EXHIBIT 10.40

                              SECOND AMENDMENT TO
                   CHAIRMAN AND FOUNDER EMPLOYMENT AGREEMENT


     This Second Amendment to Chairman and Founder Employment Agreement ("Second
Amendment") is effective as of March 29, 2000 by and between CALLAWAY GOLF
COMPANY, a Delaware corporation (the "Company") and ELY CALLAWAY ("Mr.
Callaway").

     A.   The Company and Mr. Callaway are parties to a certain Chairman and
Founder Employment Agreement entered into as of January 1, 1997 (the
"Agreement") and a First Amendment to Chairman and Founder Employment Agreement
effective December 31, 1999 (the "First Amendment").

     B.   The Company and Mr. Callaway are in negotiations regarding a new
employment agreement, and desire to keep the current Agreement in effect until
such time as a new employment agreement is finalized.

     C.   In light of the foregoing, the Company and Mr. Callaway desire to
amend the Agreement pursuant to Section 16 of the Agreement, in the manner set
forth herein.

     NOW, THEREFORE, in consideration of the foregoing and other consideration,
the value and sufficiency of which are hereby acknowledged, the Company and Mr.
Callaway hereby agree as follows:

     1.   Section 1 of the Agreement is hereby amended to read as follows:

          "TERM.  The Company hereby employs Mr. Callaway and Mr. Callaway
          ----
          hereby accepts employment pursuant to the terms and provisions of this
          Agreement for the term commencing January 1, 1997 and terminating June
          30, 2000, unless this Agreement is earlier terminated as hereinafter
          provided.  Unless such employment is earlier terminated, upon the
          expiration of the term of this Agreement, Mr. Callaway's status shall
          be one of at will employment."

     2.   But for the amendment contained herein, and any other written
amendments properly executed by the parties, the Agreement shall otherwise
remain unchanged.

          IN WITNESS WHEREOF, the Company and Mr. Callaway have caused this
Second Amendment to be executed effective as of the date set forth above.

MR. CALLAWAY                            COMPANY

                                        Callaway Golf Company,
                                        a Delaware corporation

/s/ Ely Callaway                        By: /s/ Charles J. Yash
- -------------------------                   -------------------------
Ely Callaway                                Charles J. Yash, President


Dated:  March 29, 2000                  Dated:  March 29, 2000