Travelzoo 2009 Annual Report Download - page 21

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.
Mr. Christopher Loughlin entered into an employment agreement with the Company on May 16, 2005, as
amended on July 12, 2006 and further amended on August 13, 2007. The initial term of the agreement is from
May 16, 2005 to June 30, 2010. During the initial term, the Company can terminate the agreement for cause (as
defined in the agreement) without any severance obligations. The Company can also terminate the agreement
without cause by making a payment equal to the amount of base salary that Mr. Loughlin would be entitled to
receive during the balance of the initial term or any notice period. Assuming that Mr. Loughlin was terminated by
the Company without cause as of December 31, 2009, Mr. Loughlin would have been entitled to receive $165,626.
Mr. Loughlin is paid a base salary and is entitled to certain annual and quarterly bonuses. See Components of
Executive Compensation — Other Incentive Bonus Pay above for a description of such bonuses. Mr. Loughlin is
also eligible to participate in the Company’s UK Employee Pension Contribution Program, pursuant to which the
Company contributes 7% of his base salary to the pension. Mr. Loughlin is also entitled to participate in any private
health insurance scheme that may be arranged by the Company for its executives.
Mr. Loughlin agreed to not, directly or indirectly, engage or become interested in any business competitive
with the Company during the term of the agreement. In addition, Mr. Loughlin agreed to not, directly or indirectly,
solicit any of the Company’s customers or perform services for, or engage in, any business competitive with the
Company for a period for six months after the termination of his employment. Mr. Loughlin also agreed that the
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.
On November 18, 2009, Mr. Loughlin entered into an employment agreement with the Company, pursuant to
which he will become the Company’s Chief Executive Officer. The agreement is effective beginning on July 1, 2010
and will have a four-year term. The Company may terminate the agreement, with or without cause, upon written
notice to Mr. Loughlin.
Mr. Loughlin will be paid a base salary and will be 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 will provide relocation assistance and a housing
allowance to Mr. Loughlin in connection with his move from London to New York City. Mr. Loughlin will also be
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.
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, 2009 following a change of control of the Company, Ms. Tafoya would have been
entitled to receive $259,005 and the Company would incur additional expenses for medical benefits of approx-
imately $9,275.
Ms. Tafoya is paid a base salary and from January 1, 2007 to June 30, 2008 was 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
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