Travelzoo 2008 Annual Report Download - page 20

Company will own any inventions or intellectual property created during the term of his employment and to assign
all of his interest in any such intellectual property to the Company.
Ms. Shirley Tafoya entered into an employment agreement with the Company on May 8, 2001. 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, upon two weeks prior written notice. However, 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 six 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, 2008 following a change of control of the Company, Ms. Tafoya would be entitled
to receive $259,005 and the Company would incur additional expenses for medical benefits of approximately
$8,748.
Ms. Tafoya is paid a base salary and is eligible to participate in the Company’s Executive Bonus Plan. Prior to
April 1, 2007, Ms. Tafoya also received a 1.0% commission on net advertising revenues (as defined in the
agreement) generated from the sales of advertising on the Travelzoo Web site and the Top 20 newsletter; such
commission is capped at $42,878, 1.0% of the Company’s net advertising revenues in the second quarter of 2003. In
addition, Ms. Tafoya 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.
Ms. Tafoya agreed that the Company will own any discoveries and work product (as defined in the agreement)
made during the term of her employment and to assign all of her interest in any and all such discoveries and work
product to the Company. Furthermore, Ms. Tafoya agreed to not, directly or indirectly, solicit the Company’s
customers or employees during the term of her employment and for a period of one year thereafter.
Mr. Max Rayner entered into an employment agreement with the Company on November 5, 2007 as amended
on September 23, 2008. The term of the agreement is from November 5, 2007 to June 4, 2009, after which time
Mr. Rayner is an at-will employee. However, Mr. Rayner 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 (as defined
in the agreement), and Mr. Rayner resigns within thirty calendar days after the change in control, Mr. Rayner 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. Rayner was terminated by the Company as of
December 31, 2008 following a change of control of the Company, Mr. Rayner would be entitled to receive
$450,000 and the Company would incur additional expenses for medical benefits of approximately $16,527.
Mr. Rayner 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. Rayner 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. Rayner 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. Rayner agreed to not, directly or indirectly, solicit the Company’s
customers or employees during the term of his employment and for a period of one year thereafter.
Certain Relationships and Related Party Transactions
The Company maintains policies and procedures to ensure that our directors, executive officers and employees
avoid conflicts of interest. Our Chief Executive Officer, Chief Financial Officer and Controller are subject to our
Code of Ethics and each signs the policy to ensure compliance. Our Code of Ethics requires our leadership to act
with honesty and integrity, and to fully disclose to the Audit Committee any material transaction that reasonably
could be expected to give rise to an actual or apparent conflict of interest. The Code of Ethics requires that our
leadership obtain the prior written approval of the Audit Committee before proceeding with or engaging in any
conflict of interest.
Our Audit Committee Charter further provides that the Audit Committee will review all related party
transactions and potential conflict of interest situations involving the Company’s principal stockholders, directors
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