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 ss. 240.14a-11(c) or ss. 240.14a-12
Stein Mart, Inc.
----------------
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
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1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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[ ] 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:
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3) Filing Party:
4) Date Filed:
Stein Mart, Inc.
________________
NOTICE AND PROXY STATEMENT
________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 7, 2001
TO THE HOLDERS OF COMMON STOCK:
PLEASE TAKE NOTICE that the annual meeting of stockholders of Stein Mart,
Inc. will be held on Monday, May 7, 2001, at 2:00 P.M., local time, at The
Radisson Riverwalk Hotel & Conference Center, 1515 Prudential Drive,
Jacksonville, Florida.
The meeting will be held for the following purposes:
1. To elect a Board of Directors for the ensuing year and until their
successors have been elected and qualified.
2. To approve an increase in the number of shares eligible for issuance
under the Stein Mart Employee Stock Purchase Plan by 1,000,000 shares
and to extend the Stock Purchase Plan until December 31, 2005.
3. To approve the Stein Mart 2001 Omnibus Plan (the "Plan") to replace the
Company's existing 1992 stock option plans with the Plan to take effect
upon such approval.
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The stockholders of record at the close of business on March 16, 2001, will
be entitled to vote at the annual meeting.
It is hoped you will be able to attend the meeting, but in any event, we
will appreciate it if you will date, sign and return the enclosed proxy as
promptly as possible. If you are able to be present at the meeting, you may
revoke your proxy and vote in person.
By Order of the Board of Directors,
James G. Delfs
Secretary
Dated: April 6, 2001
Stein Mart, Inc.
1200 Riverplace Boulevard
Jacksonville, Florida 32207
___________________________
PROXY STATEMENT FOR ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD MAY 7, 2001
This Proxy Statement and the enclosed form of proxy are being sent to
stockholders of Stein Mart, Inc. on or about April 6, 2001 in connection with
the solicitation by the Company's Board of Directors of proxies to be used at
the Annual Meeting of Stockholders of the Company. The meeting will be held on
Monday, May 7, 2001 at 2:00 P.M., local time, at The Radisson Riverwalk Hotel &
Conference Center, 1515 Prudential Drive, Jacksonville, Florida.
The Board of Directors has designated Jay Stein and John H. Williams, Jr.,
and each or either of them, as proxies to vote the shares of common stock
solicited on its behalf. If the enclosed form of proxy is executed and returned,
it may nevertheless be revoked at any time insofar as it has not been exercised
by (i) giving written notice to the Secretary of the Company, (ii) delivery of a
later dated proxy, or (iii) attending the meeting and voting in person. The
shares represented by the proxy will be voted unless the proxy is mutilated or
otherwise received in such form or at such time as to render it not votable.
VOTING SECURITIES
The stockholders of record entitled to vote was determined at the close of
business on March 16, 2001. At such date, the Company had outstanding and
entitled to vote 41,208,187 shares of common stock, $.01 par value. Each share
of common stock entitles the holder to one vote. Holders of a majority of the
outstanding shares of common stock must be present in person or represented by
proxy to constitute a quorum at the annual meeting.
1
The following table shows the name, address and beneficial ownership as of
March 2, 2001 of each person known to the Company to be the beneficial owner of
more than 5% of its outstanding common stock:
Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
________________ ____________________ ________
Jay Stein 16,364,622(1) 39.7%
1200 Riverplace Boulevard
Jacksonville, Florida 32207
FMR Corp. 3,191,200(2) 7.5%
82 Devonshire Street
Boston, Massachusetts 02109
_____________________________
(1) Includes 15,885,772 shares held by Stein Ventures Limited Partnership which
is 100% controlled by Mr. Stein and 429,450 shares held by the Jay Stein
Foundation Trust over which Mr. Stein has sole voting and dispositive power
as trustee of the Foundation.
(2) According to a Schedule 13G filed February 14, 2001, Fidelity Management &
Research Company ("Fidelity"), a wholly owned subsidiary of FMR Corp. and
an investment advisor registered under Section 203 of the Investment
Advisors Act of 1940 along with Fidelity Management Trust Company, a
wholly-owned subsidiary of FMR Corp. and a bank as defined in Section
3(a)(6) of the Securities Exchange Act of 1934 are considered "beneficial
owners" in the aggregate of 3,191,200 shares, or 7.5% of shares outstanding
of the Company's common stock, which shares were acquired for investment
purposes by certain advisory clients.
As of March 2, 2001, all directors and executive officers of the Company as
a group owned beneficially 17,408,982 shares of the Company's common stock, or
41.3% of the total shares outstanding. In computing the number of shares owned
beneficially by directors and executive officers of the Company as a group,
shares subject to options that are not exercisable within 60 days have been
excluded.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons owning more than ten percent of
the Company's common stock to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of common stock
and other equity securities of the Company and to furnish the Company with
copies of all such reports. To the Company's knowledge, based solely on review
of copies of such reports furnished to the Company, all Section 16(a) filing
requirements applicable to its directors, officers and greater than ten percent
beneficial owners have been complied with.
2
ELECTION OF DIRECTORS
At the meeting, a Board of nine (9) directors will be elected for one year
and until the election and qualification of their successors. Directors will be
elected by a plurality of votes cast by shares entitled to vote at the meeting.
The accompanying proxy will be voted, if authority to do so is not withheld, for
the election as directors of the persons named below who have been designated by
the Board of Directors as nominees. Each nominee is at present available for
election, is a member of the Board and, with the exceptions of Martin E. Stein,
Jr. and J. Wayne Weaver, who were appointed to the Board in late 2000, was
elected to the Board by the Company's stockholders. If any nominee should become
unavailable, which is not now anticipated, the persons voting the accompanying
proxy may in their discretion vote for a substitute. There are no family
relationships between any directors or executive officers of the Company.
Information concerning the Board's nominees, based on data furnished by them, is
set forth below.
The Board of Directors of the Company recommends a vote "for" the election
of each of the following nominees. Proxies solicited by the Board will be so
voted unless stockholders specify in their proxies a contrary choice.
Year Shares of
First Company Common
Positions with the Company; Became Stock Owned
Principal Occupations During Director Beneficially as of
Name Past Five Years; Other of the March 2, 2001
Age Directorships Company(1) (% of Class)(2)
----------------------------- ---------------------------------------------- ------------- -------------------------
Jay Stein* Chairman of the Board of the Company since 1968 16,364,622(3)
(55) 1989; President of the Company from 1979 (39.7%)
to 1990; former director of American
Heritage Life Insurance Company based in
Jacksonville, Florida and Promus Hotel
Corporation based in Memphis, Tennessee
John H. Williams, Jr.* President (since 1990) and director of the 1984 886,000(4)
(63) Company; Executive Vice President from (2.1%)
1980 to 1990; director of SunTrust Bank,
North Florida, N.A. in Jacksonville,
Florida
Alvin R. "Pete" Carpenter o Director of the Company; Vice Chairman of 1996 9,280(4)(5)
(59) CSX Corporation from July 1999 to February
2001; President and Chief Executive
Officer of CSX Transportation, Inc. from
1992 to 1999; director of Regency Centers
Corporation, Florida Rock Industries, Inc.
and Birmingham Steel Corporation
Linda McFarland Farthing+ Director of the Company; President & 1999 3,500(5)
(53) Director, Friedman's, Inc. 1998; President
& Director, Cato Corporation 1990-1997
Mitchell W. Legler o Director of the Company; sole shareholder 1991 29,000(4)(5)(6)
(58) of Mitchell W. Legler, P.A., general (0.1%)
counsel to the Company since 1991; partner
of Foley & Lardner from 1991 to 1995
3
Year Shares of
First Company Common
Positions with the Company; Became Stock Owned
Principal Occupations During Director Beneficially as of
Name Past Five Years; Other of the March 2, 2001
Age Directorships Company(1) (% of Class)(2)
----------------------------- ---------------------------------------------- ------------- -------------------------
Michael D. Rose+ Director of the Company; Private Investor; 1997 45,280(4)(5)
(58) Chairman of Promus Hotel Corporation from (0.1%)
1995 to December 1997; Chairman of Harrah's
Entertainment, Inc. from 1995 to January
1997; Chairman of The Promus Companies,
Incorporated from 1990 to 1995; Chief
Executive Officer of The Promus Companies,
Incorporated from 1990 to 1994; director of
Darden Restaurants, Inc., First Tennessee
National Corporation, Felcor Lodging Trust,
Inc., and Nextera Enterprises, LLC
Martin E. Stein, Jr. Director nominee of the Company; Chairman and - 13,800(5)
(48) Chief Executive Officer of Regency Centers
Corporation, a real estate investment trust,
since 1997; President and Chief Executive
Officer of Regency Centers Corporation from
1988 to 1997; director of Patriot
Transportation Holding, Inc.
J. Wayne Weaver Director nominee of the Company; Chairman and - -(5)
(66) Chief Executive Officer of LC Footwear,
L.L.C. since 1995; Chairman, Chief Executive
Officer and majority owner of Jacksonville
Jaguars since 1993; Chairman of Shoe
Carnival, Inc. since 1988; President and
Chief Executive Officer of Nine West Group,
Inc. from 1978 to 1993
James H. Winston+o Director of the Company; Chairman of LPMC, a 1991 57,500(4)(5)(7)
(67) real estate investment firm based in (0.1%)
Jacksonville, Florida, since 1979; President
of Omega Insurance Company, Citadel Life &
Health Insurance Company and Wellington
Investments since 1983; director of FRP
Properties, Inc., Winston Hotels and
Scott-McRae Group, Inc.
- ----------------------------------------
<FN>
* Member of the Executive Committee, any meeting of which also must include
any one of the outside directors.
+ Member of the Audit Committee.
o Member of the Compensation Committee.
(1) Directors are elected for one-year terms.
(2) Where percentage is not indicated, amount is less than 0.1% of total
outstanding common stock. Unless otherwise noted, all shares are owned
directly, with sole voting and dispositive powers. Excludes shares subject
to options that are not exercisable within 60 days.
(3) Includes 15,885,772 shares held by Stein Ventures Limited Partnership which
is 100% controlled by Mr. Stein and 429,450 shares held by the Jay Stein
Foundation Trust over which Mr. Stein has sole voting and dispositive power
as trustee of the Foundation.
4
(4) Includes the following shares which are not currently outstanding but which
the named holders are entitled to receive upon exercise of options:
John H. Williams, Jr. 886,000
Alvin R. "Pete" Carpenter 5,280
Mitchell W. Legler 12,000
Michael D. Rose 5,280
James H. Winston 12,000
The shares described in this note are deemed to be outstanding for the
purpose of computing the percentage of outstanding Common Stock owned by
each named individual and by the group, but are not deemed to be outstand-
ing for the purpose of computing the percentage ownership of any other
person.
(5) Each outside director receives non-qualified options to purchase 4,000
shares of common stock of the Company upon becoming a director. Options
that are exercisable within 60 days are included in the shares indicated.
(6) These shares are owned by Mr. Legler and his wife as tenants by the
entirety.
(7) Includes 20,400 shares owned through corporations of which Mr. Winston is
the sole stockholder.
</FN>
Executive Officers
The executive officers of the Company are:
Jay Stein Chairman and Chief Executive Officer
John H. Williams, Jr. President and Chief Operating Officer
Michael D. Fisher Executive Vice President, Stores
Gwen K. Manto Executive Vice President and
Chief Merchandising Officer
James G. Delfs Senior Vice President, Finance and
Chief Financial Officer
For additional information regarding Messrs. Stein and Williams see the
Directors' table on the preceding pages.
Mr. Fisher joined the Company in August 1993, as Executive Vice President,
Stores. From 1988 to 1993, Mr. Fisher was Senior Vice President of Stores for
Millers Outpost, Inc., a California based chain of apparel stores.
Ms. Manto joined the company February 1, 2000, as Executive Vice President
and Chief Merchandising Officer. From 1998 to 1999, Ms. Manto was President and
CEO of Kids Foot Locker, a division of Venator Corporation. From 1996 to 1998,
Ms. Manto served as Senior Vice President, General Merchandise Manager for Kids
"R" Us and Babies "R" Us. From 1986 to 1996, Ms. Manto first served as Vice
President, Divisional Merchandise Manager before becoming Senior Vice President,
General Merchandise Manager for Rich's/Lazarus/Goldsmith's Department stores.
Mr. Delfs joined the Company in May 1995, as Senior Vice President, Finance
and Chief Financial Officer. From 1993 to 1994, Mr. Delfs was Vice President,
Chief Financial Officer for Helzberg's Diamond Shops, Inc., a chain of jewelry
stores and from 1988 to 1992, Mr. Delfs was Vice President, Chief Financial
Officer for Abercrombie & Fitch, Inc., a division of The Limited, Inc.
5
Board of Directors and Standing Committees
Regular meetings of the Board of Directors are held four times a year,
normally in the first month of each quarter. During 2000, the Board held a total
of four regular meetings. All directors attended at least 75% of all meetings of
the Board and Board committees on which they served during 2000.
The Board of Directors has established three standing committees: an
Executive Committee, an Audit Committee and a Compensation Committee, which are
described below. Members of these committees are elected annually at the regular
Board meeting held in conjunction with the annual stockholders' meeting. The
Board of Directors presently does not have a nominating committee.
Executive Committee. The Executive Committee is comprised of Messrs. Stein
(Chairman) and Williams, plus any one outside director. Subject to the
limitations specified by the Florida Business Corporation Act, the Executive
Committee is authorized by the Company's bylaws to exercise all of the powers of
the Board of Directors when the Board of Directors is not in session. The
Executive Committee held no meetings during 2000.
Audit Committee. The Audit Committee is comprised of Messrs. Winston
(Chairman), Rose and Ms. Farthing, none of whom is an officer of the Company.
During 2000, the Audit Committee held four meetings. The Audit Committee is
appointed by the Board to assist the Board in monitoring (1) the integrity of
the financial statements of the Company, (2) the compliance by the Company with
legal and regulatory requirements and (3) the independence and performance of
the Company's internal and external auditors.
Compensation Committee. The Compensation Committee is comprised of Messrs.
Carpenter (Chairman), Legler and Winston. During 2000, the Compensation
Committee held four meetings. This Committee has the responsibility for
approving the compensation arrangements for senior management of the Company,
including annual bonus compensation. It also recommends to the Board of
Directors adoption of any compensation plans in which officers and directors of
the Company are eligible to participate. The Compensation Committee also serves
as the Option Committee and makes grants of stock options under the Company's
Employee Stock Plan.
6
AUDIT COMMITTEE REPORT
The purpose of the Audit Committee is to assist the Board of Directors in
its oversight of management's conduct of the Company's financial reporting
process. During the fiscal year ended December 30, 2000 the Audit Committee was
comprised of James H. Winston, Linda McFarland Farthing and Michael D. Rose,
each of whom is "independent" under Nasdaq Stock Market(R) rules. A copy of the
Audit Committee's charter is attached as an appendix to this Proxy Statement.
For the fiscal year ended December 30, 2000, the Audit Committee:
Reviewed and discussed the Company's fiscal 2000 financial statements with
management and representatives of PricewaterhouseCoopers LLP, the
Company's independent public accountants;
Discussed with PricewaterhouseCoopers LLP the matters concerning
communications with audit committees required to be discussed by Statement
on Auditing Standards No. 61; and
Received the written disclosures and the letter from Pricewaterhouse-
Coopers LLP required by Independence Standards Board Standard No. 1,
and has discussed with PricewaterhouseCoopers LLP its independence.
Based on the foregoing review, discussions and disclosures, the Audit
Committee recommended to the Board of Directors that the Company's audited
financial statements for the fiscal year ended December 30, 2000 be included in
the Company's annual report on Form 10-K for the fiscal year.
James H. Winston, Chairman
Linda McFarland Farthing
Michael D. Rose
7
COMPENSATION COMMITTEE REPORT TO SHAREHOLDERS
Compensation Philosophy
The Compensation Committee believes that the Company should continue to
emphasize its philosophy of rewarding performance within the Company, and of
encouraging a long-term view by all the Company's officers and other managerial
personnel.
The Company's 2000 fiscal year was an excellent year for the Company,
particularly in view of the difficult retail environment experienced by the
Company and all other retailers for the 4th quarter of 2000. The Company
experienced an increase in net income to $39.357 million based on an increase of
net sales of 16.6% to $1.206 billion.
The Committee continues to believe it preferable to have the bonuses
applicable to the Company's principal officers be quantitatively driven,
applying factors which the Company believes would positively impact the
profitability of the Company. This year, the Compensation Committee continued
that trend while approving bonuses for the five most highly-paid officers of the
Company generally based upon the formulas in effect for calculating bonuses for
each of those officers.
Employee Stock Ownership
The Compensation Committee determined that the Company's philosophy on
focusing on long-term value through the grant of stock options and involving
employees in direct ownership of the Company's shares would contribute
materially to the Company's success in the long run. The Compensation Committee
noted the Company's current stock option plans expire at the end of the calendar
year 2001. As the Compensation Committee believes that the existence of such
plans continue to achieve an alignment of the interests of key employees with
those of the Company's stockholders, and continue to provide a meaningful
incentive for key employees to remain with the Company, the Compensation
Committee recommended the adoption by the Board of Directors of the Stein Mart,
Inc. 2001 Omnibus Plan (the "Plan") with options available under the Plan for
4.5 million shares of the Company's common stock. The Compensation Committee
recommended that number of shares after noting that the Company currently has
3.6 million unissued options available under its currently expiring 1992 Stock
Option Plans. The Committee recommended that the Plan take effect immediately
upon its ratification by the Company's shareholders with a simultaneous ceasing
of the issuance of any options under the Company's existing 1992 Plans.
Senior Executives
As noted above, the Company achieved very good results for 2000. The
bonuses applicable to the Company's Chairman/Chief Executive Officer and
President/Chief Operating Officer, as approved last year by the Committee,
provided a possible bonus equal to 100% of base salary, with 70% of the possible
bonus being pro rata, as the Company's earnings per share increase from 95% of
the earnings per share for the prior year to 140% for the current year, and with
30% being discretionary based upon the Compensation Committee's review of the
success of the executive officers in achieving their stated goals each year.
8
For the current year, the Committee implemented those concepts as follows:
1. Jay Stein, Chairman and Chief Executive Officer, was awarded an increase
in salary of $50,000 to increase his base compensation to a total of $600,000
for the year 2001. In view of the Company's excellent performance for the year
just ending, the Committee determined that the Chairman and Chief Executive
Officer was entitled to receive 100% of the discretionary portion of his annual
bonus as well as the formula portion, with the result that he would receive a
bonus with respect to the Company's fiscal year 2000 equal to 100% of his base
salary for the year 2000, or a bonus of $550,000.
2. John H. Williams, Jr., the Company's President and Chief Operating
Officer, was awarded an increase in base salary of $50,000 to increase his base
compensation to a total of $575,000 for the year 2001. In view of the Company's
excellent performance for the year just ending, the Committee determined that
the President and Chief Operating Officer was entitled to receive 100% of the
discretionary portion of his annual bonus as well as the formula portion, with
the result that he would receive a bonus with respect to the Company's fiscal
year 2000 equal to 100% of his base salary for the year 2000, or a bonus of
$525,000.
3. Gwen Manto, the Company's Executive Vice President of Merchandising was
awarded an increase in base salary of $35,000 constituting an 8% increase,
bringing her total compensation to $475,000. As is true with other executive
officers of the Company, the Executive Vice President of Merchandising's bonus
compensation was driven by a quantitative formula. As a result of the
application of that formula to the Company's performance for the year 2000, the
Company's Executive Vice President of Merchandising was awarded a bonus of
$181,500.
4. Michael D. Fisher, the Company's Executive Vice President, Stores, was
awarded an increase in base salary of $30,000 constituting a 10% increase,
bringing his total compensation to $330,000. As is true with other executive
officers of the Company, the Executive Vice President of Stores' bonus
compensation was driven by a quantitative formula. As a result of the
application of that formula to the Company's performance for the year 2000, the
Company's Executive Vice President of Stores was awarded a bonus of $204,750.
5. James G. Delfs, the Company's Chief Financial Officer, received an
increase in base salary of $20,000, constituting a 10% increase, bringing his
total compensation to $220,000. The Company's Chief Financial Officer's bonus is
discretionary and based on the performance of the Company and the
recommendations of the Company's Chairman and it's President, the Committee
approved a bonus of $80,000.
Long-Term Incentive Compensation
The Company has in effect Stock Option and Employee Stock Purchase Plans
for the Company's employees. The Compensation Committee believes that these
plans are a principal vehicle for motivating management to work toward long-term
growth in stockholder value. Consistent with the Company's philosophy of
providing incentives to key employees at all levels, options are awarded to a
relatively broad base of employees, down through store managers. Options have
been awarded based on positions within the Company, ability to contribute to the
Company's profitability, and prior tenure with the Company. For additional
information as to the options held by executive officers, see the Option Table
under "Executive Compensation" attached to this report.
9
The employee stock options reflect the Company's philosophy that officers'
and employees' incentive compensation should reflect the same long-term
interests as the Company's shareholders. To encourage continued service with the
Company, the options become exercisable ratably on the third, fourth and fifth
anniversary dates of grant. Additional increases in the value of the Company's
common stock, which benefit all shareholders, will best serve as the primary
incentive to its executive officers.
CEO Compensation
The Compensation Committee's policies with respect to the Chief Executive
Officer, Jay Stein, were essentially the same as for the Company's other
executive officers. In addition, and consistent with the approach to other
executive officers, the Committee determined to continue the bonus formula in
effect for the prior year for the forthcoming year, including 70% based upon a
comparison of the Company's earnings per share for the current year to the
earnings per share for the prior year, all as more fully described above, and
30% being discretionary to the Compensation Committee. Moreover, in view of Jay
Stein's continuing substantial ownership of shares of the Company's common
stock, the Committee believed that Mr. Stein's primary motivation remained that
of stock ownership, which is most aligned with the interests of other
shareholders of the Company.
Certain Tax Matters
Section 162(m) of the Internal Revenue Code, enacted in 1993, precludes a
public corporation from deducting compensation of more than $1 million each, for
its chief executive officer or for any of its four other highest paid officers.
Certain performance-based compensation is exempt from this limitation.
Compensation in the form of options under the Company's Employee Stock Plan is
exempt. Although the Company's other compensation plans (including the 2001
Omnibus Plan being submitted for stockholder approval at the Annual Meeting) are
designed to relate compensation to performance, certain elements of the plans do
not meet the tax law's requirements because they allow the Compensation
Committee to exercise discretion in setting compensation. The Compensation
Committee is of the opinion that it is better to retain discretion in
determining executive compensation. However, the Compensation Committee will
continue to monitor the requirements of the Internal Revenue Code to determine
what actions, if any, should be taken with respect to Section 162(m).
STEIN MART, INC.
COMPENSATION COMMITTEE
Alvin R. "Pete" Carpenter, Chairman
Mitchell W. Legler
James H. Winston
10
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid or accrued by the
Company for services rendered during the years indicated to each of the
Company's executive officers whose total salary and bonus exceeded $100,000
during the year ended December 30, 2000. The Company did not grant any
restricted stock awards or stock appreciation rights or make any long-term
incentive plan payouts during the years indicated.
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
----------------------------------------------------------- --------------
Name And Other Number
Principal Annual Of All Other
Position Year Salary (1) Bonus Compensation Options Compensation (2)
- -------------------- ------ ------------ ------- -------------- --------- -----------------
Jay Stein 2000 $542,833 $550,000 $131,571(3) --- $ 5,033
Chairman & Chief 1999 461,667 --- 88,055(3) --- 4,418
Executive Officer 1998 446,250 --- (4) --- 2,803
John H. Williams, Jr. 2000 $519,083 $525,000 (4) --- $ 6,648
President & Chief 1999 451,667 136,200 (4) --- 5,265
Operating Officer 1998 436,250 100,000 (4) --- 2,803
Michael D. Fisher 2000 $295,833 $204,750 (4) --- $35,602
Executive Vice 1999 248,750 34,375 (4) --- 8,508
President, Stores 1998 238,333 30,800 (4) --- 2,803
Gwen K. Manto (5) 2000 $410,103 $331,500(6) $52,509(7) 250,000 $41,111
Executive Vice
President & Chief
Merchandising
Officer
James G. Delfs 2000 $197,750 $80,000 (4) --- $29,402
Senior Vice President, 1999 172,000 50,000 (4) --- 9,985
Finance & Chief 1998 165,000 36,000 $38,009(8) --- 2,803
Financial Officer
(1) Includes amounts deferred under the 401(k) features of the Company's Profit
Sharing plan and under the Executive Deferral plan.
(2) The Company has not yet made a contribution to it's Profit Sharing plan for
2000, and, accordingly, it is not possible as of the date of this Proxy
Statement to determine the amount of Company contributions that will be
allocated to the accounts of the named executives for 2000. The amounts
shown for 2000 include a matching contribution of $3,400 made by the
Company to the 401(k) portion of the Profit Sharing plan for Messers.
Stein, Williams, Fisher and Delfs as well as a matching contribution of
$30,781 for Mr. Fisher, $40,333 for Ms. Manto and $24,745 for Mr. Delfs to
the Company's Executive Deferral plan. Also, included for 2000 is imputed
income on the Executive Split Dollar plan. Included is $1,633 for Mr.
Stein, $3,248 for Mr. Williams, $1,421 for Mr. Fisher, $778 for Ms. Manto
and $1,257 for Mr. Delfs. The amounts shown for 1999 include a base
contribution of $1,600 and a matching contribution of $1,600 made by the
Company to the 401(k) portion of the plan for voluntary contributions made
as well as $536 to the Profit Sharing plan for Messers. Stein, Williams,
Fisher and Delfs. 1999 also includes a matching contribution of $4,167 for
Mr. Fisher and $5,767 for Mr. Delfs to the Company's Executive Deferral
plan. Also, included for 1999 is imputed income on the Executive Split
Dollar plan of $682 for Mr. Stein, $1,529 for Mr. Williams, $605 for Mr.
Fisher and $482 for Mr. Delfs. The amounts shown for 1998 include a base
contribution of $684 and a matching contribution of $1,600 made by the
Company to the 401(k) portion of the plan for voluntary contributions made
as well as $519 to the Profit Sharing plan for Messers. Stein, Williams,
Fisher and Delfs.
(3) The amount shown for 2000 includes $83,405 medical claims, $11,192 personal
use of company automobile, $32,193 personal use of company airplane and
$4,781 miscellaneous. The amount shown for 1999 includes $68,371 medical
claims, $13,353 personal use of company automobile and $6,331
miscellaneous.
(4) Excludes certain personal benefits, the total value of which was the lesser
of $50,000 or ten percent of the total annual compensation and bonus for
each of the named executives.
11
(5) Ms. Manto joined the Company February 1, 2000, as Executive Vice President
and Chief Merchandising Officer.
(6) The amount shown includes a signing bonus of $150,000 and a performance
bonus for 2000 of $181,500.
(7) The amount shown for 2000 includes $3,381 medical claims, $9,900 automobile
allowance, $38,542 moving expense reimbursement and $686 miscellaneous.
(8) The amount shown for 1998 includes $25,576 medical claims, $10,800
automobile allowance and $1,633 miscellaneous.
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants (1)
---------------------
Percentage of
Total Options
Number Granted to
of Options Employees in Exercise Expiration Grant Date
Name Granted 2000 (2) Price Date Value (3)
- --------------- --------- ---------- --------- --------------- -------------
Gwen K. Manto 250,000 41.3% $5.5625 March 6, 2010 $819,400
- ---------------
(1) Approximately one-third of the options become exercisable on each of the
third, fourth and fifth anniversary dates of grant. Shares acquired upon
exercise of options may be delivered in payment of the exercise price of
additional options.
(2) A total of 606,000 options were granted to key employees in 2000 under the
Company's stock option plan, the purpose of which is to provide an
incentive to key employees who are in a position to make significant
contributions to the company.
(3) Represents the present value at the date of grant using a variation of the
Black-Scholes option pricing model assuming a dividend yield of 0.0%, a
seven year expected life, expected volatility of 51.1% and a risk-free
interest rate of 5.2%.
The following table sets forth information concerning stock options
exercised by the named executives during the year ended December 30, 2000 and
the number and value of unexercised options as of December 30, 2000 held by
the named executives in the Summary Compensation Table above.
OPTION EXERCISES AND YEAR-END VALUES TABLE
Value of Unexercised
Shares Number of Unexercised In-the-Money
Acquired Options at December 30, 2000 Options at December 30, 2000
On Value (#) ($)(2)
Exercise Realized -------------------------------- ------------------------------
Name (#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ------------------------- ---------- ---------- ------------- --------------- ------------- ---------------
Jay Stein,
Chairman & Chief Not Not Not
Executive Officer 0 Applicable None None Applicable Applicable
John H. Williams, Jr.
President & Chief
Operating Officer 100,000 $1,131,701 688,000 402,000 $3,960,460 $ ---
Michael D. Fisher,
Executive Vice Not
President, Stores 0 Applicable 166,000 134,000 $ 338,624 $ ---
Gwen K. Manto,
Executive Vice President
& Chief Merchandising Not
Officer 0 Applicable None 250,000 $ --- $1,516,875
James G. Delfs,
Senior Vice President,
Finance & Chief Not
Financial Officer 0 Applicable 83,000 67,000 $ 294,624 $ ---
- -------------------------
12
(1) Value realized is calculated based on the difference between the option
exercise price and the market price of the Company's Common Stock on the
date of exercise multiplied by the number of shares to which the exercise
relates.
(2) Value of unexercised in-the-money options is calculated based on the
difference between the option exercise price and the closing price of the
Company's Common Stock at December 29, 2000, multiplied by the number of
shares underlying the options. The closing price on December 29, 2000 of
the Company's Common Stock as reported on The Nasdaq Stock Market(R) was
$11.63.
Compensation of Directors. The outside directors receive director's fees of
$12,000 per year, plus $2,000 for each meeting of the Board and $1,500 for any
committee thereof which they attend, and are reimbursed for out-of-pocket
expenses incurred in connection with attending meetings. Pursuant to the
Company's director stock option plan, upon becoming a director, each outside
director receives non-qualified options to purchase 4,000 shares of common stock
of the Company. Approximately one-third of the options become exercisable on
each of the third, fourth and fifth anniversary dates of grant at an exercise
price equal to the fair market value of the common stock on the date of grant.
Certain Transactions; Compensation Committee Interlocks and Insider Participa-
tion
The Audit Committee of the Board of Directors is responsible for evaluating
the appropriateness of all related-party transactions.
Set forth below are various transactions involving the Company and members
of the Board of Directors or their related parties. The Audit Committee of the
Board of Directors does not believe that the relationships and transactions
described below regarding members of the Board of Directors adversely affect the
performance by the members of their duties.
Mr. Mitchell W. Legler. Mr. Legler is the sole shareholder of the law firm
of Mitchell W. Legler, P.A., which serves as general counsel to the Company.
Legal fees received by that firm from the Company were $66,000 for 2000.
Mr. Martin E. Stein, Jr. Mr. Stein is Chairman and Chief Executive Officer
of Regency Centers Corporation, a real estate investment trust, through which
the Company leases eight locations owned by Regency Centers Corporation for
approximately $1.8 million in base rent annually. Regency Centers Corporation
receives market based leasing commissions from third party shopping center
owners where Regency Centers Corporation represented the Company in the
negotiation and execution of new store leases. In 2000, Regency Centers
Corporation received approximately $816,000 in commissions. The Board of
Directors believes that rents and commissions paid for leased space are
competitive with amounts that would be paid to a third party to lease similar
space.
13
COMPARATIVE STOCK PERFORMANCE
The following graph compares the cumulative total stockholder return on the
Company's common stock with the cumulative total return on The Nasdaq Stock
Market(R) and The Nasdaq Stock Market(R) Retail Trades Stock Index for the last
five years ended December 30, 2000. The comparison assumes $100 was invested at
the beginning of the five year period in Stein Mart, Inc. stock and in each of
the indices shown and assumes reinvestment of any dividends.
Comparison of Cumulative Total Return Among
Stein Mart, Inc., The Nasdaq Stock Market(R) (U.S.) Index
and The Nasdaq Stock Market(R) Retail Trades Stock Index
- --------------------------------------------------------------------------------
Stein Mart, Nasdaq Nasdaq
Date Inc. (U.S.) Retail
- --------------------------------------------------------------------------------
12/30/95 100.0 100.0 100.0
12/28/96 177.8 123.2 119.5
01/03/98 231.8 151.7 139.3
01/02/99 126.7 212.5 171.1
01/01/00 103.4 394.9 150.1
12/30/00 211.4 237.7 92.1
- --------------------------------------------------------------------------------
PROPOSAL TO INCREASE THE NUMBER OF SHARES
AUTHORIZED FOR ISSUANCE UNDER THE EMPLOYEE STOCK
PURCHASE PLAN AND TO EXTEND THE TERM OF THE PLAN
Proposed Amendment. In November 2000, the Company's Board of Directors
adopted, subject to stockholder approval, an amendment to the Stein Mart
Employee Stock Purchase Plan (the "Stock Purchase Plan"), increasing the number
of shares eligible for issuance under the Stock Purchase Plan by 1,000,000 to a
total of 1,800,000 shares and to extend the Stock Purchase Plan until December
31, 2005.
The Stock Purchase Plan was effective through 2000. A substantial number of
shares have been issued under the Stock Purchase Plan. Accordingly, to continue
to encourage an alignment of the interest of the Company's employees with those
of the Company's stockholders by encouraging ownership of the Company's shares
by its employees, the Compensation Committee determined it is appropriate to
increase the number of shares under the Stock Purchase Plan and to extend the
term of the Stock Purchase Plan. The Company believes the Stock Purchase Plan
provides a convenient method, through payroll deduction, for employees to
acquire shares in the Company and provides an excellent complement to the
Company's Stock Option Plan for employees.
14
Thus, the Company's Board of Directors approved the amendment for the
proposed increase in shares and extension of the Stock Purchase Plan. The
proposed amendment will be adopted if a majority of the shares voted with
respect to the Stock Purchase Plan are voted in favor thereof. For this purpose,
absentions and broker "non-votes" will not be counted.
Summary of Stock Purchase Plan. In February 1997, the Company's Board of
Directors adopted, and in May 1997, the shareholders approved, the Stein Mart
Employee Stock Purchase Plan (the "Stock Purchase Plan"). The Stock Purchase
Plan is intended to encourage an alignment of the interest of the Company's
employees with those of the Company's stockholders by encouraging ownership of
the Company's shares by its employees. The Company believes the Stock Purchase
Plan will provide a convenient method, through payroll deduction, for employees
to acquire shares in the Company and provide an excellent complement to the
Company's Stock Option Plan for employees.
All employees who complete 90 days employment with the Company and who work
on a full-time basis or are regularly scheduled to work more than 20 hours per
week are eligible to participate in the Stock Purchase Plan. No employee is
eligible to participate in the Stock Purchase Plan if the employee possesses 5%
or more of the voting power of the Company's shares. In addition, no employee
may accrue rights to purchase shares under the Stock Purchase Plan which exceed
$25,000 in market value of stock (determined at the time of the option grant)
for any calendar year.
The Company will make annual offerings under the Stock Purchase Plan (the
"Offerings"). The Offerings will be for a period of six or twelve months each.
Shares eligible under the Stock Purchase Plan will be limited to 1,800,000
shares in the aggregate and the Stock Purchase Plan will be effective for the
years of 1997 through 2005, with no more than 200,000 shares being made
available in each calendar year.
Participants in the Stock Purchase Plan are permitted to use their payroll
deductions to acquire shares at 85% of the fair market value of the Company's
stock determined at either the beginning or end of each option period. An
employee who is a participant in the Stock Purchase Plan may withdraw from
participation at any time prior to the last day of each Offering.
The Board of Directors recommends a vote "for" the proposal to increase the
number of shares authorized for issuance under the Employee Stock Purchase Plan
and to extend the term of the Stock Purchase Plan.
PROPOSAL TO ADOPT THE STEIN MART 2001 OMNIBUS PLAN
(THE "PLAN") TO REPLACE THE COMPANY'S EXISTING 1992 STOCK
OPTION PLANS WITH THE PLAN TO TAKE EFFECT UPON SUCH APPROVAL
Proposal. In March 2001, the Company's Board of Directors, subject to
shareholder approval, recommended the adoption of the Stein Mart, Inc. 2001
Omnibus Plan (the "Plan") with options available under the Plan for 4,500,000
shares of the Company's common stock. It was also recommended that the Plan will
take effect immediately upon it's ratification by the Company's shareholders
with a simultaneous ceasing of the issuance of any options under the Company's
existing 1992 plans that expire at the end of calendar year 2001. The Board of
Directors believes that the Plan will assist the Company in attracting and
retaining highly competent individuals to serve as key employees, non-employee
directors and advisors who will contribute to the Company's success, and to
motivate such persons to achieve long-term objectives which will inure to the
benefit of all shareholders of the Company.
Thus, the Company's Board of Directors approved the proposed adoption of
the Plan to achieve the benefits described above. The proposal will be adopted
if a majority of the shares voted with respect to the proposal are voted in
15
favor thereof. For this purpose, abstentions and broker "non-votes" will not be
counted.
Administration. The Plan is administered by a committee of the Company's
Board of Directors consisting of at least two non-employee directors. The
committee decides which eligible individuals will receive awards under the Plan.
As of February 28, 2001, there were 369 persons eligible to participate in the
Plan, including seven non-employee directors.
The Plan authorizes the committee to award different types of stock-based
awards to employee and advisor participants, including stock options, stock
appreciation rights, restricted stock and performance shares. The committee has
the sole authority to determine when awards will be granted, the type, amount,
price, timing, vesting schedules and other terms and conditions of awards and
the number of shares covered by the awards. The committee also has the authority
to make all determinations necessary or advisable for the operation of the Plan.
The Plan provides for an automatic grant of 4,000 options when a
non-employee director joins the board. The terms of these options will be the
same as those granted under the current director stock option plan. See
"Compensation of Directors" above under "Executive Compensation." The Plan also
permits the Board of Directors to make other stock-based awards to non-employee
directors, including options.
Stock Subject to the Plan. The maximum number of shares of common stock
that may be currently issued under the Plan is 4,500,000 shares. Shares covered
by unexercised options that terminate or shares that are forfeited may be
subject to new awards.
There are currently in excess of 3.5 million shares remaining available for
issuance under the Company's 1992 Plans. Upon approval of the new Plan, no
further options will be issued under the 1992 Plans.
During any single year, participants may not receive options and/or stock
appreciation rights for more than 500,000 shares of stock, performance-based
restricted stock awards for more than 500,000 shares of stock or more than
$500,000 in performance awards, provided, however, that by a vote of two-thirds
of the Committee, twice these amounts may be awarded.
Stock Options. A stock option allows a participant to purchase shares of
common stock at a fixed price at some future date. Options awarded under the
Plan may be either incentive stock options within the meaning of Section 422 of
the Internal Revenue Code, which permits the deferral of taxable income related
to the exercise of such options, or nonqualified options not entitled to such
deferral. The exercise price and term of each option is fixed by the committee,
except that the exercise price for incentive stock options must be at least
equal to 100% (or 110% in the case of incentive stock options granted to 10%
stockholders) of the fair market value of the stock on the date of grant. The
Board of Directors may consent to the grant of nonqualified options with an
exercise price less than 100% of fair market value on the date of grant. The
term of incentive stock options cannot exceed 10 years. The aggregate fair
market value (determined at the time the option is granted) of shares with
respect to which incentive stock options may be granted to any one individual
under the Plan, or any other Plan of the Company or any subsidiary, which stock
options are exercisable for the first time during any calendar year, may not
exceed $100,000. All unvested options become exercisable upon a change of
control of the Company.
Upon exercise of an option, the participant must pay the full exercise
price for the number of shares of stock being exercised. The committee may allow
the participant to pay the exercise price in cash, with shares of stock already
owned, by delivery to the Company of an exercise form together with instructions
to a broker-dealer to sell or margin a sufficient portion of the stock and
deliver the sale or margin loan proceeds directly to the Company to pay the
option price, or a combination thereof.
16
As of February 28, 2001, the closing price of the Company's common stock on
the Nasdaq Stock Market(R) was $9.56.
Amendment and Termination. The Board of Directors may amend or terminate
the Plan at any time. Unless terminated by the board, the term of the Plan is
indefinite, although incentive stock options may not be grated after the Plan
has been in effect for 10 years. Termination of the Plan may not affect the
rights of participants as to outstanding awards.
Federal Income Tax Consequences of Stock Options. The income tax treatment
of different types of awards will vary. The following is a summary of
significant federal income tax consequences associated with stock option awards
granted under the Plan. The discussion is not a comprehensive discussion of all
the federal income tax aspects of the Plan.
The holder of an incentive option generally recognizes no income for
federal income tax purposes at the time of the grant or exercise of the option.
However, the spread between the exercise price and the fair market value of the
underlying shares on the date of exercise generally will constitute a tax
preference item for purposes of the alternative minimum tax. The optionee
generally will be entitled to long term capital gain treatment upon the sale of
shares acquired on the exercise of an incentive stock option, if the shares have
been held for more than two years from the date of the option grant and for more
than one year after exercise. Generally, if the optionee disposes of the stock
before the expiration of either of these holding periods (a "disqualifying
disposition"), the gain realized on disposition will be compensation income to
the optionee to the extent the fair market value of the underlying stock on the
date of exercise exceeds the applicable exercise price. The Company will not be
entitled to an income tax deduction in connection with the exercise of an
incentive stock option but will generally be entitled to a deduction equal to
the amount of any ordinary income recognized by an optionee upon a disqualifying
disposition.
No income will be recognized by a participant at the time a non-qualified
option is granted. The exercise of a non-qualified stock option will generally
be a taxable event that requires the participant to recognize, as ordinary
income, the difference between the fair market value of the shares at the time
of exercise and the option exercise price. The Company ordinarily will be
entitled to claim a federal income tax deduction on account of the exercise of a
non-qualified option. The amount of the deduction will equal the ordinary income
recognized by the participant.
Performance Based Compensation. Section 162(m) of the Internal Revenue Code
limits the Company's income tax deduction for compensation paid in any taxable
year to certain executive officers to $1,000,000 per individual. Qualifying
performance-based compensation will not be subject to the deduction limit if
certain requirements are met. Awards under the Plan are intended, but not
required, to satisfy these requirements.
The Plan provides that restricted stock and performance awards will be
performance-based if they are conditioned on one of the following performance
criteria, as determined by the committee: net sales, gross profit, operating or
other expenses, earnings before interest and taxes, earnings before interest,
taxes, depreciation and amortization, net income, earnings per share (basic or
diluted), cash flow, average sales per store, average sales per square foot,
comparable store sales increases, average inventories, number of stores opened,
return on investment and stock price.
The Board of Directors recommends a vote "for" the proposal to approve the
Stein Mart 2001 Omnibus Plan (The "Plan") to replace the Company's existing 1992
Stock Option Plans with the Plan to take effect upon such approval. Proxies
solicited by the Board will be so voted unless stockholders specify in their
proxies a contrary choice.
17
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Company has selected the firm of PricewaterhouseCoopers LLP to serve as
the independent certified public accountants for the Company for the current
fiscal year ending December 29, 2001. That firm has served as the auditor for
the Company since 1983. Representatives of PricewaterhouseCoopers LLP are
expected to be present at the annual meeting of stockholders and will be
accorded the opportunity to make a statement, if they so desire, and to respond
to appropriate questions.
The following table provides information relating to the fees billed to the
Company by PricewaterhouseCoopers LLP for the fiscal year ended December 30,
2000.
Audit Fees $ 96,000
Financial Information Systems Design and Implementation Fees $ -0-
All Other Fees $134,166
The Audit Committee discussed the non-audit services with
PricewaterhouseCoopers LLP and determined that their provision would not impair
that firm's independence.
OTHER MATTERS
The Board of Directors does not know of any other matters to come before
the meeting; however, if any other matters properly come before the meeting it
is the intention of the persons designated as proxies to vote in accordance with
their best judgment on such matters. If any other matter should come before the
meeting, action on such matter will be approved if the number of votes cast in
favor of the matter exceeds the number opposed.
STOCKHOLDER PROPOSALS
Regulations of the Securities and Exchange Commission require proxy
statements to disclose the date by which stockholder proposals must be received
by the Company in order to be included in the Company's proxy materials for the
next annual meeting. In accordance with these regulations, stockholders are
hereby notified that if they wish a proposal to be included in the Company's
proxy statement and form of proxy relating to the 2002 annual meeting, a written
copy of their proposal must be received at the principal executive offices of
the Company no later than December 6, 2001. To ensure prompt receipt by the
Company, proposals should be sent certified mail return receipt requested.
Proposals must comply with the proxy rules relating to stockholder proposals in
order to be included in the Company's proxy materials.
ANNUAL REPORT
A copy of the Company's Annual Report for the year ended December 30, 2000
accompanies this proxy statement. Additional copies may be obtained by writing
to Ms. Susan Datz Edelman, the Company's Director of Stockholder Relations, at
1200 Riverplace Boulevard, Jacksonville, Florida 32207.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. The Company
does not expect to pay any compensation for the solicitation of proxies but may
reimburse brokers and other persons holding stock in their names, or in the
names of nominees, for their expenses for sending proxy material to principals
and obtaining their proxies.
Dated: April 6, 2001.
STOCKHOLDERS ARE URGED TO SPECIFY THEIR CHOICES, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, POSTAGE FOR WHICH HAS BEEN PROVIDED.
YOUR PROMPT RESPONSE WILL BE APPRECIATED.
18
Appendix
STEIN MART, INC.
Audit Committee Charter
-----------------------
Purpose. The Audit Committee of the Board of Directors (the "Board") of
Stein Mart, Inc. (the "Audit Committee") is appointed by the Board to assist the
Board in monitoring (1) the integrity of the financial statements of the
Company, (2) the compliance by the Company with legal and regulatory
requirements and (3) the independence and performance of the Company's internal
and external auditors.
I. Members
There shall be not less than three members of the Audit Committee each of
whom shall meet the independence and experience requirements of the National
Association of Securities Dealers' Nasdaq Stock Market, Inc. ("Nasdaq"). Thus,
the members of the Audit Committee shall meet the following criteria:
A. No member shall be an employee of the Company or any affiliate in the
current year or any of the past three years:
B. No member shall be a member of the immediate family of an executive
officer who currently serves in that role or did so in any of the past
three years.
C. No member shall have a direct business relationship with the Company
unless under exceptional and limited circumstances, the Board judges
that the relationship does not interfere with such Director's exercise
of independent judgment, and that service by one such individual is
required by the best interests of the Company and its shareholders;
D. Each member shall be able to read and understand fundamental financial
statements, including a balance sheet, income statement, and cash
flow statement;
E. At least one member shall have past employment experience in finance or
accounting, requisite professional certification in accounting, or
other comparable experience or background resulting in the individual's
financial sophistication, including being or having been a chief
executive, chief financial or other senior officer with financial over-
sight responsibilities.
II. Appointment; Authority
The members of the Audit Committee shall be appointed by the Board. The
Audit Committee shall have the authority to retain special legal, accounting or
other consultants to advise the Committee. The Audit Committee may request any
officer or employee of the Company or the Company's outside counsel or
independent auditor to attend a meeting of the Committee or to meet with any
members of, or consultants to, the Committee.
III. Committee Meetings
The Audit Committee will hold meetings at such times and at such places as
it shall deem necessary but shall hold at least the following meetings (a) a
February/March meeting (the "Winter Meeting") prior to the release of the
Company's audited financial statements for the prior year, (b) a mid-year
meeting (the "Mid-Year Meeting") to generally coincide with the annual meeting
of the Company's shareholders, (c) an October/November meeting (the "Fall
Meeting") to generally coincide with the fall meeting of the Company's Board of
Directors.
19
IV. Specific Responsibilities
The Audit Committee shall make regular reports to the Board. The Audit
Committee shall undertake the following tasks generally at the times indicated:
A. Quarterly
1. Review with management and the independent auditor the Company's
quarterly financial statements prior to filing of SEC Form 10-Q.
B. Winter Meeting
1. Review the annual audited financial statements with management,
including major issues regarding accounting and auditing principles
and practices as well as the quality and acceptability of such
principles, practices and underlying estimates, and the adequacy of
internal controls that could significantly affect the Company's
financial statements.
2. Review an analysis prepared by management and the independent
auditor of significant financial reporting issues and judgments
made in connection with the preparation of the Company's financial
statements.
3. Review major changes to the Company's auditing and accounting
principles and practices as suggested by the independent auditor,
internal auditors or management.
4. Obtain from the independent auditor a formal written statement
delineating all relationships between the auditor and the Company,
discuss with the auditor any disclosed relationships or services that
may impact auditor objectivity and independence, and if so determined
by the Audit Committee, recommend that the Board take appropriate
action to insure the independence of the auditor.
5. Obtain from the independent auditor assurance that Section 10A of the
Private Securities Litigation Reform Act of 1995 has not been
implicated.
6. Discuss with the independent auditor the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the
conduct of the audit.
7. Review with the independent auditor any problems or difficulties the
auditor may have encountered and any management letter provided by
the auditor and the Company's response to that letter. Such review
should include:
(a) Any difficulties encountered in the course of the audit work,
including any restrictions on the scope of activities or access to
required information.
(b) Any changes required in the planned scope of the internal audit.
(c) The internal audit department responsibilities, budget and staff-
ing.
8. Prepare the report required by the rules of the Securities and
Exchange Commission to be included in the Company's annual proxy
statement stating whether the committee (a) reviewed and discussed
the audited financial statements with management, (b) discussed with
the auditors the matters requiring discussion by SAS 61, (c) received
the written disclosures and letter from the auditor required to
confirm the auditors' independence and discussed with the auditors
their independence, and (d) based on the above, recommended to the
Board that the audited financial statement be included in the
Company's Annual Report on SEC Form 10-K.
9. Review with the Company's General Counsel legal matters that may
have a material impact on the financial statements, the Company's
compliance policies and any material reports or inquiries received
20
from regulators or governmental agencies.
10. Review with independent auditor the adequacy of the Company's
management information systems and the security of such systems for
the purpose of producing fairly-stated financial statements.
C. Mid-Year Meeting
1. Evaluate the performance of the independent auditor and recommend
to the Board the appointment of the independent auditor, which firm
is ultimately accountable to the Audit Committee and the Board
and approve the fees to be paid to the independent auditor.
2. Review the appointment and replacement of the senior internal
auditing executive.
3. Review the significant reports to management prepared by the internal
auditing department and management's responses.
4. Review and reassess the adequacy of this Charter annually, submit
it to the Board for approval, and cause a copy of this Charter to be
attached to the Company's annual proxy statement every three years
beginning in 2001, in accordance with SEC Rule Item 7(e) of Schedule
14A.
5. Request educational information on accounting topics as to which
the Committee seeks a greater understanding.
6. Provide the Nasdaq with written confirmation as to the Audit
Committee member qualifications and related Board determinations, as
well as the annual review and re-evaluation of the Audit Committee
Charter.
D. Fall Meeting
1. Meet with management to review the Company's major financial risk
exposures and the steps management has taken to monitor and control
such exposures.
2. Advise the Board with respect to the Company's policies and
procedures regarding compliance with applicable laws and regulations
and with the Company's Code of Conduct.
3. Meet with the independent auditor prior to the audit to review the
planning and staffing of the audit.
4. Meet with the chief financial officer, the senior internal auditing
executive and the independent auditor in separate executive sessions.
Limitation on Duties. While the Audit Committee has the responsibilities
and powers set forth in this Charter, it is not the duty of the Audit Committee
to plan or conduct audits or to determine that the Company's financial
statements are complete and accurate and are in accordance with generally
accepted accounting principles. This is the responsibility of management and the
independent auditor. Nor is it the duty of the Audit Committee to conduct
investigations, to resolve disagreements, if any, between management and the
independent auditor or to assure compliance with laws and regulations and the
Company's Code of Conduct.
As revised by the Audit Committee March 5, 2001.
James H. Winston, Chairman
Linda McFarland Farthing
Michael D. Rose
21
STEIN MART, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS IN CONNECTION WITH
THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 7, 2001
The undersigned hereby appoints Jay Stein and John H. Williams, Jr., and
each of them, with full power of substitution and revocation, as true and lawful
agents and proxies of the undersigned to attend and vote all shares of Common
Stock of Stein Mart, Inc., a Florida corporation, that the undersigned would be
entitled to vote if then personally present at the Annual Meeting of
Shareholders of Stein Mart, Inc., a Florida corporation, to be held on May 7,
2001 at 2:00 P.M., local time, at The Radisson Riverwalk Hotel and Conference
Center, 1515 Prudential Drive, Jacksonville, Florida, and at any adjournments
thereof, hereby revoking any proxy heretofore given.
(Continued and to be signed on the reverse side)
^ FOLD AND DETACH HERE ^
This Proxy when properly executed will be voted in the manner directed herein by the Please mark
undersigned shareholder. If no direction is made, this proxy will be voted FOR your vote as
Proposals 1, 2, and 3. The Board of Directors recommends a vote FOR items 1, 2 and 3. indicated in [x]
this example
1. Election of Directors as recommended
in the Proxy Statement: 2. To increase the number of shares eligible for For Against Abstain
issuance under the Stein Mart Employee Stock
FOR all nominees WITHHOLD Purchase Plan by 1,000,000 shares and to [ ] [ ] [ ]
listed below AUTHORITY extend the Stock Purchase Plan until December
(except as marked to vote for all nominees 31, 2005.
to the contrary) listed below
3. Approval of the Stein Mart 2001 Omnibus Plan
[ ] [ ] (the "Plan") to replace the Company's existing [ ] [ ] [ ]
1992 stock option plans with the Plan to take
Nominees: Alvin R. "Pete" Carpenter, Linda McFarland effect upon such approval.
Farthing, Mitchell W. Legler, Michael D. Rose, Jay
Stein, Martin E. Stein, Jr., J. Wayne Weaver, John H. 4. Should any other matters requiring a vote of the shareholders arise, the
Williams, Jr., and James H. Winston. above named proxies are authorized to vote the same in accordance with
their best judgment in the interest of the Company. The Board of
Instructions: To withhold authority to vote for any Directors is not aware of any matter which is to be presented for action
individual nominee, write that nominee's name in the at the meeting other than the matters set forth herein.
space provided below.
_____________________________________________________ Please insert the date and sign your name exactly as
it appears hereon. If shares are held jointly each
joint owner should sign. Executors, administrators,
trustees, guardians, etc., should so indicate when
signing. Corporations should sign full corporate name
by an authorized officer. Partnership should sign
partnership name by an authorized Partner.
Unless the date has been inserted below this proxy
shall be deemed to be dated for all purposes as of the
date appearing on the postmark on the envelope in
which it is enclosed. In such a case the Proxies named
above are authorized to insert the date in accordance
with these instructions.
Dated:____________________________________________,2001
_______________________________________________________
_______________________________________________________
Signature of Shareholders(s)
^ FOLD AND DETACH HERE ^
Stein Mart Inc. invites you to visit our newly redesigned Investor
Relations section of www.steinmart.com. You may view the current Stein Mart
stock price, read the latest Company news releases, or listen to the Company's
most recent conference call. You may also choose to get immediate e-mail alert
messages, conveniently delivered to your e-mail box, whenever new Stein Mart
information is posted to the Company site.
If you would prefer to receive information via U.S. Mail, please call (904)
346-1535, extension 5888. You may leave a request for information such as an
annual report or news release, and you may also ask to be added to the Stein
Mart mailing list.
For your convenience, here are the Stein Mart financial reporting dates:
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April 24, 2001 Stein Mart 1Q '01 News Release
July 24, 2001 Stein Mart 2Q '01 News Release
October 23, 2001 Stein Mart 3Q '01 News Release
March 5, 2002 Stein Mart 4Q & FY '01 News Release
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