Exhibit 10.2

 

PERFORMANCE STOCK AWARD AGREEMENT

 

Tuesday Morning Corporation
2008 Long-Term Equity Incentive Plan

 

This PERFORMANCE STOCK AWARD AGREEMENT (this “Agreement”) is entered into
between Tuesday Morning Corporation, a Delaware corporation (the “Company”), and
                     (“Executive”) effective as of                   ,        
(the “Grant Date”), pursuant to the Tuesday Morning Corporation 2008 Long-Term
Equity Incentive Plan, as amended (the “Plan”), the terms of which are
incorporated by reference herein in their entirety.  The Company and Executive
have entered into a Second Amendment To Amended And Restated Employment
Agreement dated                         ,        , under which the Company has
agreed to grant Executive a Performance Stock Award as an inducement for
Executive’s continued and effective performance of services for the Company.

 

WHEREAS, the Company desires to grant Executive the shares of equity securities
specified herein, subject to the terms and conditions of this Agreement;

 

NOW, THEREFORE, in consideration of the premises, mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
Executive agree as follows:

 

1.                                       Grant of Performance Stock Award. 
Effective as of the Grant Date, the Company shall cause to be issued in
Executive’s name                shares of the Common Stock (individually, a
“Performance Stock Share” and collectively, the “Performance Stock Shares”) as a
Performance Stock Award.  The Company shall cause certificates evidencing the
Performance Stock Shares, and any Retained Distributions issued with respect to
the Performance Stock Shares, to be issued in Executive’s name.  During the
Restricted Period such certificates shall bear a restrictive legend to the
effect that ownership of such Performance Stock Shares (and any such Retained
Distributions), and the enjoyment of all rights appurtenant thereto, are subject
to the restrictions, terms, and conditions provided in the Plan and this
Agreement.  Executive shall have the right to vote the Performance Stock Shares
awarded to Executive and to receive and retain all regular cash dividends, and
to exercise all other rights, powers and privileges of a holder of Common Stock,
with respect to such Performance Stock Shares, with the exception that
(a) Executive shall not be entitled to delivery of the stock certificate or
certificates representing such Performance Stock Shares until the Forfeiture
Restrictions applicable thereto shall have expired, (b) the Company shall retain
custody of all Retained Distributions made or declared with respect to the
Performance Stock Shares (and such Retained Distributions shall be subject to
the same restrictions, terms and conditions as are applicable to the Performance
Stock Shares) until such time, if ever, as the Performance Stock Shares with
respect to which such Retained Distributions shall have been made, paid, or
declared shall have become vested, and such Retained Distributions shall not
bear interest or be segregated in separate accounts and (c) Executive may not
sell, assign, transfer, pledge, exchange, encumber, or dispose of the
Performance Stock Shares or any Retained Distributions during the Restricted
Period.  Upon issuance the certificates for the Performance Stock Shares shall
be delivered to the Secretary of the Company or to such other depository as may
be designated by the Committee as a depository for safekeeping until the
forfeiture of such Performance Stock Shares occurs or the Forfeiture

 

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Restrictions lapse, together with stock powers or other instruments of
assignment, each endorsed in blank, which will permit transfer to the Company of
all or any portion of the Performance Stock Shares and any securities
constituting Retained Distributions which shall be forfeited in accordance with
the Plan and this Agreement.  In accepting the award of Performance Stock Shares
set forth in this Agreement Executive accepts and agrees to be bound by all the
terms and conditions of the Plan and this Agreement.  If Executive’s employment
with the Company terminates for any reason prior to the vesting of a Performance
Stock Share granted hereby all of Executive’s rights to such unvested
Performance Stock Share will lapse and be completely forfeited on the date
Executive’s employment terminates.

 

2.                                       Definitions.  For purposes of this
Agreement, the following terms shall have the meanings indicated below:

 

(a)                                  “Closing Price” means the closing sale
price of the Common Stock as reported on the principle securities exchange on
which the Common Stock is then traded.

 

(b)                                 “Common Stock” means the common stock of the
Company, $0.01 par value per share.

 

(c)                                  “Forfeiture Restrictions” shall mean any
prohibitions and restrictions set forth herein with respect to the sale or other
disposition of Performance Stock Shares issued to Executive hereunder and the
obligation to forfeit and surrender such Performance Stock Shares to the
Company.

 

(d)                                 “Restricted Period” shall mean the period
designated by the Committee during which the Performance Stock Shares are
subject to the Forfeiture Restrictions and may not be sold, assigned,
transferred, pledged, or otherwise encumbered.

 

(e)                                  “Retained Distributions” shall mean any
securities or other property (other than regular cash dividends) distributed by
the Company in respect of Performance Stock Shares during any Restricted Period.

 

(f)                                    “Trading Day” means a day on which the
principle securities exchange on which the Common Stock is traded is open for
trading.

 

Capitalized terms not otherwise defined in this Agreement shall have the
meanings given to such terms in the Plan.

 

3.                                       Transfer Restrictions.  The Performance
Stock Shares granted hereby may not be sold, assigned, pledged, exchanged,
hypothecated or otherwise transferred, encumbered or disposed of to the extent
then subject to the Forfeiture Restrictions.  Any such attempted sale,
assignment, pledge, exchange, hypothecation, transfer, encumbrance or
disposition in violation of this Agreement shall be void and the Company shall
not be bound thereby.  Further, the Performance Stock Shares granted hereby that
are no longer subject to Forfeiture Restrictions may not be sold or otherwise
disposed of in any manner that would constitute a violation of any applicable
federal or state securities laws.  Executive also agrees (a) that the Company
may refuse to cause the transfer of the Performance Stock Shares to be
registered on the applicable stock transfer records if such proposed transfer
would in the opinion of counsel satisfactory to

 

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the Company constitute a violation of any applicable securities law and (b) that
the Company may give related instructions to the transfer agent, if any, to stop
registration of the transfer of the Performance Stock Shares. The Common Stock
is registered with the Securities and Exchange Commission under a Registration
Statement on Form S-8.  A Prospectus describing the Plan and the Common Stock is
available from the Company.

 

4.                                       Vesting.  The Performance Stock Shares
that are granted hereby shall be subject to Forfeiture Restrictions.  The
Forfeiture Restrictions shall lapse as to the Performance Stock Shares that are
granted hereby in accordance with the provisions of subsections (a) through (d)
of this Section 4:

 

(a)                                  The Forfeiture Restrictions shall lapse
with respect to                of the Performance Stock Shares (the “First
Performance Stock Tranche”), and such Performance Stock Shares will vest and
become transferrable in accordance with the terms of this Agreement, if during
the period beginning November 1, 2011, and ending October 31, 2012 (the “2012
Performance Period”) the average of the Closing Price of the Common Stock for a
period of 40 or more consecutive Trading Days during the 2012 Performance Period
is equal to or greater than $8.00 per share and Executive has been actively
employed by the Company from the Grant Date through the 40th Trading Day of such
40 or more consecutive Trading Day period (the “2012 Vesting Date”) in which
case the First Performance Stock Tranche will vest on the 2012 Vesting Date.  If
Executive remains actively employed by the Company throughout the 2012
Performance Period but the average of the Closing Price of the Common Stock for
a period of 40 or more consecutive Trading Days during the 2012 Performance
Period does not equal or exceed $8.00 per share the First Performance Stock
Tranche will not vest and will rollover and be eligible for vesting in a
subsequent performance period as provided subsections (b) through (d) of this
Section 4 and the special rule provided in subsection (e) of this Section 4 will
apply to the 2013 Performance Period (as that term is defined in subsection (b)
of this Section 4).

 

(b)                                 The Forfeiture Restrictions shall lapse with
respect to                of the Performance Stock Shares (the “Second
Performance Stock Tranche”), and with respect the First Performance Stock
Tranche (if the First Performance Stock Tranche did not vest in the 2012
Performance Period), and such Performance Stock Shares will vest and become
transferrable in accordance with the terms of this Agreement, if during the
period beginning November 1, 2012, and ending October 31, 2013 (the “2013
Performance Period”) the average of the Closing Price of the Common Stock for a
period of 40 or more consecutive Trading Days during the 2013 Performance Period
(or, if applicable under subsection (e), ending on a Trading Day in the 2013
Performance Period) is equal to or greater than $8.00 per share and Executive
has been actively employed by the Company from the Grant Date through the
40th Trading Day of such 40 or more consecutive Trading Day period (the “2013
Vesting Date”) in which case the Second Performance Stock Tranche, and the First
Performance Stock Tranche (if the First Performance Stock Tranche did not vest
in the 2012 Performance Period), will vest on the 2013 Vesting Date.  If
Executive remains actively employed by the Company throughout the 2013
Performance Period but the average of the Closing Price of the Common Stock for
a period of 40 or more consecutive Trading Days during (or, to the extent
allowed under subsection (e), ending in) the 2013 Performance Period does not
equal or exceed $8.00 per share the Second Performance Stock Tranche will not
vest and will rollover and be eligible for vesting in a subsequent performance
period as provided subsections (c) through (d) of this Section 4 and the special
rule

 

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provided in subsection (e) of this Section 4 will apply to the 2014 Performance
Period (as that term is defined in subsection (c) of this Section 4).

 

(c)                                  The Forfeiture Restrictions shall lapse
with respect to                of the Performance Stock Shares (the “Third
Performance Stock Tranche”), and with respect to the First Performance Stock
Tranche and/or the Second Performance Stock Tranche (if either or both of such
tranches did not vest in a prior performance period as provided above), and such
Performance Stock Shares will vest and become transferrable in accordance with
the terms of this Agreement, if during the period beginning November 1, 2013,
and ending October 31, 2014 (the “2014 Performance Period”) the average of the
Closing Price of the Common Stock for a period of 40 or more consecutive Trading
Days during the 2014 Performance Period (or, if applicable under subsection (e),
ending on a Trading Day in the 2014 Performance Period) is equal to or greater
than $8.00 per share and Executive has been actively employed by the Company
from the Grant Date through the 40th Trading Day of such 40 or more consecutive
Trading Day period (the “2014 Vesting Date”) in which case the Third Performance
Stock Tranche, and the First Performance Stock Tranche and Second Performance
Stock Tranche (if the First Performance Stock Tranche and/or Second Performance
Stock Tranche did not vest in a prior performance period as provided above),
will vest on the 2014 Vesting Date.  If Executive remains actively employed by
the Company throughout the 2014 Performance Period but the average of the
Closing Price of the Common Stock for a period of 40 or more consecutive Trading
Days during (or, to the extent allowed under subsection (e), ending in) the 2014
Performance Period does not equal or exceed $8.00 per share the Third
Performance Stock Tranche will not vest and will rollover and be eligible for
vesting in the following performance period as provided subsection (d) of this
Section 4 and the special rule provided in subsection (e) of this Section 4 will
apply to the 2015 Performance Period (as that term is defined in subsection (d)
of this Section 4).

 

(d)                                 If any or all of the First Performance Stock
Tranche, the Second Performance Stock Tranche and/or the Third Performance Stock
Tranche do not vest in a prior performance period as provided in subsections (a)
through (c) of this Section 4 and is eligible to vest under this subsection (d),
such tranche or tranches will vest and become transferrable in accordance with
the terms of this Agreement, and the Forfeiture Restrictions with respect
thereto shall lapse, if during the period beginning November 1, 2014, and ending
October 31, 2015 (the “2015 Performance Period”) the average of the Closing
Price of the Common Stock for a period of 40 or more consecutive Trading Days
during the 2015 Performance Period (or, if applicable under subsection (e),
ending on a Trading Day in the 2015 Performance Period) is equal to or greater
than $8.00 per share and Executive has been actively employed by the Company
from the Grant Date through the 40th Trading Day of such 40 or more consecutive
Trading Day period (the “2015 Vesting Date”) in which case the First Performance
Stock Tranche, the Second Performance Stock Tranche and/or the Third Performance
Stock Tranche, as applicable, will vest on the 2015 Vesting Date.  If the
average of the Closing Price of the Common Stock for a period of 40 or more
consecutive Trading Days during (or, to the extent allowed under subsection (e),
ending in) the 2015 Performance Period does not equal or exceed $8.00 per share
each of the First Performance Stock Tranche, the Second Performance Stock
Tranche and the Third Performance Stock Tranche that has not previously vested
in accordance with the schedule set forth above shall lapse and be forfeited as
of the close of business on October 31, 2015.

 

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(e)                                  If during any of the 2012 Performance
Period, the 2013 Performance Period or the 2014 Performance Period the tranche
(or tranches) of Performance Stock Shares eligible for vesting in such
performance period does not (or do not) vest then the tranches of Performance
Stock Shares eligible for vesting in the immediately following performance
period (the “Following Performance Period”) will vest if the average of the
Closing Price of the Common Stock for a period of 40 or more consecutive Trading
Days beginning in the 2012 Performance Period, the 2013 Performance Period or
the 2014 Performance Period, as the case may be, and ending on a Trading Date in
the Following Performance Period is equal to or greater than $8.00 per share and
Executive has been actively employed by the Company from the Grant Date through
the 40th Trading Day of such 40 or more consecutive Trading Day period.

 

(f)                                    If Executive ceases to be employed by the
Company for any reason before the applicable lapse and vesting date including
due to the death or disability of Executive, the Forfeiture Restrictions then
applicable to the Performance Stock Shares shall not lapse and all the unvested
Performance Stock Shares shall be forfeited to the Company.

 

5.                                       Effect of Lapse of Restrictions.  Upon
the lapse of the Forfeiture Restrictions with respect to a Performance Stock
Share granted hereby the Company shall cause to be delivered to Executive a
stock certificate representing such Performance Stock Share, and such
Performance Stock Share shall be transferable by Executive (except to the extent
that any proposed transfer would, in the opinion of counsel satisfactory to the
Company, constitute a violation of applicable securities law).

 

6.                                       Tax Withholding.  To the extent that
the receipt of the Performance Stock Shares or the lapse of any Forfeiture
Restrictions and vesting of the Performance Stock Shares results in income to
Executive for federal, state or local income, employment or other tax purposes
with respect to which the Company has a withholding obligation, Executive shall
deliver to the Company at the time of such receipt or lapse, as the case may be,
such amount of money as the Company may require to meet its obligation under
applicable tax laws or regulations, and, if Executive fails to do so, the
Company is authorized to withhold from the Performance Stock Shares granted
hereby or from any cash or stock remuneration then or thereafter payable to
Executive in any capacity any tax required to be withheld by reason of such
resulting income.

 

7.                                       Capital Adjustments And
Reorganizations.  The existence of the Performance Stock Shares shall not affect
in any way the right or power of the Company or any company the stock of which
is awarded pursuant to this Agreement to make or authorize any adjustment,
recapitalization, reorganization or other change in its capital structure or its
business, engage in any merger or consolidation, issue any debt or equity
securities, dissolve or liquidate, or sell, lease, exchange or otherwise dispose
of all or any part of its assets or business, or engage in any other corporate
act or proceeding.

 

8.                                       Section 83(b) Election.  Executive
shall not exercise the election permitted under section 83(b) of the Code with
respect to the Performance Stock Shares without the written approval of the
Chief Financial Officer of the Company.  If the Chief Financial Officer of the
Company permits the election, Executive shall timely pay the Company the amount
necessary to satisfy the Company’s attendant tax withholding obligations, if
any.

 

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9.                                       No Fractional Shares.  All provisions
of this Agreement concern whole shares of the Common Stock.  If the application
of any provision hereunder would yield a fractional share, such fractional share
shall be rounded down to the next whole share if it is less than 0.5 and rounded
up to the next whole share if it is 0.5 or more.

 

10.                                 Legend.  Executive consents to the placing
on the certificate for the Performance Stock Shares of an appropriate legend
restricting resale or other transfer of the Performance Stock Shares except in
accordance with the Securities Act of 1933 and all applicable rules thereunder.

 

11.                                 Limit of Liability.  Under no circumstances
will the Company or an Affiliate be liable for any indirect, incidental,
consequential or special damages (including lost profits or taxes) of any form
incurred by any person, whether or not foreseeable and regardless of the form of
the act in which such a claim may be brought, with respect to the Plan, this
Agreement or the Performance Stock Shares.

 

12.                                 Notices.  Any notice, instruction,
authorization, request or demand required hereunder shall be in writing, and
shall be delivered either by personal delivery, by telegram, telex, telecopy or
similar facsimile means, by certified or registered mail, return receipt
requested, or by courier or delivery service, addressed to the Company at the
Company’s principal business office address and to Executive at Executive’s
residential address, or at such other address and number as a party shall have
previously designated by written notice given to the other party in the manner
hereinabove set forth.  Notices shall be deemed given when received, if sent by
facsimile means (confirmation of such receipt by confirmed facsimile
transmission being deemed receipt of communications sent by facsimile means);
and when delivered (or upon the date of attempted delivery where delivery is
refused), if hand-delivered, sent by express courier or delivery service, or
sent by certified or registered mail, return receipt requested.

 

13.                                 Amendment and Waiver.  Except as otherwise
provided herein or in the Plan or as necessary to implement the provisions of
the Plan, this Agreement may be amended, modified or superseded only by written
instrument executed by the Company and Executive.  Only a written instrument
executed and delivered by the party waiving compliance hereof shall waive any of
the terms or conditions of this Agreement.  Any waiver granted by the Company
shall be effective only if executed and delivered by a duly authorized director
or officer of the Company other than Executive.  The failure of any party at any
time or times to require performance of any provisions hereof shall in no manner
effect the right to enforce the same.  No waiver by any party of any term or
condition, or the breach of any term or condition contained in this Agreement,
in one or more instances, shall be construed as a continuing waiver of any such
condition or breach, a waiver of any other condition, or the breach of any other
term or condition.

 

14.                                 Governing Law and Severability.  The
validity, construction and performance of this Agreement shall be governed by
the laws of the State of Delaware, excluding any conflicts or choice of law rule
or principle that might otherwise refer construction or interpretation of this
Agreement to the substantive law of another jurisdiction.  The invalidity of any
provision of this

 

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Agreement shall not affect any other provision of this Agreement, which shall
remain in full force and effect.

 

15.                                 Successors and Assigns.  Subject to the
limitations which this Agreement imposes upon the transferability of the
Performance Stock Shares granted hereby, this Agreement shall bind, be
enforceable by and inure to the benefit of the Company and its successors and
assigns, and to Executive, Executive’s permitted assigns and upon Executive’s
death, Executive’s estate and beneficiaries thereof (whether by will or the laws
of descent and distribution), executors, administrators, agents, legal and
personal representatives.

 

16.                                 Miscellaneous.  This Agreement is awarded
pursuant to and is subject to all of the provisions of the Plan, including
amendments to the Plan, if any.

 

17.                                 Counterparts.  This Agreement may be
executed in two or more counterparts, each of which shall be an original for all
purposes but all of which taken together shall constitute but one and the same
instrument.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by
an officer thereunto duly authorized, and Executive has executed this Agreement,
all effective as of the date first above written.

 

 

TUESDAY MORNING CORPORATION

 

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

 

 

 

 

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IRREVOCABLE STOCK POWER

 

KNOW ALL MEN BY THESE PRESENTS, That The Undersigned, For Value Received, has
bargained, sold, assigned and transferred and by these presents does bargain,
sell, assign and transfer unto Tuesday Morning Corporation, a Delaware
corporation (the “Company”), the shares of the common stock of the Company,
$0.01 par value per share (the “Performance Stock Shares”) transferred pursuant
to the PERFORMANCE STOCK AWARD AGREEMENT dated                             , by
and between the Company and the undersigned granting the Performance Stock
Shares to the undersigned (the “Award Agreement”); and subject to and in
accordance with the Award Agreement the undersigned does hereby constitute and
appoint the Secretary of the Company the undersigned’s true and lawful attorney,
IRREVOCABLY, to sell, assign, transfer, hypothecate, pledge and make over all or
any part of such Performance Stock Shares and for that purpose to make and
execute all necessary acts of assignment and transfer thereof, and to substitute
one or more persons with like full power, hereby ratifying and confirming all
that said attorney or his substitutes shall lawfully do by virtue hereof.

 

In Witness Whereof, the undersigned has executed this Irrevocable Stock Power on
this              day of                                               ,
201      .

 

 

 

 

 

 

 

 

 

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