Document:

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                                                                   EXHIBIT 10.46

                                 PROMISSORY NOTE

$25,000,000                                                       March 15, 2004

         FOR VALUE RECEIVED, CALLAWAY GOLF COMPANY, a Delaware corporation
("Borrower"), promises to pay to the order of BANK OF AMERICA, N.A., a national
banking association (the "Bank"), at CCS Loan Department 1592, Attn: AFS, 333
South Beaudry Avenue, 11th Floor, Los Angeles, CA 90017-1466, or at such other
place as the holder hereof may designate, in lawful money of the United States
of America and in immediately available funds, the principal sum of TWENTY-FIVE
MILLION DOLLARS ($25,000,000.00) (the "Maximum Commitment Amount"), or so much
thereof as may be advanced and be outstanding, with interest thereon, to be
computed on each advance from the date of its disbursement until paid as set
forth herein. Capitalized terms used, but not otherwise defined, in this Note
are defined in Exhibit A to this Note.

1. COMMITMENT, BORROWING AND REPAYMENT, MATURITY, CONDITIONS TO ADVANCES:

         (a)      Commitment. Subject to the terms and conditions of this Note,
by its acknowledgement below, the Bank commits to lend to the Borrower, from
time to time, until, but not including, the Maturity Date, and the Borrower may
borrow, repay and reborrow, up to an aggregate amount outstanding at any one
time not to exceed the Maximum Commitment Amount. From the date of this Note
until the Maturity Date, the Borrower shall pay a commitment fee equal to the
Applicable Rate times the actual daily amount by which the Maximum Commitment
Amount exceeds aggregate outstanding advances under this Note, payable quarterly
in arrears and calculated as set forth in Section 2.09 (Fees) of the Credit
Agreement.

         (b)      Borrowing. The procedures for borrowing, converting advances
between Eurodollar Loans and Prime Loans, and continuing advances as Eurodollar
Loans and Prime Loans shall be as set forth in Section 2.02 (Borrowings,
Conversions and Continuations of Committed Loans) of the Credit Agreement with
respect to Committed Loans that are Eurodollar Rate Loans and Base Rate
Committed Loans, respectively or as otherwise agreed by the Bank and the
Borrower from time to time. Computations under this Note, including without
limitation, computations of interest, shall be made in accordance with Section
2.10 (Computations of Interest and Fees) of the Credit Agreement. No Interest
Period for a Eurodollar Loan may expire later than the Maturity Date.

         (c)      Payments. Unless otherwise agreed by the Bank, each repayment
and prepayment of Eurodollar Loans and Prime Loans shall be made on Business
Days at the times and in the amounts applicable to Eurodollar Rate Loans and
Base Rate Committed Loans, respectively, under the Credit Agreement. Payments
shall be made in accordance with Sections 2.05 (Prepayments), 2.07 (Repayment of
Loans) and Section 2.12 (Payments Generally) of the Credit Agreement, except
that payments under this Note shall be made to the address indicated in the
introductory paragraph to this Note. So long as no Default or Event of Default
has occurred and is continuing under the Credit Agreement, the Borrower shall
repay all amounts outstanding under this Note prior to making any voluntary
repayment of the principal amount of Committed Loans outstanding under the
Credit Agreement pursuant to Sections 2.05(a) or 2.05(b) thereof. Until
repayment in full of advances under, and termination of, this Note, the Borrower
shall not agree to (1) the reduction or termination of the Aggregate Commitments
under the Credit Agreement, (2) any acceleration of the Revolving Maturity Date
under the Credit Agreement to a date earlier than the date in effect as of the
date of this Note, (3) any amendment to the Credit Agreement pursuant to which
mandatory payments or prepayments would be required under the Credit Agreement
prior to the date such payments and prepayments would be required under the
Credit Agreement as in effect as of the date of this Note or (4) any other
amendment or modification of the Credit Agreement

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(including, without limitation, by amendments to definitions) to effectuate the
modifications described in the preceding clauses (1) through (3). All payments
to the Bank shall be made for the account of the Bank's office described in the
introduction to this Note or as otherwise directed by the Bank.

         (d)      Maturity Date. Unless payable sooner on account of the
occurrence of an Event of Default under this Note, the outstanding principal
balance of this Note, together with any accrued and unpaid interest and any
other amounts payable hereunder, shall be due and payable, and the Borrower
promises to pay such sums, in full on June 15, 2004 (the "Maturity Date").

         (e)      Taxes, Yield Protection and Illegality. The terms and
conditions of Article III (Taxes, Yield Protection and Illegality) of the Credit
Agreement are incorporated herein by reference.

         (f)      Conditions to Advances. It shall be a condition precedent to
the Bank's obligation to honor any request by the Borrower for an advance
hereunder that (1) there exists no Event of Default under this Note or Default
under, and as defined in, the Credit Agreement, (2) all representations and
warranties hereunder are correct, true and complete in all material respects
except to the extent that they specifically refer to an earlier date (as of
which they were true and correct in all material respects), (3) as of the date
of the advance requested, the Credit Agreement shall have been Fully Funded, (4)
the Borrower shall have executed and delivered to the Bank the commitment letter
dated as of March 3, 2004 (the "Commitment Letter") from the Bank to the
Borrower and (5) the Borrower shall have paid to the Bank a non-fundable up
front fee of $25,000 as contemplated by the Commitment Letter.

2. INTEREST:

         (a)      Interest. At the option of the Borrower, each advance made
under this Note shall bear interest either as a Eurodollar Loan or as a Prime
Loan.

         (b)      Payment of Interest. Interest accrued on this Note shall be
payable on each Interest Payment Date.

         (c)      Default Interest. If any amount payable by the Borrower under
this Note is not paid when due (without regard to any applicable grace periods,
whether at stated maturity, by acceleration or otherwise) such amount shall
thereafter bear interest at a fluctuating interest rate per annum equal to the
Default Rate to the fullest extent permitted by applicable law. While any Event
of Default exists under this Note, the Borrower shall pay interest on the
principal amount outstanding under this Note at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent permitted by
applicable law. Accrued and unpaid interest on past due amounts shall be payable
upon demand.

3. REPRESENTATIONS AND WARRANTIES: As of the date of this Note and each
borrowing under this Note, the Borrower makes the following representations and
warranties to the Bank:

         (a)      Binding Obligation. This Note has been duly executed and
delivered by the Borrower and constitutes its legal, valid and binding
obligation enforceable against the Borrower in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability.

         (b)      Incorporated Representations. Each of the representations and
warranties of the Borrower which are contained in the Credit Agreement, all of
which are incorporated herein by reference, are true and correct in all material
respects except to the extent that they specifically refer to an earlier date
(as of which they were true and correct in all material respects).

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4. COVENANTS: The Borrower covenants that, so long as the Bank remains committed
to extend credit to Borrower pursuant hereto or any liabilities (whether direct
or contingent, liquidated or unliquidated) of the Borrower to the Bank under
this Note remain outstanding, the Borrower shall comply with all of its
agreements in this Note and its covenants contained in the Credit Agreement, all
of which are incorporated herein by reference.

5. EVENTS OF DEFAULT: The occurrence of any of the following shall constitute an
"Event of Default" under this Note:

         (a)      Failure to Pay. The Borrower shall fail to pay (1) when and as
required to be paid herein, any principal amount of any advance made under this
Note or (2) within three days after the same becomes due, any interest on any
such advance or any commitment fee due hereunder or (3) within five days after
the same becomes due, any other amount payable under this Note.

         (b)      Defaults Under Credit Agreement. Any "Event of Default" shall
occur under, and as defined in the Credit Agreement.

         (c)      Incorporated Default. Any representation or warranty made by
the Borrower under this Note shall fail to be true and correct in all material
respects when made or the Borrower shall fail to comply with any covenant made
under this Note and any such event would constitute an Event of Default if
Section 8.01 (Events of Default) of the Credit Agreement were set forth in full
in this Note.

6. MISCELLANEOUS:

         (a)      Remedies. Upon the occurrence of any Event of Default under
this Note, the Bank may declare its commitment to make advances under this Note
to be terminated, declare the unpaid principal and interest outstanding under
this Note to be due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrower,
and exercise all other rights and remedies available to the Bank; provided that
upon the occurrence of an actual or deemed entry of an order for relief with
respect to the Borrower under the Bankruptcy Code of the United States (as
defined in the Credit Agreement), the obligation of the Bank to make advances
shall automatically terminate, the unpaid principal amount of all advances and
all interest shall automatically become due and payable. All amounts received by
the Bank after the exercise of remedies shall be applied in accordance with the
provisions of Section 8.03 (Application of Funds) of the Credit Agreement.

         (b)      Amendments. No amendment or waiver of any provision of this
Note shall be effective unless in writing signed by the Borrower and the Bank,
and no consent to any departure by the Borrower therefrom shall be effective
unless in writing signed by the Bank.

         (c)      Notices. Notices and communications between the Bank and the
Borrower shall be given in accordance with Section 10.02 (Notices and Other
Communications; Facsimile Copies) of the Credit Agreement, except that the
address for communications to the Bank shall be as set forth in the introductory
paragraph to this Note.

         (d)      No Waiver, Cumulative Remedies. No failure by the Bank to
exercise, and no delay in exercising, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

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         (e)      Attorney Costs, Expenses, Taxes and Indemnification. The
Borrower agrees make those payments and to provide those indemnities to the Bank
as are provided for in Sections 10.04 (Attorney Costs, Expenses and Taxes) and
10.05 (Indemnification by the Borrower) of the Credit Agreement.

         (f)      Successors and Assigns. The provisions of this Note shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that the Borrower may not assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of the Bank, and, so long as no Event of Default has
occurred and is continuing under this Note, the Bank may not assign or otherwise
transfer any of its rights or obligations hereunder.

         (g)      Confidentiality. The Bank agrees to maintain the
confidentiality of information in accordance with the provisions of Section
10.08 (Confidentiality) of the Credit Agreement.

         (h)      Set-off. The Bank may set off in accordance with the
provisions of Section 10.09 (Set-off) of the Credit Agreement.

         (i)      Counterparts. This Note may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         (j)      Integration. This Note comprises the complete and integrated
agreement of the parties on the subject matter hereof and thereof and supersedes
all prior agreements, written or oral, on such subject matter. This Note was
drafted with the joint participation of the respective parties thereto and shall
be construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.

         (k)      Survival of Representations and Warranties. All
representations and warranties made in this Note or in connection herewith or
therewith shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the Bank,
regardless of any investigation made by the Bank, and shall continue in full
force and effect as long as any obligation hereunder shall remain unpaid or
unsatisfied.

         (l)      Severability. If any provision of this Note is held to be
illegal, invalid or unenforceable, (a) the legality, validity and enforceability
of the remaining provisions of this Note shall not be affected or impaired
thereby and (b) the parties shall endeavor in good faith negotiations to replace
the illegal, invalid or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the illegal,
invalid or unenforceable provisions. The invalidity of a provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.

         (m)      Governing Law. (a) THIS NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, the LAW OF THE STATE OF CALIFORNIA APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT
THE BANK SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. (b) ANY LEGAL ACTION
OR PROCEEDING WITH RESPECT TO THIS NOTE MAY BE BROUGHT IN THE COURTS OF THE
STATE OF CALIFORNIA SITTING IN SAN DIEGO, CALIFORNIA OR OF THE UNITED STATES FOR
THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS NOTE,
EACH OF THE BORROWER AND THE BANK CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER AND
THE BANK IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH EITHER OF THEM
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR

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PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS NOTE. THE BORROWER AND THE
BANK WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH
MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

         (n)      Waiver of Jury Trial. EACH OF THE BORROWER AND THE BANK HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER THIS NOTE IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO
THIS NOTE, OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS NOTE MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO
THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

         (o)      Patriot Act. The Bank hereby notifies the Borrower that,
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001) (the "Act")), it is required to obtain,
verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will
allow the Bank to identify the Borrower in accordance with the Act.

         (p)      Incorporation by Reference. All sections and articles of the
Credit Agreement referenced in this Note are incorporated into this Note by
reference as though set forth at length, mutatis mutandis, except that terms
contained in such sections shall be interpreted by giving effect to the
correlative meanings of those terms in this Note.

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         IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first written above.

BORROWER:

CALLAWAY GOLF COMPANY

/s/ BRADLEY J. HOLIDAY
----------------------------

Senior Executive V.P., CFO
---------------------------------

BANK:

BANK OF AMERICA, N.A.

By: /s/ SUSAN PEPPING
    ------------------------

Susan Pepping, Senior Vice President

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                                    EXHIBIT A

         1. Credit Agreement.

         "Credit Agreement" means that certain Credit Agreement dated as of
November 10, 2003 among Callaway Golf Company, as the Borrower, Bank of America,
N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and the other
Lenders party thereto, as the same may be amended from time to time.

         2. Terms Defined in Credit Agreement.

         The terms "Aggregate Commitments," "Base Rate," "Base Rate Committed
Loan,' "Business Day," "Committed Loan," "Compliance Certificate," "Consolidated
Leverage Ratio," "Default Rate," "Eurodollar Rate," "Eurodollar Rate Loan,"
"Interest Payment Date," "Interest Period", "Loan" and "Revolving Maturity Date"
shall have the meanings given such terms in the Credit Agreement, but all
references in those definitions and any related definitions, to the extent
applicable, shall be interpreted by giving effect to the correlative meanings of
those terms in this Note.

         3. Other Terms.

         "Applicable Rate" means, from time to time, the following percentages
per annum, based upon the Consolidated Leverage Ratio as set forth in the most
recent Compliance Certificate delivered pursuant to Section 6.02(a)
(Certificates; Other Information) of the Credit Agreement:

<TABLE>
<CAPTION>
                         Consolidated
Pricing Level           Leverage Ratio       Eurodollar Rate +    Base Rate +       Commitment Fee
-------------           --------------       -----------------    -----------       --------------
<S>               <C>                        <C>                  <C>               <C>
1                 > than = to 1.00:1               1.25%          Minus 0.50%           0.200%
2                 < than 1.00 :1 but               1.00%          Minus 0.75%           0.175%
                  > than = to 0.50:1
3                 < than 0.50:1                    0.75%          Minus 1.00%           0.125%
</TABLE>

Any increase or decrease in the Applicable Rate resulting from a change in the
Consolidated Leverage Ratio shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is delivered pursuant to
Section 6.02(a) of the Credit Agreement; provided, however, that if a Compliance
Certificate is not delivered when due in accordance with such Section, then
Pricing Level 1 shall apply as of the first Business Day after the date on which
such Compliance Certificate was required to have been delivered.

         "Eurodollar Loan" means an advance under this Note bearing interest at
a rate per annum equal to the Eurodollar Rate for the relevant Interest Period
plus the Applicable Rate.

         "Fully Funded" means, with respect to the Credit Agreement, that the
"Outstanding Amount of Committed Loans" and the "Outstanding Amount of L/C
Obligations" equal the "Aggregate Commitments" under, and as each such
capitalized terms is defined in, the Credit Agreement

         "Prime Loan" means an advance under this Note bearing interest at a
rate per annum equal to the Base Rate plus the Applicable Rate.

                                       7EX-10.8 AMEND TO THE INCENTIVE COMPENSATION PLAN

 

Exhibit 10.8

AMENDMENT TO UST INC. INCENTIVE COMPENSATION PLAN

     The UST Inc. Incentive Compensation Plan (the “Plan”), as amended and
restated as of January 1, 2003, is hereby further amended as set forth below,
effective as of January 1, 2003.

	 	1.	 	The following sentences are hereby added to the end of
Section 4.5 of the Plan, to read as follows:
	 
	 	 	 	“Notwithstanding the foregoing, the Committee may determine, in its
discretion, (but subject to the approval of the Compensation
Committee), to reduce the amount of Incentive Compensation otherwise
determined to be payable to Participants (other than Executive
Officers) pursuant to the this Section 4.5. In such event, the
excess of the amount otherwise determined to be payable to such
Participants pursuant to this Section 4.5 over the actual amount so
payable shall not be used to increase the Incentive Compensation
payable to any other Participant.”
	 
	 	2.	 	Except as set forth above, the Plan is hereby ratified and
confirmed in all respects.

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