Exhibit 10.1
NONQUALIFIED STOCK OPTION AWARD
AGREEMENT
Tuesday Morning
Corporation
2004 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 2004 Long-Term Equity
Incentive Plan, as amended (the “ Plan ”), the
terms of which are incorporated by reference herein in their
entirety. The Company considers that its interests will be
served by granting Optionee an option to purchase shares of common
stock of the Company as an inducement for his 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 of the Plan and the provision of this Agreement
(including the requirement in Section 6 that Optionee continue
to be employed by the Company or serve as a Non-Employee Director
of the Company on the dates set forth below), the Option will be
exercisable in accordance with the following schedule:
(a)
on
,
20 , the Option will vest with
respect to, and may be exercised for up to, one-third of the shares
of Common Stock subject to the Option;
(b)
on
,
20 , the Option will vest with
respect to, and may be exercised for up to, an additional one-third
of the shares of Common Stock subject to the Option;
(c)
on
,
20 , the Option will vest with
respect to the remaining one-third of the shares of Common Stock
subject to the Option, so that on
,
20 , the Option shall be
exercisable in full; and
(d)
to the extent not exercised, installments shall be cumulative and
may be exercised in whole or in part.
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 Section 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 Section 10 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 10 of the Plan.
(d)
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.
(e)
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 such shares to be
made.
6.
Termination of Option
. Unless
the Option terminates earlier as provided in this Section 6
the Option shall terminate and become null and void on the tenth
anniversary of the Grant Date (the “ Option General
Expiration Date ”). If Optionee ceases to be an
employee or Non-Employee Director of the Company for any reason the
Option shall not continue to vest after such cessation of service
as an employee or Non-Employee Director of the Company.
2
(a)
If Optionee ceases to be an employee or Non-Employee Director 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 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 or Non-Employee Director 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 or Non-Employee Director 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 exercisable. For purposes of
this Section 6(c) the term “ Cause ”
means the occurrence of one of the following events:
(i) the commission of a felony or a crime involving moral
turpitude or the commission of any other act or omission involving
dishonesty, disloyalty or fraud with respect to the Company or any
of its Subsidiaries; (ii) conduct tending to bring the Company
or any of its Subsidiaries into substantial public disgrace or
disrepute; (iii) substantial and repeated failure to perform
duties properly assigned or as reasonably directed, as
dete
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