BOUND BY ANY EMPLOYMENT
AGREEMENT, NONCOMPETE AGREEMENT OR CONFIDENTIALITY AGREEMENT WITH ANY OTHER
PERSON OR ENTITY AND (C) UPON THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY
THE COMPANY, THIS AGREEMENT SHALL BE THE VALID AND BINDING OBLIGATION OF
EXECUTIVE, ENFORCEABLE IN ACCORDANCE WITH ITS TERMS.
EXECUTIVE HEREBY
ACKNOWLEDGES AND REPRESENTS THAT SHE HAS CONSULTED WITH INDEPENDENT LEGAL
COUNSEL REGARDING HER RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT AND THAT SHE
FULLY UNDERSTANDS THE TERMS AND CONDITIONS CONTAINED HEREIN.
9.
THE COMPANY'S REPRESENTATIONS.
THE
COMPANY HEREBY REPRESENTS AND WARRANTS TO EXECUTIVE THAT (A) THE EXECUTION,
DELIVERY AND PERFORMANCE OF THIS AGREEMENT HAVE BEEN DULY AUTHORIZED BY ALL
REQUISITE ACTION ON THE PART OF THE COMPANY AND DO NOT AND SHALL NOT CONFLICT
WITH, BREACH, VIOLATE OR CAUSE A DEFAULT UNDER ANY CONTRACT, AGREEMENT,
INSTRUMENT, ORDER OR DECREE TO WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES IS A
PARTY OR BY WHICH ANY OF THEM IS BOUND AND (B) UPON THE EXECUTION AND DELIVERY
OF THIS AGREEMENT BY EXECUTIVE, THIS AGREEMENT SHALL BE THE VALID AND BINDING
OBLIGATION OF THE COMPANY, ENFORCEABLE IN ACCORDANCE WITH ITS TERMS.
10.
SURVIVAL.
PARAGRAPHS 4, 5 AND 6 AND
PARAGRAPHS 10 THROUGH 19 SHALL SURVIVE AND CONTINUE IN FULL FORCE IN ACCORDANCE
WITH THEIR TERMS NOTWITHSTANDING ANY TERMINATION OF THE EMPLOYMENT PERIOD.
11.
NOTICES.
ANY NOTICE PROVIDED FOR IN THIS
AGREEMENT SHALL BE IN WRITING AND SHALL BE EITHER PERSONALLY DELIVERED, OR
MAILED BY FIRST CLASS MAIL, RETURN RECEIPT REQUESTED, TO THE RECIPIENT AT THE
ADDRESS BELOW INDICATED:
Notices to Executive:
Kathleen Mason
4242 Westway Avenue
Dallas, Texas 75205
Notices to Company:
Tuesday Morning Corporation
6250 LBJ Freeway
Dallas, TX 75240
Attention: Chairman of the
Compensation Committee of the Board of Directors
7
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.
Any
notice under this Agreement shall be deemed to have been given when so delivered
or mailed.
12.
SECTION 409A.
(A)
THIS AGREEMENT SHALL BE INTERPRETED AND
ADMINISTERED IN COMPLIANCE WITH SECTION 409A.
(B)
THE COMPANY SHALL HOLD HARMLESS AND
INDEMNIFY EXECUTIVE ON A FULLY GROSSED-UP AFTER TAX BASIS FROM AND AGAINST
(I) ANY AND ALL TAXES IMPOSED BY ANY TAXING AUTHORITY IN CONNECTION WITH
(A) STOCK OPTIONS GRANTED BY THE COMPANY TO EXECUTIVE PRIOR TO JANUARY 1, 2005,
OR GRANTED AS REQUIRED HEREIN (THE "OPTIONS"), AND (B) ANY AMOUNTS PAYABLE UNDER
THIS AGREEMENT THAT ARE SUBJECT TO SECTION 409A ("DEFERRED COMPENSATION"), IN
THE CASE OF EITHER (A) OR (B), AS A RESULT OF ANY TAXING AUTHORITY TAKING THE
POSITION THAT THE OPTIONS OR DEFERRED COMPENSATION ARE NONQUALIFIED DEFERRED
COMPENSATION WITHIN THE MEANING OF SECTION 409A OR SIMILAR STATE OR LOCAL TAX
LAW, AND (II) ALL EXPENSES (INCLUDING REASONABLE ATTORNEYS', ACCOUNTANTS', AND
EXPERTS' FEES AND EXPENSES) INCURRED BY EXECUTIVE DUE TO A TAX AUDIT OR
LITIGATION ADDRESSING THE EXISTENCE OR AMOUNT OF A TAX LIABILITY DESCRIBED IN
CLAUSE (I); (III) ANY TAX PENALTY EXPENSES