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 March 31, 2009

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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

o 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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

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

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	Number of shares outstanding at May 13, 2009
Common stock, $1.00 par value	7,037,371

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
Item 1 Financial Statements	4 - 10
Item 2 Management’s Discussion And Analysis Of Financial Condition And Results Of Operations	11-14
Item 4T Controls And Procedures	14
PART II — OTHER INFORMATION
Item 1A Risk Factors	15
Item 2 Unregistered Sales Of Equity Securities And Use Of Proceeds	15
Item 5 Other Information	15
Item 6 Exhibits	15
SIGNATURES	16
EX-4.4
EX-10.6
EX-10.7
EX-10.8
EX-31.1
EX-31.2
EX-32.1

2

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.

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.

3

PART I — FINANCIAL INFORMATION

ITEM 1 — FINANCIAL STATEMENTS

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

	Three Months Ended						Nine Months Ended
	March 31						March 31
	2009			2008			2009			2008
Net sales	$	25,051		$	30,066		$	102,612		$	119,147
Cost of goods sold		15,876			18,387			65,666			77,559
Inventory write-down		7,504			—			7,504			18,725
		23,380			18,387			73,170			96,284
Gross margin		1,671			11,679			29,442			22,863
Selling, general and administrative expenses		13,085			12,464			39,533			42,868
Depreciation and amortization		444			699			1,487			2,594
Goodwill and other intangibles impairment		—			—			—			17,774
Restructuring charges		844			612			844			1,050
Total operating expenses		14,373			13,775			41,864			64,286
Operating loss		(12,702	)		(2,096	)		(12,422	)		(41,423	)
Interest expense		(140	)		(177	)		(508	)		(1,287	)
Other income		43			3			148			52
Loss before income taxes		(12,799	)		(2,270	)		(12,782	)		(42,658	)
Income taxes (benefit)		(521	)		(58	)		(176	)		1,980
Net loss	$	(12,278	)	$	(2,212	)	$	(12,606	)	$	(44,638	)
Loss per common share	$	(1.78	)	$	(0.32	)	$	(1.82	)	$	(6.52	)
Loss per common share assuming dilution	$	(1.78	)	$	(0.32	)	$	(1.82	)	$	(6.52	)
Cash dividends declared per common share	$	—		$	0.04		$	0.04		$	0.12
Common shares outstanding		6,914			6,869			6,945			6,850
Common shares outstanding assuming dilution		6,914			6,869			6,945			6,850

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

4

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

	March 31			June 30
	2009			2008
Assets
Current assets:
Cash and cash equivalents	$	2,231		$	2,855
Accounts receivable		17,104			22,147
Inventories		25,744			35,535
Other current assets		7,104			8,783
Total current assets		52,183			69,320
Property and equipment		4,233			5,382
Other assets:
Intangibles		2,822			3,069
Other assets		702			1,617
Total other assets		3,524			4,686
	$	59,940		$	79,388
Liabilities And Stockholders’ Equity
Current liabilities:
Accounts payable	$	6,794		$	10,312
Accrued expenses		6,308			5,361
Note payable		468			363
Total current liabilities		13,570			16,036
Other liabilities:
Supplemental executive retirement obligation		—			1,893
Other liabilities		2,622			3,581
Total other liabilities		2,622			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, 7,037 shares and 7,049 shares issued and outstanding		7,037			7,049
Additional paid-in capital		34,808			34,840
Retained earnings		2,449			15,337
Other comprehensive income		570			1,666
Shares held by Benefit Restoration Plan Trust		(1,116	)		(1,014	)
Total stockholders’ equity		43,748			57,878
	$	59,940		$	79,388

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

5

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

	Nine Months Ended
	March 31
	2009			2008
Cash flows provided by operating activities:
Net loss	$	(12,606	)	$	(44,638	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Inventory write-down		7,504			18,725
Goodwill and other intangibles impairment		—			17,774
Doubtful accounts receivable provision		1,218			—
Depreciation and amortization		1,509			2,594
Stock compensation expense		46			152
Amortization of debt costs		166			273
Deferred income taxes		—			3,065
Other		(1,163	)		412
Changes in assets and liabilities:
Accounts receivable		3,825			8,010
Inventories		2,533			8,878
Other assets		3,054			(1,945	)
Accounts payable		(3,209	)		(9,777	)
Accrued expenses		(1,225	)		(784	)
Net cash provided by operating activities		1,652			2,739
Cash flows used for investing activities:
Purchases of equipment		(280	)		(467	)
Funding supplemental executive retirement plan trust		(1,060	)		—
Net cash used for investing activities		(1,340	)		(467	)
Cash flows used by financing activities:
Stock purchase program (withdrawals)		(145	)		642
Stock options exercised		—			66
Dividends paid		(564	)		(832	)
Change in cash overdrafts		(332	)		(34	)
Net note borrowings (repayments)		105			(1,720	)
Net cash used by financing activities		(936	)		(1,878	)
Net (decrease) increase in cash and cash equivalents		(624	)		394
Cash and cash equivalents beginning of year		2,855			4,076
Cash and cash equivalents end of period	$	2,231		$	4,470
Supplemental cash flow information:
Interest paid	$	349		$	772
Income taxes paid	$	344		$	285

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

6

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. In addition, we recorded noncash charges in fiscal 2009 ($7.5 million inventory write-down; $1.2 million provision for doubtful accounts receivable) and fiscal 2008 ($18.7 million inventory write-down; $17.8 million goodwill and other intangibles impairment).

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. However, sales for the first and second quarters of fiscal 2009 and 2008 were not consistent with historical patterns due to the very difficult retail environment in both years and curtailed replenishment orders by one of our largest customers in fiscal 2008. Operating results for the first nine months of fiscal 2009 are not necessarily indicative of the results that may be expected for the year ending 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 — Inventory Write-Down And Restructuring Charges

During the third quarter of fiscal 2009 following an organizational restructuring plan announcement, our chief executive officer, who joined the Company in October 2008, and other recently-employed senior executives concluded the Company and our stockholders would be better served by allocating our resources to products with higher margins and larger shipping quantities. As a result of this focus, management determined to implement a new inventory life-cycle management program and move away from low margin products with either small shipping quantities or slow turn-over rates. To facilitate implementation of an aggressive inventory life-cycle management program, we decided to liquidate inventories requiring excessive resources by reducing selling prices or scrapping items which might be difficult to sell under current market conditions. Consequently, we recorded an $7.5 million noncash inventory write-down in March 2009. The inventory write-down reflects our best estimate of the market values we anticipate realizing based on our experiences selling through inventory liquidation channels. Actual amounts realized from the marked-down inventory may differ from our estimates and such differences could have a material impact on our future results of operations, cash flows, and financial position. In connection with the organizational restructuring plan, we recorded charges in the third quarter of fiscal 2009 for termination payments ($558,000) and other costs ($286,000).

7

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, 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						Nine Months Ended
	March 31						March 31
	2009			2008			2009			2008
Net sales:
Men’s accessories	$	18,991		$	24,171		$	79,836		$	94,291
Women’s accessories		6,060			5,895			22,776			24,856
	$	25,051		$	30,066		$	102,612		$	119,147
Operating loss: (1)
Men’s accessories (2)	$	(8,461	)	$	(1,111	)	$	(8,000	)	$	(30,347	)
Women’s accessories (3)		(4,241	)		(985	)		(4,422	)		(11,076	)
		(12,702	)		(2,096	)		(12,422	)		(41,423	)
Interest expense (4)		(140	)		(177	)		(508	)		(1,287	)
Other income		43			3			148			52
Loss before income taxes	$	(12,799	)	$	(2,270	)	$	(12,782	)	$	(42,658	)
Depreciation and amortization:
Men’s accessories	$	276		$	471		$	953		$	1,844
Women’s accessories		168			228			534			750
	$	444		$	699		$	1,487		$	2,594
Capital expenditures:
Men’s accessories	$	12		$	8		$	81		$	74
Corporate		49			157			199			393
	$	61		$	165		$	280		$	467

(1)	Operating loss consists of net sales less cost of goods sold and specifically identifiable and allocated selling, general and administrative expenses.
(2)	Men’s accessories’ operating losses include inventory write-downs (fiscal 2009 third quarter — $5.1 million; fiscal 2008 nine months — $9.6 million), restructuring charges (fiscal 2009 and 2008 third quarters — $0.6 million; fiscal 2008 nine months — $1.0 million), goodwill and other intangibles impairment (fiscal 2008 nine months — $17.8 million), and a doubtful accounts receivable provision (fiscal 2009 — $1.0 million primarily in the second quarter).
(3)	Women’s accessories’ operating losses include inventory write-downs (fiscal 2009 third quarter — $2.4 million; fiscal 2008 nine months — $9.1 million), restructuring charges (fiscal 2009 third quarter — $0.2 million; fiscal 2008 nine months — $0.1 million), and a doubtful accounts receivable provision (fiscal 2009 — $0.2 million primarily in the second quarter).
(4)	Interest expense for the nine months of fiscal 2008 includes $0.2 million of costs related to a debt covenant waiver and $0.2 million related to costs previously capitalized for the credit facility with our previous lenders.

8

Note 5 — Credit Arrangements

We have a $27.5 million credit facility for borrowings and letters of credit based on accounts receivable and inventory levels. The facility was amended effective March 31, 2009 in consideration for payment of a $100,000 fee because we did not meet the tangible net worth financial ratio at that date due to the net loss for the quarter. The amendment reduced the facility from $35 million, lowered the tangible net worth financial ratio to $33.5 million as adjusted quarterly for future earnings and issuance of equity ownership interests, and increased the interest rate to the daily adjusting one-month LIBOR rate plus 4.5% or, if such rate is not available under the terms of the credit facility note, the lender’s prime rate plus 4.5%.

At March 31, 2009 we had outstanding borrowings under the amended credit facility of $0.5 million bearing interest at 5.5%, outstanding letters of credit totaling $0.5 million, and $19.2 million borrowing availability. Borrowings under the facility are due on the facility’s expiration date in February 2010.

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 as of the end of each fiscal quarter 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 acquisitions, paying dividends, 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.

Note 6 — 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 included in other current liabilities at March 31, 2009. The trust’s assets in other current assets at March 31, 2009 and other long-term assets at June 30, 2008 include investments at March 31, 2009 of $491,000 measured at their quoted prices in active markets (SFAS 157 fair value hierarchy Level 1) and $1,046,000 measured by observable inputs other than quoted prices in active markets for similar investments and market-corroborated inputs (SFAS 157 fair value hierarchy Level 2).

Note 7 — Income Taxes

The following presents the income tax components (in thousands).

	Three Months Ended						Nine Months Ended
	March 31						March 31
	2009			2008			2009			2008
Federal and state (benefit)	$	(4,780	)	$	(1,318	)	$	(4,980	)	$	(11,912	)
Foreign		23			45			212			277
Uncertain tax positions:
Gross expense		63			(14	)		219			115
Statute of limitations expiration		(607	)		—			(607	)		—
Deferred tax valuation allowance		4,780			1,229			4,980			13,500
	$	(521	)	$	(58	)	$	(176	)	$	1,980

At March 31, 2009 we had refundable income taxes of $1.2 million, included in other current assets, and federal income tax operating loss carryovers of approximately $22 million expiring in 2028 and 2029. Our deferred tax valuation allowance was approximately $20 million.

9

Note 8 — Long-Term Incentive Award

Performance units payable 50% in cash and 50% in shares of our common stock following the end of the performance cycle were awarded during the third quarter of fiscal 2009. The units earned during the performance cycle vary from 0% to 200% of the units awarded based on the Company’s basic earnings per share for each of the three fiscal years ending June 30, 2011, excluding the effects of accounting principles changes, extraordinary items, recognized capital gains and losses, and one-time, non-operating items as determined by our board of directors. Employees vest in 200% of the units awarded if there is a change in control or in the portion of units earned equal to the years employed during the cycle upon death, disability, or normal (age 65) or early (age 55 and 15 years service) retirement; otherwise, units cliff vest at the end of the cycle.

Each unit has a $1.00 assigned value and the fair value of the Company’s stock to be issued is $1.9201 per share based on its grant-date market price and assuming no dividends during the performance cycle. Based on a 200% achievement target for each year, 1,260,000 units were awarded and are outstanding at March 31, 2009 (which would be payable in cash of $630,000 and 328,108 shares of common stock) and 563,333 units are vested or are expected to vest (which would be payable in cash of $281,666 and 146,694 shares of common stock). Compensation expense is adjusted for changes in the earnings per share achieved, or expected to be achieved, and the number of units expected to vest. The $518,000 estimated future expense at March 31, 2009 is being amortized using the straight-line method to the end of the performance cycle.

Note 9 — Comprehensive Income

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

	Three Months Ended						Nine Months Ended
	March 31						March 31
	2009			2008			2009			2008
Net loss	$	(12,278	)	$	(2,212	)	$	(12,606	)	$	(44,638	)
Currency translation adjustments		(93	)		(300	)		(1,096	)		278
Comprehensive loss	$	(12,371	)	$	(2,512	)	$	(13,702	)	$	(44,360	)

Note 10 — Earnings Per Share

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

	Three Months Ended						Nine Months Ended
	March 31						March 31
	2009			2008			2009			2008
Numerator for basic and diluted earnings per share:
Net loss	$	(12,278	)	$	(2,212	)	$	(12,606	)	$	(44,638	)
Denominator:
Weighted-average shares outstanding		6,914			6,867			6,944			6,847
Contingently issuable shares		—			2			1			3
Denominator for earnings per share		6,914			6,869			6,945			6,850
Basic and diluted loss per common share	$	(1.78	)	$	(0.32	)	$	(1.82	)	$	(6.52	)

10

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^®, TOTES^®, ROLFS^®, WOOLRICH^®, CANTERBURY^®, PRINCE GARDNER^®, PRINCESS GARDNER^®, AMITY^®, COLETTA^®, STAGG^®, ACCESSORY DESIGN GROUP^®, TIGER^®, ETON^®, SURPLUS^®, and EILEEN WEST™, 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, and the retail exchange operations of the United States military.

Business development announcements in 2009 include:

• January 20 — An organizational restructuring plan with more than $3 million in anticipated annualized savings designed to focus our product development efforts, build critical capabilities, increase flexibility to better serve our retail partners’ needs, and reduce operating expenses.

• March 31 — Formation of a new Eyewear Division which will expand our presence into the emerging reading glasses category with shipping expected to commence in early fiscal 2010.

• April 23 — Signing of a definitive agreement to purchase certain strategic assets from Chambers Belt Company with closing expected by July 1, 2009.

The overall negative retail environment and general economic conditions which the global economy began to experience over a year ago showed signs of modest improvement in the last three months, but there seems to be little consensus on when there will be a full-blown turnaround. Like most companies in the retail industry, our net sales, and resulting profitability, have been severely impacted beginning in fiscal 2008 and, across the board, our customers have indicated they are taking a very conservative approach toward replenishing inventory in this environment. We are making the necessary adjustments internally to respond to these measures, and we continue to work closely with our retail partners to develop products and programs to help them through these difficult times.

Our operating results for the first nine months of fiscal 2009 were not only affected by lower net sales, but also the need to recognize that $1.2 million of accounts receivable may not be collectible due to bankruptcy filings by several of our customers. These customers accounted for approximately 8.7% and 11.4% of our net sales in the first half of fiscal 2009 and fiscal 2008, respectively. Our fiscal 2009 third quarter was also negatively impacted by an $7.5 million inventory write-down described in Note 3 of the notes to consolidated financial statements in Item 1 of this Quarterly Report incorporated herein by reference.

In connection with the organizational restructuring plan, we recorded charges in the third quarter of fiscal 2009 for termination payments relating to an approximately 17% salaried employee headcount reduction ($558,000) and other costs ($286,000).

11

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 of dollars).

	Three Months Ended						Nine Months Ended
	March 31						March 31
	2009			2008			2009			2008
Net sales:
Men’s accessories	$	18,991		$	24,171		$	79,836		$	94,291
Women’s accessories		6,060			5,895			22,776			24,856
	$	25,051		$	30,066		$	102,612		$	119,147
Gross margin (loss):
Men’s accessories	$	2,654		$	8,956		$	24,365		$	21,999
Women’s accessories		(983	)		2,723			5,077			864
	$	1,671		$	11,679		$	29,442		$	22,863
Gross margin percent of sales:
Men’s accessories		14.0	%		37.1	%		30.5	%		23.3	%
Women’s accessories		(16.2	)		46.2			22.3			3.5
Total		6.7			38.8			28.7			19.2

Net sales were lower this year (quarter — $5.0 million; nine months — $16.5 million) as the difficult retail environment, which began to affect our sales over a year and a half ago, continued to adversely impact our operations. Fewer belt sales to our largest customer accounted for most of the lower men’s accessories sales in the third quarter this year and almost half of the lower sales for the fiscal 2009 nine-month period. Men’s belt sales to other customers for the nine months this year were $3.4 million less than the fiscal 2008 period. In the first nine months of fiscal 2009, sales of men’s and women’s small leather goods were $4.0 million and $1.4 million, respectively, lower than the same period last year. The men’s accessories sales decline in the first nine months of fiscal 2009 was offset by lower discounts and allowances for returns approximating $7.4 million primarily for our gift products.

Overall gross margins in fiscal 2009 generally were lower as the result of lower sales and a $7.5 million inventory write-down. The fiscal 2008 nine-month gross margin percentage was negatively impacted by 15.7 percentage points due to an $18.7 million inventory write-down in the second quarter of that year. The fiscal 2009 three- and nine-month margin percentages include 29.9 and 7.3, respectively, percentage point effects of the inventory write-down and benefited by more than 1.5 percentage points in each period from sales of inventory at prices exceeding the previously reduced carrying values.

Our men’s accessories segment fiscal 2009 third-quarter and nine-month margins compared to fiscal 2008 improved by 2.2 and 1.7 percentage points, respectively, as we incurred lower product costs from overseas suppliers. The margin percentages for the third-quarter and nine-months include 26.9 and 6.4 percentage point effects, respectively, from a $5.1 million inventory write-down and a 1.6 percentage point benefit in each period from sales of inventory which had previously been written-down. The fiscal 2008 nine-month margin percentage was negatively impacted by 10.2 percentage points due to a $9.6 million inventory write-down in the second quarter of that year.

The women’s accessories segment margins compared to fiscal 2008 were 25.7 and 9.9 percentage points lower in the fiscal 2009 three- and nine-month periods, respectively, due to our retail partners’ reluctance to offer product at higher prices and increased product costs. The margin percentages for the fiscal 2009 third quarter and nine months include 39.4 and 10.5 percentage point effects, respectively, of a $2.4 million inventory write-down and a benefit from sales of inventory which had previously been written-down of 2.7 percentage points in each period. The nine-month margin percentage for fiscal 2008 was negatively impacted by 36.6 percentage points due to a $9.1 million inventory write-down in the second quarter of that year.

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Expenses And Taxes

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

	Three Months Ended				Nine Months Ended
	March 31				March 31
	2009		2008		2009		2008
Selling, general and administrative expenses:
Men’s accessories	$	10,196	$	8,988	$	30,769	$	31,756
Women’s accessories		2,889		3,476		8,764		11,112
	$	13,085	$	12,464	$	39,533	$	42,868
Depreciation and amortization:
Men’s accessories	$	276	$	471	$	953	$	1,844
Women’s accessories		168		228		534		750
	$	444	$	699	$	1,487	$	2,594
Interest expense	$	140	$	177	$	508	$	1,287

Selling, general and administrative (“SG&A”) expenses in the third quarter of fiscal 2009 were slightly greater than the fiscal 2008 period as distribution cost reductions were offset by higher employment expenses and a provision for doubtful accounts receivable versus a bad debt recovery in fiscal 2008. For the first nine months of fiscal 2009, SG&A expenses included a $1.2 million provision for doubtful accounts receivable while other selling and marketing costs were $4.6 million less than the prior year nine-month period. The major fiscal 2009 year-to-date SG&A expense reductions compared to fiscal 2008 were derived from lower employment expenses in the first two quarters ($1.0 million), resulting from workforce reductions, and reduced distribution costs ($2.0 million), including the benefit of closing our men’s accessories distribution facility in West Bend, Wisconsin in the second half of fiscal 2008.

Depreciation and amortization was lower this year primarily as the result of equipment and software reaching the end of their estimated depreciable lives while the first half of fiscal 2008 included $316,000 attributable to the West Bend facility which was closed and customer lists which were written off.

Interest expense in the third quarter and nine months of fiscal 2009, excluding a $33,000 write-off of previously capitalized costs due to amending our current credit facility, was 40% and 48%, respectively, less than the expense in the same periods of fiscal 2008 as both our borrowings and the interest rates were lower in the current year. The first half of fiscal 2008 interest expense included $372,000 related to a debt covenant waiver and the write-off of costs previously capitalized in connection with a credit facility which was refinanced.

Information about our income taxes is incorporated herein by reference to Note 7 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. However, sales for the first and second quarters of fiscal 2009 and 2008 were not consistent with historical patterns due to the very difficult retail environment in both years and curtailed replenishment orders by one of our largest customers in fiscal 2008.

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 ($20 million borrowing availability at March 31, 2009). Information about our credit facilities is incorporated herein by reference to Note 5 of the notes to consolidated financial statements included in Item 1 of this Quarterly Report.

Operating cash flows for the first nine months of fiscal 2009 were $1.7 million as accounts receivable and inventories decreased from their levels at June 30, 2008 by $3.8 million and $2.5 million, respectively, exclusive of the provision for doubtful accounts and inventory write-down. The lower decreases in receivables and inventories were primarily due to lower sales in fiscal 2009 than in fiscal 2008. Also contributing to the fiscal 2009 operating

13

cash flow was a $1.2 million tax refund included in other current assets at June 30, 2008. Of those cash flows, $4.4 million was used to reduce accounts payable and accrued expenses.

Investing activities included nominal amounts of capital expenditures in 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 — $564,000; 2008 — $832,000) and stock purchase program transactions (2009 — $145,000 net cash distributions in lieu of issuing shares as the result of the program being suspended; 2008 — $642,000 net contributions). Small net borrowings in fiscal 2009 offset some of the cash outflows while the greater cash inflows in fiscal 2008 permitted a net borrowing reduction in the first nine months.

In light of the ongoing decline in economic conditions, we suspended the payment of quarterly dividends in December 2008 in an effort to preserve capital and enhance our financial flexibility for investing in key growth initiatives as we implement our organizational restructuring plan. The dividend suspension will be reassessed on an ongoing basis. 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

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 March 31, 2009 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 third quarter of fiscal 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

14

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 our 2008 Annual Report on Form 10-K other than the updates set forth in our Quarterly Report on Form 10-Q for the quarter ended December 31, 2008.

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 March 31, 2009. All such 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
January 1, 2009 to January 31, 2009		11,497	$	2.04		N/A		N/A
February 1, 2009 to February 28, 2009		7		1.75		N/A		N/A
March 1, 2009 to March 31, 2009		—		—		N/A		N/A
Total		11,504		2.04		N/A		N/A

ITEM 5 — OTHER INFORMATION

On October 1, 2008, we announced that N. Roderick McGeachy, III had been appointed as President and Chief Executive Officer of our Company. Mr. McGeachy succeeded J.S.B. Jenkins, who had served as President and Chief Executive Officer of our Company since 1990. To facilitate the transition between Mr. Jenkins and Mr. McGeachy, Mr. Jenkins agreed to continue as an employee of our Company for a reasonable transition period. To that end, Mr. Jenkins retired as Chairman of the Board and as a member of our Board of Directors, effective as of May 12, 2009, and will retire as an employee of our Company, effective as of June 30, 2009.

Because Mr. Jenkins holds valuable knowledge, experience and relationships with respect to the Company and the Company’s customers, industry and business, effective as of May 8, 2009, we entered into a Consulting Agreement with Mr. Jenkins (the “Agreement”), pursuant to which, Mr. Jenkins will provide consulting services to us over the next three years, beginning July 1, 2009. Under the Agreement, we will pay Mr. Jenkins an amount equal to $400,000 per year for each year during the term of the Agreement. Mr. Jenkins agreed that, during the term of the Agreement, he will not compete, carry on or engage in a business similar to our business, solicit or accept business from any of our customers, and/or solicit or encourage any of our employees to leave the employ of our Company. Mr. Jenkins also agreed to waive and release any and all claims that he may have against us and agreed to standard terms, including, without limitation, confidentiality, non-disparagement and indemnification provisions.

The Agreement is filed as Exhibit 10.8 to this Quarterly Report. The foregoing description of the Agreement does not purport to be complete, and is qualified in its entirety by reference to the full text of such document.

ITEM 6 — EXHIBITS

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

15

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)
May 14, 2009	/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)

16

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
4.4     Amendment No. 1 to Credit Agreement dated as of       February 12, 2008 by and between Tandy Brands        Accessories, Inc. and Comerica Bank effective as of       March 31, 2009**	N/A	N/A	N/A	N/A
(10)     Material Contracts
10.1    Amendment No. 5 to the Tandy Brands Accessories, Inc.       Benefit Restoration Plan dated December 31, 2008*	10-Q	2/4/09	0-18927	10.1
10.2    Amendment No. 2 to the Tandy Brands Accessories, Inc.       1995 Stock Deferral Plan for Non-Employee Directors       dated December 31, 2008*	10-Q	2/4/09	0-18927	10.2
10.3    Amendment No. 8 to the Tandy Brands Accessories, Inc.       Employees Investment Plan effective as of January 1,       2009*	10-Q	2/4/09	0-18927	10.3
10.4    Form of Tandy Brands Accessories, Inc. 2009       Performance Unit Award Agreement*	10-Q	2/4/09	0-18927	10.6

1

TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES
EXHIBIT INDEX

	Incorporated by Reference
	(if applicable)
Exhibit Number and Description	Form	Date	File No.	Exhibit
10.5    First Amendment to Lease dated January 22, 2009 by and       between Enterprise Centre Operating Associates, LP and       Tandy Brands Accessories, Inc. relating to the corporate       office	10-Q	2/4/09	0-18927	10.6
10.6    Separation Agreement and Release of Claims by and       between Tandy Brands Accessories, Inc. and Jane Batts        effective as of February 4, 2009* **	N/A	N/A	N/A	N/A
10.7    Amendment No. 1 to Credit Agreement dated as of       February 12, 2008 by and between Tandy Brands       Accessories, Inc. and Comerica Bank effective as of       March 31, 2009**	N/A	N/A	N/A	N/A
10.8     Consulting Agreement by and between Tandy Brands       Accessories, Inc. and J.S.B. Jenkins effective as of May 8,        2009* **	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
(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

2

EX-4.4

EXHIBIT 4.4 AND 10.7
AMENDMENT NO. 1 TO CREDIT AGREEMENT

This Amendment No. 1 to Credit Agreement (“Amendment”) is dated April 28, 2009, effective as of March 31, 2009 (“Effective Date”) between Tandy Brands Accessories, Inc., a Delaware corporation (“Borrower”) and Comerica Bank, a Texas banking association (“Bank”).

Borrower and Bank entered into a Credit Agreement dated as of February 12, 2008 (“Credit Agreement”) providing terms and conditions governing certain loans and other credit accommodations extended by Bank to Borrower (“Indebtedness”). Borrower and Bank have agreed to amend the terms of the Credit Agreement as provided in this Amendment.

Accordingly, Borrower and Bank agree as follows:

1. Capitalized Terms. In this Amendment, capitalized terms that are used without separate definition shall have the meanings given to them in the Credit Agreement.

2. Amendments. The Credit Agreement is amended as follows:

(a) The following term, which is defined in the Defined Terms Addendum attached to the Credit Agreement, is given the following amended definition:

“Revolving Credit Commitment” shall mean TWENTY SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS ($27,500,000).

(b) Section 1.8 of the Loan Terms, Conditions and Procedures Addendum attached to the Credit Agreement is amended to read in its entirety as follows:

     “1.8 Unused Commitment Fee. Borrower shall pay to Bank an unused commitment fee in an amount equal to the product of (a) 0.50% multiplied by (b) the difference between (i) the Revolving Credit Commitment and (ii) the aggregate outstanding principal balance of all Revolving Loans. Such fee shall be computed on a daily basis and shall be payable quarterly in arrears as of the end of each of Borrower’s fiscal quarters. Bank shall invoice Borrower for such fees, which invoice shall be due and payable within fifteen (15) days after receipt.”

(c) Section 4.3(g) of the Credit Agreement is amended to read in its entirety as follows:

     “(g) within thirty (30) days after and as of the end of each calendar month, a Compliance Certificate dated as of the end of such month;”

(d) The following subsection (k) is hereby added to Section 5.4 of the Credit Agreement immediately following existing subsection (j):

     “(k) Borrower’s obligations with respect to “Earn-Out Payments” under the Asset Purchase Agreement dated as of April 23, 2009 between Borrower and Chambers Belt Company.”

(e) Section 1.1 of the Financial Covenants Addendum attached to the Credit Agreement is amended to read in its entirety as follows:

     “1.1 Tangible Net Worth. Maintain a Tangible Net Worth as of the end of each of Borrower’s fiscal quarters, to be tested as of the end of each such fiscal quarter, not less the amount set forth below during the corresponding period set forth below:

(a)	Thirty Three Million Five Hundred Thousand Dollars ($33,500,000) as of March 31, 2009;
(b)	as of the end of each fiscal quarter thereafter, the sum of:

(i)	the amount of Tangible Net Worth that was required to be maintained as of the end of the immediately preceding fiscal quarter, plus
(ii)	fifty percent (50%) of the Net Income (if positive), for the fiscal quarter ended as of the date of determination, plus one hundred percent of the Fixed Asset Gain/Loss (if positive), for the fiscal quarter ended as of the date of determination; plus
(iii)	one hundred percent (100%) of the Net Cash Proceeds from the issuance of any equity ownership interests during the fiscal quarter ended as of the date of determination.”

3. Representations. Borrower represents and agrees that:

(a) Except as expressly modified in this Amendment, (i) the representations and warranties set forth in the Credit Agreement and in each related document, agreement, and instrument remain true and correct in all respects, except to the extent that they expressly speak as of a specific prior date, and (ii) the covenants set forth in the Credit Agreement continue to be satisfied in all respects, and are legal, valid and binding obligations with the same force and effect as if entirely restated in this Amendment.

(b) When executed, this Amendment will be a duly authorized, legal, valid, and binding obligation of Borrower enforceable in accordance with its terms.

(c) the Certificate of Incorporation, Bylaws and resolutions of Borrower certified by the Assistant Secretary of Borrower and delivered to Bank on or about February 12, 2008, remain in full force and effect, have not been amended, repealed or rescinded in any respect and may continue to be relied upon by Bank until written notice to the contrary is received by Bank, and Borrower continues to be in good standing under the laws of the State of Delaware.

(d) There is no default continuing under the Credit Agreement, or any related document, agreement, or instrument, and no event has occurred or condition exists that is or, with the giving of notice or lapse of time or both, would be such a default.

     4. Conditions Precedent. The effectiveness of this Amendment is subject to Bank’s receipt of all of the following:

(a) this Amendment and such other agreements and instruments reasonably requested by Bank pursuant hereto (including such documents as are necessary to create and perfect Bank’s interest in the Collateral), each duly executed by Borrower;

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(b) payment to Bank of an amendment fee in the amount of $100,000; and

(c) such other documents and completion of such other matters as Bank may reasonably deem necessary or appropriate, including those items set forth on the Documentation Checklist attached hereto as Exhibit “A”; provided however, solely as to item 18 on Exhibit “A” (Warehouse Agreement), Borrower shall only be required to use commercially reasonable efforts to obtain the signature of UPS Supply Chain Solutions, Inc. (“UPS”), and Borrower’s inability to obtain such signature will not cause this Amendment to be ineffective.

5. Acknowledgment of Change in Chief Executive Officer: The Borrower has informed Bank that, effective October 1, 2008, J.S.B. Jenkins was replaced by N. Roderick McGreachy, III as chief executive officer of Borrower. The Bank acknowledges that the replacement of J.S.B. Jenkins as chief executive officer of the Borrower does not constitute an Event of Default under Section 6.1(g)(i) of the Credit Agreement.

6. No Other Changes. Except as specifically provided in this Amendment, this Amendment does not vary the terms and provisions of any note, mortgage, security agreement, or other document, instrument, or agreement evidencing, securing or relating to the Indebtedness or the Credit Agreement (“Loan Documents”). This Amendment shall not impair the rights, remedies, and security given in and by the Loan Documents. The terms of this Amendment shall control any conflict between its terms and those of the Credit Agreement.

7. Ratification. Except for the modifications under this Amendment, the parties ratify and confirm the Credit Agreement and the Loan Documents and agree that they remain in full force and effect.

8. Further Modification; No Reliance. This Amendment may be altered or modified only by written instrument duly executed by Borrower and Bank. In executing this Amendment, Borrower is not relying on any promise or commitment of Bank that is not in writing signed by Bank. This Amendment shall not be more strictly construed against one of the parties as compared to the other.

9. Confirmation of Lien Upon Collateral. Borrower acknowledges and agrees that Indebtedness and the individual advances under the Indebtedness are secured by the Collateral (as defined in the Credit Agreement) and that the Loan Documents constitute valid, legal, and binding agreements and obligations of Borrower. The Collateral is and shall remain subject to and encumbered by the lien, charge, and encumbrance of any applicable Loan Document, and nothing herein contained shall affect or be construed to affect the lien or encumbrance created by any applicable Loan Document respecting the Collateral, or its priority over other liens or encumbrances.

10. Successors and Assigns. This Amendment shall inure to the benefit of and be binding upon the parties and their respective successors and assigns.

11. Governing Law. The parties agree that the terms and provisions of this Amendment shall be governed by and construed in accordance with the internal laws of the State of Michigan, without regard to principles of conflicts of law.

12. No Defenses. Borrower acknowledges, confirms, and warrants to Bank that as of the date hereof Borrower has absolutely no defenses, claims, rights of set-off, or counterclaims against Bank under, arising out of, or in connection with, this Amendment, the Credit Agreement, the Loan Documents and/or the individual advances under the Indebtedness, or against any of the indebtedness evidenced or secured thereby.

-3-

13. Expenses. Borrower upon request shall promptly pay all out-of-pocket fees, costs, charges, expenses, and disbursements of Bank, including, without limitation, reasonable attorneys’ fees and legal expenses, incurred in connection with the preparation, execution, and delivery of this Amendment, and the other documents contemplated by this Amendment.

14. Counterparts. This Amendment may be executed in one or more counterparts, and by separate parties on separate counterparts, all of which shall constitute one and the same agreement.

[end of amendment — signature page follows]

-4-

     This Amendment No. 1 to Credit Agreement is executed and delivered as of the Effective Date.

Comerica Bank		TANDY BRANDS ACCESSORIES, INC.
By:	/s/ Steven Colwick	By:	/s/ Craig Mackey
	Name: Steven Colwick		Name: Craig Mackey
	Title: Vice President — Texas Division		Title: Chief Financial Officer

Acknowledgement and Consent of Guarantors

     Each of the undersigned has guaranteed the payment and performance of the Indebtedness by Borrower pursuant to a Guaranty dated as of February 12, 2008 (“Guaranty”). Each of the undersigned acknowledges and consents to the execution, delivery and performance of the foregoing Amendment No. 1 to Credit Agreement and the $27,500,000 Master Revolving Note dated as of [March 31, 2009] from Borrower to Bank, and agrees that its guaranty remains in full force and effect. Each of the undersigned further represents that (a) it is in compliance with all of the terms and conditions of its Guaranty; and (b) the organizational documents and resolutions of each of the undersigned certified by an authorized officer of the undersigned and delivered to Bank on or about February 12, 2008, remain in full force and effect, have not been amended, repealed or rescinded in any respect and may continue to be relied upon by Bank until written notice to the contrary is received by Bank, and each of the undersigned continues to be in good standing under the laws of the state of its incorporation or formation.

ACCESSORY DESIGN GROUP, INC.	TBAC MANAGEMENT COMPANY L.P.
TBAC — PRINCE GARDNER, INC.
AMITY/ROLFS, INC.	By:	TBAC General Management Company
TBAC GENERAL MANAGEMENT COMPANY	Its:	General Partner
TBAC INVESTMENTS, INC.
TBAC INVESTMENT TRUST	By:	/s/ Craig Mackey
TANDY BRANDS ACCESSORIES HANDBAGS, INC.		Craig Mackey
STAGG INDUSTRIES, INC.	Its:	Vice President
TBAC — TOREL, INC.
TBAC — ACQUISITION, INC.
SUPERIOR MERCHANDISE COMPANY
TBAC MASS MERCHANT QUALITY CONTROL, INC.

By:	/s/ Craig Mackey
	Craig Mackey, as Vice President of each of the above

-5-

EX-10.6

EXHIBIT 10.6
Separation Agreement and Release of Claims

This Separation Agreement and Release of Claims (“Agreement”) is made by and between Jane Batts, an Employee, and Tandy Brands Accessories, Inc., Employer (collectively, the “Parties”).

RECITALS:

WHEREAS, Employer is undergoing a reduction-in-force and restructuring that will result in the elimination or consolidation of the functions of Employee’s position;

WHEREAS, Employer desires to provide Employee with separation benefits to assist him/her in the transition resulting from the elimination of his/her position with Employer; and

WHEREAS, Employee agrees, in exchange for such separation benefits, to waive and release any and all claims that s/he may have against Employer.

NOW, THEREFORE, in consideration of the mutual promises and releases contained herein, and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree as follows:

     1. Salary and Benefits Continuation. Upon the execution of this Agreement, the Parties agree as follows:

a.	Employee shall be laid off from employment with Employer effective January 19, 2008 (hereinafter the “Layoff Date”).
b.	Employee will be provided with his/her final paycheck, including any earned but unused paid time off, within (6) days of termination date.
c.	In an effort to ease the transition into different employment, Employer agrees to pay Employee 26 weeks of Employee’s current base salary, less FIT and FICA withholding, as required by law, on regularly scheduled pay days commencing on the first scheduled pay day after the end of the Revocation Period, as defined herein.
d.	Employee agrees that s/he will not apply or reapply for employment with Employer, and understands that if s/he does, such application will be rejected pursuant to this Agreement.
e.	Employee acknowledges that by signing this Agreement and accepting the benefits provided herein, s/he is receiving benefits to which s/he would not otherwise be entitled. Employee pledges that s/he has carefully read and fully understands all the provisions of this Agreement, and that s/he is signing it voluntarily because s/he wants to take advantage of Employer’s separation offer as outlined in this Agreement.

Revised January 2009 Page 1      /s/ JB      Employee Initials

f.

Following the Layoff Date, Employee shall be entitled to any and all other rights or benefits afforded to other terminated employees of Employer, including, without limitation, the right to elect to continue, at Employee’s cost, coverage under Employer’s health plan, in accordance with the health care continuation coverage provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) and applicable law. A separate notice of COBRA rights will be provided to Employee.

g.

The Parties understand that any vested rights Employee may have under Employer’s health care program, life insurance program, employee stock purchase program, employee investment plan, flexible benefit plan, and flexible spending account are excluded from the scope of this Agreement, and are not terminated or released by it.

     2. Release. Employee, on behalf of him/herself, his/her descendants, ancestors, dependents, heirs, executors, administrators, successors, and assigns, and each of them, hereby covenants not to sue and fully releases, acquits and discharges Employer, and its subsidiaries and affiliates, past, present, future, and each of them, as well as its owners, trustees, directors, officers, shareholders, agents, servants, employees, representatives, successors, and assigns, related companies or entities, jointly and individually, and each of them (collectively referred to as “Releasees”) with respect to and from any and all claims, wages, demands, assistance, support, rights, liens, agreements, contracts, covenants, actions, suits, rights to appeal, entitlements and notices, causes of action, obligations, debts, costs, expenses, interests, attorneys’ fees, contributions, damages, judgments, orders and liabilities of whatever kind or nature in law, equity, or otherwise, whether known or unknown, suspected or unsuspected, and whether or not concealed or hidden, which Employee has at any time heretofore owned or held against said Releasees, including, without limitation, those arising out of or in any way connected with his/her employment relationship with Employer, or Employee’s layoff or any other transactions, occurrences, acts or omissions, or any loss, damage, or injury whatever, known or unknown, suspected or unsuspected, resulting from any of them, committed or omitted prior to the date of this Agreement, and including, without limitation, claims for breach of contract, libel, slander, wrongful discharge, intentional infliction of emotional harm, or other tort, or discrimination or harassment based upon any federal, state, or municipal statute or local ordinance relating to discrimination in employment. Employee does not waive his/her right to pursue claims for unemployment compensation. The claims waived and discharged include, but are not limited to those arising under the following:

Title VII of the Civil Rights Act of 1964; Executive Order 11246; Equal Pay Act; Vietnam Era Veteran Readjustment Assistance Act; Civil Rights Act of 1991; 42 U.S.C. 1981 (the 1866 Civil Rights Act); Americans with Disabilities Act; Employee Retirement Income Security Act; Family and Medical Leave Act; Fair Labor Standards Act; all laws, including the common laws of the State of Texas regarding employment-related claims; disputed wages, including claims for any back wages or overtime; wrongful discharge and/or breach of contract claims; and tort claims, including invasion of privacy, defamation, fraud, and infliction of emotional distress.

Revised January 2009 Page 2      /s/ JB      Employee Initials

     3. Indemnity Regarding Assignment of Claims. Employee represents and warrants that s/he has not heretofore assigned or transferred, or purported to assign or transfer, to any person, entity, or individual whatsoever, any of the claims released as set forth in Paragraph 2, above. Employee agrees to indemnify and hold harmless the Releasees (as defined in Paragraph 2, above) against any claim, demand, debt, obligation, liability, cost, expense, right of action, or cause of action based on, arising out of, or in assignment. Employee agrees that s/he will not bring any legal action against the Releasees for any claim that occurred prior to signing this Agreement. However, this stipulation does not prohibit Employee from filing a lawsuit for the sole purpose of enforcing his/her rights under this Agreement, or from enforcing rights that may arise subsequent to the signing of this Agreement. Employee agrees that if a claim s/he has waived or discharged under this Paragraph 3 is prosecuted in his/her name, or on his/her behalf before any court or administrative agency, s/he waives and agrees not to take any award of money or other damages from such suit. Employee also agrees that if a claim waived or discharged under this Paragraph 3 is prosecuted in his/her name, s/he will immediately request in writing that the claim on his/her behalf be withdrawn. Employee also agrees that s/he waives on behalf of him/herself and his/her attorneys all claims for attorneys’ fees and expenses, and court costs for any claim waived and discharged under this Paragraph 3.

     4. Release, Waiver, and Covenant Not to Sue Under the ADEA. By signing this Agreement, Employee consents to the following:

a.

Release and Waiver of Rights: Employee irrevocably and unconditionally releases Employer and the other Releasees, or any of them, from any and all claims, complaints, liabilities, damages, causes of action, suits, rights, costs and expenses (including attorneys’ fees) from any and all age discrimination, harassment, and/or retaliation claims under the Age Discrimination in Employment Act (“ADEA”).

b.

Covenant Not to Sue: Employee agrees that s/he will not bring any legal action against the Releasees for any claim under the ADEA that existed prior to the time s/he signed this Agreement; however, this stipulation does not keep Employee from filing a lawsuit for the sole purpose of enforcing his/her rights under this Agreement, from enforcing or securing any rights that may arise subsequent to Employee signing this Agreement, or from enforcing or securing any rights provided Employee under the ADEA that may not be legally waived.

     5. Entire Agreement. This Agreement constitutes and contains the entire Agreement and understanding concerning Employee’s employment and layoff, and the other subject matters addressed herein between the Parties, and supersedes and replaces all prior negotiations and all prior Agreements proposed or otherwise, whether written or oral, concerning the subject matter hereof.

     6. Governing Law. This Agreement shall be governed by and subject to the laws and exclusive jurisdiction of the courts of the State of Texas. In the event that Employee breaches any of the provisions of this Agreement, Employee agrees to pay Employer’s reasonable costs of prosecuting such claims, including costs and attorneys’ fees.

Revised January 2009 Page 3      /s/ JB      Employee Initials

     7. Severability. In the event that one or more of the provisions of this Agreement shall for any reason be held to be illegal or unenforceable, this Agreement shall be revised only to the extent necessary to make such provision(s) legal and enforceable.

     8. Enforceability. Before Employee takes any legal action to challenge the validity or enforceability of this Agreement, for any reason, including, without limitation, any claim that Employee did not knowingly or voluntarily enter into in this Agreement, Employee agrees that s/he must first return to Employer the payment(s) received by Employee; provided, however, that this Paragraph 8 shall not apply to the release and waiver and covenant not to sue under the ADEA.

     9. Return of Property. Employee agrees to return to Employer any and all property belonging to Employer or the other Releasees, including, but not limited to: originals and all copies of files, memoranda, records, software and related program passwords, computer printouts and disks, door and file keys, laptop computers, cell phones, smart phones, Blackberry, electronic cards, and all other property which Employee received or created in connection with his/her employment with Employer. All such property must be returned to Employer upon Employee’s execution of this Agreement. Employee agrees and guarantees that s/he has not kept any copies, electronic or otherwise, of any of Employer’s property. Upon request by Employer, Employee will provide a sworn certificate that s/he is in compliance with this Agreement, that s/he has returned all of Employer’s property, and that s/he is not using any confidential information belonging to Employer.

     10. Confidential Information. During his/her employment with Employer, Employee was provided with, and had access to, information regarding Employer’s methods of business, and was also provided with, and had access to, other confidential information. Confidential information includes, but is not limited to, customer lists, customer information, business plans, marketing plans, cost information, sourcing information, compensation figures, product pricing information, product design specification, future business plans, any and all documents, memoranda, records and files, correspondence, notes, specifications, and plans, policies and procedures, computer programs, software, and other proprietary data of whatever type or nature. Employee understands that this confidential information is in the nature of a trade secret, and is the sole property of Employer. Employee promises and agrees that s/he will not directly or indirectly, use for his/her benefit, use to the injury of Employer, or divulge to persons other than authorized representatives of Employer, any confidential information of the Employer. Upon execution of this Agreement, all confidential information shall be left with or returned to Employer. Employee agrees that his/her obligations under this Paragraph 10 shall outlast the execution of this Agreement.

     11. Nondisparagement. Employee agrees that s/he will not make any offensive remarks or statements to anyone regarding Employer and/or any of the other Releasees, including, but not limited to, statements or remarks regarding his/her employment with Employer or the termination of that employment. Employee also agrees that s/he will instruct his/her attorney and spouse (if married) to abide by the disparagement prohibition contained in this Paragraph 11. Employee also agrees that s/he will not say or do anything that damages or

Revised January 2009 Page 4      /s/ JB      Employee Initials

impairs in any way the business organization, goodwill, or reputation of Employer or any of the other Releasees.

     12. No Solicitation of Employees. Employee understands and agrees that s/he will not solicit or hire, directly or indirectly, any individual employed by Employer, or who worked for Employer during the previous six (6) months, for a period of one (1) year after execution of this Agreement.

     13. Violation of Agreement. Employee understands and agrees that if s/he violates any of the promises made in this Agreement, s/he will not receive any additional payments due under this Agreement, must return any payments already received, and may be liable for additional damages, including costs and attorneys’ fees.

     14. Voluntary Agreement. The Parties acknowledge that they have read the foregoing Agreement, understand its contents, and accept and agree to the provisions it contains, and hereby execute it voluntarily and knowingly, and with full understanding of its consequences. Employee acknowledges in executing this Agreement that s/he is not relying, and has not relied on, any guarantee or statement (except those contained in this Agreement) made by any of the Releasees or any agent of the Releasees with regard to the subject matter or effect of this Agreement or otherwise. This Agreement sets forth the entire Agreement between Employee and Employer, and takes the place of any and all prior arrangements or understandings between Employee and Employer. This Agreement is entered into in the State of Texas, and shall be interpreted in accordance with the laws of the State of Texas and in Tarrant County, Texas. The waiver by Employer of a breach of any provision of this Agreement by Employee shall not function or be construed as a waiver of any subsequent breach by Employee. Employee agrees that the provisions contained in this Agreement are fair and reasonable. Employee acknowledges that irreparable injury will result to Employer in the event of Employee’s breach of any of the provisions herein. Accordingly, in addition to any other rights or remedies available to Employer for breach of this Agreement by Employee, Employer shall be entitled to enforcement by preliminary restraining order and injunction. Employee covenants and agrees to keep this Agreement confidential, and promises not to disclose its existence or terms in any form or fashion without the prior written consent of Employer, unless disclosure is legally required. Employer agrees, however, that Employee may inform his/her spouse (if married), and also his/her attorney, accountant, and CPA of the existence and terms of this Agreement as required for legal and/or financial planning or advice.

     15. NOTICE TO EMPLOYEE. EMPLOYEE SHOULD CAREFULLY REVIEW AND UNDERSTAND THIS AGREEMENT BEFORE SIGNING IT. THIS AGREEMENT INCLUDES A RELEASE AND WAIVER OF LEGAL RIGHTS AND CLAIMS. EMPLOYER ADVISES EMPLOYEE TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS AGREEMENT. BY SIGNING THIS AGREEMENT, EMPLOYEE AGREES THAT S/HE FULLY UNDERSTANDS HIS/HER RIGHTS TO DISCUSS THIS AGREEMENT WITH AN ATTORNEY OF HIS/HER CHOICE (AT HIS/HER EXPENSE), AND THAT S/HE HAD ADEQUATE OPPORTUNITY TO DO SO. EMPLOYEE MAY ACT UPON THIS AGREEMENT ANYTIME PRIOR TO MARCH 11, 2009, WHICH WILL ALLOW EMPLOYEE MORE THAN 45 DAYS TO CONSIDER IT AFTER IT HAS BEEN

Revised January 2009 Page 5      /s/ JB      Employee Initials

DELIVERED TO EMPLOYEE. IF EMPLOYEE WISHES TO ACCEPT AND AGREE TO THESE TERMS, EMPLOYEE SHOULD SIGN THE AGREEMENT IN THE PRESENCE OF A NOTARY PUBLIC, AND DELIVER IT TO CRAIG MACKEY PRIOR TO MARCH 11. 2009. FOR A PERIOD OF 7 DAYS AFTER EMPLOYEE’S EXECUTION OF THIS AGREEMENT, EMPLOYEE MAY REVOKE THIS AGREEMENT BY DELIVERING A WRITTEN NOTICE TO CRAIG MACKEY. THIS AGREEMENT WILL NOT BECOME EFFECTIVE OR ENFORCEABLE (AND THE SALARY CONTINUATION PAYMENTS TO EMPLOYEE WILL NOT BEGIN UNTIL THIS 7-DAY REVOCATION PERIOD HAS PASSED.

     16. Employee’s Representations. By signing this Agreement, Employee represents and warrants that s/he:

1.	Understands completely his/her right to review all aspects of this Agreement with an attorney of his/her choice (at his/her expense), and that s/he has had adequate opportunity to do so;
2.	Was given at least 45 days from the date s/he received this Agreement to consider it, and understands s/he has 7 days after signing it to revoke it (“Revocation Period”);
3.	Has been provided and has reviewed a list of departmental employees, along with the job titles and ages of all individuals eligible for Employer’s cash separation program; and
4.	Has been provided and has reviewed a list of the job titles and ages of all individuals in the same department who were not selected for Employer’s cash separation program. This list is set out on Exhibit “A” attached hereto, and made a part of this Agreement for all purposes.

PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF
KNOWN AND UNKNOWN CLAIMS.

Revised January 2009 Page 6      /s/ JB      Employee Initials

EMPLOYEE	TANDY BRANDS ACCESSORIES, INC.
/s/ Jane Batts	By:	/s/ Craig Mackey
JANE BATTS		CRAIG MACKEY Chief Financial Officer

Date: 1-28-09 Date: 2/3/09

STATE OF TEXAS

COUNTY OF TARRANT §
§
§

SWORN TO AND SUBSCRIBED before me, the undersigned Notary Public, by

in person 28, on this Jan day of 28, 2009.

/s/ RF Lafave  

NOTARY PUBLIC in and for 

The State of Texas  

My Commission Expires:

SEAL

Revised January 2009 Page 7      /s/ JB      Employee Initials

EX-10.7

EXHIBIT 4.4 AND 10.7
AMENDMENT NO. 1 TO CREDIT AGREEMENT

This Amendment No. 1 to Credit Agreement (“Amendment”) is dated April 28, 2009, effective as of March 31, 2009 (“Effective Date”) between Tandy Brands Accessories, Inc., a Delaware corporation (“Borrower”) and Comerica Bank, a Texas banking association (“Bank”).

Borrower and Bank entered into a Credit Agreement dated as of February 12, 2008 (“Credit Agreement”) providing terms and conditions governing certain loans and other credit accommodations extended by Bank to Borrower (“Indebtedness”). Borrower and Bank have agreed to amend the terms of the Credit Agreement as provided in this Amendment.

Accordingly, Borrower and Bank agree as follows:

1. Capitalized Terms. In this Amendment, capitalized terms that are used without separate definition shall have the meanings given to them in the Credit Agreement.

2. Amendments. The Credit Agreement is amended as follows:

(a) The following term, which is defined in the Defined Terms Addendum attached to the Credit Agreement, is given the following amended definition:

“Revolving Credit Commitment” shall mean TWENTY SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS ($27,500,000).

(b) Section 1.8 of the Loan Terms, Conditions and Procedures Addendum attached to the Credit Agreement is amended to read in its entirety as follows:

     “1.8 Unused Commitment Fee. Borrower shall pay to Bank an unused commitment fee in an amount equal to the product of (a) 0.50% multiplied by (b) the difference between (i) the Revolving Credit Commitment and (ii) the aggregate outstanding principal balance of all Revolving Loans. Such fee shall be computed on a daily basis and shall be payable quarterly in arrears as of the end of each of Borrower’s fiscal quarters. Bank shall invoice Borrower for such fees, which invoice shall be due and payable within fifteen (15) days after receipt.”

(c) Section 4.3(g) of the Credit Agreement is amended to read in its entirety as follows:

     “(g) within thirty (30) days after and as of the end of each calendar month, a Compliance Certificate dated as of the end of such month;”

(d) The following subsection (k) is hereby added to Section 5.4 of the Credit Agreement immediately following existing subsection (j):

     “(k) Borrower’s obligations with respect to “Earn-Out Payments” under the Asset Purchase Agreement dated as of April 23, 2009 between Borrower and Chambers Belt Company.”

(e) Section 1.1 of the Financial Covenants Addendum attached to the Credit Agreement is amended to read in its entirety as follows:

     “1.1 Tangible Net Worth. Maintain a Tangible Net Worth as of the end of each of Borrower’s fiscal quarters, to be tested as of the end of each such fiscal quarter, not less the amount set forth below during the corresponding period set forth below:

(a)	Thirty Three Million Five Hundred Thousand Dollars ($33,500,000) as of March 31, 2009;
(b)	as of the end of each fiscal quarter thereafter, the sum of:

(i)	the amount of Tangible Net Worth that was required to be maintained as of the end of the immediately preceding fiscal quarter, plus
(ii)	fifty percent (50%) of the Net Income (if positive), for the fiscal quarter ended as of the date of determination, plus one hundred percent of the Fixed Asset Gain/Loss (if positive), for the fiscal quarter ended as of the date of determination; plus
(iii)	one hundred percent (100%) of the Net Cash Proceeds from the issuance of any equity ownership interests during the fiscal quarter ended as of the date of determination.”

3. Representations. Borrower represents and agrees that:

(a) Except as expressly modified in this Amendment, (i) the representations and warranties set forth in the Credit Agreement and in each related document, agreement, and instrument remain true and correct in all respects, except to the extent that they expressly speak as of a specific prior date, and (ii) the covenants set forth in the Credit Agreement continue to be satisfied in all respects, and are legal, valid and binding obligations with the same force and effect as if entirely restated in this Amendment.

(b) When executed, this Amendment will be a duly authorized, legal, valid, and binding obligation of Borrower enforceable in accordance with its terms.

(c) the Certificate of Incorporation, Bylaws and resolutions of Borrower certified by the Assistant Secretary of Borrower and delivered to Bank on or about February 12, 2008, remain in full force and effect, have not been amended, repealed or rescinded in any respect and may continue to be relied upon by Bank until written notice to the contrary is received by Bank, and Borrower continues to be in good standing under the laws of the State of Delaware.

(d) There is no default continuing under the Credit Agreement, or any related document, agreement, or instrument, and no event has occurred or condition exists that is or, with the giving of notice or lapse of time or both, would be such a default.

     4. Conditions Precedent. The effectiveness of this Amendment is subject to Bank’s receipt of all of the following:

(a) this Amendment and such other agreements and instruments reasonably requested by Bank pursuant hereto (including such documents as are necessary to create and perfect Bank’s interest in the Collateral), each duly executed by Borrower;

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(b) payment to Bank of an amendment fee in the amount of $100,000; and

(c) such other documents and completion of such other matters as Bank may reasonably deem necessary or appropriate, including those items set forth on the Documentation Checklist attached hereto as Exhibit “A”; provided however, solely as to item 18 on Exhibit “A” (Warehouse Agreement), Borrower shall only be required to use commercially reasonable efforts to obtain the signature of UPS Supply Chain Solutions, Inc. (“UPS”), and Borrower’s inability to obtain such signature will not cause this Amendment to be ineffective.

5. Acknowledgment of Change in Chief Executive Officer: The Borrower has informed Bank that, effective October 1, 2008, J.S.B. Jenkins was replaced by N. Roderick McGreachy, III as chief executive officer of Borrower. The Bank acknowledges that the replacement of J.S.B. Jenkins as chief executive officer of the Borrower does not constitute an Event of Default under Section 6.1(g)(i) of the Credit Agreement.

6. No Other Changes. Except as specifically provided in this Amendment, this Amendment does not vary the terms and provisions of any note, mortgage, security agreement, or other document, instrument, or agreement evidencing, securing or relating to the Indebtedness or the Credit Agreement (“Loan Documents”). This Amendment shall not impair the rights, remedies, and security given in and by the Loan Documents. The terms of this Amendment shall control any conflict between its terms and those of the Credit Agreement.

7. Ratification. Except for the modifications under this Amendment, the parties ratify and confirm the Credit Agreement and the Loan Documents and agree that they remain in full force and effect.

8. Further Modification; No Reliance. This Amendment may be altered or modified only by written instrument duly executed by Borrower and Bank. In executing this Amendment, Borrower is not relying on any promise or commitment of Bank that is not in writing signed by Bank. This Amendment shall not be more strictly construed against one of the parties as compared to the other.

9. Confirmation of Lien Upon Collateral. Borrower acknowledges and agrees that Indebtedness and the individual advances under the Indebtedness are secured by the Collateral (as defined in the Credit Agreement) and that the Loan Documents constitute valid, legal, and binding agreements and obligations of Borrower. The Collateral is and shall remain subject to and encumbered by the lien, charge, and encumbrance of any applicable Loan Document, and nothing herein contained shall affect or be construed to affect the lien or encumbrance created by any applicable Loan Document respecting the Collateral, or its priority over other liens or encumbrances.

10. Successors and Assigns. This Amendment shall inure to the benefit of and be binding upon the parties and their respective successors and assigns.

11. Governing Law. The parties agree that the terms and provisions of this Amendment shall be governed by and construed in accordance with the internal laws of the State of Michigan, without regard to principles of conflicts of law.

12. No Defenses. Borrower acknowledges, confirms, and warrants to Bank that as of the date hereof Borrower has absolutely no defenses, claims, rights of set-off, or counterclaims against Bank under, arising out of, or in connection with, this Amendment, the Credit Agreement, the Loan Documents and/or the individual advances under the Indebtedness, or against any of the indebtedness evidenced or secured thereby.

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13. Expenses. Borrower upon request shall promptly pay all out-of-pocket fees, costs, charges, expenses, and disbursements of Bank, including, without limitation, reasonable attorneys’ fees and legal expenses, incurred in connection with the preparation, execution, and delivery of this Amendment, and the other documents contemplated by this Amendment.

14. Counterparts. This Amendment may be executed in one or more counterparts, and by separate parties on separate counterparts, all of which shall constitute one and the same agreement.

[end of amendment — signature page follows]

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     This Amendment No. 1 to Credit Agreement is executed and delivered as of the Effective Date.

Comerica Bank		TANDY BRANDS ACCESSORIES, INC.
By:	/s/ Steven Colwick	By:	/s/ Craig Mackey
	Name: Steven Colwick		Name: Craig Mackey
	Title: Vice President — Texas Division		Title: Chief Financial Officer

Acknowledgement and Consent of Guarantors

     Each of the undersigned has guaranteed the payment and performance of the Indebtedness by Borrower pursuant to a Guaranty dated as of February 12, 2008 (“Guaranty”). Each of the undersigned acknowledges and consents to the execution, delivery and performance of the foregoing Amendment No. 1 to Credit Agreement and the $27,500,000 Master Revolving Note dated as of [March 31, 2009] from Borrower to Bank, and agrees that its guaranty remains in full force and effect. Each of the undersigned further represents that (a) it is in compliance with all of the terms and conditions of its Guaranty; and (b) the organizational documents and resolutions of each of the undersigned certified by an authorized officer of the undersigned and delivered to Bank on or about February 12, 2008, remain in full force and effect, have not been amended, repealed or rescinded in any respect and may continue to be relied upon by Bank until written notice to the contrary is received by Bank, and each of the undersigned continues to be in good standing under the laws of the state of its incorporation or formation.

ACCESSORY DESIGN GROUP, INC.	TBAC MANAGEMENT COMPANY L.P.
TBAC — PRINCE GARDNER, INC.
AMITY/ROLFS, INC.	By:	TBAC General Management Company
TBAC GENERAL MANAGEMENT COMPANY	Its:	General Partner
TBAC INVESTMENTS, INC.
TBAC INVESTMENT TRUST	By:	/s/ Craig Mackey
TANDY BRANDS ACCESSORIES HANDBAGS, INC.		Craig Mackey
STAGG INDUSTRIES, INC.	Its:	Vice President
TBAC — TOREL, INC.
TBAC — ACQUISITION, INC.
SUPERIOR MERCHANDISE COMPANY
TBAC MASS MERCHANT QUALITY CONTROL, INC.

By:	/s/ Craig Mackey
	Craig Mackey, as Vice President of each of the above

-5-

EX-10.8

EXHIBIT 10.8

CONSULTING AGREEMENT

     This Consulting Agreement (“Agreement”) is by and between J.S.B. Jenkins, an individual (“Jenkins” or the “Consultant”), and Tandy Brands Accessories, Inc. (“Company”), both of whom are sometimes referred to herein as the “Parties”, as of May 1, 2009.

RECITALS:

     WHEREAS, Jenkins served as President and Chief Executive Officer of the Company from 1990 until October 1, 2008 and has provided valuable service to the Company and holds valuable knowledge, experience and relationships with respect to the Company, its customers, industry and its business; and

     WHEREAS, effective October 1, 2008, N. Roderick McGeachy, III (“McGeachy”) was appointed President and Chief Executive Officer of the Company; and

     WHEREAS, to facilitate the transition between Jenkins and McGeachy, Jenkins agreed to continue as an employee of the Company for a reasonable transition period; and

     WHEREAS, Jenkins and the Company have mutually agreed that, effective as of June 30, 2009, Jenkins will retire as an employee of the Company and as a member of the Company’s Board of Directors; and

     WHEREAS, the Company has determined it would be advisable and in the best interests of the Company and its stockholders to engage Jenkins as a consultant and provide for certain restrictions on Jenkins’ ability to compete with the Company while receiving consulting fees from the Company and certain releases; and

     WHEREAS, Jenkins agrees, in exchange for the payments described herein and for other good and valuable consideration, to waive and release any and all claims that he may have against the Company as of this signing, and to waive and release any and all claims that he may have after this Agreement is signed by signing a Release of Claims in the form attached hereto as Exhibit “A” no sooner than June 30, 2009; and

     WHEREAS, except as otherwise provided herein, the Parties desire to keep the terms of this Agreement confidential.

     NOW, THEREFORE, in consideration of the mutual promises and agreements herein contained, including the recitals set forth above, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

     1. Services. The Parties hereby agree that, effective as of the close of business on June 30, 2009, Jenkins will retire as an employee of the Company and as a member of the Company’s Board of Directors. Following such retirement, effective as of July 1, 2009, the Company hereby engages the Consultant to provide consulting services to the Company (the “Services”) during the Term (as defined herein) and the Consultant agrees to provide the Services on the terms and conditions set forth herein. The Services will consist of mutually agreed tasks and projects as determined by the President and Chief Executive Officer of the Company which are consistent with Consultant’s skills and experience with the Company and will be reflected in written project statements describing the specific Services to be performed and the scope of the particular project.

The ultimate manner in which the Services are to be performed and the specific hours to be worked by the Consultant shall be determined by the Consultant.

     The Parties agree Consultant will work independently and exercise his own judgment, without official hours or a prescribed minimum number of hours. The Company shall have no control over the means or methods of Consultant’s work, except that Consultant shall provide the Services in a professional and workmanlike manner consistent with the standards of the trade and the particular project statement, and shall comply with all applicable local, state and federal laws, rules and regulations.

     2. Term. The term of this Agreement shall run from July 1, 2009 through June 30, 2012 (the “Term”). The Company may, by providing Consultant written notice, terminate this Agreement during the Term in the event Consultant (a) materially fails to perform the Services, or (b) otherwise materially breaches the terms of this Agreement.

     3. Compensation.

          a. In consideration for the provision of the Services in accordance with the terms hereof, the release provided for in Section 4, the covenants contained in Sections 5 and 6 of this Agreement, the Release of Claims in the form attached hereto as Exhibit “A” and the other covenants contained herein, the Company shall pay to Consultant an amount equal to $400,000 per year, payable in equal monthly installments for each year during the Term commencing August 15, 2009. The Parties acknowledge and agree that no amounts will be withheld from such payments, and that Consultant will be solely responsible for payment of all taxes which may be owed on these payments.

          b. Any reasonable and necessary business expenses which are approved by the Company in writing prior to their incurrence and incurred by Consultant in performing the Services shall be paid by the Company either directly or by reimbursing Consultant, in accordance with the Company’s regular reimbursement procedures and practices in effect for independent contractors during the Term (which will include written documentation of such expenses). Following calendar year end, the Company shall issue a Form 1099 to Consultant for all compensation Consultant received as a consultant during the applicable period.

     4. Release.

          a. In consideration of the payments described above, together with other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Consultant, together with his spouse, agents, assigns, representatives, and designees hereby settles, releases and fully discharges the Company, its stockholders, parent companies, partners, limited liability partners, officers, directors, employees, agents, legal representatives, subsidiaries, divisions, related companies, businesses, corporations, employee benefit plan fiduciaries and other related persons or entities, including their predecessors and successors, together with the officers, directors, partners, limited liability partners, agents, owners, legal representatives, servants and employees, and the assigns, heirs, privies, predecessors, successors and insurers of each such person or entity (collectively “Releasees”) from each and every grievance, administrative proceeding, dispute, claim, demand, lawsuit, controversy, action or cause of action, of whatever nature, including but not limited to those grounded in discrimination, contract, negligence, strict liability, warranty, tort or otherwise, under any and all local, state or federal laws, whether arising out of or

in any manner related to Consultant’s employment with the Company or retirement therefrom; or any other conduct by the Releasees up to Consultant’s execution of this Agreement.

          b. Without limiting the generality of the above paragraph, Consultant knowingly and voluntarily waives, and agrees to release and discharge the Releasees from all claims or demands he has based upon, arising from, or related to his employment by the Company, or retirement therefrom, including, without limitation, any and all claims for injunctive relief, attorneys’ fees, or compensatory and punitive damages for: physical injuries; mental anguish; physical pain and suffering; wrongful discharge; and any rights he may have under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993, the Employee Retirement Income Security Act of 1974, the Age Discrimination in Employment Act; sexual harassment; sex, race, national origin, religious, and disability discrimination; incapacity; failure to pay proper wage, minimum wage and/or overtime wages; unpaid wages or benefits; loss of wages or benefits, including bonuses; loss of earning capacity; loss of job security; defamation; libel; slander; humiliation; physical impairment and/or disfigurement; loss of consortium; harm to reputation; medical expenses; personal property; negligence; gross negligence; invasion of privacy; intentional infliction of emotional distress; negligent infliction of emotional distress; loss or diminution of career advancement; loss of dignity; breach of contract; and any and all claims arising under any other federal, state or local statute, law, ordinance, regulation or order relating to taxes or prohibiting employment discrimination, any such claim under tort, wrongful discharge or breach of contract, breach of agreement, or any other claim or cause of action whatsoever, whether known or unknown, arising from any action(s) of the Releasees.

          c. The waiver provisions of this Agreement are acknowledged and conclusively deemed to be in compliance with the requirements of the Older Workers Benefit Protection Act, 29 U.S.C. §§626(f)(1)(A)-(G). Consultant has knowingly and voluntarily agreed, in consideration of the payments described above, to waive, among other things, any and all rights and claims he may have against the Company under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621, et seq. (“ADEA”). Consultant specifically acknowledges that the waiver of rights under the ADEA has been written in a manner that he has understood; that the waiver specifically refers to claims arising under the ADEA; that he has not waived any rights or claims under the ADEA that arise after the date this waiver is executed; that the waiver of rights or claims under the ADEA has been in exchange for consideration in addition to anything of value to which he is already entitled; that he has been advised hereby in writing to consult with an attorney before signing this Agreement; that he has been given at least twenty-one (21) days within which to consider this Agreement; that this Agreement provides for a period of at least seven (7) days following execution by Consultant of this Agreement for Consultant to revoke the Agreement, in which case none of the payments and/or consideration referenced in Section 3 above will be made and/or given; and that this Agreement is not effective until eight (8) days after execution by all Parties.

     5. Confidential/Proprietary Information.

          a. During his employment with the Company and during the Term, the Company has disclosed and will disclose to Consultant or place Consultant in a position to have access to information not generally known and proprietary to the Company about the business, services and products of the Company and its subsidiaries and/or divisions. By way of illustration and not limitation, such information shall include information relating to products, processes, know-how, designs, formulas, methods, development or experimental work, improvements, discoveries,

plans for research, new products, marketing and selling strategies and plans, business plans, budgets and unpublished financial information or statements, licenses, prices, products and components costs and margins, suppliers and customer identities and contacts (and lists of same), and information regarding the skills and compensation of other employees of the Company. All such information described in the immediately preceding sentences, together with all non-public information relating to the terms and conditions of Consultant’ employment with the Company, is collectively referred to in this Agreement as “Confidential Information.” Consultant hereby acknowledges and agrees that all Confidential Information shall be maintained in strict confidence by Consultant and shall be used only for the purpose of performing his duties pursuant to this Agreement, and that no such Confidential Information shall be otherwise used or disclosed by Consultant during or after the Term without the prior written consent of the Company. Upon execution of this Agreement, Consultant will deliver to the Company all Confidential Information and other documents, records, notebooks, customer lists, business proposals, contracts, agreements, and other repositories containing information concerning the Company and its subsidiaries and/or divisions, or the business of the Company and its subsidiaries and/or divisions (including all copies thereof) in Consultant’s possession, whether prepared by Consultant or others, unless such Confidential Information is needed to perform the Services.

          b. Consultant agrees that all rights to discoveries, inventions, improvements and innovations (including all data and records pertaining thereto) related to the business of the Company and its subsidiaries and/or divisions, whether or not patentable, copyrightable, registrable as a trademark, or reduced to writing, that Consultant has or may discover, invent, or originate during the Term, and for a period of twelve (12) months thereafter, either alone or with others and whether or not during working hours or by the use of the facilities of the Company and its subsidiaries and/or divisions (“Inventions”), shall be the exclusive property of the Company. Consultant shall promptly disclose all Inventions to the Company, shall execute at the request of the Company any assignments or other documents the Company may deem necessary to protect or perfect its rights therein, and shall assist the Company, at the Company’s expense, in obtaining, defending and enforcing the Company’s rights therein. Consultant hereby appoints the Company as his attorney-in-fact to execute on his behalf any assignments or other documents deemed necessary by the Company to protect or perfect its rights to any Inventions.

          c. Except to the extent disclosed in the Company’s public filings with the Securities and Exchange Commission (the “SEC”) pursuant to the SEC’s rules and regulations, Consultant agrees that all terms and conditions contained in this Agreement are to remain strictly confidential and cannot be disclosed to anyone other than his spouse, attorneys, and accountant who shall be advised of this provision and agree to it before any disclosure to them is made. The confidentiality of the terms and conditions contained herein is part of the consideration inducing the Company to enter into this Agreement. In the event Consultant or his spouse, attorneys, or accountant breach the promises contained in this Section 5.c., Consultant shall be liable for any damages, including any attorneys’ fees and costs incurred as a result of such breach. Any such action permitted to the Company by the foregoing, however, shall not affect or impair any of Consultant’s obligations or promises made pursuant to this Agreement including, without limitation, the release of claims in Section 4, the Release of Claims in the form attached hereto as Exhibit “A” and the covenants contained in Sections 5 and 6.

     6. Non-Competition/Non-Solicitation. In exchange for receiving the Confidential Information referenced in Section 5, and the consideration referenced in Section 3 above,

Consultant agrees that, during the Term and for as long as he is receiving consulting fees from the Company:

          a. he will not (directly or indirectly, alone or in conjunction with others) carry on or engage in a business similar to the business of the Company or any of its subsidiaries and/or divisions (including, but not limited to, any business that manufactures, sells, or distributes leather goods);

          b. he will not (directly or indirectly, alone or in conjunction with others) solicit or accept business from any customer of the Company or its subsidiaries and/or divisions for any purpose other than doing business with the Company; and/or

          c. he will not (directly or indirectly, alone or in conjunction with others) solicit or encourage in any way any employee of the Company or any of its subsidiaries and/or divisions to leave the employ of the Company or any of its subsidiaries and/or divisions.

     The Parties agree that the time periods referenced in this Section 6 shall not include any period of time during which Consultant is in breach of this Section 6. As such, the period of time for which Consultant is not permitted to engage in the activities listed above shall extend beyond the Term and any period during which he is receiving consulting fees from the Company for a period of time equal to the period(s) of time Consultant is in breach of this Section 6.

     7. Defense. Consultant understands and agrees that this Agreement may be asserted as a full and complete defense to, and may be used as the basis for an injunction against any action, lawsuit, administrative charge, or any other claim instituted, prosecuted, maintained, or attempted by Consultant in violation of this Agreement and consistent with applicable law(s). This Agreement shall be binding on Consultant, his spouse, heirs, successors, and assigns, and inure to the benefit of the Releasees.

     8. Mutual Nondisparagement. Consultant understands and agrees that subsequent to the execution of this Agreement, he will not verbally or in writing criticize, disparage, deprecate, derogate, discredit, or vilify the Company, its subsidiaries, divisions, employees, policies, products, or procedures. The Company agrees that should a prospective employer contact it seeking a reference on Consultant, only dates of employment and last position held will be provided.

     9. Remedies Upon Breach of the Agreement; Indemnification. Consultant acknowledges and agrees that in the event of a material breach by him of any provision of this Agreement (which shall include, without limitation, any breach of the provisions of Sections 5, 6, or 8 of this Agreement): (a) the Company will be irreparably damaged and may have no adequate remedy at law, and will be entitled to injunctive relief as a matter of right from any court of competent jurisdiction restraining any further breach of this Agreement; and (b) the Company’s remaining obligations under this Agreement, if any, shall immediately terminate. Any such action permitted to the Company by the foregoing, however, shall not affect or impair any of Consultant’s obligations or promises made pursuant to this Agreement including, without limitation, the release of claims and covenants contained in Sections 4, 5 and 6 above and the Release of Claims in the form attached hereto as Exhibit “A”.

     10. Arbitration. Any dispute regarding any aspect of this Agreement or any act which allegedly has or would violate any provision of this Agreement, other than a breach or violation of Section 6 (“Arbitrable Dispute”) will be submitted to arbitration in Dallas, Texas before an

experienced arbitrator licensed to practice law in the State of Texas and selected in accordance with the Model Employment Arbitration Procedures of the American Arbitration Association, as the exclusive remedy for such claim or dispute. Should any party to this Agreement hereafter institute any legal action or administrative proceeding against the other with respect to any claim(s) released by this Agreement or pursue any Arbitrable Dispute by any method other than said arbitration, the responding party shall be entitled to recover from the initiating party all damages, costs, expenses, and attorneys’ fees incurred as a result of such action.

     11. Independent Contractor. The Parties agree that, in performing consulting services hereunder, Consultant shall be considered an independent contractor. Nothing contained herein shall be construed to create an employment, partnership, joint venture or agency relationship between the Parties. In this regard, Consultant understands and agrees he is not entitled to any employee benefits (other than with respect to COBRA) such as group health insurance, retirement benefits, etc., which are normally provided to Company employees. In addition, Consultant will be solely responsible for providing his own support staff, equipment and transportation and the Company will not provide office space, staff support, computer equipment, telephone equipment or service, automobile allowances or company vehicles or similar items normally associated with employees of the Company.

     12. Other Matters.

          a. This Agreement shall be construed and interpreted to the maximum extent possible in a manner to avoid any adverse tax consequences to Jenkins under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). If the Company or Jenkins reasonably determines that any compensation or benefits payable under this Agreement may be subject to Section 409A, the Company and Jenkins shall work together to adopt such amendments to this Agreement, or adopt other policies or procedures (including amendments, policies, and procedures with retroactive effect), or take any other commercially reasonable actions necessary or appropriate to: (a) exempt the compensation and benefits payable under this Agreement from Section 409A and/or to preserve the intended tax treatment of the compensation and benefits provided with respect to this Agreement; or (b) comply with the requirements of Section 409A.

          b. For the period during which Jenkins is entitled to continuation coverage under any group health plan of the Company under Section 4980B of the Internal Revenue Code of 1986, as amended, Jenkins shall be entitled to reimbursement of the cost for such continuation coverage for Jenkins and his eligible dependents under such plan(s) at the same level of coverage as he and his eligible dependents were receiving immediately prior to the date of Jenkins’ retirement; provided, however, that Jenkins substantiates to the Company that the cost for the continuation coverage has been paid within ninety (90) days of such payment. The Company will reimburse Jenkins for the premiums paid for continuation coverage within fifteen (15) days of the date on which the Company receives such substantiation.

     13. Entire Agreement. It is further understood and agreed that this Agreement contains the entire agreement between the parties and supersedes any and all prior agreements, arrangements, or understandings between the parties. No oral understandings, statements, promises, or inducements contrary to the terms of this Agreement exist.

     14. Modification of Agreement. This Agreement may not be changed or modified or released or discharged or abandoned or otherwise terminated, in whole or in part, except by an instrument in writing signed by the Parties hereto.

     15. Severability. This Agreement is severable, and if any provision of this Agreement is determined to be void, unenforceable, or invalid for any reason, the remainder of this Agreement shall be considered valid and operative and effect shall be given to the intent manifested by the parties.

     16. Assignment. Consultant warrants that no claims, demands, damages, actions, causes of action, or suits in equity, hereby released, have been filed, asserted, or assigned to a third party.

     17. Understanding. Consultant warrants and affirms that he has read this Agreement and fully understands it to be a compromise and settlement and release of all claims, known or unknown, present or future, that he has or may have against any of the Releasees arising out of his employment with the Company or retirement therefrom. Consultant warrants that he is legally competent to execute this Agreement.

     18. Notices. All notices pursuant to this Agreement shall be in writing and sent certified mail, return receipt requested, addressed as follows:

To the Company:	Tandy Brands Accessories, Inc. 690 East Lamar Blvd., Suite 200 Arlington, Texas 76011 Attn: N. Roderick McGeachy, III
To Consultant:	J.S.B. Jenkins 5101 Forest Lake Ct. Arlington, Texas 76017
	With a copy to: Dan McElroy Attorney at Law dan@mcelroy-law.com

     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 Section 18.

     19. Survival. Sections 4, 5, 6, 7, 8, 9 and 10 hereof shall survive the termination or expiration of this Agreement.

     20. Governing Law. This Agreement shall be construed and enforced under the laws of the State of Texas, without regard to principles of conflicts of laws.

     21. Voluntary Agreement. The parties to this Agreement represent that they have the advice and counsel of their own attorney, if deemed necessary, and that they are relying upon their own and their attorneys’ judgment, belief and knowledge with respect to the nature, extent and duration of their claims, to the extent such counsel has been provided. Consultant executes this Agreement voluntarily, without duress or coercion of any sort whatsoever.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the respective dates set forth below.

TANDY BRANDS ACCESSORIES, INC.
By:	/s/ N. Roderick McGeachy III	/s/ JSB Jenkins
	N. Roderick McGeachy, III Chief Executive Officer	J.S.B. Jenkins

Date: May 1, 2009 Date: May 1, 2009

STATE OF TEXAS

COUNTY OF TARRANT §
§
§

     SUBSCRIBED AND SWORN TO BEFORE ME, the undersigned authority, by J.S.B. Jenkins, on this 1 day of May, 2009.

SEAL	/s/ Janice Gooch
	NOTARY PUBLIC in and for The State of Texas
My Commission Expires:
6-18-13	Janice Gooch
	Typed or Printed Name of Notary Public

EXHIBIT “A”

RELEASE OF CLAIMS

     This Release of Claims (this “Release”) is by and between J.S.B. Jenkins, an individual (“Jenkins”), and Tandy Brands Accessories, Inc. (“Company”), both of whom are sometimes referred to herein as the “Parties”, as of June 30, 2009.

RECITALS:

     WHEREAS, pursuant to that certain Consulting Agreement, dated May ___, 2009, by and between Jenkins and the Company (the “Consulting Agreement”), the Parties mutually agreed that (i) effective as of June 30, 2009, Jenkins would retire as an employee of the Company and a member of the Company’s Board of Directors, (ii) effective as of July 1, 2009, the Company would engage Jenkins as a consultant, and (iii) in exchange for the payments described in the Consulting Agreement and for other good and valuable consideration, Jenkins would waive and release any and all claims that he may have against the Company as of the signing of the Consulting Agreement (the “Signing Date”), and waive and release any and all claims that he may have after the Signing Date by signing this Release no sooner than June 30, 2009; and

     WHEREAS, except as otherwise provided herein, the Parties desire to keep the terms of this Release confidential.

     NOW, THEREFORE, in consideration of the mutual promises and agreements herein contained, including the recitals set forth above, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

     1. Release.

          a. In consideration of the payments described in the Consulting Agreement, together with other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Jenkins, together with his spouse, agents, assigns, representatives, and designees hereby settles, releases and fully discharges the Company, its stockholders, parent companies, partners, limited liability partners, officers, directors, employees, agents, legal representatives, subsidiaries, divisions, related companies, businesses, corporations, employee benefit plan fiduciaries and other related persons or entities, including their predecessors and successors, together with the officers, directors, partners, limited liability partners, agents, owners, legal representatives, servants and employees, and the assigns, heirs, privies, predecessors, successors and insurers of each such person or entity (collectively “Releasees”) from each and every grievance, administrative proceeding, dispute, claim, demand, lawsuit, controversy, action or cause of action, of whatever nature, including but not limited to those grounded in discrimination, contract, negligence, strict liability, warranty, tort or otherwise, under any and all local, state or federal laws, whether arising out of or in any manner related to Jenkins’ employment with the Company or retirement therefrom; or any other conduct by the Releasees up to Jenkins’ execution of this Release.

          b. Without limiting the generality of the above paragraph, Jenkins knowingly and voluntarily waives, and agrees to release and discharge the Releasees from all claims or demands he has based upon, arising from, or related to his employment by the Company, or retirement therefrom, including, without limitation, any and all claims for injunctive relief,

attorneys’ fees, or compensatory and punitive damages for: physical injuries; mental anguish; physical pain and suffering; wrongful discharge; and any rights he may have under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993, the Employee Retirement Income Security Act of 1974, the Age Discrimination in Employment Act; sexual harassment; sex, race, national origin, religious, and disability discrimination; incapacity; failure to pay proper wage, minimum wage and/or overtime wages; unpaid wages or benefits; loss of wages or benefits, including bonuses; loss of earning capacity; loss of job security; defamation; libel; slander; humiliation; physical impairment and/or disfigurement; loss of consortium; harm to reputation; medical expenses; personal property; negligence; gross negligence; invasion of privacy; intentional infliction of emotional distress; negligent infliction of emotional distress; loss or diminution of career advancement; loss of dignity; breach of contract; and any and all claims arising under any other federal, state or local statute, law, ordinance, regulation or order relating to taxes or prohibiting employment discrimination, any such claim under tort, wrongful discharge or breach of contract, breach of agreement, or any other claim or cause of action whatsoever, whether known or unknown, arising from any action(s) of the Releasees.

          c. The waiver provisions of this Release are acknowledged and conclusively deemed to be in compliance with the requirements of the Older Workers Benefit Protection Act, 29 U.S.C. §§626(f)(1)(A) -(G). Jenkins has knowingly and voluntarily agreed, in consideration of the payments described above, to waive, among other things, any and all rights and claims he may have against the Company under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621, et seq. (“ADEA”). Jenkins specifically acknowledges that the waiver of rights under the ADEA has been written in a manner that he has understood; that the waiver specifically refers to claims arising under the ADEA; that he has not waived any rights or claims under the ADEA that arise after the date this waiver is executed; that the waiver of rights or claims under the ADEA has been in exchange for consideration in addition to anything of value to which he is already entitled; that he has been advised hereby in writing to consult with an attorney before signing this Release; that he has been given at least twenty-one (21) days within which to consider this Release; that this Release provides for a period of at least seven (7) days following execution by Jenkins of this Release for Jenkins to revoke the Release, in which case none of the payments and/or consideration referenced in Section 3 above will be made and/or given; and that this Release is not effective until eight (8) days after execution by all Parties.

     2. Confidential Information. Except to the extent disclosed in the Company’s public filings with the Securities and Exchange Commission (the “SEC”) pursuant to the SEC’s rules and regulations, Jenkins agrees that all terms and conditions contained in this Release are to remain strictly confidential and cannot be disclosed to anyone other than his spouse, attorneys, and accountant who shall be advised of this provision and agree to it before any disclosure to them is made. The confidentiality of the terms and conditions contained herein is part of the consideration inducing the Company to enter into this Release. In the event Jenkins or his spouse, attorneys, or accountant breach the promises contained in this Section 2, Jenkins shall be liable for any damages, including any attorneys’ fees and costs incurred as a result of such breach. Any such action permitted to the Company by the foregoing, however, shall not affect or impair any of Jenkins’ obligations or promises made pursuant to this Release.

     3. Defense. Jenkins understands and agrees that this Release may be asserted as a full and complete defense to, and may be used as the basis for an injunction against any action, lawsuit, administrative charge, or any other claim instituted, prosecuted, maintained, or attempted by

Jenkins in violation of this Release and consistent with applicable law(s). This Release shall be binding on Jenkins, his spouse, heirs, successors, and assigns, and inure to the benefit of the Releasees.

     4. Arbitration. Any dispute regarding any aspect of this Release or any act which allegedly has or would violate any provision of this Release (“Arbitrable Dispute”) will be submitted to arbitration in Dallas, Texas before an experienced arbitrator licensed to practice law in the State of Texas and selected in accordance with the Model Employment Arbitration Procedures of the American Arbitration Association, as the exclusive remedy for such claim or dispute. Should any party to this Release hereafter institute any legal action or administrative proceeding against the other with respect to any claim(s) released by this Release or pursue any Arbitrable Dispute by any method other than said arbitration, the responding party shall be entitled to recover from the initiating party all damages, costs, expenses, and attorneys’ fees incurred as a result of such action.

     5. Modification of Release. This Release may not be changed or modified or released or discharged or abandoned or otherwise terminated, in whole or in part, except by an instrument in writing signed by the Parties hereto.

     6. Severability. This Release is severable, and if any provision of this Release is determined to be void, unenforceable, or invalid for any reason, the remainder of this Release shall be considered valid and operative and effect shall be given to the intent manifested by the parties.

     7. Assignment. Jenkins warrants that no claims, demands, damages, actions, causes of action, or suits in equity, hereby released, have been filed, asserted, or assigned to a third party.

     8. Understanding. Jenkins warrants and affirms that he has read this Release and fully understands it to be a compromise and settlement and release of all claims, known or unknown, present or future, that he has or may have against any of the Releasees arising out of his employment with the Company or retirement therefrom. Jenkins warrants that he is legally competent to execute this Release.

     9. Notices. All notices pursuant to this Release shall be in writing and sent certified mail, return receipt requested, addressed as follows:

To the Company:	Tandy Brands Accessories, Inc. 690 East Lamar Blvd., Suite 200 Arlington, Texas 76011 Attn: N. Roderick McGeachy, III
To Jenkins:	J.S.B. Jenkins 5101 Forest Lake Ct. Arlington, Texas 76017
With a copy to:	Dan McElroy Attorney at Law dan@mcelroy-law.com

     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 Section 9.

     10. Governing Law. This Release shall be construed and enforced under the laws of the State of Texas, without regard to principles of conflicts of laws .

     11. Voluntary Agreement. The parties to this Release represent that they have the advice and counsel of their own attorney, if deemed necessary, and that they are relying upon their own and their attorneys’ judgment, belief and knowledge with respect to the nature, extent and duration of their claims, to the extent such counsel has been provided. Jenkins executes this Release voluntarily, without duress or coercion of any sort whatsoever.

[Remainder of Page Intentionally Left Blank]

     IN WITNESS WHEREOF, the parties hereto have executed this Release on the respective dates set forth below.

TANDY BRANDS ACCESSORIES, INC.
By:
	N. Roderick McGeachy, III Chief Executive Officer	J.S.B. Jenkins

Date: Date:

STATE OF TEXAS

COUNTY OF TARRANT §
§
§

     SUBSCRIBED AND SWORN TO BEFORE ME, the undersigned authority, by J.S.B. Jenkins, on this       day of          , 200   .

	NOTARY PUBLIC in and for The State of Texas
My Commission Expires:
	Typed or Printed Name of Notary Public

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.

May 14, 2009	/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.

May 14, 2009	/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 March 31, 2009 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.

May 14, 2009	/s/ N. Roderick McGeachy, III
	N. Roderick McGeachy, III
	President and Chief Executive Officer
	/s/ M.C. Mackey
	M.C. Mackey
	Chief Financial Officer