Famous Footwear 2013 Annual Report Download - page 75

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2013 BROWN SHOE COMPANY, INC. FORM 10-K 73
For the years ended February 1, 2014, February 2, 2013, and January 28, 2012, restricted shares granted were 411,735,
759,400, and 656,350, respectively. Restricted shares forfeited during 2013, 2012, and 2011 were 163,250, 169,300,
and 186,350, respectively. The weighted-average fair value of restricted stock awards granted for the years ended
February 1, 2014, February 2, 2013, and January 28, 2012, was $17.47, $9.71, and $13.78, respectively. The total grant
date fair value of restricted stock awards vested during the years ended February 1, 2014, February 2, 2013, and
January 28, 2012, was $4.1 million, $4.8 million, and $3.4 million, respectively. As of February 1, 2014, the total remaining
unrecognized compensation cost related to nonvested restricted stock grants amounted to $10.1 million, which will be
amortized over the weighted-average remaining requisite service period of 1.7 years.
The Company recognized $2.9 million, $0.9 million, and $1.0 million in 2013, 2012, and 2011 respectively, of excess tax
benefits related to restricted stock vesting and dividends, which was reflected as an increase to additional paid-in capital.
Performance Share Awards
Under the Company’s incentive compensation plans, common stock or cash may be awarded at the end of the
performance period at no cost to certain ocers and key employees if certain financial goals are met. Under the
plan, employees are granted performance share awards at a target number of shares or units, which vest generally
over a three-year service period. At the end of the three-year period, the employee will be given an amount of shares
between 0% and 200% of the targeted award, depending on the achievement of specified financial goals for the
three-year period.
Expense for performance share awards is recognized based upon the fair value of the awards on the date of grant
and the anticipated number of shares or cash to be awarded on a straight-line basis for each vesting portion of the
stock award. The fair value of the performance share awards is the quoted market price for the Company’s common
stock on the date of grant. The Company had nonvested outstanding performance share awards for 164,525 shares
at various target levels as of February 1, 2014, which may result in the issuance of up to 329,050 shares at the end of
the service periods.
The following table summarizes performance share activity for the year ended February 1, 2014:
Number of Number of
Nonvested Stock Nonvested Stock Weighted-Average
Performance Awards Performance Awards Grant Date
at Target Level at Maximum Level Fair Value
Nonvested at February 2, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . 222,325 382,525 $ 12.67
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,225 140,450 17.00
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (117,250) (175,875) 15.20
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – –
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,775) (18,050) 13.09
Nonvested at February 1, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . 164,525 329,050 $ 12.69
The weighted-average grant-date fair value of performance share awards granted for 2013, 2012, and 2011 was $17.00,
$9.46, and $15.20, respectively. Performance share awards of 117,250, 140,000, and 323,500 vested in 2013, 2012, and 2011,
respectively. In addition to the units granted, $2.5 million of performance share awards were granted in cash during 2013.
As of February 1, 2014, the remaining unrecognized compensation cost related to nonvested performance share awards
was $7.2 million, which will be recognized over the weighted-average remaining service period of 1.4 years.
Stock Options
Stock options are granted to employees at exercise prices equal to the quoted market price of the Company’s stock
at the date of grant. Stock options generally vest over four years and have a term of 10 years. Compensation cost for
all stock options is recognized over the requisite service period for each award. No dividends are paid on unexercised
options. Expense for stock options is recognized on a straight-line basis separately for each vesting portion of the
stock option award.
The Company granted 4,000, 26,000, and 111,500 stock options during 2013, 2012, and 2011, respectively. Fair values
of options granted in 2013, 2012, and 2011 were estimated using the Black-Scholes option-pricing model based on the
following assumptions:
2013 2012 2011
Dividend yield. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7% 3.1% 2.2%
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67.7% 66.5% 62.9%
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3% 1.4% 2.5%
Expected term (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 7 7