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Table of Contents


Fiscal
2014
2013
2012
(in thousands)
Stock Options $ 5,827
$ 5,891
$ 5,459
Restricted Stock Units 2,097
1,797
1,511
Performance-Based Restricted Stock Units 1,324
503
—
Director Stock Units 1,247
1,151
1,110
Total $ 10,495
$ 9,342
$ 8,080
Stock Options- The majority of the stock-based compensation awards are granted on an annual basis in the first quarter of each year. The risk-free interest rate
is based on the yield for U.S. Treasury securities for the expected term of the options at the grant date. Expected volatility is based on the historical volatility
of the DSW Common Shares. The expected term of options granted is derived from historical data on DSW Inc.'s stock option exercises. The dividend yield
assumption is based on DSW Inc.'s expectation of future dividend payouts. Forfeitures of options are estimated at the grant date based on historical rates of
DSW Inc.’s stock option activity and reduce the compensation expense recognized.
The following table illustrates the weighted-average assumptions used in the Black-Scholes pricing model for options granted in each of the periods
presented:
Fiscal
Assumptions: 2014
2013
2012
Risk-free interest rate 1.8%
0.7%
1.2%
Annual volatility of DSW Common Shares 44.5%
53.4%
56.2%
Expected option term 5.4 years
4.7 years
5.5 years
Dividend yield 2.3%
1.3%
1.2%
Other Data:
Weighted average grant date fair value $11.82
$12.85
$12.59
As of January 31, 2015, the total compensation cost related to unvested options not yet recognized was approximately $12.5 million, with a weighted
average expense recognition period remaining of 1.9 years. For the periods presented, the following tables summarize 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
2014
2013
2012
Shares
WAEP
Shares
WAEP
Shares
WAEP
Outstanding beginning of year 3,347
$ 17.62
3,694
$ 14.50
5,016
$ 11.22
Granted 502
$ 34.49
492
$ 31.75
674
$ 27.47
Increase in options from dividend adjustment —
—
—
—
128
—
Exercised (505)
$ 10.22
(748)
$ 10.99
(2,004)
$ 9.62
Forfeited (188)
$ 27.32
(91)
$ 21.79
(120)
$ 15.82
Outstanding end of year 3,156
$ 20.91
3,347
$ 17.62
3,694
$ 14.50
Options exercisable end of year 1,682
$ 15.16
1,430
$ 13.08
1,260
$ 12.76
As of January 31, 2015:
Shares
WAEP
Weighted Average Remaining
Contract Life
Aggregate Intrinsic
Value
Options exercisable
1,682
$ 15.16
4.3 years
$ 34,316
Options expected to vest
1,285
$ 27.65
7.7 years
10,177
Options vested and expected to vest
2,967
$ 20.57
5.8 years
$ 44,493
F- 18
Source: DSW Inc., 10-K, March 26, 2015 Powered by Morningstar® Document Research℠
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except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.