EXHIBIT 3
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Ambassadors Group, Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
July 29, 2003
Invemed Catalyst Fund, L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
This letter agreement grants certain rights to Invemed Catalyst Fund,
L.P. (the "Fund") in connection with the Fund's purchase and/or holding of
Ambassadors Group, Inc. (the "Company") common stock, par value $0.01 (the
"Common Stock") pursuant to that certain Stock Purchase Agreement, dated July
23, 2003, by and among the Fund, Xxxx X. Xxxxxxxxx and Xxxxx X. Xxxxxxxxx (the
"Purchase Agreement").
As a condition to the Fund's obligation to consummate the purchase of
Common Stock under the Purchase Agreement, the Company hereby agrees that the
Board of Directors of the Company (the "Board") shall, as of the date hereof,
fill the existing vacancy on the Board with one person designated by the Fund
(the "Fund Designee"), which designee shall initially be Xxxx Xxxx. The Fund
Designee shall serve in accordance with the Company's Certificate of
Incorporation and Bylaws until the next succeeding annual meeting of
stockholders of the Company to be held after such election for the purpose of
electing directors of the class of which the Fund Designee is a member.
The Company further agrees that, for as long as the Fund or its
affiliates continue to beneficially own in the aggregate not less than 600,000
shares of Common Stock (subject to adjustments if the Company pays a dividend in
shares of Common Stock or distributes shares of Common Stock to the holders of
Common Stock, subdivides or combines the Common Stock) (the "Minimum Ownership
Threshold"), commencing with the next succeeding annual meeting of the
stockholders of the Company at which directors of the class of which the Fund
Designee is a member are elected, and at each annual meeting of the stockholders
of the Company thereafter held for the purpose of electing directors of such
class, the Fund shall be entitled to designate to the Board the Fund Designee to
serve as a director of the Company. The Company covenants that it shall cause
such Fund Designee to be included in the slate of nominees recommended by the
Board to the stockholders for election as directors, and the Company shall use
its reasonable best efforts to cause the election of such Fund Designee,
including using its reasonably best efforts to cause officers of the Company who
hold proxies (unless otherwise directed by the stockholder submitting such
proxy), if any, to vote such proxies in favor of the election of such Fund
Designee, unless the Board determines in good faith, with the written advice of
outside counsel, that it would be inconsistent with their fiduciary duties to
take such actions. As long as the Fund or its affiliates continues to
beneficially own in the aggregate not less than the Minimum Ownership Threshold,
in the event that
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the Fund Designee shall cease to serve as a director for any reason, the Company
shall use its reasonable best efforts to cause any vacancy resulting thereby to
be filled by another designee of the Fund, provided that such other designee
must be approved by the Company and such approval shall be in the sole and
absolute discretion of the Company.
The Additional Rights (as defined below) granted under this letter
shall be SUSPENDED during any period in which the Company's Board of Directors
includes a representative then currently designated by the Fund as described
above.
The Additional Rights granted under this letter shall CEASE if the Fund
shall fail to hold at least 600,000 shares of Common Stock (subject to
adjustments if the Company pays a dividend in shares of Common Stock or
distributes shares of Common Stock to the holders of Common Stock, subdivides or
combines the Common Stock).
Subject to the above limitations, the Fund shall have the following
rights (the "Additional Rights"): to make proposals, recommendations and
suggestions to the Company's officers and directors relating to the business and
affairs of the Company.
Our respective signatures below indicate our mutual assent to the terms
of this letter agreement as of the date set forth above.
Very truly yours,
AMBASSADORS GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
Agreed to and accepted:
INVEMED CATALYST FUND, L.P.
By: Invemed Catalyst GenPar, LLC,
its general partner
By: Gladwyne Catalyst GenPar, LLC,
its managing member
/s/ Xxxxxxx Present
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Name: Xxxxxxx Present
Title: Member
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