UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrantþ
Filed by a Party other than the Registranto
Check the appropriate box:
o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to Section 240.14a-12
CALLAWAY GOLF COMPANY
Payment of Filing Fee (Check the appropriate box):
þ No fee required.
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
(1) | Title of each class of securities to which transaction applies: |
(2) | Aggregate number of securities to which transaction applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) | Proposed maximum aggregate value of transaction: |
(5) | Total fee paid: |
o | Fee paid previously with preliminary materials. | |||
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1) | Amount Previously Paid: |
(2) | Form, Schedule or Registration Statement No.: |
(3) | Filing Party: |
(4) | Date Filed: |
Sincerely, | |
William C. Baker | |
Chairman of the Board | |
and Chief Executive Officer |
1. | To elect seven directors to the Company’s Board of Directors to serve until the 2006 annual meeting of shareholders and until their successors are elected and qualified; | |
2. | To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2005; and | |
3. | To transact such other business as may properly come before the meeting or any adjournments thereof. |
By Order of the Board of Directors, | |
Steven C. McCracken | |
Secretary |
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Exhibit A — Audit Committee Charter | E-1 |
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Director | ||||||
Name | Positions with the Company | Since | ||||
William C. Baker | Chairman of the Board and Chief Executive Officer | 1994 | ||||
Samuel H. Armacost | Director | 2003 | ||||
Ronald S. Beard | Director | 2001 | ||||
John C. Cushman, III | Director | 2003 | ||||
Yotaro Kobayashi | Director | 1998 | ||||
Richard L. Rosenfield | Director | 1994 | ||||
Anthony S. Thornley | Director | 2004 |
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• | Review and discuss with the outside auditors the scope and results of the annual audit and any reports with respect to interim periods. | |
• | Review and discuss with management and the outside auditors the annual and quarterly financial statements of the Company, including any significant financial reporting issues and judgments, the effects of regulatory and accounting initiatives and off-balance sheet structures on the Company’s financial statements, disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in reports filed with the Securities and Exchange Commission, and any major issues regarding the Company’s accounting principles and financial statements. | |
• | Review and discuss the Company’s policies with respect to earnings releases and other disclosures of financial information and/or guidance. | |
• | Responsibility and sole authority for all matters relating to the Company’s outside auditors, including their appointment, compensation, evaluation, retention and termination. | |
• | Approval of all services to be performed by the outside auditors, including pre-approval of any permissible non-audit services. | |
• | Review and consider the independence of the outside auditors. | |
• | Obtain and review a report by the outside auditors on their internal quality control procedures and any material issues raised by the most recent internal quality control review or peer review. | |
• | Review and discuss with the principal internal auditor of the Company the scope and results of the internal audit program, and the adequacy and effectiveness of internal controls. | |
• | Review and discuss the adequacy and effectiveness of the Company’s disclosure controls and procedures. |
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• | Review material pending legal proceedings and material contingent liabilities. | |
• | Review and discuss the Company’s policies with respect to risk assessment and risk management, and oversee the Company’s legal and regulatory compliance programs, code of conduct, and conflict of interest policies. | |
• | Establish procedures for handling complaints about accounting, internal controls and audit matters. | |
• | Evaluate annually the performance of the Audit Committee and the adequacy of its charter. |
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Members of the Audit Committee | |
Ronald S. Beard(Chair) | |
Samuel H. Armacost | |
Anthony S. Thornley |
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Shares | |||||||||
Beneficially Owned | |||||||||
Name and Address of Beneficial Owner(1) | Number | Percent | |||||||
Arrowhead Trust Incorporated, Trustee for the Callaway Golf Company Grantor Stock Trust(2) | 6,980,629 | 9.2 | % | ||||||
24 Executive Park, Suite 125 | |||||||||
Irvine, CA 92614 | |||||||||
Royce & Associates LLC(3) | 6,526,778 | 8.6 | % | ||||||
1414 Avenue of the Americas | |||||||||
New York, NY 10019 | |||||||||
Goodman & Company, Investment Counsel Ltd.(4) | 5,121,340 | 6.7 | % | ||||||
55th Floor, Scotia Plaza | |||||||||
40 King Street West | |||||||||
Toronto, Ontario, Canada M5H 4A9 | |||||||||
Sterling Capital Management LLC(5) | 4,984,225 | 6.5 | % | ||||||
4064 Colony Road, Suite 300 | |||||||||
Charlotte, NC 28211 | |||||||||
Samuel H. Armacost(6) | 25,000 | * | |||||||
William C. Baker(7) | 52,901 | * | |||||||
Ronald S. Beard(8) | 27,000 | * | |||||||
John C. Cushman, III(9) | 25,000 | * | |||||||
Ronald A. Drapeau(10) | 1,068,922 | 1.4 | % | ||||||
Richard C. Helmstetter(11) | 763,168 | 1.0 | % | ||||||
Bradley J. Holiday(12) | 410,680 | * | |||||||
Patrice Hutin(13) | 440,496 | * | |||||||
Yotaro Kobayashi(14) | 100,000 | * | |||||||
Steven C. McCracken(15) | 640,580 | * | |||||||
Robert A. Penicka(16) | 320,295 | * | |||||||
Richard L. Rosenfield(17) | 70,100 | * | |||||||
Anthony S. Thornley (18) | 10,000 | * | |||||||
All directors, named executive officers and other executive officers as a group (14 persons)(19) | 4,062,941 | 5.3 | % |
* | Less than one percent |
(1) | Except as otherwise indicated, the address for all persons shown on this table is c/o Callaway Golf Company, 2180 Rutherford Road, Carlsbad, California 92008. Unless otherwise indicated in the footnotes to this table, and subject to community property laws where applicable, to the knowledge of the Company each of the shareholders named in this table has sole voting and investment power with respect to the shares shown as beneficially owned by that shareholder. Furthermore, as indicated in the following footnotes, the number of shares a holder is deemed to beneficially own for purposes of this table includes shares issuable upon exercise of options if the options may be exercised on or before May 30, 2005, irrespective of the price at which the Company’s Common Stock is trading on the New York Stock Exchange. Consequently, included in the number of shares beneficially owned are shares |
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issuable upon the exercise of options where the exercise price of the options is above the trading price of the Company’s Common Stock on the New York Stock Exchange. The closing price of the Company’s Common Stock on the New York Stock Exchange on March 31, 2005 was $12.80. | ||
(2) | The Callaway Golf Company Grantor Stock Trust (the “GST”) holds Company Common Stock pursuant to a trust agreement creating the GST in connection with the prefunding of certain obligations of the Company under various employee benefit plans. Both the GST and Arrowhead Trust Incorporated (the “Trustee”) disclaim beneficial ownership of all shares of Common Stock. The Trustee has no discretion in the manner in which the Company’s Common Stock held by the GST will be voted. The trust agreement provides that employees who hold unexercised options as of the Record Date under the Company’s stock option plans and employees who have purchased stock under the Company’s Employee Stock Purchase Plan during the twelve months preceding the Record Date will, in effect, determine the manner in which shares of the Company’s Common Stock held in the GST are voted. The Trustee will vote the Common Stock held in the GST in the manner directed by those employees who submit voting instructions for the shares. |
The number of shares as to which any one employee can direct the vote will depend upon how many employees submit voting instructions to the Trustee. If all employees entitled to submit such instructions do so, as of March 25, 2005, the following named executive officers and group would have the right to direct the vote of the following approximate share amounts: William C. Baker — 392,000, Richard C. Helmstetter — 530,000, Steven C. McCracken — 572,000, Bradley J. Holiday — 429,000, Robert A. Penicka — 429,000, and all executive officers as a group 2,352,000. If less than all of the eligible employees submit voting instructions, then the foregoing amounts would be higher. The trust agreement further provides that all voting instructions received by the Trustee will be held in confidence and not disclosed to any person including the Company. |
(3) | This information is based upon a Schedule 13G/ A filed by Royce & Associates LLC with the Securities and Exchange Commission on January 21, 2005. This schedule also reported that Royce & Associates LLC has sole voting and dispositive power with respect to all such shares. | |
(4) | This information is based upon a Schedule 13G filed by Goodman & Company, Investment Counsel Ltd with the Securities and Exchange Commission on March 10, 2005. This schedule also reported that Goodman & Company, Investment Counsel Ltd has sole voting and dispositive power with respect to all such shares. | |
(5) | This information is based upon a Schedule 13G filed by Sterling Capital Management LLC with the Securities and Exchange Commission on January 6, 2005. Sterling Capital Management LLC is an Investment Advisor registered under Section 203 of the Investment Advisors Act of 1940. Sterling MGT, Inc. is the managing member of Sterling Capital Management LLC. Eduardo A. Brea, Alexander W. McAlister, David M. Ralston, Brian R. Walton and Mark Whalen are controlling shareholders of Sterling MGT, Inc. Sterling Capital Management LLC, Sterling MGT, Inc. and all of the forgoing named controlling shareholders of Sterling MGT, Inc. are reported to be beneficial owners of all shares and to have shared voting power and dispositive power with respect to all shares. | |
(6) | Includes 20,000 shares issuable upon exercise of options held by Mr. Armacost, which are currently exercisable or become exercisable on or before May 30, 2005. | |
(7) | Includes 42,000 shares issuable upon exercise of options held by Mr. Baker, which are currently exercisable or become exercisable on or before May 30, 2005. Includes 50 shares held by Mr. Baker’s spouse. | |
(8) | Includes 26,000 shares issuable upon exercise of options held by Mr. Beard, which are currently exercisable or become exercisable on or before May 30, 2005. Includes 1,000 shares that are held by Mr. Beard and his wife as joint tenants. |
(9) | Includes 20,000 shares issuable upon exercise of options held by Mr. Cushman, which are currently exercisable or become exercisable on or before May 30, 2005. All shares are held jointly with his spouse. |
(10) | Includes 1,050,000 shares issuable upon exercise of options held by Mr. Drapeau, which are currently exercisable or become exercisable on or before May 30, 2005. Includes 1,700 shares held by |
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Mr. Drapeau’s spouse. Also includes 12,000 shares held by the Drapeau Family Trust for which Mr. Drapeau is a trustee with voting and dispositive power over such shares. Mr. Drapeau resigned as Chairman and Chief Executive Officer of Callaway Golf Company effective August 2, 2004. | |
(11) | Includes 541,667 shares issuable upon exercise of options held by Mr. Helmstetter, which are currently exercisable or become exercisable on or before May 30, 2005. Also includes 221,501 shares held by the Helmstetter Family Trust for which Mr. Helmstetter is a trustee with voting and dispositive powers over such shares. |
(12) | Includes 408,334 shares issuable upon exercise of options held by Mr. Holiday, which are currently exercisable or become exercisable on or before May 30, 2005. |
(13) | Includes 440,000 shares issuable upon exercise of options held by Mr. Hutin, which are currently exercisable or become exercisable on or before May 30, 2005. Mr. Hutin resigned as President and Chief Operating Officer of Callaway Golf Company effective November 8, 2004. |
(14) | Represents 100,000 shares issuable upon exercise of options held by Mr. Kobayashi, which are currently exercisable or become exercisable on or before May 30, 2005. |
(15) | Includes 600,001 shares issuable upon exercise of options held by Mr. McCracken, which are currently exercisable or become exercisable on or before May 30, 2005. Includes 26,466 shares held by the McCracken/ Waggener Family Trust for which Mr. McCracken is a trustee with voting and dispositive powers over such shares. Also includes 1,500 shares held by Mr. McCracken’s spouse and 550 shares held for the benefit of Mr. McCracken’s children. |
(16) | Includes 309,000 shares issuable upon exercise of options held by Mr. Penicka, which are currently exercisable or become exercisable on or before May 30, 2005. |
(17) | Includes 42,000 shares issuable upon exercise of options held by Mr. Rosenfield, which are currently exercisable or become exercisable on or before May 30, 2005. Includes 8,000 shares held in a trust for the benefit of Mr. Rosenfield’s children and 50 shares held by Mr. Rosenfield’s spouse. |
(18) | Includes 10,000 shares issuable upon exercise of options held by Mr. Thornley, which are currently exercisable or become exercisable on or before May 30, 2005. |
(19) | Includes 3,717,336 shares issuable upon exercise of options held by these individuals, which are currently exercisable or become exercisable on or before May 30, 2005. |
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Long-Term Compensation Awards | |||||||||||||||||||||||||||||
Annual Compensation | |||||||||||||||||||||||||||||
Restricted | Securities | ||||||||||||||||||||||||||||
Other Annual | Stock | Underlying | All Other | ||||||||||||||||||||||||||
Salary | Bonus | Compensation | Awards | Options | Compensation | ||||||||||||||||||||||||
Name and Principal Position | Year | ($) | ($) | ($)(1) | ($) | (#) | ($) | ||||||||||||||||||||||
William C. Baker(2) | 2004 | $ | 292,307 | $ | — | $ | 1,433 | $ | — | 506,000 | $ | 40,100 | |||||||||||||||||
Chairman and Chief | 2003 | — | — | — | — | 6,000 | 71,500 | ||||||||||||||||||||||
Executive Officer | 2002 | — | — | — | — | 6,000 | 55,400 | ||||||||||||||||||||||
Ronald A. Drapeau(3) | 2004 | 762,260 | — | 10,415 | — | 125,000 | 671,244 | ||||||||||||||||||||||
Former Chairman and Chief | 2003 | 733,654 | 350,000 | — | — | 125,000 | 41,243 | ||||||||||||||||||||||
Executive Officer | 2002 | 700,000 | 250,000 | 335 | — | 125,000 | 15,908 | ||||||||||||||||||||||
Richard C. Helmstetter(4) | 2004 | 600,000 | — | 106,522 | — | 100,000 | 24,189 | ||||||||||||||||||||||
Vice Chairman and Senior | 2003 | 600,000 | 170,000 | 106,891 | — | 100,000 | 34,721 | ||||||||||||||||||||||
Executive Vice President | 2002 | 608,937 | 150,000 | 116,313 | — | 100,000 | 18,269 | ||||||||||||||||||||||
Steven C. McCracken(5) | 2004 | 550,000 | — | 14,844 | — | 100,000 | 20,063 | ||||||||||||||||||||||
Senior Executive Vice President | 2003 | 514,795 | 175,000 | — | — | 100,000 | 31,417 | ||||||||||||||||||||||
Chief Legal Officer and Secretary | 2002 | 500,000 | 125,000 | — | — | 100,000 | 17,553 | ||||||||||||||||||||||
Bradley J. Holiday(6) | 2004 | 500,000 | — | 11,173 | — | 100,000 | 21,016 | ||||||||||||||||||||||
Senior Executive Vice President | 2003 | 429,589 | 145,000 | — | — | 75,000 | 29,246 | ||||||||||||||||||||||
and Chief Financial Officer | 2002 | 400,000 | 100,000 | — | — | 75,000 | 17,210 | ||||||||||||||||||||||
Robert A. Penicka(7) | 2004 | 500,000 | — | 9,654 | — | 200,000 | 14,620 | ||||||||||||||||||||||
Senior Executive Vice President | 2003 | 418,864 | 145,000 | 12,716 | — | 75,000 | 76,982 | ||||||||||||||||||||||
and Chief Operating Officer | 2002 | 275,000 | 100,000 | 469 | — | 75,000 | 17,254 | ||||||||||||||||||||||
Patrice Hutin(8) | 2004 | 550,000 | — | 22,789 | — | 100,000 | 17,140 | ||||||||||||||||||||||
Former President and | 2003 | 479,589 | 150,000 | — | — | 75,000 | 91,429 | ||||||||||||||||||||||
Chief Operating Officer | 2002 | 335,770 | 90,000 | — | — | 150,000 | 133,791 |
(1) | Consistent with the rules of the Securities and Exchange Commission, certain perquisites and other personal benefits are specifically identified in a footnote only if the aggregate amount of such items for a covered year is at least 10% of the total of annual salary and bonus for the named executive officer for such period or $50,000, whichever is less, and are at least 25% of the total of such perquisites and personal benefits reported for a named executive officer. |
(2) | Effective August 2, 2004, Mr. Baker was appointed as Chairman and Chief Executive Officer. Prior to Mr. Baker’s appointment, he served as a member of the Board of Directors of the Company. Mr. Baker’s All Other Compensation for 2004, 2003 and 2002 represents compensation he earned as a director of the Company for such periods. Mr. Baker’s stock options for 2004 include a grant for 6,000 shares which were granted to him as a Board member before he became Chief Executive Officer and a grant for 500,000 shares granted to him in connection with his appointment as Chief Executive Officer. The terms of Mr. Baker’s stock option grant for 500,000 shares provide that they vest, subject to his continued employment in good standing, in three equal annual installments on the first, second and third anniversaries of the date of grant. The vesting schedule is not accelerated upon a change in control or termination of employment, and unvested options will be cancelled upon the termination of Mr. Baker’s employment (which is expected to coincide with the hiring of a new Chief Executive Officer pursuant to the Company’s currently ongoing search). Notwithstanding the foregoing, the terms of the grant also provide for a minimum vesting of 50,000 shares except under certain limited circumstances. |
(3) | Mr. Drapeau’s 2004 and 2003 Salary includes salary paid for accrued but unused vacation hours in the amounts of $188,000 and $33,654, respectively. The amount paid to Mr. Drapeau in 2003 for unused vacation was used by Mr. Drapeau to make a charitable contribution to the Callaway Golf Foundation in |
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the amount of $26,192 and pay the applicable taxes on such vacation payout. Mr. Drapeau’s All Other Compensation for 2004 represents (i) a one-time lump sum payment of $500,000 in connection with Mr. Drapeau’s separation from the Company, (ii) salary continuation payments in the amount of $148,077, (iii) payment of the Company’s matching contributions under the Company’s 401(k) Retirement Investment Plan in the amount of $13,000, (iv) Company paid premiums for disability insurance in the amount of $3,916 and (v) Company paid premiums for group term life insurance of $6,251. | |
(4) | Mr. Helmstetter’s 2002 Salary includes payment for accrued but unused vacation hours in the amount of $8,937. Mr. Helmstetter’s Other Annual Compensation for 2004, 2003 and 2002 includes reimbursement of personal travel expenses in the approximate amount of $100,000 for each year. Mr. Helmstetter’s All Other Compensation for 2004 represents payment of Company matching contributions under the Company’s 401(k) Retirement Investment Plan in the amount of $13,000, (ii) Company paid premiums for group term life insurance of $7,920 and (iii) Company paid premiums for disability insurance in the amount of $3,269. |
(5) | Mr. McCracken’s All Other Compensation for 2004 represents (i) payment of Company matching contributions under the Company’s 401(k) Retirement Investment Plan in the amount of $13,000, (ii) Company paid premiums for group term life insurance of $4,140 and (iii) Company paid premiums for disability insurance in the amount of $2,923. |
(6) | Mr. Holiday’s All Other Compensation for 2004 represents payment of Company matching contributions under the Company’s 401(k) Retirement Investment Plan in the amount of $13,000, (ii) Company paid premiums for group term life insurance of $4,140 and (iii) Company paid premiums for disability insurance in the amount of $3,876. |
(7) | Mr. Penicka’s All Other Compensation for 2004 represents (i) payment of Company matching contributions under the Company’s 401(k) Retirement Investment Plan in the amount of $13,000 and (ii) Company paid premiums for disability insurance in the amount of $1,620. All Other Compensation for 2003 includes payment of relocation expenses in the amount of $62,935 in connection with Mr. Penicka’s relocation (at the Company’s request) to the Company’s Top-Flite facilities in Chicopee, Massachusetts. |
(8) | Mr. Hutin resigned as President and Chief Operating Officer as of November 2004. Mr. Hutin’s All Other Compensation for 2004 represents Company matching contributions under the Company’s 401(k) Retirement Investment Plan in the amount of $13,000 and Company paid premiums for group term life insurance in the amount of $4,140. All Other Compensation for 2003 includes payment of $61,616 representing a portion of Mr. Hutin’s relocation expenses in connection with Mr. Hutin’s relocation (at the Company’s request) from Europe to the United States. All Other Compensation for 2002 includes payment of $56,000 representing the balance of Mr. Hutin’s relocation expenses and Company payments for foreign group personal pension of $51,800. |
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% of Total | ||||||||||||||||||||
Number of Securities | Options | |||||||||||||||||||
Underlying | Granted to | Exercise or | Grant Date | |||||||||||||||||
Options Granted | Employees | Base Price | Expiration | Present Value | ||||||||||||||||
Name | (#)(1) | in Fiscal Year | ($/Sh) | Date(3) | ($)(4) | |||||||||||||||
William C. Baker(2) | 500,000 | 18.1 | % | $ | 11.62 | 11/23/2014 | $ | 1,737,500 | ||||||||||||
6,000 | 0.2 | % | $ | 19.23 | 01/26/2014 | $ | 36,168 | |||||||||||||
Ronald A. Drapeau | 125,000 | 4.5 | % | $ | 17.91 | 01/30/2014 | $ | 701,750 | ||||||||||||
Richard C. Helmstetter | 100,000 | 3.6 | % | $ | 17.91 | 01/30/2014 | $ | 561,400 | ||||||||||||
Steven C. McCracken | 100,000 | 3.6 | % | $ | 17.91 | 01/30/2014 | $ | 561,400 | ||||||||||||
Bradley J. Holiday | 100,000 | 3.6 | % | $ | 17.91 | 01/30/2014 | $ | 561,400 | ||||||||||||
Robert A. Penicka | 100,000 | 3.6 | % | $ | 17.91 | 01/30/2014 | $ | 561,400 | ||||||||||||
100,000 | 3.6 | % | $ | 11.89 | 11/29/2014 | $ | 355,500 | |||||||||||||
Patrice Hutin | 100,000 | 3.6 | % | $ | 17.91 | 01/30/2014 | $ | 561,400 |
(1) | The terms of these stock options (except for those issued to Mr. Baker, see Note 2) provide that one-third of the shares underlying the stock option would vest on each of the first, second and third anniversaries of the date of grant. The executive officer employment agreements also generally provide for accelerated vesting if the employee is terminated by the Company for convenience or by the employee for substantial cause. In addition, all such options vest in full immediately prior to a change in control of the Company. |
(2) | The terms of Mr. Baker’s stock option grant for 500,000 shares provide that they vest, subject to his continued employment in good standing, in three equal annual installments on the first, second and third anniversaries of the date of grant. The vesting schedule is not accelerated upon a change in control or termination of employment, and unvested options will be cancelled upon the termination of Mr. Baker’s employment (which is expected to coincide with the hiring of a new Chief Executive Officer pursuant to the Company’s currently ongoing search). Notwithstanding the foregoing, the terms of the grant also provide for a minimum vesting of 50,000 shares except under certain limited circumstances. Mr. Baker’s stock option for 6,000 shares was granted to him as a Board member before he became Chief Executive Officer. The terms of this stock option provide that 6,000 of the shares underlying the stock option would vest on January 26, 2006. |
(3) | The options expire on the date set forth in this column, unless the named executive officer’s employment with the Company is terminated prior to such date. Upon termination of employment, the named executive officer generally has one year from the date of termination to exercise his vested options. In addition, the options may be cancelled and rescinded and proceeds may be forfeited if the named executive officer improperly discloses or misuses confidential information or trade secrets of the Company. |
(4) | These options were valued as of the date of grant based on the Black-Scholes option pricing model adapted for use in valuing executive stock options using the following assumptions which varied based on the date of grant: (a) expected volatility of 42.6% - 44.7%; (b) risk-free interest rate of 2.45% - 2.75%; (c) dividend yield of 1.7% - 1.9%; and (d) expected term of 3 - 4 years. The actual value, if any, an executive may realize will depend on the excess of the stock price over the exercise price on the date the option is exercised, so there is no assurance the value realized by an executive will be at or near the value estimated by the Black-Scholes model. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In |
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addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in subjective input assumptions can materially affect the fair value estimates, in management’s opinion the existing models do not necessarily provide a reliable single measure of the fair value of the grants described above. |
Option Exercises | Number of Securities | |||||||||||||||||||||||
During 2004 | Underlying Unexercised | Value of Unexercised | ||||||||||||||||||||||
Options at | In-the-Money Options at | |||||||||||||||||||||||
Shares | Fiscal Year-End(#) | Fiscal Year-End($)(1) | ||||||||||||||||||||||
Acquired on | Value | |||||||||||||||||||||||
Name | Exercise(#) | Realized($) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
William C. Baker | — | $ | — | 36,000 | 512,000 | $ | 25,150 | $ | 2,642,300 | |||||||||||||||
Ronald A. Drapeau | — | $ | — | 1,075,000 | — | $ | 1,301,625 | $ | — | |||||||||||||||
Richard C. Helmstetter | 120,000 | $ | 292,100 | 491,667 | 199,999 | $ | 595,792 | $ | 316,330 | |||||||||||||||
Steven C. McCracken | 50,000 | $ | 181,000 | 530,001 | 199,999 | $ | 745,545 | $ | 316,330 | |||||||||||||||
Bradley J. Holiday | — | $ | — | 325,000 | 175,000 | $ | 774,500 | $ | 237,250 | |||||||||||||||
Robert A. Penicka | — | $ | — | 229,666 | 275,000 | $ | 290,936 | $ | 733,250 | |||||||||||||||
Patrice Hutin | — | $ | — | 440,000 | — | $ | 865,313 | $ | — |
(1) | Represents the spread between the aggregate exercise price and assumed aggregate market value using the closing price of the Company’s Common Stock on the New York Stock Exchange on December 31, 2004 ($13.50). |
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(1) | The role of the Compensation and Management Succession Committee; | |
(2) | The Company’s guiding principles for executive compensation; | |
(3) | The components of the Company’s current executive compensation plan; | |
(4) | Compensation of executives other than the Chief Executive Officer in 2004; | |
(5) | Compensation of the Chief Executive Officer in 2004; and | |
(6) | Certain other information related to executive compensation. |
1. | The Role of the Compensation and Management Succession Committee |
• | Oversee the Company’s overall compensation structure, policies and programs, and assess whether the Company’s compensation structure establishes appropriate incentives for management and employees. | |
• | Administer and make recommendations to the Board with respect to the Company’s incentive compensation and equity-based compensation plans and approve, amend or modify the terms of any compensation or benefit plan that does not require shareholder approval. | |
• | Administer the Company’s employee stock purchase plans and the Company’s other incentive compensation plans and equity-based compensation plans, including granting awards under any such plans. | |
• | Review and approve corporate goals and objectives relevant to the compensation of the Chief Executive Officer, evaluate his performance in light of those goals and objectives, and set his compensation level based on this evaluation. | |
• | Set the compensation of other executive officers based upon the recommendation of the Chief Executive Officer. | |
• | Review and approve employment agreements and severance arrangements for executive officers, including change-in-control provisions, plans or agreements. | |
• | Review periodically succession plans relating to positions held by executive officers, and make recommendations to the Board regarding the selection of individuals to fill these positions. | |
• | Annually evaluate the performance of the Compensation Committee and the adequacy of the Compensation and Management Succession Committee charter. | |
• | Perform such other duties and responsibilities as are consistent with the purpose of the Compensation Committee or as may be assigned from time to time by the Board. |
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2. | Guiding Principles for Executive Compensation |
Compensation should be related to performance. |
Compensation should reflect position and responsibility, and incentive compensation should be a greater part of total compensation for more senior positions. |
Incentive compensation should drive a balance between short-term and long-term performance. |
Compensation levels should be sufficiently competitive to attract and retain the talent needed. |
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Employees should have the opportunity to own the Company’s stock. |
The tax deductibility of compensation should be maximized where appropriate. |
3. | Components of the Executive Compensation Plan |
Base Salary and Benefits. |
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Short-Term (Annual) Incentives. |
Long-Term Incentives. |
Executive Deferred Compensation Plan. |
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4. | 2004 Compensation of Executive Officers Other Than the Chief Executive Officer |
Cash Compensation | ||||||||||||||||||||
Long Term Incentive | ||||||||||||||||||||
Annual | ||||||||||||||||||||
Salary Paid | Incentive Paid | Value of Stock Options | ||||||||||||||||||
in 2004 | for 2004 | Other | Granted in 2004 | Total | ||||||||||||||||
Richard Helmstetter(1) | $ | 600,000 | — | $ | 131,000 | $ | 561,000 | $ | 1,292,000 | |||||||||||
Steven McCracken(2) | $ | 550,000 | — | $ | 35,000 | $ | 561,000 | $ | 1,146,000 | |||||||||||
Bradley J. Holiday(3) | $ | 500,000 | — | $ | 32,000 | $ | 561,000 | $ | 1,093,000 | |||||||||||
Robert A. Penicka(4) | $ | 500,000 | — | $ | 24,000 | $ | 917,000 | $ | 1,441,000 | |||||||||||
Patrice Hutin(5) | $ | 550,000 | — | $ | 40,000 | $ | 561,000 | $ | 1,151,000 |
(1) | Other compensation for Mr. Helmstetter includes reimbursement for personal air travel ($100,000), matching contributions under the Company’s 401(k) plan, as well as income imputed to him under IRS regulations in connection with the Company’s payment on his behalf of life and disability insurance premiums and golf country club dues. |
(2) | Other compensation for Mr. McCracken includes matching contributions under the Company’s 401(k) Retirement Investment Plan, as well as income imputed to him under IRS regulations in connection with the Company’s payment on his behalf of life and disability insurance premiums, financial planning services and golf country club dues. |
(3) | Other compensation for Mr. Holiday includes matching contributions under the Company’s 401(k) Retirement Investment Plan, as well as income imputed to him under IRS regulations in connection with the Company’s payment on his behalf of life and disability insurance premiums, financial planning services and golf country club dues. |
(4) | Other compensation for Mr. Penicka includes reimbursement of taxes incurred in connection with certain relocation expenses and matching contributions under the Company’s 401(k) Retirement Investment Plan. |
(5) | Other compensation for Mr. Hutin includes matching contributions under the Company’s 401(k) Retirement Investment Plan, as well as income imputed to him under IRS regulations in connection with the Company’s payment on his behalf of life insurance premiums, financial planning services and golf country club dues. |
• | The base salaries for several top executives were increased in late 2003 to reflect increased scope of responsibility and duties in light of the expansion of the Company’s business through the acquisition of the assets of the former Top-Flite Golf Company and the Top-Flite and Ben Hogan brands. | |
• | No annual incentives (bonuses) were paid for fiscal 2004 because the Company failed to achieve minimum performance targets for return on sales and return on assets. | |
• | Mr. Penicka received a special stock option grant in late 2004 in connection with his relocation and assumption of greater responsibilities at the corporate level. | |
• | The stock option values were calculated using the Black-Scholes option pricing model. See below at “Black-Scholes Option Pricing Model” for an explanation of some of the limitations of this model. |
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5. | Compensation of the Chief Executive Officer |
Cash Compensation | Long Term Incentive | |||||||||||||||||||
Salary Paid in | Annual Incentive | Value of Stock Options | ||||||||||||||||||
2004 | Paid for 2004 | Other | Granted in 2004 | Total | ||||||||||||||||
Ronald A. Drapeau(1) | $ | 762,000 | — | $ | 682,000 | $ | 702,000 | $ | 2,146,000 | |||||||||||
William C. Baker(2) | $ | 292,000 | — | $ | 42,000 | $ | 1,774,000 | $ | 2,099,000 |
(1) | Salary paid in 2004 for Mr. Drapeau includes a payment of $188,000 for accrued but unused paid time off and severance payments of $148,000. Other compensation for Mr. Drapeau includes a one-time lump sum payment of $500,000 in connection with Mr. Drapeau’s separation from the Company, as well as matching contributions under the Company’s 401(k) plan and income imputed to him under IRS regulations in connection with the Company’s payment on his behalf of life and disability insurance premiums, financial planning services and golf country club dues. |
(2) | The value of stock options granted in 2004 includes Mr. Baker’s stock option for 6,000 shares granted to him as a Board member before he became Chief Executive Officer and the value of the stock option grant for 500,000 shares granted to him upon becoming Chief Executive Officer. The terms of Mr. Baker’s stock option grant for 500,000 shares provide that they vest, subject to his continued employment in good standing, in three equal annual installments on the first, second and third anniversaries of the date of grant. The vesting schedule is not accelerated upon a change in control or termination of employment, and unvested options will be cancelled upon the termination of Mr. Baker’s employment (which is expected to coincide with the hiring of a new Chief Executive Officer pursuant to the Company’s currently ongoing search). Notwithstanding the foregoing, the terms of the grant also provide for a minimum vesting of 50,000 shares except under certain limited circumstances. The calculated value of 50,000 shares based upon the same assumptions used in the table is $168,000. |
• | No annual incentive (bonus) was paid to either Mr. Drapeau or Mr. Baker for fiscal 2004 because, among other things, the Company failed to achieve minimum performance targets for return on sales and return on assets. | |
• | Mr. Baker’s base salary was set at a level above Mr. Drapeau’s to reflect additional burdens that would be placed upon him as an interim Chief Executive Officer, including significant commuting expenses. | |
• | As explained in the footnotes to the table, Mr. Baker’s stock option grant does not provide for accelerated vesting upon a change in control or termination of employment, and unvested options (beyond a minimum of 50,000) will expire upon the end of his service as Chief Executive Officer. These deviations from the usual practice in stock option grants were determined by the Committee to be appropriate in light of the duties Mr. Baker was being asked to assume and the expectation that his service as Chief Executive Officer will be of limited duration. | |
• | The stock option values were calculated using the Black-Scholes option pricing model. See below at “Black-Scholes Option Pricing Model” for an explanation of some of the limitations of this model. |
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6. | Other Information |
Compensation and Management | |
Succession Committee | |
Samuel H. Armacost,Chair | |
Ronald S. Beard | |
Anthony S. Thornley |
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1999 | 2000 | 2001 | 2002 | 2003 | 2004 | |||||||||||||||||||
Callaway Golf | 100.00 | 107.26 | 111.86 | 78.79 | 102.18 | 83.66 | ||||||||||||||||||
S&P 500 | 100.00 | 90.90 | 80.10 | 62.41 | 80.30 | 89.02 | ||||||||||||||||||
S&P 400 Midcap | 100.00 | 117.51 | 116.81 | 99.85 | 135.39 | 157.70 | ||||||||||||||||||
The Callaway Golf Company index is based upon the closing prices of Callaway Golf Company Common Stock on December 31, 1999, 2000, 2001, 2002, 2003 and 2004 of $17.69, $18.63 $19.15, $13.25, $16.85 and $13.50, respectively. |
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By Order of the Board of Directors, | |
Steven C. McCracken | |
Secretary |
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(i) Review and discuss with the outside auditors (a) the scope of the annual audit, the results of the annual audit examination by the auditors, and any problems or difficulties the auditors encountered in the course of their audit work, including management’s responses to any issues and any restrictions on the scope of the outside auditors’ activities or on access to requested information, and any significant disagreements with management, and (b) any reports of the outside auditors with respect to interim periods. | |
(ii) Review and discuss with management and the outside auditors the annual audited and quarterly financial statements of the Company, including (a) an analysis prepared by management or the outside auditors setting forth any significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements, including the effects of alternative GAAP methods on the financial statements, (b) the effect of regulatory and accounting initiatives, as well as any off-balance sheet structures, on the Company’s financial statements, (c) the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in periodic reports filed with the Securities and Exchange Commission, including accounting policies that may be regarded as critical and (d) major issues regarding the Company’s accounting principles and financial statement presentations, including any significant changes in the Company’s selection or application of accounting principles and financial statement presentations. The Audit Committee shall receive reports from the outside auditor as required by rules of the Securities and Exchange Commission. | |
(iii) Review and discuss the Company’s corporate policies with respect to earnings press releases, as well as financial information and earnings guidance provided to analysts and ratings agencies. | |
(iv) In its capacity as a committee of the Board, be directly responsible, and have the sole authority, for all matters relating to the Company’s outside auditors, including the appointment, compensation, evaluation, retention and termination of the Company’s outside auditors, and including resolution of disagreements between Management and the Company’s outside auditors regarding financial reporting matters. In this regard, the outside auditors shall report directly to the Audit Committee. |
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(v) Approve all services to be performed by the outside auditors, including pre-approval of any permissible non-audit service to be provided by the outside auditor. The Audit Committee shall approve the fees and the other terms of each such engagement. By approving the audit engagement, an audit service within the scope of the engagement shall be deemed to have been pre-approved. The Audit Committee may delegate to one or more members of the Audit Committee the authority to grant such pre-approvals. | |
(vi) Consider, at least annually, the independence of the outside auditors, including whether the outside auditors performance of permissible non-audit services is compatible with the auditors’ independence, and obtain and review a report by the outside auditors describing any relationships between the outside auditors and the Company or any other relationships that may adversely affect the independence of the auditors. The Audit Committee shall have the sole authority to approve any significant non-audit relationship with the outside auditors. The Audit Committee shall establish policies for the hiring of employees and former employees of the outside auditor. | |
(vii) At least annually, obtain and review a report by the outside auditors describing (a) the outside auditors’ internal quality-control procedures and (b) any material issues raised by the most recent internal quality-control review, or peer review, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the outside auditor, and any steps taken to deal with any such issues. | |
(viii) Review and discuss with the principal internal auditor of the Company the scope and results of the internal audit program. The Audit Committee shall also review and discuss the adequacy and effectiveness of the Company’s internal controls (with particular emphasis on the scope and performance of the internal audit function), including any significant deficiencies in internal controls and significant changes in such controls reported to the Audit Committee by the outside auditors or management. | |
The Company’s principal internal auditor shall functionally report directly to the Audit Committee. | |
(ix) Review and discuss the adequacy and effectiveness of the Company’s disclosure controls and procedures and management reports thereon. | |
(x) Review material pending legal proceedings involving the Company and other material contingent liabilities. | |
(xi) Review and discuss the Company’s policies with respect to risk assessment and risk management. Oversee the Company’s compliance programs with respect to legal and regulatory requirements and the Company’s code of conduct policies, including review of related party transactions and other conflict of interest issues. | |
(xii) Establish procedures for handling complaints regarding accounting, internal accounting controls and auditing matters, including procedures for confidential, anonymous submission of concerns by employees regarding accounting and auditing matters. | |
(xiii) Evaluate annually the performance of the Audit Committee and assess the adequacy of the Audit Committee charter. | |
(xiv) Perform such other duties and responsibilities as are consistent with the purpose of the Audit Committee or as may be assigned from time to time by the Board. |
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APPENDIX A
Please mark here for Address Change or Commentso | ||
SEE REVERSE SIDE |
THIS PROXY/ VOTING INSTRUCTION CARD IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY. YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES LISTED BELOW AND “FOR” PROPOSAL 2. | I PLAN TO ATTEND THE MEETINGo |
1. ELECTION OF DIRECTORS: 01 William C. Baker, 02 Samuel H. Armacost, 03 Ronald S. Beard, 04 John C. Cushman, III, 05 Yotaro Kobayashi, 06 Richard L. Rosenfield and 07 Anthony S. Thornley.
FOR all nominees listed (except as marked to the contrary) | WITHHOLD AUTHORITY to vote for all nominees listed | Choose MLinkTM for fast, easy and secure 24/7 online access to your future proxy materials, investment plan statements, tax documents and more. Simply log on to Investor ServiceDirect® at www.melloninvestor.com/isd where step-by-step instructions will prompt you through enrollment. | ||||
o | o | |||||
(INSTRUCTION: To withhold authority to vote for any individual nominee, write the nominee’s name on the line provided below.) | ||||||
2. Ratification of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm.
o FOR | o AGAINST | o ABSTAIN |
3. | In their discretion, Steven C. McCracken and Bradley J. Holiday, or either of them, are authorized to vote upon such other business as may properly come before the meeting or any adjournment or postponement thereof. |
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders to be held May 24, 2005 and the Proxy Statement furnished with this card. |
Signature | Signature | Date | |||||||||
NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. This proxy revokes all proxies previously given.
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 11:59 pm Eastern Time the day prior to annual meeting day.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.
Internet | Telephone | |||||||
http://www.proxyvoting.com/ely | 1-866-540-5760 | |||||||
Use the Internet to vote your proxy. Have your proxy card in hand when you access the website. | OR | Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. | OR | Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. |
If the proxy is voted by Internet or by telephone, you do NOT need to mail back your proxy card.
The Annual Report and Proxy Statement can be viewed on the Internet at www.callawaygolf.com/2005annualmeeting
CALLAWAY GOLF COMPANY
The undersigned shareholder of CALLAWAY GOLF COMPANY hereby appoints STEVEN C. McCRACKEN and BRADLEY J. HOLIDAY, or either of them, proxies of the undersigned, each with full power to act without the other and with the power of substitution, to represent the undersigned at the Annual Meeting of Shareholders of Callaway Golf Company to be held at the Estancia La Jolla Hotel & Spa, 9700 N. Torrey Pines Road, La Jolla, California 92037, on May 24, 2005, at 10:00 A.M. (PDT), and at any adjournments or postponements thereof, and to vote all shares of stock of the Company standing in the name of the undersigned with all the powers the undersigned would possess if personally present, in accordance with the instructions below and on the reverse hereof, and in their discretion upon such other business as may properly come before the meeting; provided, however, that such proxies, or either of them, shall have the power to cumulate votes and distribute them among the nominees listed in the manner directed herein, as they see fit, and to drop any such nominees, in order to ensure the election of the greatest number of such nominees.
THIS PROXY/ VOTING INSTRUCTION CARD WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY/ VOTING INSTRUCTION CARD WILL BE VOTED “FOR” THE NOMINEES LISTED ON THE REVERSE HEREOF AND “FOR” ALL OTHER PROPOSALS IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS. IF YOU HAVE A BENEFICIAL INTEREST IN SHARES HELD BY THE 401(K) RETIREMENT INVESTMENT PLAN SPONSORED BY CALLAWAY GOLF COMPANY, THEN THIS CARD ALSO CONSTITUTES YOUR VOTING INSTRUCTIONS TO THE TRUSTEE OF SUCH PLAN AND IF YOU DO NOT SIGN AND RETURN THIS CARD, SUCH SHARES WILL BE VOTED BY THE TRUSTEE “FOR” THE NOMINEES LISTED ON THE REVERSE HEREOF AND “FOR” ALL OTHER PROPOSALS IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS. THE TRUSTEE CANNOT GUARANTEE THAT VOTING INSTRUCTIONS RECEIVED AFTER MAY 19, 2005 WILL BE COUNTED.
IMPORTANT: SIGNATURE REQUIRED ON REVERSE SIDE
Address Change/Comments (Mark the corresponding box on the reverse side)
— FOLD AND DETACH HERE —
APPENDIX B
April 14, 2005
TO: | PARTICIPANTS IN THE CALLAWAY GOLF COMPANY EMPLOYEE STOCK PURCHASE PLAN AND EMPLOYEE STOCK OPTION PLANS |
The Company has issued shares of Callaway Golf Company Common Stock to a Grantor Stock Trust to fund benefits under, among other things, the above referenced stock plans. The Grantor Stock Trust will be entitled to vote 6,980,629 shares at the 2005 Annual Meeting of Shareholders. As a participant this past year in one or more of the stock plans, you have certain rights to direct the voting of these shares. Your voting rights are based upon the number of unexercised options you hold under the stock option plans and/or shares you purchased during the last twelve months under the Employee Stock Purchase Plan.
To exercise your voting rights, please complete the enclosed green Voting Instruction Card. It directs the Trustee, Arrowhead Trust Incorporated, how to vote. YOU MUST RETURN THE VOTING INSTRUCTION CARD TO THE TRUSTEE USING THE ENCLOSED RETURN ENVELOPE PRIOR TO THE ANNUAL MEETING, WHICH WILL BE HELD ON MAY 24, 2005, IN ORDER TO EXERCISE YOUR VOTING RIGHTS UNDER THE TRUST. THE TRUSTEE, HOWEVER, CANNOT GUARANTEE THAT VOTING INSTRUCTIONS RECEIVED AFTER MAY 19, 2005 WILL BE COUNTED.
Your Board of Directors recommends a vote “FOR” each of the nominees for director set forth on the green Voting Instruction Card. Information concerning these nominees is set forth in the enclosed Proxy Statement.
Your Board of Directors also recommends a vote “FOR” ratification of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, 2005.
You may get more than one package of materials regarding the upcoming Annual Meeting. For example, if as of March 25, 2005 you owned any shares of the Company’s Common Stock, either directly or indirectly through the Company’s 401(k) Plan, you will receive a separate mailing containing a white Proxy Card/Voting Instruction Card for these shares. YOU MUST SEPARATELY VOTE THE SHARES HELD BY YOU AS A SHAREHOLDER OR 401(K) PLAN PARTICIPANT IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED ON THE PROXY CARD/ VOTING INSTRUCTION CARD YOU RECEIVE WITH THOSE MATERIALS.
As noted above, you may be receiving more than one copy of the Annual Report and Proxy Statement. The law requires that we mail these informational materials with each voting card. We regret any inconvenience this may cause. If you wish, you can return any extra copies to the Company’s Legal Department where they will be reused or recycled.
If you need further assistance, please contact Barb West at (760) 931-1771. Thank you for your cooperation.
Sincerely, | ||||
William C. Baker | ||||
Chairman of the Board and Chief Executive Officer | ||||
APPENDIX C
CALLAWAY GOLF COMPANY
Stock Plan Participant Voting Instruction Card
TO: | Arrowhead Trust Incorporated, Trustee of the Callaway Golf Company Grantor Stock Trust |
With respect to the voting at the Annual Meeting of Shareholders of Callaway Golf Company to be held on May 24, 2005, or any adjournment or postponement thereof, the undersigned participant in the Callaway Golf Company Stock Option Plans and/or Employee Stock Purchase Plan hereby directs Arrowhead Trust Incorporated, as Trustee of the Callaway Golf Company Grantor Stock Trust, to vote all of the votes to which the undersigned is entitled to direct under the Trust in accordance with the following instructions:
THE VOTES TO WHICH THE UNDERSIGNED STOCK PLAN PARTICIPANT IS ENTITLED TO DIRECT UNDER THE TRUST WILL BE VOTED AS INSTRUCTED BELOW. IF NO INSTRUCTIONS ARE INDICATED, SUCH VOTES WILL BE VOTED “FOR” ALL NOMINEES AND “FOR” PROPOSAL 2.
1. | ELECTION OF DIRECTORS |
Nominees: | William C. Baker, Samuel H. Armacost, Ronald S. Beard, John C. Cushman, III, Yotaro Kobayashi, Richard L. Rosenfield and Anthony S. Thornley |
oFORall nominees listed | oWITHHOLD AUTHORITY | |
(except as marked to the contrary) | to vote for all nominees listed |
INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee’s name on the line provided below.
IMPORTANT: SIGNATURE REQUIRED ON REVERSE SIDE
(Continued and to be signed on other side)
2. | Ratification of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm. |
o FOR | o AGAINST | o ABSTAIN |
In their discretion, Steven C. McCracken and Bradley J. Holiday, or either of them, are authorized to vote upon such other business as may properly come before the meeting or any adjournment or postponement thereof.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders to be held May 24, 2005, and the Proxy Statement furnished herewith. | ||
Signature | ||
Please sign exactly as name appears hereon. | ||
Date _______________, 2005 | ||
PLEASE MARK, DATE, SIGN AND RETURN THIS VOTING INSTRUCTION CARD PROMPTLY IN THE ENCLOSED RETURN ENVELOPE. THE TRUSTEE CANNOT GUARANTEE THAT INSTRUCTIONS RECEIVED AFTER MAY 19, 2005 WILL BE COUNTED. |