Travelzoo 2010 Annual Report Download - page 24

Employment Agreements and Potential Payments Upon Termination or Change-in-Control
The Company has employment agreements with its named executive officers and certain other employees. The
employment agreements as of December 31, 2010 with the Company’s named executive officers are described
below.
Mr. Loughlin entered into an employment agreement with the Company on November 18, 2009, pursuant to
which he became the Company’s Chief Executive Officer on July 1, 2010. The agreement has a four-year term. The
Company may terminate the agreement, with or without cause, upon written notice to Mr. Loughlin. However, if
Mr. Loughlin’s employment is terminated at any time without cause or if Mr. Loughlin’s employment is terminated
at any time due to a change of control (as defined in the agreement) or if he is not offered a position of comparable
pay and responsibilities in the same geographic area in which he worked immediately prior to a change of control,
Mr. Loughlin will be entitled to receive his base salary and medical benefits for a twelve month period in exchange
for executing a general release of claims as to the Company. Assuming that Mr. Loughlin was terminated by the
Company as of December 31, 2010 without cause, Mr. Loughlin would have been entitled to receive $550,000 and
the Company would incur additional expenses for medical benefits of approximately $19,800.
Mr. Loughlin is paid a base salary and is eligible to certain annual and quarterly bonuses. In connection with
the agreement, on November 18, 2009 the Company granted Mr. Loughlin options to purchase 300,000 shares of the
Company’s common stock. The Company provided relocation assistance and is providing a housing allowance to
Mr. Loughlin in connection with his move from London to New York City. Mr. Loughlin is also entitled to
participate in or receive such benefits under the Company’s employee benefit plans and policies and such other
benefits which may be in effect from time to time and as are provided to similarly situated employees of the
Company.
Mr. Loughlin agreed that the Company will own any discoveries and work product (as defined in the
agreement) made during the term of his employment and to assign all of his interest in any and all such discoveries
and work product to the Company. Furthermore, Mr. Loughlin agreed not to, directly or indirectly, perform services
for, or engage in, any business competitive with the Company or solicit the Company’s customers or employees
during the term of his employment and for a period of one year thereafter.
Mr. Wayne Lee entered into an employment agreement with the Company on December 9, 2005 as amended
on September 23, 2008. Pursuant to the terms of the agreement, Mr. Lee is an at-will employee and the Company or
Mr. Lee may terminate the agreement, with or without cause, upon two weeks prior written notice. Mr. Lee is not
entitled to receive any severance or change of control benefits under the terms of the agreement. Mr. Lee is paid a
base salary and is eligible to receive a quarterly Performance Bonus and a quarterly Discretionary Bonus (as defined
in the agreement). In addition, Mr. Lee is entitled to participate in or receive such benefits under the Company’s
employee benefits plans and policies as may be in effect from time to time.
Mr. Lee agreed that the Company will own any discoveries and work product (as defined in the agreement)
made during the term of his employment and to assign all of his interest in any and all such discoveries and work
product to the Company. Furthermore, Mr. Lee agreed to not, directly or indirectly, perform services for, or engage
in, any business competitive with the Company or solicit the Company’s customers or employees during the term of
his employment and for a period of one year thereafter.
Ms. Shirley Tafoya entered into an employment agreement with the Company on August 4, 2010. Pursuant to
the terms of the agreement, Ms. Tafoya is an at-will employee and the Company or Ms. Tafoya may terminate the
agreement, with or without cause, with or without notice. However, if Ms. Tafoya’s employment is terminated at
any time without cause, Ms. Tafoya will be entitled to receive her base salary for a twelve month period in exchange
for executing a general release of claims as to the Company. Assuming that Ms. Tafoya was terminated by the
Company as of December 31, 2010 without cause, Ms. Tafoya would have been entitled to receive $530,000. If
Ms. Tafoya’s employment is terminated at any time due to a change of control (as defined in the agreement) or if she
is not offered a position of comparable pay and responsibilities in the same geographic area in which she worked
immediately prior to a change of control, Ms. Tafoya will be entitled to receive her base salary and medical benefits
for a twelve month period in exchange for executing a general release of claims as to the Company. Assuming that
Ms. Tafoya was terminated by the Company as of December 31, 2010 following a change of control of the
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