Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On September 14, 2021, in connection with his appointment as Principal and Chief
Merchant of Tuesday Morning Corporation (the "Company"), Paul Metcalf and the
Company entered into an employment agreement (the "Employment Agreement").
The Employment Agreement, provides for an initial term of three years which
automatically renews for additional one year periods unless either party gives
at least 60 days' prior written notice of nonrenewal. Under the terms of the
Employment Agreement, Mr. Metcalf is entitled to an annual base salary of not
less than $650,000. Mr. Metcalf also is eligible to earn an annual bonus each
fiscal year under the Company's annual cash incentive plan with a target amount
of 70% of his annual base salary. Under the Employment Agreement, Mr. Metcalf is
eligible to participate in the Company's applicable equity incentive plan, and,
each year during the term of the Metcalf Employment Agreement, he is entitled to
receive equity incentive awards having a value of at least $650,000. Mr. Metcalf
will also be eligible to participate in the Company's benefit plans generally
and is eligible for payment of certain relocation expenses and legal fees in
connection with the negotiation and drafting of the Employment Agreement
As an inducement to accept employment with the Company, the Employment Agreement
also provided for the grant to Mr. Metcalf of inducement equity awards,
including (i) an award of time-based restricted stock units having a grant date
fair market value of $500,000 (the "Inducement RSUs") and (ii) an award of
performance-based restricted stock units having a grant date fair market value
of $1,000,000 (the "Inducement "PRSUs"). The Inducement RSUs will vest in equal
installments on each of the first three anniversaries of the date of grant, so
long as Mr. Metcalf remains employed through each vesting date. The Inducement
PRSUs are subject to both time-based and performance-based vesting with the
time-based vesting occurring over a period of four years from the date of grant
(subject to Mr. Metcalf's continuous employment through each vesting date) and
the performance-based vesting based on the attainment of specified Company stock
price metrics. The PSUs are only fully vested when both time-based and
performance-based vesting conditions are met.
Under the terms of the Employment Agreement, if Mr. Metcalf's employment is
terminated by the Company without cause or he resigns with good reason, he will
be entitled to receive severance benefits as follows: (a) any earned but unpaid
bonus for the fiscal year preceding the year in which the termination of
employment occurs, (b) a pro rata portion of the annual bonus for the fiscal
year in which the termination of employment occurs, (c) cash severance in an
amount equal to 1.5 times his then current base salary, payable in equal
installments over an 18-month period following the date of termination of his
employment, and (d) continued health coverage for Mr. Metcalf and his eligible
dependents through the end of the fiscal year in which the termination of
employment occurs. However, if Mr. Metcalf's employment is terminated by the
Company without cause or if he resigns with good reason, in each case, within
one year following a "change in control" (as defined in the Employment
Agreement), the cash severance payable to Mr. Metcalf will equal two times his
then current base salary, and will be paid in equal installments over a period
of 24 months.
Mr. Metcalf's receipt of the severance benefits described in the previous
paragraph is subject to Mr. Metcalf's execution (and non-revocation) of a
release of claims in favor of the Company and his continued compliance with
restrictive covenants, which include customary nonsolicitation and
noncompetition covenants that apply for the duration of Mr. Metcalf's employment
and for a period of 18 months thereafter and confidentiality, nondisclosure and
nondisparagement covenants.
The foregoing summary is qualified in its entirety by reference to the full text
of the Employment Agreement, which is attached hereto as Exhibit 10.1 and
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Employment Agreement between Paul Metcalf and the Company.
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