Document:

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                                                                   EXHIBIT 10.40

                              SECOND AMENDMENT TO
                   CHAIRMAN AND FOUNDER EMPLOYMENT AGREEMENT

     This Second Amendment to Chairman and Founder Employment Agreement ("Second
Amendment") is effective as of March 29, 2000 by and between CALLAWAY GOLF
COMPANY, a Delaware corporation (the "Company") and ELY CALLAWAY ("Mr.
Callaway").

     A.   The Company and Mr. Callaway are parties to a certain Chairman and
Founder Employment Agreement entered into as of January 1, 1997 (the
"Agreement") and a First Amendment to Chairman and Founder Employment Agreement
effective December 31, 1999 (the "First Amendment").

     B.   The Company and Mr. Callaway are in negotiations regarding a new
employment agreement, and desire to keep the current Agreement in effect until
such time as a new employment agreement is finalized.

     C.   In light of the foregoing, the Company and Mr. Callaway desire to
amend the Agreement pursuant to Section 16 of the Agreement, in the manner set
forth herein.

     NOW, THEREFORE, in consideration of the foregoing and other consideration,
the value and sufficiency of which are hereby acknowledged, the Company and Mr.
Callaway hereby agree as follows:

     1.   Section 1 of the Agreement is hereby amended to read as follows:

          "TERM.  The Company hereby employs Mr. Callaway and Mr. Callaway
          ----
          hereby accepts employment pursuant to the terms and provisions of this
          Agreement for the term commencing January 1, 1997 and terminating June
          30, 2000, unless this Agreement is earlier terminated as hereinafter
          provided.  Unless such employment is earlier terminated, upon the
          expiration of the term of this Agreement, Mr. Callaway's status shall
          be one of at will employment."

     2.   But for the amendment contained herein, and any other written
amendments properly executed by the parties, the Agreement shall otherwise
remain unchanged.

          IN WITNESS WHEREOF, the Company and Mr. Callaway have caused this
Second Amendment to be executed effective as of the date set forth above.

MR. CALLAWAY                            COMPANY

                                        Callaway Golf Company,
                                        a Delaware corporation

/s/ Ely Callaway                        By: /s/ Charles J. Yash
-------------------------                   -------------------------
Ely Callaway                                Charles J. Yash, President

Dated:  March 29, 2000                  Dated:  March 29, 2000<PAGE>

                                                                   EXHIBIT 10.41

                                FIRST AMENDMENT
                                       TO
                     AMENDED AND RESTATED CREDIT AGREEMENT

          THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated
as of April 28, 2000 (this "Amendment") relates to that certain Amended and
                            ---------
Restated Credit Agreement dated as of February 10, 1999 (as the same may be
amended, supplemented, restates or otherwise modified from time to time, the

"Credit Agreement") and is entered into among Callaway Golf Company, a Delaware
-----------------
corporation (the "Borrower"), the other credit parties signatory to the Credit
                  --------
Agreement (together with the Borrower, the "Credit Parties"), the lenders
                                            --------------
signatory hereto (the "Lenders") and General Electric Capital Corporation, a New
                       -------
York corporation, as agent for the Lenders (in such capacity, the "Agent").
                                                                   -----
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in the Credit Agreement.

                              W I T N E S S E T H

          WHEREAS, the Borrower, the other Credit Parties, Agent and the Lenders
have entered into the Credit Agreement;

          WHEREAS, the Borrower and the other Credit Parties have requested that
the Agent and the Lenders amend the Credit Agreement to permit the repurchase of
shares of the Borrower's common Stock for cash in an aggregate amount of up to
$250,000,000;

          WHEREAS, the Agent and the Lenders are willing to enter into such
amendments on the terms and conditions set forth herein;

          NOW, THEREFORE, in consideration of the above premises, the Borrower,
the other Credit Parties, the Agent and the Lenders agree as follows:

     1.   Amendments to the Credit Agreement.  Upon the "Effective Date" (as
          ----------------------------------
defined in Section 3 below), the Credit Agreement is hereby amended as follows:
           ---------
          a.  Amendment to Section 6.14(e)(i).  Section 6.14(e)(i) is hereby
              -------------------------------
amended by deleting the text thereof in its entirety and substituting the
following in lieu thereof:

          "Other than as notified to Agent on or before May 4, 2000 with respect
          to repurchases of Stock in the Fiscal Quarter ending June 30, 2000,
          Agent shall have received, on the first day of each Fiscal Quarter in
          which a repurchase of Stock is planned, and, if any repurchase of
          Stock not anticipated at the beginning of a Fiscal Quarter is planned
          during that Fiscal Quarter, at least fifteen (15) Business Days prior
          to any such proposed repurchase, (A) a schedule detailing any and all
          Stock repurchases expected to occur during the current Fiscal Quarter,
          prepared in conformity with clause (p) of Annex E, (b) a pro forma
                                                    -------
          consolidated balance sheet, income statement and cash flow statement
          of Borrower and
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          its Subsidiaries, based on recent financial statements, which shall be
          complete and shall fairly present in all material respects the assets,
          liabilities, financial condition and results of operations of Borrower
          and its Subsidiaries in accordance with GAAP consistently applied, but
          taking into account such proposed payment and the funding of all Loans
          in connection therewith, and such pro forma statements shall reflect
          that the requirements of this clause (e) shall be satisfied and (C)
                                        ----------
          a certificate of the chief financial officer of Borrower to the
          effect that Borrower will be Solvent after the proposed payment and
          that the pro forma statements fairly present the financial condition
          of Borrower (on a consolidated basis) as of the date of the recent
          financial statements after giving effect to the proposed payment,"

          b.  Amendment to Section 6.14(e)(iii).  Section 6.14(e)(iii) is
              ---------------------------------
     hereby amended by deleting the text thereof in its entirety and
     substituting the following in lieu thereof:

          "the aggregate amount paid after April 1, 2000 to (or on behalf of)
          holders of Borrower's common Stock to repurchase such Stock shall not
          exceed $250,000,000,"

          c.  Amendment to Section 6.14(e)(v).  Section 6.14(e)(v) is hereby
              -------------------------------
     amended by deleting the phrase "90 days" and substituting in lieu thereof
     the phrase "180 days".

          d.  Amendment to Section 6.14(e)(vii).  Section 6.14(e)(vii) is
              ---------------------------------
     hereby amended by deleting the text thereof in its entirety and
     substituting the following in lieu thereof:

          "all Stock repurchased pursuant to this clause (e) with proceeds of
                                                  ----------
          Indebtedness shall be immediately canceled and retired, and"

          e.  Amendment to Annex E.  Annex E is hereby amended by adding the
              --------------------
     following reporting requirement to the end thereof:

              "(p)  Stock Repurchase Reports.  To Agent and Lenders, within
                    ------------------------
          thirty (30) days after the end of each Fiscal Quarter, a schedule of
          all Stock repurchases conducted during such Fiscal Quarter, describing
          in detail with respect to each such repurchase, (i) the date of such
          repurchase, (ii) the number of shares of Stock repurchased, and (iii)
          the amounts paid to (or on behalf of) the holders of Stock to
          repurchase such Stock."

          f.  Amendment to Annex H.  Annex H is hereby amended by adding the
              --------------------
     following phrase to the end of subsection (a) thereof:

          ", less (iv) all cash paid after April 1, 2000 to (or on behalf of)
             ----
          holders of the Borrower's common Stock pursuant to and subject to the
          terms and conditions of Section 6.14(e)."
                                  ---------------

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     2.   Representations and Warranties.  The Credit Parties hereby jointly and
          ------------------------------
severally represent and warrant to the Agent and the Lenders that, as of the
Effective Date and after giving effect to this Amendment:

          a.  All of the representations and warranties of the Credit Parties
     contained in this Amendment, the Credit Agreement and the other Loan
     Documents are true and correct in all material respects on and as of the
     Effective Date, as if then made (other than representations and warranties
     which expressly speak as of a different date, which shall be true and
     correct in all material respects as of that date); and

          b.  No Default or Event of Default has occurred and is continuing or
     will result after giving effect to this Amendment.

     3.   Effective Date.  This Amendment shall become effective as of the date
          --------------
first written above (the "Effective Date") upon the satisfaction of each of the
                          --------------
following conditions:

          a.  The Agent shall have received each of the following documents, in
     each case in form and substance satisfactory to the Agent, prior to 5:00
     p.m. (New York time) on May 15, 2000;

              i.    counterparts hereof executed by each of the Credit Parties,
          the Agent and the Requisite Lenders;

              ii.   duly executed amendments to the CEF Lease Facility and the
          Receivables Documents effecting all modifications necessary to permit
          the repurchases of Stock described herein, together with a certificate
          of the Chief Financial Officer of the Borrower certifying that all
          conditions to the effectiveness of the amendments have been satisfied
          and that the amendments are in full force and effect as of the
          Effective Date;

              iii.  a certificate of the Secretary or Assistant Secretary of
          each of the Credit Parties dated the Effective Date certifying (A)
          that the bylaws of such Credit Party have not been amended or
          otherwise modified since the date of the most recent certification
          thereof by the Secretary or Assistant Secretary of such Credit Party
          delivered to the Agent and remain in full force and effect as of the
          Effective Date, (B) that the charter of such Credit Party has not been
          amended or otherwise modified since the date of the most recent
          certification thereof by the Secretary of State of such Credit Party's
          jurisdiction of incorporation delivered to the Agent and remain in
          full force and effect as of the Effective Date and (C) that the
          execution, delivery and performance of this Amendment have been duly
          authorized by all necessary or proper corporate and shareholder
          action; and

              iv.   such additional documentation as the Agent may reasonably
          request;

          b.  No law, regulation, order, judgment or decree of any Governmental
     Authority shall, and the Agent shall not have received any notice that
     litigation is pending or threatened which is likely to, enjoin, prohibit or
     restrain the consummation

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     of the transactions contemplated by this Amendment, except for such laws,
     regulations, orders or decrees, or pending or threatened litigation, that
     in the aggregate could not reasonably be expected to have a Material
     Adverse Effect;

          c.  All of the representations and warranties of the Credit Parties
     contained in this Amendment, the Credit Agreement and the other Loan
     Documents shall be true and correct in all material respects on and as of
     the Effective Date, as if then made (other than representations and
     warranties which expressly speak as of a different date, which shall be
     true and correct in all material respects as of that date);

          d.  All corporate and other proceedings, and all documents,
     instruments and other legal matters in connection with the transactions
     contemplated by this Amendment shall be satisfactory in all respects in
     form and substance to the Agent; and

          e.  No Default or Event of Default shall have occurred and be
     continuing on the Effective Date or will result after giving effect to this
     Amendment.

     4.  Reference to and Effect on the Loan Documents.
         ---------------------------------------------

          a.  Upon the Effective Date, each reference to the Credit Agreement to
     "this Agreement", "hereunder", "hereof" or words of like import, and each
     reference in the other Loan Documents to the Credit Agreement, shall mean
     and be a reference to the Credit Agreement as amended and supplemented
     hereby.

          b.  Except to the extent specifically set forth herein, the respective
     provisions of the Credit Agreement and the other Loan Documents shall not
     be amended, modified, waived, impaired or otherwise affected hereby, and
     such documents and the Obligations under each of them are hereby confirmed
     as being in full force and effect.

          c.  This Amendment shall be limited solely to the matters expressly
     set forth herein and shall not (i) constitute an amendment or waiver of any
     other term or condition of the Credit Agreement or any other Loan Document,
     (ii) prejudice any right or rights which the Agent or any Lender may now
     have or may have in the future under or in connection with the Credit
     Agreement or any other Loan Document, (iii) require the Agent or any Lender
     to agree to a similar transaction on a future occasion or (iv) create any
     right herein to another Person or other beneficiary or otherwise, except to
     the extent specifically provided herein.

     5.  Miscellaneous.  This Amendment is a Loan Document.  The headings
         -------------
herein are for convenience of reference only and shall not alter or otherwise
affect the meaning hereof.

     6.  Section Titles.  The Section titles in this Amendment are and shall be
         --------------
without substantive meaning or content of any kind whatsoever and are not a part
of the agreement between the parties hereto.

     7.  Counterparts.  This Amendment may be executed in any number of
         ------------
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed and

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delivered shall be an original, but all of which shall together constitute one
and the same instrument.

     8.  GOVERNING LAW.  THIS AMENDMENT, AND ALL MATTERS OF CONSTRUCTION,
         -------------
VALIDITY AND PERFORMANCE HEREOF, SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     9.  No Strict Construction.  The parties hereto have participated jointly
         ----------------------
in the negotiation and drafting of this Amendment.  In the event an ambiguity or
question of intent or interpretation arises, this Amendment shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Amendment.

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<PAGE>

          IN WITNESS WHEREOF, the Credit Parties, the Agent and the Lenders have
caused this Amendment to be executed by their respective officers thereunto duly
authorized as of the date first above written.

                                        CALLAWAY GOLF COMPANY,
                                        as Borrower

                                        By:  /s/ Kenneth Wolf
                                           -----------------------------
                                           Name:  Kenneth Wolf
                                           Title: Senior Vice President,
                                                  Finance and Controller

                                       6
<PAGE>

                                        CALLAWAY GOLF SALES COMPANY,
                                        as a Credit Party

                                        By:  /s/ Kenneth Wolf
                                           ------------------------------
                                           Name:  Kenneth Wolf
                                           Title: Vice President and
                                                  Chief Financial Officer

                                       7
<PAGE>

                                        CALLAWAY GOLF BALL COMPANY,
                                        as a Credit Party

                                        By:  /s/ Kenneth Wolf
                                           -------------------------------
                                           Name:  Kenneth Wolf
                                           Title: Vice President and Chief
                                                  Financial Officer

                                       8
<PAGE>

                                        GENERAL ELECTRIC CAPITAL CORPORATION,
                                        as Agent and Lender

                                        By:  /s/ Robert Yasuda
                                           ----------------------------
                                           Name: Robert Yasuda
                                           Title: Authorized Signatory
                                           Pro Rata Share: 20.8333%

                                       9
<PAGE>

                                        AMERICAN NATIONAL BANK AND TRUST
                                        COMPANY OF CHICAGO,
                                        as a Lender

                                        By:  /s/ Elizabeth J. Limpert
                                           ---------------------------
                                           Name:  Elizabeth J. Limpert
                                           Title: First Vice President
                                           Pro Rata Share:  17.7083%

                                       10
<PAGE>

                                        BANK OF AMERICA, NATIONAL ASSOCIATION,
                                        as a Lender

                                        By:  /s/ Richard G. Burke
                                           ----------------------------
                                           Name:  Richard G. Burke
                                           Title: Senior Vice President
                                           Pro Rata Share:  14.1667%

                                       11
<PAGE>

                                        CONGRESS FINANCIAL CORPORATION
                                        (WESTERN),
                                        as a Lender

                                        By:  /s/ Jeffrey M.Evans
                                           -------------------------
                                           Name:  Jeffrey M. Evans
                                           Title: Vice President
                                           Pro Rata Share:  14.1667%

                                       12
<PAGE>

                                        KEY CORPORATE CAPITAL INC.,
                                        as a Lender

                                        By:  /s/ Reynaldo Flores
                                           --------------------------
                                           Name:  Reynaldo Flores
                                           Title: Vice President
                                           Pro Rata Share:  14.1667%

                                       13
<PAGE>

                                        NATIONAL CITY COMMERCIAL FINANCE, INC.,
                                        as a Lender

                                        By:  /s/ G.A. Godec
                                           ----------------------------
                                           Name:  G.A. Godec
                                           Title: Senior Vice President
                                           Pro Rata Share:  8.3333%

                                       14
<PAGE>

                                        NATIONAL WESTMINSTER BANK PLC,
                                        as a Lender

                                        By:  /s/ Nicholas Reid
                                           ------------------------
                                           Name:  Nicholas Reid
                                           Title:
                                           Pro Rata Share:  10.625%

                                       15

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