EXHIBIT 10.38
AMENDMENT FOUR 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 model amendments
issued by the Internal Revenue Service relating to minimum required
distributions under the Plan, which are required to be adopted no later than the
last day of the Plan Year beginning on or after January 1, 2003, with an
effective date of the first day of the Plan Year; and
WHEREAS, the Plan was previously amended effective July 1, 2003 to
provide for a short Plan Year beginning on July 1, 2003 and ending on December
31, 2003; and
WHEREAS the Company wishes to amend the Plan to clarify administrative
provisions relating to dividends paid on behalf of Company Stock in the Plan.
NOW THEREFORE, the Plan is hereby amended effective as of the dates
noted herein, as follows:
1. A new Article XX is hereby added to the Plan effective July 1, 2003,
to read as follows:
ARTICLE XX
MINIMUM DISTRIBUTION REQUIREMENTS
20.1 General Rules:
(a) Effective Date: The provisions of this Article
will apply for purposes of determining required minimum
distributions for calendar years beginning with the 2003
calendar year.
(b) Precedence: The requirements of this Article will
take precedence over any inconsistent provisions of the Plan,
including the provisions of Section 13.2.
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(c) Requirements of Treasury Regulations
Incorporated: All distributions required under this Article
will be determined and made in accordance with the Treasury
regulations under Code Section 401(a)(9).
(d) TEFRA Section 242(b)(2) Elections:
Notwithstanding the other provisions of this Article,
distributions may be made under a designation made before
January 1, 1984, in accordance with Section 242(b)(2) of the
Tax Equity and Fiscal Responsibility Act (TEFRA) and the
provisions of the Plan that relate to Section 242(b)(2) of
TEFRA.
20.2 Time and Manner of Distribution:
(a) Required Beginning Date: The Participant's entire
interest will be distributed, or begin to be distributed, to
the Participant no later than the Participant's Required
Beginning Date.
(b) Death of Participant Before Distributions Begin:
If the Participant dies before distributions begin, the
Participant's entire interest will be distributed, or begin to
be distributed, no later than as follows:
(i) If the Participant's surviving spouse is
the Participant's sole Designated Beneficiary, then
distributions to the surviving spouse will begin by
December 31 of the calendar year immediately
following the calendar year in which the Participant
died, or by December 31 of the calendar year in which
the Participant would have attained age 70 1/2, if
later.
(ii) If the Participant's surviving spouse
is not the participant's sole Designated Beneficiary,
then distributions to the Designated Beneficiary will
begin by December 31 of the calendar year immediately
following the calendar year in which the Participant
died.
(iii) If there is no Designated Beneficiary
as of September 30 of the year following the year of
the Participant's death, the Participant's entire
interest will be distributed by December 31 of the
calendar year containing the fifth anniversary of the
Participant's death.
(iv) If the Participant's surviving spouse
is the Participant's sole Designated Beneficiary and
the surviving spouse dies after the Participant but
before distributions to the surviving spouse begin,
this Section 20.2(b), other than Section 20.2(b)(i),
will apply as if the surviving spouse were the
Participant.
For purposes of this Section 20.2(b) and Section
20.4, unless Section 20.2(b)(iv) applies, distributions are
considered to begin on the Participant's Required Beginning
Date. If Section 20.2(b)(iv) applies, distributions are
considered to begin on the date distributions are required to
begin to the surviving spouse under Section 20.2(b)(i). If
distributions under an annuity
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purchased from an insurance company irrevocably commence to
the Participant before the Participant's Required Beginning
Date (or to the Participant's surviving spouse before the date
distributions are required to begin to the surviving spouse
under Section 20.2(b)(i)), the date distributions are
considered to begin is the date distributions actually
commence.
(c) Forms of Distribution: Unless the Participant's
interest is distributed in the form of an annuity purchased
from an insurance company or in a single sum on or before the
Required Beginning Date, as of the first Distribution Calendar
Year distributions will be made in accordance with Sections
20.3 and 20.4. If the Participant's interest is distributed in
the form of an annuity purchased from an insurance company,
distributions thereunder will be made in accordance with the
requirements of Code Section 401(a)(9) and the Treasury
regulations.
20.3 Required Minimum Distributions During Participant's
Lifetime:
(a) Amount of Required Minimum Distribution For Each
Distribution Calendar Year: During the Participant's lifetime,
the minimum amount that will be distributed for each
Distribution Calendar Year is the lesser of:
(i) the quotient obtained by dividing the
Participant's Account balance by the distribution
period in the Uniform Lifetime Table set forth in
Section 1.401(a)(9)-9 of the Treasury regulations,
using the Participant's age as of the Participant's
birthday in the Distribution Calendar Year; or
(ii) if the Participant's sole Designated
Beneficiary for the Distribution Calendar Year is the
Participant's spouse, the quotient obtained by
dividing the Participant's Account balance by the
number in the Joint and Last Survivor Table set forth
in Section 1.401(a)(9)-9 of the Treasury regulations,
using the Participant's and spouse's attained ages as
of the Participant's and spouse's birthdays in the
Distribution Calendar Year.
(b) Lifetime Required Minimum Distributions Continue
Through Year of Participant's Death: Required minimum
distributions will be determined under this Section 20.3
beginning with the first Distribution Calendar Year and up to
and including the Distribution Calendar Year that includes the
Participant's date of death.
20.4 Required Minimum Distributions After Participant's Death:
(a) Death On or After Date Distributions Begin:
(i) Participant Survived by Designated
Beneficiary: If the Participant dies on or after the
date distributions begin and there is a Designated
Beneficiary, the minimum amount that will be
distributed for each Distribution Calendar Year after
the year of the Participant's death is the quotient
obtained by dividing the Participant's Account
balance by the
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longer of the remaining life expectancy of the
Participant or the remaining life expectancy of the
Participant's Designated Beneficiary, determined as
follows:
(1) The Participant's remaining
life expectancy is calculated using the age
of the Participant in the year of death,
reduced by one for each subsequent year.
(2) If the Participant's surviving
spouse is the Participant's sole Designated
Beneficiary, the remaining life expectancy
of the surviving spouse is calculated for
each Distribution Calendar Year after the
year of the Participant's death using the
surviving spouse's age as of the spouse's
birthday in that year. For Distribution
Calendar Years after the year of the
surviving spouse's death, the remaining life
expectancy of the surviving spouse is
calculated using the age of the surviving
spouse as of the spouse's birthday in the
calendar year of the spouse's death, reduced
by one for each subsequent calendar year.
(3) If the Participant's surviving
spouse is not the Participant's sole
Designated Beneficiary, the Designated
Beneficiary's remaining life expectancy is
calculated using the age of the Beneficiary
in the year following the year of the
Participant's death, reduced by one for each
subsequent year.
(ii) No Designated Beneficiary: If the
Participant dies on or after the date distributions
begin and there is no Designated Beneficiary as of
September 30 of the year after the year of the
Participant's death, the minimum amount that will be
distributed for each Distribution Calendar Year after
the year of the Participant's death is the quotient
obtained by dividing the Participant's Account
balance by the Participant's remaining life
expectancy calculated using the age of the
Participant in the year of death, reduced by one for
each subsequent year.
(b) Death Before Date Distributions Begin:
(i) Participant Survived by Designated
Beneficiary: If the Participant dies before the date
distributions begin and there is a Designated
Beneficiary, the minimum amount that will be
distributed for each Distribution Calendar Year after
the year of the Participant's death is the quotient
obtained by dividing the Participant's Account
balance by the remaining life expectancy of the
Participant's Designated Beneficiary, determined as
provided in Section 20.4(a).
(ii) No Designated Beneficiary: If the
Participant dies before the date distributions begin
and there is no Designated Beneficiary as of
September 30 of the year following the year of the
Participant's death,
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distribution of the Participant's entire interest
will be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's
death.
(iii) Death of Surviving Spouse Before
Distributions to Surviving Spouse Are Required to
Begin: If the Participant dies before the date
distributions begin, the Participant's surviving
spouse is the Participant's sole Designated
Beneficiary, and the surviving spouse dies before
distributions are required to begin to the surviving
spouse under Section 20.2(b)(i), this Section 20.4(b)
will apply as if the surviving spouse were the
Participant.
20.5 Definitions: For purposes of this Article XX, the
following definitions shall apply:
(a) Designated Beneficiary: The individual who is
designated as the Beneficiary under Section 8.1 of the Plan
and is the Designated Beneficiary under Code Section 401(a)(9)
and Section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations.
(b) Distribution Calendar Year: A calendar year for
which a minimum distribution is required. For distributions
beginning before the Participant's death, the first
Distribution Calendar Year is the calendar year immediately
preceding the calendar year which contains the Participant's
Required Beginning Date. For distributions beginning after the
Participant's death, the first Distribution Calendar Year is
the calendar year in which distributions are required to begin
under Section 20.2(b). The required minimum distribution for
the Participant's first Distribution Calendar Year will be
made on or before the Participant's Required Beginning Date.
The required minimum distribution for other Distribution
Calendar Years, including the required minimum distribution
for the Distribution Calendar Year in which the Participant's
Required Beginning Date occurs, will be made on or before
December 31 of that Distribution Calendar Year.
(c) Life expectancy: Life expectancy as computed by
use of the Single Life Table in section 1.401(a)(9)-9 of the
Treasury regulations.
(d) Participant's Account balance: The Account
balance as of the last Valuation Date in the calendar year
immediately preceding the Distribution Calendar Year
("Valuation Calendar Year") increased by the amount of any
contributions made and allocated or Forfeitures allocated to
the Account balance as of dates in the Valuation Calendar Year
after the Valuation Date and decreased by distributions made
in the Valuation Calendar Year after the Valuation Date. The
Account balance for the Valuation Calendar Year includes any
amounts rolled over or transferred to the Plan either in the
Valuation Calendar Year or in the Distribution Calendar Year
if distributed or transferred in the Valuation Calendar Year.
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(e) Required Beginning Date: The date specified in
Section 13.2 of the Plan.
2. Section 5.2 of the Plan is hereby amended effective January 1, 2004
by adding a new subsection (d) to read as follows:
(d) Dividends and Earnings on Company Stock. Any cash
dividends or other cash income accrued with respect to Company Stock
allocated to a Participant's Individual Account (whether or not
applicable to the Frozen Company Stock Fund) on the record date on
which the cash dividend was declared or the date the other cash income
was accrued, and any income attributable to the cash dividend or other
income, shall be allocated to the Participant's Individual Account and
shall be made available to the Participant for investment in the same
manner as provided by Section 14.5.
IN WITNESS WHEREOF, this Amendment has been executed this 22nd day of
December, 2003.
TANDY BRANDS ACCESSORIES, INC.
By: /s/ Stan Ninemire
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Name: Stan Ninemire
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Title: Administrative Committee Member
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