Document:

EX-10.02

 

Exhibit 10.02

RESTRICTED SHARE UNITS AGREEMENT

     On September 2, 2005 (the “Grant Date”), Cardinal Health, Inc, an Ohio corporation
(the “Company”), has granted to Robert D. Walter (“Grantee”) 54,251 Restricted Share Units (the
“Restricted Share Units” or “Award”), representing an unfunded unsecured promise of the Company to
deliver common shares, without par value, of the Company (the “Common Shares”) to Grantee as set
forth herein. The Restricted Share Units have been granted pursuant to the Cardinal Health, Inc.
Amended and Restated Equity Incentive Plan, as amended (the “Plan”), and shall be subject to all
provisions of the Plan, which are incorporated herein by reference, and shall be subject to the
provisions of this Restricted Share Units Agreement (this “Agreement”). In the event of a conflict
between the provisions of this Agreement and the provisions of the Plan, the provisions of the Plan
shall control. Capitalized terms used in this Agreement which are not specifically defined shall
have the meanings ascribed to such terms in the Plan.

     1. Vesting. Subject to the provisions set forth elsewhere in this agreement, the
Restricted Share Units shall vest in accordance with the following schedule: 33.33% of the
Restricted Share Units shall vest on the first anniversary of the Grant Date, an additional 33.33%
of the Restricted Share Units shall vest on the second anniversary of the Grant Date, and the final
33.34% of the Restricted Share Units shall vest on the third anniversary of the Grant Date (each
such vesting date, the “Vesting Date” with respect to the Restricted Share Units scheduled to vest
on such date).

     2. Purchase Price. The purchase price of the Restricted Share Units shall be $0.00.

     3. Transferability. The Restricted Share Units shall not be transferable.

     4. Termination of Service. Unless otherwise determined by the Committee at or after
grant or termination, and except as set forth below, if Grantee’s Continuous Service (as
hereinafter defined) to the Company and its subsidiaries (collectively, the “Cardinal Group”)
terminates prior to the Vesting Date, with respect to an unvested Restricted Share Unit, such
Restricted Share Unit shall be forfeited by Grantee. If Grantee’s Continuous Service terminates
prior to the vesting in full of the Restricted Share Units by reason of Grantee’s death or
disability (as defined in the Plan), then the restrictions with respect to a ratable portion of any
unvested Restricted Share Units shall lapse and such ratable portion shall not be forfeited. Such
ratable portion shall be determined separately with respect to the Restricted Share Units scheduled
to vest on each applicable Vesting Date, and shall be an amount equal to the number of Restricted
Share Units scheduled to vest on such Vesting Date multiplied by a fraction, the numerator of which
is the number of days from the Grant Date through the date of such death or disability, and the
denominator of which is the number of days from the Grant Date through such Vesting Date. For
purposes of this Agreement, the term “Continuous Service” shall mean the absence of any
interruption or termination of service as an employee or director of any entity within the Cardinal
Group.

 

 

     5. Triggering Conduct/Competitor Triggering Conduct. As used in this Agreement,
“Triggering Conduct” shall include disclosing or using in any capacity other than as necessary in
the performance of duties assigned by the Cardinal Group any confidential information, trade
secrets or other business sensitive information or material concerning the Cardinal Group;
violation of Company policies, including conduct which would constitute a breach of any of the
Certificates of Compliance with Company Policies and/or the Certificates of Compliance with Company
Business Ethics Policies signed by Grantee; directly or indirectly employing, contacting concerning
employment, or participating in any way in the recruitment for employment of (whether as an
employee, officer, director, agent, consultant or independent contractor), any person who was or is
an employee, representative, officer or director of the Cardinal Group at any time within the 12
months prior to the termination of Grantee’s employment with the Cardinal Group; any action by
Grantee and/or his or her representatives that either does or could reasonably be expected to
undermine, diminish or otherwise damage the relationship between the Cardinal Group and any of its
customers, potential customers, vendors and/or suppliers that were known to Grantee; and breaching
any provision of any employment or severance agreement with a member of the Cardinal Group. As
used in this Agreement, “Competitor Triggering Conduct” shall include, either during Grantee’s
employment or within one year following Grantee’s termination of employment with the Cardinal
Group, accepting employment with or serving as a consultant or advisor or in any other capacity to
an entity that is in competition with the business conducted by any member of the Cardinal Group (a
“Competitor”), including, but not limited to, employment or another business relationship with any
Competitor if Grantee has been introduced to trade secrets, confidential information or business
sensitive information during Grantee’s employment with the Cardinal Group and such information
would aid the Competitor because the threat of disclosure of such information is so great that, for
purposes of this Agreement, it must be assumed that such disclosure would occur.

     6. Special Forfeiture/Repayment Rules. For so long as Grantee continues as an
employee with the Cardinal Group and for three years following Grantee’s termination of employment
with the Cardinal Group regardless of the reason, Grantee agrees not to engage in Triggering
Conduct. If Grantee engages in Triggering Conduct during the time period set forth in the
preceding sentence or in Competitor Triggering Conduct during the time period referenced in the
definition of “Competitor Triggering Conduct” set forth in Paragraph 5 above, then:

     (a) any Restricted Share Units that have not yet vested or that vested within the Look-Back
Period (as defined below) with respect to such Triggering Conduct or Competitor Triggering Conduct
and have not yet been settled by a payment pursuant to Paragraph 7 hereof shall immediately and
automatically terminate, be forfeited, and cease to exist; and

     (b) Grantee shall, within 30 days following written notice from the Company, pay to the
Company an amount equal to (x) the aggregate gross gain realized or obtained by Grantee resulting
from the settlement of all Restricted Share Units pursuant to Paragraph 7 hereof (measured as of
the settlement date (i.e., the market value of the Restricted Share Units on such settlement date))
that have already been settled and that had vested at any time within three years prior to the
Triggering Conduct (the “Look-Back Period”), minus (y) $1.00. If Grantee engages

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only in
Competitor Triggering Conduct, then the Look-Back Period shall be shortened to exclude any period
more than one year prior to Grantee’s termination of employment with the Cardinal Group, but
including any period between the time of Grantee’s termination and the time of Grantee’s engaging
in Competitor Triggering Conduct. Grantee may be released from Grantee’s obligations under this
Paragraph 6 if and only if the Committee (or its duly appointed designee) determines, in writing
and in its sole discretion, that such action is in the best interests of the Company. Nothing in
this Paragraph 6 constitutes a so-called “noncompete” covenant. This Paragraph 6 does, however,
prohibit certain conduct while Grantee is associated with the Cardinal Group and thereafter and
does provide for the forfeiture or repayment of the benefits granted by this Agreement under
certain circumstances, including, but not limited to, Grantee’s acceptance of employment with a
Competitor. Grantee agrees to provide the Company with at least 10 days written notice prior to
directly or indirectly accepting employment with or serving as a consultant or advisor or in any
other capacity to a Competitor, and further agrees to inform any such new employer, before
accepting employment, of the terms of this Paragraph 6 and Grantee’s continuing obligations
contained herein. No provision of this Agreement shall diminish, negate or otherwise impact any
separate noncompete or other agreement to which Grantee may be a party, including, but not limited
to, any of the Certificates of Compliance with Company Policies and/or the Certificates of
Compliance with Company Business Ethics Policies; provided, however, that to the extent that any
provisions contained in any other agreement are inconsistent in any manner with the restrictions
and covenants of Grantee contained in this Agreement, the provisions of this Agreement shall take
precedence and such other inconsistent provisions shall be null and void. Grantee acknowledges and
agrees that the provisions contained in this Agreement are being made for the benefit of the
Company in consideration of Grantee’s receipt of the Restricted Share Units, in consideration of
employment, in consideration of exposing Grantee to the Company’s business operations and
confidential information, and for other good and valuable consideration, the adequacy of which
consideration is hereby expressly confirmed. Grantee further acknowledges that the receipt of the
Restricted Share Units and execution of this Agreement are voluntary actions on the part of Grantee
and that the Company is unwilling to provide the Restricted Share Units to Grantee without
including the restrictions and covenants of Grantee contained in this Agreement. Further, the
parties agree and acknowledge that the provisions contained in Paragraphs 5 and 6 are ancillary to,
or part of, an otherwise enforceable agreement at the time the agreement is made.

     7. Payment. Subject to the provisions of Paragraphs 5 and 6 of this
Agreement, on the 6-month anniversary of the first date on which Grantee ceases to be an
employee of the Company, or, to the extent permitted by Treasury Regulations promulgated
under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) on such
other date as may be approved by the Committee as to all or any portion of the Restricted
Share Units, Grantee shall be entitled to receive from the Company (without any payment on
behalf of Grantee other than as described in Paragraph 11) the Common Shares represented by
such Restricted Share Units; provided, however, that, subject to the next sentence, in the
event that some or all of the Restricted Share Units vest prior to the applicable Vesting
Date as a result of the death or disability of Grantee or as a result of a Change of
Control, Grantee shall be entitled to receive the corresponding Common Shares from the
Company on the date of such vesting. Notwithstanding

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the proviso of the preceding
sentence, if Restricted Share Units vest as a result of the occurrence of a disability or a
Change of Control under circumstances where such occurrence would not qualify as a
permissible date of distribution under Section 409A(a)(2)(A) of the Code, and the
regulations thereunder, such proviso shall not apply and Grantee shall be entitled to
receive the corresponding Common Shares from the Company on the date that would have
applied absent such proviso. Elections to defer receipt of the Common Shares beyond the
date of settlement provided herein may be permitted in the discretion of the Committee
pursuant to procedures established by the Committee in compliance with the requirements
of Section 409A of the Code.

     8. Dividends. Grantee shall not receive cash dividends on the Restricted
Share Unit but instead shall, with respect to each Restricted Share Unit, receive a cash
payment from the Company on each cash dividend payment date with respect to the Common
Shares with a record date between the Grant Date and the earlier of the forfeiture of such
unit in accordance with the terms hereof or the settlement of such unit pursuant to
Paragraph 7 hereof, such cash payment to be in an amount equal to the dividend that would
have been paid on the Common Share represented by such unit.

     9. Right of Set-Off. By accepting these Restricted Share Units, Grantee consents to a
deduction from, and set-off against, any amounts owed to Grantee by any member of the Cardinal
Group from time to time (including, but not limited to, amounts owed to Grantee as wages, severance
payments or other fringe benefits) to the extent of the amounts owed to the Cardinal Group by
Grantee under this Agreement.

     10. No
Shareholder Rights. Grantee shall have no rights of a shareholder
with respect to the Restricted Share Units, including, without limitation, Grantee shall
not have the right to vote the Common Shares represented by the Restricted Share Units.

     11. Withholding Tax. The Company shall have the right to require Grantee to pay to
the Company the amount of any taxes which the Company is required to withhold with respect to the
Restricted Share Units (including the amount of any taxes which the Company is required to withhold
with respect to the cash payments described in Paragraph 8 hereof) or, in lieu thereof, to retain,
or sell without notice, a sufficient number of Common Shares to cover the amount required to be
withheld. In the case of any amounts withheld for taxes pursuant to this provision in the form of
Common Shares, the amount withheld shall not exceed the minimum required by applicable law and
regulations. The Company shall have the right to deduct from all cash payments paid pursuant to
Paragraph 8 hereof the amount of any taxes which the Company is required to withhold with respect
to such payments.

     12. Beneficiary
Designation. Grantee may designate a beneficiary to receive any
Common Shares to which the Grantee is entitled with respect to the Restricted Share Units which
vest as a result of Grantee’s death. Notwithstanding the foregoing, if Grantee engages in
Triggering Conduct or Competitor Triggering Conduct as herein defined, the Restricted Share Units
subject to such beneficiary designation shall be subject to the Special Forfeiture/Repayment Rules
and the Company’s Right of Set-Off or other right of recovery set

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forth in this Agreement, and all
rights of the beneficiary shall be subordinated to the rights of the Company pursuant to such
provisions of this Agreement. Grantee acknowledges that the Company may exercise all rights under
this Agreement and the Plan against Grantee and Grantee’s estate, heirs, lineal descendants and
personal representatives and shall not be limited to exercising its rights against Grantee’s
beneficiary.

     13. Employment Agreement. Pursuant to Section 3(b)(iii) of the Amended and Restated
Employment Agreement between the Company and Grantee, dated February 1, 2004 (the “Employment
Agreement”), Grantee is entitled to a specified value of stock options during each year of the
Employment Period (as defined in the Employment Agreement). Grantee
acknowledges that the Restricted Share Units granted hereunder, in tandem with the grant as of
the date hereof by the Company to the Grantee of an option to purchase 379,759 Common Shares,
satisfy in full the Company’s obligation under Section 3(b)(iii) of the Employment Agreement with
respect to the current year of the Employment Period. Section 5 of the Employment Agreement sets
forth certain rules in respect of treatment of restricted share units upon the Grantee’s
termination of employment, and Sections 9(e) and 9(i) of the Employment Agreement set forth certain
rules in respect of the application of restrictive covenants set forth in restricted share unit
agreements to the Grantee. The parties acknowledge that such rules set forth in the Employment
Agreement apply to the Restricted Share Units granted hereunder, and further acknowledge that in
the event of any conflict between such rules and the terms of this Agreement, such rules shall
govern.

     14. Governing Law/Venue. This Agreement shall be governed by the laws of the State of
Ohio, without regard to principles of conflicts of law, except to the extent superceded by the laws
of the United States of America. The parties agree and acknowledge that the laws of the State of
Ohio bear a substantial relationship to the parties and/or this Agreement and that the Restricted
Share Units and benefits granted herein would not be granted without the governance of this
Agreement by the laws of the State of Ohio. In addition, all legal actions or proceedings relating
to this Agreement shall be brought in state or federal courts located in Franklin County, Ohio, and
the parties executing this Agreement hereby consent to the personal jurisdiction of such courts.
Grantee acknowledges that the covenants contained in Paragraphs 5 and 6 of this Agreement are
reasonable in nature, are fundamental for the protection of the Company’s legitimate business and
proprietary interests, and do not adversely affect Grantee’s ability to earn a living in any
capacity that does not violate such covenants. The parties further agree that in the event of any
violation by Grantee of any such covenants, the Company will suffer immediate and irreparable
injury for which there is no adequate remedy at law. In the event of any violation or attempted
violations of the restrictions and covenants of Grantee contained in this Agreement, the Cardinal
Group shall be entitled to specific performance and injunctive relief or other equitable relief,
including the issuance ex parte of a temporary restraining order, without any showing of
irreparable harm or damage, such irreparable harm being acknowledged and admitted by Grantee, and
Grantee hereby waives any requirement for the securing or posting of any bond in connection with
such remedy, without prejudice to the rights and remedies afforded the Cardinal Group hereunder or
by law. In the event that it becomes necessary for the Cardinal Group to institute legal
proceedings under this Agreement, Grantee shall be responsible to the

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Company for all costs and
reasonable legal fees incurred by the Company with regard to such proceedings. Any provision of
this Agreement which is determined by a court of competent jurisdiction to be invalid or
unenforceable should be construed or limited in a manner that is valid and enforceable and that
comes closest to the business objectives intended by such provision, without invalidating or
rendering unenforceable the remaining provisions of this Agreement.

     15. Action by the Committee. The parties agree that the interpretation of this
Agreement shall rest exclusively and completely within the sole discretion of the Committee. The
parties agree to be bound by the decisions of the Committee with regard to the interpretation of
this Agreement and with regard to any and all matters set forth in this Agreement. The Committee
may delegate its functions under this Agreement to an officer of the Cardinal Group designated by
the Committee (hereinafter the “Designee”). In fulfilling its responsibilities hereunder, the
Committee or its Designee may rely upon documents, written statements of the parties or such other
material as the Committee or its Designee deems appropriate. The parties agree that there is no
right to be heard or to appear before the Committee or its Designee and that any decision of the
Committee or its Designee relating to this Agreement, including, without limitation, whether
particular conduct constitutes Triggering Conduct or Competitor Triggering Conduct, shall be final
and binding unless such decision is arbitrary and capricious.

     16. Prompt Acceptance of Agreement. The Restricted Share Units grant evidenced by
this Agreement shall, at the discretion of the Committee, be forfeited if this Agreement is not
executed by Grantee and returned to the Company within 30 days of the Grant Date set forth below.

     17. Electronic Delivery. The Company may, in its sole discretion, decide to deliver
any documents related to the Restricted Share Units grant under and participation in the Plan or
future Restricted Share Units that may be granted under the Plan by electronic means or to request
Grantee’s consent to participate in the Plan by electronic means. Grantee hereby consents to
receive such documents by electronic delivery and, if requested, to participate in the Plan through
an on-line or electronic system established and maintained by the Company or another third party
designated by the Company.

	 	 	 	 	 
	 	CARDINAL HEALTH, INC.

 	 
	DATE OF GRANT: September 2, 2005 	By:  	/s/ Anthony J. Rucci
 	 
	 	Its:	Executive Vice President & President 	 
	 	 	of Strategic Corporate Resources 	 

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ACCEPTANCE OF AGREEMENT

Grantee hereby: (a) acknowledges that he or she has received a copy of the Plan, a copy of the
Company’s most recent Annual Report on Form 10-K and other communications routinely distributed to
the Company’s shareholders, and a copy of the Plan Description dated September 2, 2005 pertaining
to the Plan; (b) accepts this Agreement and the Restricted Share Units granted to him or her under
this Agreement subject to all provisions of the Plan and this Agreement; (c) represents and
warrants to the Company that he or she is purchasing the Restricted Share Units for his or her own
account, for investment, and not with a view to or any present intention of selling or distributing
the Restricted Share Units either now or at any specific or determinable future time or period or
upon the occurrence or nonoccurrence of any predetermined or reasonably foreseeable event; and (d)
agrees that no transfer of the Common Shares delivered in respect of the Restricted Share Units
shall be made unless the Common Shares have been duly registered under all applicable Federal and
state securities laws pursuant to a then-effective registration which contemplates the proposed
transfer or unless the Company has received a written opinion of, or satisfactory to, its legal
counsel that the proposed transfer is exempt from such registration.

	 	 	 
	/s/ Robert D. Walter
 

Grantee’s Signature

	 	 
	 
	 	 
	9/2/05
 

Date

	 	 

7<PAGE>
                                                                    Exhibit 10.1

          THIS FORM OF AWARD AGREEMENT IS PART OF A PROSPECTUS COVERING
      SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933

                                    DSW INC.
                           2005 EQUITY INCENTIVE PLAN
                         FORM OF RESTRICTED STOCK UNITS
                                 AWARD AGREEMENT
             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. If you
satisfy the conditions described in this Agreement (and the Plan), your Award
will mature into common shares of the Company.

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:

     -    Read the Plan and the Plan's Prospectus carefully to ensure you
          understand how the Plan works;

     -    Read this Award Agreement carefully to ensure you understand the
          nature of your Award and what you must do to earn it; and

     -    Contact DSW's Vice President, Human Resources at (614) 238-5781 if you
          have any questions about your Award.

Also, NO LATER THAN _______________, you must return a signed copy of the Award
Agreement to:

          Katie Maurer
          Vice President, Human Resources
          DSW
          4150 East Fifth Avenue
          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 the Internal Revenue
Service has not yet issued rules fully defining the effect 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.

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<PAGE>

                              NATURE OF YOUR AWARD

You have been granted Restricted Stock Units ("RSUs"). If you satisfy the
conditions described in this Award Agreement, your RSUs will be converted to an
equal number of shares of Company stock. Federal income tax rules apply to RSUs.
These and other conditions affecting your RSUs 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:

          Katie Maurer
          Vice President, Human Resources
          DSW
          4150 East Fifth Avenue
          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 RSUs were issued on _______________.

This is the date you begin to earn your Award.

NUMBER OF RSUS: You have been granted _____ RSUs. The conditions that you must
meet before the Award matures 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 DATE: Normally, your RSUs will be converted automatically and
_____ shares of Company stock will be distributed to you if you are actively
employed on _______________. However, your RSUs may be settled earlier in the
circumstances described in the next section.

HOW YOUR RSUS MIGHT BE SETTLED EARLIER THAN THE NORMAL SETTLEMENT DATE: Your
RSUs will be settled automatically and _____ shares of Company stock will be
distributed to you if, before the Normal Settlement Date:

     -    Your employment terminates because of death, disability (as defined in
          the Plan) or retirement (i.e., you terminate after reaching age 65 and
          completing at least five years of employment); or

     -    There is a Change in Control (as defined in the Plan).

HOW YOUR RSUS MAY BE FORFEITED: You will forfeit any RSUs if, before the Normal
Settlement Date and before a Change in Control, you terminate employment
voluntarily (for reasons other than death, disability or retirement) or if you
are involuntarily terminated by the Company for any reason before the Normal
Settlement Date (and you are not disabled or eligible for retirement).

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<PAGE>

Also, you will forfeit your RSUs if:

     -    You materially fail to substantially perform your position or duties;

     -    You engage in illegal or grossly negligent conduct that is materially
          injurious to the Company or any Related Entity (as defined in the
          Plan);

     -    You materially violate any law or regulation governing the Company or
          any Related Entity;

     -    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;

     -    You materially breach the terms of any other agreement (including any
          employment agreement) with the Company or any Related Entity; or

     -    You breach any term of the Plan or this Award Agreement.

Also, if you terminate your employment (or your employment is terminated) for
any reason other than those just listed (including death, disability and
retirement) and the Company subsequently discovers that you actively concealed
an act, event or failure that is within those just listed and the Company could
not have discovered that act, event or failure through reasonable diligence
before your termination, you will be required to repay to the Company the full
value you received under this Award.

                               SETTLING YOUR AWARD

If all applicable conditions have been met, your RSUs will be settled
automatically. At that time, you will receive one share of Company stock for
each RSU you have earned.

                        OTHER RULES AFFECTING YOUR AWARD

RIGHTS BEFORE YOUR RSUS ARE SETTLED: Until your RSUs are settled, you may not
exercise any voting rights associated with the shares underlying your RSUs. Nor
will you be entitled to receive any dividends with respect to those shares.

BENEFICIARY DESIGNATION: You may name a Beneficiary or Beneficiaries to receive
any RSUs to be settled after you die. This may be done only on the attached
Beneficiary Designation Form and by following the rules described in that form.
If you die without making an effective Beneficiary designation, the RSUs subject
to this Award will be converted to shares and distributed to your surviving
spouse or, if you do not have a surviving spouse, to your estate.

TAX WITHHOLDING: Income taxes must be withheld when your Award is settled and
before your shares actually are distributed to you (see the Plan's Prospectus
for a discussion of the tax treatment of your Award). These taxes may be paid in
one of several ways. They are:

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<PAGE>

     -    The Company may withhold this amount from other amounts owed to you
          (e.g., from your salary).

     -    You may pay these taxes by giving the Company a check (payable to "DSW
          Inc.") in an amount equal to the taxes that must be withheld.

     -    By having the Company withhold a portion of the shares that otherwise
          would be distributed as of the Settlement Date. The number of shares
          withheld will have a fair market value equal to the taxes that must be
          withheld.

     -    You may give the Company other shares of Company stock (that you have
          owned for at least six months) with a value equal to the taxes that
          must be withheld.

You may choose the approach you prefer, although the Company may reject your
preferred method for any reason (or for no reason). If this happens, the Company
will specify (from among the alternatives just listed) how these taxes are to be
paid.

If you do not choose a method of paying these taxes within 30 days of the
Settlement Date, the Company will withhold a portion of the shares that
otherwise would be distributed. The number of shares withheld will have a fair
market value equal to the taxes that must be withheld and the balance of the
shares will be distributed to you.

TRANSFERRING YOUR RSUS: Normally, your RSUs may not be transferred to another
person. However, you may complete a Beneficiary Designation Form to name the
person to receive any RSUs settled after you die. Also, the Committee may allow
you to place your RSUs into a trust established for your benefit or the benefit
of your family. Contact DSW's Vice President, Human Resources at (614) 238-5781
or at the address given below if you are interested in doing this.

GOVERNING LAW: This Award Agreement will be construed in accordance with and
governed by the laws of the United States and the laws of the State of Ohio
(other than laws governing conflicts of laws).

NON COMPETITION: In consideration of receiving this Award, you agree for one
year after terminating employment with the Company or any Related Entity not,
directly or indirectly, to accept employment with, act as a consultant to, or
otherwise perform services that are substantially the same or similar to those
for which you were compensated by the Company or any Related Entity (this
comparison will be based on job-related functions and responsibilities and not
on job title) for any business that directly competes with the Company's
business, which is understood to be the sale of off-price and discount
merchandise, including discount and off-price shoes and accessories.
Illustrations of business that compete with the Company's business include: The
TJX Companies, Inc. (T.J. Maxx; Marshall's; HomeGoods; A.J.Wright; Marmaxx;
Winners); Shoe Carnival; MJM Designer Shoes; Ross Stores, Inc.; Payless
ShoeSource; Off-Broadway Shoes; Famous Footwear; Footstar; Big Lots Stores,
Inc.; and Burlington Coat Factory Warehouse Corporation and any of its
affiliates. This restriction applies to any parent, division, affiliate, newly
formed or purchased business(es) and/or successor of a business that competes
with the Company's business.

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<PAGE>

SOLICITATION OF EMPLOYEES: In consideration of receiving this Award, you agree
that during your employment, and for two years after terminating employment with
the Company or any Related Entity [1] not, directly or indirectly, to solicit
any employee of the Company or any Related Entity to leave employment with the
Company or any Related Entity, [2] not, directly or indirectly, to employ or
seek to employ any employee of the Company or any Related Entity and [3] not to
cause or induce the Company's or any Related Entity's competitors to solicit or
employ any employee of the Company or any Related Entity.

SOLICITATION OF THIRD PARTIES: In consideration of receiving this Award, you
agree that during your employment, and for two years after terminating
employment with the Company or any Related Entity not, directly or indirectly,
to recruit, solicit or otherwise induce or influence any customer, supplier,
sales representative, lender, lessor, lessee or any other person having a
business relationship with the Company or any Related Entity to discontinue or
reduce the extent of that relationship except in the course of discharging your
duties to the Company or any Related Entity and with the good faith objective of
advancing the Company's or any Related Entity's business interests.

NON-DISPARAGEMENT: In consideration of receiving this Award, you and the Company
(on its behalf and on behalf of each Related Entity) agree that neither will
make any disparaging remarks about the other and you will not make any
disparaging remarks about the Company's Chairman, Chief Executive Officer or any
of the Related Entities' senior executives. However, this section will not
preclude [1] any remarks that may be made by you pursuant to a lawfully-served
subpoena or court order or that are required to discharge your duties to the
Company or any Related Entity or [2] the Company from making (or eliciting from
any person) disparaging remarks about you concerning any conduct that may lead
to a termination for Cause (as defined in the Plan) (including initiating an
inquiry or investigation that may result in a termination for Cause), but only
to the extent reasonably necessary to investigate your conduct and to protect
the Company's and the Related Entities' interests.

OTHER AGREEMENTS: Also, your RSUs will be subject to the terms of any other
written agreements between you and the Company.

ADJUSTMENTS TO YOUR RSUS: Your RSUs will be adjusted, if appropriate, to reflect
any change to the Company's capital structure (e.g., the number of your RSUs
will be adjusted to reflect a stock split).

OTHER RULES: Your RSUs also are subject to more rules described in the Plan and
in the Plan's Prospectus. You should read both these documents carefully to
ensure you fully understand all the conditions of this Award.

                           TAX TREATMENT OF YOUR AWARD

The federal income tax treatment of your RSUs is discussed in the Plan's
Prospectus which you should read carefully.

                                      *****

                                        5

<PAGE>

You may contact DSW's Vice President, Human Resources at (614) 238-5781 or at
the address given below if you have any questions about your Award or this Award
Agreement.

                                      *****

                     YOUR ACKNOWLEDGMENT OF AWARD CONDITIONS

NOTE: You must sign and return a copy of this Award Agreement to DSW's Vice
President, Human Resources at the address given below NO LATER THAN ___________.

By signing below, I acknowledge and agree that:

     -    A copy of the Plan has been made available to me;

     -    I have received a copy of the Plan's Prospectus;

     -    I understand and accept the conditions placed on my Award and
          understand what I must do to earn my Award;

     -    I will consent (in my own behalf and in behalf of my Beneficiaries and
          without any further consideration) to any change to my Award or this
          Award Agreement to avoid paying penalties under Section 409A of the
          Internal Revenue Code, even if those changes affect the terms of my
          Award and reduce its value or potential value; and

     -    If I do not return a signed copy of this Award Agreement to the
          address shown below before _______________, my Award will be revoked
          automatically as of the date it was granted and I will not be entitled
          to receive anything on account of the retroactively revoked Award.

--------------------

----------------------------------------
(signature)

Date signed:
             ---------------------------

A signed copy of this form must be sent to the following address NO LATER THAN
_____________:

          Katie Maurer
          Vice President, Human Resources
          DSW
          4150 East Fifth Avenue
          Columbus, Ohio 43219

                                      *****

                                        6

<PAGE>

                      COMMITTEE'S ACKNOWLEDGMENT OF RECEIPT

A signed copy of this Award Agreement was received on ______________.

By:
    ---------------------------------
                    :
--------------------

     _____ Has complied with the conditions imposed on the grant and the Award
     and the Award Agreement remains in effect; or

     _____ Has not complied with the conditions imposed on the grant and the
     Award and the Award Agreement are revoked as of the Grant Date because
     ________________________________________________________________
     describe deficiency

DSW Inc. 2005 Equity Incentive Plan Committee

By:
    ---------------------------------
Date:
      -------------------------------

NOTE: Send a copy of this completed form to ____________________ and keep a copy
as part of the Plan's permanent records.

                                        7

<PAGE>

                                    DSW INC.
                           2005 EQUITY INCENTIVE PLAN
                          BENEFICIARY DESIGNATION FORM

RELATING TO RESTRICTED STOCK UNITS ISSUED TO ________________ ON _____________

                      INSTRUCTIONS FOR COMPLETING THIS FORM

You may use this form to [1] name the person you want to receive any amount due
under the DSW Inc. 2005 Equity Incentive Plan after your death or [2] change the
person who will receive these benefits.

There are several things you should know before you complete this form.

FIRST, if you do not elect another Beneficiary, any amount due to you under the
Plan when you die will be paid to your surviving spouse or, if you have no
surviving spouse, to your estate.

SECOND, your election will not be effective (and will not be implemented) unless
you sign this form.

THIRD, your election will be effective only if and when this form is completed
properly and returned to DSW's Vice President, Human Resources at the address
given below.

FOURTH, all elections will remain in effect until they are changed (or until all
death benefits are paid).

FIFTH, if you designate your spouse as your Beneficiary but are subsequently
divorced from that person (or your marriage is annulled), your Beneficiary
designation will be revoked automatically.

SIXTH, if you have any questions about this form or if you need additional
copies of this form, please contact DSW's Vice President, Human Resources at
(614) 238-5781 or at the address given below.

                         1.00 DESIGNATION OF BENEFICIARY

1.01 PRIMARY BENEFICIARY:

I designate the following persons as my Primary Beneficiary or Beneficiaries to
receive any shares of DSW stock due after my death under the terms of the Award
Agreement described at the top of this form. These shares will be allocated, in
the proportion specified, to:

     ______% to ________________________________________________________________
                     (Name)                                       (Relationship)

     Address: __________________________________________________________________

                                       8

<PAGE>

     ______% to ________________________________________________________________
                     (Name)                                       (Relationship)

     Address: __________________________________________________________________

     ______% to ________________________________________________________________
                     (Name)                                       (Relationship)

     Address: __________________________________________________________________

     ______% to ________________________________________________________________
                     (Name)                                       (Relationship)

     Address: __________________________________________________________________

1.02 CONTINGENT BENEFICIARY

IF ONE OR MORE OF MY PRIMARY BENEFICIARIES DIES BEFORE I DIE, I DIRECT THAT any
shares of DSW stock due after my death under the terms of the Award Agreement
described at the top of this form:

     _____ Be allocated to my other named Primary Beneficiaries in proportion to
     the allocation given above (ignoring the interest allocated to the deceased
     Primary Beneficiary); or

     _____ Be distributed among the following Contingent Beneficiaries.

     ______% to ________________________________________________________________
                     (Name)                                       (Relationship)

     Address: __________________________________________________________________

     ______% to ________________________________________________________________
                     (Name)                                       (Relationship)

     Address: __________________________________________________________________

     ______% to ________________________________________________________________
                     (Name)                                       (Relationship)

     Address: __________________________________________________________________

     ______% to ________________________________________________________________
                     (Name)                                       (Relationship)

     Address: __________________________________________________________________

                                      ****

                                       9

<PAGE>

ELECTIONS MADE ON THIS FORM WILL BE EFFECTIVE ONLY AFTER THIS FORM IS RECEIVED
BY DSW'S VICE PRESIDENT, HUMAN RESOURCES AND ONLY IF IT IS FULLY AND PROPERLY
COMPLETED AND SIGNED.

Name:
      --------------------------------------------------------------------------
Soc. Sec. No.:
               -----------------------------------------------------------------
Date of Birth:
               -----------------------------------------------------------------
Address:
         -----------------------------------------------------------------------

--------------------------------------------------------------------------------

Sign and return this form to DSW's Vice President, Human Resources at the
address given below.

-------------------------------------   ----------------------------------------
Date                                    Signature

Return this signed form to DSW's Vice President, Human Resources at the
following address:

          Katie Maurer
          Vice President, Human Resources
          DSW
          4150 East Fifth Avenue
          Columbus, Ohio 43219

Received on:
             ------------------------

By:
    ---------------------------------

                                       10

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