Document:

Form of Executive Recognition Agreement

 Exhibit 10.1 
 EXECUTIVE RECOGNITION AGREEMENT 
 THIS EXECUTIVE RECOGNITION
AGREEMENT (this “Agreement”) between FIRST FINANCIAL BANKSHARES, INC., a Texas corporation (the “Company”), and
                             (the “Employee”) is dated effective July 1, 2012 (the
“Effective Date”). 
 WITNESSETH: 

WHEREAS, the Company considers it essential to the best interests of its stockholders to foster the continuous employment of key
executives of the Company; and 
 WHEREAS, the Employee is a key executive of the Company; and 

WHEREAS, the parties recognize that, as is the case with many publicly-held corporations, the possibility of a “Change in
Control” (as such term is defined in Section 1 hereof) may exist and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of a key executive at a critical
time, and to the detriment of the Company and its stockholders; and 
 WHEREAS, the Company recognizes that the Employee, as a
key executive, could suffer financial and professional detriments if a Change in Control of the Company were to occur; and 

WHEREAS, in order to protect the Employee in the event of a Change in Control of the Company, the Company agrees that the Employee shall
receive the benefits set forth in this Agreement in the event the Employee’s employment with the Company is terminated subsequent to a Change in Control of the Company under the circumstances described below; 

NOW, THEREFORE, the parties hereby agree as follows: 
 1. Employment in General; Change in Control. This Agreement does not affect the Employee’s employment arrangements with the Company except for the

 
conditions contained herein pertaining to a Change in Control of the Company. Absent a Change in Control of the Company, the Employee’s continued employment with the Company shall at all
times be subject to the will of the Board of Directors of the Company (the “Board”). For purposes of this Agreement, a “Change in Control” of the Company shall be deemed to have occurred at the time (a) a report on Schedule
13D is filed with the Securities and Exchange Commission pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) disclosing that any Person (as hereinafter defined) is the beneficial owner (as
such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly of securities of the Company representing more than fifty percent (50%) of the combined voting power entitled to vote generally in the election of directors of
the then outstanding securities of the Company; or (b) any Person shall purchase securities pursuant to a tender offer or exchange offer to acquire any common stock of the Company (or securities convertible into common stock) for cash,
securities or any other consideration, provided that after consummation of the offer, the person in question is the beneficial owner (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the combined voting power entitled to vote generally in the election of directors of the then outstanding securities of the Company; or (c) the stockholders of the Company shall approve a
reorganization, merger, consolidation, recapitalization, exchange offer, purchase of assets or other transaction, in each case, with respect to which the persons who were the beneficial owners of the Company immediately prior to such a transaction
do not, immediately after consummation thereof, own more than fifty percent (50%) of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged, recapitalized or resulting company’s then
outstanding securities; or (d) the stockholders of the Company shall approve a liquidation or dissolution of the Company; or (e) the Company shall sell or otherwise transfer (or one or more of its subsidiaries shall sell or otherwise
transfer), in one or more related transactions, assets aggregating fifty percent (50%) or more 

 
of the book value of the assets of the Company and its subsidiaries (taken as a whole). For purposes of this Agreement, “Person” shall mean and include any individual, corporation,
partnership, group, association or other “person”, as such term is used in Sections 13(d) and 14(d) of the Exchange Act, other than the Company, a wholly owned subsidiary of the Company or any employee benefit plan(s) sponsored by the
Company or a subsidiary of the Company. 
 2. Term of Agreement. Unless extended pursuant to the provisions of
this Section 2, the term of this Agreement shall be for the period commencing as of the Effective Date and continuing thereafter until the earliest to occur of (a) the Employee’s death, Disability (as defined in Subsection 3(i)
hereof) or Retirement (as defined in Subsection 3(ii) hereof), (b) the termination of the Employee’s employment with the Company prior to a Change in Control of the Company, or (c) the second anniversary of this Agreement. The
foregoing notwithstanding, if a Change in Control of the Company shall have occurred during the term of this Agreement, this Agreement shall continue in effect for a period of two (2) years from the date of any such Change in Control of the
Company; and further, if a second Change in Control occurs within a period of two (2) years from the date of the first Change in Control, this Agreement shall continue in effect for a period of two (2) years from the date of the second
Change in Control of the Company; and if any benefit accrues and remains unpaid at the time this Agreement would otherwise have terminated, this Agreement shall remain in effect until such benefit is paid in full solely for the purpose of permitting
the Employee to enforce the full payment of such benefit. 
 3. Termination Following Change in Control. If a
Change in Control of the Company occurs, the Employee shall be entitled to the benefits provided in Subsection 4(iii) hereof upon the subsequent termination of the Employee’s employment during the term of this Agreement, unless such termination
is (a) because of the Employee’s death, Disability or Retirement, (b) by the Company for Cause, or (c) by the Employee other than for Good Reason. The parties hereto expressly acknowledge and agree that notwithstanding anything

 
contained in this Agreement to the contrary, the Employee is entitled to any and all benefits due to the Employee as determined in accordance with the terms of the Company’s benefit plans
(without reference to this Agreement), including, without limitation, all qualified and nonqualified deferred compensation plans, and all medical, dental, disability, accident and insurance plans, then in effect whether the Employee is terminated by
the Company for Cause or for other than Cause, by the Employee for Good Reason or for other than Good Reason, because of the Retirement, Disability or death of the Employee or for any other reason, and the benefits provided in Subsection 4(iii)
hereof shall be determined in accordance with this Agreement without any impact, impairment, reduction or other effect on the Employee’s rights or benefits under such benefit plan(s). For purposes of this Agreement the following definitions
shall apply: 
 (i) Disability. Termination by the Company of the Employee’s employment based
on “Disability” shall mean termination because of the Employee’s absence from his duties with the Company on a full-time basis for ninety (90) consecutive days as a result of the Employee’s physical or mental incapacity due
to injury or illness, unless within thirty (30) days after Notice of Termination (as hereinafter defined) is given to the Employee following such absence the Employee shall have returned to the full-time performance of his duties. 

(ii) Retirement. Termination by the Employee of the Employee’s employment based on
“Retirement” shall mean termination on or after the normal retirement date established under the terms of any qualified plan or plans of the Company in effect prior to a Change in Control. 

(iii) Cause. Termination by the Company of the Employee’s employment for “Cause” shall mean
termination upon (A) the willful and continued failure by the Employee to substantially perform his duties with the Company (other than any such failure resulting from the Employee’s

 
physical or mental incapacity due to injury or illness) after written demand for substantial performance is delivered to the Employee by the Company, which demand specifically identifies the
manner in which the Employee has not substantially performed his duties, or (B) the willful engaging by the Employee in conduct which is demonstrably injurious to the Company, monetarily or otherwise. For purposes of this Subsection (iii), no
act, or failure to act, on the Employee’s part shall be deemed “willful” unless done, or omitted to be done, by the Employee in bad faith and without “reasonable belief” (as hereinafter defined) that his action or omission
was in, or not opposed to, the best interests of the Company. The phrase “reasonable belief” shall mean the belief that a reasonable and prudent man would have had in the same or similar circumstances as to the act or failure to act. Any
act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Employee in good
faith, and in the best interests of the Company. Notwithstanding the foregoing the Employee shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Employee a copy of a resolution duly adopted by
the affirmative vote of not less than a majority of the entire membership of the Board at a meeting of the Board called for such purpose (after reasonable notice to the Employee and an opportunity for the Employee, together with counsel, to be heard
before the Board), finding that in the good faith opinion of the Board the Employee was guilty of the conduct set forth above in (A) or (B) of this Subsection (iii) and specifying the particulars thereof in detail. 

 (iv) Good Reason. Termination by the Employee of his
employment for “Good Reason” shall mean termination within a period of time not to exceed one (1) year following the initial existence of one or more of the following conditions arising without the consent of the Employee: 

(A) a determination by the Employee, made in good faith and based on the Employee’s reasonable belief, that there has
been a materially adverse change in his status or position as an executive officer of the Company as in effect immediately prior to the Change in Control, including, without limitation, any material change in the Employee’s status or position
as a result of a diminution in the Employee’s duties or responsibilities or the assignment to the Employee of any duties or responsibilities which are inconsistent with such status or position(s), or any removal of the Employee from or any
failure to reappoint or reelect the Employee to such position(s) (except in connection with the termination of the Employee’s employment for Cause, Disability or Retirement or as a result of the Employee’s death or by the Employee other
than for Good Reason). The phrase “reasonable belief” shall mean the belief that a reasonable and prudent man would have had in the same or similar circumstances as to the change in status or position; 

(B) a material reduction by the Company in the Employee’s annual base salary in effect immediately prior to the
Change in Control; 
 (C) the relocation of the Employee’s principal office outside of the city or
metropolitan area in which the Employee is residing at the time of any Change in Control of the Company; 
 (D) a
material reduction by the Company in the budget over which the Employee retained authority immediately prior to the Change in Control; 

 (E) the failure by the Company to continue in effect any Plan (as
hereinafter defined) in which the Employee participates at the time of the Change in Control of the Company (or Plans providing the Employee with at least substantially similar benefits) other than as a result of the normal expiration of any such
Plan in accordance with its terms as in effect at the time of the Change in Control. For purposes of this Agreement, “Plan” shall mean any benefit plan, including, without limitation, all qualified and nonqualified deferred compensation
plans; all medical, dental, disability, accident and life insurance plans; and any other material plan, program or policy of the Company intended to benefit the Employee; 

(F) the failure by the Company to provide and credit the Employee with the number of paid vacation days to which the
Employee is then entitled in accordance with the Company’s normal vacation policy as in effect immediately prior to the Change in Control; 
 (G) any other action or inaction by the Company following any Change in Control that constitutes a material breach by the Company of the agreement under which the Employee provided service at the time of
the Change in Control of the Company; 
 (H) the failure by the Company to obtain from any Successor (as
hereinafter defined) the assent to this Agreement contemplated by Section 5 hereof; or 
 (I) any purported
termination by the Company of the Employee’s employment which is not effected pursuant to a Notice of Termination satisfying the requirements of Subsection (v) below (and, if applicable, Subsection (iii) above); and for purposes of
this Agreement, no such purported termination shall be effective. 

 Notwithstanding the above, the Employee is required to provide notice to the Company of the existence of any
condition that would allow the Employee to terminate his employment for Good Reason within a period not to exceed ninety (90) days of the initial existence of the condition, upon the notice of which the Company shall have a period of no more
than thirty (30) days to remedy the condition and during which period the Employee may not terminate his employment for Good Reason. It is the intent of the parties that this provision regarding termination by the Employee of his employment for
Good Reason comply with the requirements of Treasury Regulation Section 1.409A-1(n)(2) and this Agreement shall be construed accordingly. 
 (v) Notice of Termination. Any purported termination of the Employee’s employment by the Company or by the Employee following a Change in Control of the Company shall be communicated by
written Notice of Termination to the other party hereto in accordance with Section 9 hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and, if the termination provision is claimed to relieve the Company of its obligation to pay the benefits provided by this Agreement, the notice shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for the denial of the payment of the benefits provided by this Agreement. 
 (vi) Date of
Termination. “Date of Termination” following a Change in Control shall mean (A) if the Employee’s employment is to be terminated for Disability, thirty (30) days after Notice of Termination is given (provided that
the Employee shall not have returned to the performance of his duties on a full-time basis during such thirty (30) day 

 
period), (B) if the Employee’s employment is to be terminated by the Company for Cause or by the Employee for Good Reason, the date specified in the Notice of Termination, or
(C) if the Employee’s employment is to be terminated by the Company for any reason other than Cause, the date specified in the Notice of Termination, which in no event shall be a date earlier than sixty (60) days after the date on
which a Notice of Termination is given, unless an earlier date has been expressly agreed to by the Employee in writing. 
 4.
Compensation Upon Termination; Other Agreements. 
 (i) If the Employee’s employment shall be
terminated for Disability following a Change in Control of the Company, the Company shall pay the Employee’s salary through the Date of Termination at the rate in effect just prior to the time a Notice of Termination is given plus any benefits
or awards under any Plans which pursuant to the terms of any Plans have been earned or become payable, but which have not been paid to the Employee. Thereafter, benefits shall be determined in accordance with the Plans then in effect. 

(ii) If the Employee’s employment shall be terminated for Cause following a Change in Control of the Company, the
Company shall pay the Employee’s salary through the Date of Termination at the rate in effect just prior to the time a Notice of Termination is given plus any benefits or awards (including both the cash and stock components) which pursuant to
the terms of any Plans have been earned or become payable, but which have not yet been paid to the Employee. Thereupon the Company shall have no further obligations to the Employee under this Agreement. 

(iii) Subject to Section 7 hereof, if, within twenty-four (24) months following a Change in Control of the
Company, employment by the 

 
Company shall be terminated by the Company other than for Cause, death, Disability or Retirement, or shall be terminated by the Employee for Good Reason, then the Company shall pay or provide to
the Employee, no later than the 15th day of the third
month following the Employee’s Date of Termination, without regard to any contrary provisions of any Plan, the following: 
 (A) two hundred eight percent (208%) of the Employee’s annual base salary payable by the Company immediately preceding the Date of Termination; and 

(B) a lump sum payment of Employee’s accrued vacation pay. 

(iv) It is the intent of the parties that this Agreement not be subject to the provisions of Section 409A of the
Internal Revenue Code of 1986, as amended from time to time (the “Code”). As such, this Agreement has been drafted to avoid the requirements imposed by Section 409A of the Code. Provided however, in the event this Agreement or any
distribution under this Agreement is later determined to be subject to the provisions of Section 409A of the Code, then if an employee is a Key Employee, pursuant to Section 409A (a)(2)(B)(i) of the Internal Revenue Code of 1986, as
amended from time to time (the “Code”), such distributions to such Key Employee upon termination of employment shall not commence earlier than six (6) months following the Date of Termination. A “Key Employee” is defined in
Section 416 (i) of the Code and includes officers of a publicly traded company who have annual compensation greater than $165,000 (as adjusted following 2012 from year to year for inflation by the Secretary of the Treasury), five percent
owners of a publicly traded company, and one percent owners who have annual compensation from a publicly traded company greater than $150,000. 

 (v) The amount of any payment provided for in this Section 4 shall not
be reduced, offset or subject to recovery by the Company by reason of any compensation earned by the Employee as the result of employment by another employer after the Date of Termination, or otherwise. 

5. Successors; Binding Agreement. 
 (i) The Company will seek, by written request at least five (5) business days prior to the time a Person becomes a Successor (as hereinafter defined), to have such Person assent to the fulfillment of
the Company’s obligations under this Agreement. Failure of such Person to furnish such assent prior to the time such Person becomes a Successor shall constitute a condition for termination by the Employee of his employment for Good Reason under
the provisions of Section 3(iv) of this Agreement, if a Change in Control of the Company occurs or has occurred. For purposes of this Agreement, “Successor” shall mean any Person that succeeds to, or has the practical ability to
control (either immediately or with the passage of time), the Company’s business directly, by merger, consolidation or purchase of assets, or indirectly, by purchase of the Company’s voting securities or otherwise. 

(ii) This Agreement shall inure to the benefit of and be enforceable by the Employee’s personal or legal
representatives, executors, administrators, heirs, distributees, and legatees. If the Employee should die while any amount would still be payable to him hereunder if the Employee had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the Employee’s legatee or other designee or, if there is no such designee, to the Employee’s estate. 

 (iii) For purposes of this Agreement, the “Company” shall include
any corporation or other entity which is the surviving or continuing entity in respect of any merger, consolidation or form of business combination in which the Company ceases to exist. 

6. Fees and Expenses. The Company shall reimburse the Employee for all reasonable legal fees and related expenses, if any,
incurred by the Employee in the successful enforcement of any right or benefit provided by this Agreement. 
 7.
Taxes. 
 (i) All payments to be made to the Employee under this Agreement will be subject to required
withholding of federal, state and local income and employment taxes. 
 (ii) Notwithstanding anything in the
foregoing to the contrary, if any of the payments provided for in this Agreement, together with any other payments which the Employee has the right to receive from the Company or any corporation which is a member of an “affiliated group”
(as defined in Section 1504(a) of the Code without regard to Section 1504(b) of the Code) of which the Company is a member, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), the payments
pursuant to this Agreement shall be reduced to the largest amount as will result in no portion of such payments being subject to the excise tax imposed by Section 4999 of the Code; provided, however, that the determination as to whether any
reduction in the payments under this Agreement pursuant to this Subsection (ii) is necessary shall be made by the Employee in good faith, and such determination shall be conclusive and binding on the Company with respect to its treatment of the
payment for tax reporting purposes and, provided further that the Employee may determine in his discretion what payment or payments provided for herein shall be reduced. 

 8. Survival. The respective obligations of, and benefits afforded to, the
Company and the Employee as provided in Sections 4, 5, 6, 7, 11 and 15 of this Agreement shall survive termination of this Agreement. 
 9. Notice. For purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered
or when mailed by United States registered mail, return receipt requested, postage prepaid to the address set forth below: 
  

					
	Employee Address:	  		  	  

		  		  	  

		  		  	  

			
	Company Address:	  		  	400 Pine Street
		  		  	Abilene, Texas 79601

 provided that all notices to the Company shall be directed to the attention of an executive officer of the Company other
than Employee, with a copy to the Secretary of the Company, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

 10. Employment with Subsidiaries. Employment with the Company for purposes of this Agreement includes
employment with any corporation in which the Company has a direct or indirect ownership interest of fifty percent (50%) or more of the total combined voting power of all classes of stock in such corporation. 

11. Confidential Information. The Employee shall hold in a fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Employee during the Employee’s employment by the

 
Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Employee or his representatives in violation of this Agreement). After
termination of the Employee’s employment with the Company, the Employee shall not, without the prior written consent of the Company, communicate or divulge any such information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of this Section 11 constitute a basis for deferring or withholding any amounts otherwise payable to the Employee under this Agreement. 

12. Miscellaneous; Governing Law. No provision of this Agreement may be amended, waived or discharged following a Change in
Control of the Company unless such amendment, waiver or discharge is agreed to in writing and signed by all of the parties affected thereby. No waiver by either party at any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party shall be deemed to be a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of Texas. 
 13. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 
 14. Headings. The headings of Sections of this Agreement are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this
Agreement. 
 15. Arbitration. Any dispute or controversy arising under or in connection with this Agreement shall
be settled by arbitration, conducted by a panel of three arbitrators in a 

 
location selected by the Employee within fifty (50) miles from the location of his job with the Company, in accordance with the rules of the American Arbitration Association then in effect.
Judgment may be entered on the arbitrators’ award in any court having jurisdiction; provided, however, that the Employee shall be entitled to seek specific performance of his right to be paid until the Date of Termination during the pendency of
any dispute or controversy arising under or in connection with this Agreement. 
 16. Counterparts and Signatures.
This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. Signatures delivered by facsimile or other electronic means shall be
treated as originals. 
 IN WITNESS WHEREOF, the undersigned have executed this Agreement to be effective as of the date
first written above. 
  

			
	FIRST FINANCIAL BANKSHARES, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

		
		 	“Company”

  

			
	ACCEPTED AND AGREED TO
	THIS      DAY OF
	                    , 2012.
		
	By:	 	  

	Name:	 	  

	
	“Employee”GUIDELINES FOR ANNUAL CASH BONUS AWARDS

 Exhibit 10.2 

FAMILY DOLLAR STORES, INC. 
 2006 INCENTIVE PLAN 
 Guidelines for Annual Cash Bonus Awards

  

	1.	Purpose 

 Family Dollar Stores, Inc. (the
“Company”) maintains for the benefit of eligible individuals the Family Dollar Stores, Inc. 2006 Incentive Plan (the “Plan”), which is intended to provide flexibility to the Company in its ability to motivate, attract, and retain
the services of such individuals upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent. These Guidelines for Annual Cash Bonus Awards (the “Guidelines”) are
intended to implement the Plan by providing eligible Team Members of the Company an opportunity to participate in the Company’s success by earning annual incentive compensation in the form of a cash bonus based on the
Company’s achievement of pre-tax earnings goals and the Team Members’ contributions to meeting such goals. 
 These Guidelines are
adopted pursuant to relevant provisions of the Plan and are to be interpreted and applied in accordance with the terms and provisions thereof. Specifically, these Guidelines provide for the grant of Performance-Based Cash Awards under Article 9 of
the Plan and, with respect to Covered Employees, the grant of Qualified Performance-Based Awards under Article 14 of the Plan. Unless otherwise provided herein, capitalized terms used in these Guidelines will have the meaning given such terms in the
Plan. 
  

	2.	Scope 

 The Guidelines cover eligible Team
Members as described in Section 3 of these Guidelines. The Guidelines cover the Company’s fiscal (not calendar) year that is the 12-month period that generally runs from approximately September to August. The actual dates for the fiscal
year are determined and announced by the Company prior to the beginning of each fiscal year. 
  

	3.	Eligibility 

 Eligibility for
participation in the Plan under these Guidelines shall be determined by any of the Chairman and Chief Executive Officer, the President or the Senior Vice President, Human Resources (or their designees) and communicated to department heads.
Additional eligibility requirements are as follows: 
  

	 	•	 	 A Team Member must be classified as a regular, full-time employee for the entire fiscal year or the Team Member’s entire employment period in the
fiscal year if the Team Member was hired subsequent to the beginning of the fiscal year. Notwithstanding the preceding, if a Team Member, whose position was previously not identified as eligible for participation in the Plan under these Guidelines
(including a Team Member classified as a part-time employee), is 

  
  

1 

	 	 
promoted or transferred to a position eligible to participate in the Plan under these Guidelines during the relevant fiscal year, such Team Member will participate in this plan, subject to its
conditions, on a prorated basis. The prorated calculation will be based upon the number of weeks and respective salary in each position. 

  

	 	•	 	 A Team Member must be hired and on the active payroll as a full-time employee as of the first business day after May 31 of the applicable fiscal
year in order to participate during that fiscal year. 

  

	 	•	 	 If a Team Member, whose position was previously not identified as eligible for participation in the Plan under these Guidelines and who was eligible to
participate in another bonus plan, is promoted to a position eligible to participate in the Plan under these Guidelines during the relevant fiscal year, such Team Member will participate in each plan, subject to its conditions, on a prorated basis.
The prorated calculation will be based upon the number of weeks and respective salary in each position. 

  

	 	•	 	 If a Team Member’s position is changed during the relevant fiscal year and as a result of that change the bonus percentage applied in his or her
individual bonus calculation under these Guidelines is affected, such Team Member will participate on a prorated basis at each bonus percentage level based upon the number of weeks and respective salary in each position.

  

	 	•	 	 Except as otherwise provided below, a Team Member must be on the payroll in a regular, full-time, active status when bonus checks are issued in order
to receive payment under these Guidelines. Except as otherwise provided below, a Team Member who is not on the payroll in regular, full-time, active status when bonus checks are issued shall forfeit all payments under these Guidelines. A Team Member
on leave of absence, regardless of type, will receive the bonus payment only upon return within one year of the commencement of such leave to regular, full-time, active status during the sixty (60) day period following the end of the fiscal
year to end concurrent with or immediately following, as applicable, the date of the Team Member’s return to regular, full-time active status; provided, however, that the Team Member must be on the payroll in regular, full-time, active status
on the payment date in order to receive payment. A Team Member who is not on the payroll in regular, full-time, active status on the applicable payment date following return from leave (other than approved military leave) will forfeit any right to
the payment. Team Members on military leave will be issued payment at the time bonus checks are issued even if they have not returned to regular, full-time, active status at that time. 

 

	 	•	 	 A Team Member whose employment with the Company terminates for any reason, other than death or termination of employment due to Disability or
Retirement during the last half of the fiscal year, prior to the issuance of bonus checks will forfeit any bonus such the Team Member otherwise would have been entitled to receive. 

  
  

2 

	 	•	 	 A Team Member who dies or terminates employment due to Disability or Retirement after the end of the fiscal year but before the issuance of bonus
checks will not forfeit the bonus which the Team Member would have otherwise been entitled to receive. 

  

	 	•	 	 A Team Member who dies or terminates employment due to Disability during a fiscal year will participate on a prorated basis in the bonus program based
upon the number of weeks of employment with the Company during such fiscal year and based upon an assumed performance rating of 3. 

  

	 	•	 	 A Team Member who terminates employment due to Retirement during a fiscal year will participate on a prorated basis in the bonus program based upon the
number of weeks of employment with the Company during such fiscal year and based upon an assumed performance rating of 3; provided that the Team Member must continue in employment for the first half of the fiscal year. A Team Member who terminates
employment due to Retirement in the first half of the fiscal year will not receive any bonus amounts pursuant to these Guidelines for such fiscal year. 

 

	 	•	 	 These Guidelines do not in any manner restrict the right of the Company or the Team Member to terminate employment at any time, for any reason, with or
without cause. 

  

	 	•	 	 A Team Member otherwise meeting all of the eligibility requirements of these Guidelines, but whose performance rating for the fiscal year is a 1, will
not participate in the Plan under these Guidelines or be eligible for bonus for that fiscal year. 

  

	4.	Target Bonus Amount and Adjustments for Performance 

 The target bonus amount for a Team Member under these Guidelines equals a percentage of the Team Member’s base compensation received in the relevant fiscal year, generally ranging from 5% to 100%.
(See above for changes in the Team Member’s position during the fiscal year.) The applicable percentage for a Team Member will be established by Human Resources and communicated to department heads. The actual bonus amount for the fiscal year,
if any, will be determined as a percentage of the target bonus amount depending on Company and individual performance as follows: 
  

	 	A.	Company pre-tax earnings vs. Target 

  

	 	•	 	 The Board of Directors of the Company determines prior to, or within 90 days after the beginning of, each fiscal year a pre-tax earnings goal for the
fiscal year. 

  

	 	•	 	 In addition, under relevant provisions of the Plan, the pre-tax earnings goal for the relevant fiscal year may be further adjusted to reflect
extraordinary events or circumstances affecting the Company or its business, which render such goal unsuitable. 

  
  

3 

	 	•	 	 Achievement of the pre-tax earnings goal determines the first part of the bonus calculation under these Guidelines. Achievement at the 100% level would
provide for payment at the Guidelines’ “target” payout percentage (a percentage of the Team Member’s base salary times an established individual performance multiplier – See B below). 

 

	 	•	 	 If the pre-tax earnings goal is exceeded, the target bonus amount will increase by 3.33% for each 1% by which the goal is exceeded, to a maximum of 50%
additional bonus for exceeding the goal by 15%, and thereafter will increase by 5% for each 1% by the goal is exceeded, to a maximum of an additional 50% bonus (up to a total of 200%) for exceeding the goal by 25%. 

 

	 	•	 	 If the pre-tax earnings goal is not achieved, the target bonus amount will decrease by 3.3% for each 1% by which the goal is not achieved, with no
bonus being payable if pre-tax earnings are less than 85% of the goal. 

  

	 	•	 	 Calculation of the target bonus payout percentage as described in the previous two paragraphs is reflected in the following chart:

  

					
	 Performance Level Against Pre-Tax Earnings Goal *
	  	Payout as Percent (%) of
Target Bonus Opportunity	 
		
	 >= 125%
	  	 	200	% 
		
	 115%
	  	 	150	% 
		
	 100%
	  	 	100	% 
		
	 85%
	  	 	50	% 
		
	 < 85%
	  	 	0	% 

  

	*	Linear interpolation will be used for performance between stated levels. 

  

	 	B.	Individual Team Member performance level for the fiscal year as determined on a five point rating scale and the incentive grouping / position level of the Team
Member. 

  

	 	•	 	 A performance multiplier is applied to the target bonus amount for which an individual Team Member is eligible, as determined by the Team Member’s
position level. The multiplier is determined using two factors: individual performance level and incentive level grouping as determined by position. 

  
  

4 

	 	•	 	 Six incentive groupings have been established based upon position levels within the Company. The higher the position level, the more heavily weighted
the Company pre-tax earnings performance becomes. The following ratios are used to establish the multiplier: 

1. Incentive Group 1 
 80/20 (80% individual performance, 20% Company performance) 
 2. Incentive
Group 2 
 60/40 (60% individual performance, 40% Company performance) 

3. Incentive Group 3 
 40/60 (40% individual performance, 60% Company performance) 
 4. Incentive
Group 4 
 20/80 (20% individual performance, 80% Company performance) 

5. Incentive Group 5 
 10/90 (10% individual performance, 90% Company performance) 
 6. Incentive
Group 6 
 100% (100% Company performance), subject to additional rules set forth below. 

 

	 	•	 	 A matrix is developed annually by the Company that incorporates the Company payout ratio, the incentive groups outlined above, and the eligible
individual performance ratings ranging from 5 to 1 with 5 being the highest possible rating and 1 being the lowest possible rating. The resulting multiplier is a function of these elements and is reflective of individual eligibility and performance
level. 

  

	 	C.	Qualified Performance-Based Awards 

 Notwithstanding anything in these Guidelines to the contrary, the following provisions will apply to any Team Member who is a Covered Employee for purposes of benefiting from the Section 162(m)
Exemption applicable to Qualified Performance-Based Awards under Article 14 of the Plan. Please refer to the Plan document for further information. 
  

	 	•	 	 All determinations under these Guidelines will be made by the Committee which, pursuant to section 4.1 of the Plan, will consist of all the members of
the Compensation Committee who are “outside directors” within the meaning of Section 162(m) of the Code. 

  

	 	•	 	 The Committee will establish the target bonus amount for each Team Member covered by this Section 4.C and the pre-tax earnings goal for the fiscal
year. 

  

	 	•	 	 Notwithstanding the foregoing, the Committee will adjust the pre-tax earnings goal for the fiscal year with respect to each Team Member covered by this
Section 4.C to adequately reflect the occurrence, during such fiscal year, of any of the events described in Section 14.4 of the Plan. 

  
  

5 

	 	•	 	 Payment of any cash bonus under these Guidelines to any Team Member covered by this Section 4.C is conditioned upon the written certification of
the Committee that the performance goals and any other material conditions applicable to such award were satisfied. 

  

	 	•	 	 The Committee will retain the discretion to decrease, but not increase, the amount of any cash bonus otherwise payable to any Team Member covered by
this Section 4.C in accordance with the applicable performance formula described above. Specifically, with respect to any Team Member covered by this Section 4.C who is not a member of the Incentive Group 6 described above (and whose bonus
therefore is calculated in part on the basis of the Team Member’s individual performance), the Committee will use the Team Member’s individual performance level for the relevant fiscal year solely for purposes of decreasing (to the extent
permitted by the performance formula described above) the amount of any cash bonus otherwise payable to the Team Member, if the Committee deems it appropriate in its discretion. 

 

	 	•	 	 In no event will the amount of any cash bonus otherwise payable to any Team Member covered by this Section 4.C in accordance with the applicable
performance formula described above exceed $3,000,000. 

  

	 	•	 	 Payment of any cash bonus under these Guidelines to any Team Member covered by this Section 4.C is conditioned upon the Plan having been
previously approved by the shareholders of the Company. 

  

	5.	Additional Rules 

  

	 	•	 	 Notwithstanding anything in these Guidelines to the contrary, the pre-tax earnings goal and the total annual bonus pool available for awards made
pursuant to these Guidelines to participating Team Members in the relevant fiscal year shall be determined by the Committee (subject to the rules described above relating to Qualified Performance-Based Awards) after the end of such fiscal year and
shall be computed on a consolidated basis determined in accordance with generally accepted accounting principles (“GAAP”), before any deduction for federal or state income taxes. In no event will the total annual bonus pool exceed 7% of
the net profit realized by the Company and its subsidiaries during the fiscal year, before any deduction in respect of, or provision for, (i) appropriations or distributions made or to be made under these Guidelines, or (ii) payments made
to officers or other employees under any agreement or other arrangements based upon or relating to profits of the Company or any of its subsidiaries, years of service with the Company or any of its subsidiaries or performance of the Company’s
retail stores (collectively, (i) and (ii) being referred to as the “bonus payments”); provided that the Committee may make the same adjustments to such net profit as may be made by the Committee with respect to the pre-tax
earnings goal to recognize or to exclude any adjustment as set forth in Section 14.4 of the 

  
  

6 

	 	 
Plan. The Company shall not be considered to have achieved the pre-tax earnings goal in any fiscal year in which the pre-tax earnings goals is achieved on a GAAP basis only if the bonus payments
to be paid and accrued pursuant to GAAP are excluded from such calculation. 

  

	 	•	 	 Bonuses earned under these Guidelines will be paid within two and one-half months following the end of the fiscal year. 

 

	 	•	 	 All bonus payments under these Guidelines are considered supplemental pay and will be taxed as such. Appropriate withholding and deductions will be
taken from such payments. Percentages will be rounded to the nearest 1/10 of a percent (for example, 10.3%). Amount of bonus will be rounded up to the nearest whole dollar. 

 

	 	•	 	 The amount of a Team Member’s earnings for the fiscal year which have actually been paid to the Team Member will be used in determining the
calculation. This calculation excludes the salary elements for Company Aircraft, Company Car, GTL Imputed Income, or any bonus payments issued during the fiscal year. 

 

	 	•	 	 These Guidelines cannot be changed or modified by a verbal communication or course of dealing, but only by a written communication signed by the
Chairman, Chief Executive Officer or President of the Company. 

  

	 	•	 	 In the event of major economic changes, catastrophic events, or any other circumstances not contemplated by the Company (but subject to the rules
described above relating to Qualified Performance-Based Awards), the Committee reserves the right to alter, amend, or terminate these Guidelines and any awards hereunder. 

 

	 	•	 	 The Chairman, Chief Executive Officer or President of the Company will make all final decisions, rulings and interpretations under these Guidelines
(subject to the rules described above relating to Qualified Performance-Based Awards, which may require action by the Committee). By participating in the Plan under these Guidelines, each Team Member agrees that such decisions, rulings and
interpretations will be final and that each Team Member will be bound by them. Each Team Member further agrees that if and when any circumstances arise relating to these Guidelines which are not covered by this description of the Plan, the Team
Member will be bound by the final decision, ruling or interpretation of the Chairman, Chief Executive Officer or President of the Company. 

  

	 	•	 	 In the event the Company restates its financial results within twelve (12) months of the payment of a bonus under these Guidelines due to material
non-compliance by the Company with any financial reporting requirements of the federal securities laws, as a result of intentional 

  
  

7 

	 	 
misconduct (as determined by the members of the Board who are “independent” under the Company’s Corporate Governance Guidelines), the Company’s executive officers shall
reimburse the Company the difference between (x) the amount of the bonus actually awarded to the executive officer and (y) the amount of the bonus such executive officer would have received had the amount of the bonus been calculated based
on the restated financial statements. 

 Adopted by the Compensation Committee: October 3, 2006 

Amended: August 28, 2007; November 5, 2007; October 7, 2008; October 13, 2009; May 10,
2011; May 9, 2012 

  
  

8

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