MICHAEL D. RAY
AGREEMENT
WITH
STEIN MART, INC.
This Agreement (this "Agreement") entered into in the City of
Jacksonville and State of Florida between Stein Mart, Inc., a Florida
corporation and its divisions, subsidiaries and affiliates (the "Company"), and
Michael D. Ray ("Executive"), is made as of July 8, 2005 (the "Effective Date").
In consideration of the promises and mutual covenants contained herein,
the parties, intending to be legally bound, agree as follows:
SECTION 1. TERM OF EMPLOYMENT
(a) Term. The Company agrees to employ Executive, and
Executive agrees to be employed by the Company, for a period of three
(3) year(s) beginning on the Effective Date (the "Term"). The Term will
be extended for successive one-year periods starting on the third
anniversary of the Effective Date and on each subsequent anniversary
date, unless Executive or the Company cancels the automatic extension
by providing written notice to the other at least 120 days prior to the
anniversary date.
SECTION 2. DEFINITIONS
"Board of Directors" means the Board of Directors of Stein Mart, Inc.
and any of its divisions, affiliates or subsidiaries.
"Cause" means the occurrence of any one or more of the following:
(a) Executive has been convicted of, or pleads guilty or
nolo contendere to, a felony involving dishonesty, theft,
misappropriation, embezzlement, fraud crimes against property or
person, or moral turpitude which negatively impacts the Company; or
(b) Executive intentionally furnishes materially false,
misleading, or omissive information to the Company or persons to whom
the Executive reports; or
(c) Executive intentionally fails to fulfill any assigned
responsibilities for compliance with the Sarbanes-Oxley Act of 2002 or
violates the same; or
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(d) Executive intentionally and wrongfully damages material
assets of the Company; or
(e) Executive intentionally and wrongfully discloses
material Confidential Information of the Employer; or
(f) Executive intentionally and wrongfully engages in any
competitive activity which would constitute a material breach of the
duty of loyalty; or
(g) Executive intentionally breaches any stated material
employment policy or any material provision of the Company's Ethics
Policy, or
(h) Executive intentionally commits a material breach of
this Agreement, or
(i) Executive intentionally engages in acts or omissions
which constitute failure to follow reasonable and lawful directives of
the Company, provided, however, that such acts or omissions are not
cured within five (5) days following the Company's giving notice to
Executive that the Company considers such acts or omissions to be
"Cause" under this Agreement.
No act, or failure to act, on the part of Executive shall be deemed
"intentional" if it was due primarily to an error in judgment or negligence, but
shall be deemed "intentional" only if done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that his action or
omission was in or not opposed to the best interests of the Company. Failure to
meet performance standards or objectives shall not constitute Cause for purposes
hereof.
"Change of Control" Change of Control means the occurrence of any of
the following: (a) the Board approves the sale of all or substantially all of
the assets of the Company in a single transaction or series of related
transactions; (b) the Company sells and/or one or more shareholders sells a
sufficient amount of its capital stock (whether by tender offer, original
issuance, or a single or series of related stock purchase and sale agreements
and/or transactions) sufficient to confer on the purchaser or purchasers thereof
(whether individually or a group acting in concert) beneficial ownership of at
least 35% of the combined voting power of the voting securities of the Company;
(c) the Company is party to a merger, consolidation or combination, other than
any merger, consolidation or combination that would result in the holders of the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Company (or such surviving entity)
outstanding immediately after such merger, consolidation or combination; or (d)
a majority of the board of directors consists of individuals who are not
Continuing Directors (for this purpose, a Continuing Director is an individual
who (i) was a director of the Company on March 1, 2001 or (ii) whose election or
nomination as a director of the Company is approved by a vote of at least a
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majority of the directors then comprising the Continuing Directors).
Notwithstanding the foregoing, a "Change of Control" does not include any event
under which a lender acquires ownership and/or control of management of the
Company pursuant to a default by the Company under the lending agreement(s) and
events occur subsequently that would otherwise constitute a Change of Control.
"Compensation Committee" means the Company's Compensation Committee or,
if no such committee exists, the term Compensation Committee shall mean the
Company's Board of Directors.
"Competing Business" means any business which (i) at the time of
determination, is substantially similar to the whole or a substantial part of
the business conducted by the Company or any of its divisions or affiliates;
(ii) at the time of determination, is operating a store or stores which, during
its or their fiscal year preceding the determination, had aggregate net sales,
including sales in leased and licensed departments, in excess of $10,000,000, if
such store or any such stores is or are located in a city or within a radius of
25 miles from the outer limits of a city where the Company, or any of its
divisions or affiliates, is operating a store or stores which, during their
fiscal year preceding the determination, had aggregate net sales, including
sales in leased and licensed departments, in excess of $10,000,000; and (iii)
had aggregate net sales at all locations, including sales in leased and licensed
departments and sales by its divisions and affiliates, during its fiscal year
preceding that in which the Executive first rendered personal services thereto,
in excess of $25,000,000.
"Disability shall mean Executive's incapacity due to physical or
mental illness or cause, which results in the Executive being unable to perform
his duties with Company on a full-time basis for a period of six (6) consecutive
months. Any dispute as to disability shall be conclusively determined by written
opinions rendered by two qualified physicians, one selected by Executive, and
one selected by Company.
"Earned Bonus" means the bonus paid in cash for the current year, if
any, pursuant to the Company's incentive compensation plans in effect from time
to time. Earned Bonus shall be prorated based on the ratio of the number of days
during such year that Executive was employed to 365. Earned Bonus shall not
include any options or restricted shares earned pursuant to any long term
incentive plan of the Company in effect from time to time
"Good Reason" means the occurrence of any one or more of the
following:
(i) a material and continuing failure to pay to Executive
compensation and benefits (as described in Section 4)
that have been earned, if any, by Executive, except
failure to pay or provide compensation or benefits
that are in dispute between the Company and the
Executive unless such failure continues following the
resolution of such dispute; or
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(ii) a material reduction in Executive's compensation or
benefits (as described in Section 4) which is
materially more adverse to the Executive than similar
reductions applicable to other executives of a
similar level of status within the Company as
Executive; or
(iii) The assignment to Executive of duties which results
in a material diminution in such position, authority,
duties or responsibilities, excluding any isolated
and inadvertent action not taken in bad faith and
which is remedied by the Company within fifteen (15)
days after receipt of notice thereof given by
Executive; or
(iv) Any failure by the Company to comply with any of the
material provisions of this Agreement and which is
not remedied by the Company within thirty (30) days
after receipt of notice thereof given by Executive;
or
(v) any requirement that Executive perform duties that,
in the good faith professional judgment of Executive,
after consultation with the Board of Directors of the
Company, are inconsistent with ethical or lawful
business practices; or
(vi) Executive's being required to relocate to a principal
place of employment more than one-hundred (100) miles
from his current principal place of employment in
Jacksonville, Florida during the Term unless the
Company shall pay all reasonable costs and expenses
related thereto.
Provided, however, after a Change of Control, the term "Good Reason" shall also
mean any restructuring or reassignment of any of the Executive's
responsibilities, in a manner that diminishes them or is materially adverse to
the Executive, from that which was in effect at the time of the Change of
Control.
"Termination Date" means the last day Executive actively provides services to
Company or written notice by the Board of Directors or Chief Executive Officer
of the last date Executive is to be employed, whichever is earlier.
SECTION 3. TITLE, POWERS AND RESPONSIBILITIES
(a) Title. Executive shall be the Senior Vice President,
Director of Stores of the Company or such other title as designated by
the Chief Executive Officer or the Company's Board of Directors.
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(b) Powers and Responsibilities.
(i) Executive shall use Executives best efforts to
faithfully perform the duties of his employment and
shall perform such duties as are usually performed
by a person serving in Executive's position with a
business similar in size and scope as the Company and
such other additional duties as may be prescribed from
time to time by the Company which are reasonable and
consistent with the Company's operations, taking into
account officer's expertise and job responsibilities.
Executive agrees to devote Executive's full business
time and attention to the business and affairs of the
Company. Executive shall serve on such boards and in
such offices of the Company or its subsidiaries as
the Company's Board of Directors reasonably requests.
(ii) Executive, as a condition to his employment under
this Agreement, represents and warrants that he can
assume and fulfill responsibilities described in
Section 3(b)(i) without any risk of violating any
non-compete or other restrictive covenant or other
agreement to which he is a party. During the
Employment Term Executive shall not enter into any
agreement that would preclude, hinder or impair his
ability to fulfill responsibilities described in
Section 3(b)(i) specifically or this Agreement
generally.
SECTION 4. COMPENSATION AND BENEFITS
(a) Annual Base Salary. Executive's base salary shall be
$275,000.00 per year ("Annual Base Salary"), which amount may be
periodically reviewed at the discretion of the Compensation Committee.
The Annual Base Salary shall be payable in accordance with the
Company's standard payroll practices and policies and shall be subject
to such withholdings as required by law or as otherwise permissible
under such practices or policies.
(b) Earned Bonus. Executive shall be eligible to receive an
Earned Bonus. Nothing in this Section 4(b) guarantees that any Earned
Bonus will be paid.
(c) Employee Benefit Plans. Executive shall be entitled to
receive the benefits described in Schedule A attached hereto, if and
for as long as the Company sponsors such plans and such plans remain in
effect for other executives with the same level of status as Executive.
(d) Stock Options. The Board of Directors, in its
discretion, may grant rights to Executive under the Stein Mart, Inc.
Omnibus Plan (the "Option Plan") on terms set by the Board of
Directors.
(e) Deferred Compensation. Executive may participate in the
Stein Mart Executive Deferred Compensation Plan (the "Deferred
Compensation Plan"). The Company reserves the right to alter, modify,
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revise or eliminate the Deferred Compensation Plan provided that any
such change to the terms will apply to Executive and similarly situated
participants.
(f) Vacation, Holidays and Salary Continuation. Executive
shall receive a total of 27 days of paid vacation, or holidays on a pro
rata basis during any 365 day period of the Term pro rata. The amount
may be adjusted in accordance with the Company's standard policy or as
directed by the Company's Board of Directors. Any vacation or holiday
leave time not used during any 365 day period of the Term will not
carry forward to the next 365 period and will be forfeited. Executive
will also participate in the Company's Management Salary Continuation
Plan as in effect from time to time. The Company reserves the right to
alter, modify, revise or eliminate the Management Salary Continuation
Plan provided that any such change to the terms will apply to Executive
and similarly situated participants.
(g) Expense Reimbursements. Executive shall have the right
to expense reimbursements in accordance with the Company's standard
policy on expense reimbursements as in effect from time to time.
(h) Indemnification. With respect to Executive's acts or
failures to act during his employment in his capacity as an officer,
employee or agent of the Company, Executive shall be entitled to
indemnification from the Company, and to liability insurance coverage
(if any), on the same basis as other officers of the Company. Executive
shall be indemnified by Company, and Company shall pay Executive's
related expenses when and as incurred, all to the full extent permitted
by law. Subject to applicable law, the Company reserves the right to
discontinue indemnification in the event the Company determines that
the Executive has breached this Agreement or the Executive has or
intends to advance a business or legal position contrary to the
Company's interests. Notwithstanding the foregoing, Executive shall not
be entitled to any indemnification if a judgment or other final
adjudication establishes that any act or omission of Executive was
material to the cause of action so adjudicated and that such act or
omission constituted: (i) a criminal violation, unless Executive had
reasonable cause to believe that Executive's conduct was lawful or had
no reasonable cause to believe that such conduct was unlawful, (ii) a
transaction from which Executive derived an improper personal benefit,
or (iii) willful misconduct or a conscious disregard for the best
interests of the Company
(i) Automobile Allowance. The Company will pay Executive
$1,100.00 per month (paid quarterly) which shall be used for the lease,
purchase, maintenance and/or operation of a vehicle that Executive is
to use for business travel or may use for personal travel. Executive
shall be solely responsible for any taxes associated with the
automobile allowance afforded to him.
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(j) Other Perquisites. The Company will provide Executive
with such other perquisites as may be made generally available to the
highest level of senior executives of the Company.
SECTION 5. TERMINATION OF EMPLOYMENT
(a) General. The Board of Directors shall have the right to
terminate Executive's employment and this Agreement at any time with or
without Cause, and Executive shall have the right to terminate his
employment and this Agreement at any time with or without Good Reason;
provided that obligations under this Section 5, Section 6 and Section 7
shall survive termination of the Agreement.
(b) Termination by Board of Directors without Cause or by
Executive for Good Reason. If (i) the Board of Directors terminates
Executive's employment without Cause, or (ii) Executive resigns for
Good Reason, then in either of those circumstances, the Company's only
obligation to Executive under this Agreement shall be to pay Executive
his earned but unpaid base salary, if any, up to the Termination Date,
plus 200% of his current total Annual Base Salary as specified in
Section 4(a) (subject to such withholdings as required by law) payable
in forty-eight equal semi-monthly installments during the two year
period (the "Post Termination Payment Period") immediately following
such termination. During the Post Termination Payment Period the
Executive shall also continue to receive, at the Company's cost,
medical, dental, life and accident and disability insurance with
coverage consistent with the lesser of (i) the coverage in effect at
Executive's termination, or (ii) the coverage in effect from time to
time as applied to persons in positions similar to the position held by
Executive at the time of termination.
(c) Termination by the Board of Directors for Cause or by
Executive without Good Reason. If the Board of Directors of the Company
terminates Executive's employment for Cause or Executive resigns
without Good Reason, the Company's only obligation to Executive under
this Agreement shall be to pay Executive his earned but unpaid Annual
Base Salary, if any, up to the Termination Date. The Company shall only
be obligated to make such payments and provide such benefits under any
employee benefit plan, program or policy in which Executive was a
participant as are explicitly required to be paid to Executive by the
terms of any such benefit plan, program or policy following the
Termination Date.
(d) Termination for Disability. Subject to the definitions
and requirements of Section 2 ("Disability"), after six (6) consecutive
months of such disability leave of absence, Executive's service may be
terminated by Company. In the event Executive is terminated from
employment due to Disability, the Company shall:
(1) pay Executive his Annual Base Salary through the
end of the month in which his employment terminates as soon as
practicable after his employment terminates;
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(2) pay Executive his Earned Bonus, pro rata and if
any, for the fiscal year in which such termination of
employment occurs;
(3) pay Executive an additional nine (9) months of
compensation at the then-Annual Base Salary;
(4) pay or cause the payment of benefits to which
Executive is entitled under the terms of any disability plan of
the Company covering the Executive at the time of such
Disability:
(5) pay premiums for COBRA coverage as provided in
Section 5(g); and
(6) make such payments and provide such benefits as
otherwise called for under the terms of each other employee
benefit plan, program and policy in which Executive was a
participant; provided no payments made under Section 5(d)(2) or
Section 5(d)(3) shall be taken into account in computing any
payments or benefits described in this Section 5(d)(4).
(7) in the event the Executive has any options or
restricted shares of which are not vested on the date of
termination for Disability, then pay to the executive (i) as to
any unvested options, the net value of the excess, if any, of
closing price of the Company's shares on the NASDAQ for the day
on which the Disability occurred and the exercise price of such
unvested options multiplied by the number of shares subject to
options which failed to vest; and (ii) as to any unvested
restricted shares, the value of the closing price of the
Company's shares on the NASDAQ for the day on which the
Disability occurred multiplied by the number of restricted
shares, if any, which failed to vest due to such termination of
employment for Disability.
Notwithstanding the Executive's Disability, during the period of
Disability leave, Executive shall be paid in full (net of insurance) as if he or
she were actively performing services. Executive agrees to simultaneously
utilize available leave under the Family and Medical Leave Act of 1993 during
such disability leave of absence. During the period of such Disability leave of
absence, the Board of Directors may designate someone to perform Executive's
duties. Executive shall have the right to return to full-time service so long as
he is able to resume and faithfully perform his full-time duties.
(e) Death. (i) If Executive's employment terminates as a
result of his death, the Company shall:
(1) pay to Executive's designated beneficiaries or
estate his Annual Base Salary through the end of the month in
which his employment terminates as soon as practicable after his
death;
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(2) pay to Executive's designated beneficiaries or
estate his Earned Bonus, when actually determined, for the year
in which Executive's death occurs, and
(3) make such payments and provide such benefits as
otherwise called for under the terms of each other employee
benefit plan, program and policy in which Executive was a
participant; provided no payments made under Section 5(e)(2)
shall be taken into account in computing any payments or
benefits described in this Section 5(e)(3).
(4) in the event the Executive has any options or
restricted shares of which are not vested on the date of
termination for Death, then pay to the executive (i) as to any
unvested options, the net value of the excess, if any, of
closing price of the Company's shares on the NASDAQ for the day
on which the Death occurred and the exercise price of such
unvested options multiplied by the number of shares subject to
options which failed to vest; and (ii) as to any unvested
restricted shares, the value of the closing price of the
Company's shares on the NASDAQ for the day on which the Death
occurred multiplied by the number of restricted shares, if any,
which failed to vest due to such termination of employment for
Death.
Any amounts payable to Executive under this Agreement which are unpaid at the
date of Executive's death or payable hereunder or otherwise by reason of his
death, shall be paid in accordance with the terms of this Agreement to
Executive's Estate.
(f) Termination Following a Change in Control. If the
Executive's Termination Date occurs within two years following a Change
in Control (i) on account of termination by the Company for reasons
other than Cause, or (ii) on account of termination by the Executive
for Good Reason, or (iii) if the Executive is willing and able to
continue employment with the Company but the Company exercises its
right to either not renew this Agreement as provided in Section 1(a)
hereof, or offers to renew this Agreement on terms materially less
favorable to the Executive than provided herein, then in any such case
the Executive shall receive from the Company a lump sum payment equal
to 200% of Executive's Annual Base Salary then in effect plus an amount
equal to 200% of the Earned Bonus in the year of the Termination Date.
For purposes of this subsection (f) Earned Bonus shall not be prorated
and shall be an amount equal to "Target" bonus as defined in the
Company's incentive compensation plan in effect from time to time.
(g) Benefit Continuation. Provided Executive is eligible for
COBRA coverage, and has not been terminated from employment for Cause
or resigned without Good Reason, then the Company shall pay the
Executive's COBRA premiums for a period of eighteen months from the
Termination Date in order to continue Executive's health insurance
coverage and maintain such coverage in effect.
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(h) Relinquishment of Corporate Positions. Executive shall
automatically cease to be an officer and/or director of the Company and
its affiliates as of his Termination Date.
(i) Payment of Benefits. If the Executive is terminated in
accordance with Section 5(b) (relating to termination without Cause or
with Good Reason) or 5(f) (relating to termination following a Change
of Control):
(1) In addition to all other amounts payable to
Executive under this Section 5, the Executive shall be entitled
to receive, upon written request, all benefits payable to him
under any of Company's tax-qualified employee benefit plans and
any other plan, program or arrangement relating to deferred
compensation, retirement or other benefits including, without
limitation, any profit sharing plan, 401(k), employee stock
ownership plan, or any plan established as a supplement to any
of the aforementioned plans or expressly provided by other
provisions of this Agreement, whether now existing or hereafter
established prior to the Termination Date, with additional
service and benefit credits (based on not less than the amount
of salary and Earned Bonus Executive would have received under
this Agreement had his services not terminated) for periods
through the end of the then current Employment Term.
(j) Limitation. Anything in this Agreement to the contrary
notwithstanding, Executive's entitlement to or payments under any other
plan or agreement shall be limited to the extent necessary so that no
payment to be made to Executive on account of termination of his
employment with the Company will be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), as then in effect, but only if, by reason of such limitation,
Executive's net after tax benefit shall exceed the net after tax
benefit if such reduction were not made. "Net after tax benefit" shall
mean (i) the sum of all payments and benefits that Executive is then
entitled to receive under any section of this Agreement or other plan
or agreement that would constitute a "parachute payment" within the
meaning of Section 280G of the Code, less (i) the amount of federal
income tax payable with respect to the payments and benefits described
in clause (i) above calculated at the maximum marginal income tax
rate for each year in which such payments and benefits shall be paid to
Executive (based upon the rate in effect for such year as set forth in
the Code at the time of the first payment of the foregoing), less (ii)
the amount of excise tax imposed with respect to the payments and
benefits described in clause (i) above by Section 4999 of the Code. Any
limitation under this Section 5(j)of Executive's entitlement to
payments shall be made in the manner and in the order directed by
Executive.
SECTION 6. COVENANTS BY EXECUTIVE
(a) Company Property. Upon the termination of Executive's
employment for any reason, Executive shall promptly return all Company
Property which had been entrusted or made available to Executive by the
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Company. "Property" means all records, files, memoranda, communication,
reports, price lists, plans for current or prospective business
operations, customer lists, drawings, plans, sketches, keys, codes,
computer hardware and software and other property of any kind or
description prepared, used or possessed by Executive during Executive's
employment by the Company (and any duplicates of any such Property)
together with any and all information, ideas, concepts, discoveries,
processes, intellectual property, inventions and the like conceived,
made, developed or acquired at any time by Executive individually or
with others during Executive's employment which relate to the Company
or its products or services or operations. Concurrent with this
Agreement Executive agrees to execute an agreement governing and
protecting the Company's intellectual property, a copy of which is
attached as Exhibit B.
(b) Trade Secrets. Executive agrees that Executive shall
hold in a fiduciary capacity for the benefit of the Company and shall
not directly or indirectly use or disclose any Trade Secret that
Executive may have acquired during the term of Executive's employment
by the Company for so long as such information remains a Trade Secret.
"Trade Secret" means information, including, but not limited to,
technical or non-technical data, a formula, a pattern, a compilation, a
program, a device, a method, a technique, a drawing or a process that
(1) derives economic value, actual or potential, from not being
generally known to, and not being generally readily ascertainable by
proper means by, other persons who can obtain economic value from its
disclosure or use and (2) is the subject of reasonable efforts by the
Company to maintain its secrecy. This Section 6(b) is intended to
provide rights to the Company which are in addition to, not in lieu of,
those rights the Company has under the common law or applicable
statutes for the protection of trade secrets.
(c) Confidential Information. During the Employment Term and
continuing thereafter indefinitely, Executive shall hold in a fiduciary
capacity for the benefit of the Company, and shall not directly or
indirectly use or disclose, any Confidential Information that Executive
may have acquired (whether or not developed or compiled by Executive
and whether or not Executive is authorized to have access to such
information) during the term of, and in the course of, or as a result
of Executive's employment by the Company without the prior written
consent of the Board of Directors unless and except to the extent that
such disclosure is (i) made in the ordinary course of Executive's
performance of his duties under this Agreement or (ii) required by any
subpoena or other legal process (in which event Executive will give the
Company prompt notice of such subpoena or other legal process in order
to permit the Company to seek appropriate protective orders).
"Confidential Information" means any secret, confidential or
proprietary information possessed by the Company or any of its
subsidiaries or affiliates, including, without limitation, trade
secrets, customer or supplier lists, details of client or consultant
contracts, current and anticipated customer requirements, pricing
policies, price lists, market studies, business plans, operational
methods, marketing plans or strategies, advertising campaigns,
information regarding customers or suppliers, computer software
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programs (including object code and source code), data and
documentation data, base technologies, systems, structures and
architectures, inventions and ideas, past current and planned research
and development, compilations, devices, methods, techniques, processes,
financial information and data, business acquisition plans and new
personnel acquisition plans and the terms and conditions of this
Agreement that has not become generally available to the public.
(d) Non-Competition. Executive recognizes that his duties
will entail the receipt of Trade Secrets and Confidential Information
as defined in this Section 6. Those Trade Secrets and Confidential
Information have been developed by the Company at substantial cost and
constitute valuable and unique property of the Company. Accordingly,
the Executive acknowledges that protection of Trade Secrets and
Confidential Information is a legitimate business interest. Executive
agrees not to compete with the Company during the Employment Term and
for a reasonable and limited period thereafter. Therefore, during the
Employment Term and for a period of two years thereafter, the Executive
shall not have an investment of $100,000.00 or more in a Competing
Business (as defined herein) and shall not render personal services to
any such Competing Business in any manner, including, without
limitation, as owner, partner, director, trustee, officer, employee,
consultant or advisor thereof. If the Executive shall breach the
covenants contained in this NonCompetition provision, the Company shall
have no further obligation to make any payment to the Executive
pursuant to this Agreement and may recover from the Executive all such
damages as it may be entitled to at law or in equity. In addition, the
Executive acknowledges that any such breach is likely to result in
irreparable harm to the Company. The Company shall be entitled to
specific performance of the covenants in this Section 6, including
entry of a temporary restraining order in state or federal court,
preliminary and permanent injunctive relief against activities in
violation of this Section 6, or both, or other appropriate judicial
remedy, writ or order, in addition to any damages and legal expenses
which the Company may be legally entitled to recover. Executive
acknowledges and agrees that the covenants in this Section 6 shall be
construed as agreements independent of any other provision of this
Agreement or any other agreement between the Company and Executive, and
that the existence of any claim or cause of action by Executive against
the Company, whether predicated upon this Agreement or any other
agreement, shall not constitute a defense to the enforcement by the
Company of such covenants. The provisions of this subsection (d) shall
not be applicable to Executive if Executive is terminated from
employment without Cause or the Executive resigns from employment for
Good Reason
(e) Non-Solicitation. During the Employment Term and for a
period of two years hereafter (such period is referred to as the "No
Recruit Period"), the Executive will not solicit, either directly or
indirectly, any person that he knows or should reasonably know to be an
employee of the Company, whether any such employees are now or
hereafter through the No Recruit Period so employed or engaged to
terminate their employment with the Company. The foregoing is not
intended to limit any legal rights or remedies that any employee of the
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Company may have under common law with regard to any interference by
Executive at any time with the contractual relationship the Company may
have with any of its employees.
(f) Reasonable and Continuing Obligations. Executive agrees
that Executive's obligations under this Section 6 are obligations which
will continue beyond the date Executive's employment terminates and
that such obligations are reasonable, fair and equitable in scope. The
terms and duration are necessary to protect the Company's legitimate
business interests and are a material inducement to the Company to
enter into this Agreement. Executive further acknowledges that the
consideration for this Section 6 is his employment or continued
employment. Executive will not be paid any additional compensation
during this Restricted Period for application or enforcement of the
restrictive covenants contained in this Section 6.
(g) Work Product. The term "Work Product" includes any and
all information, programs, concepts, processes, discoveries,
improvements, formulas, know-how and inventions, in any form
whatsoever, relating to the business or activities of the Company, or
resulting from or suggested by any work developed by the Executive in
connection with the Company, or by the Executive at the Company's
request. Executive acknowledges that all Work Product developed during
the Term is property of the Company and accordingly, Executive does
hereby irrevocably assign all Work Product developed by the Executive
to the Business Manager and agrees: (a) to assign to the Business
Manager, free from any obligation of the Company, all of the
Executive's right, title and interest in and to Work Product conceived,
discovered, researched, or developed by the Executive either solely or
jointly with others during the term of this Agreement and for three (3)
months after the termination or nonrenewal of this Agreement; and
(b) to disclose to the Company promptly and in writing such Work
Product upon the Executive's acquisition thereof.
SECTION 7. MISCELLANEOUS
(a) Notices. Notices and all other communications shall be
in writing and shall be deemed to have been duly given when personally
delivered or when mailed by United States registered or certified mail.
Notices to the Company shall be sent to:
STEIN MART, INC
Attention: Hunt Hawkins
1200 Riverplace Boulevard, 5th Floor
Jacksonville, FL 32207
Facsimile: (904) 346-1297
13
Notices and communications to Executive shall be sent to the address
Executive most recently provided to the Company.
(b) No Waiver. No failure by either the Company or Executive
at any time to give notice of any breach by the other of, or to require
compliance with, any condition or provision of this Agreement shall be
deemed a waiver of any provisions or conditions of this Agreement.
(c) Governing Law. This Agreement shall be governed by
Florida law without reference to the choice of law principles thereof.
Any litigation that may be brought by either the Company or Executive
involving the enforcement of this Agreement or any rights, duties, or
obligations under this Agreement, shall be brought exclusively before a
court of competent jurisdiction in and for Duval County, Florida.
(d) Assignment. This Agreement shall be binding upon and
inure to the benefit of the Company and any successor in interest to
the Company or any segment of such business. The Company may assign
this Agreement to any affiliate or successor that acquires all or
substantially all of the assets and business of the Company or a
majority of the voting interests of the Company. The Company will
require any successor (whether direct or indirect, by operation of law,
by purchase, merger, consolidation or otherwise to all or substantially
all of the business and/or assets of Company) to expressly assume and
agree to perform this Agreement in the same manner and to the same
extent that Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall
mean Company as defined above and, unless the context otherwise
requires, any successor to its business and/or assets as aforesaid
which assumes and agrees to perform this Agreement by operation of law,
or otherwise. Executive's rights and obligations under this Agreement
are personal and shall not be assigned or transferred.
(e) Other Agreements. This Agreement replaces and merges any
and all previous agreements and understandings regarding all the terms
and conditions of Executive's employment relationship with the Company,
and this Agreement constitutes the entire agreement between the Company
and Executive with respect to such terms and conditions.
(f) Amendment. No amendment to this Agreement shall be
effective unless it is in writing and signed by the Company and by
Executive.
(g) Invalidity and Severability. If any part of this
Agreement is held by a court of competent jurisdiction to be invalid or
otherwise unenforceable, the remaining part shall be unaffected and
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shall continue in full force and effect, and the invalid or otherwise
unenforceable part shall be deemed not to be part of this Agreement.
(h) Litigation. In the event that either party to this
Agreement institutes litigation against the other party to enforce his
or its respective rights under this Agreement, each party shall pay its
own costs and expenses incurred in connection with such litigation. As
a material part of the consideration for this Agreement, BOTH PARTIES
HERETO WAIVE ANY RIGHT TO A TRIAL BY A JURY in the event of any
litigation arising from this Agreement.
(i) Counterparts. This Agreement may be executed in
counterparts each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(j) Executive Recusal. Executive shall recuse himself from
all deliberations of the Board regarding this Agreement, Executive's
employment by the Company or related matters.
IN WITNESS WHEREOF, the Company and Executive have executed this
Agreement effective as of the Effective Date.
STEIN MART, INC. Michael D. Ray
By: /s/ Michael D. Fisher /s/ Michael D. Ray
----------------------------------- --------------------------
Name: Michael D. Fisher
Title: President & CEO
Date: 7/11/05 Date: 7/6/05
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SCHEDULE A
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BENEFITS
1. Retirement Plan/Life Insurance/AD&D
-----------------------------------
The Executive shall be entitled to participate in all retirement plans and
will be entitled to life insurance and AD&D benefits which other senior
executives of the Company or affiliates of the Company are eligible.
2. Long-Term Disability
--------------------
The Executive shall be entitled to participate in all Long-Term and Life
Time Disability plans which other senior executives of the Company or
affiliates of the Company are eligible.
3. Medical/Dental Benefits
-----------------------
The Executive shall be entitled to medical/dental benefits which other
senior executives of the Company or affiliates of the Company are eligible.
A-1