Famous Footwear 2011 Annual Report Download - page 72

70 2011 BROWN SHOE COMPANY, INC. FORM 10-K
The Company granted 111,500, 143,000 and 212,400 stock options during 2011, 2010 and 2009, respectively. Fair values
of options granted in 2011, 2010 and 2009 were estimated using the Black-Scholes option-pricing model based on the
following assumptions:
2011 2010 2009
Dividend yield. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.19% 2.0% 7.1%
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.9% 59.8% 55.3%
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5% 2.9% 2.9%
Expected term (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 7 8
Dividend yields are based on historical dividend yields. Expected volatilities are based on historical volatilities of the
Company’s common stock. The risk-free interest rate is based on the U.S. Treasury yield curve in e ect at the time of grant
for periods corresponding with the expected term of the options. The expected term of options represents the weighted-
average period of time that options granted are expected to be outstanding, giving consideration to vesting schedules and
the Company’s historical exercise patterns.
Summarized information about stock options outstanding and exercisable at January 28, 2012 is as follows:
Outstanding Exercisable
Weighted- Weighted- Weighted-
Average Average Average
Number of Remaining Exercise Number of Exercise
Exercise Price Range Options Life (Years) Price Options Price
$3.33 – $8.65 . . . . . . . . . . . . . . . . . . . . . . . . . 194,039 6 $ 4.91 97,014 $ 5.57
$8.66 – $13.97. . . . . . . . . . . . . . . . . . . . . . . . . 223,409 3 10.96 175,159 11.15
$13.98 – $19.29 . . . . . . . . . . . . . . . . . . . . . . . . 952,011 4 15.76 819,011 15.95
$19.30 – $24.61 . . . . . . . . . . . . . . . . . . . . . . . . 173,905 4 21.34 173,905 21.34
$24.62 – $29.93. . . . . . . . . . . . . . . . . . . . . . . . 3,000 5 24.97 3,000 24.97
$29.94 – $35.25. . . . . . . . . . . . . . . . . . . . . . . . 116,246 5 34.95 116,246 34.95
1,662,610 4 $ 15.79 1,384,335 $ 16.91
The weighted-average remaining contractual term of stock options outstanding and currently exercisable at January 28, 2012
was 4.1 years and 3.2 years, respectively. The aggregate intrinsic value of stock options outstanding and currently exercisable
at January 28, 2012 was $0.9 million and $0.4 million, respectively. Intrinsic value for stock options is calculated based on
the exercise price of the underlying awards as compared to the quoted price of the Company’s common stock as of the
reporting date.
The following table summarizes stock option activity for 2011 under the current and prior plans:
Number of Weighted-Average
Options Exercise Price
Outstanding at January 29, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,835,142 $ 15.42
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111,500 12.28
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (116,311) 7.93
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (167,721) 14.89
Canceled or expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – –
Outstanding at January 28, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,662,610 $ 15.79
Exercisable at January 28, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,384,335 $ 16.91
The intrinsic value of stock options exercised was $0.4 million, $1.1 million and $0.3 million for 2011, 2010 and 2009
respectively. The amount of cash received from the exercise of stock options was $0.9 million, $0.9 million and $0.1 million
for 2011, 2010 and 2009, respectively. In addition, 349, 7,124 and 7,956 shares were tendered by employees in satisfaction of
the exercise price of stock options during 2011, 2010 and 2009, respectively. The tax impact associated with stock options
exercised was less than $0.1 million for 2011, $0.2 million for 2010 and less than $0.1 million for 2009.
The following table summarizes nonvested stock option activity for 2011 under the current and prior plans:
Number of Weighted-Average
Nonvested Grant Date
Options Fair Value
Nonvested at January 29, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381,741 $ 5.37
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111,500 6.83
Vested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (124,441) 7.26
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (90,525) 5.07
Nonvested at January 28, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278,275 $ 5.26
The weighted-average grant date fair value of stock options granted for 2011, 2010 and 2009 was $6.83, $7.48 and $1.57,
respectively. The total grant date fair value of stock options vested during 2011, 2010 and 2009 was $0.9 million, $1.3 million
and $2.2 million, respectively. As of January 28, 2012, the total remaining unrecognized compensation cost related to
nonvested stock options amounted to $0.7 million, which will be amortized over the weighted-average remaining requisite
service period of 2.9 years.