lululemon athletica inc.

Note 16. Stock-Based Compensation and Benefit Plans

Stock-based compensation plans

The Company's eligible employees participate in various stock-based compensation plans, provided directly by the Company.

In June 2023, the Company's stockholders approved the adoption of the lululemon athletica inc. 2023 Equity Incentive Plan. The 2023 Equity Incentive Plan provides for awards in the form of stock options, stock appreciation rights, restricted stock purchase rights, restricted stock bonuses, RSUs, performance shares, PSUs, cash-based awards, other stock-based awards, and deferred compensation awards to employees (including officers and directors who are also employees), consultants, and directors of the Company.

The awards granted under the 2014 Equity Incentive Plan remain outstanding and continue to vest under their original conditions. No further awards will be granted under the 2014 Equity Incentive Plan.

The Company has granted stock options, PSUs, RSUs, and restricted shares. Stock options granted to date generally have afour-year vesting period and vest at a rate of 25% each year on the anniversary date of the grant. Stock options generally expire on the earlier ofseven or 10 years from the date of grant, or a specified period of time following termination. PSUs issued generally vest three years from the grant date and restricted shares generally vestone year from the grant date. RSUs granted generally have athree-year vesting period and vest at a certain percentage each year on the anniversary date of the grant.

The Company issues previously unissued shares upon the exercise of Company options, vesting of PSUs or RSUs that are settled in common stock, and granting of restricted shares.

Stock-based compensation expense charged to income for the plans was $61.8 million, $88.6 million, and $92.7 million for 2025, 2024, and 2023, respectively.

Total unrecognized compensation cost for all stock-based compensation plans was $150.9 million as of February 1, 2026, which is expected to be recognized over a weighted-average period of 2.5 years, and was $122.3 million as of February 2, 2025 over a weighted-average period of 2.0 years.

A summary of the balances of the Company's stock-based compensation plans as of February 1, 2026, February 2, 2025, and January 28, 2024, and changes during the fiscal years then ended is presented below:

A total of 2.0 million shares of the Company's common stock have been authorized for future issuance under the Company's 2023 Equity Incentive Plan.

The Company's PSUs are awarded to eligible employees and entitle the grantee to receive a maximum oftwo shares of common stock per PSU if the Company achieves specified performance goals and the grantee remains employed during the vesting period. The fair value of PSUs is based on the closing price of the Company's common stock on the grant date. Expense for PSUs is recognized when it is probable that the performance goal will be achieved.

The grant date fair value of the restricted shares and RSUs is based on the closing price of the Company's common stock on the grant date.

The grant date fair value of each stock option granted is estimated on the date of grant using the Black-Scholes model and the following are weighted averages of the assumptions that were used:

The following summarizes information about stock options outstanding and exercisable as of February 1, 2026:

As of February 1, 2026, the unrecognized compensation cost related to these options was $49.2 million, which is expected to be recognized over a weighted-average period of 3.0 years. The weighted-average grant date fair value of options granted during 2025, 2024, and 2023 was $90.53, $130.87, and $130.75, respectively.

The following table summarizes the intrinsic value of options exercised and awards that vested:

Employee share purchase plan

The Company has an Employee Share Purchase Plan ("ESPP"). Contributions are made by eligible employees, subject to certain limits defined in the ESPP, and the Company matches one-third of the contribution. The maximum number of shares authorized to be purchased under the ESPP is 6.0 million shares. All shares purchased under the ESPP are purchased in the open market. During 2025, 2024, and 2023, there were 0.2 million,0.1 million, and 0.1 million shares purchased, respectively. As of February 1, 2026,4.1 million shares remain authorized to be purchased under the ESPP.

Defined contribution pension plans

The Company offers defined contribution pension plans to eligible employees who may elect to defer and contribute a portion of their eligible compensation to a plan up to limits stated in the plan documents, not to exceed the dollar amounts set by applicable laws. The Company matches 50% to 75% of the contribution depending on the participant's length of service, and the Company's contribution is subject to atwo-year vesting period. The Company's net expense for the defined contribution plans was $23.7 million, $22.2 million, and $19.8 million during 2025, 2024, and 2023, respectively.