EXPRESS, INC. (NYSE:EXPR) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
Compensation Arrangements
On March 13, 2017, in connection with the annual review of the
executive compensation arrangements of Express, Inc. (the
“Company”), the Compensation and Governance Committee (the
“Committee”) of the Company’s Board of Directors approved the
following changes to the compensation arrangements of the
Company’s named executive officers.
executive compensation arrangements of Express, Inc. (the
“Company”), the Compensation and Governance Committee (the
“Committee”) of the Company’s Board of Directors approved the
following changes to the compensation arrangements of the
Company’s named executive officers.
Annual Base Salary Changes
|
Named Executive Officer
|
Current Annual Base Salary
|
New Annual Base Salary
|
|
Periclis (“Perry”) Pericleous – Senior Vice
President, Chief Financial Officer Treasurer |
$445,000
|
$475,000
|
The annual base salaries of David Kornberg, President and Chief
Executive Officer, and Matthew Moellering, Executive Vice
President and Chief Operating Officer, remain at $1,000,000 and
$793,000, respectively. The annual base salaries for each of John
J. (“Jack”) Rafferty, Executive Vice President – Planning and
Allocation, and Colin Campbell, Executive Vice President –
Sourcing and Production, remain at $582,000. The base salary
increase for Mr. Pericleous will become effective on April 2,
2017.
Executive Officer, and Matthew Moellering, Executive Vice
President and Chief Operating Officer, remain at $1,000,000 and
$793,000, respectively. The annual base salaries for each of John
J. (“Jack”) Rafferty, Executive Vice President – Planning and
Allocation, and Colin Campbell, Executive Vice President –
Sourcing and Production, remain at $582,000. The base salary
increase for Mr. Pericleous will become effective on April 2,
2017.
Seasonal Performance-Based Cash Incentive Target Percentage
Increases
Increases
|
Named Executive Officer
|
Current Incentive Compensation Target as a Percentage
of Base Salary |
New Incentive Compensation Target as a Percentage of
Base Salary |
|
Periclis (“Perry”) Pericleous
|
60%
|
65%
|
The seasonal performance-based cash incentive compensation
targets as a percentage of annual base salary for Messrs.
Kornberg, Moellering, Rafferty, and Campbell remain at 130%, 85%,
65%, and 60%, respectively.
targets as a percentage of annual base salary for Messrs.
Kornberg, Moellering, Rafferty, and Campbell remain at 130%, 85%,
65%, and 60%, respectively.
For 2017, the Company’s seasonal short-term cash incentive
compensation program will contain a financial goal for each
season as well as an operational goal. For each season, 75% of
the target payout opportunity will be based on an operating
income goal and 25% will be based on an operational goal. For
Spring 2017, the operational goal is tied to cost savings
initiatives and will also be subject to a minimum performance
hurdle based on EBITDA. The operational goal is binary and will
pay out at target only if the cost savings initiative and the
minimum performance hurdle are achieved. The financial goal will
continue to have a threshold, target, and maximum payout which
will allow participating executives to double the incentive
payout associated with achievement of such financial goal if the
maximum operating income goal is achieved. In previous years, the
maximum payout under the seasonal short-term cash incentive plan
was 200% of target. For 2017, the maximum total payout under the
seasonal short-term cash incentive plan will be reduced to 175%
because the operational goal metric will not pay out above
target.
compensation program will contain a financial goal for each
season as well as an operational goal. For each season, 75% of
the target payout opportunity will be based on an operating
income goal and 25% will be based on an operational goal. For
Spring 2017, the operational goal is tied to cost savings
initiatives and will also be subject to a minimum performance
hurdle based on EBITDA. The operational goal is binary and will
pay out at target only if the cost savings initiative and the
minimum performance hurdle are achieved. The financial goal will
continue to have a threshold, target, and maximum payout which
will allow participating executives to double the incentive
payout associated with achievement of such financial goal if the
maximum operating income goal is achieved. In previous years, the
maximum payout under the seasonal short-term cash incentive plan
was 200% of target. For 2017, the maximum total payout under the
seasonal short-term cash incentive plan will be reduced to 175%
because the operational goal metric will not pay out above
target.
For additional information about the Company’s seasonal
performance-based cash incentive program, refer to the Company’s
definitive proxy statement on Schedule 14A filed with the
Securities and Exchange Commission (“SEC”) on May 5, 2016.
performance-based cash incentive program, refer to the Company’s
definitive proxy statement on Schedule 14A filed with the
Securities and Exchange Commission (“SEC”) on May 5, 2016.
2017 Equity Compensation Awards
On March 14, 2017, the Companys named executive officers were
granted the following equity awards:
granted the following equity awards:
|
Named Executive Officer
|
Non-Qualified Stock Options
|
Time-Based Restricted Stock Units
|
Performance-Based Restricted Stock Units
|
||
|
Threshold
|
Target
|
Maximum
|
|||
|
David Kornberg
|
170,843
|
185,775
|
132,696
|
265,393
|
530,786
|
|
Matthew Moellering
|
44,419
|
48,301
|
34,501
|
69,002
|
138,004
|
|
John J. (“Jack”) Rafferty
|
22,893
|
24,894
|
17,781
|
35,563
|
71,126
|
|
Colin Campbell
|
22,893
|
24,894
|
17,781
|
35,563
|
71,126
|
|
Periclis (“Perry”) Pericleous
|
20,501
|
22,293
|
15,293
|
31,847
|
63,694
|
One-fourth of the stock options and one-fourth of the time-based
restricted stock units are scheduled to vest on April 15 of each
of 2018, 2019, 2020, and 2021, subject to continued employment
with the Company. The number of performance-based restricted
stock units that vest will be determined based on the Companys
adjusted earnings per diluted share for the three-year period
commencing on the first day of the Companys 2017 fiscal year and
ending on the last day of the Companys 2019 fiscal year, compared
to the performance goals established by the Committee. The
performance-based restricted stock units that are earned based on
achievement of the performance goals are scheduled to vest on
April 15, 2020, subject to continued employment with the Company.
The range of possible payouts for the performance-based
restricted stock units are set forth in the table above. The
number of performance-based restricted stock units that vest will
be determined using straight line interpolation if adjusted
earnings per diluted share over the performance period is an
amount between the performance goals.
restricted stock units are scheduled to vest on April 15 of each
of 2018, 2019, 2020, and 2021, subject to continued employment
with the Company. The number of performance-based restricted
stock units that vest will be determined based on the Companys
adjusted earnings per diluted share for the three-year period
commencing on the first day of the Companys 2017 fiscal year and
ending on the last day of the Companys 2019 fiscal year, compared
to the performance goals established by the Committee. The
performance-based restricted stock units that are earned based on
achievement of the performance goals are scheduled to vest on
April 15, 2020, subject to continued employment with the Company.
The range of possible payouts for the performance-based
restricted stock units are set forth in the table above. The
number of performance-based restricted stock units that vest will
be determined using straight line interpolation if adjusted
earnings per diluted share over the performance period is an
amount between the performance goals.
The stock options and time-based restricted stock units were
granted to the form of Non-Qualified Stock Option Agreement and
form of Restricted Stock Unit Agreement, respectively. Copies of
the form of Non-Qualified Stock Option Agreement and form of
Restricted Stock Unit Agreement were filed as Exhibits 10.1 and
10.2, respectively, to the Companys Current Report on Form 8-K on
April 4, 2014 and are incorporated herein by reference. The
performance-based restricted stock units were granted to a form
of Restricted Stock Unit Agreement for Performance Stock Units, a
copy of which is attached to this Current Report as Exhibit 10.1,
and is incorporated herein by reference. The foregoing equity
compensation awards were made to the Companys 2010 Incentive
Compensation Plan, as amended, which was filed with the SEC on
April 30, 2012 as Appendix B to the Company’s definitive proxy
statement on Schedule 14A and is incorporated herein by
reference.
granted to the form of Non-Qualified Stock Option Agreement and
form of Restricted Stock Unit Agreement, respectively. Copies of
the form of Non-Qualified Stock Option Agreement and form of
Restricted Stock Unit Agreement were filed as Exhibits 10.1 and
10.2, respectively, to the Companys Current Report on Form 8-K on
April 4, 2014 and are incorporated herein by reference. The
performance-based restricted stock units were granted to a form
of Restricted Stock Unit Agreement for Performance Stock Units, a
copy of which is attached to this Current Report as Exhibit 10.1,
and is incorporated herein by reference. The foregoing equity
compensation awards were made to the Companys 2010 Incentive
Compensation Plan, as amended, which was filed with the SEC on
April 30, 2012 as Appendix B to the Company’s definitive proxy
statement on Schedule 14A and is incorporated herein by
reference.
Amendments to Severance Arrangements
The Committee approved changes to the severance arrangements for
each of its named executive officers, other than Mr. Kornberg,
solely for the purpose of modifying the definition of Good Reason
with respect to relocation to better align with market practice
and make consistent with Mr. Kornbergs Second Amended and
Restated Employment Agreement. Under the previous definition, a
required relocation outside the United States qualified as Good
Reason. Under the new definition, a required relocation outside
of a 60 mile radius of the executives current residence qualifies
as Good Reason.
each of its named executive officers, other than Mr. Kornberg,
solely for the purpose of modifying the definition of Good Reason
with respect to relocation to better align with market practice
and make consistent with Mr. Kornbergs Second Amended and
Restated Employment Agreement. Under the previous definition, a
required relocation outside the United States qualified as Good
Reason. Under the new definition, a required relocation outside
of a 60 mile radius of the executives current residence qualifies
as Good Reason.
The definition of Good Reason now generally includes (1) an
adverse change in responsibilities, pay,
adverse change in responsibilities, pay,
or reporting relationship, (2) relocation more than 60 miles from
the executives current residence, (3) failure by the Company to
abide by the agreement, or (4) failure by any successor to assume
the agreement.
the executives current residence, (3) failure by the Company to
abide by the agreement, or (4) failure by any successor to assume
the agreement.
To effect the changes to the severance arrangements, the
Committee has approved a form of Second Amended and Restated
Employment Agreement for Messrs. Moellering, Rafferty, and
Campbell who are each party to an Employment Agreement with the
Company that was entered into prior to the Company’s initial
public offering and amended and restated in April 2013, and a
form of Amended and Restated Severance Agreement for Mr.
Pericleous who is party to a Severance Agreement with the Company
that was entered into in July 2015 in connection with Mr.
Pericleous’ promotion to Senior Vice President and Chief
Financial Officer.
Committee has approved a form of Second Amended and Restated
Employment Agreement for Messrs. Moellering, Rafferty, and
Campbell who are each party to an Employment Agreement with the
Company that was entered into prior to the Company’s initial
public offering and amended and restated in April 2013, and a
form of Amended and Restated Severance Agreement for Mr.
Pericleous who is party to a Severance Agreement with the Company
that was entered into in July 2015 in connection with Mr.
Pericleous’ promotion to Senior Vice President and Chief
Financial Officer.
The description of the changes to the severance arrangements in
this Current Report are qualified in their entirety by reference
to the complete text of the form of Second Amended and Restated
Employment Agreement and form of Amended and Restated Severance
Agreement, copies of which are filed as Exhibit 10.2 and Exhibit
10.3 hereto, respectively, and are incorporated herein by
reference.
this Current Report are qualified in their entirety by reference
to the complete text of the form of Second Amended and Restated
Employment Agreement and form of Amended and Restated Severance
Agreement, copies of which are filed as Exhibit 10.2 and Exhibit
10.3 hereto, respectively, and are incorporated herein by
reference.
Committee Appointments
On March 14, 2017, Terry Davenport and Karen Leever were
appointed to the Committee.
appointed to the Committee.
Item 9.01 Financial Statements and Exhibits.
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Exhibit No.
|
|
Description of Exhibit
|
|
|
|
|
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10.1
|
|
Form of Restricted Stock Unit Agreement for Performance
Stock Units. |
|
10.2
|
|
Form of Second Amended and Restated Employment Agreement.
|
|
10.3
|
|
Form of Amended and Restated Severance Agreement.
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About EXPRESS, INC. (NYSE:EXPR)
Express, Inc. is a specialty apparel and accessories retailer offering both women’s and men’s merchandise, targeting the 20 to 30 year old customer. The Company offers an assortment of fashionable apparel and accessories to address fashion needs across multiple aspects of lifestyles, including work, casual, jeans wear and going-out occasions. It operates through the operation of its brick-and-mortar retail and outlet stores, e-commerce operations and franchise operations segment. The Company sells its products through its e-commerce Website, www.express.com, and has franchise agreements with franchisees that operate Express locations in Latin America, the Middle East and South Africa. It operates approximately 650 stores across the United States, in Canada and in Puerto Rico, including over 80 factory outlet stores. It products are created by its in-house design team. The Company has a portfolio of products that have brand value, including the Editor pant and 1MX shirt. EXPRESS, INC. (NYSE:EXPR) Recent Trading Information
EXPRESS, INC. (NYSE:EXPR) closed its last trading session down -0.03 at 9.40 with 1,439,892 shares trading hands.
