Exhibit 10.1

STEIN MART, INC.

2018 OMNIBUS INCENTIVE PLAN

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TABLE OF CONTENTS

 

1.   Purpose; Eligibility      1     1.1   General Purpose      1     1.2  
Eligible Award Recipients      1     1.3   Available Awards      1   2.  
Definitions      1   3.   Administration      8     3.1   Authority of Committee
     8     3.2   Committee Decisions Final      9     3.3   Delegation      9  
  3.4   Committee Composition      10     3.5   Indemnification      10   4.  
Shares Subject to this Plan      11   5.   Eligibility      12     5.1   General
     12     5.2   Eligibility for Specific Awards      12     5.3   Ten Percent
Shareholders      12   6.   Option Provisions      13     6.1   Term      13    
6.2   Exercise Price of an Incentive Stock Option      13     6.3   Exercise
Price of a Non-qualified Stock Option      13     6.4   Consideration      13  
  6.5   Incentive Stock Option $100,000 Limitation      14     6.6   Dividend
Equivalents on Options      14   7.   Provisions of Awards Other Than Options   
  14     7.1   Stock Appreciation Rights      14     7.2   Restricted Awards   
  15     7.3   Performance Share Awards      18     7.4   Other Equity-Based and
Cash Awards      19   8.   Securities Law Compliance      20   9.   Use of
Proceeds from Stock      20   10.   Miscellaneous      20     10.1  
Acceleration of Exercisability and Vesting      20     10.2   Shareholder Rights
     20     10.3   No Employment or Other Service Rights      20     10.4  
Withholding Obligations      21   11.   Adjustments Upon Changes in Stock     
21   12.   Termination.      21     12.1   Termination in General.      21  

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  12.2   Upon Termination Event in Connection with Death.      22     12.3  
Upon Termination Event in Connection with Disability.      23     12.4   Upon
Termination Event in Connection with Retirement.      23     12.5   Upon
Termination Event in Connection with a Change in Control.      23     12.6  
Bona Fide Leave.      23     12.7   Change in Participant Status.      24   13.
  Effect of Change in Control      24   14.   Amendment of this Plan and Awards
     25     14.1   Amendment of this Plan      25     14.2   Shareholder
Approval      25     14.3   Contemplated Amendments      25     14.4   No
Impairment of Rights      25     14.5   Amendment of Awards      26   15.  
Transfers      26     15.1   Transfers upon Death      26     15.2   Permitted
Transfers      26     15.3   Effect of Transfer      26   16.   General
Provisions      27     16.1   Forfeiture Events      27     16.2   Clawback     
27     16.3   Other Compensation Arrangements      27     16.4   Unfunded Plan
     27     16.5   Delivery      27     16.6   No Fractional Shares      27    
16.7   Other Provisions      28     16.8   Section 409A      28     16.9  
Disqualifying Dispositions      28     16.10   Section 16      28     16.11  
Beneficiary Designation      28     16.12   Expenses      28     16.13  
Severability      29     16.14   Plan Headings      29     16.15   Non-Uniform
Treatment      29   17.   Effective Date of this Plan      29   18.  
Termination or Suspension of this Plan      29   19.   Choice of Law      29  

 

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STEIN MART, INC. 2018 OMNIBUS INCENTIVE PLAN

1.       Purpose; Eligibility.

1.1     General Purpose. The purposes of this Plan are to (a) enable the Company
and any Affiliate to attract and retain the types of Employees, Consultants and
Directors who will contribute to the Company’s long range success; (b) provide
incentives that align the interests of Employees, Consultants and Directors with
those of the shareholders of the Company; and (c) promote the success of the
Company’s business.

1.2     Eligible Award Recipients. The persons eligible to receive Awards are
the Employees, Consultants and Directors of the Company and its Affiliates and
such other individuals designated by the Committee who are reasonably expected
to become Employees, Consultants and Directors after the receipt of Awards.

1.3     Available Awards. Awards that may be granted under this Plan include:
(a) Incentive Stock Options, (b) Non-qualified Stock Options, (c) Stock
Appreciation Rights, (d) Restricted Awards, (e) Performance Share Awards and
(f) Other Equity-Based Awards.

2.       Definitions.

“Affiliate” means a corporation or other entity that, directly or through one or
more intermediaries, controls, is controlled by or is under common control with,
the Company.

“Applicable Laws” means the requirements related to or implicated by the
administration of this Plan under applicable state corporate law, United States
federal and state securities laws, the Code, the rules of any stock exchange or
quotation system on which the shares of Common Stock are listed or quoted, and
the applicable laws of any foreign country or other jurisdiction where Awards
are granted under this Plan.

“Award” means any right granted under this Plan, including an Incentive Stock
Option, a Non-qualified Stock Option, a Stock Appreciation Right, a Restricted
Award, a Performance Share Award or an Other Equity-Based Award.

“Award Agreement” means a written agreement, contract, certificate or other
instrument or document evidencing the terms and conditions of an individual
Award granted under this Plan which may, in the discretion of the Company, be
transmitted electronically to any Participant and be executed electronically by
any Participant. Each Award Agreement shall be subject to the terms and
conditions of this Plan.

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule
13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular Person, such Person shall be deemed to have
beneficial ownership of all securities that such Person has the right to acquire
by conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only after the passage of time. The term
“Beneficial Ownership” has a corresponding meaning.

“Board” means the Board of Directors of the Company, as constituted at any time.

 

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“Cash Award” means an Award denominated in cash that is granted under
Section 7.4 of this Plan.

“Cause” means: With respect to any Employee or Consultant, unless the applicable
Award Agreement states otherwise: (a) if the Employee or Consultant is a party
to an employment or service agreement with the Company or its Affiliates and
such agreement provides for a definition of Cause, the definition contained
therein; or (b) if no such agreement exists, or if such agreement does not
define Cause: (i) the commission of, or plea of guilty or no contest to, a
felony or a crime involving moral turpitude or the commission of any other act
involving willful malfeasance or material fiduciary breach with respect to the
Company or an Affiliate; (ii) conduct that results in or is reasonably likely to
result in harm to the reputation or business of the Company or any of its
Affiliates; (iii) gross negligence or willful misconduct with respect to the
Company or an Affiliate; or (iv) material violation of state or federal
securities laws.

With respect to any Director, unless the applicable Award Agreement states
otherwise, a determination by a majority of the disinterested Board members that
the Director has engaged in any of the following: (a) malfeasance in office;
(b) gross misconduct or neglect; (c) false or fraudulent misrepresentation
inducing the director’s appointment; (d) willful conversion of corporate funds;
or (e) repeated failure to participate in Board meetings on a regular basis
despite having received proper notice of the meetings in advance.

The Committee, in its absolute discretion, shall determine the effect of all
matters and questions relating to whether a Participant has been discharged for
Cause.

“Change in Control” means: (a) one Person (or more than one Person acting as a
group), other than Jay Stein or any group of which Jay Stein is a member,
acquires Beneficial Ownership of stock of the Company that, together with the
stock held by such person or group, constitutes more than fifty percent (50%) of
the total fair market value or total voting power of the stock of the Company;
provided, that, a Change in Control shall not occur if any Person (or more than
one Person acting as a group) owns more than fifty percent (50%) of the total
fair market value or total voting power of the Company’s stock and acquires
additional stock; (b) one person (or more than one person acting as a group),
other than Jay Stein or any group of which Jay Stein is a member, acquires (or
has acquired during the twelve-month period ending on the date of the most
recent acquisition) ownership of the Company’s stock possessing thirty-five
percent (35%) or more of the total voting power of the stock of such
corporation; (c) a majority of the members of the Board are replaced during any
twelve-month period by directors whose appointment or election is not endorsed
by a majority of the Board before the date of appointment or election; or
(d) one person (or more than one person acting as a group) acquires (or has
acquired during the twelve-month period ending on the date of the most recent
acquisition) assets from the Company that have a total gross fair market value
equal to or more than forty percent (40%) of the total gross fair market value
of all of the assets of the Company immediately before such acquisition(s).

“Clawback Policy” has the meaning set forth in Section 16.2.

 

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“Code” means the Internal Revenue Code of 1986, as it may be amended from time
to time. Any reference to a section of the Code shall be deemed to include a
reference to any regulations promulgated thereunder.

“Committee” means a committee of one or more members of the Board appointed by
the Board to administer this Plan in accordance with Section 3.3 and Section
3.4.

“Common Stock” means the common stock, $.01 par value per share, of the Company,
or such other securities of the Company as may be designated by the Committee
from time to time in substitution thereof.

“Company” means Stein Mart, Inc., a Florida corporation, and any successor
thereto.

“Consultant” means any individual who performs bona fide services to the Company
or an Affiliate, other than as an Employee or Director, and who may be offered
securities registrable pursuant to a registration statement on Form S-8 under
the Securities Act.

“Director” means a member of the Board.

“Disability” means, unless the applicable Award Agreement says otherwise: (a) if
an Employee or Consultant is a party to an employment or service agreement with
the Company or its Affiliates and such agreement provides for a definition of
Disability, the definition contained therein; or (b) if no such agreement exists
or if such agreement does not define Disability, that the Participant is unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment; provided, however, for purposes of
determining the term of an Incentive Stock Option pursuant to Section 12.3(a)
hereof, the term Disability shall have the meaning ascribed to it under
Section 22(e)(3) of the Code. The determination of whether an individual has a
Disability shall be determined under procedures established by the Committee.
Except in situations where the Committee is determining Disability for purposes
of the term of an Incentive Stock Option pursuant to Section 12.3(a) hereof
within the meaning of Section 22(e)(3) of the Code, the Committee may rely on
any determination that a Participant is disabled for purposes of benefits under
any long-term disability plan maintained by the Company or any Affiliate in
which a Participant participates.

“Disqualifying Disposition” has the meaning set forth in Section 16.9.

“Dividend Equivalents” has the meaning set forth in Section 7.2(b)(ii).

“Effective Date” shall mean the date as of which this Plan is adopted by the
Board, provided that the Company’s shareholders approve this Plan before the
first anniversary of the Effective Date.

“Employee” means any person, including an Officer or Director, employed by the
Company or an Affiliate; provided, that, for purposes of determining eligibility
to receive Incentive Stock Options, an Employee shall mean an employee of the
Company or a parent or subsidiary corporation within the meaning of Section 424
of the Code. Mere service as a Director or payment of a director’s fee by the
Company or an Affiliate shall not be sufficient to constitute “employment” by
the Company or an Affiliate.

 

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“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Fair Market Value” means, as of any date, the value of the Common Stock as
determined below. If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
Stock Market, the Fair Market Value shall be the closing price of a share of
Common Stock (or if no sales were reported the closing price on the date
immediately preceding such date) as quoted on such exchange or system on the day
of determination, as reported in the Wall Street Journal or such other source as
the Committee deems reliable. In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Committee, and, in the case of nonqualified deferred compensation, in accordance
with Section 409A of the Code; such determination shall be conclusive and
binding on all persons.

“Fiscal Year” means the Company’s fiscal year.

“Free Standing Rights” has the meaning set forth in Section 7.1(a).

“Good Reason” means, unless the applicable Award Agreement states otherwise:
(a) if an Employee or Consultant is a party to an employment or service
agreement with the Company or its Affiliates and such agreement provides for a
definition of Good Reason, the definition contained therein; or (b) if no such
agreement exists or if such agreement does not define Good Reason, the
occurrence of one or more of the following without the Participant’s express
written consent, which circumstances are not remedied by the Company within
thirty (30) days of its receipt of a written notice from the Participant
describing the applicable circumstances (which notice must be provided by the
Participant within ninety (90) days of the Participant’s knowledge of the
applicable circumstances): (i) any material, adverse change in the Participant’s
duties, responsibilities, authority, title, status or reporting structure;
(ii) a material reduction in the Participant’s base salary or bonus opportunity;
or (iii) a geographical relocation of the Participant’s principal office
location by more than fifty (50) miles.

“Grant Date” means the date on which the Committee adopts a resolution, or takes
other appropriate action, expressly granting an Award to a Participant that
specifies the key terms and conditions of the Award or, if a later date is set
forth in such resolution, then such date as is set forth in such resolution.

“Immediate Family Member” means any person who is a “family member” of the
Participant, as such term is used in the instructions to Form S-8 under the
Securities Act or any successor form of registration statement promulgated by
the Securities and Exchange Commission.

“Incentive Stock Option” means an Option intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code.

“ISO Limit” has the meaning set forth in Section 4.3.

 

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“Non-Employee Director” means a Director who is a “non-employee director” within
the meaning of Rule 16b-3.

“Non-qualified Stock Option” means an Option that by its terms does not qualify
or is not intended to qualify as an Incentive Stock Option.

“Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.

“Option” means an Incentive Stock Option or a Non-qualified Stock Option granted
pursuant to this Plan.

“Optionholder” means a person to whom an Option is granted pursuant to this Plan
or, if applicable, such other person who holds an outstanding Option.

“Option Exercise Price” means the price at which a share of Common Stock may be
purchased upon the exercise of an Option.

“Other Equity-Based Award” means an Award that is not an Option, Stock
Appreciation Right, Restricted Stock, Restricted Stock Unit or Performance Share
Award that is granted under Section 7.4 and is payable by delivery of Common
Stock and/or which is measured by reference to the value of Common Stock.

“Participant” means an eligible person to whom an Award is granted pursuant to
this Plan or, if applicable, such other person who holds an outstanding Award.

“Performance Criteria” means the criterion or criteria selected for purposes of
establishing the Performance Goal(s) for a Performance Period with respect to
any Award under this Plan. The Performance Criteria that will be used to
establish the Performance Goal(s) shall be based on the attainment of specific
levels of performance of the Company (or Affiliate, division, business unit or
operational unit of the Company). Performance Criteria may include, but are not
limited to, the following: (a) net sales; (b) gross profit; (c) operating or
other expenses (or any individual type of expense); (d) earnings before interest
and taxes; (e) earnings before interest, taxes, depreciation and amortization;
(f) net income; (g) earnings per share (basic or diluted); (h) cash flow;
(i) average sales per store; (j) average sales per square foot; (k) comparable
store sales increases; (l) average inventories (calculated by taking the average
of inventories at the end of each month); (m) inventory turnover (net sales
divided by average inventory during any fiscal period); (n) number of stores
opened; (o) return on investment (determined with reference to one or more
categories of income or cash flow and one or more categories of assets, capital
or equity); (p) total shareholder returns (on a standalone basis or as compared
with a designated peer group or index); (q) stock price; and (r) gross margin
(loss) determined based on all sales or with respect to one or more categories
or departments.

Any one or more of the Performance Criteria may be used on an absolute or
relative basis to measure the performance of the Company and/or an Affiliate as
a whole or any division, business unit or operational unit of the Company and/or
an Affiliate or any combination thereof, as the Committee may deem appropriate,
or as compared to the performance of a group of

 

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comparable companies, or published or special index that the Committee, in its
sole discretion, deems appropriate, or the Committee may select Performance
Criterion (q) above as compared to various stock market indices. The Committee
may provide that any of the Performance Criteria be calculated before the
accrual of expense for any Awards for the corresponding Performance Period. The
Committee also has the authority to provide for accelerated vesting of any Award
based on the achievement of Performance Goals pursuant to the Performance
Criteria specified in this paragraph.

“Performance Formula” means, for a Performance Period, the one or more objective
formulas applied against the relevant Performance Goal to determine, with regard
to the Award of a particular Participant, whether all, some portion but less
than all, or none of the Award has been earned for the Performance Period.

“Performance Goals” means, for a Performance Period, the one or more goals
established for the Performance Period based upon the Performance Criteria. The
Committee is authorized at any time, in its sole and absolute discretion, to
adjust or modify the calculation of a Performance Goal for such Performance
Period in order to prevent the dilution or enlargement of the rights of
Participants, including, without limitation, adjustments or modifications based
on the following events: (a) asset write-downs; (b) litigation or claim
judgments or settlements; (c) the effect of changes in tax laws, accounting
principles, or other laws or regulatory rules affecting reported results;
(d) any reorganization and restructuring programs; (e) extraordinary, unusual or
infrequently occurring items as described in management’s discussion and
analysis of financial condition and results of operations appearing in the
Company’s annual report to shareholders for the applicable year;
(f) acquisitions or divestitures; (g) any other specific unusual or nonrecurring
events, or objectively determinable category thereof; (h) foreign exchange gains
and losses; and (i) a change in the Fiscal Year.

“Performance Period” means the one or more periods of time, not less than one
fiscal quarter in duration, as the Committee may select, over which the
attainment of one or more Performance Goals will be measured for the purpose of
determining a Participant’s right to and the payment of an Award.

“Performance Share” means a right granted to a Participant to receive shares of
Common Stock (or the Fair Market Value thereof in cash or any combination of
cash and Common Stock, as determined by the Committee) based upon the
achievement, or level of achievement, of Performance Goals during a Performance
Period, as determined by the Committee.

“Performance Share Award” means any Award granted pursuant to Section 7.3
hereof.

“Permitted Transferee” means any transferee of an Award pursuant to and in
accordance with Section 15.1 or Section 15.2 hereof.

“Person” means a person as defined in Section 13(d)(3) of the Exchange Act.

“Plan” means this Stein Mart, Inc. 2018 Omnibus Incentive Plan, as amended
and/or amended and restated from time to time.

 

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“Related Rights” has the meaning set forth in Section 7.1(a).

“Restricted Award” means any Award granted pursuant to Section 7.2(a).

“Restricted Period” has the meaning set forth in Section 7.2(a).

“Restricted Stock” has the meaning set forth in Section 7.2(a).

“Restricted Stock Units” has the meaning set forth in Section 7.2(a).

“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time.

“Securities Act” means the Securities Act of 1933, as amended.

“Stock Appreciation Right” means the right pursuant to an Award granted under
Section 7.1 to receive, upon exercise, an amount payable in cash or shares equal
to the number of shares subject to the Stock Appreciation Right that is being
exercised multiplied by the excess of (a) the Fair Market Value of a share of
Common Stock on the date the Award is exercised, over (b) the exercise price
specified in the Stock Appreciation Right Award Agreement.

“Stock for Stock Exchange” has the meaning set forth in Section 6.4.

“Substitute Award” has the meaning set forth in Section 4.8.

“Ten Percent Shareholder” means a person who owns (or is deemed to own pursuant
to Section 424(d) of the Code) stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or of any
of its Affiliates.

“Termination Event” means the occurrence of any act or event that causes a
Participant to cease being an employee of the Company and any Affiliate,
including, without limitation, death, Disability, retirement, termination with
or without Cause, dismissal, severance at the election of the Participant, or
severance as a result of the discontinuance, liquidation, sale or transfer by
the Company or its Affiliates of a business owned or operated by the Company or
any Affiliate. With respect to any Participant who is not an employee of the
Company or any Affiliate, unless the Award Agreement states otherwise, a
Termination Event shall occur when a Participant ceases to provide services as
either a Consultant or Non-Employee Director. A Termination Event shall occur
with respect to a Participant who is employed by an Affiliate if the Affiliate
shall cease to be an Affiliate and the Participant shall not immediately
thereafter become an employee of the Company or an Affiliate. Notwithstanding
the foregoing, as described in Section 12.7, no Termination Event shall occur if
the Participant continues to be an Employee, Director or Consultant after such
termination. Provided, however, if a Termination Event constitutes a payment
event with respect to any Award that provides for the deferral of compensation
and is subject to Code Section 409A, payments to be made upon a Termination
Event shall only be made upon a separation from service with the meaning of Code
Section 409A.

“Total Share Reserve” has the meaning set forth in Section 4.1

 

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“Vested Unit” has the meaning set forth in Section 7.2(d)(ii).

3.       Administration.

3.1     Authority of Committee. This Plan shall be administered by the Committee
or, in the Board’s sole discretion, by the Board. Subject to the terms of this
Plan, the Committee’s charter and Applicable Laws, and in addition to other
express powers and authorization conferred by this Plan, the Committee (or the
Board, as the case may be) shall have the authority:

(a)     to construe and interpret this Plan and apply its provisions;

(b)     to promulgate, amend and rescind rules and regulations relating to the
administration of this Plan;

(c)     to authorize any person to execute, on behalf of the Company, any
instrument required to carry out the purposes of this Plan;

(d)     to delegate its authority to one or more Officers of the Company with
respect to Awards that do not involve “insiders” within the meaning of
Section 16 of the Exchange Act;

(e)     to determine when Awards are to be granted under this Plan and the
applicable Grant Date;

(f)     to select, subject to the limitations set forth in this Plan, those
Participants to whom Awards shall be granted;

(g)     to determine the number of shares of Common Stock, if any, to be made
subject to each Award;

(h)     to determine whether each Option is to be an Incentive Stock Option or a
Non-qualified Stock Option;

(i)     to prescribe the terms and conditions of each Award, including, without
limitation, the exercise price and medium of payment and vesting provisions, and
to specify the provisions of the Award Agreement relating to such grant;

(j)     to determine the target number of Performance Shares to be granted
pursuant to a Performance Share Award, any Performance Criteria that will be
used to establish Performance Goals, the length of any Performance Period(s),
the kind(s) and/or level(s) of the Performance Goal(s) that is (are) to apply
and the number of Performance Shares that may be earned by a Participant;

(k)     to determine whether, and to what extent, the Performance Goals for a
Performance Period have been achieved and, if so, to calculate the amount of any
Awards earned for the period based upon the Performance Formula;

 

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(l)     to reduce or eliminate the amount of an Award earned under Performance
Goals in a Performance Period if, in the Committee’s sole judgment, such
reduction or elimination is appropriate;

(m)     to amend any outstanding Awards, including for the purpose of modifying
the time or manner of vesting or the term of any outstanding Award or extending
the exercise period of any outstanding Award; provided, however, that if any
such amendment impairs a Participant’s rights or increases a Participant’s
obligations under his or her Award or creates or increases a Participant’s
federal income tax liability with respect to an Award, such amendment shall also
be subject to the Participant’s consent;

(n)     to determine the duration and purpose of leaves of absences which may be
granted to a Participant without constituting a Termination Event for purposes
of this Plan, which periods shall be no shorter than the periods generally
applicable to Employees under the Company’s employment policies;

(o)     to make decisions with respect to outstanding Awards that may become
necessary upon a change in corporate control or an event that triggers
anti-dilution adjustments;

(p)     to interpret, administer, reconcile any inconsistency in, correct any
defect in and/or supply any omission in this Plan and any instrument or
agreement relating to, or Award granted under, this Plan; and

(q)     to exercise discretion to make any and all other determinations which it
determines to be necessary or advisable for the administration of this Plan.

The Committee also may modify the purchase price or the exercise price of any
outstanding Award, provided that if the modification effects a repricing,
shareholder approval shall be required before the repricing is effective. The
foregoing restriction on repricing includes (i) reducing the exercise price of
the outstanding Options or Stock Appreciation Rights; (ii) cancelling
outstanding Options or Stock Appreciation Rights in connection with the granting
of Options or Stock Appreciation Rights with a lower exercise price to the same
individual; (iii) cancelling Options or Stock Appreciation Rights with an
exercise price in excess of the current Fair Market Value in exchange for a cash
payment or other Award(s); and (iv) taking any other action that would be
treated as a repricing of an Option or Stock Appreciation Right under the rules
of the primary securities exchange or similar entity on which the Common Stock
is listed.

3.2     Committee Decisions Final. All decisions made by the Committee (or the
Board, as the case may be) pursuant to the provisions of this Plan shall be
final and binding on the Company and the Participants, unless such decisions are
determined by a court having jurisdiction to be arbitrary and capricious.

3.3     Delegation. The Committee, or if no Committee has been appointed, the
Board, may delegate administration of this Plan to a committee or committees of
one or more members of the Board, and the term “Committee” shall apply to any
person or persons to whom such authority has been delegated. The Committee shall
have the power to delegate to a subcommittee any of the

 

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administrative powers the Committee is authorized to exercise (and references in
this Plan to the Board or the Committee shall thereafter be to the committee or
subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of this Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of this Plan. The members of the Committee shall be appointed by
and serve at the pleasure of the Board. From time to time, the Board may
increase or decrease the size of the Committee, add additional members to,
remove members (with or without cause) from, appoint new members in substitution
therefor, and fill vacancies, however caused, in the Committee. The Committee
shall act pursuant to a vote of the majority of its members or, in the case of a
Committee comprised of only two members, the unanimous consent of its members,
whether present or not, or by the written consent of the majority of its members
and minutes shall be kept of all of its meetings and copies thereof shall be
provided to the Board. Subject to the limitations prescribed by this Plan and
the Board, the Committee may establish and follow such rules and regulations for
the conduct of its business as it may determine to be advisable.

3.4     Committee Composition. Except as otherwise determined by the Board, the
Committee shall consist solely of two or more Non-Employee Directors. The Board
shall have discretion to determine whether or not it intends to comply with the
exemption requirements of Rule 16b-3. However, if the Board intends to satisfy
the exemption requirements of Rule 16b-3 with respect to Awards to any
Participant subject to Section 16 of the Exchange Act that are to be approved by
the Committee rather than the Board, then the Committee shall be a compensation
committee of the Board that consists solely of two or more Non-Employee
Directors. Within the scope of such authority, the Board or the Committee may
delegate to a committee of one or more members of the Board who are not
Non-Employee Directors the authority to grant Awards to eligible persons who are
not then subject to Section 16 of the Exchange Act. Nothing herein shall create
an inference that an Award is not validly granted under this Plan in the event
Awards are granted under this Plan by a compensation committee of the Board that
does not at all times consist solely of two or more Non-Employee Directors.

3.5     Indemnification. In addition to such other rights of indemnification as
they may have as Directors or members of the Committee, and to the extent
allowed by Applicable Laws, the Committee shall be indemnified by the Company
against the reasonable expenses, including attorney’s fees, actually incurred in
connection with any action, suit or proceeding or in connection with any appeal
therein, to which the Committee may be party by reason of any action taken or
failure to act under or in connection with this Plan or any Award granted under
this Plan, and against all amounts paid by the Committee in settlement thereof
(provided, however, that the settlement has been approved by the Company, which
approval shall not be unreasonably withheld) or paid by the Committee in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such Committee did not act in good faith and in a manner which
such person reasonably believed to be in the best interests of the Company, or
in the case of a criminal proceeding, had no reason to believe that the conduct
complained of was unlawful; provided, however, that within sixty (60) days after
the institution of any such action, suit or proceeding, such Committee shall, in
writing, offer the Company the opportunity at its own expense to handle and
defend such action, suit or proceeding.

 

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4.       Shares Subject to this Plan.

4.1     Subject to adjustment in accordance with Section 11, a total of
4,100,000 shares of Common Stock, plus the number of shares of Common Stock
underlying any award granted under the Stein Mart, Inc. 2001 Omnibus Plan, as
amended and restated effective June 21, 2016, that expires, terminates or is
canceled or forfeited under the terms of such plan, shall be available for the
grant of Awards under this Plan (the “Total Share Reserve”). During the terms of
the Awards, the Company shall keep available at all times the number of shares
of Common Stock required to satisfy such Awards.

4.2     Shares of Common Stock available for grant by the Company under this
Plan may consist, in whole or in part, of authorized and unissued shares,
treasury shares or shares reacquired by the Company in any manner.

4.3     Subject to adjustment in accordance with Section 11, no more than
4,100,000 shares of Common Stock may be issued in the aggregate pursuant to the
exercise of Incentive Stock Options (the “ISO Limit”).

4.4     Subject to adjustment in accordance with Section 11, no Non-Employee
Director (excluding Non-Employee Directors who also qualify as Consultants)
shall receive, during a single Fiscal Year, Awards with respect to more than
70,000 shares of Common Stock in the aggregate.

4.5     Subject to adjustment in accordance with Section 11, no Participant
shall receive, during a single Fiscal Year, (i) Options to purchase Common Stock
or Stock Appreciation Rights with respect to more than 1,000,000 shares of
Common Stock in the aggregate; or (ii) Restricted Stock, Restricted Stock Units,
Performance Shares, Other Equity-Based Awards subject to Performance Goals with
respect to more than 1,000,000 shares of Common stock in the aggregate. If an
Award is to be settled in cash, the number of shares of Common Stock on which
the Award is based shall not count toward the individual share limit set forth
in this Section 4.5.

4.6     No Participant shall receive, during a single Fiscal Year, Cash Awards
with an aggregate value that exceeds $2,500,000.00.

4.7     Any shares of Common Stock subject to an Award that is canceled,
forfeited or expires prior to exercise or realization, either in full or in
part, shall again become available for issuance under this Plan. Shares of
Common Stock subject to Awards that (a) are settled in cash, (b) are withheld to
satisfy tax withholding obligations with respect to Restricted Awards,
Performance Share Awards or Other Equity-Based Awards or (c) are exchanged with
the Company’s permission prior to the issuance of shares for Awards not
involving shares will be added back to this Plan share reserve and again be
available for issuance pursuant to Awards granted under this Plan.
Notwithstanding anything to the contrary contained herein, (x) shares of Common
Stock subject to an Award under this Plan shall not again be made available for
issuance or delivery under this Plan if such shares are (i) tendered in payment
of the exercise price of an Option or a Stock Appreciation Right, (ii) delivered
by a Participant or withheld by the Company to satisfy any tax withholding
obligation on an Option or Stock Appreciation Right, or (iii) not issued or
delivered as a result of the net settlement of an Option or Stock Appreciation
Right; and (y) shares repurchased on the open market with the proceeds of an
Option Exercise Price shall not again be made available for issuance under this
Plan.

 

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4.8     Awards may, in the sole discretion of the Committee, be granted under
this Plan in assumption of, or in substitution for, outstanding awards
previously granted by an entity acquired by the Company or with which the
Company combines (“Substitute Awards”). Substitute Awards shall not be counted
against the Total Share Reserve; provided, that, Substitute Awards issued in
connection with the assumption of, or in substitution for, outstanding options
intended to qualify as Incentive Stock Options shall be counted against the ISO
Limit. Subject to applicable stock exchange requirements, available shares under
a shareholder-approved plan of an entity directly or indirectly acquired by the
Company or with which the Company combines (as appropriately adjusted to reflect
such acquisition or transaction) may be used for Awards under this Plan and
shall not count toward the Total Share Limit.

4.9     Minimum Vesting Requirements for Awards. Except with respect to a
maximum of five percent (5%) of the Total Share Reserve, all Awards granted
under this Plan shall vest over a period that is not less than one (1) year.
Notwithstanding the foregoing, the Committee may, but shall not be required to,
provide for acceleration of vesting and exercisability of Awards in the terms of
any Award Agreement in the event of the Participant’s death, Disability,
retirement (as such term is defined in the applicable Award Agreement) or a
Change in Control. Each Award may, but need not, vest and therefore become
exercisable in periodic installments that may, but need not, be equal. The
vesting provisions of individual Awards may vary. No Award may be exercised for
a fraction of a share of Common Stock. The Award may be subject to such other
terms and conditions on the time or times when it may be exercised (which may be
based on performance or other criteria) as the Committee may deem appropriate.

5.       Eligibility.

5.1     General. The Committee will, in its sole discretion, designate which
Participants will be eligible to receive Awards. However, designation of a
Participant eligible to receive an Award hereunder shall not in any manner
entitle the Participant to receive an Award or payment in respect of such Award.
Moreover, designation of a Participant eligible to receive an Award hereunder
for a particular period shall not require designation of such Participant
eligible to receive an Award hereunder in any subsequent period and designation
of one person as a Participant eligible to receive an Award hereunder shall not
require designation of any other person as a Participant eligible to receive an
Award hereunder in such period or in any other period.

5.2     Eligibility for Specific Awards. Incentive Stock Options may be granted
only to Employees. Awards other than Incentive Stock Options may be granted to
Employees, Consultants and Directors and those individuals whom the Committee
determines are reasonably expected to become Employees, Consultants and
Directors following the Grant Date.

5.3     Ten Percent Shareholders. A Ten Percent Shareholder shall not be granted
an Incentive Stock Option unless the Option Exercise Price is at least one
hundred ten percent (110%) of the Fair Market Value of the Common Stock at the
Grant Date and the Option is not exercisable after the expiration of five
(5) years from the Grant Date.

 

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6.       Option Provisions. Each Option granted under this Plan shall be
evidenced by an Award Agreement. Each Option so granted shall be subject to the
conditions set forth in this Section 6, and to such other conditions not
inconsistent with this Plan as may be reflected in the applicable Award
Agreement. All Options shall be separately designated Incentive Stock Options or
Non-qualified Stock Options at the time of grant, and, if certificates are
issued, a separate certificate or certificates will be issued for shares of
Common Stock purchased on exercise of each type of Option. Notwithstanding the
foregoing, the Company shall have no liability to any Participant or any other
person if an Option designated as an Incentive Stock Option fails to qualify as
such at any time or if an Option is determined to constitute “nonqualified
deferred compensation” within the meaning of Section 409A of the Code and the
terms of such Option do not satisfy the requirements of Section 409A of the
Code. The provisions of separate Options need not be identical, but each Option
shall include (through incorporation of provisions hereof by reference in the
Option or otherwise) the substance of each of the following provisions:

6.1     Term. Subject to the provisions of Section 5.3 regarding Ten Percent
Shareholders, no Incentive Stock Option shall be exercisable after the
expiration of ten (10) years from the Grant Date. The term of a Non-qualified
Stock Option granted under this Plan shall be determined by the Committee;
provided, however, no Non-qualified Stock Option shall be exercisable after the
expiration of ten (10) years from the Grant Date.

6.2     Exercise Price of an Incentive Stock Option. Subject to the provisions
of Section 5.3 regarding Ten Percent Shareholders, the Option Exercise Price of
each Incentive Stock Option shall be not less than one hundred percent (100%) of
the Fair Market Value of the Common Stock subject to the Option on the Grant
Date. Notwithstanding the foregoing, an Incentive Stock Option may be granted
with an Option Exercise Price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Section 424(a) of the
Code.

6.3     Exercise Price of a Non-qualified Stock Option. The Option Exercise
Price of each Non-qualified Stock Option shall be not less than one hundred
percent (100%) of the Fair Market Value of the Common Stock subject to the
Option on the Grant Date. Notwithstanding the foregoing, a Non-qualified Stock
Option may be granted with an Option Exercise Price lower than that set forth in
the preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of
Section 409A of the Code.

6.4     Consideration. The Option Exercise Price of Common Stock acquired
pursuant to an Option shall be paid, to the extent permitted by applicable
statutes and regulations, either (a) in cash or by certified or bank check at
the time the Option is exercised or (b) in the discretion of the Committee, upon
such terms as the Committee shall approve, the Option Exercise Price may be
paid: (i) by delivery to the Company of other Common Stock, duly endorsed for
transfer to the Company, with a Fair Market Value on the date of delivery equal
to the Option Exercise Price (or portion thereof) due for the number of shares
being acquired, or by means of attestation whereby the Participant identifies
for delivery specific shares of Common Stock that have an aggregate Fair Market
Value on the date of attestation equal to the Option Exercise Price (or portion
thereof) and receives a number of shares of Common Stock equal to the difference
between the number of shares thereby purchased and the number of identified
attestation shares of Common Stock (a

 

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“Stock for Stock Exchange”); (ii) through a “cashless” exercise program
established with a broker; (iii) by reduction in the number of shares of Common
Stock otherwise deliverable upon exercise of such Option with a Fair Market
Value equal to the aggregate Option Exercise Price at the time of exercise;
(iv) by any combination of the foregoing methods; or (v) in any other form of
legal consideration that may be acceptable to the Committee. Unless otherwise
specifically provided in the Award Agreement, the exercise price of Common Stock
acquired pursuant to an Option that is paid by delivery (or attestation) to the
Company of other Common Stock acquired, directly or indirectly from the Company,
shall be paid only by shares of the Common Stock of the Company that have been
held for more than six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes).
Notwithstanding the foregoing, during any period for which the Common Stock is
publicly traded (i.e., the Common Stock is listed on any established stock
exchange or a national market system) an exercise by a Director or Officer that
involves or may involve a direct or indirect extension of credit or arrangement
of an extension of credit by the Company, directly or indirectly, in violation
of Section 402(a) of the Sarbanes-Oxley Act of 2002 shall be prohibited with
respect to any Award under this Plan.

6.5     Incentive Stock Option $100,000 Limitation. To the extent that the
aggregate Fair Market Value (determined at the time of grant) of Common Stock
with respect to which Incentive Stock Options are exercisable for the first time
by any Optionholder during any calendar year (under all plans of the Company and
its Affiliates) exceeds $100,000, the Options or portions thereof which exceed
such limit (according to the order in which they were granted) shall be treated
as Non-qualified Stock Options.

6.6     Dividend Equivalents on Options. In no event shall any Dividend
Equivalents (as defined below) be paid with respect to any Options.

7.       Provisions of Awards Other Than Options.

7.1     Stock Appreciation Rights.

(a)     General. Each Stock Appreciation Right granted under this Plan shall be
evidenced by an Award Agreement. Each Stock Appreciation Right so granted shall
be subject to the conditions set forth in this Section 7.1, and to such other
conditions not inconsistent with this Plan as may be reflected in the applicable
Award Agreement. Stock Appreciation Rights may be granted alone (“Free Standing
Rights”) or in tandem with an Option granted under this Plan (“Related Rights”).

(b)     Grant Requirements. Any Related Right that relates to a Non-qualified
Stock Option may be granted at the same time the Option is granted or at any
time thereafter but before the exercise or expiration of the Option. Any Related
Right that relates to an Incentive Stock Option must be granted at the same time
the Incentive Stock Option is granted.

(c)     Term of Stock Appreciation Rights. The term of a Stock Appreciation
Right granted under this Plan shall be determined by the Committee; provided,
however, no Stock Appreciation Right shall be exercisable later than the tenth
anniversary of the Grant Date.

 

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(d)     Exercise and Payment. Upon exercise of a Stock Appreciation Right, the
holder shall be entitled to receive from the Company an amount equal to the
number of shares of Common Stock subject to the Stock Appreciation Right that is
being exercised multiplied by the excess of (i) the Fair Market Value of a share
of Common Stock on the date the Award is exercised, over (ii) the exercise price
specified in the Stock Appreciation Right or related Option. Payment with
respect to the exercise of a Stock Appreciation Right shall be made on the date
of exercise. Payment shall be made in the form of shares of Common Stock (with
or without restrictions as to substantial risk of forfeiture and
transferability, as determined by the Committee in its sole discretion), cash or
a combination thereof, as determined by the Committee.

(e)     Exercise Price. The exercise price of a Free Standing Right shall be
determined by the Committee, but shall not be less than one hundred percent
(100%) of the Fair Market Value of one (1) share of Common Stock on the Grant
Date of such Stock Appreciation Right. A Related Right granted simultaneously
with or subsequent to the grant of an Option and in conjunction therewith or in
the alternative thereto shall have the same exercise price as the related
Option, shall be transferable only upon the same terms and conditions as the
related Option, and shall be exercisable only to the same extent as the related
Option; provided, however, that a Stock Appreciation Right, by its terms, shall
be exercisable only when the Fair Market Value per share of Common Stock subject
to the Stock Appreciation Right and related Option exceeds the exercise price
per share thereof and no Stock Appreciation Rights may be granted in tandem with
an Option unless the Committee determines that the requirements of Section
7.1(b) are satisfied.

(f)     Reduction in the Underlying Option Shares. Upon any exercise of a
Related Right, the number of shares of Common Stock for which any related Option
shall be exercisable shall be reduced by the number of shares for which the
Stock Appreciation Right has been exercised. The number of shares of Common
Stock for which a Related Right shall be exercisable shall be reduced upon any
exercise of any related Option by the number of shares of Common Stock for which
such Option has been exercised.

(g)     Dividend Equivalents on Stock Appreciation Rights. In no event shall any
Dividend Equivalents (as defined below) be paid with respect to any Stock
Appreciation Rights.

7.2     Restricted Awards.

(a)     General. A Restricted Award is an Award of actual shares of Common Stock
(“Restricted Stock”) or hypothetical Common Stock units (“Restricted Stock
Units”) having a value equal to the Fair Market Value of an identical number of
shares of Common Stock, which may, but need not, provide that such Restricted
Award may not be sold, assigned, transferred or otherwise disposed of, pledged
or hypothecated as collateral for a loan or as security for the performance of
any obligation or for any other purpose for such period (the “Restricted
Period”) as the Committee shall determine. Each Restricted

 

15

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Award granted under this Plan shall be evidenced by an Award Agreement. Each
Restricted Award so granted shall be subject to the conditions set forth in this
Section 7.2, and to such other conditions not inconsistent with this Plan as may
be reflected in the applicable Award Agreement.

(b)     Restricted Stock and Restricted Stock Units.

(i)     Each Participant granted Restricted Stock shall execute and deliver to
the Company an Award Agreement with respect to the Restricted Stock setting
forth the restrictions and other terms and conditions applicable to such
Restricted Stock. If the Committee determines that the Restricted Stock shall be
held by the Company or in escrow rather than delivered to the Participant
pending the release of the applicable restrictions, the Committee may require
the Participant to additionally execute and deliver to the Company (A) an escrow
agreement satisfactory to the Committee, if applicable and (B) the appropriate
blank stock power with respect to the Restricted Stock covered by such
agreement. If a Participant fails to execute an agreement evidencing an Award of
Restricted Stock and, if applicable, an escrow agreement and stock power, the
Award shall be null and void. Subject to the restrictions set forth in the
Award, the Participant generally shall have the rights and privileges of a
shareholder as to such Restricted Stock, including the right to vote such
Restricted Stock and the right to receive dividends; provided that, any cash
dividends and stock dividends with respect to the Restricted Stock shall be
withheld by the Company for the Participant’s account, and interest may be
credited on the amount of the cash dividends withheld at a rate and subject to
such terms as determined by the Committee. The cash dividends or stock dividends
so withheld by the Committee and attributable to any particular share of
Restricted Stock (and earnings thereon, if applicable) shall be distributed to
the Participant in cash or, at the discretion of the Committee, in shares of
Common Stock having a Fair Market Value equal to the amount of such dividends,
if applicable, upon the release of restrictions on such share (and, in any
event, no later than the later of the 15th day of the third month following the
end of the Participant’s first taxable year in which the expiration of the
Restricted Period occurs or the 15th day of the third month following the end of
the Company’s first taxable year in which the expiration of the Restricted
Period occurs and, if such share is forfeited, the Participant shall have no
right to such dividends.

(ii)     The terms and conditions of a grant of Restricted Stock Units shall be
reflected in an Award Agreement. No shares of Common Stock shall be issued at
the time a Restricted Stock Unit is granted, and the Company will not be
required to set aside funds for the payment of any such Award. A Participant
shall have no voting rights with respect to any Restricted Stock Units granted
hereunder. At the discretion of the Committee, each Restricted Stock Unit
(representing one (1) share of Common Stock) may be credited with cash and stock
dividends paid by the Company in respect of one (1) share of Common Stock
(“Dividend Equivalents”). Dividend Equivalents shall be withheld by the Company
and credited to the Participant’s account, and interest may be credited on the
amount of cash Dividend

 

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Equivalents credited to the Participant’s account at a rate and subject to such
terms as determined by the Committee. Dividend Equivalents credited to a
Participant’s account and attributable to any particular Restricted Stock Unit
(and earnings thereon, if applicable) shall be distributed in cash or, at the
discretion of the Committee, in shares of Common Stock having a Fair Market
Value equal to the amount of such Dividend Equivalents and earnings, if
applicable, to the Participant upon settlement of such Restricted Stock Unit
(and, in any event, no later than the later of the 15th day of the third month
following the end of the Participant’s first taxable year in which the
expiration of the Restricted Period occurs or the 15th day of the third month
following the end of the Company’s first taxable year in which the expiration of
the Restricted Period occurs). If such Restricted Stock Unit is forfeited, the
Participant shall have no right to such Dividend Equivalents.

(c)     Restrictions.

(i)     Restricted Stock awarded to a Participant shall be subject to the
following restrictions until the expiration of the Restricted Period, and to
such other terms and conditions as may be set forth in the applicable Award
Agreement: (A) if an escrow arrangement is used, the Participant shall not be
entitled to delivery of the stock certificate; (B) the shares shall be subject
to the restrictions on transferability set forth in the Award Agreement; (C) the
shares shall be subject to forfeiture to the extent provided in the applicable
Award Agreement (provided, however, that the Restricted Stock will be subject to
forfeiture until the expiration of the Restricted Period); and (D) to the extent
such shares are forfeited, the stock certificates shall be returned to the
Company, and all rights of the Participant to such shares and as a shareholder
with respect to such shares shall terminate without further obligation on the
part of the Company.

(ii)     Restricted Stock Units awarded to any Participant shall be subject to
(A) forfeiture until the expiration of the Restricted Period, and satisfaction
of any applicable Performance Goals during such period, to the extent provided
in the applicable Award Agreement, and to the extent such Restricted Stock Units
are forfeited, all rights of the Participant to such Restricted Stock Units
shall terminate without further obligation on the part of the Company and
(B) such other terms and conditions as may be set forth in the applicable Award
Agreement.

(iii)     The Committee shall have the authority to remove any or all of the
restrictions on the Restricted Stock and Restricted Stock Units whenever it may
determine that, by reason of changes in Applicable Laws or other changes in
circumstances arising after the date the Restricted Stock or Restricted Stock
Units are granted, such action is appropriate.

(d)     Delivery of Restricted Stock and Settlement of Restricted Stock Units.

(i)     Upon the expiration of the Restricted Period with respect to any shares
of Restricted Stock (and, in any event, no later than the later of the 15th day
of the third month following the end of the Participant’s first taxable year in
which

 

17

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the expiration of the Restricted Period occurs or the 15th day of the third
month following the end of the Company’s first taxable year in which the
expiration of the Restricted Period occurs), the restrictions set forth in
Section 7.2(c) and the applicable Award Agreement shall be of no further force
or effect with respect to such shares, except as set forth in the applicable
Award Agreement. If an escrow arrangement is used, upon such expiration, the
Company shall deliver to the Participant, or his or her beneficiary, without
charge, the stock certificate evidencing the shares of Restricted Stock which
have not then been forfeited and with respect to which the Restricted Period has
expired (to the nearest full share), and any cash dividends or stock dividends
credited to the Participant’s account with respect to such Restricted Stock and
any interest thereon, if any.

(ii)     Upon the expiration of the Restricted Period (and, in any event, no
later than the later of the 15th day of the third month following the end of the
Participant’s first taxable year in which the expiration of the Restricted
Period occurs or the 15th day of the third month following the end of the
Company’s first taxable year in which the expiration of the Restricted Period
occurs) with respect to any outstanding Restricted Stock Units, the Company
shall deliver to the Participant, or his or her beneficiary, without charge, one
(1) share of Common Stock for each such outstanding vested Restricted Stock Unit
(“Vested Unit”) and cash equal to any Dividend Equivalents credited with respect
to each such Vested Unit in accordance with Section 7.2(b)(ii) hereof and the
interest thereon or, at the discretion of the Committee, in shares of Common
Stock having a Fair Market Value equal to such Dividend Equivalents and the
interest thereon, if any; provided, however, that, if explicitly provided in the
applicable Award Agreement, the Committee may, in its sole discretion, elect to
pay cash or part cash and part Common Stock in lieu of delivering only shares of
Common Stock for Vested Units. If a cash payment is made in lieu of delivering
shares of Common Stock, the amount of such payment shall be equal to the Fair
Market Value of the Common Stock as of the date on which the Restricted Period
lapsed with respect to each Vested Unit.

 

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(e)     Stock Restrictions. Each certificate representing Restricted Stock
awarded under this Plan shall bear a legend in such form as the Company deems
appropriate.

7.3     Performance Share Awards.

(a)     Grant of Performance Share Awards. Each Performance Share Award granted
under this Plan shall be evidenced by an Award Agreement. Each Performance Share
Award so granted shall be subject to the conditions set forth in this
Section 7.3, and to such other conditions not inconsistent with this Plan as may
be reflected in the applicable Award Agreement. The Committee shall have the
discretion to determine: (i) the number of shares of Common Stock or
stock-denominated units subject to a Performance Share Award granted to any
Participant; (ii) the Performance Period applicable to any Award; (iii) the
conditions that must be satisfied for a Participant to earn an Award; and
(iv) the other terms, conditions and restrictions of the Award.

(b)     Earning Performance Share Awards. The number of Performance Shares
earned by a Participant will depend on the extent to which the Performance Goals
established by the Committee are attained within the applicable Performance
Period, as determined by the Committee. No payout or issuance of shares of
Common Stock shall be made with respect to any Performance Share Award except
upon written certification by the Committee that the minimum threshold
Performance Goal(s) have been achieved, and any such payout shall occur at the
time of such written certification (and, in any event, no later than the later
of the 15th day of the third month following the end of the Participant’s first
taxable year in which the Performance Period is completed or the 15th day of the
third month following the end of the Company’s first taxable year in which the
Performance Period is completed).

(c)     Dividend Equivalents on Performance Share Awards. In no event shall any
Dividend Equivalents be paid with respect to any Performance Share Awards.

7.4     Other Equity-Based and Cash Awards. The Committee may grant Other
Equity-Based Awards, either alone or in tandem with other Awards, in such
amounts and subject to such conditions as the Committee shall determine in its
sole discretion. Each Other Equity-Based Award shall be evidenced by an Award
Agreement and shall be subject to such conditions, not inconsistent with this
Plan, as may be reflected in the applicable Award Agreement; provided, however,
that such Other Equity-Based Awards shall not provide for the deferral of
compensation other than in a manner that complies with or excepted from
Section 409A of the Code. In no event shall any dividends or Dividend
Equivalents be paid with respect to any Other Equity-Based Award until such
Awards are vested, it being understood that dividends and Dividend Equivalents
may be credited with respect to such Awards, with payment subject to such Awards
actually vesting (if any). The Committee may grant Cash Awards to Participants.
Cash Awards shall be evidenced in such form as the Committee may determine. All
Other Equity-Based Awards and Cash Awards shall be paid within two and one-half
(2 1⁄2) months after the end of the Fiscal Year in which they are earned and
vested.

 

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8.       Securities Law Compliance. Each Award Agreement shall provide that no
shares of Common Stock shall be purchased or sold thereunder unless and until
(a) any then applicable requirements of state or federal laws and regulatory
agencies have been fully complied with to the satisfaction of the Company and
its counsel and (b) if required to do so by the Company, the Participant has
executed and delivered to the Company a letter of investment intent in such form
and containing such provisions as the Committee may require. The Company shall
use reasonable efforts to seek to obtain from each regulatory commission or
agency having jurisdiction over this Plan such authority as may be required to
grant Awards and to issue and sell shares of Common Stock upon exercise of the
Awards; provided, however, that this undertaking shall not require the Company
to register under the Securities Act this Plan, any Award or any Common Stock
issued or issuable pursuant to any such Award. If, after reasonable efforts, the
Company is unable to obtain from any such regulatory commission or agency the
authority which counsel for the Company deems necessary for the lawful issuance
and sale of Common Stock under this Plan, the Company shall be relieved from any
liability for failure to issue and sell Common Stock upon exercise of such
Awards unless and until such authority is obtained.

9.       Use of Proceeds from Stock. Proceeds from the sale of Common Stock
pursuant to Awards, or upon exercise thereof, shall constitute general funds of
the Company.

10.     Miscellaneous.

10.1     Acceleration of Exercisability and Vesting. The Committee shall have
the power to accelerate the time at which an Award may first be exercised or the
time during which an Award or any part thereof will vest in accordance with this
Plan, notwithstanding the provisions in the Award stating the time at which it
may first be exercised or the time during which it will vest; provided, however,
that no Award under this Plan shall vest earlier than one (1) year following the
Grant Date except in the event of the Participant’s death, Disability,
retirement or a Change in Control.

10.2     Shareholder Rights. Except as provided in this Plan or an Award
Agreement, no Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to
such Award unless and until such Participant has satisfied all requirements for
exercise of the Award pursuant to its terms and no adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions of other rights for which the record date is prior to
the date such Common Stock certificate is issued, except as provided in
Section 11 hereof.

10.3     No Employment or Other Service Rights. Nothing in this Plan or any
instrument executed or Award granted pursuant thereto shall confer upon any
Participant any right to continue to serve the Company or an Affiliate in the
capacity in effect at the time the Award was granted or shall affect the right
of the Company or an Affiliate to terminate (a) the employment of an Employee
with or without notice and with or without Cause or (b) the service of a
Director pursuant to the Bylaws of the Company or an Affiliate, and any
applicable provisions of the corporate law of the state in which the Company or
the Affiliate is incorporated, as the case may be.

 

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10.4     Withholding Obligations. To the extent provided by the terms of an
Award Agreement and subject to the discretion of the Committee, the Participant
may satisfy any federal, state or local tax withholding obligation relating to
the exercise or acquisition of Common Stock under an Award by any of the
following means (in addition to the Company’s right to withhold from any
compensation paid to the Participant by the Company) or by a combination of such
means: (a) tendering a cash payment; (b) authorizing the Company to withhold
shares of Common Stock from the shares of Common Stock otherwise issuable to the
Participant as a result of the exercise or acquisition of Common Stock under the
Award, provided, however, that no shares of Common Stock are withheld with a
value exceeding the maximum amount of tax required to be withheld by law; or
(c) delivering to the Company previously owned and unencumbered shares of Common
Stock of the Company.

11.     Adjustments Upon Changes in Stock. In the event of changes in the
outstanding Common Stock or in the capital structure of the Company by reason of
any stock or extraordinary cash dividend, stock split, reverse stock split, an
extraordinary corporate transaction such as any recapitalization,
reorganization, merger, consolidation, combination, exchange, or other relevant
change in capitalization occurring after the Grant Date of any Award, Awards
granted under this Plan and any Award Agreements, the exercise price of Options
and Stock Appreciation Rights, the maximum number of shares of Common Stock
subject to all Awards stated in Section 4 and the maximum number of shares of
Common Stock with respect to which any one person may be granted Awards during
any period stated in Section 4 will be equitably adjusted or substituted, as to
the number, price or kind of a share of Common Stock or other consideration
subject to such Awards to the extent necessary to preserve the economic intent
of such Award. In the case of adjustments made pursuant to this Section 11,
unless the Committee specifically determines that such adjustment is in the best
interests of the Company or its Affiliates, the Committee shall, in the case of
Incentive Stock Options, ensure that any adjustments under this Section 11 will
not constitute a modification, extension or renewal of the Incentive Stock
Options within the meaning of Section 424(h)(3) of the Code and in the case of
Non-qualified Stock Options, ensure that any adjustments under this Section 11
will not constitute a modification of such Non-qualified Stock Options within
the meaning of Section 409A of the Code. Any adjustments made under this
Section 11 shall be made in a manner which does not adversely affect the
exemption provided pursuant to Rule 16b-3 under the Exchange Act. The Company
shall give each Participant notice of an adjustment hereunder and, upon notice,
such adjustment shall be conclusive and binding for all purposes.

12.     Termination.

12.1     Termination in General. Except as otherwise set forth in this Plan or
determined by the Committee and set forth in an Award Agreement, upon a
Participant’s Termination Event with or to the Company or an Affiliate, for any
reason whatsoever, except as otherwise set forth in this Section 12, in an Award
Agreement or, with the consent of such individual, as determined by the
Committee at any time prior to or after such Termination Event, Awards granted
to such Participant will be treated as follows:

(a)     Any Options and Stock Appreciation Rights will (i) to the extent not
vested and exercisable as of the date of such Termination Event with or to the
Company or an

 

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Affiliate, terminate on the date of such Termination Event and (ii) to the
extent vested and exercisable as of the date of such Termination Event with or
to the Company or an Affiliate, remain exercisable for a period of ninety
(90) days following the date of such Termination Event (but in no event beyond
the maximum term of such Award); provided, however, that a Participant may not
exercise an Incentive Stock Option more than three (3) months following the date
of such Termination Event for any reason other than death or Disability (but in
no event beyond the maximum term of such Award); provided, further, that, if the
Termination Event is by the Company for Cause, all outstanding Options (whether
or not vested) shall immediately terminate and cease to be exercisable. If,
after the Termination Event, the Optionholder does not exercise his or her
Option within the time specified in the Award Agreement, the Option shall
terminate. Notwithstanding the foregoing, in the event that on the last business
day of the term of an Option (other than an Incentive Stock Option) or a Stock
Appreciation Right (i) the exercise of the Option or Stock Appreciation Right is
prohibited by applicable law or (ii) Common Stock may not be purchased or sold
by certain Employees or Non-Employee Directors due to the “black-out period” of
a Company policy or a “lock-up” agreement undertaken in connection with an
issuance of securities by the Company, the term of the Option or Stock
Appreciation Right shall be automatically extended for a period of thirty
(30) days following the end of the legal prohibition, black-out period or
lock-up agreement.

(b)     Any unvested portion of any Restricted Awards will be immediately
forfeited.

(c)     Any unvested Performance Share Awards will be immediately forfeited and
terminate.

(d)     Any other Awards, including, but not limited to, Other Equity-Based
Awards and Cash Awards, to the extent not vested will be immediately forfeited
and terminate.

12.2     Upon Termination Event in Connection with Death. Except as otherwise
provided in an Award Agreement, upon a Termination Event in connection with a
Participant’s death, Awards granted to a Participant will be treated as follows:

(a)     Any Options and Stock Appreciation Rights will (i) to the extent not
vested and exercisable as of the date of such Termination Event with or to the
Company or an Affiliate, immediately vest on the date of such termination, and
remain exercisable for a period of one (1) year following the date of such
termination (but in no event beyond the maximum term of such Award) and (ii) to
the extent vested and exercisable as of the date of such Termination Event with
or to the Company or an Affiliate, remain exercisable for a period of one
(1) year following the date of such termination (but in no event beyond the
maximum term of such Award).

(b)     A pro-rata portion of any unvested Restricted Awards equal to the
percentage of the Restricted Period which has been met as of the Termination
Event will immediately vest on the date of such termination.

 

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(c)     A pro-rata portion of any unvested Performance Share Awards equal to the
percentage of the Performance Period which has been met as of the Termination
Event will immediately vest on the date of such termination at the target number
of shares of Common Stock.

(d)     Any other Awards, including, but not limited to, Other Equity-Based
Awards and Cash Awards, to the extent not vested, will be immediately forfeited
and terminate.

12.3     Upon Termination Event in Connection with Disability. Except as
otherwise provided in an Award Agreement, upon a Termination Event in connection
with a Participant’s Disability, Awards granted to a Participant will be treated
as follows:

(a)     Any Options and Stock Appreciation Rights will (i) to the extent not
vested and exercisable as of the date of such Termination Event with or to the
Company or an Affiliate, immediately vest on the date of such termination, and
remain exercisable for a period of one (1) year following the date of such
termination (but in no event beyond the maximum term of such Award) and (ii) to
the extent vested and exercisable as of the date of such Termination Event with
or to the Company or an Affiliate, remain exercisable for a period of one
(1) year following the date of such termination (but in no event beyond the
maximum term of such Award).

(b)     A pro-rata portion of any unvested Restricted Awards equal to the
percentage of the Restricted Period which has been met as of the Termination
Event will immediately vest on the date of such termination.

(c)     A pro-rata portion of any unvested Performance Share Awards equal to the
percentage of the Performance Period which has been met as of the Termination
Event will immediately vest on the date of such termination at the target number
of shares of Common Stock.

(d)     Any other Awards, including, but not limited to, Other Equity-Based
Awards and Cash Awards, to the extent not vested, will be immediately forfeited
and terminate.

12.4     Upon Termination Event in Connection with Retirement. The Committee
may, but shall not be required to, provide for acceleration of vesting and
exercisability of Awards in the terms of any Award Agreement in the event of the
Participant’s retirement (as such term is defined in the applicable Award
Agreement).

12.5     Upon Termination Event in Connection with a Change in Control. Except
as otherwise provided in an Award Agreement, upon a Termination Event in
connection with a Change in Control, Awards granted to a Participant will be
treated as set forth in Section 13.

12.6     Bona Fide Leave. The Committee or its delegate, in its sole discretion,
may determine whether any leave of absence approved by that party, including
sick leave, military leave or any other personal or family leave of absence,
shall constitute a Termination Event. The

 

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Committee or its delegate, in its sole discretion, may determine whether a
Company transaction, such as a sale or spin-off of a division or subsidiary that
employs a Participant, shall be deemed to result in a Termination Event for
purposes of affected Awards, and such decision shall be final, conclusive and
binding; provided, however, that any Termination Event shall be determined in
accordance with the definition of a Separation from Service under Section 409A
of the Code to the extent such determination relates to any nonqualified
deferred compensation.

12.7     Change in Participant Status. If a Participant changes status from an
Employee, Director or Consultant, to an Employee, Director or Consultant,
without interruption, the Committee, in its sole discretion, may permit any
Award held by such Participant at the time of such change in status to be
unaffected by such status change; provided, however, that an Incentive Stock
Option held by an Employee shall be treated as a Non-qualified Stock Option on
the first (1st) day that is three (3) months after the date that the Participant
ceases to be an Employee.

13.     Effect of Change in Control.

13.1     Unless otherwise provided in an Award Agreement, notwithstanding any
provision of this Plan to the contrary:

(a)     Upon a Participant’s Termination Event without Cause or for Good Reason
during the 24-month period following a Change in Control, all outstanding
Options and Stock Appreciation Rights shall become immediately exercisable with
respect to one hundred percent (100%) of the shares subject to such Options or
Stock Appreciation Rights, and/or the Restricted Period shall expire immediately
with respect to one hundred percent (100%) of the outstanding shares of
Restricted Stock or Restricted Stock Units as of the date of the Participant’s
Termination Event.

(b)     With respect to Performance Share Awards, in the event of a Change in
Control, all incomplete Performance Periods in respect of such Award in effect
on the date the Change in Control occurs shall end on the date of such Change in
Control and the Committee shall cause to be paid to the applicable Participant a
pro-rata portion of such Awards equal to the percentage of the Performance
Period which has been met as of the date of the Change in Control based upon the
assumption that the applicable “target” levels of performance have been
attained. The payment of such Award shall take place no later than the later of
the 15th day of the third month following the end of the Participant’s first
taxable year in which the Change in Control occurs or the 15th day of the third
month following the end of the Company’s first taxable year in which the Change
in Control occurs.

To the extent practicable, any actions taken by the Committee under the
immediately preceding clauses (a) and (b) shall occur in a manner and at a time
which allows affected Participants the ability to participate in the Change in
Control with respect to the shares of Common Stock subject to their Awards.

13.2     In addition, in the event that the Change in Control results in a cash
payment for each outstanding share of the Company’s Common Stock (a “Cash
Payment”), then to the extent of such Cash Payment, as of the date of the Change
in Control, each Award (other than

 

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Performance Share Awards) then outstanding shall be cancelled and the holders
thereof shall receive the Cash Payment for each share of Common Stock
represented by such Awards, less the exercise price in the case of Options or
Stock Appreciation Rights. In the case of any Option or Stock Appreciation Right
with an exercise price that equals or exceeds the Cash Payment amount, the
Committee shall cancel the Option or Stock Appreciation Right without payment of
consideration therefor.

13.3     In addition, in the event of a Change in Control where the
consideration paid to the existing shareholders is stock or a combination of
cash and stock, the Committee may in its discretion and upon at least ten
(10) days’ advance notice to the affected persons, cancel any outstanding Awards
and pay to the holders thereof, in cash or stock, or any combination thereof,
the value of such Awards based upon the price per share of Common Stock received
or to be received by other shareholders of the Company in the event. In the case
of any Option or Stock Appreciation Right with an exercise price that equals or
exceeds the price paid for a share of Common Stock in connection with the Change
in Control, the Committee may cancel the Option or Stock Appreciation Right
without the payment of consideration therefor.

13.4     The obligations of the Company under this Plan shall be binding upon
any successor corporation or organization resulting from the merger,
consolidation or other reorganization of the Company, or upon any successor
corporation or organization succeeding to all or substantially all of the assets
and business of the Company and its Affiliates, taken as a whole.

14.     Amendment of this Plan and Awards.

14.1     Amendment of this Plan. The Board at any time, and from time to time,
may amend or terminate this Plan. However, except as provided in Section 11
relating to adjustments upon changes in Common Stock and Section 14.3, no
amendment shall be effective unless approved by the shareholders of the Company
to the extent shareholder approval is necessary to satisfy any Applicable Laws.
At the time of such amendment, the Board shall determine, upon advice from
counsel, whether such amendment will be contingent on shareholder approval.

14.2     Shareholder Approval. The Board may, in its sole discretion, submit any
other amendment to this Plan for shareholder approval.

14.3     Contemplated Amendments. It is expressly contemplated that the Board
may amend this Plan in any respect the Board deems necessary or advisable to
provide eligible Employees, Consultants and Directors with the maximum benefits
provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options or to the
nonqualified deferred compensation provisions of Section 409A of the Code and/or
to bring this Plan and/or Awards granted under it into compliance therewith.

14.4     No Impairment of Rights. Rights under any Award granted before
amendment of this Plan shall not be impaired by any amendment of this Plan
unless (a) the Company requests the consent of the Participant and (b) the
Participant consents in writing.

 

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14.5     Amendment of Awards. The Committee at any time, and from time to time,
may amend the terms of any one or more Awards; provided, however, that the
Committee may not affect any amendment which would otherwise constitute an
impairment of the rights under any Award unless (a) the Company requests the
consent of the Participant and (b) the Participant consents in writing.

15.     Transfers.

15.1     Transfers upon Death. Except as provided herein, Awards may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of a Participant, only by the Participant. Upon
the death of a Participant, outstanding Awards held by such Participant at the
time of his or her death may be exercised only by the executors or
administrators of the Participant’s estate or by any person or persons who shall
have acquired such right to exercise by will or by the laws of descent and
distribution. No transfer by will or the laws of descent and distribution of any
Award, or the right to exercise any Award, shall be effective to bind the
Company unless the Committee shall have been furnished with (i) written notice
thereof and with a copy of the will and/or such evidence as the Committee may
deem necessary to establish the validity of the transfer and (ii) an agreement
by the transferee to comply with all the terms and conditions of the Award that
are or would have been applicable to the Participant and to be bound by the
acknowledgements made by the Participant in connection with the grant of the
Award.

15.2     Permitted Transfers. The Committee may, in its sole discretion, permit
Awards (other than Incentive Stock Options) to be transferred by a Participant,
without consideration, subject to such rules as the Committee may adopt
consistent with any applicable Award Agreement to preserve the purposes of this
Plan, to (i) an Immediate Family Member, (ii) a trust solely for the benefit of
the Participant and/or his or her Immediate Family Members, (iii) a corporation,
partnership or limited liability company whose only shareholders, partners or
members, as applicable, are the Participant and/or his or her Immediate Family
Members, or (iv) any other transferee as may be approved by the Committee in its
sole discretion, in each case provided that (x) the Participant gives the
Committee advance written notice describing the terms and conditions of the
proposed transfer, (y) the transferee furnishes the Committee with an agreement
to comply with all the terms and conditions of the Award that are or would have
been applicable to the Participant and to be bound by the acknowledgements made
by the Participant in connection with the grant of the Award and (z) the
Committee approves the proposed transfer.

15.3     Effect of Transfer. The terms of any Award transferred in accordance
with this Section 15 shall apply to the Permitted Transferee, and any reference
in this Plan, or in any applicable Award Agreement, to a Participant shall be
deemed to refer to the Permitted Transferee, except that (i) Permitted
Transferees shall not be entitled to transfer any Award, other than by will or
the laws of descent and distribution or with the written consent of the
Committee, (ii) Permitted Transferees shall not be entitled to exercise any
transferred Option unless there shall be in effect a registration statement on
an appropriate form covering the shares of Common Stock to be acquired pursuant
to the exercise of such Option if the Committee determines, consistent with any
applicable Award Agreement, that such a registration statement is necessary or
appropriate, (iii) neither the Committee nor the Company shall be required to
provide any notice to a Permitted

 

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Transferee, whether or not such notice is or would otherwise have been required
to be given to the Participant under this Plan or otherwise, and (iv) the
consequences of the Participant’s Termination Event under the terms of this Plan
and the applicable Award Agreement shall continue to be applied with respect to
the Permitted Transferee, including without limitation that an Option shall be
exercisable by the Permitted Transferee only to the extent, and for the periods,
specified in this Plan and the applicable Award Agreement.

16.     General Provisions.

16.1     Forfeiture Events. The Committee may specify in an Award Agreement that
the Participant’s rights, payments and benefits with respect to an Award shall
be subject to reduction, cancellation, forfeiture or recoupment upon the
occurrence of certain events, in addition to applicable vesting conditions of an
Award. Such events may include, without limitation, breach of non-competition,
non-solicitation, confidentiality or other restrictive covenants that are
contained in the Award Agreement or otherwise applicable to the Participant, a
Participant’s Termination Event for Cause, or other conduct by the Participant
that is detrimental to the business or reputation of the Company and/or its
Affiliates.

16.2     Clawback. Notwithstanding any other provisions in this Plan, the
Company may cancel any Award, require reimbursement of any Award by a
Participant, and effect any other right of recoupment of equity or other
compensation provided under this Plan in accordance with any Company policies
that may be adopted and/or modified from time to time (the “Clawback Policy”).
In addition, a Participant may be required to repay to the Company previously
paid compensation, whether provided pursuant to this Plan or an Award Agreement,
in accordance with the Clawback Policy. By accepting an Award, the Participant
is agreeing to be bound by the Clawback Policy, as in effect or as may be
adopted and/or modified from time to time by the Company in its discretion
(including, without limitation, to comply with applicable law or stock exchange
listing requirements).

16.3     Other Compensation Arrangements. Nothing contained in this Plan shall
prevent the Board from adopting other or additional compensation arrangements,
subject to shareholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in specific
cases.

16.4     Unfunded Plan. This Plan shall be unfunded. Neither the Company, the
Board nor the Committee shall be required to establish any special or separate
fund or to segregate any assets to assure the performance of its obligations
under this Plan.

16.5     Delivery. Upon exercise of a right granted under this Plan, the Company
shall issue Common Stock or pay any amounts due within a reasonable period of
time thereafter. Subject to any statutory or regulatory obligations the Company
may otherwise have, for purposes of this Plan, thirty (30) days shall be
considered a reasonable period of time.

16.6     No Fractional Shares. No fractional shares of Common Stock shall be
issued or delivered pursuant to this Plan. The Committee shall determine whether
cash, additional Awards or other securities or property shall be issued or paid
in lieu of fractional shares of Common Stock or whether any fractional shares
should be rounded, forfeited or otherwise eliminated.

 

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16.7     Other Provisions. The Award Agreements authorized under this Plan may
contain such other provisions not inconsistent with this Plan, including,
without limitation, restrictions upon the exercise of the Awards, as the
Committee may deem advisable.

16.8     Section 409A. This Plan is intended to comply with Section 409A of the
Code to the extent subject thereto, and, accordingly, to the maximum extent
permitted, this Plan shall be interpreted and administered to be in compliance
therewith. Any payments described in this Plan that are due within the
“short-term deferral period” as defined in Section 409A of the Code shall not be
treated as deferred compensation unless Applicable Laws require otherwise.
Notwithstanding anything to the contrary in this Plan, to the extent required to
avoid accelerated taxation and tax penalties under Section 409A of the Code,
amounts that would otherwise be payable and benefits that would otherwise be
provided pursuant to this Plan during the six (6) month period immediately
following the Participant’s Termination Event shall instead be paid on the first
payroll date after the six-month anniversary of the Participant’s separation
from service (or the Participant’s death, if earlier). Notwithstanding the
foregoing, neither the Company nor the Committee shall have any obligation to
take any action to prevent the assessment of any excise tax or penalty on any
Participant under Section 409A of the Code and neither the Company nor the
Committee will have any liability to any Participant for such tax or penalty.

16.9     Disqualifying Dispositions. Any Participant who shall make a
“disposition” (as defined in Section 424 of the Code) of all or any portion of
shares of Common Stock acquired upon exercise of an Incentive Stock Option
within two (2) years from the Grant Date of such Incentive Stock Option or
within one (1) year after the issuance of the shares of Common Stock acquired
upon exercise of such Incentive Stock Option (a “Disqualifying Disposition”)
shall be required to immediately advise the Company in writing as to the
occurrence of the sale and the price realized upon the sale of such shares of
Common Stock.

16.10     Section 16. It is the intent of the Company that this Plan satisfy,
and be interpreted in a manner that satisfies, the applicable requirements of
Rule 16b-3 as promulgated under Section 16 of the Exchange Act so that
Participants will be entitled to the benefit of Rule 16b-3, or any other rule
promulgated under Section 16 of the Exchange Act, and will not be subject to
short-swing liability under Section 16 of the Exchange Act. Accordingly, if the
operation of any provision of this Plan would conflict with the intent expressed
in this Section 16.10, such provision to the extent possible shall be
interpreted and/or deemed amended so as to avoid such conflict.

16.11     Beneficiary Designation. Each Participant under this Plan may from
time to time name any beneficiary or beneficiaries by whom any right under this
Plan is to be exercised in case of such Participant’s death. Each designation
will revoke all prior designations by the same Participant, shall be in a form
reasonably prescribed by the Committee and shall be effective only when filed by
the Participant in writing with the Company during the Participant’s lifetime.
If no valid beneficiary designation form is on file with the Company at the time
of a Participant’s death, the default beneficiary of such Participant shall be
the Participant’s spouse, if any, then to any children equally, per stirpes; and
then the Participant’s estate.

16.12     Expenses. The costs of administering this Plan shall be paid by the
Company.

 

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16.13     Severability. If any of the provisions of this Plan or any Award
Agreement is held to be invalid, illegal or unenforceable, whether in whole or
in part, such provision shall be deemed modified to the extent, but only to the
extent, of such invalidity, illegality or unenforceability and the remaining
provisions shall not be affected thereby.

16.14     Plan Headings. The headings in this Plan are for purposes of
convenience only and are not intended to define or limit the construction of the
provisions hereof.

16.15     Non-Uniform Treatment. The Committee’s determinations under this Plan
need not be uniform and may be made by it selectively among persons who are
eligible to receive, or actually receive, Awards. Without limiting the
generality of the foregoing, the Committee shall be entitled to make non-uniform
and selective determinations, amendments and adjustments, and to enter into
non-uniform and selective Award Agreements.

17.     Effective Date of this Plan. This Plan shall become effective as of the
Effective Date.

18.     Termination or Suspension of this Plan. This Plan shall terminate
automatically on the tenth anniversary of the Effective Date. No Award shall be
granted pursuant to this Plan after such date, but Awards theretofore granted
may extend beyond that date. The Board may suspend or terminate this Plan at any
earlier date pursuant to Section 14.1 hereof. No Awards may be granted under
this Plan while this Plan is suspended or after it is terminated.

19.     Choice of Law. The law of the State of Florida shall govern all
questions concerning the construction, validity and interpretation of this Plan,
without regard to such state’s conflict of law rules.

As adopted by the Board of Directors of Stein Mart, Inc. on January 23, 2018.

As approved by the shareholders of Stein Mart, Inc. on June 19, 2018.

 

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