The Company accounts for its share-based compensation arrangements in accordance with ASC Topic 718, which requires the measurement and recognition of compensation expense for all share-based payment awards to employees and directors based on estimated fair values, and ASU No. 2014-12 for stock awards that are subject to performance measures. ASC Topic 718 further requires a reduction in share-based compensation expense by an estimated forfeiture rate. The forfeiture rate used by the Company is based on historical forfeiture trends. If actual forfeiture rates are not consistent with the Company’s estimates, the Company may be required to increase or decrease compensation expenses in future periods.

As of December 31, 2020, the Company had two shareholder approved stock plans under which shares were available for equity-based awards: the Callaway Golf Company Amended and Restated 2004 Incentive Plan (the "2004 Incentive Plan") and the 2013 Non-Employee Directors Stock Incentive Plan (the "2013 Directors Plan").

The 2004 Incentive Plan permits the granting of stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance share units and other equity-based awards to the Company’s officers, employees, consultants and certain other non-employees who provide services to the Company. All grants under the 2004 Incentive Plan are discretionary, although no participant may receive awards in any one year in excess of 2,000,000 shares. The maximum number of shares issuable over the term of the 2004 Incentive Plan is 33,000,000.

The 2013 Directors Plan permits the granting of stock options, restricted stock awards and restricted stock units to eligible directors serving on the Company's Board of Directors. The Directors may receive a one-time grant upon their initial appointment to the Board and thereafter an annual grant upon being re-elected at each annual meeting of shareholders, not to exceed 50,000 shares within any calendar year. The maximum number of shares issuable over the term of the 2013 Directors Plan is 1,000,000.

The following table presents shares authorized, available for future grant and outstanding under each of the Company’s plans as of December 31, 2020:


	Authorized	Available	Outstanding(1)
	(In thousands)



2004 Incentive Plan	33,000	8,652	2,262
2013 Directors Plan	1,000	566	74
Total	34,000	9,218	2,336

(1)Includes 3,064 shares of accrued incremental dividend equivalent rights on outstanding shares underlying restricted stock units granted under the 2004 Incentive Plan and 2013 Directors Plan.

There were no stock options granted in 2020, 2019 and 2018, and all outstanding stock options were fully vested as of December 31, 2018. For the year ended December 31, 2018, the Company recorded $14,000 of compensation expense related to outstanding stock options.

The following table summarizes the Company’s stock option activities for the year ended December 31, 2020 (in thousands, except price per share and contractual term):


Options	Number of Shares	Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2020	635	$	6.53
Granted	—	$	—
Exercised	(37)	$	6.71
Forfeited	—	$	—
Expired	—	$	—
Outstanding at December 31, 2020	598	$	6.52	2.09	$	10,457
Vested and expected to vest in the future at December 31, 2020	598	$	6.52	2.09	$	10,457
Exercisable at December 31, 2020	598	$	6.52	2.09	$	10,457

At December 31, 2020, there was no unrecognized compensation expense related to options granted to employees under the Company’s share-based payment plans.

The total intrinsic value for options exercised during the years ended December 31, 2020, 2019 and 2018 was $566,000, $792,000 and $2,621,000, respectively. Cash received from the exercise of stock options for the years ended December 31, 2020, 2019 and 2018 was $248,000, $368,000 and $1,636,000, respectively.

During the years ended December 31, 2020, 2019 and 2018, the weighted average grant-date fair value of restricted stock units granted was $17.84, $15.63 and $15.30, respectively. The Company recorded $6,417,000, $6,098,000 and $5,949,000 of compensation expense related to restricted stock units in 2020, 2019 and 2018, respectively.

The table below is a roll-forward of the activity for restricted stock units during the 12 months ended December 31, 2020 (in thousands, except fair value amounts):


Restricted Stock Units	Units	Weighted- Average Grant-Date Fair Value
Nonvested at January 1, 2020	1,036	$	14.04
Granted	409	17.84
Vested	(437)	13.63
Forfeited	(108)	15.14
Nonvested at December 31, 2020(1)	900	$	15.83

(1)Excludes 3,000 shares of accrued incremental dividend equivalent rights on outstanding shares underlying restricted stock units granted under the 2004 Incentive Plan and 2013 Directors Plan.

At December 31, 2020, there was $6,968,000 of total unrecognized compensation expense related to nonvested restricted stock units granted to employees under the Company’s share-based payment plans. That cost is expected to be recognized over a weighted-average period of 1.5 years.

The Company granted 125,000, 226,000 and 307,000 shares underlying EPS PRSUs during the years ended December 31, 2020, 2019 and 2018, respectively, at a weighted average grant-date fair value of $19.66, $15.17 and $14.80 per share, respectively. Based on the Company’s performance, participants banked a minimum of 50% of the target EPS PRSU award shares granted in 2019, and 80% of the target EPS PRSU award shares granted in 2018, in each case subject to continued service through the vesting date.

During the years ended December 31, 2020 and 2019, the Company granted 125,000 and 149,000 shares underlying rTSR PRSUs at a weighted average grant-date fair value of $23.22 and $16.96 per share, respectively. There were no rTSR PRSUs granted in 2018.

During the years ended December 31, 2020 and 2019, the Company recognized total compensation expense, net of estimated forfeitures, of $4,511,000 and $6,796,000, respectively, related to EPS PRSUs and rTSR PRSUs. During the year ended December 31, 2018, the Company recognized total compensation expense, net of estimated forfeitures of $7,567,000 related to EPS PRSUs. At December 31, 2020, the combined unamortized compensation expense related to EPS PRSUs and rTSR PRSUs was $3,527,000, which is expected to be recognized over a weighted-average period of 1.1 years.

The table below is a roll-forward of the activity for performance based awards during the 12 months ended December 31, 2020 (in thousands, except fair value amounts):


Performance Share Units	Units	Weighted- Average Grant-Date Fair Value
Nonvested at January 1, 2020	1,051	$	13.50
PSUs Granted	125	19.66
rTSR PRSUs Granted	125	23.22
Target Award Adjustment(1)	341	10.10
Vested	(709)	10.21
Forfeited	(98)	15.21
Nonvested at December 31, 2020	835	$	17.08

The table below summarizes the amounts recognized in the financial statements for the years ended December 31, 2020, 2019 and 2018 for share-based compensation, including expense for restricted stock units, performance share units, stock options and cash settled stock appreciation rights (in thousands):


	2020		2019		2018
Cost of sales	$	763	$	961	$	976
Operating expenses	10,164		11,935		12,554
Total cost of employee share-based compensation, before income tax	10,927		12,896		13,530
Income tax benefit	2,513		2,966		3,112
Total cost of employee share-based compensation, after tax	$	8,414	$	9,930	$	10,418