Exhibit 10.10
Stein Mart, Inc.
Executive Deferral Plan
Amendment and Restatement
Effective November 1, 2002
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Article I
Establishment and Purpose...........................................Page 3
Article II
Definitions.........................................................Page 3
Article III
Eligibility and Participation.......................................Page 9
Article IV
Deferral Elections, Company Contributions, Account Valuation........Page 9
Article V
Distributions and Withdrawals......................................Page 16
Article VI
Administration.....................................................Page 18
Article VII
Amendment and Termination..........................................Page 19
Article VIII
Informal Funding...................................................Page 20
Article IX
Claims.............................................................Page 21
Article X
General Conditions.................................................Page 22
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ARTICLE I
Purpose of Amendment and Restatement
(a) In accordance with Article 7, Section 7.01 of the Stein Mart Executive
Deferral Plan (the "Plan"), the Plan's sponsor, Stein Mart, Inc. (the
"Company"), has decided to and hereby amends and restates the Plan
effective November 1, 2002. This Plan document shall replace and
supersede in all respects the former plan document, originally adopted
September 1, 1999 and unamended since that date.
(b) The amended and restated plan shall continue to be known as the Stein
Mart Executive Deferral Plan. The purpose of the amendment and
restatement is to add additional flexibility to the plan. The Plan has
always been and continues to intend to be an unfunded arrangement
within the meaning of both the Internal Revenue Code and ERISA,
providing deferred compensation to eligible employees who are part of
a select group of management or highly compensated employees of the
Company within the meaning of Sections 201, 301 and 401 of ERISA. The
Plan is intended to be exempt from the requirements of Parts 2, 3 and
4 of Title I of ERISA as a "top hat" plan, and to be eligible for the
alternative method of compliance for reporting and disclosure
available for unfunded "top hat" plans.
ARTICLE II
Definitions
2.1 Account Balance. Account Balance means, with respect to the Deferred
Compensation Account or any Sub-Account, the total value of all the
Investment Options in which the Participant deferrals, and Company
Contributions, have been Deemed Invested as of a specific date, taking
into account the value of all distributions from that Account or
Sub-Account to the specific date. Account Balances are notional. They
reflect an amount due a Participant from the Company under the Plan.
They are not funded accounts, and reflect no ownership by the Participant
in any Company or trust assets.
2.2 Allocation Election. Allocation Election means a choice by a Participant
of one or more Investment Options, and the allocation among them, in which
future Participant deferrals and/or existing Account Balances are Deemed
Invested for purposes of determining earnings in a particular Sub-Account.
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2.3 Allocation Election Form. Allocation Election Form means the form (or
Website screen) approved by the Plan Administrator on which the
Participant makes an Allocation Election, Rebalances a Sub-Account, or
elects a Transfer.
2.4 Annual Enrollment Period. Annual Enrollment Period shall be the period
announced by the Plan Administrator during which Participants may
submit Compensation Deferral Agreements (or make deferral elections on
the Participant web site, if authorized by the Plan Administrator)
which shall precede the Plan Year to which the elections are applicable.
2.5 Annual Valuation Date. Annual Valuation Date shall mean the anniversary
of the Termination Valuation Date or In Service Distribution Valuation
Date utilized to determine the amount of an annual installment payment.
2.6 Beneficiary. Beneficiary means a natural person, estate, or trust
designated by a Participant on the form designated by the Plan
Administrator to receive benefits to which a Beneficiary is entitled
under and in accordance with provisions of the Plan. The Participant's
estate shall be the Beneficiary if:
a. the Participant has not designated a natural person or trust as
Beneficiary, or
b. the designated Beneficiary has predeceased the Participant.
2.7 Change in Control. Change in Control means the occurrence of: (a) any
merger or consolidation in which the Company is not the surviving
corporation and which results in the holders of the outstanding voting
securities of the Company (determined immediately prior to such merger or
consolidation) owning less than a majority of the outstanding voting
securities of the surviving corporation (determined immediately following
such merger or consolidation), (b) any sale or transfer by the Company of
all or substantially all of its assets, or (c) any tender offer or
exchange offer for or the acquisition, directly or indirectly, by any
person or group of all or a majority of the then-outstanding voting
securities of the Company.
2.8 Chief Executive Officer. Chief Executive Officer means the individual who
performs the functions of a Chief Executive Officer for the Company.
2.9 Code. Code means the Internal Revenue Code, as amended from time to time.
2.10 Company. Company means Stein Mart, Inc.
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2.11 Company Contributions. Company Contributions shall mean all Company
Discretionary Contributions and all Company Matching Contributions made
with respect to a Participant.
2.12 Company Discretionary Contributions. Company Discretionary Contributions
shall mean credits to a Participant's Retirement/Termination Sub-Account
by the Company at a time and in an amount determined in the sole
discretion of the Company.
2.13 Company Matching Contributions. Company Matching Contributions shall mean
credits to a Participant's Retirement/Termination Sub-Account by the
Company based upon deferrals made by the Participant as provided in
Section 4.3 of the Plan.
2.14 Compensation. Compensation shall mean, for purposes of this Plan, base
salary (including any deferred salary under a Code Section 401(k) or 125
plan), bonus, and such other cash compensation (if any) approved by the
Plan Administrator as Compensation for purposes of this Plan.
2.15 Compensation Deferral Agreement. Compensation Deferral Agreement shall
mean the deferral election form, or such other forms furnished by the Plan
Administrator (or screens on the Participant Website approved by the Plan
Administrator), on which a Participant elects: (a) the amount of deferral
and type of Compensation (base salary or bonus) to be deferred beginning
the first day of the following Plan Year; (b) any In Service Distribution
Dates for that year's, or a portion of that year's, deferrals; and (c) the
Form of Payment elections for Termination Benefits and In Service
Distributions. The Allocation Election Form may be part of the
Compensation Deferral Agreement, in the discretion of the Plan
Administrator. The initial Compensation Deferral Agreement constitutes
a participation agreement wherein a Participant acknowledges and agrees
to the terms and conditions of the Plan.
2.16 Death Benefit. Death Benefit shall mean a distribution of the total amount
of the Participant's Deferred Compensation Account Balance, including any
remaining unpaid In Service Account balances, to the Participant's
Beneficiary(ies) in accordance with Article V of the Plan.
2.17 Deemed Investment. A Deemed Investment (or "Deemed Invested") shall mean
the notional conversion of a dollar amount of deferred Compensation and
Company Contributions credited to a Participant's Deferred Compensation
Account into shares or units (or a fraction of such measures of ownership,
if applicable) of the underlying investment (e.g. mutual fund or other
investment) which is referred to by the Investment Option(s) selected by
the Participant. The
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conversion shall occur as if shares (or units) of the designated
investment were being purchased (or sold, for a distribution) at the
purchase price as of the close of business of the day on which the Deemed
Investment occurs. At no time shall a Participant have any real or
beneficial ownership in the actual investment to which the Investment
Option refers, irrespective of whether such a Deemed Investment is
mirrored by an actual identical investment by the Company or a trustee
acting on behalf of the Company.
2.18 Deferred Compensation Account ("Account"). A Participant's Deferred
Compensation Account shall mean the aggregate of all Sub-Accounts
maintained for Participant deferrals and Company Contributions, together
with a record of Deemed Investments in accordance with Participants'
Allocation Elections, minus any withdrawals or distributions from said
Account. The Account, and all component Sub-Accounts, shall be a
bookkeeping account utilized solely as a device for the measurement of
amounts to be paid to the Participant under the Plan. The Account, and all
Sub-Accounts, shall not constitute or be treated as an escrow, trust fund,
or any other type of funded account for Code or ERISA purposes and,
moreover, amounts credited thereto shall not be considered "plan assets"
for ERISA purposes.
2.19 Deferred Compensation Committee or "Committee". Deferred Compensation
Committee, or "Committee" means the Compensation Committee of the Board of
Directors, or if applicable, such other group consisting of at least three
(3) officers of the Company appointed by the Compensation Committee of the
Board and approved by the entire Board, who shall serve until the earlier
of termination of service or appointment of a replacement by the
Compensation Committee of the Board.
2.20 Disability. Disability means that a Participant has been determined to
have incurred total and permanent disability such that the Participant
qualifies for benefits under the Company's long-term disability ("LTD")
group plan or, if none, then as determined in the sole discretion of the
Committee.
2.21 Eligible Employee. Eligible Employee means an Employee who is part of a
select group of management or highly compensated employees of the Company
(which also includes for this purpose its subsidiaries and affiliated
companies) within the meaning of Sections 201, 301 and 401 of ERISA, and
who is selected by the Committee to participate in the Plan.
2.22 Employee. Employee means a full-time salaried employee of the Company or
any subsidiary or affiliated company of the Company.
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2.23 ERISA. ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
2.24 In Service Distribution. In Service Distribution shall mean a payment by
the Company to the Participant following a date elected by the Participant
(the In Service Distribution Date) of the amount represented by the
account balance in the In Service Sub-Account pertaining to that In
Service Distribution. In Service Distributions shall be made in
accordance with Participants' In Service Distribution form of payment
election.
2.25 In Service Distribution Date. In Service Distribution Date shall mean a
separate Sub- Account of the Deferred Compensation Account, created
whenever a Participant elects a new In Service Distribution Date (not
already established with a Sub- Account) with respect to a portion, or
all, of his or her deferral contributions, to which such portion of
deferral specified by the Participant is credited and Deemed Invested in
accordance with the Participant's Allocation Election.
2.26 In Service Distribution Date. In Service Distribution Date shall mean the
date selected by the Participant, following which the In Service
Distribution Sub- Account Balance shall be distributed in accordance with
the Plan.
2.27 In Service Distribution Valuation Date. In Service Distribution Valuation
Date shall mean the last day of the calendar month in which the In Service
Distribution Date falls.
2.28 Investment Option. Investment Option shall mean a security or other
investment such as a mutual fund, life insurance sub-account, or other
investment approved by the Plan Administrator for use as part of an
Investment Option menu, which a Participant may elect as a measuring
device to determine Deemed Investment earnings (positive or negative) to
be valued in the Participant's Account or Sub-Account. The Participant has
no real or beneficial ownership in the security or other investment
represented by the Investment Option.
2.29 Participant. Participant means an Eligible Employee who:(1) is selected to
participate in this Plan in accordance with Section 3.1 and has elected to
defer Compensation in accordance with the Plan in any Plan Year; (2) has
received a Company Discretionary Contribution; or (3) has an Account
Balance in his or her Deferred Compensation Account, including any
Sub-Account, greater than zero prior to his or her death. A Participant's
continued participation in the Plan shall be governed by Section 3.2 of
the Plan.
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2.30 Plan. Plan means the Stein Mart, Inc. Executive Deferral Plan as amended
and restated by this document and as may be amended from time to time
hereafter.
2.31 Plan Administrator. Plan Administrator shall mean a person or persons
appointed by the Deferred Compensation Committee who is (are) responsible
for the day-to-day decision making, record keeping, and administration of
the Plan; provided, that the Plan Administrator may delegate duties of the
Plan Administrator to employees or others to assist in the administration
of the Plan.
2.32 Plan Year. Plan Year means January 1 through December 31 each year.
2.33 Rebalance. Rebalance means an Allocation Election which pertains to an
existing Sub-Account Balance whereby the Participant reallocates the
Sub-Account Balance among different Investment Options.
2.34 Retirement. Retirement shall mean the voluntary termination of employment
with the Company upon reaching age 62. Retirement shall also mean such
involuntary terminations as are designated as a Retirement for purposes of
this Plan in the sole discretion of the Committee.
2.35 Retirement Benefit. Retirement Benefit shall mean the Participant's
Deferred Compensation Account Balance, including all unpaid In Service
Sub-Account Balances, distributed to the Participant (or Beneficiary) upon
Retirement in accordance with the Participant's payment schedule election.
2.36 Retirement/Termination Sub-Account. Retirement/Termination Sub-Account
shall mean that portion of the Deferred Compensation Account not allocated
to In Service Sub-Accounts.
2.37 Sub-Account. Sub-Account shall mean a portion of the Deferred Compensation
Account maintained separately by the Plan Administrator in order to
properly administer the Plan.
2.38 Termination Benefit. Termination Benefit shall mean the vested portion of
the Participant's Deferred Compensation Account Balance, including all
unpaid In Service Sub-Account Balances, distributed to a Participant upon
Termination of Employment except for Retirement in a single lump sum in
accordance with Article V of the Plan.
2.39 Termination of Employment. Termination of Employment shall mean the
termination of a Participant's employment with the Company (or its
subsidiary or affiliated company that is the Participant's employer), for
any reason.
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2.40 Termination Valuation Date. Termination Valuation Date shall mean the
last day of the calendar month in which Termination of Employment occurs.
2.41 Transfer. Transfer means a particular Allocation Election with respect to
an existing Sub-Account whereby a Participant transfers a portion of the
Sub-Account Balance from specific Investment Options to other specific
Investment Options.
ARTICLE III
Eligibility and Participation
3.1 Eligibility and Participation. Each Eligible Employee, determined in the
sole discretion of the Committee shall be eligible to participate in this
Plan. The Committee shall designate each Eligible Employee as either a
tier 1 or tier 2 Participant.
3.2 Duration. Once an Employee becomes a Participant, such Employee shall
continue to be a Participant so long as he or she is entitled to receive
benefits hereunder, notwithstanding any subsequent Termination of
Employment.
3.3 Revocation of Future Participation. Notwithstanding the provisions of
Section 3.2, the Committee may revoke such Participant's eligibility to
make future deferrals under this Plan. Such revocation will not affect in
any manner a Participant's Deferred Compensation Account or other terms of
this Plan.
3.4 Notification. Each newly Eligible Employee shall be notified by the Plan
Administrator, in writing, of his or her eligibility to participate in
this Plan.
ARTICLE IV
Deferral Elections, Company contributions, and Participant Account Valuation
4.1 Deferral Elections, generally
(a) A Participant shall make deferral elections under the Plan by
completing and submitting to the Plan Administrator a written
Compensation Deferral Agreement provided by the Plan Administrator
(or completing and electronically submitting the deferral election
screen on the
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Participant website, when made available by the Plan Administrator).
Deferral elections shall be made during the Annual Enrollment
Period which shall end no later than December 1 preceding the
Plan Year to which the deferral election relates, unless extended
by the Plan Administrator because of extraordinary circumstances
beyond the control of Participants affected. In no event may the
Annual Enrollment Period be extended beyond the last day of the
month prior to the beginning of the Plan Year to which the
deferral elections refer. Other cash Compensation deferral
elections shall be made prior to the time such amounts have been
earned, during special enrollment periods announced by the Plan
Administrator. Notwithstanding the foregoing, an Eligible
Employee who becomes eligible to be a Participant during any Plan
Year may, in the initial year of eligibility only, make deferral
elections with respect to Compensation which will be paid during
the balance of such Plan Year but after such elections in such
Plan Year, within 30 days of the date of notification of
eligibility as required in Section 3.4 of the Plan.
(b) Deferral elections shall be for a Plan Year, and shall remain in
effect from Plan Year to Plan Year unless modified or revoked by
the Participant in writing on such forms as may be prescribed by
the Plan Administrator (or by following such procedures as are
set by the Plan Administrator regarding using the Participant
website, when available) during an enrollment period. Such
modification or revocation shall become effective on the first
day of the Plan Year following the date of the modification or
revocation.
(c) A deferral election shall designate the amount of Compensation to
be deferred in whole percentages. A Participant may defer up to
100% of his or her Compensation to be paid during the Plan Year
to which the election refers. A Participant may elect different
percentages for salary and bonus.
(d) The foregoing notwithstanding, in the event a Participant's
deferral election results in insufficient non-deferred Compensation
from which to withhold taxes in accordance with applicable law,
the deferral election shall be reduced as necessary to allow
the Company to satisfy tax withholding requirements.
(e) Deferrals pertaining to base salary shall be deducted on a pro rata
basis from a Participant's base salary for each pay period during
the Plan Year, and the amount deferred shall be credited to the
Participant's Retirement/Termination Sub-Account or In Service
Sub-Account(s), and a Deemed Investment shall be made in the
investment(s) represented by the
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Investment Option(s) elected by the Participant as of the close
of business on the date it would otherwise have been paid as
Compensation to the Participant. Deferrals pertaining to bonus
awards shall be deducted from the Participant's bonus on the date
of payment of the bonus, and the amount deferred shall be
credited to the Participant's Termination Sub-Account or In
Service Sub-Account(s), and a Deemed Investment shall be made in
the investment(s) represented by the Investment Option(s) elected
by the Participant as of the close of business on the date it
would otherwise have been paid as Compensation to the Participant.
(f) The Compensation Deferral Agreement shall indicate the Participant's
election of a payment schedule for his or her Retirement Benefit.
A Participant shall elect to have such Retirement Benefit
distributed: (a) a portion, or all, in a single lump sum payable
as soon as administratively practicable following the Termination
Valuation Date; and/or (b) the balance (assuming it is at least
$25,000) in up to fifteen (15) annual installment payments payable
at the time described in Section 5.3. An election of a payment
schedule for a Participant's Retirement Benefit shall pertain to the
entire Retirement Benefit Sub-Account Balance. A Participant shall
be permitted to change his or her Retirement Benefit payment
schedule election no more than two (2) times. Such request may be
made at any time during the Plan Year by filing a new Compensation
Deferral Agreement (or by following such procedures as are set by
the Plan Administrator regarding using the Participant website,
when available), provided such election is made at least thirteen
(13) months prior to the Participant's date of Retirement. Any
payment schedule election made within thirteen months of Retirement
shall be null and void, and the most recent payment schedule
election which is dated at least thirteen months prior to Retirement
will be in effect.
4.2 In Service Distribution Date Election.
(a) The Compensation Deferral Agreement shall also indicate the
Participant's election of In Service Distribution Date(s) (if
any). An In Service Distribution election shall pertain to such
portion of deferred Compensation for the Plan Year as elected by
the Participant and shall cause an In Service Sub-Account to be
established (unless such Sub-Account already exists), to which
such portion of deferred Compensation shall be credited. In the
event an In Service Sub-Account has already been established for
the In Service Distribution Date referred to in the deferral
election, such portion of deferred Compensation shall be credited
to the existing In Service Sub-Account.
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(b) An In Service Distribution Date must be at least three (3) years
from the end of the first Plan Year in which deferrals are
credited to the corresponding In Service Sub-Account. Deferrals
may be credited to an already established In Service Sub-Account
so long as the In Service Distribution Date is after the end of
the Plan Year in which deferrals are credited to the Sub-Account.
Any In Service Distribution election which would credit deferrals
to a Sub-Account corresponding to an In Service Distribution Date
which falls in the same Plan Year as the deferrals are deducted
from Compensation is null and void.
(c) A Participant may maintain up to three (3) In Service
Sub-Accounts.
(d) A Participant may change an In Service Distribution Date no more
than two times as follows:
(i) An In Service Distribution Date change (including a
cancellation) may be made by submitting a new Compensation
Deferral Agreement or such other form as may be provided for
In Service Distribution Date changes by the Plan
Administrator (or completing and electronically submitting
the appropriate screen on the Participant website, when
available) at any time, so long as the date that such form
is submitted to the Plan Administrator is at least thirteen
(13) months prior to the In Service Distribution Date being
changed; and
(ii) The In Service Distribution Date may be extended to a
subsequent year (and must be extended by at least one year),
but it may not be made to occur sooner than the original
date.
(iii) The In Service Distribution Date may be cancelled, even
after a change. A cancellation of an In Service Distribution
Date shall cause the In Service Sub-Account associated with
it to be merged into the Retirement/Termination Sub-Account.
(iv) Making an In Service Distribution Date change or
cancellation in accordance with the Plan is specific to the
In Service Distribution to which it refers, and shall not
affect other In Service Distributions or the ability of the
Participant to make new In Service Distribution elections
with respect to new deferral contributions.
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(e) Any portion of a deferral not credited to an In Service
Distribution Sub-Account will be credited to the
Retirement/Termination Sub-Account.
(f) The Compensation Deferral Agreement shall also indicate the
Participant's election of payment schedule for each In Service
Distribution Date. Permitted payment schedules for In Service
Distributions are a single lump sum or (assuming the In Service
Distribution Sub-Account Balance is at least $10,000) from two
(2) to five (5) annual installment payments. A Participant shall
be permitted to change his or her payment schedule election for
an In Service Distribution no more than two (2) times. Such
request may be made at any time during the Plan Year by filing a
new Compensation Deferral Agreement (or by following such
procedures as are set by the Plan Administrator regarding using
the Participant website, when available), provided such request
is made at least thirteen (13) months prior to the In Service
Distribution Date.
4.3 Company Contributions and Vesting
(a) Company Matching Contributions. Each time a deferral of
Compensation is deducted from a Participant's pre-tax pay, the
Company will make a Company Matching Contribution by crediting
the Participant's Retirement/Termination Sub-Account (regardless
of which Sub-Account the Participant elects for his or her
deferrals) on the same day as the deferral is credited with an
amount specified herein:
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Tier 1 Participants $1.00 for each $1.00 of base
salary and bonus deferred to a
maximum of 10% of base salary
and bonus, respectively, for the
Plan Year.
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Tier 2 Participants $.50 for each $1.00 of base
salary and bonus deferred to a
maximum of 10% of base salary
and bonus, respectively, for the
Plan Year.
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(b) Such matching amount shall be determined without regard for
discrimination testing provisions (Code Sections 401(k) and
401(m), and limits on eligible compensation (Code Section
401(a)(17).
(c) The Company Matching Contribution may be changed by the Committee
for any future Play Year by giving written notice to all eligible
Participants prior to the Annual Enrollment Period for such Plan
Year.
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(d) Company Discretionary Contributions. The Company may, in its sole
and absolute discretion, make Company Discretionary Contributions
to one, some, or all Participant(s) by crediting to said
Participants' Retirement/Termination Sub-Accounts an amount
determined in the sole and absolute discretion of the Company.
The Company shall be under no obligation to make Company
Discretionary Contributions unless it so obligates itself under
an employment agreement or other agreement.
(e) Deemed Investments shall be made in the same manner as for
deferrals (Section 4.1 of the Plan) on the date the Company
Matching Contribution is credited to the Participant's
Termination Benefit Sub-Account.
(f) Vesting. Company Matching Contributions and Deemed Investment
earnings thereon are subject to a vesting schedule as follows:
- --------------------------------------------------------------------------------
Full or partial Plan Years in which a Participant has Percent Vested
participated in the Plan
- --------------------------------------------------------------------------------
Fewer than 4 0%
- --------------------------------------------------------------------------------
At least 4 but fewer than 5 20%
- --------------------------------------------------------------------------------
At least 5 but fewer than 6 40%
- --------------------------------------------------------------------------------
At least 6 but fewer than 7 60%
- --------------------------------------------------------------------------------
At least 7 but fewer than 8 80%
- --------------------------------------------------------------------------------
At least 8 100%
- --------------------------------------------------------------------------------
Upon Retirement, termination of the Plan, or termination
of employment within 3 years following a Change in Control 100%
- --------------------------------------------------------------------------------
(g) Vesting for Company Discretionary Contributions (if any). Company
Discretionary Contributions (if any) and Deemed Investment
earnings thereon shall be subject to a vesting schedule announced
by the Committee at the time of such Contribution. If no such
schedule is announced, then such Discretionary Contributions and
earnings shall be subject to the same vesting schedule as for
Company Matching Contributions.
4.4 Allocation Elections and Valuation of Accounts
(a) A Participant shall elect Investment Options from a menu provided
by the Plan Administrator. The initial election shall be made on
the Allocation Election form approved by the Plan Administrator
(or Allocation Election Screen on the Participant website
approved by the Plan Administrator) and shall specify the
allocations among the Investment Options elected. A
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Participant may make different Allocation Elections for each
Sub-Account. A Participant's Sub-Accounts shall be valued as the
sum of the value of all Deemed Investments minus any withdrawals
or distributions from said Sub-Account. Investment Options shall
be utilized to determine the earnings attributable to the
sub-account. Elections of Investment Options do not represent
actual ownership of, or any ownership rights in or to, the
securities or other investments to which the Investment Options
refer, nor is the Company in any way bound or directed to make
actual investments corresponding to Deemed Investments.
(b) The Committee, in its sole discretion, shall be permitted to add
or remove Investment Options provided that any such additions or
removals of Investment Options shall not be effective with
respect to any period prior to the effective date of such change.
Any unallocated portion of a Sub-Account or any unallocated
portion of new deferrals shall be Deemed Invested in an
Investment Option referring to a money market based fund or
sub-account.
(c) A Participant may make a new Allocation Election with respect to
future deferrals, and may Rebalance or Transfer funds in any of
his or her Sub- Accounts, provided that such new allocations,
Rebalances or Transfers shall be in increments of one percent
(1%), and Rebalances and Transfers apply to the entire
Sub-Account Balance. New Allocation Elections, Rebalances, and
Transfers may be made on any business day, and will become
effective on the same business day or, in the case of Allocation
Elections received after a cut-off time established by the Plan
Administrator, the following business day.
(d) Notwithstanding anything in this Section to the contrary, the
Company shall have the sole and exclusive authority to invest any
or all amounts deferred in any manner, regardless of any
Allocation Elections by any Participant. A Participant's
Allocation Election shall be used solely for purposes of
determining the value of such Participant's Sub-Accounts and the
amount of the corresponding liability of the Company in
accordance with this Plan.
4.5 Prohibition Against Modifications to deferral elections. A Participant
may not modify or revoke a deferral election during a Plan Year by
changing the amount of the Compensation deferral except in the case of
severe financial hardship and then only with the approval of the Plan
Administrator which it may or may not give in its sole discretion.
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ARTICLE V
Distributions and Withdrawals
5.1 In Service Distributions.
(a) In the event an In Service Distribution Sub-Account Balance shall be
less than $10,000 on the initial In Service Distribution Valuation
Date, the In Service Distribution shall be made in a single lump sum
as soon as administratively practicable following the In Service
Distribution Valuation Date. Otherwise, each In Service Distribution
shall be paid in accordance with the payment schedule election made
with respect thereto, beginning as soon as administratively
practicable following the In Service Distribution Valuation Date. In
the event a Participant has elected installment payments for an In
Service Distribution, the installment payments shall be determined as
set forth in Section 5.3 of the Plan.
(b) Notwithstanding a Participant's election to receive an In Service
Distribution, all In Service Distribution Sub-Account Balances shall
be distributable as part of a Retirement, Death, Disability, or
Termination Benefit if the triggering date for such Retirement, Death,
Disability, or Termination Benefit occurs prior to the completion of
payment(s) elected in connection with any In Service Distribution
Date.
5.2 Retirement Benefit Distribution. The Retirement benefit will be paid
(or the first payment will be made) in accordance with the Participant
payment schedule election as soon as administratively practicable
following the Termination Valuation Date.
5.3 Termination Benefit Distribution. The Termination Benefit shall be paid as
soon as administratively practicable following the Termination Valuation
Date.
5.4 Installment Payments. If the Participant has elected installment
payments for his or her Retirement Benefit distribution or an In
Service Distribution, annual cash payments will be made beginning as
soon as administratively practicable following the applicable Valuation
Date (Termination or In Service) or, in the event of a partial lump sum
election, following the first anniversary of the partial lump sum
payment made following Retirement. Such payments shall continue
annually on or about the anniversary of the previous installment
payment until the number of installment payments elected has been paid.
The installment payment amount shall be determined annually as the
result of a calculation, performed on the Annual Valuation Date, where
(i) is divided by (ii):
(i) equals the value of the applicable Sub-Account on the Annual
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Valuation Date; and
(ii) equals the remaining number of installment payments.
5.5 Small Account Balance Lump Sum Payment.
In the event that a Participant's Retirement/Termination Sub-Account
Balance is less than $25,000 or a Participant's In Service Distribution
Sub-Account Balance is less than $10,000 on the initial Termination or In
Service Distribution Valuation Date, the In Service Distribution or
Retirement Benefit, as applicable, shall be paid in a lump sum and any
form of payment election to the contrary shall be null and void.
5.6 Disability Benefit. In the event of Disability, a Participant shall
receive a benefit equal to the Participant's and paid as though it
were a Termination Benefit.
5.7 Death Benefit. In the event of a Participant's death either before
Termination of Employment or before complete distribution of any In
Service Distribution or Retirement Benefit, such Participant's
Beneficiary, named on the most recently filed Beneficiary Designation
Form, shall be paid a Death Benefit in the amount of the remaining
Deferred Compensation Account Balance in a single lump sum as soon as
practicable following the end of the month in which the Participant's
death occurred. The Valuation Date for purposes of determining the
Death Benefit shall be the last day of the month in which the
Participant's death occurs.
5.8 Hardship Withdrawal. A Participant may request, in writing to the Plan
Administrator, a distribution under the Plan if the Participant
experiences a "financial hardship". A financial hardship is an
unanticipated emergency that is caused by an event beyond the control
of a Participant and that would result in severe financial hardship to
the Participant if early withdrawal were not permitted. The Plan
Administrator, in its sole discretion, shall determine whether a
Participant has experienced a financial hardship. The amount of any
distribution for financial hardship is limited to the amount of the
severe financial need, which cannot be met with other resources of the
Participant. The amount of such hardship distribution shall be
subtracted first from the vested portion of the Participant's
Termination Benefit Sub-Account until depleted and then from the In
Service Distribution Sub-Accounts (if any) beginning with the most
distant. Values for purposes of administering this Section shall be
determined on the date the Plan Administrator approves the amount of
the hardship withdrawal, or such other date determined by the Plan
Administrator.
5.9 Voluntary Withdrawal. A Participant who is an active employee may
request, in writing to the Plan Administrator, to have up to 100% of
the vested portion of his
17
or her Deferred Compensation Account Balance at any time and for any
reason, subject to a penalty of 15% of the amount distributed. The
penalty shall be forfeited to the Company. There is a minimum
withdrawal amount of $5,000. Deferral elections shall be deemed revoked
for the balance of the Plan Year in which such withdrawal election is
made and not permitted for the following Plan Year. The amount of such
voluntary withdrawal shall be subtracted first from the vested portion of
the Participant's Retirement/Termination Sub-Account until depleted and
then from the In Service Sub-Accounts (if any) beginning with the most
distant. Values for purposes of administering this Section shall be
determined on the date the Plan Administrator approves the amount of the
withdrawal, or such other date determined by the Plan Administrator.
5.10 Pro-rata subtraction from Investment Options. In the event a
distribution under this Article V (e.g. an installment payment,
hardship voluntary withdrawal, etc.) is less than the entire
Sub-Account Balance and the Sub-Account is allocated over more than
one Investment Option, the distribution shall be subtracted from each
Investment Option in a pro-rata manner determined in the sole
discretion of the Plan Administrator.
ARTICLE VI
Administration
6.1 Plan Administration. This Plan shall be administered by the Plan
Administrator, which shall have authority to make, amend, interpret and
enforce all appropriate rules and regulations for the administration of
this Plan and decide or resolve any and all questions, including but
not limited to eligibility for benefits and interpretations of this
Plan and its terms, as may arise in connection with the Plan. Claims
for benefits shall be filed with the Plan Administrator and resolved in
accordance with the claims procedures in Article IX.
6.2 Withholding. The Company (or its subsidiary or affiliated company that
is or was the Participant's employer) shall have the right to withhold
from any payment made under the Plan (or any amount deferred into the
Plan) any taxes required by law to be withheld in respect of such
payment (or deferral).
6.3 Indemnification. The Company shall indemnify and hold harmless each
employee, officer, director, agent or organization, to whom or to which
is delegated duties, responsibilities, and authority with respect to
administration of the Plan, against all claims, liabilities, fines and
penalties, and all expenses reasonably incurred by or imposed upon him
or it (including but not limited to
18
reasonable attorney fees) which arise as a result of his or its actions
or failure to act in connection with the operation and administration
of the Plan to the extent lawfully allowable and to the extent that
such claim, liability, fine, penalty, or expense is not paid for by
liability insurance purchased or paid for by the Company. Notwithstanding
the foregoing, the Company shall not indemnify any person or organization
if his or its actions or failure to act are due to gross negligence or
willful misconduct or for any such amount incurred through any
settlement or compromise of any action unless the Company consents in
writing to such settlement or compromise.
6.4 Expenses. The expenses of administering the Plan shall be paid by the
Company.
6.5 Delegation of Authority. In the administration of this Plan, the Plan
Administrator may, from time to time, employ agents and delegate to
them such administrative duties as it sees fit, and may from time to
time consult with legal counsel who may be legal counsel to the
Company.
6.6 Binding Decisions or Actions. The decision or action of the Plan
Administrator in respect of any question arising out of or in
connection with the administration, interpretation and application of
the Plan and the rules and regulations thereunder shall be final and
conclusive and binding upon all persons having any interest in the
Plan.
ARTICLE VII
Amendment and Termination
7.1 Amendment and Termination. The Plan is intended to be permanent, but
the Committee may at any time modify, amend, or terminate the Plan,
provided that such modification, amendment or termination shall not
cancel, reduce, or otherwise adversely affect the amount of benefits of
any Participant accrued (and any form of payment elected) as of the
date of any such modification, amendment, or termination, without the
consent of the Participant. Notwithstanding the foregoing, the
Committee shall be permitted upon Plan termination to instruct the Plan
Administrator to pay each Participant (without such Participant's
consent) a lump sum in the amount of such Participant's Account Balance
as of the date of such Plan termination.
7.2 Adverse Income Tax Determination. Notwithstanding anything to the
contrary in the Plan, if any Participant receives a deficiency notice
from the United States Internal Revenue Service asserting constructive
receipt of amounts payable under the Plan, or if legislation is passed
which causes current income taxation of
19
deferred amounts, Company contributions, and/or the investment earnings
attributed thereto due to any Participant withdrawal right or other
Plan provision, the Committee, in its sole discretion, may terminate the
Plan or such Participant's participation in the Plan, and/or may declare
null and void any Plan provision with respect to affected Participants.
In addition, it is intended that this Plan comply with all provisions of
the Internal Revenue Code and regulations and rulings in effect from
time to time regarding the permissible deferral of compensation and
taxes thereon, and it is understood that this Plan does so comply. If
the laws of the United States or of any relevant state are amended or
construed in such a way as to make this Plan (or its intended deferral
of compensation and taxes) in whole or in part void, then the Deferred
Compensation Committee, in its sole discretion, may choose to terminate
the Plan or it may (to the extent it deems practicable) give effect to
the Plan in such a manner as it deems will best carry out the purposes
and intentions of this Plan.
ARTICLE VIII
Informal Funding
8.1 General Assets. All benefits in respect of a Participant under this
Plan shall be paid directly from the general funds of the Company, or a
Rabbi Trust created by the Company for the purpose of informally
funding the Plan, and other than such Rabbi Trust, if created, no
special or separate fund shall be established and no other segregation
of assets shall be made to assure payment. No Participant, spouse or
Beneficiary shall have any right, title or interest whatever in or to
any investments which the Company may make to aid the Company in
meeting its obligation hereunder. Nothing contained in this Plan, and
no action taken pursuant to its provisions, shall create or be
construed to create a trust of any kind, or a fiduciary relationship,
between the Company or any if its subsidiaries or affiliated companies
and any Employee, spouse, or Beneficiary. To the extent that any person
acquires a right to receive payments from the Company hereunder, such
rights are no greater than the right of an unsecured general creditor
of the Company.
8.2 Rabbi Trust. The Company may, at its sole discretion, establish a
grantor trust, commonly known as a Rabbi Trust, as a vehicle for
accumulating the assets needed to pay the promised benefit, but the
Company shall be under no obligation to establish any such trust or any
other informal funding vehicle.
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ARTICLE IX
Claims
9.1 Filing a Claim. Any controversy or claim arising out of or relating to
the Plan shall be filed with the Plan Administrator which shall make
all determinations concerning such claim. Any decision by the Plan
Administrator denying such claim shall be in writing and shall be
delivered to the Participant or Beneficiary filing the claim
("Claimant"). Such decision shall set forth the reasons for denial in
plain language. Pertinent provisions of the Plan document shall be
cited and, where appropriate, an explanation as to how the Claimant can
perfect the claim will be provided, including a description of any
additional material or information necessary to complete the claim, and
an explanation of why such material or information is necessary. The
claim denial also shall include an explanation of the claims review
procedures and the time limits applicable to such procedures, including
a statement of the Claimant's right to bring a civil action under
Section 502(a) of ERISA following an adverse decision on review. This
notice of denial of benefits will be provided within 90 days of the
Plan Administrator's receipt of the Claimant's claim for benefits. If
the Plan Administrator fails to notify the Claimant of its decision
regarding the Claimant's claim, the claim shall be considered denied,
and the Claimant shall then be permitted to proceed with an appeal as
provided in this Article. If the Plan Administrator determines that it
needs additional time to review the claim, the Plan Administrator will
provide the Claimant with a notice of the extension before the end of
the initial 90-day period. The extension will not be more than 90 days
from the end of the initial 90-day period and the notice of extension
will explain the special circumstances that require the extension and
the date by which the Plan Administrator expects to make a decision.
9.2 Appeal. A Claimant who has been completely or partially denied a
benefit shall be entitled to appeal this denial of his claim by filing
a written appeal with the Plan Administrator no later than sixty (60)
days after: (a) receipt of the written notification of such claim
denial, or (b) the lapse of ninety (90) days without an announced
decision notice of extension. A Claimant who timely requests a review
of his or her denied claim (or his or her authorized representative)
may review, upon request and free of charge, copies of all documents,
records and other information relevant to the denial and may submit
written comments, documents, records and other information relevant to
the claim to the Plan Administrator. The Plan Administrator may, in its
sole discretion and if it deems appropriate or necessary, decide to
hold a hearing with respect to the claim appeal. Following its review
of any additional information submitted by the Claimant, the Plan
Administrator shall render a decision on its review of the denied claim in
the following manner:
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(a) The Plan Administrator shall make its decision regarding the
merits of the denied claim within 60 days following His receipt
of the appeal (or within 120 days after such receipt, in a case
where there are special circumstances requiring extension of time
for reviewing the appealed claim). It shall deliver the decision
to the Claimant in writing. If an extension of time for reviewing
the appeal is required because of special circumstances, written
notice of the extension shall be furnished to the Claimant prior
to the commencement of the extension. The notice will indicate
the special circumstances requiring the extension of time and the
date by which the Plan Administrator expects to render the
determination on review.
(b) The review will take into account comments, documents, records
and other information submitted by the Claimant relating to the
claim without regard to whether such information was submitted or
considered in the initial benefit determination.
(c) The decision on review shall set forth a specific reason for the
decision, and shall cite specific references to the pertinent
Plan provisions on which the decision is based.
(d) The decision on review will include a statement that the Claimant
is entitled to receive, upon request and free of charge,
reasonable access to and copies of all documents, records, or
other information relevant to the Claimant's claim for benefits.
(e) The decision on review will include a statement describing any
voluntary appeal procedures offered by the plan and a statement
of the Claimant's right to bring an action under Section 502(a)
of ERISA.
(f) A Claimant may not bring any legal action relating to a claim for
benefits under the Plan unless and until the Claimant has
followed the claims procedures under the Plan and exhausted his
or her administrative remedies under such claims procedures.
ARTICLE X
General Conditions
10.1 Anti-assignment Rule. No interest of any Participant, spouse or
Beneficiary under this Plan and no benefit payable hereunder shall be
assigned as security for a loan, and any such purported assignment
shall be null, void and of no
22
effect, nor shall any such interest or any such benefit be subject in any
manner, either voluntarily or involuntarily, to anticipation, sale,
transfer, assignment or encumbrance by or through any Participant, spouse
or Beneficiary.
10.2 No Legal or Equitable Rights or Interest. No Participant or other
person shall have any legal or equitable rights or interest in this
Plan that are not expressly granted in this Plan. Participation in this
Plan does not give any person any right to be retained in the service
of the Company or any of its subsidiaries or affiliated companies. The
right and power of the Company (or any of its subsidiaries or
affiliated companies that is the Employee's employer) to dismiss or
discharge an Employee is expressly reserved.
10.3 No Employment Contract. Nothing contained herein shall be construed to
constitute a contract of employment between an Employee and the Company
or any of its subsidiaries or affiliated companies.
10.4 Headings. The headings of Sections are included solely for convenience
of reference, and if there is any conflict between such headings and
the text of this Plan, the text shall control.
10.5 Invalid or Unenforceable Provisions. If any provision of this Plan
shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions hereof and the
Plan Administrator may elect in its sole discretion to construe such
invalid or unenforceable provisions in a manner that conforms to
applicable law or as if such provisions, to the extent invalid or
unenforceable, had not been included.
10.6 Governing Law. To the extent not preempted by ERISA, the laws of the
State of Florida shall govern the construction and administration of the
Plan.
IN WITNESS WHEREOF, the Company has caused this Plan to be amended and restated,
effective as of November 1, 2002.
STEIN MART, INC.
By: /s/ D. Hunt Hawkins
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Its: Sr. Vice President, Human Resources
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ATTEST:
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