Document:

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                                                                   EXHIBIT 10.24

[CALLAWAY GOLF LOGO]

            Trust Agreement for the
            Callaway Golf Company
            Executive Deferred Compensation Plan

                              CALLAWAY GOLF COMPANY
                              2180 RUTHERFORD ROAD
                               CARLSBAD, CA 92008

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[CALLAWAY GOLF LOGO]

          Trust Agreement for the
          Callaway Golf Company Executive Deferred Compensation Plan

                                 TRUST AGREEMENT

                                TABLE OF CONTENTS

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ARTICLE                                                                                                PAGE
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ARTICLE 1    Name, Intentions, Irrevocability, Deposit and Definitions................................   1

      1.1    Name.....................................................................................   1
      1.2    Intentions...............................................................................   1
      1.3    Irrevocability; Creditor Claims..........................................................   1
      1.4    Initial Deposit..........................................................................   2
      1.5    Additional Definitions...................................................................   2
      1.6    Grantor Trust............................................................................   3

ARTICLE 2    General Administration...................................................................   3

      2.1    Committee Directions and Administration Before Change in Control.........................   3
      2.2    Administration Upon Change in Control....................................................   4
      2.3    Contributions............................................................................   4
      2.4    Trust Fund...............................................................................   4
      2.5    Distribution of Excess Trust Fund to Employers...........................................   4

ARTICLE 3    Powers and Duties of Trustee.............................................................   5

      3.1    Investment Directions....................................................................   5
      3.2    Investment Upon Change In Control........................................................   5
      3.3    Management of Investments................................................................   5
      3.4    Duty of Care.............................................................................   7
      3.5    Securities...............................................................................   8
      3.6    Substitution.............................................................................   8
      3.7    Distributions............................................................................   8
      3.8    Trustee Responsibility Regarding Payments on Insolvency..................................  11
      3.9    Costs of Administration..................................................................  13
      3.10   Trustee Compensation and Expenses........................................................  13
      3.11   Professional Advice......................................................................  13
      3.12   Payment on Court Order...................................................................  13
      3.13   Protective Provisions....................................................................  14
      3.14   Indemnifications.........................................................................  14
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          Trust Agreement for the
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ARTICLE 4    Insurance Contracts......................................................................  15

      4.1    Types of Contracts.......................................................................  15
      4.2    Ownership................................................................................  15
      4.3    Restrictions on Trustee's Rights.........................................................  15

ARTICLE 5    Trustee's Accounts.......................................................................  16

      5.1    Records..................................................................................  16
      5.2    Annual Accounting; Final Accounting......................................................  16
      5.3    Valuation................................................................................  16
      5.4    Delegation of Duties.....................................................................  17

ARTICLE 6    Resignation or Removal of Trustee........................................................  17

      6.1    Resignation; Removal.....................................................................  17
      6.2    Successor Trustee........................................................................  17
      6.3    Settlement of Accounts...................................................................  18

ARTICLE 7    Controversies, Legal Actions and Counsel.................................................  18

      7.1    Controversy..............................................................................  18
      7.2    Joinder of Parties.......................................................................  18

ARTICLE 8    Insurers.................................................................................  18

      8.1    Insurer Not a Party......................................................................  18
      8.2    Authority of Trustee.....................................................................  18
      8.3    Contract Ownership.......................................................................  19
      8.4    Limitation of Liability..................................................................  19
      8.5    Change of Trustee........................................................................  19

ARTICLE 9    Amendment and Termination................................................................  19

      9.1    Amendment................................................................................  19
      9.2    Final Termination........................................................................  20

ARTICLE 10   Miscellaneous............................................................................  20

      10.1   Directions Following Change in Control...................................................  20
      10.2   Taxes....................................................................................  20
      10.3   Third Persons............................................................................  21
      10.4   Nonassignability; Nonalienation..........................................................  21
      10.5   The Plan.................................................................................  21
      10.6   Applicable Law...........................................................................  21
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      Trust Agreement for the
      Callaway Golf Company Executive Deferred Compensation Plan

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10.7   Notices and Directions...................................................................  21
10.8   Successors and Assigns...................................................................  21
10.9   Gender and Number........................................................................  21
10.10  Headings.................................................................................  22
10.11  Counterparts.............................................................................  22
10.12  Beneficial Interest......................................................................  22
10.13  The Trust and Plan.......................................................................  22
10.14  Effective Date...........................................................................  22
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[CALLAWAY GOLF LOGO]

            Trust Agreement for the
            Callaway Golf Company Executive Deferred Compensation Plan

                                 TRUST AGREEMENT
                                     FOR THE
                              CALLAWAY GOLF COMPANY
                      EXECUTIVE DEFERRED COMPENSATION PLAN

            THIS TRUST AGREEMENT ("Trust Agreement") is made and entered into as
of May 6, 2002, between Callaway Golf Company, Inc., a Delaware corporation (the
"Company"), and U.S. Trust Company, N. A. (the "Trustee"), to evidence the trust
(the "Trust") to be established, pursuant to the Callaway Golf Company Executive
Deferred Compensation Plan (the "Plan") that requires the establishment of a
trust, for the benefit of a select group of management, highly compensated
employees and/or Directors who contribute materially to the continued growth,
development and business success of the Company and those subsidiaries of the
Company, if any, that participate in the Plan (collectively, "Subsidiaries," or
singularly, "Subsidiary").

                                    ARTICLE 1
                        NAME, INTENTIONS, IRREVOCABILITY,
                             DEPOSIT AND DEFINITIONS

1.1   NAME. The name of the Trust created by this Agreement (the "Trust") shall
      be:

                       TRUST FOR THE CALLAWAY GOLF COMPANY
                      EXECUTIVE DEFERRED COMPENSATION PLAN

1.2   INTENTIONS. The Company wishes to establish the Trust and to contribute to
      the Trust assets that shall be held therein, subject to the claims of the
      Company's and the Subsidiaries' creditors in the event of their Insolvency
      (as defined below) until paid to Participants and their Beneficiaries in
      such manner and at such times as specified in the Plan or until the Trust
      is terminated as provided herein. It is the intention of the parties that
      this Trust shall constitute an unfunded arrangement and shall not affect
      the status of the Plan as an unfunded plan maintained for the purpose of
      providing supplemental compensation for a select group of management,
      highly compensated employees and/or Directors for purposes of Title I of
      ERISA (as defined below). In addition, it is the intention of the Company
      and the Subsidiaries to make contributions to the Trust to provide
      themselves with a source of funds to assist them in the meeting of their
      liabilities under the Plan.

1.3   IRREVOCABILITY; CREDITOR CLAIMS. The Trust hereby established shall be
      irrevocable. Except as otherwise provided in Sections 2.5 and 9.2, the
      principal of the Trust, and any earnings thereon, shall be held separate
      and apart from other funds of the Company and the Subsidiaries and shall
      be used exclusively for the uses and purposes of the Participants and
      their Beneficiaries and the general creditors of the Company and the
      Subsidiaries as herein set forth and as provided in the

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            Trust Agreement for the
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      Plan. The Participants and their Beneficiaries shall have no preferred
      claim on, or any beneficial ownership interest in, any assets of the
      Trust. Any rights created under the Plan and this Trust Agreement shall be
      mere unsecured contractual rights of the Participants and their
      Beneficiaries against the Company and the Subsidiaries. Any assets held by
      the Trust will be subject to the claims of the Company's and the
      Subsidiaries' general creditors under federal and state law in the event
      of Insolvency as provided in Section 3.8.

1.4   INITIAL DEPOSIT. The Company hereby deposits with the Trustee in trust
      $100, which shall become the principal of the Trust to be held,
      administered and disposed of by the Trustee as provided in this Trust
      Agreement.

1.5   ADDITIONAL DEFINITIONS. In addition to the definitions set forth above,
      for purposes hereof, unless otherwise clearly apparent from the context,
      the following terms have the following indicated meanings:

      (a)   "Beneficiary" shall mean one or more persons, trusts, estates or
            other entities, designated in accordance with a Plan, that are
            entitled to receive benefits under a Plan upon the death of a
            Participant.

      (b)   "Board" shall mean the board of directors of the Company.

      (c)   "Change in Control" shall having the meaning ascribed in the
            applicable Plan.

      (d)   "Committee" shall mean the administrative committee appointed by the
            Board or its designees to administer this Trust.

      (e)   "Director" shall mean any member of the board of directors of the
            Company or any Subsidiary.

      (f)   "ERISA" shall mean the Employee Retirement Income Security Act of
            1974, as it may be amended from time to time.

      (g)   "Insolvent" shall have the meaning set forth in Section 3.8(a)
            below.

      (h)   "Insolvent Entity" shall have the meaning set forth in Section
            3.8(a) below.

      (i)   "IRS" shall mean the Internal Revenue Service.

      (j)   "Participant" shall mean a person who is a participant in the Plan
            in accordance with its terms and conditions.

      (k)   "Payment Schedule" shall have the meaning set forth in Section
            3.7(b) below.

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            Trust Agreement for the
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      (l)   "Plan" shall mean the Callaway Golf Company Executive Deferred
            Compensation Plan.

      (m)   "Plan Year" shall mean the Plan Year chosen for this Trust Agreement
            by the Board.

      (n)   "Trust Fund" shall mean the assets held by the Trustee pursuant to
            the terms of this Trust Agreement and for the purposes of the Plan.

1.6   GRANTOR TRUST. The Trust is intended to be a "grantor trust," of which the
      Company and the Subsidiaries are the grantors, within the meaning of
      subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal
      Revenue Code of 1986, as amended, and the Trust shall be construed
      accordingly.

                                    ARTICLE 2
                             GENERAL ADMINISTRATION

2.1   COMMITTEE DIRECTIONS AND ADMINISTRATION BEFORE CHANGE IN CONTROL. Until a
      Change in Control has occurred, this Section 2.1 shall be effective and
      the Committee shall direct the Trustee as to the administration of the
      Trust in accordance with the following provisions:

      (a)   The Committee members shall be identified to the Trustee by a
            written notice from the Company's Chief Executive Officer or Chief
            Financial Officer appointing the Committee. In the absence thereof,
            the Board shall be the Committee. Persons authorized to give
            directions to the Trustee on behalf of the Committee shall be
            identified to the Trustee by written notice from the Committee, and
            such notice shall contain specimens of the authorized signatures.
            The Trustee shall be entitled to rely on such written notice as
            evidence of the identity and authority of the persons appointed
            until a written cancellation of the appointment, or the written
            appointment of a successor, is received by the Trustee.

      (b)   Directions by the Committee, or its delegate, to the Trustee shall
            be in writing and signed by the Committee or persons authorized by
            the Committee, or may be made by such other method as is acceptable
            to the Trustee.

      (c)   The Trustee may conclusively rely upon directions from the Committee
            in taking any action with respect to this Trust Agreement, including
            the making of payments from the Trust Fund and the investment of the
            Trust Fund pursuant to this Trust Agreement. The Trustee shall have
            no liability for actions taken, or for failure to act, on the
            direction of the Committee. The Trustee shall have no liability for
            failure to act in the absence of directions from the Committee where
            the Committee's directions are required by this Trust Agreement.

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            Trust Agreement for the
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      (d)   The Trustee may request instructions from the Committee and shall
            have no duty to act or liability for failure to act if such
            instructions are not forthcoming from the Committee. If requested
            instructions are not received within a reasonable time, the Trustee
            may, but is under no duty to, act on its own discretion to carry out
            the provisions of this Trust Agreement in accordance with this Trust
            Agreement and the Plan.

2.2   ADMINISTRATION UPON CHANGE IN CONTROL. In the event of a Change in
      Control, the authority of the Committee to administer the Trust and direct
      the Trustee, as set forth in Section 2.1 above, shall cease, and the
      Trustee shall have complete authority to administer the Trust.

2.3   CONTRIBUTIONS. Except as provided in any Plan, the Company and the
      Subsidiaries, in their sole discretion, may at any time, or from time to
      time, make additional deposits of cash or other property in trust with the
      Trustee to augment the principal to be held, administered and disposed of
      by the Trustee as provided in this Trust Agreement. Neither the Trustee
      nor any Participant or Beneficiary shall have any right to compel such
      additional deposits. The Trustee shall have no duty to collect or enforce
      payment to it of any contributions or to require that any contributions be
      made, and shall have no duty to compute any amount to be paid to it nor to
      determine whether amounts paid comply with the terms of the Plan;
      provided, however, that following a Change in Control, the Trustee shall
      have the right, in its sole and absolute discretion, to compel a
      contribution to the Trust from the Company and the Subsidiaries to make-up
      for any shortfall between (i) the anticipated benefit obligations and
      administrative expenses that are to be paid under the Plan and Trust and
      (ii) the assets of the Trust Fund.

2.4   TRUST FUND. The contributions received by the Trustee from the Company and
      the Subsidiaries shall be held and administered pursuant to the terms of
      this Trust Agreement as a single fund without distinction between income
      and principal and without liability for the payment of interest thereon
      except as expressly provided in this Trust Agreement. During the term of
      this Trust, all income received by the Trust, net of expenses and taxes,
      shall be accumulated and reinvested.

2.5   DISTRIBUTION OF EXCESS TRUST FUND TO EMPLOYERS. Prior to a Change in
      Control, in the event that the Committee determines that the Trust Fund
      exceeds 125 percent of the anticipated benefit obligations and
      administrative expenses that are to be paid under the Plan, the Trustee,
      at the direction of the Committee shall distribute to the Company and the
      Subsidiaries such excess portion of the Trust Fund.

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            Trust Agreement for the
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                                    ARTICLE 3
                          POWERS AND DUTIES OF TRUSTEE

3.1   INVESTMENT DIRECTIONS. Except as provided in this Section and Section 3.2
      below, the Committee shall provide the Trustee with all investment
      instructions. The Trustee shall neither affect nor change investments of
      the Trust Fund, except as directed in writing by the Committee or as
      provided in Section 3.2 following a Change in Control, and shall have no
      right, duty or responsibility to recommend investments or investment
      changes; provided, that the Trustee may, pending the Committee's
      investment direction or pending disbursement of cash from the Trust,
      deposit cash on hand from time to time in any bank savings account,
      certificate of deposit, or other instrument creating a deposit liability
      for a bank, including the Trustee's own banking department, or those of
      its affiliates if the Trustee is a bank, without such prior direction.

3.2   INVESTMENT UPON CHANGE IN CONTROL. In the event of a Change in Control,
      the authority of the Committee to direct investments of the Trust Fund
      shall cease and the Trustee shall have complete authority to direct
      investments of the Trust Fund. The person who was the Chief Executive
      Officer of the Company immediately prior to the Change in Control or, if
      not available or willing to assume such responsibility, the Company's next
      highest ranking officer prior to the Change in Control (the "Ex-CEO")
      shall notify the Trustee in writing when a Change in Control has occurred.
      The Trustee has no duty to inquire whether a Change in Control has
      occurred and may rely on the Ex-CEO's notification of a Change in Control;
      provided, however, that if any officer, former officer, director, or
      former director of the Company or any Subsidiary, or any Participant
      notifies the Trustee that there has been or there may be a Change in
      Control, the Trustee shall have the duty to satisfy itself as to whether a
      Change in Control has in fact occurred. The Company and the Subsidiaries
      shall indemnify and hold harmless the Trustee for any damages or costs
      (including attorneys' fees) that may be incurred because of reliance on
      the former chief executive officer's notice or lack thereof.

3.3   MANAGEMENT OF INVESTMENTS. Subject to Section 3.1 above, the Trustee shall
      have, without exclusion, all powers conferred on the Trustee by applicable
      law, unless expressly provided otherwise herein, and all rights associated
      with assets of the Trust shall be exercised by the Trustee or the person
      designated by the Trustee, and shall in no event be exercisable by or rest
      with Participants or their Beneficiaries. The Trustee shall have full
      power and authority to invest and reinvest the Trust Fund in any
      investment permitted by law, exercising the judgment and care that persons
      of prudence, discretion and intelligence would exercise under the
      circumstances then prevailing, considering the probable income and safety
      of their capital, including, without limiting the generality of the
      foregoing, the power:

      (a)   To invest and reinvest the Trust Fund, together with the income
            therefrom, in common stock, preferred stock, convertible preferred
            stock, mutual funds, bonds, debentures, convertible debentures and
            bonds, mortgages, notes, time certificates of deposit,

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            Trust Agreement for the
            Callaway Golf Company Executive Deferred Compensation Plan

            commercial paper and other evidences of indebtedness (including
            those issued by the Trustee or any of its affiliates), other
            securities, policies of life insurance, annuity contracts, options
            to buy or sell securities or other assets, and other property of any
            kind (personal, real, or mixed, and tangible or intangible);
            provided, however, that in no event may the Trustee invest in
            securities (including stock or rights to acquire stock) or
            obligations issued by the Company or the Subsidiaries, other than a
            de minimis amount held in common investment vehicles in which the
            Trustee invests;

      (b)   To deposit or invest all or any part of the assets of the Trust Fund
            in savings accounts or certificates of deposit or other deposits
            which bear a reasonable interest rate in a bank, including the
            commercial department of the Trustee, if such bank is supervised by
            the United States or any State;

      (c)   To hold, manage, improve, repair and control all property, real or
            personal, forming part of the Trust Fund and to sell, convey,
            transfer, exchange, partition, lease for any term, even extending
            beyond the duration of this Trust, and otherwise dispose of the same
            from time to time in such manner, for such consideration, and upon
            such terms and conditions as the Trustee shall determine;

      (d)   To have, respecting securities, all the rights, powers and
            privileges of an owner, including the power to give proxies, pay
            assessments and other sums deemed by the Trustee to be necessary for
            the protection of the Trust Fund, to vote any corporate stock either
            in person or by proxy, with or without power of substitution, for
            any purpose; to participate in voting trusts, pooling agreements,
            foreclosures, reorganizations, consolidations, mergers and
            liquidations, and in connection therewith to deposit securities with
            and transfer title to any protective or other committee under such
            terms as the Trustee may deem advisable; to exercise or sell stock
            subscriptions or conversion rights; and, regardless of any
            limitation elsewhere in this instrument relative to investment by
            the Trustee, to accept and retain as an investment any securities or
            other property received through the exercise of any of the foregoing
            powers;

      (e)   To hold in cash, without liability for interest, such portion of the
            Trust Fund which, in its discretion, shall be reasonable under the
            circumstances, pending investments, or payment of expenses, or the
            distribution of benefits;

      (f)   To employ such agents including custodians and counsel as may be
            reasonably necessary and to pay them reasonable compensation; to
            settle, compromise or abandon all claims and demands in favor of or
            against the Trust assets;

      (g)   To cause title to property of the Trust to be issued, held or
            registered in the individual name of the Trustee, or in the name of
            its nominee(s) or agents, or in such form that title will pass by
            delivery;

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            Trust Agreement for the
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      (h)   To exercise all of the further rights, powers, options and
            privileges granted, provided for, or vested in trustees generally
            under the laws of the State whose laws are applicable to this Trust
            Agreement, as provided in Section 10.6 below, so that the powers
            conferred upon the Trustee herein shall not be in limitation of any
            authority conferred by law, but shall be in addition thereto;

      (i)   To borrow money from any source (including the Trustee) and to
            execute promissory notes, mortgages or other obligations and to
            pledge or mortgage any Trust assets as security;

      (j)   To institute, compromise and defend actions and proceedings; to pay
            or contest any claim; to settle a claim by or against the Trustee by
            compromise, arbitration, or otherwise; to release, in whole or in
            part, any claim belonging to the Trust to the extent that the claim
            is uncollectible;

      (k)   To use securities depositories or custodians and to allow such
            securities as may be held by a depository or custodian to be
            registered in the name of such depository or its nominee or in the
            name of such custodian or its nominee;

      (l)   To invest the Trust Fund from time to time in one or more investment
            funds, which funds shall be registered under the Investment Company
            Act of 1940; and

      (m)   To do all other acts necessary or desirable for the proper
            administration of the Trust Fund, as if the Trustee were the
            absolute owner thereof.

            Nothing in this section shall be construed to mean the Trustee
            assumes any responsibility for the performance of any investment
            made by the Trustee in its capacity as trustee under the operations
            of this Trust Agreement; provided that the foregoing shall not
            relieve the Trustee from liability for breaching its duty of care in
            making an investment selection hereunder (other than at the
            direction of the Committee). Notwithstanding any powers granted to
            the Trustee pursuant to this Trust Agreement or to applicable law,
            the Trustee shall not have any power that could give this Trust the
            objective of carrying on a business and dividing the gains
            therefrom, within the meaning of section 301.7701-2 of the Procedure
            and Administrative Regulations promulgated pursuant to the Internal
            Revenue Code of 1986, as amended.

3.4   DUTY OF CARE. The Trustee shall perform its duties hereunder with the
      care, skill, prudence and diligence under the circumstances then
      prevailing that a prudent person acting in like capacity and familiar with
      such matters would use in the conduct of an enterprise of a like character
      and with like aims; provided, however, that the Trustee shall incur no
      liability to any person for any action taken pursuant to a direction given
      by the Committee prior to a Change in Control which is contemplated by,
      and in conformity with, the terms of the Plan or this Trust.

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3.5   SECURITIES. Voting or other rights in securities shall be exercised by the
      person or entity responsible for directing such investments, and the
      Trustee shall have no duty to exercise voting or proxy or other rights
      relating to any investment managed or directed by the Committee. If any
      foreign securities are purchased pursuant to the direction of the
      Committee, it shall be the responsibility of the person or entity
      responsible for directing such investments to advise the Trustee in
      writing of any laws or regulations, either foreign or domestic, that apply
      to such foreign securities or to the receipt of dividends or interest on
      such securities.

3.6   SUBSTITUTION. Notwithstanding any provision of any Plan or the Trust to
      the contrary, the Company and/or any Subsidiary shall at all times have
      the power to reacquire the Trust Fund by substituting readily marketable
      securities (other than stock, a debt obligation or other security issued
      by the Company or any Subsidiary) and/or cash of an equivalent value and
      such other property shall, following such substitution, constitute the
      Trust Fund. Notwithstanding the foregoing, after a Change in Control, the
      Trustee, the Company and/or any Subsidiary shall have no power to
      substitute readily marketable securities for the Trust Fund.

3.7   DISTRIBUTIONS.

      (a)   The establishment of the Trust and the payment or delivery to the
            Trustee of money or other property shall not vest in any Participant
            or Beneficiary any right, title, or interest in and to any assets of
            the Trust. To the extent that any Participant or Beneficiary
            acquires the right to receive payments under any of the Plan, such
            right shall be no greater than the right of an unsecured general
            creditor of the Company and the Subsidiaries and such Participant or
            Beneficiary shall have only the unsecured promise of the Company and
            the Subsidiaries that such payments shall be made.

      (b)   Concurrent with the establishment of this Trust, the Company shall
            deliver to the Trustee a schedule (the "Payment Schedule") that
            indicates the amounts payable in respect of each Participant (and
            his or her Beneficiaries), provides a formula or formulas or other
            instructions acceptable to the Trustee for determining the amounts
            so payable, specifies the form in which such amount is to be paid
            (as provided for or available under the Plan), and the time of
            commencement for payment of such amounts. The Payment Schedule shall
            be updated annually and upon a Change in Control and from time to
            time as is necessary thereafter. Except as otherwise provided
            herein, prior to a Change in Control, the Trustee shall make
            payments to the Participants and their Beneficiaries in accordance
            with such Payment Schedule. After a Change in Control, the Trustee
            shall make payments in accordance with the payment schedules
            provided by the Administrator (as defined in Section 3.7(i)). The
            Trustee, at the direction of the Committee or, after a Change in
            Control, on its own volition, may make any distribution required to
            be made by it hereunder by delivering:

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            Trust Agreement for the
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            (i)   Its check payable to the person to whom such distribution is
                  to be made, to the person, or, if prior to a Change in
                  Control, to the Company for redelivery to such person;
                  provided that before a Change in Control, the Committee may
                  direct the Trustee to deliver one or more lump sum checks
                  payable to the Company, and the Company shall prepare and
                  deliver individual checks for each Participant or Beneficiary;
                  or

            (ii)  Its check payable to an insurer for the benefit of such
                  person, to the insurer, or, if prior to a Change in Control,
                  to the Company for redelivery to the insurer; or

            (iii) Contracts held on the life of the Participant to whom or with
                  respect to whom the distribution is being made, to the
                  Participant or Beneficiary, or, if prior to a Change in
                  Control, to the Company for redelivery to the person to whom
                  such distribution is to be made; or

            (iv)  If a distribution is being made, in whole or in part, of other
                  assets, assignments or other appropriate documents or
                  certificates necessary to effect a transfer of title, to the
                  Participant or Beneficiary, or, if prior to a Change in
                  Control, to the Company for redelivery to such person.

                  Notwithstanding the foregoing, if directed by the Committee
                  and upon receipt of such documentation satisfactory to the
                  Trustee, the Trustee shall pay all or part of a distribution
                  to which a Participant or Beneficiary would otherwise be
                  entitled under the terms of a Plan to the Company or
                  Subsidiary in satisfaction of amounts validly owed by the
                  Participant to the Company or Subsidiary for which the Company
                  or Subsidiary previously requested but did not receive
                  payment.

      (c)   If the principal of the Trust, and any earnings thereon, are not
            sufficient to make payments of benefits in accordance with the terms
            of the Plan, the Company and the Subsidiaries shall make the balance
            of each such payment as it falls due. The Trustee shall notify the
            Company and the Subsidiaries when principal and earnings are not
            sufficient. To the extent that the total Trust assets available to
            make benefit payments to Participants or Beneficiaries who are
            currently entitled to payment are less than the liability of the
            Plan, the Trustee shall make benefit payments proportionate to the
            ratio of assets available to pay benefits to the total values of the
            liabilities.

      (d)   The Company and the Subsidiaries may make payment of benefits
            directly to Participants or their Beneficiaries as they become due
            under the terms of the Plan. The Company and the Subsidiaries shall
            notify the Trustee of their decisions to make payment of benefits
            directly prior to the time amounts are payable to Participants or
            their Beneficiaries.

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            Trust Agreement for the
            Callaway Golf Company Executive Deferred Compensation Plan

      (e)   Notwithstanding anything contained in this Trust Agreement to the
            contrary, if at any time the Trust is finally determined by the IRS
            not to be a "grantor trust" with the result that the income of the
            Trust Fund is not treated as income of the Company or the
            Subsidiaries pursuant to Sections 671 through 679 of the Internal
            Revenue Code of 1986, as amended, or if a federal income tax is
            finally determined by the IRS to be payable by one or more
            Participants or Beneficiaries with respect to any interest in the
            Plan or the Trust Fund prior to payment of such interest to any such
            Participant or Beneficiary, the Trustee shall, upon direction by the
            Committee (or upon application to the Trustee by a Participant or
            Beneficiary after a Change in Control), distribute such share in a
            lump sum to each Participant or Beneficiary entitled thereto,
            regardless of whether such Participant's employment has terminated
            (provided such Participant has a vested interest in his or her
            accrued benefits under the Plan) and regardless of form and time of
            payments specified in or pursuant to the Plan. Any remaining assets
            (less any expenses or costs due under Sections 3.9 and 3.10 of this
            Trust Agreement) shall then be paid by the Trustee to the Company
            and the Subsidiaries in such amounts, and in the manner instructed
            by the Committee. If the value of the Trust Fund is less than the
            benefit obligations under the Plan, the foregoing described
            distributions will be limited to a Participant's share of the Trust
            Fund, determined by allocating assets to the Participant based on
            the ratio of the Participant's benefit obligations under the Plan to
            the total benefit obligations under the Plan. Prior to a Change in
            Control, the Trustee shall rely solely on the directions of the
            Committee with respect to the occurrence of the foregoing events and
            the resulting distributions to be made, and the Trustee shall not be
            responsible for any failure to act in the absence of such direction.

      (f)   The Trustee shall make provision for the reporting and withholding
            of any federal, state or local taxes that may be required to be
            withheld with respect to the payment of benefits pursuant to the
            terms of the Plan and shall pay amounts withheld to the appropriate
            taxing authorities or determine that such amounts have been
            reported, withheld and paid by the Company and the Subsidiaries.

      (g)   Prior to a Change in Control, payments by the Trustee shall be
            delivered or mailed to addresses supplied by the Committee and the
            Trustee's obligation to make such payments shall be satisfied upon
            such delivery or mailing. Prior to a Change in Control, the Trustee
            shall have no obligation to determine the identity of persons
            entitled to benefits or their mailing addresses. After a Change in
            Control, the Trustee shall have such obligations.

      (h)   Prior to a Change in Control, the entitlement of a Participant or
            his or her Beneficiaries to benefits under the Plan shall be
            determined by the Company and the Subsidiaries or such party as they
            shall designate under the Plan, and any claim for such benefits
            shall be considered and reviewed under the procedures set out in the
            Plan.

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            Trust Agreement for the
            Callaway Golf Company Executive Deferred Compensation Plan

      (i)   Notwithstanding Section 3.7(h), upon and after the occurrence of a
            Change in Control, the Plan shall be administered by an independent
            third party (the "Administrator") selected by the Trustee and
            approved by the Ex-CEO. The Administrator shall have the
            discretionary power to determine all questions arising in connection
            with the administration of the Plan and the interpretation of the
            Plan and Trust including, but not limited to benefit entitlement
            determinations; provided, however, upon and after the occurrence of
            a Change in Control, the Administrator shall have no power to direct
            the investment of Plan or Trust assets or select any investment
            manager or custodial firm for the Plan or Trust. Upon and after the
            occurrence of a Change in Control, the Company must: (1) pay all
            reasonable administrative expenses and fees of the Administrator;
            (2) indemnify the Administrator against any costs, expenses and
            liabilities including, without limitation, attorney's fees and
            expenses arising in connection with the performance of the
            Administrator hereunder, except with respect to matters resulting
            from the gross negligence or willful misconduct of the Administrator
            or its employees or agents; and (3) supply full and timely
            information to the Administrator or all matters relating to the
            Plan, the Trust, the Participants and their Beneficiaries, the
            Account Balances of the Participants, the date of circumstances of
            the Retirement, Disability, death or Termination of Employment of
            the Participants, and such other pertinent information as the
            Administrator may reasonably require. Upon and after a Change in
            Control, the Administrator may be terminated (and a replacement
            appointed) by the Trustee only with the approval of the Ex-CEO. Upon
            and after a Change in Control, the Administrator may not be
            terminated by the Company.

3.8   TRUSTEE RESPONSIBILITY REGARDING PAYMENTS ON INSOLVENCY.

      (a)   The Trustee shall cease payment of benefits to Participants and
            their Beneficiaries as provided in subsection (b) if the Company, or
            any Subsidiary, is Insolvent (the "Insolvent Entity"). The Insolvent
            Entity shall be considered "Insolvent" for purposes of this Trust
            Agreement if:

            (i)   the Insolvent Entity is unable to pay its debts as they become
                  due, or

            (ii)  the Insolvent Entity is subject to a pending proceeding as a
                  debtor under the United States Bankruptcy Code.

            For purposes of this Section 3.8, if an entity is determined to be
            Insolvent, each Subsidiary in which such entity has an equity
            interest shall also be deemed to be an Insolvent Entity. However,
            the insolvency of a Subsidiary will not cause a parent corporation
            to be deemed Insolvent.

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            Trust Agreement for the
            Callaway Golf Company Executive Deferred Compensation Plan

      (b)   At all times during the continuance of this Trust, as provided in
            Section 1.3 above, the principal and income of the Trust shall be
            subject to claims of the general creditors of the Company and its
            Subsidiaries under federal and state law as set forth below:

            (i)   The Board and the chief executive officer of the Company shall
                  have the duty to inform the Trustee in writing of the
                  Company's or any Subsidiary's Insolvency. If a person claiming
                  to be a creditor of the Company or any Subsidiary alleges in
                  writing to the Trustee that the Company or any Subsidiary has
                  become Insolvent, the Trustee shall determine whether the
                  Company or any Subsidiary is Insolvent and, pending such
                  determination, the Trustee shall discontinue payment of
                  benefits to the Insolvent Entity's Participants or their
                  Beneficiaries. Prior to a Change in Control, the Trustee may
                  conclusively rely on any determination it receives from the
                  Board or the chief executive officer of the Company with
                  respect to the Insolvency of the Company or any Subsidiary.

            (ii)  Unless the Trustee has actual knowledge of the Company's or a
                  Subsidiary's Insolvency, or has received notice from the
                  Company, a Subsidiary, or a person claiming to be a creditor
                  alleging that the Company or a Subsidiary is Insolvent, the
                  Trustee shall have no duty to inquire whether the Company or
                  any Subsidiary is Insolvent. The Trustee may in all events
                  rely on such evidence concerning the Company's or any
                  Subsidiary's solvency as may be furnished to the Trustee and
                  that provides the Trustee with a reasonable basis for making a
                  determination concerning the Company's or any Subsidiary's
                  solvency. In this regard, the Trustee may rely upon a letter
                  from the Company's or a Subsidiary's auditors as to the
                  Company's or any Subsidiary's financial status.

            (iii) If at any time the Trustee has determined that the Company or
                  any Subsidiary is Insolvent, the Trustee shall discontinue
                  payments to the Insolvent Entity's Participants or their
                  Beneficiaries, and shall hold the portion of the assets of the
                  Trust allocable to the Insolvent Entity for the benefit of the
                  Insolvent Entity's general creditors. Nothing in this Trust
                  Agreement shall in any way diminish any rights of Participants
                  or their Beneficiaries to pursue their rights as general
                  creditors of the Insolvent Entity with respect to benefits due
                  under the Plan or otherwise.

            (iv)  The Trustee shall resume the payment of benefits to
                  Participants or their Beneficiaries in accordance with this
                  Article 3 of this Trust Agreement only after the Trustee has
                  determined that the alleged Insolvent Entity is not Insolvent
                  (or is no longer Insolvent).

      (c)   Provided that there are sufficient assets, if the Trustee
            discontinues the payment of benefits from the Trust pursuant to
            Section 3.8(b) hereof and subsequently resumes such

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            Trust Agreement for the
            Callaway Golf Company Executive Deferred Compensation Plan

            payments, the first payment following such discontinuance shall
            include the aggregate amount of all payments due to Participants or
            their Beneficiaries under the terms of the Plan for the period of
            such discontinuance, without interest thereon to reflect delayed
            payment, less the aggregate amount of any payments made to
            Participants or their Beneficiaries by the Company or any Subsidiary
            in lieu of the payments provided for hereunder during any such
            period of discontinuance. Prior to a Change in Control, the
            Committee shall instruct the Trustee as to such amounts, and after a
            Change in Control, the Trustee shall determine such amounts in
            accordance with the terms and provisions of the Plan.

3.9   COSTS OF ADMINISTRATION. The Trustee is authorized to incur reasonable
      obligations in connection with the administration of the Trust, including
      attorneys' fees, Administrator fees, other administrative fees and
      appraisal fees. Such obligations shall be paid by the Company and the
      Subsidiaries. The Trustee is authorized to pay such amounts from the Trust
      Fund if the Company or the Subsidiaries fail to pay them within 60 days of
      presentation of a statement of the amounts due that is not contested by
      the Company in writing before the expiration of such 60-day period. If any
      amounts payable hereunder are contested by the Company, the parties hereto
      shall cooperate to determine whether such amount should be paid.

3.10  TRUSTEE COMPENSATION AND EXPENSES. The Trustee shall be entitled to
      reasonable compensation for its services as from time to time agreed upon
      between the Trustee and the Company. If the Trustee and the Company fail
      to agree upon a rate of compensation, or following a Change in Control,
      the Trustee shall be entitled to compensation at a rate equal to the rate
      charged by the Trustee for similar services rendered by it during the
      current fiscal year for other trusts similar to this Trust. The Trustee
      shall be entitled to reimbursement for expenses incurred by it in the
      performance of its duties as the Trustee, including reasonable fees for
      legal counsel. The Trustee's compensation and expenses shall be paid by
      the Company and the Subsidiaries. The Trustee is authorized to withdraw
      such amounts from the Trust Fund if the Company or the Subsidiaries fail
      to pay them within 60 days of presentation of a statement of the amounts
      due that is not contested by the Company in writing before the expiration
      of such 60-day period. If any amounts payable hereunder are contested by
      the Company, the parties hereto shall cooperate to determine whether such
      amount should be paid..

3.11  PROFESSIONAL ADVICE. The Company and the Subsidiaries specifically
      acknowledge that the Trustee and/or the Administrator may find it
      desirable or expedient to retain legal counsel (who may also be legal
      counsel for the Company generally) or other professional advisors to
      advise it in connection with the exercise of any duty under this Trust
      Agreement, including, but not limited to, any matter relating to or
      following a Change in Control or the Insolvency of the Company or any
      Subsidiary.

3.12  PAYMENT ON COURT ORDER. To the extent permitted by law, the Trustee is
      authorized to make any payments directed by court order in any action in
      which the Trustee has been named as a

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            Trust Agreement for the
            Callaway Golf Company Executive Deferred Compensation Plan

      party. The Trustee is not obligated to defend actions in which the Trustee
      is named, but shall notify the Company or Committee of any such action and
      may tender defense of the action to the Company, Committee, Participant or
      Beneficiary whose interest is affected. The Trustee shall defend any
      action in which the Trustee is named, and for which the Company has
      refused to provide defense of the action, and any expenses incurred by the
      Trustee shall be paid by the Company and the Subsidiaries if required
      under Section 3.13. The Trustee is authorized to pay such amounts from the
      Trust Fund if the Company or the Subsidiaries fail to pay them within
      sixty (60) days of presentation of a statement of the amounts due that is
      not contested by the Company in writing before the expiration of such
      60-day period. If any amounts payable hereunder are contested by the
      Company, the parties hereto shall cooperate to determine whether such
      amount should be paid.

3.13  PROTECTIVE PROVISIONS. Notwithstanding any other provision contained in
      this Trust Agreement to the contrary, the Trustee shall have no obligation
      to (i) determine the existence of any conversion, redemption, exchange,
      subscription or other right relating to any securities purchased of which
      notice was given prior to the purchase of such securities and shall have
      no obligation to exercise any such right unless the Trustee is advised in
      writing by the Committee both of the existence of the right and the
      desired exercise thereof within a reasonable time prior to the expiration
      of the right to exercise, or (ii) advance any funds to the Trust.
      Furthermore, the Trustee is not a party to the Plan.

3.14  INDEMNIFICATIONS.

      (a)   The Company and the Subsidiaries shall indemnify and hold the
            Trustee harmless from and against all loss or liability (including
            expenses and reasonable attorneys' fees) to which it may be subject
            by reason of its execution of its duties under this Trust, or by
            reason of any acts taken in good faith in accordance with any
            directions, or acts omitted in good faith due to absence of
            directions, from the Company, the Committee or a Participant, except
            that the Trustee will not be so indemnified if such loss or
            liability is finally adjudged by a court of competent jurisdiction,
            or is determined by any other proceeding mutually agreeable to the
            Company and the Trustee, to have resulted from the Trustee's
            negligence or misconduct, or breach of its duties under this Trust
            Agreement. The indemnity described herein shall be provided by the
            Company and the Subsidiaries.

      (b)   The Company and the Subsidiaries shall indemnify and hold the
            Administrator harmless from and against all loss or liability
            (including expenses and reasonable attorneys' fees) to which it may
            be subject by reason of its execution of its duties under this
            Trust, or by reason of any acts taken in good faith in accordance
            with any directions, or acts omitted in good faith due to absence of
            directions, from the Company, the Committee or a Participant, unless
            such loss or liability is due to the Administrator's negligence or

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            Trust Agreement for the
            Callaway Golf Company Executive Deferred Compensation Plan

            misconduct. The indemnity described herein shall be provided by the
            Company and the Subsidiaries.

      (c)   The Trustee shall indemnify and hold the Company, Subsidiaries and
            the Committee members harmless from and against all loss or
            liability (including expenses and reasonable attorneys' fees) to
            which they may be subject by reason of the Trustee's negligence or
            misconduct, or breach of its duties under this Trust Agreement,
            except that the Company, Subsidiaries and the Committee will not be
            so indemnified if such loss or liability is finally adjudged by a
            court of competent jurisdiction or is determined by any other
            proceeding mutually agreeable to the Trustee and the Company, to
            have resulted from the Company's negligence or misconduct, or breach
            of its duties under this Trust Agreement.

      (d)   All releases and indemnities provided in this Trust Agreement shall
            survive the termination of this Trust Agreement.

                                    ARTICLE 4
                               INSURANCE CONTRACTS

4.1   TYPES OF CONTRACTS. To the extent that the Trustee is directed by the
      Committee prior to a Change in Control to invest part or all of the Trust
      Fund in insurance contracts, the type and amount thereof shall be
      specified by the Committee. The Trustee shall be under no duty to make
      inquiry as to the propriety of the type or amount so specified.

4.2   OWNERSHIP. Each insurance contract issued shall provide that the Trustee
      shall be the owner thereof with the power to exercise all rights,
      privileges, options and elections granted by or permitted under such
      contract or under the rules of the insurer. The exercise by the Trustee of
      any incidents of ownership under any contract shall, prior to a Change in
      Control, be subject to the direction of the Committee.

4.3   RESTRICTIONS ON TRUSTEE'S RIGHTS. The Trustee shall have no power to name
      a beneficiary of the policy other than the Trust, to assign the policy (as
      distinct from conversion of the policy to a different form) other than to
      a successor Trustee, or to loan to any person the proceeds of any
      borrowing against such policy. Despite the foregoing, the Trustee may (i)
      loan to the Company or any Subsidiary the proceeds of any borrowing
      against an insurance policy held in the Trust Fund or (ii) assign all, or
      any portion, of a policy to the Company or any Subsidiary if under other
      provisions of this Trust Agreement the Company or any Subsidiary is
      entitled to receive assets from the Trust.

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            Trust Agreement for the
            Callaway Golf Company Executive Deferred Compensation Plan

                                    ARTICLE 5
                               TRUSTEE'S ACCOUNTS

5.1   RECORDS. The Trustee shall maintain accurate records and detailed accounts
      of all investments, receipts, disbursements and other transactions
      hereunder. The Trustee shall separately account for the assets contributed
      by the Company and each of its Subsidiaries. Such records shall be
      available at all reasonable times for inspection by the Company and
      Subsidiaries or their authorized representative. The Trustee, at the
      direction of the Committee, shall submit to the Committee and to any
      insurer such valuations, reports or other information as the Committee may
      reasonably require and, in the absence of fraud or bad faith, the
      valuation of the Trust Fund by the Trustee shall be conclusive.

5.2   ANNUAL ACCOUNTING; FINAL ACCOUNTING.

      (a)   Within 60 days following the end of each Plan Year and within 60
            days after the removal or resignation of the Trustee or the
            termination of the Trust, the Trustee shall file with the Committee
            a written account setting forth a description of all properties
            purchased and sold, all receipts, disbursements and other
            transactions effected by it during the Plan Year or, in the case of
            removal, resignation or termination, since the close of the previous
            Plan Year, and listing the properties held in the Trust Fund as of
            the last day of the Plan Year or other period and indicating their
            values. Such values shall be either cost or market as directed by
            the Committee in accordance with the terms of the Plan.

      (b)   The Committee may approve such account either by written notice of
            approval delivered to the Trustee or by its failure to express
            written objection to such account delivered to the Trustee within 60
            days after the date of which such account was delivered to the
            Committee.

      (c)   The approval by the Committee of an accounting shall be binding as
            to all matters embraced in such accounting on all parties to this
            Trust Agreement and on all Participants and Beneficiaries, to the
            same extent as if such accounting had been settled by a judgment or
            decree of a court of competent jurisdiction in which the Trustee,
            the Committee, the Company, the Subsidiaries and all persons having
            or claiming any interest in any Plan or the Trust Fund were made
            parties.

      (d)   Despite the foregoing, nothing contained in this Trust Agreement
            shall deprive the Trustee of the right to have an accounting
            judicially settled, if the Trustee, in the Trustee's sole
            discretion, desires such a settlement.

5.3   VALUATION. The assets of the Trust Fund shall be valued at their
      respective fair market values on the date of valuation, as determined by
      the Trustee based upon such sources of information

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            Trust Agreement for the
            Callaway Golf Company Executive Deferred Compensation Plan

      as it may deem reliable, including, but not limited to, stock market
      quotations, statistical valuation services, newspapers of general
      circulation, financial publications, advice from investment counselors,
      brokerage firms or insurance companies, or any combination of sources.
      Prior to a Change in Control, the Committee shall instruct the Trustee as
      to the value of assets for which market values are not readily obtainable
      by the Trustee. If the Committee fails to provide such values, the Trustee
      may take whatever action it deems reasonable, including employment of
      attorneys, appraisers, life insurance companies or other professionals,
      the expense of which shall be an expense of administration of the Trust
      Fund and payable by the Company and the Subsidiaries. The Trustee may rely
      upon information from the Company and the Subsidiaries, the Committee,
      appraisers or other sources and shall not incur any liability for an
      inaccurate valuation based in good faith upon such information.

5.4   DELEGATION OF DUTIES. The Company or the Committee, or both, may at any
      time employ the Trustee as their agent to perform any act, keep any
      records or accounts and make any computations that are required of the
      Company, any Subsidiary or the Committee by this Trust Agreement or the
      Plan. The Trustee may be compensated for such employment and such
      employment shall not be deemed to be contrary to the Trust. Nothing done
      by the Trustee as such agent shall change or increase its responsibility
      or liability as Trustee hereunder.

                                    ARTICLE 6
                        RESIGNATION OR REMOVAL OF TRUSTEE

6.1   RESIGNATION; REMOVAL. The Trustee may resign at any time by written notice
      to the Company, which shall be effective 60 days after receipt of such
      notice unless the Company and the Trustee agree otherwise. Prior to a
      Change in Control, the Trustee may be removed by the Company on 60 days
      notice or upon shorter notice when accepted by the Trustee. After a Change
      in Control, the Trustee may only be removed by the Ex-CEO on 60 days
      notice or upon shorter notice accepted by the Trustee.

6.2   SUCCESSOR TRUSTEE. If the Trustee resigns or is removed, a successor shall
      be appointed by the Company, in accordance with this Section, by the
      effective date of the resignation or removal under Section 6.1 above. The
      successor shall be a bank, trust company, or similar independent third
      party that is granted corporate trustee powers under state or federal law.
      After the occurrence of a Change in Control, a successor Trustee may not
      be appointed without the consent of the Ex-CEO. If no such appointment has
      been made by the effective date of the resignation or removal, the Trustee
      may appoint a successor trustee or may apply to a court of competent
      jurisdiction for appointment of a successor or for instructions. All
      expenses of the Trustee in connection with the proceeding shall be allowed
      as administrative expenses of the Trust.

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            Trust Agreement for the
            Callaway Golf Company Executive Deferred Compensation Plan

6.3   SETTLEMENT OF ACCOUNTS. Upon resignation or removal of the Trustee and
      appointment of a successor Trustee, all assets shall subsequently be
      transferred to the successor Trustee in cash and/or in kind as directed
      the Committee, or after a Change of Control, as determined by the Trustee
      in consultation with the successor trustee. The transfer shall be
      completed within 90 days after receipt of notice of resignation, removal
      or transfer, unless the Company extends the time limit. Upon the transfer
      of the assets, the successor Trustee shall succeed to all of the powers
      and duties given to the Trustee in this Trust Agreement. The resigning or
      removed Trustee shall render to the Committee an account in the form and
      manner and at the time prescribed in Section 5.2. The approval of such
      accounting and discharge of the Trustee shall be as provided in such
      Section.

                                    ARTICLE 7
                    CONTROVERSIES, LEGAL ACTIONS AND COUNSEL

7.1   CONTROVERSY. If any controversy arises with respect to the Trust, the
      Trustee shall take action as directed by the Committee or, in the absence
      of such direction or after a Change in Control, as it deems advisable,
      whether by legal proceedings, compromise or otherwise. The Trustee may
      retain the funds or property involved without liability pending settlement
      of the controversy. The Trustee shall be under no obligation to take any
      legal action of whatever nature unless there shall be sufficient property
      in the Trust to indemnify the Trustee with respect to any expenses or
      losses to which it may be subjected.

7.2   JOINDER OF PARTIES. In any action or other judicial proceedings affecting
      the Trust, it shall be necessary to join as parties the Trustee, the
      Committee, the Company and the Subsidiaries. No Participant or other
      person shall be entitled to any notice or service of process. Any judgment
      entered in such a proceeding or action shall be binding on all persons
      claiming under the Trust. Nothing in this Trust Agreement shall be
      construed as to deprive a Participant or Beneficiary of his or her right
      to seek adjudication of his or her rights by administrative process or by
      a court of competent jurisdiction.

                                    ARTICLE 8
                                    INSURERS

8.1   INSURER NOT A PARTY. No insurer shall be deemed to be a party to the Trust
      and an insurer's obligations shall be measured and determined solely by
      the terms of contracts and other agreements executed by it.

8.2   AUTHORITY OF TRUSTEE. An insurer shall accept the signature of the Trustee
      to any documents or papers executed in connection with such contracts. The
      signature of the Trustee shall be conclusive proof to the insurer that the
      person on whose life an application is being made is

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            Trust Agreement for the
            Callaway Golf Company Executive Deferred Compensation Plan

      eligible to have a contract issued on his or her life and is eligible for
      a contract of the type and amount requested.

8.3   CONTRACT OWNERSHIP. An insurer shall deal with the Trustee as the sole and
      absolute owner of any insurance contracts and shall have no obligation to
      inquire whether any action or failure to act on the part of the Trustee is
      in accordance with or authorized by the terms of the Plan or this Trust
      Agreement.

8.4   LIMITATION OF LIABILITY. An insurer shall be fully discharged from any and
      all liability for any action taken or any amount paid in accordance with
      the direction of the Trustee and shall have no obligation to see to the
      proper application of the amounts so paid. An insurer shall have no
      liability for the operation of the Trust or the Plan, whether or not in
      accordance with their terms and provisions.

8.5   CHANGE OF TRUSTEE. An insurer shall be fully discharged from any and all
      liability for dealing with a party or parties indicated on its records to
      be the Trustee until such time as it shall receive at its home office
      written notice of the appointment and qualification of a successor
      Trustee.

                                    ARTICLE 9
                            AMENDMENT AND TERMINATION

9.1   AMENDMENT. Subject to the limitations set forth in this Section 9.1, this
      Trust Agreement may be amended by a written instrument executed by the
      Trustee and the Company. Notwithstanding the foregoing, no such amendment
      shall conflict with the terms of the Plan or shall make the Trust
      revocable after it has become irrevocable in accordance with Section 1.3
      above.

      (a)   Writing and Consent. Any amendment to this Trust Agreement shall be
            set forth in writing and signed by the Company and the Trustee. Any
            amendment may be current, retroactive or prospective, in each case
            as provided therein.

      (b)   The Company and Trustee. In connection with the exercise of the
            rights under this Section 9.1(b):

            (i)   prior to a Change in Control, the Trustee shall have no
                  responsibility to determine whether any proposed amendment
                  complies with the terms and conditions of the Plan and may
                  conclusively rely on the directions of the Committee with
                  respect thereto, unless the Trustee has knowledge of a
                  proposed transaction or transactions that would result in a
                  Change in Control; and

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            Trust Agreement for the
            Callaway Golf Company Executive Deferred Compensation Plan

            (ii)  after a Change in Control, the power of the Company to amend
                  this Trust Agreement shall cease, and the power to amend that
                  was previously held by the Company shall, instead, be
                  exercised by the Ex-CEO, with the consent of the Trustee.

      (c)   Taxation. This Trust Agreement shall not be amended, altered,
            changed or modified in a manner that would cause the Participants
            and/or Beneficiaries under any Plan to be taxed on the benefits
            under any Plan in a year other than the year of actual receipt of
            benefits.

9.2   FINAL TERMINATION. The Trust shall not terminate until the date on which
      (a) Participants and their Beneficiaries are no longer entitled to
      benefits pursuant to the terms of the Plan and all of the expenses of the
      Trust have been paid, or (b) the Company obtains written approval of all
      Participants and Beneficiaries with benefits accrued under the Plan at
      such time to terminate the Trust. Upon termination of the Trust, any
      assets remaining in the Trust shall be returned to the Company and the
      Subsidiaries. Such remaining assets shall be paid by the Trustee to the
      Company and the Subsidiaries in such amounts and in the manner instructed
      by the Company, whereupon the Trustee shall be released and discharged
      from all obligations hereunder. From and after the date of termination and
      until final distribution of the Trust Fund, the Trustee shall continue to
      have all of the powers provided herein as are necessary or expedient for
      the orderly liquidation and distribution of the Trust Fund.

                                   ARTICLE 10
                                  MISCELLANEOUS

10.1  DIRECTIONS FOLLOWING CHANGE IN CONTROL. Despite any other provision of
      this Trust Agreement that may be construed to the contrary, following a
      Change in Control, all powers of the Committee, the Company and the Board
      to direct the Trustee under this Trust Agreement shall terminate, and the
      Trustee shall act on its own discretion to carry out the terms of this
      Trust Agreement in accordance with the Plan and this Trust Agreement.

10.2  TAXES. The Company and the Subsidiaries shall from time to time pay taxes
      of any and all kinds whatsoever that at any time are lawfully levied or
      assessed upon or become payable in respect of the Trust Fund, the income
      or any property forming a part thereof, or any security transaction
      pertaining thereto. To the extent that any taxes lawfully levied or
      assessed upon the Trust Fund are not paid by the Company and the
      Subsidiaries, the Trustee shall have the power to pay such taxes out of
      the Trust Fund and shall seek reimbursement from the Company and the
      Subsidiaries. Prior to making any payment, the Trustee may require such
      releases or other documents from any lawful taxing authority as it shall
      deem necessary. The Trustee shall contest the validity of taxes in any
      manner deemed appropriate by the Company or its counsel, but at the
      Company's and the Subsidiaries' expense, and only if it has received an
      indemnity

                                       20
<PAGE>

[CALLAWAY GOLF LOGO]

            Trust Agreement for the
            Callaway Golf Company Executive Deferred Compensation Plan

      bond or other security satisfactory to it to pay any such expenses. Prior
      to a Change in Control, the Trustee (i) shall not be liable for any
      nonpayment of tax when it distributes an interest hereunder on directions
      from the Committee, and (ii) shall have no obligation to prepare or file
      any tax return on behalf of the Trust Fund, any such return being the sole
      responsibility of the Committee. The Trustee shall cooperate with the
      Committee in connection with the preparation and filing of any such
      return. After a Change in Control, the Trustee shall have such duties and
      obligations.

10.3  THIRD PERSONS. All persons dealing with the Trustee are released from
      inquiring into the decisions or authority of the Trustee and from seeing
      to the application of any moneys, securities or other property paid or
      delivered to the Trustee.

10.4  NONASSIGNABILITY; NONALIENATION. Benefits payable to Participants and
      their Beneficiaries under this Trust Agreement may not be anticipated,
      assigned (either at law or in equity), alienated, pledged, encumbered or
      subjected to attachment, garnishment, levy, execution or other legal or
      equitable process.

10.5  THE PLAN. The Trust and the Plan are parts of a single, integrated
      employee benefit plan system and shall be construed together. In the event
      of any conflict between the terms of this Trust Agreement and the
      agreements that constitute the Plan, such conflict shall be resolved in
      favor of this Trust Agreement.

10.6  APPLICABLE LAW. Except to the extent, if any, preempted by ERISA, this
      Trust Agreement shall be governed by and construed in accordance with the
      internal laws of the State of California. Any provision of this Trust
      Agreement prohibited by law shall be ineffective to the extent of any such
      prohibition, without invalidating the remaining provisions hereof.

10.7  NOTICES AND DIRECTIONS. Whenever a notice or direction is given by the
      Committee to the Trustee, it shall be in the form required by Section 2.1.
      Actions by the Company shall be by the Board or a duly authorized officer,
      with such actions certified to the Trustee by an appropriately certified
      copy of the action taken. The Trustee shall be protected in acting upon
      any such notice, resolution, order, certificate or other communication
      believed by it to be genuine and to have been signed by the proper party
      or parties.

10.8  SUCCESSORS AND ASSIGNS. This Trust Agreement shall be binding upon and
      inure to the benefit of the Company, the Subsidiaries and the Trustee and
      their respective successors and assigns.

10.9  GENDER AND NUMBER. Words used in the masculine shall apply to the feminine
      where applicable, and when the context requires, the plural shall be read
      as the singular and the singular as the plural.

                                       21
<PAGE>

[CALLAWAY GOLF LOGO]

            Trust Agreement for the
            Callaway Golf Company Executive Deferred Compensation Plan

10.10 HEADINGS. Headings in this Trust Agreement are inserted for convenience of
      reference only and any conflict between such headings and the text shall
      be resolved in favor of the text.

10.11 COUNTERPARTS. This Trust Agreement may be executed in an original and any
      number of counterparts, each of which shall be deemed to be an original of
      one and the same instrument.

10.12 BENEFICIAL INTEREST. The Company and the Subsidiaries are the true
      beneficiaries hereunder in that the payment of benefits, directly or
      indirectly to or for a Participant or Beneficiary by the Trustee, is in
      satisfaction of the Company's and the Subsidiaries' liability therefore
      under the Plan. Nothing in this Trust Agreement shall establish any
      beneficial interest in any person other than the Company and the
      Subsidiaries.

10.13 THE TRUST AND PLAN. This Trust, the Plan and each Participant's Plan
      Agreement are part of and constitute a single, integrated employee benefit
      plan and trust, shall be construed together as the entire agreement
      between the Company, the Trustee, the Participants and the Beneficiaries
      with regard to the subject matter thereof, and shall supersede all
      previous negotiations, agreements and commitments with respect thereto.

10.14 EFFECTIVE DATE. The effective date of this Trust Agreement shall be May 6,
      2002.

            IN WITNESS WHEREOF the Company and the Trustee have signed this
Trust Agreement as of the date first written above.

TRUSTEE:                                       THE COMPANY:

U. S. Trust Company, N. A.                     Callaway Golf Company
                                               a Delaware corporation,

By:  /s/ Dennis M. Kunisaki                     /s/ Bradley J. Holiday
    ----------------------------------         ---------------------------------
                                               BRADLEY J. HOLIDAY
Its:  Senior Vice President                    Executive Vice President and
                                               Chief Financial Officer

                                       22<PAGE>

                                                                   EXHIBIT 10.25

NOTICE OF GRANT OF STOCK OPTION                     CALLAWAY GOLF COMPANY
AND OPTION AGREEMENT                                ID: 95-3797580
                                                    2180 RUTHERFORD ROAD
                                                    CARLSBAD, CA 92008-8815

[NAME OF DIRECTOR]                            PLAN: 2001 NON-EMPLOYEE DIRECTOR
                                                    STOCK OPTION PLAN

      1.    GRANT OF OPTION. Effective __________ ("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>
[NUMBER     $______________   ______________________   _________________________
   OF
SHARES]
</TABLE>

      This stock option award 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 2001 Non-Employee Directors Stock Option 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 Company in its discretion.

      2.    VESTING. Subject to any accelerated vesting provisions contained in
the Plan, the Option shall vest in accordance with the vesting schedule set
forth above. The Company may, in its discretion, accelerate the vesting schedule
(in which case it may impose whatever conditions it considers appropriate on the
accelerated portion).

      3.    TERM AND TERMINATION. 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 a director
of the Company for any reason including death. Subject to Section 2 (Vesting),
if you cease for any reason to be a director of the Company for any reason
including death, that portion of the Option which has not yet vested shall be
terminated.

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

                                                      CALLAWAY GOLF COMPANY

                                                      By: _____________________

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