Exhibit 10.57

 

Callaway Golf Company    Recipient: Employee/Consultant    Effective Grant Date:
Phantom Stock Unit Grant    Number of Units:    Plan: 2004 Incentive Plan

CALLAWAY GOLF COMPANY, a Delaware corporation (the “Company”), has elected to
grant to you, the Recipient named above, a Phantom Stock Unit award pursuant to
Section 12 of the Plan identified above (the “Plan”) and subject to the
restrictions and on the terms and conditions set forth below, in consideration
for your services to the Company. Terms not otherwise defined in this Phantom
Stock Unit Grant Agreement (“Agreement”) will have the meanings ascribed to them
in the Plan.

 

1. Governing Plan. The Recipient hereby acknowledges receipt of a copy of the
Plan . This Phantom Stock Unit award is subject in all respects to the
applicable provisions of the Plan, which are incorporated herein by this
reference. In the case of any conflict between the provisions of the Plan and
this Agreement, the provisions of the Plan will control.

 

2. Grant of Phantom Stock Unit. Effective as of the Effective Grant Date
identified above, the Company has granted and issued to the Recipient the Number
of Phantom Stock Units identified above (the “PSU”), representing an unfunded,
unsecured promise of the Company to make a cash payment in the future, subject
to the claims of the Company’s creditors and the terms, conditions and
restrictions set forth in this Agreement. Each PSU will represent the right to a
cash payment upon vesting equal to the Fair Market Value of one share of the
Company’s Common Stock. The number of PSUs shall be adjusted in accordance with
Section 15 of the Plan. Nothing contained in this Agreement, and no action taken
pursuant to its provisions, will create or be construed to create a trust of any
kind or a fiduciary relationship between Recipient and the Company or any other
person.

 

3. Restrictions on the PSU. The PSU is subject to the following restrictions:

 

  (a) No Transfer. The PSU may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of or encumbered until a cash payment is
actually made, and any additional requirements or restrictions contained in this
Agreement have been satisfied, terminated or waived by the Company in writing.

 

  (b) Cancellation of Unvested PSUs. In the event Recipient ceases to provide
“Continuous Service” (as defined below) for any reason before the PSU vests
pursuant to paragraph 4 and the restrictions set forth in paragraph 3 expire,
this award shall be cancelled with respect to any then unvested portion of the
PSU and no additional PSUs shall vest; provided, however, that the Board of
Directors or a designated Board committee (the “Board”) may, in its discretion,
determine not to cancel and void all or part of such unvested award, in which
case the Board may impose whatever conditions it considers appropriate with
respect to such portion of the unvested award.

For purposes of this Agreement, “Continuous Service” means that the Recipient’s
service with the Company or its “parent” or “subsidiary” as such terms are
defined in Rule 405 of the Securities Act (each an “Affiliate” and together

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“Affiliates”), whether as an employee, director or consultant, is not
interrupted or terminated. The Board shall have the authority to determine the
time or times at which “parent” or “subsidiary” status is determined within the
foregoing definition of Affiliate. A change in the capacity in which the
Recipient renders service to the Company or an Affiliate as an employee,
consultant or director or a change in the entity for which the Recipient renders
such service, provided that there is no interruption or termination of the
Recipient’s service with the Company or an Affiliate, shall not terminate a
Recipient’s Continuous Service. For example, a change in status from an employee
of the Company to a consultant of a subsidiary or to a director shall not
constitute an interruption of Continuous Service. To the extent permitted by
law, the Board, in its sole discretion, may determine whether Continuous Service
shall be considered interrupted in the case of any approved leave of absence,
including sick leave, military leave or any other personal leave.
Notwithstanding the foregoing, a leave of absence shall be treated as Continuous
Service for purposes of vesting in the PSU only to such extent as may be
provided in the Company’s leave of absence policy, in the written terms of any
leave of absence agreement or policy applicable to the Recipient, or as
otherwise required by law.

 

4. Lapse of Restrictions. The restrictions imposed under paragraph 3 will lapse
and expire, and the PSU will vest, in accordance with the following:

 

  (a) Vesting Schedule. Subject to earlier cancellation, and subject to the
accelerated vesting provisions, if any, set forth in any agreement between
Recipient and the Company or its Affiliate, as the same may be amended,
modified, extended or renewed from time to time, the restrictions imposed under
paragraph 3 will lapse and be removed, and the PSU shall vest, with respect to
the number of PSUs set forth below in accordance with the vesting schedule set
forth below (the “Vesting Schedule”):

 

Number of PSUs    Date Restrictions Lapse

The Board, however, may, in its discretion, accelerate the Vesting Schedule (in
which case, the Board may impose whatever conditions it considers appropriate on
the accelerated portion).

In addition, the restrictions imposed under paragraph 3 will automatically lapse
and be removed, and the PSU shall vest, immediately prior to any Change in
Control, if the Recipient is providing Continuous Service to the Company or its
Affiliate at that time, provided, however, that the Board, in its sole
discretion, may provide that such restrictions do not automatically lapse, and
the PSU shall not vest, immediately prior to any such Change in Control, and
instead provide that the PSU shall continue under the same terms and conditions
or shall continue under the same terms and conditions with respect to shares of
a successor company to which the PSU value may become tied in connection with a
Change in Control. Notwithstanding the foregoing, if the Board elects to provide
that such restrictions do not lapse, and PSU does not vest, in connection with a
Change in Control and Recipient’s Continuous Service is terminated for any
reason within one year following such Change in Control, then such restrictions
shall lapse and be removed, and PSU shall vest, immediately upon such
termination of Continuous Service. For purposes hereof, “Change in Control”
shall have the meaning set forth in Exhibit A attached hereto.

 

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  (b) Effect of Vesting. Within a reasonable amount of time after vesting, the
Company will deliver to Recipient a cash payment for each vested phantom stock
unit equal to the Fair Market Value on the vesting date of one share of the
Company’s Common Stock.

 

  (c) Payment of Taxes. If applicable, upon vesting and/or issuance of a cash
payment in accordance with the foregoing, the Company and/or its Affiliate shall
withhold all applicable tax-related items legally payable by Recipient from such
cash payment, his or her wages or other cash compensation paid to Recipient by
the Company and/or Affiliate equal to the amount of the total withholding tax
obligation.

 

5. No Dividend Equivalents. If a cash dividend is paid with respect to shares of
Common Stock, Recipient shall not be credited with additional PSUs as dividend
equivalent payments.

 

6. Nature of Grant. In accepting the grant, Recipient acknowledges that:

 

  (a) the Plan is established voluntarily by the Company, it is discretionary in
nature and it may be modified, amended, suspended or terminated by the Company
at any time, unless otherwise provided in the Plan and this Agreement;

 

  (b) the grant of the PSU is voluntary and occasional and does not create any
contractual or other right to receive future grants of PSUs , or benefits in
lieu of PSUs , even if PSUs have been granted repeatedly in the past, and all
decisions with respect to future PSU grants, if any, will be at the sole
discretion of the Company;

 

  (c) Recipient’s participation in the Plan shall not create a right to
Continued Service with the Company or an Affiliate and shall not interfere with
the ability the Company or an Affiliate to terminate Recipient’s service
relationship at any time with or without cause;

 

  (d) Recipient is voluntarily participating in the Plan;

 

  (e) the PSU is an extraordinary benefit and is not part of normal or expected
compensation or salary for any purposes, including, but not limited to,
calculating any severance, resignation, termination, redundancy, end of service
payments, bonuses, long-service awards, pension or retirement benefits or
similar payments and in no event should be considered as compensation for, or
relating in any way to, past services for the Company or an Affiliate;

 

  (f) the future value of the PSU is unknown and cannot be predicted with
certainty; and

 

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  (g) in consideration of the grant of the PSU, no claim or entitlement to
compensation or damages shall arise from termination of the PSU or diminution in
value of the PSU resulting from termination of Recipient’s Continuous Service by
the Company or an Affiliate (for any reason whatsoever) and Recipient
irrevocably releases the Company and its Affiliates from any such claim that may
arise; if, notwithstanding the foregoing, any such claim is found by a court of
competent jurisdiction to have arisen, then, by signing this Agreement,
Recipient shall be deemed irrevocably to have waived his or her entitlement to
pursue such claim.

 

7. Electronic Delivery. The Company may, in its sole discretion, decide to
deliver any documents related to the PSU and participation in the Plan or future
PSUs that may be granted under the Plan by electronic means or to request
Recipient consent to participate in the Plan by electronic means. Recipient
hereby consents to receive such documents by electronic delivery and, if
requested, to agree to participate in the Plan through an on-line or electronic
system established and maintained by the Company or another third party
designated by the Company.

 

8. Taxable Event. The Recipient acknowledges that the issuance of the cash
payment upon the PSU vesting will have significant tax consequences to the
Recipient and Recipient is hereby advised to consult with Recipient’s own tax
advisors concerning such tax consequences.

 

9. Amendment. This Agreement may be amended only by a writing executed by the
Company and Recipient which specifically states that it is amending this
Agreement. Notwithstanding the foregoing, this Agreement may be amended solely
by the Board by a writing which specifically states that it is amending this
Agreement, so long as a copy of such amendment is delivered to Recipient, and
provided that no such amendment adversely affecting Recipient’s rights hereunder
may be made without Recipient’s written consent. Without limiting the foregoing,
the Board reserves the right to change, by written notice to Recipient, the
provisions of this Agreement in any way it may deem necessary or advisable to
carry out the purpose of the grant as a result of any change in applicable laws
or regulations or any future law, regulation, ruling, or judicial decision,
provided that any such change will be applicable only to rights relating to that
portion of the Award which is then subject to restrictions as provided herein.

 

10. Miscellaneous.

 

  (a) The rights and obligations of the Company under this Agreement will be
transferable by the Company to any one or more persons or entities, and all
covenants and agreements hereunder will inure to the benefit of, and be
enforceable by the Company’s successors and assigns.

 

  (b) Recipient agrees upon request to execute any further documents or
instruments necessary or desirable in the sole determination of the Company to
carry out the purposes or intent of this Agreement.

 

  (c) Recipient acknowledges that the PSU award granted to Recipient under the
Plan is subject to all general Company policies as amended from time to time.

 

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11. Severability. The provisions of this Agreement shall be deemed to be
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or any
circumstance, is held to be invalid or unenforceable under present or future
laws effective during the term of this Agreement, such provision shall be fully
severed, and in lieu thereof there shall automatically be added as part of this
Agreement a suitable and equitable provision in order to carry out, so far as
may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision.

 

12. Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware and applicable federal law.

 

13. Irrevocable Arbitration of Disputes.

 

  (a) You and the Company agree that any dispute, controversy or claim arising
hereunder or in any way related to this Agreement, its interpretation,
enforceability, or applicability, that cannot be resolved by mutual agreement of
the parties shall be submitted to binding arbitration. 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) You and the Company agree that the arbitrator shall have the authority to
issue provisional relief. You 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 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 administered by JAMS pursuant to its Employment
Arbitration Rules and Procedures. 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 will be selected from
JAMS pursuant to its Employment Arbitration Rules and Procedures. 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

 

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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. In particular, the
parties expect that the arbitrator will limit discovery by controlling the
amount of discovery that may be taken (e.g., the number of depositions or
interrogatories) and by restricting the scope of discovery only to those matters
clearly relevant to the dispute. However, at a minimum, each party will be
entitled to at least one (1) deposition and shall have access to essential
documents and witnesses as determined by the arbitrator.

 

  (g) The provisions of this Section shall survive the expiration or termination
of the Agreement, and shall be binding upon the parties.

THE PARTIES HAVE READ SECTION 13 AND IRREVOCABLY AGREE TO ARBITRATE ANY DISPUTE
IDENTIFIED ABOVE.

 

                     (Company)                     (Recipient)

 

14. Data Privacy. Recipient hereby explicitly and unambiguously consents to the
collection, use and transfer, in electronic or other form, of his or her
personal data as described in this document by and among, as applicable, the
Company and its Affiliates for the exclusive purpose of implementing,
administering and managing Recipient’s participation in the Plan.

Recipient understands that the Company and its Affiliates may hold certain
personal information about Recipient, including, but not limited to, Recipient’s
name, home address and telephone number, date of birth, social insurance number
or other identification number, salary, nationality, job title, any shares of
stock or directorships held in the Company, details of all PSUs or any
entitlement to shares of stock awarded, canceled, exercised, vested, unvested or
outstanding in Recipient’s favor, for the purpose of implementing, administering
and managing the Plan (“Data”). Recipient understands that Data may be
transferred to any third parties assisting in the implementation, administration
and management of the Plan, that these Data recipients may be located in
Recipient’s country or elsewhere, and that the Data recipients’ country may have
different data privacy laws and protections than Recipient’s country. Recipient
understands that he or she may request a list with the names and addresses of
any potential third parties to whom the Data may be transferred by contacting
the local human resources representative. Recipient authorizes the recipients to
receive, possess, use, retain and transfer the Data, in electronic or other
form, for the sole purpose of implementing, administering and managing
Recipient’s participation in the Plan.. Recipient understands that Data will be
held only as long as is necessary to implement, administer and manage
Recipient’s participation in the Plan. Recipient

 

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understands that he or she may, at any time, view Data, request additional
information about the storage and processing of Data, require any necessary
amendments to Data or refuse or withdraw the consents herein, without cost, by
contacting in writing the local human resources representative. Recipient
understands, however, that refusing or withdrawing consent may affect
Recipient’s ability to participate in the Plan. For more information on the
consequences of refusal to consent or withdrawal of consent, Recipient
understands that he or she may contact the local human resources representative.

IN WITNESS WHEREOF, the Company and Recipient have executed this Agreement
effective as of the Effective Grant Date.

 

CALLAWAY GOLF COMPANY     RECIPIENT By:  

 

   

 

 

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EXHIBIT A

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

 

  (a) 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 subsidiaries and any employee benefit or stock ownership plan of
the Company or its subsidiaries 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

 

  (b) 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

 

  (c) Consummation by the Company of the sale, lease, exchange or other
disposition (in one transaction or a series of related transactions) 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

 

  (i)

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

 

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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

 

  (ii) 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

 

  (d) Approval by the shareholders of the Company or an order by a court of
competent jurisdiction of a plan of complete liquidation or dissolution of the
Company.

 

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