AGREEMENT
THIS AGREEMENT ("Agreement") is entered into and is effective as of
September 6, 2007, by and between Universal Travel Group, a Nevada corporation
("UTVG") and Xxxxxxx X. Xxxxxxx, an individual resident in the State of
Connecticut ("Xxxxxxx").
Preliminary Statement
UTVG desires to retain Xx. Xxxxxxx, and Xx. Xxxxxxx is willing to serve,
as a member of the Board of Directors of UTVG on the terms and subject to the
conditions set forth in this agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth below, UTVG and Xx. Xxxxxxx hereby agree as follows:
1. Appointment. The Board of Directors of UTVG has elected Xx. Xxxxxxx, and Xx.
Xxxxxxx has agreed to serve, as a member of the Board of Directors of UTVG,
effective as of the date of this agreement.
2. Compensation. For the duties and services to be performed by him under this
agreement, UTVG will pay to Xx. Xxxxxxx, and Xx. Xxxxxxx agrees to accept, the
compensation described below in this Section 2.
a. Directors' Fees. UTVG will pay Xx. Xxxxxxx a director's fee of $20,000
per annum, payable in equal monthly installments commencing September 2007. This
fee represents a retainer for services rendered as a member of its Board of
Directors, and is in addition to any fees to which Xx. Xxxxxxx may be entitled
under guidelines and rules established by UTVG from time to time for
compensating non-employee directors for serving on, and attending meetings of,
committees of its Board of Directors and the boards of directors of its
subsidiaries.
b. Equity Component. In addition to the cash fee(s) described in
subsection (a), on the date of this agreement, UTVG will grant Xx. Xxxxxxx
options to purchase a total of 100,000 shares of UTVG common stock. The exercise
price of these options will be the closing sale price of a share of UTVG common
stock on the OTC Bulletin Board on the date of this agreement. Options to
purchase 33,333 shares may be exercised immediately; options to purchase an
additional 33,333 shares may be exercised commencing July 1, 2008, and options
to purchase the remaining 33,334 shares may be exercised commencing July 1,
2009, provided that in the case of the options to vest in 2008 and 2009 Xx.
Xxxxxxx is still a director of or otherwise engaged by UTVG. The options will be
granted under UTVG's stock option plan, and will be subject to the terms and
conditions of that plan. Subject to the foregoing vesting provisions and the
terms and conditions set forth in the plan, the options may be exercised until
June 1, 2017, except as otherwise provided in the plan.
c. Audit Committee. The Board of Directors has appointed Xx. Xxxxxxx, and
Xx. Xxxxxxx has agreed to serve as, Chairman of the Audit Committee and for so
long as he serves in such position he will receive additional compensation of
$7,500 per annum, payable monthly.
3. Expenses. UTVG will reimburse Xx. Xxxxxxx for reasonable expenses incurred by
him in furtherance of his performance of duties hereunder, provided that such
expenses are substantiated in accordance with UTVG policies applicable to
members of its Board of Directors.
4. Fringe and Medical Benefits. Xx. Xxxxxxx may participate in any of UTVG's
medical, dental and other benefit programs as are available to non-employee
members of its Board.
5. Term and Termination.
a. General. The term of this Agreement will commence as of the date the
Board of Directors appoints Xx. Xxxxxxx a director of UTVG and will remain in
effect as long as Xx. Xxxxxxx continues to serve as a non-employee director of
UTVG. UTVG has no obligation to cause the nomination or recommend the election
of Xx. Xxxxxxx to the Board for any period of time in the future. Upon the
termination of Xx. Xxxxxxx'x tenure as a member of the Board, UTVG will promptly
pay to Xx. Xxxxxxx, or to his estate if his service is terminated upon his
death, all fees accrued for services rendered as a member of the Board and
committees thereof and expense reimbursements due as of the date of termination.
b. Continuation of Health Benefits. To the extent that health insurance
benefits are provided to Xx. Xxxxxxx under Section 4 of this Agreement at the
time Xx. Xxxxxxx'x tenure as a member of the Board terminates, other than as a
result of his voluntary resignation, for a period of six-months immediately
after termination, UTVG will maintain in effect, and pay the cost associated
with, health insurance for Xx. Xxxxxxx with the same coverage provided him prior
to termination (e.g. medical, dental, optical, mental health) and in all other
respects significantly comparable to those in place immediately prior to
termination
6. Indemnification. UTVG shall indemnify Xx. Xxxxxxx, as a director of UTVG, to
the maximum extent permitted under applicable law against all liabilities and
expenses, including amounts paid in satisfaction of judgments, in compromise, or
as fines and penalties, and counsel fees, reasonably incurred by Xx. Xxxxxxx in
connection with the defense or disposition of any civil, criminal,
administrative or investigative action, suit or other proceeding, whether civil
or criminal, in which he may be involved or with which he may be threatened,
while an officer or director of UTVG. Expenses (including attorney's fees)
incurred by Xx. Xxxxxxx in defending any such action, suit or other proceeding
shall be paid by UTVG in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of him to repay
such amount if it shall be ultimately determined that he is not entitled to be
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indemnified by UTVG. The right of indemnification provided herein shall not be
exclusive of or affect any other rights to which Xx. Xxxxxxx may be entitled.
The provisions hereof shall survive expiration or termination of this Agreement
for any reason whatsoever. In the event of any conflict between the provisions
hereof and the indemnification provisions contained in UTVG's articles of
incorporation or bylaws, or in any agreement between UTVG and Xx. Xxxxxxx, the
terms of such articles, bylaws or agreement shall govern.
7. Liability Insurance. In furtherance of its agreement to indemnify Xx.
Xxxxxxx as provided in section 6 hereof, UTVG will maintain in effect at all
times while Xx. Xxxxxxx continues to serve as a member of the Board liability
insurance provided by a recognized carrier covering members of its Board with a
face amount of no les than $3,000,000 and deductibles of no more than $150,000.
The initial policy acquired in fulfillment of this section has been issued by
Liberty International Underwriters.
8. Non-Exclusive. Nothing in this agreement will prevent Xx. Xxxxxxx (1)
from serving as an employee, officer or director of any other company, provided
that such performance is consistent with Xx. Xxxxxxx'x duty of loyalty to UTVG,
(2) from serving on voluntary, community service committees and boards, and (3)
from owning shares representing less than 5% of the outstanding equity
securities of a company that is a competitor of UTVG. Xx. Xxxxxxx will comply
with and be bound by UTVG's policies, procedures and practices applicable to
members of its Board of Directors from time to time in effect during the term of
this agreement.
9. Conflicts. Xx. Xxxxxxx represents that his performance of this
agreement will not conflict with or breach any other agreement to which he is a
party or may be bound. Xx. Xxxxxxx has not, and will not during the term of this
agreement, enter into any oral or written agreement in conflict with any of the
provisions of this agreement. Xx. Xxxxxxx represents and warrants that he is not
bound by any agreements which prohibit or restrict him from: (a) competing with,
or in any way participating in a business that competes with, any former
employer or business of any former employer to the extent that Xx. Xxxxxxx'x
performance of his duties under this agreement would be deemed to constitute
such competition; (b) soliciting personnel of a former employer or business to
leave such former employer's employment or to leave such business; or (c)
soliciting customers, suppliers, financing sources or other entities having a
substantial relationship with a former employer or business.
10. Representations and Warranties of UTVG. UTVG has filed all reports
required to be filed by it under the Securities Act and the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), including pursuant to Section
13(a) or 15(d) thereof, since January 1, 2007 (the foregoing materials being
collectively referred to herein as the "SEC Reports") on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension. As of their respective
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act and the rules and regulations of the
Securities and Exchange Commission (the "Commission") promulgated thereunder,
and none of the SEC Reports, when filed, contained any untrue statement of a
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material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of UTVG included in the SEC Reports comply in all material respects
with applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
("GAAP"), except as may be otherwise specified in such financial statements or
the notes thereto, and fairly present in all material respects the financial
position of UTVG and its consolidated subsidiaries as of and for the dates
thereof and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, year-end audit
adjustments.
There is no claim, action, suit, proceeding, arbitration, reparation,
investigation or hearing, pending or threatened, before any court or
governmental, administrative or other competent authority or private arbitration
tribunal, which could have an adverse effect on the business of UTVG; nor are
there any facts known to UTVG which could reasonably be expected to give rise to
a claim, action, suit, proceeding, arbitration, investigation or hearing, which
could have an adverse effect upon the business of UTVG.
11. Governing Law; Mediation & Arbitration. This agreement will be
governed by, and construed in accordance with the laws of the State of New York,
without regard to choice-of-law principles, as if made and to be performed
solely in New York.
12. Notices. All notices or other communications which are required or
permitted hereunder will be in writing and sufficient if delivered personally or
sent by air courier or first class certified or registered mail, return receipt
requested and postage prepaid, addressed as follows:
If to Xx. Xxxxxxx, to: 000 Xxxxxxxxx Xxxxxx Xxxxxxx,
Xxxxxxxxxxx 00000
With a copy to: Xxxxx Xxxxxxxxxxx Most & Xxxxxxxx
Xxx Xxxx Xxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Most, Esq.
If to UTVG, to: 00000 Xxxxxxxx Xxxx. Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: President
with a copy to: Xxxxx & Xxx Xxxxxx
0 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. XxXxxx, Esq.
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or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. All notices and
other communications given to any party hereto in accordance with the provisions
of this agreement shall be deemed to have been given on the date of delivery if
personally delivered; on the business day after the date when sent if sent by
air courier; and on the third business day after the date when sent if sent by
mail, in each case addressed to such party as provided in this Section or in
accordance with the latest written direction from such party.
13. Entire Agreement. This agreement constitutes the sole agreement of the
parties and supersedes all oral negotiations and prior writings, including any
and all prior agreements between Xx. Xxxxxxx and UTVG, with respect to the
subject matter hereof.
14. Advice of Counsel. EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES THAT, IN
EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE
OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND
PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY
PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.
15. Counterparts. This agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
16. Amendments. No modification, waiver, amendment, discharge or change of
this agreement shall be valid unless the same is in writing and signed by the
party against which the enforcement of said modification, waiver, amendment,
discharge or change is sought.
17. Severability. If any portion of any provision of this agreement, or
the application of such provision or any portion thereof to any person or
circumstance shall be held invalid or unenforceable, the remaining portions of
such provision or portion of such provisions of this agreement or the
application of such provision or portion of such provision as is held invalid or
unenforceable to persons or circumstances other than those to which it is held
invalid or unenforceable, shall not be effected thereby.
[signature page appears on the following page]
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[signature page to Agreement of September 6, 2007 between UTVG and Xxxxxxx
Xxxxxxx]
The parties, by signing below, agree to the terms and conditions set forth
in this agreement.
UNIVERSAL TRAVEL GROUP
By: /s/ Xxxxxxxxx Xxxxx
-------------------------------------------
Name: Xxxxxxxxx Xxxxx
Title: Chairman and Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------
Xxxxxxx X. Xxxxxxx
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