Callaway 2014 Annual Report Download - page 103

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F-35
The table below is a roll-forward of the activity for phantom stock units during the 12 months ended December 31, 2014
(in thousands, except fair value amounts):
Phantom Stock Units Units
Weighted-
Average
Grant-Date
Fair Value
Nonvested at January 1, 2014............................................................................................................ 444 $ 6.72
Granted ....................................................................................................................................... — —
Vested......................................................................................................................................... (180) 7.40
Forfeited ..................................................................................................................................... — —
Nonvested at December 31, 2014...................................................................................................... 264 $ 6.25
In connection with these awards, the Company recognized compensation expense of $649,000, $1,635,000 and
$1,724,000 for the years ended December 31, 2014, 2013 and 2012, respectively. At December 31, 2014, the Company
accrued compensation expense of $1,898,000, which was included in accrued employee compensation and benefits in the
accompanying consolidated balance sheets. Accrued compensation expense for phantom stock units was $2,830,000 at
December 31, 2013, of which $1,439,000 was included in accrued employee compensation and benefits, and $1,391,000 was
included in long-term incentive compensation and other in the accompanying consolidated balance sheets.
Stock Appreciation Rights
The Company records compensation expense for SARs based on the estimated fair value on the date of grant using the
Black Scholes option-pricing model. SARs are subsequently remeasured at each interim reporting period based on a revised
Black Scholes value until they are exercised. SARs vest over a three year period. As of December 31, 2014, the Company
reversed $1,062,000 in compensation expense related to these awards, and recognized $3,016,000 and $2,285,000 in
compensation expense related to these awards at December 31, 2013 and 2012, respectively. At December 31, 2014, the
Company accrued compensation expense of $3,990,000, which was included in accrued employee compensation and benefits
in the accompanying consolidated balance sheets. At December 31, 2013, the Company accrued compensation expense of
$5,193,000, of which $4,200,000 was included in accrued employee compensation and benefits and $993,000 was included
in long-term incentive compensation and other in the accompanying consolidated balance sheets.
The table below summarizes the total number of SARs granted to employees during the year ended December 31, 2014
(in thousands, except price per share):
Stock Appreciation Rights Units
Weighted-
Average
Exercise Price
Per Share
Nonvested at January 1, 2014 ....................................................................................................... 2,475 $ 6.39
Granted................................................................................................................................... — —
Vested..................................................................................................................................... (88) 6.39
Forfeited................................................................................................................................. (15) 6.69
Nonvested at December 31, 2014 ................................................................................................. 2,372 $ 6.39
Share-Based Compensation Expense
The table below summarizes the amounts recognized in the financial statements for the years ended December 31, 2014,
2013 and 2012 for share-based compensation, including expense for stock options, restricted stock units, phantom stock units
and cash settled stock appreciation rights (in thousands):
2014 2013 2012
Cost of sales ....................................................................................................................... $ 240 $ 473 $ 276
Operating expenses ............................................................................................................ 5,087 7,711 6,874
Total cost of employee share-based compensation included in loss before income tax .... $ 5,327 $ 8,184 $ 7,150