Item 5.02. Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Transition Agreements with Fred Hand, Marc Katz and Paul Metcalf
On November 4, 2022, Tuesday Morning Corporation
(the “Company”) entered in a Transition Agreement with Fred Hand (the “Hand Agreement”), pursuant to which the
Company and Mr. Hand agreed that Mr. Hand’s employment as Chief Executive Officer of the Company would terminate on November 4,
2022 and that Mr. Hand would resign from the board of directors of the Company on November 4, 2022.
In addition, on November 4, 2022, the Company entered
a Transition Agreement with each of Marc Katz and Paul Metcalf (together with the Hand Agreement, the “Transition Agreements”),
pursuant to which (i) the Company and Mr. Katz agreed that Mr. Katz’s employment as Principal and Chief Operating Officer and Interim
Chief Financial Officer would terminate on November 4, 2022, and (ii) the Company and Mr. Metcalf agreed that Mr. Metcalf’s employment
as Principal and Chief Merchant would terminate on November 4, 2022.
Under the terms the Transition Agreements, (i)
each of Messrs. Hand, Katz and Metcalf will provide transition services to the Company through June 30, 2023, (ii) the Company will make
transition payments of $2,275,948.32 to Mr. Hand, $882,771.44 to Mr. Katz, and $820,235.10 to Mr. Metcalf, (iii) the Company agreed to
reimburse certain legal fees incurred by Messrs. Hand, Katz and Metcalf in connection with the Transition Agreements, and (iv) each of
Messrs. Hand, Katz and Metcalf will be entitled to accelerated vesting of their time-vesting restricted stock units. The Company and each
of Messrs. Hand, Katz and Metcalf also have agreed to mutual releases.
The foregoing summary of the Transition Agreements
is qualified in its entirety by reference to the full text of the Transition Agreements, copies of which are filed as Exhibits 10.1, 10.2
and 10.3 to this report, and incorporated by reference herein.
Appointment of Andrew Berger as Chief Executive Officer
On November 4, 2022, Andrew T. Berger was appointed
as Chief Executive Officer of the Company. Mr. Berger has served as a director of the Company since September 28, 2022 and will continue
to serve as a member of the board of directors.
Mr. Berger, age 50, has served as a director of
Autoscope Technologies Corporation (including its predecessor, “Image Sensing Systems, Inc.”) since October 2015, as Executive
Chair of Autoscope since June 2016, and as Chief Executive Officer of Autoscope since April 2021. Mr. Berger was Chair of the Nominating
and Corporate Governance Committee and a member of the Audit Committee and Compensation Committee until his appointment as Chief Executive
Officer of Autoscope. Mr. Berger is the Managing Member of AB Value Management LLC, which serves as the General Partner of AB Value Partners,
LP. Mr. Berger has nearly two decades of experience in investment analysis, investment management, and business consulting. From 1998
through 2002, Mr. Berger served as Equity Analyst for Value Line, Inc. Since 2002, Mr. Berger has served as President of Walker's Manual,
Inc., an investment publisher that was transformed into a business consulting company in 2008. Since May 2017, Mr. Berger has been Chief
Executive Officer of Cosi, Inc. (and since August 2022 of its successor, Cosi Restaurant Holdings, LLC), a fast-casual restaurant chain
that operates and franchises domestic and international restaurants. In 2020, Cosi, Inc. filed for Chapter 11 protection under the federal
bankruptcy laws, and emerged in August 2022. From January 2020 through October 2021, Mr. Berger served on the board of directors of Rock
Mountain Chocolate Factory, Inc., and international franchisor, confectionary manufacturer and retail operator.
As a result of his appointment as Chief Executive
Officer, Mr. Berger will no longer serve on the Audit Committee of the board of directors.
Appointment of William Baumann as Chief
Operating Officer and Interim Chief Merchant
On November 4, 2022,
William M. Baumann was appointed Chief Operating Officer and Interim Chief Merchant of the Company. Mr. Baumann, age 60, previously
served as Executive Vice President and Chief Information Officer of the Company from July 2021 to November 4, 2022. Mr. Baumann
joined the Company from Torrid, Inc. where he served as Executive Vice President Customer Experience and Chief Information Officer.
In that role, Mr. Baumann’s scope of responsibility included Information Technology, Store Operations and Ecommerce. Prior to
that role, Mr. Baumann held the Chief Information Officer position at several retailers including, Total Wine and More, West Marine
and Recreational Equipment, Inc. (REI). Mr. Baumann earned a Masters of Business Administration from Saint Mary’s College of
California and an undergraduate degree from New Hampshire College.
Resignation of James Harris
On October 31, 2022, James Harris resigned from
the board of directors of the Company. In connection with the resignation, there were no disagreements between Mr. Harris and the Company
relating to matters concerning the Company’s operations, policies or practices.