Travelzoo 2012 Annual Report Download - page 15

Background and Purpose of the Reverse/Forward Split
Travelzoo has a stockholder base of approximately 92,000 stockholders. As of April 8, 2013, approximately 84,000 holders of our Common
Stock owned fewer than 25 shares. At that time, these 84,000 stockholders represented approximately 91% of the total number of holders of
Common Stock, but held in the aggregate approximately 655,000 shares, or only about 4% of the total number of outstanding shares of Common
Stock.
In the ordinary course, management has from time to time updated the Board of Directors on the then current and anticipated costs related
to administering the Company's stockholder accounts, including transfer agent and administration fees and printing and postage costs associated
with the mailing of proxy materials and annual reports to each stockholder. On April 3, 2013, the Board of Directors established a special committee
of independent directors, consisting of David Ehrlich, Donovan Neale
- May and Kelly Urso (the "Special Committee"), to evaluate the
appropriateness and fairness to the Company's stockholders of a transaction in the form of a reverse
Hypothetical Scenario
Result
Note: If Mr. Pink wants to continue his entire investment in Travelzoo,
he can consolidate or transfer his two record accounts prior to the
Effective Date into an account with at least 25 shares of our Common
Stock. Alternatively, he can buy at least 5 more shares of Common
Stock for his second account and hold them in that account. He would
have to act far enough in advance of the Reverse/Forward Split so that
the consolidation or the purchase is completed by 5:00 p.m. Eastern
Time on the Effective Date.
Mrs. Orange holds 20 shares of Common Stock in a brokerage account as
of the Effective Date.
Travelzoo expects that the Reverse/Forward Split will treat stockholders
holding Common Stock in street name or through a nominee (such as a
bank or broker) in the same manner as stockholders whose shares are
registered in their names. Accordingly, Mrs. Orange would be a
Cashed
- Out Stockholder and would receive the Cash - Out Payment for
each share of Common Stock held in her account. Nominees will be
advised that they may effect the Reverse/Forward Split for their
beneficial holders. However, nominees may have different procedures
and stockholders holding Common Stock in street name should contact
their nominees to be informed of any procedures such stockholders
may need to follow in order to obtain the same treatment as registered
stockholders.
Mr. Purple holds 35 shares of Common Stock in a brokerage account.
Travelzoo expects that the Reverse/Forward Split will treat stockholders
holding Common Stock in street name or through a nominee (such as a
bank or broker) in the same manner as stockholders whose shares are
registered in their names. In such case, after the Reverse/Forward Split,
Mr. Purple would continue to hold all 35 shares of Common Stock.
However, nominees may have different procedures and stockholders
holding Common Stock in street name should contact their nominees to
be informed of any procedures such stockholders may need to follow in
order to obtain the same treatment as registered stockholders.
9