EXHIBIT 10.1
SEPARATION AGREEMENT
This Separation Agreement (hereinafter the “Agreement”) is made between Michael
Searles (hereinafter “Mr. Searles”) an individual, on behalf of himself and his
heirs and representatives, and Stage Stores, Inc., a Nevada corporation,
including its officers, directors, members, employees, affiliates, agents,
subsidiaries, attorneys, benefit plans and plan administrators, joint ventures,
successors and/or assigns (hereinafter collectively referred to as “Stage”). Mr.
Searles and Stage are collectively referred to in this Agreement as the
“Parties”.
In consideration of the covenants and agreements set forth in this Agreement,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Mr. Searles and Stage, intending to be legally
bound, agree as follows:
1.    Employment Agreement. Mr. Searles and Stage are parties to an Employment
Agreement dated September 12, 2011 (the “Employment Agreement”). Terms not
otherwise defined in this Agreement shall have the definitions given to them in
the Employment Agreement.
2.    Nature of Release. This Agreement terminates the Employment Agreement and
resolves all past, pending, threatened, or possible claims, if any there be,
arising under any state, federal or other law by Mr. Searles, his heirs and
assigns and any derivative claims against Stage, its parent, subsidiaries,
related companies, or any Stage related entity or its current and/or former
officers, directors, members, attorneys, agents and employees, arising out of
the Employment Agreement, any other agreement to which Mr. Searles and Stage are
parties (other than as described in Section 21 or specifically elsewhere
herein), or any other terms or conditions of Mr. Searles' employment with Stage.
3.    Employment. Mr. Searles acknowledges that his employment with Stage
terminates effective June 14, 2013 (the “Separation Date”). The execution of
this Agreement by Mr. Searles shall evidence Mr. Searles' resignation from his
capacities as President and Chief Operating Officer, South Hill Division as of
the Separation Date.
4.    Confidentiality of this Agreement. Mr. Searles agrees he will maintain the
terms of this Agreement in confidence in all circumstances and that he will only
apprise his immediate family and his chosen accountant and/or legal
representative to the extent necessary to perform services of the terms and
conditions of this Agreement except as it is necessary in the enforcement of
this Agreement. Mr. Searles shall also advise any member of his immediate family
and his chosen accountant and/or legal representative who is apprised of the
terms of this Agreement of the confidential nature of that information, and any
disclosure of the information by one of those individuals to third parties shall
be considered a breach of this Agreement by Mr. Searles and have the same
consequences. Notwithstanding the foregoing, Mr. Searles acknowledges that, if
required, this Agreement will be filed by Stage with the Securities and Exchange
Commission.
5.    Non-Admission. The Parties acknowledge that this Agreement evidences their
mutual agreement regarding Mr. Searles' voluntary termination of their
employment relationship and is not an admission of any wrongdoing or liability
on the part of Stage or Mr. Searles.

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6.    Texas Contract. The Parties agree that this Agreement constitutes a
contract to be governed by the laws of the State of Texas without regard to the
laws of any other location. The Parties agree that they shall be subject to
Texas jurisdiction (including, as applicable, either a Texas state or federal
court in Harris County, Texas or a duly appointed arbitrator) for any action to
enforce this Agreement or to remedy any breach of this Agreement.
7.    Health Insurance. Provided Mr. Searles is eligible for and timely
exercises his election for COBRA coverage, Stage will pay the full premium for
Mr. Searles' and his eligible dependants COBRA coverage for the first twelve
months following execution of this Agreement. Mr. Searles will be responsible
for the payment of COBRA premiums for the remainder of the COBRA period
following the initial twelve months.
8.    Life Insurance. Mr. Searles' life insurance coverage through Stage will
end at 12:01 a.m. local time on June 14, 2013. Conversion options are available
and will be made known to him through the insurance carrier.
9.    Termination Payments. Exclusive of any other consideration or benefit to
Mr. Searles set forth in this Agreement, in consideration of the agreements made
herein and as set forth in Sections 4.3.1 and 4.3.2 of the Employment Agreement,
Stage agrees to pay Mr. Searles the following amounts, in each case less
applicable payroll taxes, withholding and other deductions, which may be
required to be withheld under any provision of applicable laws, agreements or as
otherwise requested by Mr. Searles:
(a)
$720,000.00, representing one year's salary and one year's bonus target amount,
which shall be paid to Mr. Searles in twenty six (26) equal installments on
Stage's regular bi-weekly paydays, commencing with the first regular payday that
occurs eight (8) days after Mr. Searles returns this executed Agreement to Stage
(provided he executes this Agreement on or before July 5, 2013), and

(b)
Any Incentive Compensation for Stage's 2013 fiscal year prorated for 19
completed weeks out of 52 weeks, for which Stage's Board of Directors determines
Mr. Searles is entitled, shall be paid to Mr. Searles in a lump sum following
approval by Stage's Board of Directors on or around April 1, 2014.

For purposes of applying the provisions of Section 409A to this Agreement, each
separately identified amount to which Mr. Searles is entitled under this
Agreement shall be treated as a separate payment within the meaning of Section
409A. In addition, any series of installment payments under this Agreement,
including the payments set forth in Section 9(a), shall be treated as a right to
a series of separate payments under Section 409A, including Treas. Reg. Section
1.409A-2(b)(2)(iii).
10.    Arbitration. The Parties acknowledge that their employment relationship
and this Agreement relate to interstate commerce and agree that any disputes,
claims or controversies between them which may arise out of their employment
relationship and/or this Agreement shall be settled by arbitration. Any
arbitration shall be in accordance with the Rules of the American Arbitration
Association governing individual employee agreements and shall be undertaken
pursuant to the Federal Arbitration Act. Arbitration will be held before a
single arbitrator in

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Harris County, Texas unless the Parties mutually agree on another location. The
decision of the arbitrator will be enforceable in any court of competent
jurisdiction. The arbitrator may award costs and attorneys' fees in connection
with the arbitration to the prevailing party; however, in the arbitrator's
discretion, each party may be ordered to bear that party's own costs and
attorneys' fees to the extent a court of competent jurisdiction would have such
discretion. The Parties agree that the arbitrator shall have the authority to
award all legal and equitable relief that could be awarded by a court of
competent jurisdiction; however, nothing in this Agreement to arbitrate shall
preclude Stage from obtaining injunctive relief or other equitable relief from a
court of competent jurisdiction prohibiting any on-going breaches of this
Agreement by Mr. Searles while the arbitration is pending.
11.    Return of Property. Mr. Searles shall deliver to Stage at 10201 Main
Street, Houston, Texas 77025, Attention: EVP, Human Resources, on or before the
Separation Date, any and all property of Stage, including but not limited to
keys, computers, credit cards, company car, documents (including Confidential
Information as defined herein and as described in Section 14) and/or any other
Stage property in Mr. Searles' possession or control.
12.    Taxes. The Parties agree that all income and other applicable tax
liabilities, if any (including excise taxes and assessed interest and
penalties), related to this Agreement, are to be paid by the respective party.
13.    No Disparagement. Mr. Searles and Stage agree not to engage in any
disruptive or disparaging activities, directly and/or indirectly, concerning
each other. This includes, but is not limited to, disparaging comments,
correspondence or conversations with any and all persons; provided, however,
this Section 13 shall not prevent either party from testifying truthfully if
compelled to do so by subpoena, court order, or other legal process, after
providing written notice to the other party. Stage commits to enforce the “No
Disparagement” agreement with regard to all officers of Stage, but cannot
control or be responsible for actions or comments made by associates below the
officer level of Stage.
14.    Confidential Information. Mr. Searles acknowledges that the information,
observations and data obtained by him while employed by Stage concerning the
business affairs of Stage (“Confidential Information”) are the property of
Stage. Mr. Searles shall not disclose to any unauthorized person, or use for Mr.
Searles' own purposes, any Confidential Information without the prior written
consent of Stage's Chief Executive Officer or its Board of Directors, unless and
to the extent that the aforementioned matters become generally known to, and
available for use by, the public other than as a result of Mr. Searles' acts or
omissions. Mr. Searles shall deliver to Stage at 10201 Main Street, Houston,
Texas 77025, Attention: EVP, Human Resources, on or before the Separation Date,
all memoranda, notes, plans, records, reports, computer tapes, printouts and
software and other documents and data (including any and all copies thereof)
relating to or containing any portion of the Confidential Information, or
relating to the business of Stage which he may then possess or have under his
control.
15.    Protection of Confidential Information. Mr. Searles agrees that, due to
his access to the Confidential Information, he would inevitably use and/or
disclose that Confidential Information in breach of his confidentiality and
non-disclosure obligations if he worked in certain capacities or engaged in
certain activities for a period of time following his employment

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with Stage as an employee or consultant or on behalf of a Comparable Business in
a position that involves (i) responsibility and decision-making authority or
input at the executive level regarding any subject or responsibility, (ii)
decision-making responsibility or input at any management level in Mr. Searles'
individual area of assignment with Stage, or (iii) responsibility and
decision-making authority or input that otherwise allows the use of the
Confidential Information (collectively referred to as the “Restricted
Occupation”). Therefore, except with the prior written consent of Stage, for the
period of two years from the Separation Date, Mr. Searles agrees not to be
employed by, consult for or otherwise act on behalf of any Comparable Business
in any capacity in which he would be involved, directly or indirectly, in a
Restricted Occupation. As used in this Agreement, a “Comparable Business” means
any business that (a) operates apparel stores in small markets (i.e., with
populations of less than 50,000), and (b) operates a significant number of its
apparel stores (25% or more of its total apparel stores) in 10,000-30,000 square
foot formats, and (c) has sales in excess of $10 million per annum. Mr. Searles
acknowledges that this commitment is intended to protect the Confidential
Information and is not intended to be applied or interpreted as a covenant
against competition.
16.    Non-Solicitation. Mr. Searles agrees that, for a period of two years from
the Separation Date, he shall not directly or indirectly, on his own behalf or
for any other person or entity, induce or attempt to induce any employee of
Stage to leave the employ of Stage, hire any person who is an employee of Stage
as of or immediately prior to the time of such hiring, or induce or attempt to
induce any manufacturers' representative, customer, supplier, licensee, agent or
any other person or entity having a business relationship with Stage to cease
doing business with or reduce the volume of its business with Stage.
17.    Damages; Attorney's Fee. Notwithstanding anything in Section 10, because
of the difficulty of measuring economic losses to Stage as a result of any
breach of this Agreement by Mr. Searles, and because of the immediate and
irreparable damage that could be caused to Stage by such a breach for which it
would have no other remedy, Mr. Searles agrees that Stage may enforce the
provisions of this Agreement by injunctions and restraining orders against Mr.
Searles for such a breach in a court of competent jurisdiction pending
arbitration, in addition to any other available relief at law or equity. Also,
should Mr. Searles breach this Agreement, (i) any amounts paid by Stage to Mr.
Searles under Section 9 before the breach occurred must be refunded to Stage by
Mr. Searles within thirty (30) days of the breach. In any action to enforce this
Agreement, the prevailing party shall be entitled to recover its costs and a
reasonable attorney's fee.
18.    Release. As a material inducement to Stage to enter into this Agreement,
Mr. Searles hereby unconditionally releases and forever discharges Stage and
each of its owners, predecessors, successors, assigns, agents, directors,
officers, members, employees, representatives, attorneys, accountants,
divisions, subsidiaries, affiliates, and all persons acting by, through, under
or in concert with any of them for any and all charges, complaints, claims,
liabilities, obligations, promises, agreement, controversies, damages, actions,
causes of action, suits, rights, demands, cost, losses, debts and expenses
(including attorneys' fees and costs actually incurred) of any nature
whatsoever, known or unknown, suspected or unsuspected, including but not
limited to rights under any and all federal, state or local laws prohibiting
discrimination, breach of contract or public policy, wrongful or retaliatory
discharge, defamation, personal or business injury claims growing out of any
legal restrictions on Stage's

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right to terminate its employees that Mr. Searles now has, or holds or claims to
have owned or held or which Mr. Searles would at any time heretofore have had,
owned or held against Stage or any Stage related entity arising before or as of
the Effective Date. This specifically includes, without limitation, the federal
Age Discrimination and Employment Act of 1967 (“ADEA”), as amended, and all
comparable state or local laws prohibiting discrimination in employment based on
age. Mr. Searles hereby expressly waives the benefit of any statute or rule of
law which, if applied to this Agreement, would otherwise exclude from its
binding effect any claims not now known by Mr. Searles to exist.
To comply with the Older Worker's Benefit Protection Act of 1990 (the “Act”),
Stage has advised Mr. Searles of the legal requirements of the Act and fully
incorporates the legal requirements of the Act by reference into this Agreement
as follows:
a.
This Agreement is written in layman's terms, and Mr. Searles represents that he
understands and comprehends its terms;

b.
Mr. Searles has been advised of his rights to consult an attorney to review this
Agreement and have the benefit of an attorney through the settlement process;

c.
Mr. Searles does not waive any rights or claims that may arise after the date
this Agreement is executed;

d.
Mr. Searles affirms that he is receiving consideration beyond anything of value
to which he is already entitled; and

e.
Mr. Searles has been given a reasonable period of time to consider this
Agreement.

19.    Consideration Period, Limited Revocation And Effective Date. The Parties
agree that Mr. Searles was provided at least twenty-one (21) calendar days
during which to consider whether to sign this Agreement. The signed Agreement
must be delivered to Stage Stores, Inc., 10201 Main Street, Houston, Texas
77025, Attention: EVP, Human Resources, no later than 5:00 p.m. C.S.T., on July
5, 2013. In any event, Mr. Searles will have seven (7) calendar days from the
date he signs and delivers a copy of this Agreement to Stage Stores, Inc., 10201
Main Street, Houston, Texas 77025, Attention: EVP, Human Resources, during which
Mr. Searles may revoke this Agreement by delivering a signed and dated notice of
revocation to Stage Stores, Inc., 10201 Main Street, Houston, Texas 77025,
Attention: EVP, Human Resources. This Agreement becomes effective and
enforceable when the seven (7) day revocation period has expired if Mr. Searles
has not delivered a written revocation to Stage Stores, Inc., 10201 Main Street,
Houston, Texas 77025, Attention: EVP, Human Resources, before that date (the
“Effective Date”).
20.    Payment Of Other Compensation. Mr. Searles acknowledges that except as
set forth in Section 9, all compensation normally due him at the time of his
termination will be paid by Stage within fourteen (14) calendar days from the
Separation Date. Except as set forth in Section 9, any other benefits to which
Mr. Searles may be entitled shall be distributed in accordance with the terms of
the individual plan documents.

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21.    Long-Term Incentive Awards. The Parties acknowledge and agree that
pursuant to the terms and conditions of various award agreements (a) Mr. Searles
is not entitled to any other long-term incentive awards which were not
previously vested on the Separation Date, and (b) Mr. Searles will have sixty
(60) calendar days following the Separation Date (which date is the close of
business on Tuesday August 13, 2013) during which he can exercise previously
vested Stock Option and SARs award shares, and any unexercised Stock Option and
SARs awards will expire and be forfeited to Stage on that date.
22.    Section 16(b) Compliance. Mr. Searles acknowledges (a) that as an officer
of Stage he has received a copy of Stage's 2013 Insider Trading and Reporting
Policy For Reporting Persons (Directors, Executive Officers and Principal
Shareholders) (the “Policy”) and that he is a Section 16(a) Reporting Person as
identified on Exhibit A to the Policy, (b) that pursuant to Section 16(b) of the
Securities Exchange Act of 1934, as amended (“Section 16(b)”), directors,
executive officers and principal shareholders must disgorge profits received in
the event they purchase and sell, or sell and purchase, Stage's common stock or
other equity securities within a six month period (any transaction executed
within six months of an opposite transaction) (“short-swing profits”), (c) that
the exercise of a stock option or a SAR and the sale of the stock acquired does
not trigger liability for short-swing profits; however, the sale of the stock
acquired from the exercise of a stock option or a SAR by a former officer or
director of Stage will be matched against all purchases of Stage stock within
six months prior to the date of sale of the stock acquired from exercise of the
stock option or SAR; and is therefore reportable under Section 16(a) on Form 4;
and Section 16(b) remains applicable to former officers and directors for a
period of six months after they cease to be in those positions, (d) it is
becoming common practice for shareholders of public companies and their counsel
to monitor transactions reported to the SEC by directors, officers and principal
shareholders of those public companies in an effort to cause the disgorgement of
profits made by those persons, (e) in addition to the disgorgement of profits,
those shareholders also seek the reimbursement of their attorneys fees related
to their investigation of Section 16(b) violations even if a lawsuit is not
filed to recover the profits, and (f) directors and officers may also be subject
to SEC or court imposed civil penalties of up to $100,000. Therefore, Mr.
Searles acknowledges and agrees as follows:

•
Transactions by him after the Separation Date that occur within six months of an
opposite transaction that occurred before the Separation Date must be reported
by him on a Form 4, the preparation and electronic filing with the SEC of which
he agrees to be solely responsible,

•
Transactions by him after the Separation Date that do not occur within six
months of an opposite transaction that occurred before the Separation Date do
not have to be reported on a Form 4,

•
He need not file a Form 4 solely to indicate his resignation,

•
He will indemnify Stage against, and immediately reimburse Stage for, any
losses, including attorney's fees, Stage may incur as a result of any violation
by him of Section 16(b), and

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•
This Agreement does not effect any rights Mr. Searles may have as an Executive
or former Executive under the Stage Stores Directors and Officers Insurance
Policy coverage.

23.    Terms of This Agreement are Severable. If any provision of this Agreement
is held invalid, the invalidity shall not affect other provisions or
applications of this Agreement which can be given effect without the invalid
provision or applications; and to this end the provisions of this Agreement are
declared to be severable.
24.    Entire Agreement. The Parties agree that this Agreement contains the
entire agreement between them with respect to Mr. Searles' voluntary termination
of his employment and supersedes all prior and/or contemporaneous written or
oral agreements between them (other as described in Section 21 or specifically
elsewhere herein). The Parties also agree and acknowledge that no other promises
or agreements have been offered before this Agreement and that no other promise
or agreement between the Parties will be binding unless it is in writing and
signed by the Parties. The Parties further agree that upon the expiration of
seven (7) days following Mr. Searles's execution of this Agreement, all
provisions of the Employment Agreement shall be superseded by this Agreement.
25.    MR. SEARLES ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS AGREEMENT, KNOWS
AND UNDERSTANDS ITS CONTENT AND MEANING, AND HAS NOT BEEN COERCED OR THREATENED
INTO SIGNING IT. MR. SEARLES REPRESENTS THAT HE UNDERSTANDS THAT HE HAS 21 DAYS
(OR MORE) TO CONSIDER THIS AGREEMENT AND THAT HE MAY REVOKE THIS AGREEMENT
WITHIN 7 DAYS AFTER HE SIGNS IT. MR. SEARLES FURTHER REPRESENTS THAT HE FULLY
UNDERSTANDS HOW TO EXERCISE THAT RIGHT OF REVOCATION SHOULD HE CHOSE TO DO SO.
MR. SEARLES IS HEREBY ADVISED TO CONSULT WITH AN ATTORNEY OF MR. SEARLES'
CHOOSING REGARDING THE EFFECT OF THIS AGREEMENT PRIOR TO SIGNING IT.
[The balance of this page has been left blank intentionally; signature page to
follow.]

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The Parties enter into this Separation Agreement voluntarily and with full
knowledge of its contents.
READ THIS AGREEMENT CAREFULLY BEFORE SIGNING.
Signed this 18th day of June, 2013.

/s/ Michael Searles

Michael Searles

Signed this 19 day of June, 2013.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stage Stores, Inc.
 
 
 
 
 
 
 
 
 
 
By:
/s/ Ron Lucas
 
 
 
 
 
Name: Ron Lucas
 
 
 
 
 
Title: EVP, Human Resources
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

    

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ACKNOWLEDGMENTS

STATE OF NC
)
 
 
 
 
)
ss:
 
 
COUNTY OF Wake
)
 
 
 

On this 18 day of June, 2013, before me, a Notary Public, personally appeared
Michael Searles, to me known to be the person who executed the foregoing
Separation Agreement, and acknowledged that he executed it as his free and
voluntary act and deed.
Given under my hand and seal the day and year last above written.

/s/ Cynthia C. Beckert

Notary Public

My Commission Expires: 4/20/15
STATE OF TEXAS
)
 
 
 
 
)
ss:
 
 
COUNTY OF HARRIS
)
 
 
 

On this 19th day of June, 2013, before me, a Notary Public, personally appeared
Ron Lucas, to me known to be the identical person who executed the foregoing
Separation Agreement as the authorized representative of Stage Stores, Inc. and
acknowledged to me that he executed the same as his free and voluntary act and
deed and as the free and voluntary act and deed of such corporation, for the
uses and purposes therein set forth.
Given under my hand and seal the day and year last above written.
 
 
 
 
 
 
 
 
 
/s/ Sue E. Howton
 
 
 
 
 
Notary Public
 

My Commission Expires: 3/5/2015

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