SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
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[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
..................... The Dress Barn Inc ..................................
(Name of Registrant as Specified In Its Charter)
.............................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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<PAGE>
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 principal executive
offices at 30 Dunnigan Drive, Suffern, New York, on Tuesday, December 21, 1999
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, 1999
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 12, 1999
================================================================================
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 31,
1999.
================================================================================
<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 21, 1999, 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 12, 1999.
The Company had outstanding 20,058,287 shares of common stock on the
record date of November 1, 1999. Each share of common stock of the Company
outstanding on the record date is entitled to one vote at the Annual Meeting and
any adjournments thereof.
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).
The Company is required to have a quorum to hold the Annual Meeting. A
quorum is a majority of the outstanding shares, present or represented by proxy.
Abstentions and broker non-votes are counted as if stockholders were present for
purposes of determining whether a quorum is present at the meeting. A "broker
non-vote" occurs when a stockbroker submits a proxy that does not indicate a
vote for a proposal because the stockbroker has not received instructions from
the beneficial owners on how to vote on the proposal and does not have the
authority to vote without instructions.
Voting is not cumulative; Directors will be elected by a plurality of
the votes cast at the Annual Meeting, which means that the two nominees with the
most votes will be elected Directors. We will count only votes cast for a
nominee, except that your proxy will be voted FOR the two nominees described in
this Proxy Statement unless you instruct us to the contrary in your proxy.
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 1999
Annual Meeting of Shareholders for three-year terms expiring at the 2002 Annual
Meeting of Shareholders. The Board has nominated Edward D. Solomon and Klaus
Eppler, whose terms of office as Director expire at the 1999 Annual Meeting of
Shareholders. Certain information with respect to the nominees for election as a
Director and incumbent Directors is set forth on the following page:
<PAGE>
Nominees for Election as Director
Name of Director and Age Director Since
Edward D. Solomon, 68.........................................1990
Klaus Eppler, 69..............................................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.
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 2000
Name of Nominee and Age Director Since
Roslyn S. Jaffe, 70...........................................1966
Donald Jonas, 70..............................................1989
Mark S. Handler, 66...........................................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.
Directors With Terms Expiring in 2001
Name of Director and Age Director Since
Elliot S. Jaffe, 73...........................................1966
Burt Steinberg, 54............................................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.
<PAGE>
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 31, 1999 ("fiscal 1999"). 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 $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 1999, 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 on the following page sets forth information regarding
ownership of the common stock of the Company as of November 1, 1999 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.
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares of
Common Stock
Beneficially Percentage
Name and Address of Beneficial Owner: Owned of Class
Directors and Executive Officers (1):
<S> <C> <C>
Elliot S. Jaffe (2)...............................3,957,976 19.39%
Roslyn S. Jaffe (3).................................310,124 1.52%
Burt Steinberg (4)..................................150,115 *
David R. Jaffe (5)...................................82,000 *
Edward D. Solomon (6)................................10,999 *
Klaus Eppler (7).....................................10,299 *
Mark S. Handler (8)..................................10,299 *
Donald Jonas (9).....................................10,099 *
Armand Correia.........................................--- *
Eric Hawn..............................................--- *
All Directors and Executive Officers as a group
(consisting of 11 persons) (10)..................4,498,219 22.10%
* Represents less than 1% of class
Other Beneficial Owners:
Franklin Mutual Advisors Inc. (11)................1,545,600 7.57%
51 John F. Kennedy Parkway
Short Hills, NJ 07078
<FN>
(1) The business address for all Directors and Executive Officers is c/o
The Dress Barn Inc., 30 Dunnigan Drive, Suffern, New York 10901
(2) Consists of 173,336 shares (0.85%) owned directly by Elliot S. Jaffe,
69,310 shares (0.34%) owned by The Jaffe Family Foundation, a New York
not-for-profit corporation (the "Foundation"), 3,655,330 shares (17.90%) owned
by the Jaffe Family Limited Partnership, a Connecticut limited partnership (the
"Partnership") and 60,000 shares covered by options exercisable within 60 days
of November 1, 1999. 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.
(3) Consists of 240,814 shares (1.18%) owned directly by Roslyn S. Jaffe
and 69,310 shares (0.34%) owned by the Foundation. See Footnote (1) above.
(4) Consists of 115 shares owned directly by Mr. Steinberg and 150,000
shares covered by options exercisable within 60 days of November 1, 1999.
<PAGE>
(5) Consists of 5,000 shares owned directly by Mr. Jaffe and 77,000 shares
covered by options exercisable within 60 days of November 1, 1999.
(6) Consists of 1,000 shares owned directly by Mr. Solomon and 9,999 shares
covered by options exercisable within 60 days of November 1, 1999.
(7) Consists of 300 shares owned directly by Mr. Eppler and 9,999 shares
covered by options exercisable within 60 days of November 1, 1999.
(8) Consists of 250 shares owned directly by Mr. Handler and 9,999 shares
covered by options exercisable within 60 days of November 1, 1999.
(9) Consists of 100 shares owned directly by Mr. Jonas and 9,999 shares
covered by options exercisable within 60 days of November 1, 1999.
(10) Includes shares owned by the Partnership and the Foundation as well as
353,996 shares covered by options held by Directors and executive officers
exercisable within 60 days of November 1, 1999.
(11) Based solely on information set forth in a Schedule 13G filed with the
Securities and Exchange Commission.
</FN>
</TABLE>
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information regarding the
compensation for each of the three fiscal years earned by the Chief Executive
Officer and the four other highest-paid executive officers of the Company as of
July 31, 1999, whose total annual salary and bonus from the Company for the year
then ended exceeded $100,000.
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
Annual Compensation
Stock Option All Other
Name and Principal Position Year Salary ($) Bonus ($) Other ($) (#) Compensation ($)
- --------------------------- ---- ---------- --------- --------- ---------- ----------------
(1) (2) (3)
<S> <C> <C> <C> <C> <C> <C>
Elliot S. Jaffe 1999 650,000 ----- ----- ----- 17,500
Chairman of the Board and 1998 521,000 604,200 ----- ----- 17,500
Chief Executive Officer 1997 521,000 153,500 ----- 100,000 17,500
Burt Steinberg 1999 450,000 ----- ----- ----- 55,339(4)
President and Chief 1998 350,000 170,000 ----- ----- 68,517(4)
Operating Officer 1997 350,000 203,100 ----- 200,000 69,263(4)
David R. Jaffe 1999 289,000 ----- ----- ----- 37,760(5)
Executive Vice President 1998 275,000 49,500 ----- ----- 37,888(5)
1997 225,000 47,500 ----- 175,000 36,611(5)
Eric Hawn 1999 226,000 ----- ----- ----- 9,000
Senior Vice President 1998 215,000 38,700 ----- ----- 9,000
1997 200,000 46,000 ----- 50,000 9,000
Armand Correia 1999 206,000 13,260 15,000(6) ----- 8,538
Senior Vice President and 1998 195,000 37,800 15,000(6) ----- 8,538
Chief Financial Officer 1997 176,000 43,900 15,000(6) 92,555 7,920
<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 $37,479 in fiscal 1999,
$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 $27,072 in fiscal 1998,
$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. Correia's employment by the Company in 1991. At July 31,
1999, Mr. Correia had no indebtedness to the Company.
</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, executives of the
Company, from the level of Department Directors 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. Since the Company's financial goals for fiscal 1999 were not
achieved, bonuses under the Management Incentive Plan are payable only to those
officers, including certain of the executive officers, of the Company who
achieved their individual goals. The Committee has approved goals under the
Management Incentive Plan for fiscal 2000 with certain changes in the formula.
The Committee has determined that, in view of the Company's failure to achieve
its financial goals for fiscal 1999, there would be no increases in salary for
any of the executive officers for fiscal 2000.
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 any of the executive officers during fiscal 1999. Following
the close of the fiscal year the Committee granted options covering an aggregate
of approximately 900,000 shares to a substantial group of officers and other
executives, including all of the executive officers named in the foregoing
tables, adopted guidelines for certain merit increases for executives other than
the executive officers and adopted a "split dollar" insurance program for all
officers and certain other executives.
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 29, 1994 (the
Base Year) through July 31, 1999, the cumulative total shareholder return of
$100 invested in 1) The Company's common stock, 2) The S&P Composite-500 Stock
Index, 3) The S&P Specialty Apparel Retailers Index and 4) an index of five peer
companies selected by the Company, assuming that all dividends were reinvested.
The Company has chosen to use this peer group index in its performance graph
because management believes the peer group index is a better reflection of the
Company's competitors in the marketplace. The peer group consists of all other
publicly traded women's specialty apparel chains known to the Company with which
it competes directly: - Catherines Stores, Cato, Charming Shoppes, Deb Shops and
United Retail Group.
The comparisons in this table are required by the Securities and
Exchange Commission and, therefore, are not intended to forecast or be
indicative of possible future performance of the Company's common stock.
COMPARISON OF CUMULATIVE TOTAL RETURN
For the period from July 29, 1994 through July 31, 1999
Cumulative Total Return
7/94 7/95 7/96 7/97 7/98 7/99
The Dress Barn Inc. 100 121 102 249 266 182
S&P 500 100 126 147 224 267 321
S&P Specialty Apparel Index 100 106 109 138 112 96
Peer Group 100 63 69 63 79 105
<PAGE>
<TABLE>
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
<CAPTION>
Shares
Acquired Number of Unexercised Value of Unexercised
on Value Options In the Money
Exercise Realized at July 31, 1999 Options(1)
---------------------------- --------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ------------ ---------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Elliot S. Jaffe ---- ---- 35,000 65,000 $235,163 $471,388
Burt Steinberg 40,000 323,125 160,000 120,000 757,200 1,312,500
David R. Jaffe ---- ---- 40,500 106,500 360,024 993,619
Eric Hawn ---- ---- 10,000 16,000 65,105 116,050
Armand Correia 28,797 216,141 ---- 57,533 ---- 416,810
<FN>
(1) Represents the difference between the closing market price of the Company's
common stock at July 31, 1999 ($15.9375 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 1999, the Company paid a total of $464,000 in rent under leases with the
affiliated parties.
<PAGE>
Under "split-dollar" insurance agreements with trusts established by
each of Burt Steinberg and David R. Jaffe and their wives, 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 8 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 $37,500 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 2000 Annual Meeting of Shareholders, which is expected to be held in
December 2000, must be received at the Company's principal executive offices no
later than July 15, 2000, 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 1999 is included with this Proxy Statement.
<PAGE>
BY ORDER OF THE BOARD OF DIRECTORS
ELLIOT S. JAFFE
Chairman of the Board
The Company's Board of Directors requests that you date and sign the
enclosed proxy and return it in the enclosed, self-addressed envelope. No
postage is required if you mail it in the United States. Your prompt response
will be helpful, and we appreciate your cooperation.
