EXHIBIT 10.1

SECOND AMENDMENT TO THE

TUESDAY MORNING CORPORATION

2004 LONG-TERM EQUITY INCENTIVE PLAN

 

                THIS SECOND AMENDMENT TO THE TUESDAY MORNING CORPORATION 2004
LONG-TERM EQUITY INCENTIVE PLAN (this “Amendment”) is effective as set forth
below and is made by the Compensation Committee (the “Committee”) of Tuesday
Morning Corporation, a Delaware corporation (the “Company”), subject in certain
cases to stockholder approval of this Amendment.

PRELIMINARY STATEMENTS

                A.            The Company has previously established the Tuesday
Morning Corporation 2004 Long-Term Equity Incentive Plan, as amended (the “2004
Plan”), for the benefit of certain directors (including Non-Employee Directors),
officers and key employees of, and certain other key individuals who perform
services for, the Company and/or its Subsidiaries.  Capitalized terms used but
not otherwise defined herein shall have the meanings ascribed to them in the
2004 Plan.

                B.            Pursuant to the Compensation Committee Charter,
the Committee has the right to make certain amendments to the 2004 Plan.

                C.            The Committee desires to amend the 2004 Plan to
(1) increase the aggregate number of Shares with respect to which Restricted
Stock awards may be granted under the 2004 Plan and (2) add a provision to the
2004 Plan regarding compliance with section 409A of the Internal Revenue Code of
1986, as amended, and the Department of Treasury rules and regulations issued
thereunder.

AMENDMENT

                NOW, THEREFORE, the 2004 Plan is hereby amended as follows:

                1.             DEDICATED SHARES; MAXIMUM AWARD.  Subject to
stockholder approval, the first paragraph of Section 4 is hereby amended and
restated in its entirety to read as follows:

“The aggregate number of shares of Common Stock (the “Shares”) with respect to
which awards may be granted under the Plan is 2,000,000.  The Committee shall
determine the appropriate methodology for calculating the number of shares of
Common Stock issued pursuant to the Plan.  The aggregate number of Shares with
respect to which Incentive Stock Options may be granted under the Plan is
2,000,000.  The aggregate number of Shares with respect to which Nonqualified
Stock Options may be granted under the Plan is 2,000,000.  The aggregate number
of Shares with respect to which Stock Appreciation Rights may be granted under
the Plan is 2,000,000.  The aggregate number of Shares with respect to which
Restricted Stock awards may be granted under the Plan shall not exceed
1,000,000, subject to the limitation set forth in the last sentence of this
paragraph.  The aggregate number of Shares with respect to which Performance

 

 

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Stock Awards may be granted under the Plan shall not exceed 400,000, subject to
the limitation set forth in the last sentence of this paragraph. 
Notwithstanding any other provision of the Plan to the contrary, the number of
Shares the Committee may award under the Plan as Restricted Stock and
Performance Stock Awards shall not exceed in the aggregate 1,000,000.”

                This amendment to the first paragraph of Section 4, and the
changes to the provisions of the 2004 Plan effected thereby, shall be effective
upon stockholder approval.

                2.             COMPLIANCE WITH SECTION 409A.  A new Section 20
is hereby added and the 2004 Plan is hereby amended effective January 1, 2005 to
reflect the following addition:

“20.         Compliance with Section 409A.

Notwithstanding any other provision of the Plan to the contrary, awards granted
under the Plan shall be designed, granted and administered in such a manner that
they are either exempt from the application of, or comply with, the requirements
of section 409A of the Code and the Department of Treasury rules and regulations
issued thereunder (collectively, “Section 409A”).  If the Committee determines
that an award granted under the Plan, Award Agreement, payment, distribution,
deferral election, transaction, or any other action or arrangement contemplated
by the provisions of the Plan would, if undertaken, cause a Holder to become
subject to additional taxes under Section 409A, then unless the Committee
specifically provides otherwise, such award, Award Agreement, payment,
distribution, deferral election, transaction or other action or arrangement
shall not be given effect to the extent it causes such result and the related
provisions of the Plan and/or Award Agreement will be deemed modified, or, if
necessary, suspended in order to comply with the requirements of Section 409A to
the extent determined appropriate by the Committee, in each case without the
consent of or notice to Holder.  The period of exercisability of an Option or a
SAR shall not be extended to the extent that such extension would subject Holder
to additional taxes under Section 409A.”

                This amendment adding a new Section 20, and the changes to the
provisions of the 2004 Plan effected thereby, shall be effective January 1,
2005.

                Except as expressly set forth herein, the 2004 Plan shall remain
in full force and effect without further amendment or modification.

 

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                IN WITNESS WHEREOF, this Amendment has been executed by a duly
authorized officer of the Company as of the date specified below and effective
as set forth herein.

 

 

 

 

 

TUESDAY MORNING CORPORATION

 

 

 

 

 

 

 

 

 

Date: November 7, 2007

 

 

 

By:

/s/ ELIZABETH SCHROEDER

 

 

 

 

 

 

 

Elizabeth A. Schroeder

 

 

 

 

 

 

 

Chief Financial Officer, Secretary and

 

 

 

 

 

 

 

Treasurer

 

 

 

 

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