TUESDAY MORNING CORPORATION (NASDAQ:TUES) Files An 8-K Entry into a Material Definitive Agreement

ME Staff 8-k
-
0

TUESDAY MORNING CORPORATION (NASDAQ:TUES) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement

On October1, 2017, the Company, Jeereddi II, LP (“Jeereddi II”), Purple Mountain Capital Partners LLC (“PMCP”) and certain of Jeereddi II and PMCP’s affiliates (Jeereddi II and PMCP, together with their affiliates, the “Jeereddi/PMCP Group”) entered into a cooperation agreement (the “Cooperation Agreement”) to settle the contested election for directors at the 2017 annual meeting of stockholders (the “2017 Annual Meeting”). The Jeereddi/PMCP Group currently beneficially owns 1,066,688 shares of the Company’s common stock, or approximately 2.32%.

to the terms of the Cooperation Agreement, the Company agreed to nominate James T. Corcoran for election to the Board at the 2017 Annual Meeting. If elected, Mr.Corcoran will be appointed to the Nominating and Governance Committee. Mr.Corcoran’s nomination will fill a vacancy created by the anticipated retirement of one of the Company’s directors, effective as of immediately following the 2017 Annual Meeting. Under the terms of the Cooperation Agreement, Mr.Corcoran will offer his resignation to the Board if at any time the Jeereddi/PMCP Group no longer beneficially owns at least 533,344 shares of the Company’s common stock (subject to adjustment for stock splits, reclassifications, combinations and similar adjustments, the “Minimum Ownership Threshold”). In addition, so long as the Jeereddi/PMCP Group meets the Minimum Ownership Threshold, the Jeereddi/PMCP Group will be entitled to certain replacement rights during the Standstill Period (as defined below) in the event Mr.Corcoran is unable to serve as a director.

Also under the terms of the Cooperation Agreement, Jeereddi II agreed to irrevocably withdraw its notice of nomination of candidates for election at the 2017 Annual Meeting previously submitted to the Company on August18, 2017. In addition, each member of the Jeereddi/PMCP Group agreed that it will not, directly or indirectly, (i)nominate or recommend for nomination any person for election at the 2017 Annual Meeting or at the 2018 annual meeting of stockholders (the “2018 Annual Meeting”), (ii)submit proposals for consideration or otherwise bring any business before the 2017 and 2018 Annual Meetings, or (iii)engage in certain activities related to “withhold” or similar campaigns with respect to the 2017 and 2018 Annual Meetings.

The Cooperation Agreement also provides that at the 2017 and 2018 Annual Meetings, each member of the Jeereddi/PMCP Group will cause all shares of the Company’s common stock beneficially owned by them to be present and voted (i)in favor of all of the directors nominated for election by the Board, (ii)in favor of the appointment of the Company’s independent registered accounting firm for the years ended June30, 2017 and June30, 2018, respectively, and (iii)in accordance with the Board’s recommendation with respect to the Company’s “say-on-pay” proposal, provided, however, that to the extent that the recommendation of both Institutional Shareholder Services Inc. (“ISS”) and Glass Lewis& Co., LLC (“Glass Lewis”) differs from the Board’s recommendation with respect to any matter other than nominees for election as directors to the Board, the Jeereddi/PMCP Group shall have the right to vote in accordance with the recommendation of ISS and Glass Lewis with respect to such matters.

Further, under the terms of the Cooperation Agreement, each member of the Jeereddi/PMCP Group agreed to certain normal and customary standstill provisions during a standstill period, which is defined as the period beginning on the date of the Cooperation Agreement and through the later of (x)the date that is the first day to submit stockholder nominations for the 2019 annual meeting of stockholders to the Company’s Bylaws (the “2019 Advance Notice Date”) and (y)the date that Mr.Corcoran no longer serves on the Board; provided, however, that if Mr.Corcoran is not re-nominated by the Board for election at the 2018 Annual Meeting, the Standstill Period shall end thirty (30) days following the conclusion of the 2018 Annual Meeting; and provided, further, that if Mr.Corcoran resigns for any reason prior to the 2019 Advance Notice Date, the Standstill Period shall continue until the 2019 Advance Notice Date (the “Standstill Period”). Among other things, the standstill provisions provide that each member of the Jeereddi/PMCP Group will not:

· make any offer or proposal (with or without conditions) with respect to any tender offer, merger, acquisition, recapitalization, restructuring, liquidation, disposition, distribution, spin-off, asset sale, joint venture or other business combination involving the Company, or encourage, initiate or support any other third party with respect to any of the foregoing, or

· with certain exceptions, institute, solicit or join, as a party, any litigation, arbitration or other proceeding against the Company or any of its current or former directors or officers (including derivative actions).

Each of the parties also agreed to certain mutual non-disparagement obligations, and the Company agreed to reimburse the Jeereddi/PMCP Group for its reasonable, documented out-of-pocket fees and expenses, including legal expenses, occurred in connection with the matters related to the negotiation and execution of the Cooperation Agreement, up to a maximum of $25,000.

The foregoing summary of the Cooperation Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Cooperation Agreement filed as Exhibit10.1 hereto, which is incorporated herein by reference.

A copy of the press release issued by the Company and the Jeereddi/PMCP Group regarding the Cooperation Agreement is attached hereto as Exhibit99.1.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

The information set forth under Item 1.01 of this Current Report on Form8-K is incorporated into this Item 5.02 by reference.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

10.1

Agreement, dated as of October1, 2017, by and among Tuesday Morning Corporation, Jeereddi II, LP, Purple Mountain Capital Partners LLC and the entities and natural persons set forth in the pagesthereto.

99.1

Press Release dated October2, 2017.


TUESDAY MORNING CORP/DE Exhibit
EX-10.1 2 a17-22327_7ex10d1.htm EX-10.1 Exhibit 10.1   EXECUTION VERSION   AGREEMENT   This Agreement (this “Agreement”) is made and entered into as of October 1,…
To view the full exhibit click here

About TUESDAY MORNING CORPORATION (NASDAQ:TUES)

Tuesday Morning Corporation is an off-price retailer. The Company specializes in selling discounted, upscale decorative home accessories, housewares, seasonal goods and famous-maker gifts. The Company operated 751 stores in 40 states in the United States, as of June 30, 2016. The Company offers products in a range of categories, such as home decor, furniture, bed and bath, kitchen, toys, crafts, pets and seasonal goods. The Company offers branded merchandise, such as Peacock Alley, Sferra, Lenox, Waterford and Hartmann. In addition to branded goods, it also carries home furnishings items made around the world. The Company’s stores operate in both primary and secondary locations of the suburban markets, such as strip malls, near its middle and upper-income customers. The Company utilizes distribution center facilities in Dallas, Texas and Phoenix, Arizona.