<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
____________________________________________________________________
Tuesday Morning Corporation
(Name of Registrant as Specified In Its Charter)
____________________________________________________________________
Mark E. Jarvis, Secretary
(Name of Person Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on the table below per Exchange Act Rule 14a-6(i)(4) and 0-11
("Rule 0-11").
(1) Title of each class of securities to which transaction applies
(2) Aggregate number of securities to which transaction applies
(3) Per unit price or other underlying value of transaction computed
pursuant to Rule 0-11
(4) Proposed maximum aggregate value of transaction
(5) Total fee paid
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party
(4) Date Filed
<PAGE>
TUESDAY MORNING CORPORATION
14621 Inwood Road
Addison, Texas 75001
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 17, 2000
To our Stockholders:
The Annual Meeting of Stockholders of Tuesday Morning Corporation (the
"Company") will be held at the Company's headquarters, 14621 Inwood Road,
Addison, Texas, on Wednesday, May 17, 2000 at 11:00 a.m., local time. At the
meeting, stockholders will be asked to vote on the following matters:
(a) To elect to the Company's Board of Directors six directors to serve a
one-year term expiring at the Annual Meeting of Stockholders in 2001,
or upon their earlier retirement, resignation or removal; and
(b) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on April 11, 2000 are
entitled to notice of, and to vote at, the meeting or any adjournment thereof.
Whether or not you plan to attend the Annual Meeting and regardless of the
number of shares you own, please date, sign and return the enclosed proxy card
in the enclosed envelope (which requires no postage if mailed in the United
States).
By Order of the Board of Directors
/s/ MARK E. JARVIS
Mark E. Jarvis
Secretary
Dallas, Texas
April 19, 2000
<PAGE>
TUESDAY MORNING CORPORATION
14621 Inwood Road
Addison, Texas 75001
PROXY STATEMENT
for the
ANNUAL MEETING OF STOCKHOLDERS
Wednesday, May 17, 2000
11:00 a.m.
This Proxy Statement is furnished to stockholders of Tuesday Morning
Corporation, a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
Annual Meeting of Stockholders to be held on May 17, 2000, at 11:00 A.M., local
time, at our corporate offices, and at any and all adjournments or postponements
thereof. Proxies in the form enclosed will be voted at the meeting, if properly
executed, returned to the Company prior to the meeting and not revoked. The
proxy may be revoked at any time before it is voted by giving written notice to
the Secretary of the Company.
This Proxy Statement and form of proxy were first mailed to stockholders of the
Company on or about April 19, 2000. The Company's 1999 Annual Report to
Stockholders, covering the Company's fiscal year ended December 31, 1999, is
enclosed herewith but does not form any part of the materials for solicitation
of proxies.
QUORUM AND VOTING
Record Date. The record date for the Annual Meeting ("Record Date") is
April 11, 2000. Only holders of record of the Company's Common Stock, $.01 par
value per share at the close of business on such date are entitled to notice of,
and to vote at, the Annual Meeting.
Voting Stock. The only class of stock entitled to be voted at the meeting
is the Company's Common Stock. Holders of record of Common Stock are entitled
to one vote per share on the matters to be considered at the Annual Meeting. At
the close of business on the Record Date, 39,093,133 shares of Common Stock were
issued and outstanding and entitled to vote at the Annual Meeting.
Quorum. In order for any business to be conducted at the Annual Meeting,
the holders of more than 50% of the shares of Common Stock entitled to vote must
be represented at the meeting, either in person or by properly executed proxy.
If a quorum is not present at the scheduled time of the Annual Meeting, the
stockholders who are present may adjourn the Annual Meeting until a quorum is
present. The time and place of the adjourned meeting will be announced at the
time the adjournment is taken, and no other notice will be given. An
adjournment will have no effect on the business that may be conducted at the
Annual Meeting.
Voting by Street Name Holders. If a stockholder owns shares in "street
name" by a broker, the broker, as the record holder of the shares, is required
to vote those shares in accordance with your instructions. If you do not give
instructions to the broker, the broker will nevertheless be entitled to vote the
shares with respect to "discretionary" items but will not be permitted to vote
the shares with respect to "non-discretionary" items (in which case, the shares
will be treated as "broker non-votes").
<PAGE>
Required Vote. The election as a director of each nominee requires the
affirmative vote of a plurality of the shares of Common Stock represented, in
person or by proxy, at the Annual Meeting (i.e., the six nominees receiving the
greatest number of votes will be elected). Abstentions and "broker non-votes"
are counted as present and entitled to vote for the purposes of determining a
quorum, but are not counted for purposes of the election of a director.
Default Voting. Where stockholders have appropriately specified how their
proxies are to be voted, they will be voted accordingly. If a stockholder
properly executes and returns the accompanying proxy, but does not indicate any
voting instructions, such stockholder's shares will be voted as follows:
(i) FOR the election of each nominee listed below as director of the
Company; and
(ii) at the discretion of the proxy holders on any other matter that may
properly come before the meeting or any adjournment thereof.
If any other matter or business is brought before the meeting, the proxy holders
may vote the proxies in their discretion. The directors do not currently know
of any such other matter or business.
ELECTION OF DIRECTORS
At the Annual Meeting, the holders of Common Stock as of the Record Date will
consider and vote for each of the members of the Company's Board of Directors.
The Board of Directors has nominated Jerry M. Smith, William J. Hunckler, III,
Benjamin D. Chereskin, Robin P. Selati, Sally Frame Kasaks and Henry F. Frigon
for reelection as directors of the Company. The nominees are currently serving
as directors of the Company, and if they are reelected, the nominees will
continue to serve until their terms expire at the Annual Meeting of Stockholders
to be held in 2001, or the earlier retirement, resignation or removal of any
such nominee. Should any nominee become unable or unwilling to accept
nomination or election, the proxy holders may vote the proxies for the election
in his stead of any other person the Board of Directors may recommend. Each of
the nominees has indicated their willingness to serve the full term.
The Board of Directors recommends that you vote FOR the election of each of
the foregoing nominees.
Biographical Information.
The following is biographical information about each of the nominees:
Mr. Smith, 63, joined Tuesday Morning in 1984, was elected Vice President,
Advertising/Public Relations and Store Operations in 1986 and was elected Senior
Vice President, Advertising/Public Relations and Store Operations in 1989. He
was elected Executive Vice President and appointed a director in November 1992.
In September 1994, Mr. Smith was elected President and Chief Operating Officer.
Mr. Smith became Tuesday Morning's Chief Executive Officer on December 29, 1997
and Chairman of the Board on September 8, 1999.
Mr. Hunckler, 46, has served as director of Tuesday Morning since December
29, 1997. Mr. Hunckler is a managing director of Madison Dearborn Partners,
Inc., which he co-founded in 1993. Prior to 1993, Mr. Hunckler was with First
Chicago Venture Capital for 13 years. Mr. Hunckler currently serves on the
board of directors of Beverages and More, Inc., The Cornerstone Investments
Group, Inc., NWL Holdings, Inc. and Peter Piper, Inc.
Mr. Chereskin, 41, has served as a director of Tuesday Morning since
December 29, 1997. Mr. Chereskin is a managing director of Madison Dearborn
Partners, Inc. which he co-founded in 1993. Prior to 1993, Mr. Chereskin was
with First Chicago Venture Capital for nine years. Mr. Chereskin currently
2
<PAGE>
serves on the board of directors of Beverages and More, Inc., The Cornerstone
Investments Group, Inc., NWL Holdings, Inc. and Carrols Holdings Corporation.
Mr. Selati, 33, has served as a director of Tuesday Morning since December
29, 1997. Mr. Selati is a managing director of Madison Dearborn Partners, Inc.
and has been with the firm since 1993. His prior experience was with Alex,
Brown & Sons Incorporated as a Financial Analyst in the consumer/retailing
investment banking group. Mr. Selati currently serves on the board of directors
of Peter Piper, Inc., NWL Holdings, Inc. and Carrols Holdings Corporation.
Ms. Kasaks, 55, has been with ISTA Incorporated, a marketing and retail-
consulting firm since January 1997. Between February 1992 and August 1996, Ms.
Kasaks served as Chairman and Chief Executive Officer of Ann Taylor Stores, Inc.
which operates a chain of women's apparel stores. Ms. Kasaks also serves as a
director of Pacific Sunwear of California, The White House, Inc. and Cortefiel,
S.A., of Madrid, Spain.
Mr. Frigon, 65, was elected to the Board of Directors in December 1999. He
is currently a private investor and business consultant. In December 1994, he
retired from Hallmark, Inc. where he served as Executive Vice President and
Chief Financial Officer. Prior to joining Hallmark he served as President and
Chief Executive Officer of BATUS, Inc. Mr. Frigon currently serves on the board
of directors of H&R Block, Buckeye Technologies, Corporate Wings, Dimon
International and Syprus Solutions.
The Board of Directors consists of such number of members as is set by the
Board of Directors from time to time. The Company's Certificate of
Incorporation provides that directors of the Company shall not be personally
liable for monetary damages to the Company or its stockholders for a breach of
fiduciary duty as a director, except for liability as a result of (i) a breach
of the director's duty of loyalty to the Company or its stockholders; (ii) acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) an act related to the unlawful stock repurchase
or payment of a dividend pursuant to Section 174 of Delaware General Corporation
Law; and (iv) transactions from which the director derived an improper benefit.
The Company has entered into agreements with each of its directors obligating
the Company to indemnify its directors to the fullest extent permitted by
Delaware law and the Company's Certificate of Incorporation.
During the year ended December 31, 1999, the Board of Directors held four
regular meetings. All directors attended all of the meetings.
Committees of the Board of Directors
The Audit Committee, composed of Benjamin D. Chereskin, and Robin P. Selati,
is empowered to review the Company's principal policies for accounting, internal
control and financial reporting, to meet periodically with the Company's
independent auditors and to recommend to the Board of Directors whether or not
to engage the independent auditors for the succeeding year. The Audit Committee
met one time during 1999 and all members were in attendance.
The Compensation Committee is composed of William J. Hunckler, III and
Benjamin D. Chereskin. Reference is made to the report of the Company's
Compensation Committee set forth elsewhere herein. The Compensation Committee
met one time during 1999 and all members were in attendance.
3
<PAGE>
Executive Officers
The following table lists the executive officers and certain key employees
of Tuesday Morning:
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Jerry M. Smith 63 President, Chief Executive Officer, Chairman of the Board
Mark E. Jarvis 48 Senior Vice President, Chief Financial Officer
G. Michael Anderson 47 Senior Vice President, Buying Group
Duane A. Huesers 44 Vice President, Finance
Richard Nance 53 Vice President, Information Systems
Karen Costigan-Goodman 50 Vice President, Real Estate
Andrew Paris 41 Vice President, Store Operations
Marvin Wilson 59 Vice President, Logistics
</TABLE>
Biographical information regarding Mr. Smith is set forth under "Election
of Directors". The following is biographical information about the other
foregoing officers and key employees of the Company:
Mr. Jarvis joined Tuesday Morning in September 1992 as Senior Vice
President and Chief Financial Officer. From 1988 to 1992, he served in several
capacities, most recently as Vice President and Treasurer, for Pier 1 Imports,
Inc., a specialty retailer.
Mr. Anderson joined Tuesday Morning in September 1989 as a buyer. In 1991,
he was appointed Vice President, Buying, Smallwares Division. Mr. Anderson was
elected Senior Vice President, Buying Group in December 1996. Prior to joining
Tuesday Morning, Mr. Anderson was a buyer for Affiliated Foods and Merchandise
Manager for Fox-Meyer Drug Company.
Mr. Huesers joined Tuesday Morning in 1992 as Vice President, Finance.
Prior to joining Tuesday Morning, Mr. Huesers served as Senior Vice President
and Chief Financial Officer of Bookstop, Inc., a chain of book superstores.
Mr. Nance joined Tuesday Morning in 1992 as Vice President, Information
Systems. Prior to joining Tuesday Morning, Mr. Nance was part of the
information systems consulting group hired by Tuesday Morning in 1991.
Ms. Costigan-Goodman joined Tuesday Morning in 1982 as a Regional Manager
of Store Operations, and became head of the real estate division in 1988. Ms.
Costigan-Goodman was elected Vice President, Real Estate in 1991. Prior to
joining Tuesday Morning, Ms. Costigan-Goodman was Assistant Managing Director of
Lord & Taylor in Chicago and Dallas.
Mr. Paris joined Tuesday Morning in 1990 as Regional Manager of Store
Operations. He was elected Vice President, Store Operations in 1996. Prior to
joining Tuesday Morning, Mr. Paris was Manager of Ramp Operations at People
Express/Continental Airlines.
Mr. Wilson joined Tuesday Morning in 1999. Prior to joining Tuesday Morning,
Mr. Wilson was President of Competitive Process Solutions.
Executive Compensation
Director Compensation. Directors who are not executive officers receive
an annual retainer from the Company in the amount of $30,000 and receive
reimbursement for their out-of-pocket expenses incurred in attending Board
meetings. Directors who are employees of the Company do not receive any
additional remuneration for serving as directors.
4
<PAGE>
Summary Compensation Table. The following table and accompanying
explanatory footnotes include annual and long-term compensation information for
(i) Tuesday Morning's Chief Executive Officer and (ii) the next four highest
paid executive officers who received total annual salary and bonus in excess of
$100,000, for services rendered in all capacities during 1997, 1998 and 1999.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- ------------
Name and Fiscal Other Annual Options All Other
Principal Position Year Salary Bonus Compensation (1) Granted Compensation (2)
------------------ ---- ------ ----- ---------------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Jerry M. Smith 1999 $475,000 $237,500 -0- -0- $ 7,449
President/CEO/ 1998 475,000 237,500 -0- -- 8,876
Chairman 1997 370,833 -0- $13,333,267 875,000 11,198
Mark E. Jarvis 1999 $215,881 -0- -0- -0- $ 7,516
Senior Vice President/ 1998 198,875 -0- -0- 145,831 6,210
Chief Financial Officer 1997 182,250 -0- $376,312 -- 7,317
G. Michael Anderson 1999 $249,262 -0- -0- -0- $ 6,016
Senior Vice President 1998 228,750 -0- -0- 218,750 6,210
1997 210,000 -0- $104,996 -- 6,770
Duane A. Huesers 1999 $179,375 -0- -0- -0- $ 6,159
Vice President, Finance 1998 158,125 -0- -0- 72,919 5,805
1997 142,104 -0- $101,279 -- 6,125
Richard Nance 1999 $167,937 -0- -0- -0- $ 6,379
Vice President, 1998 158,025 -0- -0- 72,919 6,758
Information Systems 1997 144,000 -0- $37,166 -- 6,545
</TABLE>
(1) Amounts represent cash payments in lieu of option cancellations paid in
connection with the recapitalization.
(2) The amounts indicated reflect the aggregate value of Tuesday Morning's
contributions for each of the named executive officers to Tuesday Morning's
401(k) defined contribution plan, group term life insurance and Tuesday
Morning's stock purchase plan.
Stock Options
The Company has adopted an incentive Option Plan covering 4,800,000 shares
of Common Stock of the Company. The Option Plan was implemented by the Company
in December 1997. The purpose of the Option Plan is to strengthen the Company's
ability to attract and retain key employees and to furnish additional incentives
to such persons by encouraging them to become owners of Common Stock. The
administration of the Option Plan is provided by the Compensation Committee of
the Board of Directors, which has the authority to determine the terms on which
options are granted under the Option Plan.
Under the Option Plan, each option must be granted at an exercise price of
not less than the fair market value of the shares as of the date of grant. Each
option must be exercised, if at all, during a period established in the grant
which may not exceed 10 years from the date of grant (five years with respect to
any employee who owns more than 10% of the Company's capital stock). An
employee may not transfer or assign any option granted and may not exercise any
options after a specified period after termination of the employee's employment.
The options vest over a period set by the Compensation Committee. The Company
had outstanding qualified stock options to purchase an aggregate of 1,659,640
shares. The fair market value of the Company's shares as of March 31, 2000 was
$14.375 per share.
The Company has also granted non-qualified stock options supplementary to
the Option Plan. As of April 1, 2000, the Company had outstanding non-qualified
stock options to purchase an aggregate of 6,992 shares. All of these options
were granted at exercise prices of not less than the fair market value of the
shares as of the date of grant.
5
<PAGE>
The following table sets forth certain information with respect to the
options exercised by the executive officers named above during 1999 or held by
such persons at year-end.
<TABLE>
<CAPTION>
Value of Unexercised
Shares Number of Unexercised In-the-Money Options (2)
Acquired Value Options at Dec. 31, 1999 At Dec. 31, 1999
Name On Exercise Realized (1) Exercisable Unexercisable Exercisable Unexercisable
- --------------- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mr. Smith 142,625 2,600,553 295,647 290,603 5,390,655 5,298,685
Mr. Jarvis 14,588 265,990 29,291 87,371 534,075 1,593,072
Mr. Anderson 21,875 398,858 43,941 131,059 801,195 2,389,654
Mr. Huesers 6,640 121,070 11,650 43,688 212,419 796,582
Mr. Nance 7,287 132,868 14,650 43,688 267,120 796,582
</TABLE>
(1) The named executives exercised options to purchase stock during 1999 but
have not sold the shares purchased. The "Value Realized" is calculated
based on the closing market price on December 31, 1999.
(2) Based on the closing market price on December 31, 1999.
Stock Price Performance
Set forth below is a line graph indicating the stock price performance of the
Company's Common Stock since going public in April 1999 and ending December 31,
1999, as contrasted with (i) the S & P 500 Index and (ii) a peer group of
companies consisting of Consolidated Stores Corporation; TJX Companies, Inc.;
Dollar Tree Stores, Inc.; Dollar General Corporation; Family Dollar Stores,
Inc.; Linens'n Things; Williams-Sonoma, Inc.; Bed Bath & Beyond, Inc.; Bombay
Company, Inc.; Ross Stores, Inc.; and Cost Plus, Inc.
Comparison of Total Return of the Company, Peer Group
and Broad Market
<TABLE>
<CAPTION>
COMPANIES, PEER GROUPS, INDUSTRY INDEXES AND/OR BROAD MARKETS
--------------------FISCAL YEAR ENDING--------------------
<S> <C> <C>
COMPANY/INDEX/MARKET 4/22/1999 12/31/1999
Tuesday Morning Corporation 100.00 108.46
Peer Group Index 100.00 80.28
S&P Composite 100.00 111.00
- ---------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
Report of the Compensation Committee
Tuesday Morning's Compensation Committee is empowered to review, and to
recommend to the full Board of Directors, the annual compensation, long-term
incentive compensation and compensation procedures for all executive officers of
the Company. Recommendations with respect to fiscal 1999 compensation were made
by a Compensation Committee consisting of William J. Hunckler, III and Benjamin
D. Chereskin. The current members of the Compensation Committee, Messrs.
Hunckler and Chereskin will make recommendations with respect to the fiscal 2000
compensation.
Executive officer compensation consists of a base salary component, a bonus
component and a stock option component. In determining the base salary component
and the bonus component of executive officer compensation, the Committee
evaluates numerous factors including the Company's financial performance related
to the goals established by the Board, the individual contribution of each
executive officer, competitive compensation practices within the specialty
retail industry and general inflationary economic factors. Stock price
performance has not been an important consideration in determining base salary,
because the price of our Common Stock is subject to a variety of factors outside
our control. The level of stock option grants to executive officers is based
primarily upon their relative position, responsibilities within Tuesday Morning,
the competitive environment in which we operate and the executive's performance.
On December 29, 1997, Jerry M. Smith, Tuesday Morning's President since 1994,
entered into a three-year employment agreement which provides that he will serve
as Tuesday Morning's President and Chief Executive Officer as well as a
director. Mr. Smith receives an annual base salary of $475,000 per year, subject
to possible increases and a maximum annual bonus of up to 50% of his base
salary. Mr. Smith's employment agreement also contains noncompetition and
nonsolicitation covenants and confidentiality provisions. The noncompetition
covenants restrict Mr. Smith from competing against Tuesday Morning until
December 2003 in any geographic area in which Tuesday Morning conducts business.
Mr. Smith has indicated that he plans to remain as the Chief Executive Officer
of Tuesday Morning after the expiration of his employment agreement.
No other officers' employment is subject to an employment agreement.
The members of such committee as noted below submit this report of the
Compensation Committee on executive compensation.
Compensation Committee
William J. Hunckler, III
Benjamin D. Chereskin
Certain Relationships and Related Transactions
In 1992, Jerry M. Smith, an executive officer at the Company, received a
loan, secured by Company stock, for the purchase of Tuesday Morning stock.
Outstanding principal amounts under the loan accrued interest at a rate of 6.02%
per annum. Mr. Smith paid the loan in full ($204,905 in principal and accrued
interest) at the time the Company went public in April 1999.
In the December 1997 Recapitalization, Madison Dearborn and Tuesday Morning
entered into a management service agreement pursuant to which Madison Dearborn
renders certain management and advisory services to Tuesday Morning. The
management service agreement was discontinued in April
7
<PAGE>
1999. Under the terms of this agreement, Madison Dearborn received a fee in the
amount of $350,000 per year.
Section 16(a) Beneficial Ownership Reporting Compliance
Under the securities laws of the United States, the Company's directors and
executive officers, and persons who own more than 10% of the Company's Common
Stock, are required to report their initial ownership of the Company's Common
Stock and any subsequent changes in that ownership to the Securities and
Exchange Commission. Specific due dates have been established for these reports,
and the Company is required to disclose in this proxy statement any failure to
file by these dates. All of these filing requirements were satisfied.
Compensation Committee Interlocks and Insider Participation
No executive officer of the Company served as a member of the compensation
committee (or other board committee performing similar functions or, in the
absence of any such committee, the entire board of directors) of another
corporation, one of whose executive officers served on the Compensation
Committee. No executive officer of the Company served as a director of another
corporation, one of whose executive officers served on the Compensation
Committee. No executive officers of the Company served as a member of the
compensation committee (or other board committee performing equivalent functions
or, in the absence of any such committee, the entire board of directors) of
another corporation, one of whose executive officers served as a director of the
Company.
8
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information with respect to the
beneficial ownership of Tuesday Morning's Common Stock as of March 31, 2000 by
(1) each person (or group of affiliated persons) who is known by Tuesday Morning
to own beneficially more than 5% of the Common Stock, (2) each of Tuesday
Morning's directors, (3) each of Tuesday Morning's executive officers, (4) all
directors and executive officers of Tuesday Morning as a group. Except as
otherwise noted and subject to community property laws, the persons or entities
in this table have sole voting and investment power with respect to all the
shares of Common Stock owned by them.
<TABLE>
<CAPTION>
Shares Beneficially Owned (1)
Name Number (1) Percent
---- ---------- -------
<S> <C> <C>
Madison Dearborn Capital Partners II, L.P. 27,963,527 71.9%
Three First National Plaza
Chicago, IL 60602
Jerry M. Smith (2) 876,638 2.2%
Mark E. Jarvis (3) 141,989 *
G. Michael Anderson (4) 118,962 *
Duane A. Huesers (5) 69,529 *
Richard Nance (6) 61,865 *
Benjamin D. Chereskin (7) 27,963,527 71.9%
William J. Hunckler, III (7) 27,963,527 71.9%
Robin P. Selati (7) 27,963,527 71.9%
Sally Frame Kasaks (8) 3,593 --
Henry F. Frigon (9) 1,642 *
All directors and executive officers as a group (10 persons) 29,232,510 74.2%
</TABLE>
- ---------------
* Denotes ownership of less than 1%.
1. Includes the number of shares and percentage ownership represented by such
shares determined to be beneficially owned by a person in accordance with
the rules of the Securities and Exchange Commission. The number of shares
beneficially owned by a person includes shares of Common Stock that are
subject to options or warrants held by that person that are currently
exercisable or exercisable within 60 days of March 31, 2000. Such shares are
deemed outstanding for the purpose of computing the percentage of
outstanding shares owned by such person. Such shares are not deemed
outstanding, however, for the purposes of computing the percentage ownership
of any other person.
2. Includes 416,199 shares issuable upon exercise of stock options exercisable
within 60 days of March 31, 2000.
3. Includes 12,027 shares issuable upon exercise of stock options exercisable
within 60 days of March 31, 2000.
4. Includes 18,281 shares issuable upon exercise of stock options exercisable
within 60 days of March 31, 2000.
5. Includes 6,013 shares issuable upon exercise of stock options exercisable
within 60 days of March 31, 2000.
9
<PAGE>
6. Includes 20,680 shares issuable upon exercise of stock options exercisable
within 60 days of March 31, 2000.
7. All of the shares indicated are held of record by Madison Dearborn Capital
Partners, II, L.P. Messrs. Chereskin, Hunckler and Selati are managing
directors of Madison Dearborn Partners, Inc., the general partner of Madison
Dearborn Partners L.P. which in turn is the general partner of Madison
Dearborn Capital Partners, II, L.P. and therefore may be deemed to
beneficially own the shares owned by Madison Dearborn Capital Partners, II,
L.P. Messrs. Chereskin, Hunckler and Selati disclaim beneficial ownership of
such shares. The address of each of Messrs. Chereskin, Hunckler and Selati
is Three First National Plaza, Chicago, Illinois 60602.
8. Includes 3,593 shares issuable upon exercise of stock options exercisable
within 60 days of March 31, 2000.
9. Includes 1,642 shares issuable upon exercise of stock options exercisable
within 60 days of March 31, 2000.
STOCKHOLDERS' PROPOSALS
Any proposals that stockholders of the Company desire to have presented at
the Annual Meeting of Stockholders in 2001 must be received by the Company at
its principal executive offices no later than December 19, 2000.
MISCELLANEOUS
The accompanying proxy is being solicited on behalf of the Board of
Directors of the Company. The expense of preparing, printing and mailing the
form of proxy and the material used in the solicitation thereof will be borne by
the Company. In addition to the use of the mails, proxies may be solicited by
personal interview, telephone and telegram by directors and regular officers and
employees of the Company. Arrangements may also be made with brokerage houses
and other custodians, nominees and fiduciaries for the forwarding of
solicitation material to the beneficial owners of stock held of record by such
persons, and the Company may reimburse them for reasonable out-of-pocket
expenses incurred by them in connection therewith.
Representatives of Arthur Andersen, LLP, the Company's independent
auditors, are expected to be present at the Annual Meeting with the opportunity
to make a statement if they desire and to be available to respond to appropriate
questions.
10
<PAGE>
- --------------------------------------------------------------------------------
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Tuesday Morning Corporation
The undersigned hereby appoints Mark E. Jarvis or his designate, as
proxy, and hereby authorizes him to represent and vote, as designated on
the other side, all the shares of stock of Tuesday Morning Corporation
standing in the name of the undersigned with all powers which the
undersigned would possess if present at the Annual Meeting of Stockholders
of the Company to be held May 17, 2000 or any adjournment thereof.
(Continued, and to be marked, dated and signed, on the other side)
- --------------------------------------------------------------------------------
.FOLD AND DETACH HERE.
YOUR VOTE IS IMPORTANT
Whether or not you plan to attend the Annual Meeting and regardless of
the number of shares you own, please date, sign and return the enclosed
proxy card in the enclosed envelope (which requires no postage if mailed in
the United States).
PLEASE VOTE
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<PAGE>
<TABLE>
<CAPTION>
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. Please mark [X]
your votes as
indicated in
this example
<S> <C> <C>
The Board of Directors recommends a vote FOR Item 1. FOR all nominees WITHHOLD
listed to the left AUTHORITY
1. Election of Directors (except as marked to vote for all nominees
to the contrary) listed to the left
Nominees: [_] [_]
Jerry M. Smith WITHHELD FOR: (Write that nominee's name on the space provided below.)
William J. Hunckler, III
Benjamin D. Chereskin
Robin P. Selati ____________________________________________________________________
Sally Frame Kasaks
Henry F. Frigon
Signature_______________________________________ Signature__________________________________________ Date___________________
NOTE: Please sign as name appears hereon. Joint owners should each sign, when signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
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.FOLD AND DETACH HERE.
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</TABLE>
