SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 3, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number 1-6140
DILLARD'S, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 71-0388071
(State or other (IRS Employer
jurisdiction of incorporation Identification Number)
or organization)
1600 CANTRELL ROAD, LITTLE ROCK, ARKANSAS 72201
(Address of principal executive offices)
(Zip Code)
(501) 376-5200
(Registrant's telephone number, including area code)
DILLARD DEPARTMENT STORES, INC.
(Former name if changed since last report)
Indicate by checkmark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes x No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
CLASS A COMMON STOCK as of May 3, 1997 107,696,901
CLASS B COMMON STOCK as of May 3, 1997 4,016,929
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1 Financial Statements
CONSOLIDATED BALANCE SHEETS
DILLARD'S, INC.
(Unaudited)
(Thousands)
May 3 February 1 May 4
1997 1997 1996
ASSETS
CURRENT ASSETS
Cash and cash equivalents $72,246 $64,094 $70,696
Trade accounts receivable 1,046,856 1,130,504 1,038,569
Merchandise inventories 1,874,310 1,556,958 1,750,318
Other current assets 9,897 9,080 6,237
TOTAL CURRENT ASSETS 3,003,309 2,760,636 2,865,820
INVESTMENTS AND OTHER ASSETS 106,553 107,157 87,803
PROPERTY AND EQUIPMENT, NET 2,191,609 2,131,843 2,010,346
CONSTRUCTION IN PROGRESS 107,221 55,024 38,975
BUILDINGS UNDER CAPITAL LEASES 4,823 5,066 9,347
$5,413,515 $5,059,726 $5,012,291
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable and
accrued expenses $793,654 $536,695 $700,305
Commercial paper 194,653 128,738 165,503
Federal and state income taxes 58,751 46,220 43,805
Current portion of long-term debt 106,564 181,564 206,378
Current portion of capital lease
obligations 1,559 1,529 1,835
TOTAL CURRENT LIABILITIES 1,155,181 894,746 1,117,826
LONG-TERM DEBT 1,271,409 1,173,018 1,081,004
CAPITAL LEASE OBLIGATIONS 13,330 13,690 18,400
DEFERRED INCOME TAXES 261,094 261,094 252,503
STOCKHOLDERS' EQUITY
Preferred Stock 440 440 440
Common Stock 1,136 1,136 1,135
Additional paid-in capital 641,437 641,388 636,475
Retained earnings 2,127,980 2,074,214 1,904,508
Less Treasury Stock (58,492) 0 0
2,712,501 2,717,178 2,542,558
$5,413,515 $5,059,726 $5,012,291
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
DILLARD'S, INC.
(Unaudited)
(Thousands, except per share data)
Three Months Ended Twelve Months Ended
May 3 May 4 May 3 May 4
1997 1996 1997 1996
Net sales $1,515,344 $1,453,302 $6,289,627 $6,044,586
Service charges, interest and
other 47,213 48,451 183,237 180,029
1,562,557 1,501,753 6,472,864 6,224,615
Cost and expenses:
Cost of sales 995,203 955,797 4,164,171 3,967,655
Advertising, selling,
administrative and general
expenses 382,590 366,353 1,554,687 1,475,339
Depreciation and amortization 51,202 50,334 194,587 194,323
Rentals 10,630 11,158 55,238 58,364
Interest and debt expense 30,459 28,585 122,473 121,225
Impairment charges 0 0 0 126,559
1,470,084 1,412,227 6,091,156 5,943,465
INCOME BEFORE INCOME TAXES 92,473 89,526 381,708 281,150
Income taxes 34,215 33,125 141,230 105,945
NET INCOME 58,258 56,401 240,478 175,205
Retained earnings at beginning
of period 2,074,214 1,851,507 1,904,508 1,742,899
2,132,472 1,907,908 2,144,986 1,918,104
Cash dividends declared (4,492) (3,400) (17,006) (13,596)
RETAINED EARNINGS AT END
OF PERIOD $2,127,980 $1,904,508 $2,127,980 $1,904,508
Net income per common share $0.52 $0.50 $2.11 $1.55
Cash dividends declared
per common share $0.04 $0.03 $0.15 $0.12
Average shares outstanding 112,996 113,794 113,789 113,331
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
DILLARD'S, INC.
(Unaudited)
(Thousands)
Three Months Ended
May 3 May 4
1997 1996
OPERATING ACTIVITITES
Net income $58,258 $56,401
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 51,487 50,716
Changes in operating assets and liabilities:
Decrease in trade accounts receivable 83,648 65,006
Increase in merchandise inventories and
other current assets (318,169) (260,347)
Decrease (Increase) in investments and other assets 319 (3,413)
Increase in trade accounts payable and
accrued expenses and income taxes 274,044 133,267
NET CASH PROVIDED BY OPERATING ACTIVITIES 149,587 41,630
INVESTING ACTIVITIES
Purchase of property and equipment (162,922) (73,464)
NET CASH USED IN INVESTING ACTIVITIES (162,922) (73,464)
FINANCING ACTIVITIES
Net increase in commercial paper 65,915 40,193
Proceeds from long-term borrowings 100,000 0
Principal payments on long-term debt and
capital lease obligations (76,939) (3,935)
Dividends paid (9,046) (3,400)
Common stock issued 49 11,230
Purchase of treasury stock (58,492) 0
NET CASH PROVIDED BY FINANCING ACTIVITIES 21,487 44,088
INCREASE (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS 8,152 12,254
Cash and cash equivalents at beginning of period 64,094 58,442
CASH AND CASH EQUIVALENTS AT END OF PERIOD $72,246 $70,696
See notes to consolidated financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying unaudited consolidated financial statements
have been prepared in accordance with generally accepted
accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the
three month period ended May 3, 1997 are not necessarily
indicative of the results that may be expected for the fiscal
year ending January 31, 1998 due to the seasonal nature of the
business. For further information, refer to the consolidated
financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the fiscal year ended
February 1, 1997.
2. On May 19, 1997 the Company amended its Certificate of
Incorporation in order to change its name to Dillard's, Inc.
3. On February 4, 1997, the Company issued $100 million aggregate
principal amount of its 7.15% notes due February 1, 2007. The
notes were sold in an underwritten public offering.
4. On February 21, 1997, the Board of Directors authorized the
implementation of a Class A common stock repurchase program of
up to $300 million. For the quarter ended May 3, 1997, a
total of 1.9 million shares were purchased for a total of
$58.5 million.
5. On March 31, 1997, the Company purchased seven stores in
Virginia from Proffitt's, Inc. and on April 14, 1997 the
Company purchased ten Mervyn's stores in Florida.
<PAGE>
ITEM 2 Management's Discussion And Analysis Of
Financial Condition And Results Of Operations
Results of Operations
The following table sets forth operating results expressed as a
percentage of net sales for the periods indicated:
Three Months Ended Twelve Months Ended
May 3 May 4 May 3 May 4
1997 1996 1997 1996
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 65.7 65.8 66.2 65.6
Gross Profit 34.3 34.2 33.8 34.4
Advertising, selling, administrative
and general expenses 25.2 25.2 24.7 24.4
Depreciation and amortization 3.4 3.4 3.1 3.2
Rentals 0.7 0.8 0.9 1.0
Interest and debt expense 2.0 1.9 1.9 2.0
Impairment charges 0.0 0.0 0.0 2.1
Total operating expenses 31.3 31.3 30.6 32.7
Other income 3.1 3.3 2.9 3.0
Income before income taxes 6.1 6.2 6.1 4.7
Income taxes 2.3 2.3 2.3 1.8
Net income 3.8 3.9 3.8 2.9
<PAGE>
Sales for the first quarter of 1997 were $1,515.3 million as
compared to $1,453.3 million for the first quarter of 1996. This
is an increase of 4%. The sales in comparable stores were flat for
the period versus last year. The twelve month sales increase for
1997 over 1996 was 4%; for comparable stores the increase was 1%.
The majority of the increase in sales was attributable to an
increase in the volume of goods sold rather than an increase in the
price of goods.
Cost of sales decreased slightly from 65.8% of net sales for the
first quarter of 1996 to 65.7% for the first quarter of 1997. For
the twelve months ended May 3, 1997 and May 4, 1996, the cost of
sales increased from 65.6% to 66.2% of net sales. This increase
was due to a higher level of markdowns in the current year than in
the prior year.
Advertising, selling, administrative and general expenses remained
constant at 25.2% of net sales for the first quarters of 1997 and
1996. For the twelve months ended May 3, 1997 and May 4, 1996
these expenses increased from 24.4% to 24.7% of net sales. Bad
debt expense and payroll expense in the selling area were higher as
a percentage of net sales for the twelve months ended May 3, 1997
as compared to the twelve months ended May 4, 1996.
Depreciation and amortization expense was constant as a percentage
of sales for the three months ended May 3, 1997 compared to the
three months ended May 4, 1996 and decreased slightly as a
percentage of sales from 1996 in the twelve month period ended May
3, 1997. This decrease was due to the write down of certain
impaired assets in the fourth quarter of 1995, somewhat offset by
the fact that a higher proportion of the Company's properties are
owned rather than leased.
Rental expense decreased slightly from .8% of net sales for the
first quarter of 1996 to .7% for the first quarter of 1997. For
the twelve months ended May 3, 1997 and May 4, 1996 the decrease
was from 1.0% to .9% of net sales. This was due to a higher
proportion of the Company's properties being owned rather than
leased.
Interest and debt expense increased slightly from 1.9% of net sales
for the first quarter of 1996 to 2.0% of net sales for the first
quarter of 1997 due to a relatively higher level of debt for 1997
versus 1996. For the twelve months ended May 4, 1997 and May 3,
1996 it decreased slightly from 2.0% to 1.9% of net sales.
Service charges, interest and other income decreased from 3.3% of
net sales for the first quarter of 1996 to 3.1% of net sales for
the first quarter of 1997. For the twelve months ended May 3, 1997
and May 4, 1996 the decrease was from 3.0% to 2.9% of net sales.
The primary cause for this decrease was a decline in proprietary
credit card sales as a percentage of total sales.
The effective federal and state income tax rate was 37% for the
first quarter of 1997 and 1996.
<PAGE>
Financial Condition
The Company's working capital was $1.8 billion at May 3, 1997, $1.9
billion at February 1, 1997, and $1.7 billion at May 4, 1996. The
current ratio for these periods was 2.6, 3.1 and 2.6, respectively.
The changes in working capital and current ratio were caused by a
higher level of inventory at May 3, 1997 compared to February 1,
1997.
The long-term debt to capitalization ratio was 32.1%, 30.4% and
30.2% at May 3, 1997, February 1, 1997, and May 4, 1996,
respectively. The ratio of long-term debt to capitalization is
calculated by dividing the total amount of long-term debt and
capitalized lease obligations by the sum of the total amount of
long-term debt and capitalized lease obligations plus total equity.
The increase in this ratio at May 3, 1997 was caused by a higher
level of long-term debt as well as the repurchase of $58.5 million
of the Company's Class A common stock during the quarter.
On February 4, 1997, the Company issued $100 million 7.15% notes
due February 1, 2007. On May 15, 1997, the Company issued $100
million 7.75% notes due May 15, 2027. The proceeds were used to
reduce short term borrowings.
The Company invested $162.9 million in capital expenditures for the
three months ended May 3, 1997 as compared to $73.5 million for the
three months ended May 4, 1996. In the first quarter of 1997, the
Company opened five new stores. During 1997, the Company plans to
build six additional new stores and expand and remodel four
existing stores. Also, during the first quarter of 1997 the
Company completed the acquisition of seven stores in Virginia from
Proffitt's, Inc. and ten Mervyn's stores in Florida.These stores
are being remodeled and most will open during the third quarter of
1997.In June 1997, the Company plans to complete the purchase of
three Houston area stores from Macy's. In 1996, the Company opened
sixteen new stores (one of which was a replacement store), expanded
six stores and closed three stores.
Merchandise inventories increased by 7% from $1.75 million at May
4, 1996 to $1.87 million at May 3, 1997. The Company operated 10
more stores at May 3, 1997 versus May 4, 1996. This was the
primary reason for the increase in inventory. On a comparable
store basis, the rate of increase in merchandise inventories was
2%.
The Company's Registration Statement registering an additional $400
million in debt securities went effective on May 9, 1997.
Fluctuations in certain other balance sheet accounts between
February 1, 1997 and May 3, 1997 reflect normal seasonal variations
within the retail industry. The levels of merchandise inventories
and accounts receivable fluctuate due to the seasonal nature of the
retail business. Along with the fluctuations in these current
assets, there is also a corresponding fluctuation in trade accounts
payable and commercial paper.
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
Interim information is not required until after the first
fiscal year end in which this item is applicable.
<PAGE>
PART II OTHER INFORMATION
ITEM 5 Other Information
Ratio of Earnings to Fixed Charges
The Company has calculated the ratio of earnings to fixed charges
pursuant to Item 503 of Regulation S-K of the Securities and
Exchange Commission as follows:
Three Months Ended Fiscal Year Ended
May 3 May 4 Feb. 1 Feb. 3 Jan. 28 Jan. 29 Jan. 30
1997 1996 1997 1996 1995 1994 1993
3.63 3.69 3.61 2.86 3.72 3.57 3.59
ITEM 6 Exhibits and Reports on Form 8-K
(a) Exhibit (3): Restated Certificate of Incorporation, as
amended
Exhibit (11): Statement re: Computation of Per Share
Earnings
Exhibit (12): Statement re: Computation of Ratio of
Earnings to Fixed Charges
(b) Reports on Form 8-K filed during the first quarter:
The Company filed a report on February 3, 1997 relating to the
issue of $100 million aggregate principal amount of 7.15% Notes
maturing on February 1, 2007.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
DILLARD'S, INC.
(Registrant)
DATE: June 6, 1997 /s/ James I. Freeman
James I. Freeman
Senior Vice President & Chief
Financial Officer
(Principal Financial & Accounting
Officer)
<PAGE>
EXHIBIT INDEX
Exhibits to Form 10-Q
Exhibit Number Exhibit
3 Restated Certificate of Incorporation, as amended
11 Statement re: Computation of Per Share Earnings
12 Statement re: Computation of Ratio of Earnings
to Fixed Charges
<PAGE>
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
OF
DILLARD DEPARTMENT STORES, INC.
Dillard Department Stores, Inc., a corporation organized and
existing under and by virtue of the General Corporation Law of the
State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of the
Corporation held on March 8, 1997 resolutions were duly adopted
setting forth a proposed amendment of the Certificate of
Incorporation of the Corporation, declaring the amendment to be
advisable and recommending that stockholders approve such
amendment at the annual meeting of stockholders of the Corporation
to be held on May 17, 1997. The resolution setting forth the
proposed amendment is as follows:
RESOLVED, that the Board of Directors recommends that
stockholders approve at the annual meeting of
stockholders to be held on May 17, 1997, an amendment to
Article FIRST of the Certificate of Incorporation so that
such Article, as amended, shall be and read as follows:
FIRST: The name of the corporation
(hereinafter called the "Corporation") is
Dillard's, Inc.
SECOND: That thereafter the annual meeting of stockholders of
the Corporation was duly called and held upon notice in accordance
with Section 222 of the General Corporation Law of the State of
Delaware, and at such meeting the necessary number of shares as
required by statute were voted in favor of the amendment.
THIRD: That the amendment was duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the
State of Delaware.
IN WITNESS WHEREOF, Dillard Department Stores, Inc. has caused
this Certificate of Amendment of Certificate of Incorporation to be
signed by James I. Freeman, its Senior Vice President and Chief
Financial Officer on this 19th day of May, 1997.
DILLARD DEPARTMENT STORES, INC.
By:/s/ James I. Freeman
James I. Freeman
Senior Vice President and
Chief Financial Officer
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
OF
DILLARD DEPARTMENT STORES, INC.
Dillard Department Stores, Inc., a corporation organized and
existing under the laws of the State of Delaware, hereby certifies
as follows:
1. Dillard Department Stores, Inc. was originally
incorporated under the name Mayer & Schmidt, Inc., and the original
Certificate of Incorporation of the Corporation was filed with the
Secretary of State of the State of Delaware on January 13, 1964.
2. This Restated Certificate of Incorporation was duly
adopted in accordance with Section 245 of the General Corporation
Law of the State of Delaware and only restates and integrates and
does not further amend the provisions of the Corporation's
Certificate of Incorporation as heretofore amended or supplemented,
and there is no discrepancy between those provisions and the
provisions of the Restated Certificate of Incorporation, except for
the correction of spelling and capitalization and the substitution
of the term "Corporation" for "Company" where necessary.
3. The text of the Restated Certificate of Incorporation as
heretofore amended or supplemented, is hereby restated to read in
its entirety as follows:
FIRST: The name of the corporation (hereinafter called the
"Corporation") is
DILLARD DEPARTMENT STORES, INC.
SECOND: The respective names of the County and of the City
within the county in which the principal office of the Corporation
<PAGE>
is to be located in the State of Delaware are the County of New
Castle and the City of Wilmington. The name of the resident agent
of the Corporation is The Corporation Trust Company. The street
and number of said principal office and the address by street and
number of said resident agent is 1209 Orange Street, Wilmington,
Delaware 19801.
THIRD: The nature of the business of the Corporation and the
objects or purposes to be transacted, promoted or carried on by it
are as follows:
To purchase or otherwise acquire and to conduct a general
department store or stores, with the right and authority to buy and
sell, both at retail and wholesale, all and every kind of
merchandise whatsoever, including dry goods, notions, men's
furnishing goods, women's wearing apparel, shoes, furniture,
household and lawn equipment, foods and food products of all and
every kind, and all and every kind of merchandise whatsoever
handled by the largest and widest trading department stores.
To establish, own, lease, manage, operate, maintain, and
conduct branch stores, chain store systems and chain stores, shops,
departments and stands for the trafficking and dealing in and with,
either at wholesale or retail, or both, articles and commodities of
personal and household use and consumption and all manufactured and
prepared goods, materials and produce.
To conduct a general merchandising and trading business and to
design, manufacture, produce, import, export, buy and sell at
wholesale and/or retail, lease, handle, install, erect, repair,
service, distribute, contract in respect of, and otherwise
generally deal in and with, on margin or otherwise, whether as
principal, agent, factor, broker, licensor, licensee, on
commission, on its own behalf or on behalf of others, or otherwise,
goods, wares, commodities, merchandise and personal property of
every kind and description.
To acquire by purchase or otherwise own, hold, lease,
mortgage, sell, or otherwise dispose of, erect, construct, make,
alter, enlarge, improve, and to aid or subscribe toward the
construction, acquisition or improvement of any factories,
laboratories, shops, storehouses, warehouses, buildings and
commercial and retail establishments of every character, including
all equipment, fixtures, machinery, implements and supplies
necessary, or incidental to, or connected with, any of the purposes
<PAGE>
or business of the Corporation; and generally to perform any and
all acts connected therewith or arising therefrom or incidental
thereto, and all acts proper or necessary for the purpose of the
business.
To do a general brokerage, commission merchants' and selling
agents' business; to make and enter into all manner and kinds of
contracts, agreements and obligations by or with any person or
persons, corporation or corporations, for the purchasing,
acquiring, selling, financing, manufacturing and dealing in any
articles of personal property of any kind or nature whatsoever, and
generally with full power to perform any and all acts connected
therewith or arising therefrom or incidental thereto, and all acts
proper or necessary for the purpose of the business.
To purchase, hold, sell, and deal in and with oil and gas and
mineral leaseholds and oil and mineral interests, rights and
royalty interests in any of the same, and to develop and operate
oil and gas and mining properties, and buy, sell, manufacture,
process and deal in and with petroleum, coal and the products
thereof.
To acquire by purchase, exchange, concession, easement,
contract, lease or otherwise, to hold, own, use, control, manage,
improve, maintain and develop, to mortgage, pledge, grant, sell,
convey, exchange, assign, divide, lease, sublease, or otherwise
encumber and dispose of, and to deal and trade in, real estate,
improved or unimproved, lands, leaseholds, options, concessions,
easements, tenements, hereditaments and interests in real, mixed,
and personal property, of every kind and description wheresoever
situated, and any and all rights therein.
To apply for, register, obtain, purchase, lease, take licenses
in respect of or otherwise acquire, and to hold, own, use, operate,
develop, enjoy, turn to account, grant licenses and immunities in
respect of, manufacture under and to introduce, sell, assign,
mortgage, pledge or otherwise dispose of, and, in any manner deal
with and contract with reference to:
(a) inventions, devices, formulae, processes and
any improvements and modifications thereof;
(b) letters patent, patent rights, patented
processes, copyrights, designs, and similar rights,
trade-marks, trade symbols and other indications of
origin and ownership granted by or recognized under the
laws of the United States of America or of any state or
subdivision thereof, or of any foreign country or
subdivision thereof, and all rights connected therewith
or appertaining thereunto;
(c) franchises, licenses, grants and concessions.
<PAGE>
To purchase or otherwise acquire, and to hold, mortgage,
pledge, sell, exchange or otherwise dispose of, securities (which
term, for the purpose of this Article THIRD, includes, without
limitation of the generality thereof, any shares of stock, bonds,
debentures, notes, mortgages, or other obligations, and any
certificates, receipts or other instruments representing rights to
receive, purchase or subscribe for the same, or representing any
other rights or interests therein or in any property or assets)
created or issued by any person, firms, associations, corporations,
or governments or subdivisions thereof; to make payment therefor in
any lawful manner; and to exercise, as owner or holder of any
securities, any and all rights, powers and privileges in respect
thereof.
To make, enter into, perform and carry out contracts of every
kind and description with any person, firm, association,
corporation or government or subdivision thereof; to enter into
general partnerships, limited partnerships (whether the corporation
be a limited or general partner), joint ventures, syndicates,
pools, associations and other arrangements for carrying on of one
or more of the purposes set forth in this Certificate of
Incorporation, jointly or in common with others.
To acquire by purchase, exchange or otherwise, all, or any
part of, or any interest in, the properties, assets, business and
good will of any one or more persons, firms, associations or
corporations heretofore or hereafter engaged in any business for
which a corporation may now or hereafter be organized under the
laws of the State of Delaware; to pay for the same in cash,
property or its own or other securities; to hold, operate,
reorganize, liquidate, sell or in any manner dispose of the whole
or any part thereof; and, in connection therewith, to assume or
guarantee performance of any liabilities, obligations or contracts
of such persons, firms, associations or corporations, and to
conduct the whole or any part of any business thus acquired.
To lend its uninvested funds from time to time to such extent,
to such persons, firms, associations, corporations, governments or
subdivisions thereof, and on such terms and on such security, if
any, as the Board of Directors of the Corporation may determine.
To endorse or guarantee the payment of principal, interest or
dividends upon, and to guarantee the performance of sinking fund or
other obligations of, any securities, and to guarantee in any way
permitted by law the performance of any of the contracts or other
undertakings in which the Corporation may otherwise be or become
interested, of any person, firm, association, corporation,
government or subdivision thereof, or of any other combination,
organization or entity whatsoever.
To borrow money for any of the purposes of the Corporation,
from time to time, and without limit as to amount; from time to
<PAGE>
time to issue and sell its own securities in such amounts, on such
terms and conditions, for such purposes and for such prices, now or
hereafter permitted by the laws of the State of Delaware and by
this Certificate of Incorporation, as the Board of Directors of the
Corporation may determine; and to secure such securities by
mortgage upon, or the pledge of, or the conveyance or assignment in
trust of, the whole or any part of the properties, assets, business
and good will of the Corporation, then owned or thereafter
acquired.
To draw, make, accept, endorse, discount, execute, and issue
promissory notes, drafts, bills of exchange, warrants, bonds,
debentures, and other negotiable or transferable instruments and
evidences of indebtedness whether secured by mortgage or otherwise,
as well as to secure the same by mortgage or otherwise, so far as
may be permitted by the laws of the State of Delaware.
To purchase, hold, cancel, reissue, sell, exchange, transfer
or otherwise deal in its own securities from time to time to such
an extent and in such manner and upon such terms as the Board of
Directors of the Corporation shall determine; provided that the
Corporation shall not use its funds or property for the purchase of
its own shares of capital stock when such use would cause any
impairment of its capital, except to the extent permitted by law;
and provided further that shares of its own capital stock belonging
to the Corporation shall not be voted upon directly or indirectly.
To organize or cause to be organized under the laws of the
State of Delaware, or of any other State of the United States of
America, or of the District of Columbia, or of any territory,
dependence, colony or possession of the United States of America,
or of any foreign country, a corporation or corporations for the
purpose of transacting, promoting or carrying on any or all of the
objects or purposes for which corporations may be organized, and to
dissolve, wind up, liquidate, merge or consolidate any such
corporation or corporations or to cause the same to be dissolved,
wound up, liquidated, merged or consolidated.
To conduct its business in any and all of its branches and
maintain offices both within and without the State of Delaware, in
any and all States of the United States of America, in the District
of Columbia, in any or all territories, dependencies, colonies or
possessions of the United States of America, and in foreign
countries.
To carry out all or any part of the foregoing objects and
purposes in any and all parts of the world and to conduct business
in all or any of its branches as principal factor, agent,
contractor or otherwise, either alone or through or in conjunction
with any corporations, associations, partnerships, firms, trustees,
syndicates, individuals, organizations and other entities located
in or organized under the laws of any part of the world, either
<PAGE>
directly or indirectly as a member of any partnership, general or
limited, and, in carrying out, conducting or performing its
business and attaining or furthering any of its objects and
purposes, to maintain offices, branches and agencies in any part of
the world, to make and perform any contracts and to do any acts and
things, and to carry on any business, and to exercise any powers
suitable, convenient or proper for the accomplishment of any of the
objects and purposes herein specified or which at any time may
appear conducive to or expedient for the accomplishment of any of
such objects and purposes and which might be engaged in or carried
on by a corporation formed under the General Corporation Law and to
have and exercise all of the powers conferred by the laws of the
State of Delaware upon corporations formed under the General
Corporation Law.
The foregoing provisions of this Article THIRD shall be
construed both as purposes and powers and each as an independent
purpose and power. The foregoing enumeration of specific purposes
and powers shall not be held to limit or restrict in any manner the
purposes and powers of the Corporation, and the purposes and powers
herein specified shall, except when otherwise provided in this
Article THIRD, be in no wise limited or restricted by reference to,
or inference from, the terms of any provision of this or any other
Article of this Certificate of Incorporation; provided, that the
Corporation shall not carry on any business or exercise any power
in the State of Delaware or in any state, territory, or country
which under the laws thereof the Corporation may not lawfully carry
on or exercise.
FOURTH: (a) The total number of shares of stock which
the Corporation shall have the authority to issue is
310,005,000, consisting of 289,000,000 shares of Class A
Common Stock, which shares shall have a par value of $.01
per share; 11,000,000 shares of Class B Common Stock,
which shares shall have a par value of $.01 per share;
5,000 shares of 5% Cumulative Preferred Stock, which
shares shall have a par value of $100.00 per share; and
10,000,000 shares of Additional Preferred Stock, which
shares shall be $.01 par value per share.
<PAGE>
(b) The designations, preferences, privileges, and
voting powers of the shares of each class and the
restrictions or qualifications thereof are as follows:
(i) The Class A and the Class B Common
Stock shall have the right to vote upon all
matters which may come before the
stockholders' meetings, except that holders of
Class A Common Stock shall be empowered as a
class to elect only one-third of the members
of the Board of Directors, and the holders of
Class B Common Stock shall be empowered as a
class to elect two-thirds of the members of
the Board of Directors.
(ii) Each share of Class A and Class B
Common Stock shall be entitled to participate
equally in any dividends (other than dividends
of Common Stock) which may be declared upon
Common Stock and no dividends may be declared
on shares of either class unless an equal
dividend be declared on the shares of the
other class; provided, however, that in the
case of all dividends in Common Stock of this
Corporation or stock split-ups, the Class A
Common Stock shall be entitled only to receive
Class A Common Stock and the Class B Common
Stock shall be entitled only to receive Class
B Common Stock.
(iii) Shares of Class B Common Stock
shall be convertible at any time and from time
to time at the option of the holder thereof
into shares of Class A Common Stock at the
rate of one share of Class B Common Stock for
one share of Class A Common Stock. In order
to exercise the conversion privilege, the
holder of any shares of Class B Common Stock
shall surrender the certificate or
certificates for such shares accompanied by
proper instruments of surrender to the
Corporation at its principal office. The
certificate or certificates for such shares of
Class B Common Stock shall also be accompanied
by written notice to the effect that the
holder elects to convert such shares of Class
B Common Stock and stating the name or names
to which the certificate or certificates for
shares of Class A Common Stock which shall be
issuable on such conversion shall be issued.
As promptly as practicable after the receipt
of such notice and the surrender of such
<PAGE>
shares of Class B Common Stock, the
Corporation's Transfer Agent shall issue and
deliver to such holder or to the written order
of such holder a certificate or certificates
for the number of shares of Class A Common
Stock issuable upon conversion of such shares
of Class B Common Stock. Such conversion
shall be deemed to have been effected on the
date on which such notice shall have been
received by the Corporation and such Class B
Common Stock shall have been surrendered as
hereinbefore provided. The shares of Class B
Common Stock so converted shall not be
reissued and shall be retired and cancelled as
provided by law. All shares of Class A Common
Stock which may be issued upon conversion of
the Class B Common Stock shall, upon issuance,
be validly issued, fully paid, and non-
assessable by the Corporation.
(iv) In case of the issuance of any
shares of stock as a dividend upon the shares
of Class A Common Stock or the shares of Class
B Common Stock or in the case of any sub-
division, split-up, combination, or change of
the shares of Class A Common Stock or shares
of Class B Common Stock into a different
number of shares of the same or any other
class or classes of stock, or in the case of
any consolidation or merger of the Corporation
with or into another corporation, or in case
of any sale or conveyance to another
corporation of the property of the Corporation
as an entirety or substantially as an
entirety, the conversion rate as hereinbefore
provided shall be appropriately adjusted so
that the rights of the holders of Class A
Common Stock and of Class B Common Stock shall
not be diluted as a result of such stock
dividend, sub-division, split-up, combination,
change, consolidation, merger, sale, or
conveyance. Adjustments in the rate of
conversion shall be calculated to the nearest
1/10 of a share. The Corporation shall not be
required to issue fractions of shares of Class
A Common Stock upon conversion of Class B
Common Stock. If any fractional interest in a
share of Class A Common Stock shall be
deliverable upon the conversion of any shares
of Class B Common Stock, the Corporation may
purchase such fractional interest for an
<PAGE>
amount in cash equal to the current market
value of such fractional interest.
(v) So long as any shares of Class B
Common Stock are outstanding, the Corporation
shall reserve and keep available out of its
duly authorized but unissued stock, for the
purpose of effecting the conversion of the
Class B Common Stock as hereinabove provided,
such number of its duly authorized shares of
Class A Common Stock and other securities as
shall from time to time be sufficient to
effect the conversion of all outstanding
shares of Class B Common Stock.
(vi) The 5% Cumulative Preferred Stock
shall be entitled to receive dividends at the
rate of 5% per annum, payable semi-annually on
February 1 and August 1 of each year, before
any dividends shall be paid upon the Class A
or Class B Common Stock. Said dividends shall
be cumulative from year to year if not paid
and all accrued and unpaid dividends on the
Preferred Stock must be paid before any
dividend may be paid upon the Common Stock in
any year. This Preferred Stock shall be
preferred over the Class A and Class B Common
Stock as to dividends and assets. In the
final liquidation of the Corporation, all
arrearages of dividends on, and the par value
of, the shares of the Preferred Stock shall be
first paid to the holders of the Preferred
Stock before any payments shall be made to the
holders of the Common Stock. Holders of the
Preferred Stock shall not participate in
earnings beyond said 5%, nor in assets beyond
accrued dividends and the par value of said
stock. The holders of the Preferred Stock
shall not participate in the management and
control of the Corporation. Dividends on the
Preferred Stock may be paid from current
earnings or from accumulated earned surplus in
the discretion of the Directors of the
Corporation, unless such payment from surplus
shall be prohibited by the statutes of the
State of Delaware. The Corporation has and
reserves the right to call and retire at any
time any part or all of the shares of 5%
Cumulative Preferred Stock at the par value
thereof plus accrued dividends thereon.
<PAGE>
(vii) The Board of Directors is
authorized, subject to limitations prescribed
by law and the other provisions of this
Article FOURTH, to provide for the issuance of
shares of Additional Preferred Stock in
series, and by filing a certificate pursuant
to the applicable law of the State of
Delaware, to establish from time to time the
number of shares to be included in each such
series, and to fix the designation, powers,
preferences and rights of the shares of each
such series and the qualifications,
limitations or restrictions thereof.
The authority of the Board with respect
to each series shall include, but not be
limited to, determination of the following:
(a) The number of shares constituting
that series and the distinctive designation of
that series;
(b) Rights in respect of dividends on
the shares of that series, whether dividends
shall be cumulative, and, if so, from which
date or dates, and the relative rights of
priority, if any, of payment of dividends on
shares of that series;
(c) Whether that series shall have
voting rights, in addition to the voting
rights provided by law, and, if so, the terms
of such voting rights, which may include the
right to elect not more than two directors in
the case of dividend defaults notwithstanding
the provisions of clause (i) of Subsection (b)
of Article FOURTH;
(d) Whether that series shall have
conversion privileges, and, if so, the terms
and conditions of such conversion, including
provision for adjustment of the conversion
rate in such events as the Board of Directors
shall determine;
(e) Whether or not the shares of that
series shall be redeemable, and, if so, the
terms and conditions of such redemption,
including the date or date upon or after which
they shall be redeemable, and the amount per
share payable in case of redemption, which
<PAGE>
amount may vary under different conditions and
at different redemption dates;
(f) Whether that series shall have a
sinking fund for the redemption or purchase of
shares of that series, and, if so, the terms
and amount of such sinking fund;
(g) The rights of the shares of that
series in the event of voluntary or
involuntary liquidation, dissolution or
winding up of the Corporation, and the
relative rights of priority, if any, of
payment of shares of that series;
(h) Any other relative rights,
preferences and limitations of that series.
Dividends on outstanding shares of
Additional Preferred Stock shall be paid or
declared and set apart for payment before any
dividends shall be paid or declared and set
apart for payment on the common shares with
respect to the same dividend period.
(c) No holder of any of the shares of any class of
the Corporation, whether now or hereafter authorized and
issued, shall be entitled as of right to purchase or
subscribe for (1) any unissued shares of stock of any
class, or (2) any additional shares of any class, Common
or Preferred, authorized to be issued, or (3) any bonds,
certificates of indebtedness, debentures, or other
securities convertible into stock of the Corporation, or
carrying any right to purchase stock of any class, but
any such unissued stock or such additional authorized
issue of any stock or of other securities convertible
into stock, or carrying any right to purchase stock, may
be issued and disposed of pursuant to resolution of the
Board of Directors to such persons, firms, corporations
or associations and upon such terms as may be deemed
advisable by the Board of Directors in the exercise of
its discretion.
(d) Except as set forth in sub-section (e) of this
Article FOURTH, the affirmative vote or consent of the
holders of four-fifths of all classes of stock of the
Corporation entitled to vote in elections of Directors,
considered for purposes of this Article FOURTH as one
class, shall be required (i) for the adoption of any
agreement for the merger or consolidation of the
Corporation with or into any other corporation; (ii) to
authorize any sale, lease or exchange of all or
<PAGE>
substantially all of the assets of the Corporation to, or
any sale, lease or exchange to the Corporation or any
subsidiary thereof in exchange for securities of the
Corporation of any assets of, any other corporation,
person or other entity; or (iii) to authorize dissolution
or liquidation. Such affirmative vote or consent shall
be in addition to the vote or consent of the holders of
the stock of the Corporation otherwise required by law or
any agreement between the Corporation and any national
securities exchange.
(e) The provisions of sub-section (d) of this
Article FOURTH shall not be applicable to (i) any merger
or consolidation of the Corporation with or into any
other corporation, or any sale, lease or exchange of all
or substantially all of the assets of the Corporation to,
or any sale, lease or exchange to the Corporation or any
subsidiary thereof in exchange for securities of the
Corporation of any assets of, any other corporation, or
to liquidation or dissolution, if the Board of Directors
of the Corporation shall by resolution have approved a
memorandum of understanding with such other corporation
with respect to and substantially consistent with such
transaction or such liquidation or dissolution; or (ii)
any merger or consolidation of the Corporation with, or
any sale, lease or exchange to the Corporation or any
subsidiary thereof of any of the assets of, any other
corporation of which a majority of the outstanding shares
of all classes of stock entitled to vote in elections of
Directors is owned of record or beneficially by the
Corporation and its subsidiaries.
(f) No amendment to the Certificate of
Incorporation of the Corporation shall amend, alter,
change or repeal any of the provisions of sub-section (d)
and (e) of this Article FOURTH, unless the amendment
effecting such amendment, alteration, change or repeal
shall receive the affirmative vote or consent of the
holders of four-fifths of all classes of stock of the
Corporation entitled to vote in elections of Directors,
considered for the purposes of this Article FOURTH as one
class.
FIFTH: The minimum amount of capital with which the
Corporation will commence business is One Thousand Dollars.
SIXTH: The names and places of residence of each of the
incorporators are as follows:
<PAGE>
Name Place of Residence
R.G. Dickerson Dover, Delaware
J.A. Kent Dover, Delaware
Z.A. Pool, III Dover, Delaware
SEVENTH: The Corporation is to have perpetual existence.
EIGHTH: The private property of the stockholders of the
Corporation shall not be subject to the payment of corporate debts
to any extent whatever.
NINTH: For the management of the business and for the conduct
of the affairs of the Corporation, and in further definition,
limitation and regulation of the powers of the Corporation and of
its directors and stockholders, it is further provided:
1. The number of directors of the Corporation shall
be as specified in the By-Laws of the Corporation, except
as otherwise provided for or fixed pursuant to the
provisions of subparagraph (vii) of paragraph (b) of
Article FOURTH. Such number may from time to time be
increased or decreased in such manner as may be
prescribed by the By-Laws. In no event shall the number
of directors be less than the minimum number prescribed
by law. The election of directors need not be by written
ballot. There shall be no qualifications on directors
except that the holders of the Class A Common Stock,
voting as a class, shall be entitled to vote to adopt By-
Laws fixing qualifications for the directors elected by
such class (but not qualifications for the directors
elected by any other class), and the holders of the Class
B Common Stock, voting as a class, shall be entitled to
vote to adopt By-Laws fixing qualifications for the
directors elected by such class (but not qualifications
for the directors elected by any other class). These
special voting rights are granted in addition to the
voting rights of such class provided in Article FOURTH of
the Certificate of Incorporation of the Corporation. Any
amendment to the immediately preceding two sentences
shall require a class vote of each of the Class A Common
Stock and the Class B Common Stock.
2. In furtherance and not in limitation of the
powers conferred by the laws of the State of Delaware,
the Board of Directors is expressly authorized and
empowered:
<PAGE>
(a) To make, alter, amend and repeal By-
Laws, subject to the power of the stockholders
to alter or repeal the By-Laws made by the
Board of Directors; provided, however, that
By-Laws shall not be made, altered, amended or
repealed by the stockholders of the
Corporation except, in addition to any other
vote required by law, by the vote of the
holders of not less than four-fifths of all
classes of stock of the Corporation entitled
to vote in the election of Directors;
provided, further, that nothing in this
paragraph (a) shall affect the right of
stockholders to set qualifications for
directors as provided in Section 1 of Article
NINTH.
(b) Subject to the applicable provisions
of the By-Laws then in effect, to determine,
from time to time, whether and to what extent
and at what times and places and under what
conditions and regulations the accounts and
books of the Corporation, or any of them,
shall be open to the inspection of the
stockholders, and no stockholder shall have
any right to inspect any account or book or
document of the Corporation, except as
conferred by the laws of the State of
Delaware, unless and until authorized so to do
by resolution of the Board of Directors or of
the stockholders of the Corporation.
(c) Without the assent or vote of the
stockholders, to authorize and issue
obligations of the Corporation, secured or
unsecured, to include therein such provisions
as to redeemability, convertibility or
otherwise, as the Board of Directors, in its
sole discretion, may determine, and to
authorize the mortgaging or pledging, as
security therefor, of any property of the
Corporation, real or personal, including
after-acquired property.
(d) To establish bonus, profit-sharing
or other types of incentive or compensation
plans for the employees (including officers
and directors) of the Corporation and to fix
the amount of profits to be distributed or
shared and to determine the persons to
participate in any such plans and the amounts
of their respective participations.
<PAGE>
In addition to the powers and authorities
hereinbefore or by statute expressly conferred upon it,
the Board of Directors may exercise all such powers and
do all such acts and things as may be exercised or done
by the Corporation, subject, nevertheless, to the
provisions of the laws of the State of Delaware, of the
Certificate of Incorporation and of the By-Laws of the
Corporation.
3. Any director or any officer elected or appointed
by the stockholders or by the Board of Directors may be
removed at any time in such manner as shall be provided
in the By-Laws of the Corporation.
4. In the absence of fraud, no contract or other
transaction between the Corporation and any other
corporation, and no act of the Corporation, shall in any
way be affected or invalidated by the fact that any of
the directors of the Corporation are pecuniarily or
otherwise interested in, or are directors or officers of,
such other corporation; and, in the absence of fraud, any
director, individually, or any firm of which any director
may be a member, may be a party to, or may be pecuniarily
or otherwise interested in, any contract or transaction
of the Corporation; provided, in any case, that the fact
that he or such firm is so interested shall be disclosed
or shall have been known to the Board of Directors or a
majority thereof; and any director of the Corporation who
is also a director or officer of any such other
corporation, or who is also interested, may be counted in
determining the existence of a quorum at any meeting of
the Board of Directors of the Corporation which shall
authorize any such contract, act or transaction and may
vote thereat to authorize any such contract, act or
transaction, with like force and effect as if he were not
such director or officer of such other corporation, or
not so interested.
5. Any contract, act or transaction of the
Corporation or of the directors may be ratified by a vote
of a majority of the shares having voting powers at any
meeting of stockholders, or at any special meeting called
for such purpose, and such ratification shall, so far as
permitted by law and by this Certificate of
Incorporation, be as valid and as binding as though
ratified by every stockholder of the Corporation.
6. A director of the Corporation shall not be
personally liable to the Corporation or its stockholders
for monetary damages for breach of fiduciary duty as
director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its
<PAGE>
stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any
transaction from which the director derived any improper
personal benefit. If the Delaware General Corporation
Law is amended after approval by the stockholders of this
Section 6 to authorize corporate action further
eliminating or limiting the personal liability of
directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest
extent permitted by the Delaware General Corporation Law,
as so amended.
Any repeal or modification of the foregoing
paragraph by the stockholders of the Corporation shall
not adversely affect any right or protection of a
director of the Corporation existing at the time of such
repeal or modification.
7. (a) Right to Indemnification. Each person who
was or is made a party or is threatened to be made a
party to or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of
the fact that such person is or was a director or officer
of the Corporation or is or was serving at the request of
the Corporation as a director, officer, employee or agent
of another corporation or of a partnership, joint
venture, trust or other enterprise, including service
with respect to an employee benefit plan (hereinafter an
"indemnitee"), whether the basis of such proceeding is
alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while
serving as a director, officer, employee or agent, shall
be indemnified and held harmless by the Corporation to
the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to
the extent that such amendment permits the Corporation to
provide broader indemnification rights than permitted
prior thereto), against all expenses, liability and loss
(including attorneys fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid in settlement)
reasonably incurred or suffered by such indemnitee in
connection therewith and such indemnification shall
continue as to an indemnitee who has ceased to be a
director, officer, employee or agent and shall inure to
the benefit of the indemnitee's heirs, executors and
administrators; provided, however, that, except as
provided in paragraph (b) hereof with respect to
proceedings to enforce rights to indemnification, the
<PAGE>
Corporation shall indemnify any such indemnitee in
connection with a proceeding (or part thereof) initiated
by such indemnitee only if such proceeding (or part
thereof) was authorized by the Board of Directors of the
Corporation. The right to indemnification conferred in
this Section 7 shall be a contract right and shall
include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in
advance of its final disposition (hereinafter an
"advancement of expenses"); provided, however, that, if
the Delaware General Corporation Law requires, an
advancement of expenses incurred by an indemnitee in such
indemnitee's capacity as a director or officer (and not
in any other capacity in which service was or is rendered
by such indemnitee, including, without limitation,
service to an employee benefit plan) shall be made only
upon delivery to the Corporation of an undertaking
(hereinafter an "undertaking"), by or on behalf of such
indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from
which there is no further right to appeal (hereinafter a
"final adjudication") that such indemnitee is not
entitled to be indemnified for such expenses under this
Section 7 or otherwise.
(b) Right of Indemnitee to Bring Suit. If a claim
under paragraph (a) of this Section 7 is not paid in full
by the Corporation within sixty days after a written
claim has been received by the Corporation, except in the
case of a claim for an advancement of expenses, in which
case the applicable period shall be twenty days, the
indemnitee may at any time thereafter bring suit against
the Corporation to recover the unpaid amount of the
claim. If successful in whole or in part in any such
suit, or in a suit brought by the Corporation to recover
an advancement of expenses pursuant to the terms of an
undertaking, the indemnitee shall be entitled to be paid
also the expense of prosecuting or defending such suit.
In (i) any suit brought by the indemnitee to enforce a
right to indemnification hereunder (but not in a suit
brought by the indemnitee to enforce a right to an
advancement of expenses) it shall be a defense that, and
(ii) in any suit by the Corporation to recover an
advancement of expenses pursuant to the terms of an
undertaking the Corporation shall be entitled to recover
such expenses upon final adjudication that, the
indemnitee has not met the applicable standard of conduct
set forth in the Delaware General Corporation Law.
Neither the failure of the Corporation (including its
Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the
<PAGE>
indemnitee is proper in the circumstances because the
indemnitee has met the applicable standard of conduct set
forth in the Delaware General Corporation Law, nor an
actual determination by the Corporation (including its
Board of Directors, independent legal counsel or its
stockholders) that the indemnitee has not met such
applicable standard of conduct, shall create a
presumption that the indemnitee has not met the
applicable standard of conduct, or, in the case of such
suit brought by the indemnitee, be a defense to such
suit. In any suit brought by the indemnitee to enforce
a right to indemnification or to an advancement of
expenses hereunder, or by the Corporation to recover an
advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that the indemnitee is
not entitled to be indemnified, or to such advancement of
expenses, under this Section 7 or otherwise shall be on
the Corporation.
(c) Non-Exclusivity of Rights. The rights to
indemnification and to the advancement of expenses
conferred in this Section 7 shall not be exclusive of any
other right which any person may have or hereafter
acquire under any statute, this Certificate of
Incorporation, by-law, agreement, vote of stockholders or
disinterested directors or otherwise.
(d) Insurance. The Corporation may maintain
insurance, at its expense, to protect itself and any
director, officer, employee or agent of the corporation,
partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not
the Corporation would have the power to indemnify such
person against such expense, liability or loss under the
Delaware General Corporation Law.
(e) Indemnification of Employees and Agents of the
Corporation. The Corporation may, to the extent
authorized from time to time by the Board of Directors,
grant rights to indemnification, and to the advancement
of expenses to any employee or agent of the Corporation
to the fullest extent of the provisions of this Section
7 with respect to the indemnification and advancement of
expenses of directors and officers of the Corporation.
8. No action required to be taken or which may be
taken at any annual or special meeting of stockholders of
the Corporation may be taken without a meeting, and the
power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically
denied.
<PAGE>
TENTH: From time to time any of the provisions of this
Certificate of Incorporation may be amended, altered or repealed,
and other provisions authorized by the laws of the State of
Delaware at the time in force may be added or inserted in the
manner and at the time prescribed by said laws, and all rights at
any time conferred upon the stockholders of the Corporation by this
Certificate of Incorporation are granted subject to the provisions
of this Article TENTH.
IN WITNESS WHEREOF, Dillard Department Stores, Inc. has caused
this Restated Certificate of Incorporation to be signed by James I.
Freeman, its Vice President and Chief Financial Officer, and James
E. Darr, Jr., its Vice President and Secretary, on this 1st day of
July, 1992.
DILLARD DEPARTMENT STORES, INC.
ATTEST:
By: _________________________________
James I. Freeman
__________________________ Vice President
James E. Darr, Jr.
Secretary
<PAGE>
EXHIBIT 11 - STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
Three Months Ended Twelve Months Ended
May 3 May 4 May 4 May 4
1997 1996 1996 1996
Average shares outstanding 112,794,610 113,219,578 113,375,917 113,090,100
Net effect of dilutive
stock options based on
the treasury stock method
using average market price 201,499 574,431 413,242 240,830
Total 112,996,109 113,794,009 113,789,159 113,330,930
Net Income $58,258,000 $56,401,000 $240,478,000 $175,205,000
Less preferred dividends (5,500) (5,500) (22,000) (22,000)
Net income available to
common shares $58,252,500 $56,395,500 $240,456,000 $175,183,000
Per share $0.52 $0.50 $2.11 $1.55
EXHIBIT 12 - STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
Three Months Ended Fiscal Year Ended
May 3 May 4 February 1 February 3 January 28 January 29 January 30
1997 1996 1997 1996 * 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C>
Consolidated pretax income $92,473 $89,526 $378,761 $269,653 $406,110 $399,534 $375,330
Fixed charges (less
capitalized interest) 34,002 32,304 139,188 139,666 145,921 152,568 142,857
EARNINGS $126,475 $121,830 $517,949 $409,319 $552,031 $552,102 $518,187
Interest $30,459 $28,585 $120,599 $120,054 $124,282 $130,915 $121,940
Capitalized interest 884 750 4,420 3,567 2,545 1,882 1,646
Interest factor in rent
expense 3,543 3,719 18,589 19,612 21,639 21,653 20,917
FIXED CHARGES $34,886 $33,054 $143,608 $143,233 $148,466 $154,450 $144,503
Ratio of earnings to
fixed charges 3.63 3.69 3.61 2.86 3.72 3.57 3.59
* - 53 weeks
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-END> MAY-3-1997
<CASH> 72,246
<SECURITIES> 0
<RECEIVABLES> 1,046,856
<ALLOWANCES> 25,277
<INVENTORY> 1,874,310
<CURRENT-ASSETS> 3,003,309
<PP&E> 3,675,899
<DEPRECIATION> 1,372,246
<TOTAL-ASSETS> 5,413,515
<CURRENT-LIABILITIES> 1,155,181
<BONDS> 1,284,739
0
440
<COMMON> 1,136
<OTHER-SE> 2,710,925
<TOTAL-LIABILITY-AND-EQUITY> 5,413,515
<SALES> 1,515,344
<TOTAL-REVENUES> 1,562,557
<CGS> 995,203
<TOTAL-COSTS> 995,203
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 14,989
<INTEREST-EXPENSE> 30,459
<INCOME-PRETAX> 92,473
<INCOME-TAX> 34,215
<INCOME-CONTINUING> 58,258
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 58,258
<EPS-PRIMARY> .52
<EPS-DILUTED> .52
</TABLE>
