THE DRESS BARN, INC.
30 Dunnigan Drive
Suffern, New York 10901
NOTICE OF ANNUAL MEETING
To the Shareholders of THE DRESS BARN, INC.
NOTICE IS HEREBY GIVEN THAT THE ANNUAL MEETING OF SHAREHOLDERS OF THE DRESS
BARN, INC. (the "Company") will be held at the Holiday Inn, 3 Executive
Boulevard, Suffern, New York, on Monday, December 11, 1995 at 9:00 A.M. for the
following purposes:
1. Electing two Directors;
2. Approving the adoption of The Dress Barn,
Inc. 1995 Stock Option Plan; and
3. Transacting such other business as may
properly come before the meeting or any
adjournments thereof.
Only shareholders of record at the close of business on November 3, 1995
will be entitled to notice of and to vote at said meeting.
By Order of the Board of Directors.
ELLIOT S. JAFFE
Chairman of the Board
November 15, 1995
===============================================================================
NOTE: Whether or not you expect to attend the meeting, please complete, sign and
send in your proxy promptly in the enclosed envelope. We enclose in this mailing
the Notice of Annual Meeting of Shareholders, Proxy Statement, Proxy and the
Annual Report of the Company for the fiscal year ended July 29, 1995.
===============================================================================
<PAGE>
THE DRESS BARN, INC.
30 Dunnigan Drive
Suffern, New York 10901
PROXY STATEMENT
This Proxy Statement is furnished to the shareholders of The Dress Barn,
Inc. (the "Company") in connection with the solicitation by the Company's Board
of Directors of proxies to be voted at the Annual Meeting of Shareholders of the
Company to be held on December 11, 1995, and any adjournments thereof, for the
purposes set forth herein and in the accompanying Notice of Annual Meeting. This
Proxy Statement and the enclosed form of Proxy are first being mailed to
shareholders on or about November 15, 1995. Proxies will be voted in accordance
with the directions specified therein. Any proxy on which no direction is
specified will be voted FOR election of the nominees for Director named herein
and FOR approval of the adoption of The Dress Barn Inc. 1995 Stock Option Plan
as described herein.
The Company had outstanding 22,390,279 shares of common stock on November
3, 1995. Each share is entitled to one vote.
The cost of this Proxy Statement and of solicitation of proxies will be
borne by the Company. Any proxy may be revoked by the shareholder at any time
prior to its exercise (such as by attending the meeting and voting in person or
by sending a letter of revocation to the Secretary of the Company)
ELECTION OF DIRECTORS
(Proposal No. 1)
The Certificate of Incorporation of the Company provides for a classified
Board of Directors divided into three classes, each with a staggered three year
term of office and each class of Directors as nearly equal in the number of
Directors as possible. The current number of Directors on the Board is six. The
Board of Directors has nominated Elliot S. Jaffe and Burt Steinberg, whose terms
of office as a Director expire at the 1995 Annual Meeting, for election by the
shareholders for a three-year term expiring at the 1998 Annual Meeting. Certain
information with respect to the nominees for election as a Director is set forth
below.
Name of Nominee and Age Director Since
Elliot S. Jaffe, 69.......................1966
Burt Steinberg, 50........................1983
ELLIOT S. JAFFE, Chairman of the Board and founder of the Company, has
been Chief Executive Officer since 1966. Mr. Jaffe serves as a Director of
The Zweig Fund, Inc., The Zweig Total Return Fund, Inc. and the Smith Barney
Family of Funds.
BURT STEINBERG has been in charge of the Company's merchandising
activities since 1982. He has been President and Chief Operating Officer of
the Company since 1989.
It is intended that votes will be cast pursuant to proxies received for
the election of Elliot S. Jaffe and Burt Steinberg for a term of three years and
until their successors are duly elected and qualified.
<PAGE>
Other Information Concerning Directors and Executive Officers
Certain information with respect to each member of the Board of Directors
whose term will continue after the 1995 Annual Meeting is set forth below:
Name of Director and Age Director Since Term Expiring
------------------------ -------------- -------------
Edward D. Solomon, 64....................1990 1996
Klaus Eppler, 65.........................1993 1996
Roslyn S. Jaffe, 66......................1966 1997
Donald Jonas, 66.........................1966 1997
EDWARD D. SOLOMON is President of Edward D. Solomon & Co., which
provides consulting services primarily to the retailing industry. From 1989
until 1993 he was Chief Executive Officer of Shoe-Town, Inc.
KLAUS EPPLER has, since 1965, been a partner in the law firm of Proskauer
Rose Goetz & Mendelsohn LLP, General Counsel for the Company. He is also a
director of Bed Bath & Beyond Inc. and of Inovision Corporation.
ROSLYN S. JAFFE has been the Company's Secretary since 1966 and
Treasurer since 1983. Roslyn S. Jaffe is the wife of Elliot S. Jaffe.
DONALD JONAS has been, for the past eight years, Chairman of the Board
and a Director of Lechters, Inc., a retailer of houseware products. Until
1993, Mr. Jonas was also Chief Executive Officer of Lechters, Inc.
Certain information with respect to the senior executive officers of the Company
is set forth below:
ARMAND CORREIA, age 49, joined the Company in 1991 as Senior Vice
President and Chief Financial Officer. Prior to joining the Company, Mr. Correia
was Senior Vice President and Chief Financial Officer for both Hit or Miss, Inc.
and Chadwick's of Boston, Ltd., Inc., the catalog division of TJX Companies,
Inc., as well as a Vice President of TJX Companies, Inc. for more than five
years.
ERIC HAWN, age 45, joined the Company in 1986 and has been a Senior Vice
President since 1989.
DAVID JAFFE, age 36, has been Senior Vice President of the Company
since February 1995. He joined the Company in February, 1992 as Vice
President of Business Development. Prior to joining the Company, Mr. Jaffe
was a General Partner of Chemical Venture Partners. Mr. Jaffe is the son of
Elliot S. and Roslyn S. Jaffe.
All officers of the Company hold their offices at the pleasure of the
Board of Directors.
<PAGE>
Committees and Meetings of the Board of Directors
The Company has a standing Audit and a Compensation and Stock Option
Committee of the Board of Directors. Donald Jonas and Edward D. Solomon are
currently the members of each of these Committees. The Company does not have a
nominating committee. The responsibilities of the Audit Committee include
reviewing with the Company's independent auditors the scope and results of the
auditing engagements. The Compensation and Stock Option Committee reviews and
determines the Company's policies and programs with respect to compensation of
executive officers and administers the Company's stock option plans.
The Company's Board of Directors held three meetings, the Audit Committee
held two meetings and the Compensation and Stock Option Committee held one
meeting during the fiscal year ended July 29, 1995 ("fiscal 1995"). In addition,
various actions were taken by the Board of Directors and these Committees
without a meeting.
Compensation of Directors
The Company pays its Directors, who were not also officers of the Company,
a director's fee of $10,000 per year for services rendered as Director.
Directors who are officers of the Company do not receive additional compensation
for their services as Directors.
PROPOSAL TO APPROVE THE DRESS BARN INC.
1995 STOCK OPTION PLAN
(Proposal No. 2)
On September 27, 1995, the Board of Directors adopted, subject to
shareholder approval, the 1995 Stock Option Plan (the "1995 Plan"), which
provides that options to acquire shares of the Company's common stock ("stock")
may be granted to key employees of the Company or a subsidiary and to persons
who are not employees of the Company but whose efforts are expected to be of
substantial benefit to the Company ("eligible participants"). The purpose of the
1995 Plan is to attract and retain eligible participants of outstanding
competence and to encourage their best efforts on behalf of the Company. The
Board of Directors believes that stock options provide performance incentives to
eligible participants to the benefit of the Company and its shareholders, and
recommends approval of the 1995 Plan by shareholders.
An option granted under the 1995 Plan may be an incentive stock option
("ISO") or may be a non-qualified stock option ("Non-ISO"), as determined at the
time of grant. The principal reason for adopting the 1995 Plan was to preserve
the Company's ability to make Non-ISO grants, because only 115,418 shares are
available for future Non-ISO grants under the Company's existing stock option
plans. In certain circumstances, the grant of Non-ISOs, as opposed to ISOs, can
result in federal income tax advantages to the Company, as described below. The
1995 Plan is intended to supplement the Company's existing stock option plans,
under which 1,020,698 shares are available for future ISO grants.
The 1995 Plan is designed to meet the requirements of Section 162(m) of
the Internal Revenue Code in order to preserve the Company's ability to take
compensation expense deductions in connection with the exercise of options
granted under the 1995 Plan in certain circumstances. Under Section 162(m) of
the Internal Revenue Code, a publicly held corporation is not permitted to take
a federal income tax deduction for compensation recognized by certain executive
officers in any year in excess of $1,000,000 unless such compensation meets the
shareholder approval and other requirements of Section 162(m).
The following summary describes the principal provisions of the 1995 Plan.
The summary does not purport to be complete and is qualified in its entirety by
the full text of the 1995 Plan set forth in Exhibit A thereto.
The 1995 Plan, like the Company's existing stock option plans, is
administered by the Compensation and Stock Option Committee (the "Committee"),
which is comprised of not less than two individuals appointed by the Board of
Directors who are not eligible to receive options under the 1995 Plan. The
current members of the Committee are Donald Jonas and Edward D. Solomon. The
Committee may make such rules and regulations and establish such procedures for
the administration of the 1995 Plan as it deems advisable.
The total number of shares which may be issued upon exercise of options
under the 1995 Plan shall not exceed 2,000,000 shares. In general, if options
are canceled for any reason, or expire or terminate unexpired, the shares
covered by such options again become available for grant. Such number of shares
is subject to adjustment by the Committee in the event of a recapitalization,
stock split, stock dividend or similar corporate transaction. Such shares may be
either authorized and unissued shares or shares held in treasury.
The Committee may grant options under the 1995 Plan to eligible
participants. The Company estimates that there are currently up to 1,000
employees who are eligible participants. The Committee has the discretion, in
accordance with the provisions of the 1995 Plan, to determine to whom an option
is granted, the number of shares of stock optioned (subject to a maximum of
150,000 option shares that may be granted in any year to any employee, with any
unused portion of the limitation available to be carried forward) and the terms
of the option.
Generally, the exercise price shall be the fair market value of the stock
on the date of the grant of the option, although the exercise price of Non-ISO's
may be less than fair market value, but in no event will the exercise price be
less than the par value per share. The 1995 Plan provides that optionees may pay
the exercise price in cash, the Company's stock or any combination thereof.
An option granted under the 1995 Plan may not be exercised later than the
date specified by the Committee, which shall be a maximum of ten years from the
date of the grant (five years in the case of an ISO granted to any key employee
that owns 10% or more of the stock). An option may be exercised only during the
optionee's employment or within one month after termination of employment,
provided, however, if employment terminates as a result of (a) death or total
and permanent disability or (b) retirement at age 60 or 65 (depending on the
level of seniority), then such one-month period is extended to six months and
three months, respectively.
No option may be granted under the 1995 Plan after September 26, 2005 (the
"Termination Date"). Options granted prior to the Termination Date, however, may
extend beyond such date and the provisions of the 1995 Plan will continue to
apply thereto. The Board of Directors of the Company may from time to time
alter, amend, suspend or discontinue the 1995 Plan, except that the rights of an
optionee with respect to an option granted prior to such amendment may not be
materially impaired without consent, and that no amendment may be made which
increases the aggregate number of shares that may be issued under the 1995 Plan.
Under current federal income tax laws, the grant of an ISO generally has
no income tax consequences for the optionee or the Company. No taxable income
results to the optionee upon the grant or exercise of an ISO. However, the
amount by which the fair market value of the stock acquired pursuant to the ISO
exceeds the exercise price is an adjustment item for purposes of Alternative
Minimum Tax. If no disposition of the shares is made within either two years
from the date the ISO was granted or one year from the date of exercise of the
ISO, any gain or loss realized upon disposition of the shares will be treated as
a long-term capital gain or loss to the optionee. The Company will not be
entitled to a tax deduction upon such exercise of an ISO, nor upon a subsequent
disposition of the shares unless such disposition occurs prior to the expiration
of the holding period described above. In general, if the optionee does not
satisfy the foregoing holding periods, the gain is equal to the difference
between the exercise price and the fair market value of the stock at exercise
(or, if a lesser amount, the amount realized on disposition over the exercise
price) will constitute ordinary income. In the event of such a disposition
before the expiration of the holding period described above, the Company is
entitled to a deduction at that time equal to the amount of ordinary income
recognized by the optionee. Any gain in excess of the amount recognized by the
optionee as ordinary income would be taxed to the optionee as short-term or
long-term capital gain (depending on the applicable holding period).
In addition: (i) officers and directors of the Company subject to Section
16(b) of the Securities Exchange Act of 1934 (the "Exchange Act") may be subject
to special rules regarding the income tax consequences concerning their ISOs;
(ii) any entitlement to a tax deduction on the part of the Company is subject to
the applicable federal tax rules; and (iii) in the event that the exercisability
of an option is accelerated because of a change in control, payments relating to
the options, either alone or together with certain other payments, may
constitute parachute payments under Internal Revenue Code Section 280G, which
may be subject to excise tax.
An optionee will realize no taxable income upon the grant of a Non-ISO and
the Company will not receive a deduction at the time of such grant unless the
option has a readily ascertainable fair market value (as determined under
applicable tax law) at the time of grant. Upon exercise of a Non-ISO an optionee
generally will recognize ordinary income in an amount equal to the excess of the
fair market value of the stock on the date of exercise over the exercise price.
Upon a subsequent sale of the stock by the optionee, the optionee will recognize
short-term or long-term capital gain or loss depending upon his or her holding
period for the stock. The Company will generally be allowed a deduction equal to
the amount recognized by the optionee as ordinary income.
In addition: (i) any officers and directors of the Company subject to
Section 16(b) of the Exchange Act may be subject to special tax rules regarding
the income tax consequences concerning their Non-ISO's; (ii) any entitlement to
a tax deduction on the part of the Company is subject to the applicable tax
rules; and (iii) in the event that the exercisability of an option is
accelerated because of a change in control, payments relating to the options,
either alone or together with certain other payments, may constitute parachute
payments under Internal Revenue Code Section 280G, which may be subject to
excise tax.
On October 31, 1995, the last reported sale price of the common stock of
the Company was $9.75 per share.
The Board of Directors recommends a vote FOR this proposal. The
affirmative vote of the holders of a majority of the issued and outstanding
shares of common stock is required to approve the proposal.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The table on the following page sets forth information regarding ownership
of the common stock of the Company as of November 1, 1995 for any person who is
known to be the beneficial owner of more than 5% of the Company's common stock,
by each of the Company's directors, nominees, or executive officers named in the
Summary Compensation Table and by all directors and executive officers as a
group. Unless otherwise noted in the footnotes to the table, the persons named
in the table have sole voting and investment power with respect to all shares of
common stock shown as beneficially owned by them.
<PAGE>
Number of Percentage
Name of Beneficial Owner Shares of Class
Elliot S. Jaffe (1)................... 6,560,476 28.74%
Roslyn S. Jaffe (2)......................685,124 3.00%
Burt Steinberg (3).......................473,615 2.07%
Eric Hawn (4).............................88,704 .39%
Armand Correia (5)........................46,555 .20%
David Jaffe (6)...........................24,500 .11%
Edward D. Solomon..........................1,000 ---
Klaus Eppler.................................300 ---
Donald Jonas.................................100 ---
All Directors and Executive Officers as a group
(consisting of 9 persons) (7).........7,436,064 32.57%
(1) Includes 173,336 shares (0.76%) owned directly by Elliot S. Jaffe, 444,310
shares (1.95%) owned by The Jaffe Family Foundation, a New York
not-for-profit corporation (the "Foundation"), 5,855,330 shares (25.70%)
owned by the Jaffe Family Limited Partnership, a Connecticut limited
partnership (the "Partnership") and 87,500 shares covered by options that
are exercisable within 60 days of November 1, 1995. Elliot S. Jaffe and
Roslyn S. Jaffe share voting and investment power with respect to the
shares owned by the Foundation and under the rules of the Securities and
Exchange Commission (the "SEC") are deemed to be the beneficial owners of
such shares. Both Elliot S. Jaffe and Roslyn S. Jaffe disclaim beneficial
ownership of the shares owned by the Foundation. Elliot S. Jaffe has
voting and investment power with respect to the shares owned by the
Partnership and under the rules of the SEC is deemed to be the beneficial
owner of such shares. His business address is 30 Dunnigan Drive, Suffern,
New York 10901.
(2) Includes 240,814 shares (1.06%) owned directly by Roslyn S. Jaffe
and 444,310 shares (1.95%) owned by the Foundation. See Footnote
(1) above.
(3) Includes 214,490 shares (.94%) owned directly by Mr. Steinberg and 259,125
shares covered by options that are exercisable within 60 days of November
1, 1995.
(4) Includes 15,000 shares (.07%) owned directly by Mr. Hawn and 73,704 shares
covered by options that are exercisable within 60 days of November 1,
1995.
(5) Includes 36,555 shares (.16%) owned directly by Mr. Correia, and 10,000
shares covered by options that are exercisable within 60 days of November
1, 1995.
(6) Includes 10,000 shares (.04%) owned directly by Mr. Jaffe, and 14,500
shares covered by options that are exercisable within 60 days of November
1, 1995.
(7) Includes shares owned by the Partnership and the Foundation as well as
444,829 shares covered by options that are exercisable within 60 days of
November 1, 1995 held by the executive officers.
The Company believes that Elliot S. Jaffe is, and Roslyn S. Jaffe may be
deemed to be, a "parent" of the Company within the meaning of the rules under
the Securities Act of 1933, as amended, by virtue of their respective beneficial
ownership of common stock and their positions with the Company.
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding the
compensation earned by the Chief Executive Officer and the four other
highest-paid executive officers of the Company for services rendered in fiscal
1995, 1994 and 1993.
Long-Term
Compensation
Awards
Annual Compensation Stock Options
Name and Principal All Other
Position Year Salary ($) Bonus ($) Other ($) (#) Compensation
- ------------------------------------------------------------------------------
(Profit Sharing)
Elliot S. Jaffe...1995 421,000(1) 100,000 ----- 25,000 $ 2,250
Chairman of the 1994 400,000 100,000 ----- 50,000 -----
Board and Chief 1993 400,000 200,000 ----- ----- -----
Executive Officer
Burt Steinberg... 1995 300,000 ----- ----- ----- 2,250
President and 1994 350,000 ----- 159,375(2) 200,000 -----
Chief Operating 1993 250,000 ----- ----- ----- -----
Officer
Eric Hawn........ 1995 179,620 59,832(3) ----- 5,000 2,250
Senior Vice 1994 169,620(1) 62,454(3) ----- 10,000 -----
President 1993 160,000 64,640(3) ----- ----- -----
Armand Correia. . 1995 160,186(1) 15,000(3) ----- 31,277 2,250
Senior Vice 1994 150,000 15,000(3) ----- 20,000 -----
President and 1993 150,000 ----- ----- ----- -----
Chief Financial Officer
David Jaffe...... 1995 139,092(1) ----- ----- 5,000 2,086
Senior Vice President
(1) Salaries for all the Company's employees who do not reside in New York and
who worked at the Company's former headquarters in Stamford, Connecticut
were increased in the fiscal year they began work at the Company's new
headquarters in Suffern, New York in an amount intended to compensate such
employees for the marginal increase in their state taxes as a result of the
Company's relocation to New York.
(2) Represents fair market value of shares issued in stock grant in August 1993.
(3) Bonus represents Loan and Interest Forgiveness (see "Interest of
Management and Others in Certain Transactions").
Employment Agreements
Burt Steinberg and Armand Correia are employed by the Company pursuant to
agreements, which in the case of Mr. Steinberg, terminates August 1, 1996, and
in the case of Mr. Correia, terminates May 20, 1996. Both agreements are subject
to automatic renewal periods, unless terminated.
<PAGE>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Shares
Acquired Number of Unexercised Value of Unexercised
on Value Options In the Money
Exercise Realized at July 29, 1995 Options(1)
Name (#) ($)Exercisable Unexercisable Exercisable Unexercisable
Elliot S. Jaffe.. --- --- 72,500 65,000 $464,844 $ 42,188
Burt Steinberg... --- --- 245,300 173,825 787,686 196,921
Eric Hawn........ --- --- 56,963 26,741 279,076 78,206
Armand Correia... --- --- 4,000 89,382 --- 52,780
David Jaffe...... --- --- 11,000 21,500 26,798 30,521
(1)Represents the difference between the closing market price of the Company's
common stock at July 29, 1995 ($10.4375 per share) and the exercise price per
share of in-the-money options multiplied by the number of shares underlying
the in-the-money options.
OPTION GRANTS IN THE LAST FISCAL YEAR
% of Potential Realizable
Total Value at
Options Assumed Annual
Number Granted To Rates of Stock Price
of Employees Appreciation
Options in Exercise for
Granted Fiscal Price Expiration Option Term
Name (#) Year ($/share) Date 5% 10%
- -------------- ------------------------------------------------ -----
Elliot S. Jaffe(1).. 25,000 6.16% $ 8.75 8/1/2004 $135,571 $348,631
Eric Hawn(1)........ 5,000 1.23% 8.75 8/1/2004 27,514 69,726
Armand Correia(1)... 10,000 2.46% 8.75 8/1/2004 55,028 139,452
Armand Correia(2)... 21,277 5.24% 8.75 8/1/2004 117,084 296,713
David Jaffe(1)...... 7,500 1.85% 8.75 8/1/2004 41,271 104,589
(1) Options vest 20% per year over a five year period beginning August 1,
1995.
(2) Options vest 20% per year over a five year period beginning June 17,
1996.
<PAGE>
Compensation Committee's Report on Executive Compensation
In setting compensation levels for executive officers, the Compensation
and Stock Option Committee of the Board of Directors (the "Committee") continues
to be guided by the following considerations:
- - compensation levels should be competitive with compensation generally
being paid to executives in other profitable and growing specialty retail
companies of a similar size;
- - each individual executive officer's compensation should, to the extent
possible, reflect the performance of the Company as a whole, the
performance of the officer's business unit, and the performance of the
individual executive; and
- - a significant portion of the executive officer's compensation should be
awarded in the form of stock options to closely link shareholder and
executive interests and to encourage stock ownership by executive
officers;
- - executive compensation should reflect the Company's unique,
entrepreneurial and cost-conscious orientation.
The Committee seeks to maintain base salaries of executive officers at the
levels generally competitive with the specialty retail industry.
The Committee reviewed the Company's compensation programs for executive
officers following the close of the 1995 fiscal year. The Committee recommended
to the Board the adoption of the 1995 Stock Option Plan described elsewhere in
this Proxy Statement. In this connection the Committee determined that the Plan
be designed to meet the requirements of Section 162(m) of the Internal Revenue
Code to preserve the Company's ability to take compensation expense deductions
in connection with the exercise of options under the Plan. The Committee also
adopted a Management Incentive Plan under which officers of the Company, from
Assistant Vice Presidents up through and including the Chairman and Chief
Executive Officer, would be entitled to bonuses up to prescribed percentages of
their base salaries pursuant to a formula which involves the achievement of
selected Company financial goals and individual goals involving the performance
of the officer's business unit and the individual performance of the officer.
Such bonuses, if any, are to be paid following the close of the 1996 fiscal
year. The Committee also considered the grant of additional stock options to
certain executives, including certain senior executive officers, and made
certain changes in a number of executive benefits generally, including vacation
and other benefits and the adoption of a 401(k) Plan.
The Committee also made the following determinations in view of the
increase in the Company's net income from fiscal 1994 despite the difficult
retail climate: The Committee determined that Elliot S. Jaffe's base salary for
fiscal 1996 should be increased from $421,000 to $521,000. The Committee also
determined that Mr. Jaffe's bonus for fiscal 1995 be retained at $100,000, the
same amount awarded for fiscal 1994. The Committee anticipates that Mr. Jaffe's
bonus for 1996 would be determined under the Management Incentive Plan. Finally,
the Committee determined that Burt Steinberg's base salary for fiscal 1996 be
increased from $300,000 to $350,000.
The Compensation and Stock Option Committee
Mr. Donald Jonas
Mr. Edward D. Solomon
<PAGE>
Performance Graph
The following graph illustrates, for the period from July 26, 1990 (the
Base Year) through July 29, 1995, the cumulative total shareholder return of
$100 invested in 1) The Company's common stock, 2) The S&P Composite- 500 Stock
Index and 3) S&P Specialty Apparel Retailers Index, assuming that all dividends
were reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN For the period from
July 26, 1990 through July 29, 1995
[GRAPHIC OMITTED]
<PAGE>
INTEREST OF MANAGEMENT AND
OTHERS IN CERTAIN TRANSACTIONS
The Company leases six of its store locations from Elliot S. Jaffe,
Chief Executive Officer, or members of his family or related trusts. The
following table describes the terms of these leases:
Minimum
Annual
Rent Per
Store Renewal Square Square
Location Expiration Options Feet Foot
- -------- ---------- ------- ------ -----
Branford, CT....Sept.30, 1997 Until Sept.2012 5,000 $ 3.00
Norwalk, CT ....June 30, 1997 Until June 2007 5,200 $22.00
Branford,CT DBW June 30, 1997 Until June 2007 4,100 $11.50
Wilton, CT......July 31, 1997 None 7,100 $12.00
Mt. Kisco, NY.. July 31, 2006 Until July 2011 4,500 $10.00
Danbury, CT.....Sept.30, 2010 None 8,000 $ 3.25
Such store rentals approximate the range of minimum rentals paid by the
Company on its other store leases. The store leases also contain provisions for
payment of a percentage of sales as additional rent when sales reach specified
levels. The effective rent (total rent as a percentage of sales with respect to
particular stores) for such stores is approximately seven percent. The Company
believes that the leases with such affiliated parties are on terms which are
comparable to terms the Company could obtain in arms-length negotiations with
unrelated third parties for store locations in similar geographic areas, having
such generally high sales volumes. In fiscal 1995, the Company expanded the area
of the Danbury, Connecticut, lease from 4,000 to 8,000 square feet, which will
result in a $13,000 increase in minimum annual rent and a potential increase in
percentage rent. During fiscal 1995, the Company paid a total of $430,000 in
rent under leases with the affiliated parties.
As part of their respective compensation packages, the Company issued
49,380 shares of the Company's common stock in 1987 (with transfer and sale
restrictions that have expired) and 42,555 shares of the Company's common stock
in 1991 (with transfer and sale restrictions that terminate in installments over
a five year period ending June 17, 1996), to Eric Hawn and Armand Correia,
respectively. For a limited period from June 17, 1996, Mr. Correia has the right
to sell back to the Company at $11.75 per share the 8,511 shares with respect to
which the transfer and sale restrictions terminate on June 17, 1996. The Company
has also agreed to advance to such individuals amounts equal to the tax
liabilities resulting from the release of the transfer and sale restrictions on
these shares. The Company has advanced $267,109 to Mr. Hawn and has to date
advanced $147,000 to Mr. Correia (of which $117,000 currently remains
outstanding) under these agreements. Mr. Hawn and Mr. Correia are obligated to
repay these advances. The Company has paid and will continue to pay Mr. Hawn and
Mr. Correia bonuses on an annual basis in amounts equal to the interest and
principal payments on the above-described advances; provided that, in the case
of Mr. Correia, he is in the employ of the Company on the date of such bonus
payments. During fiscal 1995, the Company paid Mr. Hawn and Mr. Correia bonuses
of $59,832 and $15,000, respectively, covering principal and interest on the
above advances through December 31, 1994.
<PAGE>
RECEIPT OF SHAREHOLDER PROPOSALS
Any proposals of shareholders that are intended to be presented at the
Company's 1996 Annual Meeting of Shareholders, which is expected to be held in
December 1996, must be received at the Company's principal executive offices no
later than July 18, 1996, and must comply with all other applicable legal
requirements in order to be included in the Company's proxy statement and form
of proxy for that meeting.
OTHER MATTERS
Management knows of no other business that will be presented for
consideration at the Annual Meeting other than as is stated in the Notice of
Meeting. If any other business should come before the meeting, it is intended
that the proxies named in the enclosed form of proxy will have discretionary
authority to vote all such proxies in the manner they shall decide.
Solicitation may be made by mail, personal interviews, telephone and
telegraph by regularly engaged officers and employees of the Company.
Insofar as the information contained in this Proxy Statement rests
peculiarly within the knowledge of persons other than the Company, the Company
has relied upon information furnished by such persons.
It is anticipated that Deloitte & Touche LLP will act as auditors with
respect to the financial statements of the Company for the current fiscal year.
A representative of Deloitte & Touche LLP is expected to attend the Annual
Meeting. Such representative will be given the opportunity to address the
meeting and will also be available to respond to questions.
The Annual Report of the Company, including financial statements, for
fiscal 1995 is included with this Proxy Statement.
<PAGE>
EXHIBIT A
THE DRESS BARN, INC.
1995 STOCK OPTION PLAN
(Effective September 27, 1995)
1.....Purpose. The purpose of this Stock Option Plan (the "Plan") is to
further the best interests of The Dress Barn, Inc., a Connecticut corporation
(the "Corporation"), and its subsidiaries ("Subsidiaries", as such term is
defined in Section 424 of Internal Revenue Code of 1986, as amended (the
"Code")), from time to time, by encouraging its key employees and persons who
are not employees of the Corporation but whose efforts are expected to be of
substantial benefit to the Corporation, as is more fully set forth in Section 5
of this Plan, to continue association with the Corporation, and by providing
additional incentive for outstanding performance through offering an opportunity
to acquire a proprietary stake in the Corporation and its future growth. The
Corporation believes that this goal may best be achieved by granting stock
options to such persons.
The stock options to be granted pursuant to this Plan (hereinafter called
"Options") may be Incentive Stock Options ("ISOs") as provided for in Section
422 of the Code, or may be Non-Incentive Stock Options ("Non-ISOs"). All Options
which are intended to qualify as ISOs shall be clearly identified in writing as
such. The terms and conditions of ISOs shall comply with the provisions of this
Plan which have been inserted herein to reflect the requirements of the
aforementioned Section 422 of the Code. All ISOs granted pursuant to this Plan,
as well as the provisions of this Plan pertaining to ISOs, shall be construed
and interpreted in a manner consistent with the requirements of the
aforementioned Section 422 of the Code and the regulations thereunder, and any
provisions of this Plan that would be in conflict with the requirements of
Section 422 shall be inapplicable to such Options. The Non-ISOs will not be
subject to such conditions and limitations and may be granted in amounts that
may be in excess of or less than the permissible annual amounts of ISOs as set
forth in Section 6(a) hereof. All Non-ISOs shall be clearly identified in
writing as Non-ISOs.
2.....Option Shares. (a) The shares of the Corporation's stock which may
be made subject to Options granted pursuant to this Plan shall be no more than a
total of 2,000,000 shares of the authorized but unissued common stock, par value
$.05 per share, of the Corporation, or shares of common stock held in the
treasury (hereinafter called "Common Stock"). If any outstanding Options granted
pursuant to this Plan expire, lapse or terminate for any reason other than the
exercise thereof, the shares of Common Stock subject to the unexercised portion
of such Options may again be made subject to Options granted pursuant to this
Plan. Until termination of the Plan, the Corporation shall at all times reserve
a sufficient number of shares of Common Stock to meet the requirements of the
Plan. Any shares of Common Stock not subject to Options at the termination of
this Plan shall cease to be reserved for the purposes of the Plan.
......(b) The maximum number of shares of Common Stock that may be granted
under this Plan during each calendar year to any Employee (as defined herein)
shall not exceed 150,000 (the "Cap") (subject to any adjustment in accordance
with Section 14 hereof); provided, however, that if the Corporation grants to an
Employee during any calendar year Options to purchase a number of shares of
Common Stock that is less than the Cap, or does not grant any Options during any
calendar year to an Employee, then the amount of such shortfall shall be carried
forward and added to the Cap in subsequent years with respect to such Employee
until it is eliminated.
3.....Effective Date of Plan. This Plan has been adopted by the Board of
Directors of the Corporation (the "Board of Directors") and shall take effect
immediately upon the date hereof, subject to approval by the Corporation's
shareholders.
<PAGE>
4.....Administration of the Plan. The Plan shall be administered by a
committee of two or more individuals (the "Committee"), which shall be appointed
by the Board of Directors. All members of the Committee shall be "disinterested
persons" within the meaning of Rule 16(b)-3 under the Securities Exchange Act of
1934, as amended, and "outside directors" within the meaning of any applicable
regulation under the Code. No member of the Committee shall, while a member, be
eligible to participate in this Plan. The Committee may from time to time
interpret this Plan, adopt, amend and rescind such rules and regulations for
carrying out this Plan, and take such other action in the administration of this
Plan, not inconsistent with the provisions hereof, as the Committee shall deem
advisable. Any determination, interpretation or decision of the Committee under
this Plan may be made by a writing signed by its members, without a notice or
meeting of the Committee. All decisions and determinations in respect of and all
interpretations of the provisions of the Plan shall be made solely by the
Committee, which decisions, determinations and interpretations shall be
conclusive and binding on the Corporation and all other persons or entities. No
member of the Committee shall be liable for any action, decision, determination
or interpretation made in good faith with respect to the Plan or any Options
granted under it.
5.....Eligibility. The persons eligible to participate in the Plan as
recipients of Options shall include the employees of the Corporation or of any
of its Subsidiaries who hold executive or other positions in the management of
the affairs of the Corporation and of its Subsidiaries ("Employees"), and
persons who are not employees of the Corporation, but whose efforts are expected
to be of substantial benefit to the Corporation (together with Employees,
"Eligible Persons").
6.....Grant of Options. (a) The Corporation, by action of the Committee,
subject to the provisions of this Plan, may, from time to time, grant Options to
purchase shares of Common Stock to such Eligible Persons and for such number of
shares of Common Stock as may be selected by the Committee; provided, however,
that only Employees shall be eligible to receive ISOs. Each grant of an Option
pursuant to this Plan shall be made in writing and upon such terms and
conditions as may be determined by the Committee at the time of grant, subject
to the provisions and limitations set forth in this Plan. The grant of such
Option shall be evidenced by written notice executed by such person(s) as have
been authorized by the Committee. The aggregate fair market value (determined as
of the time an Option is granted) of the Common Stock for which any Employee is
granted ISOs that are first exercisable by such Employee at any time in any
calendar year under all plans of the Corporation and its Subsidiaries shall not
exceed $100,000.
......(b) No Option shall be granted hereunder on or after the tenth
anniversary of the date on which the Plan is adopted by the Board of Directors,
but Options previously granted may extend beyond that date.
7.....Option Price. (a) The purchase price for each share of Common Stock
issued upon exercise of an Option granted pursuant to this Plan (hereinafter
called the "Option Price") shall be determined by the Committee; provided,
however, that in the case of grants of ISOs, the Option Price shall in no event
be less than 100% (110% for ISOs granted to a greater than ten-percent holder)
of the Fair Market Value (as hereinafter defined) of a share of Common Stock on
the date the ISO is granted. A "greater than ten-percent holder" shall mean any
Employee who at the time of grant owns directly, or is deemed to own by reason
of the attribution rules set forth in Section 424(d) of the Code, stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Corporation or any Subsidiary.
<PAGE>
......(b) The Fair Market Value of a share of Common Stock shall equal the
mean between the high and low sales prices of the Common Stock quoted through
the National Association of Securities Dealers, Inc. Automated Quotations System
on the day of determination or, in the absence of reported sales on such day,
the mean between the reported bid and asked prices through such market system on
such day; provided, however, that if the Committee determines that such mean
does not properly reflect the fair market value of the Common Stock, the Fair
Market Value shall be determined by the Committee using such method as it deems
reasonable and consistent with the applicable requirements of the Code and the
regulations issued thereunder that are applicable to incentive options.
8.....Duration of Options. The period for which each Option granted
hereunder shall be effective shall commence upon the date of the grant of the
Option and shall continue until the date that is determined by the Committee,
not to exceed ten (10) years (five (5) years in the case of an ISO granted to a
greater than ten-percent holder) from the date of grant (the "Option Period").
In addition to and in limitation of the above, the Option Period of any Option
granted pursuant to this Plan shall terminate upon the earliest of the following
dates:
......(a) One (1) month after the date upon which the Eligible Person
holding such Option (hereinafter called the "Optionee") ceases to be an employee
of, a consultant to or otherwise associated with, the Corporation and its
Subsidiaries, unless such cessation occurs in a manner described in subsections
(b), (c) or (d) below.
......(b) Three (3) months after an option who is an Employee ceases to be
an employee by reason of "Retirement", which term shall mean the Optionee's
termination of employment with the Corporation or any of its subsidiaries at or
after (I) age 65 if the Optionee has been employed by the Corporation or any of
its Subsidiaries for at least one year or (ii) age 60 if the Optionee has been
employed by the Corporation or any of its Subsidiaries for at least three years.
......(c) Six (6) months after the death or permanent disability of the
Optionee if the Optionee dies or becomes permanently disabled while being an
Employee or a consultant to or otherwise associated with the Corporation or any
of its Subsidiaries. (For purposes of this Plan, "permanent disability" shall
mean the failure or inability of any Optionee to perform substantially the usual
duties and obligations of such individual on behalf of the Corporation or its
Subsidiaries for 180 days during any 270 day period because of any mental or
physical incapacity, as determined by the Committee).
......(d) At the time the employee or other association of the Optionee
with the Corporation or its Subsidiaries is terminated by the Corporation for
cause. (For purposes of this Plan, "cause" shall mean any of the following: (i)
willful malfeasance, willful misconduct or gross negligence by the Optionee in
connection with his or her duties, (ii) continuing refusal by an Optionee to
perform his or her duties under any lawful direction of his or her supervisor or
the Board of Directors of the Corporation after notice of any such refusal to
perform such duties or direction was given to such Optionee, (iii) any willful
and material breach of fiduciary duty owing to the Corporation or its
Subsidiaries by the Optionee, (iv) the conviction of the Optionee for commission
of a felony or any other crime resulting in pecuniary loss to the Corporation or
its subsidiaries (such as theft, embezzlement or fraud) or involving moral
turpitude, or (v) habitual drunkenness or narcotics addiction.)
Nothing contained herein shall limit whatever right the Corporation or any
of its Subsidiaries might otherwise have to terminate the employment of any
Employee, or any contractual arrangement with any Optionee, and neither this
Plan nor any Option granted hereunder shall confer on an Optionee any right to
continue in the employ of the Corporation or to continue any contract or
association with the Corporation.
<PAGE>
Successive Options may be granted to the same Eligible Person whether or
not the Option or Options first granted to such Eligible Person remain
unexercised, subject to the limitations set forth in Section 6(a) above.
9.....Non-Transferability. No Option granted pursuant to this Plan may be
transferred by the Optionee except by will or the laws of descent or
distribution, and, further, during the lifetime of the Optionee, the Option may
be exercised only by such Optionee.
10....Termination of the Plan. This Plan shall terminate upon the close of
business on September 26, 2005 unless it shall have sooner terminated by there
having been granted and fully exercised Options covering the entire 2,000,000
shares of Common Stock subject to this Plan.
11. ..Excercisability of Options. Subject to Section 8 hereof, the
Committee shall determine, at the time of each grant, the date or dates when the
Options granted to any Eligible Person pursuant to this Plan shall become
exercisable. Notwithstanding anything to the contrary contained in the Plan, all
Options shall forthwith become immediately exercisable in full upon the
consummation of a sale of all or substantially all of the assets or capital
stock of the Corporation that has not been approved by the Board of Directors
(whether by means of stock sale, asset sale, merger, consolidation or
otherwise); provided, however, that, to the extent the Fair Market Value
(determined as of the time an Option is granted) of ISOs granted to any Employee
hereunder that would become exercisable pursuant to the provisions of this
Section 11 exceeds $100,000, then only such number of ISOs as shall have a Fair
Market Value of $100,000 or less shall become immediately exercisable and the
balance shall be carried forward and become exercisable, in whole or in part, in
the next calendar year, but only to the extent that the Fair Market Value of
ISOs granted to such Employee by the Corporation and its Subsidiaries that
become exercisable during such calendar year does not exceed $100,000, and the
excess shall be similarly carried forward to future calendar years; provided,
however, that the Committee shall have the discretion to convert the excess
amount of such ISOs to non-ISOs in lieu of carrying forward such excess amounts.
12....Procedure for Exercise and Payment for Shares. Exercise of an Option
shall be made by the giving of written notice to the Corporation by the
Optionee. Such written notice shall be deemed sufficient for this purpose only
if delivered to the Corporation at its principal office and only if such written
notice states the number of shares with respect to which the Option is being
exercised and, further, states the date, not more than ninety (90) days after
the date of such notice, upon which the shares of Common Stock shall be
purchased and payment therefor shall be made. Payment for shares of Common Stock
purchased pursuant to exercise of an Option shall be made at the principal
offices of the Corporation. Upon the exercise of any Option in compliance with
the provisions of this Section 12 and upon receipt by the Corporation of the
payment for the Common Stock so purchased, together with the payment of the
amount of any taxes required to be collected or withheld as a result of the
exercise of this Option, the Corporation shall deliver or cause to be delivered
to the Optionee so exercising an Option a certificate or certificates for the
number of shares of Common Stock with respect to which the Option is so
exercised and payment is so made. The shares of Common Stock shall be registered
in the name of the exercising Optionee, provided that, in no event shall any
shares of Common Stock of the Corporation be issued pursuant to exercise of an
Option until full payment therefor shall have been made as provided under this
Plan. Payment for shares of Common Stock issued pursuant to exercise of an
Option may be made, at the election of the Optionee: (i) in cash or by check
satisfactory to the Committee, (ii) through the delivery to the Corporation of
shares of Common Stock owned by the Optionee (and for which the Optionee has
good title free and clear of any liens and encumbrances) or by reduction in the
number of shares of Common Stock issuable upon such exercise, based in each
case, on the Fair Market Value of the Common Stock on the date of payment, or
(iii) any combination of the foregoing. The Optionee may elect to satisfy any
taxes required to be collected or withheld as a result of the exercise of an
Option by reducing the number of shares of Common Stock issuable upon such
exercise, based on the Fair Market Value of the Common Stock on the date of
payment. For purposes of this paragraph, the date of issuance shall be the date
upon which payment in full has been received by (or tendered to) the Corporation
as provided herein.
13....Requirements of Law and of Certain Agreements. If any law or any
regulation of any commission or agency of competent jurisdiction shall require
the Corporation or the exercising Optionee to take any action with respect to
the shares of Common Stock acquired by the exercise of an Option, then the date
upon which the Corporation shall issue or cause to be issued the certificate or
certificates for the shares of Common Stock shall be postponed for a reasonable
period to permit compliance with such requirements of law or regulation.
Further, if requested by the Corporation, at or before the time of the issuance
of the shares with respect to which exercise of an Option has been made, the
exercising Optionee shall deliver to the Corporation his or her written
statement, reasonably satisfactory in form and content to the Corporation, that
he or she intends to hold the shares so acquired by him or her on exercise of
his or her Option for investment and not with a view to resale or other
distribution thereof to the public in violation of the Securities Act of 1933,
as amended. Moreover, in the event that the Corporation shall determine that, in
compliance with such Act or other applicable statutes or regulations, it is
necessary to register any of the shares of Common Stock with respect to which an
exercise of an Option has been made, or to qualify any such shares for exemption
from any of the requirements of such Act or any other applicable statute or
regulation, no Options may be exercised and no shares shall be issued to the
exercising Optionee for a reasonable period to permit the completion of such
required action. An Optionee shall acquire none of the rights of a shareholder
of the Corporation under this Plan unless and until a certificate or
certificates for shares are issued to him or her upon the exercise of Options.
14....Adjustments. In the event of the declaration of any stock dividend
on the Common Stock or in the event of any reorganization, merger,
consolidation, recapitalization, stock-split, combination or exchange of shares
of Common Stock or like adjustment, the number of shares of Common Stock and the
class of shares of Common Stock available pursuant to this Plan and the number
and class of shares of Common Stock subject to any Option granted pursuant to
this Plan, and the Option exercise prices, shall be adjusted by appropriate
changes in this Plan and in any Options outstanding pursuant to this Plan. New
stock options may be issued or assumed in a transaction to which Section 424(a)
of the Code applies. Any such adjustment to the Plan or to Options or Option
exercise prices shall be made by action of the Board of Directors or the
Committee, as the case may be, whose determination shall be conclusive;
provided, however, that if such Option is an ISO, then such Option granted
pursuant to this Plan shall be so adjusted as to continue to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
15....Amendment or Discontinuance of the Plan. The Committee may, insofar
as permitted by law, amend, suspend, or discontinue this Plan at any time
without restriction; provided, however, that the Committee may not alter or
amend or discontinue or revoke or otherwise impair (or change any terms or
provisions which would otherwise have been applicable to) any outstanding
Options which have been granted pursuant to this Plan and which remain
unexercised, except in the event of a merger, reorganization, or other
adjustment referred to in Section 14 above, or except in the event that there is
secured the written consent of the holder of the outstanding Option proposed to
be so altered or amended and, without approval of the shareholders, the
Committee may not amend, alter or revise the Plan to increase the number of
shares subject to the Plan.
16....Governing Law. The provisions of this Plan shall be governed by the
internal laws of the State of Connecticut, without giving effect to principles
governing conflicts of law.
