Exhibit 10.2

STEIN MART, INC.

2001 OMNIBUS PLAN

OPTION AWARD AGREEMENT FOR KEY EMPLOYEES

THIS AGREEMENT is made and entered into as of the date set forth on the
signature page hereof by and between STEIN MART, INC., a Florida corporation
(“Company”), and the Key Employee of the Company whose signature is set forth on
the signature page hereof (the “Key Employee”).

W I T N E S S E T H

WHEREAS, the Company has adopted the Stein Mart, Inc. 2001 Omnibus Plan
(“Plan”), the terms of which, to the extent not stated herein, are specifically
incorporated by reference in this Agreement;

WHEREAS, the purpose of the Plan is to permit Awards under the Plan to be
granted to certain Key Employees of the Company and its Affiliates and to
further specify the terms and conditions under which such individuals may
receive such Awards;

WHEREAS, the Key Employee has entered into an employment agreement with the
Company in a key employee capacity and the Company desires him or her to remain
in such capacity, and to secure or increase his or her ownership of Shares in
order to increase his or her incentive and personal interest in the success and
growth of the Company; and

WHEREAS, defined terms used herein and not otherwise defined herein shall have
the meanings set forth in the Plan.

NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements herein set forth, the parties hereby mutually covenant and agree as
follows:

1. Option Grant.

(a) Subject to the terms and conditions set forth herein, the Company hereby
grants to the Key Employee an option (the “Option”) to purchase from the Company
all or any part of the aggregate number of Shares (hereinafter referred to as
the “Option Stock”) set forth on the signature page hereof, at the purchase
price per Share set forth on the signature page hereof. The Option vests as
follows (the “Vested Portion”):

 

1 Year from the Grant Date:

   1/3

2 Years from the Grant Date:

   1/3

3 Years from the Grant Date:

   1/3

Except as provided herein, the Vested Portion of the Option shall be exercisable
beginning on the Initial Exercise Date set forth on the signature page hereof.
No portion of the Option shall vest after the Key Employee’s employment is
terminated, regardless of the reason for termination.

The Option may be exercised in whole or in part (but any exercise shall be for
whole Shares) by notice in writing to the Company. The aggregate purchase price
for the Shares for which the Option is exercised shall be paid to the Company at
the time of exercise in cash, Shares registered in the name of the Key Employee,
or by a combination thereof, all as provided on the signature page hereof. The
approval of the board of directors of the Company is required in order for
Shares held by the Key Employee for fewer than six months to be used in payment
of the exercise price of the Option. Unless otherwise provided on the signature
page hereof, the Option shall not be an Incentive Stock Option for purposes of
Section 422 of the Code. Unless otherwise provided on the signature page hereof,
the Option shall not have the “reload feature” described in Section 6.1 of the
Plan, as of the date of grant.

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(b) If the purchase price may be paid wholly or partly in Shares, any Shares
tendered in payment thereof shall be free of all adverse claims and duly
endorsed in blank by the Key Employee or accompanied by stock powers duly
endorsed in blank. Shares tendered shall be valued at Fair Market Value on the
date on which the Option is exercised. As used herein, “Fair Market Value” means
the per Share closing price on the date in question in the principal market in
which the Shares are then traded or, if no sales of Shares have taken place on
such date, the closing price on the most recent date on which selling prices
were quoted; provided, however, that for any Option that is not an Incentive
Stock Option, the Committee in its discretion may elect to determine Fair Market
Value with respect to such Shares, based on the average of the closing prices,
as of the date of determination and a period of up to 20 trading days
immediately preceding such date. If such proviso is to be applicable, the
signature page hereof sets forth the number of trading days in such period.

2. Nontransferability.

(a) This Option is not transferable other than by will or by the laws of descent
and distribution. The Option may be exercised during the life of the Key
Employee only by the Key Employee (or his/her legal representative).

(b) The Shares acquired on exercise of the Options shall not be sold by Key
Employee (or his/her legal representative) until the earlier to occur of (i) one
year from the date of exercise or (ii) a Change of Control of the Company.

3. Exercise of Option.

(a) Except as provided herein, the Vested Portion of the Option shall be
exercisable beginning the Initial Exercise Date set forth on the signature page
hereof. No portion of the Option may be exercised until or unless vested, and no
Vested Portion of the Option may be exercised on or after the Expiration Date
set forth on the signature page hereof.

(b) If the Key Employee’s employment with the Company is terminated for Cause
(as the term “Cause” is defined in the Key Employee’s Employment Agreement with
the Company), the Key Employee shall have no right to exercise any portion of
the Option not yet exercised as of the date of such termination for Cause. If
the Key Employee’s employment with the Company is terminated by the Company
without Cause prior to the Initial Exercise Date set forth on the signature page
hereof, then the Vested Portion of the Option shall become immediately
exercisable. Notwithstanding the foregoing, no Vested Portion of the Option may
be exercised on or after the Expiration Date set forth on the signature page
hereof.

4. Beneficiary. (a) The person whose name appears on the signature page hereof
after the caption “Beneficiary” or any successor designated by the Key Employee
in accordance herewith (the person who is the Key Employee’s Beneficiary at the
time of his death herein referred to as the “Beneficiary”) shall be entitled to
exercise the Option, to the extent it is vested as of the date of death and
exercisable, after the death of the Key Employee. The Key Employee may from time
to time revoke or change his Beneficiary without the consent of any prior
Beneficiary by filing a new designation with the Committee. The last such
designation received by the Committee shall be controlling; provided, however,
that no designation, or change or revocation thereof, shall be effective unless
received by the Committee prior to the Key Employee’s death, and in no event
shall any designation be effective as of a date prior to such receipt.

 

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(b) If no such Beneficiary designation is in effect at the time of a Key
Employee’s death, or if no designated Beneficiary survives the Key Employee or
if such designation conflicts with law, the Key Employee’s estate shall be
entitled to exercise the Option, to the extent it is both vested as of the date
of death and exercisable, after the death of the Key Employee. If the Committee
is in doubt as to the right of any person to exercise the Option, the Company
may refuse to recognize such exercise, without liability for any interest or
dividends on the Option Stock, until the Committee determines the person
entitled to exercise the Option, or the Company may apply to any court of
appropriate jurisdiction and such application shall be a complete discharge of
the liability of the Company therefor.

5. No Rights As Stockholder. The Key Employee shall have no rights as a holder
of the Option Stock until the issuance of a certificate for the Option Stock.

6. Tax Withholding. (a) It shall be a condition of the obligation of the Company
to issue Option Stock to the Key Employee or the Beneficiary, and the Key
Employee agrees, that the Key Employee shall pay to the Company upon its demand,
such amount as may be requested by the Company for the purpose of satisfying its
liability to withhold federal, state, or local income or other taxes incurred by
reason of the exercise of the Option.

(b) If the Option is not an Incentive Stock Option, the Key Employee may elect
to have the Company withhold that number of Shares of Option Stock otherwise
issuable to the Key Employee upon exercise of the Option or to deliver to the
Company a number of Shares, in each case, having a Fair Market Value on the Tax
Date (as defined below) equal to the minimum amount required to be withheld as a
result of such exercise. The election must be made in writing and must be
delivered to the Company prior to the Tax Date. If the number of shares so
determined shall include a fractional share, the Key Employee shall deliver cash
in lieu of such fractional share. All elections shall be made in a form approved
by the committee and shall be subject to disapproval, in whole or in part by the
Committee. As used herein, Tax Date means the date on which the Key Employee
must include in his gross income for federal income tax purposes the fair market
value of the Option Stock over the purchase price therefor.

7. Adjustments in Event of Change in Shares. In the event that the Committee
shall determine that any dividend or other distribution (whether in the form of
cash, Shares, other securities, or other property), recapitalization, stock
split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase, or exchange of securities of the Company, or
other similar corporate transaction or event affects the Shares issuable on
exercise of the Option, such that an adjustment is determined by the Committee
to be appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall, in such manner as it shall deem equitable, adjust the number
and type of Shares awarded pursuant to this Agreement, or the terms, conditions,
or restrictions of this Agreement; provided, however, that with respect to
Awards of Incentive Stock Options no such adjustment shall be authorized to the
extent that such authority would cause the Plan to violate Section 422(b)(1) of
the Code or any successor provision thereto; and provided further, that the
number of Shares subject to any Award payable or denominated in Shares shall
always be a whole number.

8. Powers of Company Not Affected. The existence of the Option shall not affect
in any way the right or power of the Company or its stockholders to make or
authorize any combinations, subdivision or reclassification of the Shares or any
reorganization, merger, consolidation, business combination, exchange of Shares,
or other change in the Company’s capital structure or its business, or any issue
of bonds, debentures or stock having rights or preferences equal, superior or
affecting the

 

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Option Stock or the rights thereof or dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.
Nothing in this Agreement shall confer upon the Key Employee any right to
continue in the employment of the Company or any Affiliate, or interfere with or
limit in any way the right of the Company or any Affiliate to terminate the Key
Employee’s employment at any time.

9. Interpretation by Committee. The Key Employee agrees that any dispute or
disagreement which may arise in connection with this Agreement shall be resolved
by the Committee, in its sole discretion, and that any interpretation by the
Committee of the terms of this Agreement or the Plan and any determination made
by the Committee under this Agreement or the Plan may be made in the sole
discretion of the Committee and shall be final, binding, and conclusive. Any
such determination need not be uniform and may be made differently among Key
Employees awarded Option Stock.

10. Miscellaneous. (a) This Agreement shall be governed and construed in
accordance with the laws of the State of Florida applicable to contracts made
and to be performed therein between residents thereof.

(b) This Agreement may not be amended or modified except by the written consent
of the parties hereto.

(c) The captions of this Agreement are inserted for convenience of reference
only and shall not be taken into account in construing this Agreement.

(d) Any notice, filing or delivery hereunder or with respect to Option Stock
shall be given to the Key Employee at either his usual work location or his home
address as indicated in the records of the Company, and shall be given to the
Committee or the Company at 1200 Riverplace Boulevard, Jacksonville, Florida
32207, Attention Corporate Secretary. All such notices shall be given by first
class mail, postage prepaid, or by personal delivery.

(e) This Agreement shall be binding upon and inure to the benefit of the Company
and its successors and assigns and shall be binding upon and inure to the
personal benefit of the Key Employee, the Beneficiary and the personal
representative(s) and heirs of the Key Employee.

(remainder of page intentionally left blank, signature page to follow)

 

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IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its
duly authorized officer, and the Key Employee has hereunto affixed his hand, all
on the day and year set forth below.

 

STEIN MART, INC. By:  

/s/ Linda M. Farthing

  Its:  

President and Chief Executive Officer

/s/ David H. Stovall, Jr.

DAVID H. STOVALL, JR.

 

This Option is a Non-Qualified Stock Option      

SIGN, FILL IN BENEFICIARY

INFORMATION & RETURN

ONE COPY TO:

No. of Shares of Option Stock: 1,000,000      

            Stein Mart, Inc.

            Attn: James G. Delfs

            1200 Riverplace Blvd.

            Jacksonville, FL 32207

      Purchase Price Per Share: $1.25             Grant Date: December 5, 2008
            Initial Exercise Date for the Vested Portion: December 5, 2010      
      Expiration Date: December 5, 2015       PLEASE PRINT BENEFICIARY
INFORMATION       Beneficiary:                                          
                                  Address of Beneficiary:      
                                       
                                                             
                                       
                                                             
Beneficiary Tax Identification No. or Social Security No.:      
                                       
                                                             

 

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