Document:

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                                                                   EXHIBIT 10.50

NOTICE OF GRANT OF STOCK                            CALLAWAY GOLF COMPANY
OPTION AND OPTION AGREEMENT                         ID: 95-3797580
                                                    2180 RUTHERFORD ROAD
                                                    CARLSBAD, CA 92008

WILLIAM C. BAKER                             OPTION DATE: NOVEMBER 23, 2004
                                             PLAN: 2004 EQUITY INCENTIVE PLAN

         1. GRANT OF OPTION. Effective November 23, 2004 ("Effective Date"), you
have been granted a Non-qualified Stock Option ("Option") to buy shares of
Callaway Golf Company (the "Company") common stock upon the following terms:

<TABLE>
<CAPTION>
 SHARES            EXERCISE PRICE            SCHEDULED VESTING DATE              SCHEDULED EXPIRATION DATE
 ------            --------------            ----------------------              -------------------------
<S>                <C>                       <C>                                 <C>
166,667                $11.62                   November 23, 2005                    November 23, 2014
166,667                $11.62                   November 23, 2006                    November 23, 2014
166,666                $11.62                   November 23, 2007                    November 23, 2014
</TABLE>

      The Option is granted to you pursuant to the terms and conditions of this
Notice of Grant of Stock Option and Option Agreement (this "Agreement"), and the
Company's 2004 Equity Incentive Plan (as amended and restated from time to time,
the "Plan"), the provisions of which Plan are by this reference incorporated in
this Agreement. In the event of any conflict between the provisions of the Plan
and the provisions of this Agreement, the provisions of the Plan shall be
controlling. The Company has provided you with a copy of the Plan.

      The exercise price must be paid in the form of cash, unless otherwise
determined by the Board of Directors or committee administering the Plan
("Committee") in their sole discretion.

      2. VESTING. Subject to Section 3 (Term and Termination) and Section 4
(Cancellation, Forfeiture and Rescission) of this Agreement, the Option shall
vest in accordance with the vesting schedule set forth above. Notwithstanding
Section 15.3.1 of the Plan, except as otherwise set forth in this section, the
vesting of the Option shall not be accelerated upon a Change in Control (as such
term is defined in the Plan). The Committee may also in its discretion
accelerate the vesting schedule of all or any part of the Option (in which case
it may impose whatever conditions it considers appropriate on the accelerated
portion). Notwithstanding anything else in this Agreement to the contrary, if
there is a cancellation, forfeiture or recission of this Option prior to the
vesting of any part of this Option for any reason (including upon a Change in
Control) other than pursuant to (i) Section 4 below, (ii) Employee's voluntary
termination of his employment or (iii) the Company's termination of Employee's
employment for substantial cause, then immediately prior to any such
cancellation, forfeiture or recission, 50,000 Option shares shall be deemed to
have vested on an accelerated basis.

      3. TERM AND TERMINATION. Subject to Section 4 (Cancellation, Forfeiture
and Rescission) hereof, the Option shall expire on the earlier of (i) the
scheduled expiration date set forth above or (ii) in the case of an Option that
has vested, one (1) year from the date on which you cease to be an employee of
the Company or its subsidiary for any reason including death. Subject to Section
2 (Vesting), if you cease for any reason to be an employee of the Company or its
subsidiary, that portion of the Option which has not yet vested shall be
terminated.

      4. CANCELLATION, FORFEITURE AND RESCISSION.

            (a) If during your employment, you directly or indirectly disclose
or misuse any confidential information or trade secrets of the Company then:

                  (1) any unexercised portion of the Option is automatically
            cancelled as of the date you first committed the act or acts
            described above (the "Cancellation Date"); and

                  (2) any exercise of all or any portion of the Option exercised
            on or after the Cancellation

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            Date, or during the ninety day period preceding the Cancellation
            Date, shall be rescinded, and you shall be required to pay to the
            Company, within ten days of receiving written notice from the
            Company, the amount of any gain realized as the result of any such
            rescinded exercise (the "Option Gain").

The Company shall notify you in writing of any such rescission within two years
of any such exercise. For purposes of this Agreement, and in the absence of
proof of actual gain on the date of exercise, "Option Gain" shall mean the New
York Stock Exchange closing price on the date of exercise minus the exercise
price of the Option, multiplied by the number of shares you purchased upon the
exercise, without regard to any subsequent market price decrease or increase.

            (b) For purposes of this Section 4, ownership of interests in a
broadly based mutual fund shall not constitute ownership of the stocks held by
the fund. In lieu of paying to the Company any Option Gain required to be paid
to Company pursuant to this Section 4, you may return to the Company the number
of shares purchased upon exercise of the Option. You hereby agree that the
Company may set off against any amount the Company may now or hereafter owe you
the amount of any Option Gain required to be paid by you to Company under this
Section 4. This Section 4 does not limit any other legal or equitable remedy
available to the Company. As a condition of each exercise of all or any portion
of the Option, you will be required to certify to the Company on a form of
notice of exercise acceptable to the Company that you have not committed any of
the acts described in paragraph (a) above.

YOU ACKNOWLEDGE THAT YOU HAVE READ EACH PROVISION OF THIS SECTION 4 AND HAVE HAD
AN OPPORTUNITY TO ASK QUESTIONS WITH RESPECT TO THIS SECTION. YOU ACKNOWLEDGE
THAT YOU UNDERSTAND THAT THE COMPANY IS GRANTING THE OPTION SUBJECT TO THE TERMS
OF THIS SECTION 4.

                                                           __________ (OPTIONEE)

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

      6. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware and applicable
federal law.

      7. ARBITRATION.

            (a) YOU AND THE COMPANY AGREE THAT ANY DISPUTE, CONTROVERSY OR CLAIM
ARISING HEREUNDER OR IN ANY WAY RELATED TO THIS AGREEMENT, ITS INTERPRETATION,
ENFORCEABILITY, OR APPLICABILITY, THAT CANNOT BE RESOLVED BY MUTUAL AGREEMENT OF
THE PARTIES SHALL BE SUBMITTED TO BINDING ARBITRATION. YOU AND THE COMPANY ALSO
AGREE THAT ARBITRATION IS THE PARTIES' ONLY RECOURSE FOR SUCH CLAIMS AND HEREBY
WAIVE THE RIGHT TO PURSUE SUCH CLAIMS IN ANY OTHER FORUM, UNLESS OTHERWISE
PROVIDED BY LAW. ANY COURT ACTION INVOLVING A DISPUTE WHICH IS NOT SUBJECT TO
ARBITRATION SHALL BE STAYED PENDING ARBITRATION OF ARBITRABLE DISPUTES.

            (b) YOU AND THE COMPANY AGREE THAT THE ARBITRATOR SHALL HAVE THE
AUTHORITY TO ISSUE PROVISIONAL RELIEF. YOU AND THE COMPANY FURTHER AGREE THAT
EACH HAS THE RIGHT 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. YOU AND THE COMPANY 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.

                                       2
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            (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 THE
FEDERAL ARBITRATION ACT.

            (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, BUT SHALL CONTROL THE AMOUNT AND
SCOPE OF DISCOVERY.

            (g) THE PROVISIONS OF THIS SECTION 7 SHALL SURVIVE THE EXPIRATION OR
TERMINATION OF THE AGREEMENT, AND SHALL BE BINDING UPON THE PARTIES.

THE PARTIES HAVE READ SECTION 7 AND IRREVOCABLY AGREE TO ARBITRATE ANY DISPUTE
IDENTIFIED ABOVE.

                                                            _________ (OPTIONEE)

            IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the Effective Date.

CALLAWAY GOLF COMPANY                            WILLIAM C. BAKER

By: /s/ Samuel H. Armacost                       /s/ William C. Baker
    -----------------------------------          -------------------------------
    Samuel H. Armacost                           Optionee ID: ###-##-####
    Chair, Compensation and Management
    Succession Committee

                                       3<PAGE>

                                                                   EXHIBIT 10.51

                          OFFICER EMPLOYMENT AGREEMENT

      This Officer Employment Agreement ("Agreement") is entered into effective
as of January 1, 2005, by and between CALLAWAY GOLF COMPANY, a Delaware
corporation (the "Company"), and ROBERT A. PENICKA ("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 January 1, 2005 and terminating December 31, 2006, unless this
Agreement is earlier terminated as hereinafter provided. Unless such employment
is earlier terminated, upon the expiration of the term of this Agreement,
Employee's status shall be one of at-will employment.

      2. SERVICES.

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

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

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

      3. SERVICES TO BE EXCLUSIVE. During the term hereof, Employee agrees to
devote 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 and its Chief Executive Officer. Employee further
agrees, as a condition to the performance by the Company of each and all of its
obligations hereunder, that so long as Employee is employed by the Company,
Employee will not directly or indirectly render services of any nature to,
otherwise become employed by, or otherwise participate or engage in any other
business without the Company's prior written consent. Nothing herein contained
shall be deemed to preclude Employee from having outside personal investments
and involvement with appropriate community activities, and from devoting a
reasonable amount of time to such matters, provided that this shall in no manner
interfere with or derogate from Employee's work for the Company.

      4. COMPENSATION.

            (a) The Company agrees to pay Employee a base salary at the rate of
$500,000 per year, payable in equal installments on regularly scheduled Company
pay dates.

            (b) The Company shall pay to Employee a one-time special bonus in
the amount of $150,000 (less applicable withholding taxes), which amount shall
be paid by February 15, 2005.

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

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            (d) Employee shall be eligible to participate in the Company's
long-term incentive programs as they may or may not exist from time to time.
Employee acknowledges that currently all awards under such programs are
discretionary.

      5. EXPENSES AND BENEFITS.

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

            (b) Paid Time Off. Employee shall accrue 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
paid time off benefits in lieu of providing time off.

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

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

                  (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 three (3) times Employee's
base salary, not to exceed a maximum of $1,500,000.00 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;

                  (iii) 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; and

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

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

            (e) Country Club Membership. During the term of this Agreement,
Employee shall be entitled to use one of the Company's Corporate Country Club
Memberships at the Del Mar Country Club in accordance with the Company's country
club membership policy, as modified from time to time. Nothing in this Section
shall be construed to require the Company to maintain any memberships at Del Mar
Country Club.

                                                               Robert A. Penicka

                                       2
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            (f) Relocation Benefits Package. Employee shall be provided with a
relocation benefits package to assist with the relocation of his family to San
Diego County, California from Employee's residence in Connecticut, as more fully
described in the Relocation Benefits Package attached hereto as Exhibit C and
incorporated herein by this reference.

      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, regulation or written 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.

      7. BUSINESS ISSUES.

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

            (b) Other Employees. Except as may be required in the performance of
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.

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

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

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

                                                               Robert A. Penicka

                                       3
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      8. 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
accrued and unpaid as of the date of termination; and (ii) the immediate vesting
of all unvested long-term incentive awards held by Employee as of the date of
such termination. In addition to the foregoing and subject to the provisions
thereof, Employee shall be eligible to receive Special Severance as described in
Section 19 and Incentive Payments as described in Section 20.

            (b) Termination by the Company for Substantial Cause or by Employee
without Good Reason. Employee's employment under this Agreement may be
terminated immediately by the Company for substantial cause or by Employee
without good reason. In the event of any such termination, Employee shall be
entitled to receive (i) any compensation accrued and unpaid as of the date of
termination; and (ii) no other severance. "Substantial cause" shall mean for
purposes of this subsection Employee's (i) failure to substantially perform his
duties; (ii) material breach of this Agreement; (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 or 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 accrued and unpaid as of the
date of termination; and (ii) the immediate vesting of all unvested long-term
incentive awards held by Employee as of the date of such termination. In
addition to the foregoing and subject to the provisions thereof, Employee shall
be eligible to receive Special Severance as described in Section 19 and
Incentive Payments as described in Section 20. "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 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 payment schedule as in effect at the
time of termination for a period of time equal to twenty-four (24) months from
the date of termination; (iii) the immediate vesting of outstanding but unvested
long-term incentive awards held by Employee as of such termination date; (iv)
the payment of premiums owed for COBRA or Cal-COBRA insurance benefits for the
maximum time allowable under COBRA or Cal-COBRA, but not to exceed twenty-four
(24) months under any circumstances; and (v) no other severance. The Company
shall be entitled to take, as an offset against any amounts due pursuant to
subsections (i) and (ii) above, any amounts received by Employee pursuant to
disability or other insurance, or similar sources, provided by the Company.

            (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.

                                                               Robert A. Penicka

                                       4
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            (f) Pre-Termination Rights. The Company shall have the right, at its
option, to require Employee to vacate his 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.

      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), Employee shall be treated as if Employee had
been terminated by the Company without substantial cause pursuant to Section
8(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 8(d)), Employee's death, or any of the factors enumerated in
Section 8(b) providing for termination by the Company for substantial cause:

                  (i) the termination or material breach of this 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;

                  (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) To the extent that any or all of the payments and benefits
provided for in this Agreement and pursuant to any other agreements with
Employee constitute "parachute payments" within the meaning of Section 280G of
the Internal Revenue Code (the "Code") and, but for this Section 9, would be
subject to the excise tax imposed by Section 4999 of the Code, then the
aggregate amount of such payments and benefits shall be reduced by the minimum
amounts necessary to equal one dollar less than the amount which would result in
such payments and benefits being subject to such excise tax. The reduction,
unless the employee elects otherwise, shall be in such order that provides
employee with the greatest after-tax amount possible. All determinations
required to be made under this Section 9, including whether a payment would
result in a parachute payment and the assumptions to be utilized in arriving at
such determination, shall be made by a nationally recognized accounting firm
agreed to by Company and Employee. The Company shall pay the cost of the
accounting firm and shall provide detailed supporting calculations both to the
Company and the Employee. The determination of the accounting firm shall be
final and binding upon the Company and the Employee, except that if, as a result
of subsequent events or conditions (including a subsequent payment or the
absence of a subsequent payment or a determination by the Internal Revenue
Service or applicable court), it is determined that the excess parachute
payments, excise tax or any reduction in the amount of payments and benefits, is
or should be other than as determined initially, an appropriate adjustment shall
be made, as applicable, to reflect the final determination.

                                                               Robert A. Penicka

                                       5
<PAGE>

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

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

      12. TRADE SECRETS AND CONFIDENTIAL INFORMATION.

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

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

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

                                                               Robert A. Penicka

                                       6
<PAGE>

            (d) 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.

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

      13. ASSIGNMENT OF RIGHTS.

            (a) 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.

            (b) 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.

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

            (d) Pursuant to California Labor Code Section 2870, the obligation
to assign as provided in this 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:

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

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

            (e) Employee agrees that any Design, Invention and/or Innovation
which is required under the provisions of this 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.

                                                               Robert A. Penicka

                                       7
<PAGE>

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

      14. 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 his rights, benefits, duties, obligations
or other interests in this Agreement, it being understood that this Agreement is
personal to Employee.

      15. 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.

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

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

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

      17. IRREVOCABLE ARBITRATION OF DISPUTES.

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

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

                                                               Robert A. Penicka

                                       8
<PAGE>

            (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 17 AND IRREVOCABLY AGREE TO ARBITRATE ANY DISPUTE
IDENTIFIED ABOVE.

              ______ (EMPLOYEE)                 ______ (COMPANY)

      18. MISCELLANEOUS.

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

            (b) Waiver. Failure of either party at any time to require
performance by the other of any provision of this 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.

            (c) 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.

            (d) 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.

                                                               Robert A. Penicka

                                       9
<PAGE>

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

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

      19. SPECIAL SEVERANCE.

            (a) Amount. Special Severance shall consist of (i) severance
payments equal to one-half of Employee's then-current base salary paid at the
rate and on the same payment schedule as in effect at the time of termination
for a period of time equal to twenty-four (24) months from the date of
termination; (ii) the payment of premiums owed for COBRA or Cal-COBRA insurance
benefits for a period of time equal to the maximum time allowable under COBRA or
Cal-COBRA, but not to exceed twenty-four (24) months in any event; and (iii) no
other severance.

            (b) Conditions on Receiving Special Severance. Notwithstanding
anything else to the contrary, it is expressly understood that any obligation of
the Company to pay Special Severance pursuant to this Agreement shall be subject
to: (i) Employee's continued compliance with the terms and conditions of
Sections 7(b), 7(c), 7(e), 12, 13 and 17; (ii) 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 (iii) the
execution by Employee, prior to receiving any Special Severance, of a release in
the form attached hereto as Exhibit B.

      20. INCENTIVE PAYMENTS.

            (a) Terms and Conditions. Subject to the requirements set forth in
this Section, Employee shall be eligible for Incentive Payments in the event
that Employee is terminated by the Company without substantial cause pursuant to
Sections 8(a) or 9(a), or terminates employment for good reason pursuant to
Section 8(c). Incentive Payments shall be equal to one-half of Employee's
then-current base salary paid at the rate and on the same payment schedule as in
effect at the time of termination for a period of time equal to twenty-four (24)
months from the date of termination. Incentive Payments shall be conditioned
upon Employee choosing not to engage (whether as an owner, employee, agent,
consultant, or in any other capacity) in any business or venture that competes
with the business of the Company or any of its affiliates. If Employee chooses
to engage in such activities, then the Company shall have no obligation to make
Incentive Payments for the period of time during which Employee chooses to do
so.

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

      21. TREATMENT OF SPECIAL SEVERANCE AND INCENTIVE PAYMENTS. Any Special
Severance and Incentive Payments shall be subject to usual and customary
employee payroll practices and all applicable withholding requirements. Except
for the amounts specifically provided pursuant to

                                                               Robert A. Penicka

                                       10
<PAGE>

Sections 8, 19 and 20, Employee shall not be entitled to any further
compensation, bonus, damages, restitution, relocation benefits, or other
severance benefits upon termination of employment. The amounts payable to
Employee pursuant to these Sections shall not be treated as damages, but as
compensation to which Employee may be entitled by reason of termination of
employment under the applicable circumstances. The Company shall not be entitled
to set off against the amounts payable to Employee pursuant to Sections 8, 19
and 20 any amounts earned by Employee in other employment after termination of
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 Sections 8, 19 and 20
shall not limit Employee's rights under or pursuant to any other agreement or
understanding with the Company regarding any pension, profit sharing, insurance
or other employee benefit plan of the Company to which Employee is entitled
pursuant to the terms of such plan.

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

EMPLOYEE                                     COMPANY

                                             Callaway Golf Company,
                                             a Delaware corporation

/s/ Robert A. Penicka                    By: /s/ William C. Baker
-----------------------------                -----------------------------------
Robert A. Penicka                            William C. Baker
                                             Chairman of the Board and
                                             Chief Executive Officer

                                                               Robert A. Penicka

                                       11

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