The Board recommends that you vote your shares "FOR" Proposal 1, Proposal 2 and Proposal 3.
Stockholders can vote by proxy or in person, however, granting a proxy does not in any way affect your right to attend the Annual Meeting and vote 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 Broadridge Financial Solutions, Inc., 51 Mercedes Way, Edgewood, New York, NY 11717, U.S.A.
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 and "FOR" Proposal 2 and Proposal 3. If any other matter is properly brought before the meeting, your proxies will vote in accordance with their discretion. At the time of submitting this proxy statement for printing, we knew of no matter that will 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: |
| | |
| Ÿ | | Submit a valid, later-dated proxy before the Annual Meeting,
|
| Ÿ | | Notify our Corporate Secretary in writing at Travelzoo, Inc., Attention: Corporate Secretary, 800 W. El Camino Real, Suite 275, Mountain View, CA 94040 before the Annual Meeting that you have revoked your proxy, or
|
| Ÿ | | Vote in person at the Annual Meeting.
|
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. Pursuant to our bylaws, our directors are elected by a plurality of the votes cast, which means that the nominees who receive the greatest number of votes will be elected. The affirmative vote of a majority of the shares of the Company's Common Stock present in person or represented by proxy and entitled to vote on the proposal will be considered as the approval of Proposal 2 and, by an advisory vote, of Proposal 3.
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 Common Stock are present at the meeting, either in person or by proxy.
Azzurro Capital Inc., whose beneficial owner is Mr. Ralph Bartel, a member of our Board, holds an aggregate of 7,430,5387,160,500 shares of our Common Stock, representing approximately of 51.7%57.5% the outstanding shares, as of March 10, 201621, 2018.
All properly executed proxies delivered pursuant to this solicitation and not revoked will be voted at the Annual Meeting as specified in such proxies. As noted above, if no voting instructions are indicated, proxies will be voted as recommended by our Board on all matters, and in the discretion of the proxy holder on any other matters that properly come before the Annual Meeting.
What is a broker non-vote and how are broker non-votes and abstentions counted?
A broker "non-vote" occurs when a nominee holding shares of Common Stock for the beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner. Brokers that have not received voting instructions from their clients cannot vote on their clients' behalf on "non-routine" proposals. The vote on Proposals 1, 2 and 3 are considered "non-routine". Broker non-votes will not have any effect with respect to Proposals 1, 2 and 3, as shares that constitute broker non-votes are not considered entitled to vote but will be counted for the purposes of obtaining a quorum for the Annual Meeting.
Abstentions are counted as "shares present" at the Annual Meeting for purposes of determining the presence of a quorum and with respect to any matters being voted upon at the Annual Meeting. Abstentions will have no effect on the outcome of the election of directors, but with respect to any other proposal an abstention will have the same effect as a vote against such proposal.
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 a report on Form 8-K, which we intend to file within four business days following the Annual Meeting. You can obtain a copy of the Form 8-K by logging on to Travelzoo's investor relations website at www.travelzoo.com/ir, by calling the U.S. Securities and Exchange Commission ("SEC") 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 website does not constitute part of this proxy statement.
PROPOSAL 1—ELECTION OF DIRECTORS (PROPOSAL 1)
Under Travelzoo's 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 director's election and until a successor is elected and qualified or until the earlier resignation or removal of the director. The following individuals have been nominated for election to our Board of Directors, each to serve until the 20172019 Annual Meeting of Stockholders and until their successors are elected and qualified or until their earlier resignation or removal.
Following is information about each nominee, including biographical data for at least the last five years. Should one or more of these nominees become unavailable to accept nomination or election as a director, the individuals named as proxies on the enclosed proxy card will vote the shares that they represent for the election of such other persons as the Board may recommend, unless the Board reduces the number of directors. We have no reason to believe that any nominee will be unable or unwilling to serve if elected as a director.
Nominees for a One-Year Term That Will Expire in 2017:2019:
The ages, principal occupations, directorships held and other information as of March 10, 201621, 2018, with respect to our nominees are described below.
|
| | | | |
| Name | | Age | | Position |
HolgerRalph Bartel, Ph.D., Ph.D. | | 49 | 52 | Chairman of the Board of Directors |
Ralph Bartel, Ph.D.Rachel Barnett | 37 | 50 | | General Counsel and Director |
Michael Karg, Ph.D.Carrie Liqun Liu (1) (2) (3) (4) | | 44 | | Director |
Donovan Neale-May (1) (3) (4) | | 63 | 36 | Director |
| Mary Reilly (1) (2) (3) (4) | | 62 | 64 | Director |
| Beatrice Tarka (1) (2) (4) | | 44 | | Director |
Caroline Tsay | | 34 | 46 | Director |
| |
| (1) | Member of the Audit Committee |
| |
| (2) | Member of the Compensation Committee |
| |
| (3) | Member of the Disclosure Committee |
| |
| (4) | Member of the Nominating and Corporate Governance Committee |
Each of the director nominees listed above is currently a director of Travelzoo. Mr. Holger Bartel,Travelzoo and was previously elected by the shareholders. Mr. Ralph Bartel, Mr. Karg, Mr. Neale-MayMs. Rachel Barnett, Ms. Carrie Liqun Liu, Ms. Mary Reilly and Ms. ReillyBeatrice Tarka were elected directors of Travelzoo at the Company's Annual Meeting of Stockholders held on May 1, 2015. Ms. Tarka and Ms. Tsay were appointed directors of Travelzoo by the Board of Directors on August 22, 2015.2017. Our Board of Directors has determined that each of Mr. Karg, Mr. Neale-May,Ms. Liu, Ms. Reilly Ms. Tarka and Ms. TsayTarka meet the independence requirements of the listing standards of the NASDAQ Stock Market (the "NASDAQ"). The Board of Directors determined that Mr. Ralph Bartel is not independent under the rules of NASDAQ because he is a beneficial owner of Azzurro Capital Inc., which holds approximately 51.7%57.5% of our outstanding Common Stock as of March 10, 2016, and Mr. Holger Bartel is not independent under the rules of NASDAQ because he is Ralph Bartel's brother.21, 2018.
Holger Bartel, Ph.D., has been Travelzoo's Global Chief Executive Officer since January 2016. He has been the Chairman of the Board of Directors since July 2010. From September 2015 to December 2015, he was Travelzoo's Executive Chairman. From October 2011 to October 2013, he was Head of Strategy. From October 2008 to June 2010, he was Travelzoo's Chief Executive Officer. From September 1999 to November 2007, he was Executive Vice President. From 1995 to 1998, he was Engagement Manager at McKinsey & Company, a global management consulting firm. From 1992 to 1994, he was a research fellow at Harvard Business School. Holger 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.
Areas of Holger Bartel's relevant experience include deep knowledge of Travelzoo's operations, Internet, strategy, management of growth companies, travel and international management.
Ralph Bartel, Ph.D.,Ph.D.,founded Travelzoo in May 1998 and has been a member of the Board of Directors since then. He has been the Chairman of the Board of Directors since May 2017, and he has been Travelzoo's Chief Talent Officer since September 2014. From May 1998 to September 2008, he was the Chairman of the Board of Directors and the Chief Executive Officer. From October 2008 to June 2010, he was the Chairman of the Board of Directors. Ralph Bartel is a professionally trained journalist who holds a Ph.D. in Communications from the University of Mainz, Germany, a master's 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.
Areas of Ralph Bartel's relevant experience include media, journalism, Internet, finance and start-up experience.
Michael Karg, Ph.D.,Rachel Barnett, has been a memberGeneral Counsel of Travelzoo's Board of DirectorsTravelzoo since September 2013. HeFrom October 2006 to September 2013, she was an attorney at Skadden, Arps, Slate, Meagher and Flom, LLP. Ms. Barnett has also been Group Chief Executive Officer of Ebiquity and a member of its board of directorsLecturer in Law at Columbia Law School since January 2016. Ebiquity,Ms. Barnett earned her juris doctor degree from Columbia Law School and a company listed onBachelor of Science degree from Cornell University. Ms. Barnett clerked for the London Stock Exchange, provides independent marketing analytics services helping brands globally improve their return on marketing investment. From May 2013 to December 2015, he was Chief Executive OfficerHonorable Vice Chancellor Stephen P. Lamb of Razorfish International, an interactive marketing and technology services company. From September 2010 to May 2013, he was Chief Operating Officer Internationalthe Delaware Court of Razorfish Digitas. Mr. Karg holds a doctorate in business administration and an MBA in finance and accounting from the University of St. Gallen, Switzerland.Chancery.
Areas of Mr. Karg'sMs. Barnett’s relevant experience include corporate governance, risk management, and international management, marketing, digital media, and corporate strategy and development.transactions.
Donovan Neale-MayCarrie Liqun Liu, has beenis the General Manager of the Private Equity Business at Tianhong, a prominent fund management company in China. From July 2011 to May 2017, Ms. Liu was the Executive Director of Fosun China Momentum Fund. From May 2009 to July 2011, she was a senior investment professional at Henderson Equity Partners. From 2015 to 2016, she was a member of Travelzoo's Boardthe board of Directors since February 1999. He has been the Presidentdirectors and Managing Partneraudit committee of GlobalFluency since 1987. GlobalFluency is a global organization of independent marketingTom Tailor Holding AG, and communications firms with 70 offices in over 40 countries. He is the founder and Executive Director of the Chief Marketing Officer (CMO) Council, a global affinity network of more than 9,000 senior marketing and branding executives controlling more than $450 billion in aggregated annual marketing spend. Mr. Neale-May is a journalism graduate of Rhodes University in South Africa. He isalso a member of Rhodes University'sthe board of governors.directors of Cirque du Soleil, an entertainment company. Ms. Liu holds a bachelor’s degree in finance and master’s degree in law from Tsinghua University in Beijing, China.
Areas of Mr. Neale-May'sMs. Liu’s relevant experience include brand strategy, public relations, marketingAsian markets, investments, finance and international management.global strategy.
Mary Reilly has been a member of Travelzoo's Board of Directors since September 2013. From August 2002 to June 2013, she was a Partner of Deloitte LLP, an international accounting and consulting firm. At Deloitte she worked with organizations in a wide range of industries including recruitment, retail, media, business services, manufacturing, professional services, and charity. She is the Chaira member of the Auditboard of directors of Mitie plc since September 2017, of Essentra plc since July 2017, a member of the board of directors and Risk Committeeof the audit committee for Cape plc since September 2016, and a member of the board of directors and the chair of the audit committee for Ferrexpo plc since May 2015. She is also the chair of the audit and risk committee for the Department of Transport Board in the United Kingdom since June 2013. She is a member of the Boardboard of Directorsdirectors and the Chairchair of the Auditaudit and Risk Committeerisk committee for Crown Agents Ltd., an international development company that partners with governments, aid agencies, non-governmental organizations and companies in nearly 100 countries to make lasting change to the systems and organizations that are vital for people’s well-being and prosperity. From 2000 to 2008, she was a member of the Boardboard of Directorsdirectors of London 2012, a company established to run London's Olympic bid. From 2003 to 2006, she was a member of the Board of Directors of the London Development Agency. Ms. Reilly holds a bachelor's degree in history from the University College London. She completed a postgraduate course at London Business School. She is a Qualified Chartered Accountant in the United Kingdom.
Areas of Ms. Reilly's relevant experience include accounting, finance, international management and non-executive directorships.
Beatrice Tarka, has been a member of Travelzoo's Board of Directors since August 2015. She has been the founder and Chief Executive Officer of Mobissimo since September 2000. Mobissimo is an online travel search engine which allows users to compare prices of airline tickets, hotel rooms, and car rentals. From 1996 to 2000, she was Chief Executive Officer of Axall Media, a game and entertainment software developer and publisher. Ms. Tarka holds a master's degree in business administration from Boston University and a bachelor's degree in international affairs from the American University in Paris, France. She speaks English, French, Italian, and Polish.
Areas of Ms.Tarka’s relevant experience include entrepreneurship, strategic partnerships, international business and innovative online product development.
Caroline Tsay has been a member of Travelzoo's Board of Directors since August 2015. She has been Vice President and General Manager of the HP Software Online Business at Hewlett-Packard Company since March 2013. From April 2007 to March 2013, she held several product leadership positions across the consumer search, e-commerce, and advertising businesses at Yahoo!. She is a member of the Board of Directors of Rosetta Stone, a company listed on the New York Stock Exchange. Rosetta Stone provides technology-based language learning products. Ms. Tsay holds a master's degree in management science and engineering and a bachelor's degree in computer science from Stanford University. She speaks English and Mandarin.
Areas of Ms. Tsay’s relevant experience include product development, e-commerce and strategy.
Required Vote
Our Certificate of Incorporation, as amended, does not authorize cumulative voting. Delaware law and our bylaws provide that directors are to be elected by a plurality of the votes of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the election of directors. This means that the sevenfive candidates receiving the highest number of affirmative votes at the Annual Meeting will be elected as directors. Only shares that are voted in favor of a particular nominee will be counted toward that nominee's achievement of a plurality. Shares present at the Annual Meeting that are not voted for a particular nominee or shares present by proxy where the stockholder properly withheld authority to vote for such nominee will not be counted toward that nominee's achievement of a plurality. Thus, abstentions and broker non-votes will have no effect on the election of directors. Proxies cannot be voted for a greater number of persons than the number of nominees named.
Board of Directors' Recommendation
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION OF THE SEVEN DIRECTOR NOMINEES NAMED ABOVE.
The Board of Directors believes that each director nominee possesses the qualities and experience a member of Travelzoo's Board should possess. The Board of Directors seeks out, and the Board of Directors is comprised of, individuals whose background and experience complement those of other Board members.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION OF THE FIVE DIRECTOR NOMINEES NAMED ABOVE.
CORPORATE GOVERNANCE
Board Meetings and Committees
The Board of Directors has appointed an Audit Committee, a Compensation Committee, a Disclosure Committee and a Nominating and Corporate Governance 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 2015.2017. Each of Mr. HolgerRalph Bartel, Ms. Barnett, Ms. Liqun Liu, Ms. Reilly, Ms. Tarka, Mr. RalphHolger Bartel, Mr. Karg, Mr. Neale-May and Ms. ReillyTsay 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 servesserved during the period such persons served. Directors that served prior to the election of directors at the last annual meeting on May 22, 2017, including Mr. Holger Bartel, Mr. Michael Karg, Ms. Caroline Tsay and Mr. Donovan Neale-May, are listed in addition to the current director nominees as they served during fiscal year 2017 from January 1, 2017 through May 22, 2017.
|
| | | | | |
| Name | Board | Audit | Compensation | Disclosure | Nominating and Corporate Governance |
| Mr. Holger Bartel | Chair | | | | |
| Mr. Ralph Bartel | Member | | | | |
| Mr. Neale-May | Member | Member | | Chair | Chair |
| Mr. Michael Karg | Member | Member | Chair | Member | Member |
| Ms. Mary Reilly | Member | Chair | Member | | Member |
| Number of 2015 Meetings | 4 | 4 | 2 | 4 | 1 |
|
| | | | | |
| Name | Board | Audit | Compensation | Disclosure | Nominating and Corporate Governance |
| Mr. Ralph Bartel | Chair | | | | |
| Ms. Rachel Barnett | Member | | | | |
| Ms. Carrie Liqun Liu | Member | Member | | Member | |
| Ms. Mary Reilly | Member | Chair | Chair | Chair | Chair |
| Ms. Beatrice Tarka | Member | Member | Member | | Member |
| Mr. Holger Bartel* | Chair | | | | |
| Mr. Michael Karg* | Member | Member | Chair | Member | Member |
| Mr. Donovan Neale-May* | Member | Member | | Chair | Chair |
| Ms. Caroline Tsay* | Member | | | | |
| Number of 2017 Meetings | 4 | 4 | 1 | 4 | — |
* Service during fiscal year 2017 was from January 1, 2017 through May 22, 2017. | | |
The Company does not require that directors attend the Annual Meeting.
Audit Committee
The Audit Committee's primary responsibilities are to oversee and monitor (i) the integrity of Travelzoo's 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 committee's responsibilities is set forth in its written charter. A copy of 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 Ms. Mary Reilly qualifies as an audit committee financial expert within the meaning of the regulations of SEC.
Compensation Committee
The Compensation Committee reviews and approves the compensation and benefits for the Company's executive officers and directors, and makes recommendations to the Board of Directors regarding such matters. The Compensation Committee also approves the Company's non-equity incentive plans. The Compensation Committee further reviews and discusses with management the Compensation Discussion and Analysis section of this proxy statement. The Report of the Compensation Committee is included herein. The Company is not required to have a Compensation Committee charter since it is a “Controlled Company” under NASDAQ Rule 5615(c), on account of the stock ownership by Azzurro Capital Inc.
Disclosure Committee
The Disclosure Committee's 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 SEC filings, press releases and other broadly disseminated correspondence.
Nominating and Corporate Governance Committee
The Nominating Committee assists the Board in identifying qualified individuals to become directors, makes recommendations to the Board concerning the size, structure and composition of the Board and its committees, monitors the process to assess the Board’s effectiveness and is primarily responsible for oversight of corporate governance. In evaluating potential nominees to the Board, the Nominating Committee considers, among other things, independence, character, ability to exercise sound judgment, age, demonstrated leadership, skills, including financial literacy, and experience in the context of the needs of the Board. The Nominating Committee considers candidates proposed by shareholders and evaluates them using the same criteria as for other candidates. The Nominating Committee recommended to the full Board each of the current nominees for election to the Board.
The Board's Role in Risk Oversight
The full Board oversees enterprise risk as part of its role in reviewing and overseeing the implementation of the Company's strategic plans and objectives. The risk oversight function is administered both in full Board discussions and in individual committees that are tasked by the Board with oversight of specific risks. On a regular basis, the Board and its committees receive information and reports from management on the status of the Company and the risks associated with the Company's strategy and business plans. In addition, the Audit Committee reviews the Company's risk assessment and risk management policies and procedures at least annually, including steps taken to monitor and control such exposures. The Board believes the continuity of Board membership and the independent directors constituting a majority of the Board encourage open discussion and assessment of the Company's ability to manage its risks.
Code of Ethics
We have adopted a code of ethics that applies to our global chief executive officerGlobal Chief Executive Officer and our chief financial officer,Chief Financial Officer, who also serves as our principal accounting officer. This code of ethics is posted on our website located at corporate.travelzoo.com/governance. 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., 800 W. El Camino Real, Suite 275, Mountain View, CA 94040.
Communications with Directors
The boardBoard 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 boardBoard committee or any chair of any such committee by mail. To communicate with the Board of Directors, any individual directorsdirector or any group or committee of directors, correspondence should be addressed to the Board of Directors or any such individual directorsdirector or group or committee of directors by either name or title. All such correspondence should be sent "c/o Corporate Secretary" at Travelzoo, Inc., 800 W. El Camino Real, Suite 275, Mountain View, CA 94040.
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 boardBoard 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.
Director Compensation
Directors of the Company or its subsidiaries are entitled to receive certain retainers and fees. In 2015,2017, there were no adjustments to the director compensation policy. The retainers and meeting fees are as follows:
|
| | |
| Description | Fees Earned ($) |
|
Annual Chairman of the Board retainer | 175,000 |
|
Annual retainer for Board member retainer | 50,000 |
|
Annual retainer for Audit Committee Chair retainer | 30,000 |
|
| Fee for attendance of a Board meeting | 1,680 |
|
| Fee for attendance of an Audit Committee meeting | 2,800 |
|
| Fee for attendance of a Disclosure Committee meeting | 1,680 |
|
| Fee for attendance of a Compensation Committee meeting | 2,800 |
|
Members of the Board of Directors may receive fees for additional meetings and committee work.
We reimburse directors for out-of-pocket expenses incurred in connection with attending meetings.
Mr. Ralph Bartel and Ms. Rachel Barnett chose not to receive any compensation for histhe services as a director.director and/or Chairman. The following table shows compensation information for Travelzoo’s directors for fiscal year ended December 31, 20152017.
| | | Name | | Fees Earned or Paid in Cash ($) |
| | Total ($) |
| | Fees Earned or Paid in Cash ($) |
| | Total ($) |
|
| Mr. Holger Bartel | | 231,720 |
| | 231,720 |
| |
| Mr. Ralph Bartel | | — |
| | — |
| | — |
| | — |
|
| Mr. Michael Karg | | 80,240 |
| | 80,240 |
| |
| Mr. Neale-May | | 89,640 |
| | 89,640 |
| |
| Ms. Rachel Barnett | | | — |
| | — |
|
| Ms. Carrie Liqun Liu | | | 44,495 |
| | 44,495 |
|
| Ms. Mary Reilly | | 118,520 |
| | 118,520 |
| | 104,080 |
| | 104,080 |
|
| Ms. Beatrice Tarka | | 19,207 |
| | 19,207 |
| | 62,320 |
| | 62,320 |
|
| Ms. Caroline Tsay | | 19,207 |
| | 19,207 |
| |
| Mr. Holger Bartel* | | | 90,073 |
| | 90,073 |
|
| Mr. Michael Karg* | | | 33,083 |
| | 33,083 |
|
| Mr. Donovan Neale-May* | | | 30,283 |
| | 30,283 |
|
| Ms. Caroline Tsay* | | | 21,323 |
| | 21,323 |
|
* Service during fiscal year 2017 was from January 1, 2017 through May 22, 2017. | | * Service during fiscal year 2017 was from January 1, 2017 through May 22, 2017. | |
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 Global Chief Executive Officer and Chief Financial Officer 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. Moreover, employees are required to read and comply with our Guide to Business Conduct, which is a communication to all employees that ensures they are aware of their responsibility to avoid any conflicts of interest or potential conflicts of interest and to make appropriate disclosures to their manager or other personnel.
Our General Counsel and/or Chief Financial Officer review(s) all material related party transactions involving the Company and any of the Company's principal shareholders or members of our board of directors, nominees, or senior management or any immediate family member of any of the foregoing. When a potential related party transaction is identified, the General Counsel and/or the Chief Financial Officer will evaluate the transaction and determine whether the transaction requires the review and approval by the Audit Committee or a special committee of the Board consisting of independent directors (“Special Committee”). A general statement that the Audit Committee may review related party transactions is set forth in our audit committee charter, which was attached as Appendix A to our proxy statement for the 2008 Annual Meeting of Stockholders which has been filed with the SEC. Upon submission to the Audit Committee or a Special Committee, such committee will consider relevant facts and circumstances surrounding each related party transaction and any matters the committee deems appropriate. If the Audit Committee or a Special Committee determines that any such related party transaction creates a conflict of interest situation or would require disclosure under Item 404 of Regulation S-K, as promulgated by the SEC, the transaction must be approved by the committee prior to the Company entering into such transaction or ratified thereafter. Transactions or relationships previously approved by the Audit Committee or a Special Committee in existence prior to the formation of the committee do not require approval or ratification.
Ralph Bartel, who founded Travelzoo and who is a director of the Company, is the sole beneficiary of the Ralph Bartel 2005 Trust, which is the controlling shareholder of Azzurro Capital Inc. (“Azzurro”). As of March 10, 2016,21, 2018, Azzurro is the Company's largest stockholder, holding approximately 51.7%57.5% of the Company's outstanding shares.
On August 20, 2015, Travelzoo acquired the Travelzoo Asia Pacific business (“Asia Pacific”), which includes the Travelzoo businesses in Australia, China, Hong Kong, Japan, Taiwan, and Southeast Asia. This business was independently operated by Azzurro Capital Inc. under a licensing agreement with Travelzoo Inc. The Company held an option right to acquire Asia Pacific at fair market value as determined by a third party valuation expert. Under the terms of the definitive acquisition agreement, Travelzoo (Europe) Limited, a United Kingdom subsidiary of the Company, was authorized by the Company to exercise the option right to acquire Asia Pacific for a fair market transaction value of $22.6 million, subject to a working capital adjustment. As part of the acquisition, Travelzoo (Europe) Limited issued a promissory note to Azzurro with a principal amount of $5.7 million, with a maturity date of August 20, 2018 and the ability to pay off principal prior to this maturity date with no prepayment penalty and a stated interest rate of 7%. In January 2016, the full amount of the loan was paid off by Travelzoo (Europe) Limited.
Family Relationships
HolgerRalph Bartel, chairmanChairman of the Board of Directors and Holger Bartel, Global Chief Executive Officer, and Ralph Bartel, a member of the Board of Directors, are brothers. Except for Holger Bartel and Ralph Bartel, there are no familial relationships among any of our officers and directors.
Involvement in Certain Legal Proceedings
To our knowledge, during the last ten years, none of our directors and executive officers has: (i) had a bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (ii) been convicted in a criminal proceeding or been subject to a pending criminal proceeding, excluding traffic violations and other minor offenses; (iii) been subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; (iv) been found by a court of competent jurisdiction (in a civil action), the SEC, or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated; or (v) been the subject to, or a party to, any sanction or order, not subsequently reverse, suspended or vacated, of any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the named executive officers of Travelzoo as of March 10, 2016.21, 2018.
|
| | |
| Name | Age | Position |
| Holger Bartel, Ph.D. | 4951 | Chairman of the Board and Global Chief Executive Officer |
| Glen Ceremony | 4850 | Chief Financial Officer |
Vivian Hong | 42 | President, Asia Pacific |
Richard SingerRachel Barnett | 37 | President, EuropeGeneral Counsel and Director |
| Christian Smart | 39 | General Manager, Germany |
| Michael Stitt | 3638 | President, North America |
Holger Bartel, Ph.D., has been Travelzoo's Global Chief Executive Officer since January 2016. He has beenFrom July 2010 to May 2017, he was the Chairman of the Board of Directors since July 2010. From September 2015 to December 2015, he was Travelzoo's Executive Chairman.Directors. From October 2011 to October 2013, he was Head of Strategy. From October 2008 to June 2010, he was Travelzoo's Chief Executive Officer. From September 1999 to November 2007, he was Executive Vice President. From 1995 to 1998, he was Engagement Manager at McKinsey & Company, a global management consulting firm. From 1992 to 1994, he was a research fellow at Harvard Business School. Holger 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.
Glen Ceremony, has been Chief Financial Officer since June 2011. From October 2004 to June 2011, Mr. Ceremony worked at Ebay,eBay, Inc. andwhere he most recently served as Corporate Controller. In 2004, Mr. Ceremony was Senior Director of Global Finance Audit at Electronic Arts Inc. From 1998 to 2004, Mr. Ceremony worked at PWCPricewaterhouseCoopers LLP and from 1990 to 1998 he was at Coopers & Lybrand LLP. Mr. Ceremony received his B.S. in Business Administration from California State University, Sacramento.
Vivian HonRachel Barnett,g has been President, Asia PacificGeneral Counsel of Travelzoo since October 2015 after service as co-Chief Executive Officer of Asia Pacific from January 2015 to January 2016, and President of China from June 2011 to January 2015.September 2013. From October 20102006 to June 2011,September 2013, she was Online Business Director,an attorney at Skadden, Arps, Slate, Meagher and Flom, LLP. Ms. Barnett has also been a Lecturer in Law at Columbia Law School since January 2016. Ms. Barnett earned her juris doctor degree from Columbia Law School and a Bachelor of Dell Greater China.Science degree from Cornell University. Ms. Barnett clerked for the Honorable Vice Chancellor Stephen P. Lamb of the Delaware Court of Chancery.
Christian Smart, has been General Manager, Germany at Travelzoo since December 2016. From January 20072012 to JanuaryNovember 2016, he was Country Manager, Germany at Travelzoo. From December 2008 Ms. Hongto December 2011, he was Head of Marketing for eBaySales, Germany & Paypal China. From May 2000 to April 2006, Ms. Hong served as General Manager of Alibaba Shanghai. Ms. Hong holds a Bachelor’s degree in engineering from the Shanghai Jiao Tong University.
Richard Singer has been President, Europe since July 2012 after service as Commercial Director, Europe from January 2012 to July 2012.Spain at Travelzoo. From August 20032007 to January 2012,November 2008, he was Senior Sales Manager, Germany & Central Europe at Travelzoo. From June 2004 to August 2007, he worked in various roles at ProSiebenSat.1 Media SE and Amadeus. Mr. Singer workedSmart received his B.A. Hons in International Business from Hochschule RheinMain, Germany and attended business school at Telegraph Media GroupUniversity of Miami, USA, ESADE Business School, Barcelona, Spain and most recently served as General Manager, Telegraph Travel. Mr. Singer holds a BSc(Hons) degree in Sports Science and Management, and an MSc in Management postgraduate degree, each from Loughborough University United Kingdom.of St. Gallen, Switzerland.
Michael Stitt, has been President, North America at Travelzoo since October 2015. He was most recently Senior Vice President, overseeing local and entertainment categories, publishing and product planning in North America. From October 2004 to May 2010, he contributed to and then led Travelzoo’s production team. Mr. Stitt has also served as Global Head of Mobile Strategy since December 2013. Prior to joining Travelzoo, Mr. Stitt was with Meredith Corporation. He received a Bachelor of Arts degree in Advertising from Iowa State University. He also holds an MBA from the Sloan School of Management at Massachusetts Institute of Technology.
PROPOSAL 2—APPROVAL OF OPTIONS GRANTS (PROPOSAL 2)OPTION GRANT TO EXECUTIVE OFFICER
Option Agreement with Global Chief Executive Officer
The Company entered into a Nonqualified Stock Option Agreement (the “Option Agreement”) with Holger Bartel, Global Chief Executive Officer, on September 28, 2015,October 30, 2017, pursuant to which the Company granted Mr. Bartel the option (the “Option”) to purchase 400,000 shares of the Company’s common stock. The Option will begin to partly vest on March 31, 2016,2018, but will not be exercisable until stockholder approval. Stockholders are being asked to approve the issuance of common stock which is issuable to Mr. Bartel upon exercise of the Option. The principal terms of the Option Agreement are summarized below. The following summary is qualified in its entirety by the full text of the Option Agreement, which is incorporated herein by reference to Exhibit 10.2410.3 to the Company’s report on Form 8-K, filed October 1, 2015.November 3, 2017.
Exercisability of Option
The exercise price of the Option is $8.07$6.95 per share. The option will become exercisable in accordance with the following schedule:
|
| |
| Vesting Date | Percentage of Option Vesting |
March 31, 20162018 | 12.5% |
June 30, 20162018 | 12.5% |
September 30, 20162018 | 12.5% |
December 31, 20162018 | 12.5% |
March 31, 20172019 | 12.5% |
June 30, 20172019 | 12.5% |
September 30, 20172019 | 12.5% |
December 31, 20172019 | 12.5% |
Mr. Bartel must exercise the Option by September 28, 2025;October 30, 2027; after such date, the Option will expire.
Exercise of Option
Mr. Bartel may exercise, in whole or in part, the Option by delivering to the Company not less than 30 days prior to the exercise date (or such shorter period the Company may approve) a written notice of exercise, designating the number of shares to be purchased, along with payment of the full amount of the purchase price of the shares being purchased. The purchase price of the shares subject to the option may be paid for (i) in cash, (ii) in the discretion of the Board of Directors, by tender of shares of Common Stock already owned by Mr. Bartel, or (iii) in the discretion of the Board of Directors, by such other method as the Board of Directors may determine.
Adjustment of Option
As is customary in stock option agreements of this nature, the number of shares subject to the Option and exercise price are subject to adjustment in the event there is any change in the number of shares of outstanding common stock of the Company by reason of a stock dividend, recapitalization, merger, consolidation, split-up, combination, exchange of shares or other similar event.
Transfer Restrictions
The Option is not transferable by Mr. Bartel other than by will or the laws of descent and distribution and may be exercised during Mr. Bartel’s lifetime only by him or his guardian or legal representative.
Effect of Termination of Employment
If Mr. Bartel’s employment with the Company is terminated without cause (other than by reason of his death or disability), and subject to Mr. Bartel signing and not revoking a general release of claims as set forth in Appendix A of the Option Agreement, Mr. Bartel’s stock options shall immediately vest in full on the date of termination. The option shall remain exercisable for three months following the date of voluntary termination and any unexercised options shall be null and void if not exercised by that date. Should Mr. Bartel be terminated for cause (as defined in his Employment Agreement), should he voluntarily resign from the Company, or in the event of death or disability, Mr. Bartel’s (or, in the event of death, the legatee or legatees of Mr. Bartel under his last will, or his personal representatives or distributees) right to exercise the option, to the extent it was vested and he was entitled to exercise it on the date of termination of employment, shall continue for three months after such termination but not after September 28, 2025. If Mr. Bartel (or, in the event of death, the legatee or legatees of Mr. Bartel under his last will, or his personal representatives or distributees) does not exercise the option within the three months following such termination of employment, any unexercised options shall be null and void.
Registration
The Company has registered the shares of common stock made available under the Option Agreement under the Securities Act of 1933, as amended.
Personal Interest
Mr. Holger Bartel is Travelzoo's Chairman of the Board and the Global Chief Executive Officer.
Option Agreement with President, Europe
The Company entered into a Nonqualified Stock Option Agreement (the “Option Agreement”) with Richard Singer, president, Europe, on March 7, 2016, pursuant to which the Company granted Mr. Singer the option (the “Option”) to purchase 50,000 shares of the Company’s common stock. The Option will begin to partly vest on March 7, 2017. Stockholders are being asked to approve the issuance of common stock which is issuable to Mr. Singer upon exercise of the Option. The principal terms of the Option Agreement are summarized below. The following summary is qualified in its entirety by the full text of the Option Agreement, which is incorporated herein by reference to Exhibit 10.30 to the Company’s report on Form 10-K, filed on March 14, 2016.
Exercisability of Option
The exercise price of the Option is $8.55 per share. The Option will become exercisable in accordance with the following schedule:
|
| |
Vesting Date | Percentage of Stock Options Vesting |
March 7, 2017 | 25% |
March 7, 2018 | 25% |
March 7, 2019 | 25% |
March 7, 2020 | 25% |
Mr. Singer must exercise the Option by March 7, 2026; after such date, the Option will expire.
Exercise of Option
Mr. Singer may exercise, in whole or in part, the Option by delivering to the Company not less than 30 days prior to the exercise date (or such shorter period the Company may approve) a written notice of exercise, designating the number of shares to be purchased, along with payment of the full amount of the purchase price of the shares being purchased. The purchase price of the shares subject to the option may be paid for (i) in cash, (ii) in the discretion of the Board of Directors, by tender of shares of Common Stock already owned by Mr. Singer, or (iii) in the discretion of the Board of Directors, by such other method as the Board of Directors may determine.
Adjustment of Option
As is customary in stock option agreements of this nature, the number of shares subject to the Option and exercise price are subject to adjustment in the event there is any change in the number of shares of outstanding common stock of the Company by reason of a stock dividend, recapitalization, merger, consolidation, split-up, combination, exchange of shares or other similar event.
Transfer Restrictions
The Option is not transferable by Mr. Singer except upon prior written consent of the Company or by will or the laws of descent and distribution and may be exercised during Mr. Singer’s lifetime only by him or his guardian or legal representative.
Effect of Termination of Employment
If Mr. Singer’s employment with the Company is terminated, including in the event of his death or disability, any portion of the Option which is not then exercisable will immediately terminate. With respect to any portion of the Option which is then exercisable on the date of termination of employment, Mr. Singer (or, in the event of his death, his legatee(s) under his last will, or his personal representatives or distributes) may exercise the Option for a period of ninety (90) days following such termination, but in no event after March 7, 2026.
Registration
The Company has registered the shares of common stock made available under the Option Agreement under the Securities Act of 1933, as amended.
Personal Interest
Mr. Richard Singer is Travelzoo's President, Europe.
Option Agreement with President, North America
The Company entered into a Nonqualified Stock Option agreement (the “Option Agreement”) with Michael Stitt, president, North America, on March 7, 2016, pursuant to which the Company granted Mr. Stitt the option (the “Option”) to purchase 100,000 shares of the Company’s common stock. The Option will begin to partly vest on March 7, 2017. Stockholders are being asked to approve the issuance of common stock which is issuable to Mr. Stitt upon exercise of the Option. The principal terms of the Option Agreement are summarized below. The following summary is qualified in its entirety by the full text of the Option Agreement, which is incorporated herein by reference to Exhibit 10.29 to the Company’s report on Form 10-K, filed on March 14, 2016.
Exercisability of Option
The exercise price of the Option is $8.55 per share. The Option will become exercisable in accordance with the following schedule:
|
| |
Vesting Date | Percentage of Stock Options Vesting |
March 7, 2017 | 25% |
March 7, 2018 | 25% |
March 7, 2019 | 25% |
March 7, 2020 | 25% |
Mr. Stitt must exercise the Option by March 7, 2026; after such date, the Option will expire.
Exercise of Option
Mr. Stitt may exercise, in whole or in part, the Option by delivering to the Company not less than 30 days prior to the exercise date (or such shorter period the Company may approve) a written notice of exercise, designating the number of shares to be purchased, along with payment of the full amount of the purchase price of the shares being purchased. The purchase price of the shares subject to the option may be paid for (i) in cash, (ii) in the discretion of the Board of Directors, by tender of shares of Common Stock already owned by Mr. Stitt, or (iii) in the discretion of the Board of Directors, by such other method as the Board of Directors may determine.
Adjustment of Option
As is customary in stock option agreements of this nature, the number of shares subject to the Option and exercise price are subject to adjustment in the event there is any change in the number of shares of outstanding common stock of the Company by reason of a stock dividend, recapitalization, merger, consolidation, split-up, combination, exchange of shares or other similar event.
Transfer Restrictions
The Option is not transferable by Mr. Stitt except upon prior written consent of the Company or by will or the laws of descent and distribution and may be exercised during Mr. Stitt’s lifetime only by him or his guardian or legal representative.
Effect of Termination of Employment
If Mr. Stitt’s employment with the Company is terminated, including in the event of his death or disability, any portion of the Option which is not then exercisable will immediately terminate. With respect to any portion of the Option which is then exercisable on the date of termination of employment, Mr. Stitt (or, in the event of his death, his legatee(s) under his last will, or his personal representatives or distributes) may exercise the Option for a period of ninety days following such termination, but in no event after March 7, 2026.
Registration
The Company has registered the shares of common stock made available under the Option Agreement under the Securities Act of 1933, as amended.
Personal Interest
Mr. Michael Stitt is Travelzoo's President, North America.
The Company is generally entitled to a federal income tax deduction in an amount equal to the difference between the exercise price of the Option and the fair market value of the shares at the time of exercise, and the Optionees would generally recognize taxable income in that amount.
Vote Required
Approval of this proposal requires the affirmative vote of a majority of the shares of the Company’s Common Stock present in person or represented by proxy and entitled to vote on the proposal.
Board of Directors’ Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE APPROVAL OF THIS PROPOSAL RELATING TO THE OPTION AGREEMENTS.
PROPOSAL 3—ADVISORY VOTE ON THETO APPROVE EXECUTIVE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS (PROPOSAL 3)
Section 14A of the Exchange Act requires that we include in this proxy statement a non-binding stockholder vote on our executive compensation as described herein (commonly referred to as "Say-on-Pay").
We encourage stockholders to review the Compensation Discussion and Analysis included in this proxy statement. Our executive compensation program has been designed to pay for performance and align our executive compensation with business strategies focused on long-term growth and creating value for stockholders while also paying competitively and focusing on the total compensation perspective. We feel this design is evidenced by the following:
Our goal is to attract, motivate and retain key executives and to reward executives for value creation.
We provide a significant portion of our total compensation in the form of performance-based compensation; for example, approximately 32%0% to 82%31% of our named executive officers' total compensation for 20152017 was in the form of performance-based compensation based on the achievement of quarterly corporate financial measures such as revenue, operating income and audience marketing.
This is not a mechanical process, and our Board of Directors uses its judgment and experience and works with our Compensation Committee to determine the appropriate mix of compensation for each individual.
The Board of Directors strongly endorses the Company's executive compensation program and unanimously recommends that stockholders vote in favor of the following resolution:
RESOLVED, that the stockholders approve the compensation of our named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis and the other tabular and narrative disclosure in the Company's proxy statement for its 20162018 Annual Meeting of Stockholders.
Required Vote
Because the vote is advisory, it will not be binding upon the Board of Directors or the Compensation Committee and neither the Board of Directors nor the Compensation Committee will be required to take any action as a result of the outcome of the vote on this proposal. The Compensation Committee will consider the outcome of the vote when considering future executive compensation arrangements. The affirmative vote of the majority of the shares of the Company's Common Stock present in person or represented by proxy and entitled to vote on the proposal will be considered as the approval, by an advisory vote, of the compensation of our named executive officers.
Board of Directors' Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE APPROVAL OF THE ADVISORY RESOLUTION RELATING TO THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.
COMPENSATION DISCUSSION AND ANALYSIS
We hold annual votes on executive compensation, in accordance with shareholder recommendation made at the 20152017 annual meeting. In light of last year's shareholder approval of the compensation for executives, there were no significant changes in executive compensation.
| |
| Overview of Compensation Program |
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 20152017 compensation for our Global 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 |
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 Committee's objectives include the following:
Accountability for Individual Performance. Compensation should in large part depend on the named executive's 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.
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 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 includesincluded Ms. Mary Reilly and Mr. Michael Karg (chair)through May 22, 2017. The Committee includes Ms. Mary Reilly and Ms. Mary Reilly.Beatrice Tarka after May 22, 2017. Ms. Reilly, Mr. Karg and Ms. ReillyTarka satisfied the independence requirements of the NASDAQ.
Role of Management. During 2015,2017, 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 Company's Global Chief Executive Officer (CEO) and data prepared by management, including a comparison of the current compensation of the named executive officers with publicly available information. Management did rely on a service from Equilar Inc., a compensation research firm, to provide peer executive compensation data from proxies and a compensation survey for comparison purposes. However, management did not receive advice from Equilar in setting our executive compensation. The 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 Global CEO's role in the compensation determination process are evaluating employee performance, establishing business performance targets, goals and objectives and recommending salary and bonus levels. The Global CEO does not participate in discussions regarding his compensation.
The Committee compared the compensation received by the Company's 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 compared to third-party data, while in other instances the compensation was higher due to the executive's responsibilities, performance, experience and tenure.
The Committee did not engage an outside consulting firm to provide advice on executive compensation.
| |
| Components of Executive Compensation |
Components of Executive Compensation
The Committee has structured an executive compensation program comprised of base salary, cash bonus, equity and non-equity incentive pay.
Base Salary
The Committee considered two types of potential base salary increases for the named executive officers in 2015:2017: (1) "merit increases" based upon each named executive's 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 executive's overall performance and tenure with the Company. In addition, the Committee also considers the CEO's evaluation of each named executive officer in making the decision regarding merit increases.
The Committee determines any market adjustments based on the Committee's comparison of the executive's compensation with statistical information on average compensation for similarly situated executives that is publicly available.
The Committee established a base salary of Mr. Holger Bartel as shown in on the Summary Compensation Table based upon his duties and responsibilities as Global CEO and did not make any changesother change to the base salaries of its other named executive officers.officers in 2017.
Incentive Bonus Pay
In 2015, 2014 and 2013, Mr. Christopher Loughlin, Mr. Glen Ceremony, Ms. Vivian Hong, Mr. Richard Singer, Mr. Michael Stitt, and Mr. Simon Talling-Smith received incentive bonuses pursuant to the terms of their employment agreements and the discretion of the Board of Directors.
Pursuant to the terms of Mr. Loughlin's employment agreement dated November 18, 2009, effective July 1, 2010 and as amended January 1, 2013 and August 1, 2013, Mr. Loughlin was eligible to receive a quarterly Performance Bonus as set forth below.
Mr. Loughlin was eligible to receive a quarterly Performance Bonus for each quarter during 2015. The quarterly Performance Bonus is calculated based upon worldwide revenue, operating income and audience targets. The revenue bonus is calculated based upon a sliding scale that ranges from 95% through 105% achievement of the target resulting in a potential bonus that ranges from $28,000 to $56,000. The quarterly revenue bonus at 100% of target is $46,667 and the maximum revenue bonus is $56,000. The revenue bonus requires that there are no more than two significant customers and that no significant customer is 17% or more than worldwide revenue. The operating income bonus is calculated based upon a sliding scale that ranges from 90% through 105% achievement of the target resulting in a potential bonus that ranges from $28,000 to $56,000. The quarterly operating income bonus at 100% of target is $46,666 and the maximum operating income bonus is $56,000. The audience bonus is calculated based upon achievement of certain audience targets resulting in a potential bonus of up to $46,667. The total maximum Performance Bonus per quarter for the revenue, operating income and audience components combined is $158,667.
Mr. Loughlin earned a quarterly bonus for revenue for the first and second quarters, operating income for the first and fourth quarters and audience for the first and third quarters of 2015. Mr. Loughlin received Performance Bonuses totaling $235,593 during 2015. For 2015, Mr. Loughlin received 37% of the maximum Performance Bonus. The Company believes that targets set for worldwide revenue, operating income and audience align with the Company's desire to continue to grow the business. Since the individual targets are intended to be challenging, and since the separate targets related to different aspects of the Company's performance, it is expected it will be difficult for all the targets to be achieved for any given year.
Pursuant to the terms of Mr. Ceremony's employment agreement dated May 9, 2011, effective June 15, 2011 and as amended January 1, 2013,March 9, 2017, Mr. Ceremony is eligible to receive a quarterly Performance Bonus for each quarter during 2015.2017.
The quarterly Performance Bonus is calculated based upon worldwide revenue, operating income and audience targets. The revenue bonus is calculated based upon a sliding scale that ranges from 95% through 105% achievement of the target resulting in a potential and maximum bonus that ranges from $10,000 to $20,000. The quarterly revenue bonus at 100% of target is $16,667 and the maximum revenue bonus is $20,000. The revenue bonus requires that there are no more than two significant customers and that no significant customer is 17% or more than worldwide revenue.$16,667. The operating income bonus is calculated based upon a sliding scale that ranges from 90% through 105% achievement of the target resulting in a potential and maximum bonus that ranges from $10,000 to $20,000. The quarterly operating income bonus at 100% of target is $16,667 and the maximum operating income
bonus is $20,000.$16,667. The audience bonus is calculated based upon achievement of certain audience targets resulting in a potential and maximum bonus of up to $16,666. The total maximum Performance Bonus per quarter for the revenue, operating income and audience components combined is $56,666.$50,000.
Mr. Ceremony earned a quarterly bonus for revenueaudience for the firstsecond and secondthird quarters and for operating income for the first and fourth quarters and audience for the third quarter of 2015.2017. Mr. Ceremony received Performance Bonuses totaling $81,799$50,000 during 2015.2017. For 2015,2017, Mr. Ceremony received 36%25% of the maximum Performance Bonus. The Company believes that targets set for worldwide revenue, operating income and audience targets align with the Company's desire to continue to grow the business. Since
Mr. Ceremony also received a Discretionary Bonus determined by the Global Chief Executive Officer at his sole and absolute discretion. In exercising such discretion, the Global Chief Executive Officer takes into consideration Mr. Ceremony's individual targets are intendedperformance. In evaluating Mr. Ceremony’s individual performance during 2017, the Global Chief Executive Officer considered factors such as Mr. Ceremony’s leadership role in areas of corporate governance and business ethics, and financial management. Mr. Ceremony received a Discretionary Bonus totaling $62,502 for 2017.
Pursuant to be challenging,the terms of Ms. Barnett's employment agreement dated July 30, 2013, as amended May 22, 2017, Ms. Barnett also received a Discretionary Bonus determined by the Global Chief Executive Officer at his sole and sinceabsolute discretion. In exercising such discretion, the separate targets related to different aspects of the Company's performance, it is expected it will be difficultGlobal Chief Executive Officer takes into consideration Ms. Barnett's individual performance. Ms. Barnett received a Discretionary Bonus totaling $20,685 for all the targets to be achieved for any given year.2017.
Pursuant to the terms of Ms. Hong's employment agreement dated June 7, 2014,January 1, 2016, Ms. Hong was eligible to receive a quarterly Performance Bonus as set forth below.for each quarter during 2017. Ms. Hong's Performance Bonus is payable in Chinese Yuan and has been translated into US dollars (at the rate of 6.216.76 RMB to $1.00) for the purposes of this summary.
Ms. Hong was eligible to receive a quarterly Performance Bonus for each quarter during 2015. The quarterly Performance Bonus is calculated based upon Asia Pacific revenue, operating income and audience targets. The revenue bonus is calculated based upon achievement of the target resulting in a potential and maximum bonus of $5,510.$7,400. The operating income bonus is calculated based upon achievement of the target resulting in a potential and maximum bonus of $5,510.$7,400. The audience bonus is calculated based upon achievement of certain audience targets resulting in a potential and maximum bonus of $5,510.$7,400. The total maximum Performance Bonus per quarter for the revenue, operating income and audience components combined is $16,530.$22,200.
Ms. Hong earned ano quarterly bonus for revenue for the first quarters and operating income for the first, second and third quarters of 2015.in 2017. For 2017, Ms. Hong received Performance Bonuses totaling $22,040 during 2015. For 2015, Ms. Hong received 33%0% of the maximum Performance Bonus. The Company believes that targets set for Asia Pacific revenue, operating income and audience targets align with the Company's desire to continue to grow the business. Since the individual targets are intended to be challenging, and since the separate targets related to different aspects of the Company's performance, it is expected it will be difficult for all the targets to be achieved for any given year.
Ms. Hong alsoHong's employment terminated on November 1, 2017 and in exchange for executing a general release of claims she received a Discretionary Bonus determined by the Chief Executive Officer at his sole and absolute discretion. In exercising such discretion, the Chief Executive Officer takes into consideration Ms. Hong’s individual performance. In evaluating Ms. Hong’s individual performance during 2015, the Chief Executive Officer considered factors such as Ms. Hong’s leadership rolecompensation of $170,194 in developing the Asia Pacific business and team. Ms. Hong received a Discretionary Bonus totaling $179,178 for 2015.2017.
Pursuant to the terms of Mr. Singer'sSmart's employment agreement dated October 31, 2011, effective January 16,11, 2012, and as amended July 1, 2012 and January 1, 2013, Mr. SingerSmart is eligible to receive a quarterly Performance Bonus for each quarter during 2015.2017. Mr. Singer'sSmart's Performance Bonus is payable in British poundsEuro and has been translated into US dollars (at the rate of £11.13 Euro to $1.53)$1.00) for the purposes of this summary.
The quarterly Performance Bonus is calculated based upon EuropeGermany travel revenue, travel operating income, local revenue and audience targets. The travel revenue bonus is calculated based upon a sliding scale that ranges from 95% through 105% achievement of the target resulting in a potential bonus that ranges from $18,344 to $36,689. The quarterly revenue bonus at 100% of target is $30,754 and the maximum revenue bonus is $36,689. The operating income bonus is calculated based upon a sliding scale that ranges from 90% through 110% achievement of the target resulting in a potential bonus that ranges from $18,344$6,767 to $36,689.$16,917. The quarterly travel revenue bonus at 100% of target is $11,278 and the maximum revenue bonus is $16,917. The travel operating income bonus is calculated based upon a sliding scale that ranges from 95% through 110% achievement of the target resulting in a potential bonus that ranges from $6,767 to $16,917. The quarterly travel operating income bonus at 100% of target is $30,754$11,278 and the maximum operating income bonus is $36,689.$16,917. The local revenue bonus is calculated based upon a sliding scale that ranges from 95% through 110% achievement of the target resulting in a potential bonus that ranges from $10,150 to $13,534. The quarterly local revenue bonus at 100% of target is $11,278 and the maximum revenue bonus is $13,534. The audience bonus is calculated based upon achievement of certain audience targets resulting in a potential bonus of up to $15,287.$11,278. The total maximum Performance Bonus per quarter for the travel revenue, travel operating income, local revenue and audience components combined is $88,665.$58,646.
Mr. SingerSmart earned a quarterly bonus for revenue for thetravel revenue and operating income for all quarter and audience forlocal revenue the first, third and fourth quarters of 2015.2017, earned a quarterly bonus for travel operating income the first quarter of 2017 and earned a quarterly bonus for audience for all quarters of 2017. Mr. SingerSmart received Performance Bonuses totaling $289,108$121,662 during 2015.2017. For 2015,2017, Mr. SingerSmart received 82%52% of the maximum Performance Bonus. The Company believes that targets set for EuropeGermany travel revenue, travel operating income, local revenue and audience align with the Company's desire to continue to grow the business. Since the individual targets are intended to be challenging, and since the separate targets related to different aspects of the Company's performance, it is expected it will be difficult for all the targets to be achieved for any given year.
Pursuant to the terms of Mr. Stitt's employment agreement dated May 1, 2011, as amended October 1, 2014, and October 1,September 30, 2015, Mr. Stitt was eligible to receive a quarterly Performance Bonus as set forth below.for each quarter during 2017.
Mr. Stitt was eligible to receive a quarterly Performance Bonus for the first, second and third quarters during 2015. The quarterly Performance Bonus is calculated based upon North America combined Travel and Local revenue, operating income and non-financial targets. The revenue bonus is calculated based upon a sliding scale that ranges from 95% through 105% achievement of the target resulting in a potential bonus that ranges from $12,000 to $24,000. The quarterly revenue bonus at 100% of target is $20,000 and the maximum revenue bonus is $24,000. The operating income bonus is calculated based upon a sliding scale that ranges from 90% through 110% achievement of the target resulting in a potential bonus that ranges from $12,000 to $24,000. The quarterly operating income bonus at 100% of target is $20,000 and the maximum operating income bonus is $24,000. The non-financial target bonus is calculated based upon achievement of certain non-financial targets resulting in a potential bonus of up to $10,000. The total maximum Performance Bonus per quarter for the revenue, operating income and audience components combined is $58,000.
Mr. Stitt was eligible to receive a quarterly Performance Bonus for the fourth quarter of 2015. The quarterly Performance Bonus is calculated based upon North America revenue, operating income and audience targets. The revenue bonus is calculated based upon achievement of the target resulting in a potential and maximum bonus of $14,500. The revenue bonus requires that there are no more than two significant customers and that no significant customer is 15% or more than North America revenue and together do not account for 25% of North America revenue. The operating income bonus is calculated based upon achievement of the target resulting in a potential and maximum bonus of $14,500. The audience bonus is calculated based upon achievement of certain audience targets resulting in a potential and maximum bonus of $14,500. The total maximum Performance Bonus per quarter for the revenue, operating income and audience components combined is $43,500.
Mr. Stitt earned a quarterly bonus for revenue for the first and second quarters, operating income for the firstfourth quarter of 2017 and fourth quarters and non-financial targetsearned a quarterly bonus for the first,audience for the second and third quarters of 2015.2017. Mr. Stitt received Performance Bonuses totaling $69,139$58,000 during 2015.2017. For 2015,2017, Mr. Stitt received 32%33% of the maximum Performance Bonus. The Company believes that targets set for North America revenue, operating income and non-financialaudience targets align with the Company's desire to continue to grow the business. Since the individual targets are intended to be challenging, and since the separate targets related to different aspects of the Company's performance, it is expected it will be difficult for all the targets to be achieved for any given year.
Mr. Stitt also received a Discretionary Bonus determined by the Global Chief Executive Officer at his sole and absolute discretion. In exercising such discretion, the Global Chief Executive Officer takes into consideration Mr. Stitt’sStitt's individual performance. In evaluating Mr. Stitt’s individual performance during 2015,2017, the Global Chief Executive Officer considered factors such as Mr. Stitt’s leadership role in developing the North America business and team. Mr. Stitt received a Discretionary BonusesBonus totaling $14,500$108,000 for 2015.2017.
Pursuant to the terms of Mr. Talling-Smith's employment agreement dated April 12, 2013, effective August 1, 2013, Mr. Talling-Smith is eligible to receive a quarterly Performance Bonus and a quarterly non-financial bonus for each of the quarters during 2015.
The quarterly Performance Bonus is calculated based upon revenue, operating income and non-financial targets. The revenue bonus is calculated based upon a sliding scale that ranges from 95% through 105% achievement of the target resulting in a potential bonus that ranges from $15,000 to $30,000. The quarterly revenue bonus at 100% of target is $25,000 and the maximum revenue bonus is $30,000. The operating income bonus is calculated based upon a sliding scale that ranges from 90% through 110% achievement of the target resulting in a potential bonus that ranges from $15,000 to $30,000. The quarterly operating income bonus at 100% of target is $25,000 and the maximum operating income bonus is $30,000. The non-financial target bonus is calculated based upon achievement of certain non-financial targets resulting in a potential bonus of up to $25,000. The total maximum Performance Bonus per quarter for the revenue, operating income and audience components combined is $85,000.
Mr. Talling-Smith earned a quarterly bonus for revenue for the first and second quarters, operating income for the first and fourth quarters and the non-financial targets for the first, second and third quarters of 2015. Mr. Talling-Smith received Performance Bonuses totaling $135,150 during 2015. For 2015, Mr. Talling-Smith received 40% of the maximum Performance Bonus. The Company believes that targets set for revenue, operating income and non-financial targets align with the Company's desire to continue to grow the business. Since the individual targets are intended to be challenging, and since the separate targets related to different aspects of the Company's performance, it is expected it will be difficult for all the targets to be achieved for any given year.
Mr. Talling-Smith also received a Discretionary Bonus determined by the Board of Directors at their sole and absolute discretion. In exercising such discretion, the Board of Directors and the Chief Executive Officer takes into consideration Mr. Talling-Smith’s individual performance. In evaluating Mr. Talling-Smith’s individual performance during 2015, the Chief Executive Officer considered factors such as Mr. Talling-Smith’s leadership role in developing products and the overall business and team. Mr. Talling-Smith received a Discretionary Bonuses totaling $50,000 for 2015.
Other Compensation-Related Matters
Stock Options. The Company grants certain executive officers stock options (which represent the right to purchase a specific number of shares of company common stock at a predetermined price, subject to vesting conditions), to certain executive officers, to align their incentives with the long-term interests of our stockholders, retain them for the long term, reward them for potential long-term contributions, and provide a total compensation opportunity commensurate with our performance.
In September 2015,October 2017, the Company granted Mr. Holger Bartel stock options to purchase 400,000 shares of common stock with an exercise price of $8.07,$6.95, which vests in eight equal quarterly installments over a two-year period ending December 31, 2017.2019. The Compensation Committee and Board of Directors considered Mr. Holger Bartel's increased duties and responsibilities in his capacity as Chairman of the Board to oversee and determine the status of responsibilities of the Chief Executive Officer prior to the Chief Executive Officer's departure on December 31, 2015, and to formally assume the Global Chief Executive Officer role on January 1, 2016.Officer.
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 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 Interlocks & Insider Participation
The current members of our compensation committee are Mr. KargMs. Reilly and Ms. Reilly.Tarka. In 2015,2017, none of our executive officers served as a member of the compensation committee of another entity, or as a director of another entity, one of whose executive officers served on our compensation committee.
Summary Compensation Table
The following summary compensation table sets forth information concerning the compensation to our Global Chief Executive Officer, Chief Financial Officer and the three other most highly compensated executive officers during the fiscal years ended December 31, 2015, 20142017, 2016 and 2013.2015.
|
| | | | | | | |
| Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) (a) | Option Awards ($) (b) | Non-Equity Incentive Plan Compensation ($) (c) | All Other Compensation ($) (d) | Total ($) |
|
|
|
|
|
|
|
|
| Holger Bartel (1) | 2015 | — | — | 1,767,200 | — | 231,720 | 1,998,920 |
| Chairman of the Board and Global Chief Executive Officer | 2014 | — | — | — | — | 231,720 | 231,720 |
| 2013 | 502,123 | — | — | — | 21,993 | 524,116 |
|
|
|
|
|
|
|
|
| Christopher Loughlin (2) | 2015 | 600,000 |
|
| 235,593 | 601,500 | 1,437,093 |
| Chief Executive Officer | 2014 | 581,000 |
|
| 48,887 | 1,500 | 631,387 |
| 2013 | 562,000 | 60,000 | 1,415,250 | 184,364 | 24,429 | 2,246,043 |
|
|
|
|
|
|
|
|
| Glen Ceremony | 2015 | 470,000 | — |
| 81,799 | 3,903 | 555,702 |
| Chief Financial Officer | 2014 | 460,000 | 25,000 |
| 22,223 | 3,869 | 511,092 |
| 2013 | 450,000 | 88,889 |
| 116,178 | 3,903 | 658,970 |
|
|
|
|
|
|
|
|
| Vivian Hong (3) | 2015 | 284,904 | 179,178 |
| 22,040 | — | 486,122 |
| President, Asia Pacific | 2014 | 287,563 | 11,121 |
| 55,606 | — | 354,290 |
| 2013 | 242,007 | 9,312 |
| 57,034 | — | 308,352 |
|
|
|
|
|
|
|
|
| Richard Singer (4) | 2015 | 305,740 |
|
| 289,108 | 27,932 | 622,780 |
| President, Europe | 2014 | 329,284 |
|
| 128,725 | 26,980 | 484,989 |
| 2013 | 311,573 | 9,099 |
| 291,295 | 24,168 | 636,135 |
|
|
|
|
|
|
|
|
| Michael Stitt (5) | 2015 | 320,000 | 14,500 |
| 69,139 | 1,500 | 405,139 |
| President, North America | 2014 | 285,000 | 29,500 |
| 43,500 | 1,500 | 359,500 |
| 2013 | 260,000 | 65,000 |
| 40,000 | 1,500 | 366,500 |
|
|
|
|
|
|
|
|
| Simon Talling-Smith (6) | 2015 | 402,500 | 50,000 |
| 135,150 | 239,513 | 827,163 |
| President, Products & Emerging Business | 2014 | 420,000 |
|
| 85,625 | 17,903 | 523,528 |
| 2013 | 175,000 |
|
| 62,500 | 29,802 | 267,302 |
| | | | | | |
|
| | | | | | | | | | | | | |
| Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) (a) | Option Awards ($) (b) | Non-Equity Incentive Plan Compensation ($) (c) | All Other Compensation ($) (d) | Total ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Holger Bartel (1) | 2017 | 142,472 |
| — |
| 1,242,400 |
| — |
| 90,073 |
| 1,474,945 |
|
| Global Chief Executive Officer | 2016 |
|
|
|
|
|
|
|
| 231,720 |
| 231,720 |
|
| 2015 | — |
| — |
| 1,767,200 |
| — |
| 231,720 |
| 1,998,920 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Glen Ceremony | 2017 | 470,000 |
| 62,502 |
| — |
| 50,000 |
| 4,036 |
| 586,538 |
|
| Chief Financial Officer | 2016 | 470,000 |
| 62,500 |
|
|
| 53,333 |
| 4,168 |
| 590,001 |
|
| 2015 | 470,000 |
| — |
|
|
| 81,799 |
| 3,903 |
| 555,702 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Rachel Barnett (2) | 2017 | 316,945 |
| 20,685 |
| — |
| — |
| 3,846 |
| 341,476 |
|
| General Counsel and Director |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Vivian Hong (3) | 2017 | 311,972 |
| — |
| — |
| — |
| 170,194 |
| 482,166 |
|
| President, Asia Pacific | 2016 | 346,961 |
| 15,085 |
|
|
| 7,543 |
| — |
| 369,589 |
|
| 2015 | 284,904 |
| 179,178 |
|
|
| 22,040 |
| — |
| 486,122 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Christian Smart (4) | 2017 | 225,564 |
| — |
| — |
| 121,662 |
| 45,922 |
| 393,148 |
|
| General Manager, Germany |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Michael Stitt | 2017 | 320,000 |
| 108,000 |
| — |
| 58,000 |
| 17,223 |
| 503,223 |
|
| President, North America | 2016 | 320,000 |
| 58,000 |
| 472,900 |
| 14,500 |
| 1,500 |
| 866,900 |
|
| 2015 | 320,000 |
| 14,500 |
|
|
| 69,139 |
| 1,500 |
| 405,139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | |
| Notes to the Summary Compensation Table | | | |
| | | | | | | | |
| (1) | Mr. Holger Bartel ceased his role as Chairman of the Board on May 22, 2017, upon which his annual salary was an employee through October 31, 2013,set to $232,000 for his role as Global Chief Executive Officer. In addition, Mr. Holger Bartel was granted options on September 28, 2015 to oversee the transition of the Chief Executive Officer and to assume the role of Global Chief Executive Officer effective January 1, 2016.October 30, 2017. |
|
|
| (2) | Mr. Loughlin's employment terminated on December 31, 2015 and in exchange for executing a general release of claims was entitled to receive $600,000.Ms. Barnett's annual salary is $350,000 effective May 22, 2017. |
|
| | | | | | | |
| | | | | | | | |
| Notes to the Summary Compensation Table | | | |
| | | | | | | | |
| (3) | Ms. Hong joined the Company with the acquisition of the Travelzoo Asia Pacific business in August 2015. Ms. Hong's compensation is denominated in Chinese Yuan and was translated into U.S. dollars using the annual average daily exchange rate of ¥6.76 = $1.00 for 2017 and ¥6.63 = $1.00 for 2016 and ¥6.21 = $1.00 for 2015, ¥6.15 = $1.002015. Ms. Hong's employment terminated on November 1, 2017, and in exchange for 2014 and ¥6.20 = $1.00 for 2013.executing a general release of claims received compensation of $170,194. |
|
|
| (4) | Mr. Singer'sSmart's compensation is denominated in British poundsEuro and was translated into U.S. dollars using the annual average daily exchange rate of £1€1.13 = $1.53$1.00 for 2015, £1 = $1.65 for 2014 and £1 = $1.56 for 2013. |
|
|
(5) | Mr. Stitt was promoted to President, North America in October 2015. |
|
|
(6) | Mr. Talling-Smith's employment terminated on December 14, 2015 and in exchange for executing a general release of claims was entitled to receive $210,000.2017. |
|
|
| (a) | Amounts consist of discretionary bonuses earned per the terms of employment agreements and/or at the discretion of the Chief Executive Officer or Board of Directors. |
|
|
| (b) | The values reported reflect the aggregate grant date fair value of grants of stock options to each of the listed officers in the years shown. The grant date fair value of stock options is calculated using the Black-Scholes option pricing model. For a more detailed discussion on the valuation model and assumptions used to calculate the fair value of our options, refer to Note 98 to the consolidated financial statements contained in our 20152017 Annual Report on Form 10-K filed on March 14, 2016.16, 2018. |
|
|
| (c) | The amounts reflected in this column reflect the performance-based cash awards paid to the named executives pursuant to certain employment agreements, as discussed in the CD&A above. |
|
|
| (d) | The amounts reflected in this column reflect all other compensation paid to the named executives as noted below: |
|
|
| Mr. Holger Bartel's other compensation represents Board of Directors feesfee paid to him in his role as Executive Chairman and Chairman of the Board of Directors. |
|
|
| Mr. Loughlin's other compensation for 2015 is a separation payment of $600,000 and a $1,500 Company matching 401(k) plan contribution, for 2014 is a $1,500 Company matching 401(k) plan contribution and for 2013 is a housing allowance of $22,929 and a $1,500 Company matching 401(k) plan contribution.through May 22, 2017. |
|
|
| Mr. Ceremony's other compensation for 2015, 20142017, 2016 and 20132015 is a $1,500 Company matching 401(k) plan contribution for each year and the remaining amount for each year for a bonus payment made to eligible employees. |
|
|
| Mr. Singer'sMs. Hong's other compensation for 2015, 20142017 is a separation payment of $170,194. |
|
|
| Mr. Stitt's other compensation for 2017 is a $1,500 Company matching 401(k) plan contribution and a housing allowance of of $15,723, for 2016 and 2015 is $21,402, $23,050for a $1,500 Company matching 401(k) plan contribution. |
|
|
| Mr. Smart's other compensation for 2017 is a car allowance of $27,758 and $21,840, respectively, for the Company's contribution to the UK Employee Pension Contribution Plan and $3,646, $3,930, and $2,328, respectively, for premiums paid for private health insurance for Mr. Singer and his family and in 2015 the remaining amount isfor a bonus payment made to eligible employees. |
|
|
| Mr. Stitt'sMs. Barnett's other compensation for 2015, 2014 and 20132017 is a $1,500 Company matching 401(k) plan contribution for each year. |
|
|
| Mr. Talling-Smith's other compensation for 2015 is a separation payment of $210,000, accrued vacation of $29,513year and the remaining amount isfor a bonus payment made to eligible employees. Other compensation for 2014 and 2013 is $17,903 and $29,802, respectively, for a housing allowance. |
|
|
|
|
|
|
|
|
| |
| Grants of Plan-Based Awards in 2015 |
Grants of Plan-Based Awards in 2017
The following table sets forth certain information with respect to non-equity incentive plan awards granted to each of our named executive officers during the fiscal year ended December 31, 2015.2017.
|
| | | |
| | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards |
Name (1) | Threshold ($) | Target
($) | Maximum ($) |
| Christopher Loughlin | 224,000 | 560,004 | 634,668 |
| Glen Ceremony | 80,000 | 200,000 | 226,664 |
| Vivian Hong | 66,120 | 66,120 | 66,120 |
| Richard Singer | 146,755 | 305,740 | 354,658 |
| Michael Stitt | 96,000 | 200,000 | 232,000 |
| Simon Talling-Smith | 120,000 | 300,000 | 340,000 |
t |
| | | | | | |
| | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards |
Name (1) | Threshold ($) | Target
($) | Maximum ($) |
| Holger Bartel | — |
| — |
| — |
|
| Glen Ceremony | 200,000 |
| 200,000 |
| 200,000 |
|
| Rachel Barnett | — |
| — |
| — |
|
| Vivian Hong | 88,797 |
| 88,797 |
| 88,797 |
|
| Christian Smart | 139,849 |
| 180,451 |
| 234,586 |
|
| Michael Stitt | 174,000 |
| 174,000 |
| 174,000 |
|
| |
| (1) | Amount represents the potential annual Performance Bonus payments under the terms of employment agreement. The business measurements and performance goals for determining the Performance Bonus payout are described in the CD&A. |
Outstanding Equity Awards at December 31, 20152017
| | | | Option Awards | Option Awards |
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date |
| Holger Bartel (1) | — | 400,000 | 8.07 | September 28, 2025 | 400,000 |
| — |
| 8.07 |
| September 28, 2025 |
| Christopher Loughlin (2) | 300,000 | — | 14.97 | March 31, 2016 | |
| | 25,000 | — | 29.58 | March 31, 2016 | — |
| 400,000 |
| 6.95 |
| October 30, 2027 |
| Glen Ceremony (3) | 37,500 | 12,500 | 28.98 | January 23, 2022 | |
| Glen Ceremony (2) | | 50,000 |
| — |
| 28.98 |
| January 23, 2022 |
| Michael Stitt (3) | | 25,000 |
| 75,000 |
| 8.55 |
| March 7, 2026 |
| |
| (1) | The options are exercisable in quarterly increments of 12.5% from March 31, 20162018 through December 31, 2017.2019. |
| |
| (2) | The options are exercisable until March 31, 2016. |
| |
(3) | The remaining unexercisable options became exercisable on January 23, 2016. |
| |
| (3) | Option Exercises and Stock VestedThe options are exercisable in annual increments of 25% from March 7, 2017 through March 7, 2020. |
For
Option Exercises and Stock Vested
During the year ended December 31, 2015,2017, there were no options exercised by any of our named executive officers. For the year endedAt December 31, 2015, 325,0002017, 400,000 shares of Mr. Loughlin'sHolger Bartel's stock options, were vested and 37,50050,000 shares of Mr. Ceremony's stock options and 25,000 of Mr. Stitt's stock options, were vested, respectively.vested.
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, 20152017 with the Company's named executive officers are described below.
Mr. Holger Bartel entered into an employment agreement with the Company on September 28, 2015. In connection with his employment agreement and his role as Global Chief Executive Officer, in September 2015 and October 2017, the Company grantedprovided stock option grants to Mr. Holger Bartel stock options to purchase 400,000 shares of the Company’s common stock due his to increased duties and responsibilities in his capacity as Chairman of the Board to oversee and determine the status of responsibilities of the Chief Executive Officer prior to the Chief Executive Officer's departure on
December 31, 2015, and the assumption of the Global Chief Executive Officer role on January 1, 2016.for each grant. The Company may terminate the employment agreement, with or without cause, upon written notice to Mr. Holger Bartel. However, if Mr. Holger Bartels'sBartel's employment is terminated at any time without cause, Mr. Holger Bartel's stock options to purchase 400,000a cumulative 800,000 shares of the Company’s common stock will immediately vest in full on the date of termination.
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.
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. This agreement was amended on effective January 1, 2013 and August 1, 2013 and had a four year term ending on June 30, 2017. The Company could terminate the agreement, with or without cause, upon written notice to Mr. Loughlin. However, if Mr. Loughlin's employment was terminated at any time without cause or if Mr. Loughlin's employment was terminated at any time due to a change of control (as defined in the agreement) or if he was 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 would 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. Mr. Loughlin’s employment was terminated effective December 31, 2015 and, in exchange for executing a general release of claims, Mr. Loughlin was entitled to receive $600,000 and medical benefits of approximately $28,750. Mr. Loughlin has until March 31, 2016 to exercise his fully vested stock options to purchase 300,000 shares of the Company's common stock.
Mr. Loughlin agreed that the Company owns any discoveries and work product (as defined in his employment agreement) made during the term of his employment and assigned 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. Ceremony entered into an employment agreement with the Company on June 15, 2011. Pursuant to the terms of the agreement, Mr. Ceremony is an at-will employee and the Company or Mr. Ceremony may terminate the agreement, with or without cause, upon three months notice. However, if Mr. Ceremony's employment is terminated at any time without cause, Mr. Ceremony will be entitled to receive his base salary for a six month period in exchange for executing a general release of claims as to the Company. Assuming that Mr. Ceremony was terminated by the Company as of December 31, 20152017 without cause, Mr. Ceremony would have been entitled to receive $235,000. If Mr. Ceremony'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. Ceremony will be entitled to receive his 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 Mr. Ceremony was terminated by the Company as of December 31, 20152017 following a change of control of the Company, Mr. Ceremony would have been entitled to receive $235,000 and the Company would incur additional expenses for medical benefits of approximately $5,064.$14,375.
Mr. Ceremony 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. Ceremony agreed to not, directly or indirectly, solicit the Company's customers or employees during the term of his employment and for a period of one year thereafter.
Ms. HongBarnett entered into an employment agreement with the Company on June 7, 2014.July 30, 2013. Pursuant to the terms of the agreement, Ms. Hong wasBarnett is an at-will employee and the Company or Ms. HongBarnett may terminate the agreement, with or without cause, with or withoutupon three weeks notice. However, if Ms. Hong'sBarnett's employment is terminated at any time without cause, Ms. Hong wouldBarnett will be entitled to receive her base salary for a three month period in exchange for executing a general release of claims as to the Company. Assuming that Ms. HongBarnett was terminated by the Company as of December 31, 20152017 without cause, Ms. HongBarnett would have been entitled to receive $71,226.
Mr. Singer entered into an employment agreement with the Company on January 26, 2012 as amended on July 1, 2012. Pursuant to the terms of the agreement, Mr. Singer is an at-will employee and the Company or Mr. Singer may terminate the agreement, with or without cause upon six months, prior written notice. However, if Mr. Singer's$87,500. If Ms. Barnett's employment is terminated at any time without cause, Mr. Singerdue 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. Barnett will be entitled to receive hisher 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 Mr. SingerMs. Barnett was terminated by the Company as of December 31, 2015 without cause, Mr. Singer2017 following a change of control of the Company, Ms. Barnett would have been entitled to receive $152,870.$175,000 and the Company would incur additional expenses for medical benefits of approximately $14,375.
27Ms. Barnett 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 his interest in any and all such discoveries and work product to the Company. Furthermore, Ms. Barnett 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.
Mr. SingerSmart entered into an employment agreement with the Company on October 11, 2012. Pursuant to the terms of the agreement, Mr. Smart 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. SingerSmart agreed to not, directly or indirectly, solicit the Company's customers or employees during the term of his employment and for a period of one year thereafter.
Mr. Stitt entered into an employment agreement with the Company on May 1, 2011 and on September 30, 2015. Pursuant to the terms of the agreement, Mr. Stitt is an at-will employee and the Company or Mr. Stitt may terminate the agreement, with or without cause, upon two weeks notice. However, if Mr. Stitt's employment is terminated at any time without cause, Mr. Stitt will be entitled to receive his base salary for a six month period in exchange for executing a general release of claims as to the Company. Assuming that Mr. Stitt was terminated by the Company as of December 31, 20152017 without cause, Mr. Stitt would have been entitled to receive $160,000. If Mr. Stitt'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. Stitt will be entitled to receive his 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 Mr. Stitt was terminated by the Company as of December 31, 20152017 following a change of control of the Company, Mr. Stitt would have been entitled to receive $160,000 and the Company would incur additional expenses for medical benefits of approximately $5,064.$14,375.
Mr. Stitt 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. Stitt agreed to not, directly or indirectly, solicit the Company's customers or employees during the term of his employment and for a period of one year thereafter.
Mr. Talling-Smith entered into an employment agreement with
Pay Ratio Disclosure
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, the Company on April 12, 2013. Pursuantis providing the following information regarding the ratio of the total annual compensation for the Company's Global Chief Executive Officer (CEO) to the termsmedian of the agreement, Mr. Talling-Smith was an at-will employee andannual total compensation of all Company employees (other than the Company’s Global Chief Executive Officer).
For purposes of calculating the 2017 ratio of the median annual total compensation of all Company employees to the total annual compensation of the Company’s Global CEO, the Company or Mr. Talling-Smith could terminate the agreement, with or without cause, upon three months notice. However, if Mr. Talling-Smith's employment was terminated at any time without cause, Mr. Talling-Smith would be entitled to receive hisincluded in its calculation of compensation: base salary, commissions, annual bonus amounts, stock-based compensation (based on the grant date fair value of awards granted during 2017) and other incentive payments. The Company used December 31, 2017 as its measurement date. Total compensation for a six month period in exchange for executing a general releaseMr. Holger Bartel, the Company’s Global CEO was determined to be $1,474,945 and was approximately 25 times the median annual compensation of claims as toall Company employees, excluding the Company.Global CEO, of $59,663. If stock based compensation amounts are excluded from the calculation, Mr. Talling-Smith's employment was terminated at any time due to a changeBartel’s annual compensation is approximately $232,545, or 4 times the median employee compensation of control (as defined in the agreement) or if he is not offered a position$59,663. For purposes of comparable pay and responsibilities in the same geographic area in which he worked immediately prior to a change of control, Mr. Talling-Smith was entitled to receive his base salary and medical benefits for a six month period in exchange for executing a general release of claims as to the Company. Mr. Talling-Smith’s employment was terminated effective December 14, 2015 and, in exchange for executing a general release of claims, Mr. Talling-Smith was entitled to receive $210,000 and medical benefits of approximately $5,064.
Mr. Talling-Smith agreed thatthis calculation, the Company owns any discoveries and work product (as defined inhad 564 employees worldwide, excluding the agreement) made during the term of his employment and assigned all of his interest in any and all such discoveries and work product to the Company. Furthermore, Mr. Talling-Smith 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.Global CEO.
Forward-Looking Statements
Disclosures in this Compensation Discussion & Analysis may contain certain forward-looking. Statements that do not relate strictly to historical or current facts are forward-looking and usually identified by the use of words such as "anticipate," "estimate," "approximate," "expect," "intend," "plan," "believe" and other words of similar meaning in connection with any discussion of future operating or financial matters. Without limiting the generality of the foregoing, forward-looking statements contained in this report include the matters discussed regarding the expectation of compensation plans, strategies, objectives, and growth and anticipated financial and operational performance of the Company and its subsidiaries. A variety of factors could cause the Company's actual results to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements. The risks and uncertainties that may affect the operations, performance and results of the Company's business and forward-looking statements include, but are not limited to those set forth herein. Any forward-looking statement speaks only as of the date on which such statement is made and the Company does not intend to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.
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 Exchange Act, except to the extent that Travelzoo specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act.
The Company's Compensation Committee has reviewed and discussed the CD&A with management and, based on such review and discussions, the Compensation Committee recommended to the Company's Board of Directors that the CD&A be included in the proxy statement on Schedule 14A.
|
|
Compensation Committee
|
Michael KargMary Reilly (Chair)
|
Mary Reilly
Beatrice Tarka |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows the amount of our common stock beneficially owned as of March 10, 201621, 2018 by (a) each director and nominee for election to the Board of Directors, (b) each named executive officer, (c) all executive officers and directors as a group, and (d) each person known by the Company, as of March 10, 2016,21, 2018, 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 | | Beneficial Ownership |
| Beneficial Owner | | Number of Shares (1) | | Percent of Total (2) | | Number of Shares (1) | | Percent of Total (2) |
| Directors and Named Executive Officers | | | | | |
| | |
| Ralph Bartel (3) | | | 7,160,500 |
| | 57.46 | % |
| Holger Bartel | |
| | — | | 450,000 |
| | 3.61 | % |
| Ralph Bartel * (3) | | 7,430,538 | | 51.65% | |
| Rachel Barnett | | | — |
| | — |
|
| Glen Ceremony | | | 50,000 |
| | ** |
|
| Vivian Hong | | | — |
| | — |
|
| Michael Karg | | — | | — | | — |
| | — |
|
| Carrie Liqun Liu | | | — |
| | — |
|
| Donovan Neale-May | | — | | — | | — |
| | — |
|
| Mary Reilly | | — | | — | | — |
| | — |
|
| Christian Smart | | | — |
| | — |
|
| Michael Stitt | | | 53,500 |
| | ** |
|
| Beatrice Tarka | | — | | — | | — |
| | — |
|
| Caroline Tsay | | — | | — | | — |
| | — |
|
| Christopher Loughlin | | 325,000 | | 2.26% | |
| Glen Ceremony | | 50,000 | | ** | |
| Vivian Hong | | — | | — | |
| Richard Singer | | — | | — | |
| Michael Stitt | | 3,500 | | ** | |
| Simon Talling-Smith | | 4,000 | | ** | |
| Directors and executive officers as a group (13 persons) | | 7,813,038 | | 54.30% | | 7,714,000 |
| | 61.90 | % |
| * Persons Owning More Than 5% of Common Stock | | | | | |
| |
| (1) | Represents shares subject to stock options that are exercisable on March 10, 201621, 2018 or become exercisable within 60 days of March 10, 2016.21, 2018. 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 14,387,41212,461,553 shares of common stock outstanding as of March 10, 2016,21, 2018, plus the number of shares of common stock that such person or group had the right to acquire within 60 days after March 10, 2016.21, 2018. |
| |
| (3) | Ralph Bartel indirectly holds a controlling interest of Azzurro Capital Inc., which is the holder of 7,430,5387,160,500 shares, through the Ralph Bartel 2005 Trust. |
Under Section 16(a) of the Securities Exchange Act of 1934, the Company's directors, executive officers and the beneficial holders of more than 10% of the Company's 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 Company's common stock are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such forms furnished to the Company or written representations from reporting persons, during fiscal 2015,2017, all Section 16(a) filing requirements were satisfied on a timely basis.basis, except the Form 3 for Mr. Christian Smart as General Manager, Germany, as the Company has now determined that Mr. Smart should be considered a named executive officer. Mr. Smart did not purchase or sell the Company's stock during fiscal year 2017.
