Express 2014 Annual Report Download - page 65

Stockholder Rights Plan
On June 12, 2014, the Board adopted a Stockholder Rights Plan (the “Rights Plan”). Under the Rights Plan, one
right was distributed for each share of common stock outstanding at the close of business on June 23, 2014 and
one right will be issued for each new share of common stock issued thereafter. If any person or group acquires
10% or more of the Company’s outstanding common stock without the approval of the Board, there would be a
triggering event entitling a registered holder to purchase from the Company one one-hundredth of a share of
Participating Preferred Stock, par value $0.01 per share, for $70.00, subject to adjustment. Existing 10% or
greater stockholders are grandfathered to the extent of their June 12, 2014 ownership levels. The Rights Plan will
expire one year after it was adopted, on June 12, 2015, unless it is ratified by a majority vote of the Company’s
stockholders on or prior to such date (in which case the Rights Plan will expire on June 12, 2017) or unless
earlier redeemed or terminated by the Company, as provided in the Rights Plan. The rights have no voting or
dividend privileges, and, unless and until they become exercisable, have no dilutive effect on the earnings of the
Company.
10. Share-Based Compensation
The Company records the fair value of share-based payments to employees in the Consolidated Statements of
Income and Comprehensive Income as compensation expense, net of forfeitures, over the requisite service
period.
Share-based Compensation Plans
In 2010, the Board approved, and the Company implemented, the Express, Inc. 2010 Incentive Compensation
Plan (as amended, the “2010 Plan”). The 2010 Plan authorizes the Compensation Committee (the “Committee”)
of the Board and its designees to offer eligible employees and directors cash and stock-based incentives as
deemed appropriate in order to attract, retain, and reward such individuals. Effective April 3, 2012, the Board
amended the 2010 Plan to, among other things, reduce the number of shares available for issuance under the
2010 Plan. As of January 31, 2015, 15.2 million shares were authorized to be granted under the 2010 Plan and
8.2 million remained available for future issuance.
The following summarizes our share-based compensation expense:
2014 2013 2012
(in thousands)
Stock options ................................... $ 7,556 $ 8,883 $ 8,123
Restricted stock units and restricted stock ............. 11,770 12,291 8,185
Total share-based compensation .................... $19,326 $21,174 $16,308
The stock compensation related income tax benefit recognized by the Company in 2014, 2013, and 2012 was
$3.9 million, $3.5 million, and $1.7 million, respectively.
Stock Options
During 2014, the Company granted stock options under the 2010 Plan. The fair value of the stock options is
determined using the Black-Scholes-Merton option-pricing model as described later in this note. Stock options
granted in 2014 under the 2010 Plan generally vest 25% per year over four years or upon reaching retirement
eligibility as defined by the 2010 Plan. These options have a ten year contractual life. Options granted to the
former Chief Executive Officer in prior years vest ratably over three years. The expense for stock options is
recognized using the straight-line attribution method.
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