10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 3, 2009

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number 1-9548

The Timberland Company

(Exact Name of Registrant as Specified in Its Charter)

Delaware	02-0312554
(State or Other Jurisdiction of	(I.R.S. Employer Identification No.)
Incorporation or Organization)
200 Domain Drive, Stratham, New Hampshire	03885
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (603) 772-9500

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

þ Yes       o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

o Yes       o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ  Accelerated filer o  Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company o 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes       þ No

On May 1, 2009, 45,311,957 shares of the registrant’s Class A Common Stock were outstanding and 11,529,160 shares of the registrant’s Class B Common Stock were outstanding.

THE TIMBERLAND COMPANY

FORM 10-Q

TABLE OF CONTENTS

	Page(s)
Part I — Financial Information
Item 1. Financial Statements
Unaudited Condensed Consolidated Balance Sheets - April 3, 2009, December 31, 2008 and March 28, 2008		3
Unaudited Condensed Consolidated Statements of Operations - For the Quarters Ended April 3, 2009 and March 28, 2008		4
Unaudited Condensed Consolidated Statements of Cash Flows - For the Quarters Ended April 3, 2009 and March 28, 2008		5
Notes to Unaudited Condensed Consolidated Financial Statements		6-16
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		16-24
Item 3. Quantitative and Qualitative Disclosures About Market Risk		24
Item 4. Controls and Procedures		25
Part II — Other Information
Item 1A. Risk Factors		25
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		26
Item 6. Exhibits		27
Signatures		28
Exhibit Index		29
Exhibits		30-54
EX-10.1 THE TIMBERLAND COMPANY LONG TERM INCENTIVE PROGRAM
EX-10.2 FORM OF PERFORMANCE STOCK UNIT AGREEMENT
EX-10.3 FORM OF PERFORMANCE VESTED STOCK OPTION AGREEMENT
EX-10.4 FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT
EX-10.5 FORM OF RESTRICTED STOCK UNIT AGREEMENT
EX-10.6 FORM OF RESTRICTED STOCK AWARD AGREEMENT
EX-10.7 SUMMARY OF NON-EMPLOYEE DIRECTOR COMPENSATION
EX-31.1 SECTION 302 CERTIFICATION OF PEO
EX-31.2 SECTION 302 CERTIFICATION OF PFO
EX-32.1 SECTION 906 CERTIFICATION OF CEO
EX-32.2 SECTION 906 CERTIFICATION OF CFO

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Page 2

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements. As discussed in the sections entitled “Cautionary Statements for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995” on page 2 of our Annual Report on Form 10-K for the year ended December 31, 2008 (our “Annual Report on Form 10-K”) and “Forward Looking Information” in Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K, investors should be aware of certain risks, uncertainties and assumptions that could affect our actual results and could cause such results to differ materially from those contained in forward-looking statements made by or on behalf of us in our periodic reports filed with the Securities and Exchange Commission, in our annual report to shareholders, in our proxy statement, in press releases and other written materials and statements made by our officers, directors or employees to third parties. Such statements are based on current expectations only and actual future results may differ materially from those expressed or implied by such forward-looking statements due to certain risks, uncertainties and assumptions. We encourage you to refer to our Annual Report on Form 10-K and Part II, Item 1A, Risk Factors, of this Quarterly Report on Form 10-Q to carefully consider these risks, uncertainties and assumptions. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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Page 3

Part I — FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

THE TIMBERLAND COMPANY

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)

	April 3,			December 31,			March 28,
	2009			2008			2008
Assets
Current assets
Cash and equivalents	$	159,195		$	217,189		$	134,829
Accounts receivable, net of allowance for doubtful accounts of $13,239 at April 3, 2009, $14,482 at December 31, 2008 and $16,717 at March 28, 2008		172,280			168,666			201,786
Inventory, net		162,783			179,688			180,177
Prepaid expense		37,576			37,139			42,019
Prepaid income taxes		16,752			16,687			20,196
Deferred income taxes		21,974			23,425			22,749
Derivative assets		4,886			7,109			—
Total current assets		575,446			649,903			601,756
Property, plant and equipment, net		74,576			78,526			86,461
Deferred income taxes		17,204			18,528			19,075
Goodwill		43,870			43,870			44,840
Intangible assets, net		46,512			47,996			53,588
Other assets, net		10,423			10,576			10,453
Total assets	$	768,031		$	849,399		$	816,173
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	56,159		$	96,901		$	63,427
Accrued expense
Payroll and related		18,966			32,587			30,085
Other		61,309			79,503			65,250
Income taxes payable		17,841			20,697			15,321
Deferred income taxes		184			—			—
Derivative liabilities		1,212			2,386			9,257
Total current liabilities		155,671			232,074			183,340
Other long-term liabilities		33,398			40,787			40,431
Commitments and contingencies
Stockholders’ equity
Preferred Stock, $.01 par value; 2,000,000 shares authorized; none issued		—			—			—
Class A Common Stock, $.01 par value (1 vote per share); 120,000,000 shares authorized; 73,997,343 shares issued at April 3, 2009, 73,806,026 shares issued at December 31, 2008 and 73,471,161 shares issued at March 28, 2008		740			738			735
Class B Common Stock, $.01 par value (10 votes per share); convertible into Class A shares on a one-for-one basis; 20,000,000 shares authorized; 11,529,160 shares issued and outstanding at April 3, 2009 and December 31, 2008 and 11,743,660 shares issued and outstanding at March 28, 2008		115			115			117
Additional paid-in capital		261,901			260,267			253,210
Retained earnings		933,916			918,039			893,172
Accumulated other comprehensive income		7,635			12,543			24,808
Treasury Stock at cost; 28,685,386 Class A shares at April 3, 2009, 27,766,651 Class A shares at December 31, 2008 and 25,692,294 Class A shares at March 28, 2008		(625,345	)		(615,164	)		(579,640	)
Total stockholders’ equity		578,962			576,538			592,402
Total liabilities and stockholders’ equity	$	768,031		$	849,399		$	816,173

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Page 4

THE TIMBERLAND COMPANY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in Thousands, Except Per Share Data)

	For the Quarter Ended
	April 3, 2009			March 28, 2008
Revenue	$	296,648		$	340,402
Cost of goods sold		159,959			182,798
Gross profit		136,689			157,604
Operating expense
Selling		92,268			106,122
General and administrative		25,417			27,688
Impairment of intangible asset		925			—
Restructuring and related (credits)/costs		(104	)		552
Total operating expense		118,506			134,362
Operating income		18,183			23,242
Other income/(expense)
Interest income		440			854
Interest expense		(121	)		(286	)
Other income/(expense), net		(663	)		5,762
Total other income/(expense), net		(344	)		6,330
Income before provision for income taxes		17,839			29,572
Provision for income taxes		1,962			11,533
Net income	$	15,877		$	18,039
Earnings per share
Basic	$	.28		$	.30
Diluted	$	.27		$	.30
Weighted-average shares outstanding
Basic		57,108			59,618
Diluted		57,802			60,016

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Page 5

THE TIMBERLAND COMPANY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

	For the Quarter Ended
	April 3, 2009			March 28, 2008
Cash flows from operating activities:
Net income	$	15,877		$	18,039
Adjustments to reconcile net income to net cash (used)/provided by operating activities:
Deferred income taxes		2,215			2,554
Share-based compensation		811			1,539
Depreciation and other amortization		7,141			8,046
Provision for losses on accounts receivable		1,912			1,389
Provision for intangible asset impairment		925			—
Tax benefit/(expense) from share-based compensation, net of excess benefit		(295	)		151
Unrealized (gain)/loss on derivatives		34			(21	)
Other non-cash charges, net		828			520
Increase/(decrease) in cash from changes in working capital:
Accounts receivable		(7,925	)		(6,539	)
Inventory		16,656			24,086
Prepaid expense		(1,652	)		1,617
Accounts payable		(40,269	)		(23,644	)
Accrued expense		(31,261	)		(18,023	)
Prepaid income taxes		(65	)		(2,835	)
Income taxes payable		(9,040	)		(2,544	)
Other liabilities		(201	)		(1,572	)
Net cash (used)/provided by operating activities		(44,309	)		2,763
Cash flows from investing activities:
Acquisition of business, net of cash acquired		(1,516	)		—
Additions to property, plant and equipment		(2,838	)		(4,116	)
Other		(61	)		2,170
Net cash used by investing activities		(4,415	)		(1,946	)
Cash flows from financing activities:
Common stock repurchases		(9,127	)		(10,152	)
Issuance of common stock		670			453
Excess tax benefit from share-based compensation		99			122
Other		(170	)		—
Net cash used by financing activities		(8,528	)		(9,577	)
Effect of exchange rate changes on cash and equivalents		(742	)		315
Net decrease in cash and equivalents		(57,994	)		(8,445	)
Cash and equivalents at beginning of period		217,189			143,274
Cash and equivalents at end of period	$	159,195		$	134,829
Supplemental disclosures of cash flow information:
Interest paid	$	156		$	81
Income taxes paid	$	8,311		$	14,484

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Form 10-Q
Page 6

THE TIMBERLAND COMPANY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in Thousands, Except Share and Per Share Data)

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of The Timberland Company and its subsidiaries (“we”, “our”, “us”, “its”, “Timberland” or the “Company”). These unaudited condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2008.

The financial statements included in this Quarterly Report on Form 10-Q are unaudited, but in the opinion of management, such financial statements include the adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and changes in cash flows for the interim periods presented. The results reported in these financial statements are not necessarily indicative of the results that may be expected for the full year due, in part, to seasonal factors. Historically, our revenue has been more heavily weighted to the second half of the year.

The Company’s fiscal quarters end on the Friday closest to the day on which the calendar quarter ends, except that the fourth quarter and fiscal year end on December 31. The first quarters of our fiscal year in 2009 and 2008 ended on April 3, 2009 and March 28, 2008, respectively.

New Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS 141R (revised 2007), “Business Combinations” (“SFAS 141R”). SFAS 141R was revised to improve the relevance, representational faithfulness and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. It establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree; recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R is effective for business combinations made by the Company on or after January 1, 2009.

In March 2008, the FASB issued SFAS 161, “Disclosures About Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133” (“SFAS 161”). SFAS 161 changes the disclosure requirements for derivative instruments and hedging activities to provide enhanced disclosures about (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under SFAS 133 and its interpretations; and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. The Company adopted SFAS 161 effective with the interim financial statements for the quarter ending April 3, 2009.

Note 2. Fair Value Measurements

Effective January 1, 2008, the Company implemented SFAS 157, “Fair Value Measurements” (“SFAS 157”) relative to its financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements at least annually. The implementation of SFAS 157 relative to the Company’s nonfinancial assets and nonfinancial liabilities that are recognized and disclosed

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at fair value in the financial statements on a non-recurring basis became effective on January 1, 2009. The implementation of this standard to our nonfinancial assets and liabilities remeasured on a non-recurring basis impacts the manner in which we will prospectively measure fair value primarily in our goodwill, indefinite-lived and long-lived asset impairment tests, as well as initial fair value measurements for new asset retirement obligations.

SFAS 157 establishes a fair value hierarchy that ranks the quality and reliability of the information used to determine fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. The following table presents information about our assets and liabilities measured at fair value on a recurring basis as of April 3, 2009:

Description	Level 1		Level 2		Level 3		Impact of Netting			April 3, 2009
Assets:
Derivative contracts:
Derivative assets	$	—	$	4,973	$	—	$	(87	)	$	4,886
Cash surrender value of life insurance	$	—	$	5,963	$	—	$	—		$	5,963
Liabilities:
Derivative contracts:
Derivative liabilities	$	—	$	1,299	$	—	$	(87	)	$	1,212

The fair value of the derivative contracts in the table above is reported on a gross basis by level based on the fair value hierarchy with a corresponding adjustment for netting for financial statement presentation purposes, where appropriate. The Company often enters into derivative contracts with a single counterparty and certain of these contracts are covered under a master netting agreement. The fair values of our foreign currency forward contracts are based on quoted market prices or pricing models using current market rates.

The cash surrender value of life insurance represents insurance contracts held as assets in a rabbi trust to fund the Company’s deferred compensation plan. These assets are included in other assets, net on our unaudited condensed consolidated balance sheet. The cash surrender value of life insurance is based on the net asset values of the underlying funds available to plan participants.

On an on-going basis, the Company evaluates the carrying value of the GoLite trademark, which is licensed to a third party, for events or changes in circumstances indicating the carrying value of the asset may not be recoverable. Factors considered include the ability of the licensee to obtain necessary financing, the impact of changes in economic conditions and an assessment of the Company’s ability to recover all contractual payments when due under the licensing arrangement. During the first quarter of 2009, using Level 3 input factors noted above, the Company determined that the carrying value of the GoLite trademark was impaired and recorded a pre-tax non-cash charge of approximately $925, which reduced the carrying value of the trademark to zero at April 3, 2009. The charge is reflected in our Europe segment.

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Note 3. Derivatives

In the normal course of business, the financial position and results of operations of the Company are impacted by currency rate movements in foreign currency denominated assets, liabilities and cash flows as we purchase and sell goods in local currencies. We have established policies and business practices that are intended to mitigate a portion of the effect of these exposures. We use derivative financial instruments, specifically forward contracts, to manage our currency exposures. These derivative instruments are viewed as risk management tools and are not used for trading or speculative purposes. Derivatives entered into by the Company are either designated as cash flow hedges of forecasted foreign currency transactions or are undesignated economic hedges of existing intercompany assets and liabilities, certain third party assets and liabilities and non-US dollar-denominated cash balances.

Derivative instruments expose us to credit and market risk. The market risk associated with these instruments resulting from currency exchange movements is expected to offset the market risk of the underlying transactions being hedged. We do not believe there is a significant risk of loss in the event of non-performance by the counterparties associated with these instruments because these transactions are executed with a group of major financial institutions and have varying maturities through January 2010. As a matter of policy, we enter into these contracts only with counterparties having a minimum investment-grade or better credit rating. Credit risk is managed through the continuous monitoring of exposures to such counterparties.

Cash Flow Hedges

The Company principally uses foreign currency forward contracts as cash flow hedges to offset a portion of the effects of exchange rate fluctuations on certain of its forecasted foreign currency denominated sales transactions. The Company’s cash flow exposures include anticipated foreign currency transactions, such as foreign currency denominated sales, costs, expenses, inter-company charges, as well as collections and payments. The risk in these exposures is the potential for losses associated with the remeasurement of non-functional currency cash flows into the functional currency. The Company has a hedging program to aid in mitigating its foreign currency exposures and to decrease the volatility in earnings. Under this hedging program, the Company performs a quarterly assessment of the effectiveness of the hedge relationship and measures and recognizes any hedge ineffectiveness in earnings. A hedge is effective if the changes in the fair value of the derivative provide offset of at least 80 percent and not more than 125 percent of the changes in the fair value or cash flows of the hedged item attributable to the risk being hedged. The Company uses regression analysis to assess the effectiveness of a hedge relationship.

The Company’s hedging strategy uses forward contracts as cash flow hedging instruments, which are recorded in our unaudited condensed consolidated balance sheet at fair value. The effective portion of gains and losses resulting from changes in the fair value of these hedge instruments are deferred in accumulated other comprehensive income (“OCI”) and reclassified to earnings, in cost of goods sold, in the period that the hedged transaction is recognized in earnings. Hedge ineffectiveness is evaluated using the hypothetical derivative method, and the ineffective portion of the hedge is reported in our unaudited condensed consolidated statement of operations in other income/(expense), net.

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As of April 3, 2009, we had forward contracts maturing at various dates through January 2010 to sell the equivalent of $104,532 in foreign currencies at contracted rates. The contract amount represents the net amount of all purchase and sale contracts of a foreign currency.

	Contract
	Amount
	(U.S.$		Maturity
Currency	Equivalent)		Date
Pounds Sterling	$	17,264		2009
Pounds Sterling		1,934		2010
Euro		59,777		2009
Euro		4,047		2010
Japanese Yen		17,397		2009
Japanese Yen		4,113		2010
	$	104,532

Other Derivative Contracts

We also enter into derivative contracts to manage foreign currency exchange risk on intercompany accounts receivable and payable, third-party accounts receivable and payable, and non-U.S. dollar-denominated cash balances using forward contracts. These forward contracts, which are undesignated hedges of economic risk, are recorded at fair value in the balance sheet, with changes in the fair value of these instruments recognized in earnings immediately. The gains or losses related to the contracts largely offset the remeasurement of those assets and liabilities.

As of April 3, 2009, we had forward contracts maturing at various dates through July 2009 to sell the equivalent of $49,596 in foreign currencies at contracted rates and to buy the equivalent of $(24,705) in foreign currencies at contracted rates. The contract amount represents the net amount of all purchase and sale contracts of a foreign currency.

	Contract
	Amount
	(U.S.$			Maturity
Currency	Equivalent)			Date
Pounds Sterling	$	(15,985	)		2009
Euro		13,053			2009
Japanese Yen		17,071			2009
Canadian Dollar		6,661			2009
Norwegian Kroner		1,971			2009
Swedish Krona		2,120			2009
	$	24,891

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Fair Values of Derivative Instruments

	Asset Derivatives			Liability Derivatives
As of April 3, 2009	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments under SFAS 133:
Foreign exchange forward contracts	Derivative assets	$	4,803	Derivative liabilities	$	1,068
Foreign exchange forward contracts	Derivative liabilities		—	Derivative assets		75
Total derivatives designated as hedging instruments under SFAS 133		$	4,803		$	1,143
Derivatives not designated as hedging instruments under SFAS 133:
Foreign exchange forward contracts	Derivative assets	$	170	Derivative liabilities	$	144
Foreign exchange forward contracts	Derivative liabilities		—	Derivative assets		12
Total derivatives not designated as hedging instruments under SFAS 133		$	170		$	156
Total derivatives		$	4,973		$	1,299

The Effect of Derivative Instruments on the Statement of Operations for the Quarters Ended April 3, 2009 and March 28, 2008

							Amount of Gain/(Loss)
	Amount of Gain/(Loss)					Location of Gain/(Loss)	Reclassified from
	Recognized in OCI on					Reclassified from	Accumulated OCI into
Derivatives in	Derivatives					Accumulated OCI into	Income
SFAS 133 Cash Flow	(Effective Portion)					Income	(Effective Portion)
Hedging Relationships	2009		2008			(Effective Portion)	2009		2008
Foreign exchange forward contracts	$	3,477	$	(8,815	)	Cost of goods sold	$	7,316	$	(4,223	)

The Company expects to reclassify pre-tax gains of $3,661 to the income statement within the next twelve months.

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Hedge ineffectiveness is evaluated using the hypothetical derivative method, and the ineffective portion of the hedge is reported in our unaudited condensed consolidated statement of income in other income/(expense), net. The amount of hedge ineffectiveness reported in other income/(expense), net for the quarters ended April 3, 2009 and March 28, 2008 was not material.

	Location of Gain/(Loss)	Amount of Gain/(Loss)
Derivatives not Designated	Recognized in	Recognized in
as Hedging Instruments	Income on	Income on Derivative
Under SFAS 133	Derivative	2009		2008
Foreign exchange forward contracts	Other income/(expense), net	$	2,424	$	653

Note 4. Share-Based Compensation

Share-based compensation costs were recorded in Cost of goods sold, Selling expense and General and administrative expense as follows for the quarters ended April 3, 2009 and March 28, 2008, respectively:

	For the Quarter Ended
	April 3, 2009		March 28, 2008
Cost of goods sold	$	89	$	202
Selling expense		468		859
General and administrative expense		254		478
Total share-based compensation	$	811	$	1,539

Performance-based Awards

On March 4, 2009, the Management Development and Compensation Committee of the Board of Directors approved the terms of The Timberland Company 2009 Executive Long Term Incentive Program (“2009 LTIP”) with respect to equity awards to be made to certain of the Company’s executives and management team. On March 5, 2009, the Board of Directors also approved the 2009 LTIP with respect to the Company’s Chief Executive Officer. The 2009 LTIP was established under the Company’s 2007 Incentive Plan. The awards are subject to future performance, and consist of performance stock units (“PSUs”), equal in value to one share of the Company’s Class A Common Stock, and performance vested stock options (“PVSOs”), with an exercise price of $9.34 (the closing price of the Company’s Class A Common Stock as quoted on the New York Stock Exchange on March 5, 2009, the date of grant). Shares with respect to the PSUs will be granted and will vest following the end of the applicable performance period and approval by the Board of Directors, or a committee thereof, of the achievement of the applicable performance metric. The PVSOs will vest in three equal annual installments following the end of the applicable performance period and approval by the Board of Directors, or a committee thereof, of the achievement of the applicable performance metric. The payout of the performance awards will be based on the Company’s achievement of certain levels of earnings before interest, taxes, depreciation and amortization (“EBITDA”), with threshold, budget, target and maximum award levels based upon actual EBITDA of the Company during the applicable performance periods equaling or exceeding such levels. The performance period for the PSUs is the three-year period from January 1, 2009 through December 31, 2011, and the performance period for the PVSOs is the twelve-month period from January 1, 2009 through

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December 31, 2009. No awards shall be made or earned, as the case may be, unless the threshold goal is attained, and the maximum payout may not exceed 200% of the target award.

The maximum number of shares to be awarded with respect to PSUs under the March 5, 2009 grants is 845,000, which, if earned, will be settled in early 2012. Based on current estimates of the performance metrics, unrecognized compensation expense with respect to PSUs was $1,404 as of April 3, 2009. This expense is expected to be recognized over a weighted average period of 2.9 years.

The maximum number of shares subject to exercise with respect to PVSOs under the March 5, 2009 grants is 1,126,667, which, if earned, will be settled, subject to the vesting schedule noted above, in early 2010. The Company estimates the fair value of its PVSOs on the date of grant using the Black-Scholes option valuation model, which employs the following assumptions:

	For the Quarter
	Ended April 3,
	2009
Expected volatility		41.8	%
Risk-free interest rate		1.9	%
Expected life (in years)		6.5
Expected dividends		—

Based on current estimates of the performance metrics, unrecognized compensation expense related to PVSOs was $843 as of April 3, 2009. This expense is expected to be recognized over a weighted average period of 3.9 years.

Stock Options

The Company estimates the fair value of its stock option awards on the date of grant using the Black-Scholes option valuation model, which employs the assumptions noted in the following table, for stock option awards excluding the performance-based awards noted above for which performance conditions have not been met:

	For the Quarter Ended
	April 3, 2009			March 28, 2008
Expected volatility		42.4	%		32.0	%
Risk-free interest rate		2.1	%		2.8	%
Expected life (in years)		7.5			5.3
Expected dividends		—			—

The following summarizes transactions under stock option arrangements excluding the performance-based awards noted above for which performance conditions have not been met:

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						Weighted-
				Weighted-		Average
				Average		Remaining		Aggregate
				Exercise		Contractual		Intrinsic
	Shares			Price		Term		Value
Outstanding at January 1, 2009		4,163,628		$	26.03
Granted		187,194			9.34
Exercised		(81,800	)		8.19
Expired or forfeited		(149,255	)		27.47
Outstanding at April 3, 2009		4,119,767		$	25.57		5.8	$	1,129
Vested or expected to vest at April 3, 2009		3,966,690		$	25.96		5.7	$	902
Exercisable at April 3, 2009		3,351,413		$	27.62		5.1	$	222

Unrecognized compensation expense related to nonvested stock options was $3,135 as of April 3, 2009. This expense is expected to be recognized over a weighted average period of 1.4 years.

Nonvested Shares and Restricted Stock Units

Changes in the Company’s nonvested shares and restricted stock units that are not performance based for the quarter ended April 3, 2009 are as follows:

				Weighted-					Weighted-
				Average					Average
	Stock			Grant Date		Stock			Grant Date
	Awards			Fair Value		Units			Fair Value
Nonvested at January 1, 2009		278,553		$	25.39		182,600		$	14.45
Awarded		62,399			9.34		—			—
Vested		(11,904	)		14.70		(47,118	)		14.70
Forfeited		—			—		(2,364	)		14.70
Nonvested at April 3, 2009		329,048		$	22.73		133,118		$	14.36

Unrecognized compensation expense related to nonvested restricted stock awards was $919 as of April 3, 2009. The expense is expected to be recognized over a weighted-average period of 0.7 years. As of April 3, 2009, 329,048 nonvested stock awards, with a weighted-average grant date fair value of $22.73, are expected to vest. Unrecognized compensation expense related to nonvested restricted stock units was $1,588 as of April 3, 2009. The expense is expected to be recognized over a weighted-average period of 2.0 years. As of April 3, 2009, 104,337 nonvested stock units, with a weighted-average grant date fair value of $14.37 are expected to vest in the future.

Note 5. Earnings Per Share (“EPS”)

Basic EPS excludes common stock equivalents and is computed by dividing net income by the weighted-average number of common shares outstanding for the periods presented. Diluted EPS reflects the potential dilution that would occur if potentially dilutive securities such as stock options were exercised and nonvested shares vested, to the extent such securities would not be anti-dilutive.

The following is a reconciliation of the number of shares (in thousands) for the basic and diluted EPS computations for the quarters ended April 3, 2009 and March 28, 2008:

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	For the Quarter Ended
	April 3, 2009							March 28, 2008
			Weighted		Per-					Weighted		Per-
	Net		-Average		Share			Net		-Average		Share
	Income		Shares		Amount			Income		Shares		Amount
Basic EPS	$	15,877		57,108	$	.28		$	18,039		59,618	$	.30
Effect of dilutive securities:
Stock options and employee stock purchase plan shares		—		16		—			—		55		—
Nonvested shares		—		678		(.01	)		—		343		—
Diluted EPS	$	15,877		57,802	$	.27		$	18,039		60,016	$	.30

The following stock options and nonvested shares (in thousands) were outstanding as of April 3, 2009 and March 28, 2008, but were not included in the computation of diluted EPS as their inclusion would be anti-dilutive:

	For the Quarter Ended
	April 3, 2009		March 28, 2008
Anti-dilutive securities		4,031		4,351

Note 6. Comprehensive Income

Comprehensive income for the quarters ended April 3, 2009 and March 28, 2008 is as follows:

	For the Quarter Ended
	April 3, 2009			March 28, 2008
Net income	$	15,877		$	18,039
Change in cumulative translation adjustment		(3,770	)		9,892
Change in fair value of cash flow hedges, net of taxes		(1,138	)		(5,190	)
Comprehensive income	$	10,969		$	22,741

The components of accumulated other comprehensive income as of April 3, 2009, December 31, 2008 and March 28, 2008 were:

	April 3, 2009		December 31, 2008		March 28, 2008
Cumulative translation adjustment	$	4,006	$	7,776	$	33,623
Fair value of cash flow hedges, net of taxes of $183 at April 3, 2009, $244 at December 31, 2008 and $(442) at March 28, 2008		3,491		4,629		(8,815	)
Other adjustments, net of taxes of $7 at April 3, 2009 and December 31, 2008		138		138		—
Total	$	7,635	$	12,543	$	24,808

Note 7. Business Segments and Geographic Information

The Company has three reportable segments: North America, Europe and Asia. The composition of the segments is consistent with that used by the Company’s chief operating decision maker.

The North America segment is comprised of the sale of products to wholesale and retail customers in North America. It includes Company-operated specialty and factory outlet stores in the United States and our United States e-commerce business. This segment also includes royalties from licensed products sold worldwide, the related management costs and expenses associated with our worldwide licensing efforts, and certain marketing expenses and value-added services.

The Europe and Asia segments each consist of the marketing, selling and distribution of footwear, apparel and accessories outside of the United States. Products are sold outside of the United States through our

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subsidiaries (which use wholesale, retail and e-commerce channels to sell footwear, apparel and accessories), franchisees and independent distributors.

Unallocated Corporate consists primarily of corporate finance, information services, legal and administrative expenses, share-based compensation costs, distribution expenses, global marketing support expenses, worldwide product development costs and other costs incurred in support of Company-wide activities. Additionally, Unallocated Corporate includes total other income/(expense), net, which is comprised of interest income, interest expense, and other income/(expense), net, which includes foreign exchange gains and losses resulting from changes in the fair value of financial derivatives not designated as hedges, currency gains and losses incurred on the settlement of local currency denominated assets and liabilities, and other miscellaneous non-operating income/(expense). Such income/(expense) is not allocated among the reportable business segments.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. We evaluate segment performance based on revenue and operating income. Total assets are disaggregated to the extent that assets apply specifically to a single segment. Unallocated Corporate assets primarily consist of cash and equivalents, tax assets, manufacturing/sourcing assets, computers and related equipment, and transportation and distribution equipment.

For the Quarters Ended April 3, 2009 and March 28, 2008

							Unallocated
	North America		Europe		Asia		Corporate			Consolidated
2009
Revenue	$	119,858	$	139,988	$	36,802	$	—		$	296,648
Operating income/(loss)		15,045		30,113		1,830		(28,805	)		18,183
Income/(loss) before income taxes		15,045		30,113		1,830		(29,149	)		17,839
Total assets		239,796		273,040		72,989		182,206			768,031
Goodwill		36,876		6,994		—		—			43,870
2008
Revenue	$	137,730	$	164,751	$	37,921	$	—		$	340,402
Operating income/(loss)		21,353		33,121		696		(31,928	)		23,242
Income/(loss) before income taxes		21,353		33,121		696		(25,598	)		29,572
Total assets		257,815		291,016		81,892		185,450			816,173
Goodwill		37,846		6,994		—		—			44,840

The following summarizes our revenue by product for the quarters ended April 3, 2009 and March 28, 2008:

	For the Quarter Ended
	April 3, 2009		March 28, 2008
Footwear	$	211,641	$	236,598
Apparel and accessories		78,664		97,942
Royalty and other		6,343		5,862
Total	$	296,648	$	340,402

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Note 8. Inventory, net

Inventory, net consists of the following:

	April 3, 2009		December 31, 2008		March 28, 2008
Materials	$	7,978	$	7,708	$	7,116
Work-in-process		1,189		825		924
Finished goods		153,616		171,155		172,137
Total	$	162,783	$	179,688	$	180,177

Note 9. Acquisition

On March 16, 2009, we acquired 100% of the stock of Glaudio Fashion B.V. (“Glaudio”) for approximately $1,500, net of cash acquired. Glaudio operates nine Timberland retail stores in the Netherlands and Belgium which sell Timberland footwear, apparel, leather goods and product-care products for men, women and kids. The acquisition was effective March 1, 2009, and its results have been included in our Europe segment from the effective date of the acquisition. The acquisition of Glaudio was not material to the results of operations, financial position or cash flows of the Company.

Note 10. Income Taxes

In February 2009, the Company received notification that our U.S. federal tax examinations for 2006 and 2007 had been completed. Accordingly, in the first quarter of 2009, we reversed approximately $6,400 of accruals related to uncertain tax positions.

Note 11. Share Repurchase

On March 10, 2008, our Board of Directors approved the repurchase of up to 6,000,000 shares of our Class A Common Stock. Shares repurchased under this authorization totaled 900,509 for the quarter ended April 3, 2009. As of April 3, 2009, 3,668,393 shares remained available for repurchase under this authorization.

From time to time, we use plans adopted under Rule 10b5-1 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, to facilitate share repurchases.

Note 12. Litigation

We are involved in various litigation and legal proceedings that have arisen in the ordinary course of business. Management believes that the ultimate resolution of any such matters will not have a material adverse effect on our consolidated financial statements.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is management’s discussion and analysis of the financial condition and results of operations of The Timberland Company and its subsidiaries (“we”, “our”, “us”, “its”, “Timberland” or the “Company”), as well as our liquidity and capital resources. The discussion, including known trends and uncertainties identified by management, should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q, as

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well as our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2008.

Included herein are discussions and reconciliations of total Company, Europe and Asia revenue changes to constant dollar revenue changes. Constant dollar revenue changes, which exclude the impact of changes in foreign exchange rates, are not Generally Accepted Accounting Principle (''GAAP’’) performance measures. The difference between changes in reported revenue (the most comparable GAAP measure) and constant dollar revenue changes is the impact of foreign currency exchange rate fluctuations. We provide constant dollar revenue changes for total Company, Europe and Asia results because we use the measure to understand the underlying growth rate of revenue excluding the impact of items that are not under management’s direct control, such as changes in foreign exchange rates. The limitation of this measure is that it excludes items that have an impact on the Company’s revenue. This limitation is best addressed by using constant dollar revenue changes in combination with the GAAP numbers.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to sales returns and allowances, realization of outstanding accounts receivable, the carrying value of inventories, derivatives, other contingencies, impairment of assets, incentive compensation accruals, share-based compensation and income taxes. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Historically, actual results have not been materially different from our estimates. Because of the uncertainty inherent in these matters, actual results could differ from the estimates used in, or that result from, applying our critical accounting policies. Our significant accounting policies are described in Note 1 to the Company’s consolidated financial statements included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2008. Our estimates, assumptions and judgments involved in applying the critical accounting policies are described in Part II, Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the year ended December 31, 2008.

Overview

Our principal strategic goal is to become the authentic outdoor brand of choice globally. We continue to develop a diverse portfolio of footwear, apparel and accessories that reinforces the functional performance, benefits and classic styling that consumers have come to expect from our brand. We sell our products to consumers who embrace an outdoor-inspired lifestyle through high-quality distribution channels, including our own retail stores, which reinforce the premium positioning of the Timberland^â brand.

To deliver against our long-term goals, we are focused on driving progress on key strategic fronts. These include enhancing our leadership position in our core footwear business, capturing the opportunity that we see for outdoor-inspired apparel, extending enterprise reach through brand-building licensing arrangements, expanding geographically and driving operational and financial excellence while setting the standard for commitment to the community and striving to be a global employer of choice.

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A summary of our first quarter of 2009 financial performance, compared to the first quarter of 2008, follows:

• First quarter revenue decreased 12.9%, or 6.5% on a constant dollar basis, to $296.6 million, compared to $340.4 million in the prior year period.

• Gross margin decreased from 46.3% to 46.1%.

• Operating expenses were $118.5 million, down 11.8% from $134.4 million in the prior year period.

• We recorded operating income of $18.2 million in the first quarter of 2009, compared to $23.2 million in the prior year period.

• Net income was $15.9 million in the first quarter of 2009, compared to $18.0 million in the first quarter of 2008.

• Diluted earnings per share decreased from $0.30 in the first quarter of 2008 to $0.27 in the first quarter of 2009.

• Cash at the end of the quarter was $159.2 million with no debt outstanding.

The Company anticipates that 2009 will continue to be challenging due to the uncertainty around consumer spending patterns and the financial health of the retail industry. Given the volatile nature of current economic conditions, the Company believes there is not sufficient visibility to set expectations for the performance of the business.

Results of Operations for the Quarter Ended April 3, 2009 as Compared to the Quarter Ended March 28, 2008

Revenue

Consolidated revenue of $296.6 million for the first quarter of 2009 decreased $43.8 million, or 12.9%, compared to the first quarter of 2008, driven by declines in Timberland^® apparel and casual footwear, and impacted by the strengthening of the U.S. dollar. On a constant dollar basis, consolidated revenues were down 6.5%. North America revenue totaled $119.8 million for the first quarter of 2009, a 13.0% decline from the first quarter of 2008. Europe revenues were $140.0 million in the first quarter of 2009, a 15% decrease over the same period in 2008. Europe revenues were down 1.7% as compared to the prior year quarter on a constant dollar basis. Asia revenues were $36.8 million for the first quarter of 2009, a decrease of 2.9% from the same period in 2008, but declined 6.2% on a constant dollar basis.

Segments Review

We have three reportable business segments (see Note 7 to the unaudited condensed consolidated financial statements contained herein): North America, Europe and Asia.

North America revenues were $119.8 million in the first quarter of 2009, a decrease of 13.0% as compared to the same period in 2008, driven by declines in boots, as well as Timberland^® apparel, due in part to anticipated declines from the decision in 2008 to transition our North America wholesale apparel business to a licensing arrangement. The continued weakness in these areas was partially offset by growth in performance footwear and SmartWool apparel and accessories. Within North America, our retail business had revenue declines of 8.5%, driven by a 9.8% decrease in comparable store sales.

Europe recorded revenues of $140.0 million in the first quarter of 2009, which was a 15.0% decrease from the first quarter of 2008. The impact of changes in foreign exchange rates reduced Europe’s revenues by 13.3%, masking growth in our distributor businesses, as well as the German and Benelux regions. These

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growth areas were offset by continued weakness across the U.K. and Southern Europe. Declines in casual footwear and Timberland^® apparel were partially offset by continued improvement in boots, as well as SmartWool apparel and accessories.

In Asia, revenues decreased 2.9% to $36.8 million in the first quarter of 2009, but declined 6.2% in constant dollars as compared to the first quarter of 2008, due to softness in our retail business, primarily in apparel. Growth in Japan was offset by declines in our distributor business, as well as lower revenues in Hong Kong, Singapore and Taiwan.

Products

Worldwide footwear revenue was $211.6 million in the first quarter of 2009, down $25.0 million, or 10.5%, from the first quarter of 2008, driven by global declines in casual footwear and our boot business in North America. Outside North America, we continue to see encouraging signs that our boot business is strengthening. Worldwide apparel and accessories revenue fell 19.7% to $78.7 million in the first quarter of 2009. Timberland^® apparel revenues decreased worldwide, reflecting the strengthening of the U.S. dollar in Europe, softness in international markets, and the impact of the transitioning of our North America wholesale apparel business to a licensing arrangement. The Company ceased sales of in-house Timberland^® brand apparel in North America through the wholesale channel during the second quarter of 2008. We saw double-digit growth in SmartWool products, both in North America and in Europe. Royalty and other revenue was $6.3 million in the first quarter of 2009, compared to $5.9 million in the prior year quarter, primarily due to our wholesale apparel licensing arrangement in North America, offset by a decline in licensed kids’ apparel in Europe.

Channels

Wholesale revenue was $218.6 million in the first quarter of 2009, a 14.4% decrease compared to the prior year quarter. Continued softness in the wholesale markets was the primary driver of sales declines in men’s casual footwear globally, and performance footwear in Europe and Asia. Declines in Timberland^® brand apparel were due in part to the transition of the North American wholesale apparel business to a licensing arrangement.

Retail revenues decreased 8.1% to $78.0 million in the first quarter of 2009, driven by unfavorable foreign exchange rate impacts and a worldwide retail market that continues to be difficult, especially in North America. Overall, comparable store sales were down 1.6% on a global basis as compared to the first quarter of 2008, with favorable comparable store results in Europe and Asia being offset by declines in our North America outlet stores. We had 213 stores, shops and outlets worldwide at the end of the first quarter of 2009 compared to 220 at the end of the first quarter of 2008.

Gross Profit

Gross profit as a percentage of sales, or gross margin, was 46.1% for the first quarter of 2009, 20 basis points lower than in the first quarter of 2008. The impact of higher product costs was partially offset by favorable changes in business unit and channel mix.

We include the costs of procuring inventory (inbound freight and duty, overhead and other similar costs) in cost of goods sold. These costs amounted to $13.9 million and $19.5 million for the first quarters of 2009 and 2008, respectively. The decrease was primarily driven by lower costs associated with our wholesale apparel business as we transitioned to a licensing arrangement in 2008, as well as reduced footwear sourcing and logistics costs as a result of a decrease in volume.

Operating Expense

Operating expense for the first quarter of 2009 was $118.5 million, a decrease of $15.9 million, or 11.8%,

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over the first quarter of 2008. The decrease was driven primarily by a $16.1 million decrease in selling, general and administrative expenses, partially offset by an intangible asset impairment charge of $0.9 million. Overall, changes in foreign exchange rates reduced operating expense by approximately $8.6 million in the first quarter of 2009.

Selling expense was $92.3 million in the first quarter of 2009, a decrease of $13.8 million, or 13.1%, over the same period in 2008. The decrease in selling expense was due primarily to reduced sales, marketing and distribution costs in both our retail and wholesale businesses as a result of lower volume due to softness in the markets, a reduced cost base due to the transitioning of our North American wholesale apparel business to a licensing arrangement, the exiting of certain specialty brands in 2008, and a reduction in share-based and incentive compensation costs. Expenses also benefited from changes in foreign exchange rates.

We include the costs of physically managing inventory (warehousing and handling costs) in selling expense. These costs totaled $9.2 million and $9.9 million in the first quarters of 2009 and 2008, respectively.

In the first quarters of 2009 and 2008, we recorded $0.6 million and $0.8 million, respectively, of reimbursed shipping expenses within revenues and the related shipping costs within selling expense. Shipping costs are included in selling expense and were $4.7 million and $5.2 million for the quarters ended April 3, 2009 and March 28, 2008, respectively.

Advertising expense, which is included in selling expense, was $4.6 million and $5.1 million in the first quarter of 2009 and 2008, respectively. Advertising expense includes co-op advertising costs, consumer-facing advertising costs such as print, television and internet campaigns, production costs including agency fees, and catalog costs. Our continued investment in global marketing and branding initiatives, primarily through consumer-facing advertising programs, was offset by reduced spending in co-op advertising. Advertising costs are expensed at the time the advertising is used, predominantly in the season that the advertising costs are incurred. Prepaid advertising recorded on our unaudited condensed consolidated balance sheets as of April 3, 2009 and March 28, 2008 was $2.3 million and $0.3 million, respectively. These investments demonstrate our continued commitment to strengthen our premium brand position despite adverse economic conditions.

General and administrative expense for the first quarter of 2009 was $25.4 million, down 8.2% compared to the $27.7 million reported in the first quarter of 2008, driven by reductions in incentive and share-based compensation costs, the savings associated with ongoing actions taken to streamline our global operations, and the benefits of changes in foreign exchange rates.

Total operating expense in the first quarter of 2009 also included a charge of $0.9 million to reflect the impairment of a trademark, and restructuring credits of $0.1 million. We recorded net restructuring charges of $0.6 million in the first quarter of 2008.

Operating Income/(Loss)

We recorded operating income of $18.2 million in the first quarter of 2009, compared to operating income of $23.2 million in the prior year period. Operating income included an intangible asset impairment charge of $0.9 million and restructuring credits of $0.1 million in the first quarter of 2009, compared to restructuring charges of $0.6 million in the first quarter of 2008.

Operating income for our North America segment was $15.0 million, a decrease of 29.5% from the first quarter of 2008. The decrease was driven by a 330 basis point decline in gross margin, due primarily to increased product costs, the write-off of inventory and higher than anticipated sales returns and allowances, partially offset by a 14.2% decrease in operating expenses principally due to decreases in selling, marketing and distribution expenses as a result of lower volume. Savings associated with the

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exiting of certain specialty brands in 2008 were offset by fixed asset write-offs related to our e-commerce business and underperforming retail stores.

Timberland’s European segment recorded operating income of $30.1 million in the first quarter of 2009, compared to operating income of $33.1 million in the first quarter of 2008, principally due to a 14.5% decrease in gross profit, in line with a 15.0% decrease in revenue. This decrease was partially offset by a 18.1% decrease in operating expenses as a result of reduced agency, marketing and distribution costs in light of lower sales volume and the impact of changes in foreign exchange rates, partially offset by a charge for the impairment of a trademark.

We had operating income in our Asia segment of $1.8 million for the first quarter of 2009, compared to operating income of $0.7 million for the first quarter of 2008, driven by reduced operating expenses, primarily in our retail business.

Our Unallocated Corporate expenses, which include central support and administrative costs not allocated to our business segments, decreased 9.8% to $28.8 million, which reflects the benefit from the revaluation of the Company’s existing inventory to new standard prices that is not allocated to the Company’s reportable segments.

Other Income/(Expense) and Taxes

Interest income was $0.4 million and $0.9 million in the first quarters of 2009 and 2008, respectively, reflecting lower interest rates. Interest expense, which is comprised of fees related to the establishment and maintenance of our revolving credit facility and interest paid on short-term borrowings, was $0.1 million and $0.3 million in the first quarters of 2009 and 2008, respectively.

Other income/(expense), net, included foreign exchange gains/(losses) of $(0.3) million and $5.1 million in the first quarters of 2009 and 2008, respectively, resulting from changes in the fair value of financial derivatives, specifically forward contracts not designated as cash flow hedges, and the currency gains and losses incurred on the settlement of local currency denominated receivables and payables. These results were driven by the volatility of exchange rates within the first quarters of 2009 and 2008 and should not be considered indicative of expected future results.

The effective income tax rate for the first quarter of 2009 was 11.0%. The rate was impacted by the release of approximately $6.4 million in specific tax reserves due to the closure of certain audits in the first quarter of 2009, and the geographic mix of our profits. The effective income tax rate for the first quarter of 2008 was 39.0%.

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Reconciliation of Total Company, Europe and Asia Revenue Increases/(Decreases) To Constant Dollar Revenue Increases/(Decreases)

Total Company Revenue Reconciliation:

	For the Quarter
	Ended April 3, 2009
	$ Millions
	Change			% Change
Revenue decrease (GAAP)	$	(43.8	)		-12.9	%
Decrease due to foreign exchange rate changes		(21.6	)		-6.4	%
Revenue decrease in constant dollars	$	(22.2	)		-6.5	%

Europe Revenue Reconciliation:

	For the Quarter
	Ended April 3, 2009
	$ Millions
	Change			% Change
Revenue decrease (GAAP)	$	(24.7	)		-15.0	%
Decrease due to foreign exchange rate changes		(21.9	)		-13.3	%
Revenue decrease in constant dollars	$	( 2.8	)		-1.7	%

Asia Revenue Reconciliation:

	For the Quarter
	Ended April 3, 2009
	$ Millions
	Change			% Change
Revenue decrease (GAAP)	$	(1.1	)		-2.9	%
Increase due to foreign exchange rate changes		1.3			3.3	%
Revenue decrease in constant dollars	$	(2.4	)		-6.2	%

The difference between changes in reported revenue (the most comparable GAAP measure) and constant dollar revenue changes is the impact of foreign currency. We provide constant dollar revenue changes for total Company, Europe and Asia results because we use the measure to understand the underlying growth rate of revenue excluding the impact of items that are not under management’s direct control, such as changes in foreign exchange rates.

Accounts Receivable and Inventory

Accounts receivable decreased 14.6% to $172.3 million as of April 3, 2009, compared with $201.8 million at March 28, 2008. Days sales outstanding were 52 days as of April 3, 2009, compared with 53 days as of March 28, 2008. Wholesale days sales outstanding were 58 days and 60 days for the first quarters of 2009 and 2008, respectively. We maintained our collection performance despite the difficult economic environment and lower sales.

Inventory decreased 9.7% to $162.8 million as of April 3, 2009, compared with $180.2 million as of March 28, 2008, reflecting continued discipline against excess inventory.

Liquidity and Capital Resources

Net cash used by operations for the first quarter of 2009 was $44.3 million, compared with $2.8 million of cash provided by operations for the first quarter of 2008. The cash usage was due primarily to increased usage of cash for accounts payable, associated with the timing of inventory payments, and accrued expenses, including incentive compensation for 2008 results paid in the first quarter of 2009, as compared to minimal incentive compensation in the prior year period.

Net cash used for investing activities was $4.4 million in the first quarter of 2009, compared with $1.9 million in the first quarter of 2008. Cash used for the acquisition of Glaudio, net of cash acquired, was $1.5 million in the first quarter of 2009. Capital spending totaled $2.8 million in the first quarter of 2009, compared with $4.1 million in the first quarter of 2008.

Net cash used by financing activities was $8.5 million in the first quarter of 2009, compared with $9.6 million in the first quarter of 2008. We had no short-term borrowings as of April 3, 2009 or March 28, 2008. Cash flows for financing activities reflected share repurchases of $9.1 million in the first quarter of 2009, compared with $10.2 million in the first quarter of 2008.

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We are exposed to the credit risk of those parties with which we do business including counterparties on our derivative contracts and our customers. Derivative instruments expose us to credit and market risk. The market risk associated with these instruments resulting from currency exchange movements is expected to offset the market risk of the underlying transactions being hedged. We do not believe there is a significant risk of loss in the event of non-performance by the counterparties associated with these instruments because these transactions are executed with a group of major financial institutions and have varying maturities through January 2010. As a matter of policy, we enter into these contracts only with counterparties having a minimum investment-grade or better credit rating. Credit risk is managed through the continuous monitoring of exposures to such counterparties.

Additionally, consumer spending is being affected by the current macro-economic environment, particularly the disruption of the credit and stock markets and increased unemployment. Continued deterioration in the markets and economic conditions generally could adversely impact our customers and their ability to access credit.

We may utilize our committed and uncommitted lines of credit to fund our seasonal working capital needs. We have not experienced any restrictions on the availability of these lines and the adverse capital and credit market conditions are not expected to significantly affect our ability to meet our liquidity needs.

We have an unsecured committed revolving credit agreement with a group of banks, which matures on June 2, 2011 (“Agreement”). The Agreement provides for $200 million of committed borrowings, of which up to $125 million may be used for letters of credit. Upon approval of the bank group, we may increase the committed borrowing limit by $100 million for a total commitment of $300 million. Under the terms of the Agreement, we may borrow at interest rates based on Eurodollar rates (approximately 1.0% at April 3, 2009), plus an applicable margin based on a fixed-charge coverage grid of between 13.5 and 47.5 basis points that is adjusted quarterly. As of April 3, 2009, the applicable margin under the facility was 47.5 basis points. We pay a utilization fee of an additional 5 basis points if our outstanding borrowings under the facility exceed $100 million. We also pay a commitment fee of 6.5 to 15 basis points per annum on the total commitment, based on a fixed-charge coverage grid that is adjusted quarterly. As of April 3, 2009, the commitment fee was 15 basis points. The Agreement places certain limitations on additional debt, stock repurchases, acquisitions, and the amount of dividends we may pay, and includes certain other financial and non-financial covenants. The primary financial covenants relate to maintaining a minimum fixed-charge coverage ratio of 2.25:1 and a maximum leverage ratio of 2:1. We measure compliance with the financial and non-financial covenants and ratios as required by the terms of the Agreement on a fiscal quarter basis.

We have uncommitted lines of credit available from certain banks which totaled $30 million at April 3, 2009. Any borrowings under these lines would be at prevailing money market rates. Further, we have an uncommitted letter of credit facility of $80 million to support inventory purchases. These arrangements may be terminated at any time at the option of the banks or at our option.

As of April 3, 2009 and March 28, 2008, we had no borrowings outstanding under any of our credit facilities. The amount of peak borrowing under our facilities in 2008 was approximately $20.0 million, and occurred during the fourth quarter of 2008 to fund our seasonal working capital requirements. In 2009, we expect to utilize our facilities in a similar fashion to 2008, primarily to fund seasonal working capital requirements in the latter half of the year.

Management believes that our operating costs, capital requirements and funding for our share repurchase program for the balance of 2009 will be funded through our current cash balances, our existing credit facilities (which place certain limitations on additional debt, stock repurchases, acquisitions and on the amount of dividends we may pay, and also contain certain other financial and operating covenants) and cash from operations, without the need for additional financing. However, as discussed in the sections entitled “Cautionary Statements for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995” on page 2 of our Annual Report on Form 10-K for the year ended December

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31, 2008 (our “Annual Report on Form 10-K”), and “Forward Looking Information” in Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K, and in Part II, Item 1A, Risk Factors, of this Quarterly Report on Form 10-Q, several risks and uncertainties could require that the Company raise additional capital through equity and/or debt financing. From time to time, the Company considers acquisition opportunities which, if pursued, could also result in the need for additional financing. However, if the need arises, our ability to obtain any additional credit facilities will depend upon prevailing market conditions, our financial condition and the terms and conditions of such additional facilities. The continued volatility in the credit markets could result in significant increases in borrowing costs for any new debt we may require.

Off-Balance Sheet Arrangements

Letters of Credit

As of April 3, 2009 and March 28, 2008, we had letters of credit outstanding of $15.7 million and $17.1 million, respectively. These letters of credit were issued predominantly for the purchase of inventory.

We use funds from operations and unsecured committed and uncommitted lines of credit as the primary sources of financing for our seasonal and other working capital requirements. Our principal risks related to these sources of financing are the impact on our financial condition from economic downturns, a decrease in the demand for our products, increases in the prices of materials and a variety of other factors.

New Accounting Pronouncements

A discussion of new accounting pronouncements is included in Note 1 to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, our financial position and results of operations are routinely subject to a variety of risks, including market risk associated with interest rate movements on borrowings and investments and currency rate movements on non-U.S. dollar denominated assets, liabilities and cash flows. We regularly assess these risks and have established policies and business practices that should mitigate a portion of the adverse effect of these and other potential exposures.

We utilize cash from operations and U.S. dollar denominated borrowings to fund our working capital and investment needs. Short-term debt, if required, is used to meet working capital requirements and long-term debt, if required, is generally used to finance long-term investments. In addition, we use derivative instruments to manage the impact of foreign currency fluctuations on a portion of our foreign currency transactions. These derivative instruments are viewed as risk management tools and are not used for trading or speculative purposes. Cash balances are invested in high-grade securities with terms of less than three months.

We have available unsecured committed and uncommitted lines of credit as sources of financing for our working capital requirements. Borrowings under these credit agreements bear interest at variable rates based on either lenders’ cost of funds, plus an applicable spread, or prevailing money market rates. As of April 3, 2009 and March 28, 2008, we had no short-term or long-term debt outstanding.

Our foreign currency exposure is generated primarily from our European operating subsidiaries and, to a lesser degree, our Asian and Canadian operating subsidiaries. We seek to mitigate the impact of these foreign currency fluctuations through a risk management program that includes the use of derivative financial instruments, primarily foreign currency forward contracts. These derivative instruments are carried at fair value on our balance sheet. The Company has implemented a program that qualifies for

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hedge accounting treatment to aid in mitigating our foreign currency exposures and decreasing the volatility of our earnings. The foreign currency forward contracts under this program will expire in 10 months or less. Based upon a sensitivity analysis as of April 3, 2009, a 10% change in foreign exchange rates would cause the fair value of our derivative instruments to increase/decrease by approximately $12.6 million, compared to an increase/decrease of $15.1 million at December 31, 2008 and an increase/decrease of $13.4 million at March 28, 2008.

Item 4. CONTROLS AND PROCEDURES

We maintain a system of disclosure controls and procedures which are designed to ensure that information required to be disclosed by us in reports we file or submit under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed under the federal securities laws is accumulated and communicated to our management on a timely basis to allow decisions regarding required disclosure.

Based on their evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, were effective as of the end of the period covered by this report.

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during the quarter ended April 3, 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II — OTHER INFORMATION

Item 1A. RISK FACTORS

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in the sections entitled “Cautionary Statements for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995” on page 2 of our Annual Report on Form 10-K for the year ended December 31, 2008 (our “Annual Report on Form 10-K”) and “Forward-Looking Information” in Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K, which could materially affect our business, financial condition or future results. The risks described in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

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Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ISSUER PURCHASES OF EQUITY SECURITIES(1)

For the Three Fiscal Months Ended April 3, 2009

					Total Number		Maximum Number
					of Shares		of Shares
					Purchased as Part		That May Yet
	Total Number				of Publicly		be Purchased
	of Shares		Average Price		Announced		Under the Plans
Period*	Purchased **		Paid per Share		Plans or Programs		or Programs
January 1 — January 30		—	$	—		—		4,568,902
January 31 — February 27		233,264		11.36		233,264		4,335,638
February 28 — April 3		667,245		11.03		667,245		3,668,393
Q1 Total		900,509	$	11.12		900,509

Footnote (1)

			Approved
	Announcement		Program		Expiration
	Date		Size (Shares)		Date
Program 1		03/10/2008		6,000,000	None

No existing programs expired or were terminated during the reporting period.
*	Fiscal month
**	Based on trade date — not settlement date

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Item 6. EXHIBITS

Exhibits.
Exhibit 10.1 —	The Timberland Company 2009 Executive Long Term Incentive Program, filed herewith.
Exhibit 10.2 —	Form of Performance Stock Unit Agreement under The Timberland Company 2007 Incentive Plan (“2007 IP”), filed herewith.
Exhibit 10.3 —	Form of Performance Vested Stock Option Agreement under 2007 IP, filed herewith.
Exhibit 10.4 —	Form of Non-Qualified Stock Option Agreement under 2007 IP, filed herewith.
Exhibit 10.5 —	Form of Restricted Stock Unit Agreement under 2007 IP, filed herewith.
Exhibit 10.6 —	Form of Restricted Stock Award Agreement under 2007 IP, filed herewith.
Exhibit 10.7 —	Summary of Non-Employee Director Compensation, filed herewith.
Exhibit 31.1 —	Principal Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
Exhibit 31.2 —	Principal Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
Exhibit 32.1 —	Chief Executive Officer Certification Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.
Exhibit 32.2 —	Chief Financial Officer Certification Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	THE TIMBERLAND COMPANY (Registrant)
Date: May 8, 2009	By:	/s/ JEFFREY B. SWARTZ
		Jeffrey B. Swartz
		Chief Executive Officer
Date: May 8, 2009	By:	/s/ JOHN D. CRIMMINS, III
		John D. Crimmins, III
		Chief Financial Officer

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EXHIBIT INDEX

Exhibit	Description
Exhibit 10.1	The Timberland Company 2009 Executive Long Term Incentive Program, filed herewith.
Exhibit 10.2	Form of Performance Stock Unit Agreement under The Timberland Company 2007 Incentive Plan (“2007 IP”), filed herewith.
Exhibit 10.3	Form of Performance Vested Stock Option Agreement under 2007 IP, filed herewith.
Exhibit 10.4	Form of Non-Qualified Stock Option Agreement under 2007 IP, filed herewith.
Exhibit 10.5	Form of Restricted Stock Unit Agreement under 2007 IP, filed herewith.
Exhibit 10.6	Form of Restricted Stock Award Agreement under 2007 IP, filed herewith.
Exhibit 10.7	Summary of Non-Employee Director Compensation, filed herewith.
Exhibit 31.1	Principal Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
Exhibit 31.2	Principal Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
Exhibit 32.1	Chief Executive Officer Certification Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.
Exhibit 32.2	Chief Financial Officer Certification Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.

EX-10.1

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Exhibit 10.1

THE TIMBERLAND COMPANY
2009 EXECUTIVE LONG TERM INCENTIVE PROGRAM

(effective 1/1/09)

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THE TIMBERLAND COMPANY
2009 EXECUTIVE LONG TERM INCENTIVE PROGRAM

     This instrument sets forth the terms of The Timberland Company 2009 Executive Long Term Incentive Program (capitalized terms used herein are used as defined in Section 2 hereof). The Program is established under The Timberland Company 2007 Incentive Plan, and amounts paid under the Program are generally intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code.

     1. Purpose. The purpose of the Program is (a) to attract, retain and motivate key employees of outstanding ability; and (b) to provide competitive incentive pay and capital accumulation opportunities to certain key employees in exchange for their attainment of specified Performance Goals.

     2. Definitions. The following terms shall have the following meanings unless the context indicates otherwise.

(a)	“Affiliate” shall mean any corporation or other entity that stands in a relationship to the Company that would result in the Company and such corporation or other entity being treated as one employer under Section 414(b) and Section 414(c) of the Code, except that in determining eligibility for the grant of a stock option or other similar equity award by reason of service for an Affiliate, Sections 414(b) and 414(c) of the Code shall be applied by substituting “at least 50%” for “at least 80%” under Section 1563(a)(1), (2) and (3) of the Code and Treas. Regs. § 1.414(c)-2; provided, that to the extent permitted under Section 409A of the Code, “at least 20%” shall be used in lieu of “at least 50%”; and further provided, that the lower ownership threshold described in this definition (50% or 20% as the case may be) shall apply only if the same definition of affiliation is used consistently with respect to all compensatory stock options or stock awards (whether under the Plan or another plan). The Company may at any time by amendment provide that different ownership thresholds (consistent with Section 409A of the Code) apply but any such change shall not be effective for twelve (12) months.
(b)	“Award” shall mean an opportunity to earn, based on performance, incentive pay in the form of PSUs and PVSOs.
(c)	“Award Payout” shall mean the number of PSUs and PVSOs earned by a Participant as determined by the Committee.
(d)	“Board” shall mean the Board of Directors of The Timberland Company.
(e)	“Code” shall mean the Internal Revenue Code of 1986, as from time to time amended.
(f)	“Committee” shall mean the Management Development and Compensation Committee of the Board.
(g)	“Company” shall mean The Timberland Company.
(h)	“EBITDA” shall mean earnings before taxes, plus depreciation, amortization, and interest expense, less interest income, adjusted to exclude the following items: losses from discontinued operations, the cumulative effect of changes in Generally Accepted Accounting Principles, any one-time charge or dilution resulting from any acquisition or divestiture, extraordinary items of loss or expense, and any other unusual or nonrecurring items of loss or expense

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	including restructuring charges. Any such adjustment shall be made only to the extent the item is separately identified on the Consolidated Statement of Income in the Company’s Annual Report on Form 10-K; the Notes to the Consolidated Financial Statements; or in the Management Discussion & Analysis section of the Company’s Annual Report on Form 10-K and is objectively quantifiable in the Company’s accounting records as reviewed by the Company’s independent auditors. The Committee may exercise discretion to include all or part of an item of loss or expense.
(i)	“Participant” shall mean an employee of the Company or an Affiliate who is designated by the Committee or a designee of the Committee to receive an Award.
(j)	“Performance Goal” shall mean the threshold, budget, target or maximum level of performance that must be attained to earn a specified level of incentive pay.
(k)	“Performance Measure” shall mean EBITDA.
(l)	“Performance Period” shall mean the PSU Performance Period or the PVSO Performance Period.
(m)	“Plan” shall mean The Timberland Company 2007 Incentive Plan.
(n)	“Program” shall mean The Timberland Company 2009 Executive Long Term Incentive Program.
(o)	“PSU” shall mean an unfunded and unsecured promise to deliver one share of Stock, subject to the conditions and restrictions described herein or in an Award agreement.
(p)	“PSU Performance Period” shall mean the three-year period commencing January 1, 2009, and shall be the measurement period during which the attainment of the Performance Goal for PSUs shall be determined.
(q)	“PVSO” shall mean an option entitling the holder to acquire shares of Stock upon payment of the applicable exercise price, subject to the conditions and restrictions described herein or in an Award agreement.
(r)	“PVSO Performance Period” shall mean the one-year period commencing January 1, 2009, and shall be the measurement period during which the attainment of the Performance Goal for PVSOs shall be determined.
(s)	“Named Executive Officer” shall mean the Chief Executive Officer, the Chief Financial Officer and the next three highest paid officers of the Company on the last day of the taxable year, for purposes of the executive compensation disclosure rules under the Securities Exchange Act of 1934.
(t)	“Stock” shall mean Class A Common Stock of the Company, par value $.01 per share.

     3. Administration. The Program shall be administered by the Committee, in accordance with the terms of the Plan. The Committee shall have sole and complete discretion with respect to the exercise of all permissive powers and authority granted to the administrator under the Plan; provided, however, the Committee may not exercise its discretion to increase the amount of incentive pay that

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would otherwise be due a Named Executive Officer upon attainment of a Performance Goal. All actions, determinations, and decisions of the Committee shall be final, conclusive, and binding on all parties.

     4. Participation. Participants shall be as determined by the Committee or its designee.

     5. Awards. The type of Award and the number of Awards that can be earned under the Program upon achievement of a Performance Goal shall be as determined by the Committee or its designee. Each Award is expressed as a number of PSUs and PVSOs contingent upon the achievement of certain Performance Goals and subject to certain restrictions set forth herein or in an Award agreement. Awards may vary according to a Participant’s salary grade or position. Awards for a Named Executive Officer shall not be changed or modified during a Performance Period to increase the amount of incentive pay that would otherwise become payable.

     6. Performance Measures and Performance Goals. The Performance Measures and Performance Goals shall be as determined by the Committee. Performance Goals for a Named Executive Officer shall not be changed or modified during a Performance Period to increase the amount of incentive pay that would otherwise become payable.

     7. Award Payout Calculation and Approval.

(a)	Award Payouts shall be based on the degree to which a Performance Goal is attained, with nothing payable upon attainment of the threshold-level Performance Goal, 50% of the target-level Award payable upon attainment of the budget-level Performance Goal, 100% of the target-level Award payable upon attainment of the target-level Performance Goal and 200% of the target-level Award payable upon attainment of the maximum-level Performance Goal. No Award Payouts shall be made unless the threshold-level Performance Goal is surpassed. Award Payouts shall be increased proportionately on a straight-line basis to the extent the threshold, budget or target Performance Goals are surpassed. In no event shall an Award Payout exceed the maximum-level Award.
(b)	The Company’s independent public accountants shall audit the Company’s Award Payout calculations following the close of the Performance Period.
(c)	The Committee shall approve or disapprove the Award Payouts for all Participants following completion of the independent audit. The Committee may reduce a Participant’s Award Payout (or the Award Payouts to all or some Participants) if such modification would better serve the purpose of the Plan.

     8. Award Payment. For each PSU earned, as determined in accordance with Section 7 one share of Stock shall be delivered to the Participant as soon as practicable and not later than March 31, 2012. For each PVSO earned, as determined in accordance with Section 7 the Participant’s right to exercise the option shall begin to vest as soon as practicable in accordance with Section 9 and not later than March 31, 2010.

     9. Vesting of PVSOs. PVSOs shall vest in three equal annual installments following the date of Committee approval following the end of the PVSO Performance Period.

     10. Agreements. Each award of PSUs and each grant of PVSOs shall be evidenced by an Award agreement, specifying restrictions on the transfer and vesting of such securities and including such other terms, conditions and restrictions as the Committee shall determine.

     11. Employment. Except as otherwise determined by the Committee, to be eligible to receive an Award Payout, a Participant must be employed by the Company or an Affiliate on the date

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such Award Payout is made, in the case of PSUs, and the date vesting commences, in the case of PVSOs. Receiving an Award or an Award Payout shall not give any Participant the right to be retained in the employment of the Company or an Affiliate, or affect the right of the Company or an Affiliate to discharge or discipline a Participant.

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IN WITNESS WHEREOF, The Timberland Company has caused this document to be executed by its duly authorized officer effective as of the 1^st day of January, 2009.

THE TIMBERLAND COMPANY
By:	/s/ Sidney W. Swartz
	Sidney W. Swartz
	Chairman

EX-10.2

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Exhibit 10.2

THE TIMBERLAND COMPANY

2009 EXECUTIVE LONG TERM INCENTIVE PROGRAM

PERFORMANCE STOCK UNIT AGREEMENT

     The Timberland Company, a Delaware corporation (the “Company”), hereby grants, effective as of <<Date of Grant>>,                                          (the “Participant”)                                           performance stock units (“PSUs”), which PSUs if earned pursuant to the 2009 Executive Long Term Incentive Program (the “2009 LTIP”) will be paid in the form of shares of the Company’s Class A Common Stock on the basis of one share for each stock unit. The PSUs are subject to the terms and conditions of the 2007 Incentive Plan, the 2009 LTIP and the additional terms and conditions delivered herewith. Such additional terms and conditions are incorporated by reference herein and made a part hereof.

     Subject to the terms and conditions of the 2007 Incentive Plan, the 2009 LTIP and the additional terms and conditions delivered herewith, the PSUs shall be earned as follows:

PSUs upon achievement of a Performance Goal (as defined in the 2009 LTIP) as determined
                           by the Committee (as defined in the 2009 LTIP)

THE TIMBERLAND COMPANY

By:

ACKNOWLEDGED AND RECEIVED

Date:
              Participant’s Signature

ADDITIONAL TERMS AND CONDITIONS OF AGREEMENT ARE ATTACHED HERETO

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PERFORMANCE STOCK UNIT AGREEMENT

ADDITIONAL TERMS AND CONDITIONS

     The <<Date of Grant>> Award of Performance Stock Units (“PSUs”) is made pursuant to the 2009 Executive Long Term Incentive Program (the “2009 LTIP”) under the Company’s 2007 Incentive Plan (the “2007 Plan” and together with the 2009 LTIP, the “Plan Documents”). The Award is subject to the restrictions and conditions set forth below and in such Plan Documents, which are incorporated herein by reference with the same effect as if set forth herein in full. All terms used herein shall have the same meaning as in the Plan Documents, except as otherwise expressly provided.

          In consideration of the Company’s awarding PSUs, the Participant hereby agrees with the Company as follows:

     1. The PSUs shall not be sold, transferred, pledged, assigned or otherwise encumbered or disposed of except as provided below and in the Plan Documents. Once a stock certificate (or other evidence of ownership) has been delivered to the Participant in payment of the PSUs pursuant to Paragraph 2, the Participant will be free to sell the shares of Stock evidenced thereby, subject to applicable requirements of federal and state securities laws.

     2. The performance period for determining the number of PSUs earned under the 2009 LTIP shall commence on January 1, 2009 and end on December 31, 2011 (the “Performance Period”). Subject to any acceleration or termination of the PSUs as set forth in the 2007 Plan, the PSUs shall be paid in the form of Stock, to the extent the performance goals have been attained as set forth in the 2009 LTIP, provided that the Participant has been continuously employed with the Company through the date on which an Award Payout is made.

     3. The Participant expressly acknowledges that the delivery of Stock in payment of the PSUs will give rise to “wages” subject to withholding and agrees that his or her rights hereunder are subject to him or her paying to the Company, by the delivery of shares of Stock acquired hereunder (or by such other means as may be acceptable to the Administrator in its discretion), all taxes required to be withheld in connection with such vesting.

     4. This Award of PSUs does not give the Participant any right to be retained in the employ of the Company or any of its subsidiaries, nor any other right not expressly provided for herein or in the Plan Documents.

     5. In order to manage and administer the plans under the Plan Documents, the Administrator will need to process Participant’s personal data (electronically or otherwise), including but not limited to communicating such data to the Company’s group of companies and any third party administrator. By signing the Performance Stock Unit Agreement, the Participant acknowledges receipt of this notification and acknowledges that he/she understands that he/she may object to portions of the processing of his/her personal data. However, such objection may affect participation in the 2009 LTIP and result in exclusion from participation in the 2009 LTIP.

     6. By executing the Performance Stock Unit Agreement, the Participant represents that he or she accepts this Award of PSUs, agrees to the terms hereof, and acknowledges that he or she has received a copy of the Plan Documents and is familiar with their terms and provisions.

     7. The Performance Stock Unit Agreement shall be governed by and construed in accordance with the laws of the State of New Hampshire.

EX-10.3

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Exhibit 10.3

THE TIMBERLAND COMPANY

2009 EXECUTIVE LONG TERM INCENTIVE PROGRAM

PERFORMANCE VESTED
STOCK OPTION AGREEMENT

     The Timberland Company, a Delaware corporation (the “Company”), hereby grants, effective as of <<Date of Grant>>, to                                          (“Optionee”) a performance vested stock option (the “PVSO”), which PVSO if earned will allow the Optionee to purchase up to an aggregate of                                          shares of Class A Common Stock of the Company (the “Class A Common Stock”), at a price of $                                         per share (“Option Price”) (which Option Price was not less than the per share fair market value of Class A Common Stock on the date of grant). Such PVSO is subject to the terms and conditions of the 2007 Incentive Plan, the 2009 Executive Long Term Incentive Program (the “2009 LTIP”) and the additional terms and conditions delivered herewith. Such additional terms and conditions are incorporated by reference herein and made a part hereof.

     Subject to the terms of the 2007 Incentive Plan, the 2009 LTIP and the additional terms and conditions delivered herewith, the PVSO if earned shall be exercisable for up to the following number of shares prior to <<10^th Anniversary of Date of Grant>> (the “Final Exercise Date”):

shares on the first anniversary of the date on which an Award Payout (as defined in the 2009 LTIP) is approved by the Committee (as defined in the 2009 LTIP)

shares on the second anniversary of the date on which an Award Payout is approved by the Committee

shares on the third anniversary of the date on which an Award Payout is approved by the Committee

     This PVSO is not intended to constitute an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

THE TIMBERLAND COMPANY

By

ACKNOWLEDGED AND RECEIVED

Date:     Optionee’s Signature

ADDITIONAL TERMS AND CONDITIONS OF AGREEMENT ARE ATTACHED HERETO

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PERFORMANCE VESTED STOCK OPTION AGREEMENT

ADDITIONAL TERMS AND CONDITIONS

     1. Manner of Exercise; Payment. This section 1 is subject to the terms and conditions of the 2007 Incentive Plan (the “2007 Plan”), the 2009 Executive Long Term Incentive Program (the “2009 LTIP” and together with the 2007 Plan, the “Plan Documents”) (capitalized terms used but not defined herein are used as defined in the Agreement and the Plan Documents), and the Performance Vested Stock Option Agreement (the “Agreement”) to which these Additional Terms and Conditions are attached and are made a part thereof. The PVSO may be exercised by the Optionee, his heirs or assigns at any time, in whole or in part; provided, however, that no such partial exercise shall be in increments of less than 100 shares, unless the aggregate number of shares as to which this option is exercisable prior to the Final Exercise Date is less than 100 shares (in which event such lesser amount may be exercised), by notice in writing delivered to the Company at its principal office. Such notice shall be accompanied by payment in full of the Option Price for the number of shares as to which the PVSO is being exercised, plus any federal, state, local or other tax or assessment (including any interest or penalties) the Company is required to withhold. Such payment shall be made in cash, by wire transfer, by certified check, bank draft or money order payable to the order of the Company. Except as otherwise provided by the Company, such payment may be made by the Optionee: (i) by delivery of shares of Class A Common Stock acceptable to the Company and having an aggregate fair market value (valued as of the date of exercise) that is equal to the amount of such payment; or (ii) by authorizing a third-party to sell shares of Class A Common Stock acquired upon exercise of the PVSO and remit to the Company a sufficient portion of the sale proceeds to pay such payment.

     2. Adjustment of PVSO and Option Price. In the event of a stock dividend, stock split, combination of shares or other similar capital change affecting the shares of Class A Common Stock, the Option Price and the number of shares of Class A Common Stock subject to the PVSO shall be appropriately adjusted.

     3. Foreign Exchange/Ownership Requirements and Risk. Exercise of the PVSO by the Optionee will result in the Optionee owning Stock, and may also require the exchange of funds in US Dollars, or the use of a US-based brokerage account. The Optionee will be personally responsible for any compliance requirements under national law regulating such foreign investment and capital flows. These laws may change from time to time, and the Company cannot and will not guarantee that the Optionee will be able to exercise the PVSO or use the exercise methods outlined in the Plan Documents at any given time or location. Moreover, the Optionee will personally bear any risk relating to foreign exchange fluctuations between the Optionee’s local currency and the US Dollar in connection with all transactions under the Agreement.

     4. Non-transferability of PVSOs. The PVSO may not be transferred other than by will or by the laws of descent and distribution, and during the Optionee’s lifetime the PVSO may be exercised only by the Optionee.

     5. Death or Other Termination of Employment. In the event of death of the Optionee after the end of the Performance Period, the PVSO to the extent earned shall become immediately exercisable by the Optionee’s executor or administrator, or by the person or persons to whom the PVSO is transferred by will or the applicable laws of descent and distribution, at any time within the one-year period ending with the first anniversary of the Optionee’s death (subject, however, to limitations regarding the maximum exercise period for such PVSO). Except as otherwise determined by the Committee, in the event of death of the Optionee during the Performance Period, the PVSO shall terminate. If the Optionee’s employment with the Company or its subsidiaries terminates for any reason other than death, the PVSO, to the extent not then exercisable, shall terminate. To the extent exercisable on the date of such termination, the PVSO shall continue to be exercisable for a period of three months (subject, however, to limitations regarding the maximum exercise period for such PVSO), unless the Optionee was

Form 10-Q
Page 40

discharged for cause which in the opinion of the Committee casts such discredit on him as to justify termination of the PVSO. After completion of that three-month period, the PVSO shall terminate to the extent not previously exercised, expired or terminated. Employment shall not be considered terminated (i) in the case of sick leave or other bona fide leave of absence approved for purposes of the 2007 Incentive Plan by the Management Development and Compensation Committee, so long as the Optionee’s right to reemployment is guaranteed either by statute or by contract, or (ii) in the case of a transfer of employment between the Company and a subsidiary or between subsidiaries, or to the employment of a corporation (or a parent or subsidiary corporation of such corporation) issuing or assuming an Option in a transaction to which section 424(a) of the Code applies.

     6. Provisions of the Plan Documents. The PVSO is subject to the provisions of the Plan Documents as amended from time to time, copies of which the Company has made available to the Optionee. By executing the Agreement or claiming any rights hereunder, the Optionee represents that he is familiar with the terms and provisions of the Agreement and the Plan Documents, and hereby accepts the PVSO subject to all of the terms and provisions thereof. The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Company, through the Board or Committee resolving any questions arising under the Agreement or the plans under the Plan Documents.

     7. Employment. This PVSO does not give the Participant any right to be retained in the employ of the Company or any of its subsidiaries, nor any other right not expressly provided for herein or in the Plan Documents.

     8. Plan Administration. In order to manage and administer the Plan Documents, the Company will need to process Optionee’s personal data (electronically or otherwise), including but not limited to communicating such data to the Company’s group of companies and any third party administrator. By signing the Agreement, the Optionee acknowledges receipt of this notification and acknowledges that he/she understands that he/she may object to portions of the processing of his/her personal data. However, such objection may affect participation in the 2009 LTIP or result in exclusion from participation in the 2009 LTIP.

     9. Miscellaneous. The Agreement shall be binding upon and inure to the benefit of the parties hereto, the successors and assigns of the Company, and in the event of the death of the Optionee, his executor or administrator and the person or persons to whom the PVSO is transferred by will or the laws of descent and distribution. Except to the extent provided above, the Agreement may not be assigned by the Optionee without the consent of the Company. The Agreement shall be governed by and construed in accordance with the laws of the State of New Hampshire.

EX-10.4

Form 10-Q
Page 41

Exhibit 10.4

THE TIMBERLAND COMPANY

2007 INCENTIVE PLAN

NON-QUALIFIED
STOCK OPTION AGREEMENT

     The Timberland Company, a Delaware corporation (the “Company”), hereby grants effective as of <<Date of Grant>> to                                          (“Optionee”) the option (the “Option”) to purchase up to an aggregate of                                          shares of Class A Common Stock of the Company (the “Class A Common Stock”), at a price of $                                         per share (“Option Price”) (which Option Price was not less than the per share fair market value of Class A Common Stock on the date of grant of the Option) and otherwise upon the terms and conditions set forth below and attached hereto. Such additional terms and conditions are incorporated herein and made part hereof.

     Exercisability and Terms of Option. The Option shall be exercisable as to the following number of shares prior to <<10^th Anniversary of Date of Grant>> (the “Final Exercise Date”):

shares on or after
     

shares on or after
     

shares on or after
     

     This Option is not intended to constitute an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

THE TIMBERLAND COMPANY

By:

ACKNOWLEDGED AND RECEIVED

Date:
              Optionee’s Signature

TERMS AND CONDITIONS OF AGREEMENT ARE ATTACHED HERETO

Form 10-Q
Page 42

NON-QUALIFIED STOCK OPTION AGREEMENT

ADDITIONAL TERMS AND CONDITIONS

     1. Manner of Exercise; Payment. Subject to the provisions of Section 1 of the Stock Option Agreement (the “Agreement”) to which these Additional Terms and Conditions are attached and are made a part thereof, the Option may be exercised by the Optionee, his heirs or assigns at any time, in whole or in part; provided, however, that no such partial exercise shall be in increments of less than 100 shares, unless the aggregate number of shares as to which this option is exercisable prior to the Final Exercise Date is less than 100 shares (in which event such lesser amount may be exercised), by notice in writing delivered to the Company at its principal office. Such notice shall be accompanied by payment in full of the Option Price for the number of shares as to which the Option is being exercised, plus any federal, state, local or other tax or assessment (including any interest or penalties) the Company is required to withhold. Such payment shall be made in cash, by wire transfer, by certified check, bank draft or money order payable to the order of the Company. Except as otherwise provided by the Company, such payment may be made by the Optionee: (i) by delivery of shares of Class A Common Stock acceptable to the Company and having an aggregate fair market value (valued as of the date of exercise) that is equal to the amount of such payment; or (ii) by authorizing a third-party to sell shares of Class A Common Stock acquired upon exercise of the Option and remit to the Company a sufficient portion of the sale proceeds to pay such payment.

     2. Adjustment of Option and Option Price. In the event of a stock dividend, split-up, combination of shares or other similar capital change affecting the shares of Class A Common Stock, the Option Price and the number of shares of Class A Common Stock subject to the Option shall be appropriately adjusted.

     3. Foreign Exchange/ Ownership Requirements and Risk. Exercise of the Option by the Optionee will result in the Optionee owning Stock, and may also require the exchange of funds in US Dollars, or the use of a US based brokerage account. The Optionee will be personally responsible for any compliance requirements under national law regulating such foreign investment and capital flows. These laws may change from time to time and the Company cannot and will not guarantee that the Optionee will be able to exercise the Option or use the exercise methods outlined in the 2007 Incentive Plan at any given time or location. Moreover, the Optionee will personally bear any risk relating to foreign exchange fluctuations between the Optionee’s local currency and the U.S. dollar in connection with all transactions under the Agreement.

     4. Non-transferability of Options. No Option may be transferred other than by will or by the laws of descent and distribution, and during an Optionee’s lifetime an Option may be exercised only by the Optionee. In the event of the death of an Optionee, each Option held immediately prior to death shall become immediately exercisable by the Optionee’s executor or administrator, or by the person or persons to whom the Option is transferred by will or the applicable laws of descent and distribution, at any time within the one-year period ending with the first anniversary of the Optionee’s death (subject, however, to limitations regarding the maximum exercise period for such Option).

     5. Other Termination of Employment. If an Optionee’s employment with the Company or its subsidiaries terminates for any reason other than death, all Options held by the Optionee that are not then exercisable shall terminate. Options that are exercisable on the date of termination shall continue to be exercisable (i) for a period of three months (subject, however, to limitations regarding the maximum exercise period for such Option) unless the Optionee was discharged for cause which in the opinion of the Management Development and Compensation Committee casts such discredit on him or her as to justify termination of his or her Options or (ii) until the maximum exercise period for such Option if the Optionee voluntarily terminated his or her employment and has completed a total of ten (10) years of service as an

Form 10-Q
Page 43

employee as of the date of his or her service termination. After (i) completion of that three-month period or (ii) maximum exercise period, whichever is applicable, such Options shall terminate to the extent not previously exercised, expired or terminated. Employment shall not be considered terminated (i) in the case of sick leave or other bona fide leave of absence approved for purposes of the 2007 Incentive Plan by the Management Development and Compensation Committee, so long as the Optionee’s right to reemployment is guaranteed either by statute or by contract, or (ii) in the case of a transfer of employment between the Company and a subsidiary or between subsidiaries, or to the employment of a corporation (or a parent or subsidiary corporation of such corporation) issuing or assuming an Option in a transaction to which section 424(a) of the Code applies.

     6. Provisions of the Plan. The Option is subject to the provisions of the 2007 Incentive Plan, as may be amended from time to time, a copy of which the Company has made available to the Optionee free of charge. By executing the Agreement or claiming any rights hereunder, the Optionee represents that he is familiar with the terms and provisions of the Agreement and the 2007 Incentive Plan, and hereby accepts the Option subject to all of the terms and provisions thereof. The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Company, through its Board of Directors or a committee of that Board, resolving any questions arising under the Agreement or the 2007 Incentive Plan.

     7. Discretionary Awards. Pursuant to the terms and conditions set out in the 2007 Incentive Plan, this Option granted in this Agreement is wholly discretionary and does not give any right or claim to receive an Option in the future. This Option, and future Options, if any, do not form part of a contract of employment or any other working arrangement with the Company or its affiliates and are not a guarantee of continued employment. Nor does the Option, or future Options, become a term or condition of employment, unless prescribed by law.

Future Options, if any, will continue to be granted at the sole discretion of the Company, which includes but is not limited to the discretion to cease granting Options, change the type of Option granted and/or change the terms and conditions of any future Options.

     8. Plan Administration. In order to manage and administer the 2007 Incentive Plan, the Company will need to process Optionee’s personal data (electronically or otherwise), including but not limited to communicating such data to the Company’s group of companies and any third party administrator. By signing the Agreement the Optionee acknowledges receipt of this notification and acknowledges that he/she understands that he/she may object to portions of the processing of his/her personal data. However, such objection may affect participation in the 2007 Incentive Plan or result in exclusion from participation in the Plan.

     9. Miscellaneous. The Agreement shall be binding upon and inure to the benefit of the parties hereto, the successors and assigns of the Company, in the event of the death of the Optionee, his executor or administrator and the person or persons to whom the Option is transferred by will or the laws of descent and distribution. Except to the extent provided above, the Agreement may not be assigned by the Optionee without the consent of the Company. Capitalized terms not defined herein shall be defined as set forth in the Agreement. The Agreement shall be governed by and construed in accordance with the laws of the State of New Hampshire.

EX-10.5

Form 10-Q
Page 44

Exhibit 10.5

THE TIMBERLAND COMPANY

2007 INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

     The Timberland Company, a Delaware corporation, (the “Company”) hereby grants effective as of <<Date of Grant>> to <<Employee Name>>, <<RSU Amount>> Restricted Stock Units (“RSUs”), which if and when vested will be delivered to you, on a one-for-one basis, in shares of Class A Common Stock of the Company (the “Stock”), and which are subject to the terms and conditions set forth below and attached hereto. Such additional terms and conditions are incorporated herein and made part hereof. Unless defined herein, capitalized terms shall be defined in the 2007 Incentive Plan

     Vesting of the Restricted Stock Units. The Restricted Stock Units will vest in the amounts and on the dates as set forth below:

RSUs on <<First Anniversary of Grant>>      

RSUs on <<Second Anniversary of Grant>>      

RSUs on <<Third Anniversary of Grant>>      

THE TIMBERLAND COMPANY

By:

ACKNOWLEDGED AND RECEIVED

Date:         Participant’s Signature

TERMS AND CONDITIONS OF AGREEMENT ARE ATTACHED HERETO.

Form 10-Q
Page 45

RESTRICTED STOCK UNIT AGREEMENT

ADDITIONAL TERMS AND CONDITIONS

          This Award of Restricted Stock Units (“RSUs”) is made under The Timberland Company 2007 Incentive Plan (the “2007 Plan”), and is subject to the restrictions and conditions set forth below and in the 2007 Plan, which is incorporated herein by reference with the same effect as if set forth herein in full. All terms used herein shall have the same meaning as in the 2007 Plan, except as otherwise expressly provided. The term “vest” as used herein means the lapsing of the restrictions described herein and in the 2007 Plan with respect to one or more of the RSUs.

     In consideration of the Company’s accepting this Restricted Stock Unit Agreement and transferring to the Participant the RSUs provided for herein, the Participant hereby agrees with the Company as follows:

     1. The RSUs acquired by the Participant pursuant to this Restricted Stock Unit Agreement shall not be sold, transferred, pledged, assigned or otherwise encumbered or disposed of except as provided below and in the 2007 Plan. The Participant understands that once a certificate has been delivered to the Participant in respect of shares of Stock acquired hereunder due to vesting pursuant to Paragraph 2, the Participant will be free to sell the shares of Stock evidenced by such certificate, subject to applicable requirements of federal and state securities laws.

     2. The RSUs acquired hereunder shall vest in accordance with the provisions of this Paragraph 2 and the applicable provisions of the 2007 Plan and be delivered to the Participant in an equivalent number of shares of Stock upon vesting. The RSUs shall vest equally in thirds on each of the first three anniversaries of the date of grant as provided for on the front cover of this Restricted Stock Unit Agreement, provided that the Participant shall vest in the RSUs only if he or she continues to be employed (without any break in employment) by the Company or its subsidiaries on the vesting date except as otherwise provided herein.

     3. In the event of the death of a Participant, each RSU held immediately prior to death shall immediately vest and the shares of Stock delivered with respect thereto may be sold, transferred, pledged, assigned or otherwise encumbered or disposed of by the Participant’s executor or administrator, or by the person or persons to whom the shares of Stock are transferred by will or the applicable laws of descent and distribution.

     4. If a Participant’s employment with the Company or its subsidiaries terminates for any reason other than death, all RSUs held by the Participant that have not yet vested shall terminate. Employment shall not be considered terminated (i) in the case of sick leave or other bona fide leave of absence approved for purposes of the 2007 Plan by the Management Development and Compensation Committee, so long as the Participant’s right to reemployment is guaranteed either by statute or by contract, or (ii) in the case of a transfer of employment between the Company and a subsidiary or between subsidiaries, or to the employment of a corporation (or a parent or subsidiary corporation of such corporation) issuing or assuming an RSU in a transaction to which section 424(a) of the Code applies.

     5. The Participant expressly acknowledges that the vesting of the RSUs acquired hereunder will give rise to “wages” subject to withholding. The Participant expressly acknowledges and agrees that his or her rights hereunder are subject to him or her paying to the Company, by the delivery of shares of Stock acquired hereunder (or by such other means as may be acceptable to the Administrator in its discretion), all taxes required to be withheld in connection with such vesting.

Form 10-Q
Page 46

     6. Pursuant to the terms and conditions set out in the 2007 Plan, the RSUs granted in this Agreement are wholly discretionary and do not give any right or claim to receive RSUs in the future. These RSUs, and future RSUs, if any, do not form part of a contract of employment or any other working arrangement with the Company or its affiliates and are not a guarantee of continued employment. Nor do these RSUs, or future RSUs, become a term or condition of employment, unless prescribed by law.

     Future RSUs, if any, will continue to be granted at the sole discretion of the Company, which includes but is not limited to the discretion to cease granting RSUs, change the type of RSUs granted and/or change the terms and conditions of any future RSUs.

     7. In order to manage and administer the 2007 Plan, the Administrator will need to process Participant’s personal data (electronically or otherwise), including but not limited to communicating such data to the Company’s group of companies and any third party administrator. By signing the Agreement the Participant acknowledges receipt of this notification and acknowledges that he/she understands that he/she may object to portions of the processing of his/her personal data. However, such objection may affect participation in the 2007 Plan or result in exclusion from participation in the 2007 Plan.

     8. By executing this Restricted Stock Unit Agreement, the Participant represents that he or she accepts this Award of Restricted Stock Units, agrees to the terms hereof, and acknowledges that he or she has received a copy of the 2007 Plan and is familiar with the terms and provisions of the 2007 Plan.

     9. This Agreement shall be governed by and construed in accordance with the laws of the State of New Hampshire.

EX-10.6

Form 10-Q
Page 47

Exhibit 10.6

THE TIMBERLAND COMPANY
2007 INCENTIVE PLAN

Restricted Stock Award Agreement

          The Timberland Company (the “Company”) hereby awards, effective as of <<Date>> to <<Employee Name>> (the “Executive”) <<Share Amount>>            shares of Restricted Stock of the Company’s Class A Common Stock (the “Stock”). This Award of Restricted Stock is made under The Timberland Company 2007 Executive Long Term Incentive Program (“2007 LTIP”), which was established under and pursuant to The Timberland Company 2007 Incentive Plan (the “2007 Plan”) (the “2007 LTIP” and “2007 Plan”, collectively hereafter referred to as the “Plan”), and is subject to the restrictions and conditions set forth below and in the Plan, which is incorporated herein by reference with the same effect as if set forth herein in full. All terms used herein shall have the same meaning as in the Plan, except as otherwise expressly provided. The term “vest” as used herein means the lapsing of the restrictions described herein and in the Plan with respect to one or more shares of Restricted Stock. The Company’s Management Development and Compensation Committee of the Board of Directors approved this Award of Restricted Stock on <<Date>>.

     In consideration of the Company’s accepting this Restricted Stock Award Agreement and transferring to the Executive the shares of Stock provided for herein, the Executive hereby agrees with the Company as follows:

     1. The shares of Stock acquired by the Executive pursuant to this Restricted Stock Award Agreement shall not be sold, transferred, pledged, assigned or otherwise encumbered or disposed of except as provided below and in the Plan. The Executive understands that once a certificate has been delivered to the Executive in respect of shares of Stock acquired hereunder which have vested pursuant to Paragraph 2, the Executive will be free to sell the shares of Stock evidenced by such certificate, subject to applicable requirements of federal and state securities laws.

     2. The shares acquired hereunder shall vest in accordance with the provisions of this Paragraph 2 and the applicable provisions of the Plan. Restricted Stock shall vest <<Vesting Terms>>, provided that the Executive shall vest in the shares only if he continues to be employed (without any break in employment) by the Company or its subsidiaries on the vesting dates. Notwithstanding the foregoing, the Executive (A) shall fully vest in the shares on the date (i) the Executive terminates his employment for Disability or (ii) the Executive’s employment terminates by reason of death and (B) shall partially vest in the shares on the date (i) the Executive’s employment is terminated by the Company without Cause or (ii) the Executive voluntarily terminates his employment for Good Reason; such partial vesting shall be determined by multiplying the number of unvested shares on the date employment terminates by a fraction the numerator of which is the number of full months the Executive was employed after the effective date of this Restricted Stock Award Agreement (or the number of full months the Executive was employed after the vesting that occurs on <<Vesting Date(s)>>) and the denominator of which is <<Vesting Terms>> (or <<Vesting Terms>> if the date employment terminates is after the vesting that occurs on <<Vesting Date(s)>>). In the event the Company terminates the Executive’s employment for Cause or the Executive voluntarily terminates employment with the Company and its subsidiaries without Good Reason, any shares of Stock acquired hereunder which are not vested shall be immediately forfeited to the Company without compensation to the Executive for such forfeited Stock.

3.   For purposes of this Agreement:

Form 10-Q
Page 48

(a)	“Cause” shall mean (i) the willful and continued failure of the Executive to substantially perform his duties with the Company (other than any such failure resulting from incapacity due to physical or mental illness), after a written specific demand by the Company’s Board of Directors for substantial performance is delivered to the Executive, (ii) fraud or dishonesty by the Executive with respect to the Company, or (iii) the Executive’s conviction of, or plea of nolo contendre to, any non-vehicular felony. The Company may treat a termination of the Executive’s employment as termination for Cause only after (A) giving the Executive written notice of the intention to terminate for Cause and of his right to a hearing in front of the Board of Directors of the Company and (B) conducting such hearing at least ten (10) days after such notice at which the Executive may be represented by counsel.
(b)	“Disability” shall mean eligibility by the Executive for benefits under the Company’s Long Term Disability Plan.
(c)	“Good Reason” shall mean resignation or other voluntary termination of employment by the Executive within the <<___>> days following (i) a permanent material reduction of the Executive’s duties and responsibilities or a permanent change in the Executive’s duties and responsibilities such that the Executive’s duties and responsibilities are materially inconsistent with the type of duties and responsibilities of the Executive in effect immediately prior to such reduction or change, (ii) a material reduction in the Executive’s compensation or Executive benefits if such reduction results in the Executive’s receiving compensation and benefits which are, in the aggregate, less than the compensation and benefits then currently received by the Executive (other than reductions of compensation or benefits applicable to management executives of the Company in general), or (iii) relocation of the Executive’s principal place of work without his consent to a location more than <<___>> miles from its current location, or (iv) the imposition, without the Executive’s consent, of a significant increase in the travel requirements that cause the Executive to be away from his principal place of work for a significantly greater period of time than prior to such increase.

4. The Executive hereby (i) acknowledges that the shares of Stock issued to the Executive under this Award of Restricted Stock may be held in book entry form on the books of Computershare (or another institution specified by the Company), and irrevocably authorizes the Company to take such actions as may be necessary or appropriate to effectuate a transfer of the record ownership of any such shares that are unvested and forfeited hereunder, (ii) agrees to deliver to the Company, as a precondition to the issuance of any certificate or certificates with respect to unvested shares of Stock hereunder, one or more stock powers, endorsed in blank, with respect to such shares, and (iii) agrees to sign such other powers and take such other actions as the Company may reasonably request to accomplish the transfer or forfeiture of any unvested shares of Stock that are forfeited hereunder. If unvested shares are held in book entry form, the Executive agrees that the Company may give stop transfer instructions to the depository to ensure compliance with the provisions hereof. If certificates for the shares awarded hereunder are issued, the certificates for any unvested shares shall be held by the Company with blank stock powers to be used in the event of forfeiture.

     5. Any certificates representing unvested shares shall be held by the Company and any such certificate (and, to the extent determined by the Company, any other evidence of ownership of unvested shares) shall contain the following legend:

Form 10-Q
Page 49

THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE TIMBERLAND COMPANY 2007 INCENTIVE PLAN, THE TIMBERLAND COMPANY 2007 EXECUTIVE LONG TERM INCENTIVE PROGRAM, AND A RESTRICTED STOCK AWARD AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND THE TIMBERLAND COMPANY. COPIES OF SUCH PLANS AND AGREEMENT ARE ON FILE IN THE OFFICES OF THE TIMBERLAND COMPANY.

     6. The Executive shall be entitled to any and all dividends or other distributions paid with respect to all shares of Restricted Stock acquired hereunder which have not been forfeited or otherwise disposed of and shall be entitled to vote any such shares; provided, however, that any property (other than cash) distributed with respect to a share of Restricted Stock (the “associated share”) acquired hereunder, including without limitation, a distribution of Stock by reason of a stock dividend, stock split or otherwise, or a distribution of other securities with respect to an associated share, shall be subject to the restrictions of this Restricted Stock Award Agreement in the same manner and for so long as the associated share remains subject to such restrictions, and shall be promptly forfeited to the Company if and when the associated share is so forfeited.

     7. The Executive expressly acknowledges that the Award or vesting of the shares of Restricted Stock acquired hereunder will give rise to “wages” subject to withholding except to the extent that the Executive has made an Internal Revenue Code Section 83(b) election within thirty (30) days of the date of this award. The Executive expressly acknowledges and agrees that his rights hereunder are subject to his paying to the Company in cash (or by such other means as may be acceptable to the Company in its discretion, including, if the Committee so determines, by the delivery of previously acquired Stock or shares of Stock acquired hereunder) all taxes required to be withheld in connection with such Award or vesting.

     8. By executing this Restricted Stock Award Agreement, the Executive represents that he accepts this Award of Restricted Stock, agrees to the terms hereof, and acknowledges that he has received a copy of the Plan and is familiar with the terms and provisions of the Plan.

     9. The Company represents that this Restricted Stock Award Agreement and the shares have been duly authorized by the Company and the shares are validly issued, fully paid and nonassessable. The Company also represents that the shares and the 2007 Plan have been registered with the Securities and Exchange Commission under a valid Form S-8.

THE TIMBERLAND COMPANY

By:

ACCEPTED AND AGREED:

Date:

EX-10.7

Form 10-Q
Page 50

Exhibit 10.7

The Timberland Company

Summary of Non-Employee Director Compensation

     Effective January 1, 2009, The Timberland Company (the “Company”) pays fees to its non-employee directors in connection with their service as a director as follows: $50,000 annual retainer to each director; an additional $15,000 annual retainer to the Lead Director; $2,000 for each Board of Directors meeting attended; an additional $12,500 annual retainer to each committee chairperson; and $1,000 for each committee meeting attended.

     Effective January 1, 2009, under the Company’s 2007 Incentive Plan, newly elected or appointed non-employee directors receive an initial award on the date of the annual meeting of stockholders at which the director is first elected (or, if the director is first elected or appointed by the Board, on the date of the first annual meeting of stockholders occurring after such director is elected or appointed) of restricted stock units (“RSUs”) having a value equal to $200,000 on the date of grant based upon the closing price of the Company’s Class A Common Stock quoted on the New York Stock Exchange on such date, which grant vests in three (3) equal annual installments. Re-elected directors receive an award, on the date of the annual meeting of stockholders at which such directors are re-elected, of RSUs having a value equal to $100,000 on the date of grant based upon the closing price of the Company’s Class A Common Stock quoted on the New York Stock Exchange on such date, which grant vests in full on the first anniversary of the date of grant.

EX-31.1

Form 10-Q
Page 51

Exhibit 31.1

RULE 13a-14(a) CERTIFICATION IN
ACCORDANCE WITH SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002

I, Jeffrey B. Swartz, certify that:

1.     I have reviewed this report on Form 10-Q of The Timberland Company;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)     Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8, 2009	/s/ JEFFREY B. SWARTZ
	Jeffrey B. Swartz
	Chief Executive Officer

EX-31.2

Form 10-Q
Page 52

Exhibit 31.2

RULE 13a-14(a) CERTIFICATION IN
ACCORDANCE WITH SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002

I, John D. Crimmins, III, certify that:

1.    I have reviewed this report on Form 10-Q of The Timberland Company;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8, 2009	/s/ JOHN D. CRIMMINS, III
	John D. Crimmins, III
	Chief Financial Officer

EX-32.1

Form 10-Q
Page 53

Exhibit 32.1

CERTIFICATION PURSUANT TO
SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as Chief Executive Officer of The Timberland Company (the “Company”), does hereby certify that to the undersigned’s knowledge:

     1. The Company’s Quarterly Report on Form 10-Q for the period ended April 3, 2009 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     2. The information contained in the Company’s Quarterly Report on Form 10-Q for the period ended April 3, 2009 fairly presents, in all material respects, the financial condition and results of operations of the Company.

   /s/ JEFFREY B. SWARTZ Jeffrey B. Swartz

Chief Executive Officer

Date: May 8, 2009

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the Form 10-Q or as a separate disclosure document.

A signed original of this written statement, required by Section 906, has been provided to The Timberland Company and will be retained by The Timberland Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Form 10-Q
Page 54

Exhibit 32.2

CERTIFICATION PURSUANT TO
SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as Chief Financial Officer of The Timberland Company (the “Company”), does hereby certify that to the undersigned’s knowledge:

     1. The Company’s Quarterly Report on Form 10-Q for the period ended April 3, 2009 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     2. The information contained in the Company’s Quarterly Report on Form 10-Q for the period ended April 3, 2009 fairly presents, in all material respects, the financial condition and results of operations of the Company.

   /s/ JOHN D. CRIMMINS, III John D. Crimmins, III

Chief Financial Officer

Date: May 8, 2009

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the Form 10-Q or as a separate disclosure document.

A signed original of this written statement, required by Section 906, has been provided to The Timberland Company and will be retained by The Timberland Company and furnished to the Securities and Exchange Commission or its staff upon request.