Travelzoo 2003 Annual Report Download - page 13

(1) The options issued to Mr. Bartel during 2001 and 2002 constitute compensation for participation on the
Board of Directors.
Employment Agreements
Ralph Bartel has entered into an employment agreement with us. His current employment agreement
became eÅective on July 1, 2003, and provides for an annual salary of $200,000. We may terminate the
agreement with or without cause by delivering two weeks' advance written notice to Mr. Bartel. He may
terminate his employment agreement with or without cause by delivering two weeks' advance written notice to
us.
Mr. Bartel has agreed not to compete with us, solicit our suppliers or employees or reveal our conÑdential
information during the term of his employment agreement and for one year thereafter. In addition, Mr. Bartel
is bound by a proprietary inventions agreement which prohibits him from, among other things, disseminating
or using conÑdential information about our business or clients in any way that would be adverse to us.
Certain Transactions
On October 22, 2003, we entered into an underwriting agreement with Mr. Bartel and with Wedbush
Morgan Securities, Inc., relating to the secondary oÅering through Wedbush Morgan of up to 402,500 shares
of common stock of the company held by Mr. Bartel. The oÅering was intended primarily to allow Travelzoo
to satisfy the requirement for listing on the NASDAQ SmallCap Market that it have at least 300 round lot
holders of its common stock. Because of the anticipated beneÑt to the Company and its stockholders of such
listing, the Board of Directors of the Company approved the payment by the Company of the expenses of the
oÅering, in the amount of approximately $328,000, consisting primarily of legal and accounting fees. Following
completion of such oÅering, the common stock of Travelzoo was admitted to the NASDAQ SmallCap market
on December 30, 2003. Mr. Bartel paid the underwriting discount relating to the sale of his shares.
Option Grants in Last Fiscal Year
No options were granted to our executive oÇcers during Ñscal year 2003.
Option Exercises and Year-End Values
The following table contains information concerning options exercised by our executive oÇcers during
Ñscal year 2003 and unexercised options held on December 31, 2003:
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options/
Shares Acquired Value Options/SARS at FY-End(#) SARs at FY-End($)(1)
Name on Exercise Realized($) Exercisable/Unexercisable Exercisable/Unexercisable
Ralph Bartel ÏÏÏÏÏ Ì Ì 2,193,349/0 $17,766,127/$0
(1) Calculated by (A) determining the diÅerence between (1) the average of the high and low trading prices
per share of Travelzoo's common stock on December 31, 2003 and (2) the exercise price of the option
and (B) multiplying such diÅerence by the total number of shares under option, net of the aggregate
value of all option exercise proceeds.
Stock Option Plan
We do not currently have any stock option plan or other equity based compensation plans in eÅect.
Report of the Compensation Committee on Executive Compensation
The Compensation Committee consists of two directors, one of whom is an independent director.
Mr. Bartel does not participate in the committee's decision as to his speciÑc compensation package. The
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