Document:

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                                                                   EXHIBIT 10.21

                    EMPLOYMENT AGREEMENT DATED APRIL 3, 2000
                 BY AND BETWEEN GLOBALDIGITALCOMMERCE.COM, INC.
                              AND BROOKS L. ENSIGN

March 16, 2000

Dear Brooks:

We are pleased to offer you a full time exempt position as Vice President of
Mergers and Acquisitions. The anticipated start date is April 11, 2000, subject
to the favorable reference checks. The purpose of this letter is to set forth
the basic terms and conditions of your employment with
GlobalDigitalCommerce.com, Inc. ("GDCC"). By signing this letter, you will be
agreeing to these terms. It is important that you understand clearly both what
your benefits are and what is expected of you by GDCC.

     1. Duties. Your duties generally will include, but are not limited to,
        ------
those duties normally performed by a Vice President of Mergers and Acquisitions.
You may be assigned other duties as needed and your duties may change from time
to time on reasonable notice, based on the needs of GDCC and your skills, as
determined by GDCC. You will report directly to the President/CEO.

     As an employee, you are required to exercise your specialized expertise,
independent judgment and discretion to provide high-quality services. You are
required to follow company policies and procedures adopted from time to time by
GDCC and to take such general direction as you may be given from time to time by
your supervisor. GDCC reserves the right to change these policies and procedures
at any time. You are required to devote your full energies, efforts and
abilities to your employment with GDCC.

     2. Hours of Work. As a salaried exempt employee, you are expected to work
        -------------
the number of hours required to get the job done. At a minimum, to meet our
clients' needs you are generally expected to be present during the normal
working hours of GDCC, 8AM to 5PM local time. Your primary office will be in San
Diego.

     3. Salary. Please see Exhibit A.
        ------

     4. Expenses. As an employee, you will be reimbursed for all reasonable
        --------
travel and business expenses incurred on behalf of GDCC. Any expense over
$100.00 must be approved in writing in advance by John A. Whalen, Jr.

     5. Employee Benefits. You will be eligible for the standard GDCC benefits
        -----------------
which are generally applicable to full-time employees. These benefits are
subject to change, on a prospective basis at GDCC's discretion.

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     6. Proprietary Rights; Duty To Disclose. Employee hereby acknowledges and
        ------------------------------------
agrees to be bound by the provisions of GDCC's enclosed "Confidentiality and
Nonsolicitation Agreement". Employee agrees during and after the term of this
employment, not to reveal confidential information, or trade secrets to any
person, firm, corporation, or other legal entity. Should employee reveal or
threaten to reveal this information, the Company shall be entitled to an
injunction restraining the employee from disclosing same, or from rendering any
services to any entity to whom said information has been or is threatened to be
disclosed. The right to secure an injunction is not exclusive, and the Company
may pursue any other remedies it has against the employee for a breach or
threatened breach of this condition, including the recovery of damages from the
employee.

     7. Nonsolicitation Of Employees. Employee specifically agrees that during
        ----------------------------
the term of this agreement and for a period of one (1) year thereafter, employee
shall not, directly or indirectly, either for himself or for any other person,
firm, corporation or other legal entity, solicit any then employee of GDCC to
leave the employment of GDCC.

     8. Governing Law. This Agreement shall be governed by and construed and
        -------------
enforced in accordance with and subject to the laws of the State of California.
Any dispute or action between the employee and the Company resulting out of this
agreement must be brought in the jurisdiction of the State of California or it
is void.

     9. Agreement to Arbitrate. You and GDCC agree that any and all disputes
        ----------------------
between you and GDCC (including claims against its employees, officers,
directors, agents, successors and assigns which arise out of or relate to their
actions on behalf of the Company) arising out of or in any way related to the
employment relationship, including any disputes upon termination, shall, to the
fullest extent permitted by law, be resolved by binding arbitration before a
single neutral arbitrator.

         9.1 Scope of Agreement. The disputes subject to this agreement include,
             ------------------
but are not limited to, all potential claims relating to employment, such as
breach of contract, tort, discrimination, harassment, wrongful termination,
demotion, discipline or failure to accommodate, family and medical or pregnancy
disability leave, compensation or benefit claims, constitutional or common law
claims, and claims for attorneys' fees and costs to the fullest extend permitted
by law.

          9.2 Pre-Arbitration Procedures. Prior to pursuing arbitration, you and
              --------------------------
GDCC agree to take the following steps:

               9.2.1 The party claiming to be aggrieved shall furnish to the
other party a written statement of any and all disputes in sufficient detail to
apprise the other party of the substance of the claims and identifying any
witnesses or documents that support the claim and the relief requested or
proposed.

               9.2.2 If the other party does not agree to furnish the relief
requested or proposed, or otherwise does not satisfy the demand of the party
claiming to be aggrieved, the aggrieved party may request that the dispute be
submitted to mediation. If both parties agree, the dispute shall be submitted to
nonbinding mediation before a neutral mediator jointly selected by the parties.
The parties will share the costs of the mediation.

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          9.3 Arbitration Procedures.
              ----------------------

               9.3.1 If the mediation does not produce a mutually satisfactory
resolution of the dispute, the aggrieved party may request arbitration before a
single neutral arbitrator. To do so, the aggrieved party must notify the other
party in writing of the claim it wishes to arbitrate. All claims must be brought
within the applicable statute of limitations period.

               9.3.2 The arbitrator shall be mutually selected by the parties
or, if they are unable to reach agreement on an arbitrator, the parties agree to
use the then current National Rules for the Resolution of Employment Disputes of
the American Arbitration Association, except that the arbitrator shall be
selected by alternately striking names from a panel of five (5) neutral labor or
employment arbitrators designated by the American Arbitration Association.

               9.3.3 The arbitration shall be governed by the rules set forth in
California Code of Civil Procedure section 1280 and following (and any successor
statue). The parties may engage in discovery pursuant to California Code of
Civil Procedure section 1283.05. The parties may be represented by an attorney
or other representative of their choosing. The arbitrator shall have the power
to enter any award permitted by applicable law that could be entered by a judge
of the Superior Court of the State of California or the United States District
Court sitting without a jury, and only such power.

               9.3.4 By entering into this agreement, both parties understand
that they are giving up their constitutional right to have any such dispute
decided in a court of law before a jury and instead are accepting the use of
binding arbitration.

               9.3.5 The arbitrator shall not have the authority to modify,
change or refuse to enforce the terms of the employment agreement. In addition,
the arbitrator shall not have the authority to require GDCC to change any lawful
policy or benefit plan.

               9.3.6 Either party, at its expense, may arrange for and pay for
the cost of a court reporter to provide a written transcript of the proceedings.

               9.3.7 The parties shall share equally the fees and costs of the
arbitrator. Each party shall bear their own legal fees and costs. However, if
any party prevails on a statutory claim that affords the prevailing party
attorneys' fees and costs, the arbitrator may award reasonable attorneys' fees
and costs to the prevailing party.

               9.3.8 Arbitration shall be the exclusive final remedy for any
dispute between the parties to the fullest extent permitted by law. However,
nothing in this paragraph 9 shall limit the right of either party to apply for a
provisional remedy pursuant to California Civil Code section 1281.8(b) or any
successor statue.

               9.3.9 The arbitrator shall promptly render a written award which
provides the factual and legal basis for the award.

               9.3.10 This agreement to arbitrate survives the termination of
employee's

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employment with GDCC. This agreement constitutes the entire agreement between
the parties on the subject of resolution of employment disputes and supersedes
all prior understandings or agreements, written or oral, on the subject.

     10. Assignments. The rights and obligations of GDCC under this agreement
         -----------
shall inure to the benefit of and be binding upon its successors and assigns.
This agreement may not be assigned by you without the written consent of GDCC.

     11. Integrated Agreement. This agreement and the Confidentiality and
         --------------------
Nonsolicitation Agreement supersedes any prior agreements, representations or
promises of any kind, whether written, oral, express or implied between the
parties hereto with respect to the subject matter herein. It constitutes the
full, complete and exclusive agreement between you and GDCC with respect to the
subject matters herein. This Agreement may only be modified by a writing signed
by you and the President or Chief Financial Officer of GDCC.

     12. Notices. All notices or other communications provided for by this
         -------
agreement shall be made in writing and shall be deemed properly delivered when
(i) delivered personally or (ii) by the mailing of such notice by registered or
certified mail, postage prepaid, to the parties at the addresses set forth on
the signature page of this agreement (or to such other address as one party
designates to the other in writing).

     13. Counterparts. This agreement 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.

     14. Severability. If any provision of this agreement is declared invalid by
         ------------
any court or tribunal, that provision is deemed deleted from this agreement as
though such provision had never been included herein. The remaining provisions
of the agreement shall remain in effect.

     15. Performance Evaluation. There will be a probationary period of 90 days
         ----------------------
commencing on the first day of employment. At the end of the probationary period
an employee performance evaluation will be conducted. A satisfactory evaluation
will result in regular employee status. Failure to obtain a satisfactory
evaluation may result in the following:
          1.)  The extension of the probationary period.
          2.)  Termination of the employee.
This does not alter the at-will employment relationship between you and GDCC.

     16. Terms of Employment. The term of this agreement is at will. You or GDCC
         -------------------
may terminate the employment relationship at any time, with or without cause.
GDCC also reserves the right to modify your position or duties and to impose any
form of discipline it determines is appropriate at any time.

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In order to confirm your agreement with and acceptance of these terms, please
sign and return to our office no later than Monday, March 20, 2000. You are
being given two original copies, one copy for your records and the other should
be signed and returned to GDCC. If there is any matter in this letter, which you
wish to discuss further, please do not hesitate to speak to me.

                                                 Very truly yours,
                                                 GlobalDigitalCommerce.com, Inc.

                                             By:   /s/  John Anthony Whalen, Jr.
                                                  ------------------------------
                                                  John Anthony Whalen, Jr.
                                                  President/CEO

Enclosure

= = = = = = = = = = = = = = = = = = = = = = = = = = = = =

     I agree to the terms of employment set forth in this agreement. I
understand and I agree that am employed on an at will basis.

Dated: March 25, 2000

                                                   /s/ Brooks L. Ensign
                                                  ------------------------------
                                                  Brooks L. Ensign

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                                    EXHIBIT A

Employee:                 Brooks L. Ensign

Initial Position:         Vice President of Mergers and Acquisitions

Status:                   Exempt

Approximate start date:   April 11, 2000

Reports to:               President/CEO

Annual Salary:            $100,000 payable semi-monthly on the 15th and the last
                          day of each month.

Bonus:                    A bonus of $10,000 for each acquired company, upon the
                          closing of each corporate finance round.  All terms of
                          such bonus are subject to approval by the Board of
                          Directors.

Stock Options:            A grant of Incentive Stock Options ("ISOs") for
                          100,000 shares of Common Stock upon commencement of
                          work.  Options will vest monthly over 36 months with
                          vesting of first three months deferred until the 90
                          day probation is completed and expire ten (10) years
                          from date of grant.  In order to qualify for
                          preferential tax treatment, the exercise price of ISOs
                          must be no less than the fair market value of a share
                          of Common Stock on the date of the grant.  All terms
                          and conditions of the stock option grants are in
                          accordance with C2i's standard stock option plan.

Business Expenses:        Reasonable travel and expense reimbursement, with
                          proper advance approval.

Medical Expenses:         GDCC  offers  Blue  Shield of  California  as our
                          health  plan  provider  to our  employees.  For
                          additional  information  regarding  the health
                          benefits,  please refer to the Blue Shield of
                          California Summary  Plan.

                                       6<PAGE>

                                                                   EXHIBIT 10.43

                    EXECUTIVE OFFICER EMPLOYMENT AGREEMENT

     This Executive Officer Employment Agreement ("Agreement") is entered into
as of January 1, 2000, by and between Callaway Golf Company, a Delaware
corporation (the "Company"), and Ely Callaway ("Mr. Callaway").

     1.  TERM.
         ----

         (a) The Company hereby employs Mr. Callaway and Mr. Callaway hereby
accepts employment pursuant to the terms and provisions of this Agreement for
the period commencing January 1, 2000 and terminating June 30, 2003 (the
"Initial Term"), unless this Agreement is earlier terminated as hereinafter
provided.

         (b) On July 1, 2002, and on each July 1 thereafter (the "Extension
Dates"), the expiration date of this Agreement shall be automatically extended
one year, through June 30 of the following year, so long as (a) this Agreement
is otherwise still in full force and effect, (b) Mr. Callaway is still employed
by the Company pursuant to this Agreement, (c) Mr. Callaway is not otherwise in
breach of this Agreement, and (d) neither the Company nor Mr. Callaway has given
notice as provided in Section 1(c) of this Agreement.

         (c) At any time prior to an Extension Date, either Mr. Callaway or the
Company may give written notice to the other ("Notice") that the automatic
extension of the expiration date of this Agreement pursuant to Section 1(b)
shall end with the next extension, which shall be the final such automatic
extension of the expiration date of this Agreement.  Thus, if either Mr.
Callaway or the Company gives Notice on or before January 1, 2002, and all other
conditions for automatic extension of the expiration date of this Agreement
pursuant to Section 1(b) exist, then on January 1, 2002 the expiration date of
this Agreement shall be extended pursuant to Section 1(b) from December 31, 2002
to December 31, 2003, with this Agreement expiring on that date (if not earlier
terminated pursuant to its terms) without any further automatic extensions.

         (d) Upon expiration of this Agreement, Mr. Callaway's status shall be
one of at will employment.

     2.  SERVICES.
         --------

         (a) Mr. Callaway shall serve as Chief Executive Officer of Callaway
Golf Company and Chairman of the Board of Callaway Golf Ball Company until such
time as he chooses to retire from one or both positions.  Upon his retirement as
Chief Executive Officer of Callaway Golf Company, which is currently expected to
occur on or before January 1, 2001, Mr. Callaway shall assume the title of
Founder of Callaway Golf Company and Chief Executive Officer Emeritus.  Mr.
Callaway's duties shall be the usual and customary duties of the offices in
which he serves.  As Founder of the Company and CEO Emeritus, Mr. Callaway shall
advise and consult with management on such matters as may be requested by the
CEO or the Board.  Mr.
<PAGE>

Callaway shall report to the Board of Directors of Callaway Golf Company.

              (b) Mr. Callaway shall be required to comply with all policies and
procedures of the Company, as such shall be adopted, modified or otherwise
established by the Company from time to time.

          3.  SERVICES TO BE EXCLUSIVE.  As CEO, Mr. Callaway agrees to devote
              ------------------------
his full productive time and best efforts to the performance of his duties
hereunder pursuant to the supervision and direction of the Company's Board of
Directors.  As Founder and CEO Emeritus, it is understood that Mr. Callaway will
devote as much time as required for Company business, and shall otherwise be
permitted to engage in other activities not inconsistent with his obligations to
the Company, as approved by the Board of Directors or its designee.  Mr.
Callaway further agrees, as a condition to the performance by the Company of
each and all of its obligations hereunder, that so long as Mr. Callaway is
employed by the Company or otherwise receiving compensation or other
consideration from the Company, Mr. Callaway will not directly or indirectly
render services of any nature to, otherwise become employed by, or otherwise
participate or engage in any other business without the Company's prior written
consent.  Mr. Callaway further agrees to execute such secrecy, non-disclosure,
patent, trademark, copyright and other proprietary rights agreements, if any, as
the Company may from time to time reasonably require.  Nothing herein contained
shall be deemed to preclude Mr. Callaway from having outside personal
investments and involvement with appropriate community activities, and from
devoting a reasonable amount of time to such matters, provided that this shall
in no manner interfere with or derogate from Mr. Callaway's work for the
Company.

          4.  COMPENSATION.
              ------------

              (a) The Company agrees to pay Mr. Callaway a base salary at the
rate of $780,000.00 per year. On the date Mr. Callaway retires as Chief
Executive Officer of Callaway Golf Company, his base salary will decrease to a
rate of $500,000.00 per year. As Founder and CEO Emeritus, Mr. Callaway may
elect to have some or all of his compensation pursuant to this Agreement paid to
his company, known and operating under the name Ely Callaway and Associates
Advisory Services, LLC, such company having been granted a limited license by
the Company.

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

          5.  EXPENSES AND BENEFITS.
              ---------------------

              (a) Reasonable and Necessary Expenses.  In addition to the
                  ---------------------------------
compensation provided for in Section 4 hereof, the Company shall reimburse Mr.
Callaway for all reasonable,

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customary, and necessary expenses incurred in the performance of Mr. Callaway's
duties hereunder. Mr. Callaway shall first account for such expenses by
submitting a signed statement itemizing such expenses prepared in accordance
with the policy set by the Company for reimbursement of such expenses. The
amount, nature, and extent of such expenses shall always be subject to the
control, supervision, and direction of the Company.

          (b) Vacation.  Mr. Callaway shall not receive vacation benefits during
              --------
the term of this Agreement.

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

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

              (ii) receive, if Mr. Callaway is insurable under usual
underwriting standards, life insurance coverage on Mr. Callaway's life, payable
to whomever Mr. Callaway directs, in the face amount of $2,000,000.00, provided
that Mr. Callaway's physical condition does not prevent Mr. Callaway from
qualifying for such insurance coverage under reasonable terms and conditions;

              (iii) participate in the Company's 401(k) pension plan pursuant to
the terms of the plan, as the same may be modified from time to time;

              (iv)  participate in the Company's Executive Deferred Compensation
Plan, as the same may be modified from time to time; and

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

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

          (e) Club Membership.  The Company shall pay the reasonable cost of
              ---------------
initiation associated with Mr. Callaway gaining privileges at a mutually agreed
upon country club.  Mr. Callaway shall be responsible for all other expenses and
costs associated with such club use, including monthly member dues and charges.
The club membership itself shall belong to and be the property of the Company,
not Mr. Callaway.

          (f) Stock Options.  Pursuant to separate written stock option
              -------------
agreements and subject to the approval of the Stock Option Committee (Employee
Plans) of the Board of Directors of the Company, beginning in January 2001, and
continuing in January of each year

                                       3
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thereafter that this Agreement is in effect and Mr. Callaway remains an employee
of the Company, Mr. Callaway shall be granted options to purchase at least
100,000 shares of the Common Stock of the Company. The options shall vest as
stated in the respective stock option agreements, provided Mr. Callaway is then
currently employed by the Company and not in breach of this Agreement. The
option price per share shall be the NYSE closing price of Callaway Golf Common
Stock on the date of the respective grants. The options will contain such
reasonable restrictions as determined by the Stock Option Committee (Employee
Plans), including without limitation, cancellation of options or forfeiture of
gain upon exercise if Mr. Callaway discloses the Company's confidential
information or competes with the business of the Company.

          (g) Travel.  The Company believes that travel by Mr. Callaway, as the
              ------
Founder of the Company and as a goodwill ambassador whose entire persona is
closely tied to Company and its brand, benefits the Company, and wishes to
encourage Mr. Callaway to travel, as appropriate, during the term of this
Agreement.  To facilitate such travel, and to assure the continued good health
of Mr. Callaway while performing his duties on behalf of the Company, it is
agreed that all such travel shall be by chartered aircraft (preferably a
Citation X) or first class commercial airline service, and shall be conducted at
the Company's expense.  Moreover, to preserve Mr. Callaway's continued good
health, safety and vigor, the Company requires that he advise the Company of any
personal trips that he plans to take during the term of this Agreement, and that
he permit the Company to make travel arrangements, at the Company's expense, for
such travel, including the provision of chartered aircraft service (preferably a
Citation X) or first class commercial airline service where air travel is
required.  It is understood that these travel restrictions are for the good of
the Company and its shareholders, and that they should not impose undue burdens
upon Mr. Callaway, and therefore, to the extent any travel benefits provided to
Mr. Callaway by the Company are taxable to Mr. Callaway as income under state or
federal tax laws, then the Company shall provide annually a "gross up" payment
such that Mr. Callaway is reimbursed for such taxes as well as any taxes on the
"gross up" payment itself.  It is understood that, for purposes of this
Agreement, Mr. Callaway's travel is expected to take place throughout the United
States and to, from and within any of the Company's foreign markets for golf
clubs and golf balls.

          (h) Office Support.  At such time as Mr. Callaway retires as Chief
              --------------
Executive Officer, it is expected that much of Mr. Callaway's work on behalf of
the Company as Founder and CEO Emeritus will be conducted at a location of Mr.
Callaway's choice off the Company's premises, but reasonably convenient to the
Company's headquarters.  In that event, the Company shall provide during the
term of this Agreement, at its expense, for the rental of appropriate office
space, the furnishing of the space, the provision of appropriate office
equipment, including computers, phones, a fax, and a copier, and appropriate
office support, as mutually agreed upon between Mr. Callaway and the Company.
It is expected that, if he so desires and she accepts, Mr. Callaway's Executive
Assistant, Diana Duvall, shall continue on the Company's payroll as Mr.
Callaway's Executive Assistant during the period he serves as Founder and CEO
Emeritus.  Should Mr. Callaway elect to conduct the business of his company, Ely
Callaway and Associates Advisory Services, LLC, from this same location, the
parties shall equitably and reasonably allocate costs and expenses.

                                       4
<PAGE>

          6.  TAX INDEMNIFICATION.  Mr. Callaway shall be indemnified by the
              -------------------
Company for certain excise tax obligations, as more specifically set forth in
Exhibit A to this Agreement.

          7.  NONCOMPETITION.
              --------------

              (a) Other Business.  To the fullest extent permitted by law, Mr.
                  --------------
Callaway agrees that, while employed by the Company or otherwise receiving
compensation or other consideration from the Company (including any severance
pursuant to Section 8 of this Agreement), Mr. Callaway will not, directly or
indirectly (whether as agent, consultant, holder of a beneficial interest,
creditor, or in any other capacity), engage in any business or venture which
engages directly or indirectly in competition with the business of the Company
or any of its affiliates, or have any interest in any person, firm, corporation,
or venture which engages directly or indirectly in competition with the business
of the Company or any of its affiliates.  For purposes of this section, the
ownership of interests in a broadly based mutual fund shall not constitute
ownership of the stocks held by the fund.

              (b) Other Employees.  Except as may be required in the
                  ---------------
performance of his duties hereunder, Mr. Callaway shall not cause or induce, or
attempt to cause or induce, any person now or hereafter employed by the Company
or any of its affiliates to terminate such employment while employed by the
Company and for a period of one (1) year thereafter.

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

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

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

              (f) The provisions of this Section 7 shall survive the termination
or expiration of this Agreement, and shall be binding upon Mr. Callaway in
perpetuity.

          8.  TERMINATION.
              -----------

              (a) Termination at the Company's Convenience.  Mr. Callaway's
                  ----------------------------------------
employment under this Agreement may be terminated by the Company at its
convenience at any time.  In the

                                       5
<PAGE>

event of a termination by the Company for its convenience, Mr. Callaway shall be
entitled to receive (i) any compensation accrued and unpaid as of the date of
termination; and (ii) the immediate vesting of all unvested stock options held
by Mr. Callaway as of the date of such termination. In addition to the
foregoing, and subject to the provisions of Section 20, Mr. Callaway shall be
entitled to Special Severance equal to (i) severance payments equal to Mr.
Callaway's former base salary at the same rate and on the same schedule as in
effect at the time of termination for a period of time equal to the greater of
the remainder of the Initial Term of this Agreement or eighteen (18) months from
the date of termination; (ii) the payment of premiums owed for COBRA insurance
benefits for a period of time equal to eighteen (18) months from the date of
termination; and (iii) no other severance.

          (b) Termination by the Company for Substantial Cause.  Mr. Callaway's
              ------------------------------------------------
employment under this Agreement may be terminated immediately by the Company for
substantial cause at any time.  In the event of a termination by the Company for
substantial cause, Mr. Callaway shall be entitled to receive (i) any
compensation accrued and unpaid as of the date of termination; and (ii) no other
severance.  "Substantial cause" shall mean for purposes of this subsection
failure by Mr. Callaway to substantially perform his duties, material breach of
this Agreement, or misconduct, including but not limited to, dishonesty, theft,
use or possession of illegal drugs during work and/or felony criminal conduct.

          (c) Termination by Mr. Callaway for Substantial Cause.  Mr. Callaway's
              -------------------------------------------------
employment under this Agreement may be terminated immediately by Mr. Callaway
for substantial cause at any time.  In the event of a termination by Mr.
Callaway for substantial cause, Mr. Callaway shall be entitled to receive (i)
any compensation accrued and unpaid as of the date of termination; and (ii) the
immediate vesting of all unvested stock options held by Mr. Callaway as of the
date of such termination.  In addition to the foregoing, and subject to the
provisions of Section 20, Mr. Callaway shall be entitled to Special Severance
equal to (i) severance payments equal to Mr. Callaway's former base salary at
the same rate and on the same schedule as in effect at the time of termination
for a period of time equal to the greater of the remainder of the Initial Term
of this Agreement or eighteen (18) months from the date of termination; (ii) the
payment of premiums owed for COBRA insurance benefits for a period of time equal
to eighteen (18) months from the date of termination; and (iii) no other
severance.  "Substantial cause" shall mean for purposes of this subsection a
material breach of this Agreement.

          (d) Termination Due to Permanent Disability.  Subject to all
              ---------------------------------------
applicable laws, Mr. Callaway's employment under this Agreement may be
terminated immediately by the Company in the event Mr. Callaway becomes
permanently disabled.  Permanent disability shall be defined as Mr. Callaway's
failure to perform or being unable to perform all or substantially all of Mr.
Callaway's duties under this Agreement for a continuous period of more than six
(6) months on account of any physical or mental disability, either as mutually
agreed to by the parties or as reflected in the opinions of three qualified
physicians, one of which has been selected by the Company, one of which has been
selected by Mr. Callaway, and one of which has been selected by the two other
physicians jointly.  In the event of a termination by the Company due to Mr.
Callaway's permanent disability, Mr. Callaway shall be entitled to (i) any
compensation accrued and unpaid as of the date of termination; (ii) severance
payments equal to Mr. Callaway's former

                                       6
<PAGE>

base salary at the same rate and on the same schedule as in effect at the time
of termination for a period of time equal to the greater of the remainder of the
Initial Term of this Agreement or eighteen (18) months from the date of
termination; (iii) the immediate vesting of outstanding but unvested stock
options held by Mr. Callaway as of such termination date in a prorated amount
based upon the number of days in the option vesting period that elapsed prior to
Mr. Callaway's termination; (iv) the payment of premiums owed for COBRA
insurance benefits for a period of time equal to eighteen (18) months from the
date of termination; and (v) no other severance. The Company shall be entitled
to take, as an offset against any amounts due pursuant to subsections (i) and
(ii) above, any amounts received by Mr. Callaway pursuant to disability or other
insurance, or similar sources, provided by the Company.

          (e) Termination Due to Death.  Mr. Callaway's employment under this
              -------------------------
Agreement shall be terminated immediately by the Company in the event of Mr.
Callaway's death.  In the event of a termination due to Mr. Callaway's death,
Mr. Callaway's estate or other designee shall be entitled to (i) any
compensation accrued and unpaid as of the date of death; (ii) severance payments
equal to Mr. Callaway's former base salary at the same rate and on the same
schedule as in effect at the time of death for a period of time equal to the
greater of the remainder of the Initial Term of this Agreement or eighteen (18)
months from the date of death; (iii) the immediate vesting of outstanding but
unvested stock options held by Mr. Callaway as of the date of death in a
prorated amount based upon the number of days in the option vesting period that
elapsed prior to Mr. Callaway's death; and (iv) no other severance.

          (f) Any severance payments shall be subject to usual and customary
employee payroll practices and all applicable withholding requirements. Except
for such severance pay and other amounts specifically provided pursuant to this
Section 8, Mr. Callaway shall not be entitled to any further compensation,
bonus, damages, restitution, relocation benefits, or other severance benefits
upon termination of employment.  The amounts payable to Mr. Callaway pursuant to
this Section 8 shall not be treated as damages, but as severance compensation to
which Mr. Callaway is entitled by reason of termination of employment under the
applicable circumstances.  The Company shall not be entitled to set off against
the amounts payable to Mr. Callaway hereunder any amounts earned by Mr. Callaway
in other employment after termination of his employment with the Company
pursuant to this Agreement, or any amounts which might have been earned by Mr.
Callaway in other employment had Mr. Callaway sought such other employment.  The
provisions of this Section 8 shall not limit Mr. Callaway's rights under or
pursuant to any other agreement or understanding with the Company regarding any
pension, profit sharing, insurance or other employee benefit plan of the Company
to which Mr. Callaway is entitled pursuant to the terms of such plan.

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

          (h) Pre-Termination Rights.  The Company shall have the right, at its
              ----------------------
option, to require Mr. Callaway to vacate his office or otherwise remain off the
Company's premises and to

                                       7
<PAGE>

cease any and all activities on the Company's behalf without such action
constituting a termination of employment or a breach of this Agreement.

          9.  RIGHTS UPON A CHANGE IN CONTROL.
              -------------------------------

              (a) If a Change in Control (as defined in Exhibit B hereto) occurs
before the termination of Mr. Callaway's employment hereunder, then this
Agreement shall be automatically renewed (the "Renewed Employment Agreement") in
the same form and substance as in effect immediately prior to the Change in
Control, except that the Initial Term, as specified pursuant to Section 1 of
this Agreement, shall be three (3) years commencing with the effective date of
the Change in Control, and the Extension Dates shall commence with the second
anniversary of the effective date of the Change in Control.

              (b) Notwithstanding anything in this Agreement to the contrary, if
upon or at any time within one (1) year following any Change in Control that
occurs during the term of this Agreement there is a Termination Event (as
defined below), Mr. Callaway shall be treated as if he had been terminated for
the convenience of the Company pursuant to Section 8(a), and Mr. Callaway shall
be entitled to receive the same compensation and other benefits and entitlements
as are described in Section 8(a), as appropriate, of this Agreement.
Furthermore, the provisions of Section 8 shall continue to apply during the term
of the Renewed Employment Agreement except that, in the event of a conflict
between Section 8 and the rights of Mr. Callaway described in this Section 9,
the provisions of this Section 9 shall govern.

              (c) A "Termination Event" shall mean the occurrence of any one or
more of the following, and in the absence of Mr. Callaway's permanent disability
(defined in Section 8(d)), Mr. Callaway's death, and any of the factors
enumerated in Section 8(b) providing for termination by the Company for
substantial cause:

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

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

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

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

                                       8
<PAGE>

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

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

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

     12.  TRADE SECRETS AND CONFIDENTIAL INFORMATION.
          ------------------------------------------

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

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

                                       9
<PAGE>

disclosing such information to others.

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

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

     13.  ASSIGNMENT OF RIGHTS.
          --------------------

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

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

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

                                       10
<PAGE>

              (d) Pursuant to California Labor Code Section 2870, the obligation
to assign as provided in this Agreement does not apply to any Design, Invention
or Innovation to the extent such obligation would conflict with any state or
federal law. The obligation to assign as provided in this Agreement does not
apply to any Design, Invention or Innovation that Mr. Callaway developed
entirely on his own time without using the Company's equipment, supplies,
facilities or Trade Secrets and Confidential Information except those Designs,
Inventions or Innovations that either:

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

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

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

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

          14.  ASSIGNMENT.  This Agreement shall be binding upon and shall inure
               ----------
to the benefit of the parties hereto and the successors and assigns of the
Company.  Mr. Callaway shall have no right to assign his rights, benefits,
duties, obligations or other interests in this Agreement, it being understood
that this Agreement is personal to Mr. Callaway, except that it is understood
and agreed that at such time as Mr. Callaway retires as CEO, and subject to the
written approval of the Company, such approval not to be unreasonably withheld,
a portion of Mr. Callaway's rights, benefits, duties, obligations or other
interests may be assigned to a personal corporation controlled by Mr. Callaway.

          15.  ATTORNEYS' FEES AND COSTS.  If any arbitration or other
               -------------------------
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute or default in connection with any of its provisions, the
successful or prevailing party shall be entitled to recover reasonable
attorneys' fees incurred in such action or proceeding as provided in Section
18(f).

          16.  ENTIRE UNDERSTANDING.  This Agreement sets forth the entire
               --------------------
understanding of the parties hereto with respect to the subject matter hereof,
and no other representations, warranties or agreements whatsoever as to that
subject matter have been made by Mr. Callaway or the Company.  This Agreement
shall not be modified, amended or terminated

                                       11
<PAGE>

except by another instrument in writing executed by the parties hereto. This
Agreement replaces and supersedes any and all prior understandings or agreements
between Mr. Callaway and the Company regarding employment.

          17.  NOTICES.  Any notice, request, demand, or other communication
               -------
required or permitted hereunder, shall be deemed properly given when actually
received or within five (5) days of mailing by certified or registered mail,
postage prepaid, to:

               Mr. Callaway:  Ely Callaway
                                __________________________
                                __________________________

               Company:         Callaway Golf Company
                                2285 Rutherford Road
                                Carlsbad, California  92008-8815
                                Attn:  Charles J. Yash
                                President

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

     18.  IRREVOCABLE ARBITRATION OF DISPUTES.
          -----------------------------------

          (a) Mr. Callaway and the Company agree that any dispute, controversy
or claim arising hereunder or in any way related to this Agreement, its
interpretation, enforceability, or applicability, or relating to Mr. Callaway's
employment, or the termination thereof, that cannot be resolved by mutual
agreement of the parties shall be submitted to binding arbitration.  This
includes, but is not limited to, alleged violations of federal, state and/or
local statutes, claims based on any purported breach of duty arising in contract
or tort, including breach of contract, breach of the covenant of good faith and
fair dealing, violation of public policy, violation of any statutory,
contractual or common law rights, but excluding workers' compensation,
unemployment matters, or any matter falling within the jurisdiction of the state
Labor Commissioner.  The parties agree that arbitration is the parties' only
recourse for such claims and hereby waive the right to pursue such claims in any
other forum, unless otherwise provided by law.  Any court action involving a
dispute which is not subject to arbitration shall be stayed pending arbitration
of arbitrable disputes; provided, however, that the parties shall have the right
to seek provisional relief in an ancillary court action in connection with an
arbitrable dispute.

          (b) Any demand for arbitration shall be in writing and must be
communicated to the other party within one (1) year after the discovery of the
alleged claim or cause of action by the aggrieved party, or, if later, within
the time period stated in the applicable statute of limitations.

          (c) The arbitration shall be conducted pursuant to the procedural
rules stated in the National Rules for Resolution of Employment Disputes of the
American

                                       12
<PAGE>

Arbitration Association ("AAA"). The arbitration shall be conducted in San Diego
by a former or retired judge or attorney with at least 10 years experience in
employment-related disputes, or a non-attorney with like experience in the area
of dispute, who shall have the power to hear motions, control discovery, conduct
hearings and otherwise do all that is necessary to resolve the matter. The
parties must mutually agree on the arbitrator. If the parties cannot agree on
the arbitrator after their best efforts, an arbitrator from the American
Arbitration Association will be selected pursuant to the American Arbitration
Association National Rules for Resolution of Employment Disputes.

          (d) The arbitration award shall be final and binding, and may be
entered as a judgment in any court having competent jurisdiction.  It is
expressly understood that the parties have chosen arbitration to avoid the
burdens, costs and publicity of a court proceeding, and the arbitrator is
expected to handle all aspects of the matter, including discovery and any
hearings, in such a way as to minimize the expense, time, burden and publicity
of the process, while assuring a fair and just result.  In particular, the
parties expect that the arbitrator will limit discovery by controlling the
amount of discovery that may be taken (e.g., the number of depositions or
interrogatories) and by restricting the scope of discovery to only those matters
clearly relevant to the dispute.  However, at a minimum, each party will be
entitled to one deposition.

          (e) The parties understand and agree that the arbitrator has no
authority to award punitive damages.

          (f) The prevailing party shall be entitled to an award by the
arbitrator of reasonable attorneys' fees and other costs reasonably incurred in
connection with the arbitration, including witness fees and expert witness fees,
unless the arbitrator for good cause determines otherwise.

          (g) The provisions of this Section shall survive the expiration or
termination of the Agreement, and shall be binding upon the parties.

THE PARTIES HAVE READ PARAGRAPH 18 AND IRREVOCABLY AGREE TO ARBITRATE ANY
DISPUTE IDENTIFIED ABOVE.

               ______ (Mr. Callaway)      ______ (Company)

          19.  MISCELLANEOUS.
               -------------

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

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

                                       13
<PAGE>

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

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

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

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

     20.  CONDITIONS ON SPECIAL SEVERANCE.  Notwithstanding anything else to the
          -------------------------------
contrary, it is expressly understood that any obligation of the Company to pay
Special Severance pursuant to this Agreement shall be subject to:

          (a) Mr. Callaway's continued compliance with the terms and conditions
of Sections 7(a), 7(b), 7(c), 7(e), 12, 13 and 18;

          (b) Mr. Callaway must not, directly or indirectly (whether as agent,
consultant, holder of a beneficial interest, creditor, or in any other
capacity), engage in any business which engages directly or indirectly in
competition with the businesses of the Company or any of its affiliates, or have
any interest, direct or indirect, in any person, firm, corporation, or venture
which directly or indirectly competes with the businesses of the Company or any
of its affiliates.  For purposes of this section, the ownership of interests in
a broadly based mutual fund shall not constitute ownership of the stocks held by
the fund; and

          (c) Mr. Callaway must not, directly, indirectly, or in any other way,
disparage the Company, its officers or employees, vendors, customers, products
or activities, or otherwise interfere with the Company's press, public and media
relations.

     22.  SUPERSEDES OLD EXECUTIVE OFFICER EMPLOYMENT AND TAX INDEMNIFICATION
          -------------------------------------------------------------------
AGREEMENTS.  Mr. Callaway and the Company recognize that prior to the effective
----------
date of this Agreement they were parties to a certain Employment Agreement, as
amended, (the "Old Officer Employment Agreement") and a certain Tax
Indemnification Agreement (the "Old Tax Agreement").  It is the intent of the
parties that as of the effective date of this Agreement, this Agreement shall
replace and supersede the Old Officer Employment

                                       14
<PAGE>

Agreement and the Old Tax Agreement, that the Old Officer Employment Agreement
shall no longer be of any force or effect except as to Sections 7, 12, 13, 15
and 18 thereof, and that to the extent there is any conflict between the Old
Officer Employment Agreement or the Old Tax Agreement and this Agreement, this
Agreement shall control and all agreements shall be construed so as to give the
maximum force and effect to the provisions of this Agreement.

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

MR. CALLAWAY                        COMPANY
                                    Callaway Golf Company,
                                    a Delaware corporation

____________________________     By: ______________________________
Ely Callaway                         Charles J. Yash, President

                                       15
<PAGE>

                                   EXHIBIT A

                              TAX INDEMNIFICATION

     Pursuant to Section 6 of Mr. Callaway's Employment Agreement ("Section 6"),
the Company agrees to indemnify Mr. Callaway with respect to certain excise tax
obligations as follows:

     1.  Definitions.  For purposes of Section 6 and this Exhibit A, the
following terms shall have the meanings specified herein:

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

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

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

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

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

         (f) "Payment" shall mean any payment, benefit or distribution
(including, without limitation, cash, the acceleration of the granting, vesting
or exercisability of stock options or other incentive awards, or the accrual or
continuation of any other payments or benefits) granted or paid to or for the
benefit of Mr. Callaway by the Company or by any person or persons whose actions
result in a Taxable Event (as defined in this Section), or by any person
affiliated with the Company or such person(s), whether paid or payable pursuant
to the terms of this Agreement or otherwise.  Notwithstanding the foregoing, a
Payment shall not include any Gross-Up Payment required under Section 6 and this
Exhibit A

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

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

                                       16
<PAGE>

respect to any such taxes), Mr. Callaway shall retain a net amount of the Gross-
Up Payment equal to the Excise Tax imposed with respect to the Payments.

     3.  All determinations required to be made under Section 6 and this Exhibit
A, including, without limitation, whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment, and the assumptions to be
utilized in arriving at such determinations, shall be made by the accounting
firm of Pricewaterhouse Coopers LLP or, if applicable, its successor as the
Company's independent auditor (the "Accounting Firm").  In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Taxable Event to which a possible Gross-Up Payment is
related, another nationally recognized accounting firm that is mutually
acceptable to the Company and Mr. Callaway shall be appointed to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder).  The Accounting Firm shall provide
detailed supporting calculations to the Company and to Mr. Callaway regarding
the amount of Excise Tax (if any) which is payable, and the Gross-Up Payment (if
any) required hereunder, with respect to any Payment or Payments, with such
calculations to be provided at such time as may be requested by the Company but
in no event later than fifteen (15) business days following receipt of a written
notice from Mr. Callaway that there has been a Payment that may be subject to an
Excise Tax.  All fees and expenses of the Accounting Firm shall be borne solely
by the Company.  Any Gross-Up Payment as determined pursuant to Section 6 and
this Exhibit A shall be paid by the Company to Mr. Callaway within five (5)
business days after receipt of the Accounting Firm's determination.  If the
Accounting Firm determines that no Excise Tax is payable by Mr. Callaway, the
Accounting Firm shall furnish Mr. Callaway with a written opinion that failure
to disclose, report or pay the Excise Tax on Mr. Callaway's federal or other
applicable tax returns will not result in the imposition of a negligence
penalty, understatement penalty or other similar penalty.  All determinations by
the Accounting Firm shall be binding upon the Company and Mr. Callaway in the
absence of clear and indisputable mathematical error.  Following receipt of a
Gross-Up Payment as provided herein, Mr. Callaway shall be obligated to properly
and timely report his Excise Tax liability on the applicable tax returns or
reports and to pay the full amount of Excise Tax with funds provided through
such Gross-Up Payment.  Notwithstanding the foregoing, if the Company reasonably
determines that Mr. Callaway will be unable or otherwise may fail to make such
Excise Tax payment, the Company may elect to pay the Excise Tax to the Internal
Revenue Service and/or other applicable tax authority on behalf of Mr. Callaway,
in which case the Company shall pay the net balance of the Gross-Up Payment
(after deduction of such Excess Tax payment) to Mr. Callaway.

     4.  As a result of uncertainty in the application of Section 4999 of the
Code, it is possible that a Gross-Up Payment will not have been made by the
Company that should have been made (an "Underpayment") or that a Gross-Up
Payment is made that should not have been made (an "Overpayment").  In the event
that Mr. Callaway is required to make a payment of any Excise Tax, due to an
Underpayment, the Accounting Firm shall determine the amount of Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to Mr. Callaway in which case Mr. Callaway shall be obligated to make a
timely payment of the full amount of the applicable Excise Tax to the applicable
tax authority, provided, however, the Company may elect to pay the Excise Tax to
the applicable tax authority on behalf of Mr. Callaway

                                       17
<PAGE>

consistent with the provisions of Section 3, in which case the Company shall pay
the net balance of the Underpayment (after deduction of such Excise Tax payment)
to Mr. Callaway. In the event that the Accounting Firm determines that an
Overpayment has been made, any such Overpayment shall be repaid by Mr. Callaway
to the Company within ninety (90) days after written demand to Mr. Callaway by
the Company, provided, however, that Mr. Callaway shall have no obligation to
repay any amount of the Overpayment that has been paid to, and not recovered
from, a tax authority, provided further, however, in such event the Company may
direct Mr. Callaway to prosecute a claim for a refund of such amount consistent
with the principles set forth in Section 5.

     5.   Mr. Callaway shall notify the Company in writing of any Claim.  Such
notice (a) shall be given as soon as practicable, but in no event later than
fifteen (15) business days, following Mr. Callaway's receipt of written notice
of the Claim from the applicable tax authority, and (b) shall include a compete
and accurate copy of the tax authority's written Claim or otherwise fully inform
the Company of the nature of the Claim and the date on which any payment of the
Claim must be paid, provided that Mr. Callaway shall not be required to give
notice to the Company of facts of which the Company is already aware, and
provided further that failure or delay by Mr. Callaway to give such notice shall
not constitute a breach of Section 6 or this Exhibit A except to the extent that
the Company is prejudiced thereby.  Mr. Callaway shall not pay any portion of a
Claim prior to the earlier of (a) the expiration of thirty (30) days following
the date on which Mr. Callaway gives the foregoing notice to the Company, (b)
the date that any Excise Tax payment under the Claim is due, or (c) the date the
Company notifies Mr. Callaway that it does not intend to contest the Claim.  If,
prior to expiration of such period, the Company notifies Mr. Callaway in writing
that it desires to contest the Claim, Mr. Callaway shall:

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

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

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

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

provided, however, that the Company shall bear and pay directly all costs and
expenses (including, without limitation, additional interest and penalties and
attorneys' fees) incurred in connection with any such contest, and shall
indemnify and hold Mr. Callaway harmless, on an after-tax basis, for any Excise
Tax or income tax (including, without limitation, interest and penalties with
respect thereto) and all costs imposed or incurred in connection with such
contests.  Without limitation upon the foregoing provisions of this Section 5,
and except as provided below,

                                       18
<PAGE>

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

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

                                       19
<PAGE>

                                   EXHIBIT B

                               CHANGE IN CONTROL

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

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

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

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

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

                                       20
<PAGE>

or merger or consolidation (or series of related transactions involving such a
reorganization or merger or consolidation), or

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

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

                                       21

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