Callaway 2002 Annual Report Download - page 60

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(In thousands) Authorized Available Outstanding
1991 Plan 10,000 — 759
Promotion Plan 3,560 812 824
1995 Plan 10,800 1,652 6,738
1996 Plan 9,000 1,638 5,396
1998 Plan 500 250 117
Key Officer Plans 1,100 — 720
2001 Directors Plan 500 426 74
Directors Plan 840 — 308
Total 36,300 4,778 14,936
to golf professionals and other endorsers. It was the
Company’s practice to make such grants at prices equal to the
market value of the stock at the grant date, although the terms
of the plan permitted below-market grants. As a result of the
January 2003 expiration of the Promotion Plan, 812,000
options are no longer available for future issuance. The 2001
Directors Plan is a shareholder approved plan. It provides for
automatic grants of stock options upon a non-employee
Director’s initial appointment to the Company’s Board of
Directors and annually on the anniversary of such appointment.
All such grants are made at prices based on 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, 2002:
Under the Company’s stock option plans, outstanding options
generally vest over periods ranging from zero to five years
from grant date and generally expire up to 12 years after the
grant date.
CALLAWAY GOLF COMPANY 57
Options
The Company had the following fixed stock option plans,
under which shares were available for grant at December 31,
2002: 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 2001 Non-
Employee Directors Stock Option Plan (the “2001 Directors
Plan”) and the Promotion, Marketing and Endorsement Stock
Incentive Plan (the “Promotion Plan”). The Promotion Plan
expired in January 2003.
The 1996 Plan and the 1998 Plan permit the granting of options
or other stock awards to the Company’s officers, employees
and consultants. 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. Although
stock option grants under the 1995 Plan may be made at exercise
prices less than market value at the date of grant, the
Company’s practice has been to grant stock options at exercise
prices equal to the market value at the date of grant. The 1995
Plan was amended in 2001 and the 1996 Plan was amended in
2000 to increase the maximum number of shares of Common
Stock to be issued upon exercise of an option to 10,800,000 and
9,000,000 shares, respectively.
During 1996 and 1995, the Company granted options to
purchase shares to two key officers, under separate plans, in
conjunction 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, 2002.
Under the Promotion Plan, shares of Common Stock could
have been granted in the form of options or other stock awards