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Table of Contents
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
Performance-Based Restricted Stock Units ("PSU")- Beginning in fiscal 2013, DSW granted PSUs. These awards cliff vest at the end of a three year period
based upon DSW’s achievement of pre-established goals as of the end of the first year of the term. PSUs receive dividend equivalents in the form of additional
PSUs, which are subject to the same restrictions and forfeiture provisions as the original award. Consistent with RSUs, the grant date fair value of PSUs is
based on the closing market price of DSW Class A Common Shares on the date of grant. DSW expensed $0.5 million in fiscal 2013 related to PSUs. As of
February 1, 2014, the total compensation cost related to nonvested PSUs not yet recognized was approximately $1.6 million with a weighted average expense
recognition period remaining of 2.1 years. The weighted average exercise price for all PSUs is zero.
For fiscal 2013, the following tables summarize DSW’s PSU activity, GDFV and aggregate intrinsic value (units and intrinsic value in thousands):
Fiscal year ended
February 1, 2014
Units
GDFV
Outstanding beginning of year —
Granted 69
$ 31.76
Vested —
Forfeited —
Outstanding end of year 69
$ 31.76
Weighted Average
Aggregate
Remaining
Intrinsic
As of February 1, 2014:
Units
GDFV
Contract Life
Value
PSUs expected to vest
56
$ 31.76
2.1 years
$2,121
Director Stock Units- DSW issues stock units to directors who are not employees of DSW. During fiscal 2013, 2012 and 2011, DSW expensed $1.2
million, $1.1 million and $1.0 million, respectively, related to these grants. Stock units are automatically granted to each director who is not an employee of
DSW or RVI on the date of each annual meeting of shareholders for the purpose of electing directors. Each non-employee director is granted stock units based
on the fair market value of DSW Class A Common Shares on the date of the annual meeting. In addition, each director eligible to receive compensation for
board service may elect to have the cash portion of such directors’ compensation paid in the form of stock units. Stock units granted to directors vest
immediately and are settled upon the director terminating service from the board. For new grants beginning in fiscal 2012, directors were given the option to
exercise their units at a specified point in the future or upon completion of service. Stock units granted to directors, which are not subject to forfeiture, are
considered to be outstanding for the purposes of computing basic earnings per share. The exercise price of the director stock units is zero. The following table
summarizes DSW’s director stock unit activity (units in thousands):
Fiscal years ended
February 1, 2014
February 2, 2013
January 28, 2012
Outstanding beginning of year 316
384
322
Granted 34
54
62
Exercised (20)
(122)
—
Outstanding end of year 330
316
384
RVI Stock-Based Compensation Plan- Historically, both DSW and RVI issued stock-based compensation under their respective plans. After the Merger,
DSW either cash settled or converted all outstanding units and options under the RVI 2000 Stock Incentive Plan (“the RVI Plan”) to be exercisable for DSW
Class A Common Shares. At the date of the Merger, all RVI stock options and Stock Appreciation Rights (“SARs”) granted to directors immediately vested
resulting in compensation expense of $0.3 million. At the election of each option holder, options and SARs were either paid in cash at a value equal to the RVI
share price at close of the market on May 25, 2011 less the exercise price, or converted to be exercisable for DSW Class A
F- 21
Source: DSW Inc., 10-K, March 27, 2014 Powered by Morningstar® Document Research℠
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