Callaway 2011 Annual Report Download - page 102

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Note 15. Employee Benefit Plans
The Company has a voluntary deferred compensation plan under Section 401(k) of the Internal Revenue
Code (the “401(k) Plan”) for all employees who satisfy the age and service requirements under the 401(k) Plan.
Each participant may elect to contribute up to 25% of annual compensation, up to the maximum permitted under
federal law. In 2011 and 2010, the Company matched an amount equal to 100% of the participant’s contributions
up to 6% of their eligible annual compensation. In 2009, the Company match was temporarily suspended in light
of the unfavorable economic conditions and the Company’s efforts to reduce costs during that year.
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 $5,061,000, $5,431,000 and $1,380,000 during 2011, 2010 and 2009, respectively. Additionally, the Company
can make discretionary contributions based on the profitability of the Company. For the years ended
December 31, 2011, 2010 and 2009 there were no discretionary contributions.
Note 16. Income Taxes
The Company’s loss before income tax provision (benefit) was subject to taxes in the following jurisdictions
for the following periods (in thousands):
Year Ended December 31,
2011 2010 2009
United States ................................................... $(105,841) $(46,365) $(46,967)
Foreign ........................................................ 15,580 10,803 17,364
$ (90,261) $(35,562) $(29,603)
The expense (benefit) for income taxes is comprised of (in thousands):
Year Ended December 31,
2011 2010 2009
Current tax provision (benefit):
Federal ...................................................... $19,908 $(18,494) $(23,311)
State ........................................................ 580 361 790
Foreign ...................................................... 4,964 5,743 5,329
25,452 (12,390) (17,192)
Deferred tax expense (benefit):
Federal ...................................................... 43,948 117 4,752
State ........................................................ 10,987 (2,988) (1,655)
Foreign ...................................................... 1,172 (1,497) (248)
56,107 (4,368) 2,849
Income tax provision (benefit) ....................................... $81,559 $(16,758) $(14,343)
During 2011, 2010 and 2009, tax benefits related to the exercise or vesting of stock-based awards were $0,
$492,000 and $1,028,000, 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.
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