8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 28, 2004

CALLAWAY GOLF COMPANY

(Exact Name of Registrant as Specified in its Charter)

DELAWARE	1-10962	95-3797580
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2180 RUTHERFORD ROAD, CARLSBAD, CALIFORNIA
(Address of Principal Executive Offices) 92008
(Zip Code)

Registrant’s telephone number, including area code: (760) 931-1771

NOT APPLICABLE

(Former Name or Former Address, if Changed Since Last Report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EXHIBIT 10.47

Item 1.01 Entry into a Material Definitive Agreement.

     As set forth in its previously filed Form 8-K, dated August 2, 2004 and filed with the SEC on August 3, 2004, Ronald A. Drapeau resigned as Chairman and Chief Executive Officer of Callaway Golf Company (the “Company”), effective as of August 2, 2004. In connection with his resignation, Mr. Drapeau and the Company have entered into a Separation Agreement on October 28, 2004 (the “Separation Agreement”), setting forth certain agreements and understandings between them associated with Mr. Drapeau’s resignation.

     Pursuant to the Separation Agreement, in consideration for Mr. Drapeau’s execution of an unconditional and irrevocable release in favor of the Company and his reasonable cooperation with the terms of the Second Amended Executive Officer Employment Agreement by and between Mr. Drapeau and the Company, dated as of June 1, 2002, as amended (the “Employment Agreement”), the Company has agreed to: (i) pay Mr. Drapeau a one-time cash payment of $500,000, (ii) pay the costs of Cal-COBRA continuation health coverage for Mr. Drapeau and his spouse for a period of up to 18 months after the end of continuing coverage under COBRA, (iii) purchase Mr. Drapeau’s existing primary residence to the extent that such residence is not subject to a binding contract for sale or has not been sold by January 31, 2005, and (iv) in the event of a change of control, pay Mr. Drapeau the net present value of all unpaid severance payments due under his Employment Agreement as of the date of such change of control.

     The description of the terms of the Separation Agreement is qualified in its entirety by reference to the Separation Agreement, which is attached hereto as Exhibit 10.47 and incorporated herein by reference.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

     (b) As referenced in Item 1.01 above, Mr. Drapeau’s resignation as Chief Executive Officer and Chairman of the Company became effective as of August 2, 2004 and was disclosed in a Form 8-K previously filed with the SEC.

Item 9.01 Financial Statements and Exhibits.

(c)   Exhibits.

Exhibit No.	Description
10.47	Separation Agreement, entered into on October 28, 2004, by and between Callaway Golf Company and Ronald A. Drapeau.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 29, 2004
	CALLAWAY GOLF COMPANY
	By: Name: Its:	/s/ Steven S. McCracken Steven S. McCracken Senior Executive Vice President, Chief Legal Officer and Secretary

EXHIBIT INDEX

Exhibit No.	Description
10.47	Separation Agreement, entered into on October 28, 2004, by and between Callaway Golf Company and Ronald A. Drapeau.

EX-10.47

                                                                   EXHIBIT 10.47

                              SEPARATION AGREEMENT

      WHEREAS RONALD A. DRAPEAU ("Employee") is employed by CALLAWAY GOLF
COMPANY, a Delaware corporation, (the "Company") pursuant to a certain Second
Amended Executive Officer Employment Agreement entered into as of January 1,
2002, and amended from time to time thereafter (the "Employment Agreement"), and
has held positions as Chairman of the Board, Director, and Chief Executive
Officer of the Company;

      WHEREAS, at the request of the Board of Directors, Employee has resigned
as Chairman of the Board, Director and Chief Executive Officer effective August
2, 2004;

      WHEREAS the Company intends to terminate Employee's employment pursuant to
Section 8(a) of the Employment Agreement effective October 1, 2004; and

      WHEREAS the parties wish to enter into this Separation Agreement (the
"Separation Agreement") to document and reflect certain agreements and
understandings between them associated with the resignations and terminations
noted above;

      NOW THEREFORE this Separation Agreement is entered into and dated for
reference October 1, 2004, by and between the Company and Employee.

      1.    SEPARATION PAYMENTS. In consideration of the release, cooperation
and other consideration provided by Employee pursuant to this Separation
Agreement, and in addition to any payments due Employee pursuant to the
Employment Agreement, the Company shall:

            (a)   Pay to employee a one-time cash payment of five hundred
thousand dollars ($500,000.00) on or before November 5, 2004;

            (b)   Pay the costs of Cal-COBRA continuation health care coverage
for Employee and employee's spouse, to the extent such coverage is available,
for a period of up to eighteen (18) months.

            (c)   Provide an Appraised Value Offer for the Company or its
designee to purchase Employee's existing primary residence in Encinitas,
California, in accordance with the Home Purchase Procedures set forth in Exhibit
B to this Separation Agreement if, despite Employee's best efforts, such
residence has not been otherwise sold or contracted for sale by January 31,
2005. If Employee elects to accept the Appraised Value Offer, then Employee
shall cooperate fully with the Company to expedite and complete the sale
process. If Employee elects not to accept the Appraised Value Offer, Employee's
sole recourse shall be to elect not to have the Company purchase his residence
and thereby waive any rights he has under this Section 1(c) or any other promise
to have the Company purchase his residence. Employee acknowledges that Employee
has the duty to make known to the Company, its designee, or any other purchaser
the condition of the residence and associated property, particularly any defect
that might affect its value, habitability or desirability, and that Employee may
be held responsible for all expenses involved in correcting any defects not
properly disclosed.

            (d)   The Company shall otherwise comply with the terms and
conditions of the Employment Agreement.

      2.    EMPLOYEE CONSIDERATION. In consideration of the promises made by the
Company in this Separation Agreement, and in addition to any obligations imposed
pursuant to the Employment Agreement, Employee agrees as follows:



            (a)   Release.

                  (i)   Employee hereby irrevocably and unconditionally releases
and forever discharges the Company, its predecessors, successors, subsidiaries,
affiliates and benefit plans, and each and every past, present and future
officer, director, employee, representative and attorney of the Company, and
their successors and assigns (collectively referred to herein as the
"Releasees"), from any, every, and all charges, complaints, claims, causes of
action, and lawsuits of any kind whatsoever, including, to the extent permitted
under the law, all claims which Employee has against the Releasees, or any of
them, arising from or in any way related to circumstances or events arising out
of Employee's employment by the Company, including, but not limited to,
harassment, discrimination, retaliation, failure to progressively discipline
Employee, termination of employment, violation of state and/or federal wage and
hour laws, violations of any notice requirement, violations of the California
Labor Code, or breach of any employment agreement, together with any and all
other claims Employee now has against the Releasees, through the date of
execution of this Separation Agreement. EMPLOYEE ALSO SPECIFICALLY AGREES AND
ACKNOWLEDGES THAT EMPLOYEE IS WAIVING ANY RIGHT TO RECOVERY AGAINST RELEASEES
BASED ON STATE OR FEDERAL AGE, SEX, PREGNANCY, RACE, COLOR, NATIONAL ORIGIN,
MARITAL STATUS, RELIGION, VETERAN STATUS, DISABILITY, SEXUAL ORIENTATION,
MEDICAL CONDITION OR OTHER ANTI-DISCRIMINATION LAWS, INCLUDING, WITHOUT
LIMITATION, TITLE VII, THE AMERICANS WITH DISABILITIES ACT, THE CALIFORNIA FAIR
HOUSING AND EMPLOYMENT ACT, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967,
THE FAMILY MEDICAL RIGHTS ACT, THE CALIFORNIA FAMILY RIGHTS ACT OR BASED ON THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OR THE WORKER ADJUSTMENT AND RETRAINING
NOTIFICATION ACT, ALL AS AMENDED, WHETHER SUCH CLAIM BE BASED UPON AN ACTION
FILED BY EMPLOYEE OR A GOVERNMENTAL AGENCY.

                  (ii)  Employee waives all rights under section 1542 of the
Civil Code of the State of California. Section 1542 provides as follows:

            A general release does not extend to claims which the creditor does
            not know or suspect to exist in his favor at the time of executing
            the release, which if known by him must have materially affected his
            settlement with the debtor.

Notwithstanding such waiver, Employee understands that rights or claims under
the Age Discrimination in Employment Act of 1967 (29 U.S.C. Section 621, et
seq.) that may arise after the date this Separation Agreement is executed are
not waived.

                  (iii) Nothing in this Separation Agreement shall be construed
to prohibit the Employee from exercising Employee's right, if any, to file a
charge with the Equal Employment Opportunity Commission or from participating in
any investigation or proceeding conducted by the Equal Employment Opportunity
Commission. Employee understands and agrees that if Employee files such a
charge, the Company has the right to raise the defense that the charge is barred
by this Separation Agreement;

                  (iv)  The Company hereby advises Employee in writing to
discuss this release with an attorney before executing it. Employee further
acknowledges that the Company will provide Employee twenty-one (21) days within
which to review and consider this Separation Agreement, including this release,
before signing it. Should Employee decide not to use the full twenty-one (21)
days, then Employee knowingly and voluntarily waives any claims that he was not
in fact given that period of time or did not use the entire twenty-one (21) days
to consult an attorney and/or consider this release.

                  (v)   The parties acknowledge and agree that Employee may
revoke this Separation Agreement for up to seven (7) calendar days following
execution and that it shall not become effective or enforceable against either
party until any such revocation period has expired. The parties further
acknowledge and agree that such revocation must be in writing addressed to
Steven C. McCracken, Senior Executive Vice President, Chief Legal Officer and
Secretary, Callaway Golf Company, 2180 Rutherford Road, Carlsbad, California
92008, and received no later than midnight on the seventh day following the
execution of this Separation Agreement by Employee. If Employee revokes under
this section,



the Separation Agreement shall not be effective or enforceable, and Employee
will not receive the consideration described in this Separation Agreement.

                  (vi)  If Employee does not revoke this Separation Agreement in
the timeframe specified above, the Separation Agreement shall become effective
at 12:01 a.m. on the eighth day after it is fully executed by the parties.

            (b)   Employee shall fully cooperate with the Company to effectuate
all actions reasonably required in connection with Employee's termination and
the effectuation of this Separation Agreement and the Employment Agreement,
including, but not limited to, cooperation in the preparation, signing and
filing of any and all documentation necessary to implement or record the
resignation of Employee from any and all boards or positions associated with the
Company or any of the Company's subsidiaries or affiliates, as well as
reasonable cooperation with the Company's legal counsel in connection with any
legal proceedings or litigation arising out of matters occurring during the time
Employee was employed by the Company. In addition, Employee reaffirms his
obligation to protect the Company's confidential information, and as a former
member of the "control group" of senior executives of the Company, Employee
recognizes that he cannot waive, and is required to specifically protect, the
Company's attorney-client communications and attorney work product that he
learned while employed by the Company. Employee agrees that in the event he is
contacted by anyone concerning the business of the Company he shall provide
notice to the Legal Department as provided in Section 3(f) of such contact, and
give the Company a reasonable opportunity to object, limit or otherwise guide
any disclosure of Company information in accordance with any applicable
privileges, laws and regulations.

            (c)   Employee shall otherwise comply with the terms and conditions
of the Employment Agreement.

      3.    OTHER MATTERS.

            (a)   Other Health Coverage. Should Employee wish to seek other
health care coverage in lieu of continuation coverage under COBRA and/or
Cal-COBRA, the Company agrees to meet and confer with Employee to discuss such
alternatives. Employee has no obligation to seek such alternative coverage, nor
does the Company have any obligation to modify or amend its commitments under
this Separation Agreement or the Employment Agreement regarding the costs of
continuation coverage.

            (b)   Change in Control. Should there be a Change in Control as
defined in Exhibit A to this Separation Agreement, then it is agreed that the
Company shall pay to Employee within thirty (30) days the net present value of
any remaining but unpaid payments pursuant to Sections 8(a), 19 and 20 of the
Employment Agreement.

            (c)   Employee's Estate. For purposes of clarification, the parties
acknowledge that unless otherwise specifically stated or forbidden by law, any
payments due Employee pursuant to this Separation Agreement or the Employment
Agreement are not excused upon the death of Employee, and shall be paid to
Employee's estate.

            (d)   Taxes. Any payments to Employee pursuant to this Separation
Agreement shall be subject to the usual and customary taxes, employee payroll
practices and all applicable withholding requirements.

            (e)   Entire Understanding. This Separation Agreement and the
Employment Agreement set forth the entire understanding of the parties hereto
with respect to the subject matter hereof, and no other representations,
warranties or agreements whatsoever as to that subject matter have been made by
Employee or the Company. This Separation Agreement shall not be modified,
amended or terminated except by another instrument in writing executed by the
parties hereto. This Separation Agreement replaces and supersedes any and all
prior understandings or agreements between Employee and the Company regarding
employment, with the exception of the Employment Agreement, the "Employee
Invention and Confidentiality Agreement" and the "Information Security Policy
and Agreement" entered into by Employee with the Company.



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

            Company:     Callaway Golf Company
                         2180 Rutherford Road
                         Carlsbad, California  92008
                         Attn:  Michael J. Rider
                         Senior Vice President and General Counsel

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

            (g)   Headings. The headings of the several sections and paragraphs
of this Separation 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.

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

            (i)   Applicable Law. This Separation 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.

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

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

      4.    IRREVOCABLE ARBITRATION OF DISPUTES.

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

            (b)   EMPLOYEE AND THE COMPANY AGREE THAT THE ARBITRATOR SHALL HAVE
THE AUTHORITY TO ISSUE PROVISIONAL RELIEF. EMPLOYEE AND THE COMPANY FURTHER
AGREE THAT EACH HAS THE RIGHT, PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE
SECTION 1281.8, TO APPLY TO A COURT FOR A PROVISIONAL REMEDY IN CONNECTION WITH
AN ARBITRABLE DISPUTE SO AS TO PREVENT THE ARBITRATION FROM BEING RENDERED
INEFFECTIVE.

            (c)   ANY DEMAND FOR ARBITRATION SHALL BE IN WRITING AND MUST BE
COMMUNICATED TO THE OTHER PARTY



PRIOR TO THE EXPIRATION OF THE APPLICABLE STATUTE OF LIMITATIONS.

            (d)   THE ARBITRATION SHALL BE CONDUCTED PURSUANT TO THE PROCEDURAL
RULES STATED IN THE NATIONAL RULES FOR RESOLUTION OF EMPLOYMENT DISPUTES OF THE
AMERICAN ARBITRATION ASSOCIATION ("AAA"). THE ARBITRATION SHALL BE CONDUCTED IN
SAN DIEGO BY A FORMER OR RETIRED JUDGE OR ATTORNEY WITH AT LEAST 10 YEARS
EXPERIENCE IN EMPLOYMENT-RELATED DISPUTES, OR A NON-ATTORNEY WITH LIKE
EXPERIENCE IN THE AREA OF DISPUTE, WHO SHALL HAVE THE POWER TO HEAR MOTIONS,
CONTROL DISCOVERY, CONDUCT HEARINGS AND OTHERWISE DO ALL THAT IS NECESSARY TO
RESOLVE THE MATTER. THE PARTIES MUST MUTUALLY AGREE ON THE ARBITRATOR. IF THE
PARTIES CANNOT AGREE ON THE ARBITRATOR AFTER THEIR BEST EFFORTS, AN ARBITRATOR
FROM THE JUDICIAL ARBITRATION AND MEDIATION SERVICE WILL BE SELECTED PURSUANT TO
THE AMERICAN ARBITRATION ASSOCIATION NATIONAL RULES FOR RESOLUTION OF EMPLOYMENT
DISPUTES. THE COMPANY SHALL PAY THE COSTS OF THE ARBITRATOR'S FEES.

            (e)   THE ARBITRATION WILL BE DECIDED UPON A WRITTEN DECISION OF THE
ARBITRATOR STATING THE ESSENTIAL FINDINGS AND CONCLUSIONS UPON WHICH THE AWARD
IS BASED. THE ARBITRATOR SHALL HAVE THE AUTHORITY TO AWARD DAMAGES, IF ANY, TO
THE EXTENT THAT THEY ARE AVAILABLE UNDER APPLICABLE LAW(S). THE ARBITRATION
AWARD SHALL BE FINAL AND BINDING, AND MAY BE ENTERED AS A JUDGMENT IN ANY COURT
HAVING COMPETENT JURISDICTION. EITHER PARTY MAY SEEK REVIEW PURSUANT TO
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1286, ET SEQ.

            (f)   IT IS EXPRESSLY UNDERSTOOD THAT THE PARTIES HAVE CHOSEN
ARBITRATION TO AVOID THE BURDENS, COSTS AND PUBLICITY OF A COURT PROCEEDING, AND
THE ARBITRATOR IS EXPECTED TO HANDLE ALL ASPECTS OF THE MATTER, INCLUDING
DISCOVERY AND ANY HEARINGS, IN SUCH A WAY AS TO MINIMIZE THE EXPENSE, TIME,
BURDEN AND PUBLICITY OF THE PROCESS, WHILE ASSURING A FAIR AND JUST RESULT. THE
ARBITRATOR SHALL ALLOW REASONABLE DISCOVERY AS PROVIDED IN THE CALIFORNIA
ARBITRATION ACT, BUT SHALL CONTROL THE AMOUNT AND SCOPE OF DISCOVERY.

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

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

                      /s/ RAD (EMPLOYEE)         /s/ WCB (COMPANY)


      IN WITNESS WHEREOF, this Separation Agreement is entered into and dated
for reference October 1, 2004, by and between the Company and Employee.

EMPLOYEE                                        COMPANY
                                                Callaway Golf Company,
                                                a Delaware corporation

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

Dated:   October 28, 2004                       Dated:   October 28, 2004



                                                                       EXHIBIT A

                                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 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.



                                                                       EXHIBIT B

                            HOME PURCHASE PROCEDURES

Callaway Golf will enter into a contract with a third party agency (the
"Relocation Company") to make an offer and, upon acceptance of the offer, to
purchase Employee's current home pursuant to an Appraised Value Offer according
to the procedures set forth below. If Employee accepts said offer, and if the
home is purchased by the Relocation Company on behalf of Callaway Golf, then
Callaway Golf will be responsible for any loss on the sale of Employee's home by
the Relocation Company and will retain all resale profits on the sale of the
home, if any are generated.

The Relocation Company will assist Callaway Golf and Employee in determining an
Appraised Value Offer for Employee's home. The Relocation Company will provide
Employee with a list of qualified relocation appraisers who are experienced in
determining a Selling Price for such a home. Employee will select three (3)
appraisers from the list (Employee may not select an appraiser who has appraised
the home within the last six (6) months). Employee shall notify the Relocation
Company of his choices, and Relocation Company will order two (2) appraisals
using two of the appraisers selected. In turn, each appraiser will contact
Employee (or the person Employee designates) to schedule an appointment to do
the appraisal.

The two appraisers will determine the Anticipated Selling Price of Employee's
home, which shall be defined as the price at which the property is anticipated
to sell in a competitive and open market transaction, assuming an arm's length
transaction, within sixty (60) days. In estimating the Anticipated Selling
Price, the appraisers will look at competing listings, recent comparable sales,
and other market variables through the eyes of a typical buyer.

In conjunction with the appraisal process, the Relocation Company will order all
appropriate inspections at Callaway Golf's expense. Other inspections may be
ordered, as recommended by the appraisers, realtors, or inspectors. Employee
will cooperate with the Relocation Company and any and all appraisers, it being
understood that an Appraised Value Offer cannot be made without the results of
all inspections.

The appraisers will contact the Relocation Company with the results of their
appraisals, including their Anticipated Selling Prices, and will follow up with
written appraisal reports. The reports will be reviewed for accuracy and
consistency by the Relocation Company. Approximately three (3) weeks from the
date the last appraiser visits Employee's home, the Relocation Company will
contact Employee to present an Appraised Value Offer and all inspection results,
including copies of all appraisals.

The Appraised Value Offer will be the average of the two (2) Anticipated Selling
Prices submitted by the appraisers, less an Estimated Commission fixed at six
percent (6%). If the two Anticipated Selling Prices differ by more than five
percent (5%), a third appraisal will be ordered (using the third appraiser
Employee properly selected from the list provided by the Relocation Company). If
three appraisals are needed, then the Appraised Value Offer will be the average
of the two (2) closest Anticipated Selling Prices, less an Estimated Commission
fixed at six percent (6%).

Employee shall have ten (10) days to accept the offer starting upon the day the
Appraised Value Offer is communicated to Employee. Employee shall communicate
his acceptance, in writing to the Relocation Company. If Employee chooses to
accept the Appraised Value Offer from the Relocation Company, Contracts of Sale,
a deed package, and all necessary documents required to sell Employee's home to
the Relocation Company will be forwarded to Employee. Prompt execution and
notarization of these documents will be required if Employee elects to accept
the Appraised Value Offer. If Employee has not previously terminated any
existing listing agreement, then Employee will be responsible for payment of any
commission owed to any agent upon sale to the Relocation Company. If Employee
does not accept the Appraised Value Offer within ten (10) days, it shall expire
by its own terms and Callaway Golf shall thereafter have no further duty to
assist Employee with the sale of Employee's home.



If Employee accepts the Appraised Value Offer, Callaway Golf, through the
Relocation Company, will assume responsibility of all mortgage payments,
utilities, and maintenance of the home as of the date of possession. Possession
is defined as the day Employee fully executes the Contracts of Sale or vacates,
whichever is later.

Employee's Equity will be the Appraised Value Offer minus the mortgage balance,
mortgage interest prorations, tax prorations, costs of any repairs, and all
other liens against the property. The Equity will be paid to Employee directly
by the Relocation Company or Callaway Golf. Employee has no expectation of any
payments other than payment of the Equity.

Employee shall be responsible for all maintenance and repair of the property and
all expenses associated with the property, including mortgage payments, until
such time as Callaway Golf and/or the Relocation Company take possession. During
the implementation of these Home Purchase Procedures, Employee shall reasonably
cooperate with Callaway Golf and the Relocation Company in any efforts to secure
the sale of the property to a third party. It is acknowledged that the
Relocation Company will be marketing the property on behalf of Callaway Golf
during this time, and that Employee shall cooperate in keeping it in order and
scheduling showings.

Disclosure: it is the duty of the seller to make known or public to a buyer the
condition of the property, particularly with respect to any defect that could
affect its value, habitability, or desirability. Employee may be held
responsible for all expenses involved in correcting defect(s) or problems that
are not disclosed and subsequently discovered.