CALLAWAY GOLF CO /CA
EXHIBIT 10.55
<DOCUMENT>
<TYPE>EX-10.55
<SEQUENCE>5
<FILENAME>a82584exv10w55.txt
<DESCRIPTION>EXHIBIT 10.55
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.55
              FIRST AMENDED EXECUTIVE OFFICER EMPLOYMENT AGREEMENT

        This First Amended Executive Officer Employment Agreement ("First
Amended Agreement") is entered into as of June 1, 2002, by and between CALLAWAY
GOLF COMPANY, a Delaware corporation (the "Company"), and BRADLEY J. HOLIDAY
("Employee").

        A. The Company and Employee are parties to that certain Executive
Officer Employment Agreement entered into as of July 13, 2000 (the "Original
Agreement").

        B. Pursuant to Section 16 of the Original Agreement, the parties desire
to supersede and replace the Original Agreement in the manner set forth herein.
The Original Agreement shall no longer be of any force or effect except as
restated in this First Amended Agreement. To the extent there is any conflict
between the Original Agreement and this First Amended Agreement, this First
Amended Agreement shall control and all agreements shall be construed so as to
give the maximum force and effect to the provisions of this First Amended
Agreement.

        NOW, THEREFORE, in consideration of the foregoing and other
consideration, the value and sufficiency of which are hereby acknowledged, the
Company and Employee hereby agree as follows:

        1. TERM.

                (a) The Company hereby employs Employee and Employee hereby
accepts employment pursuant to the terms and provisions of this First Amended
Agreement for the period commencing August 15, 2000 and terminating December 31,
2002.

                (b) On December 31, 2002, and on each December 31 thereafter
(the "Extension Dates"), the expiration date of this First Amended Agreement
shall be automatically extended one year, through December 31 of the following
year, so long as (a) this First Amended Agreement is otherwise in full force and
effect, (b) Employee is still employed by the Company pursuant to this First
Amended Agreement, (c) Employee is not otherwise in breach of this First Amended
Agreement, and (d) neither the Company nor Employee has given notice as provided
in Section 1(c) of this First Amended Agreement.

                (c) At any time prior to an Extension Date, either Employee or
the Company may give written notice to the other ("Notice") that the next
automatic extension of the expiration date of this First Amended Agreement
pursuant to Section 1(b) shall be the final such automatic extension of the
expiration date of this First Amended Agreement. Thus, if either Employee or the
Company gives Notice on or before December 31, 2002, and all other conditions
for automatic extension of the expiration date of this First Amended Agreement
pursuant to Section 1(b) exist, then on December 31, 2002, the expiration date
of this First Amended Agreement shall be extended pursuant to Section 1(b) from
December 31, 2002 to December 31, 2003, with this First Amended Agreement
expiring on that date (if not earlier terminated pursuant to its terms) without
any further automatic extensions.

                (d) Upon expiration of this First Amended Agreement, Employee's
status shall be one of at will employment.

        2. SERVICES.

                (a) Employee shall serve as Executive Vice President & Chief
Financial Officer of the Company. Employee's duties shall be the usual and
customary duties of the offices in which Employee serves. Employee shall report
to such person as the Chief Executive Officer shall designate. The Board of
Directors and/or the Chief Executive Officer of the Company may change
employee's title, position and/or duties at any time.



<PAGE>

                (b) Employee shall be required to comply with all policies and
procedures of the Company, as such shall be adopted, modified or otherwise
established by the Company from time to time.

                (c) The Company and Employee agree that the services being
provided by Employee for the Company under the terms of this Agreement are
unique and intellectual in character and that Employee and Company are entering
into this Agreement so that the Company will have the exclusive benefit of those
services during the entire term of the Agreement and any extensions of the
Agreement.

        3. SERVICES TO BE EXCLUSIVE. During the term hereof, Employee agrees to
devote his or her full productive time and best efforts to the performance of
Employee's duties hereunder pursuant to the supervision and direction of the
Company's Board of Directors and its Chief Executive Officer. Employee further
agrees, as a condition to the performance by the Company of each and all of its
obligations hereunder, that so long as Employee is employed by the Company,
Employee will not directly or indirectly render services of any nature to,
otherwise become employed by, or otherwise participate or engage in any other
business without the Company's prior written consent. Employee further agrees to
execute such secrecy, non-disclosure, patent, trademark, copyright and other
proprietary rights agreements, if any, as the Company may from time to time
reasonably require. Nothing herein contained shall be deemed to preclude
Employee from having outside personal investments and involvement with
appropriate community activities, and from devoting a reasonable amount of time
to such matters, provided that this shall in no manner interfere with or
derogate from Employee's work for the Company.

        4. COMPENSATION.

                (a) The Company agrees to pay Employee a base salary at the rate
of $400,000.00 per year.

                (b) The Company shall provide Employee an opportunity to earn an
annual bonus based upon participation in the Company's officer bonus plan as it
may or may not exist from time to time. Employee acknowledges that currently all
bonuses are discretionary, that the current officer bonus plan does not include
any nondiscretionary bonus plan, and that the Company does not currently
contemplate establishing any nondiscretionary bonus plan applicable to Employee.

        5. EXPENSES AND BENEFITS.

                (a) Reasonable and Necessary Expenses. In addition to the
compensation provided for in Section 4 hereof, the Company shall reimburse
Employee for all reasonable, customary and necessary expenses incurred in the
performance of Employee's duties hereunder. Employee shall first account for
such expenses by submitting a signed statement itemizing such expenses prepared
in accordance with the policy set by the Company for reimbursement of such
expenses. The amount, nature, and extent of such expenses shall always be
subject to the control, supervision and direction of the Company and its Chief
Executive Officer.

                (b) Paid Time Off. Employee shall accrue thirty (30) days of
paid time off annually. With the exception of the accrual of paid time off, all
other portions of the Paid Time Off Program, as stated in the Company's Employee
Handbook, as may be modified from time to time, shall govern Employee's paid
time off. The time off may be taken any time during the year subject to prior
approval by the Company, such approval not to be unreasonably withheld. The
Company reserves the right to pay Employee for unused, accrued paid time off
benefits in lieu of providing time off.

                (c) Benefits. During Employee's employment with the Company
pursuant to this First Amended Agreement, the Company shall provide for Employee
to:

                        (i) participate in the Company's health insurance and
disability insurance plans as the same may be modified from time to time;



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<PAGE>

                        (ii) receive, if Employee is insurable under usual
underwriting standards, term life insurance coverage on Employee's life, payable
to whomever Employee directs, in an amount equal to $1,000,000.00 in coverage,
provided that Employee's physical condition does not prevent Employee from
qualifying for such insurance coverage under reasonable terms and conditions;

                        (iii) participate in the Company's 401(k) retirement
investment plan pursuant to the terms of the plan, as the same may be modified
from time to time; and

                        (iv) participate in the Company's Executive Deferred
Compensation Plan, as the same may be modified from time to time.

                        (v) participate in any other benefit plans the Company
provides from time to time to senior executive officers. It is understood that
benefit plans within the meaning of this subsection do not include compensation
or bonus plans.

                (d) Estate Planning and Other Perquisites. To the extent the
Company provides tax and estate planning and related services, or any other
perquisites and personal benefits to other officers generally from time to time,
such services and perquisites shall be made available to Employee on the same
terms and conditions.

                (e) Club Membership. Employee shall be provided with access to a
country club in accordance with the Company's country club membership policy, as
modified from time to time. The club membership itself shall belong to and be
the property of the Company, not Employee.

        6. TAX INDEMNIFICATION. Employee shall be indemnified by the Company for
certain excise tax obligations, as more specifically set forth in Exhibit A to
this First Amended Agreement.

        7. BUSINESS ISSUES.

                (a) Other Business. To the fullest extent permitted by law,
Employee agrees that, while employed by the Company, Employee will not, directly
or indirectly (whether as employee, agent, consultant, holder of a beneficial
interest, creditor, or in any other capacity), engage in any business or venture
which conflicts with Employee's duties under this First Amended Agreement,
including services that are directly or indirectly in competition with the
business of the Company or any of its affiliates, or have any interest in any
person, firm, corporation, or venture which engages directly or indirectly in
competition with the business of the Company or any of its affiliates. For
purposes of this section, the ownership of interests in a broadly based mutual
fund shall not constitute ownership of the stocks held by the fund.

                (b) Other Employees. Except as may be required in the
performance of his or her duties hereunder, Employee shall not cause or induce,
or attempt to cause or induce, any person now or hereafter employed by the
Company or any of its affiliates to terminate such employment. This obligation
shall remain in effect while Employee is employed by the Company and for a
period of one (1) year thereafter.

                (c) Suppliers. While employed by the Company, and for one (1)
year thereafter, Employee shall not cause or induce, or attempt to cause or
induce, any person or firm supplying goods, services or credit to the Company or
any of its affiliates to diminish or cease furnishing such goods, services or
credit.

                (d) Conflict of Interest. While employed by the Company,
Employee shall not engage in any conduct or enterprise that shall constitute an
actual or apparent conflict of interest with respect to Employee's duties and
obligations to the Company.



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                (e) Non-Interference. While employed by the Company, and for one
(1) year thereafter, Employee shall not in any way undertake to harm, injure or
disparage the Company, its officers, directors, employees, agents, affiliates,
vendors, products, or customers, or their successors, or in any other way
exhibit an attitude of hostility toward them. Employee understands that it is
the policy of the Company that only the Chief Executive Officer, the Senior Vice
President of Global Press and Public Relations, and their specific designees may
speak to the press or media about the Company or its business, and agrees not to
interfere with the Company's press and public relations by violating this
policy.

        8. TERMINATION.

                (a) Termination at the Company's Convenience. Employee's
employment under this First Amended Agreement may be terminated by the Company
at its convenience at any time. In the event of a termination by the Company for
its convenience, Employee shall be entitled to receive (i) any compensation
accrued and unpaid as of the date of termination; and (ii) the immediate vesting
of all unvested stock options held by Employee as of the date of such
termination. In addition to the foregoing and subject to the provisions of
Section 19, Employee shall be entitled to Special Severance as described in
Section 19 and any other benefit provided in this First Amended Agreement.

                (b) Termination by the Company for Substantial Cause. Employee's
employment under this First Amended Agreement may be terminated immediately by
the Company for substantial cause at any time. In the event of a termination by
the Company for substantial cause, Employee shall be entitled to receive (i) any
compensation accrued and unpaid as of the date of termination; and (ii) no other
severance. "Substantial cause" shall mean for purposes of this subsection
failure by Employee to substantially perform his or her duties, material breach
of this First Amended Agreement, or misconduct, including but not limited to,
dishonesty, theft, use or possession of illegal drugs during work, and/or felony
criminal conduct.

                (c) Termination by Employee for Substantial Cause. Employee's
employment under this First Amended Agreement may be terminated immediately by
Employee for substantial cause at any time. In the event of a termination by
Employee for substantial cause, Employee shall be entitled to receive (i) any
compensation accrued and unpaid as of the date of termination; and (ii) the
immediate vesting of all unvested stock options held by Employee as of the date
of such termination. In addition to the foregoing, and subject to the provisions
of Section 19, Employee shall be entitled to Special Severance as described in
Section 19 and any other benefit provided in this First Amended Agreement.
"Substantial cause" shall mean for purposes of this subsection a material breach
of this First Amended Agreement by the Company.

                (d) Termination Due to Permanent Disability. Subject to all
applicable laws, Employee's employment under this First Amended Agreement may be
terminated immediately by the Company in the event Employee becomes permanently
disabled. Permanent disability shall be defined as Employee's failure to perform
or being unable to perform all or substantially all of Employee's duties under
this First Amended Agreement for a continuous period of more than six (6) months
on account of any physical or mental disability, either as mutually agreed to by
the parties or as reflected in the opinions of three qualified physicians, one
of which has been selected by the Company, one of which has been selected by
Employee, and one of which has been selected by the two other physicians
jointly. In the event of a termination by the Company due to Employee's
permanent disability, Employee shall be entitled to (i) any compensation accrued
and unpaid as of the date of termination; (ii) severance payments equal to
Employee's then current base salary at the same rate and on the same schedule as
in effect at the time of termination for a period of twelve (12) months from the
date of termination; (iii) the immediate vesting of outstanding but unvested
stock options held by Employee as of such termination date in a prorated amount
based upon the number of days in the option vesting period that elapsed prior to
Employee's termination; (iv) the payment of premiums owed for COBRA insurance
benefits for a period of twelve (12) months from the date of termination; and
(v) no other severance. The Company shall be entitled to take, as an offset
against any amounts due pursuant to subsections (i) and (ii) above, any amounts
received by Employee pursuant to disability or other insurance, or similar
sources, provided by the Company.



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<PAGE>

                (e) Termination Due to Death. Employee's employment under this
First Amended Agreement shall be terminated immediately by the Company in the
event of Employee's death. In the event of a termination due to Employee's
death, Employee's estate shall be entitled to (i) any compensation accrued and
unpaid as of the date of death; (ii) severance payments equal to Employee's then
current base salary at the same rate and on the same schedule as in effect at
the time of death for a period of twelve (12) months from the date of death;
(iii) the immediate vesting of outstanding but unvested stock options held by
Employee as of the date of death in a prorated amount based upon the number of
days in the option vesting period that elapsed prior to Employee's death; and
(iv) no other severance.

                (f) Termination By Mutual Agreement of the Parties. Employee's
employment pursuant to this First Amended Agreement may be terminated at any
time upon the mutual agreement in writing of the parties. Any such termination
of employment shall have the consequences specified in such agreement.

                (g) Pre-Termination Rights. The Company shall have the right, at
its option, to require Employee to vacate his or her office or otherwise remain
off the Company's premises and to cease any and all activities on the Company's
behalf without such action constituting a termination of employment or a breach
of this First Amended Agreement.

        9. RIGHTS UPON A CHANGE IN CONTROL.

                (a) If a Change in Control (as defined in Exhibit B hereto)
occurs before the termination of Employee's employment hereunder, then this
First Amended Agreement shall be automatically renewed (the "Renewed Employment
Agreement") in the same form and substance as in effect immediately prior to the
Change in Control for an initial term of three (3) years commencing with the
date the Change in Control was effective (the "Renewal Term"), with further
extensions as provided in Section 1 of this Agreement.

                (b) Notwithstanding anything in this First Amended Agreement to
the contrary, if upon or at any time within one (1) year following any Change in
Control that occurs during the term of this First Amended Agreement there is a
Termination Event (as defined below), Employee shall be treated as if he or she
had been terminated for the convenience of the Company pursuant to Section 8(a).
Furthermore, the provisions of Section 8 shall continue to apply during the term
of the Renewed Employment Agreement except that, in the event of a conflict
between Section 8 and the rights of Employee described in this Section 9, the
provisions of this Section 9 shall govern.

                (c) A "Termination Event" shall mean the occurrence of any one
or more of the following, and in the absence of Employee's permanent disability
(defined in Section 8(d)), Employee's death, or any of the factors enumerated in
Section 8(b) providing for termination by the Company for substantial cause:

                        (i) the termination or material breach of this First
Amended Agreement by the Company;

                        (ii) a failure by the Company to obtain the assumption
of this First Amended Agreement by any successor to the Company or any assignee
of all or substantially all of the Company's assets;

                        (iii) any material diminishment in the title, position,
duties, responsibilities or status that Employee had with the Company, as a
publicly traded entity, immediately prior to the Change in Control;



                                       5
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                        (iv) any reduction, limitation or failure to pay or
provide any of the compensation, reimbursable expenses, stock options, incentive
programs, or other benefits or perquisites provided to Employee under the terms
of this First Amended Agreement or any other agreement or understanding between
the Company and Employee, or pursuant to the Company's policies and past
practices as of the date immediately prior to the Change in Control; or

                        (v) any requirement that Employee relocate or any
assignment to Employee of duties that would make it unreasonably difficult for
Employee to maintain the principal residence he or she had immediately prior to
the Change in Control.

        10. SURRENDER OF EQUIPMENT, BOOKS AND RECORDS. Employee understands and
agrees that all equipment, books, records, customer lists and documents
connected with the business of the Company and/or its affiliates are the
property of and belong to the Company. Under no circumstances shall Employee
remove from the Company's facilities any of the Company's and/or its affiliates'
equipment, books, records, documents, lists or any copies of the same without
the Company's permission, nor shall Employee make any copies of the Company's
and/or its affiliates' books, records, documents or lists for use outside the
Company's office except as specifically authorized by the Company. Employee
shall return to the Company and/or its affiliates all equipment, books, records,
documents and customer lists belonging to the Company and/or its affiliates upon
termination of Employee's employment with the Company.

        11. GENERAL RELATIONSHIP. Employee shall be considered an employee of
the Company within the meaning of all federal, state and local laws and
regulations, including, but not limited to, laws and regulations governing
unemployment insurance, workers' compensation, industrial accident, labor and
taxes.

        12. TRADE SECRETS AND CONFIDENTIAL INFORMATION.

                (a) As used in this First Amended Agreement, the term "Trade
Secrets and Confidential Information" means information, whether written or
oral, not generally available to the public, regardless of whether it is
suitable to be patented, copyrighted and/or trademarked, which is received from
the Company and/or its affiliates, either directly or indirectly, including but
not limited to (i) concepts, ideas, plans and strategies involved in the
Company's and/or its affiliates' products, (ii) the processes, formulae and
techniques disclosed by the Company and/or its affiliates to Employee or
observed by Employee, (iii) the designs, inventions and innovations and related
plans, strategies and applications which Employee develops during the term of
this First Amended Agreement in connection with the work performed by Employee
for the Company and/or its affiliates; and (iv) third party information which
the Company and/or its affiliates has/have agreed to keep confidential.

                (b) Notwithstanding the provisions of subsection 12(a), the term
"Trade Secrets and Confidential Information" does not include (i) information
which, at the time of disclosure or observation, had been previously published
or otherwise publicly disclosed; (ii) information which is published (or
otherwise publicly disclosed) after disclosure or observation, unless such
publication is a breach of this First Amended Agreement or is otherwise a
violation of contractual, legal or fiduciary duties owed to the Company, which
violation is known to Employee; or (iii) information which, subsequent to
disclosure or observation, is obtained by Employee from a third person who is
lawfully in possession of such information (which information is not acquired in
violation of any contractual, legal, or fiduciary obligation owed to the Company
with respect to such information, and is known by Employee) and who is not
required to refrain from disclosing such information to others.

                (c) While employed by the Company, Employee will have access to
and become familiar with various Trade Secrets and Confidential Information.
Employee acknowledges that the Trade Secrets and Confidential Information are
owned and shall continue to be owned solely by the Company and/or its
affiliates. Employee agrees that Employee will not, at any time, whether during
or subsequent to Employee's employment by the Company and/or its affiliates, use
or disclose Trade Secrets and



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<PAGE>

Confidential Information for any competitive purpose or divulge the same to any
person other than the Company or persons with respect to whom the Company has
given its written consent, unless Employee is compelled to disclose it by
governmental process. In the event Employee believes that Employee is legally
required to disclose any Trade Secrets or Confidential Information, Employee
shall give reasonable notice to the Company prior to disclosing such information
and shall assist the Company in taking such legally permissible steps as are
reasonable and necessary to protect the Trade Secrets or Confidential
Information, including, but not limited to, execution by the receiving party of
a non-disclosure agreement in a form acceptable to the Company.

                (d) The provisions of this Section 12 shall survive the
termination or expiration of this First Amended Agreement, and shall be binding
upon Employee in perpetuity.

        13. ASSIGNMENT OF RIGHTS.

                (a) As used in this First Amended Agreement, "Designs,
Inventions and Innovations," whether or not they have been patented,
trademarked, or copyrighted, include, but are not limited to designs,
inventions, innovations, ideas, improvements, processes, sources of and uses for
materials, apparatus, plans, systems and computer programs relating to the
design, manufacture, use, marketing, distribution and management of the
Company's and/or its affiliates' products.

                (b) As a material part of the terms and understandings of this
First Amended Agreement, Employee agrees to assign to the Company all Designs,
Inventions and Innovations developed, conceived and/or reduced to practice by
Employee, alone or with anyone else, in connection with the work performed by
Employee for the Company during Employee's employment with the Company,
regardless of whether they are suitable to be patented, trademarked and/or
copyrighted.

                (c) Employee agrees to disclose in writing to the Chief
Executive Officer of the Company any Design, Invention or Innovation relating to
the business of the Company and/or its affiliates, which Employee develops,
conceives and/or reduces to practice in connection with any work performed by
Employee for the Company, either alone or with anyone else, while employed by
the Company and/or within twelve (12) months of the termination of employment.
Employee shall disclose all Designs, Inventions and Innovations to the Company,
even if Employee does not believe that he or she is required under this First
Amended Agreement, or pursuant to California Labor Code Section 2870, to assign
his or her interest in such Design, Invention or Innovation to the Company. If
the Company and Employee disagree as to whether or not a Design, Invention or
Innovation is included within the terms of this First Amended Agreement, it will
be the responsibility of Employee to prove that it is not included.

                (d) Pursuant to California Labor Code Section 2870, the
obligation to assign as provided in this First Amended Agreement does not apply
to any Design, Invention or Innovation to the extent such obligation would
conflict with any state or federal law. The obligation to assign as provided in
this First Amended Agreement does not apply to any Design, Invention or
Innovation that Employee developed entirely on Employee's own time without using
the Company's equipment, supplies, facilities or Trade Secrets and Confidential
Information except those Designs, Inventions or Innovations that either:

                        (i) Relate at the time of conception or reduction to
practice to the Company's and/or its affiliates' business, or actual or
demonstrably anticipated research of the Company and/or its affiliates; or

                        (ii) Result from any work performed by Employee for the
Company and/or its affiliates.

                (e) Employee agrees that any Design, Invention and/or Innovation
which is required under the provisions of this First Amended Agreement to be
assigned to the Company shall be the sole and exclusive property of the Company.
Upon the Company's request, at no expense to Employee, Employee shall execute
any and all proper applications for patents, copyrights and/or trademarks,



                                       7
<PAGE>

assignments to the Company, and all other applicable documents, and will give
testimony when and where requested to perfect the title and/or patents (both
within and without the United States) in all Designs, Inventions and Innovations
belonging to the Company.

                (f) The provisions of this Section 13 shall survive the
termination or expiration of this First Amended Agreement, and shall be binding
upon Employee in perpetuity.

        14. ASSIGNMENT. This First Amended Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and the successors and assigns
of the Company. Employee shall have no right to assign his rights, benefits,
duties, obligations or other interests in this First Amended Agreement, it being
understood that this First Amended Agreement is personal to Employee.

        15. ENTIRE UNDERSTANDING. This First Amended Agreement sets forth the
entire understanding of the parties hereto with respect to the subject matter
hereof, and no other representations, warranties or agreements whatsoever as to
that subject matter have been made by Employee or the Company. This First
Amended Agreement shall not be modified, amended or terminated except by another
instrument in writing executed by the parties hereto. This First Amended
Agreement replaces and supersedes any and all prior understandings or agreements
between Employee and the Company regarding employment.

        16. NOTICES. Any notice, request, demand, or other communication
required or permitted hereunder, shall be deemed properly given when actually
received or within five (5) days of mailing by certified or registered mail,
postage prepaid, to Employee at the address currently on file with the Company,
and to the Company at:

               Company: Callaway Golf Company
                        2180 Rutherford Road
                        Carlsbad, California  92008
                        Attn:  Steven C. McCracken
                        Senior Executive Vice President, Chief Legal Officer

or to such other address as Employee or the Company may from time to time
furnish, in writing, to the other.

        17. IRREVOCABLE ARBITRATION OF DISPUTES.

                (a) EMPLOYEE AND THE COMPANY AGREE THAT ANY DISPUTE, CONTROVERSY
OR CLAIM ARISING HEREUNDER OR IN ANY WAY RELATED TO THIS FIRST AMENDED
AGREEMENT, ITS INTERPRETATION, ENFORCEABILITY, OR APPLICABILITY, OR RELATING TO
EMPLOYEE'S EMPLOYMENT, OR THE TERMINATION THEREOF, THAT CANNOT BE RESOLVED BY
MUTUAL AGREEMENT OF THE PARTIES SHALL BE SUBMITTED TO BINDING ARBITRATION. THIS
INCLUDES, BUT IS NOT LIMITED TO, ALLEGED VIOLATIONS OF FEDERAL, STATE AND/OR
LOCAL STATUTES, CLAIMS BASED ON ANY PURPORTED BREACH OF DUTY ARISING IN CONTRACT
OR TORT, INCLUDING BREACH OF CONTRACT, BREACH OF THE COVENANT OF GOOD FAITH AND
FAIR DEALING, VIOLATION OF PUBLIC POLICY, VIOLATION OF ANY STATUTORY,
CONTRACTUAL OR COMMON LAW RIGHTS, BUT EXCLUDING WORKERS' COMPENSATION,
UNEMPLOYMENT MATTERS, OR ANY MATTER FALLING WITHIN THE JURISDICTION OF THE STATE
LABOR COMMISSIONER. THE PARTIES AGREE THAT ARBITRATION IS THE PARTIES' ONLY
RECOURSE FOR SUCH CLAIMS AND HEREBY WAIVE THE RIGHT TO PURSUE SUCH CLAIMS IN ANY
OTHER FORUM, UNLESS OTHERWISE PROVIDED BY LAW. ANY COURT ACTION INVOLVING A
DISPUTE WHICH IS NOT SUBJECT TO ARBITRATION SHALL BE STAYED PENDING ARBITRATION
OF ARBITRABLE DISPUTES.

                (b) EMPLOYEE AND THE COMPANY AGREE THAT THE ARBITRATOR SHALL
HAVE THE AUTHORITY TO ISSUE PROVISIONAL RELIEF. EMPLOYEE AND THE COMPANY FURTHER
AGREE THAT EACH HAS THE RIGHT, PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE
SECTION 1281.8, TO APPLY TO A COURT FOR A PROVISIONAL



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<PAGE>

REMEDY IN CONNECTION WITH AN ARBITRABLE DISPUTE SO AS TO PREVENT THE ARBITRATION
FROM BEING RENDERED INEFFECTIVE.

                (c) ANY DEMAND FOR ARBITRATION SHALL BE IN WRITING AND MUST BE
COMMUNICATED TO THE OTHER PARTY PRIOR TO THE EXPIRATION OF THE APPLICABLE
STATUTE OF LIMITATIONS.

                (d) THE ARBITRATION SHALL BE CONDUCTED PURSUANT TO THE
PROCEDURAL RULES STATED IN THE NATIONAL RULES FOR RESOLUTION OF EMPLOYMENT
DISPUTES OF THE AMERICAN ARBITRATION ASSOCIATION ("AAA"). THE ARBITRATION SHALL
BE CONDUCTED IN SAN DIEGO BY A FORMER OR RETIRED JUDGE OR ATTORNEY WITH AT LEAST
10 YEARS EXPERIENCE IN EMPLOYMENT-RELATED DISPUTES, OR A NON-ATTORNEY WITH LIKE
EXPERIENCE IN THE AREA OF DISPUTE, WHO SHALL HAVE THE POWER TO HEAR MOTIONS,
CONTROL DISCOVERY, CONDUCT HEARINGS AND OTHERWISE DO ALL THAT IS NECESSARY TO
RESOLVE THE MATTER. THE PARTIES MUST MUTUALLY AGREE ON THE ARBITRATOR. IF THE
PARTIES CANNOT AGREE ON THE ARBITRATOR AFTER THEIR BEST EFFORTS, AN ARBITRATOR
FROM THE AMERICAN ARBITRATION ASSOCIATION WILL BE SELECTED PURSUANT TO THE
AMERICAN ARBITRATION ASSOCIATION NATIONAL RULES FOR RESOLUTION OF EMPLOYMENT
DISPUTES. THE COMPANY SHALL PAY THE COSTS OF THE ARBITRATOR'S FEES.

                (e) THE ARBITRATION WILL BE DECIDED UPON A WRITTEN DECISION OF
THE ARBITRATOR STATING THE ESSENTIAL FINDINGS AND CONCLUSIONS UPON WHICH THE
AWARD IS BASED. THE ARBITRATOR SHALL HAVE THE AUTHORITY TO AWARD DAMAGES, IF
ANY, TO THE EXTENT THAT THEY ARE AVAILABLE UNDER APPLICABLE LAW(s). THE
ARBITRATION AWARD SHALL BE FINAL AND BINDING, AND MAY BE ENTERED AS A JUDGMENT
IN ANY COURT HAVING COMPETENT JURISDICTION. EITHER PARTY MAY SEEK REVIEW
PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1286, ET SEQ.

                (f) IT IS EXPRESSLY UNDERSTOOD THAT THE PARTIES HAVE CHOSEN
ARBITRATION TO AVOID THE BURDENS, COSTS AND PUBLICITY OF A COURT PROCEEDING, AND
THE ARBITRATOR IS EXPECTED TO HANDLE ALL ASPECTS OF THE MATTER, INCLUDING
DISCOVERY AND ANY HEARINGS, IN SUCH A WAY AS TO MINIMIZE THE EXPENSE, TIME,
BURDEN AND PUBLICITY OF THE PROCESS, WHILE ASSURING A FAIR AND JUST RESULT. THE
ARBITRATOR SHALL ALLOW REASONABLE DISCOVERY AS PROVIDED IN THE CALIFORNIA
ARBITRATION ACT, BUT SHALL CONTROL THE AMOUNT AND SCOPE OF DISCOVERY.

                (g) THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE EXPIRATION
OR TERMINATION OF THE FIRST AMENDED AGREEMENT, AND SHALL BE BINDING UPON THE
PARTIES.

THE PARTIES HAVE READ SECTION 17 AND IRREVOCABLY AGREE TO ARBITRATE ANY DISPUTE
IDENTIFIED ABOVE.

                       ______ (EMPLOYEE) ______ (COMPANY)

        18. MISCELLANEOUS.

                (a) Headings. The headings of the several sections and
paragraphs of this First Amended Agreement are inserted solely for the
convenience of reference and are not a part of and are not intended to govern,
limit or aid in the construction of any term or provision hereof.

                (b) Waiver. Failure of either party at any time to require
performance by the other of any provision of this First Amended Agreement shall
in no way affect that party's rights thereafter to enforce the same, nor shall
the waiver by either party of any breach of any provision hereof be held to be a
waiver of any succeeding breach of any provision or a waiver of the provision
itself.



                                       9
<PAGE>

                (c) Applicable Law. This First Amended Agreement shall
constitute a contract under the internal laws of the State of California and
shall be governed and construed in accordance with the laws of said state as to
both interpretation and performance.

                (d) Severability. In the event any provision or provisions of
this First Amended Agreement is or are held invalid, the remaining provisions of
this First Amended Agreement shall not be affected thereby.

                (e) Advertising Waiver. Employee agrees to permit the Company
and/or its affiliates, and persons or other organizations authorized by the
Company and/or its affiliates, to use, publish and distribute advertising or
sales promotional literature concerning the products of the Company and/or its
affiliates, or the machinery and equipment used in the manufacture thereof, in
which Employee's name and/or pictures of Employee taken in the course of
Employee's provision of services to the Company and/or its affiliates, appear.
Employee hereby waives and releases any claim or right Employee may otherwise
have arising out of such use, publication or distribution.

                (f) Counterparts. This First Amended Agreement may be executed
in one or more counterparts which, when fully executed by the parties, shall be
treated as one agreement.

        19. SPECIAL SEVERANCE.

                (a) Amount. Special Severance shall consist of (i) severance
payments equal to one-half of Employee's then current base salary at the same
rate and on the same payment schedule as in effect at the time of termination
for a period equal to the greater of twelve (12) months from the date of
termination or the remainder of any Renewal Term; (ii) the payment of premiums
owed for COBRA insurance benefits for a period of twelve (12) months from the
date of termination; and (iii) no other severance.

                (b) Conditions on Receiving Special Severance. Notwithstanding
anything else to the contrary, it is expressly understood that any obligation of
the Company to pay Special Severance pursuant to this First Amended Agreement
shall be subject to: (i) Employee's continued compliance with the terms and
conditions of Sections 7(b), 7(c), 7(e), 12, 13 and 17; and (ii) Employee shall
not, directly, indirectly or in any other way, disparage the Company, its
officers or employees, vendors, customers, products or activities, or otherwise
interfere with the Company's press, public and media relations.

        20. INCENTIVE PAYMENTS.

                (a) Terms and Conditions. Subject to the requirements set forth
in this Section, Employee shall be eligible for Incentive Payments in the event
that Employee is terminated at the Company's convenience pursuant to Sections
8(a) or 9(b), or terminates employment for substantial cause pursuant to Section
8(c). Incentive Payments shall be equal to one-half of Employee's then-current
base salary at the rate and on the same payment schedule in effect at the time
of termination for a period equal to the greater of twelve (12) months from the
date of termination or the remainder of any Renewal Term. Incentive Payments
shall be conditioned upon Employee choosing not to engage (whether as an owner,
employee, agent, consultant, or in any other capacity) in any business or
venture that competes with the business of the Company or any of its affiliates.
If Employee chooses to engage in such activities, then the Company shall have no
obligation to make Incentive Payments for the period of time during which
Employee chooses to do so.

                (b) Sole Consideration. Employee and the Company agree and
acknowledge that the sole and exclusive consideration for the Incentive Payments
is Employee's agreement as described in subparagraph (a) above. In the event
that subparagraph (a) is deemed unenforceable or invalid for any reason, then
the Company will have no obligation to make Incentive Payments for the period of
time during which it has been deemed unenforceable or invalid. The obligations
and duties of this Section 20 shall be separate and distinct from the other
obligations and duties set forth in this First Amended



                                       10
<PAGE>

Agreement, and any finding of invalidity or unenforceability of this Section 20
shall have no effect upon the validity or invalidity of the other provisions of
this First Amended Agreement.

        21. TREATMENT OF SPECIAL SEVERANCE AND INCENTIVE PAYMENTS. Any Special
Severance and Incentive Payments shall be subject to usual and customary
employee payroll practices and all applicable withholding requirements. Except
for the amounts specifically provided pursuant to Sections 8, 19 and 20,
Employee shall not be entitled to any further compensation, bonus, damages,
restitution, relocation benefits, or other severance benefits upon termination
of employment. The amounts payable to Employee pursuant to these Sections shall
not be treated as damages, but as compensation to which Employee may be entitled
by reason of termination of employment under the applicable circumstances. The
Company shall not be entitled to set off against the amounts payable to Employee
pursuant to Sections 8, 19 and 20 any amounts earned by Employee in other
employment after termination of his or her employment with the Company pursuant
to this First Amended Agreement, or any amounts which might have been earned by
Employee in other employment had Employee sought such other employment. The
provisions of Sections 8, 19 and 20 shall not limit Employee's rights under or
pursuant to any other agreement or understanding with the Company regarding any
pension, profit sharing, insurance or other employee benefit plan of the Company
to which Employee is entitled pursuant to the terms of such plan.

        IN WITNESS WHEREOF, the parties have caused this First Amended Agreement
to be executed effective the date first written above.


EMPLOYEE                                COMPANY

                                        Callaway Golf Company,
                                        a Delaware corporation



-----------------------------------     By:
Bradley J. Holiday                         -------------------------------------
                                           Ronald A. Drapeau
                                           Chairman of the Board, President and
                                           Chief Executive Officer



                                       11
<PAGE>

                                    EXHIBIT A

                               TAX INDEMNIFICATION

        Pursuant to Section 6 of Employee's First Amended Agreement ("Section
6"), the Company agrees to indemnify Employee with respect to certain excise tax
obligations as follows:

        1. Definitions. For purposes of Section 6 and this Exhibit A, the
following terms shall have the meanings specified herein:

                (a) "Claim" shall mean any written claim (whether in the form of
a tax assessment, proposed tax deficiency or similar written notification) by
the Internal Revenue Service or any state or local tax authority that, if
successful, would result in any Excise Tax or an Underpayment.

                (b) "Code" shall mean the Internal Revenue Code of 1986, as
amended. All references herein to any section, subsection or other provision of
the Code shall be deemed to refer to any successor thereto.

                (c) "Excise Tax" shall mean (i) any excise tax imposed by
Section 4999 of the Code or any comparable federal, state or local tax, and (ii)
any interest and/or penalties incurred with respect to any tax described in
1(c)(i).

                (d) Gross-Up Payment shall mean a cash payment as specified in
Section 2.

                (e) "Overpayment" and "Underpayment" shall have the meanings
specified in Section 4.

                (f) "Payment" shall mean any payment, benefit or distribution
(including, without limitation, cash, the acceleration of the granting, vesting
or exercisability of stock options or other incentive awards, or the accrual or
continuation of any other payments or benefits) granted or paid to or for the
benefit of Employee by the Company or by any person or persons whose actions
result in a Taxable Event (as defined in this Section), or by any person
affiliated with the Company or such person(s), whether paid or payable pursuant
to the terms of this First Amended Agreement or otherwise. Notwithstanding the
foregoing, a Payment shall not include any Gross-Up Payment required under
Section 6 and this Exhibit A

                (g) "Taxable Event" shall mean any change in control or other
event which triggers the imposition of any Excise Tax on any Payment.

        2. In the event that any Payment is determined to be subject to any
Excise Tax, then Employee shall be entitled to receive from the Company a
Gross-Up Payment in an amount such that, after the payment of all income taxes,
Excise Taxes and any other taxes imposed with respect to the Gross-Up Payment
(together with payment of all interest and penalties imposed with respect to any
such taxes), Employee shall retain a net amount of the Gross-Up Payment equal to
the Excise Tax imposed with respect to the Payments.

        3. All determinations required to be made under Section 6 and this
Exhibit A, including, without limitation, whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment, and the assumptions to be
utilized in arriving at such determinations, shall be made by the Company's
current accounting firm as its independent auditor (the "Accounting Firm"). In
the event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Taxable Event to which a possible
Gross-Up Payment is related, another nationally recognized accounting firm that
is mutually acceptable to the Company and Employee shall be appointed to make
the determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). The Accounting Firm shall provide
detailed supporting calculations to the Company and to Employee regarding the
amount of Excise Tax (if any) which is payable, and the Gross-Up Payment (if



                                       12
<PAGE>

any) required hereunder, with respect to any Payment or Payments, with such
calculations to be provided at such time as may be requested by the Company but
in no event later than fifteen (15) business days following receipt of a written
notice from Employee that there has been a Payment that may be subject to an
Excise Tax. All fees and expenses of the Accounting Firm shall be borne solely
by the Company. Any Gross-Up Payment as determined pursuant to Section 6 and
this Exhibit A shall be paid by the Company to Employee within five (5) business
days after receipt of the Accounting Firm's determination. If the Accounting
Firm determines that no Excise Tax is payable by Employee, the Accounting Firm
shall furnish Employee with a written opinion that failure to disclose, report
or pay the Excise Tax on Employee's federal or other applicable tax returns will
not result in the imposition of a negligence penalty, understatement penalty or
other similar penalty. All determinations by the Accounting Firm shall be
binding upon the Company and Employee in the absence of clear and indisputable
mathematical error. Following receipt of a Gross-Up Payment as provided herein,
Employee shall be obligated to properly and timely report his Excise Tax
liability on the applicable tax returns or reports and to pay the full amount of
Excise Tax with funds provided through such Gross-Up Payment. Notwithstanding
the foregoing, if the Company reasonably determines that Employee will be unable
or otherwise may fail to make such Excise Tax payment, the Company may elect to
pay the Excise Tax to the Internal Revenue Service and/or other applicable tax
authority on behalf of Employee, in which case the Company shall pay the net
balance of the Gross-Up Payment (after deduction of such Excess Tax payment) to
Employee.

        4. As a result of uncertainty in the application of Section 4999 of the
Code, it is possible that a Gross-Up Payment will not have been made by the
Company that should have been made (an "Underpayment") or that a Gross-Up
Payment is made that should not have been made (an "Overpayment"). In the event
that Employee is required to make a payment of any Excise Tax, due to an
Underpayment, the Accounting Firm shall determine the amount of Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to Employee in which case Employee shall be obligated to make a timely
payment of the full amount of the applicable Excise Tax to the applicable tax
authority, provided, however, the Company may elect to pay the Excise Tax to the
applicable tax authority on behalf of Employee consistent with the provisions of
Section 3, in which case the Company shall pay the net balance of the
Underpayment (after deduction of such Excise Tax payment) to Employee. In the
event that the Accounting Firm determines that an Overpayment has been made, any
such Overpayment shall be repaid by Employee to the Company within ninety (90)
days after written demand to Employee by the Company, provided, however, that
Employee shall have no obligation to repay any amount of the Overpayment that
has been paid to, and not recovered from, a tax authority, provided further,
however, in such event the Company may direct Employee to prosecute a claim for
a refund of such amount consistent with the principles set forth in Section 5.

        5. Employee shall notify the Company in writing of any Claim. Such
notice (a) shall be given as soon as practicable, but in no event later than
fifteen (15) business days, following Employee's receipt of written notice of
the Claim from the applicable tax authority, and (b) shall include a compete and
accurate copy of the tax authority's written Claim or otherwise fully inform the
Company of the nature of the Claim and the date on which any payment of the
Claim must be paid, provided that Employee shall not be required to give notice
to the Company of facts of which the Company is already aware, and provided
further that failure or delay by Employee to give such notice shall not
constitute a breach of Section 6 or this Exhibit A except to the extent that the
Company is prejudiced thereby. Employee shall not pay any portion of a Claim
prior to the earlier of (a) the expiration of thirty (30) days following the
date on which Employee gives the foregoing notice to the Company, (b) the date
that any Excise Tax payment under the Claim is due, or (c) the date the Company
notifies Employee that it does not intend to contest the Claim. If, prior to
expiration of such period, the Company notifies Employee in writing that it
desires to contest the Claim, Employee shall:

                (a) give the Company any information reasonably requested by the
Company relating to the Claim;

                (b) take such action in connection with contesting the Claim as
the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation



                                       13
<PAGE>

with respect to the Claim by an attorney selected and compensated by the Company
who is reasonably acceptable to Employee;

                (c) cooperate with the Company in good faith in order to
effectively contest the Claim; and

                (d) permit the Company to participate (at its expense) in any
and all proceedings and conferences pertaining to the Claim; provided, however,
that the Company shall bear and pay directly all costs and expenses (including,
without limitation, additional interest and penalties and attorneys' fees)
incurred in connection with any such contest, and shall indemnify and hold
Employee harmless, on an after-tax basis, for any Excise Tax or income tax
(including, without limitation, interest and penalties with respect thereto) and
all costs imposed or incurred in connection with such contests. Without
limitation upon the foregoing provisions of this Section 5, and except as
provided below, the Company shall control all proceedings concerning any such
contest and, at its sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with tax authorities pertaining
to the Claim. At the written request of the Company, and upon payment to
Employee of an amount at least equal to the Claim plus any additional amount
necessary to obtain the jurisdiction of the appropriate tribunal and/or court,
Employee shall pay the same and sue for a refund or otherwise contest the Claim
in any permissible manner as directed by the Company. Employee agrees to
prosecute any contest of a Claim to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine, provided, however, that if the Company
requests Employee to pay the Claim and sue for a refund, the Company shall
indemnify and hold Employee harmless, on an after-tax basis, from any Excise Tax
or income tax (including, without limitation, interest and penalties with
respect thereto) and costs imposed or incurred in connection with such contest
or with respect to any imputed income attributable to any advances or payments
by the Company hereunder. Any extension of the statute of limitations relating
to assessment of any Excise Tax for the taxable year of Employee which is the
subject of a Claim is to be limited solely to the Claim. Furthermore, the
Company's control of a contest as provided hereunder shall be limited to issues
for which a Gross-Up Payment would be payable hereunder, and Employee shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other tax authority.

        6. If Employee receives a refund from a tax authority of all or any
portion of an Excise Tax paid by or on behalf of Employee with amounts advanced
by the Company pursuant to Section 6 and this Exhibit A, Employee shall promptly
pay to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). Employee shall, if so directed
by the Company, file and otherwise prosecute a claim for refund of any Excise
Tax payment made by or on behalf of Employee with amounts advanced by the
Company pursuant to Section 6 and this Exhibit A, with any such refund claim to
be effected in accordance with the principles set forth in Section 5. If a
determination is made that Employee shall not be entitled to any refund and the
Company does not notify Employee in writing of its intent to contest such denial
of refund prior to the expiration of thirty (30) days after such determination,
then Employee shall have no further obligation hereunder to contest such denial
or to repay to the Company the amount involved in such unsuccessful refund
claim. The amount of any advances which are made by the Company in connection
with any such refund claim hereunder, to the extent not refunded by the
applicable tax authority to Employee, shall offset, as appropriate consistent
with the purposes of Section 6 and this Exhibit A, the amount of any Gross-Up
Payment required hereunder to be paid by the Company to Employee.



                                       14
<PAGE>

                                    EXHIBIT B

                                CHANGE IN CONTROL

        A "Change in Control" means the following and shall be deemed to occur
if any of the following events occurs:

        1. Any person, entity or group, within the meaning of Section 13(d) or
14(d) of the Securities Exchange Act of 1934 (the "Exchange Act") but excluding
the Company and its affiliates and any employee benefit or stock ownership plan
of the Company or its affiliates and also excluding an underwriter or
underwriting syndicate that has acquired the Company's securities solely in
connection with a public offering thereof (such person, entity or group being
referred to herein as a "Person") becomes the beneficial owner (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of
either the then outstanding shares of Common Stock or the combined voting power
of the Company's then outstanding securities entitled to vote generally in the
election of directors; or

        2. Individuals who, as of the effective date hereof, constitute the
Board of Directors of the Company (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board of Directors of the Company,
provided that any individual who becomes a director after the effective date
hereof whose election, or nomination for election by the Company's shareholders,
is approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered to be a member of the Incumbent Board
unless that individual was nominated or elected by any Person having the power
to exercise, through beneficial ownership, voting agreement and/or proxy, 20% or
more of either the outstanding shares of Common Stock or the combined voting
power of the Company's then outstanding voting securities entitled to vote
generally in the election of directors, in which case that individual shall not
be considered to be a member of the Incumbent Board unless such individual's
election or nomination for election by the Company's shareholders is approved by
a vote of at least two-thirds of the directors then comprising the Incumbent
Board; or

        3. Consummation by the Company of the sale or other disposition by the
Company of all or substantially all of the Company's assets or a reorganization
or merger or consolidation of the Company with any other person, entity or
corporation, other than

               (a) a reorganization or merger or consolidation that would result
in the voting securities of the Company outstanding immediately prior thereto
(or, in the case of a reorganization or merger or consolidation that is preceded
or accomplished by an acquisition or series of related acquisitions by any
Person, by tender or exchange offer or otherwise, of voting securities
representing 5% or more of the combined voting power of all securities of the
Company, immediately prior to such acquisition or the first acquisition in such
series of acquisitions) continuing to represent, either by remaining outstanding
or by being converted into voting securities of another entity, more than 50% of
the combined voting power of the voting securities of the Company or such other
entity outstanding immediately after such reorganization or merger or
consolidation (or series of related transactions involving such a reorganization
or merger or consolidation), or

               (b) a reorganization or merger or consolidation effected to
implement a recapitalization or reincorporation of the Company (or similar
transaction) that does not result in a material change in beneficial ownership
of the voting securities of the Company or its successor; or

        4. Approval by the shareholders of the Company or an order by a court of
competent jurisdiction of a plan of liquidation of the Company.



                                       15


</TEXT>
</DOCUMENT>
