Exhibit 10.51
INDEMNIFICATION
AGREEMENT
THIS INDEMNIFICATION
AGREEMENT is made as of the 4 th day of March 2009, by and
between Callaway Golf Company, a Delaware corporation (the
“Company”), and John F. Lundgren
(“Indemnitee”), a director of the Company.
WHEREAS, the Company and Indemnitee
recognize the increasing difficulty in obtaining liability
insurance covering directors, the significant increases in the cost
of such insurance and the general reductions in the coverage of
such insurance;
WHEREAS, although the Company
currently has directors liability insurance, the coverage of such
insurance is such that many claims which may be brought against
Indemnitee may not be covered, or may not be fully covered, and the
Company may be unable to maintain such insurance;
WHEREAS, the Company and the
Indemnitee further recognize the substantial increase in corporate
litigation subjecting directors to expensive litigation risks at
the same time that liability insurance has been severely
limited;
WHEREAS, the current protection
available may not be adequate given the present circumstances, and
Indemnitee may not be willing to serve as a director without
adequate protection;
WHEREAS, the Company desires to
attract and retain the services of highly qualified individuals,
such as Indemnitee, to serve as directors of the Company and to
indemnify its directors so as to provide them with the maximum
protection permitted by law;
NOW, THEREFORE, the Company and
Indemnitee hereby agree as follows:
1. DEFINITIONS
. The following terms, as used
herein, have the following meaning:
1.1 Affiliate .
“Affiliate” means, (i) with respect to any
corporation, any officer, director or 10% or more shareholder of
such corporation, or (ii) with respect to any individual, any
partner or immediate family member of such individual or the estate
of such individual, or (iii) with respect to any partnership,
trust or joint venture, any partner, co-venturer or trustee of such
partnership, trust of joint venture, or any beneficiary or owner
having 10% or more interest in the equity, property or profits of
such partnership, trust or joint venture, or (iv) with respect
to any Person, any other Person which, directly or indirectly,
controls, is controlled by, or is under common control with such
Person or any Affiliate of such Person.
1.2 Agreement .
“Agreement” shall mean this Indemnification Agreement,
as the same may be amended from time to time hereafter.
1.3 DGCL . “DGCL”
shall mean the Delaware General Corporation Law, as
amended.
1.4 Person .
“Person” shall mean any individual, partnership,
corporation, joint venture, trust, estate, or other
entity.
1.5 Subsidiary .
“Subsidiary” shall mean any corporation of which the
Company owns, directly or indirectly, through one or more
subsidiaries, securities having more than 50% of the voting power
of such corporation.
2.
INDEMNIFICATION
2.1 Third Party Proceedings .
The Company shall indemnify Indemnitee if Indemnitee is or was a
party or witness or other participant in, or is threatened to be
made a party to any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or
investigative (other than action by or in the right of the Company)
by reason of the fact that Indemnitee is or was a director of the
Company or any subsidiary of the Company, by reason of any action
or inaction on the part of Indemnitee while a director of the
Company or any Subsidiary, and/or by reason of the fact that
Indemnitee is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against all
expense, liability and loss (including attorneys’ fees),
judgments, fines and amounts paid in settlement (if such settlement
is approved in advance by the Company, which approval shall not be
unreasonably withheld) actually and reasonably incurred by
Indemnitee in connection with such action, suit or 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 action or
proceeding, had no reasonable cause to believe Indemnitee’s
conduct was unlawful and provided, further, that the Company has
determined that such indemnification is otherwise permitted by
applicable law.
The termination of any action, suit
or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent shall not, of itself,
create a presumption that Indemnitee did not act in good faith and
in a manner which Indemnitee reasonably believed to be in the best
interests of the Company or that Indemnitee had reasonable cause to
believe that Indemnitee’s conduct was unlawful.
2.2 Proceedings by or in the
Right of the Company . The Company shall indemnify Indemnitee
if Indemnitee was or is a party or a witness or other participant
in or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Company or
any Subsidiary to procure a judgment in its favor by reason of the
fact that Indemnitee is or was a director of the Company or any
Subsidiary, by reason of any action or inaction on the part of
Indemnitee while a
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director of the Company or a
Subsidiary or by reason of the fact that Indemnitee is or was
serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against all expense, liability
and loss (including attorneys’ fees) and amounts paid in
settlement (if such settlement is court-approved) actually and
reasonably incurred by Indemnitee in connection with the defense or
settlement of such action or suit 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 its shareholders
and provided, further, that the Company has determined that such
indemnification is otherwise permitted by applicable law. No
indemnification shall be made in respect of any claim, issue or
matter as to which Indemnitee shall have been adjudged to be liable
to the Company in the performance of Indemnitee’s duties to
the Company and its shareholders, unless and only to the extent
that the court in which such proceeding is or was pending shall
determine upon application that, in view of all the circumstances
of the case, Indemnitee is fairly and reasonably entitled to
indemnity for expenses and then only to the extent that the court
shall determine.
2.3 Mandatory Payment of
Expenses . To the extent that Indemnitee has been successful on
the merits or otherwise in defense of any action, suit or
proceeding referred to in Section 2.1 or 2.2 or the defense of
any claim, issue or matter therein, Indemnitee shall be indemnified
against expenses (including attorneys’ fees) actually and
reasonably incurred by Indemnitee in connection
therewith.
2.4 Enforcing the Agreement .
If Indemnitee properly makes a claim for indemnification or an
advance of expenses which is payable pursuant to the terms of this
Agreement, and that claim is not paid by the Company, or on its
behalf, within ninety days after a written claim has been received
by the Company, the Indemnitee may at any time thereafter bring
suit against the Company to recover the unpaid amount of the claim
and if successful in whole or in part, the Indemnitee shall be
entitled to be paid also all expenses actually and reasonably
incurred in connection with prosecuting such claim.
2.5 Subrogation . In the
event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of
recovery of the Indemnitee, who shall execute all papers required
and shall do everything that may be necessary to secure such
rights, including the execution of such documents necessary to
enable the Company effectively to bring suit to enforce such
rights.
3. EXPENSES; INDEMNIFICATION
PROCEDURE
3.1 Advancement of Expenses .
The Company shall advance all expenses incurred by Indemnitee in
connection with the investigation, defense, settlement or appeal of
any civil or criminal action, suit or proceeding referenced in
Section 2.1 or 2.2 hereof. Indemnitee hereby undertakes to
repay such amounts advanced only if, and to the extent that, it
shall ultimately be determined that Indemnitee is not entitled to
be indemnified by the Company as authorized hereby or that such
indemnification is not otherwise permitted by applicable law. The
advances to be made hereunder shall be paid by the Company to
Indemnitee within thirty (30) days following delivery of a
written request therefor or by Indemnitee to the
Company.
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3.2 Determination of Conduct
. Any indemnification (unless ordered by a court) shall be made by
the Company only as authorized in the specified case upon a
determination that indemnification of Indemnitee is proper under
the circumstances because Indemnitee has met the applicable
standard of conduct set forth in Sections 2.1 or 2.2 of this
Agreement. Such determination shall be made by any of the
following: (1) the Board of Directors (or by an executive
committee thereof) by a majority vote of directors (or committee
members) who are not parties to such action, suit or proceeding,
even though less than a quorum, (2) if there are no such
disinterested directors, or if such disinterested directors so
direct, by independent legal counsel in a written opinion,
(3) by the shareholders, with the shares owned by Indemnitee
not being entitled to vote thereon, or (4) the court in which
such proceeding is or was pending upon application made by the
Company or Indemnitee or the attorney or other person rendering
services in connection with the defense, whether or not such
application by Indemnitee, the attorney or the other person is
opposed by the Company.
3.3 Notice/Cooperation by
Indemnitee . Indemnitee shall, as a condition precedent to
Indemnitee’s right to be indemnified under this Agreement,
give the Company notice in writing as soon as practicable of any
claim made against Indemnitee for which indemnification will or
could be sought under this Agreement. Notice to the Company shall
be given in the manner set forth in Section 10.3 hereof and to
the address stated therein, or such other address as the Company
shall designate in writing to Indemnitee. In addition, Indemnitee
shall give the Company such information and cooperation as it may
reasonably require and as shall be within Indemnitee’s
power.
3.4 Notice to Insurers . If,
at the time of the receipt of a notice of a claim pursuant to
Section 3.3 hereof, the Company has director liability
insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with
the procedures set forth in the respective policies. The Company
shall thereafter take all necessary or desirable actions to cause
such insurers to pay, on behalf of the Indemnitee, all amounts
payable as a result of such proceeding in accordance with the terms
of such policies.
3.5 Selection of Counsel . In
the event the Company shall be obligated under Section 3.1
hereof to pay the expenses of any proceeding against Indemnitee,
the Company shall be entitled to assume the defense of such
proceeding, with counsel approved by Indemnitee, upon the delivery
to Indemnitee of written notice of its election so to do. After
delivery of such notice, approval of such counsel by Indemnitee and
the retention of such counsel by the Company, the Company will not
be liable to Indemnitee under this Agreement for any fees of
counsel subsequently incurred by Indemnitee with respect to the
same proceeding, provided that (a) Indemnitee shall have the
right to employ separate
