Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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DSW Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No:
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(3)
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Filing Party:
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(4)
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Date Filed:
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1.
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To elect three Class I directors, each to serve until the 2017 Annual Meeting of Shareholders and until their successors are duly elected and qualified;
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2.
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To approve the 2005 Equity Incentive Plan;
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3.
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To approve the 2005 Cash Incentive Compensation Plan;
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4.
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To approve the 2014 Equity Incentive Plan;
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5.
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To hold an advisory vote relating to the compensation of our named executive officers; and
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6.
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To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
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By Order of the Board of Directors
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William L. Jordan
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Secretary
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Page
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Number of Shares
Beneficially Owned |
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Percentage of Shares
Beneficially Owned |
Percentage of
Combined Voting Power of All Classes of Common Stock |
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Name and beneficial owner
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Class A
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Class B
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Class A
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Class B
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Jay L. Schottenstein
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4300 East Fifth Avenue
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Columbus, Ohio 43219
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15,378,514
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(2)
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7,720,154
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(1)(2)
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16.9
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%
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99.8
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%
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47.9
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%
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Schottenstein RVI, LLC
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4300 East Fifth Avenue
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Columbus, Ohio 43219
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7,783,990
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(2)
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3,891,995
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(1)(2)
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9.4
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%
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50.3
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%
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21.5
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%
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T. Rowe Price Associates, Inc.
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100 E. Pratt Street
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Baltimore, MD 21202
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11,112,262
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(3)
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—
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13.0
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%
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—
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7.7
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%
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Capital World Investors
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333 South Hope Street
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Los Angeles, CA 90071
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6,983,000
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(4)
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—
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8.4
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%
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—
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4.8
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%
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Lone Pine Capital LLC
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Two Greenwich Plaza
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Greenwich, Connecticut 06830
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6,861,538
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(5)
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—
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8.3
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%
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—
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4.7
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%
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Wells Fargo & Company
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420 Montgomery Street
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San Francisco, CA 94104
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5,955,480
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(6)
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—
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7.2
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%
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—
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4.1
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%
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The Vanguard Group
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100 Vanguard Boulevard
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Malvern, PA 19355
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4,655,191
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(7)
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—
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5.6
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%
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—
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3.2
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%
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(1)
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Class B Common Shares of DSW are exchangeable into a like number of Class A Common Shares.
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(2)
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Mr. Schottenstein beneficially owns 15,378,514 Class A Common Shares of DSW in the aggregate. This includes (i) 71,905 Class A Common shares held by Mr. Schottenstein directly; (ii) 26,100 Class A Common Shares held by the Jerome Schottenstein Fund A Revocable Trust of which Mr. Schottenstein acts as co-trustee and has shared power to vote and dispose; (iii) 200 shares held by the Jay Schottenstein 1983 Revocable Trust of which Mr. Schottenstein is trustee and has sole power to vote and dispose; (iv) 293,092 Class A Common Shares held by Schottenstein SEI, LLC (SSEI); (v) 3,891,995 Class A Common Shares held by Schottenstein RVI, LLC (Schottenstein RVI) (Mr. Schottenstein is manager of Schottenstein RVI); (vi) 364,024 Class A Common Shares that Mr. Schottenstein has a right to purchase within sixty days of February 1, 2014; and (vii) 3,011,044 Class A Common Shares held by Ann S. Deshe, Susan S. Diamond, their spouses, and certain of their lineal descendants and affiliates (the Deshe/Diamond Affiliates), of which Mr. Schottenstein has sole voting power pursuant to a voting agreement with the Deshe/Diamond Affiliates and other parties thereto (the Deshe/Diamond Voting Agreement).
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(3)
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As of December 31, 2013, T. Rowe Price Associates, Inc., an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, is the beneficial owner of 11,112,262 Class A Common Shares, or 13.03% of the Class A Common Shares outstanding. Based solely upon information contained in a Schedule 13G/A filed with the Securities and Exchange Commission on February 7, 2014.
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(4)
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As of December 31, 2013, Capital World Investors, an investment adviser registered under Section 203 of the Investment Advisers Act of 1940 and a division of Capital Research and Management Company (CRMC), is deemed to be the beneficial owner of 6,983,000 Class A Common Shares, or 8.4% of the Class A Common Shares, as a result of CRMC acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. Capital World Investors holds more than five percent of the outstanding Class A Common Shares of DSW, Inc. as of December 31, 2013 on behalf of SMALLCAP World Fund, Inc. Based solely upon information contained in a Schedule 13G/A filed with the Securities and Exchange Commission on February 13, 2014.
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(5)
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As of December 31, 2013, Lone Pine Capital LLC, an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, is the beneficial owner of 6,861,538 Class A Common Shares, or 8.3% of the Class A Common Shares outstanding. Based solely upon information contained in a Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2014.
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(6)
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As of December 31, 2013, Wells Fargo & Company, a parent holding company, is the beneficial owner of 5,955,480 Class A Common Shares on a consolidated basis, which amounts to 7.18% Class A Common Shares. The ownership of Wells Capital Management Incorporated, an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, amounted to 4,920,713 Class A Common Shares, or 5.93% of the Class A Common Shares outstanding. Based solely upon information contained in a Schedule 13G/A filed with the Securities and Exchange Commission on February 4, 2014.
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(7)
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As of December 31, 2013, The Vanguard Group, an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, is the beneficial owner of 4,655,191 Class A Common Shares, or 5.6% of the Class A Common Shares outstanding. Based solely upon information contained in a Schedule 13G/A filed with the Securities and Exchange Commission on February 12, 2014.
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Number of Shares
Beneficially
Owned
(1)(2)
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Percentage of Shares
Beneficially
Owned
(3)
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Percentage of
Combined Voting Power of All
Classes of
Common Shares
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Name
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Class A
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Class B
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Class A
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Class B
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Henry L. Aaron
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43,544
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—
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*
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—
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*
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Elaine J. Eisenman
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44,014
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—
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*
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—
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*
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Deborah L. Ferrée
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707,707
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—
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*
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—
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*
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Carolee Friedlander
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60,650
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—
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*
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—
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*
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Joanna T. Lau
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38,574
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—
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*
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—
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*
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Michael R. MacDonald
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364,074
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—
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*
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—
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*
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Philip B. Miller
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80,970
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—
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*
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—
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*
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Harris Mustafa
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71,183
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—
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*
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—
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*
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James O'Donnell
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25,717
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—
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*
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—
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*
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Douglas J. Probst
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93,968
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—
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*
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—
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*
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Jay L. Schottenstein
(4)
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15,378,514
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7,720,154
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16.9%
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99.8%
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47.9%
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Joseph Schottenstein
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4,676
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—
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*
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—
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*
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Harvey L. Sonnenberg
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59,954
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—
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*
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—
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*
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Allan J. Tanenbaum
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85,692
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—
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*
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—
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*
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All directors and executive officers as a group (19 persons)
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17,375,454
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7,720,154
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18.8%
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99.8%
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48.7%
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*
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Represents less than 1% of outstanding Common Shares.
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Beneficial Owner
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Stock Options
Exercisable within 60 days of
March 15, 2014
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Share Units Vesting
within 60 days of
March 15, 2014
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Henry L. Aaron
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—
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11,482
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Elaine J. Eisenman
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—
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44,014
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Deborah L. Ferrée
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637,174
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—
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Carolee Friedlander
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—
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51,062
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Joanna T. Lau
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—
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38,574
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Michael R. MacDonald
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253,366
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—
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Philip B. Miller
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—
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59,170
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Harris Mustafa
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48,964
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—
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James O'Donnell
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—
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—
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Douglas J. Probst
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62,000
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—
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Jay L. Schottenstein
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364,024
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—
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Joseph Schottenstein
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—
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—
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Harvey L. Sonnenberg
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—
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46,730
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Allan J. Tanenbaum
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—
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72,521
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All directors and executive officers as a group (17 persons)
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1,632,839
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323,553
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Name
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Age
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Our Directors and Their Positions with Us/ Principal Occupations / Business Experience
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Director Since
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Carolee Friedlander*
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72
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Ms. Friedlander serves as a founder and CEO of AccessCircles, a by-invitation global community of women providing connectivity, knowledge and information in the areas of health and wellness, financial expertise and life balance. Ms. Friedlander has held that position since August 2004. From July 2001 to August 2004, Ms. Friedlander served as Senior Vice President of Retail Brand Alliance, Inc., and as President and Chief Executive Officer of Carolee Designs, Inc., a subsidiary of Retail Brand Alliance. Prior to that, Ms. Friedlander served as President and Chief Executive Officer of Carolee Designs, a fashion accessory company she founded in 1973 and sold to Retail Brand Alliance in July 2001. Ms. Friedlander’s long term service as a CEO of a retail company brings strong leadership experience and in-depth knowledge of marketing and merchandising to our Board.
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2005
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Harvey L. Sonnenberg*
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72
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Mr. Sonnenberg was a partner in the certified public accounting firm, Weiser, LLP from 1994 to 2009, and currently serves as an advisor to that firm. Mr. Sonnenberg has been active in a number of professional organizations, including the American Institute of Certified Public Accountants and the New York State Society of Certified Public Accountants, and has long been involved in rendering audit and advisory services to the retail, apparel, and consumer products industries. Mr. Sonnenberg is a certified public accountant and was the partner-in-charge of his firm’s Sarbanes-Oxley and Corporate Governance practice. Mr. Sonnenberg was a director of Retail Ventures from 2001 until May 2011. Mr. Sonnenberg’s strong accounting background, particularly in the retail industry, brings accounting and related financial management experience to the Board.
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2005
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Allan J. Tanenbaum*
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67
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Mr. Tanenbaum has been General Counsel and Managing Partner of Equicorp Partners, LLC, an Atlanta-based private investment and advisory firm, since January 2006. From February 2001 to December 31, 2005, Mr. Tanenbaum served as Senior Vice President, General Counsel and Corporate Secretary for AFC Enterprises, Inc., a franchisor and operator of quick-service restaurants. From June 1996 to February 2001, Mr. Tanenbaum was a shareholder in Cohen Pollock Merlin Axelrod & Tanenbaum, P.C., an Atlanta, Georgia law firm, where he represented corporate clients in connection with mergers and acquisitions and other commercial transactions. With Mr. Tanenbaum’s legal background and services as a general counsel of a public company, Mr. Tanenbaum brings valuable board governance experience to our Board.
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2005
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Name
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Age
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Our Directors and Their Positions with Us/ Principal Occupations / Business Experience
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Director Since
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Jay L. Schottenstein
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59
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Mr. Schottenstein has served as our Executive Chairman of the Board of Directors since March 2005. Mr. Schottenstein previously served as our Chief Executive Officer from March 2005 to April 2009. Mr. Schottenstein currently serves as Chairman of the Board of Directors of Schottenstein Realty LLC. Mr. Schottenstein also currently serves as Interim Chief Executive Officer of American Eagle Outfitters, Inc. He has been Chairman of the Board of Directors of American Eagle Outfitters, Inc. and Schottenstein Stores Corporation (SSC) since March 1992, was Chairman of the Board of Directors of Retail Ventures, Inc. from March 1992 until May 2011, and was Chief Executive Officer of Retail Ventures from April 1991 to July 1997 and from July 1999 to December 2000. Mr. Schottenstein served as Vice Chairman of SSC from 1986 until March 1992 and as a director of SSC since 1982. He served in various executive capacities at SSC since 1976. Mr. Schottenstein has been a director of American Eagle Outfitters, Inc. (NYSE: AEO) since 1992, and was a director of Retail Ventures, Inc. from 1992 until May 2011. Mr. Schottenstein also serves as the manager of Schottenstein RVI, LLC. Mr. Schottenstein’s extensive experience as a chairman and CEO of numerous companies brings strong leadership skills to our Board. Additionally, Mr. Schottenstein’s tenure with DSW provides the Board with a strong background in the shoe industry.
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2005
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Michael R. MacDonald
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62
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Mr. MacDonald has served as our President and Chief Executive Officer since April 2009. Prior to joining DSW, Mr. MacDonald served as Chairman and Chief Executive Officer of Shopko Stores, a retail company, from May 2006 to March 2009. Prior to that time, Mr. MacDonald held executive positions at Saks Incorporated from 1998 to 2006, most recently as Chairman and Chief Executive Officer of the Northern Department Stores Group for six years. Prior to serving in that capacity, Mr. MacDonald held executive positions at Carson Pirie Scott, including the position of Chairman and Chief Executive Officer. Mr. MacDonald has served as a member of the Board of Directors of Ulta Salon, Cosmetics & Fragrance, Inc. (Nasdaq: Ulta) since 2012. With over 30 years of business experience in all phases of retail, including managing merchandising, marketing, stores, operations and finance functions, Mr. MacDonald brings strong leadership abilities and in-depth retail knowledge to our Board.
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2009
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Philip B. Miller*
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75
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Mr. Miller is the President of Philip B. Miller Associates, a consulting firm. From 2001 to 2010, Mr. Miller served as Operating Director of Tri-Artisan Capital Partners, a privately held merchant bank. Mr. Miller also serves on the Board of Directors of St. John Knits, a position he has held since December 2002. Mr. Miller served on the Board of Directors of Kellwood until January 2008. Mr. Miller served as Chairman and Chief Executive Officer of Saks Fifth Avenue, Inc. from 1993 until January 2000 and continued as Chairman of that company until July 2001. From 1983 to 1990, Mr. Miller served as Chairman and Chief Executive Officer of Marshall Fields, Inc. Mr. Miller brings to the Board extensive experience in executive leadership and retail merchandising.
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2005
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James O'Donnell
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73
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Mr. O'Donnell was the Chief Executive Officer of American Eagle Outfitters Inc., a clothing and accessories retailer based in Pittsburgh, Pennsylvania, from 2002 through 2012. He also served as the company's Chief Operating Officer and was a member of the Board of Directors from December 2000 until January 2012. Prior to his time at American Eagle Outfitters, Mr. O'Donnell held senior executive positions at public and private companies including Lyte, Inc., a retail technology services company, Colmen Capital Advisors, Inc., Computer Aided Systems, Inc., and The Gap, Inc. He was a member of the Board of Directors of The Gap from 1987 to 1992. Today Mr. O'Donnell also serves on the Villanova Board of Trustees. Mr. O'Donnell brings to the Board his extensive knowledge of the retail industry and excellent leadership experience attained from his successful track record as CEO and director of other retail companies.
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2012
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Name
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Age
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Our Directors and Their Positions with Us/ Principal Occupations / Business Experience
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Director Since
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Henry Aaron*
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80
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Mr. Aaron presently serves as Senior Vice President of the Atlanta National League Baseball Club, Inc., a professional sports organization, as Chairman of 755 Restaurant Corp., a quick service restaurant company, and as director of Medallion Financial Corp., a specialty finance company, along with a number of other private business interests. Mr. Aaron has substantial institutional knowledge regarding the Company, including its operations and industries, due to his longstanding service on the Retail Ventures board from 2000 to May 2011.
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2011
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Elaine J. Eisenman*
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64
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Dr. Eisenman has served as Dean of Babson Executive Education since October 2005, the division of Babson College focused on providing education, consulting and applied research in innovation and leadership to corporations, executives, and educational and institutional non-profit enterprises. Dr. Eisenman also is responsible for the management of the Babson Executive Conference Center and serves as the Chairperson of the Compensation Committee of Harvard Vanguard Medical Associates. Prior to that, Dr. Eisenman served as Senior Vice President, Human Resources and Administration of The Children’s Place Retail Stores, Inc. since September 2003. Dr. Eisenman has also held senior executive positions at American Express, Enhance Financial Services Co. and private companies such as PDI International, a global consulting firm. With a background in human resources, Dr. Eisenman brings valuable experience in executive compensation and succession planning to our Board and Compensation Committee.
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2008
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Joanna T. Lau*
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54
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Ms. Lau currently serves as CEO of Lau Technologies, an executive consulting and investment company focused on providing debt and equity financing and consulting to mid-range companies. Ms. Lau founded Lau Technologies in 1990 and has been responsible for managing all aspects of the company from financing growth to the quality of the performance of the products previously sold by the company. Ms. Lau held leadership positions with Digital Equipment Corporation and General Electric before founding Lau Technologies. Ms. Lau is a member of the Board of Directors of ITT Education Services (NYSE: ESI) since 2003 and currently serves on the Audit Committee of ESI. Ms. Lau served as a director of TD Banknorth, Inc. until July 2007. Ms. Lau brings a strong background in technology and executive leadership to our Board.
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2008
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Joseph A. Schottenstein
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33
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Mr. Schottenstein currently serves as a member of the Board and Chief Operating Officer at Schottenstein Property Group (SPG), a privately-held company that develops big box, community and neighborhood shopping centers in the United States. Mr. Schottenstein has been with SPG since 2003, having served as the Vice President of Leasing at SPG from 2008 through 2010 and Executive Vice President of Acquisitions and Leasing at SPG from 2010 through 2013. From June 2004 to 2006, Mr. Schottenstein served as the Co-Manager of Indigo Nation, LLC, a specialty denim retailer. Mr. Schottenstein brings an expertise in real estate development to our Board.
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2012
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*
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Independent Directors under New York Stock Exchange Rules and our Corporate Governance Principles.
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•
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has no material relationship with us or our subsidiaries;
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•
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satisfies the other criteria specified by New York Stock Exchange listing standards;
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•
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has no business conflict with us or our subsidiaries; and
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•
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otherwise meets applicable independence criteria specified by law, regulation, exchange requirement or the Board of Directors.
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•
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independence;
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•
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judgment;
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•
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skill;
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•
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diversity;
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•
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strength of character;
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•
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age;
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•
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experience as an executive of, or advisor to, a publicly traded or private organization;
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•
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experience and skill relative to other Board members;
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•
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specialized knowledge or experience;
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•
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service on other boards; and
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•
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desirability of the candidate’s membership on the Board or any committees of the Board.
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•
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name, age, business address and residence address;
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•
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principal occupation or employment;
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•
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the class and number of DSW shares beneficially owned; and
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•
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any other information relating to the nominee that is required to be disclosed in solicitations for proxies for election of directors pursuant to Regulation 14A under the Exchange Act; and
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•
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name and record address; and
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•
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the class and number of our shares beneficially owned.
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•
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the integrity of our financial statements;
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•
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compliance with legal and regulatory requirements;
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•
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the independent auditor’s qualifications and independence; and
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•
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performance of our internal audit function and independent auditor.
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•
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aligns with our business strategy;
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•
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enables the business to maximize benefits technology can provide;
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•
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resources are used responsibly; and
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•
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risks are managed appropriately.
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•
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Delegation
— The Audit Committee may delegate pre-approval authority to one or more of its independent members provided that the member(s) to whom such authority is delegated promptly reports any pre-approval decisions to the other Audit Committee members. The Audit Committee has not delegated to management its responsibilities to pre-approve services performed by the independent registered public accounting firm.
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•
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Audit Services
— Annual audit, review and attestation engagement terms and fees are subject to the specific pre-approval of the Audit Committee. Any changes in the terms, conditions or fees resulting from changes in the audit scope requires the Audit Committee’s approval.
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•
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Other Services
— Unless a type of service to be provided by the independent registered public accounting firm has received general pre-approval, it will require specific pre-approval by the Audit Committee.
|
•
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Tax Services
— The Audit Committee believes that our independent registered public accounting firm can provide tax services to us such as tax compliance and certain tax advice without impairing its independence. In no event, however, will the independent registered public accounting firm be retained in connection with a transaction initially recommended by the independent registered public accounting firm, the purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations or similar regulations of other applicable jurisdictions.
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2013
|
2012
|
||||
Audit fees
|
|
$1,284,013
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|
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$1,312,000
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Audit-related fees
(1)
|
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$5,950
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|
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$99,000
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Tax fees
|
—
|
|
—
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|
||
All other fees
(2)
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$550,000
|
—
|
|
|||
Total
|
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$1,839,963
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|
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$1,411,000
|
|
(1)
|
Audit-related fees for fiscal 2013 relate to services provided in connection to our stock split. Audit-related fees for fiscal 2012 relate to services provided in connection to the following: (i) the purchase of the Air Center property and (ii) an amendment to our Form S-3.
|
(2)
|
All other fees includes $550,000 paid in 2013 to Deloitte Consulting in connection with Deloitte's advisory services relating to our Omni-channel initiative.
|
•
|
Review of our annual financial statements to be included in our Annual Report on Form 10-K and recommendation to the Board of Directors whether the audited financial statements should be included in our Annual Report on Form 10-K;
|
•
|
Review of our quarterly financial statements to be included in our Quarterly Reports on Form 10-Q;
|
•
|
Oversight of our relationship with our independent auditors, including:
|
•
|
Appointment, termination and oversight of our independent auditors; and
|
•
|
Pre-approval of all auditing services and permitted non-audit services by our independent auditors;
|
•
|
Oversight of our internal controls;
|
•
|
Oversight of the review and response to complaints made to us regarding accounting, internal accounting controls and auditing matters or other compliance matters;
|
•
|
Oversight of our internal audit function; and
|
•
|
Review and approval of related party transactions.
|
|
Respectfully submitted,
|
|
|
|
Audit Committee
|
|
Harvey L. Sonnenberg, Chair
|
|
Joanna T. Lau
|
|
Philip B. Miller
|
|
Allan J. Tanenbaum
|
•
|
Jay L. Schottenstein - Executive Chairman of the Board;
|
•
|
Michael R. MacDonald - President and Chief Executive Officer;
|
•
|
Deborah L. Ferrée - Vice Chairman and Chief Merchandising Officer;
|
•
|
Douglas J. Probst - Executive Vice President, and Chief Financial Officer; and
|
•
|
Harris Mustafa - Executive Vice President, Supply Chain and Merchandise Planning & Allocation.
|
(1)
|
Attract and retain highly talented, experienced retail executives who can make significant contributions to our long-term business success
. Specifically, we structure our compensation program to attract and keep executives we believe are critical to the implementation of our business strategy to:
|
•
|
Anticipate the desires of our brand, quality and style conscious customers who have a passion for footwear and accessories and provide them with a vast, exciting assortment of in-season styles combined with the convenience and value they desire;
|
•
|
Create a distinctive store experience that satisfies both the rational and emotional shopping needs of our customers; and
|
•
|
Execute on a growth strategy to increase total net sales through DSW store expansion, positive comparable store sales for DSW stores, increase in sales through leased business partners, and the expansion of dsw.com.
|
(2)
|
Reward executives for delivering superior performance
. The Committee regularly reviews executive compensation packages to ensure a proper balance between fixed and variable compensation with more of the focus on, and potential reward to the executive for, achievement of short- and long-term performance goals. This was true for 2013 – in aggregate, the Named Executive Officer compensation opportunity consisted of approximately 30% fixed compensation (base salary) and approximately 70% variable compensation (annual cash incentive and long-term equity compensation). The chart below reflects details for the CEO and the other Named
|
Fixed Compensation
|
|
Variable Compensation
|
Base Salary
|
|
Target Annual Cash Incentive
|
|
|
Target Annual Stock Options Value
|
|
|
Target Annual Performance-Based Restricted Stock Units Value
|
(3)
|
Create a strong link between DSW's financial performance and the total compensation of executives, and align executive incentives with shareholder value creation.
The Committee believes targeting above-median long-term equity award levels (as discussed below) is appropriate for DSW during a growth phase. As a result, the Committee annually awards equity, generally in the form of stock options and restricted stock units, to the Named Executive Officers based, in part, on DSW's financial performance. Such grants strongly align these officers' interests with the interests of our shareholders as each is focused on the same result - long-term value creation.
|
•
|
Total sales of $2.4 billion - the highest in Company history;
|
•
|
Opened 30 new stores;
|
•
|
Operating income (adjusted to exclude (i) Retail Ventures, Inc. (“RVI”) transaction costs and related expenses, and (ii) all items related to the Luxury test) rate of 11.7%; and
|
•
|
Net Income (adjusted to exclude (i) RVI transaction costs and related expenses, and (ii) all items related to the Luxury test) of $172.8 million - the highest in Company history.
|
Abercrombie & Fitch
|
Aeropostale
|
American Eagle Outfitters
|
Ann Inc.
|
Ascena Retail Group*
|
Big Lots
|
Bon-Ton Stores
|
Brown Shoe Company
|
Dick's Sporting Goods
|
Express Inc.*
|
Finish Line
|
Genesco*
|
L Brands, Inc.
|
Men's Wearhouse*
|
New York & Company
|
Pacific Sunwear
|
Skechers USA
|
Stein Mart
|
Ulta
|
|
|
Abercrombie & Fitch
|
Aeropostale
|
American Eagle Outfitters
|
Ann Inc.
|
Ascena Retail Group
|
Big Lots
|
Bon-Ton Stores
|
Charming Shoppes
|
Chico's FAS
|
Children's Place
|
Coach
|
Collective Brands
|
Dick's Sporting Goods
|
Express Inc.
|
Finish Line*
|
Footlocker
|
J. Crew
|
J.C. Penney
|
Kohl's
|
L Brands, Inc.
|
Limited Stores
|
Macy's
|
Michael's
|
New York & Company
|
Nordstrom
|
rue21*
|
Stage Stores
|
Talbots
|
Target
|
TJX Companies
|
Ulta
|
|
|
•
|
base salary;
|
•
|
performance-based annual cash incentive compensation;
|
•
|
long-term equity incentive compensation in the form of service-based stock options and performance-based restricted stock units; and
|
•
|
retirement savings contributions through both the 401(k) plan and the nonqualified deferred compensation plan.
|
•
|
overall DSW financial performance during the prior year;
|
•
|
the individual performance of the Named Executive Officer during the prior year;
|
•
|
base salary data drawn from the Survey Peer Group and Proxy Peer Group;
|
•
|
the target total cash compensation level of the appropriate benchmark position(s) as reflected in Survey Peer Group and Proxy Peer Group data; and
|
•
|
if relevant, compensation paid by a previous employer.
|
|
2012 Salary
|
|
2013 Salary
|
|
% Increase
|
|
||
Mr. Schottenstein
|
|
$650,000
|
|
|
$700,000
|
|
7.7
|
%
|
Mr. MacDonald
|
|
$1,050,000
|
|
|
$1,050,000
|
|
—
|
%
|
Ms. Ferrée
|
|
$985,000
|
|
|
$1,000,000
|
|
1.5
|
%
|
Mr. Probst
|
|
$535,000
|
|
|
$570,000
|
|
6.5
|
%
|
Mr. Mustafa
|
|
$625,000
|
|
|
$650,000
|
|
4.0
|
%
|
|
Threshold Payout
|
Target Payout
|
Maximum Payout
|
Mr. Schottenstein
|
50%
|
100%
|
150%
|
Mr. MacDonald
|
50%
|
110%
|
200%
|
Ms. Ferrée
|
50%
|
110%
|
200%
|
Mr. Probst
|
40%
|
80%
|
160%
|
Mr. Mustafa
|
25%
|
50%
|
100%
|
•
|
no payment unless the Company achieved adjusted net income of $160.3 million (approximately 91% of the target level established);
|
•
|
a payment of at least 50% but less than 100% of the target award opportunity if the Company achieved or exceeded $160.3 million of adjusted net income but did not achieve $176.2 million of adjusted net income (the target level established);
|
•
|
a payment of at least 100% but less than 200% of the target award opportunity if the Company achieved or exceeded $176.2 million of adjusted net income but did not achieve $187.8 million of adjusted net income (approximately 107% of the target level established); and
|
•
|
a payment of 200% of the target award opportunity if the Company achieved or exceeded $187.8 million of adjusted net income.
|
Name
|
# of
Nonqualified Stock Options*
|
# of Performance-Based Restricted Stock Units**
|
Mr. Schottenstein
|
43,470
|
8,520
|
Mr. MacDonald
|
144,890
|
28,400
|
Ms. Ferree
|
83,310
|
16,330
|
Mr. Probst
|
25,360
|
4,970
|
Mr. Mustafa
|
14,490
|
2,840
|
|
Respectfully submitted,
|
|
|
|
Compensation Committee
|
|
|
|
Philip B. Miller, Chair
|
|
Henry L. Aaron
|
|
Elaine J. Eisenman
|
|
Carolee Friedlander
|
Name and Principal Position
|
Fiscal Year
|
Salary ($)
|
Bonus
($)
|
Stock Awards
($) (1)
|
Option Awards
($) (2)
|
Non-Equity
Incentive Plan
Compensation ($) (3)
|
All Other Compensation ($)
(4)
|
Total ($)
|
|||||||||||||
Jay L. Schottenstein
|
2013
|
$
|
693,269
|
|
—
|
|
$
|
269,871
|
|
$
|
558,283
|
|
$
|
623,700
|
|
—
|
|
$
|
2,145,123
|
|
|
Executive Chairman of
|
2012
|
$
|
662,500
|
|
—
|
|
$
|
225,172
|
|
$
|
604,204
|
|
$
|
755,950
|
|
—
|
|
$
|
2,247,826
|
|
|
the Board of Directors
|
2011
|
$
|
626,923
|
|
—
|
|
$
|
146,172
|
|
456,945
|
|
975,000
|
|
—
|
|
$
|
2,205,040
|
|
|||
Michael R. MacDonald
|
2013
|
$
|
1,050,000
|
|
—
|
|
$
|
899,570
|
|
$
|
1,860,815
|
|
$
|
1,029,105
|
|
$
|
10,200
|
|
$
|
4,849,690
|
|
President and Chief
|
2012
|
$
|
1,062,500
|
|
—
|
|
$
|
768,880
|
|
$
|
2,024,083
|
|
$
|
1,221,150
|
|
$
|
10,630
|
|
$
|
5,087,243
|
|
Executive Officer
|
2011
|
$
|
1,000,000
|
|
—
|
|
$
|
494,736
|
|
$
|
1,532,585
|
|
$
|
2,000,000
|
|
$
|
10,733
|
|
$
|
5,038,054
|
|
Deborah L. Ferrée
|
2013
|
$
|
997,981
|
|
—
|
|
$
|
517,253
|
|
$
|
1,069,946
|
|
$
|
980,100
|
|
$
|
10,805
|
|
$
|
3,576,085
|
|
Vice Chairman and
|
2012
|
$
|
996,250
|
|
—
|
|
$
|
439,360
|
|
$
|
1,170,645
|
|
$
|
1,145,555
|
|
$
|
10,630
|
|
$
|
3,762,440
|
|
Chief Merchandising
|
2011
|
$
|
929,615
|
|
—
|
|
$
|
284,848
|
|
$
|
885,583
|
|
$
|
1,870,000
|
|
$
|
10,733
|
|
$
|
3,980,779
|
|
Officer
|
|
|
|
|
|
|
|
|
|||||||||||||
Douglas J. Probst
|
2013
|
$
|
565,289
|
|
—
|
|
$
|
157,425
|
|
$
|
325,697
|
|
$
|
406,296
|
|
$
|
10,805
|
|
$
|
1,465,512
|
|
Executive Vice President
|
2012
|
$
|
542,212
|
|
—
|
|
$
|
153,776
|
|
$
|
395,250
|
|
$
|
497,764
|
|
$
|
10,630
|
|
$
|
1,599,632
|
|
and Chief Financial Officer
|
2011
|
$
|
511,154
|
|
—
|
|
$
|
101,196
|
|
$
|
309,348
|
|
$
|
824,000
|
|
$
|
10,729
|
|
$
|
1,756,427
|
|
Harris Mustafa
|
2013
|
$
|
646,635
|
|
—
|
|
$
|
89,957
|
|
$
|
186,094
|
|
$
|
289,575
|
|
$
|
10,805
|
|
$
|
1,223,066
|
|
Executive Vice President,
|
2012
|
$
|
632,096
|
|
—
|
|
$
|
82,380
|
|
$
|
211,471
|
|
$
|
363,438
|
|
$
|
10,630
|
|
$
|
1,300,015
|
|
Supply Chain &
|
2011
|
$
|
588,692
|
|
—
|
|
$
|
63,716
|
|
$
|
192,079
|
|
$
|
593,000
|
|
$
|
10,733
|
|
$
|
1,448,220
|
|
Merchandise Planning & Allocation
|
|
|
|
|
|
|
|
|
(1)
|
This column represents the grant date fair value of Restricted Stock Units (RSU) and Performance-Based Stock Units (PSU) granted in each fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codifications Topic 718 (“ASC 718”). For RSUs & PSUs, fair value is determined by multiplying the number of units granted by the closing price of DSW Class A Common Stock on the date of grant. For additional information on the valuation assumptions, refer to note 7 of DSW’s financial statements in the Form 10-K for the year ended February 1, 2014, as filed with the SEC. See the Grants of Plan-Based Awards Table for information on awards made in fiscal 2013. The amounts reflected are for the fair value of RSUs & PSUs granted and do not necessarily correspond to the actual value that will be recognized by the Named Executive Officers upon vesting.
|
(2)
|
This column represents the grant date fair value of stock options granted in each fiscal year in accordance with ASC 718. DSW uses the Black-Scholes pricing model to value stock-based compensation expense. For additional information on the valuation assumptions, refer to note 7 of DSW’s financial statements in the Form 10-K for the year ended February 1, 2014, as filed with the SEC. See the Grants of Plan-Based Awards Table for information on options granted in fiscal 2013. The amounts reflected are for the fair value of the stock options granted and do not necessarily correspond to the actual value that will be recognized by the Named Executive Officers upon exercise.
|
(3)
|
This column represents the dollar amount paid to each applicable Named Executive Officer pursuant to our Incentive Compensation Plan (ICP) for fiscal 2013, 2012 and 2011, respectively. See the Compensation Discussion and Analysis above for information on the Plan.
|
(4)
|
The following table sets forth detail about the amounts reported for 2013 in the "All Other Compensation" column of the Summary Compensation Table above.
|
Name
|
401(k) Matching
Contributions
|
Life Insurance
Premium
|
Total
|
Michael R. MacDonald
(a)
|
$10,200
|
$—
|
$10,200
|
Deborah L. Ferrée
|
$10,200
|
$605
|
$10,805
|
Douglas J. Probst
|
$10,200
|
$605
|
$10,805
|
Harris Mustafa
|
$10,200
|
$605
|
$10,805
|
|
|
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards (1) |
Estimated Future Payouts Under Equity Incentives Plan Awards (#) (2)
|
All Other Option
Awards: Number of Securities Underlying Options
(2)
|
|
|
||||||||||||||||
Name
|
Grant
Date
|
Threshold
|
Target
|
Maximum
|
Threshold
|
Target
|
Maximum
|
Exercise or Base
Price of Option Awards
($/Sh)(3)
|
Grant Date Fair
Value of Stock and Option Awards |
|||||||||||||
Jay L. Schottenstein
|
3/26/2013
|
$
|
350,000
|
|
$
|
700,000
|
|
$
|
1,050,000
|
|
—
|
8,598
|
|
—
|
43,470
|
|
$
|
31.68
|
|
$
|
828,154
|
|
Michael R. MacDonald
|
3/26/2013
|
$
|
577,500
|
|
$
|
1,155,000
|
|
$
|
2,310,000
|
|
—
|
28,663
|
|
—
|
144,890
|
|
$
|
31.68
|
|
$
|
2,760,385
|
|
Deborah L. Ferrée
|
3/26/2013
|
$
|
550,000
|
|
$
|
1,100,000
|
|
$
|
2,200,000
|
|
—
|
16,482
|
|
—
|
83,310
|
|
$
|
31.68
|
|
$
|
1,587,199
|
|
Douglas J. Probst
|
3/26/2013
|
$
|
228,000
|
|
$
|
456,000
|
|
$
|
912,000
|
|
—
|
5,016
|
|
—
|
25,360
|
|
$
|
31.68
|
|
$
|
483,122
|
|
Harris Mustafa
|
3/26/2013
|
$
|
162,500
|
|
$
|
325,000
|
|
$
|
650,000
|
|
—
|
2,866
|
|
—
|
14,490
|
|
$
|
31.68
|
|
$
|
276,051
|
|
(1)
|
These columns represent possible payouts for fiscal 2013 under our Incentive Compensation Plan (ICP). See the Compensation Discussion and Analysis for a discussion of the performance-based criteria applicable to these awards.
|
(2)
|
Detailed in these columns is the number of shares underlying the performance-based stock units and stock options granted March 26, 2013. Performance-based stock units reflect dividend equivalents with respect to the quarterly dividend paid on June 28, 2013 and September 30, 2013, and December 31, 2013. The units also reflect the adjustment due to the 2 for 1 stock split that was effective November 2, 2013. Option amounts have been adjusted to reflect the 2 for 1 stock split. Performance-Based Stock Units vest 100% on the third anniversary of the Grant Date subject to the Company’s 100% achievement of the Performance Goal. Options vest ratably over five years on each of the first five anniversaries of the grant date.
|
(3)
|
DSW sets the exercise price of all stock options using the closing market price of its Common Shares on the date of grant. The grant price was subsequently adjusted for the 2 for 1 stock split that occurred during fiscal 2013 and as shown in the table reflects the adjustments for the split.
|
|
Option Awards
|
Stock Awards
|
||||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised Options
Exercisable
|
Number of
Securities
Underlying
Unexercised Options
Unexercisable
|
|
Equity Incentive
Plan Awards: Number
of Securities
Underlying
Unexercised
Unearned Options
|
Option Exercise
Price
|
Option Expiration Date
|
Number of Shares or Units of Stock That Have Not Vested
|
Market Value of
Shares or Units of
Stock That Have Not
Vested (1)
|
Equity Incentive
Plan Awards: Number
of Unearned Shares,
Units, or Other
Rights That Have
Not Vested
|
Equity Incentive
Plan Awards: Market
or Payout Value of
Unearned Shares,
Units, or Other
Rights That Have
Not Vested
|
||||||||
Jay L. Schottenstein
|
89,688
|
|
—
|
|
|
N/A
|
$
|
12.93
|
|
9/7/2016
|
25,904
|
|
(8)
|
$
|
975,286
|
|
N/A
|
N/A
|
|
115,930
|
|
—
|
|
|
N/A
|
$
|
19.94
|
|
4/5/2017
|
||||||||
|
40,176
|
|
—
|
|
|
N/A
|
$
|
6.01
|
|
4/3/2018
|
||||||||
|
35,774
|
|
49,642
|
|
(4)
|
N/A
|
$
|
12.38
|
|
3/24/2020
|
||||||||
|
19,444
|
|
29,164
|
|
(5)
|
N/A
|
$
|
17.43
|
|
3/22/2021
|
||||||||
|
9,888
|
|
39,558
|
|
(6)
|
N/A
|
$
|
26.66
|
|
3/27/2022
|
||||||||
|
—
|
|
43,470
|
|
(7)
|
N/A
|
$
|
31.68
|
|
3/26/2023
|
||||||||
Michael R. MacDonald
|
46,460
|
|
92,916
|
|
(4)
|
N/A
|
$
|
12.38
|
|
3/24/2020
|
125,473
|
|
(9)
|
$
|
4,724,058
|
|
N/A
|
N/A
|
|
32,606
|
|
97,820
|
|
(5)
|
N/A
|
$
|
17.43
|
|
3/22/2021
|
||||||||
|
33,128
|
|
132,520
|
|
(6)
|
N/A
|
$
|
26.66
|
|
3/27/2022
|
||||||||
|
—
|
|
144,890
|
|
(7)
|
N/A
|
$
|
31.68
|
|
3/26/2023
|
||||||||
Deborah L. Ferrée
|
106,682
|
|
—
|
|
|
N/A
|
$
|
8.84
|
|
6/28/2015
|
73,098
|
|
(10)
|
$
|
2,752,140
|
|
N/A
|
N/A
|
|
114,854
|
|
—
|
|
|
N/A
|
$
|
19.94
|
|
4/5/2017
|
||||||||
|
101,952
|
|
—
|
|
|
N/A
|
$
|
6.29
|
|
4/23/2018
|
||||||||
|
30,110
|
|
60,224
|
|
(2)
|
N/A
|
$
|
4.65
|
|
4/1/2019
|
||||||||
|
83,884
|
|
55,922
|
|
(4)
|
N/A
|
$
|
12.38
|
|
3/24/2020
|
||||||||
|
37,684
|
|
56,522
|
|
(5)
|
N/A
|
$
|
17.43
|
|
3/22/2021
|
||||||||
|
19,160
|
|
76,644
|
|
(6)
|
N/A
|
$
|
26.66
|
|
3/27/2022
|
||||||||
|
—
|
|
83,310
|
|
(7)
|
N/A
|
$
|
31.68
|
|
3/26/2023
|
||||||||
Douglas J. Probst
|
—
|
|
33,552
|
|
(2)
|
N/A
|
$
|
4.65
|
|
4/1/2019
|
25,578
|
|
(11)
|
$
|
963,012
|
|
|
|
|
—
|
|
20,648
|
|
(3)
|
N/A
|
$
|
12.34
|
|
3/23/2020
|
||||||||
|
—
|
|
19,744
|
|
(5)
|
N/A
|
$
|
17.43
|
|
3/22/2021
|
||||||||
|
—
|
|
25,878
|
|
(6)
|
N/A
|
$
|
26.66
|
|
3/27/2022
|
||||||||
|
—
|
|
25,360
|
|
(7)
|
N/A
|
$
|
31.68
|
|
3/26/2023
|
||||||||
Harris Mustafa
|
—
|
|
—
|
|
|
N/A
|
$
|
6.01
|
|
4/3/2018
|
15,575
|
|
(12)
|
$
|
586,399
|
|
N/A
|
N/A
|
|
—
|
|
24,088
|
|
(2)
|
N/A
|
$
|
4.65
|
|
4/1/2019
|
||||||||
|
—
|
|
13,764
|
|
(3)
|
N/A
|
$
|
12.34
|
|
3/23/2020
|
||||||||
|
4,086
|
|
12,260
|
|
(5)
|
N/A
|
$
|
17.43
|
|
3/22/2021
|
||||||||
|
3,460
|
|
13,846
|
|
(6)
|
N/A
|
$
|
26.66
|
|
3/27/2022
|
||||||||
|
—
|
|
14,490
|
|
(7)
|
N/A
|
$
|
31.68
|
|
3/26/2023
|
(1)
|
Represents the closing share price of DSW Class A common stock on the last day of the fiscal year ($37.65) multiplied by the number of shares not yet vested.
|
(2)
|
The remaining options vest on April 1, 2014.
|
(3)
|
The remaining options vest ratably on March 23, 2014 and 2015.
|
(4)
|
The remaining options vest ratably on March 24, 2014 and 2015.
|
(5)
|
The remaining options vest ratably on March 22, 2014, 2015 and 2016.
|
(6)
|
The remaining options vest ratably on March 27, 2014, 2015, 2016 and 2017.
|
(7)
|
The remaining options vest ratably on March 26, 2014, 2015, 2016, 2017 and 2018.
|
(8)
|
Restricted stock units vest on March 22, 2015 (8,661), and March 27, 2016 (8,645). Performance-based stock units vest on March 26, 2016 (8,598).
|
(9)
|
Restricted stock units vest on March 24, 2014 (37,973), March 22, 2015 (29,313), and March 27, 2016 (29,524). Performance-based stock units vest on March 26, 2016 (28,663).
|
(10)
|
Restricted stock units vest on March 24, 2014 (22,874), March 22, 2015 (16,875), and March 27, 2016 (16,867). Performance-based stock units vest on March 26, 2016 (16,482).
|
(11)
|
Restricted stock units vest on March 23, 2014 (8,661), March 22, 2015 (5,998), and March 27, 2016 (5,903). Performance-based stock units vest on March 26, 2016 (5,016).
|
(12)
|
Restricted stock units vest on March 23, 2014 (5,773), March 22, 2015 (3,777), and March 27, 2016 (3,159). Performance-based stock units vest on March 26, 2016 (2,866).
|
|
Option Awards
|
Stock Awards
|
||||||||
Name
|
Number of Shares
Acquired on
Exercise (1)
|
Value Realized
On Exercise
|
Number of Shares
Acquired on Vesting
|
Value Realized
on Vesting
|
||||||
Jay L. Schottenstein
|
—
|
|
$
|
—
|
|
—
|
|
$
|
—
|
|
Michael R. MacDonald
|
—
|
|
$
|
—
|
|
6
|
|
$
|
251
|
|
Deborah L. Ferrée
|
30,110
|
|
$
|
1,048,284
|
|
33,002
|
|
$
|
1,052,784
|
|
Douglas J. Probst
|
297,192
|
|
$
|
9,075,678
|
|
17,594
|
|
$
|
561,249
|
|
Harris Mustafa
|
43,878
|
|
$
|
1,121,400
|
|
13,202
|
|
$
|
421,144
|
|
(1)
|
The number of shares acquired on exercise has been adjusted for the 2 for 1 stock split that was effective November 2, 2013.
|
Name
|
Plan
|
Executive Contributions in Last FY ($) (1)
|
DSW Contributions in Last FY ($)
|
Aggregate Earnings in Last FY ($) (3)
|
Aggregate Withdrawals/ Distributions ($)
|
Aggregate Balance at Last FYE ($)
|
|||||||
Jay L. Schottenstein
|
DSW Inc. Nonqualified Deferred Compensation Plan
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Michael R. MacDonald
|
DSW Inc. Nonqualified Deferred Compensation Plan
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Deborah L. Ferrée
|
DSW Inc. Nonqualified Deferred Compensation Plan
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Douglas J. Probst
|
DSW Inc. Nonqualified Deferred Compensation Plan
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Harris Mustafa
|
DSW Inc. Nonqualified Deferred Compensation Plan
|
151,439
|
|
(2)
|
—
|
|
129,991
|
|
—
|
|
801,958
|
|
|
(1)
|
Amounts eligible to be deferred into the Nonqualified Deferred Compensation Plan are described in more detail in the Compensation Discussion and Analysis on page 29.
|
(2)
|
Amounts deferred are included in the Salary and Non-Equity Incentive Plan compensation columns presented in the Summary Compensation Table on page 31.
|
(3)
|
Aggregate earnings in the last fiscal year are not reflected in the 2013 Summary Compensation Table because the earnings were neither preferential nor above-market.
|
Named Executive Officer
|
Involuntary
Termination Without Cause or Voluntary Termination for Good
Reason (1)
|
Involuntary
Termination Because of Death
or Disability (2)
|
Voluntary
Termination Because of
Retirement (2)
|
Change in
Control (3)
|
||||||||
Jay L. Schottenstein
|
|
|
|
|
||||||||
Salary Continuation
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Benefits Continuation
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Accelerated Vesting of Equity
|
—
|
|
$
|
3,513,693
|
|
$
|
3,513,693
|
|
$
|
4,413,490
|
|
|
Total
|
—
|
|
$
|
3,513,693
|
|
$
|
3,513,693
|
|
$
|
4,413,490
|
|
|
Michael R. MacDonald
|
|
|
|
|
||||||||
Salary Continuation
(4)
|
$
|
1,050,000
|
|
—
|
|
—
|
|
—
|
|
|||
Benefits Continuation
(5)
|
$
|
5,652
|
|
—
|
|
—
|
|
—
|
|
|||
Accelerated Vesting of Equity
|
$
|
3,800,068
|
|
$
|
11,371,354
|
|
$
|
11,371,354
|
|
$
|
13,974,246
|
|
Total
|
$
|
4,855,720
|
|
$
|
11,371,354
|
|
$
|
11,371,354
|
|
$
|
13,974,246
|
|
Deborah L. Ferrée
|
|
|
|
|
||||||||
Salary Continuation
(4)
|
$
|
1,000,000
|
|
—
|
|
—
|
|
—
|
|
|||
Benefits Continuation
(5)
|
$
|
3,008
|
|
—
|
|
—
|
|
—
|
|
|||
Accelerated Vesting of Equity
|
$
|
4,246,173
|
|
$
|
8,635,234
|
|
$
|
8,635,234
|
|
$
|
10,484,612
|
|
Total
|
$
|
5,249,181
|
|
$
|
8,635,234
|
|
$
|
8,635,234
|
|
$
|
10,484,612
|
|
Douglas J. Probst
|
|
|
|
|
||||||||
Salary Continuation
(4)
|
$
|
570,000
|
|
—
|
|
—
|
|
—
|
|
|||
Benefits Continuation
(5)
|
$
|
8,114
|
|
—
|
|
—
|
|
—
|
|
|||
Accelerated Vesting of Equity
|
$
|
1,929,128
|
|
$
|
3,427,954
|
|
$
|
3,427,954
|
|
$
|
4,123,966
|
|
Total
|
$
|
2,507,242
|
|
$
|
3,427,954
|
|
$
|
3,427,954
|
|
$
|
4,123,966
|
|
Harris Mustafa
(6)
|
|
|
|
|
||||||||
Salary Continuation
(4)
|
$
|
650,000
|
|
—
|
|
—
|
|
—
|
|
|||
Benefits Continuation
(5)
|
$
|
7,909
|
|
—
|
|
—
|
|
—
|
|
|||
Accelerated Vesting of Equity
|
$
|
1,324,449
|
|
$
|
2,216,240
|
|
$
|
2,216,240
|
|
$
|
2,652,411
|
|
Total
|
$
|
1,982,358
|
|
$
|
2,216,240
|
|
$
|
2,216,240
|
|
$
|
2,652,411
|
|
(1)
|
The amount reported for “Accelerated Vesting of Equity” reflects the intrinsic value of unvested stock options and restricted stock units that otherwise would have vested during the one year following the Named Executive Officer’s date of termination.
|
(2)
|
The amount reported for “Accelerated Vesting of Equity” reflects the intrinsic value of unvested stock options and restricted stock units that would vest immediately upon the Executive’s date of death, disability or retirement as defined by our existing Equity Plan.
|
(3)
|
The amount reported for “Accelerated Vesting of Equity” reflects the intrinsic value of all unvested stock options and restricted stock units that would vest immediately upon the change in control date based on the change in control price, which is represented by the highest closing stock price within 30 days of the fiscal year end.
|
(4)
|
The amount reported reflects the continued payment of base salary for a period of 12 months at the rate in effect on the Executive’s date of termination.
|
(5)
|
The amount reported reflects the cost of maintaining health care coverage for a period of 12 months at the coverage level in effect as of the Executive’s date of termination. The cost of maintaining health care coverage is calculated as the difference between (i) the company’s cost of providing the benefits and (ii) the amount the Executive paid for such benefits as of the Executive’s date of termination.
|
(6)
|
Mr. Mustafa’s employment agreement does not contain a “Good Reason” termination clause.
|
•
|
The Compensation Committee reviews the quality of our earnings prior to approving incentive payments;
|
•
|
We provide a significant percentage of compensation based on performance, which is in turn based on annual and long-term incentives that require sustained value creation over several years to earn target incentives;
|
•
|
For cash incentive payments made under our ICP, the Compensation Committee provides a maximum payout of 200% of target;
|
•
|
We use the same financial metric—historically net income—to determine annual incentive payouts for all home office bonus eligible associates;
|
•
|
Certain payments to our Named Executive Officers are subject to recovery if we restate a financial statement due to material noncompliance with any financial reporting requirement under the securities laws and such noncompliance is a result of misconduct; and
|
•
|
The Compensation Committee has the discretion to adjust incentive payments based on (i) key performance indicators that have a long-term financial impact, and (ii) an assessment of whether results are consistent with our values.
|
•
|
An annual cash retainer of $55,000;
|
•
|
An annual equity retainer of $110,000; and
|
•
|
An additional annual retainer for committee service for each committee on which such director serves (provided that the committee chairs do not receive such additional retainer) as follows:
|
•
|
Audit Committee — $15,000
|
•
|
Compensation Committee — $11,500
|
•
|
Nominating and Corporate Governance Committee — $10,000
|
•
|
Technology Committee — $10,000
|
•
|
The annual cash retainer and the additional annual retainer for committee service are payable in quarterly installments on the last day of each fiscal quarter; and
|
•
|
The annual equity retainer is payable on the date of each annual meeting of the shareholders for the purpose of electing directors, determined by dividing the amount of the retainer by the share price of our Class A Common Shares on the grant date.
|
Name
|
Fees Earned or Paid
in Cash
|
Stock Awards (1)
|
Option Awards
|
Non-Equity
Incentive Plan
Compensation
|
Change In Pension
Value and
Nonqualified
Deferred
Compensation Earnings
|
All Other
Compensation
|
Total
|
|
|
|
|
|
|
|
|
Henry L. Aaron
|
$66,500
|
$110,000
|
—
|
—
|
—
|
—
|
$176,500
|
Elaine J. Eisenman
|
$76,500
|
$110,000
|
—
|
—
|
—
|
—
|
$186,500
|
Carolee Friedlander
|
$76,500
|
$110,000
|
—
|
—
|
—
|
—
|
$186,500
|
Joanna T. Lau
|
$95,000
|
$110,000
|
—
|
—
|
—
|
—
|
$205,000
|
Philip B. Miller
|
$100,000
|
$110,000
|
—
|
—
|
—
|
—
|
$210,000
|
James O'Donnell
|
$65,000
|
$110,000
|
—
|
—
|
—
|
—
|
$175,000
|
Joseph A. Schottenstein
(2)
|
—
|
$173,956
|
—
|
—
|
—
|
—
|
$173,956
|
Harvey L. Sonnenberg
|
$100,000
|
$110,000
|
—
|
—
|
—
|
—
|
$210,000
|
Allan J. Tanenbaum
(3)
|
—
|
$205,000
|
—
|
—
|
—
|
—
|
$205,000
|
(1)
|
Each director who is not an employee of DSW and who does not otherwise receive compensation (including severance) from DSW was granted stock units on June 5, 2013. The amounts reported in the “Stock Awards” column represent the full grant date fair value for financial statement reporting purposes, as provided by ASC 718. Messrs. Schottenstein, Sonnenberg, and Tanenbaum, Ms. Friedlander and Ms. Lau elected to have the shares distributable within 30 days of the grant date. The remaining directors have elected to settle the units upon leaving the Board of Directors.
|
(2)
|
Beginning in the first quarter of fiscal 2013, Mr. Schottenstein elected to receive payment of all fees in the form of stock awards.
|
(3)
|
Beginning in calendar year 2012, Mr. Tanenbaum elected to receive payment of all fees in the form of stock awards.
|
Name
|
Number of Stock Units Outstanding
as of February 1, 2014
|
Henry L. Aaron
|
11,482
|
Elaine J. Eisenman
|
44,014
|
Carolee Friedlander
|
51,062
|
Joanna T. Lau
|
38,574
|
Philip B. Miller
|
59,170
|
James O'Donnell
|
5,717
|
Joseph A. Schottenstein
|
432
|
Harvey L. Sonnenberg
|
46,730
|
Allan J. Tanenbaum
|
73,152
|
•
|
providing consultants, employees and eligible directors an opportunity to acquire an ownership interest in the
|
•
|
enabling the Company and related entities to attract and retain the services of outstanding consultants, employees and eligible directors upon whose judgment, interest and special efforts the successful conduct of our business is largely dependent; and
|
•
|
meeting the requirements for deductibility of certain performance-based compensation awarded to covered officers under Section 162(m).
|
•
|
decide which employees, consultants and eligible directors will be selected to participate in and be granted awards under the 2005 Plan;
|
•
|
specify the type of award to be granted and the terms and conditions upon which an award will be granted and may be earned (including, without limitation, when and how an award may be exercised or earned and the exercise price, if applicable, associated with each award);
|
•
|
prescribe any other terms and conditions (including accelerated vesting or forfeiture provisions) affecting an award;
|
•
|
adopt, amend and rescind rules and regulations relating to the 2005 Plan; and
|
•
|
make all other decisions necessary or advisable for the administration and interpretation of the 2005 Plan.
|
•
|
the number of awards that may or will be granted to participants during a fiscal year;
|
•
|
the aggregate number of shares of Stock available for awards under the 2005 Plan or subject to outstanding awards (as well as any share-based limits imposed under the 2005 Plan);
|
•
|
the respective exercise price, number of shares and other limitations applicable to outstanding or subsequently granted awards; and
|
•
|
any other factors, limits or terms affecting any outstanding or subsequently granted awards.
|
•
|
incentive stock options (
i.e.
, stock options which meet the requirements of Section 422 of the Internal Revenue Code) and nonstatutory stock options;
|
•
|
performance shares;
|
•
|
performance units;
|
•
|
restricted stock;
|
•
|
restricted stock units;
|
•
|
stock appreciation rights; and
|
•
|
stock units.
|
•
|
net earnings or net income (before or after taxes);
|
•
|
earnings per share;
|
•
|
net sales or revenue growth;
|
•
|
net operating profit;
|
•
|
return measures (including, but not limited to, return on assets, capital, invested capital, equity, sales or revenue);
|
•
|
cash flow (including, but not limited to, operating cash flow, free cash flow, cash flow return on equity and cash flow return on investment);
|
•
|
earnings before or after taxes, interest, depreciation and/or amortization;
|
•
|
gross or operating margins;
|
•
|
productivity ratios;
|
•
|
share price (including, but not limited to, growth measures and total shareholder return);
|
•
|
expense targets;
|
•
|
margins;
|
•
|
operating efficiency;
|
•
|
market share;
|
•
|
customer satisfaction;
|
•
|
working capital targets; and
|
•
|
economic value added (net operating profit after tax minus the sum of capital multiplied by the cost of capital).
|
•
|
Retirement
. All awards that are exercisable when a participant “retires” (as defined in the 2005 Plan) may be exercised at any time before the earlier of the expiration date specified in the award agreement or one year (three months in the case of incentive stock options) after the retirement date (or any shorter period specified in the award agreement).
|
•
|
Death or Disability
. All awards that are exercisable when a participant terminates because of death or “disability” (as defined in the 2005 Plan) may be exercised by the participant or the participant’s beneficiary at any time before the earlier of the expiration date specified in the award agreement or one year after the date of death or termination because of disability (or any shorter period specified in the award agreement).
|
•
|
Termination for Cause
. All awards that are outstanding (whether or not then exercisable) will be forfeited if a participant terminates for “cause” (as defined in the 2005 Plan).
|
•
|
Termination in Connection with a Section 424 Transaction
. Stock options held by a participant who terminates in connection with a transaction described in Section 424 of the Internal Revenue Code will expire immediately upon the date of termination, but only if and to the extent that another party to that transaction will grant substitute options in exchange for the stock options to be cancelled and otherwise comply with the rules and procedures prescribed under the provisions of Section 424 of the Internal Revenue Code governing that substitution. In all other cases, stock options held by a participant who terminates in connection with a transaction described in Section 424 of the Internal Revenue Code will expire as otherwise provided in the 2005 Plan and the award agreement.
|
•
|
Termination for any Other Reason
. Any awards that are outstanding when a participant terminates for any reason not described above and which are then exercisable, or which the Committee has, in its sole discretion, decided to make exercisable, may be exercised at any time before the earlier of the expiration date specified in the award agreement or ninety days after the termination date (or any shorter period specified in the award agreement) and all awards that are not then exercisable will terminate on the termination date.
|
•
|
each outstanding stock option, whether or not exercisable, will be cancelled in exchange for cash equal to the excess of the “change in control price” (as defined in the 2005 Plan) over the exercise price associated with the cancelled stock option, or, at the Committee’s discretion, for whole shares of Stock with a fair market value equal to the excess of the change in control price over the exercise price associated with the cancelled stock option, and the fair market value of any fractional share of Stock will be distributed in cash, and all related affiliated and tandem SARs will be cancelled;
|
•
|
all performance criteria associated with performance shares or performance units will be deemed to have been met, all performance periods will be accelerated to the date of the change in control and all outstanding performance shares and performance units will be distributed in a single lump sum cash payment;
|
•
|
all freestanding SARs will be deemed to be exercisable and will be liquidated in a single lump sum cash payment;
|
•
|
all stock units issued to directors will be distributed immediately in the form provided in the “annual retainer deferral form” (as defined in the 2005 Plan); and
|
•
|
all restrictions then imposed on restricted stock or restricted stock units will lapse.
|
|
|
|
|
|
Options
|
|
|
Granted Since
|
Name of Individual or Identity of Group
|
|
Inception (#)
|
Jay L. Schottenstein
Executive Chairman of the Board of Directors
|
|
672,134
|
Michael R. MacDonald
President and Chief Executive Officer |
|
931,702
|
Deborah L. Ferrée
Vice Chairman and Chief Merchandising Officer
|
|
1,321,640
|
Douglas J. Probst
Executive Vice President and Chief Financial Officer
|
|
605,088
|
Harris Mustafa
Executive Vice President, Supply Chain & Merchandise Planning & Allocation
|
|
380,652
|
All Current Executive Officers as a Group
|
|
4,964,830
|
All Current Directors Who are not Executive Officers as a Group
|
|
78,022
|
Each Nominee for Election as Director
|
|
7,008
|
Each Associate of any such Directors, Executive Officers or Nominees
|
|
None
|
Each Other Person Who Received or Is to Receive 5% of Such Options, Warrants or Rights
|
|
None
|
All Employees (including terminated Employees and Officers who are not Executive Officers) as a Group
|
|
5,825,354
|
•
|
providing participants an opportunity to earn incentive compensation if specified objectives are met; and
|
•
|
enabling the Company to attract and retain the services of outstanding employees upon whose judgment, interest and special efforts the successful conduct of the Company’s business is largely dependent.
|
•
|
determine who will participate in the 2005 ICP;
|
•
|
determine the terms and conditions of awards, the type of awards to be granted and when awards will be granted;
|
•
|
determine the performance goals applicable to awards;
|
•
|
adopt, amend and rescind rules and regulations relating to the 2005 ICP; and
|
•
|
make all other decisions necessary or advisable for the administration of the 2005 ICP.
|
•
|
net earnings or net income (before or after taxes);
|
•
|
earnings per share;
|
•
|
net sales or revenue growth;
|
•
|
net operating profit;
|
•
|
return measures (including, but not limited to, return on assets, capital, invested capital, equity, sales, or revenue);
|
•
|
cash flow (including, but not limited to, operating cash flow, free cash flow, cash flow return on equity, and cash flow
|
•
|
earnings before or after taxes, interest, depreciation, and/or amortization;
|
•
|
gross or operating margins;
|
•
|
productivity ratios;
|
•
|
share price (including, but not limited to, growth measures and total shareholder return);
|
•
|
expense targets;
|
•
|
margins;
|
•
|
operating efficiency;
|
•
|
market share;
|
•
|
customer satisfaction;
|
•
|
working capital targets; and
|
•
|
economic value added (net operating profit after tax minus the sum of capital multiplied by the cost of capital).
|
•
|
the number of shares available for issuance under the 2005 Plan;
|
•
|
the Company's historical burn rate for equity (which was 0.72% in 2013 and
averaged 1.01% for the previous three years;
|
•
|
the potential dilutive effect the issuance of shares under the 2014 Plan could have; and
|
•
|
anticipated head count growth of the Company.
|
•
|
providing consultants, employees and eligible directors an opportunity to acquire an ownership interest in the Company;
|
•
|
enabling the Company and related entities to attract and retain the services of outstanding consultants, employees and eligible directors upon whose judgment, interest and special efforts the successful conduct of our business is largely dependent; and
|
•
|
meeting the requirements for deductibility of certain performance-based compensation awarded to covered officers under Section 162(m).
|
•
|
decide which employees, consultants and eligible directors will be selected to participate in and be granted awards under the 2014 Plan;
|
•
|
specify the type of award to be granted and the terms and conditions upon which an award will be granted and may be earned (including, without limitation, when and how an award may be exercised or earned and the exercise price, if applicable, associated with each award);
|
•
|
prescribe any other terms and conditions (including accelerated vesting or forfeiture provisions) affecting an award;
|
•
|
adopt, amend and rescind rules and regulations relating to the 2014 Plan; and
|
•
|
make all other decisions necessary or advisable for the administration and interpretation of the 2014 Plan.
|
•
|
the aggregate number and/or kind of shares of Stock reserved for issuance under the Plan (including without limitation, the ISO limit);
|
•
|
the number and/or kind of shares of Stock subject to outstanding awards
|
•
|
the exercise price with respect to outstanding Stock Appreciation Value Awards;
|
•
|
any individual participant share limitations set forth herein; and
|
•
|
any other adjustment that the Committee determines to be in equitable,
provided, however,
that the number if shares subject to any Opetion shall be rounded down to the nearest whole number;
provided,further,
that no such adjustment shall fail to satisfy Code Section 409A and the regulations thereunder, and that all awards shall continue to be exempt from Code Section 409A.
|
•
|
incentive stock options (
i.e.
, stock options which meet the requirements of Section 422 of the Internal Revenue Code) and nonstatutory stock options;
|
•
|
performance shares;
|
•
|
performance units;
|
•
|
restricted stock;
|
•
|
restricted stock units;
|
•
|
stock appreciation rights; and
|
•
|
unrestricted stock units.
|
•
|
net earnings or net income (before or after taxes);
|
•
|
earnings per share;
|
•
|
net sales or revenue growth;
|
•
|
net operating profit;
|
•
|
return measures (including, but not limited to, return on assets, capital, invested capital, equity, sales or revenue);
|
•
|
cash flow (including, but not limited to, operating cash flow, free cash flow, cash flow return on equity and cash flow return on investment);
|
•
|
earnings before or after taxes, interest, depreciation and/or amortization;
|
•
|
gross or operating margins;
|
•
|
productivity ratios;
|
•
|
share price (including, but not limited to, growth measures and total shareholder return);
|
•
|
expense targets;
|
•
|
margins;
|
•
|
operating efficiency;
|
•
|
marketshare;
|
•
|
customer satisfaction;
|
•
|
working capital targets; and
|
•
|
economic value added (net operating profit after tax minus the sum of capital multiplied by the cost of capital).
|
•
|
Retirement
. All awards that are exercisable when a participant “retires” (as defined in the 2014 Plan) may be exercised at any time before the earlier of the expiration date specified in the award agreement or one year (three months in the case of incentive stock options) after the retirement date (or any shorter period specified in the award agreement).
|
•
|
Death or Disability
. All awards that are exercisable when a participant terminates because of death or “disability” (as defined in the 2014 Plan) may be exercised by the participant or the participant’s beneficiary at any time before the earlier of the expiration date specified in the award agreement or one year after the date of death or termination because of disability (or any shorter period specified in the award agreement).
|
•
|
Termination for Cause
. All awards that are outstanding (whether or not then exercisable) will be forfeited if a participant terminates for “cause” (as defined in the 2014 Plan).
|
•
|
Termination in Connection with a Section 424 Transaction
. Stock options held by a participant who terminates in connection with a transaction described in Section 424 of the Internal Revenue Code will expire immediately upon the date of termination, but only if and to the extent that another party to that transaction will grant substitute options in exchange for the stock options to be canceled and otherwise comply with the rules and procedures prescribed under the provisions of Section 424 of the Internal Revenue Code governing that substitution. In all other cases, stock options held by a participant who terminates in connection with a transaction described in Section 424 of the Internal Revenue Code will expire as otherwise provided in the 2014 Plan and the award agreement.
|
•
|
Termination for any Other Reason
. Any awards that are outstanding when a participant terminates for any reason not described above and which are then exercisable, or which the Committee has, in its sole discretion, decided to make exercisable, may be exercised at any time before the earlier of the expiration date specified in the award agreement or ninety days after the termination date (or any shorter period specified in the award agreement) and all awards that are not then exercisable will terminate on the termination date.
|
•
|
all options and stock appreciation rights shall vest and become exercisable immediately upon the change in control event;
|
•
|
the restrictions on all shares of restricted stock shall lapse and all restricted stock units shall vest immediately;
|
•
|
all performance awards shall fully vest immediately and shall be considered to be earned in full at target as if the applicable performance goals for the performance period had been achieved.
|
•
|
Attract and retain highly talented, experienced retail executives who can make significant contributions to our long-term success;
|
•
|
Reward executives for delivering superior performance; and
|
•
|
Create a strong link among the interests of shareholders, DSW’s financial performance and the total compensation of executives, and align executive incentives with shareholder value creation.
|
|
|
|
|
|
|
|
Number of securities
|
||||
|
|
|
|
|
|
|
remaining available for
|
||||
|
|
Number of securities to
|
Weighted-average
|
|
issuance under equity
|
||||||
|
|
be issued upon exercise
|
exercise price of
|
|
compensation plans
|
||||||
|
|
of outstanding options,
|
outstanding options,
|
|
(excluding securities
|
||||||
Plan Category
|
|
warrants and rights (a)
|
warrants and rights(b)
|
|
reflected in column(a))(c)
|
||||||
Equity compensation plans approved by security holders
(1)
|
|
|
4,122,591
|
|
$
|
17.62
|
|
|
|
6,713,220
|
|
|
|
|
|
|
|
|
|
|
|||
Equity compensation plans not approved by security holders
|
|
|
N/A
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Total
|
|
|
4,122,591
|
|
$
|
17.62
|
|
|
|
6,713,220
|
|
|
|
|
|
|
|
|
|
|
(1)
|
any person who is, or at any time since the beginning of the Company’s last fiscal year was, a director, director nominee or executive officer of the Company;
|
(2)
|
a shareholder of the Company who owns more than five percent (5%) of any class of the Company’s voting securities;
|
(3)
|
a member of the immediate family of any person described in (1) or (2) above; and
|
(4)
|
an entity in which any person described in (1), (2) or (3) above has a greater than ten percent (10%) equity interest.
|
•
|
Is the transaction in the normal course of the Company’s business?
|
•
|
Are the terms of the transaction fair to the Company?
|
•
|
Are the terms of the transaction commercially reasonable? Are the terms of the transaction substantially the same as the terms that the Company would be able to obtain in an arm’s-length transaction with an unrelated third party?
|
•
|
Has the Company obtained an independent appraisal or completed a financial analysis of the transaction? If so, what are the results of such appraisal or analysis?
|
•
|
Is the transaction in the best interests of the Company? The Company’s shareholders?
|
•
|
Would the transaction impair a director’s independence in the event that the related person is an independent director?
|
•
|
If SSC learns about a corporate opportunity, it does not have to tell us about it and it is not a breach of any fiduciary duty for it to pursue such corporate opportunity for itself or to direct it elsewhere.
|
•
|
If one of our directors or officers who is also a director or officer of SSC learns about a corporate opportunity, he or she shall not be liable to us or to our shareholders if SSC pursues the corporate opportunity for itself, directs it elsewhere or does not communicate information about the opportunity to us, if such director or officer acts in a manner consistent with the following policy:
|
•
|
If the corporate opportunity is offered to one of our officers who is also a director but not an officer of SSC, the corporate opportunity belongs to us unless it was expressly offered to the officer in writing solely in his or her capacity as a director of SSC, in which case it belongs to SSC.
|
•
|
If the corporate opportunity is offered to one of our directors who is not an officer of DSW, and who is also a director or officer of SSC, the corporate opportunity belongs to us only if it was expressly offered to the director in writing solely in his or her capacity as our director.
|
•
|
If the corporate opportunity is offered to one of our officers, whether or not such person is also a director, who is also an officer of SSC, it belongs to us only if it is expressly offered to the officer in writing solely in his or her capacity as our officer or director.
|
•
|
the relationship or interest is disclosed or is known to the Board of Directors or the committee approving the contract or transaction, and the Board of Directors or committee, in good faith reasonably justified by the facts, authorizes the contract or transaction by the affirmative vote of a majority of the directors who are not interested in the contract or transaction;
|
•
|
the relationship or interest is disclosed or is known to the shareholders, and the shareholders approve the contract or transaction by the affirmative vote of the holders of a majority of the voting power of the Company held by persons not interested in the contract or transaction; or
|
•
|
the contract or transaction is fair at the time it is authorized or approved by the Board of Directors, a committee of the board of directors, or the shareholders.
|
|
|
By Order of the Board of Directors
|
|
|
|
|
|
William L. Jordan
|
|
|
Secretary
|
|
Dated: _____________________, 2014
|
|
_______________________________
|
|
Signature
|
|
|
|
Signature
|
|
Signature(s) shall agree with the name(s) printed on this Proxy. If shares are registered in two names, both shareholders should sign this Proxy. If signing as attorney, executor, administrator, trustee or guardian, please give your full title as such. If the shareholder is a corporation, please sign in full corporate name by an authorized officer. If the shareholder is a partnership or other entity, please sign that entity’s name by authorized person. (Please note any change of address on this Proxy.)
|