Travelzoo 2007 Annual Report Download - page 17

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• Within 50,000 subscribers of achieving the U.S. Top 20 Subscribers target or exceeding the target;
• Within 25,000 subscribers of achieving the Canada Top 20 Subscribers target or exceeding the target; and
• There are not more than two customers that account for 10% or more of the Company’s worldwide
consolidated revenues for the quarter and no single customer accounts for more than 17% of the Company’s
worldwide consolidated revenues for the quarter.
The Company’s Annual Operating Budget relates to the Company’s operations in North America, is set at the
beginning of the year by the CEO and provides quarterly targets for revenues, operating expenses, operating
income, net income, subscribers, headcount, and other financial and non-financial performance metrics. The
Company reserves the right to amend the Annual Operating Budget at any time and for any reason. The second set of
quarterly targets were met for the first quarter of 2007 and a $25,000 bonus was paid in April 2007 to the
participating executives. The quarterly targets were not met for the second, third and fourth quarters of 2007 and no
bonuses were paid to the participating executives.
Other Incentive Bonus Pay. In 2007, Mr. Christopher Loughlin, Ms. Shirley Tafoya, Mr. Raymond Ng, and
Mr. Jason Yap also received incentive bonuses pursuant to the terms of their employment agreements.
Prior to April 1, 2007. pursuant to the terms of Ms. Tafoya’s employment agreement dated May 8, 2001, as
amended, Ms. Tafoya received a quarterly commission equal to 1.0% of the Company’s net advertising revenues
generated from the sales of advertising on the Travelzoo Web site and the Top 20 newsletter. The commission is
capped at $42,878, 1.0% of the Company’s net advertising revenues in the second quarter of fiscal year 2003. In
2007, Ms. Tafoya received a commission of $42,878 for the first quarter of 2007, which represented the maximum
capped amount of the commission.
Pursuant to the terms of Mr. Loughlin’s employment agreement dated May 16, 2005, as amended July 12, 2006
and as amended July 1, 2007, Mr. Loughlin is eligible to receive quarterly and annual bonuses. Mr. Loughlin’s
bonuses are payable in British pounds and have been translated into U.S. dollars for the purposes of this summary.
Mr. Loughlin is eligible to receive the following quarterly bonuses:
Criteria
Quarterly Bonus
Payment
Revenue goal as defined in the official budget for Europe is met ..................... $ 15,014
Net income goal as defined in the official budget for Europe is met ................... $ 15,014
Subscriber goal as defined in the official budget for Europe is met .................... $ 15,014
Performance evaluation by the Chairman of the Company........................... Upto$15,014
Total .................................................................. Upto$60,056
Under the terms of the annual bonus plan set forth in Mr. Loughlin’s employment agreement, Mr. Loughlin is
eligible to receive 20% of Travelzoo Europe’s pro forma operating income generated from operations in Europe and
such amount is not capped. In 2007, Mr. Loughlin received $105,096 and $65,003 pursuant to the quarterly and
annual bonus plans, respectively, set forth in his employment agreement.
Pursuant to the terms of Mr. Ng’s employment agreement dated February 5, 2007, Mr. Ng is eligible to receive
quarterly bonuses and a guaranteed annual bonus. Mr. Ng’s bonuses are payable in Hong Kong dollars and have
been translated into U.S. dollars for the purposes of this summary. Mr. Ng is eligible to receive the following
quarterly bonuses:
Criteria
Quarterly Bonus
Payment
Revenue goal as defined in official budget for Relevant Territory is met ................ $ 7,503
Operating income goal as defined in official budget for Relevant Territory is met ......... $ 7,503
Subscriber goal as defined in the official budget for Relevant Territory is met ............ $ 7,503
Performance evaluation by the CEO of Travelzoo Inc. . . . .......................... Upto$7,503
Total .................................................................. Upto$30,012
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