DILLARD'S, INC.
1990 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN,
AS AMENDED ON MAY 25, 1991, JUNE 12, 1992,
MARCH 29, 1996, AND MAY 17, 1997
_______________________________
WHEREAS, the Board of Directors of the Company deems it in the
best interest of the Company that key employees employed by the
Company be given an opportunity to acquire a stake in the growth of
the Company as a means of assuring their maximum effort and
continued association and employment with the Company; and
WHEREAS, the Board of Directors believes that the Company can
best obtain these and other benefits by granting stock options to
such key employees;
NOW, THEREFORE, BE IT RESOLVED:
That the Dillard's, Inc. Incentive and Nonqualified Stock
Option Plan be adopted, and that it be effective commencing March
17, 1990.
1. Purpose. The purpose of the Dillard's, Inc. 1990
Incentive and Nonqualified Stock Option Plan is to encourage
ownership of stock in the Company by key employees, and thereby
cause such key employees to increase their efforts in behalf of the
Company, to effect savings, and to otherwise promote the best
interests of the Company. It is intended that options granted
under this Plan will qualify as "incentive stock options" under the
Internal Revenue Code of 1986, as may be amended from time to time;
provided, however, that nonqualified stock options may also be
granted which do not qualify as incentive stock options.
2. Definitions. As used herein, the following definitions
shall apply.
a. "Board" shall mean the Board of Directors of the Company.
b. "Common Stock" shall mean Common Stock, Class A,
$.01 par value per share, of the Company.
c. "Code" shall mean the Internal Revenue Code of 1986,
as amended.
d. "Committee" shall mean the Stock Option Committee
appointed by the Board in accordance with paragraph 4(a) of the
Plan.
e. "Company" shall mean Dillard's, Inc.
f. "Continuous Employment" or "Continuous Status as an
Employee" shall mean the absence of any interruption or termination
of employment by the Company. Employment shall not be considered
interrupted in the case of sick leave, military leave, or any other
leave of absence approved by the Company.
g. "Effective Date" shall mean March 17, 1990.
h. "Employee" shall mean any person employed on a
full-time basis by the Company or of any subsidiaries of the
Company (as defined in Sec.425(f) of the Code).
i. "Incentive Stock Option" means an Option which meets
the requirements of Sec.422A(b) of the Code.
j. "Nonqualified Stock Option" means an Option which
is taxed pursuant to Sec.83 of the Code and does not receive the
special tax treatment received by an Incentive Stock Option.
k. "Option" shall mean a right to acquire Common Stock
which is granted pursuant to this Plan.
l. "Optioned Stock" shall mean Common Stock subject to
an Option granted pursuant to this Plan.
m. "Optionee" shall mean an Employee who receives an
Option.
n. "Plan" shall mean the Dillard's, Inc. 1990 Incentive
and Nonqualified Stock Option Plan.
o. "Share" shall mean one share of the Common Stock.
3. Shares Subject to the Plan. Except as otherwise required
by the provisions of paragraph 13 hereof, the aggregate number of
Shares of Common Stock deliverable upon the exercise of Options
pursuant to the Plan shall not exceed twelve million (12,000,000)
Shares. Such Shares may either be authorized but unissued or
treasury shares. If an Option should expire or become
unexercisable for any reason without having been exercised in full,
the unpurchased Shares which were subject thereto shall, unless the
Plan shall have been terminated, be available for the grant of
other Options under the Plan. No Optionee may receive options
covering more than one million (1,000,000) shares in any single
fiscal year under the Plan.
4. Administration of the Plan.
a. Composition of Stock Option Committee. The Plan
shall be administered by a Stock Option Committee (the "Committee")
consisting of at least two (2) directors of the Company appointed
by the Board. All persons designated as members of the Committee
shall be "non-employee directors" within the meaning of Rule 16b-3,
or any successor to such Rule, of the Securities Exchange
Commission, and "outside directors" within the meaning of
applicable Treasury Regulations, or any successor to such
Regulations, promulgated under the Internal Revenue Code of 1986,
as amended, or any successor to such Code.
b. Powers of the Stock Option Committee. The Committee
is authorized (but only to the extent not contrary to the express
provisions of the Plan or to resolutions adopted by
the Board) to interpret the Plan, to prescribe, amend, and rescind
rules and regulations relating to the Plan, to determine the form
and content of Options to be issued under the Plan, and to make
such other determinations necessary or advisable for the
administration of the Plan, and shall have and may exercise such
other power and authority as may be delegated to it by the Board
from time to time. A majority of the entire Committee shall
constitute a quorum, and the action of a majority of the members
present at any meeting at which a quorum is present shall be deemed
the action of the Committee.
The Stock Option Committee shall, from time to time, have
the power to designate from among the key Employees, the persons to
whom stock Options will be granted. Such designation shall be in
the absolute discretion of the Committee, and shall be final
without approval of the stockholders. On the occasion of the
designation of the Optionees, the Committee may grant additional
Options to Optionees then holding Options, to some of them, or may
grant Options solely or partially to new Optionees. As of the date
of grant, the Committee shall fix the number of Shares to be
optioned and whether the Option shall be treated as an Incentive
Stock Option or as a Nonqualified Stock Option; however, no Option
shall be treated as an Incentive Stock Option ten (10) years from
the date this Plan is adopted by the Board or the date the Plan is
approved by the stockholders of the Company, whichever is earlier.
In addition, to the extent the aggregate fair market value
(determined at the time the Option is granted) of Shares treated as
acquired pursuant to Incentive Stock Options which are exercisable
by the Optionee for the first time during any calendar year (under
all incentive stock option plans of the Company or subsidiaries
thereof (as defined in Sec.425(f) of the Code)) exceeds $100,000, such
Options (taking them into account in the order in which they were
granted)
cannot be treated as Incentive Stock Options. In making
the determination as to whom Options shall be granted, and as to
the number of Shares to be covered by such Options, the Committee
shall take into account the duties and responsibilities of the
proposed Optionees, their present and potential contribution to the
success of the Company, their past record, and such other factors
as the Stock Option Committee shall deem relevant in connection
with accomplishing the purposes of this Plan.
Certain officers of the Company as designated by the
Committee are hereby authorized to execute instruments evidencing
Options on behalf of the Company and to cause them to be delivered
to the Optionees or other participants.
c. Effect of Option Committee's Decision. All
decisions, determinations, and interpretations of the Committee
shall be final and conclusive on all persons affected thereby.
5. Option Price. The exercise price of Incentive Stock
Options granted under the Plan shall not be less than one hundred
percent (100%) of the fair market value of a Share on the date the
Option is granted, or, if the Optionee owns (within the meaning of
Sec.425(d) of the Code) ten percent (10%)or more of the total combined
voting power of all classes of stock of the Company, one hundred
ten percent (110%) of the fair market value of a Share on the date
the Option is granted. The exercise price of Nonqualified Stock
Options granted under the Plan shall be determined by the Committee
in its complete discretion, but in no event shall the exercise
price of Nonqualified Stock Options be less than fifty percent
(50%) of the fair market value of a Share on the date the Option is
granted. The fair market value of a Share on a particular date
shall be deemed to be the mean between the highest and lowest sales
prices per share of the Common
Stock on the principal national
securities exchange on which the Common Stock may be listed from
time to time on that date or, in either case, if there shall have
been no sale on that date on the last preceding date on which such
sale or sales were effected on such exchange. In the event that
the method just described for determining the fair market value of
the Shares shall not remain consistent with the provisions of the
Code or the regulations of the Secretary of the Treasury
promulgated thereunder, then the fair market value per Share shall
be determined by such other method consistent with the Code or
regulations as the Committee shall in its discretion select and
apply at the time of grant of the Options concerned.
6. Term of Option and Limitations on Exercise. Subject to
the terms of the Plan, the Committee shall, in its discretion,
establish the term of each Option granted pursuant to the Plan.
Notwithstanding the foregoing, an Incentive Stock Option granted
under the Plan by its terms shall not be exercisable after the
expiration of ten (10) years from the date such Option is granted,
or, five (5) years if the Optionee owns (within the meaning of
Sec.425(d) of the Code) ten percent (10%) or more of the total
combined voting power of all classes of stock of the Company. The
Committee may also, in its discretion, establish a period or
periods during which an Option may not be exercised in whole or in
part or any other limitation or restriction, subject to the terms
of the Plan, which the Committee may determine as a condition
precedent to exercising an Option, including such provisions as
deemed advisable to permit qualification of Options as Incentive
Stock Options.
7. Procedures for Exercise. Any Option granted hereunder
shall be exercisable at such times and under such conditions as
shall be permissible under the terms of the Plan and of the Option
granted to an Optionee. An Option may not be exercised for a
fractional Share. An Option granted pursuant to the Plan may be
exercised, subject to provisions relating to its termination and
limitations on its exercise, only by (a) written notice to exercise
the Option with respect to a specified number of Shares, and (b)(i)
payment to the Company (contemporaneously with delivery of each
such notice), in cash or Common Stock, of the amount of the Option
price of the number of Shares with respect to which the Option is
then being exercised, or (ii) causing the Company to receive from
a broker funds to pay for the option upon the broker's receipt of
stock certificates from the Company. Each such notice and payment
shall be delivered, or mailed by prepaid registered or certified
mail, addressed to the Treasurer of the Company at the Company's
executive offices.
8. Reload Options. If payment for Shares upon the
exercise of an Option ("Original Option") is made in the form of
Common Stock, the Optionee shall be granted on the date of exercise
an Option ("Reload Option") to purchase the number of Shares that
equals the number of Shares tendered to the Company. The price per
Share at which each Reload Option may be exercised shall be equal
to the fair market value of the Shares on the date of grant of the
Reload Option. The term of each Reload Option shall expire on the
same date as that of the Original Option.
9. Exercise During Employment or Following Death. Unless
otherwise provided in the terms of an Option, an Option may be
exercised by an Optionee only while the Optionee is an Employee and
has maintained Continuous Status as an Employee since the date of
the grant of the Option, or after the termination of the Optionee's
status as an Employee within one (1) year after such termination if
the Optionee becomes Disabled, as determined by the Committee, or
for any other termination within three (3) months after such
termination (but not later than the date on which the Option would
otherwise expire), except if the Optionee would have been entitled
to exercise the Option immediately prior to death, such Option of
the deceased Optionee may be exercised within twelve (12) months
(but not later than the date on which the Option would otherwise
expire) from the date of death by the personal representatives of
the Optionee's estate, or person or persons to whom the Optionee's
rights under such Option shall have passed by will or by laws of
descent and distribution.
The Committee's determination whether an Optionee's
employment has ceased, and the effective date thereof, shall be
final and conclusive on all persons affected thereby.
10. Form of Stock Certificates. Stock certificates to be
issued or transferred pursuant to Options granted under this Plan
shall be made in favor of the Optionee, or the Optionee and
Optionee's spouse as joint tenants. In the discretion of the
Committee, the stock certificates so issued or transferred may have
noted thereon that same have been issued or transferred pursuant to
an Option granted under this Plan.
11. Optionee's Agreement. If the underlying Shares are not
registered under the Securities Act of 1933 and applicable state
securities laws at the time of exercise of an Option, then the
Optionee shall agree that the Optionee will purchase the Shares
under such Option for investment and not with any present intention
to re-sell the same, and shall agree to sign a certificate to such
effect at the time of exercising the Option.
12. Non-Transferability of Options. Options granted under
the Plan may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by
the laws of descent and distribution. An Option may be exercised,
during the lifetime of the Optionee, only by the Optionee.
13. Effect of Change in Stock Subject to the Plan. In the
event that each of the outstanding Shares of Common Stock (other
than Shares held by dissenting shareholders) shall be changed into
or exchanged for a different number or kind of Shares of stock of
the Company or another corporation (whether by reason of merger,
consolidation, recapitalization, reclassification, stock dividend,
split-up, combination of Shares, or otherwise), then, in the sole
discretion of the Committee, there shall be substituted for each
Share of Common Stock then under Option or available for Option the
number and kind of Shares of stock into which each outstanding
Share of Common Stock (other than Shares held by dissenting
shareholders) shall be so changed or for which each such Share
shall be so exchanged, together with an appropriate adjustment of
the Option Price.
In the event there shall be any other change in the number of,
or kind of, issued Shares of Common Stock, or of any stock or other
securities into which such Common Stock shall have been changed, or
for which it shall have been exchanged, then if the Committee
shall, in its sole discretion, determine that such change equitably
requires an adjustment in the number, or kind, or Option price of
Shares then subject to an Option or available for Option, such
adjustment shall be made by the Board and shall be effective and
binding for all purposes of this Plan.
14. Time of Granting Options. The date of grant of an Option
under the Plan shall, for all purposes, be the date reflected on
the written grant of the Option to the Optionee. Notice of the
determination shall be given to each Employee to whom an Option is
so granted within a reasonable time after the date of such grant.
15. Modification of Options. At any time and from time to
time the Committee may modify any outstanding Option, provided no
such modification shall impair the Option without the consent of
the holder of the Option. Any Incentive Stock Options outstanding
under the Plan may be amended, if necessary, in order to retain
such qualification.
16. Amendment and Termination of the Plan. The Board may
amend, alter or discontinue the Plan, but no amendment or
alteration shall be made without the approval of the stockholders
of the Company which would:
(i) materially increase the benefits accruing to
participants under the Plan; or
(ii) increase the number of Shares which may be issued
under the Plan; or
(iii) modify the requirements as to eligibility for
participation in the Plan.
No amendment, alteration or discontinuation of the Plan shall
adversely affect any Options granted prior to the time of such
amendment, alteration or discontinuation.
17. Conditions Upon Issuance of Shares. Shares must not be
issued with respect to any Option granted under the Plan unless the
issuance and delivery of such Shares shall comply with all relevant
provisions of law, including, without limitation, the Securities
Act of 1933, as amended, the rules and regulations promulgated
thereunder, any applicable state securities law, and the
requirements of any stock exchange upon which the Shares may then
be listed. Inability of the Company to obtain from any regulatory
body or authority deemed by the Company's counsel to be necessary
to the lawful issuance and sale of any Shares hereunder shall
relieve the Company of any liability in respect of the non-issuance
or sale of such Shares. As a condition to the exercise of an
Option, the Company may require the person exercising an Option to
make such representations or warranties as may be necessary to
assure the availability of an exemption from the registration
requirements of federal or state securities law.
18. Reservation of Shares. The Company, during the term of
this Plan, will reserve and keep available a number of Shares
sufficient to satisfy the requirements of the Plan.