UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.   )

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TANDY LEATHER FACTORY, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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TANDY LEATHER FACTORY, INC.

1900 Southeast Loop 820

Fort Worth, Texas 76140-1003

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Dear Tandy Leather Factory, Inc. Stockholders:

On Tuesday June 4, 2024, Tandy Leather Factory, Inc. will hold our 2024 Annual Meeting of Stockholders at the Tandy retail store #4, adjacent to its principal office in Fort Worth, Texas (address shown above). The meeting will begin at 9:00 a.m. local time.

Only stockholders who owned common stock at the close of business on April 15, 2024, may vote at the Annual Meeting or any adjournments that may take place. At the Annual Meeting, we will consider:

(1)
The election of a seven-member Board of Directors for a one-year term;

(2)
Ratification of appointment of our independent registered public accounting firm;

(3)
An advisory vote on executive compensation as disclosed in these materials; and

(4)
Any other business properly presented at the meeting.

Our Board of Directors recommends that you vote in favor of Proposals 1, 2 and 3. Our proxy statement also outlines certain of our corporate governance practices and discusses our compensation philosophy and practices, and it describes the Audit Committee’s recommendation to the Board of Directors regarding our 2023 financial statements. We encourage you to read these materials carefully.

Under the rules approved by the U.S. Securities and Exchange Commission, we are now furnishing proxy materials on the Internet to our stockholders. Instructions on how to access and review the proxy materials on the Internet can be found on the Notice of Internet Availability of Proxy Materials sent to our stockholders. The Notice of Internet Availability of Proxy Materials will also include instructions for stockholders on how to access the proxy card to vote over the Internet.

Your vote is important. Whether or not you expect to attend the Annual Meeting, we urge you to vote promptly.

By Order of the Board of Directors,

 

Daniel J. Ross

General Counsel and Secretary

TABLE OF CONTENTS

	Page
Special Note on Forward-Looking Information	1
General Information about the Annual Meeting and Voting	1
Security Ownership of Certain Beneficial Owners and Management	4
PROPOSAL ONE: Election of Directors	6
General Information About our Board of Directors	6
Additional Information Concerning our Board of Directors	8
Director Compensation Table	10
Committees of the Board of Directors	10
Nominating and Governance Committee	10
Compensation Committee	11
Audit Committee	11
PROPOSAL TWO: Ratification of appointment of our independent registered public accounting firm	13
Audit Fees	13
Report of the Audit Committee	14
Compensation Discussion and Analysis	15
Report of the Compensation Committee	16
Compensation Tables and Other Information	17
Summary Compensation Table	17
Pay Versus Performance Table	18
Grants of Plan-Based Awards	19
Outstanding Stock Awards	19
PROPOSAL THREE: Advisory Vote on Executive Compensation (“Say on Pay” Vote)	20
Relationships and Transactions with Related Persons	21
Section 16(a) Beneficial Ownership Reporting Compliance	21
Code of Ethics	21
Equity Compensation Plans	22
Other Matters	23
Solicitation of Proxies	23
Stockholder Proposals	23
Stockholder Communications with Board of Directors	23

SPECIAL NOTE ON FORWARD-LOOKING INFORMATION

This document contains certain “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are based on management’s current expectations, that involve risks and uncertainties that could cause actual results to differ materially from current expectations. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “believes,” “may,” “can,” “will,” “should,” “expect,” “confidence,” “trends,” “intend,” “estimate,” “on track,” “are positioned to,” “on course,” “opportunity,” “continue,” “project,” “guidance,” “target,” “forecast,” “anticipate,” “plan,” “potential,” “position,” “see,” “would,” the negative of these terms or comparable terms. These statements include, but are not limited to, those regarding the Company’s future growth strategy and other strategic initiatives. These future events may not occur as and when expected, if at all, and, together with the Company’s business, are subject to various risks and uncertainties. The Company assumes no obligation to revise or update any such forward-looking statements for any reason, except as required by law. The Company’s actual results could differ materially from the results contemplated by these forward-looking statements and are subject to a number of risks, uncertainties, estimates and assumptions that may cause actual results to differ materially from current expectations due to a number of important factors, including but not limited to those described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

Why did I receive proxy materials for the Annual Meeting?

Because you are a stockholder of Tandy Leather Factory, Inc. as of the record date and entitled to vote at the 2024 Annual Meeting of Stockholders (the “Annual Meeting”), our Board of Directors is soliciting your proxy to vote at the Annual Meeting. You are invited to attend our Annual Meeting on June 4, 2024, beginning at 9:00 am Central time. The Annual Meeting will be held at our corporate headquarters, 1900 Southeast Loop 820, Fort Worth, Texas 76140.

Our Annual Report on Form 10-K for the year ended December 31, 2023, including our financial statements for 2023 as well as this proxy statement, is posted on our website at www.tandyleather.com. Choose the “Investor Relations” and then the “SEC Filings” (for 10-K) “Proxy Online” links. These proxy materials are first being made available to stockholders on or about April 25, 2024.

What am I voting on?

You are voting on four items:

1.
Election of seven directors for a term of one year;

2.
Ratification of appointment of our independent registered public accounting firm; and

3.
An advisory vote on Tandy Leather Factory, Inc.’s executive compensation, as disclosed in these materials.

At the date this proxy statement went to print, we were not aware of any other matters to be raised at the Annual Meeting.

What are the voting recommendations of the Board of Directors?

The Board of Directors recommends that you vote your shares:

• “FOR” each of the nominees to the Board of Directors;

• “FOR” the ratification of appointment of our independent registered public accounting firm; and

• “FOR” the approval, on an advisory basis, of the compensation of Tandy Leather Factory, Inc.’s named executive officers as disclosed in these materials.

What is the Notice of Internet Availability of Proxy Materials?

In accordance with rules and regulations adopted by the U.S. Securities and Exchange Commission, or the SEC, instead of mailing a printed copy of this proxy statement to all of our stockholders entitled to vote at the Annual Meeting, we are furnishing the proxy materials to our stockholders over the Internet. If you received a Notice of

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Internet Availability of Proxy Materials, or the Notice, by mail, you will not receive a printed copy of the proxy materials. Instead, the Notice will instruct you as to how you may access and review the proxy materials and submit your vote via the Internet or by telephone. If you received a Notice by mail and would like to receive a printed copy of the proxy materials, please follow the instructions for requesting such materials included in the Notice.

You may also choose to receive future proxy materials by e-mail by following instructions provided on the website referred to in the Notice. Choosing to receive your future proxy materials by e-mail will save us the cost of printing and mailing documents to you and will reduce the impact of our Annual Meeting on the environment. If you choose to receive future proxy materials by e-mail, you will receive an e-mail next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by e-mail will remain in effect until you terminate it.

On the date of the mailing of the Notice, all stockholders will have the ability to access all of our proxy materials on a website referred to in the Notice. These proxy materials will be available free of charge.

Who is entitled to vote?

Holders of record of shares of our common stock as of the close of business on April 15, 2024 (the record date) are entitled to vote at the Annual Meeting. As of that date, a total of 8,401,972 shares of common stock were outstanding and entitled to vote. Each share of common stock is entitled to one vote.

What is the difference between holding shares as a stockholder of record and as a beneficial owner?

Many stockholders hold their shares through a stockbroker, bank, or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.

Stockholder of Record. If your shares are registered directly in your name with our transfer agent, Broadridge Corporate Issuer Solutions, you are considered, with respect to those shares, the stockholder of record, and these proxy materials are being sent directly to you by us.

Beneficial Owner. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in “street name”, and the Notice or proxy materials are being forwarded to you by your broker or nominee who is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you are invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote these shares in person at the Annual Meeting, unless you bring with you a legal proxy from the stockholder of record. Your broker or nominee has enclosed a voting instruction card for you to use in directing the broker or nominee how to vote your shares.

How do I vote?

Your vote is important. Because many stockholders cannot attend the Annual Meeting in person, it is necessary that a large number be presented by proxy.

If you are a stockholder of record, there are four ways to vote:

• By Internet, by visiting the website shown on the Notice or the proxy card and following the instructions;

• By telephone, by calling the toll-free number shown on the Notice or the proxy card and following the instructions;

• By completing and mailing your proxy card; or

• By written ballot at the Annual Meeting.

If you vote by Internet or by telephone, your vote must be received by 11:59 PM Eastern Time on June 3, 2024, the business day before the Annual Meeting. Your shares will be voted as you indicate. If you return your proxy card but you do not indicate your voting preferences, your shares will be voted, as the case may be with respect to the item not marked: FOR the election of each of the nominees to the Board of Directors; FOR the ratification of appointment of our independent registered public accounting firm; and FOR the approval, on an advisory basis, of the compensation of Tandy Leather Factory, Inc.’s named executive officers as disclosed in these materials.

If your shares are held in a brokerage account in your broker’s name, you should follow the voting directions provided by your broker or nominee. You may complete and mail a voting instruction card to your broker or nominee

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or, in most cases, submit voting instructions via the Internet to your broker or nominee. If you provide specific voting instructions by mail or the Internet, your shares should be voted by your broker or nominee as you have directed.

We will distribute written ballots to anyone who wants to vote at the Annual Meeting. If you hold your shares in street name, you must request a legal proxy from your broker to vote at the Annual Meeting.

Is my vote confidential?

Yes. It is our policy that all proxies, ballots and vote tabulations that identify the vote of a stockholder will be kept confidential from us and our directors, officers, and employees until after the final vote is tabulated and announced, except in limited circumstances including any contested solicitation of proxies, when required to meet a legal requirement, to defend a claim against us or to assert a claim by us, or when written comments by a stockholder appear on a proxy card or other voting material.

Who counts the votes?

We will appoint an inspector of election for the Annual Meeting who will count the votes cast.

What is the quorum requirement of the meeting?

A majority of the outstanding shares of common stock determined on April 15, 2024, represented in person or by proxy at the Annual Meeting constitutes a quorum for voting on items at the Annual Meeting. If you vote, your shares will be part of the quorum. Abstentions and broker non-votes (discussed below) will be counted in determining the quorum. Neither, however, will be counted as votes cast.

What vote is required to approve the proposals?

The seven nominees for director receiving the highest number of “FOR” votes at the Annual Meeting will be elected to the Board of Directors.

The affirmative vote of a majority of the votes cast at the Annual Meeting in person or by proxy by stockholders entitled to vote on the matter is required for: (1) ratification of the appointment of our independent registered public accounting firm, and (2) the advisory approval of the executive compensation of our named executive officers as described in this proxy statement. Abstentions are not counted for purposes of these proposals.

What if I want to change my vote?

You can change your vote on a proposal at any time before the Annual Meeting for any reason by revoking your proxy. Proxies may be revoked by:

• Filing a written notice of revocation, bearing a date later than the proxy date, with our Secretary at or before the Annual Meeting;

• Properly executing a later proxy relating to the same shares;

• Voting at a later time on the Internet or by telephone, if you previously voted on the Internet or by telephone; or

• Attending the Annual Meeting and voting in person; however, attendance at the Annual Meeting will not in and of itself constitute a revocation of a proxy.

Any written notice revoking a proxy should be sent to: Secretary, Tandy Leather Factory, Inc., 1900 SE Loop 820, Fort Worth, Texas 76140.

Where can I find the voting results of the Annual Meeting?

We plan to announce preliminary voting results at the Annual Meeting and publish final results in a current report on SEC Form 8-K within four business days after the Annual Meeting.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the following as of April 15, 2024, the record date for the Annual Meeting:

• Beneficial owners of more than 5 percent of the outstanding shares of our common stock, other than our officers and directors;

• Beneficial ownership by our current directors, nominees and the named executive officers set forth in the Summary Compensation table below; and

• Beneficial ownership by all our current directors, nominees and the named executive officers as a group, without naming them.

The percentage of beneficial ownership is calculated on the basis of 8,401,972 shares of our common stock outstanding as of April 15, 2024. The information provided in the table is based on our records, information filed with the SEC, and information provided to us, except where otherwise noted.

Security Ownership of Certain Beneficial Owners

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership(1)	Percent of Class
Common Stock	Bandera Partners LLC(2) 50 Broad Street, Suite 1820 New York, NY 10004	2,857,936	34.0%
Common Stock	JCP Investment Partnership, LP(3) 1177 West Loop South, Suite 1650 Houston, TX 77027	859,197	10.2%
Common Stock	First Foundation Advisors(4) 18101 Von Karman Ave., Suite 700 Irvine, CA 92612	826,712	9.8%

Security Ownership of Management

Title of Class	Name of Beneficial Owner	Amount and Nature of Beneficial Ownership(1)	Percent of Class
Common Stock	Janet Carr	439,285	5.2%
Common Stock	Vicki Cantrell(2)	11,687	*
Common Stock	Elaine D. Crowley(3)	4,774	*
Common Stock	Jefferson Gramm(4)	2,864,055	34.1%
Common Stock	James Pappas(5)	874,449	10.4%
Common Stock	Sejal Patel(6)	11,687	*
Common Stock	Diana Saadeh-Jajeh	0	*
Common Stock	Eric Speron(7)	826,712	9.8%
	All Current Directors, Director Nominees and Executive Officers as a Group (8 persons)	5,033,461	59.9%

*
Represents beneficial ownership of less than 1% of our outstanding shares of common stock.

(1)
All shares of common stock are owned beneficially, and such owner has sole voting and investment power, unless otherwise stated. The inclusion herein of shares listed as beneficially owned does not constitute an admission of beneficial ownership. To our knowledge, none of these shares have been pledged.

(2)
Holdings for Ms. Cantrell include 1,512 shares of common stock to be issued within 60 days upon the vesting of restricted stock units held by her.

(3)
Holdings for Ms. Crowley include 2,366 shares of common stock to be issued within 60 days upon the vesting of restricted stock units held by her.

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(4)
Holdings shown for Jefferson Gramm and Bandera Partners, LLC are based on a Schedule 13D/A filed on February 5, 2021, by Mr. Gramm and Bandera Partners, LLC. Bandera Partners, LLC is the investment manager of Bandera Master Fund L.P. in whose name 2,857,936 of our shares are held. Messrs. Gregory Bylinksy and Jefferson Gramm are Managing Partners, Managing Directors and Portfolio Managers of Bandera Partners LLC. Bandera Master Fund L.P. has delegated to Bandera Partners the sole and exclusive authority to vote and dispose of the securities held by Bandera Master Fund. As a result, each of Bandera Partners and Messrs. Bylinksy and Gramm may be deemed to beneficially own the shares held by Bandera Master Fund.

(5)
Holdings shown JCP Investment Management, LLC are based on a Schedule 13D/A filed on December 6, 2018, by JCP Investment Management, LLC. Mr. Pappas, one of our Directors, is a Managing Member and Owner of JCP Investment Management, LLC. As a result, Mr. Pappas may be deemed to beneficially own the shares held by JCP Investment Management, LLC. Holdings for Mr. Pappas include 1,512 shares of common stock to be issued within 60 days upon the vesting of restricted stock units held by him.

(6)
Holdings for Ms. Patel include 1,512 shares of common stock to be issued within 60 days upon the vesting of restricted stock units held by her.

(7)
Holdings for First Foundation Advisors are based on an amendment to Schedule 13D filed on August 4, 2023, by First Foundation Advisors. Eric Speron, a nominee for Director, is a Managing Director of First Foundation Advisors. As a result, Mr. Speron may be deemed to beneficially own the shares held by First Foundation Advisors.

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PROPOSAL ONE: ELECTION OF DIRECTORS

The Board of Directors Recommends a Vote “FOR” All Nominees.

All directors are to be elected at the Annual Meeting to hold office until the next Annual Meeting of stockholders and until their successors have been duly elected and qualified. Currently, there are eight directors as provided by our corporate by-laws. Elaine Crowley, a current director, has informed the Company that she will not stand for reelection for the upcoming term; upon the Annual Meeting, the number of directors shall be reduced from eight to seven. It is the intention of the persons named in the accompanying form of proxy card to vote for the election of all seven nominees listed below for election as our directors unless authority to so vote is withheld. All seven nominees have indicated their willingness to serve for the ensuing term. If any nominee is unable or declines to serve as a director at the date of the Annual Meeting, the persons named in the proxy card have the right to use their discretion to vote for a substitute.

GENERAL INFORMATION ABOUT THE BOARD OF DIRECTORS

Name	Age	Director Since	Position
Vicki Cantrell	66	2017	Director
Janet Carr	63	2018	Director, Chief Executive Officer
Elaine D. Crowley*	65	2021	Director
Jefferson Gramm	48	2014	Chairman of the Board of Directors
James Pappas	43	2016	Director
Sejal Patel	45	2017	Director
Diana Saadeh-Jajeh	54	2024	Director
Eric Speron	44	2023	Director

*
Ms. Crowley has informed the Company that she will not stand for reelection to our Board of Directors.

Vicki Cantrell, 66, is a retail veteran with over 20 years of operational experience. Since January 2020 she has served as Chief Executive Officer for Vendors in Partnership LLC. From September 2017 until June 2018, she served as Retail Transformation Officer for Aptos Inc., where Ms. Cantrell brought transformation strategies to the retailer’s businesses and to the vendor/retail partnership. Prior to that role, Ms. Cantrell served from October 2011 to October 2016 as a Senior Vice President at National Retail Federation, which is the world’s largest retail association. From May 2008 until June 2011, she served as Chief Operating Officer of Tory Burch LLC while it experienced 300% growth. From April 2003 until May 2008 she served as Chief Information Officer of Giorgio Armani, as it underwent a multi-phase CRM implementation. Ms. Cantrell has worked in all facets of the retail industry, as retailer, vendor/partner and industry spokesperson. She has deep expertise in building and executing strategies to meet evolving needs including enhancing customer acquisition, service and loyalty; determining optimal organizational structure in ever-changing environments; and in building robust cyber security programs.

Janet Carr, 63, has served as our Chief Executive Officer and as a member of our Board of Directors since October 2018. Prior to her current role, Ms. Carr served as the SVP of Global Business Development for Caleres (formerly Brown Shoe) from January 2016 until July 2017. While there, she was responsible for international wholesale and retail for all of their brands. Prior to Caleres, Ms. Carr was the President of the Handbag Division of Nine West Group from 2013 to November 2014, where she was responsible for all aspects of design, development and sales in both wholesale and retail. Ms. Carr has deep experience in strategy and consumer insights in various roles at a number of prominent retailers including Tapestry, Inc. (formerly Coach, Inc.), Gap Inc. and Safeway.

Elaine D. Crowley, 65, served as Chief Restructuring Officer of Stage Stores, Inc. from May 2020 to October 2020 and served as a member of its Board of Directors from 2014 to 2020. From 2010 until her retirement in 2012, Ms. Crowley served as Executive Vice President and Chief Financial Officer for Mattress Giant Corporation, a mattress retailer. From 2008 to 2010, Ms. Crowley served as Executive Vice President and Chief Financial Officer and Senior Vice President, Controller and Chief Accounting Officer/Chief Financial Officer for Michaels Stores, Inc., an arts and crafts retailer. From August 1990 to September 2007, Ms. Crowley was employed by The Bombay Company, Inc., a furniture and home goods retailer, most recently as Senior Vice President, Chief Financial Officer and Treasurer. She held that title for administrative purposes while also having served as Liquidation Trustee for the

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Bombay Liquidation Trust from September 2007 to December 2017. She has 11 years of public accounting experience principally with Price Waterhouse. She holds a B.B.A. in accounting from Texas Christian University and is licensed as a certified public accountant in Texas. Ms. Crowley’s tenure in senior executive and financial roles with other retailers and experience as a Certified Public Accountant in the practice of public accounting provides the Board with valuable leadership experience and financial and retail expertise.

Jefferson Gramm, 48, is a portfolio manager at Bandera Partners LLC, which might be deemed to be an affiliate of ours by virtue of holding approximately 34.5% of our outstanding common stock. See “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT” for information regarding Bandera Partners LLC’s ownership of our common stock. Mr. Gramm has been in his present position with Bandera since 2006. His prior experience includes serving as Managing Director of Arklow Capital, LLC, a hedge fund manager focused on distressed and value investments, from October 2004 to July 2006. He has been a Director of Innovative Food holdings since September 2021. He also served as a Director of Ambassadors Group from May 2014 until October 2015 and of Morgan’s Foods Inc. from April 2013 to March 2014. He served as a Director of Peerless Systems Corp from June 2009 to November 2010. He received an M.B.A. from Columbia University in 2003 and a B.A. in Philosophy from University of Chicago in 1996. Mr. Gramm provides a unique and valuable perspective with respect to corporate governance, our stockholder base and stockholder issues in general.

James Pappas, 43, is the managing member and owner of JCP Investment Management, which might be deemed to be an affiliate of ours by virtue of holding approximately 10.5% of our outstanding common stock. Mr. Pappas serves on the board of Innovative Food Holdings, Inc. since 2020. Mr. Pappas also served as a director of US Geothermal, Inc. from September 2016 until April 2018. He served as a director of Jamba, Inc., a health and wellness brand and leading retailer of freshly squeezed juice, from January 2015 to September 2018; he also served on Jamba, Inc.’s Nominating, Corporate Governance and Audit Committees. He served on the board of The Pantry, Inc., the largest independently operated convenience store chains in the U.S. from March 2014 until it was acquired in February 2015. Mr. Pappas also serves on the board of directors of United Natural Foods, Inc., since September 2023 and previously served on the board of directors, including as Chairman of the Board, of Morgan’s Foods from February 2012 to May 2014 until it was acquired. Mr. Pappas received a BBA in Information Technology and a Masters in Finance from Texas A&M University. Mr. Pappas has substantial skills in marketing and branding, as well as experience with growth-oriented businesses. Mr. Pappas also offers a strong tactical and financial background.

Sejal Patel, 45, is a Portfolio Manager at Skale Investments since January 2019. From July 2015 through September 2018, she was a Partner/Advisor at Lake Trail Capital, a private investment firm. Her prior work experience includes serving as Vice President of Indus Capital, a hedge fund manager focused on Asian and Japanese equities, from 2012 to 2015 and Director for Kelusa Capital Management, a hedge fund manager focused on Asian equities, from 2006 to 2012. She served on the Boards of Value Quest Capital, a value fund based in India, since 2014 and the Tiger Foundation, a non-profit organization based in New York, from 2009 to 2018. She received a B.S. in Economics from the University of Pennsylvania. Ms. Patel brings a strong financial and business background to our Board.

Diana Saadeh-Jajeh, 54, has served since October 2023 as EVP- Chief Financial Officer and Chief Operating Officer at Ryvid, Inc., a company dedicated to promoting the accessibility of electrical light-mobility platforms. Prior to Ryvid, she was with GameStop, Inc., a leading specialty retailer in the field of gaming and entertainment, serving as EVP and Chief Financial Officer (July 2022 – August 2023), SVP and Chief Accounting Officer (July 2021 – July 2022 and June 2020 – March 2021) and Interim Chief Financial Officer (March 2021 – July 2021). Prior to GameStop, she was VP-Global Finance Operations and Business Transformation at JUUL Labs, Inc., between November 2018 and January, 2020. Ms. Saadeh-Jajeh earned a B.S. in accounting and finance from San Francisco State University and an MBA in electronic business management from Notre Dame de Namur University. Ms. Saadeh-Jajeh brings to our Board extensive finance and consumer products executive experience, including as a licensed certified public accountant.

Eric Speron, 43, is Managing Director of Equities at First Foundation Advisors, the investment division of First Foundation Inc. (Nasdaq: FFWM), where he has been investing since May 2007. Mr. Speron currently serves as a Director of Keweenaw Land Association, Limited, (OTC: KEWL). Mr. Speron was formerly a board member of UCP, Inc and Lead Independent Director at Vidler Water Resources. At First Foundation he helps lead the Core Portfolio as well as being the Portfolio Manager of the First Foundation Total Return Fund (Nasdaq: FBBYX). Mr. Speron is currently a member of the CFA Institute, Orange County Society of Financial Analysts and an Investor-in-Residence at UCLA’s Benjamin Graham Value Investing Program. He joined First Foundation from

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JPMorgan’s Institutional Equity division. Mr. Speron earned a B.A. from Georgetown University, with a double major in History & Government and a minor in English. Mr. Speron brings to our Board a strong financial, real estate and business background, including as an investor in the Company.

The information relating to the occupations and security holdings of our directors and nominees is based upon information received from them.

ADDITIONAL INFORMATION CONCERNING OUR BOARD OF DIRECTORS

Meeting Attendance

During fiscal 2023, the Board of Directors held four regularly scheduled meetings and one special meeting. All current directors who served during 2023 attended 75% or more of the aggregate of the total number of meetings of the Board of Directors and of committees of the Board of Directors of which he or she was a member and which were held during the time that he or she was a director or member of such committee, as applicable. We encourage and expect our directors to attend our Annual Meeting absent extenuating circumstances, but we do not have a formal policy requiring attendance. All of our directors attended our Annual Meeting held in 2023.

Director Independence

The Board of Directors has considered the listing requirements of Nasdaq for “independence” of directors, and it has determined that our non-employee directors Vicki Cantrell, Elaine D. Crowley, Jefferson Gramm, James Pappas, Sejal Patel, Diana Saadeh-Jajeh and Eric Speron are independent under these requirements. Our non-employee directors hold executive sessions at each regular meeting, unless they determine there is not a need for such session.

Board of Directors Leadership Structure

The Board of Directors has determined it appropriate to separate the roles of CEO and Chairman, allowing the CEO to run Tandy Leather Factory, Inc. and the Chairman to run the Board of Directors. Janet Carr has been our Chief Executive Officer since October 2018. Jefferson Gramm, one of our directors, has been Chairman of the Board since 2017. We believe our CEO and our Chairman have an excellent working relationship that has allowed the CEO to focus on the challenges that we face in the current business environment. The separation of the CEO and Chairman positions provides strong leadership for our Board of Directors, while also positioning our CEO as our leader in the eyes of our customers, employees, and other stakeholders.

Our Board of Directors currently consists of six independent members and one non-independent member. We have three committees of the Board of Directors comprised solely of independent directors. We believe that the number of independent, experienced directors that make up our Board of Directors benefits us and our stockholders.

Risk Oversight

The Board of Directors’ role in risk oversight is administered directly and through its standing committees, with each committee’s role more fully described in the “Committees of the Board of Directors” section below. The Audit Committee assists the Board in fulfilling its oversight responsibility relating to the performance of our system of internal controls, the integrity of our financial statements, legal and regulatory compliance, our audit, accounting and financial reporting processes, the qualifications, independence and work of our independent registered public accounting firm, and the evaluation of enterprise risk issues, particularly those risk issues not overseen by other committees. The Compensation Committee is responsible for overseeing the management of risks relating to our compensation programs, policies and practices. The Nominating and Governance Committee manages risks associated with corporate governance, related person transactions, succession planning, business conduct and ethics, and the performance of the Board, its committees and directors.

While each committee is responsible for evaluating certain risks and overseeing the management of those risks, the entire Board is regularly informed about those risks through committee reports or by attending committee meetings. The reports presented to the Board include discussions of committee agenda topics, including matters involving risk oversight. The Board also directly considers specific topics, including risks associated with our strategic plan, capital structure, information/cyber security and development activities. Members of management who supervise the day-to-day risk management responsibilities periodically provide reports to the Board as a whole and to the committees as requested.

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Director Compensation

Compensation of non-employee directors is determined by the Board. Our non-employee directors are paid an annual cash retainer of $16,000. In addition, the Chair of each of the Audit Committee, Compensation Committee and Nominating/Governance Committee is paid an additional annual retainer of $3,000 per committee; members of the Audit Committee (including the Chair) are paid an additional retainer of $2,000. All directors are reimbursed for reasonable expenses incurred in connection with their service on our Board of Directors, including the committees thereof.

We generally award restricted stock units annually to each non-employee director in accordance with our 2023 Restricted Stock Plan; these grants generally have a value equal to approximately $14,000 (based on the fair market value of our common stock as of the date of grant) and vest equally over a four-year period from the date of grant. In June 2023, we awarded each non-employee director other than Mr. Gramm and Mr. Speron (who voluntarily declined this equity grant) a grant of restricted stock units with a fair market value equal to $14,000 as of the grant date; the shares underlying the 2023 awards will vest equally over a four-year period from the date of grant, conditioned on the recipient’s continued service on our Board of Directors.

The goal of our restricted stock unit grants to directors is to attract and retain competent non-employee personnel to serve on our Board of Directors by offering them long-term equity incentives. Each of our non-employee directors is eligible to participate in this plan.

Board Diversity Matrix

The table below provides certain information with respect to the composition of the Board. Each of the categories listed in the table has the meaning ascribed to it in Nasdaq Listing Rule 5605(f).

Board Diversity Matrix
	(as of April 25, 2024)				(as of September 28, 2023)
Total Number of Directors	7				7
Part I: Gender Identity	Female	Male	Non- Binary	Did Not Disclose Gender	Female	Male	Non- Binary	Did Not Disclose Gender
Directors	4	3			4	3
Part II: Demographic Background
African American or Black
Alaskan Native or Native American
Asian	1				1
Hispanic or Latinx
Native Hawaiian or Pacific Islander
White	2	2			2	2
Two or More Races or Ethnicities	1	1			1	1
LGBTQ+
Did not Disclose Demographic Background

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DIRECTOR COMPENSATION TABLE

The table below summarizes the compensation paid by us to our non-employee directors for their service on the Board during the year ended December 31, 2023. Our directors who are also employees receive no additional compensation for serving as directors.

Name	Fees Earned or Paid in Cash ($)(1)	Restricted Stock Awards ($)(2)	Total ($)
Vicki Cantrell	$21,500	$14,000	$35,500
Elaine D. Crowley	21,000	14,000	35,000
Jefferson Gramm	—	—	—
James Pappas	4,000	14,000	18,000
Sejal Patel	18,000	14,000	32,000
Eric Speron	—	—	—

(1)
Mr. Gramm and Mr. Speron (who joined the Board in June 2023) declined to receive any cash compensation. Beginning May 2023, Mr. Pappas also declined to receive any cash compensation.

(2)
Mr. Gramm and Mr. Speron declined to receive any grant of Restricted Stock.

COMMITTEES OF THE BOARD OF DIRECTORS

As of the date of this proxy statement, our Board of Directors has three committees: (1) Audit Committee, (2) Compensation Committee, and (3) Nominating and Governance Committee. The membership as of the date of this proxy statement and the function of each committee are described below.

Name of Director	Audit	Compensation	Nom/Gov
Non-Employee Directors:
Vicki Cantrell	X		C
Elaine D. Crowley	C	X
Jefferson Gramm		X	X
James Pappas			X
Sejal Patel	X
Eric Speron		C
Employee Director:
Janet Carr
Number of Meetings in 2023	5	3	2

X = Committee member; C = Committee Chair

Nominating and Governance Committee

We have a Nominating and Governance Committee consisting of three directors, all of whom are “independent” under the listing requirements of Nasdaq. The Nominating and Governance Committee met two times during 2023.

The Board of Directors has adopted a written charter for the Nominating and Governance Committee, which is available on our website at www.tandyleather.com. This charter provides that the Nominating and Governance Committee is responsible for identifying individuals qualified to become directors consistent with criteria as may be established by the Board of Directors. The charter also provides that the Nominating and Governance Committee shall take into account such additional factors as it deems appropriate in evaluating candidates. These factors may include strength of character, mature judgment, career specialization, relevant technical skills, diversity and the extent to which a candidate would fill a present need on the Board of Directors. In addition, the charter states that the Nominating and Governance Committee will consider stockholder recommendations of director nominees, as well as nominations by our senior officers. The Nominating and Governance Committee evaluates all director nominees in a like manner without regard as to who recommended the nomination. Traditionally, we have not engaged third parties to identify or evaluate potential directors or to assist in that process. In addition, the Nominating and Governance Committee makes a review and evaluation periodically of the Board of Directors and the Nominating and Governance Committee’s own performance. Further, the Nominating and Governance Committee, among other

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functions: (1) conducts an annual performance evaluation of the full Board and all committees; (2) reviews and recommends changes to the Company’s governing documents (charter, bylaws, governance principles, etc.), (3) recommends persons to serve on the Nominating and Governance Committee as members, as well as the possible removal of any incumbent Nominating and Governance Committee members, and (4) reviews and approves any “related party” transactions with the Company’s directors and officers.

Stockholders may nominate director nominees for consideration by writing to our Secretary at 1900 Southeast Loop 820, Fort Worth, Texas 76140-1003. Any such nomination must include:

• As to each person whom the stockholder proposes to nominate for election or re-election as a director, all information relating to such person that is required by the Company’s Bylaws and required to be disclosed in solicitations of proxies for election of directors, or as otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, or any successor regulation thereto (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and

• The information regarding the nominating stockholder that is required by the Company’s Bylaws, including (but not limited to) the nominating stockholder’s name and address, as they appear on our books, and the class and number of our shares beneficially owned by him.

The Nominating and Governance Committee recommended to the Board of Directors that all seven director nominees listed in this proxy statement serve as directors for a term ending on the date of the 2025 Annual Meeting of Stockholders.

The Nominating and Governance Committee will consider nominees for directors recommended by our stockholders and will evaluate such nominees using the same criteria used to evaluate director candidates as described above. Nominations of persons for election to the Board of Directors may be made by any stockholder entitled to vote for the election of directors at the applicable meeting that complies with the notice procedures set forth in our bylaws. Such nominations shall be made pursuant to timely notice in writing to our Secretary. To be timely, a stockholder’s notice shall be delivered to or mailed and received at our principal executive offices not less than 30 days nor more than 60 days prior to the applicable meeting; provided, however, that if less than 40 days’ notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholders to be timely must be so received not later than the close of business on the 10^th day following the date on which such notice of the date of the meeting was mailed or such public disclosure was made. Any adjournment(s) or postponement(s) of the original meeting whereby the meeting will reconvene within 30 days from the original date shall be deemed for purposes of notice to be a continuation of the original meeting and no nominations by a stockholder of persons to be elected directors may be made at any such reconvened meeting other than pursuant to a notice that was timely for the meeting on the date originally scheduled. The stockholder’s notice shall set forth: (i) as to each person whom the stockholder proposes to nominate for election or re-election as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or as otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, or any successor regulation thereto (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (ii) as to the stockholder giving notice (a) the name and address, as they appear on our books, of such stockholder, and (b) the class and number of our shares that are beneficially owned by such stockholder.

Compensation Committee

The Compensation Committee is responsible for recommending to the Board of Directors the compensation program of the executive officers. The Compensation Committee consists of three directors, all of whom are “independent” under the listing requirements of Nasdaq. The Compensation Committee submits all issues concerning executive compensation to the full Board of Directors for approval. It may not delegate this authority. The Board of Directors has adopted a written charter for the Compensation Committee, which is available on our website at www.tandyleather.com. The Compensation Committee met three times during 2023.

Audit Committee

The Audit Committee’s basic role is to assist the Board of Directors in fulfilling its fiduciary responsibility pertaining to our accounting policies and reporting practices. Among other duties, the Audit Committee is to be the Board of Directors’ principal agent in assuring the independence of our outside auditor, the integrity of management, and the

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adequacy of disclosures to stockholders. The Audit Committee has been structured to comply with the requirements of Section 3(a)(58)(A) of the Exchange Act. The Board of Directors has determined that all members of the Audit Committee are “independent” under the applicable rules of the Nasdaq and that Elaine D. Crowley, Chair of the Audit Committee, qualifies as an “audit committee financial expert” within the meaning of Item 407(d)(5) of Regulation S-K. The Board of Directors has adopted a written charter for the Audit Committee, which is available on our website at www.tandyleather.com. The Audit Committee met five times during 2023. The Report of the Audit Committee for the fiscal year ended December 31, 2023, appears below.

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PROPOSAL TWO: RATIFICATION OF APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors Recommends a Vote “FOR” the ratification of appointment of our independent registered public accounting firm for fiscal year 2024.

The Audit Committee has appointed Whitley Penn (“Whitley Penn”) to serve as our independent registered public accounting firm for fiscal year 2024. We are asking stockholders to ratify the appointment of Whitley Penn as our independent registered public accounting firm at the 2024 annual meeting of stockholders. Representatives of Whitley Penn are expected to be present at the Annual Meeting. They will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.

Our bylaws do not require that the stockholders ratify the appointment of Whitley Penn as our independent auditors. However, we are submitting the appointment of Whitley Penn to the stockholders for ratification as a matter of good corporate practice. If the stockholders do not ratify the appointment, the Board of Directors and the Audit Committee will consider this fact when it appoints the independent auditors for the fiscal year ending December 31, 2025. Even if the appointment of Whitley Penn is ratified, the Audit Committee retains the discretion to appoint a different independent auditor at any time if it determines that such a change is in the best interests of the Company and our stockholders. At this time, the Board and the Audit Committee believe that the retention of Whitley Penn to serve as our independent auditors is in the best interest of the Company and our stockholders.

Audit and other Professional Fees

Weaver & Tidwell L.L.P. (“Weaver”) performed the audits of our 2023 and 2022 financial statements, as well as the reviews of the financial statements included in our Forms 10-Q for the same periods. The amounts shown below are the aggregate amounts paid to Weaver during 2023 and 2022 for services in the categories indicated and include fees for services relating to those prior years.

Types of Fees	2023	2022
Audit fees	$301,000	$271,000
Audit-related fees	0	0
Tax fees	3,800	3,800
All other fees	21,474	38,454
Total	$326,274	$313,254

In accordance with the charter of our Audit Committee as in effect at the relevant times and the rules of the SEC, the Audit Committee approved all of the fees indicated above before the services were provided. The Audit Committee considered the services listed above to be compatible with maintaining Weaver’s independence.

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Report of the Audit Committee

As members of the Audit Committee, we oversee Tandy Leather Factory, Inc.’s financial reporting process on behalf of the Board of Directors. Management is responsible for the preparation, presentation, and integrity of our financial statements, accounting and financial reporting principles, internal controls, and procedures designed to ensure compliance with accounting standards, applicable laws, and regulations. The independent auditors are responsible for auditing the annual consolidated financial statements prepared by management and expressing an opinion as to whether those financial statements conform with accounting principles generally accepted in the United States of America.

The Audit Committee is also responsible for selecting and evaluating the independence of the Company’s independent auditors and for pre-approving the audit and non-audit services rendered by the independent auditors. During 2023 we recommended, and the Board of Directors approved, the appointment of Weaver as independent auditors for the year ended December 31, 2023.

The Audit Committee reviewed and discussed the audited consolidated financial statements for the fiscal year ended December 31, 2023, with management and the Company’s independent auditors. These discussions included a review of the reasonableness of significant judgments, the acceptability of the Company’s accounting principles and such other matters as are required to be discussed with the Audit Committee. The Audit Committee has received from Weaver the written disclosures and the letter required by the applicable requirements of the PCAOB regarding Weaver’s communications with the Audit Committee concerning independence, and the Audit Committee has discussed with Weaver their independence from us and our management. Based upon the review and discussions described in this report, the Audit Committee recommended to the Company’s Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, that has been filed with the Securities and Exchange Commission.

The foregoing report was submitted by the Audit Committee and shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A promulgated by the SEC or Section 18 of the Exchange Act.

AUDIT COMMITTEE:
	Elaine D. Crowley, Chair
	Vicki Cantrell
	Sejal Patel

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COMPENSATION DISCUSSION AND ANALYSIS

The primary focus of our executive compensation programs is to improve our performance year over year and over a longer-term period. The compensation programs were designed to provide the tools necessary to hire executives with the skills needed to manage Tandy Leather Factory, Inc. to meet these goals and to retain them over the long-term. In developing the programs, a key consideration was to have plans that were easy to understand and administer, while being competitive with companies of similar size and philosophy. Over the past several years, management and the Compensation Committee have worked to refine the compensation programs used to ensure that they support these goals and our ongoing business objectives. Our philosophy has been to reward team performance, measured by our overall results. Each executive officer’s compensation is linked to their individual contribution toward increases in the size of our operations, our income, and increases in stockholder value. At the 2023 Annual Meeting, stockholders were asked to approve Tandy Leather Factory, Inc.’s 2022 executive compensation programs. Approximately 93% of the shares voted approved the program. In consideration of these results and other factors the Compensation Committee evaluates on a regular basis, the Compensation Committee concluded that Tandy Leather Factory, Inc.’s existing executive compensation programs continue to be appropriate to support Tandy Leather Factory, Inc.’s compensation philosophy and objectives described in this discussion.

Compensation for our executive officers consists of the following components:

• Base salary;

• Annual incentive bonus;

• Restricted stock unit grants;

• Retirement and other benefits, and

• Employment Agreements.

Each of these elements of pay is described below.

Company Performance. In 2023, Tandy Leather Factory, Inc.’s sales decreased approximately 5% from 2022, and net income increased by approximately 317%.

Base Salary

Base salaries are intended to reward our executive officers based upon their roles within Tandy Leather Factory, Inc. and for their performance in those roles. Base salaries are established when an executive officer is hired, based on prior experience and compared to salaries for comparable positions in other companies. Base salaries are generally increased annually, if market factors dictate such increases and assuming our financial performance is satisfactory.

Bonuses

We may award discretionary bonuses to our Chief Executive Officer, as determined by the Compensation Committee. We determine these bonuses on a subjective basis, considering business prospects for the upcoming year and the improvement in our net income and financial position for the year in question. These discretionary bonuses may be awarded annually and paid generally in the first quarter of the following year. We did not award any bonuses to our Chief Executive Officer for 2023.

Restricted Stock Unit Grants

We award restricted stock unit grants to promote long-term retention of executive officers and permit them to accumulate equity ownership in Tandy Leather Factory, Inc., so that the interests of our management team are directly aligned with the interest of our stockholders. We believe it is important to have an element of compensation that is focused directly on retaining talent so that we can minimize potential loss of company and industry knowledge and the disruption inherent in unplanned turnovers. Restricted stock unit grants also align our executive officers with our stockholders by making them stockholders themselves. Retaining talent and aligning interests encourages our executive officers to take actions to enhance the value of our business and increase stockholder value. Time-based restricted stock unit awards generally vest equally over three or four years. In October 2023, we granted an aggregate of 276,000 restricted stock units with a then-current value (if vested) of $1,181,280 to our Chief Executive Officer as a continuation of equity grants she had received upon joining the Company in October 2018. These restricted stock units will vest in three equal installments on each of October 2, 2024, 2025 and 2026 (the anniversaries of her start date of employment), subject to her continued employment with the Company.

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Retirement and Other Benefits

Our benefits program includes a retirement plan and a group insurance program. The objective of the program is to provide executive officers with reasonable and competitive levels of protection against the four contingencies (retirement, death, disability and ill health) that could interrupt the executive officer’s employment and/or income received as an active employee. Our retirement plans are designed to provide a competitive level of retirement income to our executive officers and to reward them for continued service with Tandy Leather Factory, Inc. The retirement program for executive officers consists of a tax-qualified 401(k) Plan that covers all full-time employees. The group insurance program consists of life and health insurance benefits plans that cover all full-time employees.

Employment Agreement with Ms. Carr

We entered into an employment agreement with Janet Carr, CEO, dated as of October 2, 2018. Under this agreement, Ms. Carr was entitled to receive an initial annual base salary of $500,000, subject to annual 3% increases for cost of living (which Ms. Carr declined to take until mid 2022), and is eligible to receive an annual discretionary bonus, as determined by the Board. Also under this agreement, on October 2, 2018, Ms. Carr received: (i) a time-based equity grant of 460,000 restricted stock units (“RSUs”) that vested over five years from the date of the grant; (ii) a performance-based equity grant of 92,000 RSUs that will vest if/when the Company’s operating income exceeds $12 million dollars two fiscal years in a row; and (iii) a performance-based equity grant of 92,000 RSUs that will vest if/when the Company’s operating income exceeds $14 million dollars in one fiscal year. On October 23, 2023, the Company granted Ms. Carr 276,000 RSUs that will vest over three years as described under “Restricted Stock Units” above. Ms. Carr was also reimbursed for reasonable costs and expenses in connection with her commute and relocation from New York to Texas in 2019. If Ms. Carr’s employment is terminated by the Company without Cause or by Ms. Carr for Good Reason (each as defined in her employment agreement), Ms. Carr would receive twelve months of base salary and an annual reimbursement of COBRA payments and vest in a pro-rata portion of the time-based RSUs granted in October 2023, based on the number of days that Ms. Carr was employed. Any unvested performance-based RSUs would be forfeited. In the event that Ms. Carr’s employment is terminated by the Company without Cause or by Ms. Carr for Good Reason within six months prior to or one year after a Change in Control (as defined in her employment agreement), Ms. Carr would receive thirty-six months of base salary and an annual reimbursement of COBRA payments and vest in a pro-rata portion of the time-based RSUs granted in October 2023, based on the number of days that Ms. Carr had been employed. Any unvested performance-based RSUs would be forfeited. Under this agreement, a “Change in Control” is a defined term that includes a merger, a sale of all or substantially all of our assets or a similar transaction involving us, a third party acquiring more than 50% of our shares which includes, in general, a person or entity becoming a 50% or greater stockholder of us, a covered removal of directors on our board of directors, or our liquidation or dissolution.

Change in Control Effect on other Restricted Stock Units

Except as described for Ms. Carr’s RSU grants mentioned above and to the extent that the Compensation Committee provides a result more favorable to holders of awards, in the event of a change of control, restricted stock units that are not vested will not automatically vest in connection with a change of control.

Report of the Compensation Committee

The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis (“CD&A”) with management and, based on such review and discussion, recommended to the Board of Directors that the CD&A be included in Tandy Leather Factory, Inc.’s Form 10-K and proxy statement.

The foregoing report was submitted by the Compensation Committee and shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A promulgated by the SEC, other than as provided in Item 407 of Regulation S-K, or to the liabilities of Section 18 of the Exchange Act.

COMPENSATION COMMITTEE:

Eric Speron, Chair

Elaine D. Crowley

Jefferson Gramm

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COMPENSATION TABLES AND OTHER INFORMATION

The following table includes information required by Item 402 of Regulation S-K promulgated by the SEC. The amounts shown represent the compensation paid to our named executive officers for each fiscal year noted in the table, for services rendered to us. For a more complete discussion of the elements of compensation included in this table, please refer to the discussion reflected in “Compensation Discussion and Analysis” above.

SUMMARY COMPENSATION TABLE

Name and Principal Position	Year	Salary	Bonus	Restricted Stock Awards	All Other Compensation	Total
Janet Carr, Chief Executive Officer	2023	$543,506	$—	$1,181,280(1)	$13,915(2)	$1,738,701
	2022	511,661	—	138,426(1)	12,800(2)	662,887

(1)
The amount reported as the value of this stock, which vested immediately upon grant, is based on the grant date fair value of $4.28 per share for the awards granted in 2023 and $5.08 per share for the awards granted in 2022, computed in accordance with FASB ASC Topic 718.

(2)
For 2022, represents $12,200 of matching funds contributed to Ms. Carr’s Company 401(k) plan and $600 of contribution to her health savings account under the Company’s health insurance benefit plan. For 2023, represents $13,200 of matching funds contributed to Ms. Carr’s Company 401(k) plan and $715 of contribution to her health savings account under the Company’s health insurance benefit plan.

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PAY VERSUS PERFORMANCE TABLE

Year	Summary compensation table total for PEO(1)	Compensation Actually Paid to PEO(2)	Average Summary Compensation table total for non-PEO named executive officers(1)	Average Compensation Actually Paid to non-PEO named executive officers	Value of Initial fixed $100 investment based on total shareholder return	Net Income
2023	$1,738,701	$1,733,181(3)	—	—	$133	$3,786,000
2022	$662,887	$443,007(4)	$297,529	$297,529(6)	$133	$1,227,000
2021	$520,635	$1,047,795(5)	$263,126	$263,126(6)	$158	$1,354,000

(1)
Janet Carr was the PEO for all years in the table. Non-PEO named executive officers were Steven Swank and Michael Galvan for 2021 and Michael Galvan for 2022, each of whom served in their positions for partial years in both 2021 and 2022. The Company did not have any non-PEO named executive officers during 2023.

(2)
Excludes the value of 184,000 performance-based restricted stock award units granted to Ms. Carr in 2018, which are included in the “Outstanding Stock Awards” table below. These awards are subject to the achievement of performance criteria; based on the fair value methodology used to account for share-based payments in the Company’s financial statements, it has been determined that since December 30, 2020, the probable outcome of attaining the performance goals is zero. Fair value of stock awards included in compensation actually paid to the CEO is calculated at the required measurement dates; changes to stock award fair values are based on the Company’s updated stock price at the respective measurement dates.

(3)
For 2023, adjustments made to Ms. Carr’s summary compensation table (“SCT”) total to calculate compensation actually paid were: -$1,181,280 for value of equity awards granted in 2023 and included in the SCT; $1,175,760 for value of equity awards granted in 2023 that remained outstanding and unvested at the end of the year; and zero change in fair value of prior year awards still outstanding as of the end of 2022 or awards from the prior year end that vested in 2022.

(4)
For 2022, adjustments made to Ms. Carr’s SCT total to calculate compensation actually paid were: -$138,426 for value of equity awards granted in 2022 and included in the SCT; -$82,800 for the change in fair value of prior year awards still outstanding as of the end of 2022; $138,426 for the fair value of awards granted and vested in 2022; and -$137,080 for the change in fair value of awards from the prior year end that vested in 2022.

(5)
For 2021, adjustments made to Ms. Carr’s SCT total to calculate compensation actually paid were: $358,800 for the change in fair value of prior year awards still outstanding as of the end of 2022; and $168,360 for the change in fair value of awards from the prior year end that vested in 2022.

(6)
For 2021 and 2022, no adjustments were made to the non-PEOs’ SCT total to calculate compensation actually paid, since all compensation was paid in cash or cash equivalents.

Relationship between Compensation Actually Paid disclosed in the Pay Versus Performance Table, and other table elements: Ms. Carr’s SCT compensation in each of 2021, 2022 included a base salary. In 2022, she received an immediately-vested grant of common stock (the “Make-whole Grant”) to compensate her for a temporary base salary cut due to the impact of the Covid-19 pandemic in 2020. In 2023, she received a new grant of 276,000 restricted stock units, vesting through October 2026. Ms. Carr was not awarded any cash bonuses in 2021, 2022 or 2023. As a result, the differences between her SCT totals and compensation actually paid as shown in the table above are primarily due to (1) the annual vesting of portions of the time-based restricted stock grant made to Ms. Carr at the time of her hire in October 2018 and (2) fluctuations in the value of the Company’s common stock over the three years shown in the table. The Company’s Common Stock price rose considerably during 2021, as its business recovered from the 2020 Covid-19 shutdowns and, as the Company now believes, there was some pent-up demand for its products and stimulus-driven buying. The Company’s Common Stock price fell during 2022, as consumer demand was inhibited by inflation and economic uncertainties and remained relatively even during 2023.

For non-PEO named executive officers, the average compensation actually paid is the same as average SCT compensation in both 2021 and 2022, because all elements of compensation received and not forfeited were in cash rather than long-term equity or other forms of compensation with fluctuating values. The Company did not have any non-PEO named executive officers during 2023. The Company maintains a bonus program for executives (excluding the PEO), under which bonuses are paid as a percentage of the executives’ base salary, depending on the Company’s performance in two metrics: sales and operating income. For 2021, Mr. Galvan received a cash bonus of $127,212 under this program based on those two metrics. The Company did not pay any bonuses under this program to its named executive officers for fiscal 2022. The Company’s PEO does not participate in the program but is eligible to receive a discretionary bonus that is not tied to specific performance metrics; Ms. Carr did not receive such a bonus in 2021, 2022 or 2023.

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GRANTS OF PLAN-BASED AWARDS

Name	Grant Date	Estimated future payouts under equity incentive plan awards	All other stock awards: Number of shares of stock or units (#)	Grant date fair value of stock and option awards
Janet Carr	October 23, 2023	0	276,000	$1,181,280

OUTSTANDING STOCK AWARDS

as of December 31, 2023

Name	Number of shares of stock that have not vested (#)	Market value of shares of stock that have not vested ($)
Janet Carr(1)	460,000	$1,959,600

(1)
Vesting is subject to Ms. Carr’s continued employment with the Company. 184,000 of such shares are also subject to the Company’s achievement of specified performance criteria.

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PROPOSAL THREE: ADVISORY VOTE ON EXECUTIVE COMPENSATION (“SAY-ON-PAY” VOTE)

The Board of Directors recommends a vote “FOR” the advisory approval of the executive compensation of our named executive officers as disclosed in this proxy statement.

Based upon a vote of stockholders at our 2023 Annual Meeting, following the Board of Directors’ recommendation for an annual advisory vote to approve the compensation of our named executive officers, we are providing stockholders with an annual advisory vote on executive compensation. The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), which was signed into law July 21, 2010, added Section 14A to the Securities Exchange Act of 1934, as amended, and requires that we provide our stockholders with an opportunity to cast an advisory vote on the compensation of our named executive officers as disclosed in this proxy statement pursuant to the compensation disclosure rules of the SEC. This proposal, commonly known as a “Say-on-Pay” vote, gives stockholders the opportunity to approve, reject or abstain from voting with respect to our fiscal 2023 executive compensation programs and policies and the compensation paid to our named executive officers.

As discussed in this proxy statement under the heading “Compensation Discussion and Analysis,” our executive compensation program is designed to serve us and our stockholders by aligning executive compensation with stockholder interests and by encouraging and rewarding management initiatives that will benefit us and our stockholders, customers, and employees over the long-term.

At last year’s annual meeting, approximately 93% of the votes cast on the advisory vote on executive compensation were in favor of our named executive officer compensation for 2022. We are asking our stockholders to again indicate their support for our named executive officer compensation as described in this proxy statement. This is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we are asking our stockholders to approve, on an advisory basis, the following resolution:

“RESOLVED, that the stockholders of Tandy Leather Factory, Inc. approve, on an advisory basis, the compensation paid to the named executive officers of Tandy Leather Factory, Inc., as disclosed in the 2024 proxy statement pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables, and the related narrative disclosures.”

Approval of this proposal requires the affirmative vote of the holders of a majority of the shares entitled to vote on, and who vote for and against, this proposal. Although your vote on this matter is advisory in nature and therefore will not be binding upon Tandy Leather Factory, Inc., the Compensation Committee or the Board of Directors, your advisory vote will serve as an additional tool to guide the Board of Directors and the Compensation Committee in continuing to improve the alignment of our executive compensation programs with the interests of us and our stockholders. The vote on this resolution is not intended to address any specific element of compensation but rather relates to overall compensation of our named executive officers, as described in this proxy statement in accordance with the compensation disclosure rules of the SEC.

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RELATIONSHIPS AND TRANSACTIONS WITH RELATED PERSONS

For our last two fiscal years, there have been no transactions, and there is no currently proposed transaction, in which we were or are to be a participant and the amount involved exceeds the lesser of $120,000 or one percent (1%) of the average of our total assets at year-end for our last two most recently completed fiscal years, and in which any related person, as defined under Item 404(a) of Regulation S-K, had or will have a direct or indirect material interest. Such related persons include our directors, executive officers, nominees for director, any beneficial owner of more than five percent (5%) of our common stock, and their immediate family members.

Our Code of Business Conduct, which applies to all employees, including our executive officers and our directors, provides that our employees and officers and members of our Board of Directors are expected to use sound judgment to help us maintain appropriate compliance procedures and to carry out our business with honesty and in compliance with law and high ethical standards. In addition, our directors and officers are expected to report any potential related party transactions to the Board of Directors. Our Nominating and Governance Committee, on behalf of the Board of Directors, reviews the material facts of all reported matters, by taking into account, among other factors it deems appropriate, whether a transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related person’s interest in the transaction to determine whether an actual conflict of interest exists. No director may participate in any discussion or approval of a matter for which he or she is a related party. An annual review and assessment of any ongoing relationship with a related party is performed by the Audit Committee and reported to the Board of Directors.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Sections 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers and holders of more than 10% of our common stock to file reports regarding their ownership and changes in ownership of our securities with the SEC. Based solely on a review of the copies of such reports and amendments thereto furnished to us with respect to fiscal 2023, we believe that, during 2023, our 10% stockholders complied with all Section 16(a) filing requirements. As a result of clerical errors by the Company, Forms 4 reporting restricted stock units granted and vested to our directors and executive officer during 2023 were not properly filed.

CODE OF ETHICS

The Company’s Board of Directors has adopted the Tandy Leather Factory, Inc. Code of Business Conduct and Ethics, which applies to the Company’s Chief Executive Officer, Chief Financial Officer, Controller and all other employees and Directors of the Company. This Code can be found at the Company’s website, www.tandyleather.com, under the Investor Relations/Corporate Governance/Highlights tabs.

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EQUITY COMPENSATION PLANS

The following table sets forth information regarding our equity compensation plans (including individual compensation arrangements) that authorize the issuance of shares of our common stock. The information is aggregated in two categories: plans previously approved by our stockholders and plans not approved by our stockholders. The table includes information for officers, directors, employees and non-employees. All information is as of December 31, 2023.

Plan Category	Column (A) Number of Securities to be issued upon exercise of outstanding options, warrants and rights	Column (B) Weighted-average exercise price of outstanding options, warrants and rights	Column (C) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in Column (A)
Equity compensation plans approved by stockholders	252,464	$—	511,008
Equity compensation plans not approved by stockholders	—	—	—
TOTAL	252,464	$—	511,008

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OTHER MATTERS

Solicitation of Proxies

We will pay for the cost of soliciting proxies. Our directors, officers and employees may solicit proxies. They will not be paid for soliciting the proxies but may be reimbursed for out-of-pocket expenses related to the proxy solicitation. Proxies may be solicited in person, by mail, by telephone, by telegram or other means of communication. We will make arrangements with custodians, nominees and fiduciaries in order to forward proxy solicitation materials to beneficial owners of common stock.

Stockholder Proposals for 2025

If you wish to present a proposal for consideration at an annual meeting, you must send written notice of the proposal to our Secretary not less than 90 and not more than 120 days before the anniversary date of the Company’s most recent annual meeting, provided, however, that if the annual meeting is called for a date that is more than 30 days earlier or more than 60 days later than such anniversary date, notice by the stockholder to be timely must be so received not earlier than the opening of business on the 120^th day before the meeting and not later than the later of (x) the close of business on the 90^th day before the meeting or (y) the close of business on the 10^th day following the day on which the public announcement of the date of the annual meeting is first made by the Company. We have not received notice of any stockholder proposals to be presented at this year’s Annual Meeting.

If you would like your proposal to be included in next year’s proxy statement, you must submit the proposal to our Secretary by no later than December 27, 2024, or, if we hold our next annual meeting on a date that is more than 30 days from the anniversary of our 2024 Annual Meeting, a reasonable time before we begin to print and send our proxy materials. We will include your proposal in our next annual proxy statement if it is a proposal that we would be required to include pursuant to the rules of the SEC. You may write to our Secretary at 1900 Southeast Loop 820, Fort Worth, Texas 76140-1003 to present a proposal for consideration.

See “Nominating and Governance Committee” under “Committees of the Board of Directors” for the process for stockholders to follow to suggest a director candidate to the Nominating and Governance Committee for nomination by the Board of Directors or to nominate persons for election to our Board of Directors at an applicable meeting of our stockholders.

If a stockholder raises a matter at the Annual Meeting that requires a stockholder vote, the person to whom you have given your proxy will use his or her discretion to vote on the matter on your behalf. According to our by-laws, any proposal other than the election of directors properly raised at the Annual Meeting by a stockholder will require the affirmative vote of a majority of the shares deemed present at the Annual Meeting, whether in person or by proxy, unless a different approval threshold is required by applicable law.

Stockholder Communications with Board of Directors

Stockholders who wish to communicate with the Chairman or with the directors as a group may do so by writing to our Secretary at Tandy Leather Factory, Inc., 1900 Southeast Loop 820, Fort Worth, Texas 76140-1003. Our Secretary will forward your communication to the directors or Chairman of the Board as requested by the stockholder. All appropriate communications addressed to directors will be reviewed by our Secretary. Because other appropriate avenues of communication exist for matters that are not of stockholder interest, such as general business complaints or employee grievances, communications that do not relate to matters of stockholder interest will not be forwarded to the Board of Directors. Our Secretary has the option, but not the obligation, to forward these other communications to appropriate channels within Tandy Leather Factory, Inc.

Management knows of no other business to be brought before the 2024 Annual Meeting of Stockholders. However, if any other matters shall properly come before such meeting, it is the intention of the persons named in the enclosed Proxy to vote such Proxy in accordance with their best judgment on such matters.

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IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO FILL IN, SIGN AND RETURN THE PROXY IN THE ENCLOSED ENVELOPE, OR TO VOTE ELECTRONICALLY AS DESCRIBED IN THIS PROXY STATEMENT.

	TANDY LEATHER FACTORY, INC.
	Chairman of the Board
Fort Worth, Texas
April 25, 2024

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