<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement
X Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Sect. 240.14a-11(c) or Sect. 240.14a-12
DILLARD DEPARTMENT STORES, INC.
(Name of Registrant as Specified In Its Charter)
DILLARD DEPARTMENT STORES, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
X $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(l), or
14a-6(i)(2).
$500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title or each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
DILLARD DEPARTMENT STORES, INC.
POST OFFICE BOX 486
LITTLE ROCK, ARKANSAS 72203
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
TO BE HELD MAY 21, 1994
PROXY STATEMENT
<PAGE>
DILLARD DEPARTMENT STORES, INC.
POST OFFICE BOX 486
LITTLE ROCK, ARKANSAS 72203
TO THE HOLDERS OF CLASS A AND Little Rock, Arkansas
CLASS B COMMON STOCK: April 8, 1994
Notice is hereby given that the annual meeting of Stockholders
of Dillard Department Stores, Inc., will be held at the Board Room
of the Union Building, Capitol Avenue and Louisiana Street, Little
Rock, Arkansas on Saturday, May 21, 1994, at 9:30 a.m. for the
following purposes:
1. To elect 15 Directors of the Company (five Directors to
represent Class A Stockholders and 10 Directors to represent
Class B Stockholders).
2. To consider and act upon a proposal to approve the Senior
Management Cash Bonus Plan.
3. To transact such other business as may properly come
before that meeting or any adjournment or adjournments
thereof.
The stock transfer books of the Company will not be closed, but
only stockholders of record at the close of business on March 31,
1994, will be entitled to notice of, and to vote at, the meeting.
Your participation in the meeting is earnestly solicited. If
you do not expect to be present in person at the meeting, please
sign, date, and fill in the enclosed Proxy and return it by mail in
the enclosed envelope to which no postage need be affixed if mailed
in the United States of America.
By Order of the Board of Directors
JAMES E. DARR, JR.
Secretary
<PAGE>
DILLARD DEPARTMENT STORES, INC.
POST OFFICE BOX 486
LITTLE ROCK, ARKANSAS 72203
Telephone (501) 376-5200
APRIL 8, 1994
PROXY STATEMENT
The enclosed Proxy is solicited by and on behalf of the
management of Dillard Department Stores, Inc. (the "Company"), a
Delaware corporation, for use at the annual meeting of stockholders
to be held on Saturday, May 21, 1994, at 9:30 a.m. at the Board
Room of the Union Building, Capitol Avenue and Louisiana Street,
Little Rock, Arkansas, or at any adjournment or adjournments
thereof.
Any stockholder giving a Proxy has the power to revoke it, at
any time before it is voted, by written revocation delivered to the
Secretary of the Company. 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. If no choice is
specified, the shares will be voted "FOR" each matter being acted
upon.
If matters of business other than those described in the Proxy
properly come before the meeting, the persons named in the Proxy
will vote in accordance with their best judgment on such matters.
The Proxies solicited herein shall not confer any authority to vote
at any meeting of stockholders other than the meeting to be held on
May 21, 1994, or any adjournment or adjournments thereof.
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
material to beneficial owners of shares. In addition to
solicitation by mail, certain officers and employees of the Company
may solicit Proxies by telephone, telegraph and personally. These
persons will receive no compensation other than their regular
salaries. The Company has retained D.F. King & Co., Inc., a
professional proxy solicitation firm, to assist in the solicitation
of proxies. The fees of such firm are not expected to exceed
$6,000.
<PAGE>
OUTSTANDING STOCK; VOTING RIGHTS;
VOTE REQUIRED FOR APPROVAL
The stock transfer books of the Company will not be closed, but
only stockholders of record at the close of business on March 31,
1994, will be entitled to notice of, and to vote at, the meeting.
At that date, there were 108,974,658 shares of Class A Common Stock
outstanding and 4,017,061 shares of Class B Common Stock
outstanding.
Each holder of Class A Common Stock and each holder of Class
B Common Stock shall be entitled to one vote on the matters
presented at the meeting for each share standing in his name except
that the holders of Class A Common Stock are empowered as a class
to elect one-third of the Directors and the holders of Class B
Common Stock are empowered as a class to elect two-thirds of the
Directors. Nominees for director of each class, to be elected,
must receive a plurality of the votes cast within that class.
Cumulative voting for Directors is not permitted. Approval of the
Senior Management Cash Bonus Plan requires the affirmative vote of
a majority of the votes cast on that matter. If shares are held by
a broker that has indicated that it does not have discretionary
authority to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that
matter, but such shares will be counted with respect to determining
whether a quorum is present. Abstentions will not be counted as
votes cast.
The last date for the acceptance of Proxies by management is
the close of business on May 20, 1994, and no Proxy received after
that date will be voted by management at the meeting.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth certain information regarding
persons who beneficially owned five percent (5%) or more of a class
of the Company's outstanding voting securities at the close of
business on January 29, 1994.
No. of Percent
Name and Address Class Shares Owned of Class(1)
W.D. Company, Inc.(2) Class A 41,496 *
Little Rock, Arkansas Class B 3,985,776 99.2%
*Denotes less than 0.1%
(1) At January 29, 1994, there were a total of 108,974,658 shares
of the Company's Class A Common Stock and 4,017,061 shares of
the Company's Class B Common Stock outstanding.
<PAGE>
(2) William Dillard, Chairman of the Board of Directors of the
Company, William Dillard II, President, Alex Dillard,
Executive Vice President, and Mike Dillard, Executive Vice
President, are officers and directors of W.D. Company, Inc.
and own 21.3%, 25.1%, 23.3% and 22.0%, respectively, of the
outstanding voting stock of W.D. Company, Inc.
ELECTION OF DIRECTORS
Five Directors representing Class A Stockholders and 10
Directors representing Class B Stockholders are to be elected by
the Class A Stockholders and the Class B Stockholders,
respectively, at the annual meeting for a term of one year and
until the election and qualification of their successors. The
Proxies solicited hereby will be voted "FOR" the election as
Directors of the 15 persons hereinafter identified under "Nominees
for Election as Directors" if not specified otherwise. Management
does not know of any nominee who will be unable to serve, but
should any nominee be unable or decline to serve, the discretionary
authority provided in the Proxy will be exercised to vote for a
substitute or substitutes. Management has no reason to believe
that any substitute nominee will be required.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION
AS DIRECTORS OF THE 15 PERSONS HEREINAFTER IDENTIFIED.
PROPOSAL TO APPROVE THE SENIOR MANAGEMENT CASH BONUS PLAN
In 1993 Congress enacted the Omnibus Budget Reconciliation Act
of 1993 ("OBRA"), the general effect of which is to prevent public
corporations from deducting as a business expense that portion of
compensation paid to a named executive officer in the Summary
Compensation Table that exceeds $1,000,000. This deduction limit
does not apply, however, to "performance-based compensation."
Performance-based compensation is compensation that is paid solely
on account of the attainment of one or more preestablished,
objective performance goals.
To meet the requirements of OBRA with respect to performance-
based compensation, the Company is proposing a Senior Management
Cash Bonus Plan (the "Plan"), the terms of which are described
below. Pursuant to the requirements of OBRA, the Company is
seeking shareholder approval of the Plan. If shareholders do not
approve the Plan, the Company will not make cash bonus payments
under the terms of the Plan.
Under the terms of the Plan as proposed, the Company may make
cash bonus payments to certain members of senior management.
Members of senior management eligible to participate in the Plan
are (i) the Chief Executive Officer, (ii) the President, (iii) the
Executive Vice Presidents, and (iv) the Senior Vice Presidents of
the Company. Members of senior management eligible for
compensation under the Plan for a fiscal year will be those
individuals designated by the Executive Compensation Committee
prior to commencement of that fiscal year, or such later date as
may be permitted under OBRA.
<PAGE>
In order for participants in the Plan to receive bonus
payments for a fiscal year, the Company must attain income before
federal and state income taxes ("pre-tax income"). The bonus
payments will be based on pre-tax income for the fiscal year and
the increase in pre-tax income over the prior fiscal year. No
individual shall be entitled to receive an amount under the Plan
exceeding one percent (1%) of pre-tax income. The Executive
Compensation Committee will, however, retain at all times the
ability to reduce or eliminate the bonus payments otherwise payable
under the Plan. Prior to any payments being made from the Plan,
the Executive Compensation Committee will certify in writing that
all of the performance goals and other material terms of the Plan
pertaining to the payments have been met.
Had the Plan, as proposed, utilizing the targets adopted by
the Executive Compensation Committee for the current year been in
effect for the fiscal year ended January 29, 1994, bonus payments
in the amounts shown in the table below could have been paid to the
listed individuals. However, such amounts represent a maximum
amount that could have been paid. As discussed above, the
Executive Compensation Committee retains at all times the right to
reduce or eliminate the compensation payable under the Plan if it
deems the reduction or elimination to be in the best interest of
the Company.
CASH BONUS PLAN
Dollar
Name and Position Value($)
William Dillard, Chairman of the Board $1,688,000
and Chief Executive Officer
William Dillard II, President and $1,688,000
Chief Operating Officer
Alex Dillard, Executive Vice President $1,688,000
Mike Dillard, Executive Vice President $1,123,000
James I. Freeman, Vice President and $ 327,000
Chief Financial Officer
Executive Group (1) $ 327,000
Non-Executive Director Group N/A
Non-Executive Officer Employee Group N/A
Approval of the Plan requires the affirmative vote of a
majority of the votes cast on this matter at the meeting.
Abstentions will not count as votes cast.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE PROPOSAL
TO APPROVE THE COMPANY'S SENIOR MANAGEMENT CASH BONUS PLAN.
<PAGE>
OTHER MATTERS
Management of the Company knows of no other matters that may
come before the meeting. However, if any matters other than those
referred to herein should properly come before the meeting, it is
the intention of the persons named in the enclosed Proxy to vote
the Proxy in accordance with their judgment.
NOMINEES FOR ELECTION AS DIRECTORS
The following table briefly indicates the principal occupation
of each nominee, the approximate amount of Class A and Class B
Common Stock of the Company beneficially owned by each nominee as
of January 29, 1994, and the year each nominee first was elected as
Director. The table also indicates the approximate amount of Class
A and Class B Common Stock of the Company beneficially owned by the
executive officers named under the heading "Compensation of
Directors and Executive Officers" and the amount beneficially owned
by directors and executive officers, as a group, as of January 29,
1994.
Shares of
Common Stock
Beneficially Percent
Principal Director Owned as of of
Name Age Occupation Since 1/29/94(1) Class
William Dillard 79 Chairman of 1964 Class A 608,599 (3) .6%
(b)(2) the Board and Class B 3,985,776 (3) 99.2%
Chief Executive
Officer of the
Company
Calvin N. Clyde, 73 Chairman of 1985 Class A 9,205 *
Jr. the Board, Class B None
(b) T. B. Butler
Publishing
Co., Inc.,
Tyler, TX
Robert C. Connor 52 Former 1987 Class A 13,033 (4) *
(a) President, Union Class B None
National Bank of
Arkansas, Little
Rock, AR
Drue Corbusier 47 Vice - Class A 240,263 (5) .2%
(b) President of the Class B None
Company
Will D. Davis 64 Partner, 1972 Class A 11,040 *
(a) Heath, Davis Class B None
& McCalla,
Attorneys,
Austin, TX
Alex Dillard 44 Executive 1975 Class A 674,798 (3) .6%
(b)(2) Vice President Class B 3,985,776 (3) 99.2%
of the Company
Mike Dillard 42 Executive 1976 Class A 568,973 (3) .5%
(b)(2) Vice President Class B 3,985,776 (3) 99.2%
of the Company
William Dillard 49 President and 1967 Class A 818,123 (3) .7%
II Chief Operating Class B 3,985,776 (3) 99.2%
(b)(2) Officer of the
Company
James I. Freeman 44 Vice President 1991 Class A 154,081 (6) .1%
(b) and Chief Finan- Class B None
cial Officer of
the Company
John Paul 71 Retired Member 1992 Class A None
Hammerschmidt of Congress Class B None
(a)
William B. 50 Vice Chairman 1985 Class A 6,000 (7) *
Harrison, Jr. Chemical Banking Class B None
(a) Corporation,
New York, NY
J.M. Hessels 51 Chairman, 1990 Class A None
(a) Executive Board, Class B None
Vendex International
N.V. (Retail)
Amsterdam, The
Netherlands
John H. Johnson 76 President 1986 Class A 3,000 (8) *
(b) and Publisher, Class B None
Johnson Publishing
Company, Inc.,
Chicago, IL
<PAGE>
E. Ray Kemp 69 Retired Vice 1970 Class A 167,954 (9) .2%
(b) Chairman of the Class B None
Board and Chief
Administrative
Officer of the
Company
William H. Sutton 63 Managing -
(b) Partner, Friday, Class A 1,000 *
Eldredge & Clark Class B None
Attorneys,
Little Rock, AR
All Nominees and Class A 4,642,752 (10)(11) 4.2%
Executive Officers Class B 3,985,776 (10) 99.2%
as a Group (a total
of 29 persons)
(a) Class A Director
(b) Class B Director
*Denotes less than 0.1%
(1) Based on information furnished by the respective
individuals.
(2) William Dillard is a director and officer of W. D. Company,
Inc. and owns 21.3% of the outstanding voting stock of such
company. William Dillard II, Alex Dillard and Mike Dillard
are sons of William Dillard and are directors and officers
of W. D. Company, Inc. and own 25.1%, 23.3% and 22.0%,
respectively, of the outstanding voting stock of such
company.
(3) Includes 41,496 shares of Class A Common Stock and
3,985,776 of Class B Common Stock owned by W. D. Company,
Inc., in which shares William Dillard, William Dillard II,
Alex Dillard and Mike Dillard are each deemed to have a
beneficial interest due to their respective relationships
with W. D. Company, Inc. See "Principal Holders of Voting
Securities." William Dillard and his wife individually own
294,846 and 2,772 shares, respectively, of the Class A
Common Stock; he has sole voting power with respect to
19,485 shares held in trust for three minor children and
has the right to acquire beneficial ownership of 250,000
shares pursuant to currently exercisable options granted
under Company stock option plans. William Dillard II,
individually owns 517,051 shares of the Class A Common
Stock and has the right to acquire beneficial ownership of
259,576 shares pursuant to currently exercisable options
granted under Company stock option plans. Alex Dillard and
his wife individually own 337,725 and 36,001 shares,
respectively, of the Class A Common Stock, and he has the
right to acquire beneficial ownership of 259,576 shares
pursuant to currently exercisable options granted under
Company stock option plans. Mike Dillard individually owns
248,251 shares of the Class A Common Stock, has sole voting
power with respect to 19,650 shares held in trust for three
minor children and has the right to acquire beneficial
ownership of 259,576 shares pursuant to currently
exercisable options granted under Company stock option
plans.
<PAGE>
(4) Includes 24 shares held in trust for a minor child, with
respect to which Robert C. Connor has sole voting power,
and 9 shares owned by his wife.
(5) Drue Corbusier and her husband individually own 121,844 and
14,400 shares, respectively, of the Class A Common Stock
and she has the right to acquire beneficial ownership of
104,019 shares pursuant to currently exercisable options
granted under Company stock option plans.
(6) James I. Freeman individually owns 41,937 shares, has sole
voting power with respect to 12,000 shares held in trust
for three minor children and has the right to acquire
beneficial ownership of 100,144 shares pursuant to
currently exercisable options granted under Company stock
option plans.
(7) Includes 3,300 shares owned by his wife.
(8) These shares are held by Johnson Publishing Company, Inc.,
of which John H. Johnson is President and Publisher.
(9) E. Ray Kemp and his wife individually own 70,220 and
68,484 shares, respectively, of the Class A Common Stock,
and he has sole voting power with respect to 29,250 shares
held in trust for three minor children.
(10) The shares in which William Dillard, William Dillard II,
Alex Dillard and Mike Dillard are deemed to have a
beneficial interest due to their respective relationships
with W. D. Company, Inc. have been included in this
computation only once and were not aggregated for such
purpose.
(11) Includes the right to acquire beneficial ownership of
2,136,073 shares pursuant to currently exercisable options
granted under Company stock option plans.
The following director nominees also hold directorships in the
designated companies:
Name Director of
Alex Dillard Worthen Banking Corporation
William Dillard II Acxiom Corporation, Barnes & Noble, Inc.,
MSA Realty Corp., and Simon Property Group, Inc.
John Paul Hammerschmidt Southwestern Energy Co.
William B. Harrison, Jr. Chemical Banking Corp., Freeport-McMoran
J.M. Hessels Barnes & Noble, Inc., Software Etc. Stores, Inc.
John H. Johnson The Dial Corp
<PAGE>
The business association of the nominees as shown has been
continued for more than five years, with the exception of Robert C.
Connor, who prior to 1993 was President of Union National Bank of
Arkansas, which was merged with Worthen Banking Corporation; Calvin
N. Clyde, Jr., who prior to 1990 was President and General Manager
of T.B. Butler Publishing Co., Inc.; William B. Harrison, Jr., who
prior to 1992 was Executive Vice President of Chemical Bank, New
York, NY and J.M. Hessels, who prior to 1990 was President-Director
of N.V. Deli Universal (agro-industrial products). E. Ray Kemp's
retirement was effective in March, 1992. Other than Drue Corbusier
and William H. Sutton, each nominee for director was elected to the
Board of Directors at the annual meeting of stockholders held May
15, 1993.
The Board of Directors met four times during the last 12
months, on May 15, August 21, and November 13, 1993, and March 11,
1994.
Audit Committee members are William B. Harrison, Jr. and E.
Ray Kemp. The Audit Committee held two meetings during the year.
Executive Compensation Committee members are Calvin N. Clyde,
Jr., Robert C. Connor and Will D. Davis. The Executive
Compensation Committee held three meetings during the year.
Stock Option Committee members are Calvin N. Clyde and John H.
Johnson. The Stock Option Committee held two meetings during the
year.
Of the nominees for director, only E. Ray Kemp attended fewer
than 75% of the aggregate of (1) the total number of meetings of
the board of directors and (2) the total number of meetings held by
all committees of the board on which he served. Mr. Kemp attended
67% of the board of directors and committee meetings. He was
unable to be present for one meeting date (which included a meeting
of the board of directors and a meeting of the audit committee) due
to illness.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Cash and Other Compensation
The following table sets forth, for the fiscal years indicated,
the cash and other compensation provided by the Company and its
subsidiaries to the Chief Executive Officer and each of the four
most highly compensated executive officers (the "named executive
officers") of the Company in all capacities in which they served.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Summary Compensation Table
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Restricted Securities
Annual Stock Underlying LTIP All Other
Name and Principal Compensation Award(s) Options/ Payouts Compensa- Positio
Position Year Salary($) Bonus($) ($) ($) SARs(#) ($) tion($)(1)
William Dillard 1993 $835,000 $1,135,000 - - 100,000 - $114,013
Chairman of the Board 1992 810,000 1,255,000 - - 75,000 - 348,877
& Chief Executive Officer 1991 780,000 1,050,000 - - 75,000 - -
William Dillard II 1993 535,000 1,135,000 - - 100,000 - 80,500
President, Chief Operating 1992 510,000 1,255,000 - - 75,000 - 286,623
Officer 1991 480,000 1,050,000 - - 75,000 - -
Alex Dillard 1993 445,000 1,135,000 - - 100,000 - 70,600
Executive Vice President 1992 420,000 1,255,000 - - 75,000 - 274,320
1991 390,000 1,050,000 - - 75,000 - -
Mike Dillard 1993 405,000 755,000 - - 100,000 - 61,250
Executive Vice President 1992 380,000 835,000 - - 75,000 - 189,739
1991 355,000 675,000 - - 75,000 - -
James I. Freeman 1993 365,000 220,000 - - 50,000 - 46,125
Vice President, Chief 1992 345,000 237,500 - - 30,000 - 75,719
Financial Officer 1991 325,000 175,000 - - 30,000 - -
(1) Amounts represent the Company's defined contributions for the benefit of the named executive officers
pursuant to its Retirement Plan. Disclosure for 1991 is not required.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Stock Option Grants
The following table sets forth information concerning stock options granted under the
Company's 1990 Incentive and Nonqualified Stock Option Plan to the named executive officers:
Option/SAR Grants in Last Fiscal Year
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation
Individual Grants for Option Term
(a) (b) (c) (d) (e) (f) (g)
% of
Number of Total
Securities Options/
Underlying SARs
Options/ Granted to Exercise
SARs Employees or Base
Granted in Fiscal Price Expiration
Name (#) (1) Year ($/Sh) Date 5% ($) 10% ($)
William Dillard 100,000 6.5% $39.500 5/15/98 $1,091,300 $2,411,600
William Dillard II 100,000 6.5% $39.500 5/15/98 1,091,300 2,411,600
Alex Dillard 100,000 6.5% $39.500 5/15/98 1,091,300 2,411,600
Mike Dillard 100,000 6.5% $39.500 5/15/98 1,091,300 2,411,600
James I. Freeman 50,000 3.3% $39.500 5/15/98 545,650 1,205,800
(1) These options were exercisable from the date of grant. If payment for shares upon exercise of any of
these options is made with shares of the Company's common stock owned by the optionee, the optionee
shall be granted on that date an option ("Reload Option") to purchase a number of shares equal to the
number of shares tendered to the Company. The exercise price of the Reload Option shall be the fair
market price of the Company's common stock on the Reload Option grant date, and the expiration date
of the Reload Option shall be the same as that of the original option.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Stock Option Exercises and Holdings
The following table sets forth information concerning stock options exercised during the last
fiscal year and stock options held as of the end of the last fiscal year by the named exective officers.
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#) FY-End ($)
Shares Acquired
Name on Exercise (#) Value Realized ($) Exercisable(1) Exercisable(1)
William Dillard 0 $0 250,000 $0
William Dillard II 0 0 259,576 0
Alex Dillard 0 0 259,576 0
Mike Dillard 0 0 259,576 0
James I. Freeman 0 0 100,144 0
(1) No unexercisable options are held by the named executive officers.
</TABLE>
<PAGE>
[TEXT]
Pension Plan
The following table shows the estimated annual benefits
payable pursuant to the Company's pension plan to persons in
specified compensation and years of service categories upon
retirement.
Pension Plan Table
Years of Service
Remuneration 15 20 25 30 35
300,000 67,500 90,000 112,500 135,000 157,500
350,000 78,750 105,000 131,250 157,500 183,750
400,000 90,000 120,000 150,000 180,000 210,000
450,000 101,250 135,000 168,750 202,500 236,250
500,000 112,500 150,000 187,500 225,000 262,500
550,000 123,750 165,000 206,250 247,500 288,750
600,000 135,000 180,000 225,000 270,000 315,000
650,000 146,250 195,000 243,750 292,500 341,250
A participant's compensation covered by the Company's pension
plan is his average salary (as reported in the Summary Compensation
Table) for the last five years of his employment with the Company.
The credited years of service for each of the named executive
officers is as follows: William Dillard, 0 years; William Dillard
II, 25 years; Alex Dillard, 22 years; Mike Dillard, 22 years; and
James I. Freeman, 6 years. Benefits shown are computed as a single
life annuity with five years term certain beginning at age 65.
Compensation of Directors
Directors who are not officers of the Company each receive an
annual retainer of $26,250, $1,250 for attendance at each board
meeting, $250 for each committee meeting, and actual travel
expenses.
Retirement Contract
The Company has entered into a retirement contract with
William Dillard, Chairman of the Board, providing for voluntary
retirement upon 90 days notice. Mr. Dillard will receive annual
retirement compensation equal to 50% of the average of his last
five years total annual compensation from the Company. Such
retirement compensation shall be adjusted every three years based
on the Consumer Price Index. The payments will be continued in the
event of disability, and will be paid to Mr. Dillard's wife for
life upon his death.
Compensation Committee Interlocks and Insider Participation
The Company's Executive Compensation Committee is composed of
Calvin N. Clyde, Robert C. Connor and Will D. Davis.
<PAGE>
Mr. Will D. Davis, who serves on the Company's Executive
Compensation Committee, is a partner in the law firm of Heath,
Davis & McCalla, which is retained by the Company for legal
services.
Report of Executive Compensation Committee
The following report addressing the Company's compensation
policies for executive officers for fiscal 1993 is submitted by the
Executive Compensation Committee of the Board of Directors.
General
The Executive Compensation Committee, which is composed of
independent directors who are not employees of the Company,
establishes policies relating to the compensation of employees and
oversees the administration of the Company's employee benefit
plans. The compensation program of the Company has been designed
(1) to provide compensation opportunities that are equivalent to
those offered by comparable companies, thereby allowing the Company
to compete for and retain talented executives who are critical to
the Company's long-term success, (2) to motivate key senior
officers by rewarding them for the attainment of certain pre-
established Company profitability goals, and (3) to align the
interests of executives with the long-term interests of
stockholders by including stock options as part of the compensation
paid to executives.
In order to develop a competitive compensation package for the
executive officers of the Company, the Executive Compensation
Committee compares the Company's compensation package with those
of a comparison group. The comparison group is composed of
department stores, specialty stores and other public companies that
were family-founded and continue to be family-managed. Not all of
the companies in the comparison group are included in the Standard
and Poors Department Store Index, which is used in the Company's
stock performance graph appearing elsewhere in this proxy
statement. The Executive Compensation Committee believes that the
companies in the comparison group are comparable to the Company in
management style and management culture. Although the Executive
Compensation Committee makes these comparisons, it also takes into
account that as the Company has grown in size, the number of senior
executives has not grown proportionately, so that the number of
senior executives employed by the Company is less than the number
employed at other companies of similar size.
Currently, the Company's compensation program consists of
salary, annual cash performance bonus and stock options. The
compensation program is focused on short-term and long-term
performance of the Company, rewarding executives for both
attainment of profitability and growth in stockholder value.
<PAGE>
Salary -- Each year the Executive Compensation Committee makes
a recommendation to the Board establishing the salary for all
executive officers. Increases are based on targeting the 75th
percentile of the comparison group in salary.
Cash Performance Bonus -- Cash performance bonuses are paid
annually to senior management. The bonus payments are based on the
pre-tax income for the current fiscal year and the increase in pre-
tax income over the prior fiscal year. The Executive Compensation
Committee awards bonuses to members of senior management. These
payments are targeted to the 75th percentile of the comparison
group.
Stock Options -- Stock option grants under the Company's 1990
Incentive and Nonqualified Stock Option Plan are utilized by the
Company for long-term incentive compensation for executive
officers. The stock options are granted by the Stock Option
Committee and are targeted to the 75th percentile of the comparison
group. The exercise price for the options granted is 100% of the
fair market value of the shares underlying such options on the date
of grant. The stock options generally are exercisable at any time
up to five years from the date of grant. In making option grants,
the Stock Option Committee does not consider the number of options
already held by an executive officer.
Chief Executive Officer
In setting the Chief Executive Officer's compensation, the
Executive Compensation Committee determines his salary and cash
performance bonus by comparing his compensation to chief executive
officers of companies in the comparison group. Additionally, his
contribution and leadership as well as his vision in founding the
Company are taken into account. The Chief Executive Officer's
salary increased 2% over the prior year. The Company's income
before income taxes increased by 6% over the prior year, while the
Company's net income increased 2% over the prior year. His cash
performance bonus decreased by 10% from the prior year.
Omnibus Budget Reconciliation Act of 1993
In 1993 Congress enacted the Omnibus Budget Reconciliation Act
of 1993 ("OBRA"). One effect of OBRA generally is to prevent
public corporations from deducting as a business expense that
portion of the compensation paid to the five named executive
officers in the Summary Compensation Table that exceeds $1,000,000.
However, this deduction limit does not apply to "performance-based
compensation." Compensation paid to these individuals in the form
of nonqualified stock options granted under the Company's 1990
Incentive and Nonqualified Stock Option Plan does qualify as
performance-based compensation, and is therefore deductible by the
Company under certain transitional rules relating to OBRA. To
insure that the compensation paid by the Company to its named
executive officers under the Company's current cash performance
bonus program will be deductible by the Company in the future,
the Company is this year seeking shareholder approval of the Senior
Management Cash Bonus Plan, which is described elsewhere in this
proxy statement. Unless and until shareholder approval is
obtained, no bonuses may be paid under the Plan.
Calvin N. Clyde
Robert C. Connor
Will D. Davis, Chairman
<PAGE>
Company Performance
The graph below compares for each of the last five fiscal
years the cumulative total returns of the Company's Class A Common
Stock, the Standard & Poor's 500 Index and the Standard & Poor's
Department Stores Index. The cumulative total return of Company's
Class A Common Stock assumes $100 invested in such stock on January
28, 1989 and assumes reinvestment of dividends.
The following table is submitted in lieu of the required graph:
YEAR 1989 1990 1991 1992 1993
Dillard Dept. Stores, Inc. $155.70 $213.89 $289.98 $345.79 $253.71
Standard & Poors 500 110.63 115.62 137.42 147.50 161.90
Standard & Poors Dept Stores 120.89 127.40 153.21 166.70 179.42
<PAGE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS
William Dillard II, Drue Corbusier, Alex Dillard and Mike
Dillard are children of William Dillard.
Mr. William B. Harrison, Jr. is Vice Chairman of Chemical
Banking Corporation, New York, New York. Chemical Bank, a
subsidiary of Chemical Banking Corporation, acts as Agent under two
Credit Agreements which make funds available to the Company and the
Company's wholly-owned subsidiary, Dillard Investment Co., Inc.
("DIC"), in the aggregate amount of $500,000,000. Twenty-eight
other banks participate under the Credit Agreements, with such
participations totaling 90%. Neither the Company nor DIC made any
borrowings under the Credit Agreements during the past fiscal year.
Mr. William H. Sutton is Managing Partner in the law firm of
Friday, Eldredge & Clark, which is retained by the Company for
legal services.
In the transactions disclosed above, the terms were arranged
in the ordinary course of business, on substantially the same terms
as those prevailing generally in comparable transactions with
unrelated persons, and involved no special benefit to the related
persons or unfavorable features to the Company.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's directors and executive officers, and persons who own
more than 10% of the Company's Class A Common Stock, to file with
the Securities and Exchange Commission and the New York Stock
Exchange initial reports of ownership and reports of changes in
ownership of stock of the Company.
To the Company's knowledge, based solely on a review of copies
of reports provided by such individuals to the Company and written
representations of such individuals that no other reports were
required, during the fiscal year ended January 29, 1994, all
Section 16(a) filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were complied with
by such persons.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the
Company's annual meeting of stockholders in 1995 must be received
by the Company at its principal executive offices not later than
December 9, 1994 in order to be included in the Company's Proxy
Statement and form of Proxy relating to that meeting.
<PAGE>
ANNUAL REPORTS
The Company's annual report for the fiscal year ended January
29, 1994 is being mailed with this Proxy Statement but is not to be
considered as a part hereof.
INDEPENDENT PUBLIC ACCOUNTANTS
A representative of Deloitte & Touche, the Company's
independent public accountants for fiscal year 1993 and the current
year, will be present at the meeting, will have the opportunity to
make a statement, and also will be available to respond to
appropriate questions.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING
THE FINANCIAL STATEMENTS AND SCHEDULES THERETO, REQUIRED TO BE
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, MAY BE OBTAINED
WITHOUT CHARGE BY ANY STOCKHOLDER WHOSE PROXY IS SOLICITED UPON
WRITTEN REQUEST TO:
DILLARD DEPARTMENT STORES, INC.
Post Office Box 486
Little Rock, Arkansas 72203
Attention: James E. Darr, Jr., Secretary
By Order of the Board of Directors
JAMES E. DARR, JR.
Secretary
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Dillard Department Stores, Inc.
Post Office Box 486
Little Rock, Arkansas 72203 PROXY The undersigned hereby appoints
Telephone No.(501)376-5200 William Dillard and James E. Darr, Jr. as
Proxies, each with the power to appoint his
substitute, and hereby authorizes them to
represent and vote, as designated below, all
the shares of the Class A Common Stock of
Dillard Department Stores, Inc., held of
record by the undersigned on March 31, 1994,
at the annual meeting of stockholders to be
held on May 21, 1994, or any adjournment
thereof.
1. ELECTION OF DIRECTORS. / / FOR all Class A / / WITHHOLD AUTHORITY
nominees listed to vote for all
below (except as Class A nominees
marked to the con-
trary below)
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Class A Nominees
Robert C. Connor * Will D. Davis * John Paul Hammerschmidt * William B.
Harrison, Jr. * J. M. Hessels
2. PROPOSAL TO APPROVE THE SENIOR MANAGEMENT CASH BONUS PLAN
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THE PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
DATED: , 1994
Signature
Signature, if jointly held
PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Dillard Department Stores, Inc.
Post Office Box 486
Little Rock, Arkansas 72203 PROXY The undersigned hereby appoints
Telephone No.(501)376-5200 William Dillard and James E. Darr, Jr. as
Proxies, each with the power to appoint his
substitute, and hereby authorizes them to
represent and vote, as designated below, all
the shares of the Class B Common Stock of
Dillard Department Stores, Inc., held of
record by the undersigned on March 31, 1994,
at the annual meeting of stockholders to be
held on May 21, 1994, or any adjournment
thereof.
1. ELECTION OF DIRECTORS. / / FOR all Class B / / WITHHOLD AUTHORITY
nominees listed to vote for all
below (except as Class B nominees
marked to the con-
trary below)
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Class B Nominees
William Dillard * Calvin N. Clyde, Jr. * Drue Corbusier * Alex Dillard * Mike
Dillard * William Dillard II * James I. Freeman * John H. Johnson * E. Ray
Kemp * William H. Sutton
2. PROPOSAL TO APPROVE THE SENIOR MANAGEMENT CASH BONUS PLAN
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THE PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
DATED: , 1994
Signature
Signature, if jointly held
PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
<PAGE>
DILLARD DEPARTMENT STORES, INC.
SENIOR MANAGEMENT CASH BONUS PLAN
WHEREAS, the Executive Compensation Committee of the Board of
Directors of the Company deems it in the best interest of the Company that
certain members of senior management be rewarded for positive performance of the
Company and be provided an incentive to give maximum effort for and to maintain
continued association and employment with the Company; and
WHEREAS, the Executive Compensation Committee of the Board of
Directors believes that the Company can best attain these and other benefits by
paying cash bonuses to such members of senior management for their services;
NOW, THEREFORE, BE IT RESOLVED:
That the Dillard Department Stores, Inc. Senior Management Cash Bonus
Plan be adopted on March 31, 1994, and that it be effective for the Company's
fiscal year commencing on January 30, 1994, subject to approval by stock-
holders at the annual meeting of the Company to be held May 21, 1994.
1. Definitions.
(a) "Pre-tax Income" shall mean for a fiscal year the Company's income
before federal and state income taxes.
(b) "Bonus Pool" shall mean for a fiscal year the amount equal to
one and one-half percent (1-1/2%) of any Pre-tax Income for the Company for
that fiscal year plus three and one-half percent (3-1/2%) of the increase in
Pre-tax Income over the prior fiscal year.
2. Administration of the Plan.
(a) Composition of the Compensation Committee. The Plan shall be
administered by a committee (the "Committee") consisting of at least two
directors of the Company appointed by the Board. All persons designated as
members of the Committee shall be "outside directors" within the meaning of
Proposed Treasury Regulation Section 1.162-27(e)(3), or any successor to such
regulation, promulgated pursuant to Section 162(m) of the Internal Revenue Code.
(b) Powers of the Compensation Committee. The Committee is authorized
to interpret the Plan, to prescribe, amend, and rescind rules and regulations
relating to the Plan, and to make such other determinations as necessary or
advisable for the administration of the Plan. The Committee may also amend,
modify or terminate the Plan; provided, however, the Committee may not, with-
out shareholder approval, amend the Plan to change the calculations used to
determine the amount of the bonus pool. Such restriction shall not, however,
prevent the Committee from reducing or eliminating any compensation that
might be paid from the bonus pool. A majority of the entire Committee shall
constitute a quorum, and the action of a majority of the members present at any
meeting at which a quorum is present shall be deemed the action of the
Committee.
<PAGE>
(c) Designation of Participants and Allocation Amounts. The mem-
bers of senior management eligible to participate in the Plan are (i) the
Chief Executive Officer, (ii) the President, (iii) the Executive Vice Presi-
dents, and (iv) the Senior Vice Presidents. The Committee shall designate,
prior to commencement of the fiscal year to which such compensation relates,
or such later date as may be permitted under applicable tax laws, those
individuals who will participate in the Plan for that fiscal year. At that
same time, the Committee also shall designate for such individuals
the pro rata percent of the Bonus Pool, to the extent one exists,
to which each individual shall be entitled at the end of the fiscal year.
The pro rata percent of the Bonus Pool allocated to any one individual shall
not exceed 1% of Pre-tax Income. Such designations shall be in writing and
shall be attached to the minutes of the Committee's meeting.
The Committee shall at all times retain the right to reduce or elimi-
nate any compensation that might be due upon the Company's attainment of Pre-
tax Income for a fiscal year, but under no circumstances shall the Committee
increase the amount of compensation payable upon the Company's attainment of
Pre-tax Income for a fiscal year.
(d) Effect of Compensation Committee's Decision. All decisions,
determinations, and interpretations of the Committee shall be final and con-
clusive on all persons affected thereby.
3. Certification of Creation of Bonus Pool and Payments Therefrom.
Following the conclusion of a fiscal year, and prior to any payments under
the Plan, the Committee shall certify, which certification may be in the form
of approved minutes of the Committee meeting in which such certification is
made, that the Company did achieve a Pre-tax Income for the fiscal year in
question, and further shall certify as to the amount of such Pre-tax Income.
