AGREEMENT
THIS AGREEMENT ("Agreement") is entered into and is effective as of
December 7, 2007, by and between Universal Travel Group, a Nevada corporation
("UTVG") and Xxxxx Xxxxxx, an individual resident in the State of New Jersey
("Xxxxxx").
Preliminary Statement
UTVG desires to retain Xx. Xxxxxx, and Xx. Xxxxxx 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. Xxxxxx hereby agree as follows:
1. Appointment. Xx. Xxxxxx has agreed to serve as a member of the Board of
Directors of UTVG, effective as of the date of his election to the Board by the
current Members of the Board of Directors. Appointment or election of Xx. Xxxxxx
to any committees of the Board shall only be made upon the receipt of Xx.
Xxxxxx'x prior written consent.
Xx. Xxxxxx'x appointment to the Board will be announced to the public in a
press release. The timing and wording of such release shall be approved by both
UTVG and Xx. Xxxxxx.
2. Compensation. For the duties and services to be performed by him under
this agreement, UTVG will pay to Xx. Xxxxxx, and Xx. Xxxxxx agrees to accept,
the compensation described below in this Section 2.
a. Directors' Fees. UTVG will pay Xx. Xxxxxx a director's fee of $20,000
per annum, payable in equal monthly installments commencing December 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. Xxxxxx 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 his election to the Board of Directors UTVG will
grant Xx. Xxxxxx options to purchase 100,000 shares of UTVG common stock. The
exercise price of these options will be the closing sales price of a share of
UTVG common stock on the OTC Bulletin Board on the date of his election to the
Board of Directors. Options to purchase 33,333 shares may be exercised
immediately; options to purchase an additional 33,333 shares may be exercised
commencing November 1, 2008, and options to purchase the remaining 33,334 shares
may be exercised commencing November 1, 2009, provided that in the case of the
options to vest in 2008 and 2009 Xx. Xxxxxx 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 November 1, 2017, except as otherwise
provided in the plan.
3. Expenses. UTVG will reimburse Xx. Xxxxxx 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. Xxxxxx 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. Xxxxxx a director of UTVG and will remain in
effect as long as Xx. Xxxxxx continues to serve as a non-employee director of
UTVG. UTVG has no obligation to cause the nomination or recommend the election
of Xx. Xxxxxx to the Board for any period of time in the future. Upon the
termination of Xx. Xxxxxx'x tenure as a member of the Board, UTVG will promptly
pay to Xx. Xxxxxx, 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. Xxxxxx under Section 4 of this Agreement at the
time Xx. Xxxxxx'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. Xxxxxx 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. Xxxxxx, 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. Xxxxxx 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. Xxxxxx 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 indemnified by UTVG. The right of indemnification provided herein
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shall not be exclusive of or affect any other rights to which Xx. Xxxxxx 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.
Xxxxxx with respect to indemnification, unless he has explicitly agreed
otherwise, Xx. Xxxxxx will be given the benefit of the provisions more favorable
to him.
7. Liability Insurance. UTVG currently maintains liability insurance
provided by a recognized carrier covering members of its Board with a face
amount of no less than $3,000,000 and deductibles of no more than $150,000. UTVG
is in the process of increasing the face amount of its Board's liability
insurance to no less than $5,000,000 and will exercise commercially reasonable
efforts to effectuate such increase as soon as reasonably practical. UTVG will
maintain in effect at all times while Xx. Xxxxxx 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 less than $3,000,000 and
deductibles of no more than $150,000, provided that once the face amount of its
current policy has been increased to $5,000,000 UTVG will maintain the face
amount of its liability insurance at no less than such amount.
8. Non-Exclusive. Nothing in this agreement will prevent Xx. Xxxxxx (1)
from serving as an employee, officer or director of any other company, provided
that such performance is consistent with Xx. Xxxxxx'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. Xxxxxx 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. Xxxxxx 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. Xxxxxx 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. Xxxxxx 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. Xxxxxx'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
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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
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. 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. Xxxxxx, to: 00 Xxxxxxx Xxxxxx
Xxxx Xxxx, Xxx Xxxxxx
If to UTVG, to: 1330 Ave. of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, 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. Xxxxxx 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.
(Signatures appear on the following page)
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[Signature page to Agreement between UTVG and Xxxxx Xxxxxx]
The parties, by signing below, agree to the terms and conditions set forth in
this agreement.
UNIVERSAL TRAVEL GROUP
/s/ Xxxxx Xxxxxx By: /s/ Xxxxxxxxx Xxxxx
------------------- ----------------------------------------
Xxxxx Xxxxxx Name: Xxxxxxxxx Xxxxx
Title: Chairman and Chief Executive Officer
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