SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant x
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
x Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
DILLARD'S, INC.
(Name of Registrant as Specified In Its Charter)
DILLARD'S, INC.
(Name of Person(s) Filing Proxy Statement,if other than
Registrant)
Payment of Filing Fee (Check the appropriate box):
x No fee required.
Fee computed on table below per Exchange Act Rules 14a-
6(i)(1) and 0-11.
1) Title or each class of securities to which
transaction applies:
2) Aggregate number of securities to which
transaction applies:
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11:1
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
_______________________________
1 Set forth the amount on which the filing fee is calculated
and state how it was determined.
<PAGE>
DILLARD'S, INC.
PROXY STATEMENT
DILLARD'S, INC.
POST OFFICE BOX 486
LITTLE ROCK, ARKANSAS 72203
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 15, 1999
<PAGE>
PROXY STATEMENT
DILLARD'S, INC.
POST OFFICE BOX 486
LITTLE ROCK, ARKANSAS 72203
TO THE HOLDERS OF CLASS A AND Little Rock, Arkansas
CLASS B COMMON STOCK: April 15, 1999
Notice is hereby given that the annual meeting of
Stockholders of Dillard's, Inc., will be held at the auditorium
of Dillard's Corporate Office, 1600 Cantrell Road, Little Rock,
Arkansas on Saturday, May 15, 1999, at 9:30 a.m. for the
following purposes:
1. To elect 15 Directors of the Company (five Directors to
represent Class A Stockholders and 10 Directors to represent
Class B Stockholders).
2. To consider and act upon a proposal by certain
Stockholders.
3. To transact such other business as may properly come
before the meeting or any adjournment or adjournments thereof.
The stock transfer books of the Company will not be closed,
but only stockholders of record at the close of business on March
31, 1999, will be entitled to notice of, and to vote at, the
meeting.
Your participation in the meeting is earnestly solicited.
If you do not expect to be present in person at the meeting,
please sign, date, and fill in the enclosed Proxy and return it
by mail in the enclosed envelope to which no postage need be
affixed if mailed in the United States of America.
By Order of the Board of Directors
JAMES I. FREEMAN
Senior Vice President, Chief Financial
Officer, Assistant Secretary
<PAGE>
DILLARD'S, INC.
POST OFFICE BOX 486
LITTLE ROCK, ARKANSAS 72203
Telephone (501) 376-5200
April 15, 1999
PROXY STATEMENT
The enclosed Proxy is solicited by and on behalf of the
management of Dillard's, Inc. (the "Company"), a Delaware
corporation, for use at the annual meeting of stockholders to be
held on Saturday, May 15, 1999, at 9:30 a.m. at the auditorium of
Dillard's Corporate Office, 1600 Cantrell Road, Little Rock,
Arkansas, or at any adjournment or adjournments thereof.
Any stockholder giving a Proxy has the power to revoke it,
at any time before it is voted, by written revocation delivered
to the Secretary of the Company. Proxies solicited herein will
be voted in accordance with any directions contained therein,
unless the Proxy is received in such form or at such time as to
render it ineligible to vote, or unless properly revoked. If no
choice is specified, the shares will be voted in accordance with
the recommendations of the Board of Directors as described
herein.
If matters of business other than those described in the
Proxy properly come before the meeting, the persons named in the
Proxy will vote in accordance with their best judgment on such
matters. The Proxies solicited herein shall not confer any
authority to vote at any meeting of stockholders other than the
meeting to be held on May 15, 1999, or any adjournment or
adjournments thereof.
The cost of soliciting Proxies will be borne by the Company.
The Company will reimburse brokers, custodians, nominees and
other fiduciaries for their charges and expenses in forwarding
proxy material to beneficial owners of shares. In addition to
solicitation by mail, certain officers and employees of the
Company may solicit Proxies by telephone, telegraph and
personally. These persons will receive no compensation other
than their regular salaries. The Company has retained D.F. King
& Co., Inc., a professional proxy solicitation firm, to assist in
the solicitation of proxies. The fees of such firm are not
expected to exceed $6,500.
OUTSTANDING STOCK; VOTING RIGHTS;
VOTE REQUIRED FOR APPROVAL
The stock transfer books of the Company will not be closed,
but only stockholders of record at the close of business on March
31, 1999, will be entitled to notice of, and to vote at, the
meeting. At that date, there were 102,906,719 shares of Class A
Common Stock outstanding and 4,016,929 shares of Class B Common
Stock outstanding.
Each holder of Class A Common Stock and each holder of Class
B Common Stock shall be entitled to one vote on the matters
presented at the meeting for each share standing in his name
except that the holders of Class A Common Stock are empowered as
a class to elect one-third of the Directors and the holders of
Class B Common Stock are empowered as a class to elect two-thirds
of the Directors. Nominees for director of each class, to be
elected, must receive a plurality of the votes cast within that
class. Cumulative voting for Directors is not permitted.
Approval of the Stockholder proposal requires the affirmative
vote of the holders of a majority of the shares of Common Stock
represented at the meeting and entitled to vote. Under Delaware
General Corporate Law, if shares are held by a broker that has
indicated that it does not have discretionary authority to vote
on a particular matter ("broker non-votes"), those shares will
not be considered as present and entitled to vote with respect to
that matter, but such shares will be counted with respect to
determining whether a quorum is present. Abstentions will not be
counted as votes cast for election of directors and with respect
to the Stockholder proposal, abstentions will have the effect of
a vote against such proposal.
The last date for the acceptance of Proxies by management is
the close of business on May 14, 1999, and no Proxy received
after that date will be voted by management at the meeting.
<PAGE>
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth certain information regarding
persons who beneficially owned five percent (5%) or more of a
class of the Company's outstanding voting securities at the close
of business on January 30, 1999.
No. of Percent
Name and Address Class Shares Owned of Class(1)
Sanford C. Bernstein Class A 8,717,396(2) 8.5%
& Co., Inc.
767 Fifth Avenue
New York, NY 10153
Dodge & Cox Class A 5,859,661(2) 5.7%
One Sansome St., 35th Floor
San Francisco, CA 94014
The Prudential Insurance Class A 8,659,628(2) 8.4%
Company of America
751 Broad Street
Newark, New Jersey 07102
W.D. Company, Inc.(3) Class A 41,496 *
Little Rock, Arkansas Class B 3,985,776 99.2%
*Denotes less than 0.1%
(1) At January 30, 1999 there were a total of 102,906,719 shares
of the Company's Class A Common Stock and 4,016,929 shares
of the Company's Class B Common Stock outstanding.
(2) Based on information contained in a Schedule 13G filed with
the Securities and Exchange Commission.
(3) William Dillard, Chairman of the Board of Directors of the
Company, William Dillard II, Chief Executive Officer, Alex
Dillard, President, and Mike Dillard, Executive Vice
President, are officers and directors of W.D. Company, Inc.
and own 21.3%, 25.1%, 23.3% and 22.0%, respectively, of the
outstanding voting stock of W.D. Company, Inc.
ELECTION OF DIRECTORS
Five Directors representing Class A Stockholders and 10
Directors representing Class B Stockholders are to be elected by
the Class A Stockholders and the Class B Stockholders,
respectively, at the annual meeting for a term of one year and
until the election and qualification of their successors. The
Proxies solicited hereby will be voted "FOR" the election as
Directors of the 15 persons hereinafter identified under
"Nominees for Election as Directors" if not specified otherwise.
Management does not know of any nominee who will be unable to
serve, but should any nominee be unable or decline to serve, the
discretionary authority provided in the Proxy will be exercised
to vote for a substitute or substitutes. Management has no
reason to believe that any substitute nominee will be required.
In 1998, the Company adopted a resolution amending its by-
laws to provide that nominations to represent Class A
stockholders shall be of independent persons only. For these
purposes, independent shall mean a person who: has not been
employed by the Company or an affiliate in any executive capacity
within the last five years; was not, and is not a member of a
corporation or firm that is one of the Company's paid advisers or
consultants; is not employed by a significant customer, supplier
or provider of professional services; has no personal services
contract with the Company; is not employed by a foundation or
university that receives significant grants or endowments from
the Company; is not a relative of the management of the Company;
is not a shareholder who has signed shareholder agreements
legally binding him to vote with management; and is not the
chairman of a company on which Dillard's, Inc. Chairman or Chief
Executive Officer is also a board member.
<PAGE>
All of the nominees to represent Class A Stockholders listed
below qualify as independent persons as defined in the above
resolution. Although there is no requirement that nominees to
represent Class B Stockholders be independent, over half of all
the nominees listed below qualify as independent persons under
the above described resolution.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
ELECTION AS DIRECTORS OF THE 15 PERSONS HEREINAFTER IDENTIFIED.
NOMINEES FOR ELECTION AS DIRECTORS
The following table briefly indicates the principal
occupation of each nominee, the approximate number of shares of
Class A and Class B Common Stock of the Company beneficially
owned by each nominee as of January 30, 1999, and the year each
nominee first was elected as a Director. The table also
indicates the approximate number of shares of Class A and Class B
Common Stock of the Company beneficially owned by the executive
officers named under "Compensation of Directors and Executive
Officers" and the number of shares beneficially owned by the
directors and executive officers, as a group, as of January 30,
1999.
Shares of
Common Stock
Beneficially Percent
Principal Director Owned as of of
Name Age Occupation Since 1/30/99(1) Class
William Dillard 84 Chairman of 1964 Class A 1,001,275 (3) 1.0%
(b)(2) the Board of Class B 3,985,776 (3) 99.2%
the Company
Calvin N. Clyde, 78 Chairman of 1985 Class A 11,087 (4) *
Jr. the Board, Class B None
(b) T. B. Butler
Publishing
Co., Inc.,
Tyler, TX
Robert C. Connor 57 Investments 1987 Class A 19,009 (5) *
(a) Class B None
Drue Corbusier 52 Executive 1994 Class A 426,584 (6) .4%
(b) Vice President Class B None
of the Company
Will D. Davis 69 Partner, 1972 Class A 17,040 (7) *
(a) Heath, Davis Class B None
& McCalla,
Attorneys,
Austin, TX
Alex Dillard 49 President 1975 Class A 1,197,480 (3) 1.2%
(b)(2) of the Company Class B 3,985,776 (3) 99.2%
Mike Dillard 47 Executive 1976 Class A 1,053,509 (3) 1.0%
(b)(2) Vice President Class B 3,985,776 (3) 99.2%
of the Company
William Dillard 54 Chief 1967 Class A 1,343,445 (3) 1.3%
II Executive Officer Class B 3,985,776 (3) 99.2%
(b)(2) of the Company
<PAGE>
James I. Freeman 49 Senior Vice 1991 Class A 405,658 (8) .4%
(b) President and Class B None
Chief Financial
Officer of the
Company
John Paul 76 Retired Member 1992 Class A 6,000 (9) *
Hammerschmidt of Congress Class B None
(a)
William B. 55 Vice Chairman, 1985 Class A 12,000 (10) *
Harrison, Jr. Chase Manhattan Class B None
(a) Corporation
New York, NY
John H. Johnson 81 President 1986 Class A 9,000 (11) *
(a) and Publisher, Class B None
Johnson
Publishing
Company, Inc.,
Chicago, IL
E. Ray Kemp 74 Former Vice 1970 Class A 70,812 (12) .1%
(b) Chairman of the Class B None
Board and Chief
Administrative
Officer of the
Company. Retired 1992.
Jackson T. 75 Chairman, 1997 Class A 21,000 (13) *
Stephens Stephens Class B None
(b) Group, Inc.
Little Rock, AR
William H. 68 Managing 1994 Class A 7,000 (14) *
Sutton Partner, Class B None
(b) Friday, Eldredge
& Clark, Attorneys
Little Rock, AR
All Nominees and Class A 6,506,908(15)(16) 6.1%
Executive Officers Class B 3,985,776(15) 99.2%
as a Group (a total of 25 persons)
(a) Class A Director
(b) Class B Director
*Denotes less than 0.1%
<PAGE>
(1) Based on information furnished by the respective
individuals.
(2) William Dillard is a director and officer of W. D.
Company, Inc. and owns 21.3% of the outstanding voting
stock of such company. William Dillard II, Alex Dillard
and Mike Dillard are sons of William Dillard and are
directors and officers of W. D. Company, Inc. and own
25.1%, 23.3% and 22.0%, respectively, of the outstanding
voting stock of such company.
(3) Includes 41,496 shares of Class A Common Stock and 3,985,776
of Class B Common Stock owned by W. D. Company, Inc., in which
shares William Dillard, William Dillard II, Alex Dillard and Mike
Dillard are each deemed to have a beneficial interest due to
their respective relationships with W. D. Company, Inc. See
"Principal Holders of Voting Securities." William Dillard and
his wife individually own 334,522 and 2,772 shares, respectively,
of Class A Common Stock; he has sole voting power with respect to
19,485 shares held in trust for three minor children and has the
right to acquire beneficial ownership of 603,000 shares pursuant
to currently exercisable options granted under Company stock
option plans. William Dillard II individually owns 574,921
shares of Class A Common Stock and has the right to acquire
beneficial ownership of 727,028 shares pursuant to currently
exercisable options granted under Company stock option plans.
Alex Dillard and his wife individually own 391,072 and 37,961
shares, respectively, of Class A Common Stock, and he has the
right to acquire beneficial ownership of 726,951 shares pursuant
to currently exercisable options granted under Company stock
option plans. Mike Dillard individually owns 280,708 shares of
Class A Common Stock, has sole voting power with respect to
31,305 shares held in trust for three minor children and has the
right to acquire beneficial ownership of 700,000 shares pursuant
to currently exercisable options granted under Company stock
option plans.
(4) Calvin N. Clyde owns 5,087 shares of Class A Common Stock
and has the right to acquire beneficial ownership of
6,000 shares pursuant to currently exercisable options
granted under Company stock option plans.
(5) Includes nine shares owned by his wife. Robert C. Connor
owns 13,000 shares of Class A Common Stock and has the
right to acquire beneficial ownership of 6,000 shares
pursuant to currently exercisable options granted under
Company stock option plans.
(6) Drue Corbusier owns 106,584 shares of Class A Common Stock
and has the right to acquire beneficial ownership of 320,000
shares pursuant to currently exercisable options granted under
Company stock option plans.
(7) Will D. Davis owns 11,040 shares of Class A Common Stock and
has the right to acquire beneficial ownership of 6,000 shares
pursuant to currently exercisable options granted under Company
stock option plans.
(8) James I. Freeman individually owns 88,398 shares and has the
right to acquire beneficial ownership of 317,260 shares pursuant
to currently exercisable options granted under Company stock
option plans.
(9) John Paul Hammerschmidt has the right to acquire beneficial
ownership of 6,000 shares pursuant to currently exercisable
options granted under Company stock option plans.
(10) William B. Harrison, Jr. and his wife individually own 2,700
and 3,300 shares, respectively, of Class A Common Stock, and he
has the right to acquire beneficial ownership of 6,000 shares
pursuant to currently exercisable options granted under Company
stock option plans.
(11) Johnson Publishing Company, Inc., of which John H. Johnson
is President and Publisher, owns 3,000 shares of Class A Common
Stock, and he has the right to acquire beneficial ownership of
6,000 shares pursuant to currently exercisable options granted
under Company stock option plans.
(12) E. Ray Kemp and his wife individually own 27,693 and 37,119
shares, respectively, of Class A Common Stock and he has the
right to acquire beneficial ownership of 6,000 shares pursuant to
currently exercisable options granted under Company stock option
plans.
(13) Jackson T. Stephens owns 15,000 shares of Class A Common
Stock and has the right to acquire beneficial ownership of 6,000
shares pursuant to currently exercisable options granted under
Company stock option plans.
(14) William H. Sutton owns 4,000 shares of Class A Common Stock
and has the right to acquire beneficial ownership of 3,000 shares
pursuant to currently exercisable options granted under Company
stock option plans.
(15) The shares in which William Dillard, William Dillard II,
Alex Dillard and Mike Dillard are deemed to have a beneficial
interest due to their respective relationships with W. D.
Company, Inc. have been included in this computation only once
and were not aggregated for such purpose.
(16) Includes the right to acquire beneficial ownership of
4,166,775 shares pursuant to currently exercisable options
granted under Company stock option plans.
<PAGE>
The following nominees for director also hold directorships in
the designated companies:
Name Director of
William Dillard II Acxiom Corporation and,
Barnes & Noble, Inc.
John Paul Hammerschmidt American Freightways Corporation,
First Federal Bank of Arkansas, and
Southwestern Energy Co.
William B. Harrison, Jr. Chase Manhattan Corporation, and
Freeport-McMoRan Copper and Gold, Inc.
The business associations of the nominees as shown in the table
under "Nominees for Election as Directors" have been continued
for more than five years, except that prior to 1998 William
Dillard was Chief Executive Officer of the Company, Drue
Corbusier was Vice President of the Company, Alex Dillard was
Executive Vice President of the Company and William Dillard II
was President and Chief Operating Officer of the Company. Each
nominee for Director was elected to the Board of Directors at the
annual meeting of stockholders held May 16, 1998.
The Board of Directors met six times during the last 12 months,
on May 12, May 16, July 16, August 10, and December 11, 1998, and
March 20, 1999
Audit Committee members are Calvin N. Clyde, Jr., Chairman;
John H. Johnson; E. Ray Kemp; and William H. Sutton. The Audit
Committee held three meetings during the year.
The Executive Compensation and Stock Option Committee members
are Robert C. Connor; Will D. Davis, Chairman; John Paul
Hammerschmidt; and William B. Harrison. The Executive
Compensation and Stock Option Committee held three meetings
during the year.
Of the nominees for director Jackson T. Stephens and William H.
Sutton attended fewer than 75% of the aggregate of (1) the total
number of meetings of the Board of Directors and (2) the total
number of meetings held by all committees of the board on which
they served.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Cash and Other Compensation
The following table sets forth, for the fiscal years
indicated, the cash and other compensation provided by the
Company and its subsidiaries to the Chief Executive Officer and
each of the four most highly compensated executive officers (the
"named executive officers") of the Company in all capacities in
which they served.
<PAGE>
Summary Compensation Table
<TABLE>
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Annual Restricted Securities LTIP All Other
Name and Principal Year Salary($) Bonus($) Compensation Stock Underlying Payouts Compensation
Position ($) Award(s)($) Options/ ($) ($)(1)
SARs(#)
<S> <C> <C> <C> <S> <S> <C> <S> <C> <C>
Willam Dillard II 1998 $650,000 $ 650,000 -- -- 150,000 -- $244,823 $244,82
Chief 1997 630,000 1,150,000 -- -- 150,000 -- 165,200
Executive 1996 610,000 900,000 -- -- 150,000 -- 122,630
Officer
Alex Dillard 1998 560,000 650,000 -- -- 150,000 -- 210,080
President 1997 540,000 1,150,000 -- -- 150,000 -- 152,440
1996 520,000 900,000 -- -- 150,000 -- 110,420
Mike Dillard 1998 500,000 340,000 -- -- 100,000 -- 155,639
Executive Vice 1997 480,000 600,000 -- -- 150,000 -- 110,750
President 1996 465,000 550,000 -- -- 150,000 -- 83,800
Drue Corbusier 1998 450,000 300,000 -- -- 100,000 -- 92,600
Executive Vice 1997 420,000 400,000 -- -- 70,000 -- 72,166
President 1996 400,000 250,000 -- -- 60,000 -- 41,514
James I. Freeman 1998 445,000 250,000 -- -- 100,000 -- 105,758
Senior Vice 1997 425,000 400,000 -- -- 70,000 -- 71,700
President and 1996 410,000 250,000 -- -- 60,000 -- 53,000
Chief Financial
Officer
</TABLE>
(1) Amounts represent the Company's defined contributions for the
benefit of the named executive officers pursuant to its Retirement
Plan.
<PAGE>
Stock Option Grants
The following table sets forth information concerning stock
options granted under the Company's 1998 Stock Option Plan to the
named executive officers:
Option/SAR Grants in Last Fiscal Year
<TABLE>
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term
(a) (b) (c) (d) (e) (f) (g)
Number of % of Total
Securities Options/SARs
Underlying Granted to
Option/SARs Employees in Exercise or Expiration
Name Granted(#)(1) Fiscal Year Base Price Date 5% ($) 10% ($) $)
<S> <C> <C> <C> <C> <C> <C> <C>
William Dillard II 150,000 9.2% $40.22 5/16/2005 $2,456,138 $5,723,588 $5,72
Alex Dillard 150,000 9.2 40.22 5/16/2005 2,456,138 5,723,588
Mike Dillard 100,000 6.2 40.22 5/16/2005 1,637,425 3,815,725
Drue Corbusier 100,000 6.2 40.22 5/16/2005 1,637,425 3,815,725
James I. Freeman 100,000 6.2 40.22 5/16/2005 1,637,425 3,815,725
</TABLE>
(1)If payment for shares upon exercise of any of these options is
made with shares of the Company's common stock owned by the
optionee, the optionee shall be granted on that date an option
("Reload Option") to purchase a number of shares equal to the
number of shares tendered to the Company. The exercise price
of the Reload Option shall be the market price of the Company's
common stock on the Reload Option grant date, and the
expiration date of the Reload Option shall be the same as that
of the original option.
Stock Option Exercises and Holdings
The following table sets forth information concerning stock
options exercised during the last fiscal year and stock options
held as of the end of the last fiscal year by the named executive
officers.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/ SAR VALUES
<TABLE>
(a) (b) (c) (d) (e)
Number of Securites
Underlying Value of Unexercised
Unexercised Options/ In-the-Money
SARs at FY-End (#) Options/
Name Shares Acquired Value SARs at FY-End
on Exercise (#) Realized($) ($)(1)
Exercisable Exercisable
Unexercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
William Dillard II 0 $ 0 727,028 0 $ 0 $ 0
Alex Dillard 0 0 726,951 0 0 0
Mike Dillard 0 0 700,000 0 0 0
Drue Corbusier 0 0 320,000 0 0 0
James I. Freeman 0 0 317,260 0 0 0
</TABLE>
(1)Represents the amount by which the market price at fiscal year
end of the shares underlying unexercised options exceeds the
exercise price for such shares.
<PAGE>
Pension Plan
The following table shows the estimated annual benefits payable
pursuant to the Company's pension plan to persons in specified
compensation and years of service categories upon retirement.
Pension Plan Table
Years of Service
Remuneration 15 20 25 30 35
300,000 67,500 92,066 117,066 142,066 167,066
350,000 79,566 108,733 137,900 167,066 196,233
400,000 92,066 125,400 158,733 192,066 225,400
450,000 104,566 142,066 179,566 217,066 254,567
500,000 117,066 158,733 200,400 242,067 283,733
550,000 129,566 175,400 221,233 267,067 312,900
600,000 142,066 192,066 242,067 292,067 342,067
650,000 154,566 208,733 262,900 317,067 371,233
700,000 167,066 225,400 283,733 342,067 400,400
A participant's compensation covered by the Company's pension
plan is his average salary (as reported in the Summary
Compensation Table) for the last five years of his employment
with the Company. The credited years of service for each of the
named executive officers is as follows: William Dillard II, 30
years; Alex Dillard, 27 years; Mike Dillard, 27 years; Drue
Corbusier, 30 years; and James I. Freeman, 10 years. Benefits
shown are computed as a single life annuity with five years term
certain beginning at age 65 and are not subject to deduction for
social security or other offset amounts.
Compensation of Directors
Directors who are not officers of the Company each receive an
annual retainer of $30,000, $1,250 for attendance at each board
meeting, $250 for each committee meeting, and actual travel
expenses.
Compensation Committee Interlocks and Insider Participation
The Company's Executive Compensation and Stock Option Committee
is composed of Robert C. Connor; Will D. Davis; John Paul
Hammerschmidt; and William B. Harrison. Mr. Davis is a partner
of the law firm Heath, Davis & McCalla, which is retained by the
Company for legal services.
<PAGE>
Report of Executive Compensation and Stock Option Committee
The following report addressing the Company's compensation
policies for executive officers for fiscal 1998 is submitted by
the Executive Compensation and Stock Option Committee (the
"Compensation Committee") of the Board of Directors.
General
The Compensation Committee, which is composed of independent
directors who are not employees of the Company, establishes
policies relating to the compensation of employees and oversees
the administration of the Company's employee benefit plans. The
compensation program of the Company has been designed (1) to
provide compensation opportunities that are equivalent to those
offered by comparable companies, thereby allowing the Company to
compete for and retain talented executives who are critical to
the Company's long-term success, (2) to motivate key senior
officers by rewarding them for attainment of profitability of the
Company, and (3) to align the interests of executives with the
long-term interests of stockholders by awarding stock options to
executives as part of the compensation provided to them.
In order to develop a competitive compensation package for the
executive officers of the Company, the Compensation Committee
compares the Company's compensation package with those of a
comparison group. The comparison group is composed of department
stores, specialty stores and other public companies that were
family-founded and continue to be family-managed. Not all of the
companies in the comparison group are included in the Standard &
Poor's Department Store Index. The Compensation Committee
believes that the companies in the comparison group are
comparable to the Company in management style and management
culture. Although the Compensation Committee has made these
comparisons, it also has taken into account that as the Company
has grown in size, the number of senior executives has not grown
proportionately, so that the number of senior executives retained
by the Company is lower than the number of senior executives at
other companies of similar size.
Currently, the Company's compensation program consists of salary,
annual cash performance bonus based on the profitability of the
Company, and long-term incentive opportunities in the form of
stock options. The compensation program is focused both on short-
term and long-term performance of the Company, rewarding
executives for both achievement of profitability and growth in
stockholder value.
Salary -- Each year the Compensation Committee makes a
recommendation to the Board establishing the salary for all
executive officers. Such salary recommendations are made at the
discretion of the Compensation Committee and are not specifically
related to any company performance criteria as are both the cash
performance bonus and stock option portions of the compensation
program, which are discussed below. The Compensation Committee
does, however, base any increase in salary recommendations on
target salaries based on a regression analysis of salaries paid
versus total revenues for the comparison group. For fiscal 1998,
the salary recommendations made by the Compensation Committee
were below the target salaries produced by this analysis.
Cash Performance Bonus -- Cash performance bonuses may be paid
annually to senior management. For bonuses to be paid, however,
the Company must have income before federal and state income
taxes ("pre-tax income") for the fiscal year. The Compensation
Committee, within ninety (90) days after the start of a fiscal
year, designates those individuals in senior management eligible
to receive a cash performance bonus. Bonuses are paid at the
conclusion of a fiscal year from a bonus pool which is equal to
one and one-half percent (1-1/2%) of the Company's pre-tax income
plus three and one-half (3-1/2%) of the increase in pre-tax
income over the prior fiscal year. When the Compensation
Committee designates the individuals eligible to participate in
the cash performance bonus program, it also designates the
percent of the bonus pool each individual will be entitled to
receive. The Compensation Committee retains at all times the
authority to adjust downward the amount of bonus any individual
may receive pursuant to the above-described formula. For fiscal
1998, the Company experienced a pre-tax income of $219,084,000
and no increase in pre-tax income over the prior fiscal year.
The Compensation Committee made a decision to adjust downward by
approximately $1,100,000 the amount of bonus which the named
executive officers would receive for fiscal 1998 pursuant to the
cash performance bonus program.
Stock Options -- Stock option grants under the Company's 1998
Incentive and Non-Qualified Stock Option Plan are utilized by the
Company for long-term incentive compensation for executive
officers. These stock option grants relate their compensation
directly to the performance of the Company's stock. The exercise
price for the options granted is one hundred percent (100%) of
the fair market value of the shares underlying such options on
the date of grant and have value to the executive officers only
if the Company's stock price increases. The stock options are
exercisable on or after May 16, 1998. When making option grants,
the Compensation Committee does not consider the number of
options already held by an executive officer.
<PAGE>
As discussed in previous Compensation Committee Reports, the
Omnibus Budget Reconciliation Act of 1993 prevents public
corporations from deducting as a business expense that portion of
compensation exceeding $1 million paid to a named executive
officer in the Summary Compensation Table. This deduction limit
does not apply to "performance-based compensation." The
Compensation Committee believes that the necessary steps have
been taken to qualify as performance-based compensation the
compensation paid under the cash performance bonus and stock
option portions of the Company's compensation program.
Chief Executive Officer
In setting the Chief Executive Officer's compensation, the
Compensation Committee makes the same determination with regard
to salary, cash performance bonus and stock options as discussed
above for the other named executive officers. For fiscal 1998,
the increase in the Chief Executive Officer's salary over the
prior fiscal year resulted in a salary lower than the target
salary produced by the regression analysis discussed above
Robert C. Connor
John Paul Hammerschmidt
William B. Harrison
Will D. Davis, Chairman
Company Performance
The graph below compares for each of the last five fiscal years
the cumulative total returns on the Company's Class A Common
Stock, the Standard & Poor's 500 Index and the Standard & Poor's
Department Stores Index. The cumulative total return on the
Company's Class A Common Stock assumes $100 invested in such
stock on January 31, 1994 and assumes reinvestment of dividends.
<PAGE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS
William Dillard II, Drue Corbusier, Alex Dillard and Mike
Dillard are children of William Dillard.
Mr. William H. Sutton is Managing Partner of the law firm
Friday, Eldredge & Clark, which is retained by the Company for
legal services.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's directors and executive officers, and persons who
own more than 10% of the Company's Class A Common Stock, to file
with the Securities and Exchange Commission and the New York
Stock Exchange initial reports of ownership and reports of
changes in ownership of stock of the Company.
To the Company's knowledge, based solely on a review of copies
of reports provided by such individuals to the Company and
written representations of such individuals that no other reports
were required, during the fiscal year ended January 30, 1999, all
Section 16(a) filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were complied
with.
Stockholder Proposal Concerning Child/Convict Labor
The Amalgamated Bank of New York LongView Collective Investment
Fund, 11-15 Union Square, New York, NY 10003, owner of 31,300
shares of Class A Common Stock, The Sisters of Charity of Saint
Vincent de Paul of New York, 6301 Riverdale Avenue, Bronx, NY
10471, owners of 200 shares of Class A Common Stock, and Aaron
Merle Epstein, 10850 Riverside Drive, #412, North Hollywood, CA
91602, owner of 150 shares of Class A Common Stock have indicated
that they intend to propose the following resolution for action
at the meeting:
"RESOLVED: The shareholders of Dillard's, Inc. request the Board
of Directors to prepare a report at reasonable expense describing
Dillard's actions to ensure that it does not and will not do
business with foreign suppliers who manufacture items for sale in
the United States using forced labor, convict labor, or illegal
child labor, or who fail to satisfy all applicable laws and
standards protecting their employees' wages, benefits, working
conditions, freedom of association, and other rights."
SUPPORTING STATEMENT
"As U.S. companies import more goods, concern is growing about
working conditions in many nations that fall far below basic
standards of fair and humane treatment. Several years ago, a
controversy arose after reports that goods made by convicts in
Chinese prisons were being imported into the United States for
sale to consumers. The Tariff Act of 1930 makes it illegal to
import any goods made by forced labor, including convict labor.
China's use of prison labor and its record on human rights
generally are issues in the debate about whether China should
enjoy "most favored nation" trading status with the United
States.
Public concern has also been voiced in the wake of reports that
retail items were manufactured using illegal child labor, unsafe
or unhealthy working conditions, and similar conditions. In April
1997, the White House Apparel Industry Partnership, which was
appointed by President Clinton to make recommendations in this
area, presented a report to the President setting out a Workplace
Code of Conduct and Principles of Monitoring for the apparel and
footwear industry. The standards in that report, if implemented
comprehensively and diligently, are intended to eliminate poor
working conditions for workers in the U.S. and abroad.
We are resubmitting this proposal because Dillard's imports many
goods into the United States, and thus we as shareholders have a
strong interest in learning what steps Dillard's is taking to
monitor and control the conditions under which the goods it sells
are produced. Reports that overseas suppliers are exploiting
workers may damage a company's reputation and generate a consumer
backlash.
In our view too, it makes good business sense to enforce strict
sourcing standards. For example, there are subterfuges that
suppliers can use to import goods made by forced labor into the
United States. Also, when the federal government enforces
applicable laws, it may hold companies liable for actions of
their suppliers.
<PAGE>
Strict standards and an active enforcement policy are thus vital
for a company such as Dillard's. We therefore ask the Board to
prepare a report giving investors data about Dillard's efforts to
assure that it is not doing business with overseas suppliers that
exploit workers. WE URGE YOU TO VOTE FOR THIS RESOLUTION!"
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THE ADOPTION OF THIS
PROPOSAL FOR THE FOLLOWING REASONS:
The Company recognizes the importance, as both an ethical
and a business responsibility, of obtaining assurances that the
products it sells are manufactured in accordance with all
applicable laws and that the rights and welfare of workers around
the world are respected.
The Company has always been committed to the highest
ethical conduct and strict compliance with the law in all its
business dealings, including its relationships with its many
suppliers. The Company is deeply concerned about the issues
raised in the Proposal and believes it has already adequately
addressed such issues as described below.
Products sold at the Company's stores are supplied by
independent suppliers who also supply other retail stores and
chains. To a much lesser degree, the Company is also supplied by
sources contracted by buying agents for the Company. The Company
does not engage directly in manufacturing.
The Company has previously addressed the concerns raised
in the Proposal by implementation of the following policies and
procedures:
The Company has developed a formal business policy (the
"Policy") which focuses on the workplace conditions of, and legal
compliance by, foreign vendors and suppliers. The Policy was
distributed to all of the Company's foreign vendors and suppliers
to restate and reemphasize the Company's longstanding philosophy
that no merchandise purchased by the Company will be manufactured
with the use of illegal labor conditions.
In furtherance of the Policy, the Company has renegotiated
its agreements with foreign buying agents (including a buying
office). These new buying agency agreements include prohibitions
against illegal child labor and other forms of illegal
employment, manufacturing, shipping, customs and environmental
practices. Under the contract, a buying agent must use its best
efforts to ensure that each vendor is in full compliance with any
current, or later adopted, law of either the country of
manufacture or the United States governing the use of child
labor, prison labor, and/or governing the importation into the
United States of merchandise produced with child labor as well as
any other similar human rights statute, regulation or law. Buying
agents must also follow policies and procedures which the Company
implements to ensure that all such statutes, laws or regulations
are followed. If a buying agent discovers a violation of such
prohibitions, the buying agent must immediately notify the
Company of such violation(s) or evidence of violation(s), so that
appropriate action can be taken to rectify such violation(s).
Under these agreements, among other measures, buying agents are
required to periodically inspect factories to ensure compliance
with these standards. Additionally, company employees personally
inspect selected factories to verify compliance.
The Company's philosophy also appears in the Company's
Purchase Order Terms, Conditions & Instructions, which is the
Company's standard form of purchase order and which is applicable
to all transactions between the Company and all of its suppliers.
The document explicitly requires each supplier to warrant and
represent that its merchandise is manufactured in compliance with
laws governing illegal working conditions.
The Company has previously issued a press release announcing
its business policy, which policy contains prohibitions against
workplace abuse and also contains the steps taken by the Company
to implement the policy. Futhermore, the Company has furnished a
copy of that policy to interested shareholders, and will continue
to so provide copies of that policy.
Company believes that it has already addressed the concerns
raised in the Proposal without further expenditure of valuable
time and The funds. As the above reflects, the Company is
committed to assuring that its suppliers treat their employees
properly.
FOR THE ABOVE REASONS, THE BOARD RECOMMENDS VOTING AGAINST THE PROPOSAL.
<PAGE>
OTHER MATTERS
Management of the Company knows of no other
matters that may come before the meeting. However, if any
matters other than those referred to herein should properly
come before the meeting, it is the intention of the persons
named in the enclosed Proxy to vote the Proxy in accordance
with their judgment.
STOCKHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
Proposals of stockholders intended to be presented
at the Company's annual meeting of stockholders in 1999 must
be received by the Company at its principal executive
offices not later than December 17, 1999 in order to be
included in the Company's Proxy Statement and form of Proxy
relating to that meeting.
ANNUAL REPORTS
The Company's annual report for the fiscal year
ended January 30, 1999 is being mailed with this Proxy
Statement but is not to be considered as a part hereof.
INDEPENDENT PUBLIC ACCOUNTANTS
A representative of Deloitte & Touche LLP, the
Company's independent public accountants for fiscal year
1998 and the current year, will be present at the meeting,
will have the opportunity to make a statement, and also will
be available to respond to appropriate questions.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K,
INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO,
REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, MAY BE OBTAINED WITHOUT CHARGE BY ANY
STOCKHOLDER WHOSE PROXY IS SOLICITED UPON WRITTEN REQUEST
TO:
DILLARD'S, INC.
Post Office Box 486
Little Rock, Arkansas 72203
Attention: James I. Freeman,
Senior Vice President,
Chief Financial Officer
By Order of the Board of Directors
JAMES I. FREEMAN
Senior Vice President,
Chief Financial Officer,
Assistant Secretary
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
Dillard's, Inc.
Post Office Box 486
Little Rock, Arkansas 72203 PROXY The undersigned hereby appoints
Telephone No.(501)376-5200 William Dillard and James I. Freeman as
Proxies, each with the power to appoint his
substitute, and hereby authorizes them to
represent and vote, as designated below, all
the shares of the Class A Common Stock of
Dillard's, Inc., held of record by the
undersigned on March 31, 1999, at the annual
meeting of stockholders to be held on May 15,
1999, or any adjournment thereof.
1. ELECTION OF DIRECTORS. / / FOR all Class A / / WITHHOLD AUTHORITY
nominees listed to vote for all
below (except as Class A nominees
marked to the contrary below)
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Class A Nominees
Robert C. Connor * Will D. Davis * John Paul Hammerschmidt * William B.
Harrison, Jr. * John H. Johnson
Management of the Company supports proposal 1.
2. STOCKHOLDER PROPOSAL CONCERNING CHILD/CONVICT LABOR.
(Management of the Company opposes this proposal.)
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THE PROXY
WILL BE VOTED FOR PROPOSAL 1 AND AGAINST PROPOSAL 2.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
DATED: , 1999
Signature
Signature, if jointly held
PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
Dillard's, Inc.
Post Office Box 486
Little Rock, Arkansas 72203 PROXY The undersigned hereby appoints
Telephone No.(501)376-5200 William Dillard and James I. Freeman as
Proxies, each with the power to appoint his
substitute, and hereby authorizes them to
represent and vote, as designated below, all
the shares of the Class B Common Stock of
Dillard's, Inc., held of record by the
undersigned on March 31, 1999, at the annual
meeting of stockholders to be held on May 15,
1999, or any adjournment thereof.
1. ELECTION OF DIRECTORS. / / FOR all Class B / / WITHHOLD AUTHORITY
nominees listed to vote for all
below (except as Class B nominees
marked to the contrary below)
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Class B Nominees
William Dillard * Calvin N. Clyde, Jr. * Drue Corbusier * Alex Dillard *
Mike Dillard * William Dillard II * James I. Freeman * E. Ray Kemp *
Jackson T. Stephens * William H. Sutton
Management of the Company supports proposal 1.
2. STOCKHOLDER PROPOSAL CONCERNING CHILD/CONVICT LABOR.
(Management of the Company opposes this proposal.)
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THE PROXY
WILL BE VOTED FOR PROPOSAL 1 AND AGAINST PROPOSAL 2.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
DATED: , 1999
Signature
Signature, if jointly held
PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
