Callaway

THE MARKET

More than two decades ago, Ely Callaway

set out to build a company that would bring

more enjoyment and game improvement to

golfers of all skill levels. He accomplished

much of that goal in 1991, introducing a

technological wonder called the Big Bertha

Driver. By creating in Big Bertha a larger

clubhead without adding weight, the late

founder of Callaway Golf Company turned

the most-feared club into the most-loved

almost overnight. The driver became the

fastest-selling club at retail. Many innovations

have followed. From woods, irons,

and putters to golf balls and golf accessories,

Callaway Golf has consistently used

ingenuity, quality construction, and technology

to make the finest premium products

in the industry.

Callaway Golf has also become a

global company, doing business in 107

countries and 29 languages. Through an

unwavering commitment to product innovation,

Callaway Golf creates products

and services designed to make every

golfer a better golfer.

ACHIEVEMENTS

Simply put, Callaway Golf has changed the way

the game is played. Golfers around the world have

used the company's products to increase enjoyment

and improve performance. The best example

is the revolutionary Big Bertha line of metal

woods. In the era B.B. -- Before Bertha -- the

driving club induced dread in most golfers. It was

too difficult to hit for more than just a few highly

skilled players. Then in 1991, Callaway Golf's

ambitious attempt to create an oversize metal

driver with increased forgiveness and performance

succeeded where other companies' efforts

had failed. The original Big Bertha Stainless Steel

Driver was born, and ever since, Big Bertha and

her progeny -- including such current products as

the Big Bertha Fusion FT-3 Driver and the Big

Bertha Titanium 454 Driver -- have replaced fear

with fun and made millions of players better.

Callaway Golf now designs and produces a

complete line of drivers, fairway woods, irons,

putters, and golf balls that aim to make the game

more fun and make golfers of all skill levels, from

first-time golfers to Tour professionals, better

golfers. In fact, Callaway Golf products are among

the most popular on the world's professional tours

and have been used to set several scoring records

and win hundreds of tournaments.

This success helped Callaway Golf become

the world's largest manufacturer of golf clubs

within five years of the Big Bertha Driver's

launch, prompting major changes within the golf

industry. Callaway Golf's success enabled it to

become the first major golf company to go public,

as shares of company stock began trading on

the NewYork Stock Exchange in 1992, under the

ELY ticker symbol.

HISTORY

Callaway Golf's success story begins with

a small three-person golf company called

Hickory Stick USA, which was founded in

1982 in Temecula, California. The company

initially made wedges and putters

that had unique shafts constructed of hickory

with a steel core. These clubs caught

the eye of Ely Callaway, who bought an

interest in the company the following year.

Mr. Callaway had already been a successful

businessman in the fields of textiles

and wine, and golf would become the third

and most successful act in his entrepreneurial

career. His business philosophy --

that every product his company makes

should be demonstrably superior and

pleasingly different from every other product

on the market -- is the cornerstone for

the company that has become one of the

largest makers of golf clubs in the world.

By 1988, the company had been

renamed Callaway Golf and had shifted

from trying to re-create classic clubs of

the past to pioneering innovative design

ideas. Under the direction of Richard