Exhibit 10.1

DAVID H. STOVALL, JR.

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 David H. Stovall,
Jr. (“Executive”), is made as of December 2, 2008 (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

(d) Executive intentionally and wrongfully damages material assets of the
Company; or

(e) Executive intentionally and wrongfully discloses material Confidential
Information of the Company; or

(f) Executive intentionally and wrongfully engages in any competitive activity
which would constitute a material breach of the duty of loyalty; or

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(g) Executive intentionally and materially breaches any written material
employment policy or any material provision of the Company’s Ethics Policy,
which breach is not remedied by Executive within the Executive Cure Period ;

(h) Executive intentionally commits a material breach of this Agreement, which
breach is not remedied by Executive within the Executive Cure Period; 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 the Executive Cure
Period.

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.
Notwithstanding the foregoing, whether or not “intentional,” any action or
failure to act which the Company believes not in its best interests shall be
cured during the Executive Cure Period. Failure to meet performance standards or
objectives shall not constitute Cause for purposes hereof.

“Change in Control” means the occurrence of any of the following: (a) the Board
approves the sale of all or substantially all of the assets of the Company in a
single transaction or series of related transactions; (b) the Company sells
and/or one or more shareholders sells a sufficient amount of its capital stock
(whether by tender offer, original issuance, or a single or series of related
stock purchase and sale agreements and/or transactions) sufficient to confer on
the purchaser or purchasers thereof (whether individually or a group acting in
concert) beneficial ownership of at least 35% of the combined voting power of
the voting securities of the Company; (c) the Company is party to a merger,
consolidation or combination, other than any merger, consolidation or
combination that would result in the holders of the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company (or such surviving entity) outstanding immediately
after such merger, consolidation or combination; or (d) a majority of the board
of directors consists of individuals who are not Continuing Directors (for this
purpose, a Continuing Director is an individual who (i) was a director of the
Company on July 1, 2008 or (ii) whose election or nomination as a director of
the Company is approved by a vote of at least a majority of the directors then
comprising the Continuing Directors).

“Code” means the Internal Revenue Code of 1986, as amended. Any reference to a
specific provision of the Code shall be deemed to refer to any successor
provision thereto and the regulations promulgated thereunder.

“Company Cure Period” means a period of fifteen (15) days following receipt of
written notice from the Executive that the specified act or omission, if not
cured within such fifteen (15) day period would constitute “Good Reason” under
this Agreement for the Executive’s termination,

“Compensation Committee” means the Company’s Compensation Committee or, if no
such committee exists, the term Compensation Committee shall mean the Board of
Directors.

“Competing Business” means any business which (a) 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; (b) 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

 

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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 (c) 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.

“Executive Cure Period” shall mean the following period after receipt by
Executive of notice that a specified act or omission by the Executive will, if
not cured within the Executive Cure Period, constitute “Cause” under this
Agreement: such time as would be required for a reasonable person to cure such
act or omission, but in no event more than fifteen (15) business days.

“Good Reason” means the occurrence of any one or more of the following which is
not cured by the Company within the Company Cure Period:

 

(a) a material failure to pay to Executive compensation and benefits (as
described in Section 4) that have been earned, if any, by Executive; or

 

(b) 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

 

(c) the assignment to Executive of duties which results in a material diminution
in such position, authority, duties or responsibilities and which could
reasonably be believed to be demeaning, excluding any isolated and inadvertent
action not taken in bad faith and which is remedied within the Company Cure
Period; or

 

(d) any failure by the Company to comply with any of the material provisions of
this Agreement; or

 

(e) any requirement that Executive perform duties that, in the good faith
professional judgment of Executive, after consultation with the Board of
Directors, are inconsistent with ethical or lawful business practices; or

 

(f) Executive’s being required to relocate to a principal place of employment
more than one-hundred (100) miles from his current principal place of employment
in Jacksonville, Florida during the Term unless the Company shall pay all
reasonable costs and expenses related thereto; or

 

(g) a Change in Control has occurred and Executive gives written notice of
termination for Good Reason under this clause within sixty (60) days following
the Change of Control.

“Termination Date” means the date of Executive’s termination of employment, or
if the Executive continues to provide services to Stein Mart, Inc. or its 409A
affiliates following his termination of employment, such later date as is
considered a separation from service from Stein Mart, Inc. and its 409A
affiliates within the meaning of Code Section 409A. For purposes of this
Agreement, the Executive’s “termination of employment” shall be presumed to
occur when Stein Mart, Inc. and the Executive reasonably anticipate that no
further services will be performed by the Executive for Stein Mart, Inc. and its
409A affiliates or that the level of bona fide services the Executive will
perform as an employee of Stein Mart, Inc. and its 409A affiliates will
permanently decrease to no more than 20% of the average level of bona fide
services performed by the Executive (whether as an employee or independent
contractor) for Stein Mart, Inc. and its 409A affiliates over the immediately
preceding 36-month period (or such lesser period of services). Whether the
Executive has experienced a termination of employment shall be determined by
Stein Mart, Inc. in good faith and consistent with Section 409A of the Code.
Notwithstanding the foregoing, if the Executive takes a leave of absence for
purposes of

 

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military leave, sick leave or other bona fide reason, the Executive will not be
deemed to have experienced a termination of employment for the first six
(6) months of the leave of absence, or if longer, for so long as the Executive’s
right to reemployment is provided either by statute or by contract, including
this Agreement; provided that if the leave of absence is due to a medically
determinable physical or mental impairment that can be expected to result in
death or last for a continuous period of not less than six (6) months, where
such impairment causes the Executive to be unable to perform the essential
functions of his position of employment or any substantially similar position of
employment with or without a reasonable accommodation (hereinafter referred to
as the “Disability” of Executive), as determined by the Company’s board of
directors in its good faith discretion, the leave may be extended by Stein Mart,
Inc. for up to 29 months without causing a termination of employment. For
purposes hereof, the term “409A affiliate” means each entity that is required to
be included in Stein Mart, Inc.’s controlled group of corporations within the
meaning of Section 414(b) of the Code, or that is under common control with
Stein Mart, Inc. within the meaning of Section 414(c) of the Code; provided,
however, that the phrase “at least 50 percent” shall be used in place of the
phrase “at least 80 percent” each place it appears therein or in the regulations
thereunder.

SECTION 3. TITLE, POWERS AND RESPONSIBILITIES

(a) Title. Executive shall be the Chief Executive Officer of the Company.

(b) Powers and Responsibilities.

 

  (i) Executive shall use Executive’s 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 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
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 $826,000 per year
(“Annual Base Salary”), which amount may be periodically reviewed and increased
or left unchanged 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.

 

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(b) Earned Bonus. Executive shall be eligible to receive an earned bonus up to
100% of the Annual Base Salary (the “Earned Bonus”), subject to the Compensation
Committee guidelines and the Company’s goals. Such bonus (if any), shall be
payable within two (2) months of the end of the fiscal for which it applies.
Nothing in this Section 4(b) guarantees that any Earned Bonus will be paid.
Moreover, where a bonus depends on performance for a particular period (the
“Calculation Period”) and the Executive’s employment is terminated (whether with
or without Cause or Good Reason) prior to the end of the Calculation Period,
then (i) the amount of any Earned Bonus shall be calculated at the Company’s
election by either (x) annualizing the performance for the Calculation Period
which has already expired over the entire Calculation Period, or (y) by waiting
until the end of the Calculation Period to determine if the performance criteria
have been met, and (ii) the Earned Bonus shall equal that pro-rata portion
(equal to the percent of the Calculation Period during which Executive was
employed) of the bonus which would have been earned had the Executive’s
employment not been terminated.

(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. Contemporaneously herewith, the Company has
granted the Executive one million (1,000,000) stock options under the Option
Plan and the Company will grant the Executive two hundred thousand
(200,000) stock options under the Option Plan in January 2009.

(e) Deferred Compensation. Executive will participate in the Stein Mart
Executive Deferred Compensation Plan (the “Deferred Compensation Plan”). The
Company reserves the right to alter, modify, revise or eliminate the Deferred
Compensation Plan provided that any such change to the terms will apply to
Executive and similarly situated participants.

(f) Vacation, Holidays and Salary Continuation. Executive shall receive a total
of 27 days of paid vacation, or holidays on a pro rata basis during any 365 day
period of the Term pro rata. The amount may be adjusted in accordance with the
Company’s standard policy or as directed by the 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
all of Executive’s related costs, charges and expenses, including without
limitation reasonable attorneys’ fees, 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 materially 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:

 

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(1) 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; and

(2) Executive agrees to give the Company prompt written notice of any third
party claim (a “Claim”); provided, however, that such notice shall not be a
condition to the Company’s indemnity obligations hereunder unless the Company is
materially and adversely affected by the Executive’s failure or delay in giving
such notice. If the Company has reconfirmed, in writing and in a timely manner,
its obligations to indemnify the Executive for a particular Claim, then the
Executive will allow the Company to control the defense of such Claim as long as
the Company acts promptly and reasonably. The Executive will reasonably
cooperate with the Company in the defense of such claim. Any settlement by the
Company must be approved by the Executive, with such approval not to be
unreasonably withheld if the Executive receives a complete release of any such
Claim. Notwithstanding anything herein stated, if in the Executive’s reasonable
judgment, the interests of the parties conflict, the Executive may select, at
the Company’s expense, Executive’s own counsel as long as the Executive provides
the Company notice of such selection within ten (10) business days after
receiving service of a summons and complaint. Further, notwithstanding anything
herein stated, the Executive shall at all times have the right to fully
participate in such defense at its own expense directly or through counsel;
provided, however, if representation of both parties by the same counsel would
be inappropriate under applicable standards of professional conduct and either
party obtains a written legal opinion to such effect, then the reasonable
expense of separate counsel for the Executive shall be paid by the Company.

(i) Automobile Allowance. The Company will pay Executive $1,100 per month (paid
quarterly) which shall be used for the lease, purchase, maintenance and/or
operation of a vehicle that Executive is to use for business travel or may use
for personal travel. Executive shall be solely responsible for any taxes
associated with the automobile allowance afforded to him.

(j) Other Perquisites. The Company will provide Executive with such other
perquisites as may be made generally available to the highest level of senior
executives of the Company.

 

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(k) Relocation Assistance. The Company will pay Executive a one-time payment of
$150,000 on 1/2/09 to assist the Executive with the relocation of Executive, his
family and his principal residence from Charlotte, North Carolina to
Jacksonville, Florida. While the Executive maintains a residence in Charlotte,
North Carolina, but not to exceed one hundred and fifty (150) days from the
Effective Date, the Company, at the Company’s expense, shall provide Executive
with a furnished apartment in Jacksonville, Florida located in “The Strand”
complex at 1401 Riverplace Boulevard, #1608, Jacksonville, Florida, for the
Executive’s exclusive use. In addition, the Company will reimburse the Executive
for reasonable commercial transportation expenses incurred traveling between
Charlotte, NC and Jacksonville, FL for a period of ninety (90) days from the
Effective Date. Except as expressly set forth in this Section 5(k), the
Executive shall not be entitled to reimbursement for moving or relocation
expenses

(l) Payment Obligations. All amounts payable by the Company shall be paid
without notice or demand. The Executive shall not be obligated to seek other
employment in mitigation of the amounts payable under any provision of this
Agreement, the obtaining of any such other employment shall in no event effect
any reduction of the Company’s obligations to make the payments required to be
made under this Agreement.

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 upon
fifteen (15) days written notice to Executive, and Executive shall have the
right to terminate his employment and this Agreement at any time with or without
Good Reason, upon fifteen (15) days written notice to the Company; provided that
obligations under this Section 5, Section 6 and Section 7 shall survive
termination of the Agreement. The Board of Directors may delegate its powers to
terminate the Executive to the persons to whom the Executive reports and the
Board of Directors shall have the right to relieve the Executive of his duties
prior to the expiration of the fifteen (15) day notice term provided above
although the Agreement shall not be deemed terminated until the expiration of
such period.

(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) the 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 (or his estate) his earned but unpaid base salary and
Earned Bonus, if any, up to the date of his termination of employment, plus 100%
of his current total Annual Base Salary as specified in Section 4(a) (subject to
such withholdings as required by law) payable in twelve (12) equal monthly
installments, the first six (6) of which shall be delayed and shall be paid,
with interest, on the first day of the seventh month after the Termination Date,
with the remaining six (6) payments made on a monthly basis thereafter. Interest
shall be calculated based on the Prime interest rate published in the Wall
Street Journal on the Termination Date (the one year period following the
Termination Date is called the “Post Termination Payment Period”). 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; provided that if the taxable value of the continued life
and accident and disability coverage to Executive during the first six
(6) months following the Termination Date exceeds the annual dollar limit in
effect under Code Section 402(g)(1)(B) for the year of such termination, then
the Executive shall pay the premiums in excess of such limit for such coverage
during such six (6)-month period and after the end of such six (6)-month period,
the Company shall reimburse the Executive for the amount of the premiums paid by
the Executive, without interest thereon.

 

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(c) Termination by the Board of Directors for Cause or by Executive without Good
Reason. If the Board of Directors terminates the Executive’s employment for
Cause or the Executive resigns without Good Reason, the Company’s only
obligation to Executive under this Agreement shall be to pay to Executive (or
his estate) his earned but unpaid Annual Base Salary, and Earned Bonus, if any,
up to the date of his termination of employment. 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 date of termination of employment.

(d) Termination Due to the Death or Disability of Executive. The Executive’s
employment hereunder shall be terminated automatically upon the death or
Disability of the Executive. Upon such an event,

(1) the Company shall pay to Executive (or his estate) as soon as reasonably
practical thereafter his earned but unpaid base salary and Earned Bonus, if any,
through such date as is the end of the calendar month during which such
termination occurred;

(2) all of the Executive’s interests in the Company’s annual and long-term
incentive plans, including, but not limited to, the Executive’s interests in the
incentive compensation plans established pursuant to Section 4 above, will
automatically 100% vest, and the Executive (or his estate) will be entitled to
the immediate settlement of the Executive’s interests under the terms of such
plans; provided, however, that this clause shall be effective only to the extent
the provisions of such plans do not otherwise address vesting and time for
settlement of interests in the event of death or disability under such plans;
and

(3) the Company will fully cooperate with the Executive (or his family) to
assure that COBRA coverage shall be available to the maximum extent allowed by
applicable COBRA rules and regulations.

(e) Relinquishment of Corporate Positions. Executive shall automatically cease
to be an officer and/or director of the Company and its affiliates as of the
Termination Date.

(f) Limitation. Anything in this Agreement to the contrary notwithstanding,
Executive’s entitlement to or payments under this Agreement and 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 Code Section 4999, 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 (ii) 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 (iii) 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 I.A.1.a)(1)(a)(i) of Executive’s entitlement
to payments shall be made in the manner and in the order directed by Executive.

 

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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 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 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 (i) 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 (ii) 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 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 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

 

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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 Term and for a reasonable and limited period thereafter. Therefore,
during the 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 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. Notwithstanding the above, Executive
shall be entitled to retain ownership in all stock for Belk, Inc. which he owns
as of the date of execution of this Agreement, and in any future shares of Belk,
Inc. or any successor company, to which he may be entitled as a result of
merger, acquisition, stock split or reinvested dividends. If the Executive shall
breach the covenants contained in this Non-Competition provision, then 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 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) Specific Performance; Independence of Covenants. 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.

(f) Non-Solicitation. During the 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 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.

(g) 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 (the “Restricted Period”) 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.

(h) 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

 

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property of the Company and accordingly, Executive does hereby irrevocably
assign all Work Product developed by the Executive to such entity as the Company
shall specify and agrees: (i) to assign to the such entity, 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 (ii) 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: D. Hunt Hawkins

1200 Riverplace Boulevard, 5th Floor

Jacksonville, FL 32207

Facsimile: (904) 346-1297

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 by him.

(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.

 

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(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 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 of Directors 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.   DAVID H. STOVALL, JR. By:  

/s/ Linda M. Farthing

 

/s/ David H. Stovall, Jr.

  Linda M. Farthing, CEO  

 

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SCHEDULE A

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.