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                                                                   EXHIBIT 10.16

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                     GOLFSMITH INTERNATIONAL HOLDINGS, INC.

                            2002 INCENTIVE STOCK PLAN

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                                TABLE OF CONTENTS

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SECTION 1. BACKGROUND AND PURPOSE................................................................................    1

SECTION 2. DEFINITIONS...........................................................................................    1

     2.1    Affiliate............................................................................................    1
     2.2    Board................................................................................................    1
     2.3    Change in Control....................................................................................    1
     2.4    Code.................................................................................................    2
     2.5    Committee............................................................................................    2
     2.6    Director.............................................................................................    2
     2.7    Fair Market Value....................................................................................    2
     2.8    ISO..................................................................................................    3
     2.9    Key Employee.........................................................................................    3
     2.10   1933 Act.............................................................................................    3
     2.11   1934 Act.............................................................................................    3
     2.12   Non-ISO..............................................................................................    3
     2.13   Option...............................................................................................    3
     2.14   Option Certificate...................................................................................    3
     2.15   Option Price.........................................................................................    3
     2.16   Parent...............................................................................................    3
     2.17   Plan.................................................................................................    3
     2.18   Golfsmith............................................................................................    4
     2.19   Rule 16b-3...........................................................................................    4
     2.20   Stock................................................................................................    4
     2.21   Stock Grant..........................................................................................    4
     2.22   Stock Grant Certificate..............................................................................    4
     2.23   SAR Value............................................................................................    4
     2.24   Stock Appreciation Right.............................................................................    4
     2.25   Stock Appreciation Right Certificate.................................................................    4
     2.26   Subsidiary...........................................................................................    4
     2.27   Ten Percent Stockholder..............................................................................    4

SECTION 3. SHARES RESERVED UNDER PLAN............................................................................    4

SECTION 4. EFFECTIVE DATE........................................................................................    5

SECTION 5. COMMITTEE.............................................................................................    5

SECTION 6. ELIGIBILITY...........................................................................................    6

SECTION 7. OPTIONS...............................................................................................    6

     7.1    Committee Action.....................................................................................    6
     7.2    $100,000 Limit.......................................................................................    7
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<S>                                                                                                                 <C>
     7.3    Option Price.........................................................................................    7
     7.4    Payment..............................................................................................    7
     7.5    Exercise Period......................................................................................    8
     7.6    Reload Option Grants.................................................................................    8

SECTION 8. STOCK APPRECIATION RIGHTS.............................................................................    9

     8.1    Committee Action.....................................................................................    9
     8.2    Terms and Conditions.................................................................................   10
     8.3    Exercise.............................................................................................   11

SECTION 9. STOCK GRANTS..........................................................................................   12

     9.1    Committee Action.....................................................................................   12
     9.2    Conditions...........................................................................................   12
     9.3    Dividends and Voting Rights..........................................................................   13
     9.4    Satisfaction of Forfeiture Conditions; Provision for Income Taxes....................................   14

SECTION 10. NON-TRANSFERABILITY..................................................................................   14

SECTION 11. SECURITIES REGISTRATION..............................................................................   15

SECTION 12. LIFE OF PLAN.........................................................................................   16

SECTION 13. ADJUSTMENT...........................................................................................   16

     13.1   Capital Structure....................................................................................   16
     13.2   Mergers..............................................................................................   17
     13.3   Fractional Shares....................................................................................   17

SECTION 14. SALE, MERGER OR CHANGE IN CONTROL....................................................................   18

SECTION 15. AMENDMENT OR TERMINATION.............................................................................   18

SECTION 16. MISCELLANEOUS........................................................................................   19

     16.1   Stockholder Rights...................................................................................   19
     16.2   No Contract of Employment............................................................................   20
     16.3   Withholding..........................................................................................   20
     16.4   Construction.........................................................................................   20
     16.5   Other Conditions.....................................................................................   21
     16.6   Rule 16b-3...........................................................................................   21
     16.7   Loans................................................................................................   21
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                           SECTION 1. BACKGROUND AND PURPOSE

                  The purpose of this Plan is to promote the interests of
Golfsmith by authorizing the Committee to grant Options and Stock Appreciation
Rights and to make Stock Grants to Key Employees and Directors in order (1) to
attract and retain Key Employees and Directors, (2) to provide an additional
incentive to each Key Employee or Director to work to increase the value of
Stock and (3) to provide each Key Employee or Director with a stake in the
future of Golfsmith which corresponds to the stake of each of Golfsmith's
stockholders.

                           SECTION 2. DEFINITIONS

         "AFFILIATE" means any organization (other than a Subsidiary) that would
be treated as under common control with Golfsmith under Section 414(c) of the
Code if "50 percent" were substituted for "80 percent" in the income tax
regulations under Section 414(c) of the Code.

         "BOARD" means the Board of Directors of Golfsmith.

         "CHANGE IN CONTROL" means a transaction (other than an initial public
offering of Stock) which occurs after the effective date of this Plan pursuant
to which (1) there is a "change in control" of Golfsmith of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A for a proxy
statement filed under Section 14(a) of the 1934 Act, (2) a "person" (as that
term is used in Section 14(d)(2) of the 1934 Act), other than any general or
limited partner of Atlantic Equity Partners III, L.P. or any person or entity
controlled by First Atlantic Capital, Ltd., becomes the beneficial owner (as
defined in Rule 13d-3 under the 1934 Act) directly or indirectly of securities
representing 50% or more of the combined voting power for election of directors
of the then outstanding securities of Golfsmith, (3) the individuals who at

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the beginning of any period of two consecutive years or less constitute the
Board cease for any reason during such period to constitute at least a majority
of the Board, unless the election or nomination for election of each new member
of the Board was approved by vote of at least two-thirds of the members of the
Board then still in office who were members of the Board at the beginning of
such period, (4) the stockholders of Golfsmith approve any dissolution or
liquidation of Golfsmith or any sale or disposition of 50% or more of the assets
or business of Golfsmith or (5) the stockholders of Golfsmith approve a merger
or consolidation to which Golfsmith is a party (other than a merger or
consolidation with a wholly-owned subsidiary of Golfsmith) or a share exchange
in which Golfsmith shall exchange Golfsmith shares for shares of another
corporation as a result of which the persons who were stockholders of Golfsmith
immediately before the effective date of such merger, consolidation or share
exchange shall have beneficial ownership of less than 50% of the combined voting
power for election of directors of the surviving corporation following the
effective date of such merger, consolidation or share exchange.

         "CODE" means the Internal Revenue Code of 1986, as amended.

         "COMMITTEE" means a committee of the Board, each member of which shall
be appointed by and shall serve at the pleasure of the Board.

         "DIRECTOR" means any member of the Board who is not an employee of
Golfsmith or a Parent or Subsidiary or Affiliate.

         "FAIR MARKET VALUE" means the price which the Committee acting in good
faith determines through any reasonable valuation method that a share of Stock
might change hands

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between a willing buyer and a willing seller, neither being under any compulsion
to buy or to sell and both having reasonable knowledge of the relevant facts.

         "INCENTIVE STOCK OPTION" or "ISO" means an option granted under this
Plan to purchase Stock which is intended to satisfy the requirements of Section
422 of the Code.

         "KEY EMPLOYEE" means an employee of, or consultant to, Golfsmith or any
Subsidiary or Parent or Affiliate designated by the Committee who, in the
judgment of the Committee acting in its absolute discretion, is key directly or
indirectly to the success of Golfsmith.

         "1933 ACT" means the Securities Act of 1933, as amended.

         "1934 ACT" means the Securities Exchange Act of 1934, as amended.

         "NON-QUALIFIED INCENTIVE STOCK OPTION" or "NON-ISO" means an option
granted under this Plan to purchase Stock which is intended to fail to satisfy
the requirements of Section 422 of the Code.

         "OPTION" means an ISO or a Non-ISO which is granted under Section 7.

         "OPTION CERTIFICATE" means the written certificate which sets forth the
terms and conditions of an Option granted under this Plan.

         "OPTION PRICE" means the price which shall be paid to purchase one
share of Stock upon the exercise of an Option granted under this Plan.

         "PARENT" means any corporation which is a parent corporation (within
the meaning of Section 424(e) of the Code) of Golfsmith.

         "PLAN" means the Golfsmith International, Inc. 2002 Incentive Stock
Plan as effective as of the date adopted by the Board in 2002 and as amended
from time to time thereafter.

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         "GOLFSMITH" means Golfsmith International Holdings, Inc., a Delaware
corporation, and any successor to Golfsmith International Holdings, Inc.

         "RULE 16b-3" means the exemption under Rule 16b-3 to Section 16(b) of
the 1934 Act or any successor to such rule.

         "STOCK" means the common stock of Golfsmith.

         "STOCK GRANT" means Stock granted under Section 9.

         "STOCK GRANT CERTIFICATE" means the written certificate which sets
forth the terms and conditions of a Stock Grant.

         "SAR VALUE" means the value assigned by the Committee to a share of
Stock in connection with the grant of a Stock Appreciation Right under Section
8.

         "STOCK APPRECIATION RIGHT" means a right to receive the appreciation in
a share of Stock which is granted under Section 8.

         "STOCK APPRECIATION RIGHT CERTIFICATE" means the written certificate
which sets forth the terms and conditions of a Stock Appreciation Right which is
not granted as part of an Option.

         "SUBSIDIARY" means a corporation which is a subsidiary corporation
(within the meaning of Section 424(f) of the Code) of Golfsmith.

         "TEN PERCENT STOCKHOLDER" means a person who owns (after taking into
account the attribution rules of Section 424(d) of the Code) more than ten
percent of the total combined voting power of all classes of stock of either
Golfsmith, a Subsidiary or Parent.

                           SECTION 3. SHARES RESERVED UNDER PLAN

                  There shall (subject to Section 13) be 2,850,000 shares of
Stock reserved for issuance under this Plan, and no more than such number of
shares shall (subject to Section 13) be

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issued in connection with the exercise of ISOs. Such shares of Stock shall be
reserved to the extent that Golfsmith deems appropriate from authorized but
unissued shares of Stock and from shares of Stock which have been reacquired by
Golfsmith. Any shares of Stock subject to an Option or Stock Grant which remain
unissued after the cancellation, expiration or exchange of such Option or Stock
Grant or which are forfeited after issuance and any shares of Stock subject to
issuance under a Stock Appreciation Right which remain unissued after the
cancellation or expiration of such Stock Appreciation Right thereafter shall
again become available for issuance under this Plan. Any shares of Stock used to
satisfy a withholding obligation shall be treated as issued under this Plan and
not again become available for grants under this Plan. Finally, if the Option
Price under an Option is paid in whole or in part in shares of Stock or if
shares of Stock are tendered to Golfsmith in satisfaction of any condition to a
Stock Grant, such shares thereafter shall become available for issuance under
this Plan and shall be treated the same as any other shares available for
issuance under this Plan.

                           SECTION 4. EFFECTIVE DATE

                  The effective date of this Plan shall be the date of its
adoption by the Board, provided the stockholders of Golfsmith (acting at a duly
called meeting of such stockholders) approve such adoption within twelve (12)
months of such effective date. Any Option or Stock Appreciation Right granted or
Stock Grant made before such stockholder approval automatically shall be granted
subject to such approval.

                           SECTION 5. COMMITTEE

         This Plan shall be administered by the Committee. The Committee acting
in its

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absolute discretion shall exercise such powers and take such action as expressly
called for under this Plan and, further, the Committee shall have the power to
interpret this Plan and (subject to Section 14 and Section 15 and Rule 16b-3) to
take such other action in the administration and operation of this Plan as the
Committee deems equitable under the circumstances, which action shall be binding
on Golfsmith, on each affected Key Employee or Director and on each other person
directly or indirectly affected by such action.

                           SECTION 6. ELIGIBILITY

                  Only Key Employees who are employed by Golfsmith or a
Subsidiary shall be eligible for the grant of ISOs under this Plan. All Key
Employees and Directors shall be eligible for the grant of Non-ISOs and Stock
Appreciation Rights and for Stock Grants under this Plan.

SECTION 7. OPTIONS

                  7.1 Committee Action. The Committee acting in its absolute
discretion shall have the right to grant Options to Key Employees and to
Directors under this Plan from time to time to purchase shares of Stock and,
further, the Committee shall have the right to grant new Options in exchange for
the cancellation of outstanding Options which have a higher or lower Option
Price than the new Options. Each grant of an Option to a Key Employee or
Director shall be evidenced by an Option Certificate, and each Option
Certificate shall set forth whether the Option is an ISO or a Non-ISO and shall
set forth such other terms and conditions of such grant as the Committee acting
in its absolute discretion deems consistent with the terms of this Plan;
however, if the Committee grants an ISO and a Non-ISO to a Key Employee on the
same date,

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the right of the Key Employee to exercise the ISO shall not be conditioned on
his or her failure to exercise the Non-ISO.

                  7.2 $100,000 Limit. No Option shall be treated as an ISO to
the extent that the aggregate Fair Market Value of the Stock subject to the
Option which would first become exercisable in any calendar year exceeds
$100,000. Any such excess shall instead automatically be treated as a Non-ISO.
The Committee shall interpret and administer the ISO limitation set forth in
this Section 7.2 in accordance with Section 422(d) of the Code, and the
Committee shall treat this Section 7.2 as in effect only for those periods for
which Section 422(d) of the Code is in effect.

                  7.3 Option Price. The Option Price for each share of Stock
subject to an Option shall be no less than the Fair Market Value of a share of
Stock on the date the Option is granted; provided, however, if the Option is an
ISO granted to a Key Employee who is a Ten Percent Stockholder, the Option Price
for each share of Stock subject to such ISO shall be no less than 110% of the
Fair Market Value of a share of Stock on the date such ISO is granted.

                  7.4 Payment. The Option Price shall be payable in full upon
the exercise of any Option, and at the discretion of the Committee, an Option
Certificate can provide for the payment of the Option Price either in cash, by
check or in Stock which has been held for at least 6 months and which is
acceptable to the Committee or in any combination of cash, check and such Stock.
The Option Price in addition may be paid through any cashless exercise procedure
which is acceptable to the Committee or its delegate and which is facilitated
through a sale of Stock. Any payment made in Stock shall be treated as equal to
the Fair Market Value of such

                                      -7-

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Stock on the date the certificate for such Stock (or proper evidence of such
certificate) is presented to the Committee or its delegate in such form as
acceptable to the Committee.

                  7.5 Exercise Period. Each Option granted under this Plan shall
be exercisable in whole or in part at such time or times as set forth in the
related Option Certificate, but no Option Certificate shall make an Option
exercisable on or after the earlier of :

                           (1)      the date which is the fifth anniversary of
                                    the date the Option is granted, if the
                                    Option is an ISO and the Key Employee is a
                                    Ten Percent Stockholder on the date the
                                    Option is granted, or

                           (2)      the date which is the tenth anniversary of
                                    the date the Option is granted, if the
                                    Option is (a) a Non-ISO or (b) an ISO which
                                    is granted to a Key Employee who is not a
                                    Ten Percent Stockholder on the date the
                                    Option is granted.

                  An Option Certificate may provide for the exercise of an
Option after the employment of a Key Employee or the term of a Director has
terminated for any reason whatsoever, including death or disability.

                  7.6 Reload Option Grants. The Committee as part of the grant
of an Option may provide in the related Option Certificate for the automatic
grant of an additional Option as of each date that a Key Employee or Director
exercises the original Option if the Key Employee or Director in connection with
such exercise uses (in accordance with Section 7.4) Stock to pay all or a part
of the Option Price or uses Stock to satisfy all or a part of any related tax
withholding requirement. As for each such additional Option,

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                           (1)      the number of shares of Stock subject to the
                                    additional Option shall be no more than the
                                    number of shares of Stock used to pay the
                                    related Option Price or to satisfy the
                                    related withholding requirement,

                           (2)      the Option Price shall be no less than the
                                    Fair Market Value of a share of Stock on the
                                    date of the related exercise of the original
                                    Option,

                           (3)      the additional Option shall expire no later
                                    than the expiration date for the original
                                    Option,

                           (4)      the additional Option shall be subject to
                                    such other terms and conditions as the
                                    Committee deems appropriate under the
                                    circumstances, and

                           (5)      the additional Option shall be evidenced by
                                    a Stock Option Certificate.

                           SECTION 8. STOCK APPRECIATION RIGHTS

                  8.1 Committee Action. The Committee acting in its absolute
discretion shall have the right to grant Stock Appreciation Rights to Key
Employees and to Directors under this Plan from time to time, and each Stock
Appreciation Right grant shall be evidenced by a Stock Appreciation Right
Certificate or, if such Stock Appreciation Right is granted as part of an
Option, shall be evidenced by the Option Certificate for the related Option.

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                  8.2 Terms and Conditions.

                           (a)      Stock Appreciation Right Certificate. If a
                                    Stock Appreciation Right is evidenced by a
                                    Stock Appreciation Right Certificate, such
                                    certificate shall set forth the number of
                                    shares of Stock on which the Key Employee's
                                    or Director's right to appreciation shall be
                                    based and the SAR Value of each share of
                                    Stock. Such SAR Value shall be no less than
                                    the Fair Market Value of a share of Stock on
                                    the date that the Stock Appreciation Right
                                    is granted. The Stock Appreciation Right
                                    Certificate shall set forth such other terms
                                    and conditions for the exercise of the Stock
                                    Appreciation Right as the Committee deems
                                    appropriate under the circumstances, but no
                                    Stock Appreciation Right Certificate shall
                                    make a Stock Appreciation Right exercisable
                                    on or after the date which is the tenth
                                    anniversary of the date such Stock
                                    Appreciation Right is granted.

                           (b)      Option Certificate. If a Stock Appreciation
                                    Right is evidenced by an Option Certificate,
                                    the number of shares of Stock on which the
                                    Key Employee's or Director's right to
                                    appreciation shall be based shall be the
                                    same as the number of shares of Stock
                                    subject to the related Option and the SAR
                                    Value for each such share of Stock shall be
                                    no less than the Option Price under the
                                    related Option. Each such Option Certificate
                                    shall provide that the exercise of the

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                                    Stock Appreciation Right with respect to any
                                    share of Stock shall cancel the Key
                                    Employee's or Director's right to exercise
                                    his or her Option with respect to such share
                                    and, conversely, that the exercise of the
                                    Option with respect to any share of Stock
                                    shall cancel the Key Employee's or
                                    Director's right to exercise his or her
                                    Stock Appreciation Right with respect to
                                    such share. A Stock Appreciation Right which
                                    is granted as part of an Option shall be
                                    exercisable only while the related Option is
                                    exercisable. The Option Certificate shall
                                    set forth such other terms and conditions
                                    for the exercise of the Stock Appreciation
                                    Right as the Committee deems appropriate
                                    under the circumstances.

                  8.3 Exercise. A Stock Appreciation Right shall be exercisable
only when the Fair Market Value of a share of Stock on which the right to
appreciation is based exceeds the SAR Value for such share, and the payment due
on exercise shall be based on such excess with respect to the number of shares
of Stock to which the exercise relates. A Key Employee or Director upon the
exercise of his or her Stock Appreciation Right shall receive a payment from
Golfsmith in cash or in Stock issued under this Plan, or in a combination of
cash and Stock, and the number of shares of Stock issued shall be based on the
Fair Market Value of a share of Stock on the date the Stock Appreciation Right
is exercised. The Committee acting in its absolute discretion shall have the
right to determine the form and time of any payment under this Section 8.3.

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                           SECTION 9. STOCK GRANTS

                  9.1 Committee Action. The Committee acting in its absolute
discretion shall have the right to make Stock Grants to Key Employees and to
Directors. Each Stock Grant shall be evidenced by a Stock Grant Certificate, and
each Stock Grant Certificate shall set forth the conditions, if any, under which
Stock will be issued under the Stock Grant and the conditions under which the
Key Employee's or Director's interest in any Stock which has been issued will
become non-forfeitable.

                  9.2 Conditions.

                           (a)      Conditions to Issuance of Stock. The
                                    Committee acting in its absolute discretion
                                    may make the issuance of Stock under a Stock
                                    Grant subject to the satisfaction of one, or
                                    more than one, condition which the Committee
                                    deems appropriate under the circumstances
                                    for Key Employees or Directors generally or
                                    for a Key Employee or a Director in
                                    particular, and the related Stock Grant
                                    Certificate shall set forth each such
                                    condition and the deadline for satisfying
                                    each such condition. Stock subject to a
                                    Stock Grant shall be issued in the name of a
                                    Key Employee or Director only after each
                                    such condition, if any, has been timely
                                    satisfied, and any Stock which is so issued
                                    shall be held by Golfsmith pending the
                                    satisfaction of the forfeiture conditions,
                                    if any, under Section 9.2(b) for the related
                                    Stock Grant.

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                           (b)      Forfeiture Conditions. The Committee acting
                                    in its absolute discretion may make Stock
                                    issued in the name of a Key Employee or
                                    Director subject to one, or more than one,
                                    objective employment, performance or other
                                    forfeiture condition that the Committee
                                    acting in its absolute discretion deems
                                    appropriate under the circumstances for Key
                                    Employees or Directors generally or for a
                                    Key Employee or a Director in particular,
                                    and the related Stock Grant Certificate
                                    shall set forth each such forfeiture
                                    condition, if any, and the deadline, if any,
                                    for satisfying each such forfeiture
                                    condition. A Key Employee's or a Director's
                                    non-forfeitable interest in the shares of
                                    Stock underlying a Stock Grant shall depend
                                    on the extent to which he or she timely
                                    satisfies each such condition. Each share of
                                    Stock underlying a Stock Grant shall be
                                    unavailable under Section 3 after such grant
                                    is effective unless such share thereafter is
                                    forfeited as a result of a failure to timely
                                    satisfy a forfeiture condition, in which
                                    event such share of Stock shall again become
                                    available under Section 3 as of the date of
                                    such forfeiture.

                  9.3 Dividends and Voting Rights. If a cash dividend is paid on
a share of Stock after such Stock has been issued under a Stock Grant but before
the first date that a Key Employee's or a Director's interest in such Stock (1)
is forfeited completely or (2) becomes completely non-forfeitable, Golfsmith
shall pay such cash dividend directly to such Key

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Employee or Director. If a Stock dividend is paid on such a share of Stock
during such period, such Stock dividend shall be treated as part of the related
Stock Grant, and a Key Employee's or a Director's interest in such Stock
dividend shall be forfeited or shall become non-forfeitable at the same time as
the Stock with respect to which the Stock dividend was paid is forfeited or
becomes non-forfeitable. The disposition of each other form of dividend which is
declared on such a share of Stock during such period shall be made in accordance
with such rules as the Committee shall adopt with respect to each such dividend.
A Key Employee or a Director also shall have the right to vote the Stock issued
under his or her Stock Grant during such period.

                  9.4 Satisfaction of Forfeiture Conditions; Provision for
Income Taxes. A share of Stock shall cease to be subject to a Stock Grant at
such time as a Key Employee's or a Director's interest in such Stock becomes
non-forfeitable under this Plan, and the certificate representing such share
shall be transferred to the Key Employee or Director as soon as practicable
thereafter. The Committee acting in its absolute discretion shall have the power
to authorize and direct Golfsmith to pay a cash bonus (or to provide in the
terms of the Stock Grant Certificate for Golfsmith to make such payment) to a
Key Employee to pay all, or any portion of, his or her federal, state and local
income tax liability which the Committee deems attributable to his or her
interest in the shares of Stock issued under his or her Stock Grant becoming
non-forfeitable and, further, to pay any such tax liability attributable to such
cash bonus.

                           SECTION 10. NON-TRANSFERABILITY

                  No Option, Stock Grant or Stock Appreciation Right shall
(absent the Committee's consent) be transferable by a Key Employee or a Director
other than by will or by the laws of descent and distribution, and any Option or
Stock Appreciation Right shall (absent

                                      -14-

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the Committee's consent) be exercisable during a Key Employee's or Director's
lifetime only by the Key Employee or Director. The person or persons to whom an
Option or Stock Grant or Stock Appreciation Right is transferred by will or by
the laws of descent and distribution (or with the Committee's consent)
thereafter shall be treated as the Key Employee or Director.

                           SECTION 11. SECURITIES REGISTRATION

                  As a condition to the receipt of shares of Stock under this
Plan, the Key Employee or Director shall, if so requested by Golfsmith, agree to
hold such shares of Stock for investment and not with a view of resale or
distribution to the public and, if so requested by Golfsmith, shall deliver to
Golfsmith a written statement satisfactory to Golfsmith to that effect.
Furthermore, if so requested by Golfsmith, the Key Employee or Director shall
make a written representation to Golfsmith that he or she will not sell or offer
for sale any of such Stock unless a registration statement shall be in effect
with respect to such Stock under the 1933 Act and any applicable state
securities law or he or she shall have furnished to Golfsmith an opinion in form
and substance satisfactory to Golfsmith of legal counsel satisfactory to
Golfsmith that such registration is not required. Certificates representing the
Stock transferred upon the exercise of an Option or Stock Appreciation Right or
upon the lapse of the forfeiture conditions, if any, on any Stock Grant may at
the discretion of Golfsmith bear a legend to the effect that such Stock has not
been registered under the 1933 Act or any applicable state securities law and
that such Stock cannot be sold or offered for sale in the absence of an
effective registration statement as to such Stock under the 1933 Act and any
applicable state securities law or an opinion in form and substance satisfactory
to Golfsmith legal counsel that such registration is not required.

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SECTION 12. LIFE OF PLAN

                  No Option or Stock Appreciation Right shall be granted or
Stock Grant made under this Plan on or after the earlier of

                           (1)      the tenth anniversary of the effective date
                                    of this Plan (as determined under Section
                                    4), in which event this Plan otherwise
                                    thereafter shall continue in effect until
                                    all outstanding Options and Stock
                                    Appreciation Rights have been exercised in
                                    full or no longer are exercisable and all
                                    Stock issued under any Stock Grants under
                                    this Plan have been forfeited or have become
                                    non-forfeitable, or

                           (2)      the date on which all of the Stock reserved
                                    under Section 3 has (as a result of the
                                    exercise of Options or Stock Appreciation
                                    Rights granted under this Plan or the
                                    satisfaction of the forfeiture conditions,
                                    if any, on Stock Grants) been issued or no
                                    longer is available for use under this Plan,
                                    in which event this Plan also shall
                                    terminate on such date.

                           SECTION 13. ADJUSTMENT

                  13.1 Capital Structure. The number, kind or class (or any
combination thereof) of shares of Stock reserved under Section 3, the number,
kind or class (or any combination thereof) of shares of Stock subject to Options
or Stock Appreciation Rights granted under this Plan and the Option Price of
such Options and the SAR Value of such Stock Appreciation Rights as well as the
number, kind or class (or any combination thereof) of shares of Stock subject to
Stock Grants granted under this Plan shall be adjusted by the Committee in an
equitable manner

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to reflect any change in the capitalization of Golfsmith, including, but not
limited to, such changes as stock dividends or stock splits.

                  13.2 Mergers. The Committee as part of any corporate
transaction described in Section 424(a) of the Code shall have the right to
adjust (in any manner which the Committee in its discretion deems consistent
with Section 424(a) of the Code) the number, kind or class (or any combination
thereof) of shares of Stock reserved under Section 3. Furthermore, the Committee
as part of any corporate transaction described in Section 424(a) of the Code
shall have the right to adjust (in any manner which the Committee in its
discretion deems consistent with Section 424(a) of the Code) the number, kind or
class (or any combination thereof) of shares of Stock subject to any outstanding
Stock Grants under this Plan and any related grant conditions and forfeiture
conditions, and the number, kind or class (or any combination thereof) of shares
subject to Option and Stock Appreciation Right grants previously made under this
Plan and the related Option Price and SAR Value for each such Option and Stock
Appreciation Right, and, further, shall have the right (in any manner which the
Committee in its discretion deems consistent with Section 424(a) of the Code) to
make any Stock Grants and Option and Stock Appreciation Right grants to effect
the assumption of, or the substitution for, stock grants and option and stock
appreciation right grants previously made by any other corporation to the extent
that such corporate transaction calls for such substitution or assumption of
such stock grants and stock option and stock appreciation right grants.

                  13.3 Fractional Shares. If any adjustment under this Section
13 would create a fractional share of Stock or a right to acquire a fractional
share of Stock, such fractional share shall be disregarded and the number of
shares of Stock reserved under this Plan and the number

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subject to any Options or Stock Appreciation Right grants and Stock Grants shall
be the next lower number of shares of Stock, rounding all fractions downward. An
adjustment made under this Section 13 by the Committee shall be conclusive and
binding on all affected persons.

                           SECTION 14. SALE, MERGER OR CHANGE IN CONTROL

                  If (1) Golfsmith agrees on any date (whether or not such
agreement is subject to the approval of Golfsmith's stockholders) to sell all or
substantially all of its assets or agrees to any merger, consolidation,
reorganization, division or other corporate transaction in which Stock is
converted into another security or into the right to receive securities or
property or if (2) a tender offer is made on any date which could lead to a
Change in Control (other than a tender offer by Golfsmith or an employee benefit
plan established and maintained by Golfsmith), or if (3) there otherwise is a
Change in Control of Golfsmith on any date, then any and all conditions to the
exercise of all outstanding Options and Stock Appreciation Rights on such date
and any and all outstanding issuance and forfeiture conditions on any Stock
Grants on such date automatically shall be deemed satisfied in full on such
date, and the Board shall have the right (to the extent expressly required as
part of such transaction) to cancel such Options, Stock Appreciation Rights and
Stock Grants after providing each Key Employee and Director a reasonable period
(which period shall not be less than 10 business days) to exercise his or her
Options and Stock Appreciation Rights and to take such other action as necessary
or appropriate to receive the Stock subject to any Stock Grants.

SECTION 15. AMENDMENT OR TERMINATION

                  This Plan may be amended by the Board from time to time to the
extent that the

                                      -18-

<PAGE>

Board deems necessary or appropriate; provided, however, (1) no amendment shall
be made absent the approval of the stockholders of Golfsmith to the extent such
approval is required under applicable law and (2) no amendment shall be made to
Section 14 on or after any date described in Section 14(1), Section 14(2) or
Section 14(3) which might adversely affect any rights which otherwise vest on
such date. The Board also may suspend granting Options or Stock Appreciation
Rights or making Stock Grants under this Plan at any time and may terminate this
Plan at any time; provided, however, the Board shall not have the right
unilaterally to modify, amend or cancel any Option or Stock Appreciation Right
granted or Stock Grant made before such suspension or termination unless (x) the
Key Employee or Director consents in writing to such modification, amendment or
cancellation or (y) there is a dissolution or liquidation of Golfsmith or a
transaction described in Section 13 or Section 14.

                           SECTION 16. MISCELLANEOUS

                  16.1 Stockholder Rights. No Key Employee or Director shall
have any rights as a stockholder of Golfsmith as a result of the grant of an
Option or a Stock Appreciation Right pending the actual delivery of the Stock
subject to such Option or Stock Appreciation Right to such Key Employee or
Director. Subject to Section 9.3, a Key Employee's or a Director's rights as a
stockholder in the shares of Stock underlying a Stock Grant which is effective
shall be set forth in the related Stock Grant Certificate. Any stock issued or
purchased pursuant to this Plan is subject to the Stockholders Agreement dated
as of October 15, 2002, as it may be subsequently amended from time to time (the
"STOCKHOLDERS AGREEMENT"), and holders of any such stock, prior to its issuance,
shall become Management Stockholders under the Stockholders Agreement and
executive Management Stockholder Joinder.

                                      -19-

<PAGE>

                  16.2 No Contract of Employment. The grant of an Option or a
Stock Appreciation Right or a Stock Grant to a Key Employee or Director under
this Plan shall not constitute a contract of employment or a right to continue
to serve on the Board and shall not confer on a Key Employee or Director any
rights upon his or her termination of employment or service in addition to those
rights, if any, expressly set forth in the related Option Certificate, Stock
Appreciation Right Certificate, or Stock Grant Certificate.

                  16.3 Withholding. Each Option, Stock Appreciation Right and
Stock Grant shall be made subject to the condition that the Key Employee or
Director consents to whatever action the Committee directs to satisfy the
minimum statutory federal and state tax withholding requirements, if any, which
Golfsmith determines are applicable to the exercise of such Option or Stock
Appreciation Right or to the satisfaction of any forfeiture conditions with
respect to Stock subject to a Stock Grant issued in the name of the Key Employee
or Director. The Committee also shall have the right to provide in an Option
Certificate, Stock Appreciation Right Certificate or a Stock Grant Certificate
that a Key Employee or Director may elect to satisfy such minimum statutory
federal and state tax withholding requirements through a reduction in the cash
or the number of shares of Stock actually transferred to him or to her under
this Plan. No withholding shall be effected under this Plan which exceeds the
minimum statutory federal and state withholding requirements.

                  16.4 Construction. All references to Sections are to sections
of this Plan unless otherwise indicated. This Plan shall be construed under the
laws of the State of New York. Finally, each term set forth in Section 2 shall
have the meaning set forth opposite such term for

                                      -20-

<PAGE>

purposes of this Plan and, for purposes of such definitions, the singular shall
include the plural and the plural shall include the singular.

                  16.5 Other Conditions. Each Option Certificate, Stock
Appreciation Right Certificate or Stock Grant Certificate may require that a Key
Employee or Director (as a condition to the exercise of an Option or a Stock
Appreciation Right or the issuance of Stock subject to a Stock Grant) enter into
any agreement (including the Stockholders Agreement) or make such
representations prepared by Golfsmith, including (without limitation) any
agreement which restricts the transfer of Stock acquired pursuant to the
exercise of an Option or a Stock Appreciation Right or a Stock Grant or provides
for the repurchase of such Stock by Golfsmith.

                  16.6 Rule 16b-3. The Committee shall have the right to amend
any Option, Stock Grant or Stock Appreciation Right to withhold or otherwise
restrict the transfer of any Stock or cash under this Plan to a Key Employee or
Director as the Committee deems appropriate in order to satisfy any condition or
requirement under Rule 16b-3 to the extent Rule 16 of the 1934 Act might be
applicable to such grant or transfer.

                  16.7 Loans. If approved by the Committee, Golfsmith may lend
money to, or guarantee loans made by a third party to, subject to applicable
law, including the Sarbanes-Oxley Act, any Key Employee or Director to finance
all or a part of the exercise of any Option granted under this Plan or the
purchase of any Stock subject to a Stock Grant under this Plan, and the exercise
of an Option or the purchase of any such Stock with the proceeds of any such
loan shall be treated as an exercise or purchase for cash under this Plan.

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                                      -21-

<PAGE>

                  IN WITNESS WHEREOF, Golfsmith International Holdings, Inc. has
caused its duly authorized officer to execute this Plan to evidence its adoption
of this Plan.

                                                 GOLFSMITH INTERNATIONAL
                                                 HOLDINGS, INC.

                                                 By: /s/ Noel Wilens
                                                     ----------------------
                                                     Name:  Noel Wilens
                                                     Title: Vice-President

                                                     Date:

                                      -22-