0000110471
2010-06-20
2010-09-11
0000110471
2009-06-21
2009-09-12
0000110471
2009-01-03
0000110471
2009-01-04
2009-09-12
0000110471
2010-09-11
0000110471
2010-01-02
0000110471
2009-09-12
0000110471
2010-10-15
0000110471
2010-01-03
2010-09-11
iso4217:USD
xbrli:shares
xbrli:shares
iso4217:USD
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 1 - us-gaap:SignificantAccountingPoliciesTextBlock-->
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<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="center" style="font-size: 10pt; margin-top: 0pt"><b>
</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 0pt">
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>Nature of Operations</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Wolverine World Wide, Inc. is a leading designer, manufacturer and marketer of a broad range of
quality casual shoes, performance outdoor footwear and apparel, industrial work shoes, boots and
apparel, and uniform shoes and boots. The Company’s global portfolio of owned and licensed brands
includes: <i>Bates</i><sup style="font-size: 85%; vertical-align: text-top">®</sup>, <i>Cat</i><sup style="font-size: 85%; vertical-align: text-top">®</sup> Footwear, <i>Chaco</i><sup style="font-size: 85%; vertical-align: text-top">®</sup>,
<i>Cushe</i><sup style="font-size: 85%; vertical-align: text-top">TM</sup>,
<i>Harley-Davidson</i><sup style="font-size: 85%; vertical-align: text-top">®</sup> Footwear,
<i>Hush Puppies</i><sup style="font-size: 85%; vertical-align: text-top">®</sup>, <i>HyTest</i><sup style="font-size: 85%; vertical-align: text-top">®</sup>,
<i>Merrell</i><sup style="font-size: 85%; vertical-align: text-top">®</sup>,
<i>Patagonia</i><sup style="font-size: 85%; vertical-align: text-top">®</sup> Footwear,
<i>Sebago</i><sup style="font-size: 85%; vertical-align: text-top">®</sup>, <i>Soft Style</i><sup style="font-size: 85%; vertical-align: text-top">®</sup> and
<i>Wolverine</i><sup style="font-size: 85%; vertical-align: text-top">®</sup>. Licensing arrangements with third parties extend the global reach of the
Company’s brand portfolio. The Company also operates a retail division to market its own brands as
well as branded footwear and apparel from other manufacturers; a leathers division that markets
<i>Wolverine Performance Leathers</i>™; and a pigskin procurement operation.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>Basis of Presentation</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The accompanying unaudited consolidated condensed financial statements have been prepared in
accordance with accounting principles generally accepted in the United States for interim financial
information and with the instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and footnotes required by
accounting principles generally accepted in the United States for a complete presentation of the
financial statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for fair presentation have been included in the
accompanying financial statements. For further information, refer to the consolidated financial
statements and footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year
ended January 2, 2010.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>Revenue Recognition</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Revenue is recognized on the sale of products manufactured or sourced by the Company when the
related goods have been shipped, legal title has passed to the customer and collectability is
reasonably assured. Revenue generated through programs with licensees and distributors involving
products bearing the Company’s trademarks is recognized as earned according to stated contractual
terms upon either the purchase or shipment of branded products by licensees and distributors.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company records provisions against gross revenue for estimated stock returns and cash discounts
in the period when the related revenue is recorded. These estimates are based on factors that
include, but are not limited to, historical stock returns, historical discounts taken and analysis
of credit memorandum activity.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>Cost of Goods Sold</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Cost of goods sold for the Company’s operations include the actual product costs, including inbound
freight charges, purchasing, sourcing, inspection and receiving costs. Warehousing costs are
included in selling, general and administrative expenses.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>Seasonality</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company’s business is subject to seasonal influences and the Company’s fiscal year has twelve
weeks in each of the first three quarters and, depending on the fiscal calendar, sixteen or
seventeen weeks in the fourth quarter. Both of these factors can cause significant differences in
revenue, earnings and cash flows from quarter to quarter; however, the differences have followed a
consistent pattern in previous years.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>Reclassifications</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Certain prior period amounts on the consolidated condensed financial statements have been
reclassified to conform to current period presentation. These reclassifications did not affect net
earnings.
</div>
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</div>
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<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
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<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>2. EARNINGS PER SHARE</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The following table sets forth the computation of basic and diluted earnings per share:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>12 Weeks Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>36 Weeks Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 11,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 12,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 11,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 12,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Numerator:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px">Net earnings
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>34,143</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">26,794</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>78,824</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">45,195</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px">Adjustment for earnings allocated to
nonvested restricted common stock
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(541</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(503</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,203</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(741</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Net earnings used in calculating basic
earnings per share
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>33,602</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,291</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>77,621</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">44,454</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px">Adjustment for earnings reallocated to
nonvested restricted common stock
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>13</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>27</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Net earnings used in calculating
diluted earnings per share
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>33,615</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">26,298</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>77,648</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">44,460</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Denominator:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px">Weighted average shares outstanding
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>48,731,526</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">49,234,656</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>49,161,580</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">49,079,465</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px">Adjustment for nonvested restricted
common stock
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,237,987</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(981,530</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,193,308</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(904,990</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Shares used in calculating basic
earnings per share
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>47,493,539</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">48,253,126</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>47,968,272</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">48,174,475</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px">Effect of dilutive stock options
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>869,952</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">832,674</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>986,131</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">574,947</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Shares used in calculating diluted
earnings per share
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>48,363,491</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">49,085,800</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>48,954,403</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">48,749,422</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Net earnings per share:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:45px; text-indent:-15px">Basic
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>0.71</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.54</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1.62</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.92</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:45px; text-indent:-15px">Diluted
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>0.70</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.54</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1.59</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.91</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Options to purchase 966,342 and 1,030,595 shares of common stock for the 12 and 36 weeks ended
September 11, 2010, respectively, and 1,357,240 and 3,248,232 shares for the 12 and 36 weeks ended
September 12, 2009, respectively, have not been included in the denominator for the computation of
diluted earnings per share because the related exercise prices of these shares were greater than
the average market price for the quarters then ended and, they were, therefore, anti-dilutive.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company calculates earnings per share in accordance with Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC”) Topic 260, <i>Earnings Per Share </i>(“ASC 260”). ASC
260 addresses whether instruments granted in share-based payment transactions are participating
securities prior to vesting, and therefore need to be included in the earnings allocation in
computing earnings per share under the two-class method. Under the guidance in ASC 260, the
Company’s unvested share-based payment awards that contain nonforfeitable rights to dividends or
dividend equivalents, whether paid or unpaid, are participating securities and must be included in
the computation of earnings per share pursuant to the two-class method.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 3 - us-gaap:GoodwillAndIntangibleAssetsDisclosureTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>3. GOODWILL AND OTHER NON-AMORTIZABLE INTANGIBLES</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The changes in the carrying amount of goodwill and other non-amortizable intangibles are as
follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="58%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Goodwill</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Trademarks</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at September 12, 2009
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">40,495</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">16,151</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">56,646</td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px">Intangibles acquired
</div></td>
<td> </td>
<td> </td>
<td align="right">113</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">75</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">188</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px">Foreign currency translation effects
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(636</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(636</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at January 2, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">39,972</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,226</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">56,198</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px">Intangibles acquired
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>134</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>134</b></td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px">Foreign currency translation effects
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,134</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(128</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,262</b></td>
<td nowrap="nowrap"><b>)</b></td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at September 11, 2010
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>38,838</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right"><b>16,232</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right"><b>55,070</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 4 - us-gaap:ComprehensiveIncomeNoteTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>4. COMPREHENSIVE INCOME (LOSS)</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Comprehensive income (loss) represents net earnings and any revenue, expenses, gains and losses
that, under accounting principles generally accepted in the United States, are excluded from net
earnings and recognized directly as a component of stockholders’ equity.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The ending accumulated other comprehensive income (loss) is as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="58%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 11,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">January 2,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 12,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency translation adjustments
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b> 8,042</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">14,477</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">16,735</td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Fair value of foreign exchange contracts, net of taxes
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>887</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,546</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,845</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Pension adjustments, net of taxes
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(53,737</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(53,737</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(45,885</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Accumulated other comprehensive income (loss)
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(44,808</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(42,806</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(33,995</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The reconciliation from net earnings to comprehensive income is as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>12 Weeks Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>36 Weeks Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 11,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 12,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 11,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 12,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net earnings
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right"><b>34,143</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">26,794</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>78,824</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">45,195</td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Other comprehensive income (loss):
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px">Foreign currency translation adjustments
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>3,510</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,764</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(6,435</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right">17,607</td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px">Change in fair value of foreign
exchange contracts, net of taxes
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(929</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,203</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right"><b>4,433</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,768</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Comprehensive income
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right"><b>36,724</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">30,355</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>76,822</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">54,034</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 5 - us-gaap:SegmentReportingDisclosureTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>5. BUSINESS SEGMENTS</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company has one reportable segment that is engaged in designing, manufacturing, sourcing,
marketing, licensing, and distributing to the retail sector branded footwear, apparel and
accessories. Revenue earned from the operations of this segment is derived from the sale of
branded footwear, apparel and accessories to external customers as well as royalty income from the
licensing of the Company’s trademarks and brand names to third-party licensees and distributors.
The operating segments aggregated into the branded footwear, apparel and licensing segment
manufacture, source, market and distribute products in a similar manner.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The other business units in the following tables consist of the Company’s retail, leather and
pigskin procurement operations. These other operations do not collectively form a reportable
segment because their respective operations are dissimilar and they do not meet the applicable
quantitative requirements. At September 11, 2010, the Company operated 82 retail stores in North
America and 5 retail stores in the United Kingdom that sell Company-branded products, as well as
footwear, apparel and accessory products under brands that are owned by unaffiliated companies.
The Company also has 32 consumer-direct internet sites that sell Company-branded products. The
other business units distribute products through retail and wholesale channels.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company measures segment profits as earnings before income taxes. The accounting policies used
to determine profitability and total assets of the branded footwear, apparel and licensing segment
and other business units are the same as those disclosed in Note 1.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Business segment information is as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000"><b>12 Weeks Ended September 11, 2010</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Branded</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Footwear,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Apparel and</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Other</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Licensing</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Business Units</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Corporate</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Consolidated</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Revenue
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>289,903</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>30,493</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>320,396</b></td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Intersegment revenue
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>10,355</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>607</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>10,962</b></td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Earnings (loss) before income taxes
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>54,142</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>1,464</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(7,517</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>48,089</b></td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Total assets
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>600,625</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>47,580</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>116,602</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>764,807</b></td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000"><b>36 Weeks Ended September 11, 2010</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Branded</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Footwear,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Apparel and</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Other</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Licensing</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Business Units</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Corporate</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Consolidated</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Revenue
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>776,688</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>86,804</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>863,492</b></td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Intersegment revenue
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>26,923</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>2,113</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>29,036</b></td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Earnings (loss) before income taxes
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>133,388</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>2,309</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(24,676</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>111,021</b></td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Total assets
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>600,625</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>47,580</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>116,602</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>764,807</b></td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">12 Weeks Ended September 12, 2009</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Branded</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Footwear,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Apparel and</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Other</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Licensing</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Business Units</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Corporate</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Consolidated</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Revenue
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">262,803</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">23,961</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">286,764</td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Intersegment revenue
</div></td>
<td> </td>
<td> </td>
<td align="right">16,937</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">445</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,382</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Earnings (loss) before income taxes
</div></td>
<td> </td>
<td> </td>
<td align="right">40,471</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,083</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,907</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">36,481</td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Total assets
</div></td>
<td> </td>
<td> </td>
<td align="right">563,847</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">36,836</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">106,921</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">707,604</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">36 Weeks Ended September 12, 2009</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Branded</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Footwear,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Apparel and</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Other</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Licensing</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Business Units</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Corporate</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Consolidated</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Revenue
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">716,026</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">72,500</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">788,526</td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Intersegment revenue
</div></td>
<td> </td>
<td> </td>
<td align="right">38,858</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,911</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">40,769</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Earnings (loss) before income taxes
</div></td>
<td> </td>
<td> </td>
<td align="right">89,038</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,564</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(13,812</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">63,662</td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Total assets
</div></td>
<td> </td>
<td> </td>
<td align="right">563,847</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">36,836</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">106,921</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">707,604</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
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</div>
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<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
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<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>6. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company follows FASB ASC Topic 820, <i>Fair Value Measurements and Disclosures </i>(“ASC 820”), which
provides a consistent definition of fair value, focuses on exit price, prioritizes the use of
market-based inputs over entity-specific inputs for measuring fair value and establishes a
three-tier hierarchy for fair value measurements. This topic requires fair value measurements to
be classified and disclosed in one of the following three categories:
</div>
<div align="right">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="8%"> </td>
<td width="2%"> </td>
<td width="90%"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="padding-top: 1px">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">Level 1:
</div></td>
<td> </td>
<td align="left" valign="top">
<div align="justify">Fair value is measured using quoted prices (unadjusted) in active
markets for identical assets and liabilities.
</div></td>
</tr>
<tr valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">Level 2:
</div></td>
<td> </td>
<td align="left" valign="top">
<div align="justify">Fair value is measured using either direct or indirect inputs,
other than quoted prices included within Level 1, which are
observable for similar assets or liabilities.
</div></td>
</tr>
<tr valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px">Level 3:
</div></td>
<td> </td>
<td align="left" valign="top">
<div align="justify">Fair value is measured using valuation techniques in which one or
more significant inputs are unobservable.
</div></td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">As of September 11, 2010 and September 12, 2009, liabilities of $246 and $3,834, respectively, have
been recognized for the fair value of the Company’s foreign exchange contracts. In accordance with
ASC 820, these liabilities and assets fall within Level 2 of the fair value hierarchy. The fair
values for these financial instruments are determined using prices for recently-traded financial
instruments with similar underlying terms as well as directly or indirectly observable inputs. The
Company did not have any additional assets or liabilities that were measured at fair value on a
recurring basis at September 11, 2010.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company’s financial instruments consist of cash and cash equivalents, accounts and notes
receivable, accounts payable, borrowings under the Company’s revolving credit agreement and
long-term debt. The carrying amounts of the Company’s financial instruments approximate their fair
value. Fair value was determined using discounted cash flow analyses and current interest rates
for similar instruments; therefore, the debt instruments fall within Level 2 of the fair value
hierarchy. The Company does not hold or issue financial instruments for trading purposes.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company’s credit agreement with a bank syndicate provides a revolving credit facility,
including a swing-line facility and letter of credit facility, in an initial aggregate amount of up
to $150.0 million. This amount is subject to increase up to a maximum aggregate amount of $225.0
million under certain circumstances. The revolving credit facility is used to support working
capital requirements and other business needs. There were no amounts outstanding under the
revolving credit facility at September 11, 2010 compared to $9.9 million outstanding at September
12, 2009 under a previous revolving credit agreement. The Company considers balances drawn on the
revolving credit facility, if any, to be short-term in nature. The Company was in compliance with
all debt covenant requirements at September 11, 2010 and September 12, 2009. Proceeds from the
revolving credit facility, along with cash flows from operations, are expected to be sufficient to
meet working capital needs for the foreseeable future. Any excess cash flows from operating
activities are expected to be used to purchase property, plant and equipment, pay down debt, fund
internal and external growth initiatives, pay dividends or repurchase the Company’s common stock.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company follows FASB ASC Topic 815, <i>Derivatives and Hedging, </i>which is intended to improve
transparency in financial reporting and requires that all derivative instruments be recorded on the
consolidated condensed balance sheets at fair value by establishing criteria for designation and
effectiveness of hedging relationships. The Company utilizes foreign currency forward exchange
contracts to manage the volatility associated with U.S. dollar inventory purchases made by non-U.S.
wholesale operations in the normal course of business. At September 11, 2010 and September 12,
2009, foreign exchange contracts with a notional value of $75,955 and $55,407, respectively, were
outstanding to purchase U.S. dollars with maturities ranging up to 308 days. These contracts have
been designated as cash flow hedges.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The fair value of the foreign currency forward exchange contracts represents the estimated receipts
or payments necessary to terminate the contracts. Hedge effectiveness is evaluated by the
hypothetical derivative method. Any hedge ineffectiveness is reported within the cost of goods sold
caption of the consolidated condensed statements of operations. Hedge ineffectiveness was not
material to the consolidated condensed financial statements for the 12 and 36 weeks ended September
11, 2010 and September 12, 2009. If, in the future, the foreign exchange contracts are determined
to be ineffective hedges or terminated before their contractual termination dates, the Company
would
be required to reclassify into earnings all or a portion of the unrealized amounts related to the
cash flow hedges that are currently included in accumulated other comprehensive income (loss)
within stockholders’ equity.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">For the 12 weeks ended September 11, 2010 and September 12, 2009, the Company recognized a net gain
of $560 and a net loss of $2,031, respectively, in accumulated other comprehensive income (loss)
related to the effective portion of its foreign exchange contracts. For the 12 weeks ended
September 11, 2010 and September 12, 2009, the Company reclassified a gain of $33 and a loss of
$1,161, respectively, from accumulated other comprehensive income (loss) into cost of goods sold
related to the effective portion of its foreign exchange contracts designated and qualifying as
cash flow hedges. For the 36 weeks ended September 11, 2010 and September 12, 2009, the Company
recognized net gains of $357 and $1,136, respectively, in accumulated other comprehensive income
(loss) related to the effective portion of its foreign exchange contracts. For the 36 weeks ended
September 11, 2010 and September 12, 2009, the Company reclassified a gain of $2,441 and a loss of
$5,148, respectively, from accumulated other comprehensive income (loss) into cost of goods sold
related to the effective portion of its foreign exchange contracts designated and qualifying as
cash flow hedges.
</div>
</div>
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<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>7. STOCK-BASED COMPENSATION</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company accounts for stock-based compensation in accordance with the fair value recognition
provisions of FASB ASC Topic 718, <i>Compensation-Stock Compensation </i>(“ASC 718”). The Company
recognized compensation costs of $2,611 and $7,747, respectively, and related income tax benefits
of $814 and $2,366, respectively, for grants under its stock-based compensation plans in the
consolidated condensed statement of operations for the 12 and 36 weeks ended September 11, 2010.
For the 12 and 36 weeks ended September 12, 2009, the Company recognized compensation costs of
$2,326 and $6,356, respectively, and related income tax benefits of $661 and $1,579, respectively,
for grants under its stock-based compensation plans.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Stock-based compensation expense recognized in the consolidated condensed statements of operations
for the 12 and 36 weeks ended September 11, 2010 and September 12, 2009 is based on awards
ultimately expected to vest and, therefore, has been reduced for estimated forfeitures. ASC 718
requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent
periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on
historical experience.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company estimates the fair value of employee stock options on the date of grant using the
Black-Scholes model. The weighted-average fair values for options granted during the 36 weeks ended
September 11, 2010 and September 12, 2009 were $6.96 and $4.38 per share, respectively, based on
the following weighted-average assumptions:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>12 Weeks Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>36 Weeks Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 11,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 12,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 11,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 12,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected market price volatility <sup style="font-size: 85%; vertical-align: text-top">(1)</sup>
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>37.9%</b></td>
<td nowrap="nowrap"><b> </b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">37.0%</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>37.9%</b></td>
<td nowrap="nowrap"><b> </b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">34.8%</td>
<td nowrap="nowrap"> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Risk-free interest rate <sup style="font-size: 85%; vertical-align: text-top">(2)</sup>
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>1.4%</b></td>
<td nowrap="nowrap"><b> </b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">2.0%</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>1.9%</b></td>
<td nowrap="nowrap"><b> </b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">1.6%</td>
<td nowrap="nowrap"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Dividend yield <sup style="font-size: 85%; vertical-align: text-top">(3)</sup>
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>1.6%</b></td>
<td nowrap="nowrap"><b> </b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">2.1%</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>1.9%</b></td>
<td nowrap="nowrap"><b> </b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">1.8%</td>
<td nowrap="nowrap"> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected term <sup style="font-size: 85%; vertical-align: text-top">(4)</sup>
</div></td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="right"><b>4 years</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="right">4 years</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="right"><b>4 years</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="right">4 years</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr style="font-size: 6pt">
<td width="3%"> </td>
<td width="1%"> </td>
<td width="96"> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
<td>
<div style="text-align: justify">Based on historical volatility of the market price of the Company’s common stock. The expected volatility
is based on the daily percentage change in the price of the stock over four years.
</div></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(2)</sup></td>
<td> </td>
<td>
<div style="text-align: justify">Represents the U.S. Treasury yield curve in effect for the expected term of the option at the time of grant.
</div></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(3)</sup></td>
<td> </td>
<td>
<div style="text-align: justify">Represents the Company’s estimated cash dividend yield.
</div></td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(4)</sup></td>
<td> </td>
<td>
<div style="text-align: justify">Represents the period of time that options granted are expected to be outstanding. As part of the
determination of the expected term, the Company concluded that all employee groups exhibit similar exercise
and post-vesting termination behavior.
</div></td>
</tr>
</table>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company issued 14,942 and 1,032,771 shares of common stock in connection with the exercise of
stock options and new restricted stock grants during the 12 and 36 weeks ended September 11, 2010,
respectively.
During the 12 and 36 weeks ended September 11, 2010, the Company cancelled 1,379 and 22,460 shares,
respectively, of common stock as a result of forfeiture of restricted stock awards. The Company
issued 163,756 and
979,825 shares of common stock in connection with the exercise of stock options and new restricted
stock grants during the 12 and 36 weeks ended September 12, 2009, respectively. During the 12 and
36 weeks ended September 12, 2009, the Company cancelled 3,800 and 15,634 shares, respectively, of
common stock as a result of forfeiture of restricted stock awards.
</div>
</div>
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<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>8. PENSION EXPENSE</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">A summary of net pension and Supplemental Executive Retirement Plan costs recognized by the Company
is as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>12 Weeks Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>36 Weeks Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 11,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 12,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 11,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 12,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Service cost pertaining to benefits
earned during the period
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1,322</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,046</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3,966</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,201</td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest cost on projected benefit obligations
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>2,935</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,756</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>8,806</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,433</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected return on pension assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,877</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,444</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(8,631</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7,480</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Net amortization loss
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>2,378</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,149</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>7,134</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,577</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net pension expense
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3,758</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,507</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>11,275</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">10,731</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 9 - us-gaap:CommitmentsAndContingenciesDisclosureTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>9. LITIGATION AND CONTINGENCIES</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company is involved in environmental claims and other legal actions arising in the normal
course of business. The environmental claims include sites where the U.S. Environmental Protection
Agency has notified the Company that it is a potentially responsible party with respect to
environmental remediation. However, after taking into consideration legal counsel’s evaluation of
all actions and claims against the Company, management is currently of the opinion that their
outcome will not have a material adverse effect on the Company’s consolidated financial position,
results of operations or cash flows.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company is involved in routine litigation incidental to its business and is a party to legal
actions and claims, including, but not limited to, those related to employment and intellectual
property. Some of the legal proceedings include claims for compensatory as well as punitive
damages. While the final outcome of these matters cannot be
predicted with certainty, considering, among other things, the meritorious legal defenses available
to the Company, liabilities that have been recorded with respect to such actions and claims, and
applicable insurance coverage, the
Company’s management currently believes that these items will not have a material adverse effect on
the Company’s consolidated financial position, results of operations or cash flows.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Pursuant to certain of the Company’s lease agreements, the Company has provided financial
guarantees to third parties in the form of indemnification provisions. These provisions require
the Company to indemnify and reimburse the third parties for certain costs incurred by such third
parties in connection with these lease agreements, including but not limited to adverse judgments
in lawsuits, taxes and operating costs. The terms of the guarantees are equal to the terms of the
related lease agreements. The Company is not able to calculate the maximum potential amount of
future payments it could be required to make under these guarantees, as the potential payment is
dependent upon the occurrence of future unknown events.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company has minimum royalty and other obligations due under the terms of certain licenses held
by the Company. These minimum obligations are as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2012</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2013</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2014</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Thereafter</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Minimum royalties
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,544</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,772</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">970</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">999</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,029</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,060</td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Minimum advertising
</div></td>
<td> </td>
<td> </td>
<td align="right">1,837</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,941</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,999</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,059</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,121</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,434</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Minimum royalties are based on both fixed obligations and assumptions related to the consumer price
index. Royalty payments in excess of minimum requirements are based upon future sales levels and
are not included in the
above table. In accordance with these agreements, the Company incurred royalty expense of $772 and
$2,239, respectively for the 12 and 36 weeks ended September 11, 2010. The Company has met the
minimum royalty
requirements for 2010. For the 12 and 36 weeks ended September 12, 2009, the Company incurred
royalty expense of $702 and $2,046, respectively.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The terms of certain license agreements also require the Company to make advertising expenditures
based on the level of sales. In accordance with these agreements, the Company incurred advertising
expense of $748 and $2,029, respectively, for the 12 and 36 weeks ended September 11, 2010. The
Company has met the minimum advertising requirements for 2010. For the 12 and 36 weeks ended
September 12, 2009, the Company incurred advertising expense of $733 and $1,782, respectively.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 10 - www:RestructuringAndOtherTransitionCostsTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>10. RESTRUCTURING AND OTHER TRANSITION COSTS</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">On January 7, 2009 the Board of Directors of the Company approved a strategic restructuring plan
designed to create significant operating efficiencies, improve its supply chain and create a
stronger global brand platform. On October 7, 2009, the Company announced the expansion of its
restructuring plan to include the consolidation of two owned domestic manufacturing facilities into
one and to finalize realignment in certain of the Company’s product creation organizations. The
strategic restructuring plan and all actions under the plan, except for certain cash payments, were
completed as of June 19, 2010. The Company did not incur any restructuring and other transition
costs for the 12 weeks ended September 11, 2010. The Company incurred restructuring and other
transition costs of $4,234 ($3,006 on an after-tax basis), or $0.06 per diluted share, for the 36
weeks ended September 11, 2010. For the 12 and 36 weeks ended September 12, 2009, the Company
incurred restructuring and other transition costs of $5,088 ($3,735 on an after-tax basis), or
$0.08 per diluted share, and $27,465 ($19,500 on an after-tax basis), or $0.40 per diluted share,
respectively. In fiscal 2009 the Company incurred restructuring and other transition costs of
approximately $35,600, or $0.53 per diluted share.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The following is a summary of the restructuring and other transition costs:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>12 Weeks Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>36 Weeks Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 11,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 12,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 11,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 12,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Restructuring
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,567</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>2,239</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">22,771</td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Other transition costs
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,521</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>1,995</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,694</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total restructuring and other
transition costs
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,088</td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>4,234</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">27,465</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>Restructuring</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company did not incur any restructuring charges for the 12 weeks ended September 11, 2010.
Prior to completion of the restructuring plan, the Company incurred the following restructuring
charges: $2,239 ($1,590 on an after-tax basis), or $0.03 per diluted share, for the 36 weeks ended
September 11, 2010; $3,567 ($2,618 on an after-tax basis), or $0.05 per diluted share, for the 12
weeks ended September 12, 2009; and $22,771 ($16,167 on an after-tax basis), or $0.33 per diluted
share, for the 36 weeks ended September 12, 2009.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The following is a summary of the activity with respect to a liability established by the Company
in connection with the restructuring plan, by category of costs:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="30%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Severance</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Non-cash</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">and</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">charges related</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">employee</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">to property and</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Facility exit</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Other related</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">related</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">equipment</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">costs</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">restructuring</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at September 12, 2009
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3,837</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">828</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">103</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,768</td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Charges incurred
</div></td>
<td> </td>
<td> </td>
<td align="right">2,371</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,014</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,317</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,610</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,312</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Amounts paid or utilized
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,342</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,014</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(660</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,138</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,154</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at January 2, 2010
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3,866</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,485</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">575</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,926</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Charges incurred
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>571</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>715</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>803</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>150</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>2,239</b></td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Amounts paid or utilized
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(3,511</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(715</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(435</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(389</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(5,050</b></td>
<td nowrap="nowrap"><b>)</b></td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at September 11, 2010
</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>926</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1,853</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>335</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3,115</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>Other Transition Costs</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Incremental costs incurred related to the restructuring plan that do not qualify as restructuring
costs under the provisions of FASB ASC Topic 420, <i>Exit or Disposal Cost Obligations</i>, have been
included in the Company’s consolidated condensed statements of operations on the line titled
“Restructuring and other transition costs”. These primarily include costs related to closure of
facilities, new employee training and transition to outsourced services. All costs included in
this caption were solely related to the transition and implementation of the restructuring plan and
do not include ongoing business operating costs. There were no other transition costs for the 12
weeks ended September 11, 2010, and $1,995 ($1,416 on an after-tax basis) for the 36 weeks ended
September 11, 2010, and $1,521 ($1,116 on an after-tax basis) and $4,694 ($3,333 on an after-tax
basis) for the 12 and 36 weeks ended September 12, 2009, respectively.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 11 - us-gaap:BusinessCombinationDisclosureTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>11. BUSINESS ACQUISITIONS</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">The Company accounted for the following acquisitions under the provisions of FASB ASC Topic 805,
<i>Business Combinations</i>.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">On January 8, 2009, the Company announced the acquisition of the <i>Cushe</i><sup style="font-size: 85%; vertical-align: text-top">TM</sup> footwear brand.
The purchase price consisted of $1,540 cash, a $1,540 note payable and contingent consideration of
$875. The Company acquired assets valued at $285 (consisting primarily of property, plant and
equipment and inventory) and assumed operating liabilities valued at $302, resulting in goodwill
and intangibles of $3,972. Amounts recorded relating to the acquisition are subject to change as a
result of changes in foreign currency exchange rates.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">On January 22, 2009, the Company acquired the <i>Chaco</i><sup style="font-size: 85%; vertical-align: text-top">®</sup> footwear brand and certain assets
valued at $3,912, consisting primarily of accounts receivable and inventory, for cash of $6,910 and
assumed operating liabilities valued at $4,662. The purchase resulted in goodwill and intangibles
recorded of $7,660.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Using the purchase method of accounting, the purchase price in each of these acquisitions is
allocated to the assets acquired and liabilities assumed based on their estimated fair values as of
the effective date of the acquisition. The excess purchase price over the assets and liabilities
is recorded as goodwill. The purchase price allocation for each acquisition was finalized during
the third quarter of 2009 and a final determination of all purchase accounting adjustments was made
upon finalization of asset valuations and acquisition costs. Pro forma results of operations have
not been presented because the effects of these acquisitions, individually and in the aggregate,
were not material to the Company’s consolidated results of operations. Both of the brands have
been consolidated into the Company’s results of operations since their respective acquisition
dates.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 12 - us-gaap:ScheduleOfNewAccountingPronouncementsAndChangesInAccountingPrinciplesTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>12. NEW ACCOUNTING STANDARDS</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In April 2009, the FASB issued FASB ASC Topic 825, <i>Financial Instruments </i>and ASC Topic 270, <i>Interim
Reporting </i>(“ASC 825” and “ASC 270”), to require, on an interim basis, disclosures about the fair
value of financial instruments for public entities. ASC 825 and ASC
270 were intended to improve
the transparency and quality of information provided to financial statement users by increasing the
frequency of disclosures about fair value for interim periods as well as annual periods. ASC 825
and ASC 270 were effective for interim and annual periods ending after June 15, 2009, with early
adoption permitted for periods ending after March 15, 2009. The Company has disclosed the
information required by ASC 825 and ASC 270 on an interim basis, and the adoption did not affect
the Company’s consolidated financial position, results of operations or cash flows.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In May 2009, the FASB issued FASB ASC Topic 855, <i>Subsequent Events </i>(“ASC 855”). The objective of
this statement is to establish general standards of accounting for and disclosure of events that
occur after the balance sheet date but before financial statements are issued or are available to
be issued. ASC 855, among other things, sets forth the period after the balance sheet date during
which management should evaluate events or transactions that may occur for potential recognition or
disclosure in the financial statements, the circumstances under which an entity should recognize
events or transactions occurring after the balance sheet date in its financial statements and the
disclosures an entity should make about events or transactions that occurred after the balance
sheet date. In accordance with this statement, an entity should apply the requirements to interim
or annual financial periods ending after June 15, 2009. The Company adopted ASC 855 in the second
quarter of
2009 and the adoption did not affect the Company’s consolidated financial position, results of
operations or cash flows.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In June 2009, the FASB issued FASB ASC Topic 105, <i>Generally Accepted Accounting Principles </i>(“ASC
105”). ASC 105 establishes the FASB Accounting Standards Codification<sup style="font-size: 85%; vertical-align: text-top">TM</sup>
(“Codification”) as the source of authoritative U.S. generally accepted accounting principles
(“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive
releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities
laws are also sources of authoritative U.S. GAAP for SEC registrants. ASC 105 and the Codification
were effective for financial statements issued for interim and annual periods ending after
September 15, 2009 (fiscal year ended January 2, 2010 for the Company). The Company adopted this
ASC and included the required disclosures in its financial statements.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In January 2010, the FASB issued Accounting Standard Update (“ASU”) No. 2010-06, <i>Fair Value
Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements </i>(“ASU
No. 2010-06”). ASU No. 2010-06 amends existing disclosure requirements under ASC 820 by adding
required disclosures about items transferring into and out of Levels 1 and 2 in the fair value
hierarchy; adding separate disclosures about purchases, sales, issuances and settlements relative
to Level 3 measurements; and clarifying the existing fair value disclosures about the level of
disaggregation. ASU No. 2010-06 was effective for financial statements issued for interim and
annual periods beginning after December 15, 2009 (first quarter 2010 for the Company), except for
the requirement to provide Level 3 activity, which is effective for fiscal years beginning after
December 15, 2010 (first quarter 2011 for the Company). The Company adopted the applicable
disclosure requirements of this ASU in the first quarter of 2010, and the adoption did not affect
the Company’s consolidated financial position, results of operations or cash flows.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In February 2010, the FASB issued ASU No. 2010-09, <i>Subsequent Events (Topic 855): Amendments to
Certain Recognition and Disclosure Requirements</i>. This ASU, which was effective immediately,
removed the requirement for an SEC filer to disclose a date through which subsequent events have
been evaluated. The Company adopted this standard in the first quarter of 2010 and the adoption
did not affect the Company’s consolidated financial position, results of operations or cash flows.
</div>
</div>
false
--01-01
Q3
2010
2010-09-11
10-Q
0000110471
48831627
Yes
Large Accelerated Filer
WOLVERINE WORLD WIDE INC /DE/
No
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