CALLAWAY GOLF AND ORLIMAR SETTLE LAWSUIT

Callaway Golf Company and Orlimar Golf Equipment Company LLC announced today that they have agreed to settle the case brought by Callaway Golf against Orlimar in January 1999. In that lawsuit Callaway Golf charged that Orlimar had engaged in a nationwide advertising campaign that portrayed Callaway Golf, its golf clubs and its technology in a false, misleading and damaging manner. Callaway Golf also charged that Orlimar had violated two of its patents on iron golf clubs. Orlimar denied any wrongdoing in the matter and filed a counterclaim against Callaway Golf for unfair competition and false advertising.

Pursuant to the parties' settlement agreement, a consent decree and injunction have been entered in the United States District Court. The injunction orders Orlimar not to falsely portray Callaway Golf or its products in Orlimar's future advertising or promotional materials; not to employ robot tests to compare the performance of Orlimar golf clubs with Callaway golf clubs in the future; not to use professional golfers to endorse its products by displaying Orlimar logos on their bags or hats unless they actually use at least one Orlimar club; and not to make certain other specified statements in advertising which Callaway contends could be misconstrued by, or misleading to, the consumer.

The patent issues were resolved pursuant to a separate license agreement.