Document:

2005 Non-Employee Director Restricted Stock Plan

DILLARD’S,
INC.

2005
NON-EMPLOYEE DIRECTOR

RESTRICTED
STOCK PLAN

 

ARTICLE
I

 

PURPOSE

 

Section
1.01. Purpose. This
Dillard’s, Inc. 2005 Non-Employee Director Restricted Stock Plan (the “Plan”) is
intended to attract, retain and motivate non-employee directors of Dillard’s,
Inc., a Delaware corporation (“Dillard’s”), by providing them with a proprietary
interest in the growth and performance of Dillard’s and to encourage them to
increase their stock ownership in Dillard’s. The name of the plan shall be the
Dillard’s, Inc. 2005 Non-Employee Directors Restricted Stock Plan (the “Plan”).
The Plan is adopted and effective as of the date set forth in Section 7.04
hereof.

 

ARTICLE
II

 

DEFINITIONS

 

Capitalized
terms used and not otherwise defined in the Plan shall have the following
meanings:

 

“Award” means a
grant of Restricted Shares.

 

“Board” or
“Board
of Directors” means
the Board of Directors of Dillard’s as constituted from time to
time.

 

“Code” means
the Internal Revenue Code of 1986, as amended from time to time.

 

“Committee” means
the Stock Option and Executive Compensation Committee of the Board or any
successor thereto or such other Committee designated by the Board.

 

“Disability” shall
mean the inability to engage in any substantial gainful activity because of a
medically determinable physical or mental impairment which can be expected to
last for a continuous period of 12 months or more or that may result in death;
or, eligibility for receipt of Dillard’s disability benefits for a period of
more than three months by reason of a medically determinable physical or mental
impairment which can be expected to last for a period of 12 months or more or
that may result in death. 

 

“Employee” means
any person employed by Dillard’s or a Subsidiary of Dillard’s as an employee (as
defined in Section 425(f) of the Code) and not as an independent
contractor.

 

“Non-Employee
Director” means
any member of the Board who is not an employee of Dillard’s or an affiliate of
Dillard’s. 

 

1

“Participant” means
any Non-Employee Director who is selected for participation by the Committee in
accordance with Article III and who receives an Award under the
Plan.

 

“Restricted
Period” means
the period during which Awards may be forfeited under Sections 5.03 and 5.04.
Notwithstanding the foregoing, under no circumstances shall the Restricted
Period with respect to any Participant be less than six months. This minimum
Restricted Period is intended to qualify each transaction under the Plan as an
exempt transaction pursuant to Rule 16b-3(d)(3) under the Exchange
Act.

 

“Restricted
Shares” means
Shares that are subject to the restrictions (including the restrictions on
transferability) and the substantial risks of forfeiture described in the Plan
or in an applicable Stock Award Agreement.

 

“Retire”
or “Retirement” means
ceasing to be a member of the Board as a result of a determination by the Board
that such person is no longer eligible to stand for election in accordance with
the corporate governance guidelines of Dillard’s that may be in effect from time
to time. 

 

“Share” means a
share of Class A Common Stock, $0.01 par value, of Dillard’s.

 

“Stock
Award Agreement” means
an agreement executed by a Participant prior to receiving an Award.

 

“Subsidiary” means
(i) any corporation of which Dillard’s owns, directly or indirectly,
capital stock representing more than 50% of the combined voting power of all
classes of capital stock, and (ii) any other entity or enterprise
(including, but not limited to, a partnership or joint venture) of which
Dillard’s owns, directly or indirectly, equity interests representing more than
50% of the combined voting power of all classes of equity.

 

ARTICLE
III

 

ELIGIBILITY
AND PARTICIPATION

 

Section
3.01. Eligibility. Awards
under this Plan may only be made to a person who, at the time of grant of the
Award, is a Non-Employee Director. 

 

ARTICLE
IV

 

COMPANY
STOCK SUBJECT TO PLAN

 

Section
4.01. Maximum Number of Shares. The
total number of Shares for which Awards may be granted under the Plan shall not
exceed 200,000 Shares. The maximum number of Shares issued are subject to
adjustment in accordance with Section 4.03. The Shares issued under the Plan may
be authorized and unissued Shares 

 

 

2

 

 

or
treasury Shares. The number of Shares available for issuance under the Plan
shall not be reduced to reflect any dividends or dividend equivalents that are
reinvested into additional Shares. 

 

Section
4.02. Forfeited Shares. In the
event Awards are forfeited to Dillard’s in accordance with the terms of the
Plan, the Shares so forfeited again shall be available for grant and issuance
under the Plan.

 

Section
4.03. Recapitalization Adjustment. In the
event of any merger, reorganization, consolidation, recapitalization, stock
dividend, stock split, share combination or other changes in the corporate
structure of Dillard’s affecting the Shares, the Committee may make such
adjustments to the number of Shares specified in Section 4.01 or in any Award,
the kind of capital stock to be issued under the Plan, or both, as it
determines, in its sole discretion, to be appropriate to prevent dilution or
enlargement of rights under the Plan. 

 

ARTICLE
V

 

AWARDS

 

Section
5.01. Conditions to Grant. As a
condition to the grant of Awards, Dillard’s shall require the Participant to
execute a Stock Award Agreement prior to issuing the Award.

 

Section
5.02. Amount of Awards. The
amount of Awards to be issued under the Plan may vary from year to year and by
Participant to Participant in the Committee’s sole discretion. In no event,
however, may Awards be issued to any Participant if such issuance would (i)
cause the total number of Restricted Shares awarded under the Plan to a single
Participant to exceed 5,000 Shares in any fiscal year of Dillard’s without being
approved by the Board or (ii) cause the
total number of Shares issued to all Participants to equal or exceed the maximum
amount allowed in Section 4.01. The Committee shall have the right to grant new
Awards in exchange for outstanding Awards.

 

Section
5.03. Restricted Shares.

 

(a)  Awards of
Restricted Shares shall be subject to the terms and conditions set forth in the
Stock Award Agreement. 

 

(b)  The
Committee shall have discretion in determining the terms and conditions of each
Award. Awards of Restricted Shares under Stock Award Agreements shall be subject
to such restrictions as determined by the Committee. 

 

(c)  The
Committee shall establish any vesting schedule applicable to Restricted Shares
and shall specify the periods of restriction, vesting and other requirements.
Until the end of the period(s) of time specified in the vesting schedule, the
Restricted Shares subject to such Award shall remain subject to
forfeiture.

 

3

(d)  Notwithstanding
any term, condition, restriction and/or limitation with respect to an Award
granted under the Plan but subject to the restrictions on transfer and
forfeiture in this Plan, a Participant who has been granted an Award shall be
entitled to all of the rights of a shareholder with respect to the Restricted
Shares underlying the Award from the date of grant, including voting rights and
the rights to receive dividends and other distributions. All Shares or other
securities paid on an Award shall be held by the Company and shall be subject to
the same restrictions as the Award to which they relate.

 

Section
5.04. Vesting. Unless
otherwise provided in the Stock Award Agreement, all unvested Awards shall
become immediately vested upon the Participant’s termination of service as a
member of the Board prior to the expiration of the Restricted Period as a result
of the Participant’s Retirement, death or Disability. Upon a Participant’s
termination of service as a member of the Board for any other reason prior to
the expiration of the Restricted Period, all unvested Awards shall be forfeited
to Dillard’s and be available for reissuance under the Plan. The Committee may
accelerate the vesting for any or all of the unvested Awards for any Participant
if the Committee determines that the circumstances in a particular case so
warrant, and upon such a determination, all restrictions applicable to the
Restricted Shares shall lapse. 

 

Section
5.05. Issuance of Awards; Awards Held In Escrow. Unless
and until the Awards have vested as set forth in the Plan and the related Stock
Award Agreements, such Awards shall be issued in the name of the Participant and
held by the Secretary of Dillard’s (or its designee) as escrow agent, and shall
not be sold, transferred, or otherwise disposed of, and shall not be pledged or
otherwise hypothecated other than a transfer of vested Restricted Shares upon
death by will, by descent and distribution or by designation of a beneficiary in
accordance with Section 7.02. Dillard’s may determine to issue the Awards in
book entry form and/or may instruct the transfer agent for its common stock to
place a legend on certificates representing the Restricted Shares or
Performance-Based Restricted Shares or otherwise note its records as to the
restrictions on the transfer as set forth in the Plan. 

 

Section
5.06. Delivery of Certificates. As soon
as practicable after complete vesting of the Awards granted to the Participant,
the Secretary of Dillard’s (or its designee), as escrow agent, shall cause to be
delivered to the Participant or a broker designated by Dillard’s for the purpose
of receiving such Shares, a certificate or certificates representing those
Shares free of all restrictions created under this Plan and the related Stock
Award Agreements. Prior to such delivery, Dillard’s may require the Participant
to establish a brokerage account with the broker designated by Dillard’s to
receive the Shares and execute and deliver to Dillard’s a written statement, in
form satisfactory to Dillard’s, in which the Participant represents that he or
she is acquiring Shares for the Participant’s own account, for investment only
and not for resale or distribution of any such Shares. 

 

4

ARTICLE
VI

 

ADMINISTRATION

 

Section
6.01. Authority of the Committee.

 

(a)  The Plan
shall be administered by the Committee. A majority vote of the Committee at
which a quorum is present, or acts reduced to or approved in writing by a
majority of the members of the Committee, shall be the valid acts of the
Committee for the purposes of the Plan.

 

(b)  The
Committee shall have plenary authority in its discretion, but subject to the
express provisions of the Plan, to determine the terms of all Awards granted
under the Plan, including, without limitation, the Participants to whom and the
time or times at which Awards shall be granted; the vesting schedule for such
Award grants; establishing performance-based criteria and determining if such
criteria is achieved; to interpret the Plan; and to make all other
determinations deemed advisable for the administration of the Plan. All
determinations of the Committee shall be made by not less than a majority of its
members. The Committee may designate Employees of Dillard’s to assist the
Committee in the administration of the Plan and may grant authority to such
persons to execute agreements or other documents or to take other actions on
behalf of the Committee.

 

(c)  The
Committee may make such rules and regulations and establish such procedures as
it deems appropriate for the administration of the Plan. 

 

(d)  In the
event of a disagreement as to the interpretation of the Plan or any amendment
hereto or any rule, regulation or procedure thereunder or as to any right or
obligation arising from or related to the Plan, the decision of the Committee
shall be final and binding. No member of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any
benefit granted under it.

 

ARTICLE
VII

 

MISCELLANEOUS

 

Section
7.01. No Rights as Director. Neither
the Plan nor any Awards granted hereunder shall confer upon any Participant any
right to be elected to or to remain as a member of the Board. 

 

Section
7.02. Designation of Beneficiary. Each
Participant from time to time may name any beneficiary or beneficiaries (who may
be named contingently or successively) to whom any benefit under the Plan is to
be issued or transferred in the event of the Participant’s death (or who may
exercise the Participant’s rights hereunder, if any, that are exercisable
following the death of the Participant). Each designation shall revoke all prior
designations by the Participant, shall be in a form prescribed by
the

 

 

5

 

 Committee
and shall be effective only when filed by the Participant in writing with the
Committee or its designee during the Participant’s lifetime.

 

Section
7.03. Withholding.
Dillard’s shall have the right to withhold with respect to any payments or
grants made to Participants under the Plan any taxes required by law to be
withheld because of such payments or grants. With respect to any such
withholding:

 

(e)  Each
Participant shall take whatever action that the Committee deems appropriate to
comply with the law regarding withholding of federal, state and local
taxes.

 

(f)  When a
Participant is obligated to pay to Dillard’s an amount required to be withheld
under applicable income tax laws in connection with the Awards, the Committee
may, in its discretion and subject to such rules as it may adopt, permit the
Participant to satisfy this obligation, in whole or in part, by delivering to
Dillard’s already-owned shares to satisfy the withholding amount.

 

Section
7.04. Effective Date. The
Plan is effective on April 15, 2005 (the “Effective Date”). No Shares may be
issued unless the Plan is approved by a vote of the holders of a majority, or as
otherwise provided in the certificate of incorporation, Bylaws of Dillard’s or
the listing standards of the New York Stock Exchange, of the outstanding shares
of Dillard’s common stock cast at a meeting of the stockholders of Dillard’s at
which a quorum is present held within 12 months following the Effective
Date.

 

Section
7.05. Amendment. The
Board may amend the Plan from time to time as it deems desirable or necessary by
any applicable rules and regulations, and such amendments shall include the
ability of the Board to amend the Plan and, with shareholder approval, to
increase the number of Shares subject to the Plan. Any amendment to the Plan
shall not apply to Awards granted to Participants that have vested prior to the
effective date of the amendment unless it has been otherwise agreed to, in
writing, by the Committee and the affected Participant.

 

Section
7.06. Termination of Plan. The
Plan will automatically terminate 10 years from its Effective Date.
Notwithstanding the foregoing, the Board may, in its discretion, terminate the
Plan earlier at any time, but no such termination shall deprive Participants of
their rights under Restricted Share grants existing prior to such
termination.

 

Section
7.07. Successors. The
Plan shall inure to the benefit of and shall be binding upon each successor of
Dillard’s by merger, consolidation or acquisition of all or substantially all of
the assets. All rights and obligations imposed upon a Participant and all rights
granted to Dillard’s under this Plan shall be binding upon the Participant’s
heirs, legal representatives and successors.

 

Section
7.08. Notice. Each
notice given under the Plan shall be in writing and shall be delivered in person
or by certified or registered mail to the proper address. Each notice to
Dillard’s shall be addressed as follows: Dillard’s, Inc., 1600 Cantrell Road,
Little Rock, Arkansas 72201, Attention: Secretary. Each notice to a
Participant shall be addressed to the Participant at the address of the
Participant maintained by Dillard’s on its books and records. Anyone to whom a
notice may be given under the Plan may designate a new address by written notice
to the other party to that effect.

 

 

6

 

Section
7.09. Compliance with Laws and Requirements. No
Shares shall be issued under the Plan unless the issuance and delivery of such
shares comply with all applicable provisions of state and federal law,
including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, the rules and regulations promulgated
thereunder and the requirements of any market system or stock exchange upon
which the Shares may then be listed.

 

Section
7.10. Governing Law. The
Plan shall be construed in accordance with and governed by the laws of the State
of Delaware.

 

THIS PLAN
IS HEREBY ADOPTED AND EXECUTED as of the 15th day of
April, 2005.

DILLARD’S,
INC.

By:/s/
James I. Freeman 

James I.
Freeman,

Senior
Vice President and

Chief
Financial Officer

ATTEST:

/s/
Phillip R. Watts   

Phillip
R. Watts

7Form of Restricted Stock Award Agreement

 

Form
of

DILLARD’S,
INC.

restricted
stock award agreement

(2005
Non-Employee Director Restricted Stock Plan)

 

 

THIS
RESTRICTED STOCK AWARD AGREEMENT (this
“Agreement”), made as of the       day
of                ,
      (the
“Grant Date”), between DILLARD’S
INC., a
Delaware corporation (“Dillard’s”), and                              (the
“Grantee”);

 

W I T N E S S E T H :

 

WHEREAS,
Dillard’s has adopted the 2005 Non-Employee Director Restricted Stock Plan (the
“Plan”) (except as otherwise expressly set forth herein, the capitalized terms
used in this Agreement shall have the same definitions set forth in the Plan);
and

 

WHEREAS,
pursuant to the Plan, the Committee has determined to grant an Award to the
Grantee in the form of shares of Class A Common Stock subject to the terms,
conditions and limitations provided herein and in the Plan (“Restricted
Shares”); 

 

NOW,
THEREFORE, the parties hereto agree as follows:

 

ARTICLE
I  

 

GRANT
OF RESTRICTED SHARES

 

Section
1.01.  
Dillard’s hereby grants to Grantee, on the terms and conditions set forth in
this Agreement, the number of shares of Restricted Shares set forth under the
Grantee’s name on the signature page hereto. The Restricted Shares are granted
without requirement of payment. However, if the Restricted Shares have not been
previously issued, the Grantee agrees to pay the par value ($0.01) per
Restricted Share no later than 10 business days after the Grant Date. Grantee
will be advised if this is the case and be given payment instructions at that
time.

 

Section
1.02.   The
Grantee’s rights with respect to all the Restricted Shares shall remain
forfeitable at all times prior to the Lapse Date (as defined
below).

 

Section
1.03.   This
Agreement shall be construed in accordance with, and subject to, the terms of
the Plan (the provisions of which are incorporated herein by reference). By
signing this Agreement, the Grantee accepts this Award, acknowledges receipt of
a copy of the Plan and the prospectus for the Plan and acknowledges that the
award is subject to all the terms and provisions of the Plan and this Agreement.
Grantee further agrees to accept as binding, conclusive and final all decisions
and interpretations by the Committee of the Plan upon any questions arising
under the Plan.

 

1

ARTICLE
II  

 

RIGHTS
OF GRANTEE

 

Except as
otherwise provided in this Agreement and other than with respect to those
Restricted Shares which have been forfeited pursuant to Section 3.02
hereof, the Grantee shall be entitled, at all times on and after the Grant Date,
to exercise all rights of a shareholder with respect to the Restricted Shares
(whether or not the restrictions thereon shall have lapsed), including the right
to vote the Restricted Shares and the right to receive dividends thereon.
Notwithstanding the foregoing, prior to the Lapse Date, the Grantee shall not be
entitled to transfer, sell, pledge, hypothecate or assign any Restricted Shares
(collectively, the “Transfer Restrictions”).

 

ARTICLE
III  

 

VESTING;
FORFEITURES; LAPSE OF RESTRICTIONS

 

Section
3.01.   The
Transfer Restrictions with respect to all the Restricted Shares granted under
this Agreement shall lapse on the _____________ anniversary of the Grant Date
(the “Lapse Date”), provided the Grantee continues to serve as a member of the
board of directors of Dillard’s until such Lapse Date; provided, however, that
the Transfer Restrictions with respect to all the Restricted Shares shall lapse,
if sooner, on the date of the Grantee’s termination as a member of the board of
directors as a result of the Grantee’s Retirement, death or Disability (also, a
“Lapse Date”). Notwithstanding anything in the vesting acceleration provision
contained in the provision of the preceding sentence to the contrary, in no
event shall the Grantee be vested or otherwise entitled to more than 100% of the
Restricted Shares granted pursuant to Section 1.01 above.

 

Section
3.02.  
Notwithstanding anything in this Agreement to the contrary, upon the termination
of the Grantee’s service as a member of the board of directors of Dillard’s for
any reason other than as a result of the Grantee’s Retirement, death or
Disability, all of the Restricted Shares in which the Transfer Restrictions have
not previously lapsed in accordance with Section 3.01 hereof shall be
forfeited and automatically transferred to and reacquired by Dillard’s at no
cost to Dillard’s, and neither the Grantee nor any beneficiaries, heirs,
executors, administrators or successors of such Grantee shall thereafter have
any right or interest in the Restricted Shares. 

 

2

ARTICLE
IV  

 

ESCROW
AND DELIVERY OF SHARES

 

Section
4.01.  
Certificates (or an electronic “book entry” on the books of Dillard’s or its
designee) representing the Restricted Shares shall be issued and held by
Dillard’s (or its designee) in escrow (together with any stock transfer powers
which Dillard’s may request of Grantee) and shall remain in the custody of
Dillard’s (or its designee) until (a) their delivery to the Grantee or
his/her estate as set forth in Section 4.02 hereof, or (b) their
forfeiture and transfer to Dillard’s as set forth in Section 3.02 hereof.

 

Section
4.02.  
(a) Subject to paragraph (b) of this Section 4.02, certificates
(or an electronic “book entry”) representing those Restricted Shares in respect
of which the Transfer Restrictions have lapsed pursuant to Section 3.01
hereof shall be delivered to the Grantee or a broker designated by Dillard’s for
the purpose of receiving such Restricted Shares as soon as practicable following
the Lapse Date, subject to the application of Article VIII
below.

 

(b) Certificates
(or an electronic “book entry”) representing those Restricted Shares in respect
of which the Transfer Restrictions have lapsed pursuant to Section 3.01
upon the Grantee’s death shall be delivered to a broker designated by Dillard’s
for the purpose of receiving such Restricted Shares or to the Grantee’s
beneficiary if one is designated, or the executors or administrators of the
Grantee’s estate as soon as practicable following the Lapse Date and Dillard’s
receipt of notification of the Grantee’s death, accompanied by an official death
certificate.

 

(c) The
Grantee, beneficiary, the executors or administrators of the Grantee’s estate,
as the case may be, may receive, hold, sell or otherwise dispose of those
Restricted Shares delivered to him or her pursuant to paragraph (a) or (b)
of this Section 4.02 free and clear of the Transfer Restrictions, but
subject to compliance with all federal and state securities laws.

 

Section
4.03.  
(a) Any stock certificate issued pursuant to Section 4.01 shall bear a
legend in substantially the following form:

 

This
certificate and the shares of stock represented hereby are subject to the terms
and conditions applicable to the Restricted Shares contained in the 2005
Non-Employee Director Restricted Stock Plan (the “Plan”) and a Restricted Stock
Award Agreement (the “Agreement”) between Dillard’s and the registered owner of
the shares represented hereby. Release from such terms and conditions shall be
made only in accordance with the provisions of the Plan and the Agreement,
copies of which are on file in the office of the Secretary of
Dillard’s.

 

(b) As soon
as practicable following a Lapse Date, Dillard’s shall issue a new certificate
(or electronic “book entry”) for the Restricted Shares which have become
nonforfeitable in relation to such Lapse Date, which new certificate (or
electronic “book entry”) shall not bear the legend set forth in
paragraph (a) of this Section 4.03 and shall be delivered in
accordance with Section 4.02 hereof.

 

3

ARTICLE
V  

 

NO
RIGHT TO CONTINUED SERVICE AS A DIRECTOR

 

Nothing
in this Agreement or the Plan shall be interpreted or construed to confer upon
the Grantee any right with respect to continued service or election to the board
of directors of Dillard’s, nor shall this Agreement or the Plan interfere in any
way with any right of stockholders or the board of directors of Dillard’s to
nominate, elect or remove a director on the board of directors.

 

ARTICLE
VI  

 

ADJUSTMENTS
UPON CHANGE IN CAPITALIZATION

 

If, by
operation of Section 4.03 of the Plan, the Grantee shall be entitled to
new, additional or different shares of stock or securities of Dillard’s or any
successor corporation or entity or other property, such new, additional or
different shares or other property shall thereupon be subject to all of the
conditions and restrictions which were applicable to the Restricted Shares
immediately prior to the event and/or transaction that gave rise to the
operation of Section 4.03 of the Plan.

 

ARTICLE
VII  

 

TAX
WITHHOLDING/SECTION 83 ELECTION

 

Section
7.01.  
Tax Consequences and Section 83(b) Election. The
Grantee has reviewed with the Grantee’s own tax advisors the federal, state,
local and foreign tax consequences of this investment and the transactions
contemplated by this Agreement. The Grantee is relying solely on such advisors
and not on any statements or representations of Dillard’s or any of its agents.
The Grantee understands that the Grantee (and not Dillard’s) shall be
responsible for the Grantee’s own tax liability that may arise as a result of
the transactions contemplated by this Agreement.

 

In
connection with this Agreement, the Grantee may make an election under
Section 83(b) of the Code to include in the Grantee’s gross income in the
year of this Award the amount specified in Section 83(b) of the Code. If
the Grantee makes such an election, the Grantee shall notify Dillard’s in
writing of such election within 10 days after filing the notice of the
election with the Internal Revenue Service, in addition to any filing and
notification required pursuant to regulations issued under Section 83(b) of
the Code. 

 

THE
GRANTEE ACKNOWLEDGES THAT IT IS THE GRANTEE’S SOLE RESPONSIBILITY AND NOT
DILLARD’S TO TIMELY FILE THE ELECTION UNDER SECTION 83(b) OF THE CODE, EVEN
IF THE GRANTEE REQUESTS DILLARD’S OR ITS REPRESENTATIVES TO MAKE THIS FILING ON
THE GRANTEE’S BEHALF. 

 

Section
7.02.  
Tax Withholding. Subject
to certain exceptions in the event the Grantee has previously made a valid
Section 83(b) election, upon the vesting of the Restricted Shares the Grantee
will have income in the amount of the value of the Restricted Shares that become
vested  

 

 

4

 

 

on the
Lapse Date, and the Grantee acknowledges that he or she must pay income tax on
that income. Whenever any Restricted Shares becomes vested under the terms of
this Agreement, the Grantee must remit, on or prior to the due date thereof, the
minimum amount necessary to satisfy all of the federal, state and local
withholding (including FICA) tax requirements imposed on Dillard's relating to
the Restricted Shares. The Committee may require the Grantee to satisfy these
minimum withholding tax obligations by any (or a combination) of the following
means: (i) a cash, check, or wire transfer; (ii) authorizing Dillard's to
withhold from the Restricted Shares otherwise deliverable to the Grantee as a
result of the vesting of the Restricted Shares, a number of Restricted Shares
having a Fair Market Value, as of the date the withholding tax obligation
arises, less than or equal to the amount of the withholding obligation; or (iii)
in unencumbered shares of Dillard's Class A Common Stock, which have been held
for at least six months.

 

ARTICLE
VIII  

 

MODIFICATION
OF AGREEMENT

 

Except as
set forth in the Plan and herein, this Agreement may be modified, amended,
suspended or terminated, and any terms or conditions may be waived, but only by
a written instrument executed by the parties hereto.

 

ARTICLE
IX  

 

SEVERABILITY

 

Should
any provision of this Agreement be held by a court of competent jurisdiction to
be unenforceable or invalid for any reason, the remaining provisions of this
Agreement shall not be affected by such holding and shall continue in full force
and effect in accordance with their terms.

 

ARTICLE
X  

 

GOVERNING
LAW

 

The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Delaware without giving effect to the
conflicts of laws principles thereof.

 

ARTICLE
XI  

 

SUCCESSORS
IN INTEREST

 

This
Agreement shall inure to the benefit of and be binding upon any successor to
Dillard’s. This Agreement shall inure to the benefit of the Grantee’s
beneficiaries, heirs, executors, administrators and successors. All obligations
imposed upon the Grantee and all rights granted to Dillard’s under this
Agreement shall be binding upon the Grantee’s beneficiaries, heirs, executors,
administrators and successors.

 

5

 

DILLARD’S
INC.

 

By

Name

Title

 

[GRANTEE]

 

By

Name

Title

 

Number of
Restricted Shares Awarded: ___________________________

 

6

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