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2013 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. See Note 5 to the consolidated financial statements for information
regarding the deferred compensation plan for non-employee directors.
The following table summarizes restricted stock unit activity for the year ended February 1, 2014:
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
February 2, 2013 . . . . . . . . . . . . . . . . . . . . 230,673 66,800 297,473 275,206 $ 11.91
Granted (2) . . . . . . . . . . . . . . . . . . . . . . 3,522 55,215 58,737 40,587 21.30
Vested. . . . . . . . . . . . . . . . . . . . . . . . 67,565 (67,565) – 22,267 12.01
Settled . . . . . . . . . . . . . . . . . . . . . . . (9,905) – (9,905) (9,905) 10.45
February 1, 2014 . . . . . . . . . . . . . . . . . . . . 291,855 54,450 346,305 328,155 $ 21.30
(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 4,287 RSUs resulting from dividend equivalents paid on outstanding RSUs, of which 3,522 related to outstanding
vested RSUs and 765 related to outstanding nonvested RSUs.
Information about RSUs granted, vested, and settled during 2013, 2012, and 2011 is as follows:
($ thousands, except per unit amounts) 2013 2012 2011
Weighted-average grant date fair value of RSUs granted(1) . . . . . . . . . . . . . . . . . . . . . . $ 21.33 $ 12.04 $ 10.31
Fair value of RSUs vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,600 1,156 601
RSUs settled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,905 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 2013, 2012, and 2011:
($ thousands) 2013 2012 2011
Compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,258 $ 2,769 $ 159
Income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,267) (1,077) (62)
Compensation expense, net of income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,991 $ 1,692 $ 97
The aggregate intrinsic value of RSUs outstanding and currently vested at February 1, 2014 is $8.2 million and $6.9 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 1, 2014 and February 2, 2013, the liabilities associated
with the accrued RSUs totaled $7.8 million and $4.7 million, respectively.
16. RELATED PARTY TRANSACTIONS
C. banner International Holdings Limited
The Company has a joint venture agreement with a subsidiary of C. banner International Holdings Limited (“CBI”)
(formerly known as Hongguo International Holdings Limited) to market Naturalizer footwear in China. The Company
is a 51% owner of the joint venture (“B&H Footwear”), with CBI owning the other 49%. B&H Footwear sells Naturalizer
footwear to a retail aliate of CBI on a wholesale basis, which in turn sells the Naturalizer products through department
store shops and free-standing stores in China. During 2013, B&H Footwear transferred the operation of the retail
stores in China to CBI. B&H Footwear continues to sell footwear to CBI on a wholesale basis. During 2013, 2012 and
2011, the Company, through its consolidated subsidiary, B&H Footwear, sold $8.3 million, $6.9 million, and $5.9 million,
respectively, of Naturalizer footwear on a wholesale basis to CBI.