Express 2010 Annual Report Download - page 43

Future sales of our common stock, or the perception in the public markets that these sales may occur, may
depress our stock price.
Sales of substantial amounts of our common stock in the public market, or the perception that these sales could
occur, could adversely affect the price of our common stock and could impair our ability to raise capital through
the sale of additional shares. As of January 29, 2011, we had 88.7 million shares of common stock outstanding.
Pursuant to the Registration Agreement entered into in connection with the IPO (the “Registration Rights
Agreement”), Golden Gate and Limited Brands have the right to request three long-form demand registrations
and an unlimited number of demand registrations on Form S-3 subject to the terms and conditions set forth in the
Registration Rights Agreement and the lock-up agreements. In addition, Golden Gate, Limited Brands, and
certain management stockholders have piggyback registration rights in connection with offerings initiated by us,
Golden Gate or Limited Brands. Also, subject to compliance with the federal securities laws, all of our
outstanding shares may be sold on the open market following the expiration of the lock-up period. By exercising
their registration rights or otherwise selling a large number of shares on the open market, these holders could
cause the price of our common stock to decline.
In addition, in the future, we may issue additional securities if we need to raise capital in connection with an
acquisition or another capital raise. The amount of shares of our common stock issued in connection with a
capital raise or acquisition could constitute a material portion of our then-outstanding shares of common stock
and thus materially dilute our stockholders.
Antitakeover provisions in our charter documents and Delaware law might discourage or delay acquisition
attempts for us that you might consider favorable.
Our certificate of incorporation and bylaws contain provisions that may make the acquisition of our company
more difficult without the approval of our board of directors. These provisions:
• establish a classified board of directors so that not all members of our board of directors are elected at
one time;
• authorize the issuance of undesignated preferred stock, the terms of which may be established, and the
shares of which may be issued without stockholder approval, and which may include super voting,
special approval, dividend, or other rights or preferences superior to the rights of the holders of
common stock;
• prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a
meeting of our stockholders; and
• establish advance notice requirements for nominations for elections to our board or for proposing
matters that can be acted upon by stockholders at stockholder meetings.
Our certificate of incorporation also contains a provision that provides us with protections similar to Section 203
of the Delaware General Corporate Law, that will prevent us from engaging in a business combination with a
person who acquires at least 15% of our common stock for a period of three years from the date such person
acquired such common stock, except for Golden Gate and, in certain instances, persons who purchase common
stock from Golden Gate unless board or stockholder approval is obtained prior to the acquisition. These
antitakeover provisions and other provisions under Delaware law could discourage, delay, or prevent a
transaction involving a change in control of our company, even if doing so would benefit our stockholders. These
provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect
directors of your choosing and to cause us to take other corporate actions you desire.
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