Capital Stock

12 Months Ended

Dec. 31, 2013

Equity [Abstract]

Capital Stock

Capital Stock

Common Stock and Preferred Stock

As of December 31, 2013, the Company has an authorized capital of 243,000,000 shares, $0.01 par value, of which 240,000,000 shares are designated common stock, and 3,000,000 shares are designated preferred stock. Of the preferred stock, 240,000 shares are designated Series A Junior Participating Preferred Stock and the remaining shares of preferred stock are undesignated as to series, rights, preferences, privileges or restrictions.

The holders of common stock are entitled to one vote for each share of common stock on all matters submitted to a vote of the Company’s shareholders. Although to date no shares of Series A Junior Participating preferred stock have been issued, if such shares were issued, each share of Series A Junior Participating Preferred Stock would entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the shareholders of the Company. The holders of Series A Junior Participating Preferred Stock and the holders of common stock shall generally vote together as one class on all matters submitted to a vote of the Company’s shareholders. Shareholders entitled to vote for the election of directors are entitled to vote cumulatively for one or more nominees.

Treasury Stock and Stock Repurchases

In November 2007, the Company’s Board of Directors authorized a share repurchase program with a maximum cost to the Company of $100,000,000 (the “November 2007 repurchase program”). Under this program, the Company was authorized to repurchase shares of its common stock in the open market or in private transactions, subject to the Company’s assessment of market conditions and buying opportunities.

During 2013, the Company repurchased approximately 56,000 shares of its common stock at an average cost per share of $6.50, for a total cost of $364,000. The Company acquired these shares to satisfy the Company's tax withholding obligations in connection with the vesting and settlement of employee restricted stock unit awards. The Company’s repurchases of shares of common stock are recorded at cost and result in a reduction of shareholders’ equity. In February 2014, the Board of Directors canceled this program and requested that management seek further Board approval prior to engaging in further open market transactions. The Board continued to authorize the Company to reacquire shares in satisfaction of the Company's tax withholding obligations in connection with the settlement of employee equity awards.

In November 2013, the Company redeemed 300 shares of it's Series B Cumulative Perpetual Convertible Preferred Stock for cash (see Note 4).

Grantor Stock Trust

The Callaway Golf Company Grantor Stock Trust (the “GST”) was established for the purpose of funding the Company’s obligations with respect to one or more of the Company’s nonqualified or qualified employee benefit plans. The GST shares were used primarily for the settlement of employee equity-based awards, including restricted stock awards and units, stock option exercises and employee stock plan purchases. In 2011, the GST was terminated upon the release of the remaining shares held by the trust.

The following table presents shares released from the GST for the year ended December 31, 2011 (in thousands):

	2011
Employee restricted stock units vested	205
Employee stock plan purchases	86
Total shares released from the GST	291