DSW INC.
NONQUALIFIED STOCK OPTION AGREEMENT
This Agreement is
entered into in Franklin County, Ohio. On
(the “Grant Date”), DSW Inc., an Ohio corporation (the
“Company”), has awarded to
(“Awardee”), an option (the “Option”) to
purchase
common shares, without par value, of the Company (the
“Shares”) for a price of
per share. The Option has been granted under the DSW Inc. 2005
Equity Incentive Plan (the “Plan”), and will include
and be subject to all provisions of the Plan, which are
incorporated herein by reference, and will be subject to the
provisions of this agreement. Capitalized terms used in this
agreement which are not specifically defined will have the meanings
ascribed to such terms in the Plan. This Option shall vest and
become exercisable in five installments, which shall be as nearly
equal as possible, on the first five anniversaries of the Grant
Date (each, the “Vesting Date” with respect to the
portion of the Option scheduled to vest on such date), subject to
the provisions of this agreement, including those relating to the
Awardee’s continued employment with the Company or a Related
Entity. Notwithstanding the foregoing, in the event of a Change in
Control prior to Awardee’s Termination of Employment, the
vesting of the Option shall be accelerated and settled in
accordance with the terms of Section 13 of the Plan. This
Option shall expire on
(the “Grant Expiration Date”).
1.
Method of Exercise and Payment of Price .
(a)
Method of Exercise . At any time when all of the Option or a
portion of the Option (such portion not to be fewer than 100 Shares
or the total number of Shares then underlying such Option) is
exercisable under the Plan and this agreement, some or all of the
exercisable portion of the Option may be exercised from time to
time by written notice to the Company, or such other method of
exercise as may be specified by the Company, including without
limitation, exercise by electronic means on the web site of the
Company’s third-party equity plan administrator, which
will:
(i) state the
number of whole Shares with respect to which the Option is being
exercised; and
(ii) if the
Option is being exercised by anyone other than Awardee, if not
already provided, be accompanied by proof satisfactory to counsel
for the Company of the right of such person or persons to exercise
the Option under the Plan and all applicable laws and
regulations.
(b)
Payment of Price . The full exercise price for the portion
of the Option being exercised shall be paid to the Company as
provided below:
(ii) by check
or wire transfer (denominated in U.S. Dollars);
(iii) subject
to any conditions or limitations established by the Committee,
other Shares which (A) in the case of Shares acquired from the
Company (whether upon the exercise of an Option or otherwise), have
been owned by the Participant for more than six months on the date
of surrender (unless this condition is waived by the Committee),
and (B) have a Fair Market Value on the date of surrender
equal to or greater than the aggregate exercise price of the Shares
as to which said Option shall be exercised (it being agreed that
the excess of the Fair Market Value over the aggregate exercise
price shall be refunded to the Awardee, with any fractional Share
being repaid in cash);
(iv) consideration
received by the Company under a broker-assisted sale and remittance
program acceptable to the Committee; or
(v) any
combination of the foregoing methods of payment.
2.
Transferability . The Option shall be transferable
(I) at Awardee’s death, by Awardee by will or pursuant
to the laws of descent and distribution, or (II) subject to
the Committee’s discretion, by Awardee during Awardee’s
lifetime pursuant to trust law.
