UNITED
STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
SCHEDULE
14A
(RULE
14a-101)
Proxy Statement
Pursuant to Section 14(a) of the
Securities Exchange
Act of 1934
Filed by the
Registrant x Filed
by a Party other than the Registrant ☐
Check the
appropriate box:
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Preliminary Proxy
Statement
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Confidential, for
Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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Definitive Proxy
Statement
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Definitive
Additional Materials
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Soliciting Material
Pursuant to §240.14a-12
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Ascena Retail
Group, Inc.
(Name of Registrant
as Specified In Its Charter)
(Name of Person(s)
Filing Proxy Statement, if other than the Registrant)
Payment of Filing
Fee (Check the appropriate box):
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Fee computed on
table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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Title of each class of
securities to which transaction applies:
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Aggregate number of securities
to which transaction applies:
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Per unit price or other
underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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Proposed maximum aggregate value
of transaction:
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Total fee paid:
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Fee previously paid
with preliminary materials.
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Check box if any
part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount Previously
Paid:
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Form, Schedule or Registration
Statement No.:
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Filing Party:
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Date Filed:
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933
MacArthur Boulevard
Mahwah,
New Jersey 07430
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NOTICE OF ANNUAL
MEETING OF STOCKHOLDERS
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Meeting Date:
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Tuesday, December 10,
2019
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Meeting Time:
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3:00 p.m. local
time
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Location:
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Corporate
Headquarters
Stage Street Café
933 MacArthur
Boulevard
Mahwah, New Jersey
07430
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The Annual Meeting
will be held for the following purposes:
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(1)
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to consider the
election of four directors to serve on the board of directors for
three-year terms and until their successors are duly elected and
qualified (Proposal One);
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(2)
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to consider the
approval, by non-binding advisory vote, of the compensation paid to
our named executive officers during fiscal 2019 (commonly known as
a “say-on-pay” proposal) (Proposal Two);
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(3)
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to approve an
amendment to the Company’s Third Amended and Restated Certificate
of Incorporation to effect a reverse stock split of the Company’s
common stock, at a ratio to be determined by the Board, and a
corresponding reduction in the Company’s authorized shares of
common stock (Proposal Three);
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(4)
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to ratify the
appointment of Deloitte & Touche LLP as our Independent
Registered Public Accounting Firm for the fiscal year ending
August 1, 2020 (Proposal Four); and
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(5)
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to transact such
other business as may properly come before the Annual Meeting or
any adjournments or postponements thereof.
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The board of
directors has fixed the close of business on October 15, 2019
as the record date for the determination of the stockholders
entitled to vote at the Annual Meeting or any adjournments or
postponements thereof. Only stockholders of record at the close of
business on the record date will be entitled to notice of, and to
vote at, the Annual Meeting.
In order to conserve
natural resources and reduce the cost of printing and distributing
the proxy materials, while providing our stockholders with access
to the proxy materials in a fast and efficient manner, we are
pleased to be able to take advantage of the Securities and Exchange
Commission rule allowing companies to use a “Notice and Access”
model to provide their stockholders with access to proxy materials
via the Internet. On or about October 30, 2019, we will begin
mailing a Notice of Internet Availability of Proxy Materials (the
“Notice of Internet Availability”) to our stockholders informing
them that our notice of annual meeting and proxy statement, Annual
Report on Form 10-K and voting instructions are available on the
Internet at https://proxyvote.com. As more fully described in the
Notice of Internet Availability, all stockholders may choose to
access our materials at https://proxyvote.com or may request to
receive paper copies of the proxy materials.
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BY ORDER OF THE BOARD OF
DIRECTORS
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By:
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/s/ Carrie W.
Teffner
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Carrie W. Teffner
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Interim Executive Chair of the
Board
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Dated: October 30,
2019
YOUR
VOTE IS VERY IMPORTANT. EVEN IF YOU PLAN TO ATTEND THE ANNUAL
MEETING, WE HOPE THAT YOU WILL READ THE PROXY STATEMENT AND VOTE ON
THE MATTERS TO BE CONSIDERED IN ADVANCE OF THE MEETING. YOU MAY
VOTE YOUR PROXY BY TELEPHONE OR VIA THE INTERNET OR BY REQUESTING A
PRINTED COPY OF THE PROXY MATERIALS AND RETURNING THE PROXY CARD
ENCLOSED THEREIN.
PROXY
STATEMENT
In
this proxy statement, the terms “we,” “us” and “our” refer to
Ascena Retail Group, Inc., a Delaware corporation (“Ascena” or the
“Company”), and its consolidated subsidiaries, ANN INC., referred
to as “ANN”, Tween Brands, Inc., referred to as “Justice”, Lane
Bryant, Inc., referred to as “Lane Bryant”, The Dress Barn, Inc.,
referred to as “dressbarn”, and Catherines Stores Corporation,
referred to as “Catherines”.
GENERAL
The enclosed proxy
is solicited by the board of directors (the “Board”) of Ascena for
use at our 2019 Annual Meeting of Stockholders (the “Annual
Meeting”) to be held at 3:00 p.m. local time, on Tuesday,
December 10, 2019 at our Corporate Headquarters, Stage Street
Café, 933 MacArthur Boulevard, Mahwah, New Jersey 07430, and any
and all adjournments or postponements thereof. This proxy statement
and form of proxy, along with our Annual Report on Form 10-K for
the fiscal year ended August 3, 2019, are being made available
to our stockholders on or about October 30, 2019. The proxy
statement and proxy card are being made available to you because
our records indicate that you owned shares of our common stock at
the close of business on October 15, 2019, the record date for
the Annual Meeting.
Our Board is
soliciting your proxy to be used at the Annual Meeting. When you
sign the proxy card, you appoint two of our directors, Linda
Yaccarino and John Welborn, Jr., as your representatives at the
Annual Meeting. One or both of these individuals, or a substitute
if necessary, will vote your shares at the Annual Meeting as you
have instructed them on the proxy card. If you sign and deliver
your proxy card, but you do not provide voting instructions, your
proxy representative will vote in favor of the four nominees for
director (Proposal One), in favor of Proposals Two, Three and Four,
and with respect to any other matter that may be properly presented
at the Annual Meeting, in the discretion of the proxy
representative. This way, your shares will be voted whether or not
you attend the Annual Meeting. Even if you plan to attend the
Annual Meeting, we recommend that you complete, sign and return
your proxy card in advance of the Annual Meeting as your plans may
change.
IMPORTANT NOTICE
REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2019 ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD ON DECEMBER 10,
2019
The rules of the
Securities and Exchange Commission (the “SEC”) allow us to make our
proxy statement and other Annual Meeting materials available to you
over the Internet. On or about October 30, 2019, we will begin
mailing a notice, called the Notice of Internet Availability of
Proxy Materials (the “Notice of Internet Availability”), to our
stockholders advising them that our proxy statement, Annual Report
on Form 10-K and voting instructions can be accessed via the
Internet at https://proxyvote.com. You may then access these
materials and vote your shares over the Internet or you may request
that a printed copy of the proxy materials be sent to you. You will
not receive a printed copy of the proxy materials unless you
request one in the manner set forth in the Notice of Internet
Availability. This allows us to conserve natural resources and
reduces the cost of printing and distributing the proxy materials,
while providing our stockholders with access to the proxy materials
in a fast and efficient manner via the Internet. Copies of this
proxy statement and our Annual Report on Form 10-K for the fiscal
year ended August 3, 2019 are also available online at
https://proxyvote.com.
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Ascena Retail
Group, Inc.
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2019 Proxy
Statement
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QUESTIONS AND
ANSWERS ABOUT OUR ANNUAL MEETING
When
and where will the Annual Meeting take place?
The Annual Meeting
will be held on Tuesday, December 10, 2019, at 3:00 p.m., at
our Corporate Headquarters, Stage Street Café, 933 MacArthur
Boulevard, Mahwah, New Jersey 07430.
What
is the purpose of the Annual Meeting?
At our Annual
Meeting, holders of our common stock will be asked to vote on the
following proposals:
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(1)
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election of four
directors to serve on the Board for three-year terms and until
their successors are duly elected and qualified (Proposal
One);
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(2)
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to consider the
approval, by non-binding advisory vote, of the compensation paid to
our named executive officers during fiscal 2019 (commonly known as
a “say-on-pay” proposal) (Proposal Two);
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(3)
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to approve an
amendment to the Company’s Third Amended and Restated Certificate
of Incorporation to effect a reverse stock split of the Company's
common stock, at a ratio to be determined by the Board, and a
corresponding reduction in the Company's authorized shares of
common stock (Proposal Three);
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(4)
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ratification of the
appointment of Deloitte & Touche LLP as our Independent
Registered Public Accounting Firm for the fiscal year ending
August 1, 2020 (Proposal Four); and
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(5)
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to transact such
other business as may properly come before the Annual Meeting or
any adjournments or postponements thereof.
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What
are the Board’s voting recommendations?
THE BOARD RECOMMENDS
A VOTE FOR
THE ELECTION OF THE
FOUR NOMINATED DIRECTORS, FOR
THE SAY-ON-PAY
PROPOSAL, FOR
THE APPROVAL OF THE
AMENDMENT TO THE COMPANY’S THIRD AMENDED AND RESTATED CERTIFICATE
OF INCORPORATION, TO EFFECT A REVERSE STOCK SPLIT AND A
CORRESPONDING REDUCTION IN THE COMPANY’S AUTHORIZED SHARES,
AND FOR
THE RATIFICATION OF
THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM.
Unless you give
other instructions on your proxy card, the persons referred to as
proxy holders on the proxy card will vote in accordance with the
recommendations of the Board or, with respect to any other matter
that may be presented at the Annual Meeting for which no
recommendation is given, in their own discretion.
Could
other matters be decided at the Annual Meeting?
Our by-laws require
prior notification of a stockholder’s intent to request a vote on
other matters at the Annual Meeting. The deadline for notification
has passed, and we are not aware of any other matters that could be
brought before the Annual Meeting. However, if any other business
is properly presented at the Annual Meeting, your vote by proxy
gives authority to Linda Yaccarino and John Welborn, Jr., the
persons referred to as proxy holders on the proxy card (or a
substitute, if necessary), to vote your shares on such matters in
their discretion.
Who is
entitled to attend the Annual Meeting?
All stockholders who
owned our common stock at the close of business on October 15,
2019 (the “Record Date”), or their duly appointed proxies, may
attend the Annual Meeting or any adjournments or postponements
thereof. Registration begins at 2:45 p.m. on the date of the Annual
Meeting. If you attend, please note that you may be asked to
present valid photo identification, such as a driver’s license or
passport. Please note that if you hold your shares in “street name”
(that is, through a broker, bank or other nominee), you must obtain
a signed and properly executed proxy from your broker, bank or
other nominee to vote your shares held in street name at the Annual
Meeting, and such proxy, together with a broker statement
evidencing your ownership, must be presented at the Annual
Meeting.
Who is
entitled to vote at the Annual Meeting?
Subject to the
foregoing, all stockholders who owned our common stock at the close
of business on the Record Date are entitled to attend and vote at
the Annual Meeting or at any adjournments or postponements
thereof.
How
many votes do I have?
You have one vote
for each share of our common stock that you owned on the Record
Date.
How
many votes must be present to hold the Annual Meeting?
The presence in
person or by proxy of the holders of a majority of the outstanding
shares of our common stock entitled to vote at the Annual Meeting
will constitute a quorum for the transaction of business at the
Annual Meeting. Once a share of the Company’s common stock is
represented for any purpose at the Annual Meeting, it is deemed
present for quorum purposes for the Annual Meeting and
for
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Ascena Retail
Group, Inc.
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2019 Proxy
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any adjournment of
the Annual Meeting. Abstentions and broker “non-votes” are counted
as present and entitled to vote for purposes of determining the
presence or absence of a quorum for the transaction of business. A
broker “non-vote” occurs when a broker or nominee holding shares
for a beneficial owner does not vote on a proposal because the
broker or nominee does not have the necessary voting power for that
proposal and has not received instructions from the beneficial
owner. In order for us to determine that enough votes will be
present to hold the Annual Meeting, we urge you to vote in advance
by proxy even if you plan to attend the Annual
Meeting.
Assuming a quorum
is present, how many votes will be required to approve each
proposal?
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A majority of the
votes cast at the Annual Meeting will elect the four nominees to
serve as directors. A “majority of the votes cast” means that the
number of shares voted “FOR” a nominee for director exceeds the
number of votes cast “AGAINST” such nominee;
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The say-on-pay
proposal will be approved, by non-binding advisory vote, if the
votes cast in favor of the proposal exceed the votes cast in
opposition to the proposal;
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The proposal to
approve an amendment to the Company’s Third Amended and Restated
Certificate of Incorporation to effect a reverse stock split of the
Company's common stock, at a ratio to be determined by the Board,
and a corresponding reduction in the Company's authorized shares of
common stock, will be approved if the holders of at least a
majority of the outstanding shares of common stock entitled to vote
at the Annual Meeting vote in favor of the proposal;
and
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The proposal to
ratify the appointment of the Independent Registered Public
Accounting Firm will be approved if the votes cast in favor of the
proposal at the Annual Meeting exceed the votes cast in opposition
to the proposal.
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A note about broker
non-votes: Under NYSE rules, brokers are not permitted to vote
uninstructed shares for non-routine matters, which include director
elections and executive compensation matters. As a result, if your
shares are held by a brokerage firm for you as beneficial owner and
you do not instruct your broker how to vote your shares on Proposal
One (election of directors) or Proposal Two (the say-on-pay
proposal), your brokerage firm cannot vote them for you. Please
make sure that you provide instructions to your broker regarding
Proposals One and Two. The ratification of the appointment of
independent accountants and the proposal to approve an amendment to
the Company’s Third Amended and Restated Certificate of
Incorporation to effect a reverse stock split and a corresponding
reduction in the Company’s authorized shares of common stock are
both routine items under NYSE rules. As a result, brokers who do
not receive instructions as to how to vote on Proposal Three and
Four may vote on those matter in their discretion.
What
is the effect of a “broker non-vote” or abstention on the proposals
to be voted on at the Annual Meeting?
Abstentions and
broker non-votes will be considered as present for quorum purposes,
but will have no impact on the vote on Proposal One, Two, or Four.
Abstentions and broker non-votes will have the same effect as a
vote “AGAINST” Proposal Three. Because Proposal Three and Proposal
Four are both routine items under NYSE rules, we do not anticipate
any broker non-votes with respect to either Proposal Three or
Proposal Four.
How
many votes may be cast by all stockholders?
A total of
199,247,000 votes may be cast at the Annual Meeting, consisting of
one vote for each share of our common stock outstanding on the
Record Date.
How do
I vote?
You can vote your
shares in one of two ways: either by proxy or in person at the
Annual Meeting by written ballot. If you choose to vote by proxy,
you may do so via the Internet or by telephone, or by requesting a
printed copy of the proxy materials, and signing and returning the
proxy card enclosed therein. Each of these procedures is explained
below. Even if you plan to attend the Annual Meeting, the Board
recommends that you vote by proxy so your shares of common stock
will be voted as directed by you if you are unable to attend the
Annual Meeting.
Because many
stockholders cannot attend the Annual Meeting in person, it is
necessary that a large number of stockholders be represented by
proxy. By following the procedures for voting via the Internet or
by telephone, or by requesting a printed copy of the proxy
materials and signing and returning the proxy card enclosed
therein, you will enable Ms. Yaccarino and/or Mr. Welborn,
each of whom is named on the proxy card as a “proxy holder,” to
vote your shares at the Annual Meeting in the manner indicated. If
you sign and return your proxy card, but do not specify how you
want your shares to be voted, they will be voted, in accordance
with the Board’s recommendation, “FOR” the four director nominees
named in Proposal One, in favor of Proposals Two, Three and Four,
and with respect to any other matter that may be presented at the
Annual Meeting, in the discretion of the proxy holders named in
your proxy card.
Voting
via the Internet
You can vote your
shares via the Internet by following the instructions in the Notice
of Internet Availability or by accessing www.proxyvote.com and
following the instructions contained on that website. The Internet
voting procedures are designed to authenticate your identity and to
allow you to vote your shares and confirm that your voting
instructions have been properly recorded. If you vote via the
Internet, you do not need to mail a proxy card.
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Ascena Retail
Group, Inc.
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Voting
by Telephone
You can vote your
shares by telephone by calling the number provided on the voting
website (www.proxyvote.com) and on the proxy card. The telephone
voting procedures are designed to authenticate your identity and to
allow you to vote your shares and confirm that your voting
instructions have been properly recorded. If you vote via the
telephone, you do not need to mail a proxy card.
Voting
by Mail
You can vote by mail
by requesting that a printed copy of the proxy materials be sent to
your home address. Upon receipt of the materials, you may fill out
the proxy card enclosed therein and return it per the instructions
on the card.
May I
change or revoke my vote after I submit my proxy?
Yes. To change your
vote previously submitted by proxy, you may:
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Cast a new vote by
mailing a new proxy card with a later date or by voting via the
Internet or telephone on a later date; or
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If you hold shares
in your name, attend the Annual Meeting and vote in
person.
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If you wish to
revoke rather than change your vote, written revocation must be
received by our Corporate Secretary prior to the Annual
Meeting.
What
if I participate in the Company’s 401(k) Savings Plan?
If you are a
participant in the Company’s 401(k) Savings Plan (the “401(k)
plan”) and own shares of the Company’s common stock in your 401(k)
plan account as of the Record Date, you will receive, with respect
to the number of shares held for your account under the 401(k) plan
as of the Record Date, a proxy card that will serve as a voting
instruction to the trustee of the 401(k) plan with respect to
shares held for your account. Unless the proxy card is signed and
returned, shares held in your account under the 401(k) plan will
not be voted.
How
can I attend the Annual Meeting?
Stockholders as of
the close of business on the Record Date may attend the Annual
Meeting. You may obtain directions to the location of the Annual
Meeting by contacting Ascena’s Investor Relations Department at
(551) 777-6895 or via email at
asc-ascenainvestorrelations@ascenaretail.com.
What
happens if the Annual Meeting is postponed or
adjourned?
If the Annual
Meeting is postponed or adjourned and no new record date is set,
your proxy will remain valid and may be voted when the Annual
Meeting is convened or reconvened. You may change or revoke your
proxy until it is voted.
Will
your independent registered public accounting firm participate in
the Annual Meeting?
Yes. Our independent
registered public accounting firm is Deloitte & Touche
LLP. A representative of Deloitte & Touche LLP is expected
to be present at the Annual Meeting and make any statements he or
she deem necessary and to respond to appropriate stockholder
questions.
Are
members of the Board required to attend the Annual
Meeting?
Directors are
encouraged, but not required, to attend the Annual Meeting. All of
the Company’s directors that were directors at the time of the 2018
Annual Meeting of Stockholders attended the 2018 Annual Meeting of
Stockholders.
Who
will pay the expenses incurred in connection with the solicitation
of my vote?
We pay all costs and
expenses related to preparation of these proxy materials and
solicitation of your vote and all Annual Meeting expenses. None of
our directors, officers or employees will be specially compensated
for these activities. We reimburse brokers, fiduciaries and
custodians for their costs in forwarding proxy materials to
beneficial owners of our common stock, but we will not pay any
compensation for their services.
Why
did I receive more than one Notice of Internet
Availability?
You may receive
multiple Notices of Internet Availability if you hold your shares
of our common stock in multiple accounts (such as through a
brokerage account and an employee benefit plan, such as the 401(k)
plan). To ensure all of your shares are represented at the Annual
Meeting, please vote your shares as instructed in each Notice of
Internet Availability you receive.
If your household is
receiving multiple Notices of Internet Availability and you wish to
request delivery of a single copy or wish to enroll in electronic
(email) delivery of the proxy materials, you may send a written
request to Ascena Retail Group, Inc., 933 MacArthur Boulevard,
Mahwah, New Jersey 07430, Attention: Investor Relations or via
email at asc-ascenainvestorrelations@ascenaretail.com.
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Ascena Retail
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How do
I obtain a separate Notice of Internet Availability if I share an
address with other stockholders?
In order to reduce
printing and postage costs, only one Notice of Internet
Availability is being delivered to multiple stockholders sharing an
address unless we received contrary instructions from one or more
of the stockholders sharing that address. If your household has
received only one Notice of Internet Availability, we will promptly
deliver an additional Notice of Internet Availability to any
stockholder (as of the close of business on the Record Date) who
sends a written request to: Ascena Retail Group, Inc., 933
MacArthur Boulevard, Mahwah, New Jersey 07430, Attention: Investor
Relations or via email at
asc-ascenainvestorrelations@ascenaretail.com. If you wish to
receive a separate Notice of Internet Availability in the future,
you can notify us by mailing a written request to the address
above, by calling our Investor Relations Department at (551)
777-6895 or via email at
asc-ascenainvestorrelations@ascenaretail.com.
Can I
view these proxy materials electronically?
Yes. You may access
the proxy statement and Annual Report on Form 10-K at
https://proxyvote.com. In addition to the fiscal 2019 proxy
statement and Annual Report on Form 10-K, you can view all of our
other filings with the SEC on our website at the “investors” page
at www.ascenaretail.com, accessible through the “Corporate
Governance” tab.
How
can I receive copies of the Company’s year-end SEC
filings?
We will furnish
without charge to any stockholder who requests, in writing, a copy
of our Annual Report on Form 10-K, including financial statements
and related schedules, for the fiscal year ended August 3,
2019, as filed with the SEC. Any such request should be directed to
Ascena Retail Group, Inc., 933 MacArthur Boulevard, Mahwah, New
Jersey 07430, Attention: Investor Relations or via email at
asc-ascenainvestorrelations@ascenaretail.com.
How do
stockholders submit proposals for the Company’s 2020 Annual Meeting
of Stockholders?
Proposals of
stockholders intended to be presented at the 2020 Annual Meeting of
Stockholders and desired to be included in our proxy statement for
that meeting must be received by our Corporate Secretary and
General Counsel, c/o Ascena Retail Group, Inc., 933 MacArthur
Boulevard, Mahwah, New Jersey 07430 by no later than July 2,
2020 in order to be included in such proxy statement. Any such
proposal must also meet the other requirements of the rules of the
SEC relating to stockholder proposals. Generally, if written notice
of any stockholder proposal intended to be presented at the 2020
Annual Meeting of Stockholders, and not included in our proxy
statement for that meeting, is not delivered to the Corporate
Secretary and General Counsel at the above address between
July 2, 2020 and August 1, 2020, or if such notice does
not contain the information required by Section 7 of Article
II of our by-laws, the chair of the meeting may declare that such
stockholder proposal be disregarded.
Can I
see a list of stockholders entitled to vote at the Annual
Meeting?
A complete list of
the stockholders entitled to vote at the Annual Meeting is
available for inspection at the principal office of the Company
upon written request to the Company by a stockholder, and at all
times during the Annual Meeting at the place of the Annual
Meeting.
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Ascena Retail
Group, Inc.
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PROPOSAL ONE —
ELECTION OF DIRECTORS
Our Third Amended
and Restated Certificate of Incorporation provides for a classified
Board divided into three classes, each with a staggered three-year
term of office and each class of directors as nearly equal in
number as possible. At the Annual Meeting, four directors are to be
elected for three-year terms. On the recommendation of the
Leadership and Corporate Governance Committee (the “Governance
Committee”), the Board has nominated Katie J. Bayne, Paul Keglevic,
Kay Krill and Stacey Rauch, current directors whose terms of office
expire at the Annual Meeting, for election for three-year terms
expiring at the 2022 Annual Meeting of Stockholders. Each nominee
has indicated that he or she will serve if elected. We do not
anticipate that any Board nominee will be unable or unwilling to
stand for election, but should any such nominee be unavailable for
election for any reason, your proxy, to the extent permitted by
applicable law, may be voted with discretionary authority in
connection with the nomination by the Board and the election of any
substitute nominee. On September 30, 2019, the Board was expanded
by two, and the Board appointed Mr. Keglevic to the Board as a
member of the class of directors whose terms of office will expire
at the 2019 Annual Meeting of Stockholders, and appointed Gary D.
Begeman to the Board as a member of the class of directors whose
terms of office will expire at the 2021 Annual Meeting of
Stockholders.
The charts below
provide summary information about the composition of our Board,
followed by the biographies of the director nominees and our
current Board members. Please see the section below entitled
“Questions and Answers About our Board and Corporate Governance
Matters” for additional information about our Board and the
committees of the Board.
BOARD
COMPOSITION (as of
October 15, 2019)
Gender
Diversity:
Through our unique
portfolio of fashion brands, Ascena’s core purpose is to
provide all
women and girls with
fashion and inspiration for living confidently every day. We are
honored that half of our Board is comprised of women, led by Kate
Buggeln as our Lead Independent Director and Carrie W. Teffner as
our recently appointed Interim Executive Chair of the
Board. According to the Gender Diversity Index issued by
Equilar for the first quarter of calendar 2019, the percentage of
women on Russell 3000 boards increased for the sixth consecutive
quarter to approximately 19%; however, it was also noted that less
than 40 Russell 3000 companies have achieved gender parity. We are
honored to have achieved gender parity on our Board.
nu
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Ascena Retail
Group, Inc.
|
6
|
2019 Proxy
Statement
|
Board
Refreshment:
The Governance
Committee and the Board also believe that it is important for the
Board to be “refreshed” by adding new directors with fresh
perspectives from time to time. In that regard, since 2015 we
have added ten new directors, resulting in an average director
tenure of less than five years, with an average director age of
57.
THE
BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE
ELECTION OF THE NOMINEES LISTED BELOW TO SERVE AS
DIRECTORS.
Information about
Director Nominees:
Following is
information regarding the director nominees and the other
continuing directors.
|
|
|
Name
of Director Nominee and Age
|
Director
Since
|
Katie J. Bayne, 53
|
2015
|
Paul Keglevic, 65
|
2019
|
Kay Krill, 64
|
2015
|
Stacey Rauch, 61
|
2017
|
|
|
|
KATIE
J. BAYNE
|
Age:
53
Director
Since:
2015 Committees:
Leadership and Corporate
Governance
|
Background:
KATIE J. BAYNE serves as a
Senior Advisor with Guggenheim Securities, the investment banking
and capital markets division of Guggenheim Partners. Concurrently,
Ms. Bayne serves as founder and President of Bayne Advisors, an
advisory firm that helps brands and businesses find their strategic
identities, drive sustained consumer engagement and innovate for
transformative results. Ms. Bayne began her career with The
Coca-Cola Company in 1989 in brand management and has since held
roles of increasing responsibility, which focused on consumer
strategy, retail marketing and consumer marketing in the U.S.,
Australia and globally. She eventually became Chief Marketing
Officer and then President, North American Brands. Ms. Bayne brings
extensive strategic marketing and brand management experience to
the Company. Throughout her career in leadership roles at
Coca-Cola, Ms. Bayne acquired vast managerial and operational
knowledge of the retail industry both domestically and
internationally. Ms. Bayne currently serves on the board of
directors of The Honest Company, Inc. Ms. Bayne previously
served on the board of directors of ANN until its acquisition by
the Company in August 2015, as well as Beazer Homes USA. Ms. Bayne
is also a member of the board of trustees of the American Film
Institute and the Fuqua School of Business at Duke
University.
|
Qualifications:
The Board selected Ms. Bayne to
serve as a director based on her strong background in consumer
strategy, retail and consumer marketing and brand
management.
|
|
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PAUL
KEGLEVIC
|
Age:
65
Director
Since:
2019
|
Background:
PAUL KEGLEVIC has served on
several boards of directors and related committees with experience
across multiple industries, including retail. Mr. Keglevic
currently serves on the boards of directors of PetSmart, Inc.,
Stellus Capital Investment Corp., and Bonanza Creek Energy Inc.
Prior to his retirement in April 2018, Mr. Keglevic served as Chief
Executive Officer (2016 to 2018) and Chief Financial Officer (2008
to 2016) of Energy Future Holdings Corp. Mr. Keglevic was a partner
at PricewaterhouseCoopers (“PWC”) from 2002 to 2008 and a member of
their U.S. Leadership team. Prior to PWC, Mr. Keglevic was a
partner and member of the U.S. Leadership team for Arthur
Andersen.
|
Qualifications:
The Board selected
Mr. Keglevic to serve as a director based on his finance,
merger and acquisition, transactional and governance
experience.
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|
Ascena Retail
Group, Inc.
|
7
|
2019 Proxy
Statement
|
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KAY
KRILL
|
Age:
64
Director
Since:
2015
Committees:
Compensation
|
Background:
KAY KRILL served as Chief
Executive Officer of ANN, which was acquired by the Company in
August 2015, from 2005 through October 31, 2015, and as
President of ANN from 2004 through October 31,
2015. Ms. Krill also served as a member of the Board of
Directors of ANN from 2004 until the date that it was acquired by
the Company. From 2001 to 2004, Ms. Krill served as
President of ANN’s LOFT Division. From 1998 to 2001, Ms. Krill
was Executive Vice President, Merchandise and Design of ANN’s LOFT
Division. From 1996 to 1998, Ms. Krill served as Senior
Vice President, General Merchandise Manager of ANN’s LOFT Division
and, from 1994 to 1996, she was Vice President of Merchandising for
Ann Taylor. Prior to joining ANN, Ms. Krill held various
management positions at several retailers including The Talbots,
Inc. and Hartmarx Corporation. Ms. Krill is also on the Breast
Cancer Research Foundation Board of Directors, and previously
served on the Boards of the National Retail Federation and St.
Luke’s School in New Canaan, CT.
|
Qualifications:
The Board selected
Ms. Krill to serve as a director based on her experience as
the Chief Executive Officer and board member of a publicly-held
specialty retailer, and her extensive experience in the apparel
industry.
|
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|
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STACEY
RAUCH
|
Age:
61
Director
Since:
2017
Committees:
Leadership and Corporate
Governance (Chair)
Audit
|
Background:
STACEY RAUCH has served as the
non-executive Chairman of the board of directors of Fiesta
Restaurant Group, Inc. since February 2017, as a director of Fiesta
Restaurant Group since 2012, Chair of Fiesta Restaurant Group’s
Corporate Governance & Nominating Committee, and as a
member of its Compensation Committee. Ms. Rauch is a Director
(Senior Partner) Emeritus of McKinsey & Company, from
which she retired in September 2010. Ms. Rauch was a leader in
McKinsey’s Retail and Consumer Goods Practices, served as the head
of the North American Retail and Apparel Practice, and acted as the
Global Retail Practice Convener. A 24-year veteran of McKinsey,
Ms. Rauch led engagements for a wide range of retailers,
apparel wholesalers and consumer goods manufacturers in the U.S.
and internationally. Her areas of expertise include strategy,
organization, marketing, merchandising, omnichannel management,
global expansion, and retail store operations. Ms. Rauch was a
co-founder of McKinsey’s New Jersey office, and was the first woman
at McKinsey appointed as an industry practice leader. Prior to
joining McKinsey, Ms. Rauch spent five years in product
management for the General Foods Corporation. Ms. Rauch also serves
as a director of Heidrick & Struggles International, Inc., a
global provider of executive search, leadership assessment and
development services, where she sits on its Audit and Finance
Committee, and as a non-executive director of Land Securities, PLC,
the UK’s largest commercial property company, where she sits on its
Audit, Nomination and Remuneration Committees. Previously,
Ms. Rauch served on the board of directors of CEB, Inc., a
leading member-based advisory company, ANN (which was acquired by
the Company in August 2015), and Tops Holding Corporation, the
parent company of Tops Markets LLC, a U.S. grocery
retailer.
|
Qualifications:
The Board selected
Ms. Rauch to serve as a director based on her extensive
background in business strategy, marketing, merchandising and
operations in the retail industry.
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Ascena Retail
Group, Inc.
|
8
|
2019 Proxy
Statement
|
Directors with
Terms Expiring in 2020
|
|
|
Name
of Director and Age
|
Director
Since
|
Kate Buggeln, 58
|
2004
|
David Jaffe, 60
|
2001
|
Carl “Chuck” Rubin,
60
|
2015
|
John L. Welborn, Jr.,
42
|
2018
|
|
|
|
KATE
BUGGELN
|
Age:
58
Director
Since:
2004
Committees:
Leadership and Corporate
Governance
Compensation
|
Background:
KATE BUGGELN was appointed as
Ascena’s Lead Independent Director on September 28, 2018.
Currently, Ms. Buggeln serves as a member of the Board for
publicly-traded Five Below, Inc., and is a member of its
Compensation Committee and Nominating and Corporate Governance
Committee. She also is on the Board of Noble Biomaterials, Scoop
Holdings (parent company of cabi) and the nonprofit, Bpeace.
Previously, Ms. Buggeln serves as a Senior Advisor with Irving
Place Capital, L.P., and prior to that position was Senior Vice
President of Strategy and Business Development for Coach, Inc.,
where she created and led strategies to enter new markets and new
categories. Ms. Buggeln also spent many years as a retail
consultant at LakeWest Group Ltd. and Coopers & Lybrand
LLP, where she advised retail companies on business strategy,
operations, e-commerce and supply chain. Previously,
Ms. Buggeln served as a Director at Vitamin Shoppe, Stuart
Weitzman and Timberland Company.
|
Qualifications:
The Board selected Ms. Buggeln
to serve as a director based on her strong background in strategic
planning, marketing and new business development.
|
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|
|
DAVID
JAFFE
|
Age:
60
Director
Since:
2001
|
Background:
DAVID JAFFE presently
serves as a member of the Board, and served as Ascena’s Chief
Executive Officer from 2002 to May 2019 and as Chairman of the
Board from 2016 to 2019. Previously, he had been President from
2002 to 2017, and Vice Chairman and Chief Administrative Officer
from 2000 to 2002. Mr. Jaffe joined Ascena in 1992 as Vice
President, Business Development and became Senior Vice President in
1995, Executive Vice President in 1996 and Vice Chairman in 2000.
David is the son of Elliot S. and Roslyn S. Jaffe. Elliot S. Jaffe
is a co-founder and Chairman Emeritus. Roslyn S. Jaffe is a
co-founder and Director Emeritus for Life. David Jaffe is the
brother of Elise Jaffe, a former non-executive officer and a more
than 5% stockholder, and Richard Jaffe, a significant holder of
Ascena’s stock. Mr. Jaffe is a former member of the Board of
Directors of The National Retail Federation.
|
Qualifications:
The Board selected
Mr. Jaffe to serve as a director based on his extensive retail
and financial background.
|
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|
|
CARL
“CHUCK” RUBIN
|
Age:
60
Director
Since:
2015
Committees:
Audit (chair)
Compensation
|
Background:
CARL “CHUCK” RUBIN served as
Chairman of the Board of The Michaels Companies, Inc. (“Michaels”)
from 2015 to April 2019. He joined Michaels in 2013 and was its
Chief Executive Officer from 2013 to February 2019. Prior to
joining Michaels, from 2010 to 2013, Mr. Rubin was President and
Chief Executive Officer of Ulta Salon, Cosmetics & Fragrances,
Inc. Mr. Rubin held roles of increasing responsibility at Office
Depot, serving as President beginning in 2006. Mr. Rubin spent six
years in senior leadership roles, including Partner, at Accenture
Consulting where he advised clients and led engagements across
retail formats and ecommerce business. Prior to joining Accenture
Consulting, Mr. Rubin held various management positions at several
specialty retailers. Mr. Rubin was a member of the Executive
Committee of the Board of Directors of The National Retail
Federation from 2007 to 2010.
|
Qualifications:
The Board selected Mr. Rubin to
serve as a director based on his extensive managerial and
operational knowledge of the retail industry and his experience as
a board member of a specialty retailer.
|
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|
Ascena Retail
Group, Inc.
|
9
|
2019 Proxy
Statement
|
|
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|
JOHN
L. WELBORN, JR.
|
Age:
42
Director
Since:
2018
Committees:
Leadership and Corporate
Governance
Audit
|
Background:
JOHN L. WELBORN, JR. serves as a
Managing Director of Stadium Capital Management, LLC (“Stadium”),
an investment advisory firm that focuses on smaller capitalized
publicly-traded companies in the U.S., Canada and Western
Europe. In his role at Stadium, Mr. Welborn has led or
supported Stadium’s due diligence across many different industries,
including financial services, retail, software and business
services. Mr. Welborn joined Stadium in 2000 as an
Associate. Prior to joining Stadium, from 1998 to 2000,
Mr. Welborn was a Financial Analyst at The Beacon Group, LLC,
an investment and advisory firm that is now part of J.P. Morgan
Chase & Co. At Beacon, Mr. Welborn was a member
of the Mergers & Acquisitions Group, focusing on financial
services and consumer product companies and the Liquid Investments
Committee. From 2012 to 2014, Mr. Welborn served as a
director and member of the governance committee of Intermountain
Community Bancorp and as a director of Panhandle State Bank, Inc.
From 2009-2013, Mr. Welborn was a board observer of West Coast
Bancorp.
|
Qualifications:
The Board selected
Mr. Welborn to serve as a director based on his strong
background in capital markets and investment
experience.
|
Directors with
Terms Expiring in 2021
|
|
|
Name
of Director and Age
|
Director
Since
|
Gary D. Begeman, 61
|
2019
|
Gary Muto, 60
|
2019
|
Carrie W. Teffner,
53
|
2018
|
Linda Yaccarino, 56
|
2016
|
|
|
|
GARY
D. BEGEMAN
|
Age:
61
Director
Since:
2019
|
Background:
GARY D. BEGEMAN has over 30
years of experience managing the legal support for a broad range of
strategic, financing and commercial transactions for public and
private companies. He has served as an independent director on
boards of directors of a number of privately owned companies
including SolAero Technologies Corp. (since November 2018), Toys
“R” Us Property Company II, LLC (from August 2017 to December 2018)
and Sequa Corporation (from February 2016 to May 2017). He is also
Chair and a director of the University of South Dakota Foundation.
He was previously Executive Vice President, General Counsel and
Secretary of NII Holdings, Inc., a publicly-traded wireless
telecommunications company operating in Latin America, from
November 2006 to October 2015. From August 2003 to September 2006,
Mr. Begeman was Senior Vice President and Deputy General Counsel at
Sprint Corporation and before that, he was Vice President and
Deputy General Counsel at Nextel Communications. Prior to that, Mr.
Begeman was General Counsel at XO Communications, Inc., and was a
Partner at the Jones Day law firm, focusing on capital formation
and mergers and acquisitions.
|
Qualifications:
The Board selected Mr. Begeman
to serve as a director based on his strong legal background and
work with public and private companies.
|
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|
|
GARY
MUTO
|
Age:
60
Director
Since:
2019
|
Background:
GARY MUTO serves as a director
and our Chief Executive Officer (since 2019) and served as
President and Chief Executive Officer - Ascena Brands from August
2017 to May 2019. Mr. Muto joined ANN INC. (Ascena
Retail Group, Inc.) in 2008 as President of LOFT. In 2013, he
assumed responsibility for leading the AnnTaylor, LOFT and Lou
& Grey brands. During the period 1998 to 2007, Mr. Muto held
several leadership roles at Gap, Inc., including President of
Banana Republic and President of Gap brands. While at Gap, Inc.,
Mr. Muto also launched the specialty brand, Forth &
Towne.
|
Qualifications:
The Board selected Mr. Muto to
serve as a director based on his extensive retail
background.
|
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|
Ascena Retail
Group, Inc.
|
10
|
2019 Proxy
Statement
|
|
|
|
CARRIE
W. TEFFNER
|
Age:
53
Director
Since:
2018
|
Background:
CARRIE W. TEFFNER currently
serves as our Interim Executive Chair of the Board since May 2019.
Ms. Teffner served as Executive Vice President Finance and
Strategic Projects of Crocs, Inc. (“Crocs”) from August 2018 to
April 2019, and served as Executive Vice President and Chief
Financial Officer of Crocs from December 2015 to August 2018.
Prior to joining Crocs, Ms. Teffner served as Executive Vice
President and Chief Financial Officer of PetSmart, Inc. from 2013
to 2015 until it was sold to BC Partners, where she was responsible
for finance and information technology. Ms. Teffner also
served as Executive Vice President and Chief Financial Officer of
Weber Stephen Products LLC from 2011 to 2013. From 2009 to
2011, Ms. Teffner served as Senior Vice President and Chief
Financial Officer of The Timberland Company until it was sold to VF
Corporation. Ms. Teffner spent the first 21 years of her
career with Sara Lee Corporation where she held various domestic
and international positions including divisional and segment Chief
Financial Officer and Treasurer. Ms. Teffner also serves as a
director and Audit Committee Chair for GameStop Corp. since August
2018. Ms. Teffner served as a director and the Audit
Committee Chair for Banfield, The Pet Hospital, from 2014 to 2015,
and as a director of Crocs for six months during 2015 prior to her
appointment as its Executive Vice President and Chief Financial
Officer. Ms. Teffner also served as a director of the
nonprofit community revitalization organization, Rebuilding
Together, from 2013 to 2019.
|
Qualifications:
The Board selected Ms. Teffner
to serve as a director based on her extensive strategic, financial
and operational expertise and background in financial reporting and
internal controls for large, publicly-held product and retail
companies.
|
|
|
|
LINDA
YACCARINO
|
Age:
56
Director
Since:
2016
Committees:
Compensation
(chair)
Leadership and
Corporate Governance
|
Background:
LINDA YACCARINO is Chairman,
Advertising and Client Partnerships for NBCUniversal, LLC
(“NBCUniversal”) since 2011. In this role Ms. Yaccarino oversees
all market strategy and advertising revenue totaling nearly $10
billion, for NBCUniversal’s entire portfolio of broadcast, cable
and digital assets. Prior to joining NBCUniversal in 2011, she held
roles of increasing responsibility from 1996 to 2011 at Turner
Broadcast System, Inc. (“Turner”), serving as Executive Vice
President and Chief Operating Officer, Turner Entertainment
Advertising, Sales and Marketing, and Acquisitions beginning in
2009. Prior to joining Turner, Ms. Yaccarino held various
management positions at several media sales outlets.
|
Qualifications:
The Board selected
Ms. Yaccarino to serve as a director based on her extensive
digital knowledge, multiplatform consumer engagement background and
transformation experience.
|
Compensation and
Stock Incentive Committee Interlocks and Insider
Participation
During fiscal 2019,
Linda Yaccarino, Kay Krill, Carl Rubin, Carrie W. Teffner and Kate
Buggeln served as members of our Compensation and Stock Incentive
Committee (referred to as our “Compensation Committee”). No member
of the Compensation Committee was an officer or employee of the
Company during the portion of fiscal 2019 that he or she served as
a member of the Compensation Committee or was formerly an officer
or employee of the Company, except for Ms. Krill who previously
served as President and CEO of ANN until her retirement on October
31, 2015. No executive officer of the Company served during fiscal
2019 as a director or member of a compensation committee of any
entity at which any of its executive officers served on the Board,
or the Compensation Committee, of the Company. On May 1, 2019, in
connection with her appointment as Interim Executive Chair of the
Board, Ms. Teffner stepped down as a member of the Compensation
Committee, but continues to serve as a member of the
Board.
|
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Ascena Retail
Group, Inc.
|
11
|
2019 Proxy
Statement
|
QUESTIONS AND
ANSWERS ABOUT OUR BOARD AND CORPORATE GOVERNANCE
MATTERS
What
is the makeup of the Board and how often are members
elected?
Our Board currently
has twelve members, divided into three classes, each with a
staggered three-year term of office. Four directors, Katie J.
Bayne, Paul Keglevic, Kay Krill and Stacey Rauch, whose terms are
expiring as of the date of the Annual Meeting, shall stand for
election this year.
How
often did the Board meet in fiscal 2019?
The Board met seven
times during fiscal 2019 and otherwise accomplished its business
through the work of the committees described below. During fiscal
2019, each incumbent director attended at least 75% of the meetings
of the Board and of the standing committees of which he or she was
a member during his or her tenure.
Do the
non-management directors meet in regularly scheduled executive
sessions?
Yes. The
non-management members of our Board meet in regularly scheduled
executive sessions without any members of management
present.
Does
the Company have any formal policies or requirements concerning
Board Leadership?
We do not have a
formal policy regarding the separation of our Chairman of the Board
(“Chairman”) and Chief Executive Officer (“CEO”) positions.
Following David Jaffe’s retirement as CEO and Chairman on May 1,
2019, the Board appointed Gary Muto as CEO and a member of the
Board, and Carrie W. Teffner as Interim Executive Chair of the
Board. Our current leadership structure permits Mr. Muto to focus
his attention on managing the Company’s business and its strategic
priorities, while Ms. Teffner leads the Board.
The Company believes
that strong, independent Board leadership is a critical aspect of
effective corporate governance. In September 2018,
Ms. Buggeln was appointed to serve as the Company’s Lead
Independent Director. As specified in our Corporate Governance
Guidelines, the responsibilities of the Lead Independent Director
are as follows:
|
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•
|
consult with the
Chairman as to an appropriate schedule of Board
meetings;
|
|
|
•
|
consult with the
Chairman regarding, and approve the information, agenda and
schedules of, the meetings of the Board and its
committees;
|
|
|
•
|
call meetings of the
independent directors, as appropriate;
|
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•
|
serve as chairman of
the executive sessions of the independent directors;
|
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•
|
serve as liaison
between the independent directors and the Chairman and between the
independent directors and senior management;
|
|
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•
|
ensure that
independent directors have adequate opportunities to meet and
discuss issues in sessions of the independent directors without
management present;
|
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|
•
|
chair the meetings
of the Board when the Chairman or CEO is not present;
|
|
|
•
|
recommend to the
Board the retention of advisors and consultants who report directly
to the Board; and
|
|
|
•
|
respond to questions
and comments from major stockholders that are directed to the Lead
Independent Director or to the independent directors as a group,
with such consultation with the Chairman and other directors as may
be appropriate.
|
We believe that the
Company’s new leadership structure, with Ms. Teffner serving as
Interim Executive Chair of the Board and Mr. Muto serving as CEO,
is the best governance model for our Company, its stockholders and
stakeholders at this time.
How
does the Board determine which directors are
independent?
Our Board determines
whether an individual director satisfies all of the independence
standards of the SEC and the Nasdaq Global Select Market, as such
standards may be amended from time to time, and also that the
director has no material relationship with us (either directly or
as a partner, stockholder or officer of any entity) that would be
inconsistent with a finding of independence.
Which
directors have been designated as independent?
The Board
affirmatively determined that Katie J. Bayne, Gary D. Begeman, Kate
Buggeln, Paul Keglevic, Kay Krill, Marc Lasry, Randy L. Pearce,
Carl Rubin, Stacey Rauch, Carrie W. Teffner (prior to Ms. Teffner’s
appointment as Interim Executive Chair of the Board on May 1,
2019), John L. Welborn, Jr. and Linda Yaccarino are “independent,”
as defined under Rule 5605(a)(2) of The Nasdaq Stock Market. Mr.
Pearce resigned from the Board effective as of October 4, 2018, and
Mr. Lasry resigned from the Board effective as of June 30,
2019.
|
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|
Ascena Retail
Group, Inc.
|
12
|
2019 Proxy
Statement
|
What
are the standing committees of the Board?
Our Board has three
standing committees: the Audit Committee, the Governance Committee
and the Compensation Committee.
Who
are the current members of the standing committees?
|
|
|
|
|
|
Audit
Committee
|
Compensation
and Stock
Incentive
Committee
|
Leadership and
Corporate Governance
Committee
|
Katie J. Bayne
|
|
|
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Gary D. Begeman
|
|
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Kate
Buggeln 
|
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David Jaffe
|
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Paul Keglevic
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Kay Krill
|
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Gary Muto
|
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Stacey Rauch
|
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Carl
Rubin 
|
|
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Carrie W.
Teffner
|
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John L. Welborn,
Jr. 
|
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Linda Yaccarino
|
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Chairperson
|
Member
|
Lead Independent Director
|
Financial Expert
|
Are
all of the members of the standing committees
independent?
Yes. The Board has
determined that the members of each of the standing committees are
independent pursuant to applicable SEC and Nasdaq Stock Market
rules.
Do all
of the standing committees operate under a written
charter?
Yes. The charters of
each of the standing committees are posted on the “Investors” page
of the Company’s website at www.ascenaretail.com, accessible
through the “Corporate Governance” tab.
What
are the functions of the standing committees?
Audit Committee
It is the
responsibility of the Audit Committee to assist the Board in its
oversight of our financial accounting and reporting practices. The
duties of the Audit Committee include reviewing the quality and
integrity of the financial statements, reports and other financial
information provided by the Company to the public, the Company’s
systems of internal controls regarding financial reporting, the
internal audit function, the processes for monitoring enterprise
risk, and the Company’s auditing, accounting and financial
reporting processes generally. The Audit Committee has the
authority to conduct any investigation appropriate to fulfilling
its responsibilities, and it has direct access to our independent
registered public accounting firm as well as our internal auditors.
The Audit Committee has the ability to retain, at our expense,
special legal, accounting or other consultants or experts it deems
necessary in the performance of its duties. The Audit Committee
also prepared the Audit Committee Report for inclusion in the proxy
statement. See “Audit Committee Report.” The Board has determined
that all members of the Audit Committee are “independent,” as
required by the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and the listing standards of The Nasdaq Stock
Market and meet the “financial sophistication” requirement within
the meanings of The Nasdaq Stock Market rules, and has also
determined that Mr. Rubin and Mr. Welborn qualify as “audit
committee financial experts,” as defined in Item 407(d)(5) of
Regulation S-K.
Leadership and Corporate Governance Committee
The function of the
Governance Committee is to assist the Board by (i) identifying
qualified individuals to become Board members, and recommending for
selection by the Board the director nominees to stand for election
at the next annual meeting of the Company’s
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Ascena Retail
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2019 Proxy
Statement
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stockholders,
(ii) recommending the composition of the Board and its
committees, (iii) reviewing and recommending changes to the
Board, as may be required, with respect to the Company’s Corporate
Governance Guidelines and the corporate governance policies and
practices of the Company, (iv) leading the Board in its annual
review of the Board’s performance, (v) reviewing the
succession planning recommendations for certain of the Company’s
senior officers, and (vi) advising the Board regarding
diversity and inclusion matters.
The responsibilities
and duties of the Governance Committee also include advising the
Board with respect to the charters, structure and operations of the
various committees of the Board and qualifications for membership
thereon, including any independence standards for committee
membership.
The Governance
Committee utilizes a variety of methods for identifying and
evaluating director candidates. Candidates may come to the
attention of the Governance Committee through current directors,
members of management, stockholders or other persons. From time to
time, the Governance Committee may also engage a search firm to
assist in identifying potential Board candidates, although no such
firm was used to identify any of the director nominees proposed for
election at the Annual Meeting. Once the Governance Committee has
identified a prospective nominee, the Governance Committee
evaluates the prospective nominee against the standards and
qualifications set out in the Governance Committee’s charter and
the Company’s Corporate Governance Guidelines, including the
individual’s potential contributions in providing advice and
guidance to the Board and management. The Governance Committee
seeks to identify nominees who possess a wide range of experience,
skills, areas of expertise, knowledge and business judgment. The
Governance Committee evaluates all candidates for director,
regardless of the person or firm recommending such candidate. In
considering director nominees to stand for election or to fill any
vacancy, the Governance Committee and the Board take into account,
in addition to such other factors as they deem relevant, such
factors as the desirability of selecting directors who are
accomplished in their respective fields, with superior credentials
and reputation, are believed to have (i) relevant expertise
and experience upon the basis of which such person could offer
advice and guidance to management and (ii) sufficient time
available to devote to the affairs of the Company, are believed to
be able to work with the other members of the Board, are believed
to be able to represent the long-term interests of the Company’s
stockholders as a whole, and are selected with a view to the Board
being diverse and representing a range of backgrounds and
experience. The Governance Committee and the Board also consider
all applicable legal and regulatory requirements, as well as any
requirements under the Company’s Third Amended and Restated
Certificate of Incorporation, and by-laws that govern the
composition of the Board as from time to time in
effect.
The Board, with the
advice and recommendation of the Governance Committee, determines
the total number of directors and selects nominees with a view to
maintaining a Board that is strong in its collective knowledge and
has a diversity of not only skills and experience, but also
diversity in gender, culture and geography. The Board and
Governance Committee assess the effectiveness of the Company’s
diversity policies by reviewing the nominees for director to
determine if such nominees satisfy the Company’s then-current
needs.
The Board, the
Governance Committee and the Company are committed to diversity and
inclusion and recognize the benefits diversity and inclusion can
contribute to achieving the Company’s goals. Accordingly, the
Governance Committee is responsible for advising the Board
regarding diversity and inclusion matters in an effort to promote,
foster and nurture a diverse and inclusive workforce, culture and
provision of services at the Company.
Corporate
Governance Guidelines
The Board has
adopted Corporate Governance Guidelines, a copy of which is posted
on the “Investors” page of the Company’s website at
www.ascenaretail.com, accessible through the “Corporate Governance”
tab. The Governance Committee assists the Board in carrying out the
Corporate Governance Guidelines, monitors the compliance by the
Board and its committees with the Corporate Governance Guidelines,
and, from time to time as it deems appropriate, reviews and
reassesses the adequacy of the Corporate Governance Guidelines and
recommends any proposed revisions to the Corporate Governance
Guidelines to the Board for approval. The Corporate Governance
Guidelines address topics such as (i) Board size,
(ii) Board meetings and agendas, (iii) committees,
(iv) Board leadership structure, (v) lead independent
director, (vi) executive sessions of independent directors,
(vii) director qualifications and attributes,
(viii) director independence, (ix) director selection,
(x) majority approval vote in uncontested director elections,
(xi) director orientation, (xii) director access to
officers and employees, (xiii) director responsibilities,
(xiv) changes in directors’ principal occupation, position or
responsibility, (xv) outside directorships,
(xvi) stockholder communications with the Board,
(xvii) consideration of director candidates nominated by
stockholders, (xviii) director compensation,
(xix) restrictions on hedging and pledging transactions,
(xx) annual evaluation of the Company’s CEO and succession
planning, and (xxi) annual evaluation of the
Board.
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Ascena Retail
Group, Inc.
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2019 Proxy
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Compensation Committee
The function of the
Compensation Committee is to assist the Board by:
(i) evaluating and determining all matters relating to the
compensation (including base salary, incentive compensation and
equity-based awards) of the CEO, Interim Executive Chair of the
Board and our other executive officers (including the named
executive officers and our former Chairman and CEO until his
retirement) and certain other key executives and employees;
(ii) administering and functioning as the committee that is
authorized to grant stock options, restricted stock and/or
restricted stock units (“RSUs”) and other equity-based and
incentive awards to executive officers and such other key
executives and employees as the Compensation Committee shall
determine under our stock and cash incentive plans, including the
Company’s 2016 Omnibus Incentive Plan, as amended (the “Omnibus
Incentive Plan”) and as the committee authorized to grant awards
under other incentive plans applicable to the executive officers of
the Company as in effect from time to time; and
(iii) reviewing and reporting to the Board on such other
matters as may be appropriately delegated by the Board for the
Compensation Committee’s consideration.
The Compensation
Committee has sole authority to retain and obtain the advice of
compensation consultants, outside legal counsel and other advisers,
each referred to herein as an “Adviser,” to assist it with the
execution of its duties and responsibilities. The Compensation
Committee has the authority to set the compensation and other terms
and conditions and oversee the work of the Advisers, to receive
appropriate funding from the Company for the payment of
compensation to the Advisers and to terminate the services of an
Adviser. In selecting Advisers, the Compensation Committee will
take into account factors it considers appropriate or as may be
required by law, regulation or under the Nasdaq listing
standards.
In fiscal 2018,
following an extensive search process, the Compensation Committee
selected and engaged Semler Brossy Consulting Group, LLC (“SBCG”)
as the Compensation Committee’s independent compensation
consultant. SBCG continues to serve as the Compensation Committee’s
independent compensation consultant. The Compensation Committee
determined that SBCG did not have any conflict of interest in its
dealings with the Compensation Committee (or the Company). The
Compensation Committee made this determination, in part, by
reviewing and considering the factors set out by the applicable SEC
rules and Nasdaq listing standards addressing compensation advisor
conflicts of interest.
The Compensation
Committee regularly evaluates the nature and scope of the services
provided by SBCG. In order to ensure that SBCG remains independent,
SBCG is only engaged by, takes direction from, and reports to the
Compensation Committee and, accordingly, only the Compensation
Committee has the right to terminate or replace SBCG at any
time.
How
many times did each standing committee meet in fiscal
2019?
During fiscal 2019,
the Audit Committee met eight times, the Compensation Committee met
nine times and the Leadership and Corporate Governance Committee
met six times.
What
is the Board’s role in the risk oversight process?
It is management’s
responsibility to manage risk and bring to the Board’s attention
risks that are material to the Company. The Board exercises its
oversight of the Company’s risks through regular reports to the
Board from our CEO, our Interim Executive Chair of the Board and
other members of senior management on areas of material risk,
actions and strategies to mitigate those risks and the
effectiveness of those actions and strategies. The Board also
administers its risk oversight function through its Audit and
Compensation Committees.
The Audit Committee
discusses with management the Company’s policies with respect to
risk assessment and risk management, including the Company’s major
financial risk exposures and the steps management has taken to
monitor and control those risks. Members of senior management with
responsibility for oversight of particular risks report to the
Audit Committee periodically throughout the year. The Company’s
chief internal audit executive annually prepares a comprehensive
risk assessment report which identifies the material business risks
(including strategic, operational, financial reporting and
compliance risks) for the Company as a whole, as well as for each
operating segment, and identifies the controls that address and
mitigate those risks. The chief internal audit executive reviews
that report with the Audit Committee each year. The Audit Committee
reports to the full Board annually, or more frequently as required,
on its review of the Company’s risk management.
The Compensation
Committee establishes our executive compensation programs in a
balanced and diversified manner while also creating significant,
yet appropriate, incentives for strong performance based on our
business and strategic plan. In most cases, each component of our
performance-based compensation program is subject to a limit on the
cash paid or the number of shares delivered. We believe that our
compensation programs reflect an appropriate balance of short-term,
long-term, guaranteed and performance-based compensation in order
not to encourage excessive risk-taking. A significant portion of
our compensation program includes performance-based compensation
and equity-based compensation. We believe that this helps to ensure
that our NEOs and other employees focus on the health of our
business and the success of broad performance metrics that will
deliver stockholder value over time and discourages excessive
risk-taking by our NEOs and other employees. The Compensation
Committee also evaluates on a regular basis our overall mix of
equity-based incentive awards relative to cash-based incentive
awards to align our executives’ incentives with stockholder
interests and long-term value.
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Ascena Retail
Group, Inc.
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2019 Proxy
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How
does the Board evaluate director candidates recommended by
stockholders?
The Governance
Committee does not evaluate stockholder nominees differently than
any other nominee. Pursuant to policies set forth in our Leadership
and Corporate Governance Committee Charter and Corporate Governance
Guidelines, our Governance Committee will consider stockholder
nominations for directors if we receive timely written notice, in
proper form, of the intent to make a nomination at a meeting of
stockholders. To be timely for the 2019 Annual Meeting, the notice
must be received within the time frame discussed above under the
heading “How do
stockholders submit proposals for the Company’s 2019 Annual Meeting
of Stockholders?” To be in proper form, the
notice must, among other things, include each nominee’s written
consent to be named as a nominee and to serve as a director if
elected, the number of shares held of record and beneficially owned
by the nominee, and any other information relating to the nominee
that is required to be disclosed in solicitations of proxies for
the election of directors, or is otherwise required pursuant to
Regulation 14A under the Exchange Act.
How are directors
compensated?
General Philosophy
For fiscal 2019,
total compensation for our non-employee Board members was within a
competitive range of the peer group median. The peer group used to
assess the competitiveness of non-employee director compensation is
identified under “Peer Group” in the Compensation Discussion and
Analysis. During fiscal 2019, our non-employee directors received
an annual cash retainer, committee fees, and an annual equity
retainer.
The Board, in
consultation with SBGC, the Compensation Committee’s compensation
consultant, analyzes the Company’s Board compensation in comparison
to its peer group, and determines on an annual basis whether to
recommend any adjustments in Board compensation to the Board. No
changes were made to the structure or design of the Company’s Board
compensation for fiscal 2019.
David Jaffe, our
former Chairman and CEO, and Gary Muto, our current CEO and
director, did not receive any additional cash or equity
compensation for their service as directors in fiscal 2019 while
serving as executive officers of the Company and members of the
Board. Following her appointment as Interim Executive Chair of the
Board on May 1, 2019, Ms. Teffner did not receive any additional
compensation for her service as a director in fiscal 2019.
Compensation paid to Mr. Jaffe and Ms. Teffner for their
service non-employee directors during fiscal 2019 is reflected in
the Summary Compensation Table in the Compensation and Discussion
Analysis, along with compensation paid to them for their service as
executive officers during fiscal 2019.
Cash Compensation
For fiscal 2019, we
paid our non-employee Board members as follows:
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Fee
|
Annual Board Cash
Retainer
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$80,000
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Annual fees to each committee
member (excluding committee chairs) are as follows:
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Audit Committee
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$15,000
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Compensation
Committee
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$12,500
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Leadership and Corporate
Governance Committee
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$10,000
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Annual fees to the committee
chairs and lead independent director are as follows:
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Audit Committee
Chair
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$25,000
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Compensation Committee
Chair
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$20,000
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Leadership and Corporate
Governance Committee Chair
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$15,000
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Lead Independent
Director
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$30,000
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Ascena Retail
Group, Inc.
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2019 Proxy
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Equity Compensation
The Company
generally makes equity grants of RSUs to our directors on an annual
cycle in September or October, which vest on the one-year
anniversary of the grant date. We generally provide an annual
equity retainer of $130,000 for service on our Board; however, for
a second consecutive year, the value of RSU awards to directors was
reduced by 30% to align with actions taken for our NEOs (other than
Ms. Hufford), who also received a 30% reduction to their annual
long-term incentive grants for fiscal 2019 (as described in the
“Compensation Discussion and Analysis” below). We discounted the
RSU grants to our directors in order to conserve shares during a
period of depressed share price. The following RSU grants were made
to our non-employee directors in fiscal 2019:
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Director
|
Number of Restricted
Stock Units Granted(1)
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Katie J. Bayne
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24,138
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Kate Buggeln
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24,138
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Steven
Kirshenbaum(2)
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24,138
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Katherine Krill
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24,138
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Marc Lasry(2)
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24,138
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Randy Pearce(3)
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24,138
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Stacey Rauch
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24,138
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Carl Rubin
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24,138
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Carrie W. Teffner
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24,138
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John L. Welborn,
Jr.(4)
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34,067
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Linda Yaccarino
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24,138
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(1)
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RSUs granted to
non-employee directors in fiscal 2019 vest one year from the grant
date.
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(2)
|
Messrs. Kirshenbaum
and Lasry resigned as members of the Board effective as of June 30,
2019.
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(3)
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Mr. Peace retired as
a member of the Board on October 4, 2018.
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(4)
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Mr. Welborn received
a pro-rated portion of the reduced fiscal 2018 RSU award, in
addition to the reduced fiscal 2019 RSU award.
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Changes for
Fiscal 2020
For fiscal 2020,
non-employee directors will receive an equity award of 24,000 stock
options, which is approximately equal to the number of RSUs granted
to non-employee directors in fiscal 2019. The equity award for our
directors was changed to a fixed grant of stock options to align
with the actions taken for our NEOs, who will receive a fixed
number of stock options in fiscal 2020 (as described in the
“Compensation Discussion and Analysis” below). The decision to
grant a fixed number of stock options, rather than calculate awards
based on a grant date fair value, is intended to preserve shares
under the Omnibus Incentive Plan. In a depressed share price
environment, it is critical that we control share usage and
dilution as well as avoid granting potential windfall awards to our
directors and NEOs. Further, granting stock options to our
non-employee directors is intended to align actual pay with Company
performance, as our non-employee directors will only realize value
if we achieve strong stock price performance and deliver value to
our stockholders. Cash compensation for our directors is unchanged
for fiscal 2020. The Board also determined that the compensation
for Messrs. Begeman and Keglevic, who joined the Board in September
2019, would consist of a $250,000 cash retainer and no equity
award.
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Ascena Retail
Group, Inc.
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2019 Proxy
Statement
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FISCAL 2019
DIRECTOR COMPENSATION TABLE
The following table
provides each element of non-employee director compensation for
fiscal 2019.
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Name(1)
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Fees Earned or
Paid in Cash
($)
|
RSU Awards
($)(2)
|
All
Other
Compensation
($)
|
Total
($)
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Katie J. Bayne
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90,000
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91,000
|
—
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181,000
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Kate Buggeln
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129,863
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91,000
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—
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220,863
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Steven
Kirshenbaum(3)
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72,444
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91,000
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—
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163,444
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Kay Krill
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86,250
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91,000
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—
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177,250
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David Jaffe(4)
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—
|
—
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—
|
—
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Marc Lasry(3)
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72,444
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91,000
|
—
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163,444
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Randy L.
Pearce(5)
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23,819
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—
|
—
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23,819
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Stacey Rauch
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106,374
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91,000
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—
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197,374
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Carl Rubin
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115,653
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91,000
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—
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206,653
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Carrie W.
Teffner(6)
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—
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—
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—
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—
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John L. Welborn,
Jr.(7)
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98,956
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128,432
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—
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227,388
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Linda Yaccarino
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104,458
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91,000
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—
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195,458
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(1)
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Messrs. Begeman and
Keglevic joined the Board effective September 30,
2019.
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(2)
|
Reflects the
aggregate grant date fair value of RSU awards calculated in
accordance with ASC Topic 718. Assumptions used in the valuation of
equity based awards are discussed in “Stock-Based Compensation” in
Note 17 to the Consolidated Financial Statements in our Annual
Report on Form 10-K for the fiscal year ended August 3,
2019.
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(3)
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Messrs. Kirshenbaum and
Lasry resigned as members of the Board effective as of June 30,
2019.
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(4)
|
Compensation
received by Mr. Jaffe for his service as a non-employee director
during fiscal 2019 following his retirement as an employee of the
Company effective June 28, 2019 is reported in the Summary
Compensation Table.
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(5)
|
Mr. Pearce
retired as a member of the Board on October 4, 2018.
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(6)
|
Ms. Teffner was
appointed Interim Executive Chair of the Board effective May 1,
2019. As of that date, Ms. Teffner receives no additional
compensation for her service as a member of the Board. Compensation
received by Ms. Teffner in respect of her service as a non-employee
director (including the “Teffner Director RSU” discussed in the
Summary Compensation Table below) and in respect of her service as
Interim Executive Chair of the Board is reported in the Summary
Compensation Table.
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(7)
|
Mr. Welborn received
a pro-rated portion of the reduced fiscal 2018 RSU award, in
addition to the reduced fiscal 2019 RSU award.
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Ascena Retail
Group, Inc.
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2019 Proxy
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As of August 3,
2019, the aggregate number of RSUs and stock options held by each
non-employee director was:
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Name
|
Number of
RSUs
|
Number of
Options
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Katie J. Bayne
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24,138
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—
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Kate Buggeln
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24,138
|
—
|
David Jaffe(1)
|
—
|
—
|
Steven Kirshenbaum
|
24,138
|
—
|
Kay Krill
|
24,138
|
—
|
Marc Lasry
|
—
|
—
|
Randy L. Pearce
|
—
|
—
|
Stacey Rauch
|
24,138
|
—
|
Carl Rubin
|
24,138
|
—
|
John L. Welborn,
Jr.
|
34,067
|
—
|
Linda Yaccarino
|
24,138
|
—
|
|
|
(1)
|
The aggregate number
of outstanding stock options held by Mr. Jaffe are reported in the
“Outstanding Equity Awards at Fiscal Year End” table
below.
|
Are
directors and executive officers required to own a minimum amount
of the Company shares of common stock?
Our Board believes
it is important that our non-employee directors and executive
officers have, and are recognized both internally and externally as
having, long-term financial interests that are aligned with those
of our stockholders. In fiscal 2012, pursuant to the recommendation
of the Compensation Committee, the Board adopted stock ownership
guidelines for our CEO and non-employee directors (the “Ownership
Guidelines”). In June 2016, the Ownership Guidelines were amended
and restated to, among other things, expand the group of persons
subject to the Ownership Guidelines to include all members of our
leadership team, including each of the Company’s executive officers
and presidents of each of the Company’s brands. The Ownership
Guidelines with respect to our CEO became effective in September
2011, with respect to our non-employee directors, became effective
on December 7, 2011, and with respect to all such other
members of Company leadership, became effective on June 2,
2016. See “Executive Compensation — Compensation Discussion
and Analysis — Stock Ownership Guidelines for Executive
Officers” below for a discussion of the Ownership Guidelines as
amended and restated, with regard to our CEO and all such other
members of Company leadership, and each NEO’s current progress
towards achieving the guidelines.
Under the Ownership
Guidelines, non-employee directors are required to hold (determined
annually as of the last day of the prior fiscal year) three times
their annual cash retainer (currently $80,000 per annum, for a
total of $240,000).
The Ownership
Guidelines authorize a transition period for non-employee directors
to achieve the three-time ownership level of five years from the
later of December 7, 2011 and the date the director commences
service on our Board. As of August 3, 2019, Mr. Jaffe,
Ms. Bayne, Ms. Buggeln and Ms. Krill satisfied the
Ownership Guidelines. The remaining non-employee directors are
still within the transition period to satisfy the Ownership
Guidelines.
Ownership includes:
(i) shares of our stock acquired on the open market or
purchased through the exercise of stock options or settlement of
any other type of equity award (such as restricted stock, RSUs,
deferred stock or a deferred stock unit); (ii) vested equity awards
(other than stock options or stock appreciation awards); (iii)
vested shares of our stock allocated under any tax-qualified plan
(although non-employee directors may not participate in the 401(k)
plans, if a director previously was an employee and participated in
the plan, such shares would count as “owned”); and
(iv) unvested RSUs (but excluding unvested performance-based
equity awards). Shares held individually or jointly or by a “family
member” (as defined in the securities laws which would include
certain trusts, family partnerships and foundations) would count as
“owned” by the non-employee director. Vested and unvested stock
option awards do not count towards the stock ownership requirement.
The Ownership Guidelines, as amended and restated, are posted on
the “investors” page of the Company’s website at
www.ascenaretail.com, accessible through the “Corporate Governance”
tab.
Does
the Company maintain Indemnification Agreements with the members of
the Board and Executive Officers?
Yes, the Company has
entered into indemnification agreements (collectively, the
“Indemnification Agreements”) with each of the members of the
Board. Ascena also entered into Indemnification Agreements with
Gary Muto, CEO, Carrie W. Teffner, Interim Executive Chair of the
Board, Dan Lamadrid, Executive Vice President and Chief Financial
Officer (“CFO”), and Wendy Hufford, Senior Vice President and
General Counsel. The Indemnification Agreements supplement the
Company’s Third Amended and Restated Certificate of Incorporation,
the Company’s by-laws and Delaware law in providing certain
indemnification rights to these individuals. The Indemnification
Agreements provide, among other things, that we will indemnify
these individuals to the fullest extent permitted by Delaware law
and to any greater extent that Delaware law may in the future
permit, including the advancement of attorneys’ fees and other
expenses incurred by such individuals in connection with any
threatened, pending or completed action, suit or other
proceeding,
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Ascena Retail
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2019 Proxy
Statement
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whether of a civil,
criminal, administrative, regulatory, legislative or investigative
nature, relating to any occurrence or event before or after the
date of the Indemnification Agreements, by reason of the fact that
such individuals are or were our directors or officers, subject to
certain exclusions and procedures set forth in the Indemnification
Agreements.
Does
the Company have a written Code of Ethics?
Yes, our “Code of
Ethics for Senior Financial Officers” is posted on the “investors”
page of the Company’s website at www.ascenaretail.com, accessible
through the “Corporate Governance” tab. This code of ethics
complies with the requirements of the Sarbanes-Oxley Act of 2002
pertaining to codes of ethics for chief executives and senior
financial and accounting officers. If we amend or waive a provision
of our “Code of Ethics for Senior Financial Officers” that applies
to our principal executive officer, principal financial officer,
principal accounting officer or controller, we will post such
information at this location on our website. A copy of the code of
ethics will be provided to any stockholder upon
request.
Does
the Company have a Whistleblower Policy?
Yes, as required by
the Sarbanes-Oxley Act of 2002, we have established a confidential
hotline for employees to call with any information regarding
concerns about accounting or auditing matters. All calls are
referred to the Chair of the Audit Committee. Our “Whistleblower
Policy” is posted on the “investors” page of the Company’s website
at www.ascenaretail.com, accessible through the “Corporate
Governance” tab.
How
can I communicate with members of the Board?
You may contact any
member of the Board by writing to our Board at:
Ascena’s Board of
Directors
c/o Chair of the
Audit Committee
Ascena Retail Group,
Inc.
933 MacArthur
Boulevard
Mahwah, New Jersey
07430
To the extent
reasonably practical under the circumstances, all such
communications are treated confidentially and you can remain
anonymous when communicating your concerns.
When
does the Company’s fiscal year end?
Historically, our
fiscal years have ended on the last Saturday in July. However, in
June 2018, the Board approved a change in the Company’s fiscal 2018
year end to August 4, 2018, and for each year thereafter, to
the Saturday closest to July 31. References in this proxy statement
to a “fiscal year” are to the calendar year in which the fiscal
year ends. For example, the fiscal year ended August 3, 2019
is referred to as “fiscal 2019” and the fiscal year ended
August 1, 2020 is referred to as “fiscal 2020.”
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Ascena Retail
Group, Inc.
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2019 Proxy
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EXECUTIVE
COMPENSATION — COMPENSATION DISCUSSION AND
ANALYSIS
OVERVIEW
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Ascena Retail
Group, Inc.
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2019 Proxy
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This Compensation
Discussion and Analysis describes the compensation philosophy,
objectives, policies and practices with respect to our named
executive officers (the “NEOs”). The NEOs for fiscal 2019 are
comprised of our principal executive officer, principal financial
officer, the three other most highly compensated officers serving
at the end of fiscal 2019, in addition to two former executive
officers based upon their pre-separation compensation, are as
follows:
|
|
Gary Muto,
CEO
|
|
Carrie W. Teffner,
Interim Executive Chair of the
Board
|
|
Dan Lamadrid,
EVP and CFO
|
|
Wendy Hufford,
SVP, General Counsel and
Secretary
|
|
David Jaffe,
Former Chairman and
CEO
|
|
Robb Giammatteo,
Former EVP and CFO
|
|
Brian Lynch,
Former President
and
Chief Operating
Officer
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Ascena Retail
Group, Inc.
|
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2019 Proxy
Statement
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EXECUTIVE
SUMMARY
Financial Results
and Portfolio Realignment
Our financial
results for fiscal 2019 fell short of our expectations, and we
struggled to efficiently respond to broader headwinds in the retail
industry. Specific factors impacting our fiscal 2019 enterprise
operational results included increased competition and pricing
pressure, our product portfolio that failed to reflect evolving
consumer tastes and preferences across all of our brands, and the
relatively high overhead costs embedded in our multi-brand
portfolio strategy. We, as a team, understand the imperative of
returning to profitability, and we take seriously our commitments
to our customers, vendors, and stockholders.
The disappointing
enterprise-level results in fiscal 2019 culminated in a review of
our segment and brand portfolio and overall enterprise structure.
During the second half of fiscal 2018 and the first half of fiscal
2019, we identified our Value segment as being particularly
vulnerable to secular trends towards multi-channel retail platforms
and evolving consumer tastes. As a result, we made the decision in
the second half of fiscal 2019 to sell the maurices brand to an
affiliate of OpCapita LLP and use the proceeds to pay down existing
loan balances and/or to reinvest in our other brands that we view
as having greater potential in the current retail environment. In
addition to cash proceeds, we received an approximately 49.6%
interest in the OpCapita LLP affiliate that is now the owner of
maurices. Following the sale of maurices, we also made the
difficult decision to wind-down the operations of dressbarn, which
was the first brand of Ascena and which was started by our Founder,
Roslyn Jaffe, in 1962. The decisions to sell maurices and wind-down
dressbarn’s operations were difficult and effectively removed us
from the value fashion market; that said, we believe that each
decision streamlines our operations, allows for further investment
of financial and human capital in higher growth opportunities, and
better positions us to deliver long-term value to our
stockholders.
Despite our
disappointing and unacceptable enterprise-level results in fiscal
2019, we believe that our remaining brand portfolio contains
positive growth opportunities for us to leverage in fiscal 2020. In
particular, our Premium Fashion segment continues to perform well
and achieved positive comparable sales year-over-year, and Justice
remains the number one specialty player in girls’ apparel. Our
transformation initiatives are leading to a stronger product that
resonates with our customers by providing assortment versatility.
One strong example of this is our Premium segment at Ann Taylor,
where we are shifting the perception toward more wearing occasions
relevant to our customers’ daily life. We are optimistic that this
shift in the merchandising strategy for Ann Taylor and LOFT will
translate into winning strategies across our portfolio. Our
remaining brands-Justice in the Kids Fashion segment and Lane
Bryant and Catherines in the Plus Fashion segment-had mixed results
across fiscal 2019 and are seen as key growth platforms to lift our
enterprise-level results for fiscal 2020. Our successes across
these three brands hinge on our ability to execute on our three key
priorities: (i) driving sustainable growth, (ii) improving
operating margins, and (iii) optimizing our capital
structure.
We will also look
towards fiscal 2020 as an opportunity to continue right-sizing our
brand support staff and identifying areas for cost savings. As an
output of our portfolio realignment, we have re-focused our efforts
on creating a more nimble organization and optimizing our existing
human capital across our brands. Initiatives focused on reducing
our structural costs are expected to contribute an additional $150
million in cumulative realized savings, most of which will be
realized in fiscal 2020. This focus on nimbleness and efficiency
better positions us to deliver on our commitments to our customers,
vendors, and stockholders.
New
Leadership Team
The Company
implemented several significant leadership transitions during
fiscal 2019. In connection with the aforementioned portfolio
realignment, David Jaffe retired as Chairman and CEO from those
positions on May 1, 2019 and Gary Muto was elevated to the role of
CEO and appointed to the Board of Directors. Mr. Muto had
previously served as President and CEO-Ascena Brands since August
2017.
Given the
challenging and rapidly evolving retail market, we also appointed
Carrie W. Teffner as Interim Executive Chair of the Board on May 1,
2019. In her role as Interim Executive Chair of the Board, Ms.
Teffner works as a thought partner with Mr. Muto in formulating the
Company’s go-forward strategy and stabilizing business
operations.
Among other factors,
the appointments of Mr. Muto and Ms. Teffner make our leadership
structure more efficient and optimize brand leadership and
integration under our “one ascena” philosophy, which we believe
will be a core driver in stabilizing our business. The appointments
of Mr. Muto and Ms. Teffner are described in more detail in the
section titled “Year of Significant Transition in Company
Leadership.”
Additionally, Brian
Lynch, our former President and Chief Operating Officer, and John
Pershing, our former Chief Human Resources Officer, departed the
Company during fiscal 2019. Robb Giammatteo, our former CFO,
departed the Company at the conclusion of fiscal 2019. These
departures are described in more detail in the section titled “Year
of Significant Transition in Company Leadership.”
Dan Lamadrid was
elevated to the role of CFO, effective on the first day of fiscal
2020. Mr. Lamadrid had previously served as Chief Accounting
Officer. Additionally, Wendy Hufford was appointed as SVP and
General Counsel in October 2018.
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Ascena Retail
Group, Inc.
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2019 Proxy
Statement
|
Below we provide a
timeline of leadership transitions and significant events for our
business during 2019:
Key
Fiscal 2019 Executive Compensation Outcomes
We believe the
executive compensation-related decisions made for fiscal 2019, and
the associated outcomes of our programs, highlight our ongoing
focus on aligning our executives’ interests and pay opportunities
with those of our stockholders. In fiscal 2019:
|
|
•
|
Our former CEO, Mr.
Jaffe, did not receive a seasonal cash incentive payout for either
the fall or spring 2019 season due to Consolidated Ascena
Enterprise Operating Income falling below our threshold
goals;
|
|
|
•
|
We achieved
segment/brand Operating Income results between threshold and target
goals for the fall 2019 season that resulted in a fall season
incentive compensation (“IC”) payout at 31.0% of target for our
other then-serving NEOs (other than Ms. Hufford);
|
|
|
•
|
We did not achieve
threshold Operating Income goals for the spring season, and as
such, our NEOs (other than Ms. Hufford) did not receive a spring
season IC payout;
|
|
|
•
|
Ms. Hufford received
an IC payout at 100% of target for both the fiscal 2019 fall and
spring seasons in accordance with her offer letter;
|
|
|
•
|
The Compensation
Committee again discounted the target value of annual long-term
incentive awards to each of the NEOs (other than Ms. Hufford) by
30% (as was the practice in fiscal 2018) to better align pay
opportunities with recent Company performance and to conserve
shares. As such, these NEOs, including our CEO, were granted only
70% of their typical long-term incentive award target. Ms. Hufford
received a “steady state” long-term incentive award with no
discount in accordance with her offer letter;
|
|
|
•
|
Annual long-term
incentive ("LTI") opportunities in fiscal 2019 were granted in the
form of:
|
|
|
•
|
Performance-based
cash long-term incentive plan ("LTIP") awards that vest after 3
years based on our Comparable Sales and Adjusted EBITDA performance
with a modifier for TSR performance relative to a select group of
peers (60% of “steady-state” target weighting; 86% of actual awards
for fiscal 2019). LTIP awards are intended to encourage growth to
fund our business and increase stockholder returns;
and
|
|
|
•
|
Time-vesting stock
options that vest over a 2-year period (20% of “steady-state”
weighting; 14% of actual annual awards to all NEOs in fiscal 2019).
Stock options are intended to encourage a long-term focus on value
creation given their 7-year exercise term.
|
|
|
•
|
Similar to last
year, in conjunction with the 30% reduction in long-term incentive
opportunities for the NEOs (other than Ms. Hufford), time-based
RSUs were not granted to any of our NEOs (other than Ms. Hufford)
during the annual grant cycle to further
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Ascena Retail
Group, Inc.
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2019 Proxy
Statement
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the link between
long-term pay opportunities and stockholder value creation
(time-based RSUs otherwise represent 20% of the “steady-state”
weighting); and
|
|
•
|
In October 2019, the
Compensation Committee terminated the Company’s Transformation
Bonus Program and all outstanding awards under the Transformation
Bonus Program. Additional information about the Transformation
Bonus Program and the decision to terminate it is provided below
under the heading “Transformation Bonus Opportunity”.
|
COMPENSATION
PROGRAM OBJECTIVES AND PHILOSOPHY
We design our
executive compensation program to attract and retain highly
skilled, performance-oriented executives. In doing so, we structure
incentives to motivate strong financial performance and align with
stockholder interests. The following core principles guide the
achievement of our stated objectives:
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PRINCIPLE
|
IMPACT
|
Provide market-competitive
opportunities to attract and retain key talent
|
•
Offer total compensation opportunities that are competitive with
those offered by similarly-situated companies with which we compete
for executive talent. In practice, this results in salary
compensation for senior management positions being positioned
within a competitive range of the compensation peer group
median
|
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|
Encourage and reward
performance at the individual, brand, and corporate
levels
|
•
Balances
all aspects of an executive’s responsibilities: base salary for
day-to-day responsibilities; seasonal cash incentive bonuses for
shorter-term returns linked to annual financial performance; and
long-term cash and/or equity incentive awards to align executives’
focus with stockholder value creation and the future performance of
the Company
•
For
fiscal 2019, this resulted in compensation delivered in three
primary forms: base salary, seasonal cash IC bonuses, and LTIP
awards and equity incentives. The mix of vehicles is intended to
ensure that a significant portion of the total compensation
opportunities for our executives are “at risk” based on Company and
individual performance
|
|
|
Align executives’ interests with
those of stockholders
|
•
Explicitly
ties a portion of long-term incentives to the performance of our
stock price over a period of several years
•
Encourages
retention and a longer-term performance focus though vehicles that
carry multi-year performance periods and service-based vesting
requirements
|
With respect to the
total direct compensation paid to our NEOs, the Compensation
Committee, with the recommendations and advice of its independent
compensation consultant, utilizes and reviews data from peer
companies and survey data provided by Equilar for the purposes of
analyzing the pay positioning of key roles within the organization.
Industry-based compensation studies and data inform our general
understanding of current compensation practices and serve as one
input into our compensation decision-making process. Additional
points of reference for the Compensation Committee include a role’s
scope of responsibilities, the criticality of an individual to the
organization, and an individual’s potential to influence and drive
future business results.
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Ascena Retail
Group, Inc.
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2019 Proxy
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KEY
FEATURES OF THE EXECUTIVE COMPENSATION PROGRAM
The Compensation
Committee reviews our executive compensation and benefits programs
on an ongoing basis to evaluate whether these programs support the
Company’s compensation philosophy and objectives and serve the
interests of our stockholders. The Company’s practices include the
following, each of which the Compensation Committee believes
reinforces our executive compensation philosophy and
objectives:
|
|
What
We Do:
|
•
Linkage
Between Performance Measures and Long-Term Growth — Our executive
compensation program is designed to attract and retain talent with
an emphasis on pay-for-performance and creating long-term value
through sustainable net income growth (resulting in increased
stockholder returns).
|
•
Performance-Based
Long-Term Incentive Awards — Performance-based long-term cash LTIP
awards represent 60% of the Company’s annual LTI mix for the NEOs
on a “steady-state” basis (and represented 86% of the LTI mix for
NEOs other than Ms. Hufford in fiscal 2019). For the three-year
period beginning in fiscal 2019, cash LTIP award payouts are tied
to Comparable Sales (25%) and Adjusted EBITDA (75%) with a modifier
based on TSR performance relative to a select group of
peers.
|
•
Market
Comparison of Executive Compensation Against a Relevant Peer Group
— The Compensation Committee annually reviews competitive market
data provided by its independent compensation consultant and
Company management.
|
•
“Double
Trigger” Change in Control Severance — In the event of a change in
control, cash severance benefits are predominantly payable or vest
upon a “double trigger” for our executive officers (i.e., upon an
involuntary termination that occurs 90 days prior to or within 2
years following a change in control), and there are no “walk
rights” following a change in control (i.e., the ability for
executives to receive change in control-related payments without
the loss of their job or substantial diminution of job
duties).
|
•
Independent
Compensation Consultant — The Compensation Committee retains its
own compensation consultant to review and advise on the Company’s
executive compensation program and practices.
|
•
Maximum Payout
Caps for Executive Officer Incentive Compensation Programs —
Payouts under our short-term IC and long-term cash LTIP programs
are capped at 200% of target.
|
•
Stock
Ownership Guidelines — Our CEO is required to hold 6x his base
salary, and our other executive officers and brand presidents are
required to hold 1x their base salaries, each to be achieved within
five years of the adoption of the guidelines or, if later,
promotion or hire.
|
•
Hedging/Pledging
Policy — Our executive officers or non-employee directors are
prohibited from engaging in hedging or pledging transactions with
respect to our stock.
|
|
|
What
We Don’t Do:
|
x No
Guaranteed Salary Increases
|
x No
Change in Control or Perquisite Tax Gross-Ups
|
x No
Employment Agreements
|
x No
Significant Executive Perquisites
|
x No
Excessive Severance Benefits
|
x No
Service-Based Defined Benefit Pension Plan or Other Similar
Benefits
|
x No
Repricing of Underwater Stock Options Without Stockholder
Approval
|
x No
Executive Officer is Entitled to Termination Bonus in Excess of
Market Standard
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Ascena Retail
Group, Inc.
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2019 Proxy
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KEY
ELEMENTS OF OUR EXECUTIVE COMPENSATION PROGRAM
Our executive
compensation program is designed to attract and retain quality
leaders with an emphasis on pay-for-performance and creating
sustainable long-term stockholder returns. Our compensation program
includes significant performance-based elements which are intended
to create a meaningful incentive for outstanding performance and
serves as an effective retention tool. For fiscal 2019, our annual
executive compensation program generally consisted of the following
elements:
|
|
|
Element
|
Purpose
|
Base
salary
|
Provide a fixed component of pay
that is aligned with our compensation philosophy and intended to
attract and retain executives with the necessary skills and
experience to execute on our strategic priorities.
|
Seasonal cash incentive
bonuses
|
Provide a bonus opportunity
linked to our seasonal Operating Income performance to drive
executives’ focus on our ongoing financial success.
|
Equity awards
|
Create an ownership culture
among employees, provide an incentive to contribute to the
continued growth and development of our business and align the
interests of executives with stockholders over a long-term
period.
|
Cash LTIP Awards
|
Focus our executives on the
long-term goals and strategic initiatives of the organization and
align the interests of executives with stockholders over a
long-term period.
|
FISCAL 2019 PAY
MIX & PERFORMANCE FOCUS
The following
features of our compensation program for executive officers
underscore our performance-based compensation
philosophy:
|
|
•
|
Our fiscal 2019
Annual Cash Incentive Plan was tied entirely to performance against
pre-established, seasonal Operating Income (“OI”)
goals.
|
|
|
•
|
86% of the actual
fiscal 2019 annual long-term incentive grants to each of our NEOs
(other than Ms. Hufford and Ms. Teffner) were in the form of a
three-year cash LTIP award with payout contingent on achieving
pre-established Comparable Sales and Adjusted EBITDA goals with a
relative TSR overall payout modifier.
|
|
|
•
|
Nonqualified stock
option awards comprised 14% of the annual LTI grants to our NEOs
(other than Ms. Hufford and Ms. Teffner) in fiscal 2019. NEOs only
“realize” value from stock options to the extent that our share
price increases above the exercise price.
|
|
|
•
|
Approximately 88% of
total target compensation for Mr. Muto, our CEO, was tied to the
achievement of corporate performance objectives and share price
performance.
|
|
|
•
|
We did not grant
time-based RSUs to our NEOs (other than Ms. Hufford) as part of our
ongoing pay program in fiscal 2019.
|
We allocate
compensation between short-term and long-term components and
between cash and equity in order to maximize executive performance
and retention. Long-term cash compensation and equity awards
comprise an increasingly larger percentage of overall total
compensation opportunities for our executives as position levels
increase based on our belief that these elements of compensation
more closely align their interests with our financial performance
and with our stockholders’ interests.
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Ascena Retail
Group, Inc.
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2019 Proxy
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For fiscal 2019, the
targeted mix of base salary, annual cash incentive bonuses, and
long-term incentives for our NEOs employed at the end of fiscal
2019 was: 
Other
NEOs
OPPORTUNITY FOR
STOCKHOLDER FEEDBACK
Each year, the
compensation of our NEOs, as disclosed in our annual proxy
statement, is submitted to our stockholders for a non-binding
advisory vote (commonly known as a “say-on-pay” proposal). In
response to a significant decline in stockholder support for our
say-on-pay vote at our 2015 annual meeting, we initiated
significant stockholder outreach in order to obtain input from our
stockholders regarding the Company’s executive compensation program
and as a result, made several changes to our compensation programs.
We continue to consider stockholder input when making decisions
regarding our executive compensation programs. In each of the last
three years, our say-on-pay proposal has received above 90%
support.
We value a strong
dialogue with our stockholders and discuss pay-related topics from
time-to-time in order to solicit stockholder feedback during the
program design process. Stockholders are invited to express their
views or concerns directly to the Compensation Committee or the
Board in the manner described above under “How can I
communicate with members of the Board”.
FREQUENCY OF
SAY-ON-PAY VOTE
Consistent with the
preference expressed by our stockholders at the 2017 Annual Meeting
of Stockholders in our frequency of say-on-pay vote, we currently
hold our say-on-pay vote on an annual basis.
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Ascena Retail
Group, Inc.
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2019 Proxy
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DETERMINATION OF
COMPENSATION
When reviewing and
evaluating our executive compensation for fiscal 2019, we relied on
the significant prior experience of our Compensation Committee in
establishing compensation programs and levels across many companies
in multiple industries, the input of our former Chairman and CEO
(except with regard to his own compensation) and the Compensation
Committee’s independent consultant. The following is an overview of
the roles of the various participants in our executive compensation
process:
|
|
|
PARTICIPANTS
|
ROLE
IN THE EXECUTIVE COMPENSATION PROCESS
|
Compensation
Committee
|
• Our
Compensation Committee reviews and approves salaries and other
compensation of all senior executives of the Company (including the
NEOs).
• Our
Compensation Committee also administers the Omnibus Incentive Plan,
and establishes and reviews the achievement of performance goals
and other matters relating to the Company’s annual, semi-annual and
long-term bonus and incentive plans for senior executives
(including the NEOs).
|
Executive Officers
|
• Our
CEO annually reviews the performance of each NEO with the
Compensation Committee and makes recommendations with respect to
each key element of executive compensation for each NEO (excluding
himself), as well as other senior executives at the Company. Mr.
Jaffe was our Chairman and CEO at the start of fiscal 2019 and was
responsible for making these recommendations for fiscal
2019.
• The
CFO and HR leadership also prepare and submit information during
the course of the year for the consideration of the Compensation
Committee, including information relevant to annual, semi-annual
and long-term performance measures, proposed financial targets,
proposed recommendations for salary increases and proposed equity
award allocations.
|
Bonus Review
Committee
|
• The
Company and Segment/ Brand financial goals under the Omnibus
Incentive Plan (which was amended in December 2015 to incorporate
the Amended and Restated Executive 162(m) Bonus Plan) are developed
by the applicable Bonus Review Committee, which then presents the
goals to the Compensation Committee for review and
approval.
• For
the fiscal 2019 fall season, Messrs. Jaffe, Giammatteo, and
Pershing served as the Bonus Review Committee. For the fiscal 2019
spring season, Messrs. Muto and Lamadrid and Ms. Teffner served as
the Bonus Review Committee.
|
Compensation
Consultants
|
• In
fiscal 2018, following an extensive search process, the
Compensation Committee selected and engaged SBCG as its independent
compensation consultant. SBCG continued to serve the Compensation
Committee in fiscal 2019.
|
PEER
GROUP
Each year, the
Compensation Committee reviews and confirms the appropriateness of
our compensation peer group in light of any changes to the
Company’s size, business direction or strategic vision. The peer
group generally serves as the primary reference in reviewing
competitive pay practices and compensation levels for our NEOs. The
peer group reflects our status as a multi-brand retailer and
includes companies with annual revenues generally between one-half
and two times the Company’s.
The Company uses the
proxy peer group for:
|
|
•
|
Executive
compensation market reviews, particularly for our CEO and
CFO;
|
|
|
•
|
Director
compensation benchmarking; and
|
|
|
•
|
Incentive design
review and consideration of governance factors relative to the
market.
|
The following
companies served as our peer group when on-cycle pay decisions were
made for fiscal 2019:
|
|
|
Fiscal
2019 Peer Group
|
Abercrombie &
Fitch
|
JC Penney
|
American Eagle
Outfitters
|
L Brands
|
Bed Bath &
Beyond
|
Ross Stores
|
Burlington Coat
Factory
|
Signet Jewelers
|
Dick’s Sporting
Goods
|
Tailored Brands
|
Foot Locker
|
Urban Outfitters
|
Gap
|
Williams-Sonoma
|
|
|
|
|
Ascena Retail
Group, Inc.
|
29
|
2019 Proxy
Statement
|
In addition to the
companies listed above, the Compensation Committee also considered
pay levels at several other retailers when establishing Mr. Muto’s
pay as CEO. The additional companies listed below were also
referenced as relevant data points given their retail focus,
multi-brand/ mall-based emphasis, and their relevant size following
our sale of maurices and wind-down of dressbarn.
|
|
|
Additional
Companies Considered When Establishing Mr. Muto’s Pay as
CEO
|
Carter’s
|
lululemon athletica
|
Chico’s FAS
|
PVH
|
Express
|
Ralph Lauren
|
Guess?
|
Tapestry
|
Levi Strauss
|
|
The companies
referenced when establishing Mr. Muto’s pay upon promotion were
also used in establishing Ms. Teffner’s target pay for her role as
Interim Executive Chair of the Board. In particular, the ratios of
target pay between CEOs and other named executive officers at the
companies listed above were used as a guiding post in establishing
Interim Executive Chair of the Board pay.
Following
significant changes to the Company’s portfolio of brands and the
Company’s reduced size, the Compensation Committee is in the
process of reviewing the peer group for fiscal 2020.
YEAR
OF SIGNIFICANT TRANSITION IN COMPANY LEADERSHIP
The Company
experienced several significant leadership transitions during
fiscal 2019 and in connection with the aforementioned portfolio
realignment. David Jaffe retired as Chairman and CEO on May 1, 2019
and Gary Muto was elevated to the role of CEO and appointed to the
Board of Directors. Mr. Muto had previously served as President and
CEO-Ascena Brands since August 2017.
Given the
challenging and rapidly evolving retail market, we also appointed
Carrie W. Teffner as Interim Executive Chair of the Board on May 1,
2019. The Interim Executive Chair of the Board works as a thought
partner with the CEO in formulating the company’s go-forward
strategy and stabilizing business operations.
Among other factors,
the appointments of Mr. Muto and Ms. Teffner make our leadership
structure more efficient and optimize brand leadership and
integration under our “one ascena” philosophy, which we believe
will be a core driver in stabilizing our business.
|
|
|
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Ascena Retail
Group, Inc.
|
30
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2019 Proxy
Statement
|
Below we provide a
timeline of leadership transitions and significant events for our
business during 2019: 
Mr. Jaffe served as
our Chairman and CEO from 2002 until his retirement from those
positions on May 1, 2019. Mr. Jaffe’s pay as CEO was established at
the beginning of fiscal 2019, similar to our other NEOs that were
employed on the first day of the fiscal year. Key elements of his
fiscal 2019 compensation include:
|
|
•
|
Base salary was
maintained at $1,000,000 (which is positioned near the 25th
percentile of the peer benchmarking references); Mr. Jaffe’s
base salary had not been not increased since fiscal 2013 and was
positioned near the 25th
percentile of our
peer group;
|
|
|
•
|
Mr. Jaffe’s
target seasonal bonus opportunities as a percentage of salary did
not change in fiscal 2019. Consolidated Ascena Enterprise Operating
Income achievement below threshold for the fall and spring seasons
resulted in no annual IC payout for Mr. Jaffe in fiscal 2019.
Further, he did not realize any value from the vesting of
performance-based long-term cash incentives as the FY19 cash LTIP
award threshold goals were not achieved; and
|
|
|
•
|
As with our other
NEOs that received an annual long-term incentive grant (other than
Ms. Hufford), Mr. Jaffe’s long-term incentive opportunity was
reduced by 30%. As a result, 86% of Mr. Jaffe’s fiscal 2019
long-term incentive opportunity was a multi-year, performance-based
award tied to Comparable Sales and Adjusted EBITDA with a payout
modifier for relative TSR, and his target pay opportunity was
positioned below the 25th
percentile of our
peers.
|
Following Mr.
Jaffe’s retirement as Chairman and CEO on May 1, 2019, Mr. Jaffe
remained an employee of the Company to serve as a senior advisor
through June 28, 2019, at which time Mr. Jaffe retired as an
employee. While serving as a senior advisor, Mr. Jaffe was paid a
salary at an annualized rate of $250,000.
In connection with
Mr. Jaffe’s retirement as CEO, the Company appointed Gary Muto as
the Company’s CEO and a member of the Board, effective May 1, 2019.
Mr. Muto’s offer letter provides the following compensatory
terms:
|
|
•
|
Mr. Muto's base
salary remained $1,000,000 for fiscal 2019 and his target
opportunity under the Company's IC program was increased to 150% of
base salary for the remainder of fiscal 2019, up from his previous
target of 125%;
|
|
|
•
|
Mr. Muto’s annual
LTI opportunity for fiscal 2019 was unchanged; and his LTI
opportunity for fiscal 2020 will be established as discussed in the
“Key NEO Compensation Program Changes for Fiscal 2020”
section;
|
|
|
•
|
In addition, Mr.
Muto received a one-time long-term incentive award of
performance-based equity (the “Promotion Grant”) in order to align
his incentive opportunity directly with the value realized by our
stockholders. The Promotion Grant had a target grant date value of
$3,850,000, with approximately 60% of the value granted in the form
of performance-based RSUs and 40% in the form of performance-based
stock options. Both vehicles are tied to the achievement of $3, $5,
and $7 stock price hurdles. The Promotion Grant is discussed in
further detail in the “Long-Term Incentive Award
Section”.
|
|
|
|
|
Ascena Retail
Group, Inc.
|
31
|
2019 Proxy
Statement
|
Given the
appointment of Mr. Muto as CEO during a time of significant change
in our business and a challenging and competitive retail
environment, the Company also appointed Carrie W. Teffner as
Interim Executive Chair of the Board, effective May 1, 2019. In her
new role, Ms. Teffner will work with Mr. Muto in guiding the
Company to achieve our operational milestones and deliver value to
our stockholders. Ms. Teffner’s offer letter provides the following
compensatory terms:
|
|
•
|
Ms. Teffner will
receive a base salary of $1,000,000 for fiscal 2019 and a target
opportunity under the Company’s IC program of 150% of base salary.
Ms. Teffner’s fiscal 2019 IC payout was pro-rated for her partial
year of service as an employee;
|
|
|
•
|
In addition, Ms.
Teffner received a one-time long-term incentive award of
performance-based equity (the "Appointment Grant") that had a grant
date value of $1,050,000, with approximately 60% of the value
granted in the form of performance-based RSUs and 40% in the form
of performance-based stock options. The Appointment Grant will vest
in accordance with the same vesting schedule that applies to Mr.
Muto's Promotion Grant. Similar to our CEO, the Appointment Grant
is intended to align Ms. Teffner's incentive opportunity directly
with the value realized by our stockholders. The Appointment Grant
is discussed in further detail in the ”Long-Term Incentive Award
Section”.
|
The changes to the
Company leadership structure, and the accompanying pay actions, are
aimed to lead our Company’s turnaround and ensure that our full
executive team’s interests and incentive opportunities are aligned
with our stockholders’ interests.
00BASE
SALARY
The base salaries of
our NEOs are an important element of their total compensation
packages, and are intended to reflect their respective positions,
duties and responsibilities. Each year, the Compensation Committee
reviews NEO salaries and, if appropriate, approves merit-based
increases based on a number of factors including:
|
|
•
|
The market
competitiveness of salaries;
|
|
|
•
|
The individual
performance and potential of each NEO; and
|
|
|
•
|
The overall
performance of the organization.
|
The Compensation
Committee determined not to adjust Mr. Muto’s base salary in
connection with his appointment as CEO in May 2019. Mr. Muto’s base
salary at the end of fiscal 2019 remained $1,000,000, which is
positioned near the 25th percentile of the peer benchmarking
references. The base salaries of Ms. Teffner ($1,000,000) and Ms.
Hufford ($400,000) were established in connection with their
commencement of employment with us in fiscal 2019. The Compensation
Committee did not make any adjustments to Mr. Lamadrid’s base
salary for fiscal 2019, which remained $425,000. In connection with
Mr. Lamadrid’s promotion to Executive Vice President and CFO, Mr.
Lamadrid’s base salary increased to $600,000 effective August 4,
2019 (the first day of fiscal 2020). Prior to his retirement as CEO
in May 2019, Mr. Jaffe’s base salary was $1,000,000, which was
unchanged since fiscal 2013. While serving as an advisor following
his retirement as CEO, Mr. Jaffe received a salary of $250,000 at
an annualized rate. For fiscal 2019, the Compensation Committee
increased Mr. Giammatteo’s base salary to $600,000 (from $500,000
at the end of fiscal 2018) in order to align his cash compensation
within a competitive range for CFOs within our peer group. Mr.
Lynch’s salary of $1,000,000 remained unchanged in fiscal
2019.
ANNUAL CASH
INCENTIVE PROGRAM
The Compensation Committee
believes that a substantial percentage of each executive officer’s
annual compensation should be tied directly to the financial
performance of the Company. Our annual cash incentive compensation
(IC) program is a critical element of our executive compensation
package, because it is entirely “at-risk” and any earned payouts
are solely dependent on Company performance. The IC program in
effect for fiscal 2019 was designed to encourage the achievement of
our seasonal performance objectives whereby payouts under the
program are earned based on the achievement of challenging seasonal
financial goals. The performance goals established for the fiscal
2019 seasonal IC programs were intended to focus our NEOs on key
financial objectives and business drivers, which we believe will
improve our overall operations and increase stockholder value. Each
of our NEOs participated in the IC program in fiscal
2019.
We establish the
target amount of an NEO’s IC opportunity as a percentage of base
salary for the performance period based on the NEO’s position and
level within the organization. The seasonal IC payout is equal to
their seasonal IC target modified based on performance (adjusted to
reflect extraordinary and other special items, including exclusion
of the financial effects of any unbudgeted disposal of a business
or acquisition, start-up, new joint venture or disposition of an
asset) relative to the pre-determined targeted financial
performance goals.
|
|
|
|
Ascena Retail
Group, Inc.
|
32
|
2019 Proxy
Statement
|
Key mechanics of the
program include:
Operating Income
serves as the sole metric in the plan because the Compensation
Committee believes it is a core driver of retail business
performance and a leading indicator of stockholder value creation.
Additionally, the plan’s seasonal structure allows for mid-year
development of performance targets and provides an incentive for
our NEOs to focus on meeting goals in the second half of the fiscal
year in circumstances when business performance and macro-economic
conditions change relative to our budgeted plan.
The Compensation
Committee approved modifications to the measurement of Operating
Income goals for fiscal 2019 as follows:
|
|
|
|
Participants
|
Operating
Income Weighting
|
Measurement
Detail
|
David Jaffe (until
retirement)
|
100% Consolidated Ascena
Enterprise
|
Consolidated Operating Income
for the overall business (“Consolidated Ascena Enterprise”
results)
|
Gary Muto, Rob Giammatteo, Brian
Lynch
|
50% Consolidated Ascena
Enterprise;
50% Segment/ Brand
|
Blend of Consolidated Ascena
Enterprise results and the weighted average of Segment/ Brand
results (“Segment/ Brand” results)
|
Dan Lamadrid
|
100% Segment/ Brand
|
Weighted average of Segment/
Brand results
|
Wendy Hufford
|
N/A
|
Receives 100% IC payout for both
seasons in fiscal 2019 in accordance with offer letter
|
Mr. Jaffe, our
former CEO, continued to be measured only on Consolidated Operating
Income for the entire organization in fiscal 2019. The Compensation
Committee introduced the Segment/ Brand measurement component for
our other NEOs (other than Ms. Hufford) to (i) eliminate the
potential that a single segment or brand performing below threshold
might “zero out” the IC payout for Ascena Corporate employees; and
(ii) to maintain accountability for individual segment and brand
leaders. Additionally, the Segment/ Brand component payout is
capped at 100% if any individual segment or brand results are
achieved below threshold to ensure that payouts do not exceed
target in the event that a portion of the business
underperforms.
The Compensation
Committee sets the applicable performance goals for our seasonal IC
program at the beginning of the fall and spring seasons after
considering historical operating trends (particularly prior year
results), the external market environment, and the Company’s
financial plans approved by our Board. Despite the significant
headwinds in our business, target Operating Income goals for each
fiscal 2019 season were set above actual fiscal 2018 performance.
The Compensation Committee believes that the fiscal 2019 goals were
sufficiently rigorous and motivational.
As shown in the
tables below, achievement of a threshold level of performance would
have resulted in a payout equal to 25% of the seasonal incentive
targets for each season. The Compensation Committee established a
threshold payout of 25% of target for fiscal 2019, which was lower
than the one-time threshold payout of 50% of target used in fiscal
2018. A 25% payout at threshold for our NEOs
|
|
|
|
Ascena Retail
Group, Inc.
|
33
|
2019 Proxy
Statement
|
more closely aligns
with our historical practice and approach to goal-setting.
Additionally, in both seasons, a maximum level of performance would
yield an incentive payout equal to 200% of the seasonal incentive
targets for each season, with interpolation between the threshold
and target levels and target and maximum levels.
|
|
|
|
|
|
|
Named
Executive Officer
|
Threshold
Payout Opportunity (as a % of Base Salary)
|
Annual
Target
Opportunity
(as
a % of
Base
Salary)
|
Annual
Maximum Opportunity (as a % of Base Salary)
|
Portion
Allocated
to
Fall
Season
(50%
of
Target)
|
Portion
Allocated to Spring Season (50%
of Target)
|
Gary Muto
|
37.50
|
150
|
300
|
75%
|
75%
|
Carrie W. Teffner
|
37.50
|
150
|
300
|
75%
|
75%
|
Dan Lamadrid
|
15
|
60
|
120
|
30%
|
30%
|
Wendy Hufford
|
15
|
60
|
120
|
30%
|
30%
|
David Jaffe
|
37.50
|
150
|
300
|
75%
|
75%
|
Robb Giammatteo
|
18.75
|
75
|
150
|
37.50%
|
37.50%
|
Brian Lynch
|
31.25
|
125
|
250
|
62.50%
|
62.50%
|
Fiscal
2019 — Fall Performance
Our fall performance
resulted in no payout for our former CEO, Mr. Jaffe, due to
Consolidated Ascena Enterprise results falling short of the
threshold performance level. Segment/ Brand Operating Income for
the fall was achieved between threshold and target performance
levels, and when combined with the below-threshold Consolidated
Ascena Enterprise results, resulted in a payout just above
threshold for the rest of our NEOs (other than Ms. Hufford). Ms.
Hufford received a payout of 100% of target for the fall season in
accordance with her offer letter.
|
|
|
|
|
|
|
|
Fiscal
2019 Fall Bonus
|
Threshold
OI Performance (25% Payout)
($000)
|
Target
OI Performance (100% Payout)
($000)
|
Maximum
OI Performance (200% Payout) ($000)
|
Actual
OI Achieved ($000)
|
%
of Target Achieved
|
Payout
(% Target)
|
Consolidated Ascena
Enterprise Performance
(100% of IC for Mr. Jaffe and 50% of IC for all other
NEOs)
|
6,600
|
31,800
|
47,500
|
6,200
|
0
|
0
|
Fiscal
2019 — Spring Performance
Due to rapidly
changing customer expectations and significant organizational
changes with our portfolio of brands, our Consolidated Ascena
Enterprise results and Segment/ Brand results fell short of
threshold Operating Income performance levels during the spring
season. As such, none of NEOs (other than Ms. Hufford) received a
payout under the spring seasonal plan. Ms. Hufford received a
payout of 100% of target for the spring season in accordance with
her offer letter.
|
|
|
|
|
|
|
|
Fiscal
2019 Spring Bonus
|
Threshold
OI Performance (25% Payout)
($000)
|
Target
OI Performance (100% Payout)
($000)
|
Maximum
OI Performance (200% Payout)
($000)
|
Actual
OI Achieved ($000)
|
%
of Target Achieved
|
Payout
(% Target)
|
Consolidated Ascena
Enterprise Performance (100% of IC for Mr. Jaffe and 50% of IC for
all other NEOs)
|
41,200
|
80,200
|
124,700
|
(43,900)
|
0
|
0
|
As a result of the
Fall and Spring 2019 OI achievement, the NEOs received the
following annual incentive payments for fiscal 2019 performance.
Spring 2019 threshold, target, and maximum goals were adjusted to
reflect the sale of maurices in May 2019.
|
|
|
|
Ascena Retail
Group, Inc.
|
34
|
2019 Proxy
Statement
|
|
|
|
|
|
Fiscal
2019 Bonus Payments
|
Fall
OI Earned Payment
($)
|
Spring
OI Earned Payment
($)
|
Total
Fiscal 2019 Seasonal Bonus Payments
|
Gary Muto
|
193,443
|
—
|
193,443
|
Carrie W. Teffner
|
N/A
|
—
|
—
|
Dan Lamadrid
|
98,850
|
—
|
98,850
|
Wendy Hufford
|
120,000
|
120,000
|
240,000
|
David Jaffe
|
—
|
—
|
—
|
Robb Giammatteo
|
69,640
|
—
|
69,640
|
Brian Lynch
|
193,443
|
—
|
193,443
|
Mr. Jaffe’s payout
reflects the achievement of Consolidated Ascena Enterprise OI
results. Payouts for the other NEOs (other than Ms. Hufford)
reflect the blended payout for the achievement of Consolidated
Ascena Enterprise results and Pro-Rata results. Ms. Hufford
received a target IC payout for both the fall and spring seasonal
plans in accordance with her offer letter.
LONG-TERM
INCENTIVE COMPENSATION
We endeavor to align
executive compensation with the achievement of operational and
financial results and increases in stockholder value. Our long-term
incentive compensation directly links payout opportunities with
stock and financial performance. This design is intended to ensure
that, in combination with the IC opportunity described above, a
majority of each NEO’s total compensation is “at risk” based on
Company financial and/or stock performance. However, as described
in greater detail below under “Risk Mitigation,” these incentives
are designed in a manner that the Compensation Committee believes
does not encourage excessive risk taking.
Award
Determination for Messrs. Jaffe, Muto, Giammatteo, Lynch, and
Lamadrid
Our “steady-state”
long-term incentive program contains three primary vehicles, which
are each described in greater detail below. However, as described
above, and consistent with awards granted in fiscal 2018, the value
of annual long-term incentive awards to our NEOs (other than Ms.
Hufford) who were employed at the time fiscal 2019 annual awards
were granted was reduced by 30% by: (i) halving the target
value of stock options and (ii) eliminating RSUs. The
resulting long-term incentive mix was formulated to link all
long-term pay opportunities with our stock price and/ or financial
performance and conserve shares during a period in which our share
price was depressed.
|
|
|
|
Ascena Retail
Group, Inc.
|
35
|
2019 Proxy
Statement
|
Restricted Stock
Units, 20% Stock Options, 20% Stock Options, 10% Perf.-Based LTIP,
60% 30% LTI “Discount” Perf.-Based LTIP, 60% “Steady State” LTI
Awards “Steady State” LTI Awards Reduction of Options FY18 Actual
LTI Awards Planning process to actual grant
|
|
|
Reward
Vehicle
|
Key
Program Components
|
Performance-Based Cash LTIP
Awards
86% of fiscal
2019 LTI awards
|
• Cash-settled
performance-based awards with a three-year performance
cycle
• Payout
is contingent on the attainment of predetermined performance goals
that, for awards granted in fiscal 2019, consisted 25% of
Comparable Sales and 75% of Adjusted EBITDA growth, with a payout
modifier for TSR performance relative to a select group of
peers
|
Nonqualified Stock
Options
14% of fiscal
2019 LTI awards
|
• Time-vested
stock options, generally vesting 50% per year over 2
years
• Exercise
price is equal to the fair market value of our common stock on the
grant date (defined as the average of the high and low Company
stock price on the date of grant)
• Value
realized at exercise depends on stock price
appreciation
• 7-year
term (for stock options granted on or after December 11,
2012)
|
Award
Determination for Ms. Hufford
In accordance with
Ms. Hufford’s offer letter, the Compensation Committee determined
that the fiscal 2019 long-term incentive awards granted to her
would not be discounted by 30%. Ms. Hufford received the “steady
state” long-term incentive compensation award mix, which delivered
her award 60% in the form of a performance-based cash LTIP award,
20% in the form of stock options, and 20% in the form of RSUs. The
cash LTIP award granted to Ms. Hufford has the same performance and
vesting criteria as the cash LTIP awards granted to the other NEOs
and the stock options and RSUs granted to Ms. Hufford vest 50% in
each of the next two years.
Promotion and
Appointment Grants for Mr. Muto and Ms. Teffner in Fiscal
2019
In connection with
Mr. Muto’s promotion to CEO on May 1, 2019, Mr. Muto received a
one-time long-term incentive award of performance-based equity (the
“Promotion Grant”) with grant date value of $3,850,000.
Approximately 60% of the Promotion Grant value was delivered in the
form of performance-based RSUs and approximately 40% of the
Promotion Grant value was delivered in the form of
performance-based stock options. Subject to Mr. Muto’s continued
employment (except as provided in his offer letter), the
performance-based RSUs and performance-based stock options subject
to the Promotion Grant will be eligible to vest as
follows:
|
|
•
|
25% of each of the
performance-based RSUs and performance-based stock options will be
eligible to vest if the closing price of the Company’s stock equals
or exceeds $3.00 per share for a 20-consecutive trading day period
on or prior to the third anniversary of the grant date (the “$3
Hurdle”);
|
|
|
•
|
an additional 25% of
each of the performance-based RSUs and performance-based stock
options will be eligible to vest if the closing price of the
Company’s stock equals or exceeds $5.00 per share for a
20-consecutive trading day period on or prior to the third
anniversary of the grant date (the “$5 Hurdle”); and
|
|
|
•
|
the remaining 50% of
each of the performance-based RSUs and performance-based stock
options will be eligible to vest if the closing price of the
Company’s stock equals or exceeds $7.00 per share for a
20-consecutive trading day period on or prior to the third
anniversary of the grant date (the “$7 Hurdle” and with the $3
Hurdle and $5 Hurdle, the “Hurdles”).
|
The Compensation
Committee granted performance-based RSUs and performance-based
stock options tied to share price hurdles, rather than operational
or strategic metrics, given the scale and scope of the Company’s
transformation, which will require nimbleness in an ever-changing
retail environment and achievement against a wide variety of
financial and strategic indicators (some of which are already
included as metrics in the Company’s other incentive plans). As a
result, the Compensation Committee felt that stock price
appreciation was and will be a reflective indicator of a successful
turnaround effort and that Hurdle goals of $3.00, $5.00, and $7.00
per share, or more than double the stock price on the date of grant
at the lowest Hurdle, represented meaningful steps towards our
ultimate goal of delivering value to our stockholders. The
Compensation Committee also felt that the back-loaded vesting of
the Promotion Grant, in combination with the 20-consecutive trading
day requirement for the performance conditions of any Hurdle to be
deemed satisfied, further aligns the realizable value of the
Promotional Grant with the experience of our
stockholders.
If a Hurdle is
achieved prior to the second anniversary of the grant date of the
Promotion Grant, the portion of the performance-based RSUs and
performance-based stock options related to the Hurdle that was
achieved prior to the second anniversary will vest on the second
anniversary, generally subject to Mr. Muto’s continued employment.
Any portion of the performance-based RSUs and performance-based
stock options related to a Hurdle that is not actually achieved by
the third anniversary of the grant date will be forfeited for no
consideration.
In connection with
Ms. Teffner’s appointment as Interim Executive Chair of the Board
on May 1, 2019, Ms. Teffner received a one-time long-term incentive
award of performance-based equity (the “Appointment Grant”) with a
grant date value of $1,050,000. Approximately 60% of the
Appointment Grant value was delivered in the form of
performance-based RSUs and approximately 40% of the Appointment
Grant value was delivered in the form of performance-based stock
options. Subject to Ms. Teffner’s continued employment as Interim
Chair or service as a member of the Board (except as provided in
her offer letter), the performance-based RSUs and performance-based
stock options subject to the Appointment Grant will be eligible to
vest in accordance with the same vesting schedule that applies to
Mr. Muto’s Promotion Grant.
|
|
|
|
Ascena Retail
Group, Inc.
|
36
|
2019 Proxy
Statement
|
EQUITY AWARDS
UNDER THE COMPANY’S OMNIBUS INCENTIVE PLAN
NEOs generally
receive annual grants of equity awards under our Omnibus Incentive
Plan as set forth below. For annual equity grants made to each NEO
(other than Ms. Hufford), stock options comprised 14% of the total
long-term incentive grant value, with the remaining 86% made in
performance-based cash LTIP awards. Ms. Hufford received a “steady
state” annual equity grant in accordance with her offer letter that
was comprised of 60% in the form of a performance-based cash LTIP
award, 20% stock options, and 20% time-vesting RSUs.
The Compensation
Committee generally determines the value of each grant in
accordance with pre-established grant guidelines (which are
primarily based on level of responsibility with the Company or
respective brand). Our CEO may exercise discretion in his
recommendations to the Compensation Committee for grants of long
term incentives for all executives (excluding himself) based on
individual performance. All grants to employees are made by the
Compensation Committee.
The Compensation
Committee has a practice of not granting any stock options until at
least one business day after the Company has issued its quarterly
and/or annual earnings release, as well as the public release of
any other pending material non-public information.
If an employee
ceases to be an employee of the Company for any reason (other than
for Cause, as defined under the Omnibus Incentive Plan) and the
employee has achieved the “Total Years Test” (as described in
further detail below) as of his or her last day of employment, then
all of such employee’s unvested stock options will continue to vest
and remain exercisable after the date of termination through the
one year anniversary of the vesting date of the last unvested stock
option under the applicable stock option award, but not longer than
the original term of each stock option.
In addition, all of
an employee’s unvested RSUs will become fully vested upon
achievement of the Total Years Test. Any RSUs granted to the
employee who has achieved the Total Years Test will be fully vested
upon grant, and the employee’s RSUs will become fully vested upon
the employee’s death, disability, termination (other than for
Cause) or upon a change in control of the Company on or after
achievement of the Total Years Test.
The “Total Years
Test” means 75 years, based on the sum of (i) the total number
of years of employment with the Company or an affiliate, plus
(ii) the employee’s age, which must be at least age 60. The
Company believes that the Total Years Test encourages retention as
our executive officers approach retirement age, while also
incentivizing our executive officers to drive stockholder value.
The Total Years Test does not apply to LTIP awards, which the
employee to be employed through the end of the applicable
performance period to be eligible to receive a payout. At the time
Mr. Jaffe ceased employment with the Company in June 2019, he
satisfied the Total Years Test and his outstanding and unvested
RSUs became fully vested and his outstanding stock options will
continue to vest in accordance with their terms.
The Compensation
Committee may also make other equity grants from time to time
during the year (“special equity grants”), such as when a new
employee is hired (as was the case with Ms. Hufford and Ms.
Teffner), a current employee is promoted (as was the case with Mr.
Muto ) or in recognition of special achievement.
Fiscal
2019 Equity Awards Granted
|
|
|
|
|
NEO
|
Stock
Options Granted(1)
|
Restricted
Stock Units Granted(2)
|
Performance-Based
Restricted Stock Unit Granted(3)
|
Gary Muto
|
2,874,337(3)
|
—
|
1,957,627
|
Carrie W. Teffner
|
750,000(4)
|
24,138
|
533,898
|
Dan Lamadrid
|
14,175
|
—
|
—
|
Wendy Hufford
|
13,731
|
30,239
|
—
|
David Jaffe
|
311,383
|
—
|
—
|
Robb Giammatteo
|
37,301
|
—
|
—
|
Brian Lynch
|
124,337
|
—
|
—
|
|
|
(1)
|
Represents a stock
option award made pursuant to the Company’s annual equity grant
program, as described above in the Compensation Discussion and
Analysis under “Long Term Incentive Compensation” and “Equity
Awards Under the Company’s Omnibus Incentive Plan.”
|
|
|
(2)
|
For Ms. Teffner, represents the
number of RSUs granted to her in respect of her service as a
non-employee director prior to her appointment as Interim Executive
Chair of the Board. For Ms. Hufford, represents the number of RSUs
awarded pursuant to the Company’s annual equity grant program, as
described above in the Compensation Discussion and Analysis under
“Long-Term Incentive Compensation” and “Equity Awards Under the
Company’s
|
|
|
|
|
Ascena Retail
Group, Inc.
|
37
|
2019 Proxy
Statement
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Omnibus Incentive
Plan.”
|
|
(3)
|
Performance-based
RSUs granted on May 1, 2019 to Mr. Muto in connection with his
promotion as CEO and to Ms. Teffner in connection with her
appointment as Interim Executive Chair of the Board, as described
above in the Compensation Discussion and Analysis under “Long-Term
Incentive Compensation - Promotion and Appointment Grants for Mr.
Muto and Ms. Teffner in Fiscal 2019.”
|
(4) Includes Stock
options granted on October 3, 2018 as part of the annual LTI grant
(124,337 stock options with a grant price of $3.92) and
performance-based stock options granted on May 1, 2019 in
connection with Mr. Muto’s promotion (2,750,000 stock options with
a grant price of $1.17).
|
|
(5)
|
Performance-based stock options
granted on May 1, 2019 in connection with Ms. Teffner’s appointment
as Interim Executive Chair of the Board.
|
PERFORMANCE-BASED
LONG-TERM INCENTIVE AWARDS
In fiscal 2019, the
Company granted the NEOs cash-settled performance-based awards to
be paid following the end of the three-year performance period and
the Compensation Committee’s certification of the achievement of
pre-established performance goals. Cash LTIP award performance
goals are established annually. The cash LTIP awards are intended
to tie NEO pay opportunities to our long-term financial and stock
price performance.
The following
section summarizes cash LTIP award grants made in fiscal 2019 as
well as the results of the cash LTIP awards vesting following the
conclusion of fiscal 2019. Please see prior years’ proxies for
descriptions of other outstanding LTIP grants.
Grants
made in Fiscal 2019: FY21 LTIP
In fiscal 2019, each
NEO (other than Ms. Teffner) received an annual long-term incentive
plan grant under the Omnibus Incentive Plan (the “FY21 LTIP”). The
performance period for the FY21 LTIP is fiscal years 2019 through
2021. Vesting of the FY21 LTIP grants is contingent upon our
average achievement of three one-year Comparable Sales goals over a
three-year performance period (25% weighted) and our average
achievement of three one-year Adjusted EBITDA growth goals over a
three-year performance period (75% weighted) and is subject to a
relative TSR overall payout modifier.

The Compensation
Committee established the three one-year goals for Comparable Sales
and Adjusted EBITDA growth at the beginning of the performance
period. The goals for the first year of the performance period were
established based upon prior year actual results. The goals for
subsequent years are determined based on increases over the prior
year’s actual results (i.e., goals for the second year are
determined based on actual results from the first year of the
performance period). The cash LTIP award payout is subject to
adjustment based upon the Company’s achievement of TSR relative to
a select group of peers (“TSR Peer Group”). The modifier provides
that payouts be adjusted to 80% of earned dollars for threshold
relative TSR achievement, 100% of earned dollars for target
relative TSR achievement, and 120% of earned dollars for maximum
TSR achievement, with linear interpolation for results that fall
between threshold and target, and target and maximum. Our TSR Peer
Group includes several of the companies in our benchmarking peer
group as well as additional apparel retailers that are business
competitors.
The Compensation
Committee established the FY21 LTIP goals after considering the
macro-economic environment, prior year actual performance, and our
long-range plan. The Compensation Committee transitioned to
establishing one-year goals that are based off prior year results
due to the challenges of setting 3-year goals during a period of
significant change in our business and brand portfolio. The
Comparable Sales and Adjusted EBITDA growth goals tie our
executive’s incentive opportunities to top-line growth as well as
profitability, while the TSR modifier ensures alignment with our
stockholders’ realization of value over the three-year performance
period.
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Ascena Retail
Group, Inc.
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2019 Proxy
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FY21 LTIP grants will vest at
50% of target for performance at threshold, 100% at target
performance level, and 200% of target for performance achieving or
exceeding maximum level; performance between these levels will be
calculated using linear interpolation, and are subject to
modification based on relative TSR achievement as described above.
If performance targets are achieved, any payouts under the FY21
LTIP will be made following the end of fiscal FY21. Subject to
achievement of performance conditions, the FY21 LTIP awards will be
settled in cash.
|
|
|
|
|
|
|
Performance
Measure
|
|
Performance
Range
|
Performance
Achieved
|
|
Threshold
|
Target
|
Maximum
|
FY Comparable Sales (as % of
Prior FY’s Actual Comparable Sales for each of the three one-year
period) (25% Weight)
|
100%
|
102%
|
104%
|
101.9%
|
EBITDA Growth (75%
Weight)
|
FY2019 EBITDA (as % of prior
FY’s actual EBITDA)
|
100%
|
103%
|
111%
|
0%
|
FY2020 and FY2021 EBITDA (as %
of prior FY’s actual EBITDA)
|
100%
|
107%
|
115%
|
Calculated following
the completion of applicable fiscal year
|
Grants
vesting after Fiscal 2019: FY19 LTIP
The fiscal 2019 cash
LTIP award (“FY19 LTIP”) was designed by the Compensation Committee
to give eligible executives, including each of our NEOs at the time
grants were made in 2016 (Ms. Teffner, Ms. Hufford and Mr. Lamadrid
were not employed with us at the time of the FY19 LTIP grant), a
substantial incentive to maximize our long-term financial
performance. Grants were scheduled to vest after the completion of
fiscal 2019, subject to performance at or above threshold levels.
The target payout opportunities for the FY19 LTIP are shown
below:
|
|
|
NEO(1)
|
Target
Value of
Award
|
Gary Muto
|
$2,750,000
|
Dan Lamadrid
|
$115,000
|
David Jaffe
|
$3,780,000
|
Robb Giammatteo
|
$345,000
|
Brian Lynch
|
$856,800
|
|
|
(1)
|
Neither Ms. Hufford
nor Ms. Teffner was employed at the time of the FY19 LTIP grant.
Mr. Lamadrid received a pro-rated FY19 LTIP grant.
|
The FY19 LTIP award
was contingent upon the achievement of a one-year adjusted Net
Income goal (covering fiscal year 2017) and a 3-year relative TSR
goal measuring Company TSR relative to a broader index of companies
in the “Specialty Stores” Global Industry Classification Standard
Group (covering fiscal years 2017, 2018, and 2019).
Given the many
uncertainties in the retail industry, the Compensation Committee
set FY19 LTIP targets it considered challenging but still
achievable in an industry with significant competition for
experienced executives. The adjusted Net Income target was
established by placing a 10% premium on the prior fiscal year’s
actual results (i.e., the target adjusted Net Income goal was equal
to 110% of fiscal 2016 adjusted Net Income), while threshold
performance was equal to fiscal 2016 actual adjusted Net Income and
maximum performance was equal to 120% of fiscal 2016 actual
adjusted Net Income. As shown in the charts below, the Company did
not achieve the threshold adjusted Net Income goal and was below
the threshold level for relative TSR.
|
|
|
|
|
|
|
Performance
Measure
|
Performance
Range
|
Performance
Achieved(1)
|
Payout as
% Target
|
Threshold
|
Target
|
Maximum
|
One Year Adjusted Net Income
Goal (50% Weight)
|
$118.6M
|
$130.5M
|
$142.3M
|
$42.0M
|
0
|
Relative Total Shareholder
Return Goal (50% Weight)
|
Top 75%
|
50%
|
Top 25%
|
93%
|
0
|
|
|
|
|
Ascena Retail
Group, Inc.
|
39
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2019 Proxy
Statement
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|
|
(1)
|
Represents adjusted
Net Income achievement for fiscal 2017 and relative TSR achievement
for the performance period (i.e., July 31, 2016 through July 27,
2019).
|
As a result of the
below threshold performance on the One Year Adjusted Net Income and
relative TSR targets, no payouts were made for the FY19 LTIP. The
One Year Adjusted Net Income is defined as the Company’s net income
for its 2017 fiscal year (i.e., July 31, 2016 to July 29, 2017) as
reported on an adjusted non-GAAP basis in the Company’s year-end
earnings release for such fiscal year in the non-GAAP
reconciliation table(s), and adjusted to eliminate the effects of
any integration, restructuring or purchase price accounting
expenses.
ADDITIONAL
COMPENSATION ACTIONS
Sign-on Cash Bonus
for Ms. Hufford
Ms. Hufford received
a one-time cash bonus of $100,000 in accordance with her offer
letter upon the commencement of her employment in October 2018. The
Compensation Committee determined to provide this inducement award
in cash in order to conserve shares during a period of depressed
share price. If, prior to the first anniversary of her start date,
Ms. Hufford resigns or is terminated due to a violation of company
policy or conduct giving rise to immediate discharge, she has to
repay the cash bonus within 90 days of the cessation of her
employment.
Retention Cash
Bonuses for Messrs. Giammatteo and Lamadrid in Fiscal
2019
On May 1, 2019, the
Company entered into retention agreements with Messrs. Giammatteo
and Lamadrid. Mr. Giammatteo was eligible to receive a retention
bonus of up to $700,000 in cash, payable in two equal installments
on August 31, 2019 and August 31, 2020. Mr. Lamadrid is eligible to
receive a retention bonus of up to $550,000 in cash, payable in two
equal installments on May 17, 2019 and August 31, 2020, subject to
his continued employment on each payment date. Mr. Giammatteo
resigned as CFO prior to August 31, 2019, and thus did not receive
any payout under the retention bonus. Mr. Lamadrid received the
first installment payment of his retention bonus on May 17, 2019.
In accordance with the terms of his retention letter agreement, Mr.
Lamadrid is required to repay retention bonus amounts previously
paid to him if he resigns for any reason or is terminated by the
Company (including due to violation of company policy or for cause)
prior to the date that the August 31, 2019 retention bonus
installment is paid.
TRANSFORMATION
BONUS OPPORTUNITY
In March 2017, the
Compensation Committee adopted the Transformation Bonus Program
(“TBP”) under the Company’s Omnibus Incentive Plan. The TBP was
introduced to enhance Company performance and create long-term
stockholder value by motivating key executives to deliver
significant cost savings consistent with the Company’s “Change for
Growth” enterprise transformation program and by encouraging
retention of those key executives. The Compensation Committee
identified eight executives to participate in the TBP, including
each of our NEOs (other than our former CEO, Mr. Jaffe) who were
employed at the time the TBP was adopted. Under the TBP,
participants were eligible to earn bonus awards payable in cash
based upon the achievement of cost reduction targets (“Realized
Savings”) from January 1, 2017 to the end of fiscal
2021.
Following the
conclusion of fiscal 2018, the Compensation Committee determined
that the Company had met 100% of its tranche 1 goal of $150 million
in cumulative Realized Savings and 45% of its tranche 2 goal of
$250 million in cumulative Realized Savings. This level of
performance resulted in a preliminary earned value equal to 1.56x
each participant’s salary in effect as of January 1, 2017. However,
the 2018 earned values were reduced by 50% to equal 0.78x each
participant’s salary as in effect as of January 1, 2017 since the
Company did not achieve its threshold annual Operating Income level
under the IC plan for fiscal 2018. Under the TBP, these earned
values were scheduled to be payable within 60 days following the
end of fiscal 2019.
In June 2019,
management and the Compensation Committee reviewed the TBP’s
objectives in the context of the ongoing business and leadership
transitions described above. At that time, management determined
that the TBP was no longer aligned with the Company’s re-oriented
transformation strategy following the sale of maurices and
announced wind-down of dressbarn and that the Realized Savings
goals under the TBP were no longer consistent with the Company’s
strategy. Accordingly, in June 2019, the Compensation Committee, on
the recommendation of management, canceled the TBP payments earned
with respect to fiscal 2018 performance (and payable within 60 days
following the end of fiscal 2019).
Following the
conclusion of fiscal 2019, Gary Muto, our CEO and the only
remaining participant of the TBP following the changes to our
leadership team over fiscal 2019, recommended that the Compensation
Committee exercise negative discretion and terminate all other
recently completed, ongoing, and future tranches of the TBP. As a
result, the Compensation Committee terminated the TBP in October
2019, including any payments that would have otherwise been paid
with respect to fiscal 2019 performance.
EXECUTIVE
PERQUISITES
We generally do not
offer significant perquisites to our NEOs and they represent a
relatively small portion of the NEOs’ total compensation. The cost
of perquisites for our NEOs is included in the “All Other
Compensation” column of the Summary Compensation
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Group, Inc.
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2019 Proxy
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Table. Our NEOs
participate in the Company’s broad-based health and welfare
programs that are available to our full-time employees
generally.
KEY
NEO COMPENSATION PROGRAM CHANGES FOR FISCAL 2020
Recognizing the
impact of significant changes to our business during fiscal 2019
and the impact of financial performance on our stock price, the
Compensation Committee approved several significant
compensation changes for fiscal 2020.
Annual
Incentive Compensation Program
Following
significant organizational changes with our portfolio of brands,
the Compensation Committee, with input from SBCG, reviewed the
design of our executive compensation programs with a focus on how
the programs can better support our commitments to our customers,
vendors, and stockholders. We have identified a return to
profitability as a significant operational milestone for our
business, and we believe that collaboration across our organization
under a “one ascena” mindset is critical to achieving this
objective and creating value for our stockholders. In order to
simplify the design of our IC program and focus on or operational
priorities, we have made the following changes to our IC program
for fiscal 2020:
|
|
•
|
Measure 100%
Consolidated Ascena Enterprise results for all NEOs, including our
CEO, to strengthen our enterprise foundation and further encourage
cross-brand collaboration. Returning to full Enterprise
profitability is critical to delivering value to our
stockholders;
|
|
|
•
|
Change the
performance metric to Adjusted EBITDA, which continues our focus on
profitability and also serves as a measure of cash generation,
which is critical to honoring our commitments to customers,
vendors, and stockholders;
|
|
|
•
|
Shift to an annual
performance cycle to holistically measure our longer-term trending
performance over the full year. The annual cycle will provide a
simplified payout structure while providing the ability to still
set goals that account for the seasonality of our
business.
|
Long-Term
Incentive Program
At the end of fiscal
2019, the Compensation Committee, with input from SBCG, reviewed
the long-term incentive program design in the context of shares
available under the Omnibus Incentive Plan during a period of
depressed share price and the 30% discount that has been applied to
the NEOs’ long-term incentive grants in fiscal 2018 and 2019. Given
the challenging current business environment, the Compensation
Committee aimed to (i) simplify long-term incentive compensation;
(ii) manage share usage; and (iii) tie value realization for the
NEOs more closely to stockholder value creation. As a result, the
Compensation Committee approved the following long-term incentive
compensation program changes for fiscal 2020:
|
|
•
|
Eliminate the
cash-settled performance-based cash LTIP in order to simplify the
long-term incentive program and ensure that payouts under the
program are directly tied to stock price and stockholder value;
and
|
|
|
•
|
Grant a fixed number
of stock options by level. In October 2019, Mr. Muto was granted
350,000 stock options and each of Mr. Lamadrid and Ms. Hufford was
granted 100,000 stock options. The grant-date fair value of these
awards will represent a significant decline from the grant-date
fair value of “steady state” long-term incentive awards as well as
the discounted long-term incentive awards received in fiscal 2019
given the drop in our share price. Ms. Teffner will not receive an
equity award in fiscal 2020.
|
The decision to
grant a fixed number of stock options by level is intended to
manage shares under our Omnibus Incentive Plan. In a depressed
share price environment, it is critical that we control share usage
and dilution as well as avoid granting potential windfall awards to
our executives. Further, making the grant entirely in stock options
is intended to align our NEOs’ realizable pay opportunities with
Company performance, and provides additional upside to our NEOs if
we achieve strong stock price performance and deliver value to our
stockholders.
Dan
Lamadrid’s Promotion to Chief Financial Officer Starting in Fiscal
2020
On July 25, 2019,
the Company announced the promotion of Dan Lamadrid to CFO,
succeeding Mr. Giammatteo, effective August 4, 2019.
Pursuant to the
offer letter, Mr. Lamadrid will receive a base salary of $600,000
per year and will be eligible to participate in the Company’s
performance-based incentive compensation program at a target level
of 75% of Mr. Lamadrid’s base salary.
Pursuant to the
offer letter, in October 2019, Mr. Lamadrid will receive, subject
to his continued employment and approval by the Compensation
Committee, a promotion grant of 100,000 time-vesting stock options
(the “Time-Based Options”) and a grant of 50,000
performance-vesting stock options (the “Performance-Based
Options”). Subject to Mr. Lamadrid’s continued employment, the
Time-Based Options will vest in equal installments on the first and
second anniversaries of the grant date. Subject to Mr. Lamadrid’s
continued employment, the Performance-Based Options will be
eligible to vest in accordance with the same vesting schedule that
applies to Mr. Muto’s Promotion Grant.
We believe that the
decisions for fiscal 2020 will continue to: (i) reduce
stockholder dilution; and (ii) align our NEOs’ payout
opportunities with the performance of our stock and our
stockholder’s ability to realize value.
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Group, Inc.
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2019 Proxy
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MANAGEMENT OF
COMPENSATION-RELATED RISK
Management and the
Compensation Committee utilize various procedures to mitigate the
probability of our compensation programs resulting in excessive
risk-taking:
Risk
Assessment — Each year, the Compensation Committee’s
independent compensation consultant conducts a risk-assessment of
our incentive programs. The assessment is presented to and reviewed
by the Compensation Committee.
|
|
•
|
Our Board has
reviewed and considered whether our compensation programs and
policies create risks that are reasonably likely to have a material
adverse effect on us. In that regard, we design our programs in a
balanced and diversified manner while also creating significant,
yet appropriate, incentives for strong performance based on our
business and strategic plan.
|
|
|
•
|
In most cases, each
component of our performance-based compensation program is subject
to a limit on the cash paid or the number of shares
delivered.
|
|
|
•
|
We believe that our
compensation programs reflect a balance of short-term, long-term,
guaranteed and performance based compensation in order not to
encourage excessive risk-taking.
|
|
|
•
|
A significant
portion of our compensation program includes performance-based
compensation and equity-based compensation. We believe that this
helps to ensure that our NEOs and other employees focus on the
health of our business and the success of broad performance metrics
that will deliver stockholder value over time and discourages
excess risk-taking by our NEOs and other employees.
|
|
|
•
|
The Compensation
Committee also evaluates on a regular basis our overall mix of
equity-based incentive awards relative to cash-based incentive
awards to align our executives’ incentives with stockholder
interests and long-term value.
|
Clawback
Policy — Pursuant to the executive compensation clawback
policy approved by the Compensation Committee in fiscal 2016, if
the Board determines that any cash or non-cash incentive
compensation (excluding time-based stock options) awarded to, or
received by, an executive officer (each a “covered person”) was
based on any financial results or operating metrics that were
misstated, we will seek to recover from the covered person such
compensation (in whole or in part) as the Board deems appropriate
under the circumstances and as permitted by law.
|
|
•
|
If a restatement
occurs, the Board will look at the incentive compensation paid or
awarded in each fiscal year in the three-year period prior to the
date the Company is required to prepare the restatement (any year
in such three-year period, a “Look-Back Year”).
|
|
|
•
|
If the Board
determines that incentive compensation has been paid or awarded to
a covered person in a Look-Back Year, the Board may, in its sole
discretion, regardless of fault, cancel or require repayment of all
or a portion of any excess incentive compensation (i.e., the excess
of the amount that would have been paid or awarded had such
incentive compensation been calculated based on the restatement
results).
|
STOCK
OWNERSHIP GUIDELINES FOR EXECUTIVE OFFICERS
Our Board believes
it is important that our executive officers and other members of
our leadership team have, and are recognized both internally and
externally as having, long-term financial interests that are
aligned with those of our stockholders. In fiscal 2012, pursuant to
the recommendation of the Compensation Committee, the Board adopted
stock ownership guidelines that apply to the CEO (the “Ownership
Guidelines”). In June 2016, the Ownership Guidelines were amended
and restated to, among other things, expand the group of persons
subject to the Ownership Guidelines to include all members of our
leadership team, including each of the Company’s executive officers
and presidents of each of the Company’s brands. The table below
sets forth the ownership guidelines applicable to the CEO and other
NEOs.
|
|
|
NEO
|
Stock
Ownership Guidelines
|
CEO
|
6x base salary
|
All Other NEOs
|
1x base salary
|
The Stock Ownership
Guidelines are effective as of September 21, 2011 for the CEO and
June 2, 2016 for our other NEOs and the rest of our leadership team
that is subject to the Ownership Guidelines (the “Effective Date”).
The Ownership Guidelines authorize a transition period for members
of our leadership team to achieve their required ownership level of
five years from the later of the Effective Date and the date the
individual commences employment at Ascena. As of August 4, 2019,
all of our NEOs are still within the transition period to satisfy
the Ownership Guidelines based upon the date of their commencement
of employment.
Ownership for
purposes of the Ownership Guidelines includes: (i) shares of
our stock acquired on the open market or purchased through the
exercise of stock options or settlement of any other type of equity
award (such as restricted stock, RSUs, deferred stock
or
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Group, Inc.
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a deferred stock
unit); (ii) vested equity awards (other than stock options or stock
appreciation awards); (iii) vested shares of our stock allocated
under any tax-qualified plan; and (iv) unvested RSUs (but
excluding unvested performance-based equity awards). Shares held
individually or jointly or by a “family member” (as defined in the
securities laws which would include certain trusts, family
partnerships and foundations) would count as “owned” by the
individual. Stock option awards do not count towards the stock
ownership requirement. The Ownership Guidelines are posted on the
“investors” page of the Company’s website at www.ascenaretail.com,
accessible through the “Corporate Governance” tab.
PROHIBITION ON
HEDGING AND PLEDGING OF COMPANY STOCK
Under our Corporate
Governance Guidelines, our directors and executive officers are
prohibited from engaging in hedging or monetization transactions
with respect to our stock, including through the use of financial
instruments such as exchange funds, prepaid variable forwards,
equity swaps, puts, calls, collars, forwards and other derivative
instruments, or through the establishment of a short position in
our securities. Additionally, our non-employee directors and
executive officers are prohibited from holding our stock in a
margin account or otherwise pledging our stock as collateral for a
loan.
TAX
DEDUCTIBILITY CONSIDERATIONS
As a general matter,
the Compensation Committee reviews and considers the various tax
and accounting implications of compensation vehicles that we
utilize. With respect to accounting matters, the Compensation
Committee examines the accounting cost associated with equity
compensation in light of Financial Accounting Standards Board
(FASB) Accounting Standards Codification (ASC) Topic
718.
The Compensation
Committee considers the impact of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the “Code”). Prior to
the enactment of the Tax Cuts and Jobs Act (“TCJA”),
Section 162(m) denied a corporate tax deduction for annual
compensation exceeding $1,000,000 paid to the chief executive
officer and the three other most highly compensated executive
officers of a public company (for purposes of this section only
“Covered Employees”), other than the chief financial officer,
subject to an exception for compensation payable based on
achievement of pre-established objective performance goals if
certain requirements are met. Prior to the effective date of the
TCJA, we generally endeavored to structure our performance-based
incentive compensation for our NEOs to qualify as performance-based
under Section 162(m) of the Code where it was reasonable to do
so while meeting our compensation objectives, although the Board
and the Compensation Committee reserved the authority to award
non-deductible compensation in circumstances where doing so was
deemed appropriate and in the best interests of the Company and its
stockholders. In addition, it is possible that some compensation
paid pursuant to certain equity awards may be non-deductible under
Section 162(m) of the Code.
The TCJA eliminated
the ability to rely on the performance-based compensation exception
for amounts deductible effective for tax years beginning after
December 31, 2017. In addition, under the legislation, the
definition of “Covered Employees” was expanded to include any
person who served as the chief (principal) financial officer. An
employee who is a Covered Employee for a taxable year beginning
after December 31, 2016, and any time during the fiscal year,
will remain a Covered Employee for all future years. As a result,
beginning in fiscal 2019, the Company may no longer take a
deduction for any compensation paid to Covered Employees (i.e., our
NEOs) in excess of $1,000,000, except to the extent that it is
subject to a “written binding contract” in effect as of
November 2, 2017 (“transition relief”) that is not later
modified in any material respect. No assurance can be given that
any compensation otherwise subject to a deduction limit will
qualify for an exception under this transition rule.
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COMPENSATION
COMMITTEE REPORT
The following
report of the Compensation Committee does not constitute soliciting
material and will not be deemed to be filed with the SEC under the
Securities Act or the Exchange Act or incorporated by reference
into any document so filed except to the extent that the Company
specifically incorporates this Compensation Committee Report by
reference therein.
The Compensation
Committee has reviewed and discussed with management the above
Compensation Discussion and Analysis. Based on this review and
discussion, the Compensation Committee recommended to the Board
that the Compensation Discussion and Analysis be included in this
proxy statement.
This report is
provided by the following directors, who currently comprise the
Compensation Committee.
Compensation
Committee:
Linda Yaccarino,
Chair
Kate
Buggeln
Kay
Krill
Carl
Rubin
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Group, Inc.
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SUMMARY
COMPENSATION TABLE
The table below
summarizes information concerning compensation for fiscal 2019
(which reflects 53 week), fiscal 2018 and fiscal 2017 (which
reflects 53 weeks) for our Named Executive Officers
(NEOs).
|
|
|
|
|
|
|
|
|
|
Name
|
Year
|
Salary
($)(1)
|
Bonus
($)(2)
|
Stock
Awards
($)(3)
|
Option
Awards
($)(4)
|
Non-Equity
Incentive Plan Compensation
($)(5)
|
All
Other Compensation
($)(5)
|
Total
($)
|
Gary
Muto
|
2019
|
1,038,462
|
—
|
998,390
|
908,820
|
193,443
|
60,826
|
3,199,941
|
CEO
|
2018
|
1,016,026
|
—
|
3,445,000
|
350,000
|
1,104,000
|
33,275
|
5,948,301
|
Carrie
W. Teffner
|
2019
|
261,538
|
—
|
363,288
|
187,500
|
—
|
77,754
|
890,080
|
Interim Executive Chair of the
Board
|
|
|
|
|
|
|
|
|
Dan
Lamadrid
|
2019
|
429,807
|
275,000
|
—
|
25,232
|
98,851
|
12,584
|
841,474
|
EVP and Chief Financial
Officer
|
|
|
|
|
|
|
|
|
Wendy
Hufford
|
2019
|
338,461
|
340,000
|
55,611
|
54,128
|
—
|
—
|
788,200
|
SVP and General
Counsel
|
|
|
|
|
|
|
|
|
David
Jaffe
|
2019
|
837,500
|
—
|
—
|
544,920
|
—
|
586,764
|
1,969,184
|
Former CEO
|
2018
|
1,000,000
|
—
|
1,890,000
|
611,100
|
387,300
|
67,951
|
3,956,351
|
|
2017
|
1,000,000
|
—
|
4,644,308
|
917,574
|
—
|
121,895
|
6,683,777
|
Robb
Giammatteo
|
2019
|
603,846
|
—
|
—
|
66,396
|
69,640
|
21,192
|
761,074
|
Former EVP and Chief Financial
Officer
|
2018
|
500,000
|
—
|
187,500
|
62,500
|
487,450
|
20,600
|
1,258,050
|
|
2017
|
500,000
|
100,000
|
423,888
|
83,754
|
—
|
31,461
|
1,139,103
|
Brian
Lynch
|
2019
|
876,923
|
—
|
—
|
221,320
|
193,443
|
658,602
|
1,950,288
|
Former President
and
Chief Operating
Officer
|
2018
|
998,846
|
—
|
3,445,000
|
350,000
|
1,064,938
|
48,700
|
5,907,484
|
|
2017
|
936,394
|
—
|
1,153,413
|
222,745
|
—
|
107,754
|
2,420,306
|
|
|
(1)
|
Amounts shown
reflect the retention bonus paid to Mr. Lamadrid in FY19 and to Ms.
Hufford for a sign on bonus ($100,000) and guaranteed FY19 Fall
($120,000) and Spring bonus ($120,000) paid at target. Amounts
shown reflect the discretionary bonus paid for fiscal 2017 to Mr.
Giammatteo.
|
|
|
(2)
|
For fiscal 2019
stock award grants to Mr. Muto and Ms. Teffner, the amount reflects
the aggregate grant date fair value calculated in accordance with
FASB ASC Topic 718 of (i) performance-based RSUs granted to Mr.
Muto in connection with his promotion to CEO on May 1, 2019 (the
“Muto Promotion RSU”), (ii) performance-based RSUs granted to Ms.
Teffner in connection with her appointment as Interim Executive
Chair of the Board on May 1, 2019 (the “Teffner Appointment RSU”)
having an aggregate grant date fair value of $272,288, (iii)
time-vested RSUs granted to Ms. Teffner in October 2018 in respect
of her service as a non-employee director prior to her appointment
as Interim Executive Chair of the Board (the “Teffner Director
RSU”) having an aggregate grant date fair value of $91,000 and (iv)
time-vested RSUs granted to Ms. Hufford in October 2018 (the
“Hufford Annual RSU”). For awards granted in fiscal 2018 and fiscal
2017, the amounts in this column reflect the aggregate grant date
fair value calculation in accordance with FASB ASC Topic 718.
Assumptions used in the valuation of the Teffner Director RSU, the
Hufford Annual RSU and the equity awards granted in fiscal 2018 and
fiscal 2017 equity based awards are discussed in “Stock Based
Compensation” in Note 17 to the Consolidated Financial Statements
in our Annual Report on Form 10-K for the fiscal year ended August
3, 2019. The grant date fair value of the Muto Promotion RSU and
the Teffner Appointment RSU were derived using a Monte Carlo
valuation simulation method, which used the following
assumptions:
|
|
|
|
|
Ascena Retail
Group, Inc.
|
45
|
2019 Proxy
Statement
|
|
|
|
Grant Date
|
May 1, 2019
|
Remaining Performance
Period
|
3.00 years
|
Grant Date Closing
Price
|
$1.18
|
Compounded Risk-Free Interest
Rate (3.00-yr)
|
2.25%
|
Historical Volatility
(3.00-yr)
|
74.22%
|
Cost of Equity (Used for Derived
Service Period Only)
|
13.01%
|
|
|
(3)
|
Reflects the
aggregate grant date fair value calculation in accordance with FASB
ASC Topic 718. Assumptions used in the valuation of equity based
awards are discussed in “Stock Based Compensation” in Note 17 to
the Consolidated Financial Statements in our Annual Report on Form
10-K for the fiscal year ended August 3, 2019. For Mr. Muto, this
includes the aggregate grant date fair value ($221,320) calculated
in accordance with FASB ASC Topic 718 of stock options granted to
Mr. Muto on October 3, 2018 in connection with the Company’s annual
equity award grants (the “Muto Annual Option”), as well as the
aggregate grant date fair value ($687,500) calculated in accordance
with ASC Topic 718 of performance-based stock options granted to
him in connection with his promotion to CEO on May 1, 2019 (the
“Muto Promotion Option”). For Ms. Teffner, this includes the
aggregate grant date fair value calculated in accordance with FASB
ASC Topic 718 of performance-based stock options granted to her in
connection with her appointment as Interim Executive Chair of the
Board on May 1, 2019 (the “Teffner Appointment Option”).
Assumptions used in the valuation of the Muto Annual Option and all
other stock option awards to NEOs (other than the Muto Promotion
Option and Teffner Appointment Option) are discussed in “Stock
Based Compensation” in Note 17 to the Consolidated Financial
Statements in our Annual Report on Form 10-K for the fiscal year
ended August 3, 2019. The grant date fair value of the Muto
Promotion Option and the Teffner Appointment Option were derived
using a Monte Carlo valuation simulation method, which used the
following assumptions:
|
|
|
|
Grant Date
|
May 1, 2019
|
Remaining Performance
Period
|
3.00 years
|
Grant Date Closing
Price
|
$1.18
|
Exercise Price
|
$1.17
|
Contractual Term
|
7.00 Years
|
Compounded Risk-Free Interest
Rate (7.00-yr)
|
2.39%
|
Historical Volatility
(7.00-yr)
|
56.41%
|
Cost of Equity (Used for Derived
Service Period Only)
|
13.01%
|
|
|
(4)
|
The amounts shown
for fiscal 2017, 2018 and 2019 represent amounts earned by each NEO
in respect of the Company's seasonal IC programs in effect for each
of the fiscal years. For fiscal 2019, the amounts include seasonal
IC payments received by the NEOs for the fall season. None of the
NEOs received a payout under the seasonal IC program for the spring
season of fiscal 2019.(5) We have no defined benefit pension plans.
All earnings in our non-tax qualified Executive Retirement Plans
are at market values and are therefore omitted from the
table.
|
(5) A detailed
breakdown of “All Other Compensation” for fiscal 2019 is provided
in the table below.
|
|
|
|
Ascena Retail
Group, Inc.
|
46
|
2019 Proxy
Statement
|
ALL
OTHER COMPENSATION
|
|
|
|
|
|
|
|
Name
|
Contributions
to Executive Officer’s Defined Contribution Plan
Accounts
($)
|
Contributions
to Executive Officer’s Non-Qualified Deferred Compensation Plan
Accounts ($)
|
Personal
Use of Company Car Service
($)(1)
|
Severance
Payments
($)(2)
|
Non-Employee
Director Fees Paid in Cash
($)(3)
|
Total
($)
|
Gary Muto
|
11,000
|
38,807
|
11,019
|
—
|
—
|
60,826
|
Carrie W. Teffner
|
—
|
—
|
—
|
—
|
77,754
|
77,754
|
Dan Lamadrid
|
12,884
|
—
|
—
|
—
|
—
|
12,884
|
Wendy Hufford
|
—
|
—
|
—
|
—
|
—
|
—
|
David Jaffe
|
11,000
|
58,365
|
15,434
|
494,187
|
7,778
|
586,764
|
Robb Giammatteo
|
11,000
|
10,192
|
—
|
—
|
—
|
21,192
|
Brian Lynch
|
11,000
|
55,138
|
21,951
|
570,513
|
—
|
658,602
|
|
|
(1)
|
Represents the
aggregate incremental cost to the Company for personal use of
Company car service and other transportation for commuting
purposes.
|
|
|
(2)
|
For Mr. Jaffe,
amounts in this column include cash severance payments totaling
$115,384 paid to Mr. Jaffe through the end of fiscal 2019 pursuant
to his separation agreement and $31,549 representing the value of
accelerated RSUs realized by Mr. Jaffe as of his last date of
employment. For Mr. Lynch, amounts in this column represent a lump
sum payment of $416,667 paid to Mr. Lynch upon his termination of
employment in accordance with his offer letter and cash severance
payments totaling $153,846 paid to Mr. Lynch through the end of
fiscal 2019 pursuant to his separation agreement.
|
(3) Amounts
in this column represent cash fees paid to Ms. Teffner and Mr.
Jaffe for their service as non-employee directors
during
fiscal 2019. Ms.
Teffner received cash fees for her service as a non-employee
director until her appointment as Interim Executive Chair of the
Board on May 1, 2019. Mr. Jaffe received cash fees for his service
as a non-employee director following his retirement as an employee
of the Company on June 28, 2019.
|
|
|
|
Ascena Retail
Group, Inc.
|
47
|
2019 Proxy
Statement
|
GRANTS OF PLAN
BASED AWARDS IN FISCAL 2019
The following table
provides information regarding the grants of plan-based awards made
to the NEOs during fiscal 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant
Date or Performance Period
|
|
Estimated
Future Payouts Under
Non-Equity Incentive
Plan Awards
|
Estimated
Future Payouts Under Equity Incentive
Plan Awards
|
All
Other Stock Awards:
Number
of Shares of Stock or Units
(#)(3)
|
All
Other Option Awards:
Number of Securities Underlying Options
(#)(3)
|
Exercise
or Base Price of Option Awards ($/Sh)(4)
|
Grant
Date Fair Value of stock and option awards Equity Awards
($)
|
Name
|
Plan*
|
Threshold ($)
|
Target
($)
|
Max
($)
|
Thres-hold
($)
|
Target
($)
|
Max
($)
|
Gary Muto
|
10/3/2018
|
NQ
|
|
|
|
|
|
|
|
124,337
|
3.92
|
221,320
|
|
5/1/2019
|
NQ
|
|
|
|
|
|
|
|
2,750,000
|
1.17
|
687,500
|
|
5/1/2019
|
RSU
|
|
|
|
|
|
|
1,957,627
|
|
|
998,390
|
|
FY19
|
Omnibus Incentive
Plan(1)
|
375,000
|
1,500,000
|
3,000,000
|
|
|
|
|
|
|
|
|
10/29/2018
|
FY21 LTIP(2)
|
750,000
|
1,500,000
|
3,000,000
|
|
|
|
|
|
|
|
Carrie W. Teffner
|
5/1/2019
|
NQ
|
|
|
|
|
|
|
|
750,000
|
1.17
|
187,500
|
|
5/1/2019
|
RSU
|
|
|
|
|
|
|
533,898
|
|
|
272,288
|
|
10/22/2018
|
RSU
|
|
|
|
|
|
|
24,138
|
|
|
91,000
|
|
FY19
|
Omnibus Incentive
Plan(1)
|
96,575
|
386,301
|
772,603
|
|
|
|
24,138
|
|
|
91,000
|
Dan Lamadrid
|
10/3/2018
|
NQ
|
|
|
|
|
|
|
|
14,175
|
3.92
|
25,232
|
|
FY19
|
Omnibus Incentive
Plan(1)
|
63,750
|
255,000
|
510,000
|
|
|
|
|
|
|
|
|
10/29/2018
|
FY21 LTIP(2)
|
85,500
|
171,000
|
342,000
|
|
|
|
|
|
|
|
Wendy Hufford
|
10/3/2018
|
NQ
|
|
|
|
|
|
|
|
30,239
|
3.92
|
54,128
|
|
10/3/2018
|
RSU
|
|
|
|
|
|
|
13,731
|
|
|
55,610
|
|
FY19
|
Omnibus Incentive
Plan(1)
|
|
|
480,000
|
|
|
|
|
|
|
|
|
10/29/2018
|
FY21 LTIP(2)
|
91,200
|
182,400
|
364,800
|
|
|
|
|
|
|
|
David Jaffe(5)
|
10/29/2018
|
NQ
|
|
|
|
|
|
|
|
311,383
|
3.83
|
544,920
|
|
FY19
|
Omnibus Incentive
Plan(1)
|
375,000
|
1,500,000
|
3,000,000
|
|
|
|
|
|
|
|
|
10/29/2018
|
FY21 LTIP(2)
|
1,890,000
|
3,780,000
|
7,560,000
|
|
|
|
|
|
|
|
Robb
Giammatteo(6)
|
10/3/2018
|
NQ
|
|
|
|
|
|
|
|
37,301
|
3.92
|
66,396
|
|
FY19
|
Omnibus Incentive
Plan(1)
|
112,500
|
450,000
|
900,000
|
|
|
|
|
|
|
|
|
10/29/2018
|
FY21 LTIP(2)
|
225,000
|
450,000
|
900,000
|
|
|
|
|
|
|
|
Brian Lynch(7)
|
10/3/2018
|
NQ
|
|
|
|
|
|
|
|
124,337
|
3.92
|
221,320
|
|
FY19
|
Omnibus Incentive
Plan(1)
|
312,500
|
1,250,000
|
2,500,000
|
|
|
|
|
|
|
|
|
10/29/2018
|
FY21 LTIP(2)
|
750,000
|
1,500,000
|
3,000,000
|
|
|
|
|
|
|
|
* Plan
Omnibus Incentive
Plan = the Ascena Retail Group, Inc. 2016 Omnibus Incentive
Plan
NQ = Non-qualified
stock option (granted under the Omnibus Incentive
Plan)
RSU = Restricted
Stock Units (granted under the Omnibus Incentive Plan)
FY21 LTIP= 2021 3-Yr
Long-term Incentive Plan (granted under the Omnibus Incentive
Plan)
|
|
(1)
|
Amounts represents
the range of annual cash incentive awards under the spring and fall
IC programs the NEO was potentially entitled to receive based on
the achievement of performance goals during fiscal 2019 under the
Omnibus Incentive Plan. For Ms. Teffner, the amounts are pro-rated
for the portion of fiscal 2019 that she was employed as Interim
Executive Chair of the Board. In accordance with the terms of Ms.
Hufford's offer letter, she was entitled to an amount equal to her
target annual incentive for each
|
|
|
|
|
Ascena Retail
Group, Inc.
|
48
|
2019 Proxy
Statement
|
of the fall and
spring seasons of fiscal 2019. See "Omnibus Incentive Plan" under
the "Compensation Discussion and Analysis" for more information
regarding the bonus targets under the Omnibus Incentive
Plan.
|
|
(2)
|
Amounts represent
the range of dollar values of the FY21 LTIP award that each
eligible NEO is entitled to receive based on the achievement of
performance goals established for the three year FY21 LTIP. See
“Performance Based Long Term Incentive Awards” under the
Compensation Discussion and Analysis” for more information
regarding the bonus targets under the Omnibus Incentive Plan. If
earned, these awards settle in cash.
|
|
|
(3)
|
Represents stock
option and RSU awards made during fiscal 2019 pursuant to the
Company’s annual equity grant program, as described above in the
Compensation Discussion and Analysis under “Long-Term Incentive
Compensation” and “Equity Awards Under the Company’s Omnibus
Incentive Plan.” In addition to the annual equity grants, Mr. Muto
and Ms. Teffner received performance-based stock options and
performance-based RSUs with their Promotion Grant and Appointment
Grant, respectively. For Ms. Teffner, the amount also includes RSUs
granted with respect to her services as a non-employer director
prior to her service as Interim Executive Chair of the
Board.
|
(4) The exercise
price of stock options is based on the average of the high and low
prices of the Company’s common stock on the date
of
grant.
|
|
(5)
|
Upon his retirement
as an employee of the Company effective June 28, 2019, Mr. Jaffe
satisfied the Total Years Test, and as a result, his outstanding
stock option awards, including the stock options granted to him on
October 29, 2018, will continue to vest in accordance with their
terms. Upon his retirement, Mr. Jaffe forfeited the FY21 LTIP award
granted to him on October 29, 2018.
|
|
|
(6)
|
Upon his departure
form the Company effective August 31, 2019, Mr. Giammatteo
forfeited the stock option award granted to him on October 3, 2018
and the FY21 LTIP award granted to him on October 28,
2018.
|
|
|
(7)
|
Upon his departure
from the Company effective May 1, 2019, Mr. Lynch forfeited the
stock option award granted to him on October
|
3, 2018 and the FY21
LTIP award granted to him on October 28, 2018.
|
|
|
|
Ascena Retail
Group, Inc.
|
49
|
2019 Proxy
Statement
|
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END 2019
The following table
provides information relating to outstanding equity awards held by
the NEOs at August 3, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
Awards
|
|
Stock
Awards
|
Name
and Plan(1)
|
Grant
Date
|
Number
of Securities Underlying Unexercised Options Exercisable
(#)
|
Number
of Securities Underlying Unexercised Options Unexercisable
(#)
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options
|
Option
Exercise Price
($)
|
Option
Expiration Date
|
|
Number
of Shares or Units of Stock That Have Not Vested
(#)
|
Market
Value of Shares or Units of Stock That Have Not Vested
($)(2)
|
Equity
Incentive Plan Awards:
Number of Unearned Shares, Units or Other Rights That Have Not
Vested
(#)
|
Equity
Incentive Plan Awards: Market or Payout Value of
Unearned Shares, Units or Other Rights That
Have Not Vested
($)(3)
|
Gary
Muto
|
|
|
|
|
|
|
|
|
|
|
|
NQ(4)
|
10/23/2015
|
142,518
|
|
|
12.80
|
10/23/2022
|
|
|
|
|
|
NQ(5)
|
9/21/2016
|
150,943
|
75,472
|
|
5.56
|
9/21/2023
|
|
|
|
|
|
NQ(6)
|
9/27/2017
|
180,412
|
180,413
|
|
2.37
|
9/27/2024
|
|
|
|
|
|
NQ(7)
|
10/3/2018
|
|
124,337
|
|
3.92
|
10/3/2025
|
|
|
|
|
|
NQ(8)
|
5/1/2019
|
|
|
2,750,000
|
1.17
|
5/1/2026
|
|
|
|
|
|
RSU(9)
|
9/29/2015
|
|
|
|
|
|
|
53,334
|
17,600
|
|
|
RSU(10)
|
9/21/2016
|
|
|
|
|
|
|
24,629
|
8,128
|
|
|
RSU(11)
|
9/27/2017
|
|
|
|
|
|
|
500,000
|
165,000
|
|
|
RSU(12)
|
5/1/2019
|
|
|
|
|
|
|
|
|
1,957,627
|
646,017
|
FY19
LTIP(13)
|
9/21/2016
|
|
|
|
|
|
|
|
|
|
687,500
|
FY20 LTIP(14)
|
9/27/2017
|
|
|
|
|
|
|
|
|
|
537,500
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrie W.
Teffner
|
|
|
|
|
|
|
|
|
|
|
|
NQ(8)
|
5/1/2019
|
|
|
750,000
|
1.17
|
5/1/2026
|
|
|
|
|
|
RSU(15)
|
10/22/2018
|
|
|
|
|
|
|
24,138
|
7,965
|
|
|
RSU(12)
|
5/1/2019
|
|
|
|
|
|
|
|
|
533,898
|
176,186
|
|
|
|
|
|
|
|
|
|
|
|
|
Dan
Lamadrid
|
|
|
|
|
|
|
|
|
|
|
|
NQ(16)
|
9/27/2017
|
18,900
|
37,801
|
|
2.37
|
9/27/2024
|
|
|
|
|
|
NQ(7)
|
10/3/2018
|
|
14,175
|
|
3.92
|
10/3/2025
|
|
|
|
|
|
RSU(17)
|
9/27/2017
|
|
|
|
|
|
|
14,844
|
4,899
|
|
|
FY19
LTIP(13)
|
9/27/2017
|
|
|
|
|
|
|
|
|
|
28,750
|
FY20 LTIP(14)
|
9/27/2017
|
|
|
|
|
|
|
|
|
|
42,500
|
|
|
|
|
|
|
|
|
|
|
|
|
Wendy
Hufford
|
|
|
|
|
|
|
|
|
|
|
|
NQ(7)
|
10/3/2018
|
|
30,239
|
|
3.92
|
10/3/2025
|
|
|
|
|
|
RSU(18)
|
10/3/2018
|
|
|
|
|
|
|
13,731
|
4,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
Jaffe
|
|
|
|
|
|
|
|
|
|
|
|
NQ(4)
|
9/24/2009
|
160,000
|
|
|
8.84
|
9/24/2019
|
|
|
|
|
|
NQ(4)
|
12/9/2009
|
300,000
|
|
|
15.00
|
9/26/2019
|
|
|
|
|
|
NQ(4)
|
9/23/2010
|
160,000
|
|
|
11.70
|
9/26/2019
|
|
|
|
|
|
NQ(4)
|
9/23/2010
|
150,000
|
|
|
15.00
|
9/26/2019
|
|
|
|
|
|
NQ(4)
|
3/9/2011
|
88,644
|
|
|
15.55
|
9/26/2019
|
|
|
|
|
|
NQ(4)
|
9/21/2011
|
160,000
|
|
|
13.14
|
9/26/2019
|
|
|
|
|
|
NQ(4)
|
9/20/2012
|
250,000
|
|
|
20.79
|
9/26/2019
|
|
|
|
|
|
NQ(4)
|
9/25/2013
|
375,000
|
|
|
19.91
|
9/26/2019
|
|
|
|
|
|
NQ(4)
|
9/23/2014
|
465,000
|
|
|
14.12
|
9/26/2019
|
|
|
|
|
|
NQ(4)
|
9/16/2015
|
299,288
|
|
|
12.39
|
9/26/2019
|
|
|
|
|
|
|
|
|
|
Ascena Retail
Group, Inc.
|
50
|
2019 Proxy
Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
Awards
|
|
Stock
Awards
|
Name
and Plan(1)
|
Grant
Date
|
Number
of Securities Underlying Unexercised Options Exercisable
(#)
|
Number
of Securities Underlying Unexercised Options Unexercisable
(#)
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options
|
Option
Exercise Price
($)
|
Option
Expiration Date
|
|
Number
of Shares or Units of Stock That Have Not Vested
(#)
|
Market
Value of Shares or Units of Stock That Have Not Vested
($)(2)
|
Equity
Incentive Plan Awards:
Number of Unearned Shares, Units or Other Rights That Have Not
Vested
(#)
|
Equity
Incentive Plan Awards: Market or Payout Value of
Unearned Shares, Units or Other Rights That
Have Not Vested
($)(3)
|
NQ(5)
|
9/21/2016
|
316,951
|
158,476
|
|
5.56
|
6/28/2023
|
|
|
|
|
|
NQ(6)
|
9/28/2017
|
315,000
|
315,000
|
|
2.44
|
6/28/2023
|
|
|
|
|
|
NQ(19)
|
10/29/2018
|
|
311,383
|
|
3.83
|
6/28/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robb
Giammatteo
|
|
|
|
|
|
|
|
|
|
|
|
NQ(4)
|
12/11/2013
|
10,000
|
|
|
20.41
|
12/13/2020
|
|
|
|
|
|
NQ(4)
|
9/23/2014
|
15,000
|
|
|
14.12
|
9/23/2021
|
|
|
|
|
|
NQ(4)
|
9/29/2015
|
17,779
|
|
|
13.48
|
9/29/2022
|
|
|
|
|
|
NQ(5)
|
9/21/2016
|
28,930
|
14,466
|
|
5.56
|
9/21/2023
|
|
|
|
|
|
NQ(6)
|
9/27/2017
|
32,216
|
32,217
|
|
2.37
|
9/27/2024
|
|
|
|
|
|
NQ(7)
|
10/3/2018
|
|
37,301
|
|
3.92
|
10/3/2025
|
|
|
|
|
|
RSU(10)
|
9/21/2016
|
|
|
|
|
|
|
4,722
|
1,558
|
|
|
PRSU(20)
|
9/21/2016
|
|
|
|
|
|
|
|
|
42,435(21)
|
14,003
|
FY20 LTIP(14)
|
9/27/2017
|
|
|
|
|
|
|
|
|
|
93,750
|
NQ = Non-qualified
stock option (granted under the Omnibus Incentive
Plan)
RSU = Restricted
Stock Units (granted under the Omnibus Incentive Plan)
FY19 LTIP = 2019
3-Yr Long-term Incentive Plan (granted under the Omnibus Incentive
Plan)
FY20 LTIP = 2020
3-Yr Long-term Incentive Plan (granted under the Omnibus Incentive
Plan)
FY21 LTIP = 2021
3-Yr Long-term Incentive Plan (granted under the Omnibus Incentive
Plan)
|
|
(1)
|
Mr. Lynch forfeited
all of his then-outstanding stock option, RSU and LTIP awards upon
his departure from the Company on May 1, 2019, which was prior to
the end of the Company’s fiscal year. Mr. Giammatteo forfeited all
of his outstanding stock option, RSU and LTIP awards upon his
departure from the Company on August 3, 2019, which was the last
day of the Company’s fiscal year.
|
|
|
(2)
|
The amounts in this
column equal the number of RSUs indicated in the previous column
multiplied by $0.33, which was the closing price of our common
stock on August 2, 2019, the last trading day of our 2019
fiscal year.
|
|
|
(3)
|
The amounts in this
column equal the number of performance-based RSUs or performance
share units, as applicable, indicated in the previous column
multiplied by $0.33, which was the closing price of our common
stock on August 2, 2019, the last trading day of our 2019
fiscal year.
|
|
|
(4)
|
This award is fully
vested.
|
|
|
(5)
|
The remaining stock
options related to this award vest on September 21, 2019. The
stock options related to this award that were vested prior to Mr.
Jaffe’s termination of employment were exercisable for 90 days
following his termination and expired on September 26,
2019.
|
|
|
(6)
|
The remaining stock
options related to this award vest on September 27, 2019. The stock
options related to this award that were vested prior to Mr. Jaffe’s
termination of employment were exercisable for 90 days following
his termination and expired on September 26, 2019.
|
|
|
(7)
|
One half of the
stock options related to this award vest on each of the first and
second anniversaries of the grant date.
|
|
|
(8)
|
One quarter of the
stock options subject to this award are eligible to vest based on
achievement of a $3 stock price hurdle; an additional 25% of the
stock options subject to this award are eligible to vest based on
achievement of a $5 stock price hurdle; and the remaining 50% of
the stock options subject to this award are eligible to vest based
on achievement of a $7 stock price hurdle.
|
|
|
(9)
|
The remaining RSUs
related to this award vest in substantially equal installments on
the fourth and fifth anniversaries of the grant date.
|
|
|
(10)
|
The remaining RSUs
related to this award vest on September 21, 2019.
|
|
|
(11)
|
The remaining RSUs
related to this award are eligible to vest on June 30,
2020.
|
|
|
|
|
Ascena Retail
Group, Inc.
|
51
|
2019 Proxy
Statement
|