Callaway 2008 Annual Report Download - page 99

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associated with the Performance Share Units that were granted in 2006. In 2008, based on this evaluation, the
Company reversed $737,000 of compensation expense related to these awards as it was not anticipated that its
performance metrics would be achieved for the payout of any portion of these awards.
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, 2008, 2007 and 2006, 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
2008 2007 2006 2008 2007 2006
Restricted Stock Awards ................................. — — 166 $ — $ — $14.91
Restricted Stock Units ................................... 324 260 52 $14.57 $14.76 $14.37
Performance Share 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,
2008 is as follows (in thousands, except fair value amounts):
Restricted Stock,
Restricted Stock Units and
Performance Share Units Shares
Weighted-
Average
Grant-Date
Fair Value
Nonvested at January 1, 2008 .................................................. 1,103 $13.22
Granted ................................................................... 324 $14.57
Vested .................................................................... (371) $12.52
Forfeited .................................................................. (33) $14.67
Nonvested at December 31, 2008(1) .............................................. 1,023 $13.89
(1) Total unvested shares as of December 31, 2008 include 306,000 Restricted Stock shares, 111,000 shares
underlying Performance Share Units and 606,000 shares underlying Restricted Stock Units.
At December 31, 2008, there was $6,260,000 of total unrecognized compensation expense related to
nonvested shares granted to both employees and non-employees under the Company’s share-based payment
plans. That cost is expected to be recognized over a weighted-average period of 1.2 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.
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 2008, 2007 and 2006 approximately 260,000, 201,000 and 303,000 shares, respectively,
of the Company’s Common Stock were purchased under the Plan on behalf of participating employees. As of
December 31, 2008, there were 2,900,000 shares reserved for future issuance under the Plan. In connection with
the Plan, the Company recorded $537,000, $496,000 and $597,000 of compensation expense for the years ended
December 31, 2008, 2007 and 2006, respectively.
F-25