2008 Senior Management Incentive Program



 EXHIBIT 10.48 
 CALLAWAY GOLF COMPANY 
 2008
SENIOR MANAGEMENT INCENTIVE PROGRAM 
 UNDER
THE 2004 INCENTIVE PLAN 
 1. Purposes of the Program. This Callaway Golf Company
2008 Senior Management Incentive Program (“Program”), established pursuant to Section 12 of the Callaway Golf Company Amended and Restated 2004 Incentive Plan (“Plan”), sets forth a program for
payment of performance awards subject to the provisions of Section 11 of the Plan to those Participants designated for participation and is intended to increase stockholder value and the success of the Company by attracting, retaining and
motivating Participants to perform to the best of their abilities and to achieve the Company’s objectives. The Program’s goals are to be achieved by providing such Participants with performance awards based on the achievement of goals
relating to the performance of the Company or one of its business units or upon the achievement of other objectively determinable performance goals. The Program is intended to permit the payment of awards under the Plan that may qualify as
performance-based compensation under Section 162(m). Capitalized terms not defined herein shall have the meanings provided in the Plan. 
 2. Definitions. 
 (a) “Award” has the meaning set forth in Section 4. 
 (b) “Base Salary” means, as to any Performance Period, Participant’s salary actually earned during the portion of the
Performance Period during which the individual was a Participant (including without limitation any compensation that is deferred by Participant into a Company-sponsored retirement or deferred compensation plan, but excluding any employer matching
contributions by the Company associated with any such retirement or deferred compensation plan and excluding any other Company contributions) and excludes all bonuses, incentives, commissions, expatriate premiums, fringe benefits (including without
limitation car allowances), relocation allowances, stock option grants, equity awards, employee benefits and other similar items of compensation. Such Base Salary shall be before both (i) deductions for taxes or benefits, and
(ii) deferrals of compensation pursuant to Company-sponsored plans. 
 (c) “Corporate Net Income”
means the Company’s consolidated net income as reflected in its audited financial statements for the relevant period less (i) charges for employee long-term incentive compensation, (ii) charges incurred in connection with the
Company’s gross margin initiatives and (iii) other one-time charges/benefits as determined by the Committee. 
 (d)
“Corporate Performance Measure” means the sum of (i) the Corporate Net Income Goal Achievement Percentage multiplied by .75, and (ii) Corporate Sales Goal Achievement Percentage multiplied by .25. 







 (e) “Corporate Sales” means the Company’s consolidated net
sales as reflected in the Company’s audited financial statements for the relevant period.
 (f) “Covered
Employee” means a Participant who falls within the definition of “covered employee” under Section 162(m). 
 (g) “Eligible Position” means one of the following (i) an officer of the Company, including its Chief Executive Officer, (ii) the most senior non-officer employees (employees with job classifications
of E10 or above at the Company or Callaway Golf Sales Company, (iii) the officers of each subsidiary of the Company based in the U.S., (iv) the most senior non-officer employees at Callaway Golf Ball Operations
(“CGBO”) (with a pay grade of 13 or 14 or a pay grade of 12 and the title of Director), (v) the Vice Presidents of Callaway Golf Interactive (“CGI”), (vi) the most senior officer at each of
the Company’s foreign subsidiaries located in Europe, Japan, Canada, Korea, Australia and China, and (vii) the Director-Level employees of the Company’s foreign subsidiaries listed in (vi) above (not to exceed 5% of the non-union
population) as are recommended for participation by the most senior officer at such foreign subsidiary. 
 (h) “Goal
Achievement Percentage” means the portion of the Target Goals applicable to a Participant that are actually achieved, as provided in Section 5. 
 (i) ”Financial Goal Achievement Percentage” means, with respect to a Participant, the aggregate Goal Achievement Percentages for each of the Corporate Goals and for any Subsidiary/Group
Goals applicable to such Participant, the Subsidiary/Group Deemed Achievement Percentage, with each multiplied by the weighting associated therewith, as provided in Section 5. 
 (j) “Overall Achievement Percentage” means, with respect to a Participant, the aggregate Financial Goal Achievement
Percentage together with the MBO Goal Achievement Percentage, with each multiplied by the weighting specified in the Payout Formula provided in Section 6(c). 
 (k) “Participant,” for the 2008 Performance Period, means a regular full or part-time employee who (i) has been hired, promoted or transferred into an Eligible Position
before October 1, 2008, and (ii) is an active employee or on an approved leave of absence at the Payout Date. 
 (l)
“Payout Date” means the date on which Awards are paid pursuant to Section 6(f). 
 (m)
“Payout Determination Date” means the date upon which the Committee or the Chief Executive Officer, as applicable, determines the amounts payable pursuant to an Award, in accordance with Section 6. 
 (n) “Performance-Based Compensation” means compensation that is intended to qualify as “performance-based
compensation” within the meaning of Section 162(m). 







 (o) “Performance Goals” means the goals, based on Performance Criteria
that are established by the Committee or, for Participants who are not Covered Employees, by the Chief Executive Officer, in each case as provided for in Section 11.2 of the Plan. 
 (p) “Performance Period” means any January 1 through December 31. 
 (q) “Section 162(m)” means Section 162(m) of the Internal Revenue Code of 1986, as amended, or any successor to
Section 162(m), as that Section may be interpreted from time to time by the Internal Revenue Service, whether by regulation, notice or otherwise. 
 (r) “Subsidiary/Group Deemed Achievement Percentage” means the achievement percentage that is deemed to have been achieved for purposes of this Program, as provided in Section 5(c).

 (s) “Target Determination Cutoff Date” means the latest possible date that the Committee may set the
Performance Goals, Target Awards and maximum payout that will not jeopardize an Award’s qualification as Performance-Based Compensation. For the 2008 Performance Period, this date will be March 30, 2008. 
 3. Program Administration. 
 (a)
The Committee shall be responsible for the general administration and interpretation of the Program and for carrying out its provisions. Subject to the requirements for qualifying compensation as Performance-Based Compensation, the Committee may
delegate specific administrative tasks to Company employees or others as appropriate for proper administration of the Program. Subject to the limitations on Committee discretion imposed under Section 162(m), the Committee shall have such powers
as may be necessary to discharge its duties hereunder, including, but not by way of limitation, the following powers and duties, but subject to the terms of the Program: 
 (i) discretionary authority to construe and interpret the terms of the Program, and to determine eligibility, Awards and the amount, manner and time of payment of any Awards hereunder; 
 (ii) to prescribe forms and procedures for purposes of Program participation and distribution of Awards; and 
 (iii) to adopt rules, regulations and bylaws, to formally amend the Program and to take such actions as it deems necessary or desirable for the
proper administration of the Program. 
 (b) Any rule or decision by the Committee that is not inconsistent with the provisions of the
Program shall be conclusive and binding on all persons, and shall be given the maximum deference permitted by law. 
 4. Award
Determinations. Each Participant under the plan shall be granted an award of a contingent right to a future cash payment (an “Award”), the payment of which is contingent upon the Company’s financial performance as well as
the Participant’s individual 








 
performance objectives (“MBOs”). For each Participant, the Company has established a “Target Award” expressed as a percentage of a
Participant’s Base Salary. The Target Award represents the amount a Participant could earn if the Company achieves its target financial performance goals and the Participant achieves 100% of the Participant’s MBOs. Performance above or
below the targeted goals can result in an award above or below the Target Award. The “Maximum Award” a Participant can earn is equal to 150% of the Target Award and achievement of the minimum performance criteria for the payment of
an Award results in a “Threshold Award” equal to 50% of the Target Award. The Threshold Award, Target Award and Maximum Award for each Participant is set forth below by position: 
  

									
	 Level
	    	 Position
	  	 Threshold
 Award
	  	 Target
 Award
	  	 Maximum
 Award

	1.	    	CEO (Chief Executive Officer - Callaway Golf)	  		  		  	
					
	2.	    	Sr. Exec. VP (Vice President) - Callaway Golf & Sr. VP reporting to the CEO – Callaway Golf	  		  		  	
					
	3.	    	Sr. VP – Callaway Golf and CGBO, Most senior officer of Europe & Japan, (based on size of business)	  		  		  	
					
	4.	    	VP – Callaway Golf, CGI & CGBO; most senior officer of Canada, Korea, Australia & China	  		  		  	
					
	5.	    	All other senior level participants	  		  		  	

 5. Performance Goal Determinations. Awards under this Program are contingent upon the
achievement of the Company’s threshold financial performance goals and each Participant’s Award is based on the overall achievement of these financial performance goals as well as the Participant’s MBOs. Depending on the
Participant’s position, the financial performance goals will be based either (i) solely upon the Company’s performance or (ii) upon the Company’s performance and the performance of the Participant’s subsidiary or group.
The Company will establish for the 2008 Performance Period the financial performance goals for this Program as well as each Participant’s MBOs prior to the Target Determination Cutoff Date as more fully set forth below. 
 (a) Minimum Corporate Net Income. A minimum level of Corporate Net Income of $         million is
required before any Award will be paid under this Program to any Participant regardless of any other performance measure. 
 (b) Corporate
Goals. All Participants’ Awards will be based, at least in part, on Performance Goals relating to Company Performance based on Corporate Net Income and Corporate Sales (“Corporate Goals”). For the 2008 Performance
Period, the Corporate Goals are as follows (expressed in millions): 
  

							
	 	  	THRESHOLD
GOAL	  	TARGET
GOAL	  	MAXIMUM
GOAL
	 Corporate Net Income $
	  		  		  	
	 Corporate Sales $
	  		  		  	








 For purposes of calculating the Goal Achievement Percentage with respect to the Corporate Goals, Company performance
below the “Threshold Goal” or above the “Maximum Goal” in the table above will be disregarded. The Committee shall determine the Goal Achievement Percentage by reference to the “Target
Goal.” The Goal Achievement Percentage at the Threshold Goal is 50%; the Goal Achievement Percentage at the Target Goal is 100%; and the Goal Achievement Percentage at the Maximum Goal is 150%. Performance between the Threshold Goal and
the Target Goal shall be interpolated on a straight-line basis; performance between the Target Goal and the Maximum Goal shall also be interpolated on a straight-line basis. 
 (c) Subsidiary/Group Goals. Certain Participants’ Awards will be based on Corporate Goals and Performance Goals based on the financial
performance of a Participant’s subsidiary or group (“Subsidiary/Group Goals”), established by the Committee or, for Participants who are not Covered Employees, by the Chief Executive Officer, in each case before the
Target Determination Cutoff Date. In establishing the Subsidiary/Group Goals, the Committee shall set a Target Goal, and may set a Threshold Goal and a Maximum Goal. For purposes of determining the Goal Achievement Percentage with respect to the
Subsidiary/Group Goals, the actual achievement percentage for such goals shall be adjusted based upon the Corporate Performance Measure (the “Subsidiary/Group Deemed Achievement Percentage”). For Participants with Subsidiary/Group Goals,
the Participant’s Subsidiary/Group Deemed Achievement Percentage is determined by multiplying the applicable Goal Achievement Percentage relating to the Subsidiary/Group Goals by the Corporate Performance Measure (as illustrated in the table
below); provided, however, that (i) the Subsidiary/Group Deemed Achievement Percentage shall be 0% unless at least 75% of the Subsidiary/Group Performance Goals have been achieved and (ii) the Subsidiary/Group Deemed Achievement
Percentage shall not be less than 75% if (A) the Subsidiary/Group Goal Achievement Percentage is at least 75% and (B) the Corporate Performance Measure is at least 50%. The maximum payment relating to the Subsidiary/Group Goal is 150%.
This formula is expressed in the following chart: 
 SUBSIDIARY/GROUP DEEMED
ACHIEVEMENT PERCENTAGE 
  

																	
		  		  	Corporate Performance
Measure
	 	  	 	  	49%	  	50%	  	75%	  	90%	  	100%	  	125%	  	150%
	 Sub/Group
 Performance
	  	49%	  	0%	  	0%	  	0%	  	0%	  	0%	  	0%	  	0%
	  	50%	  	0%	  	0%	  	0%	  	0%	  	0%	  	0%	  	0%
	  	75%	  	0%	  	75.00%	  	75.00%	  	75.00%	  	75.00%	  	93.75%	  	112.50%
	  	90%	  	0%	  	75.00%	  	75.00%	  	81.00%	  	90.00%	  	112.50%	  	135.00%
	  	100%	  	0%	  	75.00%	  	75.00%	  	90.00%	  	100.00%	  	125.00%	  	150.00%
	  	125%	  	0%	  	75.00%	  	93.75%	  	112.50%	  	125.00%	  	150.00%	  	150.00%
	  	150%	  	0%	  	75.00%	  	112.50%	  	135.00%	  	150.00%	  	150.00%	  	150.00%








 (d) Weighting. For Participants without Subsidiary/Group Goals, Corporate Net Income shall be
weighted 3x Corporate Sales. For Participants with Subsidiary/Group Goals, Corporate Net Income will be weighted 3x Corporate Sales and the Subsidiary/Group Goals will be weighted 2x Corporate Sales. 
 (e) MBOs. The Committee shall approve the MBOs for each Participant who is a Covered Employee. The Committee or the Chief Executive Officer shall
approve the MBOs for all other Participants who are not Covered Employees. 
 6. Payout Determination. 
 (a) Payout Determination and Certification. On the Payout Determination Date, (i) the Committee shall certify in writing (which may be by
approval of the minutes in which the certification was made) the Financial Goal Achievement Percentage and the MBO Goal Achievement Percentage for each Covered Employee and (ii) the Committee or the Chief Executive Officer shall approve the
Financial Goal Achievement Percentage and the MBO Goal Achievement Percentage for each other Participant who is not a Covered Employee. 
 (b) Maximum Payout. Subject to the maximum payout specified by Section 12 of the Plan, for the 2008 Performance Period, if the Financial Goal Achievement Percentage is not greater than 100%, then the maximum amount of a
Participant’s Award to be paid under this Program shall be the product of (i) the Participant’s Financial Goal Achievement Percentage multiplied by (ii) the Participant’s Target Award, multiplied by 1.25. If the Financial
Goal Achievement Percentage applicable to a Participant is greater than 100%, then the maximum amount of a Participant’s Award to be paid under this Program shall be the product of (x) the Participant’s Financial Goal Achievement
Percentage multiplied by (y) the Participant’s Target Award. 
 (c) Payout Formula. Notwithstanding any contrary provision
of the Program, the Committee shall, as appropriate, reduce the maximum amount payable to any Participant under Section 6(b) above under the following formula (the “Payout Formula”). For Participants without
Subsidiary/Group Goals, the Corporate Goals shall constitute 75% of the Award (with Corporate Net Income accounting for 56.25% of the Award and the Corporate Sales accounting for 18.75% of the Award) and the Participant’s satisfaction of his or
her MBOs shall constitute 25% of the Award (based on the Committee’s or Chief Executive Officer’s evaluation of a Participant’s satisfaction of his or her MBOs). For Participants with Subsidiary/Group Goals, the Corporate Goals shall
constitute 50% of the Award (with Corporate Net Income accounting for 37.5% of the Award and Corporate Sales accounting for 12.5% of the Award), the Subsidiary/Group Goals (based on the Subsidiary/Group Deemed Achievement Percentage, as provided in
Section 5(c)) shall constitute 25% of the Award and the Participant’s satisfaction of his or her MBOs shall constitute 25% of the Award. Based upon this Payout Formula, the Financial Goal Achievement Percentage and the MBO Goal Achievement
Percentage, an Overall Achievement Percentage shall be determined for each Participant. The amount payable to each participant under the Program shall be equal to the product of the (i) Overall Achievement Percentage, (ii) multiplied by
the Participant’s Target Award, and (iii) multiplied by the Participant’s Base Salary. Notwithstanding the foregoing, a Participant’s Award may be reduced or eliminated in its entirety based on the Committee’s (or, in the
case of a Participant who is not a Covered Employee, the Chief Executive Officer’s) evaluation of the Participant’s overall job performance. 







 (d) Right to Receive Payment. Each Award under the Program shall be paid solely from the general
assets of the Company. Nothing in this Program shall be construed to create a trust or to establish or evidence any Participant’s claim of any right to payment of an Award other than as an unsecured general creditor with respect to any payment
to which he or she may be entitled. At no time before the actual distribution of funds to Participants under the Program shall any Participant accrue any vested interest or right whatsoever under the Program except as otherwise stated in this
Program. 
 (e) Form of Distributions. The Company shall distribute all Awards to the Participant in cash, unless the Committee
determines to substitute shares of the Company’s Common Stock for the cash payment in accordance with Section 12 of the Plan. 
 (f) Timing of Distributions. Subject to Section 6(f) below, the Company shall
distribute amounts payable to Participants as soon as is practicable following the determination and written certification of the Award for a Performance Period, but in no event later than 2  1/
2 months after the end of the calendar year that includes the applicable Payout Determination Date. 
 (g) Deferral. The Committee may defer payment of Awards, or any portion thereof, to Participants as the Committee, in its discretion, determines
to be necessary or desirable to preserve the deductibility of such amounts under Section 162(m). In addition, the Committee, in its sole discretion, may permit a Participant to defer receipt of the payment of Awards that would otherwise be
delivered to a Participant under the Program. Any such deferral elections shall be subject to such rules and procedures as shall be determined by the Committee in its sole discretion, which shall comply with the requirements of Section 409A of
the Code and the regulations and other guidance thereunder. 
 (h) Withholding. In accordance with Section 13 of the Plan, the
Company may withhold from the Awards payable to Participants under this Program amounts necessary to satisfy any federal, state, local or foreign tax withholding obligation relating to such payments. 
 7. Term of Program. The Program shall become effective on January 1, 2008 and shall apply to the 2008 Program year. 
 8. Amendment and Termination of the Program. The Committee may amend, modify, suspend or terminate the Program, in whole or in part, at any time,
including adopting amendments deemed necessary or desirable to correct any defect or to supply omitted data or to reconcile any inconsistency in the Program or in any Award granted hereunder; provided, however, that no amendment, alteration,
suspension or discontinuation shall be made which would (i) increase the amount of compensation payable pursuant to such Award or (ii) cause compensation that is, or may become, payable hereunder to fail to qualify as Performance-Based
Compensation. To the extent necessary or advisable under applicable law, including Section 162(m), Program amendments shall be subject to stockholder approval. 
 9. Governing Plan Document. The Program is subject to all the provisions of the Plan and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated
and adopted by the Committee, the Board or the Company pursuant to the Plan. In the event of any conflict between the provisions of this Program and those of the Plan, the provisions of the Plan shall control.