Columbia Sportswear 2009 Annual Report Download - page 66

COLUMBIA SPORTSWEAR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
NOTE 12—STOCK-BASED COMPENSATION
The following table shows total stock-based compensation expense included in the Consolidated Statement
of Operations for the years ended December 31, (in thousands):
2009 2008 2007
Cost of sales ................................................ $ 335 $ 302 $ 415
Selling, general, and administrative expense ....................... 6,018 6,000 6,830
Licensing .................................................. — — 15
Pre-tax stock-based compensation expense .................... 6,353 6,302 7,260
Income tax benefits .......................................... (2,258) (2,088) (2,383)
Total stock-based compensation expense, net of tax ............. $4,095 $ 4,214 $ 4,877
No stock-based compensation costs were capitalized for the years ended December 31, 2009, 2008 and
2007.
The Company realized a tax benefit for the deduction from stock-based award transactions of $851,000,
$636,000, and $4,213,000 for the years ended December 31, 2009, 2008 and 2007, respectively.
1997 Stock Incentive Plan
The Company’s 1997 Stock Incentive Plan (the “Plan”) provides for issuance of up to 8,900,000 shares of
the Company’s Common Stock, of which 2,106,182 shares were available for future grants under the Plan at
December 31, 2009. The Plan allows for grants of incentive stock options, non-statutory stock options, restricted
stock awards, restricted stock units and other stock-based awards. The Company uses original issuance shares to
satisfy share-based payments.
Stock Options
Options to purchase the Company’s common stock are granted at prices equal to or greater than the fair
market value on the date of grant. Options granted prior to 2001 generally vested and became exercisable ratably
on a monthly basis over a period of five years from the date of grant and expire ten years from the date of grant.
Options granted after 2000 and before 2009 generally vest and become exercisable over a period of four years
(twenty-five percent on the first anniversary date following the date of grant and monthly thereafter) and expire
ten years from the date of the grant, with the exception of most options granted in 2005. Most options granted in
2005 vested and became exercisable one year from the date of grant and expire ten years from the date of grant.
Options granted in 2009 generally vest and become exercisable ratably on an annual basis over a period of four
years and expire ten years from the date of the grant.
The Company estimates the fair value of stock options using the Black-Scholes model. Key inputs and
assumptions used to estimate the fair value of stock options include the exercise price of the award, the expected
option term, the expected volatility of the Company’s stock over the option’s expected term, the risk-free interest
rate over the option’s expected term, and the Company’s expected annual dividend yield. Assumptions are
evaluated and revised as necessary to reflect changes in market conditions and the Company’s experience.
Estimates of fair value are not intended to predict actual future events or the value ultimately realized by people
who receive equity awards.
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