Callaway 2007 Annual Report Download - page 94

The table below summarizes the total number of Restricted Stock shares and shares underlying Restricted
Stock Units and Performance Share Units granted to certain employee participants and directors during the years
ended December 31, 2007, 2006 and 2005, as well as the related weighted average grant date fair value for each
type of award (number of shares are in thousands).
# of Shares
Granted
Weighted Average
Grant-Date Fair Value
2007 2006 2005 2007 2006 2005
Restricted Stock Awards ........................... — 166 160 $ — $14.91 $14.93
Restricted Stock Units ............................. 260 52 — $14.76 $14.37 $ —
Performance Units ................................ — 154 — $ — $14.90 $ —
The fair value of nonvested Restricted Stock awards, Restricted Stock Units and Performance Share Units
(collectively “nonvested shares”) is determined based on the closing trading price of the Company’s Common
Stock on the grant date. A summary of the Company’s nonvested share activity for the year ended December 31,
2007 is as follows (in thousands, except fair value amounts):
Restricted Stock,
Restricted Stock Units and
Performance Units Shares
Weighted-
Average
Grant-Date
Fair Value
Nonvested at January 1, 2007 .................................................. 1,086 $12.42
Granted .................................................................... 260 $14.76
Vested ..................................................................... (208) $10.67
Forfeited ................................................................... (35) $14.95
Nonvested at December 31, 2007(1) .............................................. 1,103 $13.22
(1) Total unvested shares as of December 31, 2007 include 683,000 Restricted Stock shares, 118,000 shares
underlying Performance Share Units and 302,000 shares underlying Restricted Stock Units.
At December 31, 2007, there was $7,284,000 of total unrecognized compensation expense related to
nonvested shares granted to both employees and non-employees under the Company’s share-based payment
plans, of which $6,796,000 relates to Restricted Stock awards and Restricted Stock Units and $489,000 relates to
Performance Share Units. That cost is expected to be recognized over a weighted-average period of 1.6 years.
The amount of unrecognized compensation expense noted above does not necessarily represent the amount that
will ultimately be realized by the Company in its Statement of Operations. Prior to the adoption of SFAS 123R
on January 1, 2006, unrecognized compensation expense related to nonvested shares of Restricted Stock awards
granted to employees was recorded as unearned share-based compensation in shareholder’s equity. As of
January 1, 2006, as part of the adoption of SFAS 123R, $2,382,000 of unrecognized compensation expense was
reclassified as a component of additional paid-in capital.
Employee Stock Purchase Plan
On February 1, 2006, the Company amended and restated the Callaway Golf Company Employee Stock
Purchase Plan (the “Plan”) to eliminate the look-back provision. Under the amended and restated plan,
participating employees authorize the Company to withhold compensation and to use the withheld amounts to
purchase shares of the Company’s common stock at 85% of the closing price on the last day of each six month
offering period. During 2007, 2006 and 2005 approximately 201,000, 303,000 and 369,000 shares, respectively,
of the Company’s Common Stock were purchased under the Plan on behalf of participating employees. As of
December 31, 2007, there were 3,160,000 shares reserved for future issuance under the Plan. In connection with
the Plan, the Company recorded $496,000 and $597,000 of compensation expense for the years ended
December 31, 2007 and 2006, respectively. The Company was not required to record compensation expense in
connection with the Plan in 2005.
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