SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
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 240.14a-11(c) or 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:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
<PAGE>
[ ] 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 20, 1995
<PAGE>
PROXY STATEMENT
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 10, 1995
Notice is hereby given that the annual meeting of Stockholders
of Dillard Department Stores, Inc., will be held at the Board Room
of the First Commercial Bank Building, Capitol and Broadway, Little
Rock, Arkansas on Saturday, May 20, 1995, 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 stockholder proposal.
3. To transact such other business as may properly come
before the 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,
1995, 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 10, 1995
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 20, 1995, at 9:30 a.m. at the Board
Room of the First Commercial Bank Building, Capitol and Broadway,
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 in accordance with the
recommendations of the Board of Directors as described herein.
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 20, 1995, 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.
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,
1995, will be entitled to notice of, and to vote at, the meeting.
At that date, there were 109,028,595 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
stockholder proposal requires the affirmative vote of the holders
of a majority of the shares of common stock represented at the
meeting and entitled to vote. 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 and with
respect to the stockholder proposal will have the effect of a vote
against such proposal.
The last date for the acceptance of Proxies by management is
the close of business on May 19, 1995, 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 28, 1995.
No. of Percent
Name and Address Class Shares Owned of Class(1)
FMR Corp. Class A 8,050,768(2) 7.4%
82 Devonshire Street
Boston, Massachusetts 02109
Mellon Bank Corporation Class A 5,722,000(2) 5.2%
One Mellon Bank Center
Pittsburg, Pennsylvania 15258
W.D. Company, Inc.(3) Class A 41,496 *
Little Rock, Arkansas Class B 3,985,776 99.2%
*Denotes less than 0.1%
(1) At January 28, 1995, there were a total of 109,028,595 shares
of the Company's Class A Common Stock and 4,017,061 shares of
the Company's Class B Common Stock outstanding.
(2) Based on information contained in a Schedule 13G filed with
the Securities and Exchange Commission.
(3) 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.
<PAGE>
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.
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 28, 1995, and the year each nominee first was elected as
a 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 "Compensation of Directors
and Executive Officers" and the amount beneficially owned by the
directors and executive officers, as a group, as of January 28,
1995.
Shares of
Common Stock
Beneficially Percent
Principal Director Owned as of of
Name Age Occupation Since 1/28/95(1) Class
William Dillard 80 Chairman of 1964 Class A 766,886 (3) .7%
(b)(2) the Board and Class B 3,985,776 (3) 99.2%
Chief Executive
Officer of the
Company
Calvin N. Clyde, 74 Chairman of 1985 Class A 8,887 *
Jr. the Board, Class B None
(b) T. B. Butler
Publishing
Co., Inc.,
Tyler, TX
Robert C. Connor 53 Investments 1987 Class A 13,033 (4) *
(a) Class B None
Drue Corbusier 48 Vice Presi- 1994 Class A 282,398 (5) .3%
(b) dent of the Class B None
Company
Will D. Davis 65 Partner, 1972 Class A 11,040 *
(a) Heath, Davis Class B None
& McCalla,
Attorneys,
Austin, TX
Alex Dillard 45 Executive 1975 Class A 831,178 (3) .8%
(b)(2) Vice President Class B 3,985,776 (3) 99.2%
of the Company
Mike Dillard 43 Executive 1976 Class A 726,283 (3) .7%
(b)(2) Vice President Class B 3,985,776 (3) 99.2%
of the Company
William Dillard 50 President and 1967 Class A 976,689 (3) .9%
II Chief Operating Class B 3,985,776 (3) 99.2%
(b)(2) Officer of the
Company
James I. Freeman 45 Senior Vice 1991 Class A 215,753 (6) .2%
(b) President and Class B None
Chief Financial
Officer of the
Company
John Paul 72 Retired Member 1992 Class A None
Hammerschmidt of Congress Class B None
(a)
<PAGE>
William B. 51 Vice Chairman, 1985 Class A 6,000 (7) *
Harrison, Jr. Chemical Banking Class B None
(a) Corporation,
New York, NY
J.M. Hessels 52 Chairman, 1990 Class A None
(a) Executive Class B None
Board, Vendex
International
N.V. (Retail)
Amsterdam, The
Netherlands
John H. Johnson 77 President 1986 Class A 3,000 (8) *
(b) and Publisher, Class B None
Johnson
Publishing
Company, Inc.,
Chicago, IL
E. Ray Kemp 70 Retired Vice 1970 Class A 160,204 (9) .1%
(b) Chairman of the Class B None
Board and Chief
Administrative
Officer of the
Company
William H. 64 Managing 1994 Class A 1,000 *
Sutton Partner, Class B None
(b) Friday, Eldredge
& Clark, Attorneys
Little Rock, AR
All Nominees and Class A 5,793,768(10)(11) 5.2%
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
303,133 and 2,772 shares, respectively, of 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 400,000 shares
pursuant to currently exercisable options granted under
Company stock option plans. William Dillard II
individually owns 525,617 shares of Class A Common Stock
and has the right to acquire beneficial ownership of
409,576 shares pursuant to currently exercisable options
granted under Company stock option plans. Alex Dillard and
his wife individually own 344,105 and 36,001 shares,
respectively, of Class A Common Stock and he has the right
to acquire beneficial ownership of 409,576 shares pursuant
to currently exercisable options granted under Company
stock option plans. Mike Dillard individually owns 253,761
shares of Class A Common Stock, has sole voting power with
respect to 21,450 shares held in trust for three minor
children and has the right to acquire beneficial ownership
of 409,576 shares pursuant to currently exercisable options
granted under Company stock option plans.
(4) Includes 24 shares held in trust for a minor child, with
respect to which Robert C. Connor has sole voting power,
and nine shares owned by his wife.
(5) Drue Corbusier and her husband individually own 123,979 and
14,400 shares, respectively, of Class A Common Stock, and
she has the right to acquire beneficial ownership of
144,019 shares pursuant to currently exercisable options
granted under Company stock option plans.
(6) James I. Freeman individually owns 43,609 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 160,144 shares pursuant to
currently exercisable options granted under Company stock
option plans.
(7) Includes 3,300 shares owned by his wife.
<PAGE>
(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 Class A Common Stock, and
he has sole voting power with respect to 21,500 shares held
in trust for two 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
3,253,073 shares pursuant to currently exercisable options
granted under Company stock option plans.
The following nominees for director also hold directorships in
the designated companies:
Name Director of
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 Corporation and
Freeport-McMoran
J. M. Hessels Barnes & Noble, Inc. and Software Etc.
Stores, Inc.
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, which
subsequently was acquired by Boatmen's Bancshares, Inc. E. Ray
Kemp's retirement was effective in March, 1992. Each nominee for
director was elected to the Board of Directors at the annual
meeting of stockholders held May 21, 1994.
The Board of Directors met four times during the last 12
months, on May 21, September 1, and November 12, 1994, and
March 18, 1995.
Audit Committee members are John Paul Hammerschmidt, Chairman,
E. Ray Kemp, and William H. Sutton. The Audit Committee held three
meetings during the year.
Executive Compensation Committee members are Calvin N. Clyde,
Jr., Robert C. Connor and Will D. Davis, Chairman. The Executive
Compensation Committee held two meetings during the year.
Stock Option Committee members are Calvin N. Clyde, Jr.,
Chairman, William B. Harrison, Jr., and John H. Johnson. The Stock
Option Committee held two meetings during the year.
Each of the following nominees for director 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: John H. Johnson.
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.
<PAGE>
Summary Compensation Table
<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
Compensation Award(s) Options/ Payouts Compensation
Name and Year Salary($) Bonus($) ($) ($) SARs(#) ($) ($)(1)
Principal Position
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William Dillard
Chairman of the Board 1994 $860,000 $1,040,000 - - 150,000 - $173,313
and Chief Executive 1993 835,000 1,135,000 - - 100,000 - 114,013
Officer 1992 810,000 1,255,000 - - 75,000 - 348,877
William Dillard II
President and Chief 1994 560,000 1,040,000 - - 150,000 - 152,305
Operating Officer 1993 535,000 1,135,000 - - 100,000 - 80,500
1992 510,000 1,255,000 - - 75,000 - 286,623
Alex Dillard
Executive Vice 1994 470,000 1,040,000 - - 150,000 - 164,187
President 1993 445,000 1,135,000 - - 100,000 - 70,600
1992 420,000 1,255,000 - - 75,000 - 274,320
Mike Dillard
Executive Vice 1994 425,000 695,000 - - 150,000 - 106,132
President 1993 405,000 755,000 - - 100,000 - 61,250
1992 380,000 835,000 - - 75,000 - 189,739
James I. Freeman
Senior Vice President 1994 380,000 205,000 - - 60,000 - 53,640
and Chief Financial 1993 365,000 220,000 - - 50,000 - 46,125
Officer 1992 345,000 237,500 - - 30,000 - 75,719
</TABLE>
(1) Amounts represent the Company's defined contributions,
for the fiscal year indicated, for the benefit of the named
executive officers pursuant to its Retirement Plan.
<PAGE>
Stock Option Grants
The following table sets forth information concerning stock
options granted to the named executive officers under the Company's
1990 Stock Option Plan:
Option/SAR Grants in Last Fiscal Year
<TABLE>
Potenial Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Option Term
(a) (b) (c) (d) (e) (f) (g)
Number of % of Total
Securities Underlying Options/SARs Exercise or
Options/ Granted to Employees Base Price Expiration
Name SARs Granted (#)(1) In Fiscal Year ($/Sh) Date 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
William Dillard 150,000 7.6% $31.25 5/21/99 $1,295,250 $2,861,700
William Dillard II 150,000 7.6% 31.25 5/21/99 1,295,250 2,861,700
Alex Dillard 150,000 7.6% 31.25 5/21/99 1,295,250 2,861,700
Mike Dillard 150,000 7.6% 31.25 5/21/99 1,295,250 2,861,700
James I. Freeman 60,000 3.0% 31.25 5/21/99 518,100 1,144,680
</TABLE>
(1) If payment for shares upon exercise of any of these options is
made with shares of the Company's common stock owned by the
optionee, the optionee shall be granted on that date an option
("Reload Option") to purchase a number of shares equal to the
number of shares tendered to the Company. The exercise price
of the Reload Option shall be the fair market price of the
Company's common stock on the Reload Option grant date, and the
expiration date of the Reload Option shall be the same as that
of the original option.
Stock Option Exercises and Holdings
The following table sets forth information concerning stock
options exercised during the last fiscal year and stock options
held as of the end of the last fiscal year by the named executive
officers.
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End
Option/SAR Values
<TABLE>
(a) (b) (c) (d) (e)
Number of Securities Underlying Value of Unexercised
Unexercised Options/ In-the-Money Options/
Shares Acquired SARS at FY-End (#) SARS at FY-End ($)
Name on Exercise (#) Value Realized($) Exercisable (1) Exercisable (1)(2)
<S> <C> <C> <C> <C>
William Dillard 0 $0 400,000 $0
William Dillard II 0 0 409,576 0
Alex Dillard 0 0 409,576 0
Mike Dillard 0 0 409,576 0
James I. Freeman 0 0 160,144 0
</TABLE>
(1) No unexercisable options are held by the named executive
officers.
(2) Amounts are zero because the exercise price for the shares
underlying the unexercised options exceeded the fair market
value of such shares as of fiscal year end.
<PAGE>
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 92,066 117,066 142,066 167,066
350,000 79,566 108,733 137,900 167,066 196,233
400,000 92,066 125,400 158,733 192,066 225,400
450,000 104,566 142,066 179,566 217,066 254,567
500,000 117,066 158,733 200,400 242,067 283,733
550,000 129,566 175,400 221,233 267,067 312,900
600,000 142,066 192,066 242,067 292,067 342,067
650,000 154,566 208,733 262,900 317,067 371,233
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 terms certain beginning at age 65 and
are not subject to deduction for social security or other offset
amounts.
Compensation of Directors
Directors who are not officers of the Company each receive an
annual retainer of $27,250, $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, Jr., Robert C. Connor, and Will D. Davis. Mr.
Davis is a partner of the law firm 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 1994 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 attainment of profitability of the
Company, and (3) to align the interests of executives with the
long-term interests of stockholders by awarding stock options to
executives as part of the compensation provided to them.
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 Poor's Department Store Index. 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 has made
these comparisons, it also has taken 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
retained by the Company is lower than the number of senior
executives at other companies of similar size.
Currently, the Company's compensation program consists of salary,
annual cash performance bonus based on the profitability of the
Company, and long-term incentive opportunities in the form of stock
options. The compensation program is focused both on short-term
and long-term performance of the Company, rewarding executives for
both achievement 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. Such salary recommendations are made at the
discretion of the Executive Compensation Committee and are not
specifically related to any company performance criteria as are
both the cash performance bonus and stock option portions of the
compensation program, which are discussed below. The Executive
Compensation Committee does, however, base any increase in salary
recommendations on target salaries calculated by performing a
regression analysis on salaries paid versus total revenues for the
comparison group. For fiscal 1994, the salary recommendations made
by the Executive Compensation Committee were slightly below the
target salaries produced by this analysis.
Cash Performance Bonus -- Cash performance bonuses may be paid
annually to senior management. For bonuses to be paid, however,
the Company must have income before federal and state income taxes
("pre-tax income") for the fiscal year. The Executive Compensation
Committee, within ninety (90) days after the start of a fiscal
year, designates those individuals in senior management eligible to
receive a cash performance bonus. Bonuses are paid at the
conclusion of a fiscal year from a bonus pool which is equal to one
and one-half percent (1-1/2%) of the Company's pre-tax income plus
three and one-half (3-1/2%) of the increase in pre-tax income over
the prior fiscal year. When the Executive Compensation Committee
designates the individuals eligible to participate in the cash
performance bonus program, it also designates the percent of the
bonus pool each individual will be entitled to receive. The
Executive Compensation Committee retains at all times the authority
to adjust downward the amount of bonus any individual may receive
pursuant to the above-described formula. For fiscal 1994, the
Company experienced a pre-tax income of $406,110,000 and an
increase in pre-tax income over the prior fiscal year of
$6,576,000.
The Executive Compensation Committee made a decision to adjust
downward by approximately $2,100,000 the amount of bonus which the
named executive officers would receive for fiscal 1994 pursuant to
the cash performance bonus program.
Stock Options -- Stock option grants under the Company's 1990
incentive and Non-Qualified Stock Option Plan are utilized by the
Company for long-term incentive compensation for executive
officers. For fiscal 1994, the Stock Option Committee utilized a
formula for determining the number of stock options granted to
executive officers. Under such formula, each named executive
officer in the Summary Compensation Table received a grant covering
the number of shares with a market value approximately equal to ten
percent (10%) of the officer's total compensation for the previous
fiscal year. Because the cash bonus portion of an individual's
total compensation is tied directly to the Company's pre-tax income
for the fiscal year plus the increase in pre-tax income over the
prior fiscal year, the stock option portion of the Company's
compensation program is partially tied to Company performance. The
exercise price for the options granted is one hundred percent
(100%) of the fair market value of the shares underlying such
options on the date of grant. The stock options are exercisable at
any time up to five (5) years from the date of grant. When making
option grants, the Stock Option Committee does not consider the
number of options already held by an executive officer.
As discussed in last year's Executive Compensation Committee
Report, the Omnibus Budget Reconciliation Act of 1993 prevents
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 million.
This deduction limit does not apply to "performance based compensation."
The Executive Compensation Committee believes that the necessary
steps have been taken to qualify as performance-based compensation
the compensation paid under the cash performance bonus and stock
option portions of the Company's compensation program.
Chief Executive Officer
In setting the Chief Executive Officer's compensation, the
Executive Compensation Committee makes the same determination with
regard to salary, cash performance bonus and stock options as
discussed above for the other named executive officers. For fiscal
1994, the increase in the Chief Executive Officer's salary over the
prior fiscal year resulted in a salary slightly lower than the
target salary calculated by performing the regression analysis
discussed above. When targeting the Chief Executive Officer's
salary, and when establishing the portion of the bonus pool to
which the Chief Executive Officer would be entitled, the Executive
Compensation Committee took into account the Chief Executive
Officer's contribution and leadership as well as his vision in
founding the Company.
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 on 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 on the
Company's Class A Common Stock assumes $100 invested in such stock
on February 3, 1990 and assumes reinvestment of dividends.
The following table is submitted in lieu of the required graph:
YEAR 1990 1991 1992 1993 1994
Dillard Department Stores,Inc $137.24 $186.24 $222.17 $162.94 $119.57
Standard & Poor's 500 104.51 124.22 133.34 146.35 142.95
Standard & Poor's Dept Stores 105.38 126.73 137.89 148.41 133.11
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 of the law firm
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.
SECTION 16(a) REPORTING DELINQUENCIES
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 28, 1995, all
Section 16(a) filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were satisfied.
<PAGE>
STOCKHOLDER PROPOSAL
The School Sisters of St. Francis - U.S. Province, 1515 S.
Layton Blvd., Milwaukee, WI 53251, owners of 5,300 shares of Class
A Common Stock, The Church of the Brethren General Board, 1451
Dundee Ave., Elgin, IL 60120-1694, owners of 500 shares of Class A
Common Stock, and The Domini Social Equity Fund, 6 St. James
Avenue, Boston, MA 02116, owners of 2,200 shares of Class A Common
Stock, have indicated that they intend to propose the following
resolution for action at the meeting:
"RESOLVED, the shareholders request our company to prepare a
report at reasonable cost, available to shareholders and employees
reporting on the following issues. This report, which may omit
confidential information, shall be available by September 1995.
1. A chart identifying employees according to their sex and
race in each of the nine major Equal Employment
Opportunity Commission defined job categories for 1992,
1993, 1994 listing either numbers or percentages in each
category.
2. A summary description of any Affirmative Action policies
and programs to improve performances, including job
categories where women and minorities are underutilized.
3. A description of any policies and programs oriented
specifically toward increasing the number of managers, who
are qualified females and/or belong to minorities.
4. A general description of how our company publicizes our
company's affirmative action policies and programs to
merchandise suppliers and service providers.
5. A description of any policies and programs utilizing the
purchase of goods and services from minority and/or
female-owned business enterprises."
The following statement was submitted in support of such
resolution:
Supporting Statement
"As shareholders we believe in a strong corporate commitment to
workplace issues and policies opposing all forms of discrimination.
According to a Wall Street Journal article Working Assets Common
Holdings sold Dillard's stock worth $2.7 million and the NAACP's
Fair Share Program dropped Dillard's in light of questions
regarding the Company's EEO record and social programs. Since a
substandard equal employment opportunity record leaves a company
open to expensive legal action, poor employee morale and even the
loss of certain types of business, we believe it is in the
Company's and shareholder's interests to have information on our
Company's equal employment record available.
One of the country's largest institutional investors, the
California Public Employees' Retirement System, includes workplace
performance guidelines as part of their corporate performance
criteria. The Department of Labor's Glass Ceiling Commission has
for the last four years conducted studies with the help of a number
of corporations and in 1994 held public hearings to ascertain the
status of equality and diversity in corporate America.
As a major employer we are in a position to take the lead in
insuring that employees receive fair employment opportunities and
promotions. We believe a report containing the basic information
requested in this resolution keeps the issue high on top
management's and the Board of Directors' agenda and reaffirms our
public commitment to equal employment opportunities and programs
responsive to the concerns of all employees. Publicizing our
standards is helpful to our investors and the companies with whom
we do business.
We are requesting that EEO information already gathered for the
purpose of complying with government regulations be made available
to Company shareholders on request. The format of the report
requested is not the central question. Many corporations openly
release their EEO-1 information in annual reports or public
interest booklets.
Different companies use different styles and levels of detail in
telling their story to shareholders. Capital Cities/American
Broadcasting Company, Bristol-Meyers, Squibb and Travelers produced
a substantial magazine style report. Campbell Soup produced a
straightforward four page document. We feel this request is fair
and reasonable."
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THE ADOPTION OF THIS
PROPOSAL FOR THE FOLLOWING REASONS:
The Company firmly supports and believes it is in full
compliance with federal and state employment opportunity laws.
Your Board of Directors supports management's policy of recruiting,
hiring, training and promoting the most qualified individuals
available at each job level without regard to race, color,
religion, sex, national origin, age, handicap or veteran status.
The Company's employment statistics as well as its record of
vindication in the defense of employment litigation provide clear
evidence of management's commitment to this policy.
Your Board of Directors further supports the Company's policy of
selecting vendors and suppliers based on the quality and value of
their products to our customers, as well as their reliability in
past dealings with the Company. Your Board feels this policy is in
the best interest of the shareholders and that a further statement
to shareholders of this policy is unnecessary.
The Board of Directors does not believe that the public
dissemination of reports that contain sensitive information
protected from public disclosure by federal law promotes the ends
of social equality and equal opportunity in any meaningful way.
The Company compiles and files federally mandated statistical
reports regarding employment practices at significant time and
expense to the Company. While the information in these reports in
fact illustrates the Company's commitment to equal opportunity, the
compilation and dissemination of these reports, of themselves,
would do nothing to promote this commitment. Additional reports,
as requested by the proponents, would increase the Company's
expenditures, and will not assist management in providing a
workplace where each individual is judged fairly according to his
or her efforts and abilities.
The information that the proponents seek is sensitive and
potentially susceptible to misinterpretation by persons who may,
for whatever reason, be interested in distracting management or
initiating unfounded legal action. In fact, the requested
reporting could provide unsophisticated activist groups with the
false impression of statistical underutilization and encourage them
to harass management or to initiate baseless legal actions. The
results may prove costly to the Company and distracting to
management.
The Company strives to respond meaningfully to all legitimate
shareholder concerns. To this end, management has initiated a
dialogue with respect to this shareholder proposal. The open
communication of information about relevant Company policies and
procedures between senior executives and concerned shareholders has
been and will continue to be fruitful and enlightening. Although
the Company may be in agreement and compliance with the ultimate
objectives of the shareholder proponents in many respects, the
Directors of the Company do not believe it is in the shareholders'
best interest to increase the burdens already placed on management
or to expose the Company to potentially costly litigation by
requiring the preparation and dissemination of the requested
reports.
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THIS STOCKHOLDER
PROPOSAL. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO
VOTED UNLESS STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
<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.
STOCKHOLDER PROPOSALS FOR THE 1996 ANNUAL MEETING
Proposals of stockholders intended to be presented at the
Company's annual meeting of stockholders in 1996 must be received
by the Company at its principal executive offices not later than
December 12, 1995 in order to be included in the Company's Proxy
Statement and form of Proxy relating to that meeting.
ANNUAL REPORTS
The Company's annual report for the fiscal year ended January
28, 1995 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 1994 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, 1995,
at the annual meeting of stockholders to be
held on May 20, 1995, 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. STOCKHOLDER PROPOSAL REQUESTING PREPARATION OF EMPLOYMENT PRACTICES
REPORT.
(Management of the Company opposes this proposal.)
/ / 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 PROPOSAL 1 AND AGAINST PROPOSAL 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: , 1995
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, 1995,
at the annual meeting of stockholders to be
held on May 20, 1995, 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. STOCKHOLDER PROPOSAL REQUESTING PREPARATION OF EMPLOYMENT PRACTICES
REPORT.
(Management of the Company opposes this proposal.)
/ / 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 PROPOSAL 1 AND AGAINST PROPOSAL 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: , 1995
Signature
Signature, if jointly held
PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
