EXECUTION
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    EMPLOYMENT
      AGREEMENT

    


    EMPLOYMENT
      AGREEMENT
      (the
“Agreement”) effective as of the 1st
      day of
      January, 2008 between YTB
      INTERNATIONAL, INC., a
      Delaware corporation with principal executive offices located at 1901 East
      Edwardsville Road, Wood River, IL 62095 (the “Corporation”), and John Clagg,
      with an office at 1901 East Edwardsville Road, Wood River, IL 62095 (the
“Executive”).

    


    W
      I T N E S E T H:

    


    WHEREAS,
      the
      Corporation desires to employ the Executive as Chief Financial Officer and
      Treasurer of the Corporation, to engage in such activities and to render such
      services under the terms and conditions hereof and has authorized and approved
      the execution of this Agreement;

    


    WHEREAS,
      the
      Executive desires to be employed by the Corporation under the terms and
      conditions hereinafter provided; and

    


    WHEREAS,
      the
      Agreement constitutes the entire understanding and agreement between the Company
      and the Executive regarding its subject matter and supersedes all prior or
      contemporaneous negotiations and agreements, whether oral or written, between
      them with respect to such subject matter. 

    


    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and undertakings herein contained, the
      parties agree as follows:

    


    1. Employment,
      Duties and Acceptance.

    


    1.1 Services.
      The
      Corporation hereby employs Executive, for the Term (as hereinafter defined
      in
      Section 2 hereof), to render services to the business and affairs of the
      Corporation in the office referenced in the recitals hereof and, in connection
      therewith, shall perform such duties as directed by the Board of Directors
      of
      the Corporation and the Chief Executive Officer of the Corporation from time
      to
      time, in their reasonable discretion, and shall perform such other duties as
      shall be consistent with the responsibilities of such office (collectively
      the
“Services”). Executive shall perform activities related to such office as he
      shall reasonably be directed or requested to so perform by the Chief Executive
      Officer of the Corporation, to whom he shall report. Executive shall use his
      best efforts, skill and abilities to promote the interests of the Corporation
      and its subsidiaries. 

    


    1.2 Acceptance.
      Executive hereby accepts such employment and agrees to render the Services.
      Executive shall not engage in any other business activity or serve in any
      industry, trade, professional, governmental or academic position during the
      term
      of this Agreement. The Executive may request permission from the Board to engage
      in business activity unrelated to the business activity of the Corporation
      and
      may only do so if the Board expressly approves the request in advance in
      writing.

    


    
      
         

      

      
         

        
          

        

      

      
        
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    1.3 Representations
      of the Executive.
      The
      Executive represents and warrants to the Corporation that his execution and
      delivery of this Agreement, his performance of the Services hereunder and the
      observance of his other obligations contemplated hereby will not (i) violate
      any
      provisions of or require the consent or approval of any party to any agreement,
      letter of intent or other document to which he is a party or (ii) violate or
      conflict with any arbitration award, judgment or decree or other restriction
      of
      any kind to or by which he is subject or bound.

    


    2. Term
      of Employment. 

     

    The
      term
      of Executive’s employment under this Agreement (the “Term”) shall commence on
      January 1, 2008 (the “Commencement Date”) and shall terminate on December 31,
      2012 unless sooner terminated pursuant to Sections 9 or 5 of this Agreement;
      provided,
      however,
      if
      either party shall fail to give written notice of non-renewal not less than
      90
      days prior to the scheduled expiration or any extension of the Term hereof,
      the
      Term shall automatically be extended for an additional one (1) year period,
      at
      the then current Base Salary (as hereinafter defined). Notwithstanding anything
      to the contrary contained herein, the provisions of this Agreement governing
      Protection of Confidential Information shall continue in effect as specified
      in
      Section 10 hereof.

    


    3. Base
      Salary and Expense Reimbursement.

    


    3.1 Base
      Salary.
      During
      the Term, as full compensation for the Services, the Corporation agrees to
      pay
      Executive a base salary (“Base Salary”) at the annual rate of $300,000 for the
      period from January 1, 2008 to December 31, 2008, increasing annually thereafter
      on the anniversary date of the Commencement Date in the amount of $25,000 per
      year of the then current Base Salary (“Salary Increments”). Base Salary is
      subject to withholding and other applicable taxes, payable during the term
      of
      this Agreement in accordance with the Corporation’s customary payment practices,
      but not less frequently than monthly.

    


    3.2 Stock
      Option Agreement.
      In
      addition to the Base Salary the Executive shall on the Commencement Date be
      granted options to purchase up to 300,000 shares of the Corporation’s Class A
      Common Stock. Such option grant will be made under the Corporation’s 2004 Stock
      Option and Restricted Stock Plan (the “Plan”) and be evidenced by separate
      agreements. The per share option exercise price shall equal the fair market
      value of a share of Class A Common Stock as defined under the Plan on the
      Commencement Date. The stock options granted in this Section 3.2 will be
      composed of non-qualified stock options and Incentive Stock Options in the
      discretion of the Corporation’s Compensation Committee (“the Compensation
      Committee”).

    


    3.3 Business
      Expense Reimbursement.
      Upon
      submission to, and approval by an officer of the Corporation designated by
      the
      Board of Directors of the Corporation, of a statement of expenses, reports,
      vouchers or other supporting information, which approval shall be granted or
      withheld based on the Corporation’s policies in effect at such time, the
      Corporation shall promptly reimburse Executive for all reasonable business
      expenses actually incurred or paid by him during the Term or renewals thereof
      in
      the performance of the Services, including, but not limited to, expenses for
      entertainment, travel and similar items.

     

    
      
         

      

      
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    4. Bonuses.

     

    4.1 Bonus
      Amount.
      In order
      to provide performance-based incentive compensation to the Executive, the
      Corporation hereby agrees to pay the Executive, in addition to the Base Salary
      and Stock Options set forth in Section 3 hereof, a bonus in respect of each
      fiscal year during the Executive’s employment hereunder (the “Bonus”)
in
      the
      amount of two percent (2%) of the Net Pre-Tax Income (as defined below) of
      the
      Corporation. No Bonus shall be payable unless the
      Net
      Pre-Tax Income of the Corporation is at least $4,000,000 in each such fiscal
      year. The Bonus shall be paid in the form of a restricted stock award made
      under
      the Plan, and be evidenced by a separate written agreement. 

    


    4.2 Net
      Pre-Tax Income of the Corporation. For
      purposes hereof, the Net Pre-Tax Income of the Corporation shall be the amount
      determined by the Compensation Committee, after consultation with the
      independent accountants and Audit Committee of the Corporation, to be the Net
      Pre-Tax Income of the Corporation with respect to a given fiscal year, which
      amount shall be determined based on the financial statements of the Corporation
      (a) in a manner consistent with generally accepted accounting principles, (b)
      with regard solely to the Corporation and its subsidiaries, (c) so as to exclude
      the effect of any elimination of inter-company transfers applied with respect
      to
      any entity which is not a subsidiary of the Corporation, (d) having regard
      to
      such other matters, if any, as the Compensation Committee may determine to
      be
      equitable to consider and (e) without giving effect to any Bonus paid pursuant
      to this Section 4.2. The determination of the Compensation Committee of the
      Corporation shall be final, conclusive and binding for all purposes, absent
      manifest error. 

    


    4.3 Determination
      and Payment.
      The
      determination of the amount of Net Pre-Tax Income and the extent to which any
      Bonus under this Section 4 may be payable (the “Final Determination”)
shall
      be
      determined by the Compensation Committee in accordance with the terms hereof
      based on the audited financial statements of the Corporation and the criteria
      set forth herein with respect to each fiscal year. Such Final Determination
      with
      respect to any fiscal year shall be made promptly, and in any event within
      15
      days, after the Corporation has filed its Annual Report on Form 10-K for each
      year with the Securities and Exchange Commission.
      The
      Bonus
      shall be
      payable to the Executive in a
      restricted
      stock award of Class A Common Stock pursuant to the Plan no later than the
      date
      of the Final Determination in each year of this Agreement.
      In any
      event, all matters pertaining to the Bonus and to the payment of any Bonus
      to
      the Executive hereunder, shall be administered and determined by the
      Compensation Committee in its reasonable discretion consistent with the terms
      hereof, the determination of which shall be final, conclusive and binding for
      all purposes, absent manifest error.

    


    4.4 Partial
      Years.
      Notwithstanding anything contained herein to the contrary, no Bonus under this
      Section 4 shall be deemed earned or payable with respect to any fiscal year
      during which this Agreement or the Executive’s employment is terminated by the
      Corporation for Cause (as such term is hereinafter defined). 

    


    4.5 No
      Additional Rights.
      Nothing
      in this Section 4 shall be construed as conferring upon the Executive any right
      (i) normally associated with the ownership of capital stock; (ii) to
      continue in the employ of the Corporation or any affiliate of the Corporation;
      or (iii) to interfere in any way with the right of the Corporation to
      terminate this Agreement in accordance with the provisions hereof. Nothing
      in
      this Agreement shall be construed to imply that any specific assets of the
      Corporation have been set aside to provide for payments under this Agreement.
      Any payments under this Agreement shall be made solely from general assets
      of
      the Corporation existing at the time such payments are due.

    


    
      
         

      

      
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    5. Severance.

    


    5.1 Termination
      Without Cause. In
      the
      event that Executive’s employment hereunder shall be terminated by the
      Corporation without Cause (as defined in Section 9.4 hereof) at any time prior
      to the end of the Term, the Executive shall be entitled to receive from the
      Corporation, in addition to any Base Salary earned to the date of termination,
      severance pay in an amount equal to the Executive’s
      Base
      Salary payable for the remainder of the Term as if the Agreement had not been
      terminated. In
      the
      event of such termination, the amounts due hereunder shall be payable without
      offset or defense or any obligation of the Executive to mitigate damages.


    


    6. Additional
      Benefits.

    


    6.1 In
      General.
      In
      addition to the compensation, bonuses, expenses and other benefits to be paid
      under Sections 3, 4 and 5 hereof, Executive will be entitled to all rights
      and
      benefits for which he shall be eligible under any insurance, health and medical
      (including health and medical plans offered exclusively to the management of
      the
      Corporation), incentive, bonus, profit-sharing, pension
      or other extra compensation or “fringe” benefit plan of the Corporation or any
      of its subsidiaries now existing or hereafter adopted for the benefit of the
      executives or employees generally of the Corporation. The provisions of this
      Agreement which incorporate employee benefit packages shall change as and when
      such employee benefit packages change. 

    


    7. Vacation.

    


    7.1
       In
      General. The
      Executive shall be entitled each year during the Term of this Agreement to
      a
      vacation period of three (3) weeks, during which all salary, compensation,
      benefits and other rights to which the Executive is entitled to hereunder shall
      be provided in full. Such vacation may be taken in the Executive’s discretion,
      and such time or times as are not inconsistent with the reasonable business
      needs of the Corporation.

    


    8. Right
      to Insure.
      In the
      event that Executive is insurable, Executive agrees that the Corporation shall
      have the right during the Term to insure the life of Executive by a policy
      or
      policies of insurance in such amount or amounts as it may deem necessary or
      desirable, and the Corporation shall be the beneficiary of any such policy
      or
      policies and shall pay the premiums or other costs thereof. The Corporation
      shall have the right, from time to time, to modify any such policy or policies
      of insurance or to take out new insurance on the life of Executive. Executive
      agrees, upon request, at any time or times prior to the commencement of or
      during the Term to sign and deliver any and all documents and to submit to
      any
      physical or other reasonable examinations which may be required in connection
      with any such policy or policies of insurance or modifications
      thereof.

    


    
      
         

      

      
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    9. Termination.

    


    9.1 Death.
      If
      Executive dies during the Term of this Agreement, Executive’s employment
      hereunder shall terminate upon his death and all obligations of the Corporation
      hereunder shall terminate on such date, except that Executive’s estate or his
      designated beneficiary shall be entitled to payment of any unpaid accrued Base
      Salary through the date of his death. In addition, any accrued and unpaid Bonus
      shall be paid in accordance with Section 4 hereof.

    


    9.2 Disability.
      Subject
      to the provisions of Section 6.1, if Executive shall be unable to perform a
      significant part of his duties and responsibilities in connection with the
      conduct of the business and affairs of the Corporation and such inability lasts
      for (i) a period of at least one hundred twenty (120) consecutive days, or
      (ii)
      periods aggregating at least one hundred eighty (180) days during any three
      hundred sixty five (365) consecutive days, by reason of Executive’s physical or
      mental disability, whether by reason of injury, illness or similar cause,
      Executive shall be deemed disabled, and the Corporation any time thereafter
      may
      terminate Executive’s employment hereunder by reason of the disability. Upon
      delivery to Executive of such notice, all obligations of the Corporation
      hereunder shall terminate, except that Executive shall be entitled to the
      payment of any unpaid accrued Base Salary through the date of termination.
      In
      addition, any accrued and unpaid Bonus shall be paid in accordance with Section
      4 hereof. The obligations of Executive under Section 9 hereof shall continue
      notwithstanding termination of Executive’s employment pursuant to this Section
      9.2.

    


     

    9.3 Termination
      for Cause.
      The
      Corporation may at any time during the Term, without any prior notice, terminate
      this Agreement and discharge Executive for Cause, whereupon the Corporation’s
      obligation to pay compensation or other amounts payable hereunder to or for
      the
      benefit of Executive shall terminate on the date of such discharge. As used
      herein the term “Cause” shall mean: (i) a willful and material breach by
      Executive of the terms of this Agreement, (ii) willful violation of specific
      and
      lawful written direction from the Board of Directors of the Corporation or
      the
      Chief Executive Officer; provided such direction is not inconsistent with the
      Executive’s duties and responsibilities the Executive is holding at the time of
      the directive; (iii) fraud, embezzlement or other material dishonesty by the
      Executive with respect to the Corporation or any of its Affiliates; (iv)
      conviction of the Executive of a felony by a federal or state court of competent
      jurisdiction; (v) Executive’s willful failure to perform (other than by reason
      of disability), or gross negligence in the performance of the Services; or
      (vi)
      Executive’s excessive absenteeism, alcoholism or drug abuse. The obligations of
      the Executive under Section 10 shall continue notwithstanding termination of
      the
      Executive’s employment pursuant to this Section 9.3. 

     

    9.4 Termination
      Without Cause.
      The
      Corporation shall have the option to terminate this Agreement without Cause
      upon
      ninety (90) days written notice to the Executive. In the event the Corporation
      terminates this Agreement without Cause as defined above, the Corporation shall
      pay the Executive upon termination, the amount required pursuant to Section
      5.1.
      The obligations of the Executive under Section 10 hereof shall continue
      notwithstanding termination of the Executive’s employment pursuant to this
      Section 9.4.

    


    
      
         

      

      
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    9.5 Post
      Agreement Employment.
      In the
      event Executive remains in the employ of the Corporation following termination
      of this Agreement, by the expiration of the Term or otherwise, then such
      employment shall be at will.

     

    10. Protection
      of Confidential Information; Intellectual Property.

    


    In
      view
      of the fact that Executive’s work for the Corporation will bring him into close
      contact with confidential information and plans for future developments,
      Executive agrees to the following:

    


    10.1 Secrecy.
      To keep
      secret and retain in the strictest confidence all confidential matters of the
      Corporation, including, without limitation, trade “know how” and trade secrets,
      customer lists, pricing policies, marketing plans, technical processes,
      formulae, inventions and research projects, and other business affairs of the
      Corporation, learned by him heretofore or hereafter, and not to disclose them
      to
      anyone inside or outside of the Corporation, except in the course of performing
      the Services hereunder or with the express written consent of the Chief
      Executive Officer or Board of Directors of the Corporation and except to the
      extent such information is already known to the general public.

    


    10.2 Return
      Memoranda, etc.
      To
      deliver promptly to the Corporation on termination of his employment, or at
      any
      other time as the Chief Executive Officer or the Board of Directors of the
      Corporation may so request, all memoranda, notes, records, reports, manuals,
      drawings, blueprints and other documents (and all copies thereof) relating
      to
      the Corporation’s business and all property associated therewith, which he may
      then possess or have under his control.

    


    10.3 Covenants.

    


    10.3.1 Non-competition.
      Executive agrees that at all times while he is employed by the Corporation
      and,
      regardless of the reason for termination of his employment or this Agreement,
      for a period of two (2) years thereafter, he will not, as a principal, agent,
      employee, employer, consultant, stockholder, investor, director or co-partner
      of
      any person, firm, corporation or business entity other than the Corporation,
      or
      in any individual or representative capacity whatsoever, directly or indirectly,
      without the express prior written consent of the Corporation:

    


    (i) engage
      or
      participate in any business whose products or services are competitive with
      that
      of the Corporation, which business is the sale of travel and sale support
      services to the travel industry, and which conducts or solicits business, or
      transacts with supplier or customers located within the United States or Puerto
      Rico;

    


    (ii) aid
      or
      counsel any other person, firm, corporation or business entity to do any of
      the
      above;

    


    
      
         

      

      
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    (iii) become
      employed by a firm, corporation, partnership or joint venture which competes
      with the business of the Corporation within the United States or Puerto Rico;
      or

    


    (iv) approach,
      solicit business from, or otherwise do business or deal with any customer of
      the
      Corporation in connection with any product or service competitive to any
      provided by the Corporation. 

    


    10.3.2 Anti-Raiding.
      Executive agrees that during the term of his employment hereunder, and,
      thereafter for a period of two (2) years, he will not, as a principal, agent,
      employee, employer, consultant, director or partner of any person, firm,
      corporation or business entity other than the Corporation, or in any individual
      or representative capacity whatsoever, directly or indirectly, without the
      prior
      express written consent of the Corporation approach, counsel or attempt to
      induce any person who is then in the employ of the Corporation to leave the
      employ of the Corporation or employ or attempt to employ any such person or
      persons who at any time during the preceding six months was in the employ of
      the
      Corporation.

    


    10.3.3 Executive’s
      Acknowledgements.
      Executive acknowledges (i) that his position with the Corporation requires
      the
      performance of services which are special, unique, and extraordinary in
      character and places him in a position of confidence and trust with the
      customers and employees of the Corporation, through which, among other things,
      he shall obtain knowledge of the Corporation’s “technical information” and
“know-how” and become acquainted with its customers, in which matters the
      Corporation has substantial proprietary interests; (ii) that the restrictive
      covenants set forth above are necessary in order to protect and maintain such
      proprietary interests and the other legitimate business interests of the
      Corporation; and (iii) that the Corporation would not have entered into this
      Agreement unless such covenants were included herein. Executive also
      acknowledges that the business of the Corporation presently will extend
      throughout the United States and Puerto Rico, and that he will personally
      supervise and engage in such business on behalf of Corporation and, accordingly,
      it is reasonable that the restrictive covenants set forth above are not more
      limited as to geographic area then is set forth therein. Executive also
      represents to the Corporation that the enforcement of such covenants will not
      prevent Executive from earning a livelihood or impose an undue hardship on
      the
      Executive.

    


    10.3.4 Assignment
      of Rights to Intellectual Property.
      Executive shall promptly and fully disclose all Intellectual Property to the
      Corporation. Executive hereby assigns and agrees to assign to the Corporation
      (or as otherwise directed by the Corporation) Executive’s full right, title and
      interest in and to all Intellectual Property. Executive agrees to execute any
      and all applications for domestic and foreign patents, copyrights or other
      proprietary rights and to do such other acts (including without limitation
      the
      execution and delivery of instruments of further assurance or confirmation)
      requested by the Corporation to assign the Intellectual Property to the
      Corporation and to permit the Corporation to enforce any patents, copyrights
      or
      other proprietary rights to the Intellectual Property. Executive will not charge
      the Corporation for time spent, although the Corporation will reimburse
      Executive for any expenses Executive reasonably incurs, in complying with these
      obligations. All copyrightable works that Executive creates shall be considered
      “work made for hire”. “Intellectual Property” means inventions, discoveries,
      developments, methods, processes, compositions, works, concepts and ideas
      (whether or not patentable or copyrightable or constituting trade secrets)
      conceived, made, created, developed or reduced to practice by Executive (whether
      alone or with others, whether or not during normal business hours or on or
      off
      Corporation premises) during Executive’s employment that relate to either the
      Products or any prospective activity of the Corporation under active
      consideration. “Products” means all products planned, researched, developed,
      tested, manufactured, sold, licensed, leased or otherwise distributed or put
      into use by the Corporation or any of its Affiliates, together with all services
      provided or planned by the Corporation, during Executive’s
      employment.

    


    
      
         

      

      
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    10.4 Severability.
      If any
      of the provisions of this Section 10, or any part thereof, is hereinafter
      construed to be invalid or unenforceable, the same shall not affect the
      remainder of such provision or provisions, which shall be given full effect,
      without regard to the invalid portions. If any of the provisions of this Section
      10, or any part thereof, is held to be unenforceable because of the duration
      of
      such provision, the area covered thereby or the type of conduct restricted
      therein, the parties agree that the court making such determination shall have
      the power to modify the duration, geographic area and/or other terms of such
      provision and, as so modified, said provision(s) shall then be enforceable.
      In
      the event that the courts of any one or more jurisdictions shall hold such
      provisions wholly or partially unenforceable by reason of the scope thereof
      or
      otherwise, it is the intention of the parties hereto that such determination
      not
      bar or in any way affect the Corporation’s right to the relief provided for
      herein in the courts of any other jurisdictions as to breaches or threatened
      breaches of such provisions in such other jurisdictions, the above provisions
      as
      they relate to each jurisdiction being, for this purpose, severable into diverse
      and independent covenants.

    


    10.5 Injunctive
      Relief.
      Executive acknowledges and agrees that, because of the unique and extraordinary
      nature of his services, any breach or threatened breach of the provisions of
      Sections 10.1, 10.2, or 10.3 hereof will cause irreparable injury and
      incalculable harm to the Corporation, and the Corporation shall, accordingly,
      be
      entitled to injunctive and other equitable relief for such breach or threatened
      breach and that resort by the Corporation to such injunctive or other equitable
      relief shall not be deemed to waive or to limit in any respect any right or
      remedy which the Corporation may have with respect to such breach or threatened
      breach. The Corporation and Executive agree that any such action for injunctive
      or equitable relief shall be heard in a state or federal court situate in New
      Jersey and each of the parties hereto, hereby agrees to accept service of
      process by registered mail and to otherwise consent to the jurisdiction of
      such
      courts.

    


    10.6 Expenses
      of Enforcement of Covenants.
      In the
      event that any action, suit or proceeding at law or in equity is brought to
      enforce the covenants contained in Sections 10.1, 10.2, or 10.3 hereof or to
      obtain money damages for the breach thereof, the party prevailing in any such
      action, suit or other proceeding shall be entitled upon demand, to reimbursement
      from the other party for all expenses (including, without limitation, reasonable
      attorneys’ fees and disbursements) incurred in connection
      therewith.

    


    10.7 Section
      16(a). Executive
      acknowledges that he is an insider under Section 16(a) of the Exchange Act
      due
      to his status as an officer of the Corporation. Executive acknowledges he is
      aware of and agrees to comply with the Exchange Act requirements pertaining
      to
      insiders by reporting to the Securities and Exchange Commission (the “SEC”) on
      Form 4 any transactions involving equity securities of the Corporation within
      two business days following the day on which the transaction is
      executed.

    


    
      
         

      

      
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    10.8 Separate
      Agreement.
      The
      provisions of this Section 10 shall be construed as an agreement on the part
      of
      the Executive independent of any other part of this Agreement or any other
      agreement, and the existence of any claim or cause of action of the Executive
      against the Corporation, whether predicated on this Agreement or otherwise,
      shall not constitute a defense to the enforcement by the Corporation of the
      provisions of this Section 9.

    


    11. Indemnification.

    


    The
      Corporation shall provide the Executive (including his heirs, executors and
      administrators) with coverage under a standard directors and officer’s liability
      insurance policy at the Corporation’s expense to the same extent as provided for
      any other director, officer or trustee of the Corporation. In addition, the
      Corporation shall indemnify the Executive (and his heirs, executors and
      administrators) to the fullest extent permitted under the law of its state
      of
      incorporation against all expenses and liabilities reasonably incurred by him
      in
      connection with or arising out of any action, suit or proceeding in which the
      Executive may be involved by reason of his having been a director or officer
      of
      the Corporation or any subsidiary thereof. Such expenses and liabilities shall
      include, but not be limited to, judgments, court costs and attorneys’ fees and
      the cost of reasonable settlements, such settlements to be approved by the
      Board
      if such action is brought against the Executive in his capacity as a director
      or
      officer of the Corporation or any subsidiary thereof. The Corporation shall,
      upon the request of the Executive, advance to the Executive such amounts as
      necessary to cover expenses, including without limitation legal fees and
      expenses, incurred by the Executive in connection with any suit or proceeding
      in
      which the Executive may be involved by reason of his being or having been a
      director or officer of the Corporation or of any subsidiary thereof. Such
      indemnity and advance of expenses, however, shall not extend to matters as
      to
      which the Executive is finally adjudged to be liable for willful misconduct
      in
      the performance of his duties.

    


    12. Arbitration.
      

    


    Except
      with respect to any proceeding brought under Section 10 hereof, any controversy,
      claim, or dispute between the parties, directly or indirectly, concerning this
      Employment Agreement or the breach hereof, or the subject matter hereof,
      including questions concerning the scope and applicability of this arbitration
      clause, shall be finally settled by arbitration in Madison County, Illinois,
      pursuant to the rules then applying of the American Arbitration Association.
      The
      arbitrators shall consist of one representative selected by the Corporation,
      one
      representative selected by the Executive and one representative selected by
      the
      first two arbitrators. The parties agree to expedite the arbitration proceeding
      in every way, so that the arbitration proceeding shall be commenced within
      thirty (30) days after request therefore is made, and shall continue thereafter,
      without interruption, and that the decision of the arbitrators shall be handed
      down within thirty (30) days after the hearings in the arbitration proceedings
      are closed. The arbitrators shall have the right and authority to assess the
      cost of the arbitration proceedings and to determine how their decision or
      determination as to each issue or matter in dispute may be implemented or
      enforced. The decision in writing of any two of the arbitrators shall be binding
      and conclusive on all of the parties to this Agreement. Should either the
      Corporation or the Executive fail to appoint an arbitrator as required by this
      Section 12 within thirty (30) days after receiving written notice from the
      other
      party to do so, the arbitrator appointed by the other party shall act for all
      of
      the parties and his decision in writing shall be binding and conclusive on
      all
      of the parties to this Employment Agreement. Any decision or award of the
      arbitrators shall be final and conclusive on the parties to this Agreement;
      judgment upon such decision or award may be entered in any competent Federal
      or
      state court located in the United States of America; and the application may
      be
      made to such court for confirmation of such decision or award for any order
      of
      enforcement and for any other legal remedies that may be necessary to effectuate
      such decision or award.

    


    
      
         

      

      
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    13. Notices.

    


    All
      notices, requests, consents and other communications required or permitted
      to be
      given hereunder, shall be in writing and shall be deemed to have been duly
      given
      if delivered personally or sent by prepaid telegram, telecopy or mailed first
      class, postage prepaid, by registered or certified mail (notices sent by
      telegram or mailed shall be deemed to have been given on the date sent), to
      the
      parties at their respective addresses hereinabove set forth or to such other
      address as either party shall designate by notice in writing to the other in
      accordance herewith.

    


    14. General.

    


    14.1 Governing
      Law.
      This
      Agreement shall be governed by and construed and enforced in accordance with
      the
      local laws of the State of Delaware.

    


    14.2 Captions.
      The
      section headings contained herein are for reference purposes only and shall
      not
      in any way affect the meaning or interpretation of this Agreement.

    


    14.3 Entire
      Agreement.
      This
      Agreement sets forth the entire agreement and understanding of the parties
      relating to the subject matter hereof, and supersedes all prior agreements,
      arrangements and understandings, written or oral, relating to the subject matter
      hereof. No representation, promise or inducement has been made by either party
      that is not embodied in this Agreement, and neither party shall be bound by
      or
      liable for any alleged representation, promise or inducement not so set
      forth.

    


    14.4 Severability.
      If any
      of the provisions of this Agreement shall be unlawful, void, or for any reason,
      unenforceable, such provision shall be deemed severable from, and shall in
      no
      way affect the validity or enforceability of, the remaining portions of this
      Agreement.

    


    14.5 Waiver.
      The
      waiver by any party hereto of a breach of any provision of this Agreement by
      any
      other party shall not operate or be construed as a waiver of any subsequent
      breach of the same provision or any other provision hereof.

    


    
      
         

      

      
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    14.6 Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which taken together shall constitute one and
      the
      same Agreement.

    


    14.7 Assignability.
      This
      Agreement, and Executive’s rights and obligations hereunder, may not be assigned
      by Executive. The Corporation may assign its rights, together with its
      obligations, hereunder in connection with any sale, transfer or other
      disposition of all or substantially all of its business or assets; in any event
      the rights and obligations of the Corporation hereunder shall be binding on
      its
      successors or assigns, whether by merger, consolidation or acquisition of all
      or
      substantially all of its business or assets. This Agreement shall inure to
      the
      benefit of, and be binding upon, the Executive and his executors,
      administrators, heirs and legal representatives.

    


    14.8 Amendment.
      This
      Agreement may be amended, modified, superseded, cancelled, renewed or extended
      and the terms or covenants hereof may be waived, only by a written instrument
      executed by both of the parties hereto, or in the case of a waiver, by the
      party
      waiving compliance. No superseding instrument, amendment, modification,
      cancellation, renewal or extension hereof shall require the consent or approval
      of any person other than the parties hereto. The failure of either party at
      any
      time or times to require performance of any provision hereof shall in no matter
      affect the right at a later time to enforce the same. No waiver by either party
      of the breach of any term or covenant contained in this Agreement, whether
      by
      conduct or otherwise, in any one or more instances, shall be deemed to be,
      or
      construed as, a further or continuing waiver of any such breach, or a waiver
      of
      the breach of any other term or covenant contained in this
      Agreement.

    


    
      
         

      

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

    


    
      	ATTEST:	 	YTB INTERNATIONAL,
              INC.
	 	 	 	 	 
	By:	 	 	By:	 
	 	
              

            	 	 	
              
                

              

              J. Lloyd Tomer, Chairman
                of the Board of Directors

            
	 	 	 	 	 
	 	 	 	 
	ATTEST:	 	EXECUTIVE


    

     

     

    
      
        	 	 	 	 	 
	 	
                

              	 	 	
                
                  

                

                
                  John
                    Clagg, Individually

                

              


      

       

       

      
        
           

        

        
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