Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis section of this Proxy Statement with Under Armour’s management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in our Proxy Statement and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2007, filed with the SEC.

Harvey L. Sanders, Chairman

Byron K. Adams, Jr.

William R. McDermott

2007 Summary Compensation Table

The following table sets forth information concerning compensation paid or accrued in 2007 and 2006 to our Chief Executive Officer, our Chief Financial Officer and the other three most highly compensated executive officers.

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Grants of Plan-Based Awards for 2007

The following table contains information concerning (1) possible payments to the named executive officers under our 2007 annual incentive plan approved by the Compensation Committee in early 2007 (actual payments made under this plan in March 2008 are included in the Summary Compensation table under “Non-Equity Incentive Plan Compensation”) and (2) equity awards to the named executive officers in 2007 under our 2005 Omnibus Long-Term Incentive Plan.

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Employment Agreements

Mr. Plank entered into a five-year employment agreement with us in September 2003. This agreement was terminated early upon his request in March 2008. Therefore his employment with us is no longer subject to an employment agreement. The other named executive officers also do not have an employment agreement with us.

Outstanding Equity Awards at 2007 Fiscal Year-End

The following table contains information concerning unexercised stock options and shares of restricted stock that have not vested for the named executive officers as of December 31, 2007.

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Nonqualified Deferred Compensation

Effective June 1, 2007, the Board approved a new Deferred Compensation Plan. The Compensation Committee administers the plan. The plan allows a select group of management or highly compensated employees as approved by the committee to make annual base salary and bonus deferrals. Compensation deferrals began for participating employees on January 1, 2008.

Participating employees may elect to defer from 10%-75% of their annual base salary and 10%-90% of their annual bonus. They generally must make salary deferral elections for a given year by December 31 ^st of the prior year, and bonus deferral elections for a given year by June 30 ^th of the year for which bonuses are earned. For example, to defer 2007 bonuses payable in early 2008, employees must have made an election by June 30, 2007. Deferral elections cannot be changed or revoked except in very limited hardship circumstances as permitted under applicable law. Employees will immediately vest in all amounts credited to their accounts.

The plan includes a “make whole” feature for employees who, due to participation in the plan, receive a reduction in the matching contribution under our 401(k) plan. A reduction occurs under the 401(k) plan because of the rule that forbids the 401(k) plan from recognizing deferrals to a non-qualified plan, such as our deferred compensation plan, in the 401(k) plan’s definition of compensation for matching contribution purposes. Under this plan feature, any amount that, because of these rules, cannot be contributed as a matching contribution to the 401(k) plan will be contributed instead to the deferred compensation plan for those participants employed on the last day of the year. We make no other contributions to the plan.

We credit the deferred compensation accounts with earnings or losses based on the performance of one or more money market or mutual funds selected by the employee from several offered under the plan. Employees may change their investment elections daily. We will contribute to a grantor trust in order to provide us with a source of funds for the benefits payable to participants under the plan. The assets in the trust are available to provide benefits under the plan if we do not pay benefits for any reason other than bankruptcy or insolvency of Under Armour.

The timing of distributions is based on elections made by the employees at the time of the initial deferral election. Employees can generally elect to receive a distribution from the plan at least three years after the year in

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which the deferral amount is actually deferred. Employees may elect to postpone the distribution date for a minimum of five years if they do so at least one year before the previously specified date. Employees may also elect to receive a distribution upon retirement in a lump sum or in annual installments over a period of 2 to 10 years, as elected at the time of deferral. If an employee becomes disabled, we pay distributions in a lump sum or in annual installments over a period of 2 to 10 years, as selected by the employee at the time of deferral. If an employee leaves the company, we pay distributions in a lump sum six months following termination of employment. If an employee dies, we pay distributions in a lump sum to the employee’s beneficiary. Employees may not otherwise withdraw amounts from the plan except in the case of an unforeseeable financial emergency as defined in the plan.

Retirement Plans

We have no defined benefit pension plans or supplemental retirement plans for executives.

Potential Payments Upon Termination of Employment or Change in Control

The table provides an estimate of the payments and benefits that would be paid to our named executive officers in connection with any termination of employment or upon a change in control of Under Armour. The payments are quantified assuming the termination of employment or change in control occurred on December 31, 2007. The definitions of “change in control,” “cause” and “good reason” and descriptions of the payment and benefits appear after the table.

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Definitions

In the change in control severance agreements and for the equity awards (except the equity awards noted below), the term “change in control” is generally defined as:

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For Mr. Marino’s equity awards and for Mr. Mirchin’s 36,000 unvested stock options and 42,000 restricted shares (see “Outstanding Equity Awards at 2007 Fiscal Year End” table) the term change in control is defined as a planned sale of all or substantially all of the assets of Under Armour, either through an asset or stock transaction.

In the change in control severance agreements, the term “cause” is generally defined as:

The term “good reason” is generally defined as:

Benefits and Payments

Upon a Change in Control

All restricted stock vests upon a change in control and all or a portion (depending on the terms of the particular award) of stock options vest upon a change in control. The amounts reflect the value of restricted stock and, for stock options that vest, the value of the stock covered by the option minus the exercise price. See “Outstanding Equity Awards at 2007 Fiscal Year End” table for stock options that vest upon a change in control.

Upon termination of employment without Cause or by Executive for Good Reason in connection with a Change in Control

Under the change in control severance agreements, if the executive’s employment is terminated without cause or by the executive for good reason in connection with a change in control, the executive would receive:

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As a condition to the receipt of the lump sum payment and the continuation of benefits described above, the executive will be required to sign or reconfirm a confidentiality agreement and a one-year non-competition and non-solicitation agreement and execute a general release of claims against Under Armour and its affiliates.

Upon termination of employment for any other reason in connection with a Change in Control

Under the change in control severance agreements, if the executive’s employment is terminated for any other reason, other than cause or for good reason, the executive is entitled to:

Termination of employment for any reason with Under Armour enforcing a non-compete

Executives may not compete for one year after termination of employment for any reason if we continue to pay 60% of their salary during this period.

Disability

All restricted stock vests upon the executive’s disability.

Each named executive is covered by a supplemental long-term disability insurance policy that provides an additional benefit beyond the standard benefit offered to employees generally (standard benefit is up to $6,500 monthly). If executives had become disabled, they would have received the following monthly supplemental disability insurance payments until age 65: Mr. Plank, $15,600; Mr. Marino, $10,000; Mr. Calo, $13,180; Mr. Mirchin, $12,380; and Ms. Wallace, $7,000.

Death

All restricted stock vests upon the executive’s death.

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The number of securities remaining available for future issuance includes 1,863,929 shares of our Class A Stock under our 2005 Omnibus Long-Term Incentive Plan, or our 2005 Stock Plan, and 960,968 shares of our Class A Stock under our Employee Stock Purchase Plan. In addition to securities issued upon the exercise of stock options, the 2005 Stock Plan authorizes the issuance of restricted and unrestricted shares of our Class A Stock, restricted stock units and other equity awards.

The number of securities issued under equity compensation plans not approved by security holders includes 480,000 fully vested and non-forfeitable warrants granted in 2006 to NFL Properties LLC as partial consideration for footwear promotional rights. See Note 12 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2007 for a further discussion of the warrants.

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TRANSACTIONS WITH RELATED PERSONS

Certain immediate family members of our directors and executive officers are employees of Under Armour. The following immediate family members were employed by us in 2007. The list includes only those employees with annual compensation in 2007 exceeding $120,000. For purposes of this list, immediate family members include a spouse, parent, stepparent, child, stepchild, sibling, mother or father-in-law, son or daughter-in-law, and brother or sister-in-law. The amounts indicated include 2007 salary and 2007 bonus paid in early 2008: Karen Marino, Director of Assortment Planning and wife of Wayne Marino, our Chief Operating Officer (formerly our Chief Financial Officer) $140,784; and J. Scott Plank, Senior Vice President of Retail and brother of Kevin Plank, our President, Chief Executive Officer, Chairman of the Board of Directors and principal stockholder, $425,250. The Compensation Committee approved the compensation for J. Scott Plank as one of our executive officers.

KP Flyers, LLC, a company controlled by Kevin Plank, owns a jet aircraft. In May 2007, we entered into an operating lease agreement with KP Flyers to lease the aircraft when it is used by Kevin Plank or other persons for our business purposes. We pay KP Flyers $4,500 per hour to lease the aircraft. This was the charter rate for this aircraft before KP Flyers purchased the aircraft in 2007. We reviewed charter rates for this type of aircraft and determined that our hourly rate is at or below market rates. For 2007, we paid KP Flyers $357,750 for our business use of the aircraft. In May 2007, we also entered into an agreement with Kevin Plank and the company managing the aircraft. Under this agreement, Kevin Plank has agreed to pay the management expenses related to our business use as well as his personal use of the aircraft. The Audit Committee approved our entering into these agreements. The committee determined these agreements were reasonable and that we would benefit by Kevin Plank’s use of the aircraft for company business.

Policies and Procedures for Review and Approval of Transactions with Related Persons

Our Corporate Governance Guidelines require that any transaction involving Under Armour and a director or executive officer or entities controlled by a director or executive officer, be approved by our Board of Directors. The Board has delegated to the Audit Committee oversight and approval of these and other matters that may present conflicts of interest. In November 2007, the Audit Committee adopted a formal written policy on transactions with related persons. Related persons are generally defined under SEC rules as our directors, executive officers, or stockholders owning at least five percent of our outstanding shares, or immediate family members of any of the foregoing. The policy provides that the Audit Committee shall review and approve or ratify transactions with related persons and any material changes to such transactions. The policy further provides that in determining whether to approve or ratify such a transaction, the committee may consider, among other factors it deems appropriate:

To the extent our employment of an immediate family member of a director, executive officer or five percent stockholder is considered a transaction with a related person, the policy provides that the committee will not be required to ratify or approve such employment if the executive officer, director or five percent stockholder does not participate in decisions regarding the hiring, performance evaluation, or compensation of the family member.

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APPROVAL OF A NEW EXECUTIVE ANNUAL INCENTIVE PLAN

(Proposal 2)

The Compensation Committee and the Board of Directors have approved a new executive annual incentive plan. The plan provides performance-based incentives to our executives in a manner that preserves our ability to deduct, for tax purposes, annual incentive compensation paid to the executives. This plan is being submitted to stockholders for approval.

The following is a summary of the principal features of the executive annual incentive plan. The plan is set forth in its entirety as Appendix A to this Proxy Statement. The following summary is qualified in its entirety by reference to Appendix A.

Description of the Plan

Administration.  A committee of our Board of Directors comprised solely of “outside directors” (as that term is defined in regulations under Section 162(m) of the Internal Revenue Code) shall administer the plan. Currently, the plan is administered by our Compensation Committee. The committee shall have authority to interpret the plan, to make, amend, and rescind rules and regulations relating to it, and to make all other determinations deemed necessary or advisable for the administration of the plan.

Eligibility.  The Compensation Committee shall determine the executives that shall participate in the plan each year. For 2008, the committee has determined that our executives at the level of Vice President and above, or currently 25 persons, shall participate in the plan.

Awards under the Plan. The Compensation Committee shall set a performance goal and target award amount for each year. The performance goal shall measure performance of our company or any subsidiary, division or other unit of our company for the year based on one or more of the following: revenues, sales, income before income taxes, net income or earnings per share. The committee shall have the discretion to include or exclude extraordinary items, restructuring charges, accounting changes or any other unusual or nonrecurring items.

After the end of the year, the committee shall certify, in writing, prior to payment of any award, the attainment of the performance goal for the year. Notwithstanding attainment of the performance goal, the committee shall have the discretion to reduce or eliminate the award amount based upon the performance of our company or the executive or such other factors as the committee determines in its discretion. The committee may not increase the amount of such award or waive the achievement of the performance goal.

Award amounts shall be based on a percentage of the executive’s annual base salary or as otherwise determined by the committee. The maximum award amount that may be paid to any executive under the plan for any given year shall be $2,500,000. Payment under this plan may be made in cash, stock, restricted stock, other stock-based or stock denominated units, or any other form of consideration or any combination thereof, as determined by the committee.

Amendment and Termination . Our Board may amend or terminate the plan at any time. Any amendment which requires shareholder approval in order for the plan to continue to comply with Section 162(m) of the Internal Revenue Code shall not be effective unless the amendment is approved by our stockholders.

Certain Tax Considerations for the Plan

Under Section 162(m) of the Internal Revenue Code, the federal income tax deductibility of compensation paid to our chief executive officer and to each of our next three most highly compensated executive officers as disclosed in our Proxy Statement may be limited to the extent that it exceeds $1,000,000 in any one year. We can

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only deduct compensation in excess of that amount if it qualifies as “performance-based compensation” under Section 162(m) of the Internal Revenue Code. Performance-based compensation includes compensation payable solely on account of the attainment of one or more performance goals established by a committee of outside directors if the material terms under which the compensation is to be paid are approved by our stockholders. Our Compensation Committee and Board intend that annual incentive awards paid by us pursuant to this plan will qualify as performance-based compensation and thus will be fully deductible for federal income tax purposes if the plan is approved by our stockholders. Section 162(m) of the Internal Revenue Code requires that the plan be re-approved by our stockholders every five years in order for awards under the plan to continue to qualify as performance-based compensation.

Plan Benefits

Our Compensation Committee has established a net revenues target for 2008 as the performance objective for our company that must be achieved for payment of an annual incentive award for 2008 under this plan. The 2008 target award amount has been set at $1,474,000 for our Chief Executive Officer and at 75% of 2008 annual base salary for all other executives participating in the plan. The committee may exercise its discretion to reduce or eliminate the award amount based on our company’s profitability for 2008 as measured by our company’s 2008 income from operations as a percentage of net revenues, inventory levels for 2008 or other factors determined by the committee.

The affirmative vote of a majority of the votes cast at the meeting is required to approve the new executive annual incentive plan.

The Board of Directors recommends a vote “FOR” approval of the new executive annual incentive plan.

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INDEPENDENT AUDITORS

The Audit Committee has selected PricewaterhouseCoopers LLP, or PwC, to continue as our independent registered public accounting firm for the year ending December 31, 2008. Representatives of PwC are expected to attend the Annual Meeting. They will have an opportunity to make a statement if they so desire and they will respond to appropriate questions from stockholders.

Fees

The fees billed by PwC for 2007 and 2006 for services rendered to Under Armour were as follows:

Audit Fees

Audit fees are for the audit of our annual consolidated financial statements and our internal control over financial reporting, for reviews of our quarterly financial statements and for services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements, including issuance of comfort letters to underwriters and consent procedures in connection with our secondary stock offering in 2006.

Audit-Related Fees

Audit-related fees are for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not included under “Audit Fees” above.

Tax Fees

Tax fees include fees for tax compliance, tax planning and tax advice, primarily related to international tax.

Other Fees

All other fees include a subscription to an accounting research tool and fees for consulting on customs valuations.

Pre-Approval Policies and Procedures

As set forth in the Audit Committee’s Charter, the Audit Committee approves in advance all services to be performed by our independent registered public accounting firm, including all audit and permissible non-audit services. In February 2008, the Audit Committee adopted a written policy for such approvals. The policy provides that the committee must specifically pre-approve the terms of the annual audit services engagement and may pre-approve, for up to one year in advance, particular types of permissible audit-related, tax and other non-audit services. The policy also provides that the services shall be described in sufficient detail as to the scope of services, fee and fee structure, and the impact on auditor independence. The policy states that, in exercising its pre-approval authority, the committee may consider whether the independent registered public accounting firm is best positioned to provide the most effective and efficient service, for reasons such as familiarity with our business, people, culture, accounting systems, risk profiles and other factors, and whether the service might enhance our ability to manage or control risk or improve audit quality. The policy also provides that the committee should be mindful of the relationship between fees for audit and non-audit services. Under the policy, the committee may delegate pre-approval authority to one or more of its members and any pre-approval decisions will be reported to the full committee at its next scheduled meeting. The committee has delegated this pre-approval authority to the Chairman of the committee.

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