Callaway 2000 Annual Report Download - page 40

Callaway Golf Company | 40
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 10
STOCK OPTIONS AND RIGHTS
Options
The Company had the following fixed stock option plans, under
which shares were available for grant at December 31, 2000: the
1991 Stock Incentive Plan (the “1991 Plan”), the 1995 Employee
Stock Incentive Plan (the “1995 Plan”), the 1996 Stock Option
Plan (the “1996 Plan”), the 1998 Stock Incentive Plan (the “1998
Plan”), the Promotion, Marketing and Endorsement Stock
Incentive Plan (the “Promotion Plan”) and the Non-Employee
Directors Stock Option Plan (the “Directors Plan”).
The 1991 Plan, the 1996 Plan and the 1998 Plan permit the
granting of options or other stock awards to the Company’s offi-
cers, employees and consultants. Under the 1991 Plan, option
prices may be less than the market value at the date of grant,
while under the 1996 Plan and the 1998 Plan options may not be
granted at option prices that are less than fair market value at the
date of grant. The 1995 Plan permits the granting of options or
other stock awards to only non-executive officer employees and
consultants of the Company at option prices that may be less than
market value at the date of grant. The 1995 Plan and 1996 Plan
were amended in 2000 to increase the maximum number of shares
of Common Stock to be issued upon exercise of an option to
9,300,000 and 9,000,000 shares respectively.
During 1996 and 1995, the Company granted options to pur-
chase shares to two key officers, under separate plans, in con-
junction with terms of their initial employment (the “Key Officer
Plans”). No shares are available for grant under the Key Officer
Plans as of December 31, 2000.
Under the Promotion Plan, shares of Common Stock may be
granted in the form of options or other stock awards to golf pro-
fessionals and other endorsers at prices that may be less than the
market value of the stock at the grant date. The Directors Plan
permits the granting of options to purchase shares of Common
Stock to Directors of the Company who are not employees, at
prices based on a non-discretionary formula, which may not be
less than the market value of the stock at the date of grant.
The following table presents shares authorized, available for future grant and outstanding under each of the Company’s plans as of
December 31, 2000:
(in thousands) Authorized Available Outstanding
1991 Plan 10,000 60 2,076
Promotion Plan 3,560 816 1,014
1995 Plan 9,300 2,363 6,135
1996 Plan 9,000 2,275 5,967
1998 Plan 500 250 250
Key Officer Plans 1,100 820
Directors Plan 840 52 496
TOTAL 34,300 5,816 16,758
Under the Company’s stock option plans, outstanding options vest over periods ranging from zero to five years from the grant date and
expire up to 12 years after the grant date.
The following summarizes stock option transactions for the years ended December 31, 2000, 1999 and 1998:
(in thousands, except per share data) Year ended December 31,
2000 1999 1998
Weighted- Weighted- Weighted-
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
Outstanding at beginning of year 15,747 $20.46 13,637 $22.62 11,257 $22.41
Granted 4,461 $13.71 4,012 $11.30 4,020 $25.04
Exercised (2,252) $10.64 (851) $ 6.40 (441) $10.16
Canceled (1,198) $25.01 (1,051) $24.95 (1,199) $34.86
Outstanding at end of year 16,758 $19.66 15,747 $20.46 13,637 $22.62
Options exercisable at end of year 12,394 $19.99 11,066 $18.64 6,039 $17.78
Price range of outstanding options $2.50 - $40.00 $0.44 - $40.00 $0.44 - $40.00