EXHIBIT 10.3
AMENDMENT NO. 8 TO THE
TANDY BRANDS ACCESSORIES, INC.
EMPLOYEES INVESTMENT PLAN
     Pursuant to the authority of the undersigned, and the provisions of
Section 15.1 thereof, the Tandy Brands Accessories, Inc. Employees Investment
Plan, as amended and restated July 1, 2000 (the “Plan”) is hereby amended in the
following respects only, effective as of January 1, 2009.
     (1) Article II, Section 2.1 (s) is hereby amended to read as follows:
     (s) Entry Date. The first day of the first payroll period of each calendar
month.
     (2) Article II, Section 2.1, subsection (oo) is hereby amended to read as
follows:
     (oo) Salary Reduction Contributions. Contributions made to the Plan by the
Company, at the election or deemed election of a Participant, in lieu of cash
compensation, pursuant to a payroll withholding agreement, as provided in
Section 4.1 hereof.
     (3) Article II, Section 2.1, subsection (pp) is hereby amended to read as
follows:
     (pp) Salary Reduction Contribution Account. A separate subaccount to which
is credited a Participant’s Salary Reduction Contributions, if any, Catch-Up
Contributions, if any, and any earnings attributable thereto, adjusted to
reflect any withdrawals, distributions or investment losses attributable
thereto.
     (4) Article II, Section 2.1, subsection (vv) is hereby added to read as
follows:
     (vv) Catch-Up Contributions. Contributions made to the Plan by an Employer,
at the election of an eligible Participant, in lieu of cash compensation,
pursuant to a salary reduction agreement, as provided in Section 4.10, or as
otherwise permitted in accordance with Section 5.3 hereof.
     (5) Article II, Section 2.1, subsection (ww) is hereby added to read as
follows:
     (ww) Deemed Election Date. Except as otherwise provided herein, the Entry
Date immediately following the thirty (30)-day period beginning on the later of:
(a) the Employee’s employment commencement date or, (b) the applicable
Notification Date. Notwithstanding the foregoing, in the event that a
Participant is on a Leave of Absence on such Entry Date, such Participant’s
Deemed Election Date shall be delayed to the Entry Date immediately following

1

--------------------------------------------------------------------------------

 

the thirty (30)-day period beginning on the later of: (a) the date on which such
Participant is again actively at work or (b) the applicable Notification Date
following such return to active work. Furthermore, in the event that a
Participant’s employment with the Employer and all Affiliates terminates, any
prior deemed election shall automatically terminate (or, in the event such
termination occurs prior to the Deemed Election Date, whether or not such
employment is later reinstated), such Participant shall have a new Deemed
Election Date, which shall be the Entry Date immediately following the thirty
(30)-day period beginning on the later of: (a) the date on which such
Participant is eligible for re-entry into the Plan, as provided in Section 3.2
hereof or, if employment shall be reinstated, the date of such reinstatement; or
(b) the applicable Notification Date thereafter.
     (6) Article II, Section 2.1, subsection (xx) is hereby added to read as
follows:
     (xx) Notification Date. The date on which the Plan Administrator or, if
later, its authorized delegate, notifies the Participant that, absent a salary
reduction election (including an election to contribute 0% of his Annual
Compensation) filed with the Plan Administrator, he will be deemed to have made
an election under Section 4.1 hereof to have one percent (1%) of his Annual
Compensation contributed to the Trust Fund on his behalf. In the event that a
Participant shall be entitled to an additional notification following a
termination of employment, or return from a Leave of Absence, the date of the
notification by the Plan Administrator or its authorized delegate, following
such return to employment or return to active work shall apply.
     (7) Article III, Section 3.1 is hereby amended to read as follows:
     3.1 Eligibility Requirements. Every Employee on the Effective Date, who was
a Participant in the Prior Plan on the day before the Effective Date, shall
continue to be a Participant in the Plan. Every other Employee shall become a
Participant in the Plan as of the first Entry Date concurrent with or next
following his completion of thirty (30) days of service. Notwithstanding the
foregoing, (a) Employees included in a unit of Employees covered by a collective
bargaining agreement between employee representatives and an Employer, if
retirement benefits were the subject of good faith bargaining between such
employee representatives and the Employer, shall not be eligible to participate
in the Plan unless such collective bargaining agreement expressly provides for
the inclusion of such Employees under the Plan; (b) Non-resident aliens who
receive no earned income from an Employer which constitutes income from sources
within the United States shall not be eligible to participate in the Plan;
(c) Individuals classified as independent contractors or Leased Employees under
the Employer’s customary worker classification procedures shall not be eligible
to participate in the Plan, regardless of whether or not such individual is
actually an employee. An Employee’s allocation of contributions under the Plan
shall take into account his Annual Compensation for only that portion of the
Plan Year during which he is eligible to participate in the Plan.

2

--------------------------------------------------------------------------------

 

     (8) Article IV, Section 4.1 is hereby amended to read as follows:
     4.1 Salary Reduction Contributions. Each Participant may elect to have
contributed on his behalf to the Trust Fund, on a pre-tax basis, any whole
percentage of his Annual Compensation which is not less than one percent (1%)
and which does not exceed twenty-five percent (25%); provided, however, that
such amount may not exceed the dollar limitation contained in Section 402(g) of
the Code in effect for such taxable year of the Participant, except to the
extent permitted under Section 414(v) of the Code, if applicable. Salary
Reduction Contributions shall be elected pursuant to a payroll withholding
agreement, in accordance with Section 5.3 hereof. In the event that a payroll
withholding agreement is not received for a Participant, a payroll withholding
agreement is deemed to have been made and such Participant will be treated as if
he elected one percent (1%) of his Annual Compensation to be contributed on his
behalf to the Trust Fund as of the Deemed Election Date. Salary Reduction
Contributions are at all times one hundred percent (100%) vested and
nonforfeitable. Salary Reduction Contributions made on behalf of a Participant
shall be added to the Trust Fund as soon as practicable after deduction from a
Participant’s paycheck, and shall be credited to the Salary Reduction
Contribution Account of the Participant in accordance with Section 6.1.
     (9) Article IV, Section 4.4 is hereby amended to read as follows:
     4.4 Dollar Limitation of Section 402(g) of the Code. If a Participant’s
Salary Reduction Contributions hereunder should exceed the applicable dollar
amount as set forth in Section 402(g) of the Code ($16,500 for the Participant’s
taxable year beginning 2009), adjusted for increases in the cost of living, as
set forth in Section 402(g)(4) of the Code, the excess (with earnings thereon)
shall be reduced as follows:
     (a) To the extent that such excess Salary Reduction Contributions do not
exceed the applicable dollar amount under Section 414(v) of the Code, reduced by
elective deferrals previously treated as Catch-Up Contributions, for the taxable
year in which the Plan Year ends, whether under this Plan or another applicable
employer plan (as defined in Section 414(v)(6)(A) of the Code), the amount of
such excess Salary Reduction Contributions shall be recharacterized as Catch-Up
Contributions, if such Participant is otherwise eligible to make Catch-Up
Contributions pursuant to Section 4.10 during the taxable year in which the
excess deferral arises;
     (b) If the Participant is not eligible to make Catch-Up Contributions, as
provided in Section 4.10, or to the extent that recharacterization of such
excess Salary Reduction Contributions, together with elective deferrals
previously treated as Catch-Up Contributions, whether under this Plan or another
applicable employer plan (as defined in Section 414(v)(6)(A) of the Code),
exceeds the applicable dollar amount under Section 414(v) of the Code, the
amount of such excess Salary Reduction Contributions shall be distributed to the
Participant. Any distribution under this paragraph (b) shall be made to the
Participant no later than the April 15th immediately following the close of the
Participant’s taxable year with respect to which such excess deferrals were
made.

3

--------------------------------------------------------------------------------

 

     If the Participant also participates in another elective deferral program
(within the meaning of Section 402(g)(3) of the Code) and if, when aggregating
his elective deferrals under all such programs, an excess deferral arises under
the applicable dollar amount set forth in Section 402(g) of the Code with
respect to such Participant, the Participant shall, no later than March 1st
following the close of the Participant’s taxable year, notify the Plan
Administrator as to the portion of such excess deferrals to be allocated to this
Plan and such excess so allocated to this Plan (with earnings thereon) shall be
deemed a Catch-Up Contribution in accordance with paragraph (a) herein, as the
case may be, or distributed to the Participant in accordance with paragraph
(b) herein. In the event there is a loss allocable to an excess deferral, any
distribution to a Participant as required by paragraph (b) of this Section shall
be no greater than the lesser of: (i) the value of the Participant’s Salary
Reduction Contribution Account (without regard to Catch-Up Contributions) or
(ii) the Participant’s excess deferrals for the taxable year.
     In determining the amount of income allocable to excess deferrals, any
reasonable alternative method of calculating income allocable to excess
deferrals may be utilized, including the safe harbor method. Income from the end
of the Plan Year through a date that is no more than seven (7) days before the
actual date of distribution (“gap period” income) will also be calculated and
distributed with such excess deferrals.
     (10) Article IV, Section 4.10 is hereby added to read as follows:
     4.10 Catch-Up Contributions. Each Participant who has or would have
attained age fifty (50) prior to the close of the Participant’s taxable year,
may, as of January 1 of such year, elect to have Catch-Up Contributions
contributed on his behalf to the Trust Fund on a pre-tax basis, in accordance
with, and subject to the limitations of, Section 414(v) of the Code. Except as
otherwise provided under Section 5.3 hereof, Catch-Up Contributions shall be
made pursuant to a salary reduction election. Catch-Up Contributions are at all
times one hundred percent (100%) vested and nonforfeitable. Catch-Up
Contributions made on behalf of a Participant shall be added to the Trust Fund
as soon as practicable after deduction from a Participant’s paycheck and shall
be credited to the Salary Reduction Contribution Account of the Participant.
     (11) Article V, Section 5.1 is hereby amended to read as follows:
     5.1 Individual Accounts. The Committee shall establish an Individual
Account for each Participant showing the monetary value of the individual
interest in the Trust Fund of each Employee, former Employee and Beneficiary.
The Individual Account of each Participant shall be composed of a Company
Matching Contribution Account, to which Company Matching Contributions, if any,
and Catch-Up Contributions, if any, shall be credited and a Salary Reduction
Contribution Account, to which Salary Reduction Contributions, if any, shall be
credited, together with Company Matching Contributions, if any, utilized to
satisfy the deferral percentage test or the contribution percentage test, as set
forth in Sections 4.5 and 4.6 hereof. Qualified Nonelective Contributions, if
any, contributed to satisfy the deferral percentage test or the contribution
percentage test as set forth in Section 4.5 and 4.6 hereof, shall be credited to
a Participant’s Qualified Nonelective Contribution Account. If an individual has
made

4

--------------------------------------------------------------------------------

 

either Prior Plan Employee Contributions or Rollover Contributions, or received
Prior Plan Employer Contributions, then his Individual Account shall include a
Prior Plan Employee Contribution Account, a Rollover Contribution Account and a
Prior Plan Employer Contribution Account, as applicable.
     (12) Article V, Section 5.3 is hereby amended to read as follows:
     5.3 Salary Reduction Elections. Each Participant who desires to make Salary
Reduction Contributions (including an election to contribute 0% of his Annual
Compensation) shall indicate such intent by making a salary reduction election
to be effective as of the first day of the first payroll period for which he
elects Salary Reduction Contributions; provided, that each Participant with
respect to whom a deemed election has been made pursuant to Section 4.1 hereof
shall be deemed to have filed a salary reduction election to be effective as of
the Deemed Election Date. Each Participant who is eligible to make Catch-Up
Contributions under Section 4.10 hereof and who desires to make such
contributions for the taxable year shall indicate such intent by making a salary
reduction election to be effective as of the first day of the first payroll
period for which he elects Catch-Up Contributions. Such elections must be made
prior to the first day of the applicable payroll period and shall be effective
for each payroll period thereafter until modified or amended, as provided below.
     Salary reduction elections (including deemed elections) shall constitute a
payroll withholding agreement between the Participant and the Employer, and
shall constitute authorization for the reduction in Annual Compensation
described above. The terms of such elections shall evidence the Participant’s
intent to have his Employer withhold from his compensation each payroll period
any whole percentage of his Annual Compensation, subject to the applicable
limitations of Article IV. The Employer will make a contribution to the Trust
Fund on behalf of the Participant for each payroll period in an amount equal to
the total amount by which the Participant’s Annual Compensation from the
Employer was reduced during such payroll period pursuant to the salary reduction
election
     Notwithstanding any provision of this Section 5.3 to the contrary, salary
reduction elections shall be governed by the following general guidelines:
     (a) A salary reduction election shall be made in the manner determined by
the Plan Administrator. All salary reduction elections (including deemed
elections) shall apply to each payroll period during which such election is in
effect. Upon termination of employment, such election will become void.
     (b) A Participant may revoke his salary reduction election (or a deemed
election) at any time upon advance notice to the Plan Administrator, within the
time period established by the Plan Administrator, and thus discontinue all
future withholding thereafter. Following such a revocation, a Participant may
elect to resume withholding effective as of the first day of the first full
payroll period next following the payroll period in which the revocation occurs,
or as of the first day of any payroll period thereafter next following timely
receipt by the

5

--------------------------------------------------------------------------------

 

Plan Administrator of such notice. A resumption of withholding following the
revocation of a salary reduction election may be made only upon advance notice
to the Plan Administrator, within the time period established by the Plan
Administrator, and in the manner prescribed by the Plan Administrator. A
Participant may increase the percentage to be withheld from his Annual
Compensation or decrease the percentage to be withheld from his Annual
Compensation upon advance notice to the Plan Administrator, within the time
period established by the Plan Administrator, and in the manner prescribed by
the Plan Administrator, such increase or decrease to be effective as of the
first day of the first full payroll period next following timely receipt by the
Plan Administrator of such notice. Any revocation of or change in the terms of a
salary reduction election shall be made in the manner prescribed by the Plan
Administrator.
     (c) An Employer may unilaterally amend or revoke a salary reduction
election (including a deemed election) at any time, including an amendment to
recharacterize an election of Salary Reduction Contributions as an election of
Catch-Up Contributions, if the Employer determines that such revocation or
amendment is necessary to insure that a Participant’s Annual Additions, as
defined in subsection 6.6(b) hereof, for any Plan Year will not exceed the
limitations of Article VI or to ensure that the requirements of Section 401(k)
of the Code and Sections 4.1 and 4.10 hereof have been satisfied with respect to
the amount that may be withheld and contributed on behalf of a Participant.
     (13) Article VI, Section 6.1 is hereby amended to read as follows:
     6.1 Salary Reduction, Catch-Up Contributions and Rollover Contributions.
Salary Reduction Contributions shall be credited to the Salary Reduction
Contribution Accounts of Participants and former Participants, as of the
Valuation Date coinciding with the date on which Salary Reduction Contributions
and Catch-Up Contributions are received by the Trust Fund, or as soon thereafter
as administratively feasible, in accordance with each Participant’s or former
Participant’s payroll withholding agreement. Rollover Contributions shall be
credited to the Individual Accounts of Participants and Employees as provided in
Section 4.7 hereof.
     (14) Article VII, Section 7.2 is hereby amended to read as follows:
     7.2 Benefit Upon Retirement. Upon Retirement (whether normal or late
Retirement in accordance with Section 7.1), a Participant shall be entitled to
the entire amount to the credit of his Individual Account as of the Valuation
Date concurrent with or next preceding his date of Retirement, together with his
portion, if any, of Salary Reduction Contributions, Catch-Up Contributions and
Company Matching Contributions allocated after his date of Retirement, adjusted
for earnings and losses, if any, which accrue to the Valuation Date immediately
preceding the date of distribution, if later. Upon his Retirement under this
Article VII, a Participant shall receive the benefits to which he is entitled at
the time and in the manner provided in Article XIII hereof.

6

--------------------------------------------------------------------------------

 

     (15) Article VIII, Section 8.2 is hereby amended to read as follows:
     8.2 Benefit. Upon the death of a Participant or former Participant, his
designated Beneficiary or Beneficiaries shall be entitled to the entire vested
amount to the credit of his Individual Account as of the Valuation Date
concurrent with or next preceding his date of death, together with his portion,
if any, of Salary Reduction Contributions, Catch-Up Contributions and Company
Matching Contributions allocated after his date of death, adjusted for earnings
and losses, if any, which accrue to the Valuation Date immediately preceding the
date of distribution, if later. Payment shall be made at the time and in the
manner provided in Article XIII hereof.
     (16) Article IX, Section 9.1 is hereby amended to read as follows:
     9.1 Benefit. In the event of the Disability of a Participant, he shall be
entitled to the entire vested amount to the credit of his Individual Account as
of the Valuation Date concurrent with or next preceding the date on which his
employment terminates as a result of his Disability, together with his portion,
if any, of Salary Reduction Contributions, Catch-Up Contributions and Company
Matching Contributions allocated after the date of his termination of
employment, adjusted for earnings and losses, if any, which accrue to the
Valuation Date immediately preceding the date of distribution, if later.
Payments shall be made at the time and in the manner provided in Article XIII
hereof. A Participant who suffers a Disability who has not terminated employment
may request an in-service withdrawal in accordance with Section 13.10 hereof.
     (17) Article XIII, Section 13.7 is hereby amended to read as follows:
     13.7 Financial Hardship Withdrawals. A Participant may, upon the approval
of the Committee, withdraw any portion of his Individual Account, other than
amounts attributable to income on such Participant’s Salary Reduction
Contributions, on account of financial hardship. A Participant who wishes to
request a hardship withdrawal shall file with the Committee a written request
for withdrawal, on a form provided by the Committee. The Committee shall adopt
uniform and nondiscriminatory rules regarding the granting of such requests and
shall evaluate hardship requests made under this Section 13.7. Financial
hardship means an immediate and heavy financial need of the Participant for
which funds are not reasonably available from other resources of the
Participant. If approved by the Committee, any withdrawal for financial hardship
may not exceed the amount required to meet the immediate financial need created
by the hardship. Furthermore, the Committee shall not approve the request of any
Participant for a hardship withdrawal, unless the Participant has theretofore
made all withdrawals, other than hardship withdrawals, and has theretofore
obtained all loans permitted under all plans maintained by the Employer. The
determination of whether a Participant suffers sufficient hardship to justify
the granting of his written request and of the amount permitted to be withdrawn
under this Section 13.7 shall be made in the sole and absolute discretion of the
Committee after a full review of the Participant’s written request and evidence
presented by the Participant showing financial hardship.

7

--------------------------------------------------------------------------------

 

     A distribution will be treated as necessary to satisfy a financial hardship
if the Committee relies upon the Participant’s written representation, unless
the Committee has actual knowledge to the contrary, that the hardship cannot
reasonably be relieved:
     (a) through reimbursement or compensation by insurance or otherwise:
     (b) by liquidation of the Participant’s assets;
     (c) by cessation of Salary Reduction Contributions and Catch-Up
Contributions under the Plan; or
     (d) by other distributions or nontaxable (determined at the time of the
loan) loans from plans maintained by the Employer, or any other employer of such
Participant, or by borrowing from commercial sources on reasonable commercial
terms in an amount sufficient to satisfy the financial hardship.
     Upon a Participant’s receipt of a withdrawal for financial hardship, such
Participant shall be prohibited from making Salary Reduction Contributions and
Catch-Up Contributions for a period of six (6) months, beginning on the date on
which the hardship withdrawal is made. A Participant may elect to resume Salary
Reduction Contributions and Catch-Up Contributions as of the first payroll
period commencing on or after the Entry Date next following the last day of such
six (6) month period by executing a new payroll withholding agreement within the
time period prior to such date established by the Committee.
     Expenses which may warrant approval of a Participant’s request for a
hardship withdrawal include:
     (i) Expenses for (or necessary to obtain) medical care that would be
deductible under Code Section 213(a) (determined without regard to whether the
expenses exceed 7.5% of adjusted gross income) for the Participant, the
Participant’s spouse or dependents (as defined in Code Section 152);
     (ii) Costs directly related to the purchase of a principal residence for
the Participant (excluding mortgage payments);
     (iii) Payment of tuition, related educational fees, and room and board
expenses, for up to the next twelve (12) months of post secondary education for
the Participant or the Participant’s spouse, children or dependents (as defined
in Code Section 152 without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B));
     (iv) Payments necessary to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of that residence;

8

--------------------------------------------------------------------------------

 

     (v) Payments for burial or funeral expenses for the Participant’s deceased
parent, spouse, children or dependents (as defined in Code Section 152 without
regard to Section 152(d)(1)(B));
     (vi) Expenses for the repair of damage to the Participant’s principal
residence that would qualify for the casualty deduction Code Section 165
(determined without regard to whether the loss exceeds 10% of adjusted gross
income); or
     (vii) Such other purposes as permitted by the Commissioner of Internal
Revenue.
     (18) Article XIV, Section 14.5, subsection (a) is hereby amended to read as
follows:
     (a) Investment of Contributions: Any Participant, on or before entry into
the Plan, within the time period established by the Plan Administrator, may
designate the manner and the applicable percentage in which the Participant
desires the Trustee to invest his current contributions, pursuant to the
provisions set forth above, which designation shall continue in effect until
revoked or modified by the Participant. If such Participant fails to designate
the investment of his current contributions on or before his entry into the
Plan, or if the Participant wishes to change such designation, the Participant
may make such designation, within the time period established by the Plan
Administrator, to become effective as soon as practicable following such time
period as is established by the Plan Administrator, and such designation shall
continue in effect until revoked by the Participant.
     In the event the nature of any investment shall, in the opinion of the
Company, or its authorized delegate, change, then the Plan Administrator shall
notify those Participants who the Plan Administrator, in its sole and absolute
discretion, determines are affected by the change, who shall then have a
reasonable period of time, as determined by the Plan Administrator, to designate
the manner and the applicable percentages in which amounts so invested and
affected by the change shall be invested.
     Any amounts with respect to which the Trustee fails to receive a proper
investment direction from any Participant shall be invested, as directed by the
Plan Administrator to the Trustee in writing, in a qualified default investment
alternative, as defined in Department of Labor Proposed Regulations §2550.404c-5
and such other guidance as may be promulgated by the Department of Labor, and
with respect to which the other conditions set forth in Department of Labor
Proposed Regulations §2550.404c-5 are met, including, but not limited to, the
delivery to the Participant of any material provided to the Plan that relates to
the Participant’s investment therein. All investment designations under this
subparagraph (a) shall be made in the manner prescribed by the Plan
Administrator.

9

--------------------------------------------------------------------------------

 

     The Plan Administrator shall maintain separate subaccounts in the name of
each Participant within his Individual Account to reflect such Participant’s
accrued benefit attributable to his directed investment in each investment fund.
     IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the
foregoing instrument comprising Amendment No. 8 to the Tandy Brands Accessories,
Inc. Employees Investment Plan, Tandy Brands Accessories, Inc. has caused these
presents to be duly executed in its name and behalf by a proper officer
thereunto duly authorized this 31st day of December, 2008.

                  TANDY BRANDS ACCESSORIES, INC.    
 
           
 
  By:
Name:
Title:   /s/ Craig Mackey
 
Craig Mackey
 
CFO
 
     

10