EXPR Express Inc

The Board and its Compensation and Governance Committee are committed to ensuring that the Board possesses the right diversity of backgrounds, skills, experience, and perspectives to constitute an effective Board. The Board currently consists of ten members and is divided into three classes of directors, with four Class I directors, three Class II directors, and three Class III directors. The current term of our Class I directors expires at the Annual Meeting, while the terms for Class II and Class III directors will expire at our 2024 and 2025 annual meetings of shareholders, respectively.

Messrs. Archbold, Baxter, Mehta and Swinburn currently serve as Class I directors and are each independent. Upon the recommendation of the Compensation and Governance Committee, the Board has nominated Messrs. Archbold, Baxter, Mehta and Swinburn for re-election as Class I directors, to each serve three-year terms expiring at the 2026 annual meeting of shareholders. Messrs. Archbold and Swinburn have served as directors since 2012, Mr. Baxter has served as a director since 2019, and each was elected to serve a three-year term most recently at our 2020 annual meeting of shareholders. Mr. Mehta has served as a director since December 2022.

Messrs. Archbold, Baxter, Mehta and Swinburn have consented to serve if elected. If elected, each of Messrs. Archbold, Baxter, Mehta and Swinburn will hold office until their respective successor has been duly elected and qualified or until their earlier resignation or removal. If Messrs. Archbold, Baxter, Mehta or Swinburn becomes unavailable to serve as a director, the Board may either designate a substitute nominee or reduce the number of directors. If the Board designates a substitute nominee, the persons named as proxies will vote for the substitute nominee designated by the Board.

Information with respect to our Class I director nominees and our continuing Class II and Class III directors, including their recent employment or principal occupation, a summary of select qualifications, skills, and experience that led to the conclusion that they are qualified to serve as directors, the names of other public companies for which they currently serve as a director or have served as a director within the past five years, their period of service on the Board, and their ages as of April 17, 2023 (the “Record Date”) are provided in this section. The Board believes that our continuing directors, together with our director nominees, possess a complementary and diverse set of qualifications, skills, and experience to allow the Board to function at a high level and fulfill its responsibilities to our shareholders. Please refer to “Corporate Governance—Board Composition” on page 15 for other information about our Board, including a description of the qualifications, skills, and experience that the Board believes are important to effectively oversee the Company as it carries out its growth strategy and commitment to long-term value creation.

    ELECTION OF CLASS I DIRECTORS (PROPOSAL NO. 1)     

NOMINEES FOR CLASS I DIRECTORS FOR ELECTION AT THE 2023 ANNUAL MEETING

    ELECTION OF CLASS I DIRECTORS (PROPOSAL NO. 1)     

CLASS II DIRECTORS WITH TERMS CONTINUING UNTIL THE 2024 ANNUAL MEETING

    ELECTION OF CLASS I DIRECTORS (PROPOSAL NO. 1)     

BOARD RESPONSIBILITIES

The Board is responsible for overseeing the affairs of the Company to generate sustainable long-term value for our shareholders and does so through oversight of the Company’s (1) strategy and performance, (2) management, including succession planning, (3) risk management program, (4) compliance and ESG programs, and (5) other corporate governance practices, including shareholder engagement.

The Board believes that effective oversight is best achieved through (1) having the right combination of people on the Board, (2) an effective Board leadership and committee structure, and (3) effective Board practices. The Board continually reassesses the composition of the Board, the Board’s leadership and structure, and its governance practices and believes that the continuing directors, along with the director nominees, together have a complementary and diverse set of skills, backgrounds, experiences, and perspectives to constitute an effective Board; and furthermore, that the Board’s leadership and committee structure, as well as its governance practices, are effective. See “Board Composition” below and “Election of Class I Directors (Proposal No. 1)” on page 9 for more information about the composition of the Board; see “Board Leadership and Structure” on page 17 for more information about the Board’s leadership structure and its committees; and see “Board Practices” on page 21 for more information about the Board’s governance practices.

BOARD COMPOSITION

The Board and its Compensation and Governance Committee (in this “Corporate Governance” section, the “Committee”) are committed to ensuring that the Board possesses the right diversity of backgrounds, skills, experience, and perspectives to constitute an effective Board. The Committee is responsible for developing the criteria for, and reviewing periodically with the Board, the skills and characteristics of nominees, as well as the composition of the Board as a whole. These criteria include independence, diversity, age, skills, tenure, and experience in the context of the needs of the Board. The Committee also considers a number of other factors, including the ability to represent all shareholders without a conflict of interest; the ability to work in and promote a productive environment; sufficient time and willingness to fulfill the substantial duties and responsibilities of a director; a high level of character and integrity; broad professional and leadership experience and skills necessary to effectively respond to complex issues encountered by a publicly traded company; and the ability to apply sound and independent business judgment. Pursuant to the Investment Agreement (as defined below), an affiliate of WHP has certain director appointment rights as further described in the Investment Agreement. For more information on these rights, see “Related Person Transactions–WHP Partnership–Investment Agreement–WHP Director” on page 24.

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u BOARD COMPETENCIES AND EXPERIENCE

The Board believes that it has the right mix of qualifications, skills, experience, and perspectives that allow it to fulfill its responsibilities, including overseeing management’s execution of the Company’s corporate strategy, which is designed to create long-term shareholder value. The information below shows how the Board’s collective qualifications, skills, and experience relate to the Company’s corporate strategy. For biographical information regarding each of our directors and their individual qualifications, skills, and experience see, “Election of Class I Directors (Proposal No. 1)” beginning on page 9.

Long-Term Strategy for Value Creation				Strategic Competencies and Experience				Corporate Governance Competencies and Experience
				• Retail merchandising & operations   • Apparel merchandising & design   • E-commerce and omni-channel retailing   • Business development & strategic planning   • Supply chain   • International and franchise operations   • Technology development and management experience   • Data analytics   • Leadership development				• Accounting, finance, and capital structure   • Investor relations   • Executive compensation   • Mergers and acquisitions   • Executive leadership of complex organizations   • ESG matters   • Corporate governance and public company board practices   • Risk management   • Succession planning
ENGAGE Our Customers and Acquire New Ones
X-ECUTE With Precision to Accelerate Sales and Profitability
PRODUCT First
REINVIGORATE our Brand

u BOARD DEMOGRAPHICS AND REFRESHMENT

As previously noted, in addition to ensuring that the Board collectively has a diverse set of competencies, experience, and perspectives, the Committee and Board also consider independence, as well as diversity, age, and tenure. The charts below show certain demographic information about our Board as of April 17, 2023.

The Board does not believe it should establish term limits or age limits for service of directors because such limits may disadvantage the Company and the Board by causing loss of the contribution of directors who have been able to develop, over a period of time, increasing insight into the Company and its operations and, therefore, provide an increasing contribution to the Board as a whole. To assure the appropriate balance between members with new and different perspectives and those with a deep understanding of the Company built up over many years, the Committee reviews a director’s continuation on the Board each time such director’s term of office expires. The Board believes that together these practices are effective at ensuring an appropriate balance between experience and a fresh perspective on the Board.

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u IDENTIFYING AND EVALUATING DIRECTOR CANDIDATES

The Committee is responsible for identifying, recruiting, and recommending candidates for the Board and is responsible for reviewing and evaluating any candidates recommended by shareholders.

The following shows our nomination process for candidates to our Board:

Conduct a Needs Assessment

The Committee determines the director skills, experience, and attributes needed for the Board to exercise effective oversight of the Company. The Committee assesses the skills, experience, and attributes of existing directors against desired director skills, experience, and attributes to identify any skills, experience, and attributes that would strengthen the collective skills and experience of the Board.

Develop a New Director Profile

The Committee develops a profile that sets forth the skills, experience, and attributes desired for the new director, which satisfies the needs identified in the needs assessment.

Identify New Director Candidates

The Committee may identify new director candidates through professional search firms, professional networks of sitting directors, and nominations suggested by shareholders.

Selection of New Director

The Committee makes a recommendation to the Board based on an initial round of interviews, reference checks, and a final round of interviews with all directors.

Due Diligence and Onboarding

Once due diligence is performed and the nominee is appointed to the Board, the Company provides a robust onboarding program which includes a full day of in-person meetings with senior leadership at the Company’s headquarters and participation in a multi-day new director education program for first-time directors.

The Committee considers all director candidates, including candidates proposed by shareholders in accordance with our Bylaws, based on the same criteria. As noted above, the Committee may engage third party search firms to identify potential director nominees.

BOARD LEADERSHIP AND STRUCTURE

u LEADERSHIP STRUCTURE

Ms. Mangum has served as the Company’s independent Chairman since assuming the role at our 2016 Annual Meeting of Shareholders. The independent Chairman’s roles and responsibilities include: (1) establishing the Board agendas and schedules to confirm that appropriate topics are reviewed and sufficient time is allocated to each; (2) providing input to the CEO with respect to the information provided to the Board; (3) serving as a liaison between the independent directors and the CEO; (4) presiding at the executive sessions of independent directors; (5) facilitating communications and coordination of activities among the committees as appropriate; and (6) approving and coordinating the retention of advisors and consultants to the Board.

Our Corporate Governance Guidelines provide that the roles of Chairman and CEO may be separated or combined. The Board exercises its discretion in combining or separating these positions as it deems appropriate. The Board believes that the combination or separation of these positions should be considered as part of the succession planning process. In the event that the Chairman is not independent, the Board believes that it is beneficial for the independent directors to appoint an independent Lead Director. Currently, the Board believes that having an independent Chairman best serves the Board in its oversight role.

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u BOARD COMMITTEES

The Board has two standing committees: an Audit Committee and a Compensation and Governance Committee. The composition and leadership of these committees are shown in the table below. In the future, the Board may establish other committees, as it deems appropriate, to assist it with its responsibilities. The committees report to the Board as they deem appropriate and as the Board may request. Each standing committee operates under a charter that has been approved by the Board and each is comprised solely of independent directors.

Audit Committee

Audit Committee Responsibilities

The Audit Committee also prepares the Audit Committee Report that SEC rules require to be included in our annual proxy statement. This report is on page 67 of this proxy statement.

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Audit Committee Meetings

The Audit Committee met eight times in 2022. The Audit Committee generally has eight regularly scheduled meetings per year and has an opportunity at each meeting to speak with the lead audit partner from the Company’s independent registered public accounting firm, as well as the Company’s director of internal audit, without any other members of management present. In addition, the Audit Committee Chair has regularly scheduled teleconferences with each of the Company’s Chief Financial Officer and the lead audit partner from the Company’s independent registered public accounting firm.

Audit Committee Practices

At the end of each quarter, the Audit Committee reviews and discusses with management and the Company’s independent registered public accounting firm the Company’s financial results, press releases concerning the Company’s financial performance and earnings estimates, any significant control deficiencies identified and steps management has taken or plans to take to remediate the deficiencies, significant estimates and proposed adjustments to the financial statements, reports to the Company’s ethics hotline, internal audit activities and reports, risk management activities, and the results of the independent registered public accounting firm’s review or audit of the Company’s financial statements, among other things.

Each year the Audit Committee evaluates the performance of the Company’s independent registered public accounting firm and considers whether it is in the best interests of the Company and its shareholders to engage the firm for another year. As part of its evaluation, the Audit Committee considers the qualifications of the persons who will be staffed on the Company’s engagement, including the lead audit partner, quality of work, firm reputation, independence, fees, retail experience, and understanding of the Company’s financial reporting processes, policies, and procedures. The Audit Committee solicits feedback from management as part of its evaluation process.

Audit Committee Independence and Expertise

The Board has affirmatively determined that each of our Audit Committee members meets the definition of “independent director” for purposes of serving on the Audit Committee under both Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the NYSE listing rules. The Board has affirmatively determined that each of Mr. Archbold and Ms. Mangum qualifies as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K.

Audit Committee Charter

The Audit Committee Charter may be viewed on the “Corporate Governance” page in the Investor Relations section of our website at www.express.com/investor. We will also provide a copy of the charter in print without charge upon written request delivered via email to IR@express.com or by mail to Express, Inc., 1 Express Drive, Columbus, OH 43230, Attention: Investor Relations.

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Compensation and Governance Committee

Compensation and Governance Committee Responsibilities

The Compensation and Governance Committee also prepares the Compensation and Governance Committee Report that SEC rules require to be included in our annual proxy statement. This report is on page 48 of this proxy statement.

Compensation and Governance Committee Independence

The Board has affirmatively determined that each of our Compensation and Governance Committee members meets the definition of “independent director” for purposes of serving on the Compensation and Governance Committee under both Rule 10C-1 of the Exchange Act and the NYSE listing rules.

Compensation and Governance Committee Meetings

The Compensation and Governance Committee met six times in 2022. The Compensation and Governance Committee generally has six regularly scheduled meetings per year and has an opportunity at each meeting to speak with the Compensation and Governance Committee’s independent compensation consultant.

Compensation and Governance Committee Practices

See “Executive Compensation—Compensation Discussion & Analysis—Executive Compensation Practices” on page 44 for additional information about the Compensation and Governance Committee’s practices.

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BOARD PRACTICES

u STRATEGY OVERSIGHT

The Board has deep experience in the area of strategy and business development, with much of that experience gained in the retail sector. At least once per year, the Board and management engage in an in-depth discussion and align on the Company’s corporate strategy which is designed to create long-term shareholder value and serves as the foundation upon which goals are established and decisions are made. Short and medium term objectives are developed to support achievement of the long-term strategy and the Board monitors management’s progress against such objectives.

u RISK OVERSIGHT

u MANAGEMENT OVERSIGHT AND SUCCESSION PLANNING

As part of its management oversight responsibilities, the Board assesses whether the Company has the management talent needed to successfully pursue the Company’s strategy, monitors management’s execution of the Company’s strategy, and provides advice to management as a strategic partner. The Board believes that open communications between the Board and management play a key role in effective oversight. Accordingly, in addition to formal meetings, individual directors and members of management engage in frequent dialogue concerning the Company in between meetings.

The Board is responsible for succession planning for the CEO position and for monitoring and advising on management’s succession planning for other executive officers and key contributors. The Board reviews and discusses succession plans for the CEO position and the Company’s other executive officers and key contributors at least once annually, usually as part of the annual talent review of the executive leadership and key contributors in the Company. As part of the annual talent review process, the CEO shares their evaluation of the executive leadership in the business and makes recommendations and evaluations of potential successors, along with a review of any development plans recommended for such individuals. Directors become familiar with potential successors for key management positions through various means, including annual talent reviews, presentations to the Board, and communications outside of meetings.

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u COMPLIANCE OVERSIGHT

The Board is committed to ensuring that the Board and the management team together cultivate a high-performing, collaborative corporate culture that emphasizes the importance of acting according to high ethical standards and in compliance with legal requirements. The Board receives a compliance update each quarter from the Company’s Chief Legal Officer who has day-to-day oversight responsibilities for the Company’s compliance program. On an annual basis, the Board reviews with management the Company’s top compliance risks based on an updated risk assessment, steps management is taking to reduce compliance risk, and key compliance initiatives for the upcoming year.

u CYBERSECURITY RISK OVERSIGHT

In addition, the Board oversees the Company’s Information Risk and Resilience program. In order to respond to the threat of security breaches and cyberattacks, we have developed a program, overseen by the Company’s Chief Technology Officer, the Head of Information Security and our Information Security Office, that is designed to protect and preserve the confidentiality, integrity and continued availability of all information owned by, or in the care of, the Company. This program also includes a cyber incident response plan that provides controls and procedures for timely and accurate reporting of any material cybersecurity incident. The Audit Committee, which is tasked with oversight of certain risk issues, including cybersecurity, receives reports from the Head of Information Security, the Chief Technology Officer and the Global Head of Operational Risk throughout the year. The Board and the Audit Committee also receive updates about the results of annual readiness assessments led by outside advisors who provide a third-party independent assessment of our technical program and our internal response preparedness. The Audit Committee regularly briefs the full Board on these matters, and the full Board also receives periodic briefings on cyber threats to enhance our directors’ literacy on cyber issues.

u ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) INITIATIVES

Environmental, social and governance (ESG) matters, which include respect for our communities, the environment and human rights, influence our ability to create long-term shareholder value. The Compensation and Governance Committee maintains oversight over ESG matters and makes recommendations to the Board regarding key initiatives. We believe these initiatives, which are incorporated in Board discussions throughout the year, are critical to all our Company’s stakeholders, including our employees, customers and shareholders. To extend the reach and impact of our commitment, we require our product suppliers in our direct supply chain to follow strict ethical labor standards as outlined in our Supplier Code of Conduct. In 2021, we created our Express Together mission and published specific goals in the areas of (i) Diversity, Equity and Inclusion; (ii) Giving & Mentoring; and (iii) Conscious Sourcing & Product. We made meaningful progress against these goals in 2022 and we continue to share our progress on our website at https://www.express.com/exp/expresstogether. The information accessible through our website is not incorporated by reference into and is not a part of this proxy statement.

u COMMUNICATIONS WITH THE BOARD

Shareholders and other interested parties may contact an individual director, including the independent Chairman, the Board as a group, or a specified Board committee or group, including the independent directors as a group, at the following address: Office of the Corporate Secretary, Express, Inc., 1 Express Drive, Columbus, OH 43230 Attn: Board of Directors. Any correspondence should clearly indicate whether the correspondence is intended for an individual director, the Board as a group, or a specified committee or group of directors.

All such reports or correspondence will be forwarded to the appropriate director or group of directors as indicated on the correspondence unless the correspondence is of a trivial nature, irrelevant to the Board’s responsibilities, or already addressed by the Board. A report will be made to the Audit Committee of all communications to the Board, and all such correspondence is made available to all directors.

u BOARD MEETINGS

The Board held a total of fourteen meetings during 2022. Each director attended at least 75% of the meetings of the Board and of the committees on which he or she served during 2022. Directors are expected to attend our annual meetings of shareholders. All then-serving directors attended our 2022 annual meeting of shareholders, which was held virtually via a live webcast, except Mr. Lucio, who was unable to attend due to a prior commitment he made before joining the Board in December 2021.

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The independent directors are given an opportunity to meet in executive session at each Board meeting and do so routinely.

u CORPORATE GOVERNANCE PRINCIPLES

The Board has adopted policies and procedures to ensure effective governance of Express. Our Corporate Governance Guidelines may be viewed on the “Corporate Governance” page in the Investor Relations section of our website at www.express.com/investor. We will also provide the Corporate Governance Guidelines in print without charge upon request by telephone at (888) 423-2421, via email to IR@express.com, or via mail delivered to Express, Inc., 1 Express Drive, Columbus, OH 43230, Attention: Investor Relations.

The Compensation and Governance Committee reviews our Corporate Governance Guidelines from time to time as necessary, but no less than annually, and may propose modifications to the principles and other key governance practices from time to time for adoption by the Board. The Board most recently updated our Corporate Governance Guidelines in June 2022.

u DIRECTOR ELECTION STANDARDS

Our Bylaws and Corporate Governance Guidelines provide for a majority voting standard in uncontested director elections. Therefore, in uncontested director elections, a director nominee must receive more votes cast for than against their election to be elected to the Board. The Board expects a director to tender their resignation if they fail to receive the required number of votes for election or re-election.

The Company has a classified Board, with each class of directors serving three-year terms. Our certificate of incorporation provides that, subject to any rights applicable to any then-outstanding preferred stock, the Board shall consist of such number of directors as is determined from time to time by resolution adopted by a majority of the total number of authorized directors, whether or not there are any vacancies in previously authorized directorships. Subject to any rights applicable to any then-outstanding preferred stock, any vacancies resulting from an increase in the size of the Board or otherwise must be filled by the directors then in office unless otherwise required by law or by a resolution passed by the Board. The term of office for each director will be until their successor is elected at an annual meeting of shareholders or their death, resignation, or removal, whichever is earliest to occur. Any additional directorships resulting from an increase in the size of the Board will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the total number of directors.

u BOARD EVALUATIONS

The Board conducts a comprehensive annual self-evaluation to determine whether it and its committees are functioning effectively and to identify potential areas of improvement. The evaluation process generally includes written questionnaires and one-on-one interviews with each director. The Chairman shares a summary of the results with the full Board and action plans are created to address identified improvement opportunities.

u OUTSIDE BOARD MEMBERSHIPS

Our Corporate Governance Guidelines provide that directors should not serve on more than four public company boards in addition to the Company’s Board; provided, however, that directors who are executive officers of public companies should not serve on more than two total public company boards in addition to the Company’s Board. Directors are expected to advise the Chairman in advance of accepting an invitation to serve on another public company board or for-profit private company board and before accepting an assignment to any other public company’s audit or compensation committee. No director may serve as a director, officer, or employee of a competitor of ours.

u CODE OF CONDUCT

Our Code of Conduct serves as the foundation for our compliance program and sets forth the ethical standards, legal requirements, and other policies we expect our directors, officers, and associates to comply with at all times. Shareholders may access a copy of our Code of Conduct on the “Corporate Governance” page in the Investor Relations section of our website at www.express.com/investor. We will also provide the Code of Conduct in print without charge upon request by telephone at (888) 423-2421, via email to IR@express.com or via mail delivered to Express, Inc., 1 Express Drive, Columbus, OH 43230, Attention: Office of the Corporate Secretary.

    CORPORATE GOVERNANCE    

We will promptly disclose any waivers of our Code of Conduct involving our directors or executive officers. We intend to satisfy any disclosure requirements regarding any amendment or waiver of our Code of Conduct by posting the information on the “Corporate Governance” page of our website which can be found at www.express.com/investor.

u RELATED PERSON TRANSACTIONS

Under our current Related Person Transaction policy, a “Related Person Transaction” is any transaction, arrangement, or relationship between us or any of our subsidiaries and a Related Person where the amount involved exceeds $120,000 and the Related Person has or will have a direct or indirect material interest. A “Related Person” is any of our executive officers, directors, director nominees, any shareholder beneficially owning in excess of 5% of our stock or securities exchangeable for our stock, any immediate family member of any of the foregoing persons, and any firm, corporation, or other entity in which any of the foregoing persons is an executive officer, a partner or principal, or in a similar position, or in which such person has a 5% or greater beneficial ownership interest in such entity.

All Related Person Transactions must be approved or ratified by a majority of the disinterested directors on the Board or a designated committee thereof consisting solely of disinterested directors in accordance with our Related Person Transaction Policy. In approving any Related Person Transaction, the Board or the committee must determine that the transaction is on terms no less favorable in the aggregate than those generally available to an unaffiliated third-party under similar circumstances.

Since January 31, 2022, other than as described below, there has not been, and there is not currently proposed, any transaction or series of transactions to which we were or will be a participant in which the amount involved exceeded or will exceed $120,000 and in which any Related Person had or will have a direct or indirect material interest.

WHP Partnership

On January 25, 2023, we closed the strategic partnership transaction with WHP. Pursuant to the transaction, WHP acquired 5.4 million newly issued shares of our common stock at a purchase price of $4.60 per share, or $25 million in the aggregate, representing approximately 7.4% of our outstanding shares of common stock, on a pro forma basis, as of the closing of the transaction. We also formed the IP JV, valued at approximately $400 million, with WHP committing $235 million to the IP JV for 60% ownership of the IP JV and the Company contributing certain intellectual property in exchange for 40% ownership of the IP JV. Pursuant to the terms of the Investment Agreement (as defined and described below), upon the closing of the stock purchase, Yehuda Shmidman, Chairman and Chief Executive Officer of WHP, was appointed to the Board as a Class II director.

On April 13, 2023, the Company and WHP Investments, LLC, an affiliate of WHP (“WHP Investments”) (including their respective subsidiaries) agreed to purchase the Bonobos business (“Bonobos”) from Walmart Inc. (the “Bonobos Transaction”). Under the terms of the Bonobos Transaction, which was arranged as part of the Company’s previously-announced strategic partnership with WHP, (i) WHP Investments has agreed to purchase intellectual property related to the Bonobos brand for a purchase price of $50.0 million and (ii) the Company has agreed to purchase Bonobos’ operating assets and assume the related certain liabilities of the Bonobos business for a purchase price of $25.0 million, subject to a customary purchase price adjustment for net working capital. The completion of the Bonobos Transaction is subject to customary closing conditions. At the closing of the Bonobos Transaction, the Company will enter into the Bonobos License Agreement with WHP as described below.

A description of the agreements we entered into in connection with the WHP partnership transaction are set out below. Except for the Bonobos License Agreement, each of these agreements were filed as exhibits to our Annual Report.

Investment Agreement

On December 8, 2022, the Company entered into an investment agreement (the “Investment Agreement”) with WH Borrower, LLC, an affiliate of WHP (“WH Borrower”), pursuant to which the Company issued and sold 5.4 million shares of common stock to WH Borrower (the “Purchased Shares”) in a private placement for a purchase price of $4.60 per share, or an aggregate purchase price of approximately $25.0 million (the “Stock Purchase”).

WHP Director

Pursuant to the Investment Agreement, until the occurrence of the Fall-Away of Investor Board Rights (as defined in the Investment Agreement), in the event of the death, disability, resignation or removal of Mr. Yehuda Shmidman (the “Investor Director”) as a member of the Board, WH Borrower may designate a replacement designee reasonably acceptable to the Board (and the

    CORPORATE GOVERNANCE    

Compensation and Governance Committee of the Board). Until the occurrence of the Fall-Away of Investor Board Rights, at any annual meeting of the Company’s stockholders at which the term of the Investor Director (or any subsequent replacement of the Investor Director) shall expire, WH Borrower has the right to designate one director, which director shall be nominated by the Board for election at such annual meeting. Upon the occurrence of the Fall-Away of Investor Board Rights, the Investor Director is required to immediately resign from the Board.

Restrictions on Transfer

Subject to certain exceptions set forth in the Investment Agreement, neither WH Borrower nor any of its affiliates may transfer any of the Purchased Shares to any unaffiliated person until July 1, 2026, subject to certain exceptions set forth in the Investment Agreement. WH Borrower and its affiliates are also restricted from transferring Purchased Shares to a Prohibited Transferee (as defined in the Investment Agreement) or from tendering any shares into any tender offer not approved by the Board.

Standstill

Except as otherwise expressly permitted in the Investment Agreement and subject to certain exceptions, WH Borrower agreed that until the later of (a) the Fall-Away of Investor Board Rights and (b) the 12-month anniversary of the closing of the Stock Purchase, without the prior written approval of the Board, WH Borrower is subject to certain customary standstill restrictions, including prohibitions on (i) acquiring or proposing to acquire securities or assets of the Company or its subsidiaries, (ii) participating in any solicitation of proxies or seeking to advise or influence any person with respect to voting of Company securities, (iii) demanding a copy of the Company’s stock ledger list of stockholders, (iv) effecting a tender offer, merger or acquisition of the Company, (v) seeking to control or influence the Company, (vi) initiating or joining certain actions against the Company, (vii) increasing its beneficial ownership to more than 15%, (viii) taking any action that would require a public announcement regarding the possibility of a transaction or certain events and (ix) joining or participating in a “group” (as defined in Sections 13(d)(3) and 13(g)(3) of the Exchange Act) with any third party.

Registration Rights Agreement

At the closing of the transaction, in connection with the Investment Agreement, the Company and WH Borrower entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which, among other things, the Company granted WH Borrower certain registration rights. Under the Registration Rights Agreement, the Company is required to register the resale of the Purchased Shares by July 1, 2026.

Membership Interest Purchase Agreement

On December 8, 2022, the Company entered into a membership interest purchase agreement (the “Membership Interest Purchase Agreement”), by and among the Company, WH Borrower and Express LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“Seller”). Pursuant to the Membership Interest Purchase Agreement, (a) Seller and wholly owned subsidiary of Seller (“Contribution Co”) entered into a contribution agreement (the “Contribution Agreement”) with the IP JV, pursuant to which Seller contributed certain of its intellectual property assets to the IP JV in exchange for 100% of the limited liability company interests of the IP JV, after which Seller assigned a 1% limited liability company interest to Contribution Co and (b) following the closing of the transactions contemplated by the Contribution Agreement, WH Borrower purchased from Seller a 60% ownership interest in the IP JV.

IP JV Operating Agreement

On January 25, 2023, in connection with the Membership Interest Purchase Agreement, Seller, Contribution Co and an affiliate of WH Borrower entered into an amended and restated limited liability company agreement governing the operations of the IP JV (the “Operating Agreement”). Cash earnings of the IP JV will be distributed quarterly to the Company (through Seller and Contribution Co) and WH Borrower on a pro rata basis. Under the Operating Agreement, the IP JV is required to be managed by a board of managers controlled by WH Borrower, subject to the Company’s right to approve certain actions by the IP JV. The Operating Agreement precludes the Company from entering into any partnership or other similar agreement or any sale, merger or other divestiture with certain Restricted Parties (as defined in the Operating Agreement). Pursuant to the Operating Agreement, each of WH Borrower and the Company agreed to provide the other with a right of first offer with respect to any Retail Opportunity (as defined in the Operating Agreement).

    CORPORATE GOVERNANCE    

Intellectual Property License Agreement

On January 25, 2023, the Company and the IP JV entered into an Intellectual Property License Agreement (the “License Agreement”). The License Agreement provides the Company with an exclusive license in the United States to the intellectual property contributed in connection with the Membership Interest Purchase Agreement and certain other intellectual property. The initial term of the License Agreement is 10 years, and the License Agreement automatically renews for successive renewal terms of 10 years (unless the Company provides notice of non-renewal at least 24 months prior to the end of the initial or applicable renewal term). Except for the Company’s right not to renew the License Agreement, the License Agreement is not terminable by either party. The Company agreed to pay the IP JV a royalty on net sales of certain licensed goods and committed to an annual guaranteed minimum annual royalty during the term of the License Agreement (i.e., $60 million in the first contract year, increasing by $1 million per year for the next five contract years, and remaining at $65 million following the sixth contract year). The Company will pay actual royalties at a rate of (i) 3.25% of net sales arising from retail sales of certain licensed goods in the first through the fifth contract years (and 3.5% thereafter), and (ii) 8% of net sales arising from wholesale sales of such goods.

Bonobos License Agreement

On April 13, 2023, in connection with the Bonobos Transaction, the Company and WHP Investments, have agreed to, at the closing of the Bonobos Transaction, enter into a license agreement (the “Bonobos License Agreement”) that will provide the Company with an exclusive license in the United States to intellectual property related to the Bonobos brand, including intellectual property rights for the Bonobos brand that will be acquired by WHP Investments in connection with the Bonobos Transaction. The Bonobos License Agreement has an initial term of ten (10) years from the effective date, and will automatically renew for successive renewal terms of ten (10) years unless (i) the Company provides notice of non-renewal at least 24 months prior to the end of the initial or applicable renewal term, or (ii) WHP Investments exercises its right to not renew in the event of certain failures by the Company to pay the annual guaranteed minimum royalty. Except for such non-renewal rights, the Bonobos License Agreement will not be terminable by either party. The Company will pay WHP Investments a royalty on net sales of certain licensed goods and will commit to an annual guaranteed minimum royalty during the term of the Bonobos License Agreement (ranging from $6.5 million in the first contract year to $11.5 million in the tenth contract year and each contract year thereafter). The Company will pay royalties at a rate of (i) 3.25% of net sales arising from retail sales of certain licensed goods in the first through the fifth contract years (and 3.5% thereafter), and (ii) 8% of net sales arising from wholesale sales of such goods.

Conflict of Interest and Confidentiality Policy

In February 2023, following the closing of the WHP partnership transaction, the Board adopted a Conflict of Interest and Confidentiality Policy. This policy is intended to, among other things, assist the Board in managing any actual or potential conflict of interest that involves a member of the Board who has a significant relationship or affiliation with another entity or person that may have interests that conflict with those of the Company.

Non-employee directors also receive equity grants on an annual basis. In 2022, non-employee directors were granted restricted stock units that had a fair value of approximately $130,000 on the date of grant and that vest on June 15, 2023, subject to continued service. The Company’s non-employee Chairman was entitled to an additional grant of restricted stock units that had a fair value of approximately $40,000 on the date of grant and that vest on June 15, 2023 subject to continued service. All directors receive reimbursement for reasonable out-of-pocket expenses incurred in connection with their Board service.

The annual cash retainer amount for non-employee directors and the annual equity grant for non-employee directors were each increased by $5,000 in July 2022 based on market conditions and as recommended by the Committee’s independent compensation consultant.

Reasonable Individual Compensation Limitations for Non-Employee Directors

Under the Second Amended and Restated Express, Inc. 2018 Incentive Compensation Plan (the “Plan”), the aggregate value of all compensation paid or granted to any individual for service as a non-employee director during any calendar year, including awards granted under the 2018 Plan and cash fees paid by us, will not exceed $600,000, calculating the value of any awards granted during such calendar year based on the grant date fair value of such awards for financial reporting purposes, other than with respect to any special compensation paid to any non-employee director for their service as Chairman of the Board.

u DIRECTOR STOCK OWNERSHIP GUIDELINES

The Board has director stock ownership guidelines which call for non-employee directors to own an amount of our common stock equal to five times their annual cash retainer. Directors have five years to meet the guidelines. Under these guidelines, directors are generally not permitted to sell any shares of our common stock until they achieve the ownership guideline and thereafter are only permitted to sell shares to the extent that such sale would not cause the director to fall below the ownership guideline. To avoid fluctuating ownership requirements, once a director has achieved the applicable stock ownership guideline, he or she is considered to have satisfied the guideline, provided that the shares used to meet the underlying requirement are retained. As of the end of fiscal 2022, all non-employee directors have met or are on track to meet the stock ownership guidelines.

        CORPORATE GOVERNANCE    

u 2022 DIRECTOR COMPENSATION TABLE

The following table sets forth information regarding compensation earned for each of our non-employee directors in fiscal 2022.

Our executive officers are appointed by the Board and serve until their successors have been duly elected and qualified or their earlier resignation or removal. There are no family relationships among any of our directors or executive officers.

Set forth below is a description of the background of the persons named above, other than Mr. Baxter, whose background information is provided in “Election of Class I Directors (Proposal No. 1)” on page 9.

Matthew Moellering has served as our President and Chief Operating Officer since September 2019, and served as our Interim Chief Financial Officer from October 2021 to April 2022. He also served as Interim President and Interim Chief Executive Officer from January 2019 to June 2019. Prior to his current role, he was Executive Vice President and Chief Operating Officer from 2011 to 2019; Executive Vice President, Chief Administrative Officer, Chief Financial Officer, Treasurer and Secretary from 2009 until 2011, Senior Vice President, Chief Financial Officer, Treasurer and Secretary from 2007 until 2009, and Vice President of Finance from 2006 until 2007. Before joining Express, he served in various roles with Limited Brands, Inc. (later known as L Brands, Inc.) from 2003 until 2006, including Vice President of Financial Planning. Mr. Moellering also served in various roles with Procter and Gamble where he was employed from 1995 until 2003 and prior to that he served as an officer in the United States Army. Mr. Moellering serves on the board of directors of L.L. Bean, Inc., which is a privately held company.

Malissa Akay has served as our Executive Vice President and Chief Merchandising Officer since September 2019. Ms. Akay joined Express from Lane Bryant (part of Ascena Retail Group, Inc.), where she most recently served as Executive Vice President and General Merchandise Manager from 2018 to 2019 and as Senior Vice President and General Merchandise Manager from 2016 to 2017. Prior to that, Ms. Akay served in various roles with Ralph Lauren from 2012 until 2016 including Chief Merchandising Officer, Polo Accessories, and Senior Vice President, Merchandising, Planning and Allocation and Visual Merchandising. Previously, Ms. Akay spent 13 years with DFS Group where she held merchandising leadership positions across multiple categories.

Sara Tervo has served as our Executive Vice President and Chief Marketing Officer since September 2019. Ms. Tervo joined Express from Justice (part of Ascena Retail Group, Inc.), where she was Executive Vice President and Chief Marketing Officer from 2016 to 2019. Prior to that Ms. Tervo held multiple leadership positions with Limited Brands, Inc. (later known as L Brands, Inc.) from 1998 to 2016 across marketing, creative services and public relations, including Executive Vice President, Marketing for Victoria’s Secret and Senior Vice President, Marketing for PINK.

Jason Judd has served as our Senior Vice President, Chief Financial Officer and Treasurer since April 2022. Mr. Judd joined Express from Big Lots, Inc., where he served as Senior Vice President, Corporate Finance & Treasurer since October 2019. Before joining Big Lots, Inc., Mr. Judd served as Chief Financial Officer and Senior Vice President from February 2016 to October 2019, and as Chief Financial Officer and Vice President from July 2015 to February 2016, of Justice (part of Ascena Retail Group, Inc.). Prior to that, Mr. Judd served as Associate Vice President of Finance of Victoria’s Secret Stores from June 2011 to May 2015. Mr. Judd has been a member of the Park National Bank board of directors and the Park National Corporation board of directors since January 2019.

COMPENSATION DISCUSSION AND ANALYSIS

2022 Named Executive Officers

This Compensation Discussion and Analysis focuses on the compensation of our named executive officers (our “NEOs”) for 2022, who are listed below:

u Executive Summary

This year, the Compensation and Governance Committee (the “Committee”) set challenging performance targets that required significant year-over-year growth and incorporated a performance metric to align compensation more closely with shareholder returns. These changes continued to promote alignment of our executive compensation program with the Company’s efforts to successfully execute the EXPRESSway Forward strategy to drive value for our shareholders. We believe our fiscal 2022 compensation program reinforces our pay for performance philosophy and continues to motivate, retain, and attract high-caliber executives.

In March 2022, the Committee determined to add a total shareholder return (TSR) modifier to the long-term performance targets based on EBITDA, subject to adjustments for extraordinary items (“Adjusted EBITDA”). Using an Adjusted EBITDA target focuses on the operational aspect of the business from a cash generation standpoint and the TSR modifier ties the long-term incentive awards more closely to shareholder returns. The Committee established rigorous three-year 2022-2024 EBITDA goals during a challenging macroeconomic environment, with consumer spending significantly impacted by high inflation. The three-year performance period requires that our management execute on our long-term business plan to achieve these goals over a longer period of time. The Adjusted EBITDA metric was also used for the same purpose in 2021 and 2020, promoting consistency year-over-year. Based on this year’s performance, Adjusted EBITDA performance must significantly improve over the next two years for there to be any payout of the performance-based long-term incentives granted to our NEOs in 2022 (which are subject to a three-year performance period through 2024).

With respect to our seasonal short-term incentive compensation program, the Committee once again determined to use Adjusted EBITDA as the financial performance metric for Spring and Fall 2022. Goals were set at competitive levels compared to the prior year and accordingly, a payout of 42% was made to our NEOs under the program for the Spring 2022 season and no payout was made for the Fall 2022 season.

We believe that we are well positioned in 2023 to continue to advance the Company’s EXPRESSway Forward strategy and have a high performing executive leadership team in place to drive our transformation across each one of our four strategic pillars (Product, Brand, Customer, Execution). Through the WHP strategic partnership, we also expect to further invest in our omnichannel platform and drive long-term growth through non-core domestic category licensing and international expansion opportunities.

For more information about compensation program decisions made in 2022 by the Committee, please refer to “2022 Compensation Highlights” on page 32.

    EXECUTIVE COMPENSATION    

2022 Business Performance

In December 2022, we entered into a partnership with WHP, a leading global brand management firm. The mutually transformative strategic partnership advances the Company’s omnichannel platform which is expected to drive accelerated, long-term growth through the acquisition and operation of a portfolio of brands. In connection with the closing of this transaction in January 2023, the Company and WHP formed the IP JV, intended to scale the Express brand through new domestic category licensing and international expansion opportunities.

Key Financial Results

Consolidated comparable sales were flat for 2022, with negative comparable sales in the second half of the year offsetting gains during the first half of the year.

Net income was $293.8 million, or $4.25 per diluted share, which included the after tax impact of the $409.5 million gain on the transaction with WHP, compared to a net loss of $14.4 million, or $0.22 per diluted share, in 2021. On an adjusted basis¹, net loss was $82.4 million, or $1.21 per diluted share in 2022. EBITDA¹ was $402.7 million, which included the $409.5 million gain on the transaction with WHP, compared to EBITDA of $64.7 million in 2021. Adjusted EBITDA¹ was $6.8 million.

As part of the transaction with WHP, the Company received proceeds of $260 million which strengthened our balance sheet and enabled us to repay our term loan and a portion of our revolving credit facility.

    EXECUTIVE COMPENSATION    

2022 Compensation Highlights

Our executive compensation program for 2022 was designed to align executive compensation with the Company’s performance and shareholder interests. In 2022:

    EXECUTIVE COMPENSATION    

2022 CEO Target Total Direct Compensation (“TDC”) Versus Summary Compensation Table TDC⁽¹⁾

The table below compares our CEO’s annual target total direct compensation package and the CEO’s compensation reported in the Summary Compensation Table on page 49 and explains differences between his target total direct compensation and compensation reported in the Summary Compensation Table.

    EXECUTIVE COMPENSATION    

Executive Compensation Objectives and Practices

Below we highlight the core objectives that serve as the foundation for our compensation program, the practices we have implemented to achieve those objectives, and practices we have not implemented because we do not believe they would serve the Company’s long-term interests.

    EXECUTIVE COMPENSATION    

u WHAT WE PAY AND WHY: ELEMENTS OF COMPENSATION

Our executive compensation program is designed to strongly align executive compensation with the Company’s financial performance and drive shareholder value. The elements of our compensation program for 2022 were as follows:

    EXECUTIVE COMPENSATION    

The Committee strives to achieve an appropriate mix between the various elements of our compensation program to meet our compensation objectives; however, it does not apply any rigid allocation formula in setting our executive compensation, and the Committee may make adjustments to this approach for various positions on a case-by-case basis as appropriate. A significant portion of executive compensation is variable and tied to the Company’s financial performance and stock price. The following charts show that in 2022, 55% of CEO compensation and 47% of other NEO compensation at target was variable.

Base Salary

We provide a base salary to our executive officers to compensate them for their services during the year and to provide them with a stable source of income. NEO base salaries are determined by an annual assessment of a number of factors, including the individual’s current base salary, job responsibilities, peer group and other data, relevant market survey data, and individual and Company performance.

The annual base salaries in effect for each of our NEOs as of January 28, 2023 are shown in the following table:

    EXECUTIVE COMPENSATION    

Performance-Based Incentives

Short-Term Incentives

Our short-term performance-based cash incentive compensation program provides our NEOs with incentive payment opportunities for each six-month operating season that corresponds to the traditional retail selling seasons of Spring (February through July) and Fall (August through January). The target short-term performance-based cash incentive compensation opportunity for each eligible executive is set at a percentage of base salary. 40% of each executive’s annual target bonus is allocated to the six-month Spring season and 60% is allocated to the six-month Fall season, which is intended to align with the seasonality in our business where higher portions of our net sales and net income are typically realized in the six-month Fall season due primarily to the impact of the holidays.

The Committee generally sets performance goals near the beginning of each six-month season based on an analysis of (i) historical performance, (ii) internal financial plans, (iii) strategic objectives, and (iv) general economic conditions. The seasonal design allows us to establish appropriately challenging performance targets that align business performance expectations with (1) the seasonal nature of our business and (2) prevailing market and economic conditions which can change quickly in the retail apparel sector.

Generally, performance goals are set at the same targets for most leadership in the business. We believe it is important to have all members of leadership working towards the same goals and that those goals are clear, understandable, and within their control.

2022 Short-Term Cash Incentive Payout Opportunity

For 2022, the amount of the performance-based cash incentive opportunity for participating executives (which include our NEOs) ranged from zero to 200% of their incentive target, based upon the extent to which the performance goals were achieved. The threshold, target, and maximum short-term performance-based cash incentive payout opportunities for our NEOs for 2022 are set forth in the “Grants of Plan-Based Awards” table on page 51.

The target cash incentive compensation opportunity as a percentage of base salary in effect for 2022 for each of our NEOs is shown below:

Final payout amounts for each six-month season have historically been approved by the Committee at its first regularly scheduled in-person Committee meeting following the end of each six-month operating season and are paid to executives after Committee approval.

2022 Short-Term Cash Incentive Compensation Goals and Payouts

For 2022, the Committee determined to continue to use Adjusted EBITDA as the financial performance metric for the Company’s short-term performance-based cash incentive compensation program to maintain focus of the executive leadership team on achieving the singular goal of meeting the Company’s operating plan for 2022. The Committee set challenging goals in light of the Company’s performance and expectations. Maximum payout under the short-term incentive plan remained capped at 200% of target. The Committee selected Adjusted EBITDA because cash flow is a key driver of the Company’s transformation and future success. In addition, Adjusted EBITDA helps to focus management’s attention on the operational aspect of the business from a cash generation standpoint.

2023 Modifications to Short-Term Incentive Opportunities

Responding to feedback from the Committee and our stockholders, the Committee is focused on aligning the incentive compensation plans of the Company even better with Company performance in 2023 and beyond. In furtherance of this goal, in March 2023, the Committee determined to use operating income as the financial metric and to change to an annual plan structure for short-term incentives. Challenging annual financial goals will be set by the Committee rather than 6-month seasonal goals that are weighted for seasonality. The Committee also determined to incorporate an individual performance metric so that 20% of the short-term incentive award will be dependent on personal performance measured against annual individual goals. The individual performance metric will only pay out if the threshold annual operating income goal is achieved.

Long-Term Incentives

For 2022, the Committee and Board determined that our NEOs would receive a mix of long-term incentives comprised of the following:

Fiscal 2022

Long-Term Incentive Awards

We grant long-term awards to our NEOs to: (1) create a direct correlation between the Company’s financial performance and stock price and compensation paid to our NEOs; (2) retain our NEOs; (3) assist in building equity ownership of our NEOs to increase alignment with long-term shareholder interests; (4) attract and motivate key associates; (5) reward our NEOs for performance in relation to the creation of shareholder value; and (6) deliver competitive levels of compensation consistent with our compensation objectives. The total grant date fair value of awards for our NEOs are determined on a position-by-position basis using market data for corresponding positions in our peer group and other relevant market survey data, the individual’s job responsibilities, and individual performance.

Executives are generally granted long-term incentive awards as part of our annual merit review process. During this process, the Committee determines the appropriate overall value and mix of long-term incentive grants for our NEOs. For more information on our executive compensation practices, including the annual merit review process and the objectives and factors considered by the Committee as part of the executive compensation decision making process, see “—Executive Compensation Practices—“Determining Compensation for the CEO” and “Determining Compensation for the Other NEOs” beginning on page 44.

    EXECUTIVE COMPENSATION    

In 2022, our NEOs were granted the following target long-term incentive grants:

2022 Time-Based Cash Awards

In a continued effort to conserve shares under our equity incentive plan while still promoting the stability and retention of a high-performing executive leadership team over the long-term, the Company granted our NEOs time-based cash awards in the amounts set forth above in 2022 and these grants represent 50% of the total long-term incentive awards granted in 2022. One-third of the time-based cash awards are scheduled to vest on each of April 15, 2023, 2024, and 2025, subject to continued employment with the Company. These awards are not reported in the Summary Compensation Table until earned.

The performance awards have performance goals based on Adjusted EBITDA measured over a three-year performance period commencing on the first day of the Company’s 2022 fiscal year and ending on the last day of the Company’s 2024 fiscal year. Using an Adjusted EBITDA target focuses on the operational aspect of the business from a cash generation standpoint and the TSR modifier ties the long-term incentive awards more closely to shareholder returns. The Committee established rigorous three-year 2022-2024 Adjusted EBITDA goals during a challenging macroeconomic environment, with consumer spending significantly impacted by high inflation. The three-year performance period requires that our management execute on our long-term business plan to achieve these goals over a longer period of time. The Adjusted EBITDA metric was also used for the same purpose in 2021 and 2020, promoting consistency year-over-year. The Committee also expects to continue to set challenging Adjusted EBITDA and relative TSR metrics for these awards in 2023.

Recognizing that a key driver of the Company’s continued long-term success is tied to total shareholder return, in March 2022 the Committee determined to increase the alignment between the long-term performance-based awards and shareholder value creation by re-introducing a three-year relative total shareholder return (TSR) modifier to the 2022-2024 long-term performance-based awards measured as of the grant date of the 2022 performance-based restricted stock units. The Company’s TSR based on a 20-day trading averaging period will be ranked by percentile amongst the other companies in the Dow Jones U.S. Retail Apparel Index (“Index”) to determine whether a modifier will apply. No modifications will be made if Company TSR falls between the 25th and 75th percentile of the Index. Payouts are decreased by 20% if Company TSR is below the 25th percentile of the Index and payouts are increased by 20% if Company TSR exceeds the 75th percentile of the Index, except that payouts are capped at 200% of the target.

The following chart identifies the performance metric, performance levels, the performance levels as a percentage of the target goal, and corresponding payouts as a percentage of the target performance-based award grant for the Company’s performance-based restricted stock units granted in 2022.

The Committee set the three-year Adjusted EBITDA target at $352 million. Full year 2022 Adjusted EBITDA was negative $5 million. Accordingly, performance must significantly improve for these awards to payout.

2020 Performance-Based Awards Earned in 2022

In March 2020, the Company granted our NEOs at that time performance-based awards comprised of performance-based cash.

The 2020 performance awards had performance goals based on Adjusted EBITDA measured over a two-year performance period commencing on the first day of the Company’s 2021 fiscal year and ending on the last day of the Company’s 2022 fiscal year. The performance period was reduced from 3 years to 2 years because of the delayed setting of performance targets due to the significant disruption caused by the COVID-19 pandemic on the Company’s business operations in 2020. At the time the targets were set in February 2021, the Committee had limited information about how the COVID-19 pandemic would continue to affect the Company and believed the targets were challenging and achievable. The Committee set the two-year Adjusted EBITDA target at $54 million. This compared to an Adjusted EBITDA loss of $348 million in 2020.

The following table illustrates the financial performance goals and actual performance and payout level for the Company’s performance-based cash awards granted in 2020 and paid in 2022.

These awards paid out at 134% of target and are reflected below and in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table for 2022.

Non-GAAP Performance Metrics

“Adjusted EBITDA” means the Company’s earnings before interest, taxes, depreciation, and amortization calculated in accordance with GAAP and excluding the impact of non-core operating items. The Company provides supplemental non-GAAP financial information to exclude non-core operating items that may not be indicative of, or are unrelated to, our underlying operating results and that we believe provides a better baseline for analyzing trends.

Special Cash Retention Awards

On January 19, 2023, the Company awarded Jason Judd, Senior Vice President, Chief Financial Officer and Treasurer, a special cash retention bonus of $250,000. The award recognized the importance of Mr. Judd’s continued leadership as a member of the management team, including with respect to the completion of the Company’s partnership with WHP. The award requires that Mr. Judd remain employed with the Company through January 24, 2025. If Mr. Judd voluntarily terminates employment with the Company: (i) on or prior to January 26, 2024, he will forfeit the entire Award; or (ii) between January 25, 2024 and January 24, 2025, he will forfeit half of the Award.

    EXECUTIVE COMPENSATION    

Additional Executive Benefits

We provide our executive officers with benefits that the Committee believes are reasonable and in the best interests of the Company and its shareholders. Consistent with our compensation objectives, we provide benefits for our executive officers, including retirement plans, life insurance benefits, housing relocation benefits, and paid time off. The Committee, in its discretion, may revise, amend, or add to an officer’s executive benefits if it deems it advisable. We believe these benefits are generally equivalent to benefits provided by comparable companies.

We have no current plans to materially change the levels of benefits we provide.

Retirement Plan Benefits

We do not sponsor a defined benefit retirement plan as we do not believe that such a plan best serves the needs of our associates or the Company at this time. We do sponsor a tax-qualified defined contribution retirement plan. Participation in the qualified plan is available to associates who meet certain age and service requirements and our executive officers participate in the qualified plan based on these requirements.

Qualified Retirement Plan

Our qualified retirement plan is available to all eligible associates, including executive officers, and allows them to elect contributions up to the maximum limits allowable under Section 401(k) of the Code. We match 100% of associate deferrals, up to 4% of compensation not in excess of the IRS maximum compensation limit. Associates’ contributions and Company matching contributions vest immediately. Please refer to footnote 5 to the Summary Compensation Table on page 50 for details of Company contributions.

Perquisites and Use of Corporate Aircraft

The Company has purchased fractional ownership interests in aircraft for business travel. As a general matter, our executives are not permitted to use Company aircraft for a non-business purpose. Notwithstanding the fact that a personal benefit or expense may be provided to an executive or incurred on his or her behalf for a business reason or for the convenience of the Company, SEC rules require a personal benefit or expense to be classified as a “perquisite” unless it is “integrally and directly related” to the performance of the executive’s duties or otherwise generally available on a non-discriminatory basis to all employees.

Following a comprehensive review by the Committee, we identified that certain use of the Company’s fractional ownership interests in aircraft and related personal security services by Mr. Baxter for certain business trips during 2022, 2021 and 2020 was not “integrally and directly related to” the performance of his duties. For 2022, in accordance with the Company’s new policy (as described below), Mr. Baxter reimbursed the Company for all incremental cost associated with his use of the Company’s fractional ownership interest in aircraft that were determined not to have been “integrally and directly related” to the performance of his duties, and therefore, the incremental cost associated with such use was not disclosable as a perquisite in accordance with SEC rules. For 2021 and 2020, we determined that the aggregate incremental cost of such use should have been classified as perquisites in accordance with SEC rules as such amounts were not reimbursed by Mr. Baxter. In addition, Mr. Baxter reimbursed the Company for $34,849 for 2021 and $48,310 for 2020 for incremental costs that were determined to be related to his personal use. Please refer to footnote 5 the Summary Compensation Table on page 50 for details regarding the types and amounts of these perquisites for 2021 and 2020.

As a result of this review, the Committee has instituted a policy providing that use of our corporate aircraft by our executive officers is not permitted unless it is “integrally and directly related” to the performance of their duties (or such use has been approved in accordance with our policy). In addition, we are strengthening our controls and procedures with respect to this new policy.

Health and Welfare Benefits

Executive Life Insurance

We provide all executive officers with executive life insurance that offers a benefit equal to two times their annual base salary up to a maximum of $2 million.

Executive Disability Insurance

We provide all executive officers with disability coverage that provides a benefit of 100% base salary continuation for up to 365 days and then 60% of the executive’s base salary plus the annual average of the last three years of cash incentive compensation, up to a maximum benefit of $25,000 per month.

    EXECUTIVE COMPENSATION    

Employment Agreements; Severance and Post-Employment Benefits

Mr. Baxter entered into an employment agreement with the Company in connection with his employment as our Chief Executive Officer, and entered into a new employment with the Company in June 2022. Mr. Moellering entered into an employment agreement with the Company prior to our IPO. Their employment agreements are described under “—Employment Related Agreements” beginning on page 54.

Ms. Akay, Ms. Tervo and Mr. Judd do not have employment agreements with the Company. Each have entered into a severance agreement with the Company, which are described under “—Other Severance Agreements” beginning on page 56.

    EXECUTIVE COMPENSATION    

u EXECUTIVE COMPENSATION PRACTICES

Determining Compensation for the CEO

The Committee works directly with an independent compensation consultant to obtain independent market data, analysis, and advice related to our CEO’s total compensation package. The Committee, together with the compensation consultant, present a recommended pay package for our CEO to the independent directors of the Board for further review, discussion, and approval. Mr. Baxter does not participate in any deliberations about his own compensation. The Committee takes multiple factors into consideration when determining the appropriate CEO compensation package, including the CEO’s existing compensation, the Company’s performance, the CEO’s individual performance and qualifications, peer group CEO pay levels, competitor and industry performance, our compensation objectives, and our business and succession plans.

Determining Compensation for the Other NEOs

Each year, the Committee approves a compensation package for each of our executive officers (excluding the CEO), that is consistent with our compensation objectives. As part of the review and approval process, at the Committee’s request, our CEO and Senior Vice President, Chief Human Resources Officer make recommendations for the upcoming year to the Committee regarding compensation for executive officers other than for the CEO. The recommendations are based on our compensation objectives, individual and Company performance, compensation data compiled from independent third-party executive compensation surveys, publicly available data from our peer group companies, and feedback and insights from management’s compensation consultant, all of which is summarized by management and shared with the Committee. Management engaged Meridian Compensation Partners, LLC (“Meridian”) to serve as its compensation consultant in 2022 in its assessment of compensation for executive officers other than the CEO and to make recommendations for 2022 compensation. Meridian does not provide separate services to management.

The Committee considers individual performance when determining (i) the annual pay increases for NEOs, (ii) the amount of the short-term cash incentive compensation opportunity for NEOs, and (iii) the amount of the long-term incentives awarded to NEOs.

Individual performance is evaluated based upon several individualized leadership factors, including: attaining specific financial and operational objectives; building and developing individual skills and a strong leadership team; execution of the Company’s business strategy; and individual performance relative to job requirements.

The Committee has an opportunity to review, analyze, and discuss the information and recommendations with its independent compensation consultant, and outside the presence of management. The Committee gives considerable weight to the CEO’s evaluation of the other NEOs when approving other NEO compensation because of the CEO’s direct knowledge of each executive officer’s performance and contributions.

The Role of Peer Companies and Benchmarking

How The Peer Group is Determined. The Committee selects our peer group companies based on such factors as business focus, competition for executive talent, geographic proximity of corporate locations, size of business, and publicly available compensation data. The size of the group has been established to provide sufficient market data across the range of senior positions at Express. The Committee annually evaluates whether companies should be added or removed from our peer group companies.

Our peer group for purposes of determining 2022 NEO compensation was comprised of the following retail companies:

How The Peer Group is Used. The Committee reviews both compensation and performance at peer companies to support its decision-making process so it can set total compensation levels that it believes are consistent with our compensation objectives to pay for performance and pay competitively. The Committee does not strictly set compensation at a given level relative to its peers (e.g., median). The pay positioning of individual executives varies based on their competencies, skills, experience, business impact, and performance, as well as internal alignment and pay relationships. Actual total compensation earned may be more or less than target compensation based on Company performance during the performance period.

Shareholder Engagement and Annual Advisory Vote on Executive Compensation

We offer our shareholders the opportunity to vote annually on the Company’s executive compensation program (say-on-pay). At our 2022 annual meeting of shareholders, shareholders demonstrated support for our 2021 executive compensation program with approximately 89% of the votes cast in support of the “say-on-pay” proposal. This level of support followed strong support received at each of our 2021 and 2020 annual meetings. Our shareholders’ views on corporate governance and executive compensation are important to us and we value and use the feedback and insights that we receive from shareholders. Shareholders may contact the Board or the Committee at any time throughout the year to provide feedback on our executive compensation. See Communications with the Board on page 22 for information about how to reach us.

The Role of the Committee’s Compensation Consultant

The Committee engaged Meridian Compensation Partners, LLC as its independent executive compensation consultant to advise the Committee about our executive compensation program and practices.

The Committee has determined that the work of Meridian did not raise any conflicts of interest in 2022. In making this assessment with respect to Meridian, the Committee considered the independence factors enumerated in Rule 10C-1(b) under the Exchange Act, including the fact that Meridian provided limited services in 2022 to Company management to assess the compensation for executive officers other than the CEO and assist management in making recommendations for 2022 compensation to the Committee and that Meridian is serving as compensation consultant to a company on whose compensation committee Ms. Mangum serves, the level of fees received from the Company as a percentage of Meridian’s total revenue, policies and procedures employed by Meridian to prevent conflicts of interest, and whether the individual Meridian advisers to the Committee own any of the Company’s stock or have any business or personal relationships with members of the Committee or our executive officers.

Analysis of Risk in Our Compensation Program

The Committee evaluates the risks of our compensation program as part of its responsibilities. The independent oversight provided by the Committee with respect to both executive compensation and other employee compensation programs helps to mitigate risks for the Company. The overall compensation program is intended to discourage excessive risk taking by executives and associates to obtain short-term benefits that may be harmful to the Company and our shareholders over the long term. We believe that the following elements of our compensation program discourage excessive risk taking:

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Compensation Clawback Policy

The Company’s policy concerning the recovery of incentive compensation applies to performance-based awards and long-term time-based equity awards paid to our NEOs, as well as to other executives.

Under the policy, if a covered associate engages in detrimental conduct that could result in significant reputational harm to the Company (unrelated to a financial restatement), the Committee may, in its discretion, recover all or part of the covered associate’s incentive compensation granted, awarded, earned, vested, paid, settled, or received during the three years immediately preceding the Committee’s determination that detrimental conduct occurred. The policy is effective for all incentive awards granted under the 2018 Plan.

This policy is in addition to any requirements which might be imposed pursuant to Section 304 under the Sarbanes-Oxley Act, and will be modified to the extent required by the Dodd-Frank Act of 2010. In October 2022, the SEC adopted final rules implementing the incentive-based compensation recovery provisions of the Dodd-Frank Act. The final rules direct the stock exchanges to establish listing standards requiring listed companies to develop and implement a policy providing for the recovery of erroneously awarded incentive-based compensation received by current or former executive officers and to satisfy related disclosure obligations. In February 2023, the NYSE submitted its proposed listing standards to the SEC. We intend to timely modify our clawback policy to reflect these new requirements.

The executives and Board members have five years to meet the guidelines. Under the guidelines, executives and directors are generally not permitted to sell any shares of our common stock until they achieve the ownership guideline and thereafter are only permitted to sell shares of our common stock to the extent that such sale would not cause the executive or director to fall below the ownership guideline. To avoid fluctuating ownership requirements, except upon a promotion, once an individual has achieved the ownership guideline, they will be considered to have satisfied the requirements as long as the shares used to meet the underlying requirements are retained. The Committee annually reviews individual executive and director stock ownership levels. During the Committee’s most recent review of ownership levels, it was confirmed that all NEOs and directors currently meet or are on track to meet the applicable ownership guideline.

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Policy Regarding Timing of Stock-Based Awards

The Committee recognizes the importance of adhering to specific practices and procedures in the granting of equity awards and has adopted a specific policy around this process.

The Committee generally grants equity awards to executive officers annually during the first quarter in a given fiscal year at the Board’s first regularly scheduled in-person meeting for the year. For directors, the Committee generally grants equity awards annually on the date of the Company’s annual meeting of shareholders. To the extent that equity awards are granted at other times throughout the year, including with respect to grants made to new executive hires, such grants are generally made on the 15th calendar day of a month.

Accounting and Tax Considerations

As amended by the Tax Cuts and Jobs Act (the “TCJA”), which was enacted December 22, 2017, Section 162(m) of the Code generally disallows a tax deduction to public companies for compensation paid in excess of $1 million to “covered employees” under Section 162(m) (generally, such company’s chief executive officer and its chief financial officer and its three other highest paid executive officers). As in prior years, the Committee will continue to take into account the tax and accounting implications (including the expected lack of deductibility under the revised Section 162(m)) when making compensation decisions, but reserves its right to make compensation decisions based on other factors as well if the Committee determines it is in the Company’s best interest to do so.

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