Under Armour 2009 Annual Report Download - page 75

Restricted Stock and Restricted Stock Units
A summary of the Company’s restricted stock and restricted stock units as of December 31, 2009, 2008 and
2007, and changes during the years then ended is presented below:
Year Ended December 31,
(In thousands, except per share amounts) 2009 2008 2007
Number of
Restricted
Shares
Weighted
Average
Value
Number of
Restricted
Shares
Weighted
Average
Value
Number of
Restricted
Shares
Weighted
Average
Value
Outstanding, beginning of year 639 $38.27 362 $42.06 210 $23.81
Granted 63 24.36 404 36.55 254 48.59
Forfeited (19) 44.96 (45) 51.74 (17) 42.72
Vested (195) 35.32 (82) 39.63 (85) 16.51
Outstanding, end of year 488 $37.40 639 $38.27 362 $42.06
Total stock-based compensation expense for the years ended December 31, 2009, 2008 and 2007 was $12.9
million, $8.5 million and $4.2 million, respectively. As of December 31, 2009, the Company had $22.5 million of
unrecognized compensation expense, excluding performance-based stock options, expected to be recognized over
a weighted average period of 2.8 years.
Warrants
On August 3, 2006, the Company issued fully vested and non-forfeitable warrants to purchase
480.0 thousand shares of the Company’s Class A Common Stock to NFL Properties as partial consideration for
footwear promotional rights which are recorded as an intangible asset (refer to Note 5). With the assistance of an
independent third party valuation firm, the Company assessed the fair value of the warrants using various fair
value models. Using these measures, the Company concluded that the fair value of the warrants was $8.5 million.
The warrants have a term of 12 years from the date of issuance and an exercise price of $36.99 per share, which
was the closing price of the Company’s Class A Common Stock on August 2, 2006. As of December 31, 2009,
all outstanding warrants were exercisable, and no warrants have been exercised.
13. Other Employee Benefits
The Company offers a 401(k) Deferred Compensation Plan for the benefit of eligible employees. Employee
contributions are voluntary and subject to Internal Revenue Service limitations. The Company matches a portion
of the participant’s contribution and recorded expense for the years ended December 31, 2009, 2008 and 2007, of
$1.3 million, $1.1 million and $0.9 million, respectively. Shares of the Company’s Class A Common Stock are
not an investment option in this plan.
Effective June 1, 2007, the Company’s Board of Directors approved the Under Armour, Inc. Deferred
Compensation Plan (the “Deferred Compensation Plan”). The Deferred Compensation Plan allows a select group
of management or highly compensated employees, as approved by the Compensation Committee, to make an
annual base salary and/or bonus deferral for each year. Compensation deferrals began for participating
employees on January 1, 2008. As of December 31, 2009 and 2008, the Deferred Compensation Plan obligations
were $2.7 million and $2.2 million, respectively, and were included in other long term liabilities on the
consolidated balance sheets.
The Company established a rabbi trust (the “Rabbi Trust”) in March 2008 to fund obligations to participants
in the Deferred Compensation Plan. As of December 31, 2009 and 2008, the assets held in the Rabbi Trust were
trust owned life insurance policies (“TOLI”) with cash-surrender values of $2.8 million and $2.2 million,
respectively. These assets are consolidated as allowed by accounting guidance, and are included in other
non-current assets on the consolidated balance sheet. Refer to Note 9 for a discussion of the fair value
measurements of the assets held in the Rabbi Trust and the Deferred Compensation Plan obligations.
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