STAGE STORES, INC. PERFORMANCE BASED SHARE AGREEMENT

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THIS PERFORMANCE BASED SHARE AGREEMENT (the “Agreement”) is made effective as of the __________ day of _______________, 20___ (the "Effective Date"), by and between STAGE STORES, INC., a Nevada corporation (hereinafter called the "Company"), and _____________________, an employee of the Company, its subsidiaries or its affiliates (hereinafter called the " Employee").

 

WHEREAS, the Board of Directors of the Company (the "Board") has adopted the Stage Stores, Inc. Amended and Restated 2001 Equity Incentive Plan (the "Plan"), as it may be amended from time to time; and

 

WHEREAS, the Company considers it desirable and in the Company's best interests that the Employee be given an opportunity to acquire Common Shares in furtherance of the Plan to provide incentive for the Employee to remain an employee of the Company, its subsidiaries or its affiliates and to promote the growth, earnings and success of the Company.

 

NOW, THEREFORE, in consideration of the premises, it is agreed as follows:

 

1.           TARGET NUMBER OF PERFORMANCE SHARES.  The Target Number of Performance Shares for Employee under this Agreement is _______________.  The number of Common Shares ultimately received, if any, for Performance Shares earned under this Agreement will be determined pursuant to Section 3 of this Agreement.  For purposes of this Agreement, "Common Shares" s hall mean the Company's authorized voting common stock, par value $0.01, and “Performance Shares” shall mean the number of Common Shares earned under this Agreement.

 

2.           PERFORMANCE CYCLE.  The Performance Cycle commences on __________, 20____, and ends on ___________, 20___.

 

3.           SETTLEMENT OF AWARD.  Except as provided below, the Company shall deliver to the Employee one Common Share for each Performance Share earned by the Employee, as determined in accordance with the performance measure(s) and provisions set forth in Exhibit “A”, which is attached to and forms a part of this Agreement.  Any fractional Common Share s shall be rounded up or down to the nearest whole Common Share.  It is intended that Common Shares will be issued for the Performance Shares; provided however, the Company’s Board of Directors may in its sole discretion pay all or a portion of the award in cash instead of Common Shares.  For purposes of this Agreement, reference to the “Board” shall include the Compensation Committee (the “Committee”) to the extent that the Board has designated the Committee to administer the Plan.

 

4.           TIME OF PAYMENT. Except as otherwise provided in this Agreement, payment of Common Shares earned pursuant to this Agreement will be made within 75 days of the end of the Performance Cycle.

 

 

5.           ELIGIBILITY FOR PERFORMANCE SHARES.  The Employee shall be eligible for payment of earned Performance Shares, as specified in Section 3, only if the Employee’s employment with the Company continues through the end of the Performance Cycle or the Employee’s employment with the Company terminates during the Performance Cycle due to the Employee’s death, disability or retirement.

 

6.           DEATH OF EMPLOYEE.  If the Employee’s employment with the Company is terminated due to death during the Performance Cycle, he or she will receive the Target Number of Performance Shares set forth in this Agreement within thirty (30) days of his or her death.

 

7.           DISABILITY OF EMPLOYEE. If the Employee’s employment with the Company is terminated due to disability during the Performance Cycle, he or she will receive the Target Number of Performance Shares set forth in this Agreement within thirty (30) days of his or her disability.  For the purposes of this Agreement, the Employee shall be deemed to have terminated his or her employment by the Company by reason of disability, if the Committee shall determine that the physical or mental condition of the Employee by reason of which such employment terminated was such at that time as would entitle him or her to payment of monthly disability benefits under any Company disability plan.  If the Employee is not eligible for benefits under any disability plan of the Company, he or she shall be deemed to have terminated such employment by reason of disability if the Committee shall determine that his or her physical or mental condition would entitle him or her to benefits under any Company disability plan if he or she were eligible therefor.

 

8.           RETIREMENT OF EMPLOYEE.   If the Employee’s employment with the Company is terminated due to retirement (as determined by the Board) during the Performance Cycle, he or she will receive the Target Number of Performance Shares set forth in this Agreement within thirty (30) days of his or her retirement.

 

9.           CHANGE IN CONTROL.  In the event of a Change in Control during the Performance Cycle, the Employee will receive the Target Number of Performance Shares set forth in this Agreement within thirty (30) days of the effective date of the Change in Control.  For purposes of this Agreement, a “Change in Control” shall be deemed to have occurred:

 

(a)           on such date within the 12-month period following the date that any one person, or more than one person acting as a group (as defined in §1.409A-3(i)(5)(v)(B) of the Treasury Regulations), acquires ownership of stock that represents twenty-five percent (25%) or more of the combined voting power of the Company’s then outstanding securities (the “Trigger Date”), that a majority of the individuals who, as of the Trigger Date, constitute the Board (the “Incumbent Board”) are replaced by new members whose appointment or election is not endorsed by a majority of the members of the Incumbent Board before the date of such appointment or election;

 

(b)           as of the date that any one person, or more than one person acting as a group (as defined in §1.409A-3(i)(5)(v)(B) of the Treasury Regulations), acquires ownership of stock that, together with stock held by such person or group, constitutes more than 50% of either (1) the then outstanding shares of common stock of the Company or (2) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the

 

 

(c)           the date any one person, or more than one person acting as a group (as defined in §1.409A-3(i)(5)(v)(B) of the Treasury Regulations), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) all, or substantially all, of the assets of the Company, except for any sale, lease exchange or transfer resulting from any action taken by any creditor of the Company in enforcing its rights or remedies against any assets of the Company in which such creditor holds a security interest.  Provided further, a transfer of assets by the Company shall not be treated as a Change in Control if the assets are transferred to:

 

(i)           A shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock;

 

(ii)           An entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company;

 

(iii)           A person, or more than one person acting as a group, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company; or

 

(iv)           An entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person described in paragraph (iii) herein.

 

For purposes of subsection (c) and except as otherwise provided in paragraph (i), a person’s status is determined immediately after the transfer of the assets.

 

10.       OTHER TERMINATION OF EMPLOYMENT. The termination of the Employee’s employment with the Company for any reason other than death, disability or retirement during the Performance Cycle shall result in the forfeiture of the entire award of Performance Shares, with no payment to the Employee.