Exhibit 10.18

 

**AmendmentNo. 1**

**tothe**

**TileShop Holdings, Inc. 2012 Equity Award Plan**

** **

 

This Amendment No.1 dated February 14, 2013 is an amendment to that certain 2012 Equity Award Plan of Tile Shop Holdings, Inc., a Delaware corporation(the “Company”), dated June 24, 2012 (the “Original Plan”).

 

1.	Amendmentto Title of the Original Plan. The title of the Original Plan shall be deleted in its entirety and replaced with “TileShop Holdings, Inc. 2012 Omnibus Award Plan.”

 

2.	Amendmentto Section 1(a) of the Original Plan. The reference in Section 1(a) of the Original Plan that reads “The Tile Shop Holdings,Inc. 2012 Equity Award Plan (the ‘Plan’)” shall be deleted in its entirety and replaced with “The TileShop Holdings, Inc. 2012 Omnibus Award Plan (the ‘Plan’)”.

 

3.	Amendmentto Section 2(c) of the Original Plan. Section 2(c) shall be deleted in its entirety and replaced with the following:

 

	“(c)	‘Award’means a grant of Options, Restricted Stock, or a Performance Award.”

 

4.	Addition ofSection 2(aa) to the Original Plan. A new Section 2(aa) shall be added to the Original Plan which reads as follows:

 

	“(aa)	‘PerformanceAward’ means any grant pursuant to Section 14 hereof of an Award, which value, if any, shall be paid to a Participantby delivery of cash upon achievement of such Performance Goals during the Performance Period as the Committee shall establish atthe time of such grant or thereafter.”

 

5.	Addition ofSection 2(bb) to the Original Plan. A new Section 2(bb) shall be added to the Original Plan which reads as follows:

 

	“(bb)	‘PerformancePeriod’ means the period, established at the time any Performance Award is granted or at any time thereafter, during whichany Performance Goals specified by the Committee with respect to such Performance Award are to be measured.”

 

6.	Amendmentto Section 6(a) of the Original Plan.	Section 6(a) shall be deleted in its entirety and replaced with the following:

 

	“(a)	PlanReserve. Subject to adjustment as provided in Section 12, an aggregate of 2,500,000 Shares are reserved for issuance underthe Plan. On January 1 of each year beginning after the Effective Date and ending on February 14, 2013, an additional number ofShares shall become available for issuance under the Plan equal to the lesser of: (i) 2,500,000 Shares; (ii) six percent (6%) ofthe number of Shares issued and outstanding (on an as-converted basis) as of the immediately preceding December 31; and (iii) anotheramount determined by the Board; provided, however, after February 14, 2013 the adjustment provided in this sentence shall be eliminated.Subject to Section 6(b) and Section 12(a), all Shares reserved for issuance under the Plan may be issued as Incentive Stock Options.”

 

 

 

7.	Addition ofSection 14 to the Original Plan. A new Section 14 shall be added to the Original Plan which reads as follows:

 

	“14.	PerformanceAwards. Each Performance Award granted pursuant to this Section 14 shall be evidenced by a written performance award agreement(the “Performance Award Agreement”). The Performance Award Agreement shall be in such form as may be approved fromtime to time by the Committee and may vary from Participant to Participant; provided, however, that each Participant and each PerformanceAward Agreement shall comply with and be subject to the following terms and conditions:

 

(a)	Awards.Performance Awards may be granted to any Participant in the Plan. Performance Awards shall consist of monetary awards which maybe earned or become vested in whole or in part if the Company or the Participant achieves certain Performance Goals establishedby the Committee over a specified Performance Period.

 

(b)	PerformanceObjectives, Performance Period and Payment. The Performance Award Agreement shall set forth:

 

(i) 	the dollar value of each Performance Award;

 

(ii) 	one or more Performance Goals established by the Committee;

 

(iii) 	thePerformance Period over which Performance Award may be earned or may become vested;

 

(iv)	theextent to which partial achievement of the Performance Goals may result in a payment of the Performance Award, as determined bythe Committee; and

 

(v) 	thedate upon which payment of Performance Award will be made and the extent to which such payment may be deferred.

 

(c)	WithholdingTaxes. The Company or its Affiliates shall be entitled to withhold and deduct from any payments made in connection with thePerformance Award, or from any other future payments made to the Participant, all legally required amounts necessary to satisfyany and all withholding and employment-related taxes attributable to the Participant’s Performance Award.

 

(d)	Nontransferability.No Performance Award shall be transferable, in whole or in part, by the Participant, other than by will or by the laws of descentand distribution. If the Participant shall attempt any transfer of any Performance Award granted under the Plan, such transfershall be void and the Performance Award shall terminate.

 

 

 

 

(e)	OtherProvisions. The Performance Award Agreement authorized under this Section 14 shall contain such other provisions as the Committeeshall deem advisable.

 

8.	Except as otherwiseamended or modified herein, all other provisions of the Original Plan shall remain in full force and effect.

 

 

**IN WITNESS WHEREOF,**the Company has executed this document effective as of the 14th day of February, 2013.