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DSW INC.
2005 EQUITY INCENTIVE PLAN
FORM OF STOCK UNITS
GRANTED TO
ON
DSW Inc.
(“Company”) and its shareholders believe that their
business interests are best served by extending to you an
opportunity to earn additional compensation based on the growth of
the Company’s business. To this end, the Company and its
shareholders adopted the DSW Inc. 2005 Equity Incentive Plan
(“Plan”) as a means through which you may share in the
Company’s success. This is done by granting Awards to
directors.
This Award
Agreement describes many features of your Award and the conditions
you must meet before you may receive the value associated with your
Award. To ensure you fully understand these terms and conditions,
you should:
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Read the Plan and the Plan’s
Prospectus carefully to ensure you understand how the Plan
works;
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Read this Award Agreement carefully
to ensure you understand the nature of your Award and what must
happen if you are to earn it; and
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Contact DSW’s Senior Vice
President, Human Resources at
if you have any questions about your Award.
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Also, no later
than
you must return a signed copy of the Award Agreement to:
Senior Vice
President, Human Resources
DSW
810 DSW Drive
Columbus, Ohio 43219
If you do not
do this, your Award will be revoked automatically as of the Grant
Date and you will not be entitled to receive anything on account of
the retroactively revoked Award.
Section 409A of the Internal Revenue Code
(“Section 409A”) imposes substantial penalties on
persons who receive some forms of deferred compensation (see the
Plan’s Prospectus for more information about these
penalties). Your Award has been designed to avoid these penalties.
However, because of uncertainty in the application of
Section 409A, it may be necessary to revise your Award
Agreement if you are to avoid these penalties. As a condition of
accepting this Award, you must agree to accept those revisions,
without any further consideration, even if those revisions change
the terms of your Award and reduce its value or potential
value.
1
You have been
granted an Award consisting of Stock Units, which will be converted
to common shares of the Company if the conditions described in this
Award Agreement are met. Federal income tax rules apply to the
payment of your Award. These and other conditions affecting your
Award are described in this Award Agreement, the Plan and the
Plan’s Prospectus, all of which you should read
carefully.
No later than
, you must return a signed copy of this Award Agreement
to:
Senior Vice
President, Human Resources
DSW
810 DSW Drive
Columbus, Ohio 43219
If you do not
do this, your Award will be revoked automatically as of the Grant
Date and you will not be entitled to receive anything on account of
the retroactively revoked Award.
Grant
Date: Your Stock Units
were granted on
and it also is the date your Stock Units vested.
Number of
Stock Units: You have
been granted
Stock Units in payment of a portion of your annual retainer.
Although these Stock Units are not actual shares of Company stock,
they will be credited with “dividends” at the same rate
and at the same time dividends are paid on actual shares of Company
Stock. These dividends will be converted to additional Stock Units
based on the amount of dividends paid and the Fair Market Value (as
defined in the Plan) of a share of Company stock. These additional
Stock Units will be distributed at the same time and subject to the
same terms and conditions that apply to other Stock Units granted
with this Award Agreement.
The conditions
that must be met before the Award is converted into shares of
Company stock are discussed below in the Section titled “When
Your Award Will Be Settled.”
When Your Award Will Be
Settled
Normal
Settlement: Your Stock
Units normally will be settled and converted to an equal number of
shares of Company stock when you leave the Company’s board of
directors (provided such termination of service constitutes a
separation from service within the meaning of
Section 409A).
How Your
Stock Units Might Be Settled Before the Normal Settlement
Date: If there is a
Change in Control (as defined in the Plan) before the Normal
Settlement Date, your Stock Units will be settled as of the date of
the Change in Control.
How Your
Stock Units May Be Forfeited: You will forfeit any Stock Units if, before they
are settled and before Change in Control, your board service ends
because:
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You
materially fail to substantially perform your position or
duties;
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You
engage in illegal or grossly negligent conduct that is materially
injurious to the Company or any Related Entity (as defined in the
Plan);
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You
materially violate any law or regulation governing the Company or
any Related Entity;
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You
commit a material act of fraud or dishonesty which has had or is
likely to have a material adverse effect upon the Company’s
(or any Related Entity’s) operations or financial
conditions;
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You
materially breach the terms of any other agreement with the Company
or any Related Entity; or
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You
breach any term of the Plan or this Award Agreement.
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Also, if you
terminate your boar
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