Exhibit 4.4
CALLAWAY GOLF COMPANY
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") is effective as of May 10.
1996 by and between Callaway Golf Company, a California corporation (the
"Company"), and Charles Yash ("Optionee"), with reference to the following
facts:
A. Pursuant to an Employment Agreement entered into as of May 10,
1996, the Company retained the services of Optionee.
B. As part of Optionee's compensation and to align Optionee's
interests with those of the Company, the Company agreed to grant Optionee an
option to purchase shares of the Company's common stock.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, it is agreed as follows:
1. Grant of Option. The Company hereby grants to Optionee a stock
option ("Option") to purchase shares of the Company's common stock upon the
following terms:
a. Option Grant Date: May 10, 1996
b. Number of Shares: 600,000 shares of common stock
c. Exercise Price: $25.13
d. Vesting Schedule: 200,000 shares on May 10, 1996
100,000 shares on May 10, 1997
100,000 shares on May 10, 1998
100,000 shares on May 10, 1999
100,000 shares on May 10, 2000
e. Type of Option: nonstatutory stock option
2. Term of Option. The Option shall expire on the earliest of (i)
one year from the date on which Optionee ceases to be an employee of the
Company for any reason other than death; (ii) one year from the date of death
of Optionee; or (iii) the fifth anniversary of each vesting date, i.e., the
shares that vest on May 10, 1996 shall expire on May 10, 2001.
Other than as described in Section 3 of this Agreement or as provided in the
Employment Agreement mentioned above, if Optionee ceases for any reason to be
an employee of the Company, that portion of the Option which has not yet
become vested shall be terminated, unless the Company's Board of Directors in
its discretion accelerates the vesting schedule in which case it may impose
whatever conditions it considers appropriate on the accelerated portion.
3. Acceleration upon Change in Control. Notwithstanding any vesting
provisions of the Option or anything else herein to the contrary, all shares
evidenced by the Option shall vest and become exercisable immediately prior to
any Change in Control, if Optionee is an employee of the Company at that time.
For purposes hereof, "Change in Control" shall have the meaning set forth in
Exhibit A attached hereto.
4. Exercise of Option. Optionee shall exercise the Option to the
extent exercisable, in whole or in part, by sending written notice to the
Company of his intent to exercise. Said notice shall specify the number of
shares which Optionee desires to purchase pursuant to this Agreement and the
date (which date shall be within five (5) days after receipt by the Company of
said notice) on which he desires to complete his purchase.
a. On or before the date specified in such notice for the
completion of the purchase of the shares, Optionee shall pay the Company, by
cash, or by check, the exercise price of the shares purchased.
b. Subject to the Company's compliance with all applicable
laws, rules, and regulations relating to the issuance of such shares and
Optionee's compliance with all the terms and conditions of this Option, the
Company shall promptly deliver the shares to Optionee upon receipt of the
exercise price therefore.
5. Minimum Share Purchase. Not less than One Hundred (100) shares
may be purchased at any one time. No fractional share shall be purchased
hereunder.
6. Option Not Transferable. The Option granted hereunder shall not
be transferable in any manner other than upon the death of Optionee. In the
event of Optionee's death, the executor or administrator of his estate or the
person to whom the Option shall have been transferred pursuant to will or the
laws of descent and distribution may exercise the Option to the extent it was
exercisable on the date of his death subject to Section 2 hereof; provided,
however, that such transferee shall be entitled to no greater rights than
Optionee hereunder. More particularly (but without limiting the foregoing),
the Option may not be assigned, transferred (except as expressly provided
herein), pledged, or hypothecated in any way, shall not be assignable by
operation of law and shall not be subject to execution, attachment, or similar
process. Any attempted assignment, transfer, pledge, hypothecation, or other
disposition of the Option contrary to the provisions hereof, or the levy of
any execution, attachment, or similar process upon the Option, shall be null
and void and without effect.
7. Adjustments to Option Shares. The Company shall adjust the number
of shares granted under this Agreement, and which Optionee has not purchased,
as follows:
a. The grant of this Option shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure, or to merge,
consolidate, dissolve, liquidate, sell, or transfer all or any part of its
business or assets.
b. Except as expressly provided herein, Optionee shall have no
other rights by reason of any subdivision or consolidation of shares of stock
of any class or the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class or by reason of any
dissolution, liquidation, merger or consolidation or spin-off of assets or
stock of another corporation. Any issue by the Company of shares of stock of
any class or securities convertible into shares of stock of any class shall
not affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares subject to the Option.
c. In the event there are splits, subdivisions, combinations or
reclassifications of the Company's stock subsequent to the Option Grant Date,
the number of shares reserved for issuance pursuant to this Option shall be
increased or decreased proportionately, as the case may be, to appropriately
reflect such event.
8. Registration of Shares. The shares represented by this Option
will be registered under the Securities Act of 1933, as amended.
9. No Right to Continued Employment. This Agreement does not confer
upon Optionee any right to continue in the employ of the Company, nor does it
limit in any way the right of the Company to terminate employment at any time,
with or without cause.
10. Acknowledgments of Optionee. Optionee acknowledges and agrees
that:
a. Optionee is aware that this Option is NOT an Incentive Stock
Option as contemplated under the Internal Revenue Code;
b. Optionee and his transferees have no rights as a stockholder
with respect to any shares covered by this Agreement until the date of the
issuance of a stock certificate to him for such shares. No adjustment shall
be made for dividends (ordinary or extraordinary, whether in cash, securities
or other property) or distributions or other right for which the record date
is prior to the date such stock certificate is issued, except as provided
herein.
11. Withholding Taxes. Whenever under this Agreement, shares are to
be issued, the Company shall have the right to require Optionee to remit to
the Company an amount sufficient to satisfy federal, state, and local
withholding tax requirements prior to issuance and/or delivery of any
certificate or certificates for such shares.
12. Successors and Assigns. This Agreement shall bind and inure to
the benefit of the parties' heirs, legal representatives, successors, and
assigns. Nothing in this Section 12 shall be construed to limit the
provisions of Section 6 herein or any agreements executed or required to be
executed pursuant thereto.
13. Entire Agreement. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter contained herein and
shall supersede all prior and contemporaneous agreements, representations, and
understandings of the parties, including, but not limited to, the Callaway
Golf Company Stock Option Agreement (1996 Stock Option Plan) by and between
the Company and Optionee dated May 10, 1996. No supplement, modification, or
amendment of this Agreement shall be binding unless executed in writing by all
of the parties. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver shall
be binding unless executed in writing by the party making the waiver.
14. Governing Law. This Agreement shall be construed according to the
laws of the State of California.
15. Validity. Should any portion of this Agreement be declared
invalid and unenforceable, then such portion shall be deemed to be severable
from this Agreement and shall not affect the remainder hereof.
16. Litigation and Attorneys' Fees. 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 and other costs incurred in such action or proceeding, in
addition to any relief to which such party may be deemed entitled.
IN WITNESS WHEREOF, this Agreement is made effective as of the day and
year above first written.
CALLAWAY GOLF COMPANY, OPTIONEE
a California corporation
By: /s/ Donald H. Dye By: /s/ Charles Yash
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Donald H. Dye, President Charles Yash