Callaway 2009 Annual Report Download - page 104

Download and view the complete annual report

Please find page 104 of the 2009 Callaway annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 120

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120

certain financial performance metrics associated with Performance Share Units, the Company determined that the
performance metrics would not be achieved for the payout of any portion of these awards, and as a result,
reversed previously recognized compensation expense of $737,000. There were no Performance Share Units
granted in 2009.
The table below summarizes the total number of Restricted Stock Units granted to certain employee
participants and directors during the years ended December 31, 2009, 2008 and 2007, 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
2009 2008 2007 2009 2008 2007
Restricted Stock Units .................................... 512 324 260 $7.72 $14.57 $14.76
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,
2009 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, 2009 .................................................. 1,023 $13.89
Granted ................................................................... 512 $ 7.72
Vested .................................................................... (358) $12.33
Forfeited .................................................................. (158) $13.65
Nonvested at December 31, 2009(1) .............................................. 1,019 $11.37
(1) Total unvested shares as of December 31, 2009 represent shares underlying Restricted Stock Units.
At December 31, 2009, there was $4,650,000 of total unrecognized compensation expense related to
nonvested shares granted to employees under the Company’s share-based payment plans. That cost is expected to
be recognized over a weighted-average period of 1.4 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
consolidated statement of operations.
Phantom Stock Units
Phantom Stock Units awarded under the 2004 Plan are a form of share-based award that is indexed to the
Company’s stock and is settled in cash. They are accounted for as liabilities, which are initially measured based
on the estimated fair value of the awards on the date of grant. The estimated fair value is determined based on the
closing price of the Company’s common stock on the award date multiplied by the number of shares underlying
the phantom stock units awarded. The liabilities are subsequently remeasured based on the fair value of the
awards at the end of each interim reporting period through the settlement date of the awards. Total compensation
expense is recognized on a straight-line basis over the vesting period, reduced by an estimated forfeiture rate. On
December 29, 2009, the Company granted 1,150,000 shares underlying Phantom Stock Units, of which fifty
percent will vest on the second anniversary date from the date of grant, and the remaining fifty percent will vest
on the third anniversary date. On December 29, 2009, these Phantom Stock Units had an initial valuation of
$9,050,000. As of December 31, 2009, the remeasurement date, the value of these awards decreased to
$8,671,000.
F-28