Famous Footwear 2012 Annual Report Download - page 77

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2012 BROWN SHOE COMPANY, INC. FORM 10-K 75
Restricted Stock Units for Non-Employee Directors
Equity-based grants may be made to non-employee directors in the form of cash-equivalent restricted stock units (“RSUs”)
at no cost to the non-employee director. The RSUs are subject to a vesting requirement (usually one-year), earn dividend
equivalent units and are payable in cash on the date the director terminates service or such earlier date as a director may
elect, subject to restrictions, based on the then-current fair value of the Company’s common stock. Dividend equivalents
are paid on outstanding RSUs at the same rate as dividends on the Company’s common stock, are automatically re-invested
in additional RSUs and vest immediately as of the payment date for the dividend. Expense related to the initial grant of
RSUs is recognized ratably over the vesting period based upon the fair value of the RSUs, as remeasured at the end of
each period. Expense for the dividend equivalents is recognized at fair value immediately. Gains and losses resulting from
changes in the fair value of the RSUs subsequent to the vesting period and through the settlement date are reported in the
Company’s consolidated statements of earnings.
The following table summarizes restricted stock unit activity for the year ended February 2, 2013:
Outstanding Accrued(1) Nonvested RSUs
Weighted-Average
Number of Number of Total Number Total Number Grant Date
Vested RSUs Nonvested RSUs of RSUs of RSUs Fair Value
January 28, 2012 . . . . . . . . . . . . . . . . . . . . 165,338 65,975 231,313 209,321 $ 10.41
Granted (2) . . . . . . . . . . . . . . . . . . . . . 4,377 68,215 72,592 50,325 11.94
Vested. . . . . . . . . . . . . . . . . . . . . . . . 67,390 (67,390) – 21,992 10.47
Settled . . . . . . . . . . . . . . . . . . . . . . . (6,432) – (6,432) (6,432) 16.31
February 2, 2013 . . . . . . . . . . . . . . . . . . . . 230,673 66,800 297,473 275,206 $ 11.91
(1) Accrued RSUs include all fully vested awards and a pro-rata portion of nonvested awards based on the elapsed portion of the vesting period.
(2) Granted RSUs include 5,792 RSUs resulting from dividend equivalents paid on outstanding RSUs, of which 4,377 related to outstanding
vested RSUs and 1,415 related to outstanding nonvested RSUs.
Information about RSUs granted, vested and settled during 2012, 2011 and 2010 is as follows:
($ thousands, except per unit amounts) 2012 2011 2010
Weighted-average grant date fair value of RSUs granted(1) . . . . . . . . . . . . . . . . . . . . . . $ 12.04 $ 10.31 $ 16.46
Fair value of RSUs vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,156 601 534
RSUs settled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,432 47,796 –
(1) Includes dividend equivalents granted on outstanding RSUs, which vest immediately.
The following table details the RSU compensation expense and the total related income tax benefit for 2012, 2011 and 2010:
($ thousands) 2012 2011 2010
Compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,769 $ 159 $ 798
Income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,077) (62) (310)
Compensation expense, net of income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,692 $ 97 $ 488
The aggregate intrinsic value of RSUs outstanding and currently vested at February 2, 2013 is $5.1 million and $4.0 million,
respectively. Aggregate intrinsic value for RSUs is calculated based on the average of the high and low prices of the
Company’s common stock as of the reporting date. As of February 2, 2013 and January 28, 2012, the liabilities associated
with the accrued RSUs totaled $4.7 million and $2.0 million, respectively.
Stock Performance 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 stock performance awards at a target number of shares, which cli-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. Beginning in 2012, stock
performance awards will only settle in cash.
Expense for stock performance 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 over the three-year service period. The
fair value of the stock performance awards is the quoted market price for the Company’s common stock on the date of
grant. The Company had nonvested outstanding stock performance awards for 222,325 shares at a 60% target level as of
February 2, 2013, which may result in the issuance of up to 382,525 shares at the end of the service periods.