Dillard : 2026 Proxy Statement PDF

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To Be Held on Thursday, May 28, 2026

The Annual Meeting of Shareholders (as it may be adjourned, continued or postponed from time to time, the "Annual Meeting") of Dillard's, Inc. (the "Company", "Dillard's", "we", "us" or "our") will be held at the Company's Corporate Office, 1600 Cantrell Road, Little Rock, Arkansas 72201, on Thursday,

May 28, 2026, at 9:00 a.m. CDT for the following purposes:

1. To consider and vote on a proposal to approve (i) the Agreement and Plan of Merger, dated as of March 20, 2026, as amended on March 25, 2026 (including the plan of merger set forth therein and as it may be further amended from time to time, the "Merger Agreement"), by and among the Company, W.D. Company, Inc., an Arkansas corporation ("WDC"), and Alex Dillard, solely in his capacity as the Shareholder Representative, under which WDC will merge with and into the Company (the "Merger"), with the Company surviving the Merger, a copy of which is attached as Annex A to the accompanying proxy statement and is incorporated therein by reference, (ii) the Merger and (iii) the other transactions contemplated by the Merger Agreement, which proposal we refer to as the "Merger Proposal;"

2. To consider and vote on a proposal to approve, for the purposes of complying with

   Section 312.03(b)(i), Section 312.03(b)(ii) and Section 312.03(c) of the New York Stock Exchange ("NYSE") Listed Company Manual, the issuance of (i) up to 41,496 shares of Class A common stock, par value $0.01 per share, of the Company ("Dillard's Class A Common Stock"), and (ii) up to 3,985,776 shares of Class B common stock, par value $0.01 per share, of the Company ("Dillard's Class B Common Stock" and, together with the Dillard's Class A Common Stock, the "Dillard's Common Stock"), in connection with the Merger, which proposal we refer to as the "NYSE Proposal;"

3. To elect as directors the fourteen nominees named in the accompanying proxy statement (five of whom are to be elected by the holders of Dillard's Class A Common Stock and nine of whom are to be elected by the holders of Dillard's Class B Common Stock);

4. To ratify the appointment of KPMG LLP as the Company's independent registered public accounting firm for fiscal year 2026;

5. To conduct an advisory vote on the compensation of the Company's named executive officers; and

6. To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.

The foregoing items of business are more fully described in the accompanying proxy statement, which forms a part of this notice and is incorporated herein by reference. Our Board of Directors (the "Board") has fixed the close of business on March 30, 2026 as the record date for the determination of shareholders entitled to notice of and to vote at the Annual Meeting or any postponement or adjournment thereof (the "Record Date"). All holders of record of Dillard's Class A Common Stock and Dillard's Class B Common Stock at the close of business on the Record Date are entitled to receive notice of and attend the Annual Meeting or any postponement or adjournment of the Annual Meeting.

The Board, acting upon the authorization and recommendation of a committee composed of independent directors and by unanimous vote, has (i) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of the Company and its shareholders, (ii) approved and declared advisable the Merger Agreement, the Merger

and the other transactions contemplated by the Merger Agreement, and (iii) recommended that the shareholders approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and directed that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement be submitted to the shareholders for approval.

The Board unanimously recommends that you vote "FOR" the Merger Proposal, "FOR" the NYSE Proposal, "FOR" the election of each director nominee, "FOR" the ratification of the appointment of KPMG LLP as the Company's independent registered public accounting firm for fiscal year 2026 and "FOR" the approval, on an advisory basis, of the compensation of our named executive officers.

Your participation in the Annual Meeting is earnestly solicited. Even if you expect to attend the Annual Meeting, we encourage you to vote in advance by proxy. The giving of a proxy does not affect your right to revoke it later or vote your shares in person in the event you should attend the Annual Meeting.

By Order of the Board of Directors DEAN L. WORLEY

Vice President, General Counsel, Corporate Secretary

Little Rock, Arkansas April 6, 2026

Important Notice Regarding the Availability of Proxy Materials for the 2026 Annual Meeting of Shareholders to Be Held on May 28, 2026. The accompanying proxy statement and the Company's Annual Report on Form 10-K are available at investor.dillards.com/financial-information/annual-report-and-proxy/default.aspx TABLE OF CONTENTS

INFORMATION ABOUT THE ANNUAL MEETING AND THE PROPOSALS . . . . . . . . . . 1

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

PROXY VOTING AND RELATED MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS . . . . . 13

INFORMATION ABOUT WDC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

THE MERGER AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

VOTING AND EXCHANGE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

PROPOSAL NO. 1. THE MERGER PROPOSAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

PROPOSAL NO. 2. THE NYSE PROPOSAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

PROPOSAL NO. 3. ELECTION OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

COMPENSATION DISCUSSION AND ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

COMPENSATION COMMITTEE REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

AUDIT COMMITTEE REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

PROPOSAL NO. 4. RATIFICATION OF THE SELECTION OF THE COMPANY'S

INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . . 71

PROPOSAL NO. 5. ADVISORY VOTE ON EXECUTIVE COMPENSATION . . . . . . . . . . . . . 72

CERTAIN RELATIONSHIPS AND TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS . . . . . . . . . . . . . . . . . . . 75

SECURITY OWNERSHIP OF MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

APPRAISAL RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

HOUSEHOLDING OF PROXY MATERIALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

SHAREHOLDER PROPOSALS FOR THE 2027 ANNUAL MEETING . . . . . . . . . . . . . . . . . 83

WHERE YOU CAN FIND ADDITIONAL INFORMATION; INCORPORATION OF

CERTAIN INFORMATION AND DOCUMENTS BY REFERENCE . . . . . . . . . . . . . . . . . 84

INDEX TO FINANCIAL STATEMENTS (UNAUDITED) OF W.D. COMPANY, INC. . . . . . . F-1 ANNEX A-1 - MERGER AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1-1 ANNEX A-2 - AMENDMENT NO. 1 TO MERGER AGREEMENT . . . . . . . . . . . . . . . . . . A-2-1

ANNEX B - VOTING AND EXCHANGE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

DILLARD'S, INC. 1600 CANTRELL ROAD LITTLE ROCK, ARKANSAS 72201 Telephone [phone] PROXY STATEMENT May 28, 2026 INFORMATION ABOUT THE ANNUAL MEETING AND THE PROPOSALS

The enclosed proxy is solicited by and on behalf of the Board of Directors (the "Board") of Dillard's, Inc., a Texas corporation (the "Company", "Dillard's", "we", "us" or "our") for use at the annual meeting of shareholders (as it may be adjourned, continued or postponed from time to time, the "Annual Meeting")

to be held on Thursday, May 28, 2026, at 9:00 a.m. CDT, at our principal executive offices, 1600 Cantrell Road, Little Rock, Arkansas, 72201.

The accompanying Notice of Annual Meeting, this proxy statement and the form of proxy for the Annual Meeting are first being mailed on or about April 6, 2026 to our shareholders of record as of the close of business on March 30, 2026 (the "Record Date"). This proxy statement contains important information for you to consider when deciding how to vote on the matters brought before the Annual Meeting. Please read it carefully.

The Annual Meeting is being held for the following purposes:

1. To consider and vote on a proposal to approve (i) the Agreement and Plan of Merger, dated as of March 20, 2026, as amended on March 25, 2026 (including the plan of merger set forth therein and as it may be further amended from time to time, the "Merger Agreement"), by and among the Company, W.D. Company, Inc., an Arkansas corporation ("WDC"), and Alex Dillard, solely in his capacity as the Shareholder Representative, under which WDC will merge with and into the Company (the "Merger"), with the Company surviving the Merger, a copy of which is attached as Annex A to this proxy statement and is incorporated herein by reference, (ii) the Merger and

   (iii) the other transactions contemplated by the Merger Agreement, which proposal we refer to as the "Merger Proposal;"

2. To consider and vote on a proposal to approve, for the purposes of complying with

   Section 312.03(b)(i), Section 312.03(b)(ii) and Section 312.03(c) of the New York Stock Exchange (the "NYSE") Listed Company Manual, the issuance of (i) up to 41,496 shares of Class A common stock, par value $0.01 per share, of the Company ("Dillard's Class A Common Stock"), and (ii) up to 3,985,776 shares of Class B common stock, par value $0.01 per share, of the Company ("Dillard's Class B Common Stock" and, together with the Dillard's Class A Common Stock, the "Dillard's Common Stock"), in connection with the Merger, which proposal we refer to as the "NYSE Proposal;"

3. To elect as directors the fourteen nominees named in this proxy statement (five of whom are to be elected by the holders of Dillard's Class A Common Stock and nine of whom are to be elected

   by the holders of Dillard's Class B Common Stock);

4. To ratify the appointment of KPMG LLP ("KPMG") as the Company's independent registered public accounting firm for fiscal year 2026;

5. To conduct an advisory vote on the compensation of the Company's named executive officers; and

6. To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.

As of the date of this proxy statement, management and the Board were not aware of any other matters to be presented at the Annual Meeting.

The Board unanimously recommends that you vote "FOR" the Merger Proposal, "FOR" the NYSE Proposal, "FOR" the election of each director nominee, "FOR" the ratification of the appointment of KPMG LLP as the Company's independent registered public accounting firm for fiscal year 2026 and "FOR" the approval, on an advisory basis, of the compensation of our named executive officers.

Only holders of record of Dillard's Class A Common Stock and Dillard's Class B Common Stock at the close of business on the Record Date are entitled to receive notice of and vote at the Annual Meeting. On the Record Date, there were 11,630,838 shares of Dillard's Class A Common Stock outstanding and 3,986,233 shares of Dillard's Class B Common Stock outstanding. Dillard's Class A Common Stock and Dillard's Class B Common Stock will vote as a single class on all matters described in this proxy statement for which your vote is being solicited, except that the holders of Dillard's Class A Common Stock are empowered as a class to elect one-third of the directors and the holders of Dillard's Class B Common Stock are empowered as a class to elect two-thirds of the directors.

SUMMARY

This summary highlights selected information from this proxy statement related to the Merger. This summary does not contain all of the information that may be important to you. You should carefully read this proxy statement, including the annexes attached to this proxy statement, which are incorporated into and constitute a part of this proxy statement, to fully understand the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, before voting on the proposals presented at the Annual Meeting.

The Parties to the Merger (page 15)

Dillard's, Inc.

Dillard's, Inc., a Texas corporation, ranks among the nation's largest fashion apparel, cosmetics and home furnishing retailers. The Company, originally founded in 1938 by William T. Dillard, was incorporated in 1964. As of January 31, 2026, we operated 271 Dillard's stores, including 28 clearance centers, and an Internet store at dillards.com offering a wide selection of merchandise including fashion apparel for women, men and children, accessories, cosmetics, home furnishings and other consumer goods. Dillard's Common Stock consists of two classes: Dillard's Class A Common Stock and Dillard's Class B Common Stock. Dillard's Class A Common Stock is listed on the NYSE under the ticker symbol "DDS." For additional information about the Company, see the section entitled "Where You Can Find More Information." The Company's principal executive offices are located at 1600 Cantrell Road, Little Rock, Arkansas 72201 and its telephone number is [phone].

W.D. Company, Inc.

W.D. Company, Inc. is a privately held Arkansas corporation organized as a family holding company to own and hold shares of Dillard's Common Stock primarily for the benefit of the Dillard family. WDC has no business operations and engages in no business activities other than (a) owning, holding, and disposing of certain equity securities, including 41,496 shares of Dillard's Class A Common Stock and 3,985,776 shares of Dillard's Class B Common Stock and a de minimis amount of shares of another publicly-traded common stock, and (b) receiving cash dividends from Dillard's and distributing such dividends directly to WDC's shareholders (the "WDC Shareholders"), in each case solely in a manner incidental to the ownership of such securities and the maintenance of WDC's corporate existence. WDC's principal executive offices

are located at 1600 Cantrell Road, Little Rock, Arkansas 72201 and its telephone number is [phone].

Shareholder Representative

Pursuant to the Merger Agreement, Alex Dillard has been designated to serve as the Shareholder Representative. Immediately prior to the closing of the Merger (the "Closing") and without further act of WDC or any WDC Shareholder, Alex Dillard will serve as the representative, agent and attorney-in-fact for each of the WDC Shareholders to take any and all actions on behalf of the WDC Shareholders pursuant to the Merger Agreement and any other documents related to the Merger to which the Shareholder Representative is or will be a party (the "Shareholder Representative Documents").

Required Vote (page 11)

Approval of (a) the Merger Proposal requires the affirmative vote of the holders of a majority of the shares of Dillard's Common Stock outstanding at the close of business on the Record Date and entitled to vote on the Merger Proposal, voting as a single class, and (b) the NYSE Proposal requires the affirmative vote of the holders of a majority of the shares of Dillard's Common Stock present in person or represented by proxy and entitled to vote on the NYSE Proposal, voting as a single class (collectively, the "Requisite Shareholder Approval"). Abstentions will have the same effect as votes "AGAINST" the Merger Proposal and the NYSE Proposal. Broker non-votes will have the same effect as votes "AGAINST" the Merger Proposal and will have no effect on the NYSE Proposal.

IF WE DO NOT RECEIVE THE REQUISITE SHAREHOLDER APPROVAL, THE MERGER PROPOSAL WILL NOT BE APPROVED AND THE MERGER WILL NOT BE COMPLETED.

ACCORDINGLY, YOUR VOTE IS VERY IMPORTANT REGARDLESS OF THE CLASS OR NUMBER OF SHARES OF DILLARD'S COMMON STOCK THAT YOU OWN.

Effects of the Merger (page 16)

Upon the terms and subject to the conditions of the Merger Agreement and in accordance with the applicable provisions of the Texas Business Organizations Code (the "TBOC") and the Arkansas Business Corporation Act (the "ABCA"), at the Effective Time (as defined below), WDC will be merged with and into the Company, at which time the separate existence of WDC will cease and the Company will continue as the surviving corporation (the Company, in its capacity as the surviving corporation of the Merger, is sometimes referred to herein as the "Surviving Corporation"). At the Effective Time, each share of voting common stock, $1.00 par value per share, of WDC (the "WDC Voting Common Stock") and each share of non-voting common stock, $1.00 par value per share, of WDC (the "WDC Non-Voting Common Stock", and together with the WDC Voting Common Stock, the "WDC Common Stock"), other than Dissenting Shares (as defined below), will be cancelled. At the Effective Time, the shares of Dillard's Common Stock held by WDC immediately prior to the Effective Time will automatically become treasury stock of the Surviving Corporation and, immediately thereafter, will be cancelled and returned to the status of authorized but unissued shares available for future reissuance.

Because the Aggregate Stock Merger Consideration (as defined below) consists of a number of shares of Dillard's Class A Common Stock and Dillard's Class B Common Stock identical (subject to reduction to avoid the issuance of fractional shares) to the number of shares of Dillard's Class A Common Stock and Dillard's Class B Common Stock currently held by WDC, the WDC Shareholders, collectively, will have the same or a slightly lower percentage interest in the voting power, liquidation value and aggregate book

value of the Company following the consummation of the Merger as such shareholders currently hold. Accordingly, there will be no dilution to current shareholders of the Company as a result of the Merger.

Merger Consideration (page 27)

The Merger Agreement provides that, at the Effective Time, each share of WDC Common Stock issued and outstanding immediately prior to the Effective Time (other than shares of WDC Common Stock that are issued and outstanding immediately prior to the Effective Time and that are held by any holder who is entitled to and who has properly demanded appraisal of such shares in compliance with the ABCA ("Dissenting Shares")) will be automatically cancelled, and in exchange therefor, each WDC Shareholder will be entitled to receive such WDC Shareholder's Pro Rata Share (as defined below) of (a) up to 41,496

shares of Dillard's Class A Common Stock and up to 3,985,776 shares of Dillard's Class B Common Stock, excluding, for the avoidance of doubt, any fractional shares (the "Aggregate Stock Merger Consideration"); and (b) the amount in cash equal to the sum of (i) WDC's cash and cash equivalents as of the closing date of the Merger (the "Closing Date"), plus (ii) the amount equal to the average of the high and low trading prices of other publicly traded securities owned by WDC (as reported by FactSet) on the last trading day that is two (2) business days prior to the Closing Date (the "Aggregate Cash Merger Consideration", and together with the Aggregate Stock Merger Consideration, the "Aggregate Merger Consideration"). "Pro Rata Share" means, with respect to any WDC Shareholder, a fraction expressed as a percentage, the numerator

of which is the number of shares of WDC Common Stock held by such WDC Shareholder immediately prior to the Effective Time and the denominator of which is the total number of shares of WDC Common

Stock issued and outstanding immediately prior to the Effective Time (other than Dissenting Shares), in each case as set forth on the allocation schedule to be delivered by WDC no less than two (2) business days prior to the Closing Date (the "Final Aggregate Merger Consideration Allocation Schedule"). Dissenting Shares will not be converted into or represent the right to receive such WDC Shareholder's Pro Rata Share of the Aggregate Cash Merger Consideration or such WDC Shareholder's Pro Rata Share of the Aggregate Stock Merger Consideration, but will be entitled only to such rights as are granted by the ABCA, unless and

until such holder fails to perfect, withdraws or otherwise loses such holder's right to appraisal under the ABCA.

The Aggregate Cash Merger Consideration (and each WDC Shareholder's Pro Rata Share thereof) and the Aggregate Stock Merger Consideration (and each WDC Shareholder's Pro Rata Share thereof) will be set forth on the Final Aggregate Merger Consideration Allocation Schedule. No fractional shares of Dillard's

Common Stock will be issued to any WDC Shareholder in connection with the Merger. After aggregating all fractional shares of Dillard's Common Stock to be received by any WDC Shareholder, such WDC Shareholder will be entitled to receive, in lieu of any remaining fractional share of Dillard's Common Stock that would have been issued in the Merger to such WDC Shareholder, an amount in cash (rounded down to the nearest whole cent) equal to the product of (i) such fraction, multiplied by (ii) the average of the high

and low trading prices of shares of Dillard's Class A Common Stock on NYSE (as reported by FactSet) on the last trading day that is two (2) business days prior to the Closing Date.

Prior to the Closing Date, WDC will distribute to each holder of record of WDC Common Stock (i) a letter of transmittal (the "Letter of Transmittal") and (ii) instructions for use in effecting the surrender to the Company of WDC Common Stock in exchange for the portion of the Aggregate Merger Consideration to which such shares of WDC Common Stock are entitled. Promptly following the later of (a) the Effective Time and (b) surrender to the Company of WDC Common Stock and delivery to the Company of the Letter of Transmittal, such WDC Shareholder will receive its appropriate portion of the Aggregate Merger Consideration (subject to any applicable withholding taxes) in exchange for the shares of WDC Common Stock held by that WDC Shareholder.

Recommendation of the Board (page 22)

The Board, acting upon the authorization and recommendation of a committee established by the Board composed of independent directors (the "Special Committee") and by unanimous vote, has

(i) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of the Company and its shareholders, (ii) approved and declared advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, and (iii) recommended that the shareholders approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and directed that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement be submitted to the shareholders for approval. Certain factors considered by the Board in reaching its decision to approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement can be found in the section entitled "The Merger - Reasons for the Merger".

The Board unanimously recommends that you vote:

• "FOR" the Merger Proposal; and

• "FOR" the NYSE Proposal.

Voting and Exchange Agreement (page 36)

On March 19, 2026, certain WDC Shareholders and the Company entered into a Voting and Exchange Agreement (as defined below), which becomes effective only if the Merger is consummated. Pursuant to the Voting and Exchange Agreement, such WDC Shareholders agreed to, among other things, continue

voting their respective shares of Dillard's Class B Common Stock as a unified group following the Merger. The Voting and Exchange Agreement will promote the continued ownership of Dillard's Class B Common Stock by lineal descendants of William T. Dillard. This concentration of voting power helps ensure that, following the Merger, the Company will continue to qualify as a "controlled company" in accordance with the NYSE Listed Company Manual. For additional details regarding the Voting and Exchange Agreement, please see the section entitled "Voting and Exchange Agreement."

Interests of Our Directors and Executive Officers in the Merger (page 22)

When considering the recommendation of the Board that you vote "FOR" the Merger Proposal and the NYSE Proposal, you should be aware that certain of our directors and executive officers have interests in the Merger that may be different from, or in addition to, your interests as a shareholder generally. For example, certain of the Company's directors and executive officers also serve as directors and officers of WDC, and certain of the Company's directors and executive officers are WDC Shareholders and will each receive his or her Pro Rata Share of the Aggregate Merger Consideration in exchange for his or her shares of WDC Common Stock upon consummation of the Merger. Furthermore, the Company has agreed in the Merger Agreement to indemnify the WDC Shareholders, including certain directors and executive officers

of the Company, for losses arising from breaches of the Company's representations, warranties, covenants or agreements under the Merger Agreement. The Special Committee and the Board were aware of these interests in, among other matters, approving the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and recommending that the Merger Agreement be adopted by the shareholders of the Company. See the section entitled "The Merger - Interests of Our Directors and Executive Officers in the Merger." You should take these interests into account in deciding whether to vote "FOR" the Merger Proposal or the NYSE Proposal.

Regulatory Matters (page 24)

Each of the Company and WDC has agreed to promptly make any required filing or application under applicable antitrust laws, including the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and with respect to the HSR Act make any required filings no later than thirty (30) business days after March 20, 2026 (the "Signing Date"). WDC has also agreed to cause each of the WDC Shareholders who is required to make a filing under the HSR Act to make such filing no later than thirty (30) business days after the Signing Date. The parties have agreed to supply as promptly as reasonably practicable any additional information and documentary material that may be requested pursuant to antitrust laws

and to take all other actions necessary, proper or advisable to cause the expiration or termination of the applicable waiting periods or obtain required approvals.

The Merger Agreement (page 27)

A summary of the material provisions of the Merger Agreement, a copy of which is attached as Annex A to this proxy statement and which is incorporated by reference in this proxy statement, is included in the section entitled "The Merger Agreement."

Effective Time of the Merger; Closing (page 28)

We are working to complete the Merger as promptly as practicable. Assuming timely satisfaction or waiver of necessary closing conditions set forth in the Merger Agreement, we anticipate that the Merger will be completed in the second fiscal quarter of 2026. However, the Merger is subject to the closing conditions specified in the Merger Agreement, many of which are outside of our control, and we cannot assure completion of the Merger by any particular date, if at all.

If our shareholders vote to approve the Merger Proposal and unless otherwise mutually agreed between the Company and WDC, the Closing under the Merger Agreement is expected to occur on the fifth business day following the satisfaction or waiver of the conditions to the Merger. On the Closing Date, the Company and WDC will (i) file a certificate of merger (the "Certificate of Merger") with the Texas Secretary of State, and make all such other filings or recordings required by the TBOC in connection with the Merger and

1. file the Articles of Merger (the "Articles of Merger") with the Arkansas Secretary of State, and make all such other filings or recordings required by the ABCA in connection with the Merger. The Merger will become effective upon the later of (a) the date and time the Certificate of Merger is filed with and accepted by the Secretary of State of the State of Texas, and (b) such later effective time as may be agreed in

   writing by the Company and WDC and specified in the Certificate of Merger in accordance with the TBOC (the "Effective Time").

   Conditions to Closing (page 32)

   The Closing depends on a number of conditions being satisfied or waived. These conditions, which are described more fully in the section entitled "The Merger Agreement - Conditions to Closing," include:

   • the receipt of the Requisite Shareholder Approval in accordance with applicable law, the Company's organizational documents, and the applicable rules of NYSE;

   • approval of the Merger Agreement (including the plan of merger set forth therein) and the transactions contemplated thereby (including the Merger) by the WDC Shareholders at the WDC Shareholders' Meeting (as defined below) in accordance with the ABCA and WDC's organizational documents (the "Requisite WDC Approval");

   • completion of all required filings under the HSR Act (including any filing under the HSR Act that is required to be made by any WDC Shareholder in connection with the transactions contemplated

     by the Merger Agreement) and the expiration or termination of any applicable waiting period;

   • the absence of any order by a governmental body of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by the Merger Agreement;

   • the delivery by WDC to Dillard's of evidence reasonably satisfactory to Dillard's that the number of Dissenting Shares as of the Effective Time does not exceed one percent (1%) of the number of outstanding shares of WDC Common Stock;

   • the aggregate number of shares of Dillard's Class B Common Stock that are held by registered holders of Dillard's Class B Common Stock who have properly and validly exercised and perfected their statutory rights of dissent and appraisal in respect of such shares in accordance with the TBOC does not exceed one percent (1%) of the total number of outstanding shares of Dillard's Class B Common Stock as of the Effective Time;

   • the accuracy of each party's representations and warranties in the Merger Agreement (subject to materiality qualifiers); and

   • the performance or compliance in all material respects by each party of all covenants and agreements required to be performed or complied with under the Merger Agreement.

     Termination (page 33)

     The Merger Agreement may be terminated at any time prior to the Effective Time under certain circumstances, including:

   • by mutual written agreement of the Company (acting with the prior approval of the Special Committee) and WDC;

   • by either the Company (acting with the prior approval of the Special Committee) or WDC if any law or final governmental order has the effect of permanently preventing, restraining, enjoining, prohibiting or making illegal the consummation of the transactions contemplated by the Merger Agreement;

   • by either the Company (acting with the prior approval of the Special Committee) or WDC if the Requisite Shareholder Approval is not obtained at the Annual Meeting (or any adjournment or postponement thereof);

   • by WDC if the Company breaches or fails to perform or comply with its representations, warranties, covenants or other agreements contained in the Merger Agreement, the breach or failure results in the Company being unable to satisfy certain closing conditions, and the Company fails to cure the breach or failure by the earlier of (x) thirty (30) days after written notice and (y) the Outside Date (as defined below);

   • by the Company (acting with the prior approval of the Special Committee) if WDC breaches or fails to perform or comply with its representations, warranties, covenants or other agreements contained in the Merger Agreement, the breach or failure results in WDC being unable to satisfy certain closing conditions, and WDC fails to cure the breach or failure by the earlier of (x) 30 days after written notice and (y) the Outside Date;

   • by the Company (acting with the prior approval of the Special Committee) if the Effective Time has not occurred on or before August 1, 2026 (the "Outside Date"); or

   • by WDC, if (i) WDC or Dillard's receives written notice from the IRS that the PLR (as defined below) has been revoked or modified in a manner that is materially adverse to WDC or the WDC Shareholders, or (ii) there has been a change in applicable law after the Signing Date that would reasonably be expected to cause the Merger to fail to qualify for the Intended Tax Treatment (as defined below).

See the section entitled "The Merger Agreement - Termination."

Company Board Recommendation Change (page 29)

The Merger Agreement permits the Board, at any time prior to obtaining the Requisite Shareholder Approval and solely in response to an Intervening Event (as defined below), to make a Change in Recommendation (as defined below) if the Board (acting upon the recommendation of the Special Committee) determines in good faith, after consultation with its outside legal counsel, that failure to do so would reasonably be expected to constitute a breach of its fiduciary duties under applicable law. Prior to effecting any such Change in Recommendation, the Company must provide WDC with at least five (5) business days' advance written notice and negotiate in good faith with WDC to make adjustments to the terms of the Merger Agreement. See the section entitled "The Merger Agreement - Company Board Recommendation Change."

Indemnification (page 31)

The Merger Agreement provides for customary indemnification obligations. Each WDC Shareholder has agreed to severally (and not jointly) indemnify the Company for such WDC Shareholder's Pro Rata Share of losses arising from breaches of representations, warranties, covenants or agreements, certain indebtedness or expenses of WDC, indemnified taxes, and other pre-Closing matters. The Company has agreed to indemnify the WDC Shareholders for losses arising from breaches of the Company's representations, warranties, covenants or agreements. The indemnification obligations are subject to a cap equal to the Aggregate Merger Consideration, except for losses arising from breaches of Fundamental Representations (as defined below) or in the case of fraud or intentional misconduct. See the section entitled "The Merger Agreement - Indemnification."

Appraisal Rights (page 79)

Rights of Dissent and Appraisal for WDC Shareholders

WDC Shareholders who comply with all of the required procedures under the ABCA will have the right to seek appraisal of the fair value of their shares of WDC Common Stock in lieu of receiving their respective Pro Rata Share of the Aggregate Merger Consideration. Dissenting Shares will not be converted into or represent the right to receive the Pro Rata Share of the Aggregate Cash Merger Consideration or the Pro Rata Share of the Aggregate Stock Merger Consideration but will be entitled only to such rights as are granted by the ABCA. See the section entitled "Appraisal Rights."

Rights of Dissent and Appraisal for Holders of Dillard's Class A Common Stock

Under the TBOC, holders of Dillard's Class A Common Stock are not entitled to dissent and appraisal rights with respect to the Merger. Pursuant to Chapter 10, Subchapter H of the TBOC, shareholders of a domestic entity that is a party to a merger are not entitled to dissent and obtain payment of the fair value of their ownership interests if, on the record date for determination of shareholders entitled to vote at the meeting of shareholders to act on the plan of merger, the ownership interests were either listed on a national securities exchange or held of record by at least 2,000 holders. As of the Record Date, the shares of Dillard's Class A Common Stock were listed on NYSE. Accordingly, holders of shares of Dillard's Class A Common Stock are not entitled to dissent and appraisal rights under the TBOC with respect to the

Merger.

Rights of Dissent and Appraisal for Holders of Dillard's Class B Common Stock

Shareholders of Dillard's Class B Common Stock who hold one or more shares of Dillard's Class B Common Stock have the right to dissent from the Merger and have the appraised fair value of their shares of Dillard's Class B Common Stock as of the date immediately prior to the Closing Date paid to them in cash under Subchapter H. Shareholders of Dillard's Class B Common Stock contemplating exercising the right to dissent are urged to read carefully the provisions of Subchapter H, the full text of which is available at the following URL, accessible without subscription or cost, which is incorporated into this proxy statement by reference: https://statutes.capitol.texas.gov/Docs/BO/htm/BO.10.htm, and which qualifies in all respects the following discussion of those provisions, and to consult with legal counsel before electing or attempting to exercise these rights. For more information, please see the section of this proxy statement captioned "Appraisal Rights."

Material U.S. Federal Income Tax Consequences (page 24)

The parties intend that the Merger will qualify as a "reorganization" constituting a "statutory merger or consolidation" within the meaning of Section 368(a)(1)(A) of the Internal Revenue Code, as amended (the "Internal Revenue Code"). and Treasury Regulations Section 1.368-2(b)(1)(ii). Assuming the Merger qualifies as such a reorganization, WDC Shareholders generally will not recognize gain or loss upon the receipt of shares of Dillard's Common Stock in exchange for shares of WDC Common Stock in the Merger, except to the extent of any cash received (including cash received in lieu of fractional shares). Holders of WDC Common Stock are urged to consult their tax advisors regarding the particular tax consequences to them of the Merger. See the section entitled "The Merger - Material U.S. Federal Income Tax Consequences."

PROXY VOTING AND RELATED MATTERS Proxy Voting

The manner in which your shares may be voted depends on how your shares are held. If you own shares of record, meaning that your shares are represented by certificates or book entries in your name so that you appear as a shareholder on the records of our stock transfer agent, you may vote by proxy, meaning you authorize individuals named on the proxy card to vote your shares in accordance with your instructions. If you are a shareholder of record, you can vote your shares using the following methods:

By Internet: You may vote via the internet by visiting the website noted on your proxy card. Internet voting is available 24 hours a day. We encourage you to vote via the internet, as it is the most cost-effective way to vote.

By Telephone: You may vote your shares by telephone by calling the toll-free telephone number indicated on your proxy card and following the voice prompt instructions. Telephone voting is available 24 hours a day.

By Mail: You may vote your shares by completing, signing, dating and returning the proxy card enclosed with the proxy materials that are provided in printed form.

During the Annual Meeting: You may vote your shares during the Annual Meeting by attending the Annual Meeting at our principal executive offices, 1600 Cantrell Road, Little Rock, Arkansas, 72201.

If you are a shareholder of record and you do not return a proxy and you do not vote at the Annual Meeting, your shares will not be voted at the Annual Meeting, and if you are not present at the Annual Meeting, your shares will not be counted for purposes of determining whether a quorum exists for the Annual Meeting. If you do return a signed proxy via the internet, telephone or mail, but you fail to specify how your shares should be voted, then your shares will be voted in accordance with the recommendations of the Board.

If you own your shares in "street name," that is, through a brokerage account or in another nominee form, you are a beneficial owner and not a shareholder of record. Therefore, you must provide instructions to your broker or nominee as to how your shares held by them should be voted. Your ability to vote in person, via the internet, by mail or by telephone depends on the voting procedures of your broker or nominee.

Please follow the directions that your broker or nominee provides. Beneficial owners may vote during the Annual Meeting only after requesting, completing and delivering the proper documentation provided by the broker or other nominee. If you do not provide voting instructions to your broker or other nominee, the broker or nominee may nevertheless vote your shares on your behalf with respect to the ratification of the appointment of KPMG as our independent auditors for fiscal 2026, but not on any other matters being considered at the Annual Meeting.

All proxies related to shares held of record as of March 30, 2026, other than those held through the Dillard's Stock Fund portion of the Dillard's, Inc. Investment & Employee Stock Ownership Plan (the "401(k) Plan"), must be submitted no later than 11:59 p.m. EDT on May 27, 2026, and no proxy received after that date and time will be voted at the Annual Meeting. If you hold shares of Dillard's Common Stock through the 401(k) Plan, you are entitled to instruct Newport Trust Company, Trustee for the 401(k) Plan ("Trustee"), on how to vote such shares, provided that your voting instructions are submitted in accordance with the instructions on the proxy card and received by 11:59 p.m. EDT on May 25, 2026 in order to allow sufficient time for votes within the 401(k) Plan to be tabulated by the Trustee. Pursuant to the terms of the 401(k) Plan document, for any shares held through the 401(k) Plan for which timely voting instructions

are not received from a 401(k) Plan participant or if no choice is specified on a particular proposal in voting instructions that are timely submitted, such shares will be voted in accordance with the recommendation

of the Board as described herein.

Revocation of Proxies

Any shareholder of record giving a proxy has the power to revoke it at any time before it is voted, either by written revocation delivered to the Corporate Secretary of the Company at our principal executive

offices, by attending the Annual Meeting and voting in person or by submitting a subsequent proxy by mail, over the internet or by telephone. To obtain directions to attend the Annual Meeting and vote in person, please call [phone]. Your attendance at the Annual Meeting will not automatically revoke your proxy unless you vote again at the Annual Meeting or specifically request in writing that your prior proxy be revoked. Beneficial owners should follow the directions provided by their broker or other nominee in order to revoke previously provided voting instructions. Proxies solicited herein will be voted in accordance with any directions contained therein, unless the proxy is received in such form or at such time as to render it ineligible to vote, or unless properly revoked. The proxies solicited herein will not confer any authority to vote at any meeting of shareholders other than the Annual Meeting.

Quorum

The presence, in person or by proxy, of the holders of a majority of the shares of Dillard's Common Stock issued and outstanding as of the Record Date and entitled to vote at the Annual Meeting is required to establish a quorum at the Annual Meeting.

Vote Required; Abstentions and Broker Non-Votes

Assuming a quorum is present, each holder of Dillard's Class A Common Stock and each holder of Dillard's Class B Common Stock will be entitled to one vote on the matters presented at the Annual Meeting for each share standing in such holder's name, except that the holders of Dillard's Class A Common Stock are empowered as a class to elect one-third of the directors serving on the Board and the holders of Dillard's Class B Common Stock are empowered as a class to elect two-thirds of the directors serving on the Board. Shareholders will not be allowed to vote for a greater number of nominees than those named in this proxy statement.

Set forth below is a summary of the vote required to approve each proposal and the impact of abstentions and broker non-votes, if any:

Proposal Vote Required

Merger Proposal Affirmative vote of the holders of a

majority of the shares of Dillard's Common Stock outstanding at the close of business on the Record Date and entitled to vote on the Merger Proposal, voting as a single class

NYSE Proposal Affirmative vote of the holders of a

majority of the shares of Dillard's Common Stock present in person or represented by proxy and entitled to vote on the NYSE Proposal, voting as a single class

Effect of Abstentions or Withheld Votes

Same effect as vote AGAINST

Same effect as vote AGAINST

Effect of Broker Non-Votes

Same effect as vote AGAINST

No effect

Election of directors

Class A directors: Plurality of the votes cast by the holders of the shares of Dillard's Class A Common Stock present in person or represented by proxy and eligible to vote in such election, voting as a separate class

Class B directors: Plurality of the votes cast by the holders of the shares of Dillard's Class B Common Stock present in person or represented by proxy and eligible to vote in such election, voting as a separate class

No effect No effect

Proposal Vote Required Effect of Abstentions or Withheld Votes Effect of Broker Non-Votes

Ratification of the appointment of KPMG

Advisory approval of the compensation of our named executive officers

Affirmative vote of the holders of a majority of the shares of Dillard's Common Stock present in person or represented by proxy and entitled to vote on the proposal, voting as a single class

Affirmative vote of the holders of a majority of the shares of Dillard's Common Stock present in person or represented by proxy and entitled to vote on the proposal, voting as a single class

Same effect as vote AGAINST

Same effect as vote AGAINST

N/A

No effect

Costs of Solicitation

The cost of soliciting proxies will be borne by the Company. The Company will reimburse brokers, custodians, nominees and other fiduciaries for their charges and expenses in forwarding proxy materials to beneficial owners of shares of Dillard's Common Stock. In addition to solicitation by mail, certain officers, directors and associates of the Company may solicit proxies by telephone, fax, e-mail or other electronic means, or in person. These persons will receive no compensation other than their regular salaries.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act")). These forward-looking statements include, among other things, statements about the Merger, the expected timing and completion of the Merger, the future business, performance and opportunities of the Company and other financial and non-financial items that are not historical facts.

Words such as "anticipate," "assume," "believe," "can," "could," "estimate," "forecast," "intend," "expect," "may," "project," "plan," "seek," "should," "target," "will," "would" and their opposites and similar expressions are intended to identify forward-looking statements. Forward-looking statements are subject to numerous risks, uncertainties and other factors that could cause actual results to differ materially from those set forth in forward-looking statements. Such risks, trends and uncertainties are, in most instances, beyond the Company's control, and include, but are not limited to, factors and matters described or incorporated by reference in this proxy statement, and the following factors:

• the announcement and pendency of the Merger may adversely affect our business, results of operations and financial condition;

• litigation relating to the Merger may be filed against the Company and the Board, which could be costly, prevent or delay consummation of the Merger, divert management's attention and otherwise adversely affect our business and financial condition;

• we may be unable to obtain the Requisite Shareholder Approval;

• other conditions to the Closing may not be satisfied;

• the Merger may involve unexpected costs, liabilities or delays;

• the amount of the costs, fees, expenses and charges related to the Merger may exceed our expectations; and

• we may be adversely affected by other economic, business, and/or competitive factors.

The Merger may not be consummated in the expected time frame, on the expected terms or at all.

While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. For additional discussion of other important factors that could impact our future results, performance or transactions, see the section entitled "Risk Factors" set forth in Part I, Item 1A of the Annual Report on Form 10-K filed by the Company with the SEC on March 27, 2026, and subsequent filings by the Company with the SEC. All forward-looking statements made herein are expressly qualified in their entirety by these cautionary statements, and the actual results, events or developments referenced herein may not occur or be realized. There may be other factors of which we are currently unaware or deem immaterial that may cause our actual results to differ materially from the forward-looking statements. In addition, to the extent any inconsistency or conflict exists between the information included in this proxy statement and the information included in our prior reports and other filings with the SEC, the information contained

in this proxy statement updates and supersedes such information.

Forward-looking statements speak only as of the date they are made, and except as required by law, we undertake no obligation to update them in light of new information or future events.

INFORMATION ABOUT WDC

WDC is a privately held Arkansas corporation that was organized as a family holding company to own and hold shares of Dillard's Common Stock primarily for the benefit of the Dillard family. WDC has no business operations and engages in no business activities other than (a) owning, holding, and disposing of certain equity securities (including shares of Dillard's Common Stock and a de minimis amount of shares of another publicly-traded common stock) and (b) receiving cash dividends from Dillard's and distributing such dividends directly to WDC's Shareholders, in each case solely in a manner incidental to the ownership of such securities and the maintenance of WDC's corporate existence. As of the date of this proxy statement, WDC owns 41,496 shares of Dillard's Class A Common Stock and 3,985,776 shares of Dillard's Class B Common Stock, representing approximately 0.36% of the outstanding shares of Dillard's Class A Common Stock and 99.99% of the outstanding shares of Dillard's Class B Common Stock. The WDC Shareholders have historically held their interests in the Company indirectly through their ownership of WDC Common Stock.

The unaudited balance sheets of WDC as of December 31, 2025 and 2024 and unaudited statements of income and cash flows of WDC for the fiscal years ended December 31, 2025, 2024 and 2023 are included in this proxy statement beginning on page F-1.

THE MERGER

The following discussion of the Merger is qualified in its entirety by reference to the Merger Agreement. A copy of the Merger Agreement is attached as Annex A to this proxy statement and incorporated into this proxy statement by reference. You should read the entire Merger Agreement carefully as it is the legal document that governs the Merger.

Overview

The Company entered into the Merger Agreement with WDC and the Shareholder Representative on the Signing Date. Under the terms of the Merger Agreement, subject to the satisfaction or waiver of specified closing conditions, WDC will merge with and into the Company, with the Company surviving the Merger as the Surviving Corporation and the separate corporate existence of WDC ceasing to exist. The Board, acting upon the authorization and recommendation of the Special Committee, has determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, are fair to and in the best interests of the Company and its shareholders and has approved and declared advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement.

If the Merger is completed, the aggregate consideration to be paid by the Company in exchange for the WDC Common Stock will consist of the Aggregate Cash Merger Consideration and the Aggregate Stock Merger Consideration. The shares of Dillard's Common Stock to be issued in connection with the Merger will not be registered under the Securities Act and will be issued in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act as a transaction by an issuer not involving a public offering.

The Parties to the Merger

Dillard's, Inc.

Dillard's, Inc., a Texas corporation, ranks among the nation's largest fashion apparel, cosmetics and home furnishing retailers. The Company, originally founded in 1938 by William T. Dillard, was incorporated in 1964. As of January 31, 2026, we operated 271 Dillard's stores, including 28 clearance centers, and an Internet store at dillards.com offering a wide selection of merchandise including fashion apparel for women, men and children, accessories, cosmetics, home furnishings and other consumer goods. Dillard's Common Stock consists of two classes: Dillard's Class A Common Stock and Dillard's Class B Common Stock. Dillard's Class A Common Stock is listed on NYSE under the ticker symbol "DDS." For additional information about the Company, see the section entitled "Where You Can Find More Information." The Company's principal executive offices are located at 1600 Cantrell Road, Little Rock, Arkansas 72201 and its telephone number is [phone].

W.D. Company, Inc.

W.D. Company, Inc. is a privately held Arkansas corporation organized as a family holding company to own and hold shares of Dillard's Common Stock primarily for the benefit of the Dillard family. WDC has no business operations and engages in no business activities other than (a) owning, holding, and disposing of certain equity securities, including shares of Dillard's Common Stock and a de minimis amount of

shares of another publicly-traded common stock, and (b) receiving cash dividends from Dillard's and distributing such dividends directly to the WDC Shareholders, in each case solely in a manner incidental to the ownership of such securities and the maintenance of WDC's corporate existence. WDC's principal executive offices are located at 1600 Cantrell Road, Little Rock, Arkansas 72201 and its telephone number is [phone].

Shareholder Representative

Pursuant to the Merger Agreement, Alex Dillard has been designated to serve as the Shareholder Representative. Immediately prior to the Closing and without further act of WDC or any of the WDC Shareholders, Alex Dillard will serve as the representative, agent and attorney-in-fact for each of the WDC

Shareholders to take any and all actions on behalf of the WDC Shareholders pursuant to the Shareholder Representative Documents.

The Shareholder Representative has been granted broad powers and authority to act on behalf of the WDC Shareholders, including the authority to: (i) give and receive notices and communications on behalf of the WDC Shareholders under any of the Shareholder Representative Documents; (ii) enforce and protect the rights and interests of the WDC Shareholders arising under any of the Shareholder Representative Documents; (iii) resolve on behalf of the WDC Shareholders all questions, disputes, conflicts and controversies concerning any of the Shareholder Representative Documents; (iv) take all actions necessary in connection with any amendment of, or any waiver of any breach or default under, any of the Shareholder Representative Documents; (v) defend and/or settle on behalf of the WDC Shareholders any claims that may be made by Dillard's following the Closing in respect of any indemnity obligations of the WDC Shareholders; and (vi) take any and all additional action necessary or appropriate in the judgment of the Shareholder Representative for the accomplishment of the foregoing.

The Shareholder Representative has the authority to execute the Shareholder Representative Documents on behalf of the WDC Shareholders, and the execution thereof will bind the WDC Shareholders. The Shareholder Representative will have only the duties expressly stated in the Shareholder Representative Documents and will have no other duty, express or implied. The Shareholder Representative is not, by virtue of serving as Shareholder Representative, a fiduciary of the WDC Shareholders or any other person and has no personal responsibility or liability for any representation, warranty or covenant of the Company.

Effects of the Merger

Upon the terms and subject to the conditions of the Merger Agreement and in accordance with the applicable provisions of the TBOC and the ABCA, at the Effective Time, WDC will be merged with and into the Company, at which time the separate existence of WDC will cease and the Company will continue as the Surviving Corporation.

At the Effective Time, by operation of law, all (i) rights, title, and interests to all real estate and other property owned by each of WDC and the Company will be allocated to and vested in the Surviving Corporation without reversion or impairment, (ii) all liabilities and obligations of each of WDC and the Company will become the liabilities and obligations of the Surviving Corporation, (iii) the Surviving Corporation will be the primary obligor for such liabilities or obligations, and (iv) the Surviving Corporation will be substituted in any proceeding pending by or against WDC or the Company. For the avoidance of doubt, at the Effective Time, all shares of WDC Common Stock will no longer be outstanding and will automatically be cancelled.

At the Effective Time, each share of WDC Common Stock issued and outstanding immediately prior to the Effective Time will be automatically cancelled, and in exchange therefor, each WDC Shareholder (other than holders of Dissenting Shares) will be entitled to receive such WDC Shareholder's Pro Rata Share of the Aggregate Cash Merger Consideration and such WDC Shareholder's Pro Rata Share of the Aggregate Stock Merger Consideration, in each case as set forth on the Final Aggregate Merger Consideration Allocation Schedule.

At the Effective Time, the shares of Dillard's Common Stock held by WDC immediately prior to the Effective Time will automatically become treasury stock of the Surviving Corporation and, immediately thereafter, will be cancelled and returned to the status of authorized but unissued shares available for future reissuance. At and after the Effective Time, the officers and directors of the Company immediately prior

to the Effective Time will be the officers and directors, respectively, of the Surviving Corporation until their successors are duly elected or appointed and qualified.

At and after the Effective Time until the same have been duly amended, (a) the certificate of formation of the Company, as in effect immediately prior to the Effective Time, will be the certificate of formation of the Surviving Corporation until thereafter amended in accordance with the applicable provisions of the TBOC and such certificate of formation, and (b) the bylaws of the Company, as in effect immediately prior to the Effective Time, will be the bylaws of the Surviving Corporation until thereafter amended in accordance with the applicable provisions of the TBOC, the certificate of formation of the Surviving Corporation and such bylaws.

Background of the Merger

The following chronology summarizes key meetings and events that led to the signing of the Merger Agreement. The chronology does not catalog every conversation or meeting held by or among the Board, members of the Company's management, the Company's representatives and other parties. The Company discussed such matters with representatives of Haynes and Boone, LLP ("Haynes Boone"), the Company's outside legal counsel, throughout the course of the events described below.

WDC is a privately held Arkansas corporation that was organized as a family holding company to own and hold shares of Dillard's Common Stock primarily for the benefit of the Dillard family. WDC has no business operations and engages in no business activities other than (a) owning, holding, and disposing of certain equity securities (including shares of Dillard's Class A Common Stock and Dillard's Class B Common Stock) and (b) receiving cash dividends from Dillard's and distributing such dividends directly to WDC's shareholders, in each case solely in a manner incidental to the ownership of such securities and the maintenance of WDC's corporate existence. As of the date of this proxy statement, WDC owns 41,496 shares of Dillard's Class A Common Stock and 3,985,776 shares of Dillard's Class B Common Stock, representing approximately 0.36% of the outstanding shares of Dillard's Class A Common Stock and 99.99% of the outstanding shares of Dillard's Class B Common Stock.

The WDC Shareholders have historically held their interests in the Company indirectly through their ownership of WDC Common Stock. In 2025, the WDC Shareholders determined that it would be desirable to simplify the corporate ownership structure by eliminating WDC as an intermediate holding company, thereby allowing the WDC Shareholders to hold their interests in the Company directly. The WDC Shareholders believed that such a restructuring would provide several benefits, including (i) eliminating the administrative burden and costs associated with maintaining WDC as a separate corporate entity (including relief from certain subchapter S compliance costs and administrative burdens as well as relief from filing S corporation U.S. federal income, Arkansas income and Arkansas franchise tax returns for WDC), (ii) providing WDC Shareholders with direct ownership of shares of Dillard's Common Stock,

(iii) eliminating WDC's dual voting and nonvoting capital structure, (iv) reducing the administrative burden associated with quarterly dividend distributions to WDC Shareholders and (v) simplifying estate planning for all WDC Shareholders.

Consequently, on May 16, 2025, WDC, on behalf of itself and the Company, submitted a request for a private letter ruling (the "PLR"). From May 16, 2025 through December 16, 2025, while the PLR remained pending, WDC and the Company took no action in anticipation of completion of the PLR by the Internal Revenue Service (the "IRS"). The IRS issued the PLR on December 16, 2025. On January 12, 2026, WDC engaged Kutak Rock LLP ("Kutak Rock") as legal counsel. Based on the considerations described above and the PLR, on February 24, 2026, WDC submitted a letter to the Company (the "Proposal Letter"), in which WDC proposed to merge WDC into the Company, in exchange for shares of capital stock of the Company mirroring the existing shares of capital stock of the Company held by WDC. The Proposal Letter contemplated that, upon consummation of the proposed merger, the WDC Shareholders would receive shares of Dillard's Class A Common Stock and Dillard's Class B Common Stock in the same amounts as are currently held by WDC (subject to reduction to avoid the issuance of fractional shares), plus cash consideration for the remaining value of the Company's assets. The Proposal Letter noted that the proposed merger would simplify the corporate ownership structure by eliminating WDC as an intermediate holding company, while providing the WDC Shareholders with direct ownership of approximately the same number of shares and the same classes of shares of Dillard's Common Stock that WDC currently holds on their behalf.

On February 25, 2026, Haynes Boone sent an initial draft of the proposed merger agreement and a draft of a proposed memorandum of understanding (the "MOU") to Kutak Rock.

On February 26, 2026, the Board held a meeting to review the Proposal Letter, which contemplated a proposal to merge WDC into the Company in exchange for an amount of shares of capital stock of the Company mirroring the existing shares of capital stock of the Company held by WDC. The General Counsel of the Company reviewed with the directors their fiduciary duties under applicable law in connection with the proposed merger, including the heightened scrutiny that may apply to transactions involving a controlling shareholder and the importance of establishing a special committee to evaluate and oversee the negotiations

of the terms of the proposed merger. Following discussion, the Board unanimously approved the establishment of the Special Committee, which was composed of James Freeman, J.C. Watts, Jr. and Nick White, each of whom the Board determined was (i) an independent director under the rules of NYSE,

(ii) disinterested with respect to the proposed merger and (iii) independent of the Company, the Dillard family and WDC for purposes of evaluating the proposed merger. The Board delegated to the Special Committee the authority and power of the Board to evaluate the proposed merger, to oversee the negotiations with WDC regarding the terms of the merger agreement and to determine whether to recommend that the Board approve the proposed merger, and upon what terms, conditions and structure. The Special Committee was specifically authorized to decide not to proceed with the proposed merger. The Special Committee was also authorized to engage, at the expense of the Company, legal counsel and other advisors as the Special Committee deemed appropriate. When establishing the Special Committee, the Board determined that Messrs. Freeman, Watts and White would not receive any additional compensation for serving on the Special Committee.

On February 26, 2026, following the Board meeting, the Special Committee met in person, with all three members present, to discuss the committee process and selection of independent legal counsel. The Special Committee agreed that Mr. Freeman would contact and interview qualified law firms and report back to the Special Committee.

Following the February 26, 2026, meeting, Mr. Freeman contacted and interviewed multiple law firms and, on February 27, 2026, the Special Committee retained Bracewell LLP ("Bracewell") as its independent legal counsel based upon, among other considerations, its experience in Texas corporate law and representing special committees in conflict transactions.

On March 3, 2026, the Special Committee held a meeting via video conference, with all three members present along with Bracewell, the Special Committee's legal advisor. At the meeting, Bracewell reviewed the Special Committee's purpose, authority, and fiduciary duties under Texas law, confirmed its independence from WDC and the Dillard family, and reviewed the independence and disinterestedness of each Special Committee member. The Special Committee and its legal advisor also reviewed the structure of the Proposed Merger and discussed the tax-free nature of the transaction as confirmed by the PLR, the effect of the proposed MOU on the shareholder vote threshold, and next steps in the process. The Special Committee also considered whether to retain an independent financial advisor and determined that it was not necessary to do so, given that the proposed merger would not result in any change to the economic ownership or voting rights of the Company's public shareholders. Immediately following the meeting, Bracewell distributed to each member of the Special Committee initial draft versions of the merger agreement and the MOU for the Special Committee's review, together with copies of the PLR and the proposed Voting and Exchange Agreement.

On March 6, 2026, Haynes Boone sent a revised draft of the proposed merger agreement to Bracewell.

Bracewell shared the revised draft merger agreement with the Special Committee.

Between March 6 and 18, 2026, Bracewell, Haynes Boone and Kutak Rock exchanged multiple drafts of the merger agreement and held discussions to negotiate its terms. The provisions subject to negotiation included, among others, the representations and warranties of the parties, the covenants relating to WDC's conduct of business prior to closing, the conditions to closing, the termination provisions, and the indemnification provisions.

On March 12, 2026, the Special Committee held a meeting via video conference, with all three members present along with its legal advisor. Bracewell reviewed the principal terms of the draft merger agreement, including the merger consideration, the representations and warranties of each party, the conditions to closing, the termination provisions, the antitrust filing requirements, and the indemnification provisions. The

Special Committee's legal advisor also reported on the written comments that Bracewell had delivered to the Company's counsel on behalf of the Special Committee and the discussion of those comments with the Company's management and counsel. The Special Committee also considered the purpose of the MOU and its effect on reducing the required shareholder vote threshold. The Special Committee also discussed the strategic rationale for the proposed merger, including its potential to support management succession planning and continuity and mitigate disruption in the management, operations and ownership of the Company upon the death of one or more principal shareholders of WDC.

On March 18, 2026, the Special Committee held a meeting via video conference, with all three members present along with its legal advisor. Bracewell reported on the status of the transaction, summarized the Special Committee's process and work to date, and confirmed that the substantive comments provided by the Special Committee's legal advisor on the draft merger agreement had been addressed and reflected in the execution version of the merger agreement. Bracewell reviewed the execution versions of the merger agreement and the MOU in detail and provided an overview of the proposed Voting and Exchange Agreement.

Bracewell also reviewed the requirements of Section 21.418 of the TBOC applicable to the proposed merger as a conflict of interest transaction, including the nature of the conflict, the identity of the interested parties, the available safe harbor and the basis for the Special Committee's authorization thereunder.

Following discussion and deliberation, the Special Committee unanimously (i) resolved to authorize the Merger Agreement and the transactions contemplated thereby, including the Merger, for purposes of TBOC Section 21.418(b)(1)(A), and (ii) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are advisable and in the best interests of the Company and its shareholders. The Special Committee also unanimously resolved to recommend to the Board that the Board (i) approve the Merger Agreement and the transactions contemplated thereby, including the Merger, (ii) approve the plan of merger set forth in the Merger Agreement and (iii) recommend that the plan of merger set forth in the Merger Agreement be approved by the Company's shareholders and submit the plan of merger to the Company's shareholders for approval. The Special Committee also unanimously (i) resolved to authorize the MOU for purposes of TBOC Section 21.418(b)(1)(A), (ii) determined that the MOU is advisable and in the best interests of the Company and its shareholders, and (iii) resolved to recommend to the Board that the Board approve the MOU.

On March 19, 2026, the Board held a meeting with Company management and representatives of Haynes Boone in attendance. Representatives of Haynes Boone summarized the key terms of the proposed Merger Agreement and the other related agreements. The Special Committee reported to the Board on its evaluation of the Merger and delivered its authorization of the Merger Agreement and the Merger and recommendation that the Board approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. Following the report of the Special Committee, and after discussion and deliberation, the Board unanimously (i) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of the Company and its shareholders, (ii) approved and declared advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, (iii) approved the MOU in accordance

with Subsection (d) of Article FOURTH of the Company's Certificate of Formation, and (iv) directed that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement be submitted to the shareholders for approval. The Board also approved the submission of the NYSE Proposal to the shareholders for a separate vote in accordance with the applicable rules of the NYSE.

On March 19, 2026, certain WDC Shareholders and the Company entered into the Voting and Exchange Agreement, which becomes effective only if the Merger is consummated. Pursuant to the Voting and Exchange Agreement, such WDC Shareholders agreed to, among other things, continue voting their respective shares of Dillard's Class B Common Stock as a unified group following the Merger. In addition, the Voting and Exchange Agreement includes a right of first offer mandating that each Dillard family member must offer for purchase his or her shares of Dillard's Class B Common Stock to the other Dillard family members party to the Voting and Exchange Agreement prior to selling to a non-Dillard family member. The Company is a party to the Voting and Exchange Agreement due to its anticipated role in facilitating transfers of Dillard's Class B Common Stock among Dillard family members. The Voting and Exchange Agreement will promote the continued ownership of Dillard's Class B Common Stock by lineal descendants of William T. Dillard. This concentration of voting power helps ensure that, following the Merger, the Company will continue to qualify as a "controlled company" in accordance with the NYSE Listed Company Manual. For additional details regarding the Voting and Exchange Agreement, please see the section entitled "Voting and Exchange Agreement."

On March 20, 2026, the parties executed the Merger Agreement. The Merger Agreement was amended on March 25, 2026 to provide that each of the Company and WDC will pay 50% of the filing fee incurred in connection with the filing of the proxy statement.

Reasons for the Merger

In evaluating the Merger Agreement and the consummation of the transactions contemplated thereby, including the Merger, the Board consulted with the Company's management and representatives of Haynes Boone and considered and analyzed a number of factors, including the following principal factors (which are not intended to be exhaustive and are not presented in any relative order of importance) that the Board viewed as supporting its decision:

• the belief of the Board and the Special Committee that it is critical to the present and future success of the Company that (i) members of the Dillard family that currently serve as officers continue to be motivated to contribute to the ongoing success of the Company and (ii) members of the Dillard family that currently are employed (or may be employed in the future) by the Company but do not currently serve as officers will be motivated to eventually progress into executive management roles to continue the consistent performance of the Company;

• the belief of the Board and the Special Committee that the Merger would support the Company's management succession planning and continuity and would mitigate disruption in the management, operations and ownership of the Company upon the death of one or more principal shareholders of WDC;

• the fact that the Voting and Exchange Agreement (which becomes effective upon consummation of the Merger) contains a right of first offer mandating that each Dillard family member must offer for purchase his or her shares of Dillard's Class B Common Stock to the other Dillard family members party to the Voting and Exchange Agreement prior to selling to a non-Dillard family member, which the Board and the Special Committee believe will ensure that current and future generations of Dillard family members will continue to be motivated and involved in management;

• the fact that there are currently no contractual transfer restrictions on the transfer of WDC Common Stock analogous to the restrictions under the Voting and Exchange Agreement;

• the fact that no Dillard family member has retired or resigned from the Company since William T. Dillard retired in 1998, and the fact that the Board and the Special Committee believe that the Dillard family members who serve in management are currently undercompensated relative to their respective contributions to the Company;

• the fact that, because equity incentive awards constitute a very small portion of the compensation paid to Dillard family members who serve in management, such Dillard family members' direct ownership of Dillard's Common Stock following the Merger will constitute the primary economic nexus between the Company and certain members of the Dillard family, whose economic motivation is primarily derived through the ownership of Dillard's Common Stock;

• the fact that the WDC Shareholders who are lineal descendants of William T. Dillard intend to continue voting their respective shares of Dillard's Class B Common Stock as a unified group following the Merger pursuant to the Voting and Exchange Agreement, which will help ensure that, following the Merger, the Company will continue to qualify as a "controlled company" in accordance with the NYSE Listed Company Manual;

• the fact that the Merger will eliminate WDC as a separate corporate entity that holds shares of Dillard's Common Stock on behalf of the WDC Shareholders, thereby simplifying the corporate ownership structure by eliminating the need to maintain WDC as a separate intermediate holding company with its own board of directors, officers, shareholders and corporate formalities, which the Board believes will allow for more efficient decision-making and clearer lines of ownership (and direct alignment of interests with the other shareholders of the Company) for the Dillard family members who are WDC Shareholders;

• the fact that the direct ownership of Dillard's Common Stock by the WDC Shareholders following the Merger will simplify estate planning for all WDC Shareholders, as the ability to hold Dillard's Common Stock directly, rather than through an intermediate holding company, may (i) provide greater flexibility for estate planning purposes by making such holdings more liquid and easier to value and (ii) facilitate intergenerational transfer;

• the fact that the Merger will not result in any dilution to the Company's existing public shareholders, because the Aggregate Stock Merger Consideration consists of a number of shares of Dillard's Class A Common Stock and Dillard's Class B Common Stock identical to the number of shares of Dillard's Class A Common Stock and Dillard's Class B Common Stock currently held by WDC (subject to reduction to avoid the issuance of fractional shares);

• the fact that the Merger will reduce the administrative burden on the Dillard family members who serve as officers and directors of WDC by eliminating the need to hold separate WDC board meetings, maintain separate WDC corporate records, and otherwise manage WDC as a going concern, which the Board and the Special Committee believe will allow the Dillard family members to focus more of their time and attention on the business and affairs of the Company; and

• the other terms and conditions of the Merger Agreement, including the representations and warranties of the parties, the covenants relating to WDC's conduct of business prior to Closing, the conditions to Closing, the termination provisions, and the indemnification provisions, which the Board considered to be reasonable and in the best interests of the Company and its shareholders.

  The Board also considered the following factors relating to the procedural safeguards that the Board believed were present to ensure the fairness of the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, to the Company and the Company's shareholders (which are not intended to be exhaustive and are not presented in any relative order of importance):

• the fact that the terms and conditions of the Merger Agreement resulted from extensive negotiations among (i) the Special Committee and its counsel, (ii) WDC and its counsel and (iii) the Company and its counsel;

• the fact that the Board established the Special Committee, composed of independent and disinterested directors, to evaluate the Merger and determine whether to recommend that the Board approve the Merger, and upon what terms, conditions and structure;

• the fact that the Special Committee was specifically authorized to decide not to proceed with the Merger and was authorized to engage, at the expense of the Company, legal counsel and other advisors as the Special Committee deemed appropriate;

• the fact that the Special Committee retained independent legal counsel to advise the Special Committee in connection with its evaluation of the Merger;

• the fact that the Special Committee was actively involved in the Company's review of the Merger and that the Special Committee (i) was advised by Bracewell as the Special Committee's outside legal counsel, (ii) conducted extensive deliberations and discussions with such counsel, and (iii) oversaw the negotiations with WDC regarding the terms of the proposed Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement;

• the fact that the Special Committee considered the potential conflicts of interest created by the fact that certain of the Company's directors and officers have interests in the proposed Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, that are different from or in addition to those of other shareholders; and

• the availability of dissent and appraisal rights to shareholders of Dillard's Class B Common Stock who comply with all of the required procedures under the TBOC for exercising such rights, which rights allow such shareholders to dissent and seek appraisal of the fair value of their shares.

  The Board also considered a variety of risks, uncertainties and other countervailing factors with respect to the Merger and the Merger Agreement, including the following (which are not intended to be exhaustive and are not presented in any relative order of importance):

• the fact that if the Merger is not consummated, (i) the Company's directors, senior management and other employees will have expended extensive time and effort and will have experienced significant distractions from their work during the pendency of the Merger, and (ii) the Company will have incurred significant transaction costs, including legal fees, accounting fees, filing fees and other expenses, which costs will be incurred regardless of whether the Merger is consummated;

• the fact that certain directors and officers of the Company are also directors and officers of WDC;

• the fact that certain directors and officers of the Company are also WDC Shareholders and each will receive his or her Pro Rata Share of the Aggregate Merger Consideration upon the consummation of the Merger;

• the fact that, as the Surviving Corporation, the Company will succeed to and assume all liabilities of WDC, which is mitigated in part by the fact that the WDC Shareholders will agree to indemnify

  the Company for losses arising from breaches of WDC's representations, warranties, covenants or agreements under the Merger Agreement;

• the fact that the Company has agreed to indemnify the WDC Shareholders for losses arising from breaches of the Company's representations, warranties, covenants or agreements under the Merger Agreement;

• the fact that the obligations of the parties to consummate the Merger are subject to the satisfaction or waiver of various conditions, including the approval of the Merger by the Company's shareholders, and there can be no assurance that all conditions will be satisfied or waived, and if the conditions are not satisfied or waived, the Merger will not be consummated;

• the fact that certain WDC Shareholders are required to make filings under the HSR Act and obtain clearance from the applicable antitrust authorities, and although the parties do not anticipate any significant regulatory issues in connection with the Merger, there can be no assurance that the applicable waiting periods will expire or be terminated without adverse action by the regulatory authorities; and

• the risk that litigation may occur in connection with the Merger and such litigation may increase costs and result in a diversion of management focus.

The foregoing discussion of the factors considered by the Board is not intended to be exhaustive but does set forth the principal factors considered by the Board. The Board, acting upon the authorization and recommendation of the Special Committee and by unanimous vote, reached the conclusion to approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, after consulting with the Company's outside legal advisors and considering all of the various factors described above and other factors that each member of the Board deemed relevant. In view of the wide variety of factors considered by the members of the Board in connection with their evaluation of the Merger and

the complexity of these matters, the Board did not consider it practical, and did not attempt, to quantify, rank or otherwise assign relative weights to the specific factors it considered in reaching its decision. The Board made its decision based on the totality of information presented to and considered by it. In considering the factors discussed above, individual directors may have given different weights to different factors.

Recommendation of the Board

The Board, acting upon the authorization and recommendation of the Special Committee and by unanimous vote, has (i) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of the Company and its shareholders, (ii) approved and declared advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, and (iii) recommended that the shareholders approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement

and directed that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement be submitted to the shareholders for approval. The Board unanimously recommends that you vote "FOR" the Merger Proposal and the NYSE Proposal.

Interests of Our Directors and Executive Officers in the Merger

When considering the recommendation of the Board that you vote "FOR" the Merger Proposal and the NYSE Proposal, you should be aware that certain of our directors and executive officers have interests in the Merger that may be different from, or in addition to, your interests as a shareholder generally. The Board was aware of these interests in, among other matters, approving the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and recommending that the Merger

Agreement and other proposals be adopted by the shareholders of the Company. See the sections entitled "The Merger - Background of the Merger" and "The Merger - Reasons for the Merger." You should take these interests into account in deciding whether to vote "FOR" the Merger Proposal or the NYSE Proposal.

Directors and Officers of WDC

Certain of the Company's directors and executive officers also serve as directors and officers of WDC. William Dillard II serves as Chairman and President of WDC, Alex Dillard serves as a director, Vice President and Assistant Secretary of WDC and Mike Dillard serves as a director and Vice President of WDC. In addition, Phillip R. Watts, the Company's Senior Vice President, Co-Principal Financial Officer and Principal Accounting Officer, serves as Vice President, Treasurer and Assistant Secretary of WDC and Dean L. Worley, the Company's Vice President and General Counsel, serves as Secretary of WDC. Messrs. Watts and Worley are not WDC Shareholders and do not have any financial interest in the proposed Merger.

WDC Shareholders Who Are Directors or Executive Officers of the Company

Certain of our directors and executive officers are also shareholders of WDC. Based on their respective ownership interests in WDC as of the date of this proxy statement, the following directors and/or executive officers of the Company would receive the following shares of Dillard's Common Stock upon consummation of the Merger:

Merger Consideration to be Received Dillard's Class A Dillard's Class B

Name of Director and/or Executive Officer	Position and Office at the Company		Common Stock		Common Stock
William Dillard, II . . . . . . . . . . . . .	Director; Chief Executive Officer		9,997		960,246
Alex Dillard . . . . . . . . . . . . . . . . . .	Director; President		10,097		969,864
Mike Dillard . . . . . . . . . . . . . . . . . .	Director; Executive Vice President		9,515		913,975
Drue Matheny . . . . . . . . . . . . . . . .	Director; Executive Vice President		2,850		273,724
Denise Mahaffy . . . . . . . . . . . . . . .	Director; Senior Vice President		2,850		273,724
William Dillard, III(1). . . . . . . . . . .	Director; Senior Vice President		734		70,445
Annemarie Jazic(2). . . . . . . . . . . . . .	Vice President		151		14,557
Alexandra Lucie(3). . . . . . . . . . . . . .	Vice President		151		14,557

1. In addition to the shares of Dillard's Common Stock listed here, Mr. Dillard's spouse and trusts for the benefit of certain family members for which Mr. Dillard serves as trustee would receive, in the aggregate, 500 shares of Dillard's Class A Common Stock and 48,090 shares of Dillard's Class B Common Stock.

2. Shares would be issued to a trust of which Ms. Jazic is the sole beneficiary and serves as trustee.

3. Shares would be issued to a trust of which Ms. Lucie is the sole beneficiary and serves as trustee.

   Following the Merger, such individuals will hold shares of Dillard's Class A Common Stock and Dillard's Class B Common Stock directly, rather than indirectly through their ownership of WDC Common Stock.

   Indemnification of WDC Shareholders

   Pursuant to the Merger Agreement, the Company has agreed to indemnify each WDC Shareholder, including William Dillard, II, Alex Dillard, Mike Dillard, Drue Matheny, Denise Mahaffy, William Dillard, III, Annemarie Jazic and Alexandra Lucie, and their respective affiliates, equity holders, directors, officers, employees, members, partners, agents, attorneys, representatives, successors and permitted assigns for any losses arising from:

   • any breach or inaccuracy of the representations or warranties made by the Company in the Merger Agreement or any certificate or other document furnished or to be furnished to WDC pursuant to the Merger Agreement; or

   • any breach of any covenant or other agreement on the part of the Company under the Merger Agreement.

The indemnification obligations of the Company are subject to a cap equal to the Aggregate Merger Consideration, except in the case of fraud or intentional misconduct. See the section entitled "The Merger Agreement - Indemnification."

Regulatory Matters

Each of the Company and WDC has agreed to promptly make any required filing or application under applicable antitrust laws, including the HSR Act, and with respect to the HSR Act make any required filings no later than thirty (30) business days after the Signing Date. WDC has also agreed to cause each of the WDC Shareholders who is required to make a filing under the HSR Act to make such filing no later than thirty (30) business days after the Signing Date. The parties have agreed to supply as promptly as reasonably practicable any additional information and documentary material that may be requested pursuant to antitrust laws and to take all other actions necessary, proper or advisable to cause the expiration or termination of the applicable waiting periods or obtain required approvals.

Accounting Treatment

The Merger will be accounted for as a "purchase transaction" for financial accounting purposes.

Material U.S. Federal Income Tax Consequences

The following discussion summarizes certain material U.S. federal income tax consequences of the Merger to holders of shares of WDC Common Stock whose shares are exchanged for shares of Dillard's Common Stock and cash pursuant to the Merger. This discussion is based on the Internal Revenue Code, applicable Treasury regulations promulgated or proposed thereunder, judicial authority, and administrative rulings and practice, all as in effect as of the date of this proxy statement, and all of which are subject to change at any time, possibly with retroactive effect.

This discussion is limited to holders of WDC Common Stock that are "U.S. holders" (as defined below) and that hold their shares of WDC Common Stock as "capital assets" within the meaning of Section 1221 of the Internal Revenue Code. Further, this discussion does not discuss all tax considerations

that may be relevant to holders of WDC Common Stock in light of their particular circumstances (including the Medicare tax imposed on net investment income and the alternative minimum tax), nor does it address any tax consequences to holders subject to special treatment under the U.S. federal income tax laws, such as tax-exempt entities, partnerships or other pass-through entities for U.S. federal income tax purposes (and investors therein), holders that acquired their shares of WDC Common Stock pursuant to the exercise of employee stock options or otherwise as compensation, financial institutions, insurance companies, dealers or traders in securities, holders that have a functional currency other than the U.S. dollar, and holders that hold their shares of WDC Common Stock as part of a straddle, hedge, conversion, constructive sale, synthetic security, integrated investment or other risk-reduction transaction for U.S. federal income tax purposes.

This discussion does not address any U.S. federal estate, gift, or other non-income tax consequences or any state, local, or foreign tax consequences.

For purposes of this section, a "U.S. holder" is a beneficial owner of WDC Common Stock that is, for

U.S. federal income tax purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation created or organized under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate, the income of which is subject to U.S. federal income tax regardless of its source, or (iv) a trust, if (a) a court within the United States is able to exercise primary jurisdiction over its administration and one or more U.S. persons have the authority to control all of its substantial decisions, or

(b) it has a valid election in place under applicable Treasury Regulations to be treated as a U.S. person.

If a partnership (including any entity or arrangement treated as partnership for U.S. federal income tax purposes) holds shares of WDC Common Stock, the tax treatment of a partner in the partnership will generally depend upon the status of the partner, the activities of the partnership and certain determinations

made at the partner level. Partnerships holding WDC Common Stock and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them of the Merger.

Intended Tax Treatment

The parties intend that (i) the Merger will qualify as a "reorganization" constituting a "statutory merger or consolidation" within the meaning of Section 368(a)(1)(A) of the Internal Revenue Code and Treasury Regulations Section 1.368-2(b)(1)(ii) (the "Intended Tax Treatment") and (ii) the Merger Agreement will constitute, and is hereby adopted as, a "plan of reorganization" within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-1(c).

Tax Consequences to U.S. Holders of WDC Common Stock

Assuming the Merger qualifies as a "reorganization" constituting a "statutory merger or consolidation" within the meaning of Section 368(a)(1)(A) of the Internal Revenue Code and Treasury Regulations

Section 1.368-2(b)(1)(ii), then, for U.S. federal income tax purposes:

• Stock Consideration. No gain or loss will be recognized by, and no amount will be included in the income of, a holder of WDC Common Stock upon the receipt of shares of Dillard's Common Stock in exchange for shares of WDC Common Stock in the Merger, except to the extent of any cash received (including cash received in lieu of fractional shares).
• Cash Consideration. A U.S. holder who receives cash (other than any cash received in lieu of a fractional share of Dillard's Common Stock) in exchange for shares of WDC Common Stock pursuant to the Merger will (unless such exchange is determined to have the effect of the distribution of a dividend) recognize gain (but not loss) in an amount equal to the lesser of (i) the amount of cash received and (ii) the excess, if any, of the sum of the cash and the fair market value of the shares of Dillard's Common Stock received over the U.S. holder's adjusted tax basis in its shares of WDC Common Stock surrendered in the Merger. Any such gain will generally be treated as capital gain if the WDC Common Stock was held as a capital asset and will be long-term capital gain if the U.S. holder's holding period in the shares of WDC Common Stock surrendered in the Merger is greater than one year as of the effective date of the Merger. Long-term capital gains of certain non-corporate holders, including individuals, are generally subject to U.S. federal income tax at preferential rates. The deductibility of capital losses is subject to limitations. In some cases, the cash received in the Merger could be treated as having the effect of the distribution of a dividend under the tests set forth in Section 302 of the Internal Revenue Code, in which case, such gain would be treated as ordinary income. These rules are complex and dependent upon the specific factual circumstances particular to each U.S. holder.
• Tax Basis. The aggregate tax basis of the shares of Dillard's Common Stock (including fractional shares deemed to be received and then subsequently deemed to be exchanged as described below) received by a holder of shares of WDC Common Stock in connection with the Merger will equal

  the aggregate tax basis of the shares of WDC Common Stock surrendered in exchange for such shares of Dillard's Common Stock, decreased by the amount of cash received (excluding any cash received in lieu of fractional shares) and increased by the amount of income or gain recognized in the exchange.

• Holding Period. The holding period of the shares of Dillard's Common Stock (including fractional shares deemed to be received and then subsequently deemed to be exchanged as described below) received by a holder of WDC Common Stock in connection with the Merger will include the holding period of the shares of WDC Common Stock surrendered in exchange for such shares of Dillard's Common Stock.
• Fractional Shares. A U.S. holder who receives cash in lieu of a fractional share of Dillard's Common Stock will be treated as having received the fractional share pursuant to the Merger and then as having exchanged the fractional share for cash. As a result (unless such exchange is determined to be essentially equivalent to a dividend), such U.S. holder will recognize gain or loss equal to the difference between the amount of cash received and the tax basis in such U.S. holder's fractional share interest as set forth above. The gain or loss recognized by the U.S. holder described in this paragraph

will generally be capital gain or loss, and will be long-term capital gain or loss if, as of the effective date of the Merger, the U.S. holder's holding period for the relevant shares (including the holding period for the WDC Common Stock deemed to be exchanged therefor) is greater than one year. The deductibility of capital losses is subject to limitations.

Holders of WDC Common Stock that have acquired different blocks of WDC Common Stock at different times or at different prices, and whose blocks of such WDC Common Stock are exchanged for shares of Dillard's Common Stock in connection with the Merger, should consult their tax advisors regarding the allocation of their aggregate tax basis among, and the holding period of, such shares of Dillard's Common Stock.

Information Reporting and Backup Withholding

Payments made in exchange for shares of WDC Common Stock pursuant to the Merger may be subject, under certain circumstances, to information reporting and backup withholding (currently at a rate of 24%). To avoid backup withholding, a U.S. holder that does not otherwise establish an exemption should complete and return to the applicable withholding agent a properly completed and executed IRS Form W-9, certifying under penalties of perjury that such U.S. holder is a "United States person" (within the meaning of the Internal Revenue Code), that the taxpayer identification number provided is correct and that such U.S. holder is not subject to backup withholding. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded by the IRS or credited against a holder's

U.S. federal income tax liability, if any, provided that such holder furnishes the required information to the IRS in a timely manner.

Record Retention

Assuming the Merger qualifies as a tax-free "reorganization" constituting a "statutory merger or consolidation" within the meaning of Section 368(a)(1)(A) of the Internal Revenue Code and Treasury Regulations Section 1.368-2(b)(1)(ii), each holder of WDC Common Stock who receives shares of Dillard's Common Stock in the Merger is required to retain permanent records pertaining to the Merger and make such records available to any authorized IRS officers and employees. Such records should specifically include information regarding the amount, basis and fair market value of the WDC Common Stock held at the Effective Time.

Each WDC Shareholder at the Effective Time who owns at least one percent (by vote or value) of the total outstanding stock of WDC or who owns stock in WDC with a tax basis of $1,000,000 or more, is required to attach a statement to its tax returns for the year in which the Merger is consummated that contains the information listed in Treasury Regulations Section 1.368-3(b). Such statement must include the holder's tax basis in the WDC Common Stock and the fair market value of such WDC Common Stock.

In addition, each WDC Shareholder at the Effective Time must attach a copy of the PLR to its tax returns for the year in which the Merger is consummated. Alternatively, such holders filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of the PLR.

Consultation with Tax Advisors

HOLDERS OF WDC COMMON STOCK ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE MERGER, INCLUDING ANY APPLICABLE U.S. FEDERAL, STATE, LOCAL OR FOREIGN TAX CONSEQUENCES.

THE MERGER AGREEMENT

This section describes certain material terms of the Merger Agreement. The description of the Merger Agreement in this section and elsewhere in this proxy statement may not contain all of the information about the Merger Agreement that is important to you and is qualified in its entirety by reference to the complete text of the Merger Agreement, a copy of which is attached as Annex A to this proxy statement and incorporated by reference into this proxy statement. We urge you to read the Merger Agreement carefully and in its entirety because it is the legal document that governs the Merger.

The Merger

The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, at the Effective Time, WDC will be merged with and into the Company in accordance with the applicable provisions of the TBOC and the ABCA, and the separate existence of WDC will cease. The Company will continue its existence under the laws of the State of Texas as the Surviving Corporation.

Merger Consideration

The aggregate consideration to be paid by the Company in respect of the Merger will equal the Aggregate Merger Consideration, consisting of the Aggregate Cash Merger Consideration plus the Aggregate Stock Merger Consideration. At the Effective Time, by virtue of the Merger and without any action on the part of any person, each share of WDC Common Stock issued and outstanding immediately prior to the Effective Time (other than Dissenting Shares) will be automatically cancelled, and in exchange therefor, each WDC Shareholder will be entitled to receive such WDC Shareholder's Pro Rata Share of

the Aggregate Cash Merger Consideration and such WDC Shareholder's Pro Rata Share of the Aggregate Stock Merger Consideration, in each case as set forth on the Final Aggregate Merger Consideration Allocation Schedule.

No fractional shares of Dillard's Common Stock will be issued to any WDC Shareholder in connection with the Merger. Instead, each WDC Shareholder will be entitled to receive, in lieu of any remaining fractional share of Dillard's Common Stock that would have been issued in the Merger to such WDC Shareholder, an amount in cash (rounded down to the nearest whole cent) equal to the product of (i) such fraction, multiplied by (ii) the average of the high and low trading prices of shares of Dillard's Class A Common Stock on NYSE (as reported by FactSet) on the last trading day that is two (2) business days prior to the Closing Date.

Certain Effects of the Merger; Directors and Officers; Certificate of Formation; Bylaws

At and after the Effective Time, the officers and directors of the Company immediately prior to the Effective Time will be the officers and directors, respectively, of the Surviving Corporation until their successors are duly elected or appointed and qualified.

At and after the Effective Time until the same have been duly amended, (a) the certificate of formation of the Company, as in effect immediately prior to the Effective Time, will be the certificate of formation of the Surviving Corporation until thereafter amended in accordance with the applicable provisions of the TBOC and such certificate of formation, and (b) the bylaws of the Company, as in effect immediately prior to the Effective Time, will be the bylaws of the Surviving Corporation until thereafter amended in accordance with the applicable provisions of the TBOC, the certificate of formation of the Surviving Corporation and such bylaws.

No Dilution of Current Shareholders

Because the Aggregate Stock Merger Consideration consists of a number of shares of Dillard's Class A Common Stock and Dillard's Class B Common Stock identical (subject to reduction to avoid the

issuance of fractional shares) to the number of shares of Dillard's Class A Common Stock and Dillard's Class B Common Stock currently held by WDC, there will be only a de minimis decrease in the number of outstanding shares of Dillard's Class A Common Stock and Dillard's Class B Common Stock as a result

of the Merger, and the consummation of the Merger will not result in any dilution to the current shareholders