by the Company, Executive shall certify to the Company in writing that all such materials have been returned.
c.	Because of the difficulty of measuring economic losses to the Company as a result of a breach of the covenants contained in paragraphs 7, 8.a and 8.b of this Agreement, and because of the immediate and irreparable damage that could be

9

	caused to the Company for which it would have no other adequate remedy, Executive agrees that such covenants may be enforced by the Company, in the event that a court of competent jurisdiction determines that he has breached, or has attempted or threatened to breach, any of such covenants, by injunctions, restraining orders, and orders of specific performance issued by a court of competent jurisdiction. This relief is in addition to all other remedies available at law.
d.	Nothing contained in paragraphs 7, 8.a and 8.b of this Agreement shall be construed to limit the Company’s common law and statutory rights regarding the protection of its trade secrets and Confidential Information.
e.	Nothing contained in paragraphs 7 and 8a and 8.b of this Agreement shall be construed to limit Executive’s right to use the expertise, skills, and knowledge he possessed as of the date of his execution of this Agreement, to the extent such use is consistent with applicable laws.

9. As used in this Agreement, the term “Confidential Information” shall mean any information or material known to or used by or for the TBAC Companies (whether or not owned or developed by the TBAC Companies and whether or not developed by Executive) that is not generally known to the public or persons in the Accessories Business. Subject to the foregoing, Confidential Information includes, but is not limited to, the following: all trade secrets of the TBAC Companies; all information that the TBAC Companies have marked as confidential or has otherwise described to Executive (either in writing or orally) as confidential; all nonpublic information concerning the TBAC Companies’ products, services, prospective products or services, research, product designs, prices, discounts, costs, marketing plans, marketing techniques, market studies, test data, customers, customer lists and records, suppliers and contracts; all TBAC Companies’ business records and plans; all TBAC Companies’ personnel files; all financial information of or concerning the TBAC Companies; all information relating to operating system software, application software, software and system methodology, hardware platforms, technical information, inventions, computer programs and listings, source codes, and object codes, copyrights and other intellectual property; all technical specifications; any proprietary information belonging to the TBAC Companies; all computer hardware or software manuals; all training or instruction manuals; and all data and all computer system passwords and user codes. For purposes hereof, Confidential Information shall not include such information (i) that was known to Executive prior to the Effective Date; (ii) which becomes known to the public or in the industry through no fault of Executive; (iii) the disclosure of which is required by law (including regulations and rulings) or the order of any competent governmental authority or Executive reasonably believes is required in connection with the defense of a lawsuit against Executive, provided that in either case, prior to disclosing any information, Executive shall give prior written notice thereof to the Company and provide the Company with the opportunity to contest such disclosure; or (iv) any personnel, compensation, or benefits information regarding Executive.

10. No Prior Agreements. Executive hereby represents and warrants to the Company that the execution of this Agreement by Executive and his employment by the Company and the

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performance of his duties hereunder will not violate or be a breach of any agreement, including any non-competition agreement, invention or secrecy agreement, with a former employer, client or any other person or entity.

11. Assignment: Binding Effect. Executive understands that he has been selected for employment by the Company on the basis of his personal qualifications, experience and skills. Executive agrees, therefore, that he cannot assign all or any portion of his performance under this Agreement. Subject to the preceding two sentences, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective heirs, legal representatives, successors and assigns. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and assets of the Company, to expressly assume and agree in writing reasonably satisfactory to Executive to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such written agreement prior to the effectiveness of any such succession shall be a material breach of this Agreement.

12. No Mitigation; Offset. Executive shall not be required to mitigate the amount of any Company payment provided for in this Agreement by seeking other employment or otherwise. The amount of any payment required to be paid to Executive by the Company may be reduced by any amounts that are owed to the Company by Executive.

13. Release. Notwithstanding anything in this Agreement to the contrary, Executive shall not be entitled to receive any severance payments pursuant to paragraph 4. of this Agreement unless Executive has executed (and not revoked) a release of all claims arising under this Agreement or relating to Executive’s employment or termination thereof, known or unknown, that Executive may have against the Company, its subsidiaries, their directors, officers, and employees, in a form of such release reasonably acceptable to the Company. The Company shall have no obligation to commence payments pursuant to paragraph 4 until such a release becomes effective, provided that such release is consistent and enforceable under all applicable laws. Any such release executed by Executive pursuant to this Agreement will not act to waive any rights or claims that may arise after the date the release is executed.

14. Complete Agreement. This Agreement supersedes, and replaces in full, all representations, understandings and agreements (oral or written) between Executive and the Company or any of the TBAC Companies or any of their officers, directors or representatives existing as of the Effective Date and covering the same subject matter as this Agreement, save and except any indemnity obligations in prior Employment Agreements between the Company (or any predecessors) and Executive. This written Agreement is the final, complete and exclusive statement and expression of the agreement between the Company and Executive and of all the terms of this Agreement, and it cannot be varied, contradicted or supplemented by evidence of any prior or contemporaneous oral or written agreements. This written Agreement may not be modified after the Effective Date except by a further writing signed by a duly authorized officer of the Company and Executive, and no term of this Agreement may be waived except by writing signed by the party waiving the benefit of such term. Without limiting

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the generality of the foregoing, either party’s failure to insist on strict compliance with this Agreement shall not be deemed a waiver thereof.

15. Notice. Whenever any notice is required hereunder, it shall be given in writing addressed as follows:

To the Company:	Tandy Brands Accessories, Inc.
	690 East Lamar Blvd., Suite 200
	Arlington, Texas 76011
	Attn: Chairman of the Board of Directors
To Executive:	N. Roderick McGeachy, III
	2318 Kirkpatrick Place
	Greensboro, North Carolina 27408

	Notice shall be deemed given and effective on the earlier of three days after the deposit in the U.S. mail of a writing addressed as above and sent first class mail, certified, return receipt requested, or when actually received. Either party may change the address for notice by notifying the other party of such change in accordance with this paragraph 16.
16.	Severability; Headings. If any portion of this Agreement is held invalid or inoperative, the other portions of this Agreement shall be deemed valid and operative and, so far as is reasonable and possible, effect shall be given to the intent manifested by the portion held invalid or inoperative. The paragraph headings herein are for reference purposes only and are not intended in any way to describe, interpret, define or limit the extent or intent of the Agreement or of any part hereof.
17.	Dispute Resolutions. Except with respect to injunctive relief as provided in paragraph 3b., neither party shall institute a proceeding in any court or administrative agency to resolve a dispute between the parties before that party has sought to resolve the dispute through direct negotiation with the other party. If the dispute is not resolved within two weeks after a demand for direct negotiation, the parties shall attempt to resolve the dispute through mediation. If the parties do not promptly agree on a mediator, the parties shall request the Association of Attorney Mediators in Tarrant County, Texas (or if the Company’s principal offices are not in Tarrant or Dallas County, a similar organization in the county in which the Company’s principal offices are located) to appoint a mediator certified by the Supreme Court of Texas (or applicable judicial authority in another jurisdiction). If the mediator is unable to facilitate a settlement of the dispute within a reasonable period of time, as determined by the mediator, the mediator shall issue a written statement to the parties to that effect and any unresolved dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a single arbitrator in the city in which the Company has its principal offices in Texas (or if its officers are relocated out of Texas, in the county in which the Executive resides), in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect. The arbitrator shall not have the authority to modify or change any term of this Agreement, but may award the Executive any compensation or benefits due under the Agreement, and in addition, may award the Executive reasonable attorneys’ fees and expenses and interest thereon in the event the

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	arbitrator determines (i) that Executive was involuntarily terminated by the Company without Disability or Cause, as defined in paragraphs 4b. and 4c., respectively, and the Company breached its obligations to the Executive under paragraph 4, or (ii) that the Company has otherwise materially breached this Agreement. In addition, the arbitrator may award the Company damages and attorneys’ fees and expenses and interest thereon in the event the Arbitrator determines that the Executive has materially breached this Agreement. A decision by the arbitrator shall be final and binding. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. The arbitrator may award costs and expenses, including reasonable attorneys’ fees, to the prevailing party as determined by the arbitrator in any dispute arising under this Agreement.
18.	Governing Law. This Agreement shall in all respects be construed according to the laws of the State of Texas without regard to its conflicts of law provisions.
19.	Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument.

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective for all purposes as of the Effective Date.

TANDY BRANDS ACCESSORIES, INC.
By:	/s/ JSB Jenkins
Name:	J.S.B. Jenkins
Title:	Chairman of the Board
EXECUTIVE
/s/ N. Roderick McGeachy, III
N. RODERICK MCGEACHY, III

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EX-10.2

EXHIBIT 10.2
EMPLOYEE
NONQUALIFIED STOCK OPTION AGREEMENT
pursuant to the
TANDY BRANDS ACCESSORIES, INC. 2002 OMNIBUS PLAN

     THIS EMPLOYEE NONQUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) is made as of this 1^st day of October, 2008, between TANDY BRANDS ACCESSORIES, INC., a Delaware corporation (the “Company”), and N. Roderick McGeachy, III, an employee of the Company or one or more of its subsidiaries (“Employee”).

W I T N E S S E T H:

     WHEREAS, the Company desires to carry out the purposes of the Tandy Brands Accessories, Inc. 2002 Omnibus Plan (the “Plan”), by affording Employee the opportunity to purchase shares of the common stock, $1.00 par value per share (“Common Stock”), of the Company.

     NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

     1. Grant of Option. The Company hereby grants to Employee the right and option (the “Option”) to purchase an aggregate of 30,000 shares (the “Shares”) of Common Stock, such Shares being subject to adjustment as provided in Paragraph 8 hereof, on the terms and conditions herein set forth.

     2. Purchase Price. The purchase price of the Shares shall be $5.31 per Share, such purchase price being 100% of the Fair Market Value (as defined in the Plan) of the Shares on the date first appearing above (the “Date of Grant”).

     3. Exercise of Option. Unless expired as provided in Paragraph 5 below, and subject to the special provisions of Paragraph 6 below, the Option may be exercised from time to time in whole or in part for not more than 33-1/3% of the entire number of Shares at any time after the first anniversary of the Date of Grant, and an additional 33-1/3% of the total Shares on or after each of the two (2) succeeding anniversaries of the Date of Grant.

     4. Manner of Exercise; Payment of Purchase Price.

     (a) Subject to the terms and conditions of this Agreement, the Option shall be exercised by the delivery of written notice to the Company setting forth the number of shares of Common Stock with respect to which the Option is to be exercised and the date of exercise thereof which shall be at least three (3) days after giving such notice unless an earlier time shall have been mutually agreed upon. Such notice of exercise shall be signed by Employee and shall be irrevocable when given.

     (b) The notice of exercise shall be accompanied by the full payment of the purchase price for the Shares. The purchase price may be paid by (1) cash, check, bank draft, or money order payable to the order of the Company, (2) Common Stock (including Restricted Stock (as defined in the Plan)) owned by Employee on the date of exercise, and/or (3) in any other form of valid consideration as provided in the Plan. In the event Employee wishes to pay all or any portion of the purchase price by delivering shares of Common Stock, Employee shall, not less

than fourteen (14) days prior to the date of exercise, give written notice to the Secretary or Assistant Secretary of the Company requesting approval of such payment method, setting forth the particulars of the proposed payment method. The Committee (as defined in the Plan) shall approve, disapprove or modify the proposed payment method within fourteen (14) days of its receipt of the request. The failure of the Committee to respond to the request within the time period required shall be deemed an approval of Employee’s proposed payment method.

     (c) Upon receipt of the purchase price, and subject to the terms of Paragraph 11, the certificate or certificates representing the Shares purchased shall be registered in the name of the person or persons so exercising the Option. If the Option shall be exercised by Employee and, if Employee shall so request in the notice exercising the Option, the Shares shall be registered in the name of Employee and another person as joint tenants with right of survivorship, and shall be delivered as provided above to or upon the written order of the person or persons exercising the Option. In the event the Option shall be exercised pursuant to Paragraph 7 hereof, by any person or persons other than Employee, such notice shall be accompanied by appropriate proof satisfactory to the Company of the right of such person or persons to exercise the Option. All Shares that shall be purchased upon the exercise of the Option as provided herein shall be fully paid and nonassessable.

     5. Expiration of Option. The Option shall expire and become null and void upon the happening of whichever of the following events shall first occur: (a) expiration of three (3) months after Employee ceases to be employed by the Company or any of its subsidiaries for any reason other than termination for cause, retirement, or due to death or Total and Permanent Disability (as defined in the Plan); (b) a period of twelve (12) months shall have elapsed since Employee’s death; (c) a period of thirty-six (36) months shall have elapsed since Employee’s cessation of employment due to Total and Permanent Disability (as defined in the Plan); (d) a period of thirty-six (36) months shall have elapsed since Employee’s retirement; (e) a period of ten (10) years shall have elapsed since the Date of Grant; or (f) Employee’s employment shall have been terminated for cause as determined by the Committee or the Board of Directors of the Company. Except as provided in Paragraph 6, only those portions of the Option exercisable as of the date of termination of Employee’s employment may be exercised, whether such termination is by retirement or otherwise.

     6. Acceleration of Exercise Dates. Notwithstanding the provisions of Paragraph 3 above relating to the exercise of the Option in installments: (a) upon Employee’s death or cessation of employment due to Total and Permanent Disability (as defined in the Plan), the Option shall be immediately exercisable until the expiration date provided in Paragraph 5 above, for the entire number of Shares covered hereby; (b) upon Employee’s retirement, the Committee may, in its discretion, permit the Option to be immediately exercisable, until the expiration date provided in Paragraph 5 above, for the entire number of Shares covered hereby; (c) pursuant to Section 4(d) of that certain Employment Agreement, effective as of October 1, 2008, between the Company and Employee (the “Employment Agreement”), should Employee be terminated by the Company without Cause (as defined in the Employment Agreement) and other than due to Disability (as defined in the Employment Agreement) or should Employee terminate with Good Reason (as defined in the Employment Agreement) during the initial two-year term of the Employment Agreement, the Option shall be immediately exercisable until the expiration date provided in Paragraph 5 above, for the entire number of Shares covered hereby; and (d) upon any Change of Control of the Company (as defined in the Plan), the Option may be exercised for a period of sixty (60) days following the date of the Change of Control for the entire number of Shares covered hereby.

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     7. Option Nontransferable. Except as otherwise herein provided, the Option and the rights and privileges conferred hereby may not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this option or any right or privilege conferred hereby, contrary to the provisions hereof, the Option and the rights and privileges conferred hereby shall immediately become null and void. Notwithstanding the foregoing, upon the death of Employee, the Option may be exercised by Employee’s executor, administrator, legatee or distributee as the case may be, in accordance with Paragraph 6. References herein to Employee shall include, where applicable, a permitted transferee.

     8. Adjustments of Shares Subject to Option. If the outstanding shares of Common Stock shall at any time be changed or exchanged by reason of reorganization, merger, consolidation, recapitalization, reclassification, stock split, combination of shares or a dividend payable in stock, then the aggregate number of Shares subject to this Agreement and the purchase price of such Shares shall be automatically adjusted such that Employee’s proportionate interest shall be maintained as before the occurrence of such event. The determination of any such adjustment by the Committee shall be final, binding and conclusive.

     9. No Contract. This Agreement does not constitute a contract for employment and shall not affect the right of the Company to terminate Employee’s employment for any reason whatsoever.

     10. Rights as Stockholder. This Option shall not entitle Employee or any permitted transferee to any rights of a stockholder of the Company or to any notice of proceedings of the Company with respect to any Shares issuable upon exercise of the Option unless and until the Option has been exercised for such Shares and such Shares have been registered in the Employee’s (or permitted transferee’s) name upon the stock records of the Company.

     11. Restriction on Issuance of Shares. The Company shall not be required to issue or deliver any certificates for Shares purchased upon the exercise of an Option prior to: (a) the obtaining of any approval from any governmental agency which the Company shall, in its sole discretion, determine to be necessary or advisable; (b) the completion of any listing, registration or other qualification of such Shares on any securities exchange or inter-dealer quotation system or under any state or federal law or ruling or regulation of any governmental body which the Company shall, in its sole discretion, determine to be necessary or advisable; and (c) the determination by the Committee that Employee has tendered to the Company any federal, state or local tax owed by Employee as a result of exercising the Option when the Company has a legal liability to satisfy such tax. In addition, if the Common Stock reserved for issuance upon the exercise of the Option shall not then be registered under the Securities Act of 1933, the Company may upon Employee’s exercise of the Option, require Employee or his permitted transferee to represent in writing that the Shares being acquired are for investment and not with a view to distribution, and may mark the certificate for the Shares with a legend restricting transfer and may issue stop transfer orders relating to such certificate to the Company’s transfer agent.

     12. Lapse of Option. This Agreement shall be null and void in the event Employee shall fail to sign and return a counterpart hereof to the Company within thirty (30) days of its delivery to Employee.

     13. Construction. The Committee shall have authority to make reasonable constructions of the Option and to correct any defect or supply any omission or reconcile any inconsistency in the Option, and to prescribe reasonable rules and regulations relating to the administration of the Option.

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     14. Notice. Any notice relating to this Agreement shall be given in writing and shall be deemed effective upon personal delivery or upon deposit in the United States mail, registered or certified, postage prepaid and addressed to the Company at its main office at 690 E. Lamar Boulevard, Suite No. 200, Arlington, Texas 76011 or to such other address as may be hereafter specified by the Company, to the attention of the Company’s Secretary or Assistant Secretary. All notices to Employee shall be delivered to Employee at Employee’s address specified below or to such other address as may be hereafter specified by Employee.

     15. Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision, provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party.

     16. Binding Effect. This Agreement shall be binding upon the permitted transferees, heirs, executors, administrators, and successors of the parties hereto.

     17. No Waiver. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition, whether of like or different nature.

     18. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

     19. Governing Instrument and Law. This Option and any Shares issued hereunder shall in all respects be governed by the terms and provisions of the Plan, which terms and provisions are hereby incorporated herein by reference, and by the laws of the State of Texas, and in the event of a conflict between the terms of this Agreement and the terms of the Plan (copy attached), the terms of the Plan shall control.

     20. Entire Agreement. The Plan and this Agreement constitute the entire contract between the parties hereto with regard to the subject matter hereof.

     21. Nonqualified Stock Option. This Option is not intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code and shall not be so construed.

TANDY BRANDS ACCESSORIES, INC.
By:	/s/ M.C. Mackey
	M.C. Mackey
	Chief Financial Officer

Accepted and Agreed:
EMPLOYEE:
/s/ N. Roderick McGeachy, III	Date: 10/15/08
N. Roderick McGeachy, III
Address: _______________________________                _______________________________

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EX-31.1

EXHIBIT 31.1
CERTIFICATION PURSUANT TO
RULE 13a-14(a)/15d-14(a)
(CHIEF EXECUTIVE OFFICER)

CERTIFICATION BY CHIEF EXECUTIVE OFFICER

I, N. Roderick McGeachy, III, certify that:

     1. I have reviewed this quarterly report on Form 10-Q of Tandy Brands Accessories, Inc.;

     2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

     4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

     5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 10, 2008	/s/ N. Roderick McGeachy, III
	N. Roderick McGeachy, III
	President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2
CERTIFICATION PURSUANT TO
RULE 13a-14(a)/15d-14(a)
(CHIEF FINANCIAL OFFICER)

CERTIFICATION BY CHIEF FINANCIAL OFFICER

I, M.C. Mackey, certify that:

     1. I have reviewed this quarterly report on Form 10-Q of Tandy Brands Accessories, Inc.;

     2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

     4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

     5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 10, 2008	/s/ M.C. Mackey
	M.C. Mackey
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, N. Roderick McGeachy, III and M.C. Mackey, President and Chief Executive Officer and Chief Financial Officer, respectively, of Tandy Brands Accessories, Inc. (the “Company”), certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

     1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 10, 2008	/s/ N. Roderick McGeachy, III
	N. Roderick McGeachy, III
	President and Chief Executive Officer
	/s/ M.C. Mackey
	M.C. Mackey
	Chief Financial Officer