Exhibit 10.1
FORM OF
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this
“Agreement”) is made as of the [ ] day of
December, 2006, by and between Ashworth, Inc., a Delaware
corporation (the “ Company ”) and (“ Indemnitee
”).
WHEREAS, the Board of Directors has
determined that in order to attract and retain qualified persons as
directors and officers of the Company, it is in the best interests
of the Company and its stockholders to assure such persons that
there will be adequate certainty of protection through insurance
and indemnification against risks of claims and actions against
them arising out of their service to and activities on behalf of
the Company;
WHEREAS, the Company has adopted
provisions in its By-laws permitting indemnification of its
officers and directors to the fullest extent permitted by
applicable law, and the Company wishes to clarify and detail the
rights and obligations of the Company and Indemnitee with respect
to indemnification;
WHEREAS, in order to induce and
encourage highly experienced and capable persons such as Indemnitee
to serve and continue to serve as directors and officers of the
Company and in any other capacity with respect to the Company, and
to otherwise promote the desirable end that such persons will
resist what they consider unjustified lawsuits and claims made
against them in connection with the good faith performance of their
duties to the Company, with the knowledge that certain costs,
judgments, penalties, fines, liabilities and expenses incurred by
them in their defense of such litigation are to be borne by the
Company and they will receive the maximum protection against such
risks and liabilities as may be afforded by law, the Board of
Directors of the Company has determined that the following
Agreement is reasonable and prudent to promote and ensure the best
interests of the Company and its stockholders; and
WHEREAS, the Company desires to have
Indemnitee continue to serve as a director and/or officer of the
Company and in such other capacity with respect to the Company as
the Company may request, as the case may be, free from undue
concern for unpredictable, inappropriate or unreasonable legal
risks and personal liabilities by reason of Indemnitee acting in
good faith in the performance of Indemnitee’s duty to the
Company; and Indemnitee desires to continue so to serve the
Company, provided, and on the express condition, that Indemnitee is
furnished with the indemnity set forth hereinafter.
NOW, THEREFORE, in consideration of
Indemnitee’s continued service as a director and/or officer
of the Company, the parties hereto agree as follows:
1. Service by Indemnitee
. Indemnitee will serve and/or continue to serve as a director or
officer of the Company faithfully and to the best of
Indemnitee’s ability so long as Indemnitee is duly elected or
appointed and until such time as Indemnitee is removed as permitted
by law or tenders a resignation in writing.
2. Indemnification . The
Company shall indemnify Indemnitee to the fullest extent permitted
by the Delaware General Corporation Law in effect on the date
hereof or as such law may be amended from time to time (but, in the
case of any such amendment, only to the extent that such amendment
permits the Company to provide broader indemnification rights than
said law permitted the Company to provide prior to such amendment).
Without diminishing the scope of the indemnification provided by
this Section 2, the rights of indemnification of Indemnitee
provided hereunder shall include but shall not be limited to those
rights hereinafter set forth, except that no indemnification shall
be paid to Indemnitee:
(a) for which payment is actually made to Indemnitee under a
valid and collectible insurance policy or under a valid and
enforceable indemnity clause, by-law or agreement of the Company or
any other company or organization on whose board Indemnitee serves
at the request of the Company, except in respect of any indemnity
exceeding the payment under such insurance, clause, by-law or
agreement;
(b) in connection with an action, suit or proceeding, or part
thereof (including claims and counterclaims) initiated or brought
voluntarily by Indemnitee and not by way of defense, except a
judicial proceeding or arbitration pursuant to Section 11 to
enforce rights under this Agreement, unless the action, suit or
proceeding (or part thereof) was authorized by the Board of
Directors of the Company;
(c) on account of Indemnitee’s conduct which is finally
adjudged to have been knowingly fraudulent or deliberately
dishonest, or to constitute willful misconduct;
(d) on account of any suit in which judgment is rendered
against Indemnitee for an accounting of profits made for the
purchase or sale by Indemnitee of securities of the Company
pursuant to Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute;
(e) with respect to any action, suit or proceeding brought by
or on behalf of the Company against Indemnitee that is authorized
by the Board of Directors of the Company, except as provided in
Sections 4, 5 and 6 below; and
(f) if a final decision by a court having competent
jurisdiction in the matter shall determine that such
indemnification is not lawful.
3. Action or Proceedings
Other than an Action by or in the Right of the Company . Except
as limited by Section 2 above, Indemnitee shall be entitled to
the indemnification rights provided in this Section 3 if
Indemnitee was or is a party or is threatened to be made a party to
any Proceeding (defined below) (other than an action by or in the
right of the Company) (a) by reason of the fact that
Indemnitee is or was a director, officer, employee, agent or
fiduciary of the Company, or is or was serving at the request of
the Company as a director, officer, employee, agent or fiduciary of
any other entity (including, but not limited to, another
corporation, partnership, joint venture, trust or employee benefit
plan) or (b) by reason of anything done or not done by
Indemnitee in any such capacity. Pursuant to this Section 3,
Indemnitee shall be indemnified against all costs, judgments,
penalties, fines, liabilities, amounts paid in settlement by or on
behalf of Indemnitee, and Expenses (defined below) actually and
reasonably incurred by Indemnitee in connection with such
Proceeding, if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, and with respect to any criminal
Proceeding, had no reasonable cause to believe his conduct was
unlawful.
4. Indemnity in Proceedings
by or in the Right of the Company . Except as limited by
Section 2 above, Indemnitee shall be entitled to the
indemnification rights provided in this Section 4 if
Indemnitee was or is a party or is threatened to be made a party to
any Proceeding brought by or in the right of the Company to procure
a judgment in its favor (a) by reason of the fact that
Indemnitee is or was a director, officer, employee, agent or
fiduciary of the Company, or is or was serving at the request of
the Company as a director, officer, employee, agent or fiduciary of
another entity (including, but not limited to, another corporation,
partnership, joint venture, trust or employee benefit plan), or
(b) by reason of anything done or not done by Indemnitee in
any such capacity. Pursuant to this Section 4, Indemnitee
shall be indemnified against all costs, judgments, penalties,
fines, liabilities, amounts paid in settlement by or on behalf of
Indemnitee, and Expenses actually and reasonably incurred by
Indemnitee in connection with such Proceeding if Indemnitee acted
in good faith and in a manner Indemnitee reasonably believed to be
in or not opposed to the best interests of the Company; provided,
however, that no such indemnification shall be made in respect of
any claim, issue, or matter as to which Delaware law expressly
prohibits such indemnification by reason of any adjudication of
liability of Indemnitee to the Company, unless and only to the
extent that the Court of Chancery of the State of Delaware or the
court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view
of all the circumstances of the case, Indemnitee is entitled to
indemnification for such costs, judgments, penalties, fines,
liabilities and Expenses as such court shall deem proper.
5. Indemnification for
Costs, Charges and Expenses of Successful Party .
Notwithstanding the limitations of Sections 2(e), 3 and 4
above, to the extent that Indemnitee has been successful, on the
merits or otherwise, in whole or in part, in defense of any action,
suit or proceeding (including an action, suit or proceeding brought
by or on behalf of the Company) or in defense of any claim, issue
or matter therein, including, without limitation, the dismissal of
any action without prejudice, or if it is ultimately determined
that Indemnitee is otherwise entitled to be indemnified against
Expenses, Indemnitee shall be indemnified against all Expenses
actually and reasonably incurred in connection therewith.
6. Partial
Indemnification . If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a
portion of the costs, judgments, penalties, fines, liabilities or
Expenses actually and reasonably incurred in connection with any
action, suit or proceeding (including an action, suit or proceeding
brought by or on behalf of the Company), but not, however, for all
of the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion of such costs, judgments,
penalties, fines, liabilities and Expenses actually and reasonably
incurred to which Indemnitee is entitled.
7. Contribution . If the
indemnification provided in Sections 3, 4 , 5 and 6 above is
unavailable and may not be paid to Indemnitee for any reason (other
than those set forth in Section 2(a)-(f)), then, with respect to
any Proceeding in which the Company is jointly liable with
Indemnitee (or would be if joined in such Proceeding), the Company
shall contribute to the amount of Expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred and
paid or payable by Indemnitee to the fullest extent allowed by
applicable law, in such proportion as is appropriate to reflect
(a) the relative benefits received by the Company on the one
hand and by Indemnitee on the other hand from the transaction from
which such Proceeding arose and (b) the relative fault of the
Company on the one hand and Indemnitee on the other hand in
connection with the events which resulted in such Expenses,
judgments, fines or settlement amounts, as well as any other
relevant equitable considerations. The relative fault of the
Company on the one hand and of Indemnitee on the other hand shall
be determined by reference to, among other matters, the
parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent the circumstances resulting
in such Expenses, judgments, fines or settlement amounts. The
Company agrees that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro
rata allocation or any other method of allocation which does not
take into account the foregoing equitable considerations.
8. Indemnification for
Expenses of a Witness . Notwithstanding any other provision of
this Agreement, to the maximum extent permitted by applicable law,
Indemnitee shall be entitled to indemnification against all
Expenses actually and reasonably incurred or suffered by Indemnitee
or on Indemnitee’s behalf if Indemnitee appears as a witness
or otherwise incurs legal expenses as a result of or related to
Indemnitee’s service as a director, officer, employee, agent
or fiduciary of the Company or, at the request of the Company, of
any other entity, in any threatened, pending or completed legal,
administrative, investigative or other proceeding or matter to
which Indemnitee neither is, nor is threatened to be made, a
party.
9. Determination of
Entitlement to Indemnification . Upon written request by
Indemnitee for indemnification pursuant to Sections 3, 4, 5, 6
or 8, the entitlement of Indemnitee to indemnification, to the
extent not provided pursuant to the terms of this Agreement, shall
be determined by the following person or persons who shall be
empowered to make such determination: (a) the Board of
Directors of the Company by a majority vote of Disinterested
Directors (defined below), whether or not such majority constitutes
a quorum; (b) a committee of Disinterested Directors
designated by a majority vote of such directors, whether or not
such majority constitutes a quorum; (c) if there are no
Disinterested Directors, or if the Disinterested Directors so
direct, by Independent Counsel (defined below) in a wri
