Express 2011 Annual Report Download - page 83

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10. Stockholders’ Equity
Prior to the Reorganization (see Note 1), the Company was a limited liability company with outstanding Class L,
A, and C equity units.
Certain executive management members were provided the opportunity to purchase equity ownership for a
combination of cash and promissory notes payable. These seven-year promissory notes were fully-recourse to the
employee, accrued interest on an arm’s length rate basis, and were secured by a pledge of all equity interests
purchased by the executive management member. On February 9, 2010, management promissory notes totaling
$5.6 million were repaid in full by each member of management, and therefore interest income received by the
Company in 2010 was negligible.
During 2011, 2010, and 2009, the Company repurchased certain shares of common stock or equity units at cost
from employees who were separated from the Company.
On May, 18, 2010, the Company sold 10.5 million shares of newly-issued common stock in the IPO, raising net
proceeds of approximately $160.1 million, after deducting the underwriting discount and costs incurred related to
the IPO.
In conjunction with the Reorganization described in Note 1, the Company’s certificate of incorporation
authorized 500.0 million shares of common stock and 10.0 million shares of preferred stock. No preferred stock
was issued or outstanding as of January 28, 2012. Further, effective May 2, 2010, the Company became taxed as
a corporation rather than as a partnership. In accordance with Staff Accounting Bulletin (“SAB”) Topic 4B, the
Company reclassified $87.2 million in undistributed losses through May 12, 2010 to additional paid-in-capital.
The Company also recorded a non-cash capital contribution of $0.8 million related to certain tax assets it
received.
On November 30, 2010, the Board of Directors of the Company (the “Board”) approved a special dividend of
$0.56 per share of the Company’s common stock, totaling $49.5 million. The special dividend was paid on
December 23, 2010 to shareholders of record as of the close of business on December 16, 2010.
11. Share-Based Compensation
The Company records the fair value of share-based payments to employees in the Consolidated Financial
Statements as compensation expense, net of forfeitures, over the requisite service period on a straight-line basis.
Share-based Compensation Plans
Prior to the IPO, the Company maintained an equity incentive program. In connection with the IPO, the equity
from this program was converted into restricted shares of the Company and this program was terminated.
In 2010, the Board approved, and the Company implemented, the Express, Inc. 2010 Incentive Compensation
Plan (“2010 Plan”). The 2010 Plan authorizes the Compensation Committee of the Board to offer eligible
employees cash and stock-based incentives as deemed appropriate in order to attract, retain, and reward such
individuals. As of January 28, 2012, 16.8 million shares were authorized to be granted under the 2010 Plan and
13.2 million were available for future issuance.
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