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Table of Contents DSW INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RVI Stock-Based Compensation Plan
RVI had a 2000 Stock Incentive Plan (“the RVI Plan”)
that provided for the issuance of stock options to purchase up to 13.0 million common
shares (which represent 5.7 million DSW Common Shares factoring in the exchange ratio of 0.435
pursuant to the Merger) or the issuance of
restricted stock to management, key employees of RVI and affiliates, consultants (as defined in the RVI Plan), and directors of RVI. Stock options
generally vested 20% per year on a cumulative basis. Stock options granted under the RVI Plan were exercisable for a period of ten years from the
date of grant.
Stock Options- Excluding any expense related to the Merger, RVI expensed $0.1 million, $0.5 million and $0.3 million in fiscal 2011 , 2010
and
2009 related to stock options.
Stock Appreciation Rights-
RVI expensed less than $0.1 million, negative $1.0 million, and $0.7 million in fiscal 2011, 2010 and 2009,
respectively, related to RVI SARs. SARs generally vested ratably over five years although some of the more recent grants vested over a three year
period with 50% vesting at the end of the third year. The exercise price was equal to the fair market value on the date of the grant. There were no
SARs granted in fiscal 2011 , 2010 and 2009 .
Restricted Stock Units -
RVI expensed less than $0.1 million during fiscal 2010 and fiscal 2009 related to RVI restricted stock units. RVI issued
restricted stock units to certain executives of RVI. The restricted stock units issued by RVI, generally vested over three years, in one-
third
increments per year and were settled immediately upon vesting. The restricted stock units were settled only in cash in an amount equal to the fair
market value of an equivalent number of RVI’
s Common Shares on the date of vesting. The restricted stock units provided that no Common
Shares of RVI would be issued, authorized, reserved, purchased or sold at any time in connection with the restricted stock units. The restricted
stock units were under no circumstances considered RVI Common Shares nor did they entitle the holder of the restricted stock units to the
exercise of any other rights arising from the ownership of RVI Common Shares, including dividend and voting rights. There were no restricted
stock units accrued as of January 28, 2012
or January 29, 2011. RVI paid $0.1 million in fiscal 2010 and less than $0.1 million in fiscal 2009 to
settle vested restricted stock units.
Restricted Shares-
RVI expensed $0.1 million and $0.6 million during fiscal 2011 and 2010, respectively, related to RVI restricted shares. There
was no expense related to RVI restricted shares during fiscal 2009. As of January 29, 2011, RVI had 70,000 restricted shares (which represent
30,450 DSW shares factoring in the exchange ratio of 0.435
subsequent to the merger) outstanding, which were settled in the first quarter of fiscal
2011. RVI issued restricted common shares to certain key employees pursuant to individual employment agreements and certain other grants from
time to time, which were approved by the RVI board of directors. The agreements conditioned the vesting of the RVI restricted shares generally
upon continued employment with RVI with such restrictions generally expiring over one to three years. The market value of the RVI restricted
shares at the date of grant was charged to expense on a straight-line basis over the period that the restrictions lapsed.
The Company leases stores, distribution and fulfillment centers and office facilities under various arrangements with related and unrelated parties.
Such leases expire through 2028 and in most cases provide for renewal options. Generally, the Company is required to pay base rent, real estate
taxes, maintenance, insurance and contingent rentals based on sales in excess of specified levels. Under supply agreements, the Company pays
contingent rents based on sales for the leased departments it operates. As of January 28, 2012 and January 29, 2011
, the Company had no capital
leases.
As of January 28, 2012 , the Company leased or had other agreements with entities affiliated with Schottenstein Affiliates for 22
store locations,
one office facility, a trailer parking lot, one fulfillment center and one distribution center for a total annual minimum rent of $13.2 million .
The following table presents future minimum lease payments required under the aforementioned leases, exclusive of real estate taxes, insurance
and maintenance costs, as of January 28, 2012 :
F-21
5.
LEASES