Exhibit
10.1
WILLIAM A.
MOLL
AGREEMENT
WITH
STEIN MART,
INC.
This Agreement
(this “ Agreement ”) entered into in the
City of Jacksonville and State of Florida between Stein Mart, Inc.,
a Florida corporation and its divisions, subsidiaries and
affiliates (the “ Company ”), and
WILLIAM A. MOLL (“ Executive ”),
is made as of the 15 th
day
of September, 2009 (the “ Effective Date
”).
In
consideration of the promises and mutual covenants contained
herein, the parties, intending to be legally bound, agree as
follows:
SECTION 1. TERM
OF EMPLOYMENT
(a)
Term . The Company
agrees to employ Executive, and Executive agrees to be employed by
the Company, for a period of two (2) year(s) beginning on the
Effective Date (the “ Term ”).
SECTION 2.
DEFINITIONS
“Board
of Directors” means the Board
of Directors of Stein Mart, Inc. and any of its divisions,
affiliates or subsidiaries.
“Cause”
means the
occurrence of any one or more of the following:
(a) Executive
has been convicted of, or pleads guilty or nolo contendere
to, a felony involving dishonesty, theft, misappropriation,
embezzlement, fraud crimes against property or person, or moral
turpitude which negatively impacts the Company; or
(b) Executive
intentionally furnishes materially false, misleading, or omissive
information to the Company or persons to whom the Executive
reports; or
(c) Executive
intentionally fails to fulfill any assigned responsibilities for
compliance with the Sarbanes-Oxley Act of 2002 or violates the
same; or
(d) Executive
intentionally and wrongfully damages material assets of the
Company; or
(e) Executive
intentionally and wrongfully discloses material Confidential
Information of the Employer; or
(f) Executive
intentionally and wrongfully engages in any competitive activity
which would constitute a material breach of the duty of loyalty;
or
(g) Executive
intentionally breaches any stated material employment policy or any
material provision of the Company’s Ethics Policy,
or
(h) Executive
intentionally commits a material breach of this Agreement,
or
(i) Executive
intentionally engages in acts or omissions which constitute failure
to follow reasonable and lawful directives of the Company,
provided, however, that such acts or omissions are not cured within
five (5) days following the Company’s giving notice to
Executive that the Company considers such acts or omissions to be
“Cause” under this Agreement.
No
act, or failure to act, on the part of Executive shall be deemed
“intentional” if it was due primarily to an error in
judgment or negligence, but shall be deemed
“intentional” only if done, or omitted to be done, by
the Executive not in good faith and without reasonable belief that
his action or omission was in or not opposed to the best interests
of the Company. Failure to meet performance standards or objectives
shall not constitute Cause for purposes hereof.
“Change
in Control ” means
the occurrence of any of the following: (a) the Board approves
the sale of all or substantially all of the assets of the Company
in a single transaction or series of related transactions;
(b) the Company sells and/or one or more shareholders sells a
sufficient amount of its capital stock (whether by tender offer,
original issuance, or a single or series of related stock purchase
and sale agreements and/or transactions) sufficient to confer on
the purchaser or purchasers thereof (whether individually or a
group acting in concert) beneficial ownership of at least 35% of
the combined voting power of the voting securities of the Company;
(c) the Company is party to a merger, consolidation or
combination, other than any merger, consolidation or combination
that would result in the holders of the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of
the combined voting power of the voting securities of the Company
(or such surviving entity) outstanding immediately after such
merger, consolidation or combination; or (d) a majority of the
board of directors consists of individuals who are not Continuing
Directors (for this purpose, a Continuing Director is an individual
who (i) was a director of the Company on July 1, 2008 or
(ii) whose election or nomination as a director of the Company
is approved by a vote of at least a majority of the directors then
comprising the Continuing Directors). For purposes hereof, the
definition of a Change of Control shall be construed and
interpreted so as to comply with the definition contained in Code
Section 409A.
“
Code ” means the Internal Revenue Code of 1986,
as amended. Any reference to a specific provision of the Code shall
be deemed to refer to any successor provision thereto and the
regulations promulgated thereunder.
“Compensation
Committee” means the
Company’s Compensation Committee or, if no such committee
exists, the term Compensation Committee shall mean the
Company’s Board of Directors.
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“
Competing Business ” means any business which
(i) at the time of determination, is substantially similar to
the whole or a substantial part of the business conducted by the
Company or any of its divisions or affiliates; (ii) at the
time of determination, is operating a store or stores which, during
its or their fiscal year preceding the determination, had aggregate
net sales, including sales in leased and licensed departments, in
excess of $10,000,000, if such store or any such stores is or are
located in a city or within a radius of 25 miles from the outer
limits of a city where the Company, or any of its divisions or
affiliates, is operating a store or stores which, during their
fiscal year preceding the determination, had aggregate net sales,
including sales in leased and licensed departments, in excess of
$10,000,000; and (iii) had aggregate net sales at all
locations, including sales in leased and licensed departments and
sales by its divisions and affiliates, during its fiscal year
preceding that in which the Executive first rendered personal
services thereto, in excess of $25,000,000.
“
Continuation Period ” means a period following
the Termination Date of the Executive’s employment with the
company equal to:
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(a)
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twelve
(12) months (a) following a termination by the Company
due to a non-renewal of the Term of this Agreement under §5(a)
hereof, or (b) following a termination by the Company without
Cause or by the Executive for Good Reason under §5(b) hereof,
or
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(b)
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twenty-four
(24) months following a termination (a) by the Company
without Cause following a Change in Control under §5(f)(i)
hereof, or (b) by the Executive for Good Reason following a
Change in Control under §5(b) as the definition of Good Reason
is expanded in §5(b)(i) hereof.
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“
Current Insurance Coverage ” means medical,
dental, life and accident and disability insurance with coverage
consistent with the lesser of (i) the coverage in effect at
Executive’s termination, or (ii) the coverage in effect
from time to time as applied to persons in positions similar to the
position held by Executive at the time of termination.
“
Disability” means Executive’s incapacity
due to physical or mental illness or cause, which results in the
Executive being unable to perform his duties with Company on a
full-time basis for a period of six (6) consecutive months.
Any dispute as to disability shall be conclusively determined by
written opinions rendered by two qualified physicians, one selected
by Executive, and one selected by Company; provided that if such
opinions are conflicting, then such physicians shall select a
mutually agreeable third physician whose opinion shall be
conclusive and binding.
“Earned
Bonus” means the bonus
paid, if any, pursuant to the Company’s incentive
compensation plans in effect from time to time. Earned Bonus shall
be prorated based on the ratio of the number of days during such
year that Executive was employed to 365.
“
Good Reason ” means the occurrence of any one
or more of the following:
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(a)
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a material and
continuing failure to pay to Executive compensation and benefits
(as described in Section 4 ) that have been earned, if
any, by Executive, except failure to pay or provide compensation or
benefits that are in dispute between the Company and the Executive
unless such failure continues following the resolution of such
dispute; or
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(b)
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a material
reduction in Executive’s compensation or benefits (as
described in Section 4 ) which is materially more
adverse to the Executive than similar reductions applicable to
other executives of a similar level of status within the Company as
Executive; or
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(c)
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any failure by
the Company to comply with any of the material provisions of this
Agreement and which is not remedied by the Company within thirty
(30) days after receipt of notice thereof given by Executive;
or any requirement that Executive perform duties that, in the good
faith and reasonable professional judgment of Executive, after
consultation with the Board of Directors of the Company, are
inconsistent with ethical or lawful business practices; or
Executive’s being required to relocate to a principal place
of employment more than one-hundred (100) miles from his
current principal place of employment in Jacksonville, Florida
during the Term unless the Company shall pay all reasonable costs
and expenses related thereto; or if following a Change in Control
only, there occurs a material change in Executive’s
duties, roles, or responsibilities. For purposes of this
subsection, “material change” shall be of such a
character that a reasonable person serving in a like or similar
executive capacity would feel compelled to resign from employment.
Examples of “material change” include, but are not
limited to substantial reduction of Executive’s authority to
make decisions relating to his or her business responsibilities;
Executive being required to assume or perform substantially greater
responsibilities (without additional compensation) than previously
required to perform; substantial reduction of Executive’s
responsibilities for personnel matters relating to his or her
business operations; substantial alteration or change in
Executive’s work schedule; any restructuring or reassignment
of any of the Executive’s responsibilities, in a manner that
diminishes them or is materially adverse to the Executive, from
that which was in effect at the time of the Change in Control; and
other substantial changes in Executive’s terms or conditions
of employment not related to Executive’s principal business
responsibilities. Good Reason pursuant to this subsection shall not
exist unless (a) the Executive’s “material
change” has existed for a period of at least six months;
(b) Executive has consulted with management senior to
Executive and his or her supervisor, in a good faith effort to
resolve the issues giving Executive reason to believe a
“material change” has occurred; and (c) Executive
gives written notice of Executive’s resignation for Good
Reason under this paragraph within eight months following the
commencement of the “material change.”
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“
Termination
Date ” means
the date of Executive’s termination of employment, or if the
Executive continues to provide services to Stein Mart, Inc. or its
409A affiliates following his termination of employment, such later
date as is considered a separation from service from Stein Mart,
Inc. and its 409A affiliates
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within the
meaning of Code Section 409A. For purposes of this Agreement,
the Executive’s “termination of employment” shall
be presumed to occur when Stein Mart, Inc. and the Executive
reasonably anticipate that no further services will be performed by
the Executive for Stein Mart, Inc. and its 409A affiliates or that
the level of bona fide services the Executive will perform as an
employee of Stein Mart, Inc. and its 409A affiliates will
permanently decrease to no more than 20% of the average level of
bona fide services performed by the Executive (whether as an
employee or independent contractor) for Stein Mart, Inc. and its
409A affiliates over the immediately preceding 36-month period (or
such lesser period of services). Whether the Executive has
experienced a termination of employment shall be determined by
Stein Mart, Inc. in good faith and consistent with
Section 409A of the Code. Notwithstanding the foregoing, if
the Executive takes a leave of absence for purposes of military
leave, sick leave or other bona fide reason, the Executive will not
be deemed to have experienced a termination of employment for the
first six (6) months of the leave of absence, or if longer,
for so long as the Executive’s right to reemployment is
provided either by statute or by contract, including this
Agreement; provided that if the leave of absence is due to a
medically determinable physical or mental impairment that can be
expected to result in death or last for a continuous period of not
less than six (6) months, where such impairment causes the
Executive to be unable to perform the duties of his position of
employment or any substantially similar position of employment, the
leave may be extended by Stein Mart, Inc. for up to 29 months
without causing a termination of employment. For purposes hereof,
the term “409A affiliate” means each entity that is
required to be included in Stein Mart, Inc.’s controlled
group of corporations within the meaning of Section 414(b) of
the Code, or that is under common control with Stein Mart, Inc.
within the meaning of Section 414(c) of the Code; provided,
however , that the phrase “at least 50 percent”
shall be used in place of the phrase “at least 80
percent” each place it appears therein or in the regulations
thereunder.
SECTION 3.
TITLE, POWERS AND RESPONSIBILITIES
(a)
Title . Executive shall be the Senior Vice President
of the Company or such other title as designated by the Chief
Executive Officer or the Company’s Board of
Directors.
(b) Powers
and Responsibilities .
(1) Executive
shall use Executives best efforts to faithfully perform the duties
of his employment and shall perform such duties as are usually
performed by a person serving in Executive’s position with a
business similar in size and scope as the Company and such other
additional duties as may be prescribed from time to time by the
Company which are reasonable and consistent with the
Company’s operations, taking into account officer’s
expertise and job responsibilities. Executive agrees to devote
Executive’s full business time and attention to the business
and affairs of the Company. Executive shall serve on such boards
and in such offices of the Company or its subsidiaries as the
Company’s Board of Directors reasonably requests without
additional compensation.
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(2) Executive,
as a condition to his employment under this Agreement, represents
and warrants that he can assume and fulfill responsibilities
described in Section 3(b)(1) without any risk of violating any
non-compete or other restrictive covenant or other agreement to
which he is a party. During the Employment Term Executive shall not
enter into any agreement that would preclude, hinder or impair his
ability to fulfill responsibilities described in
Section 3(b)(1) specifically or this Agreement
generally.
SECTION 4.
COMPENSATION AND BENEFITS
(a) Annual
Base Salary . Executive’s base salary shall be
$436,525.00 per year (“ Annual Base Salary
”) , which amount may be periodically reviewed at the
discretion of the Compensation Committee. The Annual Base Salary
and any payments to the Executive during any Continuation Period
shall be payable in accordance with the Company’s standard
payroll practices and policies (unless otherwise expressly provided
herein) and shall be subject to such withholdings as required by
law or as otherwise permissible under such practices or
policies.
(b) Earned
Bonus; Incentive Compensation . Executive shall be eligible to
receive an Earned Bonus. Executive shall also be eligible to
participate in such annual and long term incentive plans as are in
effect from time to time as applicable to persons at
Executive’s level of authority and position. Nothing in this
Section 4(b) guarantees that any Earned Bonus or other
incentive compensation will be paid.
(c)
Employee Benefit Plans . Executive shall be entitled to
receive the benefits described in Schedule A attached hereto, if
and for as long as the Company sponsors such plans and such plans
remain in effect for other executives with the same level of status
as Executive.
(d) Stock
Options . The Board of Directors, in its discretion, may grant
rights to Executive under the Stein Mart, Inc. Omnibus Plan (the
“ Option Plan ” ) on terms set by the
Board of Directors or the Compensation Committee.
(e)
Deferred Compensation . Executive will participate in the
Stein Mart Executive Deferred Compensation Plan (the “
Deferred Compensation Plan ” ). The Company
reserves the right to alter, modify, revise or eliminate the
Deferred Compensation Plan provided that any such change to the
terms will apply to Executive and similarly situated
participants.
(f)
Vacation, Holidays and Salary Continuation . Executive shall
receive a total of 27 days of paid vacation, or holidays on a
pro rata basis during any 365 day period of the Term. The
amount may be adjusted in accordance with the Company’s
standard policy or as directed by the Company’s Board of
Directors. Any vacation or holiday leave time not used during any
365 day period of the Term will not carry forward to the next 365
period and will be forfeited.
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(g) Expense
Reimbursements . Executive shall have the right to expense
reimbursements in accordance with the Company’s standard
policy on expense reimbursements as in effect from time to
time.
(h)
Indemnification . With respect to Executive’s acts or
failures to act during his employment in his capacity as an
officer, employee or agent of the Company, Executive shall be
entitled to indemnification from the Company, and to liability
insurance coverage (if any), on the same basis as other officers of
the Company. Executive shall be indemnified by Company, and Company
shall pay Executive’s related expenses when and as incurred,
all to the full extent permitted by law. Subject to applicable law,
the Company reserves the right to discontinue indemnification in
the event the Company determines that the Executive has breached
this Agreement or the Executive has advances, or intends to
advance, a business or legal position contrary to the
Company’s interests. Notwithstanding the foregoing, Executive
shall not be entitled to any indemnification if a judgment or other
final adjudication establishes that any act or omission of
Executive was material to the cause of action so adjudicated and
that such act or omission constituted: (i) a criminal
violation, unless Executive had reasonable cause to believe that
Executive’s conduct was lawful or had no reasonable cause to
believe that such conduct was unlawful, (ii) a transaction
from which Executive derived an improper personal benefit, or
(iii) willful misconduct or a conscious disregard for the best
interests of the Company.
(i)
Automobile Allowance . The Company will pay Executive $1,100
per month (paid quarterly) which shall be used for the lease,
purchase, maintenance and/or operation of a vehicle that Executive
is to use for business travel or may use for personal travel.
Executive shall be solely responsible for any taxes associated with
the automobile allowance afforded to him.
(j) Other
Perquisites . The Company will provide Executive with such
other perquisites as may be made generally available to others in a
similar level of executive position within the Company.
SECTION 5.
TERMINATION OF EMPLOYMENT
(a)
