Travelzoo 2011 Annual Report Download - page 22

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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, 2011 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, 2011 without cause, Mr. Loughlin would have been entitled to receive $562,000 and the Company would incur
additional expenses for medical benefits of approximately $19,375.
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 was 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 was not entitled to receive any severance or change of
control benefits under the terms of the agreement. Mr. Lee was paid a base salary and was eligible to receive a quarterly Performance
Bonus and a quarterly Discretionary Bonus (as defined in the agreement). In addition, Mr. Lee was 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. The agreement was
terminated on July 27, 2011.
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, 2011 without cause, Ms. Tafoya would have been entitled to
receive $542,000. 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 Company, Ms. Tafoya would have been entitled to receive $542,000 and
the Company would incur additional expenses for medical benefits of approximately $19,350.
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.