EXHIBIT 10.52
C ALLAWAY G OLF C OMPANY
2009 S ENIOR M ANAGEMENT I NCENTIVE P ROGRAM
UNDER THE 2004 I NCENTIVE P LAN
1. Purposes of the Program. This Callaway
Golf Company 2009 Senior Management Incentive Program (“
Program ”), established pursuant to
Section 12 of the Callaway Golf Company Amended and Restated
2004 Incentive Plan (“ Plan ”), sets
forth a program for payment of performance awards subject to the
provisions of Section 11 of the Plan to those Participants
designated for participation and is intended to increase
stockholder value and the success of the Company by attracting,
retaining and motivating Participants to perform to the best of
their abilities and to achieve the Company’s objectives. The
Program’s goals are to be achieved by providing such
Participants with performance awards based on the achievement of
goals relating to the performance of the Company or one of its
business units or upon the achievement of other objectively
determinable performance goals. The Program is intended to permit
the payment of awards under the Plan that may qualify as
performance-based compensation under Section 162(m).
Capitalized terms not defined herein shall have the meanings
provided in the Plan.
2. Definitions.
(a) “ Award ” has the
meaning set forth in Section 4.
(b)
“ Base
Salary ” means, as to any Performance Period,
Participant’s salary actually earned during the portion of
the Performance Period during which the individual was a
Participant (including without limitation, any compensation that is
deferred by Participant into a Company-sponsored retirement or
deferred compensation plan, but excluding any employer matching
contributions by the Company associated with any such retirement or
deferred compensation plan and excluding any other Company
contributions and, for employees in China, Japan, Thailand and
Malaysia, including “13 th month pay” or equivalent)
and excludes all bonuses, incentives, commissions, expatriate
premiums, fringe benefits (including without limitation car
allowances), relocation allowances, stock option grants, equity
awards, employee benefits and other similar items of compensation.
Such Base Salary shall be before both (i) deductions for taxes
or benefits, and (ii) deferrals of compensation pursuant to
Company-sponsored plans.
(c) “ Corporate Net Income
” means the Company’s currency-neutral net
income (that is, net income determined by excluding the impact,
both positive and negative, of the translation of foreign currency
to U.S. dollars) for the relevant period less (i) charges
incurred in connection with the Company’s gross margin
initiatives and (ii) other unforeseen one-time charges as
determined by the Committee.
(d) “Covered Employee”
means a Participant who falls within the definition of
“covered employee” under
Section 162(m).
1.
(e) “Eligible Position”
means one of the following (i) an officer of the Company,
including its Chief Executive Officer, (ii) the most senior
non-officer employees (employees with job classifications of E10 or
above at the Company or Callaway Golf Sales Company),
(iii) the officers of each subsidiary of the Company based in
the U.S., (iv) the most senior non-officer employees at
Callaway Golf Ball Operations ( “CGBO” )
(with a pay grade of 13 or 14 or a pay grade of 12 and the title of
Director), (v) the Vice Presidents of Callaway Golf
Interactive (“ CGI ”), (vi) the most
senior officer at each of the Company’s foreign subsidiaries
located in Europe, Japan, Canada, Korea, Australia and China, and
(vii) the Director-Level employees of the Company’s
foreign subsidiaries listed in (vi) above who are recommended
for participation by the most senior officer at such foreign
subsidiary and approved by the VP, Sr. Human Resources.
(f) “ Goal Achievement
Percentage ” means the portion of the Target Goals
applicable to a Participant that are actually achieved, as provided
in Section 5.
(g) “ Financial Goal Achievement
Percentage ” means, with respect to a Participant,
the Goal Achievement Percentage for the Corporate Net Income Goal,
as provided in Section 5.
(h) “Overall Achievement
Percentage” means, with respect to a Participant, the
aggregate Financial Goal Achievement Percentage together with the
MBO Goal Achievement Percentage, with each multiplied by the
weighting specified in the Payout Formula provided in
Section 6(c).
(i) “ Participant ,
” for the 2009 Performance Period, means a regular full or
part-time employee who (i) has been hired, promoted or
transferred into an Eligible Position before October 1, 2009,
and (ii) is an active employee or on an approved leave of
absence at the Payout Date.
(j) “ Payout Date ” means
the date on which Awards are paid pursuant to
Section 6(f).
(k) “ Payout Determination Date
” means the date upon which the Committee or the Chief
Executive Officer, as applicable, determines the amounts payable
pursuant to an Award, in accordance with Section 6.
(l) “ Performance-Based
Compensation ” means compensation that is intended to
qualify as “performance-based compensation” within the
meaning of Section 162(m).
(m) “ Performance Goals ”
means the goals, based on Performance Criteria that are established
by the Committee or, for Participants who are not Covered
Employees, by the Chief Executive Officer, in each case as provided
for in Section 11.2 of the Plan.
(n) “ Performance Period
” means any January 1 through
December 31.
2.
(o) “ Section 162(m) ”
means Section 162(m) of the Internal Revenue Code of 1986, as
amended, or any successor to Section 162(m), as that Section
may be interpreted from time to time by the Internal Revenue
Service, whether by regulation, notice or otherwise.
(p) “ Target Determination Cutoff
Date ” means the latest possible date that the
Committee may set the Performance Goals, Target Awards and maximum
payout that will not jeopardize an Award’s qualification as
Performance-Based Compensation. For the 2009 Performance Period,
this date will be March 31, 2009.
3. Program
Administration.
(a) The Committee shall be responsible for the
general administration and interpretation of the Program and for
carrying out its provisions. Subject to the requirements for
qualifying compensation as Performance-Based Compensation, the
Committee may delegate specific administrative tasks to Company
employees or others as appropriate for proper administration of the
Program. Subject to the limitations on Committee discretion imposed
under Section 162(m), the Committee shall have such powers as
may be necessary to discharge its duties hereunder, including, but
not by way of limitation, the following powers and duties, but
subject to the terms of the Program:
(i) discretionary authority to construe and
interpret the terms of the Program, and to determine eligibility,
Awards and the amount, manner and time of payment of any Awards
hereunder;
(ii) to prescribe forms and procedures for purposes
of Program participation and distribution of Awards; and
(iii) to adopt rules, regulations and bylaws, to
formally amend the Program and to take such actions as it deems
necessary or desirable for the proper administration of the
Program.
(b) Any rule or decision by the Committee that is
not inconsistent with the provisions of the Program shall be
conclusive and binding on all persons, and shall be given the
maximum deference permitted by law.
4. Award Determinations. Each Participant
under the plan shall be granted an award of a contingent right to a
future cash payment (an “ Award ”), the payment
of which is contingent upon the Company’s financial
performance as well as the Participant’s individual
performance objectives (“ MBOs ”). For each
Participant, the Company has established a “Target
Award” expressed as a percentage of a Participant’s
Base Salary. The Target Award represents the amount a Participant
could earn if the Company achieves its target financial performance
goal and the Participant achieves 100% of the Participant’s
MBOs. Performance above or below the targeted goals can result in
an award above or below the Target Award. The “Maximum
Award” a Participant can earn is equal to 150% of the
Target
