FIRST AMENDMENT TO THE
TUESDAY MORNING CORPORATION
1997 LONG-TERM EQUITY INCENTIVE PLAN
THIS FIRST AMENDMENT TO THE TUESDAY MORNING CORPORATION 1997 LONG-
TERM EQUITY INCENTIVE PLAN (this “Amendment”) is made and adopted by Tuesday Morning
Corporation, a Delaware corporation (the “Company”), effective as of July 28, 2005.
A. The stockholders of the Company have approved, and the Company has adopted, the
Tuesday Morning Corporation 1997 Long-Term Equity Incentive Plan (the “1997 Plan”). Capitalized terms
used but not otherwise defined herein shall have the meanings ascribed to them in the 1997 Plan.
B. The compensation committee of the board of directors of the Company desires to exercise
its power to modify the 1997 Plan by defining “Fair Market Value” under the 1997 Plan in a manner that is
consistent with certain guidance given by the Internal Revenue Service regarding what would be deemed a
reasonable methodology for determining the “fair market value” of stock underlying an option to purchase stock
with respect to all options granted on or after July 28, 2005.
NOW, THEREFORE, the 1997 Plan is hereby amended as follows:
1. Section 2(k)(i) is hereby amended to read as follows in its entirety:
“(i) the mean between the highest and lowest selling prices of the Common Stock on the
date of determination or, if there have been no sales on the date of determination but there were
sales on dates within a reasonable period both before and after the determination date, the
weighted average of the means between the highest and lowest sales on the nearest date before
and the nearest date after the determination date; such average is to be weighted inversely by the
respective number of trading days between the selling dates and the determination date.”
2. Section 2(k)(ii) is hereby amended to read as follows in its