(a)

Employee, individually and on behalf of Employee’s attorneys, heirs, assigns, successors, executors, and administrators, hereby GENERALLY RELEASES, ACQUITS, AND DISCHARGES the Company and its parents, subsidiaries, affiliated, and related corporations, firms, associations, partnerships, and entities, their successors and assigns, and the current and former owners, shareholders, directors, officers, employees, agents, attorneys, representatives, and insurers of said corporations, firms, associations, partnerships, and entities, and their guardians, successors, assigns, heirs, executors, and administrators (hereinafter collectively referred to as the “Company Releasees” and individually as a “Company Releasee”) from and against any and all claims, complaints, grievances, liabilities, obligations, promises, agreements, damages, causes of action, rights, debts, demands, controversies, costs, losses, and expenses (including attorneys’ fees and expenses) whatsoever, under any local, state, or federal law, common or statutory -- including, but in no way limited to, claims arising under the United States and Texas Constitutions; the Age Discrimination in Employment Act of 1967 (“ADEA”); Title VII of the Civil Rights Act of 1964, as amended (including the Civil Rights Act of 1991); Sections 1981 through 1988 of Title 42 of the United States Code; the Americans with Disabilities Act of 1990, as amended by the Americans with Disabilities Amendment Act; the Patient Protection and Affordable Care Act of 2010; the Employee Retirement Income Security Act of 1974, (“ERISA”), as amended; the Occupational Safety and Health Act, as amended; the Worker Adjustment and Retraining Notification Act (“WARN”); the Consolidated Omnibus Budget Reconciliation Act (“COBRA”); the Texas Commission on Human Rights Act; the Texas Payday Act; Section 451.001 of the Texas Workers Compensation Act; the Sabine Pilot doctrine and/or any other claims, including claims in equity or at law -- for any actions or omissions whatsoever, whether known or unknown and whether connected with the employment relationship between Employee and the Company that existed or may have existed prior to, or contemporaneously with, the date Employee executes this Agreement (collectively, the “Employee Released Claim(s)”).  Employee agrees that this Agreement includes a release of any and all negligence claims, contractual claims (express and implied), wrongful discharge claims, fraud, misrepresentation, defamation, and claims of discrimination, harassment, or retaliation of every possible kind.  

(b)

Employee understands that nothing in this Agreement is intended to interfere with or deter Employee’s right to challenge the waiver of an ADEA claim or state law age discrimination claim or the filing of an ADEA charge or ADEA complaint or state law age discrimination complaint or charge with the EEOC or any state discrimination agency or commission or to participate in any investigation or proceeding conducted by those agencies.  Further, Employee understands that nothing in this Agreement would require Employee to tender back the money received under this Agreement if Employee seeks to challenge the validity of the ADEA or state law age discrimination waiver, nor does the Employee agree to ratify any ADEA or state law age discrimination waiver that fails to comply with the Older Workers’ Benefit Protection Act by retaining the money received under the Agreement.  Further, nothing in this Agreement is intended to require the payment of damages, attorneys’ fees or costs to the Company should Employee challenge the waiver of an ADEA or state law age discrimination claim or file an ADEA or state law age discrimination suit except as authorized by federal or state law.

(c)

This release specifically excludes: (i) any claim which cannot be released by private agreement, such as workers’ compensation claims, claims after the Effective Date of this Agreement (as defined below); (ii) the right to file administrative charges with certain government agencies; and (iii) any and all contractual and/or statutory rights Employee may have to be indemnified by the Company or any Releasee, by virtue or as a result of Employee’s role as an executive and officer of the of the Company, for acts or omissions occurring during Employee’s employment.  In particular, nothing in this Agreement shall be construed to prohibit Employee from filing a charge with, making a complaint to, or participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission, National Labor Relations Board, or a comparable state or local agency, or to the Securities Exchange Commission or Internal Revenue Service. Employee agrees to waive the right to receive future monetary recovery directly from Employer, including Employer payments that result from any complaints or charges that Employee files with any governmental agency or that are filed on Employee’s behalf.

(d)

This general release covers both claims that Employee knows about and those that Employee may not know about, except that it does not waive any rights or claims, including claims under the ADEA that may arise after the Effective Date of this Agreement (as defined below).  Employee further represents and warrants that: (i) Employee has been fully and properly paid for all hours worked, (ii) Employee has received all leave to which Employee is entitled in accordance with applicable law; and (iii) Employee has not suffered any on the job injury for which Employee has not already filed a claim.  Employee further acknowledges, agrees and hereby stipulates that: (i) during Employee’s employment with the Company, Employee was allowed to take all leave and afforded all other rights to which Employee was entitled under the Family and Medical Leave Act (“FMLA”); and (ii) the Company has not in any way interfered with, restrained or denied the exercise of (or attempt to exercise) any FMLA rights, nor terminated or otherwise discriminated against Employee for exercising (or attempting to exercise) any such rights.

(a)

Employee expressly acknowledges, agrees, and covenants that Employee will not make any negative public or private statements, comments, or communications in any form, oral, written, or electronic, which in any way could constitute libel, slander, or disparagement of the Company or any other Releasee or which may be considered to be derogatory or detrimental to the name or business reputation of the Company or any other Releasee; provided, however, that the terms of this paragraph shall not apply to communications between Employee and the Employee’s spouse and/or clergy, or attorneys, which are subject to a claim of privilege existing under common law, statute, or rule of procedure.

(b)

The Company expressly acknowledges, agrees, and covenants that neither the Company’s CEO nor any of the member of the Company’s Board of Directors will make any negative public or private statements, comments, or communications in any form, oral, written, or electronic, which in any way could constitute libel or slander of Employee; provided, however, that the terms of this paragraph shall not apply to communications within the Company and/or between the Company and its financial and/or tax advisors, and attorneys, which are subject to a claim of privilege existing under common law, statute, or rule of procedure.

(c)

The Parties agree that this paragraph is a material inducement to the Parties entering into this Agreement. Additionally, the Parties agree that a breach of this paragraph by a Party will cause the non-breaching Party irreparable harm and that the non-breaching Party may enforce this paragraph without posting a bond.

(a)

The Company will pay to Employee the gross amount of Two Hundred Seventeen Thousand Eight Hundred Twelve Dollars and no/100 cents ($217,812.00), subject to applicable payroll taxes and withholding (“Separation Payment”). This Separation Payment will be paid on the Company’s regular payroll schedule over a period of six (6) months (“Severance Period”).  The first Separation Payment shall be paid to Employee in the first regularly scheduled payroll period following expiration of the 21 day and 7 day revocation periods, provided Employee has executed and not revoked this Agreement and is otherwise in compliance with this Agreement.

(b)

If, after 90 days following the Separation Date, Employee has not obtained employment or an engagement as an independent contractor on a full-time basis in a position substantially similar to the position Employee held with the Company immediately prior to the Separation Date in terms of responsibility and compensation, the Company will pay to Employee the gross amount of Two Hundred Seventeen Thousand Eight Hundred Twelve Dollars and no/100 cents ($217,812.00), subject to applicable payroll taxes and withholdings (“Extended Separation Payment”).  This Extended Separation Payment will be paid on the Company’s regular payroll schedule over a period of six (6) months (“Extended Severance Period”).  The first Extended Separation Payment shall be paid to Employee on the first regularly scheduled payroll in the month following the last Separation Payment made pursuant to paragraph 4(a) above, provided Employee is otherwise in compliance with this Agreement.

(c)

The Company will pay to Employee the gross sum of Fifteen Thousand Dollars and no/100 ($15,000.00), subject to applicable payroll taxes and withholdings (“Enhanced Severance”), within seven (7) business days of the Effective Date of this Agreement (as defined below), provided Employee has executed and not revoked this Agreement and is otherwise in compliance with this Agreement.

(d)

Provided Employee timely and properly elects continued coverage under the Company’s group health plan pursuant to COBRA following the Separation Date, the Company agrees to pay on Employee’s behalf an amount equal to the amount the Company previously paid as the Company portion of Employee’s monthly premiums for health benefits, until the earliest of (1) the date on which Employee obtains either (i) employment with an employer or (ii) an independent contractor engagement with a service recipient, either of which that offer health benefits to Employee; (2) the expiration of 12 months following the Separation Date; or (3) the date on which Employee is no longer entitled to COBRA continuation coverage under the Company’s group health plan but in no event longer than 12 months; provided, however, that the Company may unilaterally amend this paragraph 4(d) or eliminate the benefit provided thereunder to the extent it deems necessary to avoid the imposition of excise taxes, penalties or similar charges on the Company or its affiliates (or any of their successors), including, without limitation, under Section 4980D of the Internal Revenue Code of 1986, as amended.

(e)

During the Severance Period and the Extended Severance Period (as applicable), Employee agrees to provide the Company with written notice of her acceptance of any new employment or engagement as an independent contractor not later than five (5) business days after her acceptance of same.  Notice shall be sent to Bridgett Zeterberg, Sr. Vice President and General Counsel, Tuesday Morning, Inc., 6250 LBJ Freeway, Dallas, Texas 75240, email:  bzeterberg@tuesdaymorning.com.

(f)

Employee acknowledges and agrees that the Separation and Extended Separation Payments referenced in paragraphs 4(a), 4(b), 4(c) and 4(d) constitute new and adequate consideration to support the release set forth in this paragraph 1 of this Agreement and fully compensate Employee for the claims Employee is releasing. For purposes of this paragraph, “Consideration” means the payments and benefits set forth in paragraph 4(a), 4(b), 4(c) and 4(d), which are payments and benefits to which Employee is not already entitled.

(g)

Unless already provided, Employee agrees to return to the Company all Company-owned property, equipment and documents (paper and electronic) no later than January 16, 2017, and will not maintain copies of the same in any form, whether tangible or intangible.

(a)

All files, records, documents, information, data, and similar items relating to the business of the Company, whether prepared by Employee or otherwise coming into Employee’s possession, remain the exclusive property of the Company, and in any event must be promptly delivered to the Company upon Employee’s departure from the Company

(b)

Employee represents and agrees that she has not improperly during her employment disclosed Company Trade Secrets and further agrees that she has not and will not following the Separation Date, directly or indirectly disclose Confidential Information, access the Company’s computer systems, download files or information from the Company’s computer systems or in any way interfere, disrupt, modify or change any computer program used by the Company or any data stored on the Company’s computer system.

(c)

Employee agrees that upon receipt of any formal or informal request, requirement, subpoena, process, or other action seeking Employee’s direct or indirect disclosure or production of any Trade Secrets to any entity, agency, tribunal, or person, or in connection with a judicial, administrative or other proceeding, Employee shall promptly and timely notify the Company, and promptly and timely provide a description and, if applicable, hand deliver a copy of such request, requirement, subpoena, process or other action to the Company.  In all such instances, Employee irrevocably nominates and appoints the Company (including any attorney retained by the Company) as Employee’s true and lawful attorney-in-fact to act in Employee’s name, place and stead to perform any act that Employee might perform to defend and protect against any disclosure of any Trade Secret.  For purposes of this paragraph 7, this Agreement shall be considered a Trade Secret.

(a)

This Agreement is written in a manner in which Employee fully understands; Employee specifically waives any rights or claims arising under the ADEA;

(b)

This Agreement does not waive rights or claims under the ADEA that may arise after the date this Agreement is executed;

(c)

The rights and claims waived in this Agreement are in exchange for consideration over and above anything to which Employee is already entitled;

(d)

Employee has been advised in writing to consult with an attorney prior to executing this Agreement, and has, in fact had an opportunity to do so;

(e)

Employee has been given a period of up to at least twenty-one (21) days, if desired, within which to consider this Agreement;  

(f)

Once executed, the Employee has a period of seven (7) days within which she can revoke this Agreement (“Revocation Period”).  If Employee chooses to revoke this Agreement, she must do so in writing, and the revocation must be addressed and delivered to Bridgett Zeterberg, Sr. Vice President and General Counsel, Tuesday Morning, Inc., 6250 LBJ Freeway, Dallas, Texas 75240, email:  bzeterberg@tuesdaymorning.com before the expiration of the seven (7) day revocation period. If Employee delivers the revocation by hand, the revocation will be considered timely if

delivered to Bridgett Zeterberg of the Company, at the above address within 7 days of Employee’s execution of this Agreement. If Employee delivers the revocation by mail or email, the revocation will be considered timely if it is mailed or emailed to Bridgett Zeterberg at the above address(es) and postmarked (as to mail) within seven (7) days of Employee’s execution of this Agreement; and

(g)

Any changes made to this Agreement, whether material or immaterial, will not restart the running of this 21-day period.

(a)

Notwithstanding any provisions of this Agreement to the contrary, to the extent (i) any payments to which Employee becomes entitled under this Agreement, constitute deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), (ii) Employee is deemed at the time of such termination of employment to be a “specified employee” as defined in the applicable Final Treasury Regulations under Section 409A of the Code, or any successor provision thereto, and (iii) at the time of Employee’s separation from service the Company is publicly traded (as defined in Section 409A of the Code) and the provisions of this Section 18(a) otherwise apply to Employee, then such payment or payments shall not be made or commence until the earliest of (x) the expiration of the six-month period measured from the date of Employee’s Termination Date (or, if earlier, the date of death of Employee). Upon the expiration of the applicable deferral period, any payments which would have otherwise been made during that period (whether in a single sum or in installments) in the absence of this Section 18 shall be paid to Employee or Employee’s beneficiary in one lump sum.

(b)

It is intended that this Agreement comply with or be exempt from the provisions of Section 409A of the Code and the Final Treasury Regulations and guidance of general applicability issued thereunder so as to not subject Employee to the payment of additional interest and taxes under Section 409A of the Code, and in furtherance of this intent, this Agreement shall be interpreted, operated and administered in a manner consistent with these intentions.

(c)

Notwithstanding any provision of this Agreement to the contrary, if the 28-day period (consisting of the 21-day review period plus the seven day revocation period) described in paragraph 14 of this Agreement commences in one taxable year and ends in another taxable year, the Separation Payment shall be paid beginning on the first regularly scheduled payday in the later taxable year.

(d)

For purposes of Section 409A of the Code, each payment made under this Agreement shall be treated as a separate and distinct payment and the right to a series of installment payments under this Agreement shall be treated as the right to a series of separate and distinct payments.