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 14, 1998 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 2, 1998
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 9, 1998
================================================================================
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 25,
1998.
================================================================================
<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 14, 1998, 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 9, 1998. 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 22,786,445 shares of common stock on the
record date of November 2, 1998. 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. Two Directors are to be elected at the 1998
Annual Meeting of Shareholders for three-year terms expiring at the 2001 Annual
Meeting of Shareholders. The Board has nominated Elliot S. Jaffe and Burt
Steinberg, whose terms of office as Director expire at the 1998 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 Director and Age Director Since
Elliot S. Jaffe, 72.........................................1966
Burt Steinberg, 53..........................................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.
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>
Directors With Terms Expiring in 1999
Name of Director and Age Director Since
Edward D. Solomon, 67.........................................1990
Klaus Eppler, 68..............................................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.
Directors With Terms Expiring in 2000
Name of Nominee and Age Director Since
Roslyn S. Jaffe, 69.........................................1966
Donald Jonas, 69............................................1989
Mark S. Handler, 65.........................................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, and they
are the parents of David R. Jaffe and Elise Jaffe, executive officers of the
Company.
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.
Committees and Meetings of the Board of Directors
The Company has a standing Audit and a standing Compensation and Stock
Option Committee of the Board of Directors. Donald Jonas and Edward D. Solomon
are the 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 25, 1998 ("fiscal 1998"). In
addition, various actions were taken by the Board of Directors and these
Committees without a meeting.
<PAGE>
Compensation of Directors
The Company pays its Directors, who were not also officers of the
Company, a director's fee of $15,000 per year for services rendered as Director.
Directors who are officers of the Company do not receive additional compensation
for their services as Directors.
In fiscal 1998 and again during the current fiscal year, the Company
granted each of its Directors, who were not also officers of the Company,
options to purchase 10,000 shares of the Company's common stock at the fair
market value of the stock on the date of grant. The options vest in three equal
installments on the first, second and third anniversary from the option grant
date.
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 2, 1998 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
<S> <C> <C>
Directors and Executive Officers:
Elliot S. Jaffe (1)...........................................3,932,976 17.03%
Roslyn S. Jaffe (2).............................................310,124 1.34%
Burt Steinberg (3)..............................................172,615 *
David R. Jaffe (4)...............................................45,500 *
Armand Correia (5)...............................................16,031 *
Eric Hawn (6)....................................................10,000 *
Edward D. Solomon (7).............................................4,333 *
Klaus Eppler (8)..................................................3,633 *
Mark S. Handler (9)...............................................3,583 *
Donald Jonas (10).................................................3,433 *
All Directors and Executive Officers as a group
(consisting of 11 persons) (11)..............................4,465,318 19.34%
<FN>
* Represents less than 1% of class
<PAGE>
(1) Consists of 173,336 shares (0.75%) 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
(15.83%) 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) Consists of 240,814 shares (1.04%) owned directly by Roslyn S. Jaffe
and 69,310 shares (0.30%) owned by the Foundation. See Footnote (1)
above.
(3) Consists of 2,615 shares owned directly by Mr. Steinberg and 303,000
shares covered by options exercisable within 60 days of November 2,
1998.
(4) Consists of 5,000 shares owned directly by Mr. Jaffe and 40,500 shares
covered by options exercisable within 60 days of November 2, 1998.
(5) Consists of shares covered by options exercisable within 60 days of
November 2, 1998.
(6) Consists of shares covered by options exercisable within 60 days of
November 2, 1998.
(7) Consists of 1,000 shares owned directly by Mr. Solomon and 3,333 shares
covered by options exercisable within 60 days of November 2, 1998.
(8) Consists of 300 shares owned directly by Mr. Eppler and 3,333 shares
covered by options exercisable within 60 days of November 2, 1997.
(9) Consists of 250 shares owned directly by Mr. Handler and 3,333 shares
covered by options exercisable within 60 days of November 2, 1998.
(10) Consists of 100 shares owned directly by Mr. Jonas and 3,333 shares
covered by options exercisable within 60 days of November 2, 1998.
(11) Includes shares owned by the Partnership and the Foundation as well as
305,263 shares covered by options held by the executive officers
exercisable within 60 days of November 2, 1998.
</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
1998, 1997 and 1996.
<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 1998 521,000 604,200 ----- ----- 17,500
Chairman of the Board and 1997 521,000 153,500 ----- 100,000 17,500
Chief Executive Officer 1996 521,000 51,666 ----- ----- -----
Burt Steinberg 1998 350,000 170,000 ----- ----- 68,517(4)
President and Chief 1997 350,000 203,100 ----- 200,000 69,263(4)
Operating Officer 1996 350,000 36,750 ----- ----- 15,878
David R. Jaffe 1998 275,000 49,500 ----- ----- 37,888(5)
Executive Vice President 1997 225,000 47,500 ----- 175,000 36,611(5)
1996 148,000 15,417 ----- ----- 8,525
Eric Hawn 1998 215,000 38,700 ----- ----- 9,000
Senior Vice President 1997 200,000 46,000 ----- 50,000 9,000
1996 179,620 12,721 59,832(6) ----- 10,616
Armand Correia 1998 195,000 37,800 15,000(6) ----- 8,538
Senior Vice President and 1997 176,000 43,900 15,000(6) 92,555 7,920
Chief Financial Officer 1996 160,186 16,688 15,000(6) ----- 8,507
<FN>
(1) Includes all payments of salary and salary deferred through the
Company's Executive Retirement Plan.
(2) Includes bonuses paid under the Company's Management Incentive Plan.
(3) Amounts consist of the Company's contribution under the Company's
Executive Retirement Plan and associated insurance.
(4) Includes paid life insurance premiums of $50,657 in fiscal 1998 and
$50,873 in fiscal 1997 paid pursuant to two "split dollar" agreements.
(5) Includes paid life insurance premiums of $27,200 in fiscal 1998 and
$27,378 in fiscal 1997 pursuant to a "split dollar" agreement.
(6) Represents loan forgiveness arising out of contractual arrangements in
connection with Mr. Hawn's and Mr. Correia's employment by the Company
in 1986 and 1991, respectively. Mr. Correia's outstanding loan totals
$15,000, while Mr. Hawn's loan was repaid.
</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>
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;
- - 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; and
- - executive compensation should reflect the Company's entrepreneurial and
cost-conscious orientation.
Under the Company's Management Incentive Plan, officers of the Company,
from the level below Assistant Vice President 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 senior executives can receive was reduced. In view of the record
financial results for fiscal 1998, the Committee approved bonuses in addition to
the amounts payable under the Management Incentive Plan of $500,000 for the
Chairman and Chief Executive Officer and $100,000 for the President and Chief
Operating Officer. The Committee also decided to increase the base salaries of
the Chairman and the President to $650,000 and $450,000 per annum, respectively.
The base salaries of these executives have not increased in three years, and the
increases are intended to make their salaries more competitive. The Committee
also approved the continuation of the Management Incentive Plan for fiscal 1999
with certain changes and approved the Company's merit increase program for
executives for fiscal 1999.
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 executive officers were granted
options by the Committee following the close of the 1996 fiscal year, no options
have been granted to executive officers since the beginning of the 1998 fiscal
year.
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 30, 1993 (the
Base Year) through July 25, 1998, the cumulative total shareholder return of
$100 invested in 1) The Company's common stock, 2) The S&P Composite- 500 Stock
Index, 3) The S&P Specialty Apparel Retailers Index and 4) an index of five peer
companies selected by the Company, assuming that all dividends were reinvested.
The Company has chosen to use this peer group index in its performance graph
because management believes the peer group index is a better reflection of the
Company's competitors in the marketplace. The peer group consists of all other
publicly traded women's specialty apparel chains known to the Company with which
it competes directly: - Catherines Stores, Cato, Charming Shoppes, Deb Shops and
United Retail Group.
The comparisons in this table are required by the SEC and, therefore,
are not intended to forecast or be indicative of possible future performance of
the Company's common stock.
COMPARISON OF CUMULATIVE TOTAL RETURN
For the period from July 30, 1993 through July 25, 1998
The following chart represents data points on the performance graph which
appears in the printed version of the proxy.
Cumulative Total Return
7/93 7/94 7/95 7/96 7/97 7/98
The Dress Barn Inc. 100 72 88 74 179 192
S&P 500 100 105 133 155 235 281
S&P Specialty Apparel Index 100 97 104 106 135 110
Peer Group 100 71 44 49 45 55
<PAGE>
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Shares
Acquired Number of Unexercised Value of Unexercised
on Value Options In the Money
Exercise Realized at July 25, 1998 Options(1)
---------------------------- ------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ------------ ---------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Elliot S. Jaffe 117,500 2,073,335 ---- 100,000 $ ---- $1,512,800
Burt Steinberg 213,000 4,834,656 120,000 200,000 1,530,000 3,557,200
David R. Jaffe 60,500 1,075,539 2,000 145,000 26,940 2,551,890
Eric Hawn 14,000 227,920 2,000 24,000 26,940 363,840
Armand Correia 57,502 944,288 31 86,299 470 1,313,530
<FN>
(1) Represents the difference between the closing market price of the Company's
common stock at July 24, 1998 ($24.00 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>
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 Until 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 $10.00
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 1998, the Company paid a total of $438,000 in rent under leases with the
affiliated parties.
<PAGE>
The Company has entered into "split-dollar" insurance agreements 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 9 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 Policies.
RECEIPT OF SHAREHOLDER PROPOSALS
Any proposals of shareholders that are intended to be presented at the
Company's 1999 Annual Meeting of Shareholders, which is expected to be held in
December 1999, must be received at the Company's principal executive offices no
later than July 12, 1999, 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 1998 is included with this Proxy Statement.
