Share-Based Compensation
 12 Months Ended
Feb. 03, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Share-Based Compensation
Share-Based Compensation
The Company records the fair value of share-based payments to employees in the Consolidated Statements of Income and Comprehensive Income as compensation expense, net of forfeitures, over the requisite service period.
Share-Based Compensation Plans
In 2010, the Board approved, and the Company implemented, the Express, Inc. 2010 Incentive Compensation Plan (as amended, the "2010 Plan"). The 2010 Plan authorizes the Compensation Committee (the "Committee") of the Board and its designees to offer eligible employees and directors cash and stock-based incentives as deemed appropriate in order to attract, retain, and reward such individuals. Effective April 3, 2012, the Board amended the 2010 Plan to, among other things, reduce the number of shares available for issuance under the 2010 Plan. As of February 3, 2018, 15.2 million shares were authorized to be granted under the 2010 Plan and 5.2 million remained available for future issuance, assuming that outstanding restricted stock units with performance-based vesting conditions vest at target.
The following summarizes share-based compensation expense:
 
2017
 
2016
 
2015
 
(in thousands)
Stock options
$
1,958

 
$
2,464

 
$
3,399

Restricted stock units and restricted stock
12,050

 
10,394

 
15,039

Total share-based compensation
$
14,008

 
$
12,858

 
$
18,438


The stock compensation related income tax benefit recognized by the Company in 2017, 2016, and 2015 was $2.1 million, $6.2 million, and $4.7 million, respectively.
Stock Options
During 2017, the Company granted stock options under the 2010 Plan. Stock options granted in 2017 under the 2010 Plan vest 25% per year over four years or upon retirement if the holder has provided 10 years of service and is at least 55 years old at retirement. These options have a ten year contractual life. The expense for stock options is recognized using the straight-line attribution method.
The Company's activity with respect to stock options during 2017 was as follows:
 
Number of
Shares 
 
Grant Date
Weighted Average
Exercise Price
 
Weighted-Average Remaining Contractual Life
(in years)
 
Aggregate Intrinsic Value
 
(in thousands, except per share amounts and years)
Outstanding, January 28, 2017
2,329

 
$
18.18

 
 
 
 
Granted
512

 
$
9.33

 
 
 
 
Exercised
—

 
$
—

 
 
 
 
Forfeited or expired
(232
)
 
$
18.40

 
 
 
 
Outstanding, February 3, 2018
2,609

 
$
16.43

 
5.6
 
$
—

Expected to vest at February 3, 2018
772

 
$
12.96

 
8.5
 
$
—

Exercisable at February 3, 2018
1,801

 
$
18.02

 
4.3
 
$
—


The following provides additional information regarding the Company's stock options:
 
2017

2016

2015
 
(in thousands, except per share amounts)
Weighted average grant date fair value of options granted
$
4.35

 
$
9.32

 
$
7.79

Total intrinsic value of options exercised
$
—

 
$
547

 
$
176


As of February 3, 2018, there was approximately $2.4 million of total unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted-average period of approximately 1.7 years.
The Company uses the Black-Scholes-Merton option-pricing model to value stock options granted to employees and directors. The Company's determination of the fair value of stock options is affected by the Company's stock price as well as a number of subjective and complex assumptions. These assumptions include the risk-free interest rate, the Company's expected stock price volatility over the term of the awards, expected term of the award, and dividend yield. The following are the weighted-average assumptions used in the determination of the fair value of the Company's stock options:
 
2017
 
2016
 
2015
Risk-free interest rate (1)
2.27
%
 
1.62
%
 
1.60
%
Price Volatility (2)
45.58
%
 
43.23
%
 
47.81
%
Expected term (years) (3)
6.10

 
6.52

 
6.25

Dividend yield (4)
—

 
—

 
—


(1)
Represents the yield on U.S. Treasury securities with a term consistent with the expected term of the stock options.
(2)
Primarily based on the historical volatility of the Company's common stock over a period consistent with the expected term of the stock options.
(3)
Beginning in 2016, the Company calculated the expected term assumption using the midpoint scenario, which combines historical exercise data with hypothetical exercise data for outstanding options. The Company believes this data currently represents the best estimate of the expected term of new employee options. Prior to 2016, the Company utilized the simplified method to calculate the expected term.
(4)
The Company does not currently plan on paying regular dividends.

Restricted Stock Units and Restricted Stock
During 2017, the Company granted restricted stock units ("RSUs") under the 2010 Plan, including 0.8 million RSUs with performance conditions. The fair value of the RSUs is determined based on the Company's closing stock price on the day prior to the grant date in accordance with the 2010 Plan. The expense for RSUs without performance conditions is recognized using the straight-line attribution method. The expense for RSUs with performance conditions is recognized using the graded vesting method based on the expected achievement of the performance conditions. The RSUs with performance conditions are also subject to time-based vesting. Any of the RSUs granted during 2017 that are earned based on the achievement of performance criteria will vest on April 15, 2020. RSUs without performance conditions vest ratably over four years.
The Company's activity with respect to RSUs and restricted stock, including awards with performance conditions, for 2017 was as follows:
 
Number of
Shares 
 
Grant Date
Weighted Average
Fair Value 
 
(in thousands, except per share amounts)
Unvested, January 28, 2017
1,683

 
$
17.64

Granted (1)
2,011

 
$
9.17

Performance Shares Adjustment (2)
(43
)
 
$
—

Vested
(584
)
 
$
14.48

Forfeited
(165
)
 
$
12.78

Unvested, February 3, 2018
2,902

 
$
11.06


(1)
Approximately 0.8 million RSUs with three-year performance conditions were granted in the first quarter of 2017. Eighty percent of these RSUs are currently included as granted in the table above based on current estimates against predefined performance targets. The number of performance-based RSUs that are ultimately earned may vary from 0% to 200% of target depending on achievement relative to the predefined financial performance targets.
(2)
Relates to a change in estimate of RSUs with performance conditions granted in 2015. As of year-end 2017 the actual amount that will vest is approximately 75% of the number of shares granted in 2015 based on the actual performance against predefined financial targets.
The total fair value of RSUs and restricted stock that vested was $8.5 million, $14.0 million, and $11.2 million, during 2017, 2016, and 2015, respectively. As of February 3, 2018, there was approximately $20.9 million of total unrecognized compensation expense related to unvested RSUs and restricted stock, which is expected to be recognized over a weighted-average period of approximately 1.8 years.