Express 2011 Annual Report Download - page 76

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paid in cash under the Advisory Agreement and (ii) the quotient of the number of units held by Limited Brands
over the number of units held by Golden Gate at the time of payment of such Advisory Agreement fees. Effective
May 12, 2010, the LLC Agreement, including the advisory arrangement with Limited Brands, was terminated in
connection with the Company’s conversion to a corporation and IPO. The Company paid Limited Brands a
one-time termination fee of $3.3 million in the second quarter of 2010 in connection with the termination of the
LLC Agreement.
The Company incurred the following charges from Limited Brands related to advisory fees and the termination
of the LLC Agreement. These charges are included in other operating (income) expense, net, in the Consolidated
Statements of Income and Comprehensive Income:
2011 2010 2009
(in thousands)
Limited Brands LLC Agreement Fee
(including termination fee) ........................... $— $4,156 $2,275
As a result of the termination of the LLC Agreement, the Company no longer had a financial obligation to
Limited Brands related to this agreement as of January 28, 2012 or January 29, 2011.
Transactions with Golden Gate
In connection with the Golden Gate Acquisition, the Company entered into an Advisory Agreement with Golden
Gate that was originally scheduled to expire in July 2017. Pursuant to the Advisory Agreement, the Company
paid Golden Gate an annual management fee equal to the greater of (i) $2.0 million per fiscal year or (ii) 3% of
adjusted EBITDA of Express Holding. Additionally, the Company reimbursed Golden Gate for reasonable
out-of-pocket expenses incurred as a result of providing on-going advisory services. Effective May 12, 2010, the
Advisory Agreement was terminated in connection with the Company’s conversion to a corporation and IPO.
The Company paid Golden Gate a one-time termination fee of $10.0 million in the second quarter of 2010 in
connection with the termination of the Advisory Agreement.
The Company incurred the following charges from Golden Gate related to advisory fees, out-of-pocket expenses,
and the termination of the Advisory Agreement. These charges are included in other operating (income) expense,
net in the Consolidated Statements of Income and Comprehensive Income:
2011 2010 2009
(in thousands)
Advisory fees and out-of-pocket expenses
(including termination fee) .......................... $— $12,752 $7,153
As a result of the termination of the Advisory Agreement, the Company no longer has a financial obligation to
Golden Gate as of January 28, 2012 or January 29, 2011.
Transactions with Other Golden Gate Affiliates
The Company also transacts with affiliates of Golden Gate for e-commerce warehouse and fulfillment services,
software license purchases, and consulting and software maintenance services. The Company incurred the
following charges, included primarily in cost of goods sold, buying, and occupancy costs in the Consolidated
Statements of Income and Comprehensive Income:
2011 2010 2009
(in thousands)
E-commerce warehouse and fulfillment .............. $32,869 $18,780 $19,248
Software licenses and maintenance and consulting ...... $ 228 $ 323 $ 255
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