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                                                                   EXHIBIT 10.55

                              CALLAWAY GOLF COMPANY
                  CHIEF EXECUTIVE OFFICER EMPLOYMENT AGREEMENT


         This Chief Executive Officer Employment Agreement ("Agreement") is
entered into as of July 29 , 2005, by and between CALLAWAY GOLF COMPANY, a
Delaware corporation, (the "Company") and GEORGE FELLOWS ("Employee").

         1. TERM. The Company hereby employs Employee and Employee hereby
accepts employment pursuant to the terms and provisions of this Agreement for
the period commencing August 1, 2005, and ending December 31, 2008, unless this
Agreement is earlier terminated as hereinafter provided. Upon expiration of this
Agreement Employee's status shall be one of at-will employment. Should the
Company fail by August 31, 2008 to offer Employee a new employment agreement on
substantially the same economic terms and with a term running until at least
December 31, 2010, then Employee shall have the right for thirty (30) days
(i.e., until September 30, 2008) to treat such failure to act on the Company's
part as grounds for termination of this Agreement by Employee for good reason
pursuant to Section 7(c). At all times during the term of this Agreement,
Employee shall be considered an employee of the Company within the meaning of
all federal, state and local laws and regulations, including, but not limited
to, laws and regulations governing unemployment insurance, workers'
compensation, industrial accident, labor and taxes.

         2. TITLES; POSITIONS.

            (a) Employee shall serve as President and Chief Executive Officer of
the Company. Employee's duties shall be the usual and customary duties of the
offices in which Employee serves. Employee shall report solely to the Board of
Directors.

            (b) It is agreed that Employee shall be appointed immediately upon
the start of his employment to fill a vacancy on the Board of Directors, and
that Employee shall be nominated for election by the shareholders as a Director
at the first annual meeting of shareholders held thereafter. If elected by the
shareholders at that meeting, and so long as Employee continues to meet the
standards required of a Director, Employee shall continue to be nominated for
election as a Director at each subsequent annual meeting of shareholders during
the term of Employee's employment with the Company.

         3. SERVICES TO BE EXCLUSIVE. During the term hereof, Employee agrees to
devote Employee's full productive time and best efforts to the performance of
Employee's duties hereunder pursuant to the supervision and direction of the
Company's Board of Directors. Employee further agrees, as a condition to the
performance by the Company of each and all of its obligations hereunder, that so
long as Employee is employed by the Company, Employee will not directly or
indirectly render services of any nature to, otherwise become employed by, or
otherwise participate or engage in any other business without the Company's
prior written consent. Nothing herein contained shall be deemed to preclude
Employee from having outside personal investments, involvement with appropriate
community and charitable activities, continuing to serve on the two boards of
directors previously disclosed as of the date Employment commences, or from
devoting a reasonable amount of time to such matters, provided that this shall
in no manner interfere with or derogate from Employee's work for the Company.


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         4. COMPENSATION.

            (a) Base Salary. The Company agrees to pay Employee a base salary at
the rate of $850,000 per year (prorated for any partial years of employment
including 2005), payable in equal installments on regularly scheduled Company
pay dates as they may be adjusted from time to time.

            (b) Annual Bonus. The Company shall provide Employee an opportunity
to earn an annual bonus based upon participation in the Company's applicable
bonus plan as it may or may not exist from time to time. Employee acknowledges
that currently all bonuses are discretionary. However, and notwithstanding the
foregoing, (i) it is agreed that during the term of this Agreement Employee
shall have a target annual bonus opportunity equal to 100% of Employee's annual
Base Salary paid in the pertinent year, based upon the achievement of realistic
performance goals determined by the Board of Directors and/or its compensation
committee in consultation with Employee, and (ii) Employee is guaranteed an
annual bonus for services rendered in 2005 of no less than 65% of the base
salary paid to Employee in 2005, such bonus to be paid at the same time as any
bonus earned in 2005 paid to any other officer of the Company but no later than
March 30, 2006.

            (c) Long Term Incentive.

                (i) Effective upon the date Employee commences employment with
the Company pursuant to this Agreement, the Company shall award to Employee long
term incentive compensation in the form of 160,000 restricted shares of the
Company's Common Stock and options to purchase up to 400,000 shares of the
Company's Common Stock at the market price of such stock on the date of grant.
The restricted stock shall vest on December 31, 2008. One-third of the options
shall vest on each anniversary of the grant date. These grants of restricted
stock and options shall be governed by the terms and conditions of written
equity award agreements, which shall be separately executed concurrently with
this Agreement.

                (ii) Commencing January 1, 2007, the Company shall provide
Employee an opportunity to participate in the Company's applicable long term
incentive plan as it may or may not exist from time to time.

         5. EXPENSES AND BENEFITS.

            (a) Reasonable and Necessary Expenses. In addition to the
compensation provided for in Section 4, the Company shall reimburse Employee for
all reasonable, customary and necessary expenses incurred in the performance of
Employee's duties hereunder. Employee shall first account for such expenses in
accordance with the policies and procedures set by the Company from time to time
for reimbursement of such expenses. The amount, nature, and extent of such
expenses shall always be subject to the control, supervision and direction of
the Company.

            (b) Paid Time Off. Employee shall accrue paid time off in accordance
with the terms and conditions of the Company's Paid Time Off Program, as stated
in the Company's Employee Handbook, and as may be modified from time to time.
Subject to the maximum accrual permitted under the Paid Time Off Program,
Employee shall accrue paid time off at the rate of thirty (30) days per year.
The time off may be taken any time during the year subject to prior approval by
the Company. The Company reserves the right to pay Employee for unused, accrued
benefits in lieu of providing time off.

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


                                        2                         George Fellows

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

                (ii) receive, if Employee is insurable under usual underwriting
standards, term life insurance coverage on Employee's life, payable to whomever
Employee directs, in an amount equal to $3,000,000 in coverage, provided that
Employee completes the required health statement and application and that
Employee's physical condition does not prevent Employee from qualifying for such
insurance coverage under reasonable terms and conditions; and

            (d) Retirement. Employee shall be permitted to participate in the
Company's 401(k) retirement investment plan, employee stock purchase plan and
executive deferred compensation plan pursuant to the terms of such plans, as the
same may be modified from time to time, to the extent such plans are offered to
other officers of the Company from time to time.

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

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

            (g) Temporary Living Expenses. For a reasonable period of time
commencing with the date of employment and ending no later than July 31, 2006,
the Company shall provide the following benefits. To the extent such benefits
are taxable as compensation to Employee, the Company shall provide a gross up
payment equal to all such taxes plus any taxes payable in connection with the
gross up payment.

                (i) The Company shall provide for Employee's use a mutually
agreed upon, furnished apartment near the Company's headquarters in Carlsbad,
California.

                (ii) The Company shall provide for Employee's use a mutually
agreed upon automobile for use while in California.

                (iii) The Company shall reimburse Employee for the actual and
reasonable cost of round trip first class air travel for Employee and/or
Employee's spouse between San Diego and New York.

            (h) Relocation. Should Employee choose to relocate his principal
residence to San Diego County, California, to a location proximate the Company's
headquarters, then Employee and the Company shall agree upon a reasonable
relocation package consistent with the Company's practices and industry norms.

         6. TAXES. Employee acknowledges that Employee is responsible for all
taxes related to Employee's compensation except for those taxes for which the
Company is obligated to pay under applicable law or regulation, or as provided
in Sections 5(g) and 9(c) of this Agreement. Employee agrees that the Company
may withhold from Employee's compensation any amounts that the Company is
required to withhold under applicable law or regulation.



                                       3                          George Fellows

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         7. TERMINATION.

            (a) Termination by the Company Without Substantial Cause. Employee's
employment under this Agreement may be terminated by the Company at any time
without substantial cause. In the event of a termination by the Company without
substantial cause, Employee shall be entitled to receive (i) any compensation
(including Paid Time Off) accrued and unpaid as of the date of termination; (ii)
a lump sum amount equal to Employee's target annual bonus opportunity pro rated
for service through the date of termination; and (iii) the immediate vesting of
all unvested stock-based long term incentive compensation, whether in the form
of options, restricted stock, performance shares, stock appreciation rights or
otherwise constituted. In addition to the foregoing and subject to the
provisions thereof, Employee shall be eligible to receive Special Severance as
described in subsection 7(g) and Incentive Payments as described in subsection
7(h).

            (b) Termination by the Company for Substantial Cause or by Employee
Without Good Reason. Employee's employment under this Agreement may be
terminated immediately and at any time by the Company for substantial cause or
by Employee without good reason. In the event of such a termination, Employee
shall be entitled to receive (i) any compensation (including Paid Time Off)
accrued and unpaid as of the date of termination; and (ii) no other severance.
"Substantial cause" shall mean for purposes of this subsection Employee's (i)
continued failure to substantially perform Employee's duties after a written
demand for substantial performance has been delivered to Employee by the Board
of Directors; (ii) material breach of this Agreement that is not cured to the
reasonable satisfaction of the Board of Directors within fifteen (15) days after
delivery of written notice describing the breach; (iii) misconduct, including
but not limited to, use or possession of illegal drugs during work and/or any
other action that is damaging or detrimental in a significant manner to the
Company; (iv) conviction of, or plea of guilty or nolo contendere to, a felony;
or (v) failure to cooperate with, or any attempt to obstruct or improperly
influence, any investigation authorized by the Board of Directors or any
governmental or regulatory agency entity.

            (c) Termination by Employee for Good Reason. Employee's employment
under this Agreement may be terminated immediately by Employee for good reason
at any time. In the event of a termination by Employee for good reason, Employee
shall be entitled to receive (i) any compensation (including Paid Time Off)
accrued and unpaid as of the date of termination; (ii) a lump sum amount equal
to Employee's target annual bonus opportunity pro rated for service through the
date of termination; and (iii) the immediate vesting of all unvested stock-based
long term incentive compensation, whether in the form of options, restricted
stock, performance shares, stock appreciation rights or otherwise constituted.
In addition to the foregoing and subject to the provisions thereof, Employee
shall be eligible to receive Special Severance as described in subsection 7(g)
and Incentive Payments as described in subsection 7(h). "Good Reason" shall mean
for purposes of this subsection a material breach of this Agreement by the
Company.

            (d) Termination Due to Permanent Disability. Subject to all
applicable laws, Employee's employment under this Agreement may be terminated
immediately by the Company in the event Employee becomes permanently disabled.
Permanent disability shall be defined as Employee's failure to perform or being
unable to perform all or substantially all of Employee's duties under this
Agreement for a continuous period of more than six (6) months on account of any
physical or mental disability, either as mutually agreed to by the parties or as
reflected in the opinions of three qualified physicians, one of which has been
selected by the Company, one of which has been selected by Employee, and one of
which has been selected by the two other physicians jointly. In the event of a
termination by the Company due to Employee's permanent disability, Employee
shall be entitled to (i) any compensation (including Paid Time Off) accrued and
unpaid as of the date of termination; (ii) severance payments equal to
Employee's then current base salary at the same rate and on the same schedule as
in effect at the time of termination for a period of six (6) months from the
date of termination; (iii) a lump sum amount equal to Employee's target annual
bonus opportunity


                                       4                          George Fellows


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pro rated for service through the date of termination; (iv) the immediate
vesting of all unvested stock-based long term incentive compensation, whether in
the form of options, restricted stock, performance shares, stock appreciation
rights or otherwise constituted, held by Employee that would have vested had
Employee remained employed pursuant to this Agreement for a period of six (6)
months from the date of such termination; (v) the payment of premiums owed for
COBRA insurance benefits for a period of twelve (12) months from the date of
termination; and (vi) no other severance. The Company shall be entitled to take
as an offset against any amounts due pursuant to subsections (i) and (ii) above,
any amounts received by Employee pursuant to disability or other insurance, or
similar sources, provided by the Company.

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

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

            (g) Special Severance.

                (i) Amount in the Event of a Termination Pursuant to Sections
7(a) or 7(c). In the event of a termination pursuant to Sections 7(a) or 7(c) of
this Agreement, Special Severance shall consist of a total amount equal to 1.0
times the sum of Employee's then current annual base salary and annual target
bonus, payable in equal installments on the same pay schedule as in effect at
the time of termination over a period of twenty-four (24) months from the date
of termination; the payment of premiums owed for COBRA and/or CalCOBRA insurance
benefits for a period of twenty-four (24) months from the date of termination;
and no other severance.

                (ii) Amount in the Event of a Termination Pursuant to Section 9.
In the event of a termination pursuant to Section 9 of this Agreement, then
Special Severance shall consist of a total amount equal to 1.5 times the sum of
Employee's then current annual base salary and annual target bonus, payable in
equal installments on the same pay schedule as in effect at the time of
termination over a period of thirty-six (36) months from the date of
termination; the payment of premiums owed for COBRA and/or CalCOBRA insurance
benefits for a period of thirty-six (36) months from the date of termination;
and no other severance.

                (iii) Amount in the Event of a Subsequent Change in Control.
Notwithstanding any other provisions to the contrary, if a Change in Control (as
defined in Exhibit A) occurs within six (6) months following a termination of
Employee's employment under this Agreement pursuant to Sections 7(a) or 7(c),
and that Change in Control is the direct result of discussions or undertakings
that were ongoing as of the date of such termination, then the amount of Special
Severance shall be calculated in accordance with Section 7(g)(ii).

                (iv) Conditions on Receiving Special Severance. Notwithstanding
anything else to the contrary, it is expressly understood that any obligation of
the Company to pay Special Severance pursuant to this Agreement shall be subject
to Employee's continued compliance with the terms and conditions of Sections 8
and 11; Employee's continued forbearance from directly, indirectly or in any
other way, disparaging the Company, its officers or employees, vendors,
customers, products or activities, or otherwise interfering with the Company's
press, public and media relations; and the execution by Employee, prior to
receiving any Special Severance, of a release in the form attached hereto as
Exhibit B.


                                       5                          George Fellows

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            (h) Incentive Payments.

                (i) Amount in the Event of a Termination Pursuant to Sections
7(a) or 7(c). In the event of a termination pursuant to Sections 7(a) or 7(c) of
this Agreement, Employee shall be offered the opportunity to receive Incentive
Payments in a total amount equal to 1.0 times the sum of Employee's then current
annual base salary and target bonus, payable in equal installments on the same
pay schedule in effect at the time of termination over a period of twenty-four
(24) months from the date of termination.

                (ii) Amount in the Event of a Termination Pursuant to Section 9.
In the event of a termination pursuant to Section 9 of this Agreement, Employee
shall be offered the opportunity to receive Incentive Payments in a total amount
equal to 1.5 times the sum of Employee's then current annual base salary and
annual target bonus, payable in equal installments on the same pay schedule as
in effect at the time of termination over a period of thirty-six (36) months
from the date of termination.

                (iii) Amount in the Event of a Subsequent Change in Control.
Notwithstanding any other provisions to the contrary, if a Change in Control (as
defined in Exhibit A) occurs within six (6) months following a termination of
Employee's employment under this Agreement pursuant to Sections 7(a) or 7(c),
and that Change in Control is the direct result of discussions or undertakings
that were ongoing as of the date of such termination, then the amount of
available Incentive Payments shall be calculated in accordance with Section
7(h)(ii).

                (iv) Terms and Conditions for Incentive Payments. Employee may
receive Incentive Payments so long as Employee chooses not to engage (whether as
an owner, employee, agent, consultant, or in any other capacity) in any business
or venture that competes with the business of the Company or any of its
affiliates. If Employee chooses to engage in such activities, then the Company
shall have no obligation to make further Incentive Payments commencing upon the
date which Employee chooses to do so. For purposes of this Section, Employee
shall not be deemed to "own" an entity if Employee holds less than 2% beneficial
ownership interests of a firm, corporation or venture.

                (v) Sole Consideration. Employee and the Company agree and
acknowledge that the sole and exclusive consideration for the Incentive Payments
is Employee's forbearance as described in this subsection 7(h). In the event
that this subsection 7(h) is deemed unenforceable or invalid for any reason,
then the Company will have no obligation to make Incentive Payments for the
period of time during which it has been deemed unenforceable or invalid. The
obligations and duties of this subsection 7(h) shall be separate and distinct
from the other obligations and duties set forth in this Agreement, and any
finding of invalidity or unenforceability of this subsection 7(h) shall have no
effect upon the validity or invalidity of the other provisions of this
Agreement.

            (i) Treatment of Special Severance and Incentive Payments; Catch-Up
Payments. Any Special Severance and Incentive Payments shall be subject to usual
and customary employee payroll practices and all applicable withholding
requirements. If required pursuant to Section 409A of the Internal Revenue Code
of 1986, or any regulations or other binding guidance promulgated thereunder, to
delay the payment of any Special Severance or Incentive Payments for six months
following termination, then on the day following the end of such six-month
period the Company shall make a Catch-Up Payment equal to the total amount of
such payments that would have been made during the six-month period but for the
application of Section 409A plus interest calculated at the one-year Treasury
Bill rate.


                                       6                          George Fellows

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            (j) Other. Except for the amounts specifically provided pursuant to
this Section 7, Employee shall not be entitled to any further compensation,
bonus, damages, restitution, relocation benefits, or other severance benefits
upon termination of employment. The amounts payable to Employee pursuant to
these Sections shall not be treated as damages, but as compensation to which
Employee may be entitled by reason of termination of employment under the
applicable circumstances. The Company shall not be entitled to set off against
the amounts payable to Employee pursuant to this Section 7 any amounts earned by
Employee in other employment after termination of Employee's employment with the
Company pursuant to this Agreement, or any amounts which might have been earned
by Employee in other employment had Employee sought such other employment. The
provisions of this Section 7 shall not limit Employee's rights under or pursuant
to any other agreement or understanding with the Company regarding any pension,
profit sharing, insurance or other employee benefit plan of the Company to which
Employee is entitled pursuant to the terms of such plan.

         8. OTHER EMPLOYEE DUTIES AND OBLIGATIONS.

            In addition to any other duties and obligations set forth in this
Agreement, Employee shall be obligated as follows:

            (a) Compliance with Company Policy. Employee shall be required to
comply with all policies and procedures of the Company as such shall be adopted,
modified or otherwise established by the Company from time to time, including
but not limited to the Company' Code of Conduct.

            (b) Trade Secrets and Confidential Information.

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

                (ii) While employed by the Company, Employee will have access to
and become familiar with Trade Secrets and Confidential Information. Employee
acknowledges that Trade Secrets and Confidential Information are owned and shall
continue to be owned solely by the Company and/or its affiliates. Employee
agrees that Employee will not, at any time, whether during or subsequent to
Employee's employment by the Company and/or its affiliates, use or disclose
Trade Secrets and Confidential Information for any competitive purpose or
divulge the same to any person other than the Company or persons with respect to
whom the Company has given its written consent, unless Employee is compelled to
make disclosure by governmental process. In the event Employee believes that
Employee is legally required to disclose any Trade Secrets or Confidential
Information, Employee shall give reasonable notice to the Company prior to
disclosing such information and shall assist the Company, at the Company's sole
cost and expense, in taking such legally permissible steps as are reasonable and
necessary to protect the Trade Secrets or Confidential Information, including,
but not limited to execution by the receiving party of a non-disclosure
agreement in a form acceptable to the Company.


                                       7                          George Fellows

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                (iii) Employee agrees to execute such secrecy, non-disclosure,
patent, trademark, copyright and other proprietary rights agreements, if any, as
the Company may from time to time reasonably require.

                (iv) The provisions of this subsection 8(b) shall survive the
termination or expiration of this Agreement, and shall be binding upon Employee
in perpetuity.

            (c) Assignment of Rights.

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

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

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

                (iv) Pursuant to California Labor Code Section 2870, the
obligation to assign as provided in this Agreement does not apply to any Design,
Invention or Innovation to the extent such obligation would conflict with any
state or federal law. The obligation to assign as provided in this Agreement
does not apply to any Design, Invention or Innovation that Employee developed
entirely on Employee's own time without using the Company's equipment, supplies,
facilities or Trade Secrets and Confidential Information except those Designs,
Inventions or Innovations that either relate at the time of conception or
reduction to practice to the Company's and/or its affiliates' business, or
actual or demonstrably anticipated research of the Company and/or its
affiliates; or result from any work performed by Employee for the Company and/or
its affiliates.

                (v) Employee agrees that any Design, Invention and/or Innovation
which is required under the provisions of this Agreement to be assigned to the
Company shall be the sole and exclusive property of the Company. Upon the
Company's request, at no expense to Employee, Employee shall execute any and all
proper applications for patents, copyrights and/or trademarks, assignments to
the Company, and all other applicable documents, and will give testimony when
and where requested to perfect the title and/or patents (both within and without
the United States) in all Designs, Inventions and Innovations belonging to the
Company.

                (vi) The provisions of this subsection 8(c) shall survive the
termination or expiration of this Agreement, and shall be binding upon Employee
in perpetuity.

                                       8                          George Fellows

<PAGE>

            (d) Competing Business. To the fullest extent permitted by law,
Employee agrees that, while employed by the Company, Employee will not, directly
or indirectly (whether as employee, agent, consultant, holder of a beneficial
interest, creditor, or in any other capacity), engage in any business or venture
which conflicts with Employee's duties under this Agreement, including services
that are directly or indirectly in competition with the business of the Company
or any of its affiliates, or have any interest in any person, firm, corporation,
or venture which engages directly or indirectly in competition with the business
of the Company or any of its affiliates. For purposes of this section, the
ownership of interests in a broadly based mutual fund shall not constitute
ownership of the stocks held by the fund, and Employee shall not be deemed to
"own" an entity if Employee holds less than 2% beneficial ownership interests of
a firm, corporation or venture.

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

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

            (g) Conflict of Interest. While employed by the Company, Employee
shall comply with all Company policies regarding actual or apparent conflicts of
interest with respect to Employee's duties and obligations to the Company.

            (h) Non-Disparagement. While employed by the Company, and for one
(1) year thereafter, Employee shall not in any way undertake to harm, injure or
disparage the Company, its officers, directors, employees, agents, affiliates,
vendors, products, or customers, or their successors, or in any other way
exhibit an attitude of hostility toward them.

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

         9. RIGHTS UPON A CHANGE IN CONTROL.

            (a) Notwithstanding anything in this Agreement to the contrary, if
upon or at any time during the term of this Agreement there is a Termination
Event (as defined below) that occurs within one (1) year following any Change in
Control (as defined in Exhibit A) and Employee provides notice to the Company
during that one (1) year period of Employee's intent to terminate his Employment
pursuant to this Section 9, then Employee shall be treated as if Employee had
been terminated by the Company without substantial cause pursuant to Section
7(a).

            (b) A "Termination Event" shall mean the occurrence of any one or
more of the following, and in the absence of Employee's permanent disability
(defined in Section 7(d)),


                                       9                          George Fellows

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Employee's death, or any of the factors enumerated in Section 7(b) providing for
termination by the Company for substantial cause, accompanied by the giving of
notice by Employee as described in Section 9(a) of this Agreement:

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

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

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

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

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

            (c) In the event of a Change in Control, Employee shall be
indemnified by the Company for certain excise tax obligations, as more
specifically set forth in Exhibit C to this Agreement.

         10. MISCELLANEOUS.

            (a) Assignment. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and the successors and assigns of the
Company. Employee shall have no right to assign Employee's rights, benefits,
duties, obligations or other interests in this Agreement, it being understood
that this Agreement is personal to Employee.

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

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

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


                                       10                         George Fellows

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

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

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

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

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

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

            (i) Employee's Legal Fees. The Company agrees to reimburse Employee
for actual and reasonable fees incurred by Employee for legal or other
professional services provided with regard to the negotiation and execution of
this Agreement, provided that such reimbursement, in the aggregate, shall not
exceed $35,000.

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

         11. IRREVOCABLE ARBITRATION OF DISPUTES.

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


                                       11                         George Fellows

<PAGE>

            (b) EMPLOYEE AND THE COMPANY AGREE THAT THE ARBITRATOR SHALL HAVE
THE AUTHORITY TO ISSUE PROVISIONAL RELIEF. EMPLOYEE AND THE COMPANY FURTHER
AGREE THAT EACH HAS THE RIGHT, PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE
SECTION 1281.8, TO APPLY TO A COURT FOR A PROVISIONAL REMEDY IN CONNECTION WITH
AN ARBITRABLE DISPUTE SO AS TO PREVENT THE ARBITRATION FROM BEING RENDERED
INEFFECTIVE.

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

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

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

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

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

THE PARTIES HAVE READ SECTION 11 AND IRREVOCABLY AGREE TO ARBITRATE ANY DISPUTE
IDENTIFIED ABOVE.

                   /s/ GF  (EMPLOYEE)       /s/ RSB  (COMPANY)
                   --------                 ----------

                                       12                         George Fellows

<PAGE>


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

EMPLOYEE                                     COMPANY
                                             Callaway Golf Company,
                                             a Delaware corporation


/s/ George Fellows                           By:  /s/ Ronald S. Beard
---------------------                        ---------------------------
George Fellows                               Ronald S. Beard



                                       13                         George Fellows

<PAGE>


                                                                       EXHIBIT A

                                CHANGE IN CONTROL


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

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

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

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

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

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

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


                                       14                         George Fellows

<PAGE>


                                                                       EXHIBIT B

                       RELEASE OF CLAIMS - GENERAL RELEASE

         This Release of Claims - General Release ("Release") is effective as of
the date provided for in Section 10 below, and is made by and between GEORGE
FELLOWS ("Employee"), pursuant to the Chief Executive Officer Employment
Agreement (the "Agreement") to which this document is attached, and CALLAWAY
GOLF COMPANY (the "Company"), a Delaware corporation. This Release is entered
into in light of the fact that Employee's employment with the Company will
terminate and Employee will be eligible to receive Special Severance pursuant to
Section 7 of the Agreement.

         1. Consideration. In consideration for the payment of Special
Severance, Employee agrees to the terms and provisions set forth in this
Release.

         2. Release.

            (a) Employee hereby irrevocably and unconditionally releases and
forever discharges the Company, its predecessors, successors, subsidiaries,
affiliates and benefit plans, and each and every past, present and future
officer, director, employee, representative and attorney of the Company, its,
predecessors, successors, subsidiaries, affiliates and benefit plans, and their
successors and assigns (collectively referred to herein as the "Releasees"),
from any, every, and all charges, complaints, claims, causes of action, and
lawsuits of any kind whatsoever, including, to the extent permitted under the
law, all claims which Employee has against the Releasees, or any of them,
arising from or in any way related to circumstances or events arising out of
Employee's employment by the Company, including, but not limited to, harassment,
discrimination, retaliation, failure to progressively discipline Employee,
termination of employment, violation of state and/or federal wage and hour laws,
violations of any notice requirement, violations of the California Labor Code,
or breach of any employment agreement, together with any and all other claims
Employee now has or may have against the Releasees through and including
Employee's date of termination from the Company, provided, however, that
Employee does not waive or release the right to enforce the Agreement, the right
to enforce any stock option, restricted stock, retirement, welfare or other
benefit plan, agreement or arrangement, or any rights to indemnification or
reimbursement, whether pursuant to charter and by-laws of the Company or its
affiliates, applicable state laws, D&O insurance policies or otherwise. EMPLOYEE
ALSO SPECIFICALLY AGREES AND ACKNOWLEDGES THAT EMPLOYEE IS WAIVING ANY RIGHT TO
RECOVERY AGAINST RELEASEES BASED ON STATE OR FEDERAL AGE, SEX, PREGNANCY, RACE,
COLOR, NATIONAL ORIGIN, MARITAL STATUS, RELIGION, VETERAN STATUS, DISABILITY,
SEXUAL ORIENTATION, MEDICAL CONDITION OR OTHER ANTI-DISCRIMINATION LAWS,
INCLUDING, WITHOUT LIMITATION, TITLE VII, THE AMERICANS WITH DISABILITIES ACT,
THE CALIFORNIA FAIR HOUSING AND EMPLOYMENT ACT, THE AGE DISCRIMINATION IN
EMPLOYMENT ACT OF 1967, THE FAMILY MEDICAL RIGHTS ACT, THE CALIFORNIA FAMILY
RIGHTS ACT OR BASED ON THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OR THE WORKER
ADJUSTMENT AND RETRAINING NOTIFICATION ACT, ALL AS AMENDED, WHETHER SUCH CLAIM
BE BASED UPON AN ACTION FILED BY EMPLOYEE OR A GOVERNMENTAL AGENCY.

            (b) Employee understands that rights or claims under the Age
Discrimination in Employment Act of 1967 (29 U.S.C. Section 621, et seq.) that
may arise after the date this Release is executed are not waived. Nothing in
this Release shall be construed to prohibit Employee from exercising Employee's
right to file a charge with the Equal Employment Opportunity Commission or from
participating in any investigation or proceeding conducted by the Equal
Employment Opportunity Commission.


                                       15                         George Fellows

<PAGE>
            (c) Employee understands and agrees that if Employee files such a
charge, the Company has the right to raise the defense that the charge is barred
by this Release.

         3. Employee also waives all rights under section 1542 of the Civil Code
of the State of California. Section 1542 provides as follows:

                           A general release does not extend to claims which the
                           creditor does not know or suspect to exist in his
                           favor at the time of executing the release, which if
                           known by him must have materially affected his
                           settlement with the debtor.

         4. Governing Law. This Release shall be construed and enforced in
accordance with the internal laws of the State of California.

         5. Binding Effect. This Release shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.

         6. IRREVOCABLE ARBITRATION OF DISPUTES.

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

            (b) EMPLOYEE AND THE COMPANY AGREE THAT THE ARBITRATOR SHALL HAVE
THE AUTHORITY TO ISSUE PROVISIONAL RELIEF. EMPLOYEE AND THE COMPANY FURTHER
AGREE THAT EACH HAS THE RIGHT, PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE
SECTION 1281.8, TO APPLY TO A COURT FOR A PROVISIONAL REMEDY IN CONNECTION WITH
AN ARBITRABLE DISPUTE SO AS TO PREVENT THE ARBITRATION FROM BEING RENDERED
INEFFECTIVE.

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

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


                                       16                         George Fellows

<PAGE>

SERVICE WILL BE SELECTED PURSUANT TO THE AMERICAN ARBITRATION ASSOCIATION
NATIONAL RULES FOR RESOLUTION OF EMPLOYMENT DISPUTES. THE COMPANY SHALL PAY THE
COSTS OF THE ARBITRATOR'S FEES.

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

            (f) IT IS EXPRESSLY UNDERSTOOD THAT THE PARTIES HAVE CHOSEN
ARBITRATION TO AVOID THE BURDENS, COSTS AND PUBLICITY OF A COURT PROCEEDING, AND
THE ARBITRATOR IS EXPECTED TO HANDLE ALL ASPECTS OF THE MATTER, INCLUDING
DISCOVERY AND ANY HEARINGS, IN SUCH A WAY AS TO MINIMIZE THE EXPENSE, TIME,
BURDEN AND PUBLICITY OF THE PROCESS, WHILE ASSURING A FAIR AND JUST RESULT. 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 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 RELEASE, AND SHALL BE BINDING UPON THE PARTIES.

THE PARTIES HAVE READ SECTION 6 AND IRREVOCABLY AGREE TO ARBITRATE ANY DISPUTE
IDENTIFIED ABOVE.

               ______ (EMPLOYEE)        ______ (COMPANY)

         7. Counterparts. This Release may be executed in one or more
counterparts which, when fully executed by the parties, shall be treated as one
agreement.

         8. Advice of Counsel. The Company hereby advises Employee in writing to
discuss this Release with an attorney before executing it. Employee further
acknowledges that the Company will provide Employee twenty-one (21) days within
which to review and consider this Release before signing it. Should Employee
decide not to use the full twenty-one (21) days, then Employee knowingly and
voluntarily waives any claims that he was not in fact given that period of time
or did not use the entire twenty-one (21) days to consult an attorney and/or
consider this Release.

         9. Right to Revoke. The parties acknowledge and agree that Employee may
revoke this Release for up to seven (7) calendar days following Employee's
execution of this Release and that it shall not become effective or enforceable
until the revocation period has expired. The parties further acknowledge and
agree that such revocation must be in writing addressed to Steven C. McCracken,
Senior Executive Vice President and Chief Legal Officer, Callaway Golf Company,
2180 Rutherford Road, Carlsbad, California 92008, and received no later than
midnight on the seventh day following the execution of this Release by Employee.
If Employee revokes this Release under this section, it shall not be effective
or enforceable, and Employee will not receive the consideration described in
Section 1 above.

         10. Effective Date. If Employee does not revoke this Release in the
timeframe specified in Section 9 above, the Release shall become effective at
12:01 a.m. on the eighth day after it is fully executed by the parties.


                                       17                         George Fellows

<PAGE>

         11. Severability. In the event any provision or provisions of this
Release is or are held invalid, the remaining provisions of this Release shall
not be affected thereby.

         IN WITNESS WHEREOF, the parties hereto have executed this Release on
the dates set forth below, to be effective as of the date set forth in Section
10 above.

EMPLOYEE                                    COMPANY
                                            Callaway Golf Company,
                                            a Delaware corporation


                                            By:
----------------------------------             ---------------------------------
George Fellows                                 [Authorized Signature]

Dated:                                      Dated:
      ----------------------------                ------------------------------


                                       18                         George Fellows

<PAGE>


                                                                       EXHIBIT C

                               TAX INDEMNIFICATION

         Pursuant to Section 9(c) of Employee's Employment Agreement ("Section
9"), the Company agrees to indemnify Employee with respect to certain excise tax
obligations as follows:

         1. Definitions. For purposes of Section 9 and this Exhibit C, the
following terms shall have the meanings specified herein:

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

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

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

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

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

            (f) "Payment" shall mean any payment, benefit or distribution
(including, without limitation, cash, the acceleration of the granting, vesting
or exercisability of stock options or other incentive awards, or the accrual or
continuation of any other payments or benefits) granted or paid to or for the
benefit of Employee by the Company or by any person or persons whose actions
result in a Taxable Event (as defined in this Section), or by any person
affiliated with the Company or such person(s), whether paid or payable pursuant
to the terms of this Agreement or otherwise. Notwithstanding the foregoing, a
Payment shall not include any Gross-Up Payment required under Section 9 and this
Exhibit C

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

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

         3. All determinations required to be made under Section 9 and this
Exhibit C, including, without limitation, whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment, and the assumptions to be
utilized in arriving at such determinations, shall be made by a mutually agreed
upon nationally recognized accounting firm that is not serving as accountant or
auditor for the individual, entity or group effecting the Taxable Event to which
a possible Gross-Up Payment is related (the "Accounting Firm"). The Accounting
Firm shall provide detailed supporting


                                       19                         George Fellows

<PAGE>


calculations to the Company and to Employee regarding the amount of Excise Tax
(if any) which is payable, and the Gross-Up Payment (if any) required hereunder,
with respect to any Payment or Payments, with such calculations to be provided
at such time as may be requested by the Company, but in no event later than
fifteen (15) business days following receipt of a written notice from Employee
that there has been a Payment that may be subject to an Excise Tax. All fees and
expenses of the Accounting Firm shall be borne solely by the Company. Any
Gross-Up Payment as determined pursuant to Section 9 and this Exhibit C shall be
paid by the Company to Employee within five (5) business days after receipt of
the Accounting Firm's determination. If the Accounting Firm determines that no
Excise Tax is payable by Employee, the Accounting Firm shall furnish Employee
with a written opinion that failure to disclose, report or pay the Excise Tax on
Employee's federal or other applicable tax returns will not result in the
imposition of a negligence penalty, understatement penalty or other similar
penalty. All determinations by the Accounting Firm shall be binding upon the
Company and Employee in the absence of clear and indisputable mathematical
error. Following receipt of a Gross-Up Payment as provided herein, Employee
shall be obligated to properly and timely report his Excise Tax liability on the
applicable tax returns or reports and to pay the full amount of Excise Tax with
funds provided through such Gross-Up Payment. Notwithstanding the foregoing, if
the Company reasonably determines that the Employee will be unable or otherwise
may fail to make such Excise Tax payment, the Company may elect to pay the
Excise Tax to the Internal Revenue Service and/or other applicable tax authority
on behalf of the Employee, in which case the Company shall pay the net balance
of the Gross-Up Payment (after deduction of such Excess Tax payment) to the
Employee.

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

         5. Employee shall notify the Company in writing of any Claim. Such
notice (a) shall be given as soon as practicable, but in no event later than
fifteen (15) business days, following Employee's receipt of written notice of
the Claim from the applicable tax authority, and (b) shall include a compete and
accurate copy of the tax authority's written Claim or otherwise fully inform the
Company of the nature of the Claim and the date on which any payment of the
Claim must be paid, provided that Employee shall not be required to give notice
to the Company of facts of which the Company is already aware, and provided
further that failure or delay by Employee to give such notice shall not
constitute a breach of Section 9 or this Exhibit C except to the extent that the
Company is prejudiced thereby. Employee shall not pay any portion of a Claim
prior to the earlier of (a) the expiration of thirty (30) days following the
date on which Employee gives the foregoing notice to the Company, (b) the date
that any Excise Tax payment under the Claim is due, or (c) the date the Company
notifies Employee that it does not intend to contest the Claim. If, prior to
expiration of such period, the Company notifies Employee in writing that it
desires to contest the Claim, Employee shall:


                                       20                         George Fellows

<PAGE>

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

            (b) take such action in connection with contesting the Claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to the Claim by
an attorney selected and compensated by the Company who is reasonably acceptable
to Employee;

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

            (d) permit the Company to participate (at its expense) in any and
all proceedings and conferences pertaining to the Claim;

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

         6. If Employee receives a refund from a tax authority of all or any
portion of an Excise Tax paid by or on behalf of Employee with amounts advanced
by the Company pursuant to Section 9 and this Exhibit C, Employee shall promptly
pay to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). Employee shall, if so directed
by the Company, file and otherwise prosecute a claim for refund of any Excise
Tax payment made by or on behalf of Employee with amounts advanced by the
Company pursuant to Section 9 and this Exhibit C, with any such refund claim to
be effected in accordance with the principles set forth in Section 5 of this
Exhibit C. If a determination is made that Employee shall not be entitled to any
refund and the Company does not notify Employee in writing of its intent to
contest such denial of refund prior to the expiration of thirty (30) days after
such determination, then Employee shall have no further obligation hereunder to
contest such denial or to repay to the Company the amount involved in such
unsuccessful refund claim. The amount of any advances which are made by the
Company in connection with any such refund claim hereunder, to the extent not
refunded by the applicable tax


                                       21                         George Fellows

<PAGE>

authority to Employee, shall offset, as appropriate consistent with the purposes
of Section 9 and this Exhibit C, the amount of any Gross-Up Payment required
hereunder to be paid by the Company to Employee.


                                       22                         George Fellows