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 Company's Corporate Headquarters,
30 Dunnigan Drive, Suffern, New York, on Monday, December 15, 1997 at 9:00 A.M.
for the following purposes:
1. To elect three Directors;
2 To transact 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, 1997
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 14, 1997
===============================================================================
NOTE: Shareholders are cordially invited to attend the meeting in person.
Whether or not you plan to attend, please complete, sign and send in your proxy
promptly in the enclosed envelope so your vote can be recorded. 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 26,
1997.
===============================================================================
<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 15, 1997, 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 14, 1997. 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.
The Company had outstanding 22,958,070 shares of common stock on
November 3, 1997. 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)
INFORMATION REGARDING NOMINEES FOR ELECTION AS DIRECTOR AND INCUMBENT DIRECTORS
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. Three Directors are to be elected at the 1997
Annual Meeting of Shareholders for three year terms expiring at the 2000 Annual
Meeting of Shareholders. The Board has nominated Roslyn S. Jaffe, Donald Jonas
and Mark S. Handler, whose terms of office as Director expire at the 1997 Annual
Meeting of Shareholders. Certain information with respect to the nominees for
election as a Director and incumbent Directors is set forth below.
Nominees for Election as Director
Name of Nominee and Age Director Since
Roslyn S. Jaffe, 68.........................................1966
Donald Jonas, 68............................................1989
Mark S. Handler, 64.........................................1996
ROSLYN S. JAFFE has been the Company's Secretary since 1966 and Treasurer
since 1983. Roslyn S. Jaffe is the spouse of Elliot S. Jaffe.
DONALD JONAS has been Chairman of the Board and a Director of Lechters,
Inc., a retailer of houseware products, since 1987. Mr. Jonas is currently also
the Chief Executive Officer of Lechters, Inc.
MARK S. HANDLER was Co-Chairman and Co-Chief Executive Officer of R.H.
Macy's, Inc. until 1993. Previously, he was President and Chief Operating
Officer of R.H. Macy's, Inc. Mr. Handler is also a director of Pivot Sportswear.
It is intended that votes will be cast pursuant to proxies received for the
election of Roslyn S. Jaffe, Donald Jonas and Mark S. Handler for a term of
three years and until their successors are duly elected and qualified.
<PAGE>
Directors With Terms Expiring in 1998
Name of Director and Age Director Since
Elliot S. Jaffe, 71.........................................1966
Burt Steinberg, 52..........................................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, President and Chief Operating Officer of the Company since
1989, has been in charge of the Company's merchandising activities since 1982.
Directors With Terms Expiring in 1999
Name of Director and Age Director Since
Edward D. Solomon, 66.......................................1990
Klaus Eppler, 67............................................1993
EDWARD D. SOLOMON is President of Edward D. Solomon & Co., which provides
consulting services primarily to the retailing industry. 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 LLP, General Counsel for the Company. He is also a director of Bed Bath &
Beyond Inc. and of Inovision Corporation.
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
members of the Compensation Committee and Mark S. Handler and Edward D. Solomon
are the members of the Audit Committee. 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
two meetings during the fiscal year ended July 26, 1997 ("fiscal 1997"). 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.
<PAGE>
INFORMATION REGARDING OTHER EXECUTIVE OFFICERS
DAVID R. JAFFE, age 38, joined the Company in 1992 as Vice President of
Business Development, was named Senior Vice President of the Company in 1995 and
Executive Vice President in August 1996. 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.
ARMAND CORREIA, age 51, Senior Vice President and Chief Financial Officer,
joined the Company in 1991.
ERIC HAWN, age 47, Senior Vice President since 1989, joined the Company in
1986.
All officers of the Company hold their offices at the pleasure of the Board
of Directors.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The table below sets forth information regarding ownership of the
common stock of the Company as of November 3, 1997 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 and 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.
<TABLE>
<CAPTION>
Number of
Shares of
Common Stock
Beneficially Percentage
Name of Shareholder: Owned of Class
Directors and Executive Officers:
<S> <C> <C>
Elliot S. Jaffe (1).......................................... 3,897,976 16.75%
Roslyn S. Jaffe (2).............................................310,124 1.33%
Burt Steinberg (3)..............................................353,615 1.52%
Armand Correia (4)................................................4,000 *
David R. Jaffe (5)................................................2,000 *
Eric Hawn (6).....................................................2,000 *
Edward D. Solomon.................................................1,000 *
Klaus Eppler........................................................300 *
Mark S. Handler.....................................................250 *
Donald Jonas........................................................100 *
All Directors and Executive Officers as a group
(consisting of 10 persons) (7)...............................4,502,055 19.35%
<FN>
* Represents less than 1% of class
(1) Includes 173,336 shares (0.74%) owned directly by Elliot S. Jaffe,
69,310 shares (0.30%) owned by The Jaffe Family Foundation, a New York
not-for-profit corporation (the "Foundation"), 3,655,330 shares
(15.71%) owned by the Jaffe Family Limited Partnership, a Connecticut
limited partnership (the "Partnership"). 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 (1.03%) owned directly by Roslyn S. Jaffe
and 69,310 shares (0.30%)owned by the Foundation. See Footnote (1)
above.
(3) Includes 50,615 shares owned directly by Mr. Steinberg and 303,000
shares covered by options that are exercisable within 60 days of
November 3, 1997.
(4) Includes 4,000 shares covered by options that are exercisable
within 60 days of November 3, 1997.
(5) Includes 2,000 shares covered by options that are exercisable
within 60 days of November 3, 1997.
(6) Includes 2,000 shares covered by options that are exercisable
within 60 days of November 3, 1997.
(7) Includes shares owned by the Partnership and the Foundation as well as
311,000 shares covered by options held by the executive officers that
are exercisable within 60 days of November 3, 1997.
</FN>
</TABLE>
<PAGE>
EXECUTIVE COMPENSATION
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
1997, 1996 and 1995.
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
Annual Compensation Stock Options All Other
Name and Principal Position Year Salary ($) Bonus ($) Other ($) (#) Compensation ($)
- --------------------------- ---- ---------- --------- --------- ---------- ----------------
(1) (2) (3)
<S> <C> <C> <C> <C> <C> <C>
Elliot S. Jaffe 1997 521,000 153,500 ----- 100,000 17,500
Chairman of the Board and 1996 521,000 51,666 ----- ----- -----
Chief Executive Officer 1995 421,000 100,000 ----- 25,000 2,250
Burt Steinberg 1997 350,000 203,100(4) ----- 200,000 69,263(5)
President and Chief 1996 350,000 36,750 ----- ----- 15,878
Operating Officer 1995 300,000 ----- ----- ----- 2,250
David R. Jaffe 1997 225,000 47,500 ----- 175,000 36,611(6)
Executive Vice President 1996 148,000 15,417 ----- ----- 8,525
1995 139,092 ----- ----- 5,000 2,086
Eric Hawn 1997 200,000 46,000 ----- 50,000 9,000
Senior Vice President 1996 179,620 12,721 59,832(7) ----- 10,616
1995 179,620 ----- 59,375(7) 5,000 2,250
Armand Correia 1997 176,000 43,900 15,000(7) 92,555 7,920
Senior Vice President and 1996 160,186 16,688 15,000(7) ----- 8,507
Chief Financial Officer 1995 160,186 ----- 15,000(7) 31,277 2,250
<FN>
(1) Includes all payments of salary and salary deferred through the Company's
Executive Retirement Plan.
(2) Amounts in fiscal 1997 and fiscal 1996 represent bonuses paid under the
Company's Management Incentive Plan.
(3) Amounts in fiscal 1997 and fiscal 1996 consist of the Company's
contribution under the Company's Executive Retirement Plan and associated
insurance. Amounts in fiscal 1995 consist of the Company's contribution to
the Company's Profit Sharing Plan.
(4) Includes additional $100,000 bonus paid pursuant to a prior agreement.
(5) Includes life insurance premiums of $50,873 paid pursuant to two "split
dollar" agreements.
(6) Includes life insurance premiums of $27,378 paid pursuant to a "split
dollar" agreement.
(7) Represents Loan and Interest Forgiveness (see "Interest of Management and
Others in Certain Transactions").
</FN>
</TABLE>
Burt Steinberg is employed by the Company pursuant to a one-year
employment agreement expiring August 1 which contains automatic renewal
provisions.
<PAGE>
Option Grants in the Last Fiscal Year
<TABLE>
<CAPTION>
% of
Total
Options
Number Granted To
of Employees
Options in Exercise Grant Date
Granted Fiscal Price Expiration Present
Name(1) (#) Year ($/share) Date Value (2)
- ----------------- ------------------------------- ----------------------------- --------------
<S> <C> <C> <C> <C> <C>
Elliot S. Jaffe 100,000 11.34% $ 8.68 8/8/2006 $ 379,495
Burt Steinberg 200,000 22.67% 5.00 8/8/2006 1,071,047
David R. Jaffe 75,000 8.50% 8.68 8/8/2006 284,621
David R. Jaffe 100,000 11.34% 5.00 8/8/2006 535,523
Eric Hawn 25,000 5.67% 8.68 8/8/2006 94,874
Armand Correia 50,000 5.67% 8.68 8/8/2006 161,494
<FN>
(1) All options were granted for a term of ten years, vesting 20% per year over
a five-year period.
(2) This column represents the fair values of the options on the grant date
using the Black-Scholes option-pricing model with the following weighted
average assumptions: dividend yield of zero, expected volatility of
approximately 39.6%, risk-free interest rate of approximately 5.7%, and
expected lives of option grants of approximately 5.0 years. For an
estimate of the impact of all stock option grants on the Company's
financial results using the Black-Scholes valuation method, see note 7 to
the Consolidated Financial Statements in the Company's Annual Report to
Stockholders for the fiscal year ended July 26, 1997.
</FN>
</TABLE>
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Shares
Acquired Number of Unexercised Value of Unexercised
on Value Options In the Money
Exercise Realized at July 26, 1997 Options(1)
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ------------ ---------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Elliot S. Jaffe 20,000 213,166 82,500 135,000 $1,088,163 $1,439,525
Burt Steinberg 67,000 717,375 253,000 280,000 2,838,725 3,609,400
David R. Jaffe --- --- 24,000 183,500 269,670 2,368,693
Eric Hawn --- --- 8,000 32,000 76,320 342,630
Armand Correia --- --- 24,510 119,321 245,195 1,289,857
<FN>
(1) Represents the difference between the closing market price of the Company's
common stock at July 25, 1997 ($19.625 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.
</FN>
</TABLE>
<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 entrepreneurial and
cost-conscious orientation.
Under the Company's Management Incentive Plan, officers of the Company,
from Assistant Vice Presidents up through and including the Chairman and Chief
Executive Officer, are entitled to bonuses up to a prescribed percentage of
their base salaries pursuant to a formula which involves the achievement of
selected Company financial goals and individual goals related to the performance
of the officer's business unit and the individual performance of the officer.
For fiscal 1998, the Management Incentive Plan was broadened to increase the
number of covered executives and the maximum percentage of base salary an
executive can receive as bonus under the Plan has been changed, reducing the
percentage for more senior officers and increasing the percentage for others.
Stock options are usually granted on a three year cycle, so that an
executive or key employee will ordinarily receive a new option when 3/5ths of
the previously granted option has vested. Since all the executive officers named
in the foregoing tables were granted options by the Committee following the
close of the 1996 fiscal year, the Committee has no plans to grant such
executives any options during the 1998 fiscal year.
The Committee made no changes in the salary of the Chairman and Chief
Executive Officer for fiscal 1997 and has no plans to increase his salary for
fiscal 1998. Pursuant to the guidelines for executive merit increases adopted by
the committee, the salaries of several executive officers were increased for
fiscal 1997 and certain salaries are expected to be increased for fiscal 1998.
Pursuant to an understanding with the President and Chief Operating Officer, he
became entitled to a $100,000 bonus for fiscal 1997 in addition to the bonus
under the Management Incentive Plan as a result of the Company's fiscal 1997 net
income performance.
The Company maintains a broad-based contributory 401(k) plan and a
contributory Executive Retirement Plan for officers of the Company from
Assistant Vice Presidents up. The Committee has approved certain changes to the
Executive Retirement Plan which among other things will permit covered
executives to elect to defer bonus money into the Plan and will permit the
conversion of the life insurance portion of the Plan to a split dollar
arrangement. During the 1997 fiscal year, the Committee approved split-dollar
insurance arrangements with the President and Chief Operating Officer and the
Executive Vice President.
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 31, 1992 (the
Base Year) through July 26, 1997, 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) an index of six (6) peer companies selected by the Company,
assuming that all dividends were reinvested. The Company has chosen to use this
peer group index in its performance graph because management believes the peer
group index is a better reflection of the Company's competitors in the
marketplace. The peer group consists of all other publicly traded women's
specialty apparel chains known to the Company with which it competes directly: -
Catherines Stores, Cato, Charming Shoppes, Deb Shops and United Retail Group.
Clothestime was in the peer group last year, but is no longer actively traded on
any public stock exchange, and therefore was excluded from the peer group in the
following performance graph. This peer group index is subject to occasional
change as the Company or its competitors change their focus, merge or are
acquired, undergo significant changes, or as new competitors emerge. For
comparison purposes, the S&P Specialty Apparel Retailers Index is also shown on
the performance graph.
The comparisons in this table are required by the SEC and, therefore,
are not intended to forecast or be indicative of possible future performance of
the Company's common stock.
COMPARISON OF CUMULATIVE TOTAL RETURN
For the period from July 31, 1992 through July 26, 1997
[PERFORMANCE GRAPH APPEARS HERE]
The following chart represents data points on the performance graph which
appears in the printed version of the proxy.
Cumulative Total Return
7/92 7/93 7/94 7/95 7/96 7/97
The Dress Barn Inc. 100 110 80 97 82 198
S&P 500 100 109 114 144 168 255
S&P Specialty Apparel Index 100 116 113 120 123 156
Peer Group 100 89 64 40 46 46
<PAGE>
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
The Company leases five 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:
<TABLE>
<CAPTION>
Minimum
Annual
Rent Per
Store Renewal Square Square
Location Expiration Options Feet Foot
- -------- ---------- ------- ------ -----
<S> <C> <C> <C> <C>
Branford, CT...................June 30, 2002 Until June 2012 5,000 $12.20
Norwalk, CT DB/DBW............April 30, 2011 April 30, 2031 12,700 $11.22
Branford, CT DBW...............June 30, 2002 Until June 2012 4,100 $12.57
Mt. Kisco, NY.................. July 31,2006 Until July 2011 4,500 $8.33
Danbury, CT.....................June 30,2000 Until June 2015 8,000 $13.00
</TABLE>
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 eight percent. The Company
believes that the leases with such affiliated parties are on terms that are
comparable to terms the Company could obtain in arms-length negotiations with
unrelated third parties for store locations in similar geographic areas. During
fiscal 1997, the Company paid a total of $500,000 in rent under leases with the
affiliated parties.
The Company entered into "split-dollar" insurance agreements as of
January 1, 1997 with trusts established by each of Burt Steinberg and David R.
Jaffe and their wives, pursuant to which the Company has agreed to pay, during
the life of certain life insurance policies, a portion of the premiums on these
policies which are on the joint lives of each of David R. Jaffe and his wife and
Burt Steinberg and his wife, and which have fair values of $5 million and $2.5
million respectively (the "Insurance Policies"). The Company is obligated to
continue to pay the premiums on the Insurance Policies until the earlier of (a)
such time as the cash value of each Insurance Policy is sufficient to pay the
premiums, estimated to be approximately 10 years, or (b) the termination of the
"split-dollar" agreements. These agreements terminate on the earliest of a
number of events including (i) reimbursement to the Company of the premiums paid
by it, (ii) the resignation or retirement of the executive or (iii) the death of
the survivor of the executive and his spouse. The premiums are estimated to be
approximately $52,000 in the case of Burt Steinberg, and $28,000 in the case of
David R. Jaffe annually. Under the "split-dollar" agreements, the premiums paid
by the Company are to be returned no later than (a) the death of the survivor of
the executive and his spouse and (b) the surrender or termination of each
Insurance Policy. Consequently, the Insurance Policies should not result in an
expense to the Company, except to the extent of costs incurred (if any) for
advancing the premiums, and for the excess (if any) of the premiums paid by the
Company over the cash surrender value of the Insurance Policy.
As part of his compensation package, the Company issued 42,555 shares
of the Company's common stock in 1991 (with transfer and sale restrictions that
also have expired), to Armand Correia. The Company has also agreed to advance to
Mr. Correia amounts equal to the tax liabilities resulting from the release of
the transfer and sale restrictions on these shares. The Company has to date
advanced $147,000 to Mr. Correia (of which $102,000 currently remains
outstanding) under these agreements. Mr. Correia is obligated to repay these
advances. The Company has paid Mr. Correia, and will continue to pay Mr.
Correia, bonuses on an annual basis in amounts equal to the interest and
principal payments on the above-described advances; provided that Mr. Correia is
in the employ of the Company on the date of such bonus payments. During fiscal
1997, the Company paid Mr. Correia a bonus of $15,000, covering principal and
interest on the above advances through December 31, 1996.
<PAGE>
RECEIPT OF SHAREHOLDER PROPOSALS
Any proposals of shareholders that are intended to be presented at the
Company's 1998 Annual Meeting of Shareholders, which is expected to be held in
December 1998, must be received at the Company's principal executive offices no
later than July 17, 1998, 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 1997 is included with this Proxy Statement.
