Document:

EXHIBIT 10.7

    

       

    

    RESTRICTED STOCK UNIT AGREEMENT

    Pursuant to the Tandy Leather Factory, Inc. 2013 Restricted Stock Plan

    

    
    	 	
            GRANTED TO (“Participant”):

             

          	 	 
	 	
            GRANT DATE:

             

          	 	 
	 	
            NUMBER OF RSUs:

             

          	 	 
	 	
            VESTING DATE(S):

             

          	 	
            1⁄4 of the RSUs on each of the first, second, third and fourth anniversaries of the Grant Date

          

    

       

    1.            Restricted Stock Unit Agreement.  This Restricted Stock Unit Agreement (this “Agreement”) is made and entered into as of the date of grant shown above (the
        “Grant Date”) between Tandy Leather Factory, Inc., a Delaware corporation (the “Company”), and the Participant named above, pursuant to the Tandy Leather Factory, Inc. 2013 Restricted Stock Plan (the “Plan”).  Capitalized terms
        not defined herein shall have the meanings ascribed thereto in the Plan.

     

      

    2.            Grant of Restricted Stock Units.  The Participant is granted the number of restricted stock units (“RSUs”) shown above.  Upon vesting as described below, each RSU
        shall convert into one share of Common Stock of the Company (“Common Stock”).  The RSUs are granted as provided for by the Plan and are subject to the terms and conditions set forth in the Plan and this Agreement.

     

      

    3.            Vesting.  Subject to the provisions of Section 5 of this Agreement, during the term of Participant’s employment the RSUs shall vest (i.e., each vesting RSU shall convert into one share of Common Stock, without payment or other action by the Participant) on each of the vesting dates shown above (each, a “Vesting Date”).  Upon vesting of
        RSUs, shares of Common Stock shall be promptly issued to the Participant and evidenced by a certificate for such shares issued in the Participant’s name or by book entry at the Company’s option.  Notwithstanding anything contained in this Agreement
        to the contrary, if there is a Change in Control (as defined in the Plan) of the Company, all unvested RSUs granted under this Agreement shall become fully vested immediately upon the occurrence of the Change in Control, and such vested RSUs shall
        be paid out or settled, as applicable, within 60 days after the occurrence of the Change in Control, subject to requirements of applicable laws and regulations.

     

      

    4.         

      No Transfer.  Unvested RSUs may not be sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of except by will or the laws of
        descent and distribution.  Any attempt by the Participant to dispose of any unvested RSUs in violation of this section shall result in the immediate forfeiture of such RSUs.

     

      

    
      106

      
        

    

    5.       

             Termination of Employment.

     

      

    a.            Death or Disability.  If the Participant’s employment is terminated due to death or Disability, all unvested RSUs held by the Participant on the date of the
        Participant’s death or the date of the termination of his or her employment related to Disability, as the case may be, shall immediately become vested as of such date.

     

      

    b.       

                Other Termination.  If the Participant’s employment is terminated for any reason, including, without limitation, retirement, other than due
        to death or Disability, all unvested RSUs held by the Participant on the date of the termination of his or her employment shall immediately be forfeited by such Participant as of such date.

     

      

    c.        

              Discretionary Accelerated Vesting.  Notwithstanding anything contained in this Agreement to the contrary, the Committee may, in its discretion,
        provide that any or all unvested RSUs held by the Participant on the date of the termination of the Participant’s employment shall immediately become vested as of such date of as of such other date as the Committee may determine.

     

      

    6.      

              Tax Withholding.  All payments or distributions of an Award made pursuant to this Agreement shall be net of any amounts required to be withheld
        pursuant to applicable federal, state and local tax withholding requirements.  If the Company proposes or is required to distribute Common Stock pursuant to this Agreement, it may require the Participant receiving such Common Stock to remit to it
        or to the Affiliate that employs such Participant an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Common Stock.  In lieu thereof, the Company or the Affiliate employing the
        Participant shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company or the Affiliate, as the case may be, to the Participant receiving Common Stock, as the Committee shall prescribe.  The
        Committee may, in its discretion, and subject to such rules as the Committee may adopt (including any as may be required to satisfy applicable tax and/or non-tax regulatory requirements), permit a Participant to pay all or a portion of the federal,
        state and local withholding taxes arising in connection with this Award consisting of shares of Common Stock by electing to have the Company withhold shares of Common Stock having a Fair Market Value equal to the amount of tax to be withheld, such
        tax calculated at rates required by statute or regulation.

     

      

    7.     

                Legend.  If the Company, in its sole discretion, shall determine that it is necessary to comply with applicable securities laws, the
        certificate or certificates representing any shares of Common Stock delivered to the Participant upon vesting under this Agreement shall bear an appropriate legend in form and substance, as determined by the Company, giving notice of applicable
        restrictions on transfer under or with respect to such laws.  Unless and until the shares of Common Stock delivered to the Participant upon vesting under this Agreement are registered under the Securities Act of 1933, as amended (the “Securities
          Act”), all certificates representing such shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other
        similar capital event shall bear legends in substantially the following form:

     

      

    THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR UNDER
      THE APPLICABLE OR SECURITIES LAWS OF ANY STATE.  NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF
      ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.

     

       

    
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    Appropriate stop transfer instructions with respect to such shares have been placed with the Company’s transfer agent.

    8.         

           Securities Act.  The Participant covenants and agrees with the Company that if, with respect to any shares of Common Stock delivered to the
        Participant pursuant to this Agreement, there does not exist an effective registration statement on an appropriate form under the Securities Act, which registration statement shall have become effective and shall include, or shall be accompanied
        by, as applicable, a prospectus that is current with respect to the shares of Common Stock subject to this Agreement, (i) he or she takes the shares of Common Stock for his or her own account and not with a view to the resale or distribution
        thereof, (ii) any subsequent offer for sale or sale of any such shares shall be made either pursuant to (x) a registration statement on an appropriate form under the Securities Act, which registration statement shall have become effective and shall
        be current with respect to the shares being offered and sold, or (y) a specific exemption from the registration requirements of the Securities Act, but in claiming such exemption, the Participant shall, prior to any offer for sale or sale of such
        shares, may be required to obtain a favorable written opinion from counsel for or approved by the Company as to the applicability of such exemption and (iii) the certificate or certificates evidencing such shares shall bear a legend to the effect
        of the foregoing.

     

      

    9.       

             Conflicts.  This Agreement is subject to all terms, conditions, limitations and restrictions contained in the Plan, which shall be controlling
        in the event of any conflicting or inconsistent provisions.  In the event, however, of any conflict between the provisions of this Agreement or the Plan and the provisions of an employment or change-in-control agreement between the Company and the
        Participant, as applicable, the provisions of the latter shall prevail.

     

      

    10.          

      No Employment Contract.  This Agreement is not a contract of employment, as applicable, and the terms of the Participant’s employment shall not be
        affected hereby or by any agreement referred to herein except to the extent specifically so provided herein or therein. Nothing herein shall be construed to impose any obligation on the Company to continue the Participant’s employment, and it shall
        not impose any obligation on the Participant’s part to remain in the employ of the Company or any of its Affiliates.

     

      

    11.      

      Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORD WITH THE LAWS OF THE STATE OF DELAWARE, EXCLUDING PRINCIPLES OF CONFLICTS OF
        LAW.

     

      

    12.            Headings.  The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this
        Agreement.

     

      

    13.      

      Counterparts.  This Agreement may be executed in any number of counterparts with the same effect as if all signing parties had signed the same document.
        All counterparts will be construed together and constitute the same instrument.

     

      

    
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    IN WITNESS WHEREOF, the undersigned have executed this Restricted Stock Unit Agreement as of the date first written above.

     

       

    	 	
            TANDY LEATHER FACTORY, INC.

          	 
	 	 	 	 
	 	
            By:

          	 	 
	 	 	 	
            Name:  Leann Day

          	 
	 	 	 	
            Title:  VP Human Resources

          	 

    

       

    ACCEPTED:

    

       

    	 	 	 
	 	
            By:

          	 	 
	 	 	
            Name of Participant:

          	 

    

       

    

       

     

  

   
  109EXHIBIT 10.13

    

       

    Separation and Release Agreement

    

       

    Tandy Leather Factory, Inc. and its subsidiaries (“Employer”) and Tina Castillo (“Employee”) enter into this Separation and Release Agreement (“Agreement”), which was received by Employee on the 15th day of October,
      2019, signed by Employee on the date shown below Employee’s signature on the last page of this Agreement and is effective eight days (8) after the date of execution by Employee unless employee revokes the
      agreement before that date, for and in consideration of the promises made among the parties and other good and valuable consideration as follows:

    1.  Change of Role; Separation Date.  Employee has submitted to Employer her resignation as Chief Financial Officer of
      Employer but has agreed to remain with Employer during a transition period of such role.  Employer and Employee agree that upon Employer identifying and onboarding an interim Chief Financial Officer, Employee shall assume the title of Vice President,
      Special Projects; in such role, Employee shall facilitate the training of the interim CFO as well as assist with finance, accounting and other business matters of Employer as needed.  Employee shall remain in such role until the earlier of February
      28, 2020 or such other date as may otherwise be agreed by Employer and Employee (such date, the “Separation Date”).

    2.  Salary and Payments upon Separation Date.  Employee shall receive a base salary of $200,000 per year during the period
      of her employment as Vice President, Special Projects, and will continue to participate in all company health and retirement plans and other benefits programs during such period.  Provided Employee executes this Agreement, does not revoke this
      Agreement under Section 3(b), is not terminated by Employer for Cause, and does not resign her employment or quit without Good Reason prior to the Separation Date, then subject to the terms of this Agreement,
      Employer will pay Employee gross aggregate amount of $75,000, subject to the usual withholding required by law (the “Cash Stay Bonus”). The Cash Stay Bonus will be in accordance with and subject to the terms and conditions of this Agreement and shall
      be paid not later than seven (7) days after the Separation Date.  Additionally, Employee may elect COBRA continuation coverage after the Separation Date, for which Employer shall reimburse Employee for its portion of the contribution for a period of
      up to five (5) months after the Separation Date; if Employee obtains another job during this period through which health benefits would be provided, Employee shall promptly inform Employer, who shall then discontinue further COBRA reimbursements. 
      Employee’s participation in the group medical and dental plan of Employer shall then terminate in accordance with the COBRA continuation of coverage provisions under the group medical and dental plan of Employer.  Good Reason, as used in this
      Agreement, means failure of Employer to provide the pay and benefits described in this Agreement for the Vice President –Special Projects or moving Employee’s work location more than twenty-five miles from its current location.  Cause, as used in
      this Agreement, means Employee’s consistent and prolonged failure or inability to perform duties as assigned or adhere to the policies of the Company; Employee’s perpetuation of fraud, theft or other misappropriation of Employer property or funds;
      Employee is charged with, indicted of, or has pleaded guilty or nolo contendere to any felony or to any crime involving moral turpitude; and/or Employee willfully violates laws and regulations or commits acts that causes material damage to the
      Employer.

    (a)  Restricted Stock Unit Vesting.  Subject to Employee’s eligibility to receive the Cash Stay Bonus, upon the Separation
      Date, Employer shall immediately vest 10,000 restricted stock units currently held by Employee.  Promptly following the Separation Date, Employer shall cause the shares of common stock underlying such restricted stock units into an account for
      Employee’s benefit with Employer’s common stock transfer agent.  Employee is responsible for all personal income tax due.

    (b)  Professional Fees.  Employer will reimburse Employee for reasonable professional fees she may incur in connection with
      Employee’s separation and the review and negotiation of this Agreement, up to a maximum of $3,000.

    (c)  Cell Phone Number.  Upon the Separation Date, Employer and Employee shall cooperate as needed to transfer Employee’s
      current cell phone number to a personal account.  Employee shall direct callers contacting that number for company business after the Separation Date to speak with a designated person with Employer.

    (d)  Employee acknowledges and agrees that, other than any items specifically set forth in this Agreement, Employee is not and
      will not be due any other compensation, including, but not limited to, compensation for unpaid salary (except for amounts unpaid and owing for Employee’s employment with Employer and its affiliates prior to the Separation Date), unpaid bonus and
      severance from Employer any of its affiliates, and as of and after the Separation Date, except as provided herein, Employee will not be eligible to participate in any of the benefit plans of Employer or any of its affiliates, including, without
      limitation, Employer’s 401k  plan or insurance policies.  Employee will be entitled to receive benefits, which are vested and accrued prior to the Separation Date pursuant to the employee benefit plans of Employer.  Employer shall promptly reimburse
      Employee for business expenses incurred in the ordinary course of Employee’s employment on or before the Separation Date, but not previously reimbursed, provided Employer’s policies of documentation and approval are satisfied.

     

       

    
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     3.  Release.

    (a)  Employee, for herself, Employee’s successors, administrators, heirs and assigns, hereby fully releases, waives and forever
      discharges Employer, any affiliated company or subsidiary, their predecessors, successors, affiliates, assigns, shareholders, directors, officers, agents, attorneys, and employees, whether past, present, or future (the “Released Parties”) from any
      and all actions, suits, debts, demands, damages, claims, judgements, or liabilities of any nature, including costs and attorneys’ fees, whether known or unknown, including, but not limited to, all claims arising out of Employee’s employment with or
      separation from any of the Released Parties, such as (by way of example only) any claim for bonus, severance, or other benefits apart from the benefits stated herein; breach of contract; wrongful discharge; impairment of economic opportunity; any
      claim under common-law or at equity; any tort; claims for reimbursements; claims for commissions; or claims for employment discrimination under any state, federal and local law, statute, or regulation or claims related to any other restriction or the
      right to terminate employment, including without limitation, Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act of 1990, as amended, and the Human Rights Act, as amended.  Nothing herein shall release any party
      from any obligation under this agreement.  Employee acknowledges and agrees that this release and the covenant not to sue set forth in Paragraph 4 are essential and material terms of this Agreement and that, without such release and covenant not to
      sue, no agreement would have been reached by the parties and no benefits under this Agreement would have been paid.  Employee understands and acknowledges the significance and consequences of this release and this Agreement.  Nothing contained in
      this Agreement is intended to, nor shall be construed to, waive or release Employee’s right to defense, indemnification and/or advancement of defense costs for claims asserted against Employee by third parties arising out of Employee’s employment
      with Company.

    (b)  EMPLOYEE SPECIFICALLY WAIVES AND RELEASES EMPLOYER FROM ALL CLAIMS EMPLOYEE MAY HAVE AS OF THE DATE EMPLOYEE SIGNS THIS
      AGREEMENT REGARDING CLAIMS OR RIGHTS ARISING UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, 29 U.S.C. 621 (“ADEA”).  THIS PARAGRAPH DOES NOT WAIVE RIGHTS OR CLAIMS THAT MAY ARISE UNDER THE ADEA AFTER THE DATE EMPLOYEE SIGNS THIS
      AGREEMENT.  EMPLOYEE AGREES THAT THIS AGREEMENT PROVIDES BENEFITS TO WHICH EMPLOYEE IS NOT OTHERWISE ENTITLED, THAT EMPLOYER HAS ADVISED EMPLOYEE TO CONSULT AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT, AND THAT EMPLOYEE HAS CONSULTED COMPETENT
      COUNSEL OF HIS/HER OWN SELECTION PRIOR TO SIGNING THIS AGREEMENT.  EMPLOYEE HAS BEEN PROVIDED TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER WHETHER EMPLOYEE SHOULD SIGN THIS AGREEMENT AND WAIVE AND RELEASE ALL CLAIMS AND RIGHTS ARISING UNDER THE
      ADEA.  EMPLOYEE SHALL HAVE SEVEN (7) DAYS WITHIN WHICH TO REVOKE THIS AGREEMENT AFTER ITS EXECUTION BY EMPLOYEE AND THIS AGREEMENT SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THAT REVOCATION PERIOD HAS EXPIRED.  ANY REVOCATION WITHIN THIS PERIOD
      MUST BE SUBMITTED IN WRITING TO EMPLOYER’S GENERAL COUNSEL AT 1900 SE LOOP 820, FORT WORTH, TEXAS 76140 AND MUST STATE:  “I HEREBY REVOKE MY ACCEPTANCE OF OUR AGREEMENT AND GENERAL RELEASE.”

    (c)  IN THE EVENT EMPLOYEE RETAINS ANY AMOUNT PAID UNDER THE AGREEMENT AND LATER ASSERTS OR FILES A CLAIM, CHARGE, COMPLAINT, OR
      ACTION AND OBTAINS A JUDGEMENT, IT IS THE INTENT OF THE PARTIES THAT ALL PAYMENTS MADE TO EMPLOYEE HERE UNDER SHALL BE OFFSET AGAINST ANY JUDGEMENT EMPLOYEE OBTAINS.

    (e)  Additional Release.  Employee agrees that her entitlement to the Stay Bonus and the vesting of Restricted Stock Units
      hereunder are expressly conditioned on her execution of a subsequent release in the form annexed hereto as Addendum A of all claims covering the period between execution of this Agreement and the Separation Date.  If Employee does not execute this
      additional release, she will not be entitled to any compensation or COBRA continuation benefits described in Paragraph 2 above.

     

       

    
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    4.  Covenant Not to Sue.

    (a)  To the maximum extent permitted by law, Employee covenants not to sue or to institute or cause to be instituted any action in
      any federal, state, or local agency or court against any of the Released Parties, including but not limited to any of the claims released in paragraph 3 of this Agreement.  In the event of Employee’s breach of the terms of this Agreement, without
      prejudice to Employer’s other rights and remedies available at law or in equity, except as prohibited by law, Employee shall be liable for all costs and expenses (including, without limitation, reasonable attorney’s fees and legal expenses) incurred
      by Employer as a result of such breach.

    (b)  Notwithstanding the foregoing, nothing in this Agreement is intended to or shall preclude Employee from filing a complaint
      and/or charge with the Equal Employment Opportunity Commission, or an appropriate federal, state, or local government agency, or preclude Employee from cooperating with said agency in its investigation.  Employee, however, shall not be entitled to
      receive any relief, recovery, or monies in connection with any complaint or charge brought against Employer, without regard as to who brought any said complaint or charge.  Nothing herein shall prevent Employee or Employer from instituting any action
      required to enforce the terms of this Agreement.  In addition, nothing herein shall be construed to prevent Employee from enforcing any rights Employee may have under the Employee Retirement Income Security Act of 1974, commonly known as ERISA.

    5.  Confidentiality.  At all times hereafter, Employee will maintain the confidentiality of all information in whatever
      form concerning Employer or any of its affiliates relating to its or their businesses, customers, finances, strategic or other plans, marketing, employees, trade practices, trade secrets, know-how or other matters which are not generally known
      outside Employer, and Employee will not, directly or indirectly, make any disclosure thereof to anyone, or make any use thereof, on her own behalf or on behalf of any third party, unless specifically requested by or agreed to in writing by an
      executive officer of Employer.  Employee will promptly after the Separation Date return to Employer all reports, files, memoranda, records, computer equipment and software, credit cards, cardkey passes, door and file keys, computer access codes or
      disks and instructional manuals, and other physical or personal property which she received or prepared or helped prepare in connection with her employment with Employer, its subsidiaries and affiliates, and Employee will not retain any copies,
      duplicates, reproductions or excerpts thereof.  In addition, Employee agrees that, except as required by law or regulation, she will not, at any time, discuss publicly (including, without limitation, any member of the media) the terms of Employee’s
      employment severance (including, without limitation, the terms of this Agreement), except with Employee’s immediate family and financial advisors, and to the extent necessary to enforce the terms and conditions of this Agreement or as otherwise
      required by law, or pursuant to a valid subpoena, discovery notice, demand or request, or Court order or process.

    6.  Non-Disparagement.  Employee agrees to refrain from making public or private comments or taking any actions which
      disparage, or are disparaging, derogatory or negative about the business of Employer, or the products, policies or decisions of Employer, or any present or former officers, directors or employees of Employer or any of its operating divisions,
      subsidiaries or affiliates.  In the event that Employee breaches this Paragraph 6, Employee shall be required to reimburse Employer the full amount of any Cash Stay Bonus received under this Agreement.  In addition, Employer shall be entitled to
      preliminarily or permanently enjoin Employee from violating this Paragraph 6 in order to prevent the continuation of such harm.  Nothing in this Agreement shall be construed to prohibit Employer from also pursuing any other remedy available to it,
      the parties having agreed that all remedies are to be cumulative.

    7.  Non-Solicitation. In consideration for receiving the payments called for hereunder, Employee agrees that during the one
      (1) year period beginning on the Separation Date, Employee shall not, without the prior written consent of Employer, alone, or in association with others, solicit on behalf of Employee, or any other person, firm, corporation or entity, any employee
      of Employer, or any of its operating divisions, subsidiaries or affiliates, for employment, consulting or other independent contractor arrangements.  For purposes of this Agreement and to avoid any ambiguity, Employer and Employee agree that it will
      be presumed that Employee solicited an employee of Employer if such employee commences employment for or on behalf of Employee within one (1) year after Employee leaves Employer.  Employee acknowledges that compliance with this Paragraph 7 is
      necessary to protect the business and good will of Employer and that a breach of any of these provisions will irreparably and continually damage Employer, for which money damages may not be adequate.  Accordingly, in the event that Employee breaches
      this Paragraph 7, Employee shall be required to reimburse Employer the full amount of any Cash Stay Bonus received under this Agreement.  In addition, Employer shall be entitled to preliminarily or permanently enjoin Employee from violating this
      Paragraph 7 in order to prevent the continuation of such harm.  Nothing in this Agreement shall be construed to prohibit Employer from also pursuing any other remedy available to it, the parties having agreed that all remedies are to be cumulative.

     

       

    
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    8.  Employee’s Understanding.  Employee acknowledges by signing this Agreement that Employee has read and understands this
      document, that Employee has conferred with or had opportunity to confer with Employee’s attorneys regarding the terms and meaning of this Agreement, that Employee has had suffi-cient time to consider the terms provided for in this Agreement, that no
      representations or inducements have been made to Employee except as set forth herein, and that Employee has signed the same KNOWINGLY AND VOLUNTARILY.

     9.  Directors and Officer’s Insurance.  For a period of three years following the Separation Date, Employer shall maintain
      comparable levels of Directors and Officers Insurance coverage as existed as of the Separation Date with respect to the periods of Employee’s service to the Company.  In addition, unless otherwise required by law or regulation, for a period of three
      years following Separation Date, Employer shall maintain its policies of indemnification of Directors and Officers as existed as of the Separation Date with respect to the Employee’s service to the Company.  The foregoing shall not preclude Employer
      from making changes to its insurance coverage or indemnification policies to the extent such changes would be applicable to all the then-current Directors and Officers of the Employer.

    10.  Provisions. It is intended that the provisions of this Agreement shall be enforced to the fullest extent permissible
      under the laws and public policies applied in each jurisdiction in which enforcement is sought.  The provisions of this Agreement shall be construed in accordance with the internal laws of the State of Texas.  In the event that any paragraph,
      subparagraph or provision of this Agreement shall be determined to be partially contrary to governing law or otherwise partially unenforceable, the paragraph, subparagraph, or provision and this Agreement shall be enforced to the maximum extent
      permitted by law, and if any paragraph, subparagraph, or provision of this Agreement shall be determined to be totally contrary to governing law or otherwise totally unenforceable, the paragraph, subparagraph, or provision shall be severed and
      disregarded and the remainder of this Agreement shall be enforced to the maximum extent permitted by law.

    11.  Non-Admission of Liability. Employee agrees that neither this Agreement nor performance hereunder constitutes an
      admission by any of the Released Parties of any violation of any federal, state, or local law, regulation, common-law, breach of any contract, or any other wrongdoing of any type.

    12.  Overpayments, Employee Reimbursements and Return of Company Property.

    (a) Employee agrees to repay any overpayment of any amount miscalculated hereunder to which Employee is not expressly entitled
      under the terms of this Agreement (“Overpayment”).  Employee expressly agrees that Employer may reconcile or set off any Overpayment against any remaining unpaid pay due under this Agreement, or against any amounts due to Employee under any Employer
      non-qualified plans.

    (b) Employee further agrees that if Employee does not return all Employer property or reimburse Employer for all personal expenses
      charged to Employer within 7 days after the Separation Date, then Employer may reconcile or set off the value of the property or the amount of the personal charges against any remaining unpaid amount due hereunder, or against any amounts due to
      Employee under any Employer non-qualified plans.  For purposes of this paragraph, the value of any Employer property shall be determined by Employer in its sole discretion.

     

       

    
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    Exhibit A:  Additional Release Addendum

    Pursuant to the Separation and Release Agreement dated October 15, 2019 (the “Agreement”) between Tandy Leather Factory, Inc. (“Employer”) and Tina
      Castillo (“Employee”), of which this release is made a apart, and in consideration of the Stay Bonus and vesting of restricted stock units described in the Agreement, Employer hereby agrees to the following as of the date set forth below (the
      “Separation Date”):

    Employee, for herself, Employee’s successors, administrators, heirs and assigns, hereby fully releases, waives and forever discharges Employer, any
      affiliated company or subsidiary, their predecessors, successors, affiliates, assigns, shareholders, directors, officers, agents, attorneys, and employees, whether past, present, or future (the “Released Parties”) from any and all actions, suits,
      debts, demands, damages, claims, judgements, or liabilities of any nature, including costs and attorneys’ fees, whether known or unknown, including, but not limited to, all claims arising out of Employee’s employment with or separation from any of
      the Released Parties, such as (by way of example only) any claim for bonus, severance, or other benefits apart from the benefits stated herein; breach of contract; wrongful discharge; impairment of economic opportunity; any claim under common-law or
      at equity; any tort; claims for reimbursements; claims for commissions; or claims for employment discrimination under any state, federal and local law, statute, or regulation or claims related to any other restriction or the right to terminate
      employment, including without limitation, Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act of 1990, as amended, and the Human Rights Act, as amended.  Nothing herein shall release any party from any
      obligation under this agreement.  Employee acknowledges and agrees that this release and the covenant not to sue set forth in Paragraph 4 of the Agreement are essential and material terms of the Agreement and that, without such release and covenant
      not to sue, no agreement would have been reached by the parties and no benefits under such Agreement would have been paid.  Employee understands and acknowledges the significance and consequences of this release and the Agreement.

    

       

    Signed and delivered as of the Separation Date set forth below:

    	 	 	 	
            EMPLOYEE:

          	 
	 	 	 	 	 
	 	 	 	 	 
	

             	

             	

             	
            Tina Castillo

          	 
	 	 	 	 	 
	
            Date:

          	

             	

             	

             	 

    

       

    

       

     

  

   
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