Callaway 2006 Annual Report Download - page 34

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In addition, the Company from time to time receives information claiming that products sold by the
Company infringe or may infringe patent or other intellectual property rights of third parties. It is possible that
one or more claims of potential infringement could lead to litigation, the need to obtain licenses, the need to alter
a product to avoid infringement, a settlement or judgment, or some other action or material loss by the Company.
On February 9, 2006, the Company filed a complaint in the United States District Court for the District of
Delaware, Case No. C.A. 06-91, asserting claims against Acushnet Company for patent infringement.
Specifically, Callaway Golf asserts that Acushnet’s sale of the Titleist Pro V1 family of golf balls infringes four
golf ball patents that Callaway Golf acquired when it acquired the assets of Top-Flite. Callaway Golf is seeking
damages and an injunction to prevent future infringement by Acushnet. In its answer to the Complaint, Acushnet
has responded that the patents at issue are invalid and not infringed by the Pro V1 golf balls. Acushnet also has
filed petitions for reexamination with the United States Patent and Trademark Office (“PTO”). Although the PTO
agreed the petitions for reexamination raised certain substantial new questions of patentability, and has issued a
first office action preliminarily rejecting the claims of two of the patents based on some of the arguments
advanced by Acushnet, the PTO has not made a final and binding determination as to validity and has not yet
considered Callaway Golf’s evidence as to the validity of the patents. The validity of the asserted patents has also
not yet been addressed by the District Court. Additionally, the District Court has denied Acushnet’s motion to
stay the litigation pending a resolution in the PTO. The trial of this matter is set to commence in the District
Court on December 3, 2007.
The Company and its subsidiaries, incident to their business activities, are parties to a number of legal
proceedings, lawsuits and other claims, including the matters specifically noted above. Such matters are subject
to many uncertainties and outcomes are not predictable with assurance. Consequently, management is unable to
estimate the ultimate aggregate amount of monetary liability, amounts which may be covered by insurance, or the
financial impact with respect to these matters. Management believes at this time that the final resolution of these
matters, individually and in the aggregate, will not have a material adverse effect upon the Company’s
consolidated annual results of operations, cash flows or financial position.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Executive Officers of the Registrant
Biographical information concerning the Company’s executive officers is set forth below.
Name Age Position(s) Held
George Fellows ..................... 64 President and Chief Executive Officer, Director
Steven C. McCracken ................ 56 Senior Executive Vice President, Chief Administrative
Officer and Secretary
Bradley J. Holiday .................. 53 Senior Executive Vice President and Chief Financial
Officer
David A. Laverty ................... 49 Senior Vice President, Operations
Thomas Yang ...................... 54 Senior Vice President, International
George Fellows is President and Chief Executive Officer of the Company as well as one of its Directors. He
has served in such capacities since joining the Company in August 2005. Prior to joining the Company, during
the period 2000 through July 2005, he served as President and Chief Executive Officer of GF Consulting, a
management consulting firm, and served as Senior Advisor to Investcorp International, Inc. and J.P. Morgan
Partners, LLC. Previously, Mr. Fellows was a member of senior management of Revlon, Inc. from 1993 to 1999,
including his terms as President, which commenced in 1995, and Chief Executive Officer, which began in 1997.
He is a member of the board of directors of VF Corporation (a global apparel company) and Jack in the Box, Inc.
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