Express 2012 Annual Report Download - page 77

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Restricted Stock Units and Restricted Stock
During 2012, the Company granted restricted stock units (“RSUs”) and restricted stock under the 2010 Plan,
including 0.4 million shares of performance-based restricted stock and 0.1 million shares of performance-based
RSUs. The fair value of the RSUs and restricted stock is determined based on the Company’s stock price on the
grant date. The expense for RSUs and restricted stock is recognized using the straight-line attribution method,
except for awards with performance conditions, for which the graded vesting method is used. These awards have
vesting conditions with requisite service periods of 3 years for the Chief Executive Officer, 4 years for other
employees, and 1 year for members of the Board.
The Company’s activity with respect to RSUs and restricted stock for the 2012 was as follows:
Number of
Shares
Grant Date
Weighted Average
Fair Value
(in thousands, except per share amounts)
Unvested, January 28, 2012 ............. 900 $18.52
Granted ......................... 837 $23.97
Vested .......................... (180) $17.95
Forfeited ........................ (339) $23.18
Unvested, February 2, 2013 ............. 1,218 $21.49
The total fair value/intrinsic value of RSUs and restricted stock that vested was $3.2 million and $0.1 million
during 2012 and 2011, respectively. No RSUs or restricted stock vested during 2010. As of February 2, 2013,
there was approximately $15.6 million of total unrecognized compensation expense related to unvested RSUs
and restricted stock, which is expected to be recognized over a weighted-average period of approximately 1.3
years.
12. Earnings Per Share
The following table provides a reconciliation between basic and diluted weighted-average shares used to
calculate basic and diluted earnings per share:
2012 2011 2010
(in thousands)
Weighted-average shares—basic ............................. 86,852 88,596 85,369
Dilutive effect of stock options, restricted stock units, and restricted
stock ................................................. 354 300 681
Weighted-average shares—diluted ........................... 87,206 88,896 86,050
Equity awards representing 3.1 million, 2.3 million and 1.3 million shares of common stock were excluded from
the computation of diluted earnings per share for 2012, 2011, and 2010, respectively, as the effects of the awards
would have been anti-dilutive.
13. Pro forma Information (unaudited)
The pro forma net income applied in computing the pro forma earnings per share for 2010 is based on the
Company’s historical net income as adjusted to reflect the Company’s conversion to a corporation as if it had
occurred as of the beginning of the respective periods. In connection with the conversion, effective May 2, 2010,
the Company became taxed as a corporation. The Company was previously treated as a partnership for tax
purposes and, therefore, generally not subject to federal income tax. The pro forma net income includes
adjustments for income tax expense as if the Company had been a corporation at an assumed combined federal,
state, and local income tax rate of 40.9% for the first thirteen weeks of 2010.
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