<PAGE>
PROSPECTUS SUPPLEMENT Filed pursuant to Rule 424(B)(2)
(To Prospectus dated May 9, 1997) SEC File No. 333-26343
$100,000,000
Dillard Department Stores, Inc.
7.75% NOTES DUE 2027
----------------
Interest payable May 15 and November 15
----------------
THE NOTES WILL MATURE ON MAY 15, 2027 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 100%
----------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(2)
-------- -------------- -----------
<S> <C> <C> <C>
Per Note................................ 100.00% .875% 99.125%
Total................................... $100,000,000 $875,000 $99,125,000
</TABLE>
- --------
(1) The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(2) 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 May 15, 1997, through the book-entry
facilities of The Depository Trust Company, against payment therefor in
immediately available funds.
----------------
MORGAN STANLEY & CO.
Incorporated
May 12, 1997
<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.
----------------
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES.
SPECIFICALLY, THE UNDERWRITER MAY OVERALLOT IN CONNECTION WITH THE OFFERING,
AND MAY BID FOR, AND PURCHASE, THE NOTES IN THE OPEN MARKET. FOR A DESCRIPTION
OF THESE ACTIVITIES, SEE "THE UNDERWRITER."
----------------
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 commercial paper
indebtedness, the proceeds of which were used for working capital.
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,
1997. 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, capitalized interest and the interest portion of
rental expense which is approximated at one-third of rent expense.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
----------------------------------------------------------------------------------
FEBRUARY 1, FEBRUARY 3, JANUARY 28, JANUARY 29, JANUARY 30,
1997 1996* 1995 1994 1993
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
3.61 2.86 3.72 3.57 3.59
</TABLE>
- --------
* 53 weeks.
S-2
<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 The Chase Manhattan
Bank (formerly known as 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 May 15, 2027. Interest on the Notes will accrue
from May 15, 1997 and will be payable semiannually, on each May 15 and
November 15, beginning November 15, 1997, to the persons in whose names the
Notes are registered at the close of business on the May 1 or November 1 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-3
<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 .50%
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.
In order to facilitate the offering of the Notes, the Underwriter may engage
in transactions that stabilize, maintain or otherwise affect the price of the
Notes. Specifically, the Underwriter may overallot in connection with the
offering, creating a short position in the Notes for its own account. In
addition, to cover overallotments or to stabilize the price of the Notes, the
Underwriter may bid for, and purchase, the Notes in the open market. Finally,
the underwriting syndicate may reclaim selling concessions allowed to an
underwriter or a dealer for distributing the Notes in the offering, if the
syndicate repurchases previously distributed Notes in transactions to cover
syndicate short positions, in stabilization transactions or otherwise. Any of
these activities may stabilize or maintain the market price of the Notes above
independent market levels. The Underwriter is not required to engage in these
activities, and may end any of these activities at any time.
From time to time, the Underwriter has acted as financial advisor to the
Company and has received compensation for such services.
S-4
<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.
$500,000,000 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 May 9, 1997.
<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,
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-
2511, and New York Regional Office, 7 World Trade Center, Suite 1300, New
York, New York 10048. 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. Additionally, such material may be accessed
at the Commission's Web site (http://www.sec.gov). 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 document, filed with the Commission, is hereby incorporated by
reference in this Prospectus: the Company's Annual Report on Form 10-K for the
fiscal year ended February 1, 1997.
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.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including any documents that are incorporated by reference
as set forth in "Incorporation of Certain Documents by Reference," contains
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. Such statements are indicated by
words or phrases such as "anticipate," "estimate," "projects," "management
believes," "the Company believes" and similar words or phrases. Such
statements are subject to certain risks, uncertainties or assumptions. Should
one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
anticipated, estimated or projected.
2
<PAGE>
THE COMPANY
Dillard Department Stores, Inc. is a regional group of department stores
operating, as of February 1, 1997, 250 stores in Alabama, Arizona, Arkansas,
Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky,
Louisiana, Mississippi, Missouri, Nebraska, Nevada, New Mexico, North
Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Texas and Utah. The
stores vary from 44,000 square feet to 409,000 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 160,000 square feet. The stores are
owned either by the Company or a wholly owned subsidiary, with the exception
of 64 stores, which are leased from third parties. The stores feature branded
and private label goods in the middle to upper-middle price ranges and cater
to a broad spectrum of the population. With minor exceptions, all stores are
full-line department stores and sell quality name-brand and private label
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, home
furnishings and electronics.
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 $500,000,000 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,
1997. 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, capitalized interest and the interest portion of
rental expense which is approximated at one-third of rent expense.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
------------------------------------------------------------------------
FEB. 1, FEB. 3, JAN. 28, JAN. 29, JAN. 30,
1997 1996* 1995 1994 1993
------- ------- -------- -------- --------
<C> <S> <C> <C> <C>
3.61 2.86 3.72 3.57 3.59
</TABLE>
- --------
* 53 weeks
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 The Chase Manhattan Bank (formerly known
as 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.
3
<PAGE>
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 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
4
<PAGE>
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 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.
5
<PAGE>
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 after May 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 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
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(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"). (Sections 1007(b) and 1008(b))
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.
"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
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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 on January 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,
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)
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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 ofDebt 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) 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)
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)
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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 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
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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
The Chase Manhattan Bank (formerly known as Chemical Bank) ("Chase") is the
Trustee under the Indenture and is also the trustee under prior indentures
between the Company and Chase. Chase maintains normal banking relations with
the Company, including participating in and acting as Agent for a credit
agreement for the Company and Dillard Investment Co., Inc., a wholly owned
subsidiary of the Company ("DIC"). Chase also is the trustee under indentures
between DIC and Chase.
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 (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.
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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. William H. Sutton and Paul B. Benham III, partners
in Friday, Eldredge & Clark, beneficially own 1,000 and 2,000 shares,
respectively, of the Company's Class A Common Stock either directly or
indirectly through segregated accounts in a retirement plan maintained by the
law firm. Additionally, Mr. Sutton 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 which are incorporated
in this Prospectus by reference to the Company's Annual Report on Form 10-K
have been audited by Deloitte & Touche LLP, independent certified public
accountants. Such financial statements are incorporated herein in reliance
upon such report given upon the authority of such firm as experts in auditing
and accounting.
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