DSW 2008 Annual Report Download - page 22

Some o
f
our
d
irectors an
d
o
ff
icers a
l
so serve as
d
irectors an
d
o
ff
icers o
f
Retai
l
Ventures, an
d
ma
yh
ave
c
onflicts of interest because they may own Retail Ventures stock or options to purchase Retail Ventures
s
toc
k
,ort
h
e
y
ma
y
receive cas
h
-ore
q
uit
y
-
b
ase
d
awar
d
s
b
ase
d
on t
h
e
p
er
f
ormance o
f
Retai
l
Ventures.
Some of our directors and officers also serve as directors or officers of Retail Ventures and ma
y
own Retail
V
entures stoc
k
or opt
i
ons to purc
h
ase Reta
il
Ventures stoc
k
,ort
h
ey may
b
e ent
i
t
l
e
d
to part
i
c
i
pate
i
nt
h
e Reta
il
V
entures
i
ncent
i
ve p
l
ans. Jay L. Sc
h
ottenste
i
n
i
s our C
hi
e
f
Execut
i
ve O
ffi
cer an
d
C
h
a
i
rman o
f
t
h
e Boar
d
o
f
D
irectors and Chairman of the Board of Directors of Retail Ventures; Harve
y
L. Sonnenber
g
is a director of DSW
an
d
o
f
Reta
il
Ventures; an
d
James A. McGra
d
y
i
saV
i
ce Pres
id
ent o
f
DSW an
d
t
h
eC
hi
e
f
Execut
i
ve O
ffi
cer
,
Execut
i
ve V
i
ce Pres
id
ent, C
hi
e
f
F
i
nanc
i
a
l
O
ffi
cer, Secretary an
d
Treasurer o
f
Reta
il
Ventures. T
h
e Reta
il
Ventures
i
ncentive plans provide cash- and equit
y
-based compensation to emplo
y
ees based on Retail Ventures’ performance
.
These employment arrangements and ownership interests or cash- or equity-based awards could create, or appear t
o
c
reate, potent
i
a
l
con
fli
cts o
fi
nterest w
h
en
di
rectors or o
ffi
cers w
h
o own Reta
il
Ventures stoc
k
or stoc
k
opt
i
ons o
r
w
h
o
p
art
i
c
ip
ate
i
nt
h
ese
i
ncent
i
ve
pl
ans are
f
ace
d
w
i
t
hd
ec
i
s
i
ons t
h
at cou
ld h
ave
diff
erent
i
m
pli
cat
i
ons
f
or Reta
il
V
entures than they do for us. These potential conflicts of interest may not be resolved in our favor.
We
d
o not ex
p
ect to
p
a
yd
ivi
d
en
d
sint
h
e
f
oreseea
bl
e
f
uture.
We anticipate that future earnin
g
s will be used principall
y
to finance our retail expansion. Thus, we do not
i
nten
d
to pay cas
hdi
v
id
en
d
s on our Common S
h
ares
i
nt
h
e
f
oreseea
bl
e
f
uture. Prov
i
s
i
ons
i
n our secure
d
revo
l
v
i
ng
c
re
di
t
f
ac
ili
ty may a
l
so restr
i
ct us
f
rom
d
ec
l
ar
i
ng
di
v
id
en
d
s. Our
b
oar
d
o
fdi
rectors w
ill h
ave so
l
e
di
scret
i
on t
o
determine the dividend amount, if an
y
, to be paid. Our board of directors will consider a number of factors
,
i
nc
l
u
di
ng app
li
ca
bl
e prov
i
s
i
ons o
f
O
hi
o corporate
l
aw, our
fi
nanc
i
a
l
con
di
t
i
on, cap
i
ta
l
requ
i
rements,
f
un
ds
g
enerated from operations, future business prospects, applicable contractual restrictions and an
y
other factor
s
our board ma
y
deem relevant
.
If
our existing s
h
are
h
o
ld
ers or
h
o
ld
ers o
f
rig
h
ts to
p
urc
h
ase our Common S
h
ares se
ll
t
h
es
h
ares t
h
e
y
o
wn, or i
f
Retai
l
Ventures
d
istri
b
utes our Common S
h
ares to its s
h
are
h
o
ld
ers, it cou
ld
a
d
verse
ly
a
ff
ect t
he
p
rice of our Class A Common Shares
.
Th
e mar
k
et pr
i
ce o
f
our C
l
ass A Common S
h
ares cou
ld d
ec
li
ne as a resu
l
to
f
mar
k
et sa
l
es
by
our ex
i
st
i
n
g
s
hareholders, includin
g
Retail Ventures, or a distribution of our Common Shares to Retail Ventures’ shareholders or
t
he perception that such sales or distributions will occur. These sales or distributions also might make it difficult fo
r
us to se
ll
equ
i
ty secur
i
t
i
es
i
nt
h
e
f
uture at a t
i
me an
d
at a pr
i
ce t
h
at we
d
eem appropr
i
ate. We cannot pre
di
ct t
h
es
i
ze
of future sales of our Common Shares
.
As of Januar
y
31, 2009, there were 16,232,545 Class A Common Shares of DSW outstandin
g
. Additionall
y,
t
here were 308,8
5
1 restricted stock units and director stock units outstandin
g
at Januar
y
31, 2009 that were issue
d
p
ursuant to the terms of DSW’s equity incentive plan. The remaining 27,702,667 Class B Common Shares
outstan
di
ng are restr
i
cte
d
secur
i
t
i
es w
i
t
hi
nt
h
e mean
i
ng o
f
Ru
l
e 144 un
d
er t
h
e Secur
i
t
i
es Act
b
ut w
ill b
ee
li
g
ibl
e
f
o
r
r
esale sub
j
ect to applicable volume, manner of sale, holdin
g
period and other limitations of Rule 144.
SSC, Sc
h
ottenste
i
n RVI, LLC, Cer
b
erus Partners L.P., or Cer
b
erus, an
d
M
ill
enn
i
um Partners, L.P., or
Millennium, have the ri
g
ht to acquire Class A Common Shares of DSW from Retail Ventures pursuant to warran
t
agreements they have with Retail Ventures. All these Common Shares are eligible for future sale, subject to th
e
app
li
ca
bl
evo
l
ume, manner o
f
sa
l
e,
h
o
ldi
n
g
per
i
o
d
an
d
ot
h
er
li
m
i
tat
i
ons o
f
Ru
l
e 144. Reta
il
Ventures
h
a
s
r
e
g
istration ri
g
hts with respect to its DSW Common Shares in specified circumstances pursuant to the master
s
eparation a
g
reement. In addition, SSC, Schottenstein RVI, LLC and Cerberus (and an
y
part
y
to whom either of
t
hem transfers at least 15% of their interest in registrable DSW Common Shares) have the right to require that w
e
r
e
g
ister for resale in specified circumstances the Class A Common Shares issued to them upon exercise of their
warrants, and each of these entities and Millennium will be entitled to participate in re
g
istrations initiated b
y
th
e
ot
h
er ent
i
t
i
es
.
18