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 16, 1996 at 9:00 A.M.
for the following purposes:
1. To elect two 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 1, 1996
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, 1996
===============================================================================
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 27,
1996.
===============================================================================
<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 16, 1996, 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, 1996. 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 22,650,189 shares of common stock on
November 1, 1996. 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. The current number of Directors on the Board is
seven, including Mark S. Handler who was elected by the Board in September 1996
to fill a newly-created additional directorship for a term expiring at the 1997
Annual Meeting of Shareholders. Two Directors are to be elected at the 1996
Annual Meeting of Shareholders for three year terms expiring at the 1999 Annual
Meeting of Shareholders. The Board has nominated Edward D. Solomon and Klaus
Eppler, whose terms of office as Director expire at the 1996 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
Edward D. Solomon, 65.........................................1990
Klaus Eppler, 66..............................................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 Goetz & Mendelsohn LLP, General Counsel for the Company. He is
also a director of Bed Bath & Beyond Inc. and of Inovision Corporation.
It is intended that votes will be cast pursuant to proxies received for the
election of Edward D. Solomon and Klaus Eppler for a term of three years and
until their successors are duly elected and qualified.
Directors With Terms Expiring in 1997
Name of Director and Age Director Since
Roslyn S. Jaffe, 67.........................................1966
Donald Jonas, 67............................................1989
Mark S. Handler, 63.........................................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.
Directors With Terms Expiring in 1998
Name of Director and Age Director Since
Elliot S. Jaffe, 70.........................................1966
Burt Steinberg, 51..........................................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.
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
two meetings during the fiscal year ended July 27, 1996 ("fiscal 1996"). 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.
INFORMATION REGARDING OTHER EXECUTIVE OFFICERS
DAVID JAFFE, age 37, 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 50, Senior Vice President and Chief Financial Officer,
joined the Company in 1991.
ERIC HAWN, age 46, 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.
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 1, 1996 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.
Number of
Shares of
Common Stock
Beneficially Percentage
Name of Shareholder: Owned of Class
Directors and Executive Officers:
Elliot S. Jaffe (1).............................. 6,575,476 28.42%
Roslyn S. Jaffe (2)....................... .........685,124 2.96%
Burt Steinberg (3)..................................538,615 2.38%
Armand Correia (4)...................................61,066 *
David Jaffe (5)......................................31,000 *
Eric Hawn (6)........................................18,000 *
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)...................7,466,621 32.27%
* Represents less than 1% of class
Other Beneficial Owners:
Charles M. Royce (8)..............................2,200,600 9.51%
Quest Advisory Corp.
1414 Avenue of the Americas
New York, NY 10019
(1) Includes 173,336 shares owned directly by Elliot S. Jaffe, 444,310
shares (1.92%) owned by The Jaffe Family Foundation, a New York
not-for-profit corporation (the "Foundation"), 5,855,330 shares
(25.30%) owned by the Jaffe Family Limited Partnership, a Connecticut
limited partnership (the "Partnership") and 102,500 shares covered by
options that are exercisable within 60 days of November 1, 1996. 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 (1.04%) owned directly by Roslyn S. Jaffe and
444,310 shares (1.92%) owned by the Foundation. See Footnote (1) above.
(3) Includes 188,165 shares owned directly by Mr. Steinberg and 350,000
shares covered by options that are exercisable within 60 days of
November 1, 1996.
(4) Includes 36,555 shares owned directly by Mr. Correia and 25,411 shares
covered by options that are exercisable within 60 days of
November 1, 1996.
(5) Includes 10,000 shares owned directly by Mr. Jaffe and 21,000 shares
covered by options that are exercisable within 60 days of
November 1, 1996.
(6) Includes 10,000 shares owned directly by Mr. Hawn and 8,000 shares
covered by options that are exercisable within 60 days of
November 1, 1996.
(7) Includes shares owned by the Partnership and the Foundation as well as
506,011 shares covered by options held by the executive officers that
are exercisable within 60 days of November 1, 1996.
(8) Information regarding Mr. Charles M. Royce, Quest Advisory Corp.
("Quest") and Quest Management Corp. ("QMC") was obtained solely from a
Schedule13G dated February 14, 1996, filed by Mr. Royce, Quest and QMC
with the SEC, a copy of which was sent to the Company. Such Schedule
13G states that Quest has the sole power to vote and dispose of
2,106,900 shares, that QMC has the sole power to vote and dispose of
93,700 shares, that Mr. Royce may be deemed to be a controlling person
of Quest and QMC and as such may be deemed to beneficially own the
shares owned by Quest and QMC, and that Mr. Royce does not own any
shares outside of Quest and QMC and disclaims beneficial ownership of
the shares held by Quest and QMC.
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>
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
1996, 1995 and 1994.
Long-Term
Compensation
Awards
All
Stock Other
Name and Principal Annual Compensation Options Compen-
Position Year Salary($) Bonus($) Other ($) #) ation
- --------------------------------------------------------------------------------
(1) (2) (3)
Elliot S. Jaffe ............ 1996 521,000 51,666 -- -- $ --
Chairman of the Board and 1995 421,000(4) 100,000 -- 25,000 2,250
Chief Executive Officer 1994 400,000 100,000 -- 50,000 --
Burt Steinberg ............. 1996 350,000 36,750 -- -- 15,878
President and Chief ..... 1995 300,000 -- -- -- 2,250
Operating Officer ..... 1994 350,000 -- 198,375(5) 200,000 --
David Jaffe ................ 1996 148,000(6) 15,417 -- -- 8,525
Executive Vice President 1995 139,092(4) -- -- 5,000 2,086
Eric Hawn .................. 1996 179,620 12,721 59,832(7) -- 10,616
Senior Vice President ... 1995 179,620 -- 59,375(7) 5,000 2,250
1994 169,620(4) -- 62,454(7) 10,000 --
Armand Correia ............. 1996 160,186 16,688 15,000(7) -- 8,507
Senior Vice President and 1995 160,186(4) -- 15,000(7) 31,277 2,250
Chief Financial Officer 1994 150,000 -- 15,000(7) 20,000 --
(1) Includes all payments of salary and salary deferred through the
Company's Executive Retirement Plan.
(2) Amounts in fiscal 1996 represent bonuses paid under the Company's
Management Incentive Plan.
(3) Amounts in fiscal 1996 consist of the Company's contribution under the
Company's Executive Retirement Plan and associated insurance. Amounts in
fiscal 1995 and fiscal 1994 consist of the Company's contribution to the
Company's Profit Sharing Plan.
(4)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.
(5) Represents fair market value of shares issued in stock grant in August
1993.
(6) In August 1996, David Jaffe was named Executive Vice President and his
salary increased to $225,000.
(7) Represents Loan and Interest Forgiveness (see "Interest of Management
and Others in Certain Transactions").
Burt Steinberg and Armand Correia are employed by the Company pursuant to
one-year employment agreements expiring August 1 and May 20, respectively, both
of which contain automatic renewal provisions.
<PAGE>
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Shares
Acquired Number of Unexercised Value of Unexercised
on Value Options In the Money
Exercise Realized at July 27, 1996 Options(1)
---------------------------- ------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ------------ ---------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Elliot S. Jaffe.......... --- --- 87,500 50,000 $393,125 $ 10,000
Burt Steinberg........... 19,125 105,500 310,000 90,000 650,000 0
David Jaffe.............. --- --- 17,500 15,000 26,750 9,500
Eric Hawn................ 68,700 387,468 5,000 10,000 500 2,000
Armand Correia........... --- --- 14,255 79,577 3,128 12,511
</TABLE>
(1) Represents the difference between the closing market price of the Company's
common stock at July 26, 1996 ($9.25 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.
<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.
During the 1996 fiscal year the Company adopted a Management Incentive
Plan. Under the 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. Following the close of the fiscal
year, the Company adopted a Management Incentive Plan for fiscal 1997, with
certain changes in the formula.
During the fiscal year, the Committee made changes in a number of
executive benefits generally, including adoption of a broad-based contributory
401(k) plan and a contributory Executive Retirement Plan for officers of the
Company from Assistant Vice Presidents up through and including the Chairman and
Chief Executive Officer. Under these plans, eligible participants may elect to
authorize a pre-tax payroll deduction or deferral of a percentage of their base
salary resulting in a contribution to the plan by the Company. In addition, the
Company bears the cost of administering the plans and, in the case of the
Executive Retirement Plan, the cost of insurance policies insuring participants'
tax deferrals and providing additional death benefits. During the fiscal year,
the Committee granted no options to any of the executive offices named in the
foregoing tables. Following the close of the fiscal year, the Committee adopted
guidelines for certain executive merit increases, increased the base
compensation of certain executive officers and granted options covering an
aggregate of over 1,000,000 shares to a substantial group of officers and other
executives, including all of the executive officers named in the foregoing
tables.
The Committee determined that Elliot S. Jaffe's base salary for fiscal
1997 should remain unchanged from fiscal 1996. The Committee anticipates that
Mr. Jaffe's bonus for fiscal 1997 would be determined under the Management
Incentive Plan.
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 25, 1991 (the
Base Year) through July 27, 1996, 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, and not to use the S&P Specialty
Apparel Retailers Index that it used in prior years, 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, Clothestime, Deb Shops and United
Retail Group. 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 this year's 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 25, 1991 through July
27, 1996
<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:
<TABLE>
<CAPTION>
Minimum
Annual
Rent Per
Store Renewal Square Square
Location Expiration Options Feet Foot
- -------- ---------- ------- ------ -----
<S> <C> <C> <C> <C>
Branford, CT...................June 30, 1997 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, 1997 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
Wilton, CT......................July 31,1997 None 7,100 $12.00
</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, having
such generally high sales volumes. In July 1996, the Company terminated the
Wilton, Connecticut lease, vacated the premises and paid Elliot S. Jaffe $35,837
for early termination of the lease. At the same time the Company expanded the
area of the nearby Norwalk, Connecticut, lease from 5,200 to 12,700 square feet.
The net effect of the Wilton termination and the Norwalk expansion is a $57,075
decrease in minimum annual rent and a potential increase in percentage rent.
During fiscal 1996, the Company paid a total of $492,000 in rent, including the
Wilton lease termination fee, 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 also have expired), 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 terminated
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 (of which no amounts are outstanding) and has to date advanced $147,000 to
Mr. Correia (of which $117,000 currently remains outstanding) under these
agreements. Mr. Correia is obligated to repay these advances. The Company has
paid Mr. Hawn and 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, in the case of Mr. Correia, he is in
the employ of the Company on the date of such bonus payments. During fiscal
1996, 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, 1995.
<PAGE>
RECEIPT OF SHAREHOLDER PROPOSALS
Any proposals of shareholders that are intended to be presented at the
Company's 1997 Annual Meeting of Shareholders, which is expected to be held in
December 1997, must be received at the Company's principal executive offices no
later than July 18, 1997, 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 1996 is included with this Proxy Statement.
