Document:

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                                                                    Exhibit 10.3

                           INDEMNIFICATION AGREEMENT

      INDEMNIFICATION AGREEMENT (this "Agreement"), dated as of October 15,
2002, by and between Golfsmith International Holdings, Inc., a Delaware
corporation ("Parent"), and the undersigned Stockholder Representatives, each of
whom is listed on Exhibit A.

                                    RECITALS:

      WHEREAS, Parent, BGA Acquisition Corporation, a Delaware corporation
("Merger Sub"), and Golfsmith International, Inc., a Delaware corporation (the
"Company"), have entered into an Agreement and Plan of Merger, dated as of
September 23, 2002 (the "Merger Agreement") pursuant to which Merger Sub will be
merged with and into Company (the "Merger"), with the Company continuing as the
surviving corporation. All capitalized terms herein that are not otherwise
defined herein shall have the meanings given to them in the Merger Agreement.

      WHEREAS, in connection with the transactions contemplated by the Merger
Agreement, and as a material inducement to Parent to enter into the Merger
Agreement, the Stockholder Representatives desire to pay Parent and the
Surviving Corporation, as applicable, for the indemnification obligations of the
Stockholders under Article 10 of the Merger Agreement and the Closing Working
Capital adjustments under Section 2.12 of the Merger Agreement, in each case in
accordance with and subject to the limitations set forth in the Merger
Agreement.

      WHEREAS, the Stockholder Representatives desire to provide for the
allocation of the indemnification obligations of the Stockholders under Article
10 of the Merger Agreement, the Closing Working Capital adjustments under
Section 2.12 of the Merger Agreement and all related costs among themselves.

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

                                    ARTICLE I
                        CONTRIBUTION AND INDEMNIFICATION

      Section 1.1 Closing Working Capital. Each Stockholder Representative shall
pay to Parent, in accordance with Section 2.12(f) of the Merger Agreement and
subject to the limitations contained therein, such Stockholder Representative's
Proportionate Amount of any deficiency of (a) the Closing Working Capital as set
forth in the Final Working Capital Statement over (b) the preliminary estimate
of the Closing Working Capital as set forth in the Preliminary Closing Working
Capital Statement, to the extent that such deficiency is not satisfied out of
the Escrow Funds in accordance with the Escrow Agreement and Section 2.12(f) of
the Merger Agreement. As used in this Agreement, a Stockholder Representative's
"Proportionate Amount" shall mean the percentage set forth opposite such
Stockholder Representative's name on Exhibit A. Each such payment will be made
by wire transfer of immediately available funds promptly, but in any event
within 5 Business Days after the determination of the Final Working Capital
Statement.
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      Section 1.2 Indemnification Obligations. Each Stockholder Representative
shall pay to Parent or the Surviving Corporation, as applicable, in accordance
with Article 10 of the Merger Agreement and subject to the limitations set forth
therein, such Stockholder Representative's Proportionate Amount of any
indemnification obligations of the Stockholders to the extent that such
indemnification obligations exceed the available Escrow Funds.

      Section 1.3 Contribution; Indemnification among Stockholder
Representatives. The Stockholder Representatives' obligations are several (and
not joint and several). In no event shall any Stockholder Representative be
liable or responsible for the proportionate amount of any other Stockholder
Representative for the above obligations. If any Stockholder Representative, in
its sole and absolute discretion, pays the proportionate amount of any other
Stockholder Representative that has failed to make such payment within the time
periods specified above, then the Stockholder Representative making such payment
shall be entitled to recover the amount of such payment from the Stockholder
Representative that failed to make such payment and the Stockholder
Representative that failed to make such payment shall pay such amount to the
Stockholder Representative making such payment immediately upon notice thereof.
In addition, each Stockholder Representative hereby indemnifies and agrees to
hold harmless each other Stockholder Representative from and against any
liability incurred by such other Stockholder Representative in respect of the
above obligations that exceeds such other Stockholder Representative's
proportionate amount of the above obligations, as well as any and all costs and
expenses (including, without limitation, reasonable attorneys fees) that may be
incurred by each such other Stockholder Representative in enforcing the terms
hereof.

                                   ARTICLE II
                                  MISCELLANEOUS

      Section 2.1 Action by Stockholder Representatives. The Stockholder
Representatives may act jointly or individually for all purposes under this
Agreement and any action by a Stockholder Representative hereunder shall, with
respect to Parent, be binding on the other Stockholder Representative.

      Section 2.2 Authority; No Violation; Consents. Each Stockholder
Representative hereby represents and warrants, on behalf of itself only, as
follows:

            (a) Such Stockholder Representative has the requisite power and
authority to enter into this Agreement and to consummate the transactions
contemplated herein. This Agreement has been duly executed and delivered by such
Stockholder Representative and, assuming that this Agreement constitutes the
valid and binding agreement of the other parties hereto, constitutes the valid
and binding obligations of such Stockholder Representative, enforceable against
such Stockholder Representative in accordance with its terms and conditions,
except that the enforcement hereof may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar
Applicable Laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity). For each
Stockholder Representative that is not a natural person, the execution and
delivery of this Agreement by such Stockholder Representative and the
consummation by such Stockholder Representative of the transactions contemplated
herein have been duly authorized by all necessary corporate or other action on
the part of such Stockholder Representative.

                                       2
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            (b) The execution and delivery by such Stockholder Representative of
this Agreement does not, and the performance by such Stockholder Representative
of the transactions contemplated herein will not, conflict in any material
respect with or result in a material violation or material breach of, or
constitute a default (with or without due notice or lapse of time or both)
under, any of the terms, conditions or provisions of any contract or agreement
to which such Stockholder Representative is a party or to which any of its
properties or assets may be subject, or (iii) violate any order, writ, judgment,
injunction, decree, statute, Applicable Law, rule or regulation of any
Governmental Entity binding upon such Stockholder Representative or by which or
to which any material portion of its assets is bound or subject.

      Section 2.3 Further Assurances. Each party hereto shall execute such
documents and other papers and take such further actions as any other party may
reasonably request in order to carry out the provisions of this Agreement.

      Section 2.4 Survival of Representations and Warranties and Covenants. The
representations, warranties, and covenants contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing and shall in no way be affected by any investigation of the subject
matter of such representations, warranties, and covenants.

      Section 2.5 Amendments. This Agreement may be amended, altered or modified
by written instrument executed by each of the parties hereto.

      Section 2.6 Entire Agreement. This Agreement, together with the Merger
Agreement and the Escrow Agreement, constitutes the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof,
except as provided herein, and supersedes all prior agreements and
understandings, written and oral, among the parties with respect to the subject
matter hereof.

      Section 2.7 Interpretation. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." Whenever the context may require, any pronouns
used in this Agreement shall include the corresponding masculine, feminine or
neuter forms and the singular form of nouns and pronouns shall include the
plural and vice versa. The phrases "the date of this Agreement," "the date
hereof" and terms of similar import, unless the context otherwise requires,
shall be deemed to refer to the date set forth in the first paragraph of this
Agreement.

      Section 2.8 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.

      Section 2.9 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if (a) delivered in person, (b)
transmitted by telecopy (with

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confirmation), (c) mailed by certified or registered mail (return receipt
requested and obtained) or (d) delivered by an express courier (with
confirmation) to the parties at the addresses set forth on the signature pages
hereto (or at such other address for a party as shall be specified by like
notice).

      Section 2.10 Binding Effect; Persons Benefitting; No Assignment. This
Agreement shall inure to the benefit of and be binding upon the parties hereto,
and the respective successors and permitted assigns of such persons. Except as
set forth in the preceding sentence, nothing in this Agreement is intended or
shall be construed to confer upon any person other than the parties hereto and
their successors and permitted assigns any right, remedy or claim under or by
reason of this Agreement or any part hereof. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto, whether by operation of Applicable Law or otherwise; provided,
Parent may transfer its rights under this Agreement to a third party following
the Closing if such third party purchases substantially all of the business of
the Company; provided, further, that Parent may be permitted to transfer its
rights under this Agreement to an Affiliate of Parent it such Affiliate assumes,
jointly and severally with Parent, all of the obligations of Parent and will be
at least as likely as Parent to be able to consummate the transactions
contemplated by the Merger Agreement and proceed to Closing; and, provided,
further, Parent may transfer or collaterally assign its rights under this
Agreement to its lenders. Any assignment in violation of the foregoing shall be
null and void.

      Section 2.11 No Impairment. This Agreement shall remain in full force and
effect without regard to, and the obligations of the parties hereunder shall not
be affected or impaired by: (a) any amendment, modification of or supplement to
the Merger Agreement; (b) any extension, indulgence or other action or inaction
in respect of the Merger Agreement; or (c) any exercise or non-exercise of any
right, remedy, power or privilege in respect of the Merger Agreement.

      Section 2.12 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which, taken
together shall constitute one and the same agreement, it being understood that
all of the parties need not sign the same counterpart.

      Section 2.13 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING
EFFECT TO ANY CONFLICTS OF LAW PROVISIONS.

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      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.

                                     GOLFSMITH INTERNATIONAL HOLDINGS, INC.

                                     By:     /s/ Noel Wilens
                                            ------------------------------------
                                     Name:   Noel Wilens
                                            ------------------------------------
                                     Title:  Vice President
                                            ------------------------------------

                                     Address:   c/o First Atlantic Capital, Ltd.
                                                135 E. 57th Street; 29th Floor
                                                New York, New York 10022
                                                Attention: Noel Wilens
                                                Facsimile: (212) 750-0954

                                     STOCKHOLDER REPRESENTATIVES:

                                                /s/ Carl F. Paul
                                     -------------------------------------------
                                     Name:      Carl F. Paul
                                     Address:   9106 Yucca Mountain Road
                                                Austin, Texas 78759

                                                /s/ Franklin C. Paul
                                     -------------------------------------------
                                     Name:      Franklin C. Paul
                                     Address:   5207 Rambling Range
                                                Austin, Texas 78727

<PAGE>
                                    EXHIBIT A

<TABLE>
<CAPTION>
        STOCKHOLDER REPRESENTATIVE      PROPORTIONATE AMOUNT
        --------------------------      --------------------
<S>                                     <C>
        Carl F. Paul                    65.39%
        Franklin C. Paul                34.61%
</TABLE><PAGE>
                                                                    Exhibit 10.4

      MANAGEMENT CONSULTING AGREEMENT (this "AGREEMENT"), dated as of October
15, 2002, among GOLFSMITH INTERNATIONAL HOLDINGS, INC., a Delaware corporation
("HOLDINGS"), GOLFSMITH INTERNATIONAL, INC., a Delaware corporation ("GOLFSMITH"
and, together with Holdings and each of their respective subsidiaries, the
"COMPANIES"), and FIRST ATLANTIC CAPITAL LTD., a Delaware corporation (together
with its affiliates, successors, and assigns, "FIRST ATLANTIC").

      WHEREAS, the Companies have heretofore availed themselves of the
management, advisory, financing arrangement and corporate structuring expertise
of First Atlantic in connection with the transactions contemplated by the
Agreement and Plan of Merger, dated as of September 23, 2002 (the "MERGER
AGREEMENT"), among Holdings, BGA Acquisition Corporation and Golfsmith;

      WHEREAS, Holdings, Atlantic Equity Partners III, L.P. and certain other
equity holders of Holdings have entered into a Stockholders Agreement (the
"STOCKHOLDERS AGREEMENT") dated as of the date hereof;

      WHEREAS, the Companies desire to continue to avail themselves of First
Atlantic's expertise and consequently have requested First Atlantic to make such
expertise available from time to time in rendering certain management consulting
and advisory services related to the business and affairs of the Companies and
the review and analysis of certain financial and other transactions; and

      WHEREAS, First Atlantic and the Companies agree that it is in their
respective best interests to enter into this Agreement whereby, for the
consideration specified herein, First Atlantic shall provide such services as an
independent consultant to the Companies.

      NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the Companies and First Atlantic agree as follows:

      SECTION 1.  RETENTION OF FIRST ATLANTIC.

      The Companies hereby retain First Atlantic, and First Atlantic accepts
such retention, upon the terms and conditions set forth in this Agreement.

      SECTION 2.  TERM.

      This Agreement shall commence on the date hereof and shall terminate on
the tenth anniversary of the date hereof (the "INITIAL TERM"). Upon the
termination of the Initial Term and at the end of each year thereafter this
Agreement shall automatically be extended for an additional year unless notice
to the contrary is given by either party at least 30, but no more than 60, days
prior to such anniversary (the Initial Term and all extensions thereof are
collectively referred to as the "TERM"). Notwithstanding the foregoing, this
Agreement shall terminate on the date on which Atlantic Equity Partners III,
L.P. and its Affiliates (including the Transferee Partnership as defined in the
Stockholders Agreement) collectively are no longer the beneficial owner of at
least 50% of the outstanding shares of common stock of Holdings. In addition,
notwithstanding the foregoing, this Agreement will terminate upon the
consummation of a Public
<PAGE>
Offering (as defined in the Stockholders Agreement) if the underwriters require
that it be terminated.

      SECTION 3.  MANAGEMENT CONSULTING SERVICES.

      (a) First Atlantic shall advise the Companies concerning such management
matters that relate to proposed financial transactions, acquisitions and other
senior management matters related to the business, administration and policies
of the Companies and their respective affiliates, in each case as the Companies
shall reasonably and specifically request. First Atlantic shall devote such time
to any such request as First Atlantic shall, in its discretion, deem necessary.
Such consulting services shall, in First Atlantic's discretion, be rendered in
person or by telephone or other communication. First Atlantic shall have no
obligation to the Companies as to the manner and time of rendering its services
hereunder, and the Companies shall have no right to dictate or direct the
details of the services rendered hereunder.

      (b) First Atlantic shall perform all such services as an independent
contractor of the Companies and not as an employee, agent or representative of
the Companies. First Atlantic shall have no authority to act for or to bind any
of the Companies without their prior written consent.

      (c) This Agreement shall in no way prohibit First Atlantic or any
director, officer, shareholder or employee thereof from engaging in other
activities, whether or not competitive with any business of the Companies or
their affiliates.

      SECTION 4.  COMPENSATION.

      (a) As consideration for the expertise and services set forth in the
recital of this Agreement and provided by First Atlantic heretofore in
connection with the transactions contemplated by the Merger Agreement, the
Companies shall (i) pay to First Atlantic a closing fee of $1,252,500 and (ii)
reimburse First Atlantic for all out-of-pocket expenses and other disbursements
incurred by First Atlantic and any of its directors, officers, employees or
agents in connection with the transactions contemplated by the Merger Agreement,
such payments to be made on the Closing Date (as such term is defined in the
Merger Agreement).

      (b) As consideration for First Atlantic's agreement to render the
management consulting services set forth in Section 3 of this Agreement and as
compensation for any such services rendered by First Atlantic, the Companies
shall pay First Atlantic an annual fee in the aggregate amount of up to
$600,000, payable in advance in equal monthly installments on the first day of
each month (or, if such date is not a business day, on the next business day
thereafter) commencing with the month of October 2002. The amount of such annual
fee shall be determined by the board of directors of Holdings.

      (c) The Companies (or, at the Companies' option, any affiliate thereof)
shall, upon presentation of an itemized listing by First Atlantic, reimburse
First Atlantic for all out-of-pocket expenses and other disbursements incurred
by any of its directors, officers, employees or agents in the performance of
First Atlantic's obligations hereunder.

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      (d) Nothing in this Agreement shall have the effect of prohibiting First
Atlantic from receiving from the Companies or any of their affiliates any other
fees, including any fee for financial advisory and consulting services in
connection with future acquisitions, dispositions or debt or equity financings
by any of the Companies or their affiliates; provided, that with respect to each
such transaction, such fee shall not exceed an amount equal to (i) in the case
of a transaction involving less than $50,000,000 in total enterprise value, 2%
of such total enterprise value, (ii) in the case of a transaction involving
$50,000,000 or more but less than $100,000,000 in total enterprise value,
$1,000,000, and (iii) in the case of a transaction involving $100,000,000 or
more in total enterprise value 1% of such total enterprise value. With respect
to a transaction involving a Sale of Holdings, such fee shall be equal to 1% of
the total enterprise value. For purposes of this paragraph (d), "total
enterprise value" shall be determined by the board of directors of Holdings in
good faith. For purposes of this paragraph (d), "SALE OF HOLDINGS" shall mean
the sale of Holdings pursuant to which such purchaser or purchasers acquire (i)
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended) of at least majority of the capital
stock of Holdings (whether by purchase, merger, consolidation, tender offer or
other business combination transaction) or (ii) all or substantially all of
Holdings' assets determined on a consolidated basis.

      SECTION 5.  INDEMNIFICATION.

      The Companies shall indemnify and hold harmless First Atlantic and its
directors, officers, employees, agents and affiliates (collectively, the
"INDEMNIFIED PERSONS") on demand from and against any and all liabilities,
costs, expenses and disbursements (collectively, "CLAIMS") of any kind with
respect to or arising from this Agreement or the performance by any Indemnified
Person of any services in connection herewith. Notwithstanding the foregoing
provision, the Companies shall not be liable for any Claim under this Section 5
arising from the gross negligence or willful misconduct of such Indemnified
Person.

      SECTION 6.  OBLIGATIONS OF THE COMPANIES.

      Each of the Companies acknowledges and agrees that any obligation of the
Companies hereunder is the obligation of each of Holdings and Golfsmith jointly
and severally.

      SECTION 7.  NOTICES.

      All notices, requests, consents and other communications hereunder shall
be in writing and shall be deemed sufficient if personally delivered, sent by
nationally-recognized overnight courier, by telecopy, or by registered or
certified mail, return receipt requested and postage prepaid, addressed as
follows:

            if to First Atlantic, to:

            First Atlantic Capital, Ltd.
            135 East 57th Street, 29th Floor
            New York, New York  10022
            Attention: Mr. Noel Wilens
            Fax:       (212) 750-0954

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            if to the Companies, to:

            Golfsmith International Holdings, Inc.
            c/o First Atlantic Capital, Ltd.
            135 East 57th Street, 29th Floor
            New York, New York  10022
            Attention: Mr. Noel Wilens
            Fax:       (212) 750-0954

            in either case, with a copy to:

            King & Spalding
            1185 Avenue of the Americas
            New York, New York  10036
            Attention: Lawrence Graev, Esq.
                       Mark E. Thompson, Esq.
            Phone:     (212) 556-2100
            Fax:       (212) 556-2222

or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such notice
or communication shall be deemed to have been received (a) in the case of
personal delivery, on the date of such delivery, (b) in the case of
nationally-recognized overnight courier, on the next business day after the date
when sent, (c) in the case of telecopy or facsimile transmission, when received,
and (d) in the case of mailing, on the third business day following that on
which the piece of mail containing such communication is posted.

      SECTION 8.  BENEFITS OF AGREEMENT.

      This Agreement shall bind and inure to the benefit of the Indemnified
Persons and any successors to or assigns of First Atlantic and the Companies;
provided, however, that this Agreement may not be assigned by First Atlantic
without the prior written consent of Holdings and may not be assigned by any of
the Companies without the prior written consent of First Atlantic.

      SECTION 9.  GOVERNING LAW.

      This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York without giving effect to any
choice or conflict of law provision or rule (whether in the State of New York or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York.

      SECTION 10.       HEADINGS.

      Section headings are used for convenience only and shall in no way affect
the construction of this Agreement.

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      SECTION 11.       ENTIRE AGREEMENT; AMENDMENTS.

      This Agreement contains the entire understanding of the parties with
respect to its subject matter, and neither it nor any part of it may in any way
be altered, amended, extended, waived, discharged or terminated except by a
written agreement signed by each of the parties hereto.

      SECTION 12.       COUNTERPARTS.

      This Agreement may be executed in counterparts, and each such counterpart
shall be deemed to be an original instrument, but all such counterparts together
shall constitute but one agreement.

      SECTION 13.       WAIVERS.

      Any party to this Agreement may, by written notice to the other party,
waive any provision of this Agreement. The waiver by any party of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach.

                            [SIGNATURE PAGE FOLLOWS]

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      IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.

                                    GOLFSMITH INTERNATIONAL HOLDINGS, INC.

                                    By: /s/ NOEL E. WILENS
                                        ----------------------------------------
                                        Name:   Noel E. Wilens
                                        Title:  Vice President

                                    GOLFSMITH INTERNATIONAL, INC.

                                    By: /s/ NOEL E. WILENS
                                        ----------------------------------------
                                        Name:   Noel E. Wilens
                                        Title:  Vice President

                                    FIRST ATLANTIC CAPITAL, LTD.

                                    By: /s/ NOEL E. WILENS
                                        ----------------------------------------
                                        Name:      Noel E. Wilens
                                        Title:        Principal

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