def14a
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment
No. )
Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
o Preliminary
proxy statement
o Confidential,
for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
þ Definitive
proxy statement
o Definitive
additional materials
o Soliciting
material pursuant to §240.14a-12
Travelzoo
Inc.
(Name
of Registrant as Specified in Its Charter)
(Name
of Person(s) Filing Proxy Statement, if Other Than the
Registrant)
Payment of filing fee (Check the appropriate box):
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No fee required
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1)
and 0-11
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Per unit price or other underlying value of transaction computed
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pursuant to Exchange Act
Rule 0-11:
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Proposed maximum aggregate value of transaction:
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Check box if any part of the fee is offset as provided by
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and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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Form, Schedule or Registration Statement No.:
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Travelzoo Inc.
590 Madison Avenue, 37th Floor
New York, NY 10022
April 29, 2009
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of Travelzoo Inc. on June 4, 2009. We will
hold the meeting at 590 Madison Avenue, 37th Floor, New
York, New York 10022 at 10:00 a.m. local time.
In connection with the meeting, we enclose a notice of the
meeting, a proxy statement and a proxy card. Detailed
information relating to Travelzoos activities and
operating performance is contained in our 2008 Annual Report on
Form 10-K,
as filed with the Securities and Exchange Commission, which is
also enclosed.
Whether or not you plan to attend the Annual Meeting of
Stockholders, please vote your shares via mail with the enclosed
proxy card. Please note that you can attend the meeting and vote
in person, even if you have previously voted by proxy. If you
plan to attend the meeting in person, please provide advance
notice to Travelzoo by checking the box on your proxy card. In
addition, you may provide notice to Travelzoo that you plan to
attend in person by delivering written notice to
Travelzoos Corporate Secretary at 590 Madison Avenue,
37th Floor, New York, New York 10022.
If you hold your shares in street name through a bank, broker,
or other nominee, please bring identification and proof of
ownership, such as an account statement or letter from your bank
or broker, for admittance to the meeting. An admission list
containing the names of all of those planning to attend will be
placed at the registration desk at the entrance to the meeting.
You must check in to be admitted.
Travelzoo will make available an alphabetical list of
stockholders entitled to vote at the meeting for examination by
any stockholder during ordinary business hours at
Travelzoos principal executive offices, located at 590
Madison Avenue, 37th Floor, New York, New York 10022, for
ten days prior to the meeting. A stockholder may examine the
list for any legally valid purpose related to the meeting.
On behalf of the entire Board of Directors, we look forward to
seeing you at the meeting.
Sincerely,
RALPH BARTEL
Chairman of the Board of Directors
TABLE OF CONTENTS
TRAVELZOO
INC.
590 Madison Avenue
37th Floor
New York, New York 10022
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on June 4,
2009
To the
Stockholders of Travelzoo Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders
of Travelzoo Inc., a Delaware corporation, will be held on
Thursday, June 4, 2009, at 10:00 a.m., local time, at
590 Madison Avenue, 37th Floor, New York, New York 10022,
for the following purposes:
1. To elect five directors for terms expiring in
2010; and
2. To transact such other business as may properly come
before the Annual Meeting or any adjournment or postponement of
the Annual Meeting.
Only stockholders of record at the close of business on
April 16, 2009 may vote at the Annual Meeting. Your
vote is important. Whether you plan to attend the Annual Meeting
or not, please cast your vote by completing, dating and
signing the enclosed proxy card and returning it via mail to the
address indicated. If you attend the meeting and prefer to
vote in person, you may do so even if you have previously voted
by proxy.
By Order of the Board of Directors,
TRAVELZOO INC.
WAYNE LEE
Corporate Secretary
PROXY
STATEMENT
FOR THE TRAVELZOO INC.
2009 ANNUAL MEETING OF STOCKHOLDERS
INFORMATION
ABOUT THE ANNUAL MEETING
Why am I
receiving these proxy materials?
Travelzoos Board of Directors is soliciting proxies to be
voted at the 2009 Annual Meeting of Stockholders. This proxy
statement includes information about the issues to be voted upon
at the meeting.
On or about May 8, 2009, we intend to mail these proxy
materials to all stockholders of record at the close of business
on April 16, 2009. On the record date, there were
16,443,828 shares of our common stock outstanding.
Where and
when is the Annual Meeting?
The Annual Meeting of Stockholders will take place on
June 4, 2009 at 590 Madison Avenue, 37th Floor, New
York, New York 10022. The meeting will begin at 10:00 a.m.
local time.
What am I
voting on?
We are asking our stockholders to elect five directors.
How many
votes do I have?
You have one vote for each share of our common stock that you
owned at the close of business on April 16, 2009, the
record date. These shares include:
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Shares held directly in your name as the stockholder of
record and
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Shares held for you as the beneficial owner through a broker,
bank, or other nominee in street name.
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If I am a
stockholder of record, how can I vote my shares?
You can vote by proxy or in person.
How do I
vote by proxy?
If you are a stockholder of record, you may vote your proxy by
mail. If you receive a paper copy of the Proxy Statement, simply
mark the enclosed proxy card, date and sign it, and return it in
the postage paid envelope provided. If you receive the Proxy
Statement via
e-mail,
please print the attached proxy card, date and sign it, and
return it via mail to Travelzoo Inc., Attention: Corporate
Secretary, 590 Madison Avenue, 37th Floor, New York, New
York 10022.
If you vote by proxy, the persons named on the card (your
proxies) will vote your shares in the manner you
indicate. You may specify whether your shares should be voted
for all, some or none of the nominees for director or any other
proposals properly brought before the Annual Meeting. If you
sign your proxy card and do not indicate specific choices, your
shares will be voted FOR the election of all
nominees for director. If any other matter is properly brought
before the meeting, your proxies will vote in accordance with
their best judgment. At the time of submitting this Proxy
Statement for printing, we knew of no matter that is required to
be acted on at the Annual Meeting other than those discussed in
this Proxy Statement.
If you wish to give a proxy to someone other than the persons
named on the enclosed proxy card, you may strike out the names
appearing on the card and write in the name of any other person,
sign the proxy, and deliver it to the person whose name has been
substituted.
May I
revoke my proxy?
If you give a proxy, you may revoke it in any one of three ways:
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Submit a valid, later-dated proxy before the Annual Meeting,
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Notify our Corporate Secretary in writing before the Annual
Meeting that you have revoked your proxy, or
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Vote in person at the Annual Meeting.
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How do I
vote in person?
If you are a stockholder of record, you may cast your vote in
person at the Annual Meeting.
If I hold
shares in street name, how can I vote my shares?
You can submit voting instructions to your broker or nominee. In
most instances, you will be able to do this over the Internet or
by mail. Please refer to the voting instruction card included in
the materials provided by your broker or nominee.
What vote
is required to approve each proposal?
Each share of our common stock is entitled to one vote with
respect to each matter on which it is entitled to vote. Our
directors are elected by a plurality of votes, which means that
the nominees who receive the greatest number of votes will be
elected. Under our bylaws, a majority of the shares present at
the meeting in person or by proxy is required for approval of
all other items.
In order to have a valid stockholder vote, a stockholder quorum
must exist at the Annual Meeting. A quorum will exist when
stockholders holding a majority of the outstanding shares of our
stock are present at the meeting, either in person or by proxy.
If a broker indicates on its proxy that it does not have
authority to vote certain shares held in street name
on particular proposals, the shares not voted (broker
non-votes) will not have any effect with respect to such
proposals. Broker non-votes occur when brokers do not have
discretionary voting authority on certain proposals and the
beneficial owner has not instructed the broker how to vote on
these proposals.
Ralph Bartel holds an aggregate of 10,900,489 shares of our
common stock, representing approximately 66.3% of the
outstanding shares, as of March 31, 2009. He has indicated
that he intends to vote in favor of all of the director nominees.
Who is
paying the costs of soliciting these proxies?
We are paying the cost of preparing, printing, mailing and
otherwise distributing these proxy materials. We will reimburse
banks, brokerage firms, and others for their reasonable expenses
in forwarding proxy materials to beneficial owners and obtaining
their instructions. A few of our officers and employees may also
participate in the solicitation, without additional
compensation, by telephone,
e-mail,
other electronic means, or in person.
Where can
I find the voting results of the meeting?
We intend to announce preliminary voting results at the meeting.
We will publish the final results in our Quarterly Report on
Form 10-Q
for the second quarter of 2009, which we intend to file on or
before August 10, 2009. You can obtain a copy of the
Form 10-Q
by logging on to Travelzoos investor relations Web site at
www.travelzoo.com/ir, by calling the Securities and
Exchange Commission at (800) SEC-0330 for the location of
the nearest public reference room, or through the EDGAR system
at www.sec.gov. Information on our Web site does not
constitute part of this proxy statement.
2
ELECTION
OF DIRECTORS (PROXY ITEM NO. 1)
Under Travelzoos bylaws, the number of directors of
Travelzoo is fixed, and may be increased or decreased from time
to time, by resolution of the Board of Directors. Each director
holds office for a term of one year, until the annual meeting of
stockholders next succeeding the directors election and
until a successor is elected and qualified or until the earlier
resignation or removal of the director. Mr. Holger Bartel,
Mr. Ralph Bartel, Mr. Ehrlich, Mr. Neale-May, and
Ms. Urso are currently directors of Travelzoo.
Nominees
for a One-Year Term That Will Expire in 2010:
The ages, principal occupations, directorships held and other
information as of March 31, 2009, with respect to our
nominees are shown below.
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Name
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Age
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Position
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Holger Bartel, Ph.D.
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Director and Chief Executive Officer
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Ralph Bartel, Ph.D.(2)
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Chairman of the Board of Directors
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David J. Ehrlich(1)
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Director
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Donovan Neale-May(1)(3)
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Director
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Kelly M. Urso(1)(2)(3)
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Director
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Member of the Audit Committee |
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Member of the Compensation Committee |
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Member of the Disclosure Committee |
Each of the director nominees listed above was elected to be a
director at the Companys Annual Meeting of Stockholders
held on June 3, 2008. Our Board of Directors has determined
that each of Mr. Ehrlich, Mr. Neale-May, and
Ms. Urso meet the independence requirements of the listing
standards of the NASDAQ Stock Market (the NASDAQ).
Holger Bartel, Ph.D., has served as a Director since
June 2005. Mr. Bartel has served as Chief Executive Officer
since October 2008, after serving as Executive Vice President
from September 1999 to November 2007. From 1995 to 1998,
Mr. Bartel worked as an Engagement Manager at
McKinsey & Company in Los Angeles. From 1992 to 1994,
Mr. Bartel was a research fellow at Harvard Business
School. Mr. Bartel holds a Ph.D. in Economics and an MBA in
Finance and Accounting from the University of St. Gallen,
Switzerland. He is the brother of Ralph Bartel.
Ralph Bartel, Ph.D., founded Travelzoo in 1998 and
has served as Chairman of the Board of Directors since
inception. From May 1998 to September 2008, Mr. Bartel
served as Travelzoos Chief Executive Officer and
President. Mr. Bartel is a professionally trained
journalist who also holds a Ph.D. in Communications from the
University of Mainz, Germany, a Masters degree in
Journalism from the University of Eichstaett, Germany, and a
Ph.D. in Economics and an MBA in Finance and Accounting from the
University of St. Gallen, Switzerland. He is the brother of
Holger Bartel
David J. Ehrlich has served as a Director since February
1999. Since March 2007, Mr. Ehrlich has served as Chief
Executive Officer of ParAccel, Inc., a technology company. From
2003 to 2006, Mr. Ehrlich was Senior Vice President,
Marketing and Chief Strategy Officer of NetIQ Corporation. From
1998 to 2002, Mr. Ehrlich was Vice President, Product
Management and Strategic Partnering for Visual Networks, Inc.
From 1993 to 1998, Mr. Ehrlich worked as a consultant for
McKinsey & Company. Mr. Ehrlich holds a
bachelors degree in Sociology from Stanford University, a
Masters degree in Industrial Engineering from Stanford
University, and an MBA from Harvard Business School.
Donovan Neale-May has served as a Director since February
1999. Mr. Neale-May is the president and managing partner
of GlobalFluency, Inc., a global organization of independent
marketing and communication firms with 70 offices in over 40
countries. Since 1987, Mr. Neale-May has been managing and
running his own marketing and public relations agency business,
Neale-May & Partners, operating from Silicon Valley
and New York offices. Previously, Mr. Neale-May held senior
positions with marketing, promotions and public relations
agencies, such as
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Ogilvy & Mather, in Silicon Valley, New York, London
and Los Angeles. During his 30 years as an international
marketing and brand strategist, Mr. Neale-May has consulted
with over 300 leading multi-nationals, new venture starts and
emerging growth companies. Mr. Neale-May is the founder and
executive director of the Chief Marketing Officer (CMO) Council,
a global affinity network of more than 3,000 senior marketing
and branding executives. Mr. Neale-May is a journalism
graduate of Rhodes University in South Africa and serves on the
board of trustees for the Rhodes University Trust, USA.
Kelly M. Urso has served as a Director since February
1999. Since 2003, Ms. Urso has been a principal at K. M.
Urso & Company, LLC, a firm that provides
U.S. and international tax consulting and compliance
services. From 2001 to 2003, Ms. Urso was a tax attorney
with Reynolds & Rowella LLP. From 1997 to 2001,
Ms. Urso was the leader of the expatriate tax group at
General Electric International, Inc. Ms. Urso holds a
bachelors degree in business administration from the
University of Cincinnati and a Juris Doctor degree from the
Thomas M. Cooley Law School in Lansing, Michigan.
The Board of Directors is not aware that any nominee named in
this Proxy Statement is unwilling or unable to serve as a
director. If, however, a nominee is unavailable for election,
your proxy authorizes the named designees to vote for a
replacement nominee if the Board of Directors names one.
YOUR
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THESE
NOMINEES.
Board
Meetings and Committees
The Board of Directors has appointed an Audit Committee, a
Compensation Committee, and a Disclosure Committee. Below is a
table indicating the membership of each of the Audit Committee,
Compensation Committee, and Disclosure Committee and how many
times the Board of Directors and each such committee met in
fiscal year 2008. Each of Mr. Ralph Bartel, Mr. Holger
Bartel, Mr. Ehrlich, Mr. Neale-May, and Ms. Urso
attended at least 75 percent of the total number of
meetings of the Board of Directors and of the committees on
which he or she serves.
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Board
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Audit
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Compensation
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Disclosure
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Mr. Holger Bartel
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Member
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Mr. Ralph Bartel
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Chair
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Chair
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Mr. Ehrlich
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Member
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Chair
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Mr. Neale-May
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Member
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Member
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Member
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Ms. Urso
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Member
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Member
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Member
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Chair
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Number of 2008 Meetings
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4
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5
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The Company does not require that directors attend the Annual
Meeting. Ms. Kelly Urso attended the 2008 Annual Meeting.
Audit
Committee
The Audit Committees primary responsibilities are to
oversee and monitor (i) the integrity of Travelzoos
financial statements, (ii) the qualifications and
independence of our independent registered public accounting
firm, (iii) the performance of our independent registered
public accounting firm and internal audit staff, and
(iv) the compliance by Travelzoo with legal and regulatory
requirements. A complete description of the committees
responsibilities is set forth in its written charter. A copy the
written charter can be found in Appendix A of our 2008
Proxy Statement. The Audit Committee is responsible for
appointing the independent registered public accounting firm and
is directly responsible for the compensation and oversight of
the work of our independent registered public accounting firm.
The Audit Committee is composed solely of independent directors
as defined in the listing standards of the NASDAQ. The Board has
determined that Mr. Neale-May qualifies as an audit
committee financial expert within the meaning of the regulation
of the Securities and Exchange Commission (SEC).
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Compensation
Committee
The Compensation Committee reviews and approves the compensation
and benefits for the Companys executive officers and
directors, and makes recommendations to the Board of Directors
regarding such matters. The Compensation Committee also approves
the Companys non-equity incentive plans. The Compensation
Committee further reviews and discusses with management the
Compensation Discussion and Analysis section of this Proxy
Statement. The Compensation Committee does not have a charter.
The Report of the Compensation Committee is included on
page 12.
Disclosure
Committee
The Disclosure Committees primary responsibilities are
(i) to design, establish and evaluate controls and other
procedures that are designed to ensure the accuracy and timely
disclosure of information to the SEC and investment community
and (ii) to review and supervise preparation of all SEC
filings, press releases and other broadly disseminated
correspondence.
Nominating
Committee
Travelzoo does not have a nominating committee of the Board of
Directors. Since it is a Controlled Company under
NASDAQ Rule 5615(c), on account of the stock ownership by
Ralph Bartel, such a committee is not required. Through his
share ownership, Mr. Ralph Bartel is in a position to
control Travelzoo and to elect our entire Board of Directors.
Mr. Ralph Bartel considers candidates for director nominees.
Communications
With Directors
The board has established a process to receive communications
from stockholders. Stockholders and other interested parties may
contact any member (or all members) of the board, or the
non-management directors as a group, any board committee or any
chair of any such committee by mail. To communicate with the
Board of Directors, any individual directors or any group or
committee of directors, correspondence should be addressed to
the Board of Directors or any such individual directors or group
or committee of directors by either name or title. All such
correspondence should be sent
c/o Corporate
Secretary at Travelzoo Inc., 590 Madison Avenue,
37th Floor, New York, NY 10022.
All communications received as set forth in the preceding
paragraph will be opened by the Corporate Secretary for the sole
purpose of determining whether the contents represent a message
to our directors. Any contents that are not in the nature of
advertising, promotions of a product or service, patently
offensive material or matters deemed inappropriate for the board
of directors will be forwarded promptly to the addressee. In the
case of communications to the board or any group or committee of
directors, the Corporate Secretary will make sufficient copies
of the contents to send to each director who is a member of the
group or committee to which the correspondence is addressed.
Audit
Committee Report
The information contained in this report shall not be deemed to
be soliciting material or filed with the
SEC or subject to the liabilities of Section 18 of the
Securities Exchange Act of 1934, as amended (the Exchange
Act), except to the extent that Travelzoo specifically
incorporates it by reference into a document filed under the
Securities Act of 1933, as amended (the Securities
Act) or the Exchange Act.
The Audit Committee oversees Travelzoos financial
reporting process on behalf of the Board of Directors.
Management is primarily responsible for the financial statements
and reporting processes including the systems of internal
controls, while the independent auditors are responsible for
performing an independent audit of Travelzoos consolidated
financial statements in accordance with auditing standards of
the Public Company Accounting Oversight Board
(PCAOB), and expressing an opinion on the conformity
of those financial statements with accounting principles
generally accepted in the United States.
In this context, the committee has met and held discussions with
management and the independent auditors regarding the
Companys audited consolidated financial statements. The
committee discussed with Travelzoos
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independent auditors the overall scope and plan for their audit.
The committee met, at least quarterly, with the independent
auditors, with and without management present, and discussed the
results of their examinations, their evaluations of
Travelzoos internal controls, and the overall quality of
Travelzoos financial reporting. Management represented to
the committee that Travelzoos consolidated financial
statements were prepared in accordance with accounting
principles generally accepted in the United States. The
committee has reviewed and discussed the consolidated financial
statements with management and the independent auditors,
including their judgments as to the quality, not just the
acceptability, of Travelzoos accounting principles and
such other matters as are required to be discussed with the
committee under auditing standards of the PCAOB.
Travelzoos independent auditors also provided to the
committee the written disclosures required by applicable
requirements of the PCAOB regarding the independent
accountants communications with the audit committee
concerning independence, and the committee discussed with the
independent auditors that firms independence, including
those matters required to be discussed by Statement on Auditing
Standards No. 61.
In reliance on the reviews and discussions referred to above,
the committee recommended to the Board of Directors (and the
Board of Directors has approved) that the audited financial
statements be included in the Annual Report on
Form 10-K
for the fiscal year ended December 31, 2008 for filing with
the SEC. The committee has not yet selected Travelzoos
independent auditors for fiscal year 2009.
While the committee has the responsibilities and powers set
forth in its charter, it is not the duty of the committee to
plan or conduct audits or to determine that Travelzoos
financial statements are complete and accurate and are in
accordance with generally accepted accounting principles. This
is the responsibility of management and the independent auditor.
Nor is it the duty of the committee to conduct investigations or
to assure compliance with laws and regulations and
Travelzoos business conduct policies.
Audit Committee
David J. Ehrlich (Chairman)
Donovan Neale-May
Kelly M. Urso
Director
Compensation
Directors who are employed by the Company or its subsidiaries do
not receive compensation for serving as directors. Directors who
are not employees of the Company or its subsidiaries are
entitled to receive certain retainers and fees. On
October 10, 2008, the Compensation Committee reviewed its
director compensation policy and determined that no adjustments
to this director compensation policy were necessary. The
retainers and meeting fees are as follows:
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Annual board member retainer $30,000;
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Annual Audit Committee chair retainer $30,000;
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Fee for attendance of a board meeting $1,680;
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Fee for attendance of an Audit Committee meeting
$2,800;
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Fee for attendance of a Disclosure Committee meeting
$1,680;
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Fee for attendance of a Compensation Committee
meeting $2,800; and
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Fee for attendance of a strategy meeting $4,480.
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We reimburse non-employee directors for out-of-pocket expenses
incurred in connection with attending meetings.
Mr. Ralph Bartel chose not to receive any compensation for
his services.
6
The following table shows compensation information for
Travelzoos non-employee directors for fiscal year ended
December 31, 2008.
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Change in
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Pension Value
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and Nonqualified
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Fees Earned
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Non-Equity
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Deferred
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or Paid in
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Stock
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Option
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Incentive Plan
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Compensation
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All Other
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Name
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Cash ($)
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Awards ($)
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Awards ($)
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Compensation ($)
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Earnings ($)
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Compensation ($)
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Total ($)
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Mr. Ralph Bartel
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Mr. Ehrlich
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85,200
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|
|
|
|
|
|
|
|
|
|
|
85,200
|
|
Mr. Neale-May
|
|
|
59,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59,120
|
|
Ms. Urso
|
|
|
61,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61,920
|
|
Security
Ownership of Certain Beneficial Owners and Management
The following table shows the amount of our common stock
beneficially owned as of March 31, 2009 by (a) each
director and nominee, (b) each named executive officer,
(c) all executive officers and directors as a group, and
(d) each person known by the Company, as of
December 31, 2008, to beneficially own more than 5% of the
outstanding shares of common stock of the Company. In general,
shares beneficially owned include those shares a
person has or shares the power to vote, or the power to dispose
of.
|
|
|
|
|
|
|
|
|
|
|
Beneficial Ownership
|
|
|
|
Number of
|
|
|
Percent
|
|
Beneficial Owner
|
|
Shares(1)
|
|
|
of Total(2)
|
|
|
Directors and Named Executive Officers
|
|
|
|
|
|
|
|
|
Holger Bartel
|
|
|
|
|
|
|
|
|
Ralph Bartel(3)
|
|
|
10,900,489
|
|
|
|
66.3
|
%
|
David J. Ehrlich
|
|
|
|
|
|
|
|
|
Wayne Lee
|
|
|
1,500
|
|
|
|
*
|
|
Christopher Loughlin
|
|
|
6,790
|
|
|
|
*
|
|
Donovan Neale-May
|
|
|
|
|
|
|
|
|
Max Rayner
|
|
|
|
|
|
|
|
|
Shirley Tafoya
|
|
|
|
|
|
|
|
|
Kelly M. Urso(4)
|
|
|
17,725
|
|
|
|
*
|
|
Jason Yap
|
|
|
|
|
|
|
|
|
Directors and executive officers as a group (10 persons)(4)
|
|
|
10,926,504
|
|
|
|
66.5
|
%
|
Persons Owning More Than 5% of Common Stock
|
|
|
|
|
|
|
|
|
JPMorgan Chase & Co.(5)
|
|
|
1,771,739
|
|
|
|
10.8
|
%
|
270 Park Avenue
|
|
|
|
|
|
|
|
|
New York, New York 10017
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Less than 1% |
|
(1) |
|
Except as otherwise indicated and subject to applicable
community property laws, the persons named in the table have
sole voting and investment power with respect to all their
shares of common stock. |
|
(2) |
|
For each person and group indicated in this table, percentage
ownership is calculated by dividing the number of shares
beneficially owned by such person or group by the sum of
16,443,828 shares of common stock outstanding as of
March 31, 2009, plus the number of shares of common stock
that such person or group had the right to acquire within
60 days after March 31, 2009. |
|
(3) |
|
Ralph Bartel indirectly holds 100% of Azzurro Capital Inc.,
which is the holder of 10,900,489 shares, through the Ralph
Bartel 2005 Trust. |
|
(4) |
|
Consists of options to purchase 17,725 shares which are
currently exercisable or will be exercisable within 60 days
of March 31, 2009. |
7
|
|
|
(5) |
|
Based solely on information reported on a Schedule 13G/A
filed with the SEC on January 27, 2009 by JPMorgan
Chase & Co. As of December 31, 2008,
1,771,739 shares were beneficially held by JPMorgan
Chase & Co. of which it possessed sole voting power to
1,570,091 shares and sole dispositive power to
1,771,739 shares. |
Section 16(a)
Beneficial Ownership Reporting Compliance
Under Section 16(a) of the Securities Exchange Act of 1934,
the Companys directors, executive officers and the
beneficial holders of more than 10% of the Companys common
stock are required to file reports of ownership and changes in
ownership with the SEC. Such directors, executive officers and
beneficial holders of more than 10% of the Companys common
stock are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file.
To the Companys knowledge, based solely on a review of the
copies of such forms furnished to the Company or written
representations from reporting persons, we believe that during
fiscal 2008, all Section 16(a) filing requirements were
satisfied on a timely basis.
Code of
Ethics
We have adopted a code of ethics that applies to our Chief
Executive Officer, our Chief Financial
Officer, and our Controller for North America. This
code of ethics is posted on our Web site located at
corporate.travelzoo.com/governance.
We intend to satisfy the disclosure requirement under
Item 10 of
Form 8-K
regarding an amendment to, or waiver from, a provision of this
code of ethics by posting such information on our Web site, at
the address and location specified above. A copy of the code of
ethics is also available in print to stockholders and interested
parties without charge upon written request delivered to our
Corporate Secretary at Travelzoo Inc., 590 Madison Avenue,
37th Floor, New York, NY 10022.
Executive
Compensation
Compensation
Discussion and Analysis
Overview
of Compensation Program
The following Compensation Discussion and Analysis, or
CD&A, describes our overall compensation
philosophy and the primary components of our compensation
program. Furthermore, the CD&A explains the process by
which the Compensation Committee or Committee
determined the 2008 compensation for our Chief Executive
Officer, Chief Financial Officer and other most highly
compensated officers. We refer to these individuals collectively
as the named executives or the named executive
officers.
Compensation
Philosophy and Objectives
The fundamental objectives of our executive compensation program
are to attract and retain highly qualified executive officers,
motivate these executive officers to materially contribute to
our long-term business success, and align the interests of our
executive officers and stockholders by rewarding our executives
for individual and corporate performance based on targets
established by the Committee.
We believe that achievement of these compensation program
objectives enhances long-term profitability and stockholder
value. The elements utilized to help achieve the
Committees objectives include the following:
|
|
|
|
|
Accountability for Individual
Performance. Compensation should in large part
depend on the named executives individual performance in
order to motivate and acknowledge the key contributors to our
success.
|
|
|
|
Recognition for Business
Performance. Compensation should take into
consideration our overall financial performance and overall
growth.
|
|
|
|
Attracting and Retaining Talented Executives.
Compensation should generally reflect the competitive
marketplace and be designed to attract and retain superior
employees in key competitive positions.
|
8
We implement our compensation philosophy through setting base
salaries for our executive officers, through the use of our
executive bonus plan and through reviewing and approving other
terms of employment agreements.
Compensation
Determination Process
Compensation Committee Members. The Committee
is responsible for establishing, overseeing and reviewing
executive compensation policies and for approving, validating
and benchmarking the compensation and benefits for named
executive officers. The Committee is also responsible for
determining the fees paid to our outside directors. The
Committee includes Mr. Ralph Bartel (Chair) and
Ms. Kelly M. Urso. Ms. Urso satisfies the independence
requirements of the NASDAQ. The Compensation Committee does not
have a charter.
Role of Management. During 2008, the Committee
engaged in its annual review of executive compensation with the
goal of ensuring the appropriate combination of fixed and
variable compensation linked to individual and corporate
performance. In the course of its review, the Committee
considered the advice and input of the Companys CEO and
data prepared by management, including a comparison of the
current compensation of the named executive officers with
publicly available industry data from The Wall Street Journal.
The Wall Street Journal data utilized by the Committee included
salary and total compensation information based on the title,
job description, and geographic location of similarly situated
executives. The most significant aspects of the CEOs role
in the compensation determination process are evaluating
employee performance, establishing business performance targets,
goals and objectives and recommending salary and bonus levels.
The Committee compared the compensation received by the
Companys named executive officers with the levels of
compensation received by similarly situated executives in the
same geographic location in light of the named executives
responsibilities, performance, experience and tenure, in order
to arrive at the total compensation package for each of the
named executive officers. In some cases, the compensation
package that the Committee awarded a named executive officer was
at or below the median compensation received by executives per
The Wall Street Journal data, while in other instances the
compensation was higher due to the executives
responsibilities, performance, experience and tenure.
Mr. Bartel did not participate in the determination of his
compensation during 2008. The Committee did not engage an
outside consulting firm to provide advice on executive
compensation.
Components
of Executive Compensation
The Committee has structured an executive compensation program
comprised of base salary, cash bonus and non-equity incentive
pay.
Base Salary. The Committee considered two
types of potential base salary increases for the named executive
officers in 2008: (1) merit increases based
upon each named executives individual performance;
and/or
(2) market adjustments based upon the salary
range for similarly situated executives.
In determining merit increases, the Committee considers the
specific responsibilities of the executive and the
executives overall performance and tenure with the
Company. In addition, the Committee also considers the
CEOs evaluation of each named executive officer in making
the decision regarding merit increases.
The Committee determines any market adjustments based on the
Committees comparison of the executives compensation
with statistical information on average compensation for
similarly situated executives that is publicly available through
The Wall Street Journal.
The Committee did not make any changes to the salaries of the
named executive officers in 2008.
Executive Bonus Plan. We believe that the
Executive Bonus Plan provides the Company with a valuable tool
to assist in focusing executives on accomplishing operational
and financial objectives over the Companys quarterly
periods. The plan is designed to reward the Companys
executives for achieving their quarterly targets as set per the
Companys operating budget.
On April 6, 2007 the Committee adopted the North America
Executive Bonus Plan, as amended and restated effective as of
January 1, 2007 and determined that Ms. Shirley
Tafoya, and of the named executive officers,
9
Mr. Ralph Bartel and Mr. Wayne Lee, would be eligible
to participate in the North America Executive Bonus Plan.
Mr. Max Rayner was eligible to participate in the North
Executive Bonus Plan per the terms of his employment agreement.
Ms Tafoya, Mr. Bartel, Mr. Lee and Mr. Rayner are
collectively referred to in this section as the
participating executives. The North America
Executive Bonus Plan was discontinued on September 23, 2008.
Effective as of January 1, 2007, the participating
executives were eligible to receive a bonus of $50,000 per
quarter upon the attainment of all of the following goals as set
forth in the Companys Annual Operating Budget:
|
|
|
|
|
100% of Revenue target;
|
|
|
|
100% of Pro Forma Operating Income target;
|
|
|
|
100% of the U.S. Top 20 Subscribers target;
|
|
|
|
100% of the Canada Top 20 Subscribers target; and
|
|
|
|
There are not more than two customers that account for 10% or
more of the Companys worldwide consolidated revenues for
the quarter and no single customer accounts for more than 17% of
the Companys worldwide consolidated revenues for the
quarter.
|
If one or more of the above targets were not met, the
participating executives were eligible to receive a bonus of
$25,000 per quarter upon attainment of all of the following
goals as set forth in the Companys Annual Operating Budget:
|
|
|
|
|
98% of Revenue target;
|
|
|
|
90% of Pro Forma Operating Income target;
|
|
|
|
Within 50,000 subscribers of achieving the U.S. Top 20
Subscribers target or exceeding the target;
|
|
|
|
Within 25,000 subscribers of achieving the Canada Top 20
Subscribers target or exceeding the target; and
|
|
|
|
There are not more than two customers that account for 10% or
more of the Companys worldwide consolidated revenues for
the quarter and no single customer accounts for more than 17% of
the Companys worldwide consolidated revenues for the
quarter.
|
The Companys Annual Operating Budget relates to the
Companys operations in North America, is set at the
beginning of the year by the CEO and provides quarterly targets
for revenues, operating expenses, operating income, net income,
subscribers, headcount, and other financial and non-financial
performance metrics. The Company reserves the right to amend the
Annual Operating Budget at any time and for any reason. The
quarterly targets were not met for the first and second quarters
of 2008 and no bonuses were paid to the participating
executives. The North America Executive Bonus Plan was
discontinued as of the end of the second quarter of 2008.
Other Incentive Bonus Pay. In 2008,
Mr. Holger Bartel, Mr. Christopher Loughlin,
Mr. Wayne Lee, and Mr. Max Rayner also received
incentive bonuses pursuant to the terms of their employment
agreements.
Pursuant to the terms of Mr. Holger Bartels
employment agreement dated September 17, 2008 and effective
October 1, 2008, Mr. Bartel is eligible to receive a
quarterly Performance Bonus and a quarterly Discretionary Bonus.
The quarterly Performance Bonus is calculated as follows:
|
|
|
|
|
|
|
Quarterly Bonus
|
|
Criteria
|
|
Payment
|
|
|
Worldwide revenue target for the quarter met AND there are no
more than two Significant Customers AND no Significant Customer
accounts for 17% or more of Worldwide consolidated revenue for
the quarter
|
|
$
|
20,000
|
|
Worldwide operating income target for the quarter met
|
|
$
|
20,000
|
|
Worldwide subscriber target for the quarter met
|
|
$
|
20,000
|
|
Total maximum Performance Bonus per quarter
|
|
$
|
60,000
|
|
The quarterly targets were not met for the fourth quarter of
2008 and no Performance Bonus was paid to Mr. Bartel.
10
Mr. Bartel is also eligible to receive a quarterly
Discretionary Bonus of up to $20,000 per quarter. The
Discretionary Bonus is to be determined by the Compensation
Committee of the Board of Directors at its sole and absolute
discretion. In exercising such discretion, the Compensation
Committee will take into consideration Mr. Bartels
individual performance. Mr. Bartel received a Discretionary
Bonus totaling $20,000 for the fourth quarter of 2008.
Pursuant to the terms of Mr. Loughlins employment
agreement dated May 16, 2005, as amended July 12, 2006
and as amended July 1, 2007, Mr. Loughlin is eligible
to receive quarterly and annual bonuses.
Mr. Loughlins bonuses are payable in British pounds
and have been translated into U.S. dollars for the purposes
of this summary. Mr. Loughlin is eligible to receive the
following quarterly bonuses:
|
|
|
|
|
|
|
Quarterly Bonus
|
|
Criteria
|
|
Payment
|
|
|
Revenue goal as defined in the official budget for Europe is met
|
|
$
|
13,764
|
|
Net income goal as defined in the official budget for Europe is
met
|
|
$
|
13,764
|
|
Subscriber goal as defined in the official budget for Europe is
met
|
|
$
|
13,764
|
|
Performance evaluation by the Chairman of the Company
|
|
Up to $
|
13,764
|
|
|
|
|
|
|
Total
|
|
Up to $
|
55,056
|
|
|
|
|
|
|
Under the terms of the annual bonus plan set forth in
Mr. Loughlins employment agreement, Mr. Loughlin
is eligible to receive 20% of Travelzoo Europes pro forma
operating income generated from operations in the U.K., Germany
and France until December 31, 2009 and is eligible to
receive 10% of Travelzoo Europes pro forma operating
income generated from operations in the U.K., Germany and France
from January 1, 2010 to June 30, 2010 and such amounts
are not capped. In 2008, Mr. Loughlin received $113,220 and
$294,337 pursuant to the quarterly and annual bonus plans,
respectively, set forth in his employment agreement.
Pursuant to the terms of Mr. Lees employment
agreement as amended September 23, 2008, Mr. Lee is
eligible to receive a quarterly Performance Bonus and a
quarterly Discretionary Bonus starting in the third quarter of
2008. The quarterly Performance Bonus is calculated as follows:
|
|
|
|
|
|
|
Quarterly Bonus
|
|
Criteria
|
|
Payment
|
|
|
Worldwide revenue target for the quarter met AND there are no
more than two Significant Customers AND no Significant Customer
accounts for 17% or more of Worldwide consolidated revenue for
the quarter
|
|
$
|
15,000
|
|
Worldwide operating income target for the quarter met
|
|
$
|
15,000
|
|
Worldwide subscriber target for the quarter met
|
|
$
|
15,000
|
|
|
|
|
|
|
Total maximum Performance Bonus per quarter
|
|
$
|
45,000
|
|
|
|
|
|
|
The quarterly targets were not met for the third and fourth
quarters of 2008 and no Performance Bonus was paid to
Mr. Lee.
Mr. Lee is also eligible to receive a quarterly
Discretionary Bonus of up to $15,000 per quarter. The
Discretionary Bonus is to be determined by the Chief Executive
Officer in his sole and absolute discretion. In exercising such
discretion, the Chief Executive Officer will take into
consideration Mr. Lees individual performance.
Mr. Lee received Discretionary Bonuses totaling $30,000 for
the third and fourth quarters of 2008.
Pursuant to the terms of Mr. Rayners employment
agreement dated November 5, 2007 and as amended
September 23, 2008, Mr. Rayner is eligible to receive
a quarterly Performance Bonus starting in the third quarter of
11
2008 and is eligible to receive a quarterly Discretionary Bonus.
The quarterly Performance Bonus is calculated as follows:
|
|
|
|
|
|
|
Quarterly Bonus
|
|
Criteria
|
|
Payment
|
|
|
Worldwide revenue target for the quarter met AND there are no
more than two Significant Customers AND no Significant Customer
accounts for 17% or more of Worldwide consolidated revenue for
the quarter
|
|
$
|
20,000
|
|
Worldwide operating income target for the quarter met
|
|
$
|
20,000
|
|
Worldwide subscriber target for the quarter met
|
|
$
|
20,000
|
|
|
|
|
|
|
Total maximum Performance Bonus per quarter
|
|
$
|
60,000
|
|
|
|
|
|
|
The quarterly targets were not met for the third and fourth
quarters of 2008 and no Performance Bonus was paid to
Mr. Rayner.
Mr. Rayner is also eligible to receive a quarterly
Discretionary Bonus of up to $50,000 per quarter. The
Discretionary Bonus is to be determined by the Chief Executive
Officer in his sole and absolute discretion. In exercising such
discretion, the Chief Executive Officer will take into
consideration Mr. Rayners individual performance.
Mr. Rayner received Discretionary Bonuses totaling $190,000
for 2008.
Other
Compensation-Related Matters
Perquisites and Additional Benefits. The
Company seeks to maintain an open and inclusive culture in its
facilities and operations among executives and other Company
employees. Accordingly, the Company does not provide executives
with reserved parking spaces or separate dining or other
facilities, nor does the Company have programs for providing
personal-benefit perquisites to executives, such as permanent
lodging, club dues or defraying the cost of personal
entertainment. Named executive officers and employees may seek
reimbursement for business related expenses in accordance with
our business expense reimbursement policy.
Employment Agreements. The Company has entered
into employment agreements with the named executive officers,
some of which contain severance and change of control
provisions. The terms of such employment agreements are
described in more detail below in Employment Agreements and
Potential Payments Upon Termination or
Change-in-Control.
The Committee believes these agreements are appropriate for a
number of reasons, including the following:
|
|
|
|
|
the agreements assist in attracting and retaining executives as
we compete for talented employees in a marketplace where such
agreements are commonly offered;
|
|
|
|
the change in control provisions require terminated executives
to execute a release in order to receive severance
benefits; and
|
|
|
|
the change in control and severance provisions help retain key
personnel during rumored or actual acquisitions or similar
corporate changes.
|
Compensation
Committee Report
The information contained in this report shall not be deemed to
be soliciting material or filed with the
SEC or subject to the liabilities of Section 18 of the
Securities Exchange Act of 1934, as amended (the Exchange
Act), except to the extent that Travelzoo specifically
incorporates it by reference into a document filed under the
Securities Act of 1933, as amended (the Securities
Act) or the Exchange Act.
12
The Companys Compensation Committee has reviewed and
discussed the CD&A with management and, based on such
review and discussions, the Compensation Committee recommended
to the Companys Board of Directors that the CD&A be
included in this proxy statement on Schedule 14A.
Compensation Committee
Ralph Bartel (Chairman)
Kelly M. Urso
Compensation
Committee Interlocks and Insider Participation
During 2008, Ralph Bartel, our Chief Executive Officer until
September 30, 2008, and Kelly M. Urso were members of the
Compensation Committee. Mr. Ralph Bartel did not
participate in the determination of his compensation as an
executive officer during 2008. In 2008, there were no
transactions between the Company and Mr. Ralph Bartel,
other than the payment of Mr. Ralph Bartels salary
and reimbursement of Company-related expenses.
Summary
Compensation Table
The following summary compensation table sets forth information
concerning the compensation to our Chief Executive Officer,
former Chief Executive Officer, Chief Financial Officer and the
three other most highly compensated executive officers during
the fiscal year ended December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan
|
|
|
All Other
|
|
|
|
|
|
|
Fiscal
|
|
|
Salary
|
|
|
Bonus
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Total
|
|
Name and Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)
|
|
|
($)
|
|
|
Holger Bartel(2)
|
|
|
2008
|
|
|
|
100,000
|
|
|
|
20,000
|
(8)
|
|
|
|
|
|
|
613,822
|
(19)
|
|
|
733,822
|
|
Chief Executive Officer
|
|
|
2007
|
|
|
|
241,867
|
|
|
|
|
|
|
|
25,000
|
(14)
|
|
|
115,902
|
(19)
|
|
|
382,769
|
|
(effective October 1, 2008)
|
|
|
2006
|
|
|
|
328,000
|
|
|
|
1,500
|
(9)
|
|
|
15,000
|
(14)
|
|
|
3,000
|
(21)
|
|
|
347,500
|
|
and Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ralph Bartel(3)
|
|
|
2008
|
|
|
|
286,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
286,650
|
|
Chief Executive Officer
|
|
|
2007
|
|
|
|
322,004
|
|
|
|
|
|
|
|
25,000
|
(14)
|
|
|
|
|
|
|
347,004
|
|
(through September 30, 2008)
|
|
|
2006
|
|
|
|
329,723
|
|
|
|
1,500
|
(9)
|
|
|
15,000
|
(14)
|
|
|
1,500
|
(20)
|
|
|
347,723
|
|
and Chairman of the Board
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wayne Lee(4)
|
|
|
2008
|
|
|
|
240,000
|
|
|
|
47,335
|
(10)
|
|
|
|
|
|
|
1,500
|
(21)
|
|
|
288,835
|
|
Chief Financial Officer
|
|
|
2007
|
|
|
|
201,500
|
|
|
|
|
|
|
|
25,000
|
(14)
|
|
|
1,500
|
(21)
|
|
|
228,000
|
|
|
|
|
2006
|
|
|
|
154,083
|
|
|
|
1,500
|
(9)
|
|
|
|
|
|
|
3,000
|
(21)
|
|
|
158,583
|
|
Christopher Loughlin(5)
|
|
|
2008
|
|
|
|
381,714
|
|
|
|
|
|
|
|
407,556
|
(15)
|
|
|
31,011
|
(22)
|
|
|
820,281
|
|
Executive Vice President, Europe
|
|
|
2007
|
|
|
|
408,369
|
|
|
|
|
|
|
|
170,099
|
(15)
|
|
|
28,586
|
(22)
|
|
|
607,054
|
|
|
|
|
2006
|
|
|
|
293,490
|
|
|
|
1,500
|
(9)
|
|
|
144,944
|
(16)
|
|
|
16,396
|
(22)
|
|
|
456,330
|
|
Max Rayner(6)
|
|
|
2008
|
|
|
|
450,000
|
|
|
|
190,000
|
(11)
|
|
|
|
|
|
|
1,500
|
(21)
|
|
|
641,500
|
|
Chief Information Officer
|
|
|
2007
|
|
|
|
71,591
|
|
|
|
31,667
|
(11)
|
|
|
|
|
|
|
|
|
|
|
103,258
|
|
Shirley Tafoya(7)
|
|
|
2008
|
|
|
|
518,010
|
|
|
|
175,000
|
(12)
|
|
|
|
|
|
|
1,500
|
(21)
|
|
|
694,510
|
|
President, North America
|
|
|
2007
|
|
|
|
475,133
|
|
|
|
25,000
|
(12)
|
|
|
67,878
|
(17)
|
|
|
1,500
|
(21)
|
|
|
569,511
|
|
|
|
|
2006
|
|
|
|
338,250
|
|
|
|
2,750
|
(13)
|
|
|
186,510
|
(18)
|
|
|
1,500
|
(20)
|
|
|
529,010
|
|
|
|
|
(1) |
|
The amounts reflected in this column reflect the
performance-based cash awards paid to the named executives under
our Executive Bonus Plan and pursuant to certain employment
agreements, as discussed in the CD&A above. |
|
(2) |
|
Mr. Holger Bartel became the Chief Executive Officer on
October 1, 2008. From November 12, 2007 to
September 30, 2008, Mr. Holger Bartel served as a
consultant to the Company under the terms of an independent
contractor agreement. In 2006 and from January 1, 2007 to
November 11, 2007 Mr. Holger Bartel served as
Executive Vice President. |
13
|
|
|
(3) |
|
Mr. Ralph Bartel resigned his position as Chief Executive
Officer effective October 1, 2008 and continues to serve as
the Chairman of the Board of Directors. |
|
(4) |
|
Mr. Lee became the Chief Financial Officer on
September 17, 2006. Mr. Ralph Bartel fulfilled the
duties of this position prior to Mr. Lees appointment. |
|
(5) |
|
Mr. Loughlins compensation is denominated in British
pounds and was translated into U.S. dollars using the average
2008, 2007 and 2006 daily exchange rates of £1 = $1.83516,
£1 = $2.00181 and £1 = $1.8426, respectively, per
OANDA Corporation. |
|
(6) |
|
Mr. Rayner commenced employment on November 5, 2007. |
|
(7) |
|
Ms. Tafoya became the President, North America on
June 18, 2008. Prior to June 18, 2008, Ms. Tafoya
served as Senior Vice President of Sales. |
|
(8) |
|
Amount consists of discretionary bonuses earned per the terms of
Mr. Holger Bartels employment agreement. |
|
(9) |
|
Amount consists of a $1,500 bonus payment made to all employees
of the Company as of the end of March 31, 2006. |
|
(10) |
|
Amount consists of $30,000 of discretionary bonuses earned per
the terms of Mr. Lees employment agreement, a
discretionary $15,000 employee bonus award and $2,335 bonus
payment made to eligible employees of the Company as of the end
of December 31, 2008. |
|
(11) |
|
Amount consists of discretionary bonuses earned per the terms of
Mr. Rayners employment agreement. |
|
(12) |
|
Amount consists of discretionary employee bonus awards. |
|
(13) |
|
Amount consists of a $1,500 bonus payment made to all employees
of the Company as of the end of March 31, 2006 and a
discretionary $1,250 employee bonus award. |
|
(14) |
|
Amounts consist of bonuses earned during fiscal 2007 and 2006
under our Executive Bonus Plan. |
|
(15) |
|
Amounts consist of bonuses earned during fiscal 2008 and 2007
per the terms of Mr. Loughlins employment agreement. |
|
(16) |
|
Of this amount, $129,944 was earned during fiscal 2006 under a
quarterly performance bonus plan per the terms of
Mr. Loughlins employment agreement and $15,000 was
from bonuses earned during fiscal 2006 under our Executive Bonus
Plan. |
|
(17) |
|
Of this amount, $42,878 was from commissions earned during
fiscal 2007 under the terms of Ms. Tafoyas employment
agreement and $25,000 was from bonuses earned during fiscal 2007
under our Executive Bonus Plan. |
|
(18) |
|
Of this amount, $171,510 was from commissions earned during
fiscal 2006 under the terms of Ms. Tafoyas employment
agreement and $15,000 was from bonuses earned during fiscal 2006
under our Executive Bonus Plan. |
|
(19) |
|
For 2008, amount consists of $590,982 in fees paid to
Mr. Holger Bartel pursuant to the terms of his consulting
agreement and $22,840 in non-employee director fees paid to
Mr. Holger Bartel for the period from January 1, 2008
to September 30, 2008. For 2007 amount consists of the fees
paid to Mr. Holger Bartel pursuant to the terms of his
consulting agreement. |
|
(20) |
|
Amount consists of
gross-up for
taxes on bonus payments. |
|
(21) |
|
For 2008 and 2007, amount consists of the Companys
matching contribution of $1,500 under the tax-qualified 401(k)
Plan. For 2006, amount consists of the Companys matching
contribution of $1,500 under the tax-qualified 401(k) Plan and
$1,500 for the
gross-up for
taxes on bonus payments. |
|
(22) |
|
For 2008, amount consists of the Companys contribution of
$26,720 to the Companys UK Employee Pension Contribution
Plan and $4,291 for premiums paid for private health insurance
for Mr. Loughlin and his family. For 2007, amount consists
of the Companys contribution to the Companys UK
Employee Pension Contribution Plan. For 2006, amount consists of
the Companys contribution of $15,449 to the Companys
UK Employee Pension Contribution Plan and $947 for the
gross-up of
taxes on bonus payments. |
14
Grants of
Plan-Based Awards in 2008
The following table sets forth certain information with respect
to non-equity incentive plan awards granted to each of our named
executive officers during the fiscal year ended
December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
Estimated Possible Payouts Under Non-Equity
|
|
|
|
Incentive Plan Awards
|
|
|
|
Threshold
|
|
|
Target
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
Holger Bartel(1)
|
|
|
|
|
|
|
60,000
|
|
Ralph Bartel(2)
|
|
|
|
|
|
|
100,000
|
|
Wayne Lee(2)
|
|
|
|
|
|
|
100,000
|
|
Wayne Lee(3)
|
|
|
|
|
|
|
90,000
|
|
Chris Loughlin(4)
|
|
|
|
|
|
|
220,224
|
|
Max Rayner(2)
|
|
|
|
|
|
|
100,000
|
|
Max Rayner(5)
|
|
|
|
|
|
|
120,000
|
|
Shirley Tafoya(2)
|
|
|
|
|
|
|
100,000
|
|
|
|
|
(1) |
|
Amount represents the potential quarterly Performance Bonus
payments under the terms of Mr. Holger Bartels
employment agreement. The business measurements and performance
goals for determining the Performance Bonus payout are described
in the CD&A. |
|
(2) |
|
Amount represents the potential quarterly bonus payments under
the terms of the Executive Bonus Plan. The Executive Bonus Plan
was discontinued after the second quarter of 2008. The business
measurements and performance goals for determining the payout
are described in the CD&A. |
|
(3) |
|
Amount represents the potential quarterly Performance Bonus
payments under the terms of Mr. Lees employment
agreement. The business measurements and performance goals for
determining the Performance Bonus payout are described in the
CD&A. |
|
(4) |
|
Amount represents the potential quarterly bonus payments under
the terms of Mr. Loughlins employment agreement.
Mr. Loughlin was also eligible for an annual bonus payment
which did not have a targeted payout amount, as the amount that
Mr. Loughlin may receive for such bonus is not capped. The
measurements for determining the quarterly and annual payouts
are described in the CD&A. |
|
(5) |
|
Amount represents the potential quarterly Performance Bonus
payments under the terms of Mr. Rayners employment
agreement. The business measurements and performance goals for
determining the Performance Bonus payout are described in the
CD&A. |
Outstanding
Equity Awards at December 31, 2008
There were no equity awards for any of our named executive
officers that remained outstanding as of December 31, 2008.
Option
Exercises and Stock Vested
The following table provides information about options exercised
for our named executive officers during the year ended
December 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
Number of Shares
|
|
|
Value Realized
|
|
|
|
Acquired on Exercise
|
|
|
on Exercise(1)
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
Ralph Bartel
|
|
|
35,000
|
|
|
|
266,950
|
|
|
|
|
(1) |
|
Represents the amounts realized based on the difference between
the market price of Travelzoo Inc. stock on the date of exercise
and the exercise price. |
For the year ended December 31, 2008, there was no stock
vested for any of our named executive officers.
15
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, 2008 with the Companys named
executive officers are described below.
Mr. Holger Bartel entered into an employment agreement with
the Company on October 1, 2008. Pursuant to the terms of
the agreement, Mr. Holger Bartel agrees not to leave or
discontinue his employment with the Company during the first six
months of his employment. Similarly, the Company agrees not to
terminate Mr. Holger Bartels employment during the
first six months with the Company without cause. After the six
month period has ended, Mr. Holger Bartel is an at-will
employee and the Company or Mr. Holger Bartel may terminate
the agreement, with or without cause, upon two weeks prior
written notice. Mr. Holger Bartel is not entitled to
receive any severance or change of control benefits under the
terms of the agreement. Mr. Holger Bartel 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. Holger Bartel is entitled to
participate in or receive such benefits under the Companys
employee benefits plans and policies as may be in effect from
time to time.
Mr. Holger Bartel 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. Holger Bartel agreed to not,
directly or indirectly, perform services for, or engage in, any
business competitive with the Company during the period of his
employment. He also agreed to not, directly or indirectly,
solicit the Companys 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 is 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 is not
entitled to receive any severance or change of control benefits
under the terms of the agreement. Mr. Lee 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. Lee is entitled to participate
in or receive such benefits under the Companys employee
benefits plans and policies as may be in effect from time to
time.
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 Companys 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 term of the agreement is from May 16, 2005 to
June 30, 2010, after which time either party may terminate
the agreement, with or without cause, upon twelve months prior
written notice. 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,
2008, Mr. Loughlin would be entitled to receive $572,572.
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 Companys 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 Companys 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
16
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. Tafoyas 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 Companys 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 Companys net
advertising revenues in the second quarter of 2003. In addition,
Ms. Tafoya is entitled to participate in or receive such
benefits under the Companys 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 Companys 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 Companys 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 Companys 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
Companys principal stockholders, directors
17
or senior management. Upon notice of a potential conflict of
interest, the Audit Committee will evaluate the transaction to
determine if it is in the Companys best interests and
whether, in the Audit Committees judgment, the terms of
such transaction are at least as beneficial to us as the terms
we could obtain in a similar transaction with an independent
third party.
In November 2007, the Company entered into an independent
contractor agreement with Holger Bartel, the Companys
current Chief Executive Officer, a member of the Companys
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.
Independent
Public Accountants
KPMG LLP (KPMG) served as Travelzoos
independent registered public accounting firm for our 2008
fiscal year. KPMG representatives are not expected to be present
at the Annual Meeting or to make a formal statement.
Consequently, representatives of KPMG will not be available to
respond to questions at the meeting.
The Audit Committee has not yet selected our independent
registered public accounting firm for our 2009 fiscal year. The
Audit Committee annually reviews the performance of our
independent registered public accounting firm and the fees
charged for their services. This review has not yet been
completed. Based upon the results of this review, the Audit
Committee will determine which independent registered public
accounting firm to engage to perform our annual audit.
Stockholder approval of our accounting firm is not required by
our bylaws or otherwise required to be submitted to the
stockholders.
Principal
Accountant Fees and Services
During fiscal year 2007 and 2008, KPMG charged fees for services
rendered to Travelzoo as follows:
|
|
|
|
|
|
|
|
|
Service
|
|
2007 Fees
|
|
|
2008 Fees
|
|
|
Audit fees(1)
|
|
$
|
855,101
|
|
|
$
|
924,685
|
|
Audit-related fees
|
|
|
|
|
|
|
|
|
Tax fees(2)
|
|
|
|
|
|
|
20,692
|
|
All other fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
855,101
|
|
|
$
|
945,377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Audit fees consisted of fees for professional services rendered
for the annual audit of Companys consolidated financial
statements and review of the interim consolidated financial
statements included in the quarterly reports and audit services
rendered in connection with other statutory or regulatory
filings. |
|
(2) |
|
Tax fees consisted of tax advice and tax planning fees. |
Policy on
Audit Committee Pre-Approval of Audit and Permissible Non-Audit
Services of Independent Registered Public Accounting
Firm
The Audit Committee pre-approves all audit and permissible
non-audit services provided by the Companys independent
registered public accounting firm. These services may include
audit services, audit-related services, tax and other services.
Pre-approval is generally provided for up to one year, and any
pre-approval is detailed as to the particular service or
category of services and is generally subject to a specific
budget. The independent registered public accounting firm and
management are required to periodically report to the Audit
Committee regarding the extent of services provided by the
independent registered public accounting firm in accordance with
this pre-approval, and the fees for the services performed to
date. The Audit Committee may also pre-approve particular
services on a
case-by-case
basis. During 2007 and 2008, all services provided by KPMG were
pre-approved by the Audit Committee in accordance with this
policy
18
Voting
Under the Delaware General Corporation Law and our certificate
of incorporation and bylaws, the presence, in person or
represented by proxy, of the holders of a majority of the
outstanding shares of our stock is necessary to constitute a
quorum of stockholders to take action at the Annual Meeting.
Once a quorum of stockholders is established, the affirmative
vote of a plurality of the shares, which are present in person
or represented by proxy at the Annual Meeting, is required to
elect each director. The affirmative vote of a majority of the
shares entitled to vote and present in person or by proxy in
favor of any other matter properly brought before the Annual
Meeting is required to approve of such action.
Shares represented by proxies which are marked vote
withheld with respect to the election of any person to
serve on the Board of Directors will not be considered in
determining whether such a person has received the affirmative
vote of a plurality of the shares. Shares represented by proxies
that are marked abstain with respect to any other
proposal will not be considered in determining whether such
proposal has received the affirmative vote of a majority of the
shares and such proxies will not have the effect of a
no vote.
Shares represented by proxies which deny the proxy-holder
discretionary authority to vote on any other proposal will not
be considered in determining whether such proposal has received
the affirmative vote of a majority of the shares and such
proxies will not have the effect of a no vote.
We know of no matters to come before the Annual Meeting except
as described in this Proxy Statement. If any other matters
properly come before the Annual Meeting, the proxies solicited
hereby will be voted on such matters in accordance with the
judgment of the persons voting such proxies.
Availability
of the Proxy Materials
This proxy statement is available on the Internet at
corporate.travelzoo.com/annualreport.
Stockholder
Proposals for the 2010 Annual Meeting
Proposals of eligible stockholders intended to be presented at
the 2010 Annual Meeting must be received by us by
February 4, 2010 for inclusion in our proxy statement and
proxy relating to that meeting. Upon receipt of any such
proposal, we will determine whether or not to include such
proposal in the proxy statement and proxy in accordance with
regulations governing the solicitation of proxies.
If a stockholder wishes to present a proposal at
Travelzoos 2010 Annual Meeting or to nominate one or more
directors and the proposal is not intended to be included in
Travelzoos proxy statement relating to that meeting, the
stockholder must give advance written notice to Travelzoo by
March 15, 2010. These requirements are separate from and in
addition to the requirements a stockholder must meet to have a
proposal included in our proxy statement.
Any such notice must be delivered or mailed to our Corporate
Secretary, at Travelzoo Inc., 590 Madison Avenue,
37th Floor, New York, New York 10022. Any stockholder
desiring a copy of our bylaws will be forwarded one upon written
request.
Householding
As permitted by applicable law, only one copy of this Proxy
Statement is being delivered to stockholders residing at the
same address, unless such stockholders have notified the Company
of their desire to receive multiple copies of the Proxy
Statement.
The Company will promptly deliver, upon oral or written request,
a separate copy of the Proxy Statement to any stockholder
residing at an address to which only one copy was mailed.
Requests for additional copies, or requests for a single copy to
be delivered to a shared address should be directed to Investor
Relations, Travelzoo Inc., 590 Madison Avenue, 37th Floor,
New York, New York 10022 or by telephone at
(212) 484-4900.
19
Other
We will bear the cost of solicitation of proxies. Proxies will
be solicited by mail and also may be solicited by our executive
officers and other employees personally or by telephone, but
such persons will not be specifically compensated for such
services. It is contemplated that brokerage houses, custodians,
nominees and fiduciaries will be requested to forward the
soliciting material to the beneficial owners of stock held of
record by such persons and we will reimburse them for their
reasonable expenses incurred in connection therewith.
Even if you plan to attend the meeting in person, please sign,
date and return the enclosed proxy promptly in accordance with
the instructions shown on the enclosed proxy. You have the power
to revoke your proxy, at any time before it is exercised, by
giving written notice of revocation to our Corporate Secretary
or by duly executing and delivering a proxy bearing a later
date, or by attending the Annual Meeting and casting a contrary
vote. All shares represented by proxies received in time to be
counted at the Annual Meeting will be voted. Your cooperation in
giving this your immediate attention will be appreciated.
RALPH BARTEL
Chairman of the Board of Directors
590 Madison Avenue, 37th Floor
New York, New York 10022
20
TRAVELZOO INC.
ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Ralph Bartel as his/her Proxy, with full power
of substitution, to represent him/her at the Annual Meeting of Stockholders of
Travelzoo Inc. (the Company) on June 4, 2009, or any adjournments or
postponements thereof. If you do not indicate how you wish to vote, the Proxy
will vote for all nominees to the Board of Directors, and as he may determine,
in his discretion, with regard to any other matter properly presented at the
meeting.
This proxy, when properly executed, will be voted as directed by the stockholder.
(Continued, and to be marked, dated and signed, on the other side) |
TRAVELZOO INC.
Mailing Instructions
If you receive this proxy card via mail, please date and sign it, and return it in the postage
paid envelope provided.
If you receive this proxy card via e-mail, please print the proxy card, date and sign it, and
return it to:
Travelzoo Inc.
Attention: Corporate Secretary
590 Madison Avenue
37th Floor
New York, NY 10022
âDETACH PROXY CARD HERE: â
1. ELECTION OF £ FOR all nominees listed below (except as marked to the contrary, if £ WITHHOLD
DIRECTORS any, below) AUTHORITY to vote for
all nominees listed
below
Nominees: 01 Holger Bartel, 02 Ralph Bartel, 03 David Ehrlich, 04 Donovan Neale-May, 05 Kelly Urso.
(To withhold authority to vote for an individual, write that nominees name in the space provided below.) Please Detach Here
q You Must
Detach This Portion
of the Proxy Card
q
Before Returning it
in the Enclosed
Envelope
2. SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE SAID MEETING AND ANY POSTPONEMENT OR ADJOURNMENT THEREOF
The undersigned hereby acknowledges receipt of the Proxy Statement and 2008
Annual Report of Travelzoo Inc.
Date , 2009
(signature)
(signature, if jointly held)
Please sign exactly as name appears at left. If stock is jointly held each
owner should sign. Executors, Administrators, Trustees, Guardians and
Corporate Officers should indicate their fiduciary capacity or full title
when signing.
MARK HERE IF YOU INTEND TO ATTEND THE MEETING
£ |