<PAGE>
Filed Pursuant to Rule 424(b)(2)
SEC File No. 33-53046
PROSPECTUS SUPPLEMENT
(To Prospectus dated October 27, 1992)
$100,000,000
Dillard Department Stores, Inc.
6 7/8% NOTES DUE 2005
----------------
Interest payable June 1 and December 1
----------------
THE NOTES WILL MATURE ON JUNE 1, 2005 AND WILL NOT BE REDEEMABLE PRIOR TO
MATURITY. THE NOTES WILL BE REPRESENTED BY A GLOBAL NOTE REGISTERED IN
THE NAME OF A NOMINEE OF THE DEPOSITORY TRUST COMPANY, AS DEPOSITARY
(THE "DEPOSITARY"). BENEFICIAL INTERESTS IN THE NOTES WILL BE SHOWN
ON, AND TRANSFERS THEREOF WILL BE EFFECTED ONLY THROUGH, RECORDS
MAINTAINED BY THE PARTICIPANTS OF THE DEPOSITARY. EXCEPT AS
DESCRIBED IN THE PROSPECTUS, NOTES IN CERTIFICATED FORM WILL
NOT BE ISSUED IN EXCHANGE FOR THE GLOBAL NOTE.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------
PRICE 99.182% AND ACCRUED INTEREST, IF ANY
----------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3)
--------- -------------- -------------
<S> <C> <C> <C>
Per Note............................... 99.182% .650% 98.532%
Total.................................. $99,182,000 $650,000 $98,532,000
</TABLE>
--------
(1) Plus accrued interest, if any, from June 1, 1995.
(2) The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deduction of expenses payable by the Company estimated at
$100,000.
----------------
The Notes are offered, subject to prior sale, when, as and if accepted by
the Underwriter and subject to approval of certain legal matters by Simpson
Thacher & Bartlett, counsel for the Underwriter. It is expected that delivery
of the Notes will be made on or about June 1, 1995, through the book-entry
facilities of The Depository Trust Company, against payment therefor in New
York funds.
----------------
MORGAN STANLEY & CO.
Incorporated
May 24, 1995
<PAGE>
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IN CONNECTION WITH THE
OFFER CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY THE UNDERWRITER. THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OTHER SECURITIES OFFERED
HEREIN IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH STATE. THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN
IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
----------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
RECENT DEVELOPMENTS
On May 9, 1995, the Company released certain financial information relating
to the Company's quarter ended April 29, 1995. Sales for such quarter were
$1,326,754,000, net income was $48,379,000, and earnings per share were $.43,
as compared to $1,283,941,000, $48,306,000 and $.43, respectively, for the
quarter ended April 30, 1994.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the Notes
offered hereby (the "Notes") will be used to reduce short-term indebtedness.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for the
Company for each of the years in the five year period ended January 28, 1995.
For purposes of computing the ratio, earnings consist of earnings before income
taxes plus fixed charges (less capitalized interest), and fixed charges consist
of interest expense, preferred stock dividends, capitalized interest and the
interest portion of rental expense which is approximated at one-third of rent
expense.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
----------------------------------------------------------------------------------
JANUARY 28, JANUARY 29, JANUARY 30, FEBRUARY 1, FEBRUARY 2,
1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
3.72 3.57 3.59 3.40 3.38
</TABLE>
S-2
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company and its
consolidated subsidiaries as of January 28, 1995 and as adjusted to give effect
to the issuance by the Company of the Notes offered hereby.
<TABLE>
<CAPTION>
AS
OUTSTANDING ADJUSTED(1)
----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Short-Term Debt Including Current Portion of Long-Term
Debt and Capital Lease Obligations.................... $ 147,982 $ 49,450
========== ==========
Long-Term Debt......................................... 1,178,503 1,277,685
Capital Lease Obligations.............................. 22,279 22,279
---------- ----------
Stockholders' Equity
5% Cumulative Preferred Stock, $100 par value;
authorized shares 5,000; issued shares 4,400......... 440 440
Additional Preferred Stock, $.01 par value; authorized
shares 10,000,000;
no shares issued..................................... -- --
Class A Common Stock, $.01 par value; authorized
shares 289,000,000; issued shares 109,028,595........ 1,090 1,090
Class B Common Stock, $.01 par value; authorized
shares 11,000,000;
issued shares 4,017,061.............................. 40 40
Additional Paid-in Capital............................. 624,086 624,086
Retained Earnings...................................... 1,697,911 1,697,911
---------- ----------
Total Stockholders' Equity......................... 2,323,567 2,323,567
---------- ----------
Total Capitalization............................... $3,524,349 $3,623,531
========== ==========
</TABLE>
--------
(1) Does not include expenses in connection with the issuance of the Notes
offered hereby, estimated to be $100,000.
S-3
<PAGE>
DESCRIPTION OF NOTES
GENERAL
The Notes are to be issued under an Indenture dated May 15, 1988 (as
supplemented, the "Indenture") between the Company and Chemical Bank, as
trustee (the "Trustee"). Provisions of the Indenture are more fully described
under "Description of Debt Securities" in the Prospectus to which reference is
hereby made.
The Notes will mature on June 1, 2005. Interest on the Notes will accrue
from June 1, 1995 and will be payable semiannually, on each June 1 and
December 1, beginning December 1, 1995, to the persons in whose names the
Notes are registered at the close of business on the May 15 or November 15
prior to the payment date at the annual rate set forth on the cover page of
this Prospectus Supplement.
The Notes will be issued only in book-entry form through the facilities of
the Depositary, and will be in denominations of $1,000 and integral multiples
thereof. Transfers or exchanges of beneficial interests in Notes in book-entry
form may be effected only through a participating member of the Depositary.
See "Global Notes". As described in the Prospectus, under certain
circumstances Notes may be issued in certificated form in exchange for the
Global Notes. In the event that Notes are issued in certificated form, such
Notes may be transferred or exchanged at the offices described in the
immediately following paragraph.
Payments on Notes issued in book-entry form will be made to the Depositary.
In the event Notes are issued in certificated form, principal and interest, if
any, will be payable, the transfer of the Notes will be registrable, and Notes
will be exchangeable for Notes bearing identical terms and provisions at the
office of the Trustee in The City of New York designated for such purpose,
provided that payment of interest may be made at the option of the Company by
check mailed to the address of the person entitled thereto as shown on the
Securities Register.
The Notes are not redeemable prior to maturity and are not entitled to any
sinking fund.
By Board Resolution the Company has established that the defeasance
provisions described under "Defeasance of Offered Debt Securities or Certain
Covenants in Certain Circumstances" and the event of default described in
subparagraph (e) under "Events of Default" in the Prospectus will be
applicable to the Notes.
GLOBAL NOTES
The Notes will be issued in whole or in part in the form of one or more
Global Notes deposited with, or on behalf of the Depositary, and registered in
the name of a nominee of the Depositary. Except under the limited
circumstances described in the Prospectus under "Description of Debt
Securities -- Global Notes," owners of beneficial interests in Global Notes
will not be entitled to physical delivery of Notes in certificated form.
Global Notes may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any nominee to a
successor of the Depositary or a nominee of such successor.
The Depositary has advised the Company and the Underwriter as follows: The
Depositary is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. The Depositary was created to hold securities
of its participants and to facilitate the clearance and settlement of
securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movements of securities certificates. The
Depositary's participants include securities brokers and dealers (including
the Underwriter), banks, trust
S-4
<PAGE>
companies, clearing corporations, and certain other organizations, some of whom
(and/or their representatives) own the Depositary. Access to the Depositary's
book-entry system is also available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship
with a participant, either directly or indirectly. Persons who are not
participants may beneficially own securities held by the Depositary only
through participants.
THE UNDERWRITER
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated the date hereof, Morgan Stanley & Co. Incorporated (the
"Underwriter") has agreed to purchase, and the Company has agreed to sell to
the Underwriter, $100,000,000 principal amount of Notes.
The Underwriting Agreement provides that the obligation of the Underwriter to
pay for and accept delivery of the Notes is subject to the approval of certain
legal matters by its counsel and to certain other conditions. The Underwriter
is obligated to take and pay for all the Notes if any are taken.
The Underwriter proposes to offer part of the Notes directly to the public at
the public offering price set forth on the cover page hereof and part to
certain dealers at a price that represents a concession not in excess of .40%
of the principal amount of the Notes. The Underwriter may allow, and such
dealers may reallow, a concession not in excess of .25% of the principal amount
of the Notes to certain other dealers.
The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
The Company does not intend to apply for listing of the Notes on a national
securities exchange, but has been advised by the Underwriter that it presently
intends to make a market in the Notes as permitted by applicable laws and
regulations. The Underwriter is not obligated, however, to make a market in the
Notes and any such market making may be discontinued at any time at the sole
discretion of the Underwriter. Accordingly, no assurance can be given as to the
liquidity of, or trading markets for, the Notes.
From time to time, the Underwriter has acted as financial advisor to the
Company and has received compensation for such services.
S-5
<PAGE>
DILLARD DEPARTMENT STORES, INC.
DEBT SECURITIES
----------------
The Company may from time to time offer Debt Securities consisting of
debentures, notes and/or other unsecured evidences of indebtedness in one or
more series at an aggregate initial offering price not to exceed U.S.
$300,000,000 or its equivalent in any other currency or composite currency. The
Debt Securities may be offered as separate series in amounts, at prices and on
terms to be determined at the time of sale. The accompanying Prospectus
Supplement sets forth with regard to the series of Debt Securities in respect
of which this Prospectus is being delivered the title, aggregate principal
amount, denominations (which may be in United States dollars, in any other
currency or in a composite currency), maturity, rate (which may be fixed or
variable), if any, and time of payment of any interest, any terms for
redemption at the option of the Company or the holder, any terms for sinking
fund payments, any terms regarding payment in or on the basis of currencies
other than U.S. dollars, any listing on a securities exchange and the initial
public offering price and any other terms in connection with the offering and
sale of such Debt Securities.
The Company may sell Debt Securities through underwriters, dealers or agents,
or directly to one or more purchasers. The Prospectus Supplement will set forth
the names of underwriters, dealers or agents, if any, any applicable
commissions or discounts and the net proceeds to the Company from any such
sale. See "Plan of Distribution" for possible indemnification arrangements for
underwriters, dealers, agents and purchasers.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this Prospectus is October 27, 1992
<PAGE>
AVAILABLE INFORMATION
Dillard Department Stores, Inc. (the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934 (the
"Exchange Act") and in accordance therewith files reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other information can be inspected
and copied at the public reference facilities maintained by the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the following
Regional Offices of the Commission: Chicago Regional Office, Suite 1400,
Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois 60661-
2511, and New York Regional Office, Room 1400, 75 Park Place, New York, New
York 10007. Copies of such material can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. In addition, such material may also be inspected at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005 on which certain of the Company's securities are listed.
The Company has filed with the Commission a registration statement on Form S-
3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended. This
Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is hereby made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed with the Commission, are hereby incorporated
by reference in this Prospectus: (i) the Company's Annual Report on Form 10-K
for the fiscal year ended February 1, 1992; (ii) the Company's Quarterly
Reports on Form 10-Q for the quarters ended May 2, 1992 and August 1, 1992 (as
amended by a Form 8 filed October 1, 1992); and (iii) the Company's Current
Reports on Form 8-K dated June 5, 1992, July 17, 1992, September 3, 1992 and
October 2, 1992.
All other documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Debt Securities shall be deemed
to be incorporated by reference into this Prospectus and to be a part hereof
from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein, or
contained in this Prospectus, shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon the request of any such person, a copy of any or
all of the documents incorporated herein by reference, other than the exhibits
to such information (unless such exhibits are specifically incorporated by
reference in such documents). Requests should be directed to Dillard Department
Stores, Inc., 1600 Cantrell Road, Little Rock, Arkansas 72201, Attention: James
E. Darr, Jr., telephone (501) 376-5200.
2
<PAGE>
THE COMPANY
Dillard Department Stores, Inc. is a regional group of traditional department
stores operating, as of October 1, 1992, 206 stores in Alabama, Arizona,
Arkansas, Florida, Illinois, Iowa, Kansas, Louisiana, Mississippi, Missouri,
Nebraska, Nevada, New Mexico, North Carolina, Oklahoma, South Carolina,
Tennessee and Texas. The stores vary from 30,000 square feet to 370,000 square
feet in size, with the area of typical stores ranging between 80,000 to 220,000
square feet, and the average store size being approximately 140,000 square
feet. The stores are owned either by the Company or a wholly owned subsidiary,
with the exception of 79 stores, which are leased from third parties. The
stores feature branded goods in the middle to upper-middle price ranges and
cater to a broad spectrum of the population. With minor exception, all stores
are full-line department stores and sell quality name-brand apparel and
accessories for men, women and children, as well as accessories for the home
such as linens and domestics, china, silverware, draperies and housewares.
Special emphasis is placed on fashion-oriented apparel and home furnishings.
Prior to June 1991, Dillard Investment Co., Inc. ("DIC"), a wholly owned
subsidiary of the Company, purchased substantially all of the Company's
accounts receivable. In June 1991, Dillard National Bank ("DNB"), a national
credit card bank and wholly owned subsidiary of DIC, purchased approximately
40% of the Company's accounts receivable then owned by DIC and which were
associated with customers residing in certain states. All new accounts
receivable in these states will be created and owned by DNB.
Additionally, the Company, in a joint venture with The Edward J. DeBartolo
Corporation ("DeBartolo"), owns The Higbee Company, which operates 14
department/specialty stores located in Cleveland, Canton and Akron, Ohio. The
Company has, however, entered into an agreement with DeBartolo to purchase all
of DeBartolo's interest in The Higbee Company.
The Company is incorporated under the laws of the State of Delaware. The
executive offices of the Company are located at 1600 Cantrell Road, Little
Rock, Arkansas 72201, telephone number:(501) 376-5200.
USE OF PROCEEDS
Except as may be set forth in an applicable Prospectus Supplement
accompanying this Prospectus, the net proceeds to be received by the Company
from the issuance of up to $300,000,000 aggregate principal amount of the
Company's debt securities (the "Debt Securities") offered hereby will be used
to reduce short-term and other indebtedness, to finance the Company's
operations and for other general corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for the
Company for each of the years in the five year period ended February 1, 1992
and for the six months ended August 1, 1992 andAugust 3, 1991. For purposes of
computing the ratio, earnings consist of earnings before income taxes plus
fixed charges (less capitalized interest), and fixed charges consist of
interest expense, preferred stock dividends, capitalized interest and the
interest portion of rental expense which is approximated at one-third of rent
expense.
<TABLE>
<CAPTION>
UNAUDITED
SIX MONTHS
ENDED FISCAL YEAR ENDED
--------------- -----------------------------------------
AUG. 1, AUG. 3, FEB. 1, FEB. 2, FEB. 3. JAN. 28, JAN. 30,
1992 1991 1992 1991 1990* 1989 1988
------- ------- ------- ------- ------- -------- --------
<C> <S> <C> <C> <C> <C> <C>
2.91 2.84 3.40 3.38 3.07 2.75 3.02
</TABLE>
--------
* 53 Weeks
3
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities in respect of which this Prospectus is being delivered
(the "Offered Debt Securities") are to be issued under an Indenture dated as of
May 15, 1988, as supplemented by a First Supplemental Indenture dated as of
December 16, 1988, and a Second Supplemental Indenture dated as of September
14, 1990 (the Indenture, as supplemented, being referred to herein as the
"Indenture") between the Company and Chemical Bank, as Trustee (the "Trustee"),
a copy of which is filed as an exhibit to the Registration Statement. The
following summaries of certain provisions of the Indenture do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Indenture, including the definitions therein of
certain terms. Whenever particular sections of, or terms defined in, the
Indenture are referred to, such sections or defined terms are incorporated
herein by reference.
GENERAL
The Debt Securities will be unsecured obligations of the Company and will
rank on a parity with all other unsecured and unsubordinated indebtedness of
the Company.
The Indenture does not limit the aggregate principal amount of the Debt
Securities or of any particular series of Offered Debt Securities and provides
that Debt Securities may be issued thereunder from time to time in one or more
series. All Debt Securities of any series need not be issued at the same time
or bear interest at the same rate or mature on the same date.
Reference is made to the Prospectus Supplement (the "Prospectus Supplement")
relating to the Offered Debt Securities for the following terms thereof: (1)
the title of the Offered Debt Securities; (2) any limit on the aggregate
principal amount of the Offered Debt Securities; (3) the date or dates on which
the Offered Debt Securities will mature; (4) the rate or rates per annum (or
the method of calculating such rates) at which the Offered Debt Securities will
bear interest, if any, and the date from which such interest, if any, will
accrue; (5) the Interest Payment Dates on which any such interest on the
Offered Debt Securities will be payable and the Regular Record Date for any
interest payable on any Offered Debt Securities on any Interest Payment Date
and the extent to which, or the manner in which, any interest payable on a
global Debt Security (a "Global Note") on an Interest Payment Date will be paid
if other than in the manner described under "Global Notes" below; (6) the
dates, if any, on which and the price or prices at which the Offered Debt
Securities may, pursuant to any mandatory or optional sinking fund provisions,
be redeemed by the Company and other detailed terms and provisions of any such
sinking funds; (7) the date, if any, after which and the price or prices at
which the Offered Debt Securities may, pursuant to any optional redemption
provisions, be redeemed at the option of the Company or of the holder thereof
and other detailed terms and provisions of any such optional redemption; (8)
the right of the Company to defease the Offered Debt Securities or certain
covenants under the Indenture; (9) the currency or currencies, which may be a
composite currency such as the European Currency Unit, of payment of principal
of and premium, if any, and interest on the Offered Debt Securities, if other
than U.S. Dollars; (10) whether the Offered Debt Securities are to be issued
with original issue discount within the meaning of Section 1273(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), and the regulations
thereunder; (11) whether the Offered Debt Securities are to be issued in whole
or in part in the form of one or more Global Notes and, if so, the identity of
the depositary, if any, for such Global Note or Notes; (12) any addition to, or
modification or deletion of, any Events of Default or covenants provided for
with respect to the Offered Debt Securities; (13) any index used to determine
the amount of payments of principal of and premium, if any, and interest on the
Offered Debt Securities; and (14) any other terms of the Offered Debt
Securities not inconsistent with the terms of the Indenture.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
principal of and any premium and interest on the Offered Debt Securities will
be payable, and the Offered Debt Securities will be exchangeable and transfers
thereof will be registrable, at the corporate trust office of the Trustee in
New York, New York, provided that, at the option of the Company, payment of any
interest may be made by check mailed to the address of the person entitled
thereto as it appears in the Security Register. Unless otherwise
4
<PAGE>
indicated in the Prospectus Supplement relating thereto, payment of any
interest due on any Offered Debt Security will be made to the Person in whose
name such Offered Debt Security is registered at the close of business on the
Regular Record Date for such interest. (Sections 301, 305, 307 and 1002)
Unless otherwise indicated in the Prospectus Supplement relating thereto, the
Offered Debt Securities will be issued only in fully registered form without
coupons in denominations of $1,000 or any integral multiple thereof, and no
service charge will be made for any transfer or exchange of such Offered Debt
Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith. (Sections
302 and 305)
Debt Securities may be issued under the Indenture as Original Issue Discount
Securities to be offered and sold at a substantial discount from the principal
amount thereof. Special Federal income tax, accounting and other considerations
applicable thereto will be described in the Prospectus Supplement relating to
any such Original Issue Discount Securities.
GLOBAL NOTES
The Debt Securities of a series may be issued in whole or in part in the form
of one or more Global Notes that will be deposited with or on behalf of a
depositary located in the United States (a "Depositary") identified in the
Prospectus Supplement relating to such series.
The specific terms of the depositary arrangement with respect to any Debt
Securities of a series will be described in the Prospectus Supplement relating
to such series. The Company anticipates that the following provisions will
apply to all depositary arrangements.
Unless otherwise specified in an applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Note to be deposited with or
on behalf of a Depositary will be represented by a Global Note registered in
the name of such Depositary or its nominee. Upon the issuance of a Global Note
in registered form, the Depositary for such Global Note will credit, on its
book-entry registration and transfer system, the respective principal amounts
of the Debt Securities represented by such Global Note to the accounts of
institutions that have accounts with such Depositary or its nominee
("participants"). The accounts to be credited shall be designated by the
underwriters or agents of such Debt Securities or by the Company, if such Debt
Securities are offered and sold directly by the Company. Ownership of
beneficial interests in such Global Notes will be limited to participants or
persons that may hold interests through participants. Ownership of beneficial
interests by participants in such Global Notes will be shown on, and the
transfer of that ownership interest will be effected only through, records
maintained by the Depositary or its nominee for such Global Note. Ownership of
beneficial interests in Global Notes by persons that hold through participants
will be effected only through records maintained by such participants. The laws
of some jurisdictions require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and such
laws may impair the ability to transfer beneficial interests in a Global Note.
So long as the Depositary for a Global Note, or its nominee, is the
registered owner of such Global Note, such depositary or such nominee, as the
case may be, will be considered the sole owner or holder of the Debt Securities
represented by such Global Note for all purposes under the Indenture. Except as
set forth below, owners of beneficial interests in such Global Note will not be
entitled to have Debt Securities of the series represented by such Global Note
registered in their names, will not receive or be entitled to receive physical
delivery of Debt Securities of such series in definitive form and will not be
considered the owners or holders thereof under the Indenture.
Payment of principal of, premium, if any, and any interest on Debt Securities
registered in the name of or held by a Depositary or its nominee will be made
to the Depositary or its nominee, as the case may be, as the registered owner
or the holder of the Global Note representing such Debt Securities. None of the
Company, the Trustee, any Paying Agent or the Security Registrar for such Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial
5
<PAGE>
ownership interests in a Global Note for such Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Company expects that the Depositary for Debt Securities of a series, upon
receipt of any payment of principal, premium, or interest in respect of a
permanent Global Note, will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Note as shown on the records of such
Depositary. The Company also expects that payments by participants to owners of
beneficial interest in such Global Note held through such participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers registered in "street name,"
and will be the responsibility of such participants.
A Global Note may not be transferred except as a whole by the Depositary for
such Global Note to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such depositary or by such
depositary or any such nominee to a successor of such depositary or a nominee
of such successor. (Section 304(b)) If a Depositary for Debt Securities of a
series is at any time unwilling or unable to continue as Depositary and a
successor depositary is not appointed by the Company within ninety days, the
Company will issue Debt Securities in definitive registered form in exchange
for the Global Note or Notes representing such Debt Securities. In addition,
the Company may at any time and in its sole discretion determine not to have
any Debt Securities represented by one or more Global Notes and, in such event,
will issue Debt Securities in definitive registered form in exchange for all
the Global Notes representing such Debt Securities. In any such instance, an
owner of a beneficial interest in a Global Note will be entitled to physical
delivery in definitive form of Debt Securities of the series represented by
such Global Note equal in principal amount to such beneficial interest and to
have such Debt Securities registered in its name.
CERTAIN COVENANTS OF THE COMPANY
Restrictions on Liens. The Company will not, and will not permit any
Restricted Subsidiary to, issue, assume or guarantee any Indebtedness secured
by any mortgage, security interest, pledge, lien or other encumbrance (herein
referred to as a "Mortgage" or "Mortgages") upon any Operating Property or
Operating Asset of the Company or any Restricted Subsidiary, whether such
assets are now owned or hereafter acquired, without in any such case
effectively providing that the Debt Securities (together with, if the Company
shall so determine, any other Indebtedness ranking equally with the Debt
Securities) shall be secured equally and ratably with such Indebtedness except
that the foregoing restrictions shall not apply to (i) the giving,
simultaneously with or within 180 days after the latest of May 15, 1988, or the
acquisition or construction of such property, of a purchase money Mortgage on
property acquired or constructed afterMay 15, 1988, or the acquisition after
May 15, 1988, of property subject to any Mortgage which is limited to such
property and which secures Indebtedness not in excess of the lesser of the cost
or fair market value of such property, (ii) the giving by the Company or a
Restricted Subsidiary of a Mortgage on real property which is the sole security
for Indebtedness incurred within two years after the latest of May 15, 1988,
the acquisition of the property or completion of the first substantial
improvements thereon, provided that the Indebtedness does not exceed the lesser
of the cost of the property and improvements or their fair market value and the
holder of such Indebtedness is entitled to enforce its payment only by
resorting to such security, and (iii) Mortgages, or renewals thereof, existing
on the date of the Indenture or on assets of a Restricted Subsidiary existing
on the date it became a Subsidiary. Notwithstanding the foregoing, the Company
or any Restricted Subsidiary may create or assume Mortgages in addition to
those permitted above, and renew, extend or replace such Mortgages provided
that at the time of such creation, assumption, renewal, extension or
replacement, and after giving effect thereto, Exempted Debt does not exceed 5%
of Consolidated Net Tangible Assets. (Section 1007) On May 15, 1988, no
Operating Properties were subject to any liens.
Restrictions on Sale and Leaseback Transactions. The Company will not, nor
will it permit any Restricted Subsidiary to, enter into any arrangement with
any person providing for the leasing by the Company or any Restricted
Subsidiary of any Operating Property or Operating Asset which has been or is to
be sold or transferred by the Company or such Restricted Subsidiary to such
person (a "Sale and Leaseback
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Transaction") unless the net proceeds of such sale or transfer have been
determined by the Company's Board of Directors to be at least equal to the fair
value of such Operating Property or Operating Assets at the time of such sale
and transfer and (i) within 180 days after the receipt of the proceeds of such
sale and transfer, either the Company or any Restricted Subsidiary applies an
amount equal to such net proceeds to the prepayment or retirement (other than
any mandatory prepayment or retirement) of Senior Funded Debt of the Company or
such Restricted Subsidiary, or (ii) the Company or such Restricted Subsidiary
would be entitled, at the time of the effective date of such sale or transfer,
to incur indebtedness secured by a Mortgage on such Operating Property or
Operating Assets in an amount at least equal to the Attributable Debt in
respect thereof, without equally and ratably securing the Debt Securities
pursuant to the "Restrictions on Liens" described above. The foregoing
restriction shall not apply to (i) any Sale and Leaseback Transaction for a
term of not more than two years, including renewals, (ii) in the case of any
Operating Property acquired or constructed subsequent to May 15, 1986, any Sale
and Leaseback Transaction with respect thereto (including presently owned real
property upon which such Operating Property is to be constructed) if a binding
commitment is entered into within two years after the later of the acquisition
of the property or completion of the first substantial improvements thereon and
(iii) any Sale and Leaseback Transaction between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries provided that the lessor shall be
the Company or a wholly-owned Restricted Subsidiary. (Section 1008)
Exempted Debt. Notwithstanding the restrictions in the Indenture on (i)
Mortgages and (ii) Sale and Leaseback Transactions, the Company or its
Restricted Subsidiaries may, in addition to amounts permitted under such
restrictions, create Indebtedness secured by Mortgages, or enter into Sale and
Leaseback Transactions, provided that, after giving effect thereto, the
aggregate outstanding amount of all such Indebtedness secured by Mortgages plus
Attributable Debt resulting from such Sale and Leaseback Transactions does not
exceed 5% of Consolidated Net Tangible Assets (collectively, the "Exempted
Debt").
No Special Protection in the Event of a Highly Leveraged Transaction. Unless
otherwise indicated in the Prospectus Supplement relating thereto, the terms of
the Offered Debt Securities will not afford the holders special protection in
the event of a highly leveraged transaction.
CERTAIN DEFINITIONS
Set forth below are certain significant terms which are defined in Section
101 of the Indenture:
"Attributable Debt" in respect of a Sale and Leaseback Transaction means, at
the time of determination, the present value (discounted at the actual rate of
interest of such transaction) of the obligation of the lessee for net rental
payments during the remaining term of the lease included in such Sale and
Leaseback Transaction (including any period for which such lease has been
extended or may, at the option of the lessor, be extended).
"Capitalized Lease Obligations" means obligations created pursuant to leases
which are required to be shown on the liability side of a balance sheet in
accordance with generally accepted accounting principles.
"Consolidated" when used with respect to any of the terms defined in the
Indenture, refers to such terms as reflected in a consolidation of the accounts
of the Company and its Restricted Subsidiaries in accordance with generally
accepted accounting principles.
"Funded Debt" means indebtedness which matures more than one year from the
date of computation, or which is extendable or renewable at the sole option of
the obligor so that it may become payable more than one year from such date,
but, generally, shall not include obligations created pursuant to leases.
"Indebtedness" means, generally, all obligations for borrowed money,
including obligations secured by liens on property owned by a person whether or
not such person is directly liable therefor.
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"Investment" means and includes any investment in stock, evidences of
indebtedness, loans or advances, however made or acquired, but shall not
include accounts receivable of the Company or of any Restricted Subsidiary
arising from transactions in the ordinary course of business, or any evidences
of indebtedness, loans or advances made in connection with the sale to any
Subsidiary of accounts receivable of the Company or any Restricted Subsidiary
arising from transactions in the ordinary course of business of the Company or
any Restricted Subsidiary.
"Net Tangible Assets" means the total amounts of assets (less depreciation
and valuation reserves and other reserves and items deductible from gross book
value of specific asset accounts under generally accepted accounting
principles) which under generally accepted accounting principles would be
included on a balance sheet after deducting therefrom (i) all liability items
except Funded Debt, Capitalized Lease Obligations, stockholders' equity and
reserves for deferred income taxes, (ii) all goodwill, trade names, trademarks,
patents, unamortized debt discount and expense and other like intangibles,
which in each such case would be so included on such balance sheet, (iii)
Investments (less applicable reserves) in, or equity in the net assets of, Non-
Restricted Subsidiaries in excess of the amount of such Investments and equity
in net assets onJanuary 30, 1988, and (iv) capitalized property rights created
pursuant to Capitalized Lease Obligations. As of January 30, 1988, the amount
of Investments in, or equity in the net assets of, Non-Restricted Subsidiaries
totaled approximately $308,320,000.
"Operating Assets" means all merchandise inventories, furniture, fixtures and
equipment (including all transportation and warehousing equipment but excluding
office equipment and data processing equipment) owned by the Company or a
Restricted Subsidiary.
"Operating Property" means all real property and improvements thereon owned
by the Company or a Restricted Subsidiary and constituting, without limitation,
any store, warehouse, service center or distribution center wherever located;
provided that such term shall not include any store, warehouse, service center
or distribution center which the Company's Board of Directors declares by
resolution not to be of material importance to the business of the Company and
its Restricted Subsidiaries.
"Restricted Subsidiaries" means all Subsidiaries other than Non-Restricted
Subsidiaries. "Non-Restricted Subsidiaries" means (i) any Subsidiary so
designated by the Board of Directors of the Company in accordance with the
Indenture, and (ii) any other Subsidiary of which the majority of the voting
stock is owned directly or indirectly by one or more Non-Restricted
Subsidiaries. The Indenture provides that the Company's Board of Directors may
change the designations of Restricted Subsidiaries and Non-Restricted
Subsidiaries. (Section 1009) Initially the Company will have no Restricted
Subsidiaries.
"Senior Funded Debt" means all Funded Debt of the Company or any person
(except Funded Debt, the payment of which is subordinated to the payment of the
Debt Securities).
"Subsidiary" means any corporation of which at least a majority of the
outstanding stock having voting power under ordinary circumstances to elect a
majority of the board of directors of said corporation or business entity is at
the time owned or controlled by the Company, or by the Company and one or more
Subsidiaries, or by any one or more Subsidiaries.
MERGER AND CONSOLIDATION
The Indenture provides that the Company may, without the consent of the
Holders of the Debt Securities, consolidate with or merge into any other
corporation, or convey, transfer or lease its properties and assets
substantially as an entirety to any person, provided that in any such case (i)
the successor corporation shall be a domestic corporation and such corporation
shall assume by a supplemental indenture the Company's obligations under the
Indenture and the Debt Securities, (ii) immediately after such transaction, no
Event of Default shall have happened and be continuing, and (iii) if as a
result of any such merger, consolidation, or such conveyance, transfer or lease
an Operating Property of the Company would become subject to a Mortgage which
would not be permitted under "Restrictions on Liens" described above,
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the Debt Securities would be secured, equally and ratably with (or prior to)
all indebtedness so secured. Upon compliance with these provisions by a
successor corporation, the Company (except in the case of a lease) would be
relieved of its obligations under the Indenture and the Debt Securities.
(Sections 801 and 802)
EVENTS OF DEFAULT
The following will be Events of Default under the Indenture with respect to
Debt Securities of any series: (a) default in payment of principal of or
premium, if any, on any Debt Security of that series when due;(b) default in
payment of any interest on any Debt Security of that series when due, continued
for 30 days; (c) default in the deposit of any sinking fund payment, when due,
in respect of any Debt Security of that series; (d) default in the performance
or breach of any other covenant or warranty of the Company in the Indenture
(other than a covenant or warranty a default in whose performance or whose
breach is elsewhere in the Indenture specifically dealt with or which has been
included in the Indenture solely for the benefit of series of Debt Securities
other than that series), continued for 60 days after written notice as provided
in the Indenture; (e) if so specified in the Prospectus Supplement accompanying
this Prospectus that this clause (e) shall apply to the Debt Securities of that
series (and set forth in the Prospectus Supplement relating to the Debt
Securities of that series), acceleration of any indebtedness for money borrowed
by the Company under the terms of the instrument under which such indebtedness
is issued or secured, if such acceleration is not discharged within 10 days
after written notice as provided in the Indenture; (f) certain events in
bankruptcy, insolvency or reorganization; and (g) any other Event of Default
provided with respect to Debt Securities of that series. No Event of Default
with respect to a particular series of Debt Securities issued under the
Indenture (except as to such events in bankruptcy, insolvency or
reorganization) necessarily constitutes an Event of Default with respect to any
other series of Debt Securities issued thereunder. (Section 501)
If an Event of Default with respect to Debt Securities of any series at the
time Outstanding shall occur and be continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debt Securities of that series may, by a notice in writing to the
Company (and to the Trustee if given by Holders), declare to be due and payable
immediately the principal amount (or, if the Debt Securities of that series are
Original Issue Discount Securities, such portion of the principal amount as may
be specified in the terms of that series) of all Debt Securities of that
series. However, at any time after such a declaration of acceleration with
respect to Debt Securities of any series has been made, but before a judgment
or decree for payment of the money due has been obtained by the Trustee, the
Holders of a majority in principal amount of Outstanding Debt Securities of
that series may, subject to certain conditions, rescind and annul such
acceleration if all Events of Default, other than the non-payment of
accelerated principal, with respect to Debt Securities of that series have been
cured or waived as provided in the Indenture.(Section 502) For information as
to waiver of defaults, see "Modification and Waiver" herein. Reference is made
to the Prospectus Supplement relating to any series of Offered Debt Securities
which are Original Issue Discount Securities for the particular provisions
relating to acceleration of a portion of the principal amount of such Original
Issue Discount Securities upon the occurrence of an Event of Default and the
continuation thereof.
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the
Indenture provides that the Trustee will be under no obligation to exercise any
of its rights or powers under the Indenture at the request or direction of any
of the Holders, unless such Holders shall have offered to the Trustee
reasonable security and indemnity. (Sections 601 and 603) Subject to such
provisions for security and indemnification of the Trustee and certain other
rights of the Trustee, the Holders of a majority in principal amount of the
Outstanding Debt Securities of any series shall have the right to direct the
time, method and place of conducting any proceedings for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee with
respect to the Debt Securities of that series. (Section 512)
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No Holder of any Debt Security of any series will have any right to institute
any proceeding with respect to the Indenture or for any remedy thereunder,
unless such Holder shall have previously given to the Trustee written notice of
a continuing Event of Default with respect to Debt Securities of that series
and unless also the Holders of at least 25% in principal amount of the
Outstanding Debt Securities of that series shall have made written request, and
offered reasonable security and indemnity, to the Trustee to institute such
proceeding as trustee, and the Trustee shall not have received from the Holders
of a majority in principal amount of the Outstanding Debt Securities of that
series a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days. (Section 507) Notwithstanding the
foregoing, the Holder of any Debt Security will have an absolute and
unconditional right to receive payment of the principal of (and premium, if
any) and any interest on such Debt Security on or after the due dates expressed
in such Debt Security and to institute suit for the enforcement of any such
payment. (Section 508)
The Indenture requires the Company to furnish to the Trustee annually a
statement as to compliance with the Indenture. (Section 1011) The Indenture
provides that the Trustee may withhold notice to the Holders of Debt Securities
of any series of any default (except in payment of principal, any premium,
interest or any sinking fund payments) with respect to Debt Securities of such
series if it considers it in the interest of the Holders of Debt Securities of
such series to do so. (Section 602)
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of 66 2/3% in principal amount of
the Outstanding Debt Securities of each series affected by such modifications
or amendments; provided, however, that no such modification or amendment may,
without the consent of the Holder of each Outstanding Debt Security affected
thereby, (a) change the stated maturity date of the principal of, or any
installment of principal of or interest on, any Debt Security, (b) reduce the
principal amount of, or the premium (if any) or any interest on, any Debt
Security or reduce the amount of principal of an Original Issue Discount
Security that would be due and payable upon acceleration, (c) change the place
or currency of payment of principal of, or premium (if any) or interest on, any
Debt Security, (d) impair the right to institute suit for the enforcement of
any payment on or with respect to any Debt Security after the stated maturity
date, or (e) reduce the percentage in principal amount of Outstanding Debt
Securities of any series, the consent of whose Holders is required for
modification or amendment of the Indenture, for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults. (Section
902)
The Holders of 66 2/3% in principal amount of the Outstanding Debt Securities
of any series may on behalf of the Holders of all Debt Securities of that
series waive, insofar as that series is concerned, compliance by the Company
with certain restrictive provisions of the Indenture. (Section 1012) The
Holders of a majority in principal amount of the Outstanding Debt Securities of
any series may on behalf of the Holders of all Debt Securities of that series
waive any past default under the Indenture with respect to that series except a
default in the payment of the principal of (or premium, if any) or any interest
on any Debt Security of that series or in respect of a provision which under
the Indenture cannot be modified or amended without the consent of the Holder
of each Outstanding Debt Security of that series affected. (Section 513)
DEFEASANCE OF OFFERED DEBT SECURITIES OR CERTAIN COVENANTS IN CERTAIN
CIRCUMSTANCES
Defeasance and Discharge. The Indenture provides that the Board of Directors
of the Company may provide by resolution that the Company will be discharged
from any and all obligations in respect of the Debt Securities of any series
(except for certain obligations to register the transfer or exchange of Debt
Securities of such series, to replace stolen, lost or mutilated Debt Securities
of such series, to maintain paying agencies and hold moneys for payment in
trust) upon the deposit with the Trustee, in trust, of money and/or U.S.
Government Obligations (as defined), which through the payment of interest and
principal thereof in accordance with their terms will provide money in an
amount sufficient to pay any installment of principal (and premium, if any) and
interest on and any mandatory sinking fund payments in respect of the Debt
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Securities of such series on the stated maturity of such payments in accordance
with the terms of the Indenture and such Debt Securities. Such discharge may
only occur if the Company has received from, or there has been published by,
the United States Internal Revenue Service a ruling to the effect that such a
discharge will not be deemed, or result in, a taxable event with respect to
Holders of the Debt Securities of such series; and such discharge will not be
applicable to any Debt Securities of such series then listed on the New York
Stock Exchange or any other securities exchange if the provision would cause
said Debt Securities to be de-listed as a result thereof. (Section 403)
Defeasance of Certain Covenants. The Indenture provides that the Board of
Directors of the Company may by resolution provide that the terms of any series
of Debt Securities may provide the Company with the option to omit to comply
with certain restrictive covenants described in Sections 1007 through 1009 of
the Indenture. The Company, in order to exercise such option, will be required
to deposit with the Trustee money and/or U.S. Government Obligations (as
defined) which through the payment of interest and principal thereof in
accordance with their terms will provide money in an amount sufficient to pay
principal (and premium, if any) and interest on and any mandatory sinking fund
payments in respect of the Debt Securities of such series on the stated
maturity of such payments in accordance with the terms of the Indenture and
such Debt Securities. The Company will also be required to deliver to the
Trustee an opinion of counsel to the effect that the deposit and related
covenant defeasance will not cause the Holders of the Debt Securities of such
series to recognize income, gain or loss for Federal income tax purposes.
(Section 1010)
Defeasance and Events of Default. In the event the Company exercises its
option to omit compliance with certain covenants of the Indenture with respect
to any series of Debt Securities and the Debt Securities of such series are
declared due and payable because of the occurrence of any Event of Default, the
amount of money and U.S. Government Obligations on deposit with the Trustee
will be sufficient to pay amounts due on the Debt Securities of such series at
the time of their Stated Maturity but may not be sufficient to pay amounts due
on the Debt Securities of such series at the time of the acceleration resulting
from such Event of Default. However, the Company shall remain liable for such
payments.
The Prospectus Supplement will state if any defeasance provision will apply
to the Offered Debt Securities.
CONCERNING THE TRUSTEE
Chemical Bank is the Trustee under the Indenture and is also the trustee
under prior indentures between the Company and Chemical Bank. Chemical Bank
maintains normal banking relations with the Company, including participating in
and acting as Administrative Agent for a credit agreement for the Company and
DIC. Chemical Bank is also the trustee under indentures between DIC and
Chemical Bank.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities through underwriters, dealers or agents
or directly to one or more purchasers. The distribution of the Debt Securities
may be effected from time to time in one or more transactions at a fixed price
or prices, which may be changed, or at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices.
In connection with the sale of Debt Securities, underwriters may receive
compensation from the Company or from purchasers of Debt Securities for whom
they may act as agents in the form of discounts, concessions or commissions.
Underwriters may sell Debt Securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or commissions
from the underwriters and/or commissions from the purchasers for whom they may
act as agents. Underwriters, dealers and agents that participate in the
distribution of Debt Securities may be deemed to be underwriters, and any
discounts or commissions received by them from the Company and any profit on
the resale of Debt Securities by them may be deemed to be underwriting
discounts and commissions, under the Securities Act of 1933, as amended
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(the "Act"). Any such underwriter or agent will be identified, and any such
compensation received from the Company will be described, in the Prospectus
Supplement. In the event the Company sells directly to one or more purchasers,
the Company's employees will not receive additional compensation in connection
with their participation in such sales, and, accordingly, the Company will not
register any employees as broker/dealers in reliance upon Rule 3a4-1 as
promulgated under the Exchange Act.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Debt Securities may be entitled
to indemnification by the Company against certain liabilities, including
liabilities under the Act, or to contribution with respect to payments which
the underwriters, dealers or agents may be required to make in respect thereof.
LEGAL MATTERS
Unless otherwise indicated in the Prospectus Supplement, certain legal
matters in connection with the Debt Securities will be passed upon for the
Company by Friday, Eldredge & Clark, Little Rock, Arkansas and for the
underwriter(s), dealer(s) or agent(s) by Simpson Thacher & Bartlett (a
partnership which includes professional corporations), 425 Lexington Avenue,
New York, New York 10017. Herschel H. Friday and Paul B. Benham, III, partners
in Friday, Eldredge & Clark, beneficially own 4,500 and 3,000 shares,
respectively, of the Company's Class A Common Stock indirectly through
segregated accounts in a retirement plan maintained by the law firm.
Additionally, Mr. Friday is a director of the Company. Simpson Thacher &
Bartlett from time to time acts as counsel in various matters for the Company.
EXPERTS
The consolidated financial statements of the Company as of February 1, 1992
and February 2, 1991 and for each of the three years in the period ended
February 1, 1992, which are incorporated in this Prospectus by reference to the
Company's Annual Report on Form 10-K for the fiscal year ended February 1,
1992, have been audited by Deloitte & Touche, independent certified public
accountants, for the period indicated in their report thereon. Such financial
statements are, and audited financial statements to be included in documents
subsequently filed with the Commission which are audited and reported on by
Deloitte & Touche will be, incorporated herein in reliance upon such report and
upon the authority of such firm as experts in auditing and accounting.
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