8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  July 18, 2006

Tuesday Morning Corporation
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation) 0-19658
(Commission File Number) 75-2398532
(IRS Employer Identification No.)

6250 LBJ Freeway
Dallas, Texas
(Address of principal executive offices) 75240
(Zip Code)

Registrant’s telephone number, including area code:  (972) 387-3562

Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On July 18, 2006, Kathleen Mason, on behalf of Tuesday Morning Corporation (the “Company”), entered into a letter agreement with Elizabeth Schroeder regarding the terms of her employment as Executive Vice President and Chief Financial Officer.  Pursuant to the letter agreement, Ms. Schroeder is entitled to a base salary of $11,458.34 paid semi-monthly on the 15th and the last day of the month and she will receive a $25,000 signing bonus payable on her first day of employment.  Ms. Schroeder will be eligible for a performance evaluation in March 2007 and at such time will be eligible to receive additional compensation in the form of base salary and/or bonus based on the Company’s performance.  Ms. Schroeder is also eligible to participate in all normal and standard benefits, offered to eligible employees of the Company, after published qualifying periods of employment.  In addition, Ms. Schroeder will receive a stock option grant of 150,000 shares of the Company’s stock that will vest daily over a five year period after a six-month cliff.  The letter agreement does not specify the term of Ms. Schroeder’s employment; however, in the event that the Company terminates Ms. Schroeder’s employment for any reason, other than cause, during the first 24 months of employment, the Company will continue to pay Ms. Schroeder’s salary and the employer portion of benefits for a period of 12 months.  This summary of the letter agreement with Ms. Schroeder does not purport to be complete and is subject to and qualified in its entirety by reference to the text of the letter agreement, included as Exhibit 10.1 to this filing.  Exhibit 10.1 is incorporated by reference into this Item 1.01.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

On July 18, 2006, the Company announced that effective July 18, 2006, Elizabeth Schroeder will become the Company’s Executive Vice President and Chief Financial Officer.  Ms. Schroeder will succeed Michael J. Marchetti who has been serving as Acting Chief Financial Officer since the departure of Loren K. Jensen in May 2006.  Mr. Marchetti resigned his position as Acting Chief Financial Officer effective July 18, 2006.  Mr. Marchetti will maintain his current duties as Executive Vice President and Chief Operating Officer.  A copy of the Company’s press release dated July 18, 2006, announcing the appointment of Ms. Schroeder is attached hereto at Exhibit 99.1 and incorporated herein by reference.

Ms. Schroeder, age 41, was most recently Executive Vice President and Chief Financial Officer of Wyndham International, Inc. (“Wyndham”) from October 2004 until April 2006.  Ms. Schroeder joined Wyndham in August 1998 as vice president of financial reporting.  In May 2000, Ms. Schroeder was promoted to senior vice president, financial reporting with primary responsibility for Wyndham’s investor relations activities.  Prior to joining Wyndham, Ms. Schroeder was the corporate controller for American General Hospitality Corporation for five years.

Ms. Schroeder has entered into a letter agreement regarding the terms of her employment.  A description of the material terms of the letter agreement are contained in Item 1.01 above, which is incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

(d)Exhibits

Exhibit Number	Exhibit Title
10.1	Letter Agreement dated July 18, 2006 from Kathleen Mason, on behalf of Tuesday Morning Corporation, to Elizabeth Schroeder
99.1	Press Release issued on July 18, 2006, announcing the appointment of the new Executive Vice President and Chief Financial Officer

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TUESDAY MORNING CORPORATION
Date:  July 18, 2006	By:	/s/ Kathleen Mason
		Kathleen Mason President and Chief Executive Officer

EXHIBIT INDEX

Exhibit Number	Exhibit Title
10.1	Letter Agreement dated July 18, 2006 from Kathleen Mason, on behalf of Tuesday Morning Corporation, to Elizabeth Schroeder
99.1	Press Release issued on July 18, 2006, announcing the appointment of the new Executive Vice President and Chief Financial Officer

EX-10.1

EXHIBIT 10.1

June 23, 2006

Elizabeth Schroeder
Dallas, Texas

Dear Elizabeth,

On behalf of Tuesday Morning, it is my pleasure to offer you the position of Executive Vice-President/Chief Financial Officer for Tuesday Morning, Inc.  Outlined below are the details of your offer:

·     Start Date:  July 18, 2006

·     Location:  Tuesday Morning Corporate Office located at 6250 LBJ Freeway, Dallas, Texas 75240

·     Person to request upon arrival:  Stephanie White

·     Typical Work Schedule:  Monday through Friday from 8:00a — 5:00p

·     Salary:   $11,458.34 paid semi-monthly on the 15th and the last day of the month

·     Signing Bonus:  You will receive a $25,000 signing bonus payable on your first day of employment.

·     Additional Compensation:  You will be eligible for a performance evaluation in March 2007 and at such time
                will be eligible to receive additional compensation in the form of base and/or bonus based on company
                performance.

·     Classification:  Exempt

·     Stock Options:  150,000 shares of Tuesday Morning stock vesting over a five (5) year period.  Stock price for
                options is based on the average price of the stock on your date of hire.

·     Vacation:  Seven (7) days vacation during 2006.  Three (3) weeks vacation each year, thereafter, until you are
                eligible for additional time based on Tuesday Morning’s vacation policy.

·     Benefits:  All normal and standard benefits, offered to eligible Tuesday Morning employees after published
                qualifying periods of employment.  (See enclosed benefit sheet).

·     Additional Terms:  Should Tuesday Morning terminate your employment for any reason, other than for cause,
                during the first twenty-four (24) months of employment, Tuesday Morning will continue your salary and the
                employer portion of benefits for a period of 12 months.

Your contribution to the continued success of Tuesday Morning is greatly anticipated.  We look forward to having you as a part of our Team!

Please sign below acknowledging your acceptance of the above offer and return to Beverly Stewardson in the Human Resource Dept. using the enclosed envelope.  Please bring your Driver’s License and Social Security card on your first day
so that we may complete your new hire packet.  If you have any questions or I can be of any assistance, please contact me.

Sincerely,

/s/ Kathleen Mason

Kathleen Mason

President, Chief Executive Officer

I have read, understand and accept the employment offer for the position of EVP/CFO for Tuesday Morning, Inc. and agree to the terms therein.

/s/ Elizabeth Schroeder	July 18, 2006
Elizabeth Schroeder	Date

EX-99.1

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

                                                                                                CONTACT:
                                                                                                Laurey Peat
                                                                                                LAUREY PEAT + ASSOCIATES
                                                                                                214/871-8787

Tuesday Morning Corporation Names Elizabeth Schroeder Executive
Vice President & Chief Financial Officer
Seasoned Financial Executive Joins Senior Management Team.

DALLAS — July 18, 2006 —Tuesday Morning Corporation (NASDAQ: “TUES”), the leading national deep-discount retailer of first quality famous maker home furnishings and gifts, today named Elizabeth Schroeder as the new Executive Vice President & Chief Financial Officer.

Ms. Schroeder brings extensive financial experience to Tuesday Morning most recently as Executive Vice President & Chief Financial Officer of Wyndham International, Inc., one of the nation’s largest hospitality companies with revenues over $1 billion.

“We’re pleased to welcome Elizabeth to Tuesday Morning,” said Kathleen Mason, President and Chief Executive Officer. “Ms. Schroeder is a seasoned financial executive who has demonstrated a rare combination of skills across a wide range of disciplines within a leading nationally branded consumer services company. Her top level experience in finance and the hospitality industry will broaden our senior management team and bring a fresh perspective to our company.”

In addition to her primary responsibilities in the areas of corporate finance management, Ms. Schroeder will play an important role in the company’s investor relations programs and will oversee strategic planning, treasury, corporate tax and human resources.

Prior to joining Tuesday Morning, Ms. Schroeder served as Executive Vice President, Chief Financial Officer for Wyndham International, Inc. since 2004, leading the company through its post-acquisition transition as a key member of management. In 2000, Ms. Schroeder became Senior Vice President, Financial Reporting with primary responsibility for Wyndham International’s investor relations activities on Wall Street. As Vice President of Financial Reporting from 1998 to 2000, Ms. Schroeder was responsible for all financial and SEC reporting, working directly with external auditors, evaluating and implementing controls, managing all functions related to cash management and was a key member of the corporate reorganization team.

Prior to joining Wyndham International, Ms. Schroeder was the Corporate Controller for American General Hospitality Corporation for five years.

Ms. Schroeder is a Certified Public Accountant and a native of Louisiana. She graduated from Louisiana State University, Shreveport with a Bachelor of Science in Accounting. Ms. Schroeder succeeds Mike Marchetti who has served as acting Chief Financial Officer for Tuesday Morning since the departure in May 2006 of Loren Jensen.

About Tuesday Morning
Tuesday Morning is the leading closeout retailer of upscale, decorative home accessories and famous-maker gifts in the United States. The Company opened its first store in 1974 and currently operates 762 stores in 46 states during periodic “sale events.” Tuesday Morning is nationally known for bringing its more than 8.0 million loyal customers a treasure hunt of high-end, first quality, brand name merchandise at prices 50% to 80% below department and specialty stores and catalogues.

This press release contains forward-looking statements, within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995, which are based on management’s current expectations, estimates and projections.  Words such as “ can,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements.  Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected or implied in the forward-looking statements.  Such risks and uncertainties include: the success of new store openings, competitive factors, access to merchandise and unanticipated changes in consumer demand and economic trends, as well as other risks detailed in the company’s filings with the Securities and Exchange Commission, including Forms 8-K, 10-Q and 10-K.  The Company undertakes no obligation to revise the forward-looking statements contained therein to reflect events or circumstances after the date hereof as a result of new information, future events or otherwise.

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