Document:

exv10w43

 

EXHIBIT
10.43

FIFTH AMENDMENT TO CREDIT AGREEMENT

     THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) made as of the
19th day of April, 2006, by and among TANDY BRANDS ACCESSORIES, INC.
(“Borrower”), WELLS FARGO HSBC TRADE BANK, N. A. (“Agent”), and the lenders
specified herein (“Lenders”).

     WHEREAS, Borrower, Agent and certain lenders entered into a Credit Agreement dated as of June
27, 2001 (the “Original Credit Agreement”), as amended by that First Amendment to Credit
Agreement dated as of June 28, 2002, (the “First Amendment”); as amended by that Second
Amendment to Credit Agreement dated as of June 26, 2003 (the “Second Amendment”); as
amended by that Third Amendment to Credit Agreement dated as of August 26, 2004 (the “Third
Amendment”); as amended by that Fourth Amendment to Credit Agreement dated as of September 30,
2005 (the “Fourth Amendment”); the Original Credit Agreement, the First Amendment, the
Second Amendment, the Third Amendment, and the Fourth Amendment together, the “Credit
Agreement”); and

     WHEREAS, Borrower has requested that Agent and Lenders make certain amendments to the Credit
Agreement, and Agent and Lenders are willing to do so subject to the terms and conditions set forth
herein;

     NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable
consideration, the sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:

     1. Defined Terms. All capitalized terms used but not otherwise defined in this
Amendment shall have the meaning ascribed to them in the Credit Agreement. Unless otherwise
specified, all section references herein refer to sections of the Credit Agreement.

     2. Amendments to Credit Agreement. The Credit Agreement is hereby amended as follows:

          2.1 Definitions

     (a) Applicable Commitment Fee. The chart in clause (b) in the
definition of “Applicable Commitment Fee Percentage” is revised to read as follows:

	 	 	 
	Tandy Brands
Accessories, Inc. — Fifth Amendment
	1	 

 

 

	 	 	 	 	 
	 	 	APPLICABLE
	TOTAL FUNDED INDEBTEDNESS	 	COMMITMENT FEE
	TO EBITDA RATIO	 	PERCENTAGE
	Less than 1.00 to 1.00
	 	 	0.20	%
	 
	 	 	 	 
	Greater than or equal to 1.00 to 1.00 but less than 2.00 to
1.00
	 	 	0.25	%
	 
	 	 	 	 
	Greater than or equal to 2.00 to 1.00, but less than 2.50
to 1.00
	 	 	0.30	%
	 
	 	 	 	 
	Greater than or equal to 2.50 to 1.00, but less than 3.00
to 1.00
	 	 	0.375	%
	 
	 	 	 	 
	Greater than or equal to 3.00 to 1.00
	 	 	0.375	%*

 

			
	 	 	*Applicable from Effective Date of Fifth Amendment through Review
Date.

     (b) Applicable Margin. The definition of “Applicable Margin” is
revised to read as follows:

“‘Applicable Margin’ means, the following percentages per annum,
which percentages shall be added to the applicable interest rates
for purposes of calculating the interest rates payable to the
Lenders, as more fully described by Section 2.8:

     (a) For the period from the Effective Date of the Fifth
Amendment until receipt and satisfactory review of the
financial statements for the fiscal quarter ending December
31, 2006 (the “Review Date”), the Applicable Margin
for Alternate Base Borrowings shall be 0.0%, the Applicable
Margin for Eurodollar Borrowings shall be 2.00%, and the
Applicable Commitment Fee Percentage shall be 0.375%.

     (b) Following the Review Date, (i) the Applicable Margin
for Alternate Base Borrowings shall be 0.0%; and (ii) the
following Applicable Margins per annum for Eurodollar
Borrowings shall apply, and shall be determined as a function
of the Total Funded Indebtedness to EBITDA Ratio, as set
forth on the most recent certificate showing compliance
delivered to the Agent by the Borrower pursuant to
Section 9.1(b), as follows:

	 	 	 
	Tandy Brands
Accessories, Inc. — Fifth Amendment
	2	 

 

 

	 	 	 	 	 
	 	 	APPLICABLE
	 	 	MARGIN FOR
	TOTAL FUNDED INDEBTEDNESS	 	EURODOLLAR
	TO EBITDA RATIO	 	BORROWINGS
	Less than 1.00 to 1.00
	 	 	1.000	%
	 
	 	 	 	 
	Greater than or equal to 1.00 to 1.00 but less than 1.50 to 1.00
	 	 	1.125	%
	 
	 	 	 	 
	Greater than or equal to 1.50 to 1.00 but less than 2.00 to 1.00
	 	 	1.250	%
	 
	 	 	 	 
	Greater than or equal to 2.00 to 1.00, but less than 2.50 to
1.00
	 	 	1.500	%
	 
	 	 	 	 
	Greater than or equal to 2.50 to 1.00, but less than 3.00 to
1.00
	 	 	1.75	%
	 
	 	 	 	 
	Greater than or equal to 3.00 to 1.00
	 	 	2.00	%”*

 

			
	 	 	*Applicable from Effective Date of Fifth Amendment through Review
Date.

     (c) EBITDA. The definition of “EBITDA” is amended to read as follows:

“‘EBITDA’ means, for any period comprising the most recent four
quarterly periods, the sum of (a) Consolidated Net Income for such
period, plus (b) Interest Expense paid during such period
which was deducted in determining such Consolidated Net Income,
plus (c) all income taxes which were deducted in determining
such Consolidated Net Income, plus (d) all depreciation and
amortization which were deducted in determining such Consolidated
Net Income, plus (e) Add-backs allowed pursuant to Article
11, Regulation S-X, of the Securities Act of 1933, plus (f)
non-cash losses arising from the impairment of good will or
intangibles under FASB 142, such additions to EBITDA not to exceed
$1,500,000 during any four quarterly period; plus (g) a
one-time charge of up to $9,000,000 attributable to the women’s
segment inventory write-offs subsequent to February 28, 2006,
severance or pay in lieu of notice and related benefit costs in
connection with the restructure and write-offs of men’s and women’s
packaging inventory related to relocation of product lines. Upon
consummation of a Permitted Acquisition, EBITDA may be adjusted to
include the financial results of the acquired entity or assets for
the period comprising the four quarterly periods prior to the
Permitted Acquisition, including any period of less than a full
quarter, provided that the Borrower shall have provided Agent with
(i) audited financial statements prepared not more than fifteen (15)
months prior to the closing date of the Permitted Acquisition, or
(ii) if such audited financial statements are not available,
verification of the adjustments for such acquisition prepared by an
accounting firm acceptable to Agent, such statements or verification, as the case may be, to be satisfactory
to the Agent in its sole discretion.”

	 	 	 
	Tandy Brands
Accessories, Inc. — Fifth Amendment
	3	 

 

 

     (d) Effective Date of Fifth Amendment. The definition of “Effective
Date of the Fifth Amendment” is added to the Credit Agreement as follows:

“‘Effective Date of the Fifth Amendment’ means March 31, 2006, the
effective date of the Fifth Amendment to Credit Agreement dated as
of April 19, 2006.”

     (e) Fixed Charge Coverage Ratio. The definition of “Fixed Charge
Coverage Ratio” is amended to read as follows:

“‘Fixed Charge Coverage Ratio’, means, for the four consecutive
fiscal quarterly periods ending on the date of determination for
Borrower and its Subsidiaries, the ratio of (a) EBITDA determined on
a consolidated basis minus Capital Expenditures
minus federal, state, local and foreign income taxes
divided by (b) Interest Expense plus payments made
in respect of Capitalized Lease Obligations plus any cash
dividend made by Borrower or any of its Subsidiaries, plus
any payments made by Borrower or any of its Subsidiaries in respect
of the redemption, retirement, acquisition, or prepayment of any
Borrower’s capital stock, or any other equity interest during the
term of this Agreement, plus any Investments in Sheldon.”

     (f) Permitted Acquisitions. The definition of “Permitted Acquisition”
is revised to read as follows:

“‘Permitted Acquisition’ means an acquisition of a business entity
or assets (i) provided the aggregate amount of all consideration for
all such acquisitions from the Effective Date of the Fifth Amendment
until the Termination Date does not exceed $10,000,000 or (ii) for
which Borrower has received the prior written consent of the
Required Lenders.”

          2.2 Leverage Ratio

Section 10.14 is amended to read as follows:

“10.14 Leverage Ratio. Borrower shall not permit the ratio of (a)
Total Funded Indebtedness on a consolidated basis, as of the last
day of each fiscal quarter of the Borrower to (b) EBITDA, on a
consolidated basis, for the four (4) fiscal quarters ending on March
31, 2006 and June 30, 2006 to exceed 3:00 to 1:00, for the four (4)
fiscal quarters ending on September 30, 2006 to exceed 3:25 to 1:00;
and for any fiscal quarter thereafter to exceed 3:00 to 1:00.”

	 	 	 
	Tandy Brands
Accessories, Inc. — Fifth Amendment
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     3. Effectiveness of Amendment. This Amendment shall be effective as of March 31, 2006
upon receipt by Agent of:

(a) A copy or copies of this Amendment signed by
each of the parties hereto;

(b) A Confirmation of Guaranty executed by each
Guarantor (other than Sheldon);

(c) A Compliance Certificate executed by Borrower;
and

(d) Payment for all other fees and expenses due and
owing by the Borrower.

     4. Ratifications, Representations and Warranties.

(a) The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and
provisions set forth in the Credit Agreement and, except as expressly
modified and superseded by this Amendment, the terms and provisions of
the Credit Agreement are ratified and confirmed and shall continue in
full force and effect. Borrower, Agent and Lenders agree that the
Credit Agreement and the Loan Documents, as amended hereby, shall
continue to be legal, valid, binding and enforceable in accordance with
their respective terms.

(b) To induce Agent and Lenders to enter into this Amendment, Borrower
ratifies and confirms each representation and warranty set forth in the
Credit Agreement as if such representations and warranties were made on the
even date herewith, (except to the extent that such representations and
warranties related solely to an earlier date and except to the extent that
the facts upon which such representations are based have been changed by the
transactions contemplated in the Credit Agreement) and further represents
and warrants (i) that there has occurred since the date of the last
financial statements delivered to Agent and Lenders no event or circumstance
that has resulted or could reasonably be expected to result in a Material
Adverse Change, (ii) that after giving effect to this Amendment no Event of
Default exists on the date hereof after giving effect to this Amendment,
(iii) that Borrower is fully authorized to enter into this Amendment, and
(iv) that the Guarantors signing the Confirmation of Guaranty attached
hereto are all of the Borrower’s Subsidiaries as of the date of this
Amendment (other than Sheldon).

     5. Benefits. This Amendment shall be binding upon and inure to the benefit and
Borrower, Agent and Lenders and their respective successors and assigns; provided, however, that
Borrower may not, without the prior written consent of Agent and Lenders, assign any rights,
powers, duties or obligations under this Amendment, the Credit Agreement or any of the other Loan
Documents.

	 	 	 
	Tandy Brands
Accessories, Inc. — Fifth Amendment
	5	 

 

 

     6. Construction. This Amendment shall be governed by and construed in accordance with
the laws of the State of Texas.

     7. Invalid Provisions. If any provision of this Amendment is held to be illegal,
invalid or unenforceable under present or future laws, such provision shall be fully several and
the remaining provisions of this Amendment shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its severance.

     8. Entire Agreement. The Credit Agreement, as amended by this Amendment, contains the
entire agreement among the parties regarding the subject matter hereof and supersedes all prior
written and oral agreements and understandings among the parties hereto regarding same.

     9. Reference to Credit Agreement. The Credit Agreement and any and all other
agreements, documents or instruments now or hereafter executed and delivered pursuant to the terms
hereof or pursuant to the terms of the Credit Agreement, as amended hereby, are hereby amended so
that any reference in the Credit Agreement to the Credit Agreement shall mean a reference to the
Credit Agreement as amended hereby.

     10. Counterparts. This Amendment may be separately executed in any number of
counterparts, each of which shall be an original, but all of which, taken together, shall be deemed
to constitute one and the same agreement.

[The remainder of this page intentionally left blank.]

	 	 	 
	Tandy Brands
Accessories, Inc. — Fifth Amendment
	6	 

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and
delivered by their proper and duly authorized officers as of the day and year first above written.

	 	 	 	 	 
	 	 	BORROWER:
	 
	 	 	 	 
	 	 	TANDY BRANDS ACCESSORIES, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark J. Flaherty
	 

	 	 	 	 
	 

	 	Name:
	 	Mark J. Flaherty
	 

	 	Title:
	 	Chief Financial Officer
	 
	 	 	 	 
	 	 	AGENT:
	 
	 	 	 	 
	 	 	WELLS FARGO HSBC TRADE BANK, N.A.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ John R. Peloubet
	 

	 	 	 	 
	 

	 	Name:
	 	John R. Peloubet
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	WELLS FARGO BANK, N. A.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ John W. Johnson
	 

	 	 	 	 
	 

	 	Name:
	 	John W. Johnson
	 

	 	Title:
	 	Sr. Vice President

	 	 	 
	Tandy Brands
Accessories, Inc. — Fifth Amendment
	 	 

 

 

	 	 	 	 	 
	 	 	LENDERS:
	 
	 	 	 	 
	 	 	WELLS FARGO HSBC TRADE BANK, N. A.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ John R. Peloubet
	 

	 	 	 	 
	 	 	Name:           John R. Peloubet
	 	 	Title:             Vice President
	 
	 	 	 	 
	 	 	COMERICA BANK
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Corey R. Bailey
	 

	 	 	 	 
	 	 	Name:           Corey R. Bailey
	 	 	Title:             Vice President
	 
	 	 	 	 
	 	 	BANK OF AMERICA, N.A.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ S.A. MacKenzie
	 

	 	 	 	 
	 	 	Name:           Steven A. MacKenzie
	 	 	Title:             Senior Vice President
	 
	 	 	 	 
	 	 	JPMORGAN CHASE BANK
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Jerry Petrey
	 

	 	 	 	 
	 	 	Name:           Jerry Petrey
	 	 	Title:             Vice President

	 	 	 
	Tandy Brands
Accessories, Inc. — Fifth Amendment
	 	 

 

 

CONFIRMATION OF GUARANTY

     Reference is made to the Credit Agreement dated as of June 27, 2001 (as amended, the
“Credit Agreement”) among Tandy Brands Accessories, Inc. (“Borrower”), Wells Fargo
HSBC Trade Bank, N. A. (“Agent”), and the lenders specified therein (“Lenders”).
The undersigned Guarantors hereby confirm that their guaranty under the Subsidiary Guaranty dated
as of June 27, 2001 for the benefit of Agent, Lenders, and Wells Fargo Bank, N. A., continues in
full force and effect notwithstanding the Fifth Amendment to Credit Agreement dated as of April 19,
2006, which Fifth Amendment is hereby accepted and consented to by each Guarantor. In accordance
herewith, the aforesaid guaranty shall be deemed to cover and support the Obligations at any time
due from Borrower to Lenders pursuant to the Credit Agreement as the latter has been modified by
the Fifth Amendment. This Confirmation of Guaranty shall be governed by and construed in
accordance with the laws of the State of Texas.

Dated as of the 19th day of April, 2006.

	 	 	 	 	 
	 	 	ACCESSORY DESIGN GROUP, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark J. Flaherty
	 

	 	 	 	 
	 	 	Name:           Mark J. Flaherty
	 	 	Title:             Chief Financial Officer
	 
	 	 	 	 
	 	 	AMITY/ROLFS, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark J. Flaherty
	 

	 	 	 	 
	 	 	Name:           Mark J. Flaherty
	 	 	Title:             Chief Financial Officer

	 	 	 
	Tandy Brands
Accessories, Inc. — Fifth Amendment
	 	 

 

 

	 	 	 	 	 
	 	 	TANDY BRANDS ACCESSORIES HANDBAGS, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark J. Flaherty
	 

	 	 	 	 
	 	 	Name:           Mark J. Flaherty
	 	 	Title:             Chief Financial Officer
	 
	 	 	 	 
	 	 	TBAC INVESTMENTS, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark J. Flaherty
	 

	 	 	 	 
	 	 	Name:           Mark J. Flaherty
	 	 	Title:             Chief Financial Officer
	 
	 	 	 	 
	 	 	TBAC GENERAL MANAGEMENT COMPANY
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark J. Flaherty
	 

	 	 	 	 
	 	 	Name:           Mark J. Flaherty
	 	 	Title:             Chief Financial Officer

	 	 	 	 	 	 	 
	 	 	TBAC MANAGEMENT COMPANY L.P.
	 

	 	 	 	By:
	 	TBAC General Management Company,
	 

	 	 	 	 	 	its general partner
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Mark J. Flaherty
	 

	 	 	 	 	 	 
	 	 	 	 	Name:           Mark J. Flaherty
	 	 	 	 	Title:             Chief Financial Officer

	 	 	 	 	 
	 	 	TBAC PRINCE GARDNER, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark J. Flaherty
	 

	 	 	 	 
	 	 	Name:           Mark J. Flaherty
	 	 	Title:             Chief Financial Officer

	 	 	 
	Tandy Brands
Accessories, Inc. — Fifth Amendment
	 	 

 

 

	 	 	 	 	 
	 	 	STAGG INDUSTRIES, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark J. Flaherty
	 

	 	 	 	 
	 	 	Name:           Mark J. Flaherty
	 	 	Title:             Chief Financial Officer
	 
	 	 	 	 
	 	 	TBAC — TOREL, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark J. Flaherty
	 

	 	 	 	 
	 	 	Name:           Mark J. Flaherty
	 	 	Title:             Chief Financial Officer
	 
	 	 	 	 
	 	 	TBAC — MASS MERCHANT QUALITY CONTROL, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark J. Flaherty
	 

	 	 	 	 
	 	 	Name:           Mark J. Flaherty
	 	 	Title:             Chief Financial Officer
	 
	 	 	 	 
	 	 	TBAC INVESTMENT TRUST
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark J. Flaherty
	 

	 	 	 	 
	 	 	Name:           Mark J. Flaherty
	 	 	Title:             Chief Financial Officer
	 
	 	 	 	 
	 	 	SUPERIOR MERCHANDISE COMPANY
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark J. Flaherty
	 

	 	 	 	 
	 	 	Name:            Mark J. Flaherty
	 	 	Title:             Chief Financial Officer
	 
	 	 	 	 
	 	 	TBAC — ACQUISITION, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark J. Flaherty
	 

	 	 	 	 
	 	 	Name:            Mark J. Flaherty
	 	 	Title:             Chief Financial Officer

	 	 	 
	Tandy Brands
Accessories, Inc. — Fifth Amendment
	 	 

 

 

	 	 	 	 	 
	ACCEPTED as of the date first written above.	 	 
	 
	 	 	 	 
	BORROWER:	 	 
	 
	 	 	 	 
	TANDY BRANDS ACCESSORIES, INC.	 	 
	 
	 	 	 	 
	By:  

	/s/ Mark J. Flaherty	 	 
	 

	 	 	 	 
	Name: Mark J. Flaherty	 	 
	Title: Chief Financial Officer	 	 

	 	 	 
	Tandy Brands
Accessories, Inc. — Fifth Amendment
	 	 

 

 

COMPLIANCE CERTIFICATE

As of April 19, 2006

     Reference is made to that certain Credit Agreement dated as of June 27, 2001 among Tandy
Brands Accessories, Inc. (“Borrower”), Wells Fargo HSBC Trade Bank, N. A. (“Agent”), and the
lenders specified therein (“Lenders”), by and among Borrower, Agent, and Lenders (as amended, the
“Credit Agreement”). Terms which are defined in the Credit Agreement and which are used but not
defined herein shall have the meanings given them in the Credit Agreement. The undersigned,
Mark J. Flaherty_, Borrower’s _CFO___, hereby certifies in the name, and on
behalf, of Borrower that Borrower has made a thorough inquiry into all matters certified herein and
based upon such inquiry, experience, and the advice of counsel, does hereby further certify that:

     1. All representations and warranties made by Borrower in any Loan Document delivered on or
before the date hereof (including, without limitation, the representations and warranties contained
in Section 4 of the Fifth Amendment to Credit Agreement of even date herewith [“Fifth Amendment”])
are true in all material respects on and as of the date hereof (except to the extent that such
representations and warranties related solely to an earlier date and except to the extent that the
facts upon which such representations are based have been changed by the transactions contemplated
in the Credit Agreement) as if such representations and warranties had been made as of the date
hereof.

     2. After giving effect to the Fifth Amendment no Event of Default exists on the date hereof.

     3. Borrower has performed and complied with all agreements and conditions required in the Loan
Documents to be performed or complied with by it on or prior to the date hereof.

     IN WITNESS WHEREOF, this instrument is executed by the undersigned as of the date first above
written.

	 	 	 	 	 
	 	 	TANDY BRANDS ACCESSORIES, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark J. Flaherty
	 

	 	 	 	 
	 	 	Name:           Mark J. Flaherty
	 	 	Title:             Chief Financial Officer

	 	 	 
	Tandy Brands
Accessories, Inc. — Fifth Amendmentexv10w44

 

EXHIBIT
10.44

AMENDMENT FIVE TO THE

TANDY BRANDS ACCESSORIES, INC.

EMPLOYEES INVESTMENT PLAN

     WHEREAS, Tandy Brands Accessories, Inc. (the “Company”) previously established the Tandy
Brands Accessories, Inc. Employees Investment Plan (the “Plan”) effective as of January 1, 1991;
and

     WHEREAS, the Plan provides at Section 15.1 that the Company reserves the right to amend the
Plan; and

     WHEREAS, the Plan has been amended from time to time since its establishment; and

     WHEREAS the Company wishes to amend the Plan to simply administrative provisions relating to
diversification of the Frozen Company Stock Fund in the Plan, pursuant to authority from the Board
of Directors of the Company in a meeting held on October 14, 2004.

     NOW THEREFORE, the Plan is hereby amended effective as of the dates noted herein, as follows:

     1. Section 14.5(c) is hereby amended effective January 1, 2005 by replacing it in its entirety
to read as follows:

     (c) Prior Plan Employee Contribution Account and Prior Plan Employer Contribution
Account: Prior to July 1, 2000, the Prior Plan Employee Contribution Accounts and Prior
Plan Employer contribution Accounts of Participants were invested solely in Company Stock.
After July 1, 2000 and through December 31, 2004, all Prior Plan Employee Contribution
Accounts and Prior Plan Employer Contribution Accounts were required to remain invested in
Company Stock (such Company Stock fund hereinafter defined as the “Frozen Company Stock
Fund”), and Participants could only convert such accounts into other investment options upon
attainment of a specified age.

     Effective January 1, 2005, each Participant, regardless of age, may elect to direct the
investment of all or a portion of his Prior Plan Employee Contribution Account and Prior
Plan Employer Contribution Account from the Frozen Company Stock Fund into the other
investment options designated by the Committee for investment in accordance with this
Section 14.5.

1

 

     IN WITNESS WHEREOF, this Amendment has been executed this 1st day of
January      , 2005.

	 	 	 	 	 
	 	 	TANDY BRANDS ACCESSORIES, INC.
	 
	 	 	 	 
	 

	 	By:	/s/ J.S.B. Jenkins
	 

	 	 	 	 
	 

	 	Name:
	 	J.S.B. Jenkins
	 

	 	Title:
	 	President & CEO

2

 

AMENDMENT SIX TO THE

TANDY BRANDS ACCESSORIES, INC.

EMPLOYEES INVESTMENT PLAN

     WHEREAS, Tandy Brands Accessories, Inc. (the “Company”) previously established the Tandy
Brands Accessories, Inc. Employees Investment Plan (the “Plan”) effective as of January 1, 1991;
and

     WHEREAS, the Plan provides at Section 15.1 that the Company reserves the right to amend the
Plan; and

     WHEREAS, the Plan has been amended from time to time since its establishment; and

     WHEREAS, the Plan requires amendment to incorporate legislative changes to lump sum payout
provisions under the Plan, which are required to be adopted no later than December 31, 2005 with an
effective date of March 28, 2005; and

     WHEREAS, the Company wishes to amend the Plan to increase the amount a participant can
contribute as a salary reduction contribution.

     NOW THEREFORE, the Plan is hereby amended effective as of the dates noted herein, as follows:

     1. Section 4.1 is hereby amended effective January 1, 2006 by replacing it in its entirety to
read as follows:

     4.1 Salary Reduction Contributions: Each Participant may elect to have
contributed on his behalf to the Trust Fund, on a pre-tax basis, any whole percentage of his
Annual Compensation which is not less than one percent (1%) and which does not exceed
twenty-five percent (25%); provided, however, that such amount may not exceed the dollar
limitation contained in Section 402(g) of the Code in effect for such taxable year of the
Participant, except to the extent permitted under Section 414(v) of the Code, if applicable.
Salary Reduction Contributions shall be elected pursuant to a payroll withholding agreement,
in accordance with Section 5.3 hereof. In the event that a payroll withholding agreement is
not received for a Participant, a payroll withholding agreement is deemed to have been made
and such Participant will be treated as if he elected one percent (1%) of his Annual
Compensation to be contributed to the Trust Fund on his behalf as Salary Reduction
Contributions. Salary Reduction Contributions are at all times one hundred percent (100%)
vested and nonforfeitable. Salary Reduction Contributions made on behalf of a Participant
shall be added to the Trust Fund as soon as practicable after deduction from a Participant’s
paycheck, and shall be credited to the Salary Reduction Contribution Account of the
Participant in accordance with Section 6.1.

1

 

     2. Section 13.2 is hereby amended effective March 28, 2005 by replacing the first paragraph of
such Section in its entirety to read as follows:

     13.2 Time of Payment: After a Participant, former Participant, former
Participant or Beneficiary is entitled to receive benefits hereunder, as provided in
Articles VII, VIII, IX or X, benefits shall commence for such Participant or Beneficiary,
subject to the requirements herein, as soon as practicable following receipt by the
Committee of the Participant’s or Beneficiary’s request for distribution. In the event that
the vested portion of a Participant’s Individual Account does not exceed One Thousand
Dollars ($1,000), distribution of such Participant’s benefits shall be made in a lump sum as
soon as reasonably practicable following the Participant’s termination of employment. In
the event that the vested portion of a Participant’s Individual Account exceeds (or at the
time of any prior distribution exceeded) One Thousand Dollars ($1,000), no distributions may
commence without the Participant’s written consent, as described below, until the
Participant attains his Normal Retirement Age. Such consent must be obtained in writing
within the ninety (90) day period ending on the date of distribution. The Committee shall
notify the Participant of the right to defer any distribution until he attains Normal
Retirement Age. Such notification shall include a general description of the material
features, and an explanation of the relative values of, the optional forms of benefit
available under the Plan in a manner that would satisfy the notice requirements of Section
417(a)(3) of the Code, and shall be provided no less than thirty (30) days and no more than
ninety (90) days prior to the date of distribution. Notwithstanding the foregoing, the
consent of the Participant shall not be required to the extent that a distribution is
required to satisfy Section 415 or Sections 401(k)(8) or 401(m)(6) of the Code. In
addition, upon termination of this Plan if the Plan does not then offer an annuity option,
the Participant’s Individual Account may, without the consent of the Participant, be
distributed to the Participant or transferred to another defined contribution plan within
the same controlled group, as defined in Section 414(b) or (c) of the Code. Furthermore, if
a distribution is one to which Sections 401(a)(11) and 417 of the Code do not apply, such
distribution may commence less than thirty (30) days after the notice required under Section
1.411(a)-11(c) of the Treasury Regulations is given, provided that: (a) the Committee
clearly informs the Participant that he has a right to a period of at least thirty (30) days
after receiving the notice to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular distribution option), and (b) the
Participant, after receiving the notice, affirmatively elects a distribution.

     3. Section 13.5 is hereby amended effective March 28, 2005 by replacing the first paragraph of
such Section in its entirety to read as follows:

     13.5 Distributions Under Domestic Relations Orders: Nothing contained in this
Plan shall prevent the Trustee, in accordance with the direction of the Committee, from
complying with the provisions of a qualified domestic relations order (as defined in Section
414(p) of the Code). The Plan specifically permits distribution to an alternate payee under
a qualified domestic relations order at any time, irrespective of whether the Participant
has attained his earliest retirement age under the Plan, as defined in Section 414(p) of the
Code. A distribution to an alternate payee prior to the Participant’s attainment of
earliest retirement age is available only if (a) the order specifies distribution

2

 

at that time or permits an agreement between the Plan and the alternate payee to
authorize an earlier distribution; (b) the order specifies such distribution to be in the
form of a single, lump sum payment; and (c) if the amount to which the alternate payee is
entitled under the Plan exceeds $1,000, and the order so requires, the alternate payee
consents to any distribution occurring prior to the Participant’s attainment of earliest
retirement age. Nothing in this Section 13.5 gives a Participant a right to receive
distribution at a time otherwise not permitted under the Plan nor does it permit the
alternate payee to receive a form of payment not otherwise permitted under the Plan.

     IN WITNESS WHEREOF, this Amendment has been executed this 24 day of
October      , 2005.

	 	 	 	 	 
	 	 	TANDY BRANDS ACCESSORIES, INC.
	 
	 	 	 	 
	 

	 	By:
	/s/ J.S.B. Jenkins
	 

	 	 	 	 
	 

	 	Name:
	 	     J.S.B. Jenkins
	 

	 	Title:
	 	     President and CEO

3

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