Travelzoo 2010 Annual Report Download - page 16

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From January 1, 2007 through June 30, 2008, the participating executives were eligible to receive a bonus of
$50,000 per quarter upon the attainment of all of the following goals as set forth in the Company’s operating budget:
• 100% of Revenue target;
• 100% of Pro Forma Operating Income target;
• 100% of the U.S. Top 20 Subscribers target;
• 100% of the Canada Top 20 Subscribers 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.
If one or more of the above targets were not met, the participating executives were eligible to receive a bonus of
$25,000 per quarter upon attainment of all of the following goals as set forth in the Company’s operating budget:
• 98% of Revenue target;
• 90% of Pro Forma Operating Income target;
• 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 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 quarterly targets were not met
for the first and second quarters of 2008 and no bonuses were paid to the participating executives. The
North America Executive Bonus Plan was discontinued as of the end of the second quarter of 2008.
Other Incentive Bonus Pay. In 2008, 2009 and 2010, Mr. Christopher Loughlin, Mr. Holger Bartel,
Mr. Wayne Lee, Mr. Max Rayner, and Ms. Shirley Tafoya also received incentive bonuses pursuant to the
terms of their employment agreements.
Pursuant to the terms of Mr. Loughlin’s previous employment agreement dated May 16, 2005, as amended on
July 12, 2006 and as amended on July 1, 2007, Mr. Loughlin was eligible to receive quarterly and annual bonuses.
Mr. Loughlin’s bonuses were payable in British pounds and have been translated into U.S. dollars (at the rate of
£1 = $1.54431) for the purposes of this summary. Mr. Loughlin was eligible to receive the following quarterly
bonuses:
Criteria
Quarterly Bonus
Payment
Revenue goal as defined in the official budget for Europe is met .............. $ 11,582
Net income goal as defined in the official budget for Europe is met ............ $ 11,582
Subscriber goal as defined in the official budget for Europe is met ............. $ 11,582
Performance evaluation by the Chairman of the Company ................... Upto$11,582
Total maximum bonus per quarter . .................................... Upto$46,328
Under the terms of the annual bonus plan set forth in Mr. Loughlin’s pervious employment agreement,
Mr. Loughlin was eligible to receive 10% of Travelzoo Europe’s pro forma operating income generated from
operations in the U.K., Germany and France from January 1, 2010 to June 30, 2010. The quarterly net income goal
was met for the first quarter of 2010. Mr. Loughlin was paid 100% of his quarterly performance evaluation bonus for
the first and second quarters of 2010. In determining the quarterly performance evaluation bonus for the first and
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