Tandy Brands Accessories, Inc. 2009 Performance Unit Award Agreement

1.

Performance Units Granted:                      Performance Units granted to                      (the “Participant”).

2.

Date of Grant: January 19, 2009.

3.

Performance Cycle. The performance cycle commences on January 1, 2009, and ends on June 30, 2011 (the “Performance Cycle”).

4.

Performance Unit . Each Performance Unit shall be payable 50% in cash and 50% in shares of Common Stock of the Company, with the number of shares of Common Stock payable based on the Fair Market Value of the Common Stock of the Company on the date of grant, which was $1.9201. The value of a single Performance Unit shall equal $1.00.

5.

Performance Measure — Earnings Per Share. Earnings Per Share (“EPS”) shall be determined by dividing the Company’s consolidated net income or loss by the number of basic common shares of the Company for each twelve-month period, which shall begin each July 1 and end on the following June 30, in the Performance Cycle (each, a “Performance Year”). For purposes of determining EPS for the Performance Year ending June 30, 2009, such Performance Year shall include the period beginning July 1, 2008 and ending December 31, 2008, despite the fact that the Performance Cycle does not commence until January 1, 2009. All amounts necessary to calculate EPS for each Performance Year shall be determined in accordance with generally accepted accounting principles in the United States and, to the extent possible, based on disclosures in the Company’s consolidated financial statements; provided, however, with respect to the determination of:

(i)

the cumulative effect(s) of changes in accounting principles;

(ii)

extraordinary items;

(iii)

recognized capital gains or losses; and

(iv)

such one-time, non-operating items as determined by the Board; and

(i)

be made in accordance with the provisions of Financial Accounting Standards Board Statement No. 128, “Earnings per Share,” as amended and interpreted as of the date of this Award Agreement and without regard to subsequent revisions, amendments, interpretations, or replacements; and

(ii)

exclude the effects, if any, during the Performance Cycle of:

6.

Amount of Performance Unit Award Earned: If not previously forfeited, on June 30, 2011, the Participant shall vest in and have a nonforfeitable right to the percentage of Performance Units that equals the average of the Achievement Percentages attained for each Performance Year in the Performance Cycle that corresponds with the EPS Performance Level Achieved for each such year as set forth in the table below.

Performance

EPS Performance Level Achieved

Year Ending

(Income (Loss))

June 30,

Threshold

Target

Maximum

2009

$

$

$

50

%

100

%

200

%

2010

$

$

$

50

%

100

%

200

%

2011

$

$

$

50

%

100

%

200

%

•

If the actual EPS Performance Level Achieved for each of 2009, 2010 and 2011 was $ ___, $ ___and $ ___, respectively, the corresponding Achievement Percentages for each of 2009, 2010 and 2011 would be ___%, ___% and ___%, respectively.

•

Based on the foregoing, the percentage of Performance Units that would vest at the end of the Performance Cycle would be the average of the Achievement Percentages, or ___%.

•

As a result, the Performance Units earned would equal                      multiplied by ___%, or                      Performance Units.

•

Of the                      Performance Units earned, the Participant would be entitled to receive (a) 50% in cash, or $                      (calculated by multiplying                      Performance Units by $1.00 and multiplying the product by 50%), and (b) 50% in shares of Common Stock, or                      shares (calculated by multiplying                      Performance Units by $1.00 and multiplying the product by 50%, then, dividing by $1.9201, the Fair Market Value of the Company’s Common Stock on the date of grant) with a cash settlement to be made for any fractional shares.

(a)

The Participant was approved as a participant for the Performance Cycle; and

(b)

(i) The Participant:

(ii)

There is a Change of Control of the Company during the Performance Cycle.