Note 8

Shareholders' Equity

The following tables set forth the changes in Brown Shoe Company, Inc. shareholders' equity and noncontrolling interests for the thirteen weeks ended April 28, 2012:


($ thousands)	Brown Shoe Company, Inc. Shareholders' Equity			Noncontrolling Interests			Total Equity
Equity at January 28, 2012	$	412,669		$	1,047		$	413,716
Net earnings (loss)		1,695			(67	)		1,628
Other comprehensive income		596			2			598
Dividends paid		(2,999	)		–			(2,999	)
Stock issued under share-based plans		(2,148	)		–			(2,148	)
Tax benefit related to share-based plans		753			–			753
Share-based compensation expense		1,444			–			1,444
Other		2			–			2
Equity at April 28, 2012	$	412,012		$	982		$	412,994

Share-Based Compensation

During the first quarter of 2012, the Company granted 26,000 stock options to certain employees with a weighted-average exercise price and grant date fair value of $9.18 and $5.46, respectively. These options vest in four equal increments, 25% vesting over each of the next four years, with a term of ten years. Share-based compensation expense is recognized on a straight-line basis separately for each vesting portion of the stock option award.

The Company also granted 625,500 restricted shares to certain employees with a weighted-average grant date fair value of $9.18 during the first quarter of 2012. The restricted shares granted to employees vest in four years and share-based compensation expense will be recognized on a straight-line basis over the four-year period.

The Company granted 93,075 performance share awards during the first quarter of 2012 with a weighted-average grant date fair value of $9.18. Vesting of performance-based awards is dependent upon the financial performance of the Company and the attainment of certain financial goals over the next three years. Performance share awards are payable in cash based on the Company's stock price upon payout. The performance share awards may pay out at a maximum of 200% of the target number of units. Share-based compensation expense is being recognized based on the fair value of the award on the date of grant and the anticipated number of units to be awarded on a straight-line basis over the three-year service period.

The Company recognized share-based compensation expense of $1.4 million and $1.7 million during the first quarter of 2012 and the first quarter of 2011, respectively. The Company issued 1,153,764 shares of common stock during the first quarter of 2012 for restricted stock grants, 2009 stock performance grants, stock options exercised and directors' fees. During the first quarter of 2012, the Company cancelled restricted stock awards of 33,500 shares as a result of forfeitures.

The Company also granted 1,743 restricted stock units to non-employee directors with a weighted-average grant date fair value of $9.29 during the first quarter of 2012. All restricted stock units granted during the first quarter of 2012 immediately vested and compensation expense was fully recognized.