Callaway 2010 Annual Report Download - page 110

Download and view the complete annual report

Please find page 110 of the 2010 Callaway annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 126

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126

The portion of the participant’s account attributable to elective deferral contributions and rollover
contributions are 100% vested and nonforfeitable. Participants vest in employer matching and profit sharing
contributions at a rate of 25% per year, becoming fully vested after the completion of four years of service. In
accordance with the provisions of the 401(k) Plan, the Company matched employee contributions in the amount
of $5,431,000, $1,380,000 and $7,098,000 during 2010, 2009 and 2008, respectively. Additionally, the Company
can make discretionary contributions based on the profitability of the Company. For the years ended
December 31, 2010, 2009 and 2008 there were no discretionary contributions.
The Company had an unfunded, nonqualified deferred compensation plan that was backed by Company-
owned life insurance policies. As of October 1, 2009, the Company announced the termination of the plan. In
December 2009, a portion of the plan assets were liquidated and distributed to its participants. The remaining
plan assets were fully liquidated and distributed in October 2010. The plan had been offered to its officers,
certain other employees and directors, and allowed participants to defer all or part of their compensation, to be
paid to the participants or their designated beneficiaries upon retirement, death or separation from the Company.
At December 31, 2009, the cash surrender value of the remaining Company-owned insurance related to deferred
compensation was $3,623,000 and was included in other current assets, and the liability for the deferred
compensation was $3,043,000 and was included in accrued employee compensation and benefits. For the year
ended December 31, 2009, the total participant deferrals were $423,000.
Note 16. Income Taxes
The Company’s income (loss) before income tax provision (benefit) was subject to taxes in the following
jurisdictions for the following periods (in thousands):
Year Ended December 31,
2010 2009 2008
United States .................................................... $(46,365) $(46,967) $ 76,255
Foreign ......................................................... 10,803 17,364 25,052
$(35,562) $(29,603) $101,307
The expense (benefit) for income taxes is comprised of (in thousands):
Year Ended December 31,
2010 2009 2008
Current tax provision (benefit):
Federal ...................................................... $(18,494) $(23,311) $18,534
State ........................................................ 361 790 1,720
Foreign ...................................................... 5,743 5,329 8,370
(12,390) (17,192) 28,624
Deferred tax expense (benefit):
Federal ...................................................... 117 4,752 4,216
State ........................................................ (2,988) (1,655) 1,297
Foreign ...................................................... (1,497) (248) 994
(4,368) 2,849 6,507
Income tax provision (benefit) ....................................... $(16,758) $(14,343) $35,131
During 2010, 2009 and 2008, tax benefits related to the exercise or vesting of stock-based awards were
$492,000, $1,028,000 and $1,379,000, respectively. Such benefits were recorded as a reduction of income taxes
payable with a corresponding increase in additional paid-in capital or a decrease to deferred tax assets in
connection with compensation cost previously recognized in income.
F-32