Travelzoo 2009 Annual Report Download - page 84

The agreements with these customers are in the form of multiple insertion orders from groups of entities under
common control, in either the Company’s standard form or in the customer’s form.
(9) Employee Benefit Plan
The Company maintains a 401(k) Profit Sharing Plan & Trust (the “401(k) Plan”) for its employees in the
United States. The 401(k) Plan allows employees of the Company to contribute up to 80% of their eligible
compensation, subject to certain limitations. Since 2006, the Company matches employee contributions up to
$1,500 per year. Employee contributions are fully vested upon contribution, whereas the Company’s matching
contributions are fully vested after the first year of service. The Company also has various defined contribution
plans for our international employees. The Company’s contributions to these benefit plans were approximately
$705,000, $420,000 and $111,000 for the years ended December 31, 2009, December 31, 2008 and December 31,
2007, respectively.
(10) Related Party Transaction
In November 2007, the Company entered into an independent contractor agreement with Holger Bartel, the
Company’s current Chief Executive Officer, a member of the Company’s Board of Directors, and brother of
Ralph Bartel, who controls the Company, to provide consulting services. Fees and expenses for these services
during the year ended December 31, 2008 totaled approximately $591,000. Effective October 1, 2008, Holger
Bartel was appointed as Chief Executive Officer of the Company and the independent contractor agreement
between the Company and Holger Bartel was terminated on September 30, 2008.
On October 31, 2009, the Company completed the sale of its Asia Pacific operating segment to Azzurro Capital
Inc. and its wholly owned subsidiaries, Travelzoo (Asia) Limited and Travelzoo Japan K.K. Azzurro Capital Inc. is
owned and controlled by the Ralph Bartel 2005 Trust, on behalf of itself. Ralph Bartel, the Company’s Chairman
and principal shareholder, is a member of the board of directors of Azzurro Capital Inc. and is currently the sole
beneficiary of the Ralph Bartel 2005 Trust. The Company’s receivables from Travelzoo (Asia) Limited and
Travelzoo Japan K.K. subsequent to October 31, 2009 totaled $94,000 as of December 31, 2009 and are part of
prepaid expenses and other current assets in the accompanying Consolidated Balance Sheets. See Note 11 for a
further discussion on the sale of the Company’s Asia Pacific operating segment.
(11) Discontinued Operations
On September 30, 2009, the Company and its principal Asia Pacific subsidiaries entered into two definitive
Asset Purchase Agreements (“Asset Purchase Agreements”) with Azzurro Capital Inc. and it’s newly formed
wholly-owned subsidiaries, Travelzoo (Asia) Limited and Travelzoo Japan K.K. to acquire substantially all of the
assets, and with the exception of intercompany loans, assume substantially all of the liabilities of Travelzoo’s
principal Asia Pacific subsidiaries, which constitute Travelzoo’s Asia Pacific operating segment. The aggregate
purchase price under the Asset Purchase Agreements was $3,600,000, subject to a working capital adjustment, as
defined in the Asset Purchase Agreements, based on unaudited balance sheets as of October 31, 2009.
As part of the transaction, the Company and Azzurro Capital Inc., Travelzoo (Asia) Limited and Travelzoo
Japan K.K. entered into the following additional agreements:
• A License Agreement providing for a limited, nontransferable (except as provided therein), perpetual,
exclusive (except as provided therein) fully paid-up license to perform the Licensed Services and Licensed
Business Processes (as defined in the License Agreement), and to use the Licensed Marks, the Licensed
Software, the Licensed Trade Secrets, and the Licensed Works (as defined in the License Agreements) in
connection with the Licensed Services and Licensed Business Processes within the Territory, which is
defined as all countries located in those time zones that are more than five hours ahead of Greenwich Mean
Time, based on Standard time, including India and Pakistan, but excluding Russia.
• A Hosting Agreement under which Travelzoo agrees to host, transact, process, store, implement, operate,
manage, maintain and provide access to licensed software and to data files and content provided by
Travelzoo (Asia) Limited and Travelzoo Japan K.K. for use in connection with the Licensed Services and the
Licensed Business Processes referred to in the Hosting Agreement.
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