Note 8

Shareholders' Equity

The following tables set forth the changes in Brown Shoe Company, Inc. shareholders' equity and noncontrolling interests for the twenty-six weeks ended July 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 loss		(840	)		(246	)		(1,086	)
Other comprehensive income		(878	)		(4	)		(882	)
Dividends paid		(6,005	)		–			(6,005	)
Issuance of common stock under share-based plans, net		(2,058	)		–			(2,058	)
Tax benefit related to share-based plans		738			–			738
Share-based compensation expense		3,275			–			3,275
Equity at July 28, 2012	$	406,901		$	797		$	407,698

Share-Based Compensation

During the second quarter of 2012, the Company granted 108,700 restricted shares to certain employees with a weighted-average grant date fair value of $11.68. Of the 108,700 restricted shares granted, 67,350 shares vest in equal installments over four years. The remaining 41,350 restricted shares vest in four years. Share-based compensation expense is recognized on a straight-line basis separately for each vesting portion of the restricted stock award.

The Company also granted 16,700 restricted shares to non-employee directors with a weighted-average grant date fair value of $11.91 during the second quarter of 2012. The restricted shares granted to non-employee directors during the second quarter of 2012 vest in one year and share-based compensation expense will be recognized on a straight-line basis over the one-year period.

The Company granted 11,250 performance share units during the second quarter of 2012 with a weighted-average grant date fair value of $11.73 per unit. Vesting of performance-based units is dependent upon the financial performance of the Company and the attainment of certain financial goals over the next three years. Performance share units are payable in cash based on the Company's stock price upon payout. The performance share units may pay out at a maximum of 200% of the target number of units. Share-based compensation expense is being recognized ratably over the three-year service period based upon the anticipated number of units to be earned and the fair value of the performance share units, as remeasured at the end of each period.

The Company recognized share-based compensation expense of $1.8 million and $1.3 million during the thirteen weeks and $3.3 million and $3.0 million during the twenty-six weeks ended July 28, 2012 and July 30, 2011, respectively. The Company issued 154,527 shares of common stock during the thirteen weeks ended July 28, 2012, for restricted stock grants, stock options exercised and directors' fees. The Company issued 1,308,291 shares of common stock during the twenty-six weeks ended July 28, 2012, for performance share awards, restricted stock grants, stock options exercised and directors' fees. During the thirteen and twenty-six weeks ended July 28, 2012, the Company cancelled restricted stock awards of 81,000 and 114,500 shares, respectively, as a result of forfeitures.

The Company also granted 68,398 restricted stock units to non-employee directors with a weighted-average grant date fair value of $11.93 during the second quarter of 2012. Of the 68,398 restricted stock units granted, 1,598 of the restricted stock units vested and compensation expense was fully recognized during the second quarter of 2012 and 66,800 of the restricted stock units vest in one year and compensation expense will be recognized ratably over the one-year period based upon the fair value of the restricted stock units, as remeasured at the end of each period.