Document:

exv10w1

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

     This Employment Agreement (the “Agreement”) by and between Tandy Brands Accessories, Inc., a
Delaware corporation (the “Company” or “Tandy Brands”), and N. Roderick McGeachy, III (“Executive”)
is hereby entered into effective as of October 1, 2008 (“Effective Date”).

RECITALS

     Whereas, as of the Effective Date, the Company and the subsidiaries of the Company (the
Company and such subsidiaries being collectively, the “TBAC Companies”) designs and markets fashion
accessories and gifts for men, women and children; and

     Whereas, the Company wishes to employ Executive, and Executive wishes to be employed by the
Company, on the terms set forth herein; and

     Whereas, in the course of his employment with the Company, Executive will become familiar with
and aware of information as to the TBAC Companies’ customers and specific manner of doing business,
including the processes, techniques and trade secrets used by the TBAC Companies, and future plans
with respect thereto, all of which have been and will be established and maintained at great
expense to the TBAC Companies and which constitute trade secrets and the valuable goodwill of the
TBAC Companies.

     Therefore, in consideration of the mutual promises, terms, covenants and conditions set forth
herein and the performance of each, it is hereby agreed as follows:

AGREEMENTS

	1.	 	Employment and Duties.

	 	a.	 	The Company hereby employs Executive as the President and Chief Executive
Officer of Tandy Brands Accessories, Inc. As such, Executive shall have the
responsibilities, duties and authority customarily appertaining to such offices and
such other duties as may be reasonably assigned to Executive by the Board of Directors
of the Company and which are consistent with such position. Executive shall report to
the Board of Directors of the Company (the “Board” or the “Board of Directors”).
Executive hereby accepts this employment upon the terms and conditions herein contained
and, subject to paragraph 1(c), agrees to devote substantially all of his time,
attention and efforts during normal business hours, excluding any periods of vacation,
sick leave or personal leave, to promote and further the business and interests of the
Company and its affiliates.
	 
	 	b.	 	Executive shall faithfully adhere to, execute and fulfill all reasonable and
lawful policies established by the Company, to the extent such policies have been
communicated to Executive in writing or the Executive is otherwise aware of such
policies, and such policies are not inconsistent with any of the terms of this
Agreement or with any federal, state or local law or regulation.

 

 

	 	c.	 	Except as authorized by the Company’s Board of Directors, Executive shall not,
during the term of his employment hereunder, engage in any other business activity
pursued for gain, profit or other pecuniary advantage to the extent such activity
materially interferes with Executive’s duties and responsibilities hereunder. The
foregoing limitations shall not prohibit Executive from making personal investments in
such form or manner as will not materially interfere with Executive’s performance of
his duties under this Agreement.
	 
	 	d.	 	During the Initial Term and any Extended Term, Executive shall be entitled to
fifteen (15) days of personal time off in accordance with the policies of the Company.

	2.	 	Compensation. For all services rendered by Executive, the Company shall compensate
Executive as follows:

	 	a.	 	Base Salary. The base salary payable to Executive from the Effective Date
through June 30, 2009 (the “2009 Fiscal Period”) will be $300,000 per year (“Base
Salary”) payable in accordance with the Company’s payroll procedures for officers. For
the period from July 1, 2009 to June 30, 2010 (the “2010 Fiscal Period”), Executive’s
Base Salary will be $330,000. For any periods after June 30, 2010, on an annual basis
such Base Salary shall be reviewed by the Board of Directors, and may be adjusted at
its discretion in light of the Executive’s position, responsibilities, performance and
such other reasonable, job-related factors that the Board deems appropriate.
	 
	 	b.	 	Annual Bonus. During the Initial Term and any Extended Term, Executive shall
be entitled to participate in any incentive bonus plan maintained by the Company for
its executive officers. For the 2009 Fiscal Period, Executive’s target bonus will be
set at seventy-five percent (75%) of the 2009 Fiscal Period Base Salary and Executive
will be entitled to receive at least fifty-five percent (55%) as a guaranteed bonus
payment. For the 2010 Fiscal Period, Executive’s target bonus will be set at
seventy-five percent (75%) of the 2010 Fiscal Period Base Salary and Executive will be
entitled to receive at least thirty-five percent (35%) as a guaranteed bonus payment.
	 
	 	c.	 	Sign-On Bonus. In consideration of the benefits foregone from Executive’s
previous employer, the Company will pay to Executive a sign-on bonus of $210,000 (the
“Sign-On Bonus”). One-half of the Sign-On Bonus will be paid as of the Effective Date
and the remaining one-half of the Sign-On Bonus will be paid sixty days following the
Effective Date.
	 
	 	d.	 	Executive Perquisites and Benefits. During the Term, Executive shall be
entitled to receive additional benefits and compensation from the Company in the form
and to the extent specified below:

	 	i.	 	Executive shall be reimbursed for all business travel and other
out-of-pocket expenses reasonably incurred by Executive in the performance of
his duties pursuant to this Agreement and in accordance with the

2

 

	 	 	 	Company’s policy for its officers. All such expenses shall be appropriately
documented in reasonable detail by Executive upon submission of any request
for reimbursement, and in a format and manner consistent with the Company’s
expense reporting policy.
	 
	 	ii.	 	Executive shall be entitled to participate in the various
employee benefit plans or programs provided to the other comparable officers
(in terms of position) of the Company in general, subject to the regular
eligibility requirements with respect to each of such benefit plans or
programs, and such other benefits or perquisites as may be approved for
Executive by the Board during the term of this Agreement. The preceding
sentence shall not require the Company to establish or maintain any particular
employee benefit plan, program, or arrangement, or in any way limit the
Company’s right to amend, modify or revoke any such employee benefit plan,
program, or arrangement without Executive’s consent.
	 
	 	iii.	 	The Company will pay certain annual insurance premiums for term
life coverage of $700,000 ($400,000 automatically approved and the balance
based on verification of health) and disability coverage of $15,000 per month.
	 
	 	iv.	 	The relocation benefits described on Schedule 1
attached hereto.

	3.	 	Non-Competition Agreement.

	 	a.	 	Executive acknowledges that as a consequence of his employment with the
Company, he will be furnished or have access to Confidential Information (as defined
below). Executive further recognizes that the Company’s willingness to enter into this
Agreement is based in material part on Executive’s agreement to the provisions of this
paragraph 3 and that Executive’s breach of the provisions of this paragraph 3 could
materially damage the Company. Subject to the further provisions of this Agreement,
Executive will not, during his actual employment with the Company and, following the
termination of such employment for any reason for a period that shall expire on the
later of (I) the expiration of the Initial Term, or (ii) twelve months after the
termination of such employment (the “Non-competition Period”), directly or indirectly,
for himself or on behalf of or in conjunction with any other person, company,
partnership, corporation or business of whatever nature:

	 	i.	 	engage, as an officer, director, shareholder, owner, partner,
joint venture, or in a managerial capacity, whether as an employee, independent
contractor, consultant or advisor, or as a sales representative, whether paid
or unpaid, in any gift or accessories business directly related thereto (such
business and operations referred to herein as the “Accessories Business”), in
direct competition with any of the TBAC Companies within the United States (the
“Territory”);

3

 

	 	ii.	 	call upon any person who is at that time or was within the
preceding 6 months an employee of the TBAC Companies for the purpose or with
the intent of enticing such employee away from or out of the employ of the TBAC
Companies; or
	 
	 	iii.	 	call upon any person or entity which is, at that time, or which
has been, within one year prior to that time, a customer of the TBAC Companies
within the Territory for the purpose of soliciting customers, orders or
contracts for any Accessories Business within the Territory; (other than the
TBAC Companies during Executive’s actual employment with the Company).
	 
	 	 	 	Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit Executive from acquiring as an investment (i) 1% of the capital
stock of a company engaged in the Accessories Business, whose stock is
traded on a national securities exchange or on an over-the-counter or
similar market or (ii) 1% of the capital stock of a competing business whose
stock is not publicly traded, if the Board consents to such acquisition;
provided that Executive, neither alone nor in conjunction with other
affiliated parties, has any power or authority to manage, operate, advise,
consult with or control such entity, or to select a director, manager,
general partner, or similar governing official of such entity, other than in
connection with the normal and customary voting powers afforded Executive in
connection with any permissible equity ownership. Any ownership interest in
any business which is in competition in any material regard and which is
known to Executive with the TBAC Companies shall immediately be disclosed to
the Board by Executive.

	 	b.	 	Because of the difficulty of measuring economic losses to the Company as a
result of a breach of the foregoing covenant, and because of the immediate and
irreparable damage that could be caused to the Company for which they would have no
other adequate remedy, Executive agrees that the foregoing covenant may be enforced by
the Company, in the event that a court of competent jurisdiction determines that he has
breached, or has attempted or threatened to breach, the foregoing covenant, by
injunctions, restraining orders, and orders of specific performance issued by a court
of competent jurisdiction. This relief is in addition to all other remedies that are
available at law.
	 
	 	c.	 	It is agreed by the parties that the foregoing covenants in this paragraph 3
impose a reasonable restraint on Executive in light of the activities and business of
the TBAC Companies on the date of the execution of this Agreement and the current plans
of the TBAC Companies; but it is also the intent of the Company and Executive that,
subject to paragraph 3.d. hereof, such covenants be construed and enforced in
accordance with the changing activities, business and locations of the TBAC Companies
throughout the term of this covenant, whether before or, to the extent reasonably
contemplated by the Board, after the date of termination of the employment of
Executive, unless the Executive was conducting such new business prior to the TBAC
Companies’ conducting such new business.

4

 

	 	d.	 	It is further agreed by the parties hereto that, in the event that Executive
shall cease to be employed hereunder and shall enter into a business or pursue other
activities not in competition with the Accessories Business of the TBAC Companies or
related activities or business in locations the operation of which, under such
circumstances, does not violate clause (a)(i) of this paragraph 3, and in any event
such new business, activities or location are not in violation of this paragraph 3 or
of Executive’s obligations under this paragraph 3, if any, Executive shall not be
chargeable with a violation of this paragraph 3 if the TBAC Companies shall at any time
after the termination of Executive’s employment enter the same, similar or a
competitive (i) business, (ii) course of activities or (iii) location, as applicable.
	 
	 	e.	 	The covenants in this paragraph 3 are severable and separate, and the
non-enforceability of any specific covenant shall not affect the provisions of any
other covenant. Moreover, in the event any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set forth are unreasonable,
then it is the intention of the parties that such restrictions be enforced to the
fullest extent which the court deems reasonable, and the Agreement shall thereby be
reformed.
	 
	 	f.	 	It is specifically agreed that the portion of the Non-competition Period
following termination of employment stated at the beginning of this paragraph 3, during
which the agreements and covenants of Executive made in this paragraph 3 shall be
effective, may be computed by excluding from such computation any time during which
Executive is in material violation of any provision of this paragraph 3.
	 
	 	g.	 	The Company and the Executive hereby agree that this covenant is a material and
substantial part of this Agreement.

	4.	 	Term; Termination; Rights on Termination. The term of this Agreement shall begin on
the Effective Date and continue to October 1, 2010 (the “Initial Term”), unless terminated
sooner as herein provided; however, beginning on the second anniversary of the Effective Date
and on each anniversary thereafter the term shall automatically continue for one year on the
same terms and conditions contained herein in effect as of the time of renewal (the “Extended
Term”) unless not less than thirty (30) days prior to any such anniversary either party shall
give written notice to the other party that the term shall not be so extended. This Agreement
and Executive’s employment may be terminated in any one of the followings ways:

	 	a.	 	Death. The death of Executive shall immediately terminate this Agreement with
no severance compensation due Executive’s estate; provided, however, for the 90-day
period following Executive’s death, the Company, at its sole cost and expense, shall
continue to provide Executive’s then qualified beneficiaries with coverage under the
Company’s group health plan in which Executive or such beneficiaries participated
immediately prior to Executive’s death or a successor plan thereto, subject to the
terms of such plan as it may be amended (“Company

5

 

	 	 	 	Health Plan”). Thereafter, the Company shall provide continuation of coverage
elections to such qualified beneficiaries as required by law.
	 
	 	b.	 	Disability. If Executive becomes entitled to and receives benefits under an
insured long term disability plan of the TBAC Companies (incurs a “Disability”), the
Company, with the approval of the Board (excluding for this purpose Executive if he is
a member of the Board), may terminate this Agreement and Executive’s employment
hereunder. In the event this Agreement is terminated as a result of Executive’s
Disability, Executive shall have no right to any severance compensation; provided,
however, (i) Executive shall be entitled to any benefits payable to Executive under
such long term disability plan, and (ii) the Company, at its sole cost and expense,
shall continue the coverage of Executive and his qualified beneficiaries (for as long
as they are qualified beneficiaries thereunder) under the Company Health Plan, subject
to the terms of the Company Health Plan, for as long as Executive continues to qualify
for and receive benefits under such long term disability plan, but not to exceed two
years. Thereafter, the Company shall provide continuation of coverage elections to
Executive and his qualified beneficiaries as required by law.
	 
	 	 	 	In the event Executive ceases to be disabled, the provisions of paragraph 3 shall
not apply unless the Company shall offer to reinstate Executive under an agreement
containing terms and provisions no less beneficial to Executive than those set forth
in this Agreement.
	 
	 	c.	 	Cause. The Company may terminate this Agreement and Executive’s employment for
“Cause,” which shall be: (1) Executive’s breach of this Agreement (which remains
uncured at the end of a 10-day period after receipt of written notice of the breach);
(2) Executive’s malfeasance, negligence in the performance or intentional
nonperformance (in either case continuing for 10 days after receipt of written notice
of need to cure) of any of Executive’s material duties and responsibilities hereunder;
(3) Executive’s dishonesty or fraud with respect to the business, reputation or affairs
of the TBAC Companies; (4) fraud, misappropriation or embezzlement of funds or other
property of the TBAC Companies, (5) Executive’s conviction of a felony crime which, in
the opinion of the Board, brings Executive or the TBAC Companies into disrepute or
causes harm to the TBAC Companies’ business, customer relations, financial condition or
prospects, or (6) violation of any statutory or common law duty of loyalty to the TBAC
Companies. Any termination for Cause must be approved by the Board (excluding for this
purpose Executive if he is a member of the Board). In the event of a termination for
Cause, Executive shall have no right to any severance compensation.
	 
	 	d.	 	Without Cause or For Good Reason. Executive may be terminated without Cause
and other than due to Disability by the Company during either the Initial Term or
Extended Term only if such termination is approved by the Board (excluding for this
purpose Executive if he is a member of the Board). Should Executive be terminated by
the Company without Cause and other than due to Disability or should Executive
terminate with Good Reason during the Initial Term, Executive

6

 

	 	 	 	shall receive from the Company, in addition to any accrued but unpaid salary, bonus
and benefits, in a lump sum payment due on the effective date of termination, an
amount equivalent to Executive’s Base Salary (then in effect) for (i) whatever time
period is remaining under the Initial Term or (ii) for one year, whichever amount is
greater. If Executive resigns or otherwise terminates his employment without Good
Reason, rather than the Company terminating his employment pursuant to this
paragraph 4.d., Executive shall receive no severance compensation.
	 
	 	e.	 	Executive shall have “Good Reason” to terminate his employment hereunder as a
consequence of any of the following events, unless such event is agreed to in writing
by Executive: (i) a material reduction in his authority, titles, responsibilities or
duties; (ii) the relocation of the Company’s principal executive offices or Executive’s
principal office to a location outside the state of Texas without a commensurate
adjustment in Executive’s Base Annual Salary to reflect any increase in cost of living
as measured by comparing the applicable regional or local consumer price indices; (iii)
the request by the Board that Executive perform any illegal act to which criminal
sanctions might apply; (iv) the failure of the Company to obtain a satisfactory
agreement from any successor or assign of the Company to assume and agree to perform
this Agreement, as contemplated in paragraph 11; or (v) a material breach of this
Agreement by the Company (including failure of the Company to pay Executive on a timely
basis the amounts to which Executive is entitled under this Agreement); provided,
however, Good Reason shall exist with respect to a matter only if such matter is not
corrected by the Company within 30 days of its receipt of written notice of such matter
from Executive.
	 
	 	f.	 	If termination of Executive’s employment arises out of the events set forth in
paragraph 4.e.(iii) or 4.e.(v) as determined by a court of competent jurisdiction or
pursuant to the provisions of paragraph 17 below, the Company shall pay all amounts and
damages to which Executive may be entitled as a result of such breach, including
interest thereon and all reasonable legal fees and expenses and other costs incurred by
Executive to enforce his rights hereunder. Further, none of the provisions of
paragraph 3 shall apply in the event the Company breaches its payment obligations under
Paragraphs 2 or 4.d. and such breach is not corrected within 20 business days after the
date Executive delivers written notice of such breach to the Company.
	 
	 	g.	 	Resignation Without Good Reason. Executive may, without Good Reason, terminate
this Agreement and Executive’s employment, effective 30 days after written notice is
provided to the Company. If Executive resigns or otherwise terminates his employment
without Good Reason, rather than the Company terminating his employment pursuant to
paragraph 4.d., Executive shall receive all accrued but unpaid salary, bonus and
benefits. Under no circumstances where Executive terminates Executive’s employment
without Good Reason, shall Executive be entitled to any pro rata share or payment of
any bonus or other compensation which requires employment at the time of the
determination or award for eligibility.

7

 

	 	h.	 	Upon termination of this Agreement for any reason provided above, in addition
to the above payments, if any, Executive shall be entitled to receive all compensation
earned (including but not limited to any bonus with respect to which Executive has
fulfilled all of the requirements for payment of the bonus, as set forth in the terms
of such bonus plan or arrangement, but which has not yet been paid as of the
termination of employment, accrued vacation, sick leave and personal leave, and
reimbursements due through the effective date of termination, paid to Executive in a
lump sum on the next regularly scheduled payday following the effective date of
termination. Unless specifically provided herein, under no circumstance where
Executive’s employment terminates shall Executive be entitled to any pro rata share or
payment of any bonus or other compensation which requires employment at the time of the
determination or award for eligibility. In addition, a termination of this Agreement
for any reason provided above shall not alter or impair any of Executive’s vested
rights or benefits, if any, under any (i) employee benefit plan of the TBAC Companies
or (ii) deferred compensation plan, including, without limitation, any stock option
plan, of the TBAC Companies. All other rights and obligations of the Company and
Executive under this Agreement shall cease as of the effective date of termination,
except that Executive’s obligations under paragraphs 3, 5, 6, 7, and 8 herein shall
survive such termination in accordance with their terms, unless or except as expressly
provided otherwise in this Agreement.

	5.	 	Return of Company Property. All records, designs, patents, business plans, financial
statements, manuals, memoranda, lists and other property delivered to or compiled by Executive
by or on behalf of any of the TBAC Companies or their representatives, vendors or customers
which pertain to the business of any TBAC Companies shall be and remain the property of the
TBAC Companies, as the case may be, and be subject at all times to their discretion and
control. Likewise, all correspondence, reports, records, charts, advertising materials and
other similar data pertaining to the business, activities or future plans of the TBAC
Companies which is collected by Executive shall be delivered promptly to the Company without
request by it upon termination of Executive’s employment for any reason and Executive shall
not retain any copies of the same. The foregoing shall not apply to any personnel,
compensation, or benefits information regarding Executive.

	6.	 	Intellectual Property. During the term of Executive’s employment and at any time
thereafter, Executive shall disclose promptly to the Company any and all conceptions, ideas,
designs, plans, know-how, processes, improvements and other discoveries, whether patentable or
not, which (i) are conceived or made by Executive, solely or jointly with another, during the
period of employment, (ii) are directly related to business or activities of the TBAC
Companies, and (iii) Executive conceives as a result of his employment by the Company
(collectively, the “Intellectual Property”). Executive hereby assigns and agrees to assign
all his interests therein to the Company or its nominee. Whenever requested to do so by the
Company, Executive shall execute any and all applications, assignments or other instruments
that the Company shall deem necessary to apply for and obtain Letters Patent of the United
States or any foreign country or to otherwise protect the Company’s interest therein.
Executive must also render to the Company, at the

8

 

	 	 	Company’s expense, reasonable assistance in the perfection, enforcement and defense of any
Intellectual Property.

	7.	 	Trade Secrets. Executive agrees that he will not, during Executive’s actual
employment and, following the termination of such employment for any reason, directly or
indirectly, disclose any trade secrets of the TBAC Companies, except as required by law and
prior to any such disclosure Executive shall give the Company prior written notice thereof and
the opportunity to contest such disclosure.

	8.	 	Confidentiality.

	 	a.	 	Executive acknowledges and agrees that all Confidential Information (as defined
below) of the Company is confidential and a valuable, special and unique asset of the
Company that gives the Company an advantage over its actual and potential, current and
future competitors. Executive further acknowledges and agrees that Executive owes the
Company a fiduciary duty to preserve and protect all Confidential Information from
unauthorized disclosure or unauthorized use, that certain Confidential Information
constitutes “trade secrets” under applicable laws and that unauthorized disclosure or
unauthorized use of the Confidential Information would irreparably injure the Company.
During Executive’s actual employment and, following the termination of such employment
for any reason, for a period that shall expire three years after the termination of
such employment, Executive shall: (a) hold all Confidential Information in strict
confidence, and (b) not use any Confidential Information except for the benefit of the
Company, in accordance with the duties assigned to Executive, and (c) not disclose any
Confidential Information to any person or entity (except other employees of the Company
who have a need to know the information in connection with the performance of their
employment duties, and who have been informed of the confidential nature of the
confidential information and have agreed to keep it confidential), or copy, reproduce,
modify, transmit, including electronic transmission, decompile or reverse engineer any
Confidential Information. Executive shall take reasonable precautions to protect the
physical security of all documents and other material containing Confidential
Information (regardless of the medium on which the Confidential Information is stored).
This Agreement applies to all Confidential Information, whether now known or later to
become known to Executive.
	 
	 	b.	 	Upon the termination of Executive’s employment with the Company for any reason,
and upon written request of the Company at any other time, Executive shall promptly
surrender and deliver to the Company all documents and other written material of any
nature containing or pertaining to any Confidential Information and shall not retain
any such document or other material. Within ten days of a written request by the
Company, Executive shall certify to the Company in writing that all such materials have
been returned.
	 
	 	c.	 	Because of the difficulty of measuring economic losses to the Company as a
result of a breach of the covenants contained in paragraphs 7, 8.a and 8.b of this
Agreement, and because of the immediate and irreparable damage that could be

9

 

	 	 	 	caused to the Company for which it would have no other adequate remedy, Executive
agrees that such covenants may be enforced by the Company, in the event that a court
of competent jurisdiction determines that he has breached, or has attempted or
threatened to breach, any of such covenants, by injunctions, restraining orders, and
orders of specific performance issued by a court of competent jurisdiction. This
relief is in addition to all other remedies available at law.
	 
	 	d.	 	Nothing contained in paragraphs 7, 8.a and 8.b of this Agreement shall be
construed to limit the Company’s common law and statutory rights regarding the
protection of its trade secrets and Confidential Information.
	 
	 	e.	 	Nothing contained in paragraphs 7 and 8a and 8.b of this Agreement shall be
construed to limit Executive’s right to use the expertise, skills, and knowledge he
possessed as of the date of his execution of this Agreement, to the extent such use is
consistent with applicable laws.

	9.	 	As used in this Agreement, the term “Confidential Information” shall mean any information or
material known to or used by or for the TBAC Companies (whether or not owned or developed by
the TBAC Companies and whether or not developed by Executive) that is not generally known to
the public or persons in the Accessories Business. Subject to the foregoing, Confidential
Information includes, but is not limited to, the following: all trade secrets of the TBAC
Companies; all information that the TBAC Companies have marked as confidential or has
otherwise described to Executive (either in writing or orally) as confidential; all nonpublic
information concerning the TBAC Companies’ products, services, prospective products or
services, research, product designs, prices, discounts, costs, marketing plans, marketing
techniques, market studies, test data, customers, customer lists and records, suppliers and
contracts; all TBAC Companies’ business records and plans; all TBAC Companies’ personnel
files; all financial information of or concerning the TBAC Companies; all information relating
to operating system software, application software, software and system methodology, hardware
platforms, technical information, inventions, computer programs and listings, source codes,
and object codes, copyrights and other intellectual property; all technical specifications;
any proprietary information belonging to the TBAC Companies; all computer hardware or software
manuals; all training or instruction manuals; and all data and all computer system passwords
and user codes. For purposes hereof, Confidential Information shall not include such
information (i) that was known to Executive prior to the Effective Date; (ii) which becomes
known to the public or in the industry through no fault of Executive; (iii) the disclosure of
which is required by law (including regulations and rulings) or the order of any competent
governmental authority or Executive reasonably believes is required in connection with the
defense of a lawsuit against Executive, provided that in either case, prior to disclosing any
information, Executive shall give prior written notice thereof to the Company and provide the
Company with the opportunity to contest such disclosure; or (iv) any personnel, compensation,
or benefits information regarding Executive.

	10.	 	No Prior Agreements. Executive hereby represents and warrants to the Company that
the execution of this Agreement by Executive and his employment by the Company and the

10

 

	 	 	performance of his duties hereunder will not violate or be a breach of any agreement,
including any non-competition agreement, invention or secrecy agreement, with a former
employer, client or any other person or entity.

	11.	 	Assignment: Binding Effect. Executive understands that he has been selected for
employment by the Company on the basis of his personal qualifications, experience and skills.
Executive agrees, therefore, that he cannot assign all or any portion of his performance under
this Agreement. Subject to the preceding two sentences, this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties hereto and their respective heirs,
legal representatives, successors and assigns. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and assets of the Company, to expressly assume and agree in
writing reasonably satisfactory to Executive to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such written agreement prior to the
effectiveness of any such succession shall be a material breach of this Agreement.

	12.	 	No Mitigation; Offset. Executive shall not be required to mitigate the amount of any
Company payment provided for in this Agreement by seeking other employment or otherwise. The
amount of any payment required to be paid to Executive by the Company may be reduced by any
amounts that are owed to the Company by Executive.

	13.	 	Release. Notwithstanding anything in this Agreement to the contrary, Executive shall
not be entitled to receive any severance payments pursuant to paragraph 4. of this Agreement
unless Executive has executed (and not revoked) a release of all claims arising under this
Agreement or relating to Executive’s employment or termination thereof, known or unknown, that
Executive may have against the Company, its subsidiaries, their directors, officers, and
employees, in a form of such release reasonably acceptable to the Company. The Company shall
have no obligation to commence payments pursuant to paragraph 4 until such a release becomes
effective, provided that such release is consistent and enforceable under all applicable laws.
Any such release executed by Executive pursuant to this Agreement will not act to waive any
rights or claims that may arise after the date the release is executed.

	14.	 	Complete Agreement. This Agreement supersedes, and replaces in full, all
representations, understandings and agreements (oral or written) between Executive and the
Company or any of the TBAC Companies or any of their officers, directors or representatives
existing as of the Effective Date and covering the same subject matter as this Agreement, save
and except any indemnity obligations in prior Employment Agreements between the Company (or
any predecessors) and Executive. This written Agreement is the final, complete and exclusive
statement and expression of the agreement between the Company and Executive and of all the
terms of this Agreement, and it cannot be varied, contradicted or supplemented by evidence of
any prior or contemporaneous oral or written agreements. This written Agreement may not be
modified after the Effective Date except by a further writing signed by a duly authorized
officer of the Company and Executive, and no term of this Agreement may be waived except by
writing signed by the party waiving the benefit of such term. Without limiting

11

 

	 	 	the generality of the foregoing, either party’s failure to insist on strict compliance with
this Agreement shall not be deemed a waiver thereof.

	15.	 	Notice. Whenever any notice is required hereunder, it shall be given in writing
addressed as follows:

	 	 	 
	To the Company:

	 	Tandy Brands Accessories, Inc.
	 

	 	690 East Lamar Blvd., Suite 200
	 

	 	Arlington, Texas 76011
	 

	 	Attn: Chairman of the Board of Directors
	 
	 	 
	To Executive:

	 	N. Roderick McGeachy, III
	 

	 	2318 Kirkpatrick Place
	 

	 	Greensboro, North Carolina 27408

	 	 	Notice shall be deemed given and effective on the earlier of three days after the deposit in
the U.S. mail of a writing addressed as above and sent first class mail, certified, return
receipt requested, or when actually received. Either party may change the address for
notice by notifying the other party of such change in accordance with this paragraph 16.
	 
	16.	 	Severability; Headings. If any portion of this Agreement is held invalid or
inoperative, the other portions of this Agreement shall be deemed valid and operative and, so
far as is reasonable and possible, effect shall be given to the intent manifested by the
portion held invalid or inoperative. The paragraph headings herein are for reference purposes
only and are not intended in any way to describe, interpret, define or limit the extent or
intent of the Agreement or of any part hereof.
	 
	17.	 	Dispute Resolutions. Except with respect to injunctive relief as provided in
paragraph 3b., neither party shall institute a proceeding in any court or administrative
agency to resolve a dispute between the parties before that party has sought to resolve the
dispute through direct negotiation with the other party. If the dispute is not resolved
within two weeks after a demand for direct negotiation, the parties shall attempt to resolve
the dispute through mediation. If the parties do not promptly agree on a mediator, the
parties shall request the Association of Attorney Mediators in Tarrant County, Texas (or if
the Company’s principal offices are not in Tarrant or Dallas County, a similar organization in
the county in which the Company’s principal offices are located) to appoint a mediator
certified by the Supreme Court of Texas (or applicable judicial authority in another
jurisdiction). If the mediator is unable to facilitate a settlement of the dispute within a
reasonable period of time, as determined by the mediator, the mediator shall issue a written
statement to the parties to that effect and any unresolved dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by arbitration,
conducted before a single arbitrator in the city in which the Company has its principal
offices in Texas (or if its officers are relocated out of Texas, in the county in which the
Executive resides), in accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect. The arbitrator shall not have the authority to modify
or change any term of this Agreement, but may award the Executive any compensation or benefits
due under the Agreement, and in addition, may award the Executive reasonable attorneys’ fees
and expenses and interest thereon in the event the

12

 

	 	 	arbitrator determines (i) that Executive was involuntarily terminated by the Company without
Disability or Cause, as defined in paragraphs 4b. and 4c., respectively, and the Company
breached its obligations to the Executive under paragraph 4, or (ii) that the Company has
otherwise materially breached this Agreement. In addition, the arbitrator may award the
Company damages and attorneys’ fees and expenses and interest thereon in the event the
Arbitrator determines that the Executive has materially breached this Agreement. A decision
by the arbitrator shall be final and binding. Judgment may be entered on the arbitrator’s
award in any court having jurisdiction. The arbitrator may award costs and expenses,
including reasonable attorneys’ fees, to the prevailing party as determined by the
arbitrator in any dispute arising under this Agreement.
	 
	18.	 	Governing Law. This Agreement shall in all respects be construed according to the
laws of the State of Texas without regard to its conflicts of law provisions.
	 
	19.	 	Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original and all of which together shall
constitute but one and the same instrument.

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective for all purposes
as of the Effective Date.

	 	 	 	 	 	 	 
	 	 	TANDY BRANDS ACCESSORIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ JSB Jenkins
 

	 	 
	 

	 	Name:
	 	J.S.B. Jenkins	 	 
	 

	 	Title:
	 	Chairman of the Board	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 
	 	/s/ N. Roderick McGeachy, III
	 	 	 	 	 
	 	 	N. RODERICK MCGEACHY, III	 	 

13exv10w2

EXHIBIT 10.2

EMPLOYEE

NONQUALIFIED STOCK OPTION AGREEMENT

pursuant to the

TANDY BRANDS ACCESSORIES, INC. 2002 OMNIBUS PLAN

     THIS EMPLOYEE NONQUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) is made as of
this 1st day of October, 2008, between TANDY BRANDS ACCESSORIES, INC., a Delaware
corporation (the “Company”), and N. Roderick McGeachy, III, an employee of the Company or
one or more of its subsidiaries (“Employee”).

W I T N E S S E T H:

     WHEREAS, the Company desires to carry out the purposes of the Tandy Brands Accessories, Inc.
2002 Omnibus Plan (the “Plan”), by affording Employee the opportunity to purchase shares of the
common stock, $1.00 par value per share (“Common Stock”), of the Company.

     NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

     1. Grant of Option. The Company hereby grants to Employee the right and option (the
“Option”) to purchase an aggregate of 30,000 shares (the “Shares”) of Common Stock,
such Shares being subject to adjustment as provided in Paragraph 8 hereof, on the terms and
conditions herein set forth.

     2. Purchase Price. The purchase price of the Shares shall be $5.31 per Share, such purchase
price being 100% of the Fair Market Value (as defined in the Plan) of the Shares on the date first
appearing above (the “Date of Grant”).

     3. Exercise of Option. Unless expired as provided in Paragraph 5 below, and subject
to the special provisions of Paragraph 6 below, the Option may be exercised from time to
time in whole or in part for not more than 33-1/3% of the entire number of Shares at any time after
the first anniversary of the Date of Grant, and an additional 33-1/3% of the total Shares on or
after each of the two (2) succeeding anniversaries of the Date of Grant.

     4. Manner of Exercise; Payment of Purchase Price.

     (a) Subject to the terms and conditions of this Agreement, the Option shall be
exercised by the delivery of written notice to the Company setting forth the number of
 shares of Common Stock with respect to which the Option is to be exercised and the date of
exercise thereof which shall be at least three (3) days after giving such notice unless an
earlier time shall have been mutually agreed upon. Such notice of exercise shall be signed
by Employee and shall be irrevocable when given.

     (b) The notice of exercise shall be accompanied by the full payment of the purchase
price for the Shares. The purchase price may be paid by (1) cash, check, bank draft, or
money order payable to the order of the Company, (2) Common Stock (including Restricted
Stock (as defined in the Plan)) owned by Employee on the date of exercise, and/or (3) in any
other form of valid consideration as provided in the Plan. In the event Employee wishes to
pay all or any portion of the purchase price by delivering shares of Common Stock, Employee
shall, not less

 

 

than fourteen (14) days prior to the date of exercise, give written notice to the
Secretary or Assistant Secretary of the Company requesting approval of such payment method,
setting forth the particulars of the proposed payment method. The Committee (as defined in
the Plan) shall approve, disapprove or modify the proposed payment method within fourteen
(14) days of its receipt of the request. The failure of the Committee to respond to the
request within the time period required shall be deemed an approval of Employee’s proposed
payment method.

     (c) Upon receipt of the purchase price, and subject to the terms of Paragraph
11, the certificate or certificates representing the Shares purchased shall be
registered in the name of the person or persons so exercising the Option. If the Option
shall be exercised by Employee and, if Employee shall so request in the notice exercising
the Option, the Shares shall be registered in the name of Employee and another person as
joint tenants with right of survivorship, and shall be delivered as provided above to or
upon the written order of the person or persons exercising the Option. In the event the
Option shall be exercised pursuant to Paragraph 7 hereof, by any person or persons
other than Employee, such notice shall be accompanied by appropriate proof satisfactory to
the Company of the right of such person or persons to exercise the Option. All Shares that
shall be purchased upon the exercise of the Option as provided herein shall be fully paid
and nonassessable.

     5. Expiration of Option. The Option shall expire and become null and void upon the happening
of whichever of the following events shall first occur: (a) expiration of three (3) months after
Employee ceases to be employed by the Company or any of its subsidiaries for any reason other than
termination for cause, retirement, or due to death or Total and Permanent Disability (as defined in
the Plan); (b) a period of twelve (12) months shall have elapsed since Employee’s death; (c) a
period of thirty-six (36) months shall have elapsed since Employee’s cessation of employment due to
Total and Permanent Disability (as defined in the Plan); (d) a period of thirty-six (36) months
shall have elapsed since Employee’s retirement; (e) a period of ten (10) years shall have elapsed
since the Date of Grant; or (f) Employee’s employment shall have been terminated for cause as
determined by the Committee or the Board of Directors of the Company. Except as provided in
Paragraph 6, only those portions of the Option exercisable as of the date of termination of
Employee’s employment may be exercised, whether such termination is by retirement or otherwise.

     6. Acceleration of Exercise Dates. Notwithstanding the provisions of Paragraph 3
above relating to the exercise of the Option in installments: (a) upon Employee’s death or
cessation of employment due to Total and Permanent Disability (as defined in the Plan), the Option
shall be immediately exercisable until the expiration date provided in Paragraph 5 above,
for the entire number of Shares covered hereby; (b) upon Employee’s retirement, the Committee may,
in its discretion, permit the Option to be immediately exercisable, until the expiration date
provided in Paragraph 5 above, for the entire number of Shares covered hereby; (c) pursuant
to Section 4(d) of that certain Employment Agreement, effective as of October 1, 2008, between the
Company and Employee (the “Employment Agreement”), should Employee be terminated by the Company
without Cause (as defined in the Employment Agreement) and other than due to Disability (as defined
in the Employment Agreement) or should Employee terminate with Good Reason (as defined in the
Employment Agreement) during the initial two-year term of the Employment Agreement, the Option
shall be immediately exercisable until the expiration date provided in Paragraph 5 above,
for the entire number of Shares covered hereby; and (d) upon any Change of Control of the Company
(as defined in the Plan), the Option may be exercised for a period of sixty (60) days following the
date of the Change of Control for the entire number of Shares covered hereby.

2

 

     7. Option Nontransferable. Except as otherwise herein provided, the Option and the rights and
privileges conferred hereby may not be transferred, assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to execution, attachment or
similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of
this option or any right or privilege conferred hereby, contrary to the provisions hereof, the
Option and the rights and privileges conferred hereby shall immediately become null and void.
Notwithstanding the foregoing, upon the death of Employee, the Option may be exercised by
Employee’s executor, administrator, legatee or distributee as the case may be, in accordance with
Paragraph 6. References herein to Employee shall include, where applicable, a permitted
transferee.

     8. Adjustments of Shares Subject to Option. If the outstanding shares of Common Stock shall
at any time be changed or exchanged by reason of reorganization, merger, consolidation,
recapitalization, reclassification, stock split, combination of shares or a dividend payable in
stock, then the aggregate number of Shares subject to this Agreement and the purchase price of such
Shares shall be automatically adjusted such that Employee’s proportionate interest shall be
maintained as before the occurrence of such event. The determination of any such adjustment by the
Committee shall be final, binding and conclusive.

     9. No Contract. This Agreement does not constitute a contract for employment and shall not
affect the right of the Company to terminate Employee’s employment for any reason whatsoever.

     10. Rights as Stockholder. This Option shall not entitle Employee or any permitted transferee
to any rights of a stockholder of the Company or to any notice of proceedings of the Company with
respect to any Shares issuable upon exercise of the Option unless and until the Option has been
exercised for such Shares and such Shares have been registered in the Employee’s (or permitted
transferee’s) name upon the stock records of the Company.

     11. Restriction on Issuance of Shares. The Company shall not be required to issue or deliver
any certificates for Shares purchased upon the exercise of an Option prior to: (a) the obtaining
of any approval from any governmental agency which the Company shall, in its sole discretion,
determine to be necessary or advisable; (b) the completion of any listing, registration or other
qualification of such Shares on any securities exchange or inter-dealer quotation system or under
any state or federal law or ruling or regulation of any governmental body which the Company shall,
in its sole discretion, determine to be necessary or advisable; and (c) the determination by the
Committee that Employee has tendered to the Company any federal, state or local tax owed by
Employee as a result of exercising the Option when the Company has a legal liability to satisfy
such tax. In addition, if the Common Stock reserved for issuance upon the exercise of the Option
shall not then be registered under the Securities Act of 1933, the Company may upon Employee’s
exercise of the Option, require Employee or his permitted transferee to represent in writing that
the Shares being acquired are for investment and not with a view to distribution, and may mark the
certificate for the Shares with a legend restricting transfer and may issue stop transfer orders
relating to such certificate to the Company’s transfer agent.

     12. Lapse of Option. This Agreement shall be null and void in the event Employee shall fail
to sign and return a counterpart hereof to the Company within thirty (30) days of its delivery to
Employee.

     13. Construction. The Committee shall have authority to make reasonable constructions of the
Option and to correct any defect or supply any omission or reconcile any inconsistency in the
Option, and to prescribe reasonable rules and regulations relating to the administration of the
Option.

3

 

     14. Notice. Any notice relating to this Agreement shall be given in writing and shall be
deemed effective upon personal delivery or upon deposit in the United States mail, registered or
certified, postage prepaid and addressed to the Company at its main office at 690 E. Lamar
Boulevard, Suite No. 200, Arlington, Texas 76011 or to such other address as may be hereafter
specified by the Company, to the attention of the Company’s Secretary or Assistant Secretary. All
notices to Employee shall be delivered to Employee at Employee’s address specified below or to such
other address as may be hereafter specified by Employee.

     15. Severability. In the event that any provision of this Agreement becomes or is declared by
a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall
continue in full force and effect without said provision, provided that no such severability shall
be effective if it materially changes the economic benefit of this Agreement to any party.

     16. Binding Effect. This Agreement shall be binding upon the permitted transferees, heirs,
executors, administrators, and successors of the parties hereto.

     17. No Waiver. No waiver of any breach or condition of this Agreement shall be deemed to be a
waiver of any other or subsequent breach or condition, whether of like or different nature.

     18. Counterparts. This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the same instrument.

     19. Governing Instrument and Law. This Option and any Shares issued hereunder shall in all
respects be governed by the terms and provisions of the Plan, which terms and provisions are hereby
incorporated herein by reference, and by the laws of the State of Texas, and in the event of a
conflict between the terms of this Agreement and the terms of the Plan (copy attached), the terms
of the Plan shall control.

     20. Entire Agreement. The Plan and this Agreement constitute the entire contract between the
parties hereto with regard to the subject matter hereof.

     21. Nonqualified Stock Option. This Option is not intended to qualify as an “incentive stock
option” within the meaning of Section 422 of the Internal Revenue Code and shall not be so
construed.

	 	 	 	 	 
	 	TANDY BRANDS ACCESSORIES, INC.

 	 
	 	By:  	/s/ M.C. Mackey
 	 
	 	 	M.C. Mackey 	 
	 	 	Chief Financial Officer 	 
	 

	 	 	 	 	 
	Accepted and Agreed:
	 	 	 	 
	EMPLOYEE:
	 	 	 	 
	 
	 	 	 	 
	/s/ N. Roderick McGeachy, III
 

	 	 	 	Date: 10/15/08 
	N. Roderick McGeachy, III
	 	 	 	 
	Address: _______________________________

               _______________________________
	 	 	 	 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00149-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00149-of-00352.parquet"}]]