Exhibit 10.3
NONQUALIFIED STOCK OPTION AWARD
AGREEMENT
FOR EMPLOYEES
Tuesday Morning
Corporation
2008 Long-Term Equity Incentive Plan
This NONQUALIFIED STOCK
OPTION AWARD AGREEMENT (this “ Agreement
”) is entered into between Tuesday Morning Corporation, a
Delaware corporation (the “ Company ”), and
(“ Optionee ”). The Board of Directors of
the Company has adopted, and the stockholders of the Company have
approved, the Tuesday Morning Corporation 2008 Long-Term Equity
Incentive Plan (the “ Plan ”), the terms of
which are incorporated by reference herein in their entirety.
The Company has agreed to grant Optionee this option to purchase
shares of common stock of the Company as an inducement for
Optionee’s continued and effective performance of services
for the Company. Any term used in this Agreement that is not
specifically defined herein shall have the meaning specified in the
Plan.
IT IS AGREED:
1.
Grant of Option
. Subject to the
terms of the Plan, this Agreement and the Notice of Grant of Stock
Options and Option Agreement to which this Agreement is attached
(the “ Option Notice ”), on
(the “ Grant Date ”), the Company granted to
Optionee an option (the “ Option ”) to purchase
shares
of the common stock of the Company, $.01 par value per share (the
“ Common Stock ”), at a price of
$
per share (the “ Exercise Price ”), subject to
adjustment as provided in the Plan.
2.
Type of Option
. The
Option is a nonqualified stock option which is not intended to be
governed by section 422 of the Code.
3.
Optionee’s
Agreement . In accepting the
Option, Optionee accepts and agrees to be bound by all the terms
and conditions of the Plan which pertain to nonqualified stock
options granted under the Plan.
4.
Vesting of Option
. Subject
to the provisions hereof and the provisions of the Plan, the Option
will vest and become exercisable ratably on a daily basis
commencing on the day following the Grant Date and ending on the
third anniversary of the Grant Date (the “ Vesting
Period ”) so that on the third anniversary of the Grant
Date the Option shall be exercisable in full, provided that
Optionee is and has been continuously employed by the Company or
any Subsidiary (as that term is defined in Section 21) from
the date of this Agreement through such date. Any reference
to “daily” vesting in the Option Notice shall mean that
the Option vests ratably on a daily basis during the Vesting
Period. To the extent not exercised, installments shall be
cumulative and may be exercised in whole or in part. In the
event that Optionee’s employment is terminated by the Company
without “Cause” or by Optionee with “Good
Reason”, (a) the portion of the Option which is then
vested will continue to be exercisable until the tenth anniversary
of the Grant Date (the “ Option General Expiration
Date ”) and (b) if the Option is not then fully
vested and exercisable an amount of the shares of Common Stock
subject to the Option equal to one more year’s vesting (or
such lesser number of shares as are not then
vested) will vest and become
exercisable upon such termination and will continue to be
exercisable until the Option General Expiration Date. No
portion of the Option shall be exercisable in any event on or after
the Option General Expiration Date. An option may not be
exercised for a fraction of a share of Common Stock.
5.
Manner of Exercise
.
(a)
To the extent
that the Option is vested and exercisable in accordance with
Section 4 of this Agreement, the Option may be exercised by
Optionee at any time, or from time to time, in whole or in part, on
or prior to the termination of the Option (as set forth in
Sections 4 and 6 of this Agreement) upon payment of the
Exercise Price for the shares to be acquired in accordance with the
terms and conditions of this Agreement and the Plan.
(b)
If Optionee is
entitled to exercise the vested and exercisable portion of the
Option, and wishes to do so, in whole or part, Optionee shall
(i) deliver to the Company a fully completed and executed
notice of exercise, in the form attached as
Annex A
hereto, or such
other form as may hereinafter be designated by the Company in its
sole discretion, specifying the exercise date and the number of
shares of Common Stock to be purchased pursuant to such exercise
and (ii) remit to the Company in a form satisfactory to the
Company, in its sole discretion, the Exercise Price for the shares
to be acquired on exercise of the Option, plus an amount sufficient
to satisfy any withholding tax obligations of the Company that
arise in connection with such exercise (as determined by the
Company) in accordance with the provisions of Sections 5.7 and
15.3 of the Plan.
(c)
The
Company’s obligation to deliver shares of the Common Stock to
Optionee under this Agreement is subject to and conditioned upon
Optionee satisfying all tax obligations associated with
Optionee’s receipt, holding and exercise of the Option.
Unless otherwise approved by the Committee, all such tax
obligations shall be payable in accordance with the provisions of
Section 5.7 of the Plan. The Company and its
Subsidiaries, as applicable, shall be entitled to deduct from any
compensation otherwise due to Optionee the amount necessary to
satisfy all such taxes.
(d)
Upon full payment
of the Exercise Price and satisfaction of all applicable tax
obligations, and subject to the applicable terms and conditions of
the Plan and the terms and conditions of this Agreement, the
Company shall cause certificates for the shares purchased hereunder
to be delivered to Optionee or cause an uncertificated book-entry
representing the such shares to be made.
6.
Termination of Option
. Except as
otherwise provided in Section 4 of this Agreement, unless the
Option terminates earlier as provided in this Section 6 the
Option shall terminate and become null and void on the Option
General Expiration Date. Except as otherwise provided in
Section 4 of this Agreement, if Optionee ceases to be an
employee of the Company for any reason the Option shall not
continue to vest after such cessation of service as an
employee.
(a)
If Optionee
ceases to be an employee of the Company and any Subsidiary due to
death or Disability, (i) the portion of the Option that was
exercisable on the date of such
2
cessation shall remain
exercisable for, and shall otherwise terminate and become null and
void at the end of, a period of one year from the date of such
death or Disability, but in no event after the Option General
Expiration Date; and (ii) the portion of the Option that was
not exercisable on the date of such cessation shall be forfeited
and become null and void immediately upon such
cessation.
(b)
If Optionee
ceases to be an employee of the Company and any Subsidiary upon the
occurrence of Optionee’s Retirement (as that term is defined
in Section 21), (A) the portion of the Option that was
exercisable on the date of Retirement shall remain exercisable for,
and shall otherwise terminate and become null and void at the end
of, a period of up to three years after the date of Retirement, but
in no event after (x) the Option General Expiration Date or
(y) the day before the date Optionee begins engaging in
Competition (as that term is defined in Section 21) during
such three-year period unless he or she receives written consent to
do so from the Board or the Committee, and (B) the portion of
the Option that was not exercisable on the date of Retirement shall
be forfeited and become null and void immediately upon such
Retirement.
(c)
If Optionee
ceases to be an employee of the Company or a Subsidiary due to
Cause, all of the Option shall be forfeited and become null and
void immediately upon such cessation, whether or not then
exercis
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