DILLARD'S, INC.
6.17% RESET PUT SECURITY DUE 2011
REGISTERED REGISTERED
NO. R-1
CUSIP 254067AC5
If this Security is registered in the name of The
Depository Trust Company (the "Depositary") (55 Water
Street, New York, New York) or its nominee, this
Security 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 any such nominee to a
successor Depositary or a nominee of such successor
Depositary unless and until this Security is exchanged
in whole or in part for Securities in definitive form.
Unless this certificate is presented by an authorized
representative of the Depositary to the Company or its
agent for registration of transfer, exchange or
payment, and any certificate issued is registered in
the name of Cede & Co. or such other name as requested
by an authorized representative of the Depositary and
any payment is made to Cede & Co., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL since the registered owner hereof,
Cede & Co. has an interest herein.
DILLARD'S, INC., a Delaware corporation (herein called the
"Company", which term includes any successor corporation under
the Indenture, hereinafter referred to), for value received,
hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of $100,000,000 (ONE HUNDRED MILLION DOLLARS) on
August 1, 2011, subject to mandatory repayment of principal to
the existing Holder hereof pursuant to the purchase and
repurchase rights described on the reverse of this Security, and
to pay interest thereon from August 7, 1998 or from the most
recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually on February 1 and August 1 in
each year, commencing February 1, 1999, at the rate of 6.17% per
annum, from and including August 7, 1998 to but excluding the
Coupon Reset Date referred to on the reverse hereof, and at the
rate per annum determined in accordance with the Coupon Reset
Process referred to on the reverse hereof, from and including the
Coupon Reset Date, until the principal hereof is paid or made
available for payment.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed under its corporate seal.
Dated: August 7, 1998
TRUSTEE'S CERTIFICATE DILLARD'S, INC.
OF AUTHENTICATION
This is one of the By:_____________________
Securities of the series
designated therein Senior Vice President
referred to in the and Chief Financial Officer
within-mentioned
Indenture.
THE CHASE MANHATTAN ATTEST:
BANK, (formerly known as
Chemical Bank), Trustee
By:_____________________
By:_____________________
Assistant Secretary
Authorized Officer
(REVERSE OF NOTE)
6.17% RESET PUT SECURITY DUE 2011
This Note is one of a duly authorized issue of debentures,
notes or other evidences of indebtedness of the Company (the
"Securities"), all issued or to be issued under and pursuant to
an indenture, dated as of dated as of May 15, 1988, as
supplemented by a First Supplemental Indenture dated as of
December 16, 1988, a Second Supplemental Indenture dated as of
September 14, 1990, and a Third Supplemental Indenture dated as
of August 7, 1998 (the "Indenture"), between the Company and The
Chase Manhattan Bank (formerly known as Chemical Bank), as
Trustee (the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description
of the rights, duties and immunities thereunder of the Company
and the Trustee and the rights thereunder of the Holders of the
Securities. This Note is one of the series designated on the
face hereof, limited in aggregate principal amount to
$100,000,000 (the "Notes").
Payment of the principal of and interest on this Note will
be made at the office or agency of the Company maintained for
that purpose in New York, New York, in such coin or currency of
the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided,
however, that at the option of the Company payment of interest
may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
Interest Rate and Interest Payment Dates
The Notes will bear interest at the rate of 6.17% from and
including August 7, 1998 to but excluding August 1, 2001 (the
"Coupon Reset Date"). Interest on the Notes will be payable
semi-annually on February 1 and August 1 of each year, commencing
February 1, 1999 (each, an "Interest Payment Date"). The
interest payable, and punctually paid and duly provided for, on
any Interest Payment Date will be paid to the Person in whose
name this Note is registered at the close of business on the
fifteenth calendar day (whether or not a Business Day) next
preceding such Interest Payment Date (each such date a "Record
Date"). Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on
such Record Date and may either be paid to the Person in whose
name this Note is registered at the close of business on a
special Record Date for the payment of such defaulted interest to
be fixed by the Trustee, notice whereof shall be given to Holders
of the Notes not less than 10 days prior to such special Record
Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which the Notes may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said
Indenture. Interest will be calculated based on a 360-day year
consisting of twelve 30-day months. "Business Day" means any
day other than a Saturday, a Sunday or a day on which banking
institutions in The City of New York are authorized or required
by law or regulation to be closed.
If the Remarketing Dealer (as defined below) purchases the
Notes as described below, the Remarketing Dealer will reset the
interest rate for the Notes effective on the Coupon Reset Date,
pursuant to the Coupon Reset Process described below. In such
circumstance, (i) this Note will be purchased by the Remarketing
Dealer at 100% of the principal amount hereof on the Coupon Reset
Date, on the terms and subject to the conditions described herein
(interest accrued to but excluding the Coupon Reset Date will be
paid by the Company on such date to the Holder hereof on the most
recent Record Date), and (ii) from and including the Coupon Reset
Date, the Notes will bear interest at the rate determined by the
Remarketing Dealer in accordance with the procedures set forth
under "Coupon Reset Process if Notes Are Remarketed" below.
Maturity Date
The Notes will mature on August 1, 2011 (the "Maturity
Date"). On the Coupon Reset Date pursuant to automatic purchase
of this Note, the Holder hereof will be entitled to receive 100%
of the principal amount hereof (the "Purchase/Repurchase Price")
(interest accrued to but excluding the Coupon Reset Date will be
paid by the Company on such date to the Holders of the Notes on
the most recent Record Date) from either (i) the Remarketing
Dealer, if the Remarketing Dealer purchases this Note, or
(ii) the Company, pursuant to either optional or mandatory
repurchase of this Note by the Company.
Purchase by the Remarketing Dealer; Remarketing
If the Remarketing Dealer gives notice in writing (the
"Remarketing Notification") to the Company and the Trustee on a
Business Day (the "Notification Date") not later than fifteen
calendar days prior to the Coupon Reset Date of its intention to
purchase the Notes for remarketing, the Notes will be
automatically purchased, or deemed purchased, by the Remarketing
Dealer at the Purchase/Repurchase Price on the Coupon Reset Date,
except in the circumstances described below. Interest accrued to
but excluding the Coupon Reset Date will be paid by the Company
on such date to the Holder hereof on the most recent Record Date.
If the Remarketing Dealer purchases the Notes as aforesaid, from
and after the Coupon Reset Date, the Notes will bear interest at
the Coupon Reset Rate.
The Remarketing Notification must contain the requisite
delivery details, including the identity of the Remarketing
Dealer's account with The Depository Trust Company, New York, New
York (the "Depositary"). The Remarketing Dealer may revoke the
Remarketing Notification and terminate its obligation to remarket
the Notes by giving notice thereof to the Company and the Trustee
at any time prior to 2:00 p.m., New York time, on the Business
Day prior to the Coupon Reset Date. Such revocation will
terminate the Coupon Reset Process.
If the Remarketing Dealer gives the Remarketing Notification
as aforesaid, then unless a Termination Event (as defined below)
occurs, not later than 2:00 P.M., New York time, on the Business
Day prior to the Coupon Reset Date, the Remarketing Dealer shall
deliver the Purchase/Repurchase Price in immediately available
funds to the Trustee for payment of the Purchase/Repurchase Price
on the Coupon Reset Date and the Holder of this Note shall be
required to deliver, and any owner of a beneficial interest in
this Note shall be deemed to have delivered its beneficial
interest in, this Note to the Remarketing Dealer against payment
of the Purchase/Repurchase Price on the Coupon Reset Date through
the facilities of the Depositary.
The Remarketing Dealer's obligation to purchase the Notes
will be terminated and the Coupon Reset Process will terminate,
if any of the following (a "Termination Event") occurs: (i) an
Event of Default occurs under the Indenture (in which case,
termination is at the Remarketing Dealer's option); (ii) on the
Bid Date (as defined below), fewer than two Dealers (as defined
below) submit timely Bids (as defined below) substantially as
provided below (in which case, termination is automatic);
(iii) the Company exercises its right to repurchase the Notes as
described under "-Optional Repurchase by the Company" below (in
which case, termination is automatic); (iv) a "legal defeasance"
or a "covenant defeasance" under Section 403 or 1010 of the
Indenture has occurred; (v) the Remarketing Dealer fails to pay
the Purchase/Repurchase Price by 2:00 p.m., New York time, on the
Business Day prior to the Coupon Reset Date (other than due to
the occurrence of a Market Disruption Event, as such term is
defined in the Remarketing Agreement referred to below) (in which
case, termination is automatic); (vi) the Remarketing Dealer does
not give the Remarketing Notification (in which case, termination
is automatic); (vii) the Remarketing Dealer revokes the
Remarketing Notification in the manner set forth above (in which
case, termination is automatic); or (viii) prior to the
Notification Date the Remarketing Dealer resigns and no successor
has been appointed (in which case, termination is automatic).
The Remarketing Dealer will give the Trustee immediate
written notice of any Termination Event under clause (i), (ii) or
(v) (in the case of a Market Disruption Event) and the Company
will give the Trustee immediate written notice of a Termination
Event under clause (viii). If a Termination Event occurs, the
Company will repurchase the Notes on the Coupon Reset Date as
described below.
The transactions described above will be executed on the
Coupon Reset Date through the Depositary in accordance with the
procedures of the Depositary, and the accounts of participants
will be debited and credited and the Notes delivered by book-
entry as necessary to effect the purchases and sales thereof.
Notice to Holders by Trustee
In anticipation of the purchase of the Notes by the
Remarketing Dealer or the repurchase of the Notes by the Company
on the Coupon Reset Date, the Trustee will notify the Holders of
the Notes, not less than 30 days nor more than 60 days prior to
the Coupon Reset Date, that all Notes shall be delivered on the
Coupon Reset Date through the facilities of the Depositary
against payment of the Purchase/Repurchase Price by the
Remarketing Dealer or the Company.
Coupon Reset Process if Notes Are Remarketed
If the Remarketing Dealer elects to remarket the Notes, then
the following steps (the "Coupon Reset Process") will be taken in
order to determine the Coupon Reset Rate. The Company and the
Remarketing Dealer will use reasonable efforts to cause the
actions contemplated below to be completed in as timely a manner
as possible.
(a) No later than five Business Days prior to the Coupon
Reset Date, the Company will provide the Remarketing Dealer with
(i) a list (the "Dealer List"), containing the names and
addresses of three dealers, one of whom shall be the Remarketing
Dealer, from whom the Company desires the Remarketing Dealer to
obtain Bids for the purchase of the Notes and (ii) such other
material as may reasonably be requested by the Remarketing Dealer
to facilitate a successful Coupon Reset Process.
(b) Within one Business Day following receipt by the
Remarketing Dealer of the Dealer List, the Remarketing Dealer
will provide to each dealer ("Dealer") on the Dealer List (i) a
copy of the Prospectus Supplement dated July 30, 1998 and
Prospectus dated July 24, 1998, relating to the offering of the
Notes (collectively, the "Prospectus Supplement"), (ii) a copy of
the form of Notes and (iii) a written request that each Dealer
submit a Bid to the Remarketing Dealer no later than 3:00 p.m.,
New York time, on the third Business Day prior to the Coupon
Reset Date (the "Bid Date"). "Bid" means an irrevocable written
offer given by a Dealer for the purchase of all of the Notes,
settling on the Coupon Reset Date, and shall be quoted by such
Dealer as a stated yield to maturity on the Notes ("Yield to
Maturity"). Each Dealer shall also be provided with (i) the name
of the Company, (ii) an estimate of the Remarketing Purchase
Price (which shall be stated as a U.S. dollar amount and be
calculated by the Remarketing Dealer in accordance with paragraph
(c) below), (iii) the principal amount and maturity of the Notes
and (iv) the method by which interest will be calculated on the
Notes.
(c) The purchase price for the Notes in connection with the
Coupon Reset Process (the "Remarketing Purchase Price") shall be
equal to (i) the principal amount of the Notes, plus (ii) a
premium (the "Notes Premium") which shall be equal to the excess,
if any, on the Coupon Reset Date of (A) the discounted present
value to the Coupon Reset Date of a bond with a maturity of
August 1, 2011 which has an interest rate of 5.503%, semiannual
interest payments on each February 1 and August 1, commencing
February 1, 2002, and a principal amount equal to the principal
amount of the Notes, and assuming a discount rate equal to the
Treasury Rate over (B) such principal amount of Notes. The
"Treasury Rate" means the per annum rate equal to the offer side
yield to maturity of the current on-the-run ten-year United
States Treasury Security per Telerate page 500, or any successor
page, no later than 3:00 p.m., New York time, on the Bid Date (or
such other time or date that may be agreed upon by the Company
and the Remarketing Dealer) or, if such rate does not appear on
Telerate page 500, or any successor page, at such time, the rates
on GovPX End-of-Day Pricing at 3:00 p.m., New York time, on the
Bid Date (or such other time or date that may be agreed upon by
the Company and the Remarketing Dealer).
(d) The Remarketing Dealer will provide written notice to
the Company as soon as practicable on the Bid Date, setting forth
(i) the names of each of the Dealers from whom the Remarketing
Dealer received Bids on the Bid Date, (ii) the Bid submitted by
each such Dealer and (iii) the Remarketing Purchase Price as
determined pursuant to paragraph (c) above. Except as provided
below, the Remarketing Dealer will thereafter select from the
Bids received the Bid with the lowest Yield to Maturity (the
"Selected Bid"); provided, however, that (i) if the Remarketing
Dealer has not received a timely Bid from a Dealer on or before
the Bid Date, the Selected Bid shall be the lowest of all Bids
received by such time and (ii) if any two or more of the lowest
Bids submitted are equivalent, the Company shall in its sole
discretion select any of such equivalent Bids (and such selected
Bid shall be the Selected Bid). In all cases, the Remarketing
Dealer shall have the right to match the Bid with the lowest
Yield to Maturity in which case the Remarketing Dealer's Bid
shall be the Selected Bid. The Remarketing Dealer will set the
Coupon Reset Rate equal to the interest rate that will amortize
the Notes Premium fully over the term of the Notes at the Yield
to Maturity indicated by the Selected Bid.
(e) Immediately after calculating the Coupon Reset Rate for
the Notes, the Remarketing Dealer will provide written notice to
the Company and the Trustee, setting forth the Coupon Reset Rate.
The Coupon Reset Rate for the Notes will be effective from and
including the Coupon Reset Date.
The Remarketing Dealer
On or prior to the date of original issuance of the Notes,
the Company and Morgan Stanley & Co. Incorporated (the
"Remarketing Dealer") entered into a Remarketing Agreement (a
"Remarketing Agreement"). No Holder or beneficial owner of any
Notes shall have any rights or claims under the Remarketing
Agreement or against the Company or the Remarketing Dealer as a
result of the Remarketing Dealer not purchasing the Notes.
The Remarketing Dealer, in its individual or any other
capacity, may buy, sell, hold and deal in any of the Notes. The
Remarketing Dealer may exercise any vote or join in any action
which any Holder or beneficial owner of the Notes may be entitled
to exercise or take with like effect as if such Remarketing
Dealer did not act in any capacity under its Remarketing
Agreement. The Remarketing Dealer, in its individual capacity,
either as principal or agent, may also engage in or have an
interest in any financial or other transaction with the Company
as freely as if it did not act in any capacity under its
respective Remarketing Agreement.
Mandatory Repurchase by the Company
If any Termination Event occurs, the Company will repurchase
the entire principal amount of the Notes on the Coupon Reset Date
at the Purchase/Repurchase Price plus accrued and unpaid
interest, if any, on the Notes.
Optional Repurchase by the Company
If the Remarketing Dealer gives the Remarketing
Notification, then, not later than the fourth Business Day
following the Notification Date, the Company may irrevocably
elect, by notice in writing to the Remarketing Dealer and the
Trustee, to terminate the Coupon Reset Process, whereupon the
Company will repurchase the entire principal amount of the Notes
on the Coupon Reset Date at the Purchase/Repurchase Price plus
accrued and unpaid interest, if any, on the Notes.
In case the Company is required to or elects to purchase the
Notes pursuant to either of the preceding two paragraphs, the
Company shall deliver the Purchase/Repurchase Price in
immediately available funds to the Trustee by no later than 10:00
A.M., New York time, on the Coupon Reset Date, and the Holder of
this Note shall be required to deliver, and any owner of a
beneficial interest in this Note shall be deemed to have
delivered its beneficial interest in, this Note to the Company
against payment of the Purchase/Repurchase Price on the Coupon
Reset Date through the facilities of the Depositary. Notes that
have been purchased by the Company as aforesaid shall be canceled
by the Trustee in accordance with the Indenture and no Notes may
be issued in lieu thereof or in exchange therefor.
The Notes are not subject to redemption prior to maturity
except in accordance with the following paragraphs.
Redemption
Upon the occurrence of a Merger Redemption Event (as defined
below), the Notes shall be subject to redemption in whole but not
in part at a redemption price equal to 102% of the aggregate
principal amount thereof, plus accrued and unpaid interest
thereon to the date of redemption. Immediately following a
Merger Redemption Event, the Company will mail a notice to the
Trustee and the Holders of the Notes stating that the Merger
Redemption Event has occurred and that the Notes will be redeemed
no later than 30 days after the date of such notice. The Notes
shall be redeemed in whole at the foregoing redemption price by
said 30th day.
A "Merger Redemption Event" will be deemed to have occurred
at such time as either of the following events occurs: (i) the
Agreement and Plan of Merger, dated as of May 16, 1998 (the
"Merger Agreement"), among the Company, MSC Acquisition, Inc.
("NEWCO") and Mercantile Stores Company, Inc. ("Mercantile") is
terminated or (ii) the merger of NEWCO with and into Mercantile
pursuant to the Merger Agreement is not consummated on or prior
to October 31, 1998.
General Matters
If an Event of Default with respect to the Notes shall occur
and be continuing, the principal of the Notes may be declared due
and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the
rights and obligations of the Company and the rights of the
Holders of the Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66-2/3% in principal amount of the
Securities at the time outstanding of each series to be affected.
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of
each series at the time outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Note shall be conclusive
and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of
this Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of (and premium, if any) and interest on
this Note at the time, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Note is
registrable in the Security Register, upon surrender of this Note
for registration of transfer at the office or agency of the
Company in any place where the principal of (and premium, if any)
and interest on this Note are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Notes and of like tenor,
of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or
transferees.
The Notes are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiples
thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Notes are exchangeable for a
like aggregate principal amount of Notes and of like tenor of a
different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Note is
registered as the owner hereof for all purposes, whether or not
this Note be overdue, and neither the Company, the Trustee nor
any such agent shall be affected by notice to the contrary.
Terms used herein which are defined in the Indenture shall
have the respective meanings assigned thereto in the Indenture.
This Note shall be governed by and construed in accordance
with the laws of the State of New York.
___________________________
ABBREVIATIONS
The following abbreviations, when used in the inscription
on the face of this instrument, shall be construed as though they
were written out in full according to applicable laws or
regulations:
TEN COM --as tenants in common UNIF GIFT MIN ACT--______CUSTODIAN______
TEN ENT --as tenants by the entireties (Cust) (Minor)
JT TEN --as joint tenants with right Under Uniform Gifts to Minors Act
of survivorship and not as
tenants in common ______________________________
(State)
Additional abbreviations may also be used though not in
the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
Please Insert Social Security or
Other Identifying Number of Assignee
________________
/ /
_________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING
POSTAL ZIP CODE OF ASSIGNEE
_________________________________________________________________
_________________________________________________________________
the within Note of Dillard's, Inc. and does hereby irrevocably
constitute and appoint
__________________________________________________________
attorney to transfer said Note on the books of the Company, with
full power of substitution in the premises.
Dated: _________________________
_______________________________________
_______________________________________
NOTICE: The signature to this assignment must correspond with
the name as written upon the face of the within instrument in
every particular, without alteration or enlargement or any change
whatever.