##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
 Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 For the fiscal year ended June 30, 2008
    
    Commission File Number 0-18927
 TANDY BRANDS ACCESSORIES, INC.
  Delaware
    
    75-2349915(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification Number)
 690 East Lamar Boulevard, Suite 200, Arlington, TX 76011
 817-548-0090
 Common Stock, Par Value $1.00 Per Share
 None
 o þ
 o þ
 þ o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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TABLE OF CONTENTS
 PART IItem 1 Business
    
    
    3Item 1A Risk Factors
    
    
    10Item 1B Unresolved Staff Comments
    
    
    13Item 2 Properties
    
    
    13Item 3 Legal Proceedings
    
    
    13Item 4 Submission Of Matters To A Vote Of Security Holders
    
    
    13PART IIItem 5 Market For Registrants Common Equity, Related Stockholder Matters
And Issuer Purchases Of Equity Securities
    
    
    14Item 6 Selected Financial Data
    
    
    16Item 7 Managements Discussion and Analysis Of Financial Condition And Results Of Operations
    
    
    16Item 7A Quantitative And Qualitative Disclosures About Market Risk
    
    
    21Item 8 Financial Statements And Supplementary Data
    
    
    22Item 9 Changes In And Disagreements With Accountants On Accounting And Financial Disclosure
    
    
    39Item 9A(T) Controls And Procedures
    
    
    39Item 9B Other Information
    
    
    39PART IIIItem 10 Directors, Executive Officers And Corporate Governance
    
    
    40Item 11 Executive Compensation
    
    
    40Item 12 Security Ownership Of Certain Beneficial Owners And Management
And Related Stockholder Matters
    
    
    40Item 13 Certain Relationships And Related Transactions, And Director Independence
    
    
    40Item 14 Principal Accounting Fees And Services
    
    
    40PART IVItem 15 Exhibits And Financial Statement Schedules
    
    
    41SIGNATURES
    
    
    42Fiscal 2009 Compensation SummariesList of SubsidiariesConsent of Ernst & Young LLPRule 13a-14(a)/15d-14(a) CertificationRule 13a-14(a)/15d-14(a) CertificationSection 1350 Certifications
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FORWARD-LOOKING STATEMENTS
 This Annual Report on Form 10-K , including Managements Discussion And Analysis Of Financial
Condition And Results Of Operations, contains forward-looking statements regarding future events
and our future results that are subject to the safe harbors created under the Securities Act of
1933 and the Securities Exchange Act of 1934. Words such as expects, anticipates, intends,
plans, believes, seeks, estimates, continues, may, variations of such words, and
similar expressions are intended to identify forward-looking statements. In addition, any
statements that refer to projections of our future financial performance, our anticipated growth
and trends in our business, and other characterizations of future events or circumstances are
forward-looking statements. We have based these forward looking statements on our current
expectations about future events, estimates and projections about the industry in which we operate.
These statements are not guarantees of future performance and involve risks, uncertainties and
assumptions that are difficult to predict. Our actual results may differ materially from those
suggested by these forward-looking statements for various reasons, including those identified under
Risk Factors on page 10. Given these risks and uncertainties, you are cautioned not to place
undue reliance on forward-looking statements. The forward-looking statements included in this
report are made only as of the date hereof. Except as required under federal securities laws and
the rules and regulations of the United States Securities and Exchange Commission, we do not
undertake, and specifically decline, any obligation to update any of these statements or to
publicly announce the results of any revisions to any forward-looking statements after the
distribution of this report, whether as a result of new information, future events, changes in
assumptions, or otherwise.
 
 PART I
 
 ITEM 1  BUSINESS
  What do we do?
 ® ®  ® ® ® ® ® ® ® ® ® ® ® ® ®    ® ®
 What significant business developments were there in fiscal 2008?
   3




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® ®
 What are our product lines?
  Belts
    
    
    58.8
    %Small leather goods
    
    
    19.3Gift accessories
    
    
    14.0Handbags
    
    
    1.0Other products
    
    
    6.9100.0
    %
  Belts
  Small Leather Goods
  Gift Accessories
  Other Products
  What brands do we sell?
  Type
    
    Net SalesPrivate brands
    
    $
    82.1
    
    
    
    54.9
    %Proprietary brands
    
    
    39.3
    
    
    
    26.4Licensed brands
    
    
    27.9
    
    
    
    18.7$
    149.3
 Private Brand Products
  4




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® ® ® ® ® ® ®
 License Agreements
 ® ®  ®  ®
  
    
    Geno and Geno DLucca  exclusive right to market high end belts, small
leather goods, sandals, and other products in North America under this respected Mexican
brand.
    
    Goodyear  nonexclusive right to market a gift line of The Goodyear Tire &
Rubber Company in the United States, Canada, and Mexico.
    
    Dr. Martens® and Dr. Martens Airwair®  exclusive right to market,
manufacture, import, and sell belts, wallets, and bags in the continental United States and
Canada under these well-known brands.
 ®
 Proprietary Brands
 ® ® ® ® ® ® ® ®
 Distribution Of Our Key Brands
  Department stores
    
    E-commerce websitesSpecialty chains
    
    National chain storesMass merchants
    
    Outlet storesUnited States military retail exchange operations
    
    Sporting goods storesGolf pro shops
    
    Individual specialty storesSupermarkets
    
    Catalog retailersUniform stores
    
    Shoe storesTV shopping networks
    
    Wholesale clubsDrug stores
    
    Premium marketsOffice supply stores
    
    Automobile and tire stores
  Brand
    
    Distribution Channel
    
    ProductsDockers®
    
    National chain stores
    
    BeltsDepartment stores
    
    HandbagsSpecialty stores
    
    Small leather goodsLevis®
    
    National chain stores
    
    BeltsDepartment stores
    
    Small leather goodsSpecialty stores
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##### Table of Contents



Brand
    
    Distribution Channel
    
    ProductsLevi Strauss Signature
    
    Mass merchants
    
    BeltsNational chain stores
    
    Small leather goodsCasual multipurpose bagsRolfs®
    
    National chain stores
    
    Small leather goodsDepartment storesSpecialty storesCanterbury®
    
    Specialty stores
    
    BeltsGolf pro shops
    
    Small leather goodsPrince Gardner®
    
    National chain stores
    
    Small leather goodsSpecialty storesPrincess Gardner®
    
    National chain stores
    
    Small leather goodsSpecialty storesAmity®
    
    Mass merchants
    
    Small leather goodsNational chain storesColetta®
    
    Mass merchants
    
    HandbagsNational chain storesAccessory Design Group®
    
    Mass merchants
    
    BeltsNational chain stores
    
    Womens accessoriesTiger®
    
    Mass merchants
    
    BeltsNational chain storesStagg®
    
    Mass merchants
    
    BeltsNational chain stores
    
    Small leather goodsETON®
    
    Mass merchants
    
    Gift accessoriesNational chain storesDepartment storesSpecialty storestotes®
    
    National chain stores
    
    Gift accessoriesDepartment storesSpecialty storesSurplus®
    
    National chain stores
    
    BeltsSmall leather goodsGift accessoriesEileen West
    
    Department stores
    
    BeltsSpecialty stores
    
    Small leather goodsHandbagsGeno DLucca
    
    Department stores
    
    BeltsSmall leather goodsSandalsGoodyear
    
    Automobile and tire
stores
    
    Gift accessoriesMass merchantsDr. Martens® and
    
    Specialty stores
    
    BeltsDr. Martens Airwair®
    
    
    
    WalletsBags
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®
 Who are our customers?
  Department Stores
    
    National Chains
    
    Mass MerchantsKohls
    
    JCPenney (U.S. and Mexico)
    
    Wal-Mart (U.S., Canada
and Mexico)Belk
    
    Stein Mart
    
    TargetBon-Ton/Carsons
    
    AAFES
    
    Fred MeyerFederated Stores
    
    Casual Male
    
    ShopkoDillards
    
    Academy Sports & Outdoors
    
    Zellers (Canada)Boscovs
    
    Tractor Supply
    
    Big LotsThe Bay (Canada)
    
    Marshalls
    
    PamidaGottschalks
    
    GoodysStage
    
    Moores (Canada)Peebles
    
    T.J. Maxx
  How do we maintain strong customer relations?
   How do we merchandise and develop our products?
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What is our competitive position?
  
    
    trends toward more casual attire which has increased demand for accessories outside the
traditional dress category;
    
    increased consumer awareness of branded accessories as a fashion and lifestyle
statement; and
    
    a desire for newness and change in accessories styles.
   Product Category
    
    CompetitorsMens and boys belts
    
    Swank, Randa/Humphreys, Cipriani, and FossilMens wallets
    
    Buxton, Randa/Humphreys, Mundi, Fossil, Swank, and CiprianiMens gifts
    
    E&B, Merchsource, Excalibur, JLR, and MundiWomens and girls belts
    
    Cipriani, Circa, Accessory Network, Chambers, and FossilWomens small leather goods
    
    Buxton, Mundi, Fossil, Relic, and Nine West
  How do we seek to grow our business?
  Where and how are our products produced?
  8




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Is our business seasonal?
  First
    
    Second
    
    Third
    
    FourthQuarter
    
    Quarter
    
    Quarter
    
    QuarterNet salesFiscal 2008
    
    
    26.4
    %
    
    
    33.2
    %
    
    
    20.2
    %
    
    
    20.2
    %Fiscal 2007
    
    
    29.2
    
    
    
    32.9
    
    
    
    19.3
    
    
    
    18.6Pretax (loss) incomeFiscal 2008
    
    
    (6.2
    )%
    
    
    (81.5
    )%
    
    
    (4.9
    )%
    
    
    (7.4
    )%Fiscal 2007
    
    
    142.1
    
    
    
    171.0
    
    
    
    (71.1
    )
    
    
    (142.0
    )
 
 The fiscal 2008 second quarter includes noncash charges of $36.5 million, or 79.2% of the quarters pretax loss. Are we subject to governmental regulations?
   How many employees do we have?
  What role does intellectual property play in our business?
  What are our working capital practices?
  9




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Where can investors access additional information about Tandy Brands?
  
 ITEM 1A  RISK FACTORS
  Risks Relating To Our Business
 A significant portion of our sales is attributable to a few major customers.
  We do not maintain long-term contracts with our customers and are unable to control their
purchasing decisions.
  Direct sales to customers by suppliers could negatively impact our sales.
  We extend unsecured credit to our customers and are subject to potential financial difficulties
they may face.
  The loss of certain of our license agreements could result in the loss of significant sales.
 ®
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Distribution problems could delay product shipments.
  The loss of, or problems with, third-party manufacturers could adversely impact our operations.
  Our business is dependent on our ability to maintain proper inventory levels.
  Price increases by our suppliers could negatively affect our operating results.
  Risks Relating To Our Industry
 Our business is highly subject to consumer preferences and fashion trends.
  Our industry is highly competitive and subject to pricing pressures that could adversely affect our
financial position.
  11




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Our industry is highly subject to economic cycles and retail industry conditions.
  Consolidation in the retail industry may negatively impact our operations.
  
    
    store closures;
    
    increased customer leverage over suppliers, resulting in lower product prices or lower margins;
    
    tighter inventory management on the part of the customer, resulting in lower inventory
levels and decreased orders; and
    
    a greater exposure to customer credit risk.
 Risks Relating To International Operations
 We source most of our products from foreign countries.
  Fluctuations in foreign currencies could adversely impact our financial condition.
  Risks Relating To Our Company
 Our business depends on a limited number of key personnel with whom we do not have employment agreements. The loss of any one of these individuals could disrupt our business.
  We are dependent on the creative talent of our designers and the effectiveness of our sales
personnel.
  12




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The requirements of complying with the Exchange Act and the Sarbanes-Oxley Act may strain our
resources.
  
 ITEM 1B  UNRESOLVED STAFF COMMENTS
  
 ITEM 2  PROPERTIES
  Form ofFacility Location
    
    Use
    
    OwnershipYoakum, Texas  4 facilities (1)
    
    Office and distribution of mens accessories
    
    OwnWest Bend, Wisconsin
    
    Warehouse held for sale and leased to third parties
    
    OwnScarborough, Ontario, Canada
    
    Manufacture and distribution of mens accessories
    
    LeaseDallas, Texas
    
    Distribution of womens accessories
    
    LeaseArlington, Texas
    
    Corporate offices
    
    LeaseNew York, New York
    
    Office and showroom
    
    LeaseKowloon, Hong Kong
    
    Office
    
    Lease
 
 (1)
    
    One of the Yoakum, Texas facilities is under contract for sale with expected closing in October 2008.  Square FeetOwned
    
    Leased
    
    TotalWarehouse and office
    
    
    559,000
    
    
    
    219,000
    
    
    
    778,000Factory
    
    
    
    
    
    
    27,000
    
    
    
    27,000Total
    
    
    559,000
    
    
    
    246,000
    
    
    
    805,000
 
 ITEM 3  LEGAL PROCEEDINGS
  
 ITEM 4  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  13




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PART II
 
 ITEM 5  MARKET FOR THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
 What is the principal market for our common stock
  Fiscal 2008
    
    Fiscal 2007Quarter Ended
    
    High
    
    Low
    
    High
    
    LowSeptember 30
    
    $
    13.15
    
    
    $
    10.12
    
    
    $
    11.68
    
    
    $
    9.27December 31
    
    $
    11.86
    
    
    $
    7.91
    
    
    $
    12.36
    
    
    $
    9.73March 31
    
    $
    9.66
    
    
    $
    4.50
    
    
    $
    13.70
    
    
    $
    11.21June 30
    
    $
    6.99
    
    
    $
    3.82
    
    
    $
    13.29
    
    
    $
    10.63
 How many common stockholders do we have?
  Did we declare any cash dividends in fiscal 2008 or the prior fiscal year?
  DividendDeclaration
Date
    
    Record Date
    
    Payable Date
    
    Per ShareFiscal 2008August 13, 2007
    
    September 28, 2007
    
    October 19, 2007
    
    $
    0.04October 29, 2007
    
    December 31, 2007
    
    January 18, 2008
    
    $
    0.04February 4, 2008
    
    March 31, 2008
    
    April 18, 2008
    
    $
    0.04April 21, 2008
    
    June 30, 2008
    
    July 18, 2008
    
    $
    0.04
 Fiscal 2007August 16, 2006
    

September 30, 2006
    

October
20, 2006
    
   $
    0.0275October 16, 2006
    

December
29, 2006
    

January
19, 2007
    
   $
    0.0275January 31, 2007
    

March
30, 2007
    

April
20, 2007
    
    $
    0.04April 17, 2007
    

June
29, 2007
    

July
20, 2007
    
    $
    0.04
  How many shares of common stock are authorized for issuance under our equity compensation plans?
  
    
    1997 Employee Stock Option Plan;
    
    Nonqualified Formula Stock Option Plan for Non-Employee Directors;
    
    2002 Omnibus Plan;
    
    1995 Stock Deferral Plan for Non-Employee Directors;
    
    Stock Purchase Program; and
    
    Nonqualified stock option agreements with certain nonemployee directors.
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(A)
    
    
    
    (C)Number of Securities
    
    

(B)
    
    
    Number Of Securities RemainingTo Be Issued upon
    
    Weighted-Average
    
    Available For Future IssuanceExercise Of
    
    Exercise Price Of
    
    Under Equity CompensationOutstanding Options,
    
    Outstanding Options,
    
    Plans (Excluding SecuritiesPlan Category
    
    Warrants And Rights
    
    Warrants And Rights
    
    Reflected In Column (A))Equity Compensation
Plans Approved by
Stockholders
    
    
    519,909
    (1)
    
    $
    11.65
    (2)
    
    
    758,498
    (3)Equity Compensation
Plans Not Approved
by Stockholders
    
    
    15,000
    (4)
    
    $
    6.09
    
    
    
    Total
    
    
    534,909
    
    
    $
    11.49
    (2)
    
    
    758,498
 
 (1)
    
    Includes options to purchase common stock under the following plans: 1997 Employee Stock Option Plan  236,850 shares; Nonqualified Formula Stock Option Plan for Non-Employee Directors  40,685
shares; and 2002 Omnibus Plan  240,197 shares.Also includes 2,177 shares of common stock issuable on settlement of phantom stock units under
the 1995 Stock Deferral Plan for Non-Employee Directors.Excludes up to 116,770 performance units which are payable in shares of our common stock
following the end of the July 1, 2006 to June 30, 2009 performance cycle if we achieve the
maximum performance goal. We do not anticipate any payout under these awards.(2)
    
    Calculation of weighted-average exercise price does not include phantom stock units
credited to participants accounts under the 1995 Stock Deferral Plan for Non-Employee
Directors because they have no exercise price.(3)
    
    Includes 26,198 shares of common stock issuable under the 1995 Stock Deferral Plan
for Non-Employee Directors and 508,026 shares of common stock issuable under the 2002 Omnibus
Plan, of which up to 116,770 shares are issuable following the end of the July 1, 2006 to
June 30, 2009 performance cycle if we achieve the maximum performance goal (we do not
anticipate any payout under these awards). Upon adoption of the 2002 Omnibus Plan, the
number of shares authorized and reserved for issuance under our previously existing stock
option plans were transferred to the 2002 Omnibus Plan and are presently authorized and
reserved for issuance under that plan. All shares of common stock authorized and reserved
for issuance on the exercise of outstanding stock options under our previous stock option
plans and the 2002 Omnibus Plan will, on the cancellation or expiration of any such stock
options, automatically be authorized and reserved for issuance under the 2002 Omnibus Plan.Also includes 224,274 shares of common stock issuable under the Stock Purchase Program. The
Stock Purchase Program is open to all full-time employees who have been employed at least six
months, but less than one year, or who have been employed one year or more and are
contributing to the Tandy Brands Accessories, Inc. Employees Investment Plan. Under the Stock
Purchase Program participants may contribute 5% or 10% of their earnings and we match 25% or
50% of each participants contribution depending on their length of employment and other
considerations. The Stock Purchase Program purchases treasury stock, if available, or
unissued common stock directly from our Company at monthly average market prices. The shares
are fully vested upon purchase and the participant may withdraw from the Stock Purchase
Program at any time. The shares purchased under the Stock Purchase Program are distributed to
participants annually.(4)
    
    Stock options to purchase an aggregate of 15,000 shares of common stock under
nonqualified stock option agreements for nonemployee directors dated October 16, 2001 with
Dr. James F. Gaertner (4,250), Gene Stallings (4,250), Roger R. Hemminghaus (2,500), and
Colombe M. Nicholas (4,000). These options became fully vested six months after the grant
date and expire on October 16, 2011. 
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Did our Company repurchase any shares of common stock during the fourth quarter of fiscal 2008?
  Total Number Of
    
    Maximum NumberTotal
    
    
    
    
    
    Shares Purchased
    
    Of Shares That MayNumber
    
    Average
    
    As Part Of Publicly
    
    Yet Be Purchased AsOf Shares
    
    Price Paid
    
    Announced Plans
    
    Part Of The PlansPeriod
    
    Purchased
    
    Per Share
    
    Or Programs
    
    Or ProgramsApril 1, 2008 to April 30, 2008
    
    
    802
    
    
    $
    4.43
    
    
    
    N/A
    
    
    
    N/AMay 1, 2008 to May 31, 2008
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    N/AJune 1, 2008 to June 30, 2008
    
    
    740
    
    
    
    4.94
    
    
    
    N/A
    
    
    
    N/ATotal
    
    
    1,542
    
    
    
    4.68
    
    
    
    N/A
    
    
    
    N/A
 
 ITEM 6  SELECTED FINANCIAL DATA
  
 ITEM 7  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  OVERVIEW
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2008
    
    
    Decrease
    
    
    2007Net sales:Mens accessories
    
    $
    118,949
    
    
    
    (15.1
    )%
    
    $
    140,072Womens accessories
    
    
    30,308
    
    
    
    (45.6
    )
    
    
    55,737$
    149,257
    
    
    
    (23.8
    )
    
    $
    195,809Gross margin:Mens accessories
    
    $
    30,364
    
    
    
    (40.3
    )%
    
    $
    50,835Womens accessories
    
    
    2,296
    
    
    
    (87.9
    )
    
    
    19,019$
    32,660
    
    
    
    (53.3
    )
    
    $
    69,854Gross margin percent of sales:Mens accessories
    
    
    25.5
    %
    
    
    
    
    
    
    36.3
    %Womens accessories
    
    
    7.6
    
    
    
    
    
    
    
    34.1Total
    
    
    21.9
    
    
    
    
    
    
    
    35.7
   Mens
    
    
    Womens
    
    
    Total2008Belts
    
    $
    76,265
    
    
    
    64.1
    %
    
    $
    11,557
    
    
    
    38.1
    %
    
    $
    87,822
    
    
    
    58.8
    %Small leather goods
    
    
    12,790
    
    
    
    10.8
    
    
    
    15,964
    
    
    
    52.7
    
    
    
    28,754
    
    
    
    19.3Gift accessories
    
    
    19,821
    
    
    
    16.7
    
    
    
    1,089
    
    
    
    3.6
    
    
    
    20,910
    
    
    
    14.0Handbags
    
    
    
    
    
    
    
    
    
    
    1,497
    
    
    
    4.9
    
    
    
    1,497
    
    
    
    1.0Other products
    
    
    10,073
    
    
    
    8.5
    
    
    
    201
    
    
    
    0.7
    
    
    
    10,274
    
    
    
    6.9$
    118,949
    
    
    
    
    
    
    $
    30,308
    
    
    
    
    
    
    $
    149,2572007Belts
    
    $
    90,605
    
    
    
    64.7
    %
    
    $
    27,399
    
    
    
    49.2
    %
    
    $
    118,004
    
    
    
    60.3
    %Small leather goods
    
    
    17,473
    
    
    
    12.5
    
    
    
    22,608
    
    
    
    40.6
    
    
    
    40,081
    
    
    
    20.5Gift accessories
    
    
    19,664
    
    
    
    14.0
    
    
    
    825
    
    
    
    1.5
    
    
    
    20,489
    
    
    
    10.4Handbags
    
    
    
    
    
    
    
    
    
    
    3,087
    
    
    
    5.5
    
    
    
    3,087
    
    
    
    1.6Other products
    
    
    12,330
    
    
    
    8.8
    
    
    
    1,818
    
    
    
    3.2
    
    
    
    14,148
    
    
    
    7.2$
    140,072
    
    
    
    
    
    
    $
    55,737
    
    
    
    
    
    
    $
    195,809
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##### Table of Contents



Increase2008
    
    
    (Decrease)
    
    
    2007Selling, general and administrative expense:Mens accessories
    
    $
    42,008
    
    
    
    (0.7
    )%
    
    $
    42,293Womens accessories
    
    
    14,596
    
    
    
    (22.8
    )
    
    
    18,911$
    56,604
    
    
    
    (7.5
    )
    
    $
    61,204Depreciation and amortization:Mens accessories
    
    $
    2,234
    
    
    
    (31.0
    )%
    
    $
    3,237Womens accessories
    
    
    968
    
    
    
    (34.5
    )
    
    
    1,478$
    3,202
    
    
    
    (32.1
    )
    
    $
    4,715Interest expense
    
    $
    1,394
    
    
    
    13.7
    %
    
    $
    1,226
   2008 COMPARED TO 2007
 Net Sales And Gross Margins
     18




---



##### Table of Contents



Operating Expenses
  Contract labor
    
    $
    1,234Market value of compensation plans investments
    
    
    731Distribution costs
    
    
    516Travel
    
    
    328Advertising
    
    
    298Legal
    
    
    275
    Interest, Other Income, And Taxes
   19




---



##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
     OFF-BALANCE SHEET ARRANGEMENTS
  CRITICAL ACCOUNTING POLICIES
   Revenues And Accounts Receivable Allowances
  Sensitivity Analysis
 20




---



##### Table of Contents



Sales
    
    Allowances
    
    
    
    EarningsChange
    
    Reserves
    
    Expense
    
    Per ShareChange in customer allowances and returns
    
    +/- 0.5
    %
    $746/$(746
    )
    $746/$(746
    )
    $(0.07)/$ 0.07Change in allowance for doubtful accounts
    
    +/- 0.125
    
    187/(187
    )
    187/(187
    )
    (0.02)/0.02
 Inventories
  Sensitivity Analysis
 Percentage
    
    
    
    
    
    
    
    
    
    EarningsOf Inventory
    
    Inventory
    
    Expense
    
    Per ShareChange in inventory markdown
    
    -1%
    
    $
    (355
    )
    
    $
    355
    
    
    $
    (0.03
    )
 Uncertain Tax Positions
  Share-Based Compensation
  IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
  
 ITEM 7A  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  21




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##### Table of Contents



ITEM 8  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
        
 22




---



##### Table of Contents



Tandy Brands Accessories, Inc. And Subsidiaries
Consolidated Balance Sheets
(in thousands)
 June 302008
    
    
    2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    2,855
    
    
    $
    4,076Accounts receivable
    
    
    22,147
    
    
    
    31,357Inventories
    
    
    35,535
    
    
    
    64,372Deferred income taxes
    
    
    
    
    
    
    3,454Other current assets
    
    
    8,783
    
    
    
    3,879Total current assets
    
    
    69,320
    
    
    
    107,138Property and equipment
    
    
    5,382
    
    
    
    10,548Other assets:Goodwill
    
    
    
    
    
    
    16,361Intangibles
    
    
    3,069
    
    
    
    4,882Other assets
    
    
    1,617
    
    
    
    1,734Total other assets
    
    
    4,686
    
    
    
    22,977$
    79,388
    
    
    $
    140,663Liabilities And Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    10,312
    
    
    $
    16,903Accrued compensation
    
    
    1,985
    
    
    
    2,420Accrued expenses
    
    
    3,376
    
    
    
    4,019Note payable
    
    
    363
    
    
    
    6,069Total current liabilities
    
    
    16,036
    
    
    
    29,411Other liabilities:Supplemental executive retirement obligation
    
    
    1,893
    
    
    
    1,587Deferred income taxes
    
    
    
    
    
    
    389Other liabilities
    
    
    3,581
    
    
    
    1,369Total other liabilities
    
    
    5,474
    
    
    
    3,345CommitmentsStockholders equity:Preferred stock, $1.00 par value, 1,000 shares authorized, none issued
    
    
    
    
    
    
    Common stock, $1.00 par value, 10,000 shares authorized,
7,049 shares and 6,912 shares issued and outstanding
    
    
    7,049
    
    
    
    6,912Additional paid-in capital
    
    
    34,840
    
    
    
    33,616Retained earnings
    
    
    15,337
    
    
    
    66,967Other comprehensive income
    
    
    1,666
    
    
    
    1,326Shares held by Benefit Restoration Plan Trust
    
    
    (1,014
    )
    
    
    (914
    )Total stockholders equity
    
    
    57,878
    
    
    
    107,907$
    79,388
    
    
    $
    140,663
  23




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##### Table of Contents



Tandy Brands Accessories, Inc. And Subsidiaries
Consolidated Statements Of Operations
(in thousands except per share amounts)
 Year Ended June 302008
    
    
    2007Net sales
    
    $
    149,257
    
    
    $
    195,809Cost of goods sold
    
    
    97,872
    
    
    
    125,955Inventory write-down
    
    
    18,725
    
    
    
    116,597
    
    
    
    125,955Gross margin
    
    
    32,660
    
    
    
    69,854Selling, general and administrative expenses
    
    
    56,604
    
    
    
    61,204Depreciation and amortization
    
    
    3,202
    
    
    
    4,715Goodwill and other intangibles impairment
    
    
    17,774
    
    
    
    Total operating expenses
    
    
    77,580
    
    
    
    65,919Operating (loss) income
    
    
    (44,920
    )
    
    
    3,935Interest expense
    
    
    (1,394
    )
    
    
    (1,226
    )Other income
    
    
    237
    
    
    
    550(Loss) income before income taxes
    
    
    (46,077
    )
    
    
    3,259Income taxes
    
    
    3,211
    
    
    
    1,325Net (loss) income
    
    $
    (49,288
    )
    
    $
    1,934(Loss) earnings per common share
    
    $
    (7.18
    )
    
    $
    0.29(Loss) earnings per common share assuming dilution
    
    $
    (7.18
    )
    
    $
    0.28Cash dividends declared per common share
    
    $
    0.16
    
    
    $
    0.135Common shares outstanding
    
    
    6,863
    
    
    
    6,720Common shares outstanding assuming dilution
    
    
    6,863
    
    
    
    6,891
  24




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##### Table of Contents



Tandy Brands Accessories, Inc. And Subsidiaries
Consolidated Statements Of Cash Flows
(in thousands)
 Year Ended June 302008
    
    
    2007Cash flows provided by operating activities:Net (loss) income
    
    $
    (49,288
    )
    
    $
    1,934Adjustments to reconcile net (loss) income
to net cash provided by operating activities:Inventory write-down
    
    
    18,725
    
    
    
    Goodwill and other intangibles impairment
    
    
    17,774
    
    
    
    Depreciation and amortization
    
    
    3,237
    
    
    
    4,879Stock compensation expense
    
    
    249
    
    
    
    447Amortization of debt costs
    
    
    315
    
    
    
    170Excess income tax benefit from stock option exercises
    
    
    (9
    )
    
    
    (30
    )Deferred income taxes
    
    
    3,074
    
    
    
    (913
    )Other
    
    
    738
    
    
    
    289Change in assets and liabilities:Accounts receivable
    
    
    9,210
    
    
    
    (4,035
    )Inventories
    
    
    10,112
    
    
    
    (2,602
    )Other assets
    
    
    (2,328
    )
    
    
    1,559Accounts payable
    
    
    (6,233
    )
    
    
    6,946Accrued expenses
    
    
    66
    
    
    
    457Net cash provided by operating activities
    
    
    5,642
    
    
    
    9,101Cash flows used for investing activities:Purchases of property and equipment
    
    
    (594
    )
    
    
    (2,204
    )Proceeds from trademark sale
    
    
    
    
    
    
    500Net cash used for investing activities
    
    
    (594
    )
    
    
    (1,704
    )Cash flows used by financing activities:Stock sold to stock purchase program
    
    
    840
    
    
    
    1,059Stock options exercised
    
    
    67
    
    
    
    356Dividends paid
    
    
    (1,112
    )
    
    
    (838
    )Change in cash overdrafts
    
    
    (358
    )
    
    
    (149
    )Proceeds from borrowings
    
    
    41,911
    
    
    
    32,143Borrowing repayments
    
    
    (47,617
    )
    
    
    (40,074
    )Net cash used by financing activities
    
    
    (6,269
    )
    
    
    (7,503
    )Net decrease in cash and cash equivalents
    
    
    (1,221
    )
    
    
    (106
    )Cash and cash equivalents beginning of year
    
    
    4,076
    
    
    
    4,182Cash and cash equivalents end of year
    
    $
    2,855
    
    
    $
    4,076Supplemental cash flow information:Interest paid
    
    $
    859
    
    
    $
    1,153Income taxes paid
    
    $
    545
    
    
    $
    2,868
  25




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##### Table of Contents



Tandy Brands Accessories, Inc. And Subsidiaries
Consolidated Statements Of Stockholders Equity
(in thousands except per share amounts)
 Shares HeldAdditional
    
    
    
    
    
    
    Other
    
    
    By Benefit
    
    
    TotalCommon Stock
    
    
    Paid-In
    
    
    Retained
    
    
    Comprehensive
    
    
    Restoration
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    Plan Trust
    
    
    EquityBalance June 30, 2006
    
    
    6,795
    
    
    $
    6,795
    
    
    $
    31,911
    
    
    $
    65,960
    
    
    $
    988
    
    
    $
    (815
    )
    
    $
    104,839Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,934
    
    
    
    
    
    
    
    
    
    
    
    1,934Currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    338
    
    
    
    
    
    
    
    3382,272Cash dividends declared  $0.135 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (928
    )
    
    
    
    
    
    
    
    
    
    
    (928
    )Stock sold to Stock Purchase Program
    
    
    90
    
    
    
    90
    
    
    
    969
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,059Stock options exercised
    
    
    34
    
    
    
    34
    
    
    
    322
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    356Share-based compensation
    
    
    (7
    )
    
    
    (7
    )
    
    
    414
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    408Benefit Restoration Plan Trust shares purchased
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (99
    )
    
    
    (99
    )Balance June 30, 2007
    
    
    6,912
    
    
    
    6,912
    
    
    
    33,616
    
    
    
    66,967
    
    
    
    1,326
    
    
    
    (914
    )
    
    
    107,907Uncertainty in income taxes accounting change
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,225
    )
    
    
    
    
    
    
    
    
    
    
    (1,225
    )Comprehensive (loss):Net (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (49,288
    )
    
    
    
    
    
    
    
    
    
    
    (49,288
    )Currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    340
    
    
    
    
    
    
    
    340(48,948
    )Cash dividends declared  $0.16 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,120
    )
    
    
    
    
    
    
    
    
    
    
    (1,120
    )Stock sold to Stock Purchase Program
    
    
    113
    
    
    
    113
    
    
    
    727
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    840Stock options exercised
    
    
    8
    
    
    
    8
    
    
    
    59
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    67Share-based compensation
    
    
    16
    
    
    
    16
    
    
    
    438
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    457Benefit Restoration Plan Trust shares purchased
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (100
    )
    
    
    (100
    )Balance June 30, 2008
    
    
    7,049
    
    
    $
    7,049
    
    
    $
    34,840
    
    
    $
    15,337
    
    
    $
    1,666
    
    
    $
    (1,014
    )
    
    $
    57,878
  26




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1  Overview
 The Company
  Basis Of Presentation
   Foreign Currency Translation
  Financial Instrument Fair Values
  Note 2  Summary Of Significant Accounting Policies
 Cash And Cash Equivalents
  Accounts Receivable And Allowances
   Beginning
    
    Charged To
    
    
    
    
    
    EndingFiscal Year
    
    Balance
    
    Expense
    
    Deductions
    
    Balance2008
    
    $
    943
    
    
    $
    9,540
    
    
    $
    9,312
    
    
    $
    1,1712007
    
    
    1,598
    
    
    
    8,138
    
    
    
    8,793
    
    
    
    943
 27




---



##### Table of Contents



Inventories
  June 302008
    
    
    2007Raw materials
    
    $
    2,545
    
    
    $
    3,288Work-in-process
    
    
    148
    
    
    
    239Finished goods
    
    
    32,842
    
    
    
    60,845$
    35,535
    
    
    $
    64,372
 Property And Equipment
  June 302008
    
    
    2007
    
    
    Depreciation RatesBuildings
    
    $
    4,171
    
    
    $
    8,514
    
    
    
    3%Leasehold improvements
    
    
    3,232
    
    
    
    3,139
    
    
    Lesser of lease term or asset lifeMachinery and equipment
    
    
    24,996
    
    
    
    27,275
    
    
    10% to 50%32,399
    
    
    
    38,928Accumulated depreciation
    
    
    (27,017
    )
    
    
    (28,380
    )$
    5,382
    
    
    $
    10,548
    Intangibles And Impairment Of Long-Lived Assets
   Derivative Instruments And Hedging Activities
  28




---



##### Table of Contents



Sales
  Costs And Expenses
  Advertising Costs
  Share-Based Compensation
  Income Taxes
   Recent Accounting Pronouncements
   29




---



##### Table of Contents



Note 3  Significant Events
 Fiscal 2008 Inventory Write-Down, Intangibles Impairment, And Restructuring Charges
     Fiscal 2007 Manufacturing Facility Conversion, Severance Costs, And Trademark Sale
   Note 4  Goodwill And Intangibles
 Changes in the carrying amount of goodwill were (in thousands):June 30, 2006  Accumulated amortization   $6,594
    
    $
    16,292Currency translation adjustment
    
    
    69June 30, 2007  Accumulated amortization   $6,670
    
    
    16,361Currency translation adjustment
    
    
    114Impairment
    
    
    (16,475
    )June 30, 2008
    
    $
    
 30




---



##### Table of Contents



2008
    
    
    2007Gross carrying amount
    
    $
    6,730
    
    
    $
    9,330Accumulated amortization
    
    
    (3,661
    )
    
    
    (4,448
    )$
    3,069
    
    
    $
    4,882
 2008
    
    
    Weighted-Average LifeBalance
    
    
    Expense
    
    
    Total
    
    
    RemainingTrade names
    
    $
    3,050
    
    
    $
    316
    
    
    
    20.7
    
    
    
    9.7Customer lists
    
    
    
    
    
    
    178
    
    
    
    
    
    
    
    Other
    
    
    19
    
    
    
    20
    
    
    
    11.4
    
    
    
    1.5$
    3,069
    
    
    $
    514
    
    
    
    20.5
    
    
    
    9.3
 
  Note 5  Credit Arrangements
      31




---



##### Table of Contents



Note 6  Commitments
    Fiscal Year
    
    Rent
    
    
    Royalty2009
    
    $
    2,076
    
    
    $
    9412010
    
    
    1,116
    
    
    
    5972011
    
    
    596
    
    
    
    4202012
    
    
    468
    
    
    
    5152013
    
    
    251
    
    
    
    198$
    4,507
    
    
    $
    2,671
 Note 7  Share-Based Compensation
 Omnibus Plan
    Awards Granted
 Restricted Stock
 32




---



##### Table of Contents



Weighted-AverageNumber
    
    
    
    Grant-DateOf Shares
    
    
    
    Fair ValueNonvested June 30, 2007
    
    
    61,606
    
    
    
    $ 11.60Granted
    
    
    28,260
    
    
    
    11.76Vested
    
    
    (22,892
    )
    
    
    13.22Forfeited
    
    
    (7,164
    )
    
    
    10.57Nonvested June 30, 2008
    
    
    59,810
    
    
    
    11.18
  Stock Options
  Weighted-AverageRemaining
    
    
    AggregateNumber
    
    
    Exercise
    
    
    Contractual
    
    
    IntrinsicOf Shares
    
    
    Price
    
    
    Term
    
    
    ValueOutstanding June 30, 2007
    
    
    639,892
    
    
    $
    11.69Exercised
    
    
    (7,500
    )
    
    
    7.62Forfeited and cancelled
    
    
    (99,660
    )
    
    
    13.08Outstanding June 30, 2008
    
    
    532,732
    
    
    
    11.49Vested and expected to vest
    
    
    532,732
    
    
    
    11.49
    
    
    4.0 Years
    
    
    Exercisable
    
    
    515,405
    
    
    
    11.52
    
    
    3.9 Years
    
    
    
 Options Exercised2008
    
    2007Total intrinsic value
    
    $
    25,000
    
    
    $
    86,000Cash received
    
    
    57,000
    
    
    
    326,000Realizable tax benefit
    
    
    9,000
    
    
    
    32,000
 Performance Units
 Weighted-AverageNumber
    
    
    
    Grant-DateOf Shares(1)
    
    
    
    Fair ValueOutstanding June 30, 2007
    
    
    137,184
    
    
    
    $ 11.44Forfeited
    
    
    (20,414
    )
    
    
    11.07Outstanding June 30, 2008
    
    
    116,770
    
    
    
    11.50Vested and expected to vest
    
    
    
    
    
    
    
 
 (1)
    
    Assuming maximum payout. 33




---



##### Table of Contents



Expense
 Note 8  Employee Benefit Plans
  401(k) Plan
 Stock Purchase Program
 Benefit Restoration Plan
 Acknowledgment and Release Agreement
 34




---



##### Table of Contents



Note 9  Disclosures About Segments Of Our Business And Related Information
   2008
    
    
    2007Net sales:Mens accessories
    
    $
    118,949
    
    
    $
    140,072Womens accessories
    
    
    30,308
    
    
    
    55,737$
    149,257
    
    
    $
    195,809Operating (loss) income: (1)Mens accessories (2)
    
    $
    (31,652
    )
    
    $
    5,305Womens accessories (3)
    
    
    (13,268
    )
    
    
    (1,370
    )(44,920
    )
    
    
    3,935Interest expense (4)
    
    
    (1,394
    )
    
    
    (1,226
    )Other income (5)
    
    
    237
    
    
    
    550(Loss) income before income taxes
    
    $
    (46,077
    )
    
    $
    3,259Depreciation and amortization:Mens accessories
    
    $
    2,234
    
    
    $
    3,237Womens accessories
    
    
    968
    
    
    
    1,478$
    3,202
    
    
    $
    4,715Capital expenditures:Mens accessories
    
    $
    101
    
    
    $
    770Womens accessories
    
    
    
    
    
    
    77Corporate
    
    
    493
    
    
    
    1,357$
    594
    
    
    $
    2,204Total assets:Mens accessories
    
    $
    53,730
    
    
    $
    96,731Womens accessories
    
    
    15,792
    
    
    
    29,085Corporate
    
    
    9,866
    
    
    
    14,847$
    79,388
    
    
    $
    140,663
 
 (1)
    
    Operating (loss) income consists of net sales less cost of goods sold and
specifically identifiable and allocated SG&A expenses.(2)
    
    Mens accessories fiscal 2008 operating loss includes charges of $28.4 million:
goodwill impairment ($16.5 million); write-down of out-of-program and slow-moving inventory
($9.6 million); intangibles impairment ($1.3 million); and restructuring ($1 million).(3)
    
    Womens accessories fiscal 2008 operating loss includes charges of $9.2 million:
write-down of out-of-program and slow-moving inventory ($9.1 million); and restructuring
($0.1 million).(4)
    
    Interest expense for fiscal 2008 includes $196,000 of costs related to a debt
covenant waiver we received for the first quarter and $176,000 related to costs previously
capitalized for the credit facility with our previous lenders.(5)
    
    Other income includes interest, royalty income from corporate trade names, other
income not specifically identifiable with a segment and, in fiscal 2007, a $440,000 gain from
the sale of a trademark.  35




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##### Table of Contents



2008
    
    
    2007Net sales:United States
    
    $
    137,753
    
    
    $
    186,428Canada
    
    
    11,504
    
    
    
    9,381$
    149,257
    
    
    $
    195,809(Loss) income before income taxes:United States
    
    $
    (45,403
    )
    
    $
    2,671Canada
    
    
    (674
    )
    
    
    588$
    (46,077
    )
    
    $
    3,259Property and equipment:United States
    
    $
    31,620
    
    
    $
    38,207Canada
    
    
    779
    
    
    
    721$
    32,399
    
    
    $
    38,928Total assets:United States
    
    $
    72,349
    
    
    $
    131,518Canada
    
    
    7,039
    
    
    
    9,145$
    79,388
    
    
    $
    140,663
  Note 10  Director Stock Deferral Plan
  Note 11  Preferred Stock
   36




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##### Table of Contents



Note 12  Income Taxes
  2008
    
    
    2007Deferred tax assets:Inventory valuation
    
    $
    7,942
    
    
    $
    2,787Net operating loss carryover
    
    
    3,533
    
    
    
    Compensation plans
    
    
    1,768
    
    
    
    1,662Uncertain tax positions
    
    
    844
    
    
    
    Depreciation
    
    
    816
    
    
    
    506Accounts receivable valuation
    
    
    202
    
    
    
    187Other net
    
    
    74
    
    
    
    15,179
    
    
    
    5,142Deferred tax liabilities:Goodwill and other intangibles
    
    
    
    
    
    
    (2,061
    )Other net
    
    
    
    
    
    
    (16
    )
    
    
    
    (2,077
    )Valuation allowance
    
    
    (15,179
    )
    
    
    Net deferred tax asset
    
    $
    
    
    
    $
    3,065
  2008
    
    
    2007Current:Federal (benefit)
    
    $
    (1,412
    )
    
    $
    1,748State
    
    
    235
    
    
    
    304Foreign
    
    
    300
    
    
    
    186(877
    )
    
    
    2,238Deferred:Federal
    
    
    3,712
    
    
    
    (850
    )State
    
    
    286
    
    
    
    (63
    )Uncertain tax positions
    
    
    90
    
    
    
    4,088
    
    
    
    (913
    )$
    3,211
    
    
    $
    1,325
  2008
    
    
    2007Statutory rate
    
    
    (34.0
    )%
    
    
    34.0
    %Deferred tax valuation
    
    
    31.2
    
    
    
    Goodwill impairment
    
    
    8.7
    
    
    
    State and foreign taxes net of federal tax benefit
    
    
    1.1
    
    
    
    3.8Uncertain tax positions
    
    
    0.2
    
    
    
        Other net
    
    
    (0.2
    )
    
    
    2.97.0
    %
    
    
    40.7
    %
  37




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##### Table of Contents



Unrecognized tax benefits:July 1, 2007
    
    $
    1,946Decreases in prior years tax positions
    
    
    (48
    )Settlements
    
    
    (26
    )Statutes of limitations lapses
    
    
    (2
    )June 30, 2008
    
    
    1,870Accrued interest and penalties
    
    
    1,074Uncertain tax positions liability
    
    $
    2,944Unrecognized tax benefits affecting tax rate if recognized
    
    $
    1,393Interest and penalty expense
    
    $
    221
 Note 13  (Loss) Earnings Per Share
  2008
    
    
    2007Numerator for basic and diluted
(loss) earnings per share:Net (loss) income
    
    $
    (49,288
    )
    
    $
    1,934Denominator:Weighted-average shares outstanding
    
    
    6,860
    
    
    
    6,716Contingently issuable shares
    
    
    3
    
    
    
    4Denominator for basic (loss) earnings per share
    
    
    6,863
    
    
    
    6,720Effect of dilutive share-based compensation
    
    
    
    
    
    
    171Denominator for diluted (loss) earnings per share
    
    
    6,863
    
    
    
    6,891(Loss) earnings per common share
    
    $
    (7.18
    )
    
    $
    0.29(Loss) earnings per common share assuming dilution
    
    $
    (7.18
    )
    
    $
    0.28
  38




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##### Table of Contents



ITEM 9  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A(T)  CONTROLS AND PROCEDURES
 Disclosure Controls And Procedures
  Managements Report On Internal Control Over Financial Reporting
    Changes In Internal Control Over Financial Reporting
  
 ITEM 9B  OTHER INFORMATION
  39




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##### Table of Contents



PART III
  Caption In TheTandy Brands Accessories, Inc.Item
    

    2008 Proxy Statement
 
 ITEM 10  DIRECTORS,
EXECUTIVE OFFICERS
AND CORPORATE
GOVERNANCE
    
    Proposal One: Election of Directors Biographical and Other Information Regarding Our
Nominees for Re-Election to Our Board of DirectorsProposal One: Election of Directors
 Biographical and Other Information Regarding Our
Continuing DirectorsExecutive OfficersProposal One: Election of Directors
 Corporate Governance Information
 Code of EthicsProposal One: Election of Directors
 Corporate Governance Information
 Committees  Audit CommitteeSection 16(a) Beneficial Ownership Reporting
Compliance
 
 ITEM 11  EXECUTIVE
COMPENSATION
    
    Executive CompensationProposal One: Election of Directors
 Director Compensation
 
 ITEM 12  SECURITY
OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS
AND MANAGEMENT AND
RELATED STOCKHOLDER
MATTERS
    
    Security Ownership of Certain Beneficial Owners
 
 ITEM 13  CERTAIN
RELATIONSHIPS AND
RELATED
TRANSACTIONS, AND
DIRECTOR
INDEPENDENCE
    
    Proposal One: Election of Directors
 Corporate Governance Information
 Review, Approval or Ratification of Transactions
with Related PersonsProposal One: Election of Directors
 Corporate Governance Information
 Director Independence
 
 ITEM 14  PRINCIPAL
ACCOUNTING FEES AND
SERVICES
    
    Proposal Two: Ratification of Independent Auditor
 Background
 40




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##### Table of Contents



PART IV
 
 ITEM 15  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 Financial Statements
  
    
    Consolidated Balance Sheets as of June 30, 2008 and 2007
    
    Consolidated Statements of Operations for the years ended June 30, 2008 and 2007
    
    Consolidated Statements of Cash Flows for the years ended June 30, 2008 and 2007
    
    Consolidated Statements of Stockholders Equity for the years ended June 30, 2008 and
2007
 Financial Statement Schedules
  Exhibits
  41




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##### Table of Contents



SIGNATURES
  TANDY BRANDS ACCESSORIES, INC.
(Registrant)/s/ J.S.B. JenkinsJ.S.B. JenkinsPresident and Chief Executive Officer
   Name
    
    Position
    
    Date/s/ J.S.B. Jenkins

J.S.B. Jenkins
    
    Director, Chairman of the Board, 
President and
Chief Executive Officer
(principal executive officer)
    
    September 23, 2008/s/ W. Grady Rosier
    
    Lead Independent Director
    
    September 23, 2008W. Grady Rosier/s/ Dr. James F. Gaertner

Dr. James F. Gaertner
    
    Director
    
    September 23, 2008/s/ Roger R. Hemminghaus

Roger R. Hemminghaus
    
    Director
    
    September 23, 2008/s/ George C. Lake

George C. Lake
    
    Director
    
    September 23, 2008/s/ Colombe M. Nicholas

Colombe M. Nicholas
    
    Director
    
    September 23, 2008/s/ Gene Stallings

Gene Stallings
    
    Director
    
    September 23, 2008/s/ William D. Summitt

William D. Summitt
    
    Director
    
    September 23, 2008/s/ M.C. Mackey

M.C. Mackey
    
    Chief Financial Officer (principal
financial officer and
principal accounting officer)
    
    September 23, 2008
 42




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##### Table of Contents



TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES
 
 EXHIBIT INDEX
 Incorporated by Reference(if applicable)Exhibit Number and Description
    
    Form
    
    Date
    
    File No.
    
    Exhibit(3)
    
    Articles of Incorporation and Bylaws3.1     Certificate of Incorporation of
Tandy Brands Accessories, Inc.
    
    S-1
    
    11/02/90
    
    33-37588
    
    
    3.13.2     Certificate of Amendment of the
Certificate of Incorporation of Tandy
Brands Accessories, Inc.
    
    8-K
    
    11/02/07
    
    0-18927
    
    
    3.13.3     Amended and Restated Bylaws of Tandy
Brands Accessories, Inc., effective July
2007
    
    8-K
    
    7/13/07
    
    0-18927
    
    
    3.013.4     Amendment No. 1 to Amended and
Restated Bylaws of Tandy Brands
Accessories, Inc.
    
    8-K
    
    11/02/07
    
    0-18927
    
    
    3.2(4)
    
    Instruments Defining the Rights of Security
Holders, Including Indentures4.1     Form of Common Stock Certificate of
Tandy Brands Accessories, Inc.
    
    S-1
    
    12/17/90
    
    33-37588
    
    
    4.24.2     Certificate of Elimination of Series
A Junior Participating Cumulative
Preferred Stock of Tandy Brands
Accessories, Inc.
    
    8-K
    
    10/24/07
    
    0-18927
    
    
    3.14.3     Credit Agreement by and between
Tandy Brands Accessories, Inc. and
Comerica Bank dated as of February 12,
2008
    
    10-Q
    
    2/14/08
    
    0-18927
    
    
    4.3(10)
    
    Material Contracts10.1   Tandy Brands Accessories, Inc.
Benefit Restoration Plan and related
Trust Agreement and Amendments Nos.
1 and 2 thereto*
    
    10-K
    
    9/25/97
    
    0-18927
    
    
    10.1410.2   Amendment No. 3 to the Tandy Brands
Accessories, Inc. Benefit Restoration
Plan, effective as of July 1, 2003*
    
    10-K
    
    9/23/03
    
    0-18927
    
    
    10.3210.3   Succession Agreement, dated July 1,
2001, between Tandy Brands Accessories,
Inc. and Chase Texas, N.A. (the Former
Trustee) and Comerica Bank  Texas (the
Trustee), relating to the Tandy Brands
Accessories, Inc. Benefit Restoration
Plan*
    
    10-K
    
    9/23/03
    
    0-18927
    
    
    10.3410.4   Form of Indemnification
Agreement between Tandy Brands
Accessories, Inc. and each of
its Directors*
    
    S-1
    
    12/17/90
    
    33-37588
    
    
    10.1610.5   Form of Indemnification Agreement
between Tandy Brands Accessories,
Inc. and each of its Officers*
    
    S-1
    
    12/17/90
    
    33-37588
    
    
    10.17
 1




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##### Table of Contents



TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES
EXHIBIT INDEX
 Incorporated by Reference(if applicable)Exhibit Number and Description
    
    Form
    
    Date
    
    File No.
    
    Exhibit10.6   Tandy Brands Accessories, Inc.
Non-Qualified Formula Stock Option Plan
for Non-Employee Directors*
    
    S-8
    
    2/10/94
    
    33-75114
    
    
    28.110.7   Amendment No. 4 to the Tandy Brands
Accessories, Inc. Nonqualified Formula
Stock Option Plan For Non-Employee
Directors*
    
    10-Q
    
    5/10/02
    
    0-18927
    
    
    10.3910.8   Tandy Brands Accessories, Inc.
Non-Qualified Stock Option Plan for
Non-Employee Directors*
    
    S-8
    
    2/10/94
    
    33-75114
    
    
    28.310.9   Tandy Brands Accessories, Inc. 1995
Stock Deferral Plan for Non-Employee
Directors*
    
    S-8
    
    6/03/96
    
    33-08579
    
    
    99.110.10 Tandy Brands Accessories, Inc. 1997
Employee Stock Option Plan*
    
    S-8
    
    12/12/97
    
    333-42211
    
    
    99.110.11  Amendment No. 2 to the Tandy Brands
Accessories, Inc. 1997 Employee Stock
Option Plan*
    
    10-Q
    
    5/10/02
    
    0-18927
    
    
    10.3810.12 Tandy Brands Accessories, Inc.
Employees Investment Plan, as Amended and
Restated effective July 1, 2000*
    
    10-K
    
    9/26/00
    
    0-18927
    
    
    10.3910.13  Mid-Market Trust Agreement, dated
August 19, 2001, between Tandy Brands
Accessories, Inc. and State Street Bank
and Trust Company, relating to the Tandy
Brands Accessories, Inc. Employees
Investment Plan*
    
    10-K
    
    9/23/03
    
    0-18927
    
    
    10.2810.14 Amendments Nos. 1-3 to the Tandy
Brands Accessories, Inc. Employees
Investment Plan, as Amended and Restated
effective July 1, 2000*
    
    10-K
    
    9/23/03
    
    0-18927
    
    
    10.3110.15  Succession Agreement, dated June 20,
2002, between Tandy Brands Accessories,
Inc. and Comerica Bank  Texas, (the
Trustee), relating to the Tandy Brands
Accessories, Inc. Employees Investment
Plan*
    
    10-K
    
    9/23/03
    
    0-18927
    
    
    10.3510.16 Amendment No. 4 to the Tandy Brands
Accessories, Inc. Employees Investment
Plan, dated December 22, 2003*
    
    10-Q
    
    2/12/04
    
    0-18927
    
    
    10.3810.17  Nonqualified Stock Option Agreement
for Non-Employee Directors, dated October
16, 2001, by and between Tandy Brands
Accessories, Inc. and Dr. James F.
Gaertner*
    
    S-8
    
    5/15/02
    
    33-88276
    
    
    10.2
 2




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##### Table of Contents



TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES
EXHIBIT INDEX
 Incorporated by Reference(if applicable)Exhibit Number and Description
    
    Form
    
    Date
    
    File No.
    
    Exhibit10.18 Nonqualified Stock Option Agreement
for Non-Employee Directors, dated October
16, 2001, by and between Tandy Brands
Accessories, Inc. and Gene Stallings*
    
    S-8
    
    5/15/02
    
    33-88276
    
    
    10.410.19 Nonqualified Stock Option Agreement
for Non-Employee Directors, dated October
16, 2001, by and between Tandy Brands
Accessories, Inc. and Roger R. Hemminghaus*
    
    S-8
    
    5/15/02
    
    33-88276
    
    
    10.510.20  Nonqualified Stock Option Agreement
for Non-Employee Directors, dated October
16, 2001, by and between Tandy Brands
Accessories, Inc. and Colombe M. Nicholas*
    
    S-8
    
    5/15/02
    
    33-88276
    
    
    10.610.21 Tandy Brands Accessories, Inc. 2002
Omnibus Plan*
    
    10-Q
    
    11/12/02
    
    0-18927
    
    
    10.2410.22 Form of Non-Employee Director
Nonqualified Stock Option Agreement
pursuant to the Tandy Brands Accessories,
Inc. 2002 Omnibus Plan*
    
    10-K
    
    9/23/04
    
    0-18927
    
    
    10.3910.23 Form of Employee Nonqualified Stock
Option Agreement pursuant to the Tandy
Brands Accessories, Inc. 2002 Omnibus Plan*
    
    10-K
    
    9/23/04
    
    0-18927
    
    
    10.4010.24 Form of Non-Employee Director
Restricted Stock Award Agreement pursuant
to the Tandy Brands Accessories, Inc. 2002
Omnibus Plan*
    
    10-K
    
    9/23/04
    
    0-18927
    
    
    10.4110.25 Form of Employee Restricted Stock
Award Agreement pursuant to the Tandy
Brands Accessories, Inc. 2002 Omnibus Plan*
    
    10-K
    
    9/23/04
    
    0-18927
    
    
    10.4210.26 Form of Severance Agreement between
Tandy Brands Accessories, Inc. and certain
Executive Officers*
    
    10-K
    
    9/23/03
    
    0-18927
    
    
    10.3310.27 Office Lease Agreement, dated January
31, 2004, between Koll Bren Fund VI, LP and
Tandy Brands Accessories, Inc. relating to
the corporate office
    
    10-Q
    
    2/12/04
    
    0-18927
    
    
    10.3610.28 Acknowledgement and Release Agreement
between Tandy Brands Accessories, Inc. and
J.S.B. Jenkins relating to the termination
of the Supplemental Executive Retirement
Plan*
    
    8-K
    
    8/22/05
    
    0-18927
    
    
    10.4510.29 Amendments Nos. 5-6 to the Tandy
Brands Accessories, Inc. Employees
Investment Plan, as Amended and Restated
effective July 1, 2000*
    
    10-Q
    
    5/11/06
    
    0-18927
    
    
    10.44
 3




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##### Table of Contents



TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES
EXHIBIT INDEX
 Incorporated by Reference(if applicable)Exhibit Number and Description
    
    Form
    
    Date
    
    File No.
    
    Exhibit10.30 Amendment No. 2 to the Tandy Brands
Accessories, Inc. 1995 Stock Deferral Plan
for Non-Employee Directors*
    
    10-K
    
    9/22/06
    
    0-18927
    
    
    10.3510.31 Credit Agreement by and between Tandy
Brands Accessories, Inc. and Comerica Bank
dated as of February 12, 2008
    
    10-Q
    
    2/14/08
    
    0-18927
    
    
    10.3110.32 Amendment No. 4 to the Tandy Brands
Accessories, Inc. Benefit Restoration Plan,
dated July 1, 2001*
    
    10-Q
    
    11/14/06
    
    0-18927
    
    
    10.3710.33 Form of 2006 Performance Unit Award
Agreement pursuant to the Tandy Brands
Accessories, Inc. 2002 Omnibus Plan*
    
    10-Q
    
    2/14/07
    
    0-18927
    
    
    10.3710.34 Amendment No. 7 to the Tandy Brands
Accessories, Inc. Employees Investment
Plan, effective as of January 1, 2006*
    
    10-Q
    
    2/14/07
    
    0-18927
    
    
    10.3810.35 Amendment No. 1 to the Tandy Brands
Accessories, Inc. 2002 Omnibus
Plan*
    
    10-K
    
    9/21/07
    
    0-18927
    
    
    10.3810.36 Settlement Agreement by and among
Tandy Brands Accessories, Inc., Golconda
Capital Management, LLC, Golconda Capital
Portfolio, LP and each of William D.
Summitt and Jedd M. Flowers
    
    8-K
    
    10/29/07
    
    0-18927
    
    
    10.110.37 Tandy Brands Accessories, Inc. Stock
Purchase Program (As Amended And Restated
Effective December 1, 2005)*
    
    10-Q
    
    11/19/07
    
    0-18927
    
    
    10.4010.38  Fiscal 2009 Compensation
Summaries* **
    
    N/A
    
    N/A
    
    N/A
    
    
    N/A(21)
    
    Subsidiaries of the Registrant21.1    List of Subsidiaries**
    
    N/A
    
    N/A
    
    N/A
    
    
    N/A(23)
    
    Consents of Experts and Counsel23.1    Consent of Ernst & Young LLP**
    
    N/A
    
    N/A
    
    N/A
    
    
    N/A(31)
    
    Rule 13a-14(a)/15d-14(a) Certifications31.1    Certification Pursuant to Rule
13a-14(a)/15d-14(a) (Chief Executive
Officer)**
    
    N/A
    
    N/A
    
    N/A
    
    
    N/A31.2    Certification Pursuant to Rule
13a-14(a)/15d-14(a) (Chief Financial
Officer)**
    
    N/A
    
    N/A
    
    N/A
    
    
    N/A
 4




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##### Table of Contents



TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES
EXHIBIT INDEX
 Incorporated by Reference(if applicable)Exhibit Number and Description
    
    Form
    
    Date
    
    File No.
    
    Exhibit(32)
    
    Section 1350 Certifications32.1   Section 1350 Certifications (Chief
Executive Officer and Chief Financial
Officer)**
    
    N/A
    
    N/A
    
    N/A
    
    N/A
 
 *
    
    Management contract or compensatory plan**
    
    Filed herewith 5