Columbia Sportswear 2004 Annual Report Download - page 56

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COLUMBIA SPORTSWEAR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
period beginning from the date of grant and expire ten years from the date of grant. Options granted after 2000
generally become exercisable over a period of four years beginning one year after the date of grant and expire ten
years from the date of the grant.
The following table summarizes the stock option activity under the Company’s option plan:
Outstanding Exercisable
Number of
Shares
Weighted
Average
Exercise
Price
Number of
Shares
Weighted
Average
Exercise
Price
Options outstanding at January 1, 2002 ...................... 2,259,203 $18.37 618,855 $11.07
Granted ............................................... 823,780 38.27
Cancelled .............................................. (21,110) 27.98
Exercised .............................................. (410,665) 13.87
Options outstanding at December 31, 2002 ................... 2,651,208 25.17 906,787 $17.14
Granted ............................................... 544,005 35.04
Cancelled .............................................. (62,799) 28.30
Exercised .............................................. (710,672) 20.42
Options outstanding at December 31, 2003 ................... 2,421,742 28.67 963,994 $23.01
Granted ............................................... 609,575 53.25
Cancelled .............................................. (129,870) 40.05
Exercised .............................................. (625,443) 25.89
Options outstanding at December 31, 2004 ................... 2,276,004 $35.37 1,072,981 $26.57
The Company continues to measure compensation cost for the Plan using the method of accounting
prescribed by APB 25. In electing to continue to follow APB 25 for expense recognition purposes, the Company
is required to provide the expanded disclosures required under SFAS No. 148 for stock-based compensation
granted, including disclosure of pro forma net income and earnings per share, as if the fair value based method of
accounting defined in the SFAS No. 123, had been adopted.
The Company has computed, for pro forma disclosure purposes, the value of all stock options granted
during 2004, 2003 and 2002 using the Black-Scholes option pricing model as prescribed by SFAS No. 123 using
the following weighted average assumptions:
2004 2003 2002
Risk-free interest rate ................... 2.44–4.46% 1.99–4.32% 2.33–5.33%
Expected dividend yield ................. 0% 0% 0%
Expected lives ......................... 2to7years 4 to 8 years 4 to 8 years
Expected volatility ..................... 46.00% 58.99% 62.68%
Using the Black-Scholes methodology, the total value of stock options granted during 2004, 2003 and 2002
was $12,924,000, $11,193,000 and $19,251,000, respectively, which would be amortized on a pro forma basis
over the vesting period of the options. The weighted average fair value of options granted during 2004, 2003 and
2002 was $21.20, $20.57 and $23.37 per share, respectively.
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