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Table of Contents
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
The following table illustrates the weighted-average assumptions used in the Black-Scholes pricing model for DSW options granted in each of the periods
presented:
Fiscal years ended
Assumptions: February 1, 2014
February 2, 2013
January 28, 2012
Risk-free interest rate 0.7%
1.2%
2.4%
Annual volatility of DSW common stock 53.4%
56.2%
55.1%
Expected option term 4.7 years
5.5 years
5.9 years
Dividend yield 1.3%
1.2%
0.0%
DSW expensed $5.9 million, $5.5 million and $5.1 million, respectively, in fiscal 2013, 2012 and 2011 related to stock options. The weighted average grant
date fair value of each stock option granted in fiscal 2013, 2012 and 2011 was $12.85, $12.59 and $10.28, respectively. In connection with the special
dividends paid on October 26, 2012 and September 30, 2011, DSW adjusted its outstanding stock options under the anti-dilution provision by decreasing the
grant price and increasing the number of shares to make the optionee whole as required under the DSW plan. As of February 1, 2014, the total compensation
cost related to unvested options not yet recognized was approximately $14.2 million, with a weighted average expense recognition period remaining of 2.0 years.
For the periods presented, the following tables summarize DSW’s stock option activity, related per share weighted average exercise prices (“WAEP”), weighted
average remaining contract life and aggregate intrinsic value (shares and intrinsic value in thousands):
Fiscal years ended
February 1, 2014
February 2, 2013
January 28, 2012
Shares
WAEP
Shares
WAEP
Shares
WAEP
Outstanding beginning of year 3,694
$14.50
5,016
$11.22
5,314
$10.02
Granted 492
$ 31.75
674
$27.47
726
$19.06
RVI options converted —
—
146
$13.14
Increase in options from dividend adjustment —
128
228
Exercised (748)
$10.99
(2,004)
$9.62
(1,090)
$8.62
Forfeited (91)
$21.79
(120)
$15.82
(308)
$ 10.52
Outstanding end of year 3,347
$17.62
3,694
$14.50
5,016
$11.22
Options exercisable end of year 1,430
$13.08
1,260
$12.76
2,250
$11.32
As of February 1, 2014:
Shares
WAEP
Weighted Average Remaining
Contract Life
Aggregate Intrinsic
Value
Options exercisable
1,430
$13.08
4.7 years
$ 35,141
Options expected to vest
1,667
$21.23
7.5 years
27,365
Options vested and expected to vest
3,097
$17.47
6.2 years
$62,506
F- 19
Source: DSW Inc., 10-K, March 27, 2014 Powered by Morningstar® Document Research℠
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