The Company entered into a Nonqualified Stock Option Agreement (the “Option Agreement”) with Holger Bartel, Global Chief Executive Officer,William Brown, General Manager, Canada, on October 30, 2017,January 1, 2021, pursuant to which the Company granted Mr. BartelBrown the option (the “Option”) to purchase 400,00050,000 shares of the Company’s common stock.stock (such option being hereinafter referred to as the “Option”). The Option will begin to partlypartially vest on March 31, 2018,January 1, 2022, but will not be exercisable until stockholder approval.the stockholders approve. Stockholders are being asked to approve the issuance of common stock which is issuable to Mr. BartelBrown upon exercise of the Option.
Mr. BartelBrown must exercise the Option by October 30, 2027;January 1, 2026; after such date, the Option will expire.
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.
The Option is not transferable by Mr. BartelBrown other than by will or the laws of descent and distribution and may be exercised during Mr. Bartel’sBrown’s lifetime only by him or his guardian or legal representative.
If Mr. Bartel’sBrown’s employment with the Company is terminated, without cause (other than by reasonincluding in the event of his death or disability), and subject to Mr. Bartel signing and not revoking a general release of claims as set forth in Appendix Adisability, any portion of the Option Agreement, Mr. Bartel’s stock options shallwhich is not then exercisable will immediately vest in fullterminate. With respect to any portion of the Option which is then exercisable on the date of termination. The option shall remain exercisable for three months following the datetermination of voluntary termination and any unexercised options shall be null and void if not exercised by that date. Shouldemployment, 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’sBrown (or, in the event of his death, the legatee or legatees of Mr. Bartelhis legatee(s) under his last will, or his personal representatives or distributees) right todistributes) may exercise such portion of the option, to the extent it was vested and he was entitled to exercise it on the dateOption for a period of termination of employment, shall continue for three months afterninety (90) days following such termination, but notin no event 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.
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:
▪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.
▪Changing Market Conditions. Compensation should take into consideration the constantly changing and evolving market environment in which the Company operates.
We implement our compensation philosophy through setting base salaries for our executive officers, through the use of our executive bonus plan and granting of stock options to certain key employees and through reviewing and approving other terms of employment agreements.
Compensation Determination Process
Compensation Committee Members. The Committee is responsible for establishing, overseeing and reviewing executive compensation policies and for approving, validating and benchmarking the compensation and benefits for named executive officers. The Committee is also responsible for determining the fees paid to our outside directors. The Committee included Ms. Mary Reilly and Mr. Michael Karg through May 22, 2017. The Committee includes Ms. Mary Reilly and Ms. Beatrice Tarka after May 22, 2017.Tarka. Ms. Reilly Mr. Karg and Ms. Tarka satisfied the independence requirements of the NASDAQ.
Role of Management. During 2017,2020, 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 Chairman, Global Chief Executive Officer (CEO)Head of Human Resources and General Counsel and data prepared by management, including a comparison of the current compensation of the named executive officers with publicly available information,. The data utilized by as applicable. Management assisted 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 evaluatingto properly evaluate employee performance, establishingestablish business performance targets, goals and objectives and recommendingrecommend salary and bonus levels. The Global CEO does not participateNo executive officer participated in discussions regarding histheir own compensation.
Although difficult to find a comparable company, the Committee compared the compensation received by the Company's named executive officers with the levels of compensation received by similarly situated executives inexecutives. For these comparisons, the sameCommittee considered geographic location, in light ofindustry and company size, as well as the named executives'executive’s responsibilities, performance, experience and tenure, in ordertenure. This allowed the Committee to arrive atreview and confirm that the totaloverall compensation packagepackages for each of the namedCompany’s executive officers.officers are reasonable. 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 also compared the mix of cash and stock compensation of similarly-situated executives to confirm that the mix awarded to the Company’s executive officers was and continues to be reasonable.
The Committee did not engage an outside consulting firm to provide advice on executive compensation.
In response to a letter received from a shareholder of the Company in June 2020, the Committee authorized the Global Head of Human Resources and General Counsel of the Company to arrange a call. The feedback received from the shareholder was then discussed with the Committee as part of their review of 2020 executive compensation. During the call, the shareholder stated that the Company performed well on the pay-for-performance score (quantitative) and provided feedback regarding qualitative factors, specifically claw-back policy and holding requirements for executive stock ownership. In connection with this feedback, the Committee is considering whether to implement a claw-back policy as part of its Code of Ethics and will conduct a review of holding requirements to determine if imposing one on future stock option grants is appropriate and in the best interests of the Company.
Components of Executive Compensation
The Committee has structured an executive compensation program comprised of base salary, cash bonus, equity and non-equity incentive pay. The mix of these components depends on the executive officer’s role, performance, tenure and experience.
Base Salary
The Committee considered two types of potential base salary increases for the named executive officers in 2017:2020: (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 considersconsidered 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'sconsidered an evaluation of each named executive officer provided by the Global Head of Human Resources in making the decision regarding merit increases.
The Committee determinesdetermined 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 salaryalso considered the key market factors impacting the Company and its overall performance especially in the context of Mr. Holger Bartel as shown inthe COVID pandemic and its impact on the Summary Compensation Table based upon his duties and responsibilities as Global CEO and did not make any other change to base salaries of its other named executive officers in 2017.travel industry specifically.
Incentive Bonus Pay
Pursuant to the terms of Mr. Ceremony'sMs. Su's employment agreement dated May 9,February 16, 2011, effective June 15,May 2, 2011, and as amended March 9, 2017, Mr. Ceremony isJuly 1, 2019, Ms. Su was eligible to receive a quarterly Performance Bonus for each quarterperformance bonus and discretionary bonus during 2017.2020.
The quarterly Performance Bonusperformance bonus is calculated based upon worldwide revenue and operating income and audience targets for 2020. The revenue bonus is calculated based upon achievement of the target resulting in a potential and maximum bonus of $12,500. The operating income bonus is calculated based upon achievement of the target resulting in a potential and maximum bonus of $12,500. The audience bonus is calculated based upon achievement of certain audience targets resulting in a potential and maximum bonus of $12,500. The total maximum performance bonus per quarter for the revenue, operating income and audience components combined is $37,500 during 2020. The discretionary bonus is determined in the discretion of Ms. Su’s manager . In evaluating Ms. Su’s individual performance during 2020, management and the Committee considered factors such as Ms. Su’s leadership role in areas of corporate governance, business ethics, and financial management. The discretionary bonus per quarter was $12,500 during 2020.
Ms. Su did not earn a quarterly performance or discretionary bonus for the first, third, or fourth quarters of 2020. Ms. Su received a discretionary bonus of $6,500 for the second quarter of 2020.
Pursuant to the terms of Mr. Peterson's employment agreement dated June 22, 2018, Mr. Peterson was eligible to receive a quarterly performance bonus in 2020.
The quarterly performance bonus is calculated based upon worldwide 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 $16,667.$12,500. The operating income bonus is calculated based upon achievement of the target resulting in a potential and maximum bonus of $16,667.$12,500. The audience bonus is calculated based upon achievement of certain audience targets resulting in a potential and maximum bonus of $16,666.$12,500. The total maximum Performance Bonusperformance bonus per quarter for the revenue, operating income and audience components combined is $50,000.
$37,500 during 2020. The discretionary bonus is determined in the discretion of Mr. Ceremony earned a quarterly bonus for audience for the second and third quarters and for operating income for the fourth quarter of 2017. Mr. Ceremony received Performance Bonuses totaling $50,000 during 2017. For 2017, Mr. Ceremony received 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.
Mr. Ceremony also received a Discretionary Bonus determined by the Global Chief Executive Officer at his sole and absolute discretion.Peterson’s manager. In exercising such discretion, the Global Chief Executive Officermanagement takes into consideration Mr. Ceremony'sPeterson's individual performance. 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 governancePeterson did not earn a bonus and business ethics, and financial management. Mr. Ceremony received a Discretionary Bonus totaling $62,502 for 2017.
Pursuant to 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 absolute discretion. In exercising such discretion, the Global Chief Executive Officer takes into consideration Ms. Barnett's individual performance. Ms. Barnett received a Discretionary Bonus totaling $20,685 for 2017.
Pursuant to the terms of Ms. Hong's employment agreement dated January 1, 2016, Ms. Hong was eligible todid not receive a quarterly Performance Bonus 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 6.76 RMB to $1.00) for the purposes of this summary.
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 $7,400. The operating income bonus is calculated based upon achievement of the target resulting in a potential and maximum bonus of $7,400. The audience bonus is calculated based upon achievement of certain audience targets resulting in a potential and maximum bonus of $7,400. The total maximum Performance Bonus per quarter for the revenue, operating income and audience components combined is $22,200.
Ms. Hong earned no quarterlydiscretionary bonus in 2017. For 2017, Ms. Hong received 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.
Ms. Hong's employment terminated on November 1, 2017 and in exchange for executing a general release of claims she received compensation of $170,194 in 2017.
Pursuant to the terms of Mr. Smart's employment agreement dated October 11, 2012, Mr. Smart is eligible to receive a quarterly Performance Bonus for each quarter during 2017. Mr. Smart's Performance Bonus is payable in Euro and has been translated into US dollars (at the rate of 1.13 Euro to $1.00) for the purposes of this summary.
The quarterly Performance Bonus is calculated based upon Germany travel revenue, travel operating income, local revenue and audience targets. The travel revenue 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 $6,767 to $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 $11,278 and the maximum operating income bonus is $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 $11,278. The total maximum Performance Bonus per quarter for the travel revenue, travel operating income, local revenue and audience components combined is $58,646.
Mr. Smart earned a quarterly bonus for travel revenue and local revenue the first, third and fourth quarters of 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 2017.2020. Mr. Smart received Performance Bonuses totaling $121,662 during 2017. For 2017, Mr. Smart received 52% ofPeterson resigned from the maximum Performance Bonus. The Company believes that targets set for Germany travel revenue, travel operating income, local revenue and audience align with the Company's desire to continue to grow the business.
Pursuant to the terms of Mr. Stitt's employment agreement dated Septemberon March 30, 2015, Mr. Stitt was eligible to receive a quarterly Performance Bonus for each quarter during 2017.
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 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 and operating income for the fourth quarter of 2017 and earned a quarterly bonus for the audience for the second and third quarters of 2017. Mr. Stitt received Performance Bonuses totaling $58,000 during 2017. For 2017, Mr. Stitt received 33% of the maximum Performance Bonus. The Company believes that targets set for North America revenue, operating income and audience targets align with the Company's desire to continue to grow the business.
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's individual performance. In evaluating Mr. Stitt’s individual performance during 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 Bonus totaling $108,000 for 2017.
2020, effective April 10, 2020.
Other Compensation-Related Matters
The Company grants stock options (which represent the right to purchase a specific number of shares of company common stockthe Company’s Common Stock at a predetermined price, subject to vesting conditions) to certain executive officers,staff, 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 October 2017,March 2020, the Company granted Mr. Holger BartelMs. Lisa Su stock options to purchase 400,000100,000 shares of common stockCommon Stock with an exercise price of $6.95,$3.49, of which vests25,000 shares are exercisable annually starting March 30, 2021 and ending March 30, 2024. The grant was subject to approval by the stockholders of the Company at the 2020 Annual Meeting and could have been unwound if approval were not received. However, the shareholders approved the grant. The options expire in eight equal quarterly installments over a two-year period ending December 31, 2019. The2025. In approving the grant of the options to Ms. Su, the Compensation Committee and the Board of Directors considered Ms. Su’s duties and responsibilities as Chief Accounting Officer, particularly during the COVID pandemic, and the voluntary pay-cut Ms. Su took during that time.
In March 2020, the Company doubled and re-priced the outstanding options of Mr. Holger Bartel. This meant that (a) the 400,000 options granted to Mr. Bartel in 2015 at an exercise price of $8.07 were increased to 800,000 options at an exercise price of $3.49; (b) the 400,000 options granted to Mr. Bartel in 2017, of which 250,000 had been exercised, at an exercise price of $6.95, were increased to 300,000 options at an exercise price of $3.49; and (c) the 400,000 options granted to Mr. Bartel in 2019 at an exercise price of $10.79 were increased to 800,000 options at an exercise price of $3.49. This doubling and re-pricing was subject to approval by the stockholders of the Company at the 2020 Annual Meeting and could have been unwound if approval were not received. However, the shareholders approved the doubling and re-pricing. The options granted in 2015 expire in 2025, the options granted in 2017 expire in 2027 and the options granted in 2019 expire in 2024. In approving the doubling and re-pricing of the options, the Compensation Committee and the Board of Directors considered Mr. Holger Bartel'sBartel’s duties and responsibilities as Global Chief Executive Officer.Officer, particularly during the COVID pandemic, and the voluntary pay-cut Mr. Bartel took during that time, as well as the fact that Mr. Bartel does not have a bonus plan in place.
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 ourthe Company's business expense reimbursement policy.
Employment Agreements. The Company has entered into employment agreements with the namedcertain executive officers,staff, 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 Ms. Reilly and Ms. Tarka. In 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 FinancialAccounting Officer, and the three other most highly compensated executive officersformer Chief Technology Officer during the fiscal years ended December 31, 2017, 20162020 and 2015.2019.
|
| | | | | | | | | | | | | |
Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) (a) | Option Awards ($) (b) | Non-Equity Incentive Plan Compensation ($) (c) | All Other Compensation ($) (d) | Total ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Holger Bartel (1) | 2017 | 142,472 |
| — |
| 1,242,400 |
| — |
| 90,073 |
| 1,474,945 |
|
Global Chief Executive Officer | 2016 |
|
|
|
|
|
|
|
| 231,720 |
| 231,720 |
|
| 2015 | — |
| — |
| 1,767,200 |
| — |
| 231,720 |
| 1,998,920 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Glen Ceremony | 2017 | 470,000 |
| 62,502 |
| — |
| 50,000 |
| 4,036 |
| 586,538 |
|
Chief Financial Officer | 2016 | 470,000 |
| 62,500 |
|
|
| 53,333 |
| 4,168 |
| 590,001 |
|
| 2015 | 470,000 |
| — |
|
|
| 81,799 |
| 3,903 |
| 555,702 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rachel Barnett (2) | 2017 | 316,945 |
| 20,685 |
| — |
| — |
| 3,846 |
| 341,476 |
|
General Counsel and Director |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vivian Hong (3) | 2017 | 311,972 |
| — |
| — |
| — |
| 170,194 |
| 482,166 |
|
President, Asia Pacific | 2016 | 346,961 |
| 15,085 |
|
|
| 7,543 |
| — |
| 369,589 |
|
| 2015 | 284,904 |
| 179,178 |
|
|
| 22,040 |
| — |
| 486,122 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christian Smart (4) | 2017 | 225,564 |
| — |
| — |
| 121,662 |
| 45,922 |
| 393,148 |
|
General Manager, Germany |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Stitt | 2017 | 320,000 |
| 108,000 |
| — |
| 58,000 |
| 17,223 |
| 503,223 |
|
President, North America | 2016 | 320,000 |
| 58,000 |
| 472,900 |
| 14,500 |
| 1,500 |
| 866,900 |
|
| 2015 | 320,000 |
| 14,500 |
|
|
| 69,139 |
| 1,500 |
| 405,139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) (a) | Option Awards ($) (b) | Non-Equity Incentive Plan Compensation ($) (c) | All Other Compensation ($) (d) | Total ($) |
| | | | | | | |
Holger Bartel (1) | 2020 | 208,000 | | — | | 5,850,250 | | — | | — | | 6,058,250 | |
Global Chief Executive Officer | 2019 | 232,000 | | 250,000 | | — | | — | | — | | 482,000 | |
| | | | | | | |
Lisa Su (2) | 2020 | 268,333 | | 6,500 | | 392,800 | | — | | 1,500 | | 669,133 | |
Chief Accounting Officer | 2019 | 260,510 | | 50,000 | | — | | 50,000 | | 3,793 | | 364,303 | |
| | | | | | | |
Michael Peterson (3) | 2020 | 95,890 | | — | | — | | | 1,500 | | 97,390 | |
Chief Technology Officer | 2019 | 350,000 | | 37,500 | | — | | 25,000 | | 1,500 | | 414,000 | |
|
| | | | | | | | | | | | | | | | | | | | | | |
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 set to $232,000 for his role as Global Chief Executive Officer. In addition, Mr. Holger Bartel was granted options on October 30, 2017. |
|
|
(2) | Ms. Barnett's annual salary is $350,000 effective May 22, 2017. |
|
| | | | | | | |
(1) | | | | | | | Mr. Holger Bartel's annual salary is $232,000 for his role as Global Chief Executive Officer. In 2020, base salary reduced 20% from $232,000 to $185,600 to support cost reduction efforts due to COVID-19 pandemic. $208,800 represents annual salary cost based on 20% reduction for six months. |
Notes to the Summary Compensation Table | | | |
(2) | Ms. Su was appointed as the Company's Chief Accounting Officer in July 2019. In 2020, base salary reduced 10% from $280,000 to $252,000 to support cost reduction efforts due to COVID-19 pandemic. $268,333 represents annual salary cost based on 10% reduction for five months. |
| | | | | | |
(3) | Ms. Hong's compensation is denominated in Chinese Yuan andMr. Peterson joined the Company on June 22, 2018, his annual salary was translated into U.S. dollars using$350,000. Mr. Peterson resigned from 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. Ms. Hong's employment terminatedCompany on November 1, 2017, and in exchange for executing a general release of claims received compensation of $170,194.March 30, 2020. |
|
|
(4) | Mr. Smart's compensation is denominated in Euro and was translated into U.S. dollars using the annual average daily exchange rate of €1.13 = $1.00 for 2017. |
|
|
(a) | Amounts consist of discretionary bonuses earned per the terms of employment agreements or bonus plans and/or at the discretion of the Global Chief Executive Officer or the 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 810 to the consolidated financial statements contained in our 20172020 Annual Report on Form 10-K filed on March 16, 2018.31, 2021. |
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| | | | | | |
(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"Executive Compensation" section 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 fee paid to him in his role as Chairman of the Board through May 22, 2017. |
|
|
| Mr. Ceremony's other compensation for 2017, 2016 and 2015 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. |
|
|
| Ms. Hong's other compensation for 2017 is a separation payment of $170,194. |
|
|
| Mr. Stitt's other compensation for 2017 is aincluding $1,500 Company matching 401(k) plan contribution and a housing allowance of of $15,723, for 2016 and 2015 is for a $1,500 Company matching 401(k) plan contribution. |
|
|
| Mr. Smart's other compensation for 2017 is a car allowance of $27,758 and the remaining amount for a bonus payment made to eligible employees. |
|
|
| Ms. Barnett's other compensation for 2017 is a $1,500 Company matching 401(k) plan contribution for each year and the remaining amount for a bonus paymentmiscellaneous payments made to eligible employees. |
Grants of Plan-Based Awards in 20172020
The following table sets forth certain information with respect to non-equity incentive plan awards granted to each of our named executive officers during the fiscal year ended December 31, 2017.2020.
| | | | | | | | | | | |
| Estimated Possible Payouts Under Non-Equity Incentive Plan Awards |
Name (1) | Threshold ($) | Target ($) | Maximum ($) |
Holger Bartel | — | | — | | — | |
Lisa Su | 100,000 | | 100,000 | | 200,000 | |
Michael Peterson | 50,000 | | 100,000 | | 200,000 | |
(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 section entitled, “Executive Compensation”.
|
| | | | | | |
| Estimated Possible Payouts Under Non-Equity Incentive Plan Awards |
Name (1) | Threshold ($) | Target ($) | Maximum ($) |
Holger Bartel | — |
| — |
| — |
|
Glen Ceremony | 200,000 |
| 200,000 |
| 200,000 |
|
Rachel Barnett | — |
| — |
| — |
|
Vivian Hong | 88,797 |
| 88,797 |
| 88,797 |
|
Christian Smart | 139,849 |
| 180,451 |
| 234,586 |
|
Michael Stitt | 174,000 |
| 174,000 |
| 174,000 |
|
| |
(1) | Amount represents the potential annual Performance Bonus payments under the terms of employment agreement. The business measurements and performance goals for determining the Performance Bonus payout are described in the CD&A. |
Outstanding Equity Awards at December 31, 20172020.
The following table sets forth certain information with respect to outstanding equity awards at December 31, 2020. |
| | | | | | | |
| Option Awards |
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date |
Holger Bartel (1) | 400,000 |
| — |
| 8.07 |
| September 28, 2025 |
| — |
| 400,000 |
| 6.95 |
| October 30, 2027 |
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, 2018 through December 31, 2019. |
| |
(2) | The remaining unexercisable options became exercisable on January 23, 2016. |
| |
(3) | The options are exercisable in annual increments of 25% from March 7, 2017 through March 7, 2020. |
| | | | | | | | | | | | | | | | | |
| | Option Awards |
Name | | 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 | | 400,000 | | 3.49 | | September 5, 2024 |
| (1) | | 300,000 | | — | | 3.49 | | October 30, 2027 |
| (2) | | 800,000 | | — | | 3.49 | | September 28, 2025 |
Lisa Su | (3) | | — | | 100,000 | | 3.49 | | March 30, 2025 |
Michael Peterson | (4) | | — | | — | | — | | — | |
(1)400,000 shares of option were granted to Mr. Holger Bartel in each of 2015, 2017 and 2019. In 2019, Mr. Bartel exercised 250,000 options pursuant to the 2017 grant. In 2020, all outstanding, unexercised options were doubled and re-priced, resulting in 800,000 from his 2015 grant, 300,000 from his 2017 grant and 800,000 from his 2019 grant. In 2021, Mr. Bartel exercised 300,000 from his 2017 grant, meaning the option grant is now terminated and 100,000 from his 2015 grant.
(2)The options are exercisable in quarterly increments of 12.5% from March 31, 2020 through December 31, 2021.
(3)The options are exercisable in annual increments of 25% from March 30, 2021 through March 30, 2024.
(4)Mr. Peterson resigned from the Company on March 30, 2020, effective April 10, 2020.
Option Exercises and Stock Vested
During the year ended December 31, 2017, there were2020, no optionsexecutive officer exercised by any of our named executive officers. At December 31, 2017, 400,000 shares of Mr. Holger Bartel's stock options, 50,000 shares of Mr. Ceremony's stockoptions. In March 2020, Ms. Su was granted 100,000 options and 25,000the unexercised options previously granted to Mr. Bartel in 2015, 2017, 2019 were doubled and re-priced with the approval of Mr. Stitt's stock options, were vested.
the Board of Directors and the stockholders of the Company.
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, 20172020 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 and September 2019, the Company provided stock option grants to Mr. Holger Bartel to purchase 400,000 shares of the Company’s common stockCommon Stock for each grant. Mr. Holger Bartel exercised 250,000 options during 2019. In March 2020, the Company doubled and re-priced the unexercised options of Mr. Holger Bartel, resulting in total options granted to Mr. Holger Bartel of 1,900,000.
The Company may terminate the employment agreement, with or without cause, upon written notice to Mr. Holger Bartel. However, if Mr. Holger Bartel's employment is terminated at any time without cause, Mr. Holger Bartel's remaining stock options to purchase a 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. CeremonyMs. Su 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 claimsMay 2, 2011, as to the Company. Assuming that Mr. Ceremony was terminated by the Company as of December 31, 2017 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, 2017 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 $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. Barnett entered into an employment agreement with the Company onamended July 30, 2013.1, 2019. Pursuant to the terms of the agreement, Ms. BarnettSu is an at-will employee andmeaning the Company or Ms. Barnett maySu could terminate the agreement at any time, with or without cause, upon three weeks notice.two (2) weeks' prior notice to the other party. However, if Ms. Barnett'sSu 's employment is terminated at any time without cause, Ms. BarnettSu will be entitled to receive her base salary for a threesix (6) month period in exchange for executing a general release of claims as to the Company. Assuming that Ms. BarnettSu was terminated by the Company as of December 31, 20172020 without cause, Ms. BarnettSu would have been entitled to receive $87,500.receive $140,000. If Ms. Barnett'sSu's employment is terminated at any time due to a change of control (as defined in the agreement) or if she is not offered a position of comparable pay and
responsibilities in the same geographic area in which she worked immediately prior to a change of control, Ms. BarnettSu will be entitled to receive her base salary and medical benefits for a six month period in exchange for executing a general release of claims as to the Company. Assuming that Ms. BarnettSu was terminated by the Company as of December 31, 20172020 following a change of control of the Company, Ms. BarnettSu would have been entitled to receive $175,000$140,000 and the Company would incur additional expenses for medical benefits of approximately $14,375.$10,000.
Ms. BarnettSu agreed that the Company will own any discoveries and work productproduct (as defined in the agreement) made during the term of her employment and to assign all of hisher interest in any and all such discoveries and work product to the Company. Furthermore, Ms. BarnettSu 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 (1) year thereafter.
Mr. Smart 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. Smart 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 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, 2017 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, 2017 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 $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.
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 is providing the following information regarding the ratio of the total annual compensation for the Company's Global Chief Executive Officer (CEO) to the median of the annual 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 included 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 Mr. Holger Bartel, the Company’s Global CEO was determined to be $1,474,945 and was approximately 25 times the median annual compensation of all Company employees, excluding the Global CEO, of $59,663. If stock based compensation amounts are excluded from the calculation, Mr. Bartel’s annual compensation is approximately $232,545, or 4 times the median employee compensation of $59,663. For purposes of this calculation, the Company had 564 employees worldwide, excluding the 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.
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Compensation Committee
|
Mary Reilly (Chair)
|
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 21, 2018April 7, 2021 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 21, 2018,April 7, 2021, to beneficially own more than 5% of the outstanding shares of common stockCommon 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 Owner | | Number of Shares | | Percent of Total (5) |
Directors and Executive Officers | | | | |
Ralph Bartel (1) | | 4,918,125 | | | 42.9 | % |
Holger Bartel (2) | | 1,260,849 | | | 11.0 | % |
Christina Sindoni Ciocca (3) | | 25,000 | | | — | |
Carrie Liqun Liu | | — | | | — | |
Mary Reilly | | — | | | — | |
Lisa Su (4) | | 25,000 | | | — | |
Beatrice Tarka | | — | | | — | |
Directors and executive officers as a group (7 persons) | | 6,228,974 | | | 54.3 | % |
* Persons Owning More Than 5% of Common Stock | | | | |
(1)Ralph Bartel indirectly holds a controlling interest of Azzurro Capital Inc., which is the holder of 4,518,125 shares, through the Ralph Bartel 2005 Trust. Mr. Ralph Bartel holds 400,000 options that are exercisable on April 7, 2021 or become exercisable within 60 days of April 7, 2021.
(2)Mr. Holger Bartel holds 1,200,000 options that are exercisable on April 7, 2021 or become exercisable within 60 days of April 1, 2021. 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. Mr. Holger Bartel holds 60,849 shares of common stock.
(3)Represents shares subject to stock options that are exercisable on April 7, 2021 or become exercisable within 60 days of April 7, 2021. 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.
(4)Represents shares subject to stock options that are exercisable on April 7, 2021 or become exercisable within 60 days of April 7, 2021. 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.
(5)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 11,469,705 shares of common stock outstanding as of April 7, 2021, plus the number of shares of Common Stock that such person or group had the right to acquire within 60 days after April 7, 2021.
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| | | | | | |
| | Beneficial Ownership |
Beneficial Owner | | 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 | % |
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 | | — |
| | — |
|
Directors and executive officers as a group (13 persons) | | 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 21, 2018 or become exercisable within 60 days of March 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. |
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(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 12,461,553 shares of common stock outstanding as of March 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 21, 2018. |
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(3) | Ralph Bartel indirectly holds a controlling interest of Azzurro Capital Inc., which is the holder of 7,160,500 shares, through the Ralph Bartel 2005 Trust. |
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 stockCommon 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 stockCommon 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 2017,2020, all Section 16(a) filing requirements were satisfied on a timely 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.
basis.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Independent Public Accountants
PricewaterhouseCoopers RSM US LLP (“PwC”RSM”) served as Travelzoo's independent registered public accounting firm for our 20172020 and 20162019 fiscal years and KPMG LLP ("KPMG") served as Travelzoo's independent registered public accounting firm for our 2015 fiscal year. The change in the Company's independent registered public accounting firm was previously disclosed in the Company's Form 8-K dated June 22, 2016.years. The Audit Committee has not yet selected our independent registered public accounting firm for our 20182021 fiscal year. The Audit Committee annually reviews the performance of our independent registered public accounting firm and the fees charged for their services. This review has not yet been completed. Based upon the results of this review, the Audit Committee will determine which independent registered public accounting firm to engage to perform our annual audit. Stockholder approval of our accounting firm is not required by our bylaws or otherwise required to be submitted to the stockholders. PwCRSM representatives are expected to be present at the Annual Meeting and will be available to respond to questions at the meeting; however, they are not expected to make a formal statement.
Principal Accountant Fees and Services
During fiscal years 2017The audit fees and 2016, PwC and KPMG total fees charged for services rendered to Travelzoo charged by RSM for 2020 and 2019 are as follows:
| | Service | | 2017 Fees | | 2016 Fees | Service | | 2020 Fees | | 2019 Fees |
Audit fees (1) | | $ | 1,201,674 |
| | $ | 1,197,855 |
| Audit fees (1) | | $ | 881,100 | | | $ | 746,400 | |
Audit-related fees | | — |
| | — |
| |
Audit-related fees (2) | | Audit-related fees (2) | | 25,000 | | | — | |
Tax fees | | — |
| | — |
| Tax fees | | — | | | — | |
All other fees | | 1,800 |
| | 1,800 |
| All other fees | | — | | | — | |
Total | | $ | 1,203,474 |
| | $ | 1,199,655 |
| Total | | $ | 906,100 | | | $ | 746,400 | |
| |
(1) | Audit fees consisted of fees for professional services rendered for the annual audit of Company’s consolidated financial statements and review of the interim consolidated financial statements included in the quarterly reports and audit services rendered in connection with other statutory or regulatory filings. The 2017 and 2016 audit fees include KPMG fees of $131,524 and $305,355, respectively. |
(1)Audit fees consisted of fees for professional services rendered for the annual audit of the Company's consolidated financial statements and review of the interim consolidated financial statements included in the quarterly reports, and audit services rendered in connection with other statutory or regulatory filings.
(2)Audit-related fees represents fees for professional services rendered related to the consent issued for the Company's S-8 Registration Statement filing and review of pro-forma financial information included in the Company's Form 8-K/A filing.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm
The Audit Committee pre-approves all audit and permissible non-audit services provided by the Company's independent registered public accounting firm. These services may include audit services, audit-related services, tax and other services. Pre-approval is generally provided for up to one year, and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis. During 20172020 and 2016,2019, all services provided by PwC and KPMGRSM were pre-approved by the Audit Committee in accordance with this policy.
AUDIT COMMITTEE REPORT
The information contained in this report shall not be deemed to be "soliciting material" or "filed" with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), except to the extent that Travelzoo specifically incorporates it by reference into a document filed under the Securities Act of 1933, as amended (the "Securities Act") or the Exchange Act.
The Audit Committee oversees Travelzoo's financial reporting process on behalf of the Board of Directors. Management is primarily responsible for the financial statements and reporting processes including the systems of internal controls, while the independent auditors are responsible for performing an independent audit of Travelzoo's consolidated financial statements in accordance with auditing standards of the Public Company Accounting Oversight Board ("PCAOB"), and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States.
In this context, the committee has met and held discussions with management and the independent auditors regarding the Company's audited consolidated financial statements for the fiscal year ended December 31, 2017.2020. The committee discussed with Travelzoo's independent auditors the overall scope and plan for their audit. The committee met, at least quarterly, with the independent auditors, with and without management present, and discussed the results of their examinations, their evaluations of Travelzoo's internal controls, and the overall quality of Travelzoo's financial reporting. Management represented to the committee that Travelzoo's consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States. The committee has reviewed and discussed the consolidated financial statements with management and the independent auditors, including their judgments as to the quality, not just the acceptability, of Travelzoo's accounting principles and such other matters as are required to be discussed with the committee under auditing standards of the PCAOB.
Travelzoo's independent auditors also provided to the committee the written disclosures required by applicable requirements of the PCAOB regarding the independent accountant's communications with the audit committee concerning independence, and the committee discussed with the independent auditors that firm's independence, including those matters required to be discussed by PCAOB Auditing Standard No. 16 Communications with Audit Committees.
In reliance on the reviews and discussions referred to above, the committee recommended to the Board of Directors (and the Board of Directors has approved) that the audited financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 20172020 filed with the SEC. The committee has not yet selected Travelzoo's independent auditors for fiscal year 2018.2021.
While the committee has the responsibilities and powers set forth in its charter, it is not the duty of the committee to plan or conduct audits or to determine that Travelzoo's financial statements are complete and accurate and are in accordance with generally accepted accounting principles. This is the responsibility of management and the independent auditors. Nor is it the duty of the committee to conduct investigations or to assure compliance with laws and regulations or Travelzoo's business conduct policies.
| | |
|
Audit Committee
|
Mary Reilly (Chair) |
|
Carrie Liqun Liu |
Beatrice Tarka |
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" information into this document. This means that the Company can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be a part of this document, except for any information that is superseded by information that is included directly in this document or in any other subsequently filed document that also is incorporated by reference herein.
This document incorporates by reference our Annual Report on Form 10-K for the fiscal year ended December 31, 2017,2020, which was filed previously with the SEC and contains important information about the Company and its financial condition, including information contained in our 20172020 Annual Report under the captions "Financial Statements and Supplementary Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Changes in and Disagreements with Accountants on Accounting and Financial Disclosure," and "Quantitative and Qualitative Disclosures about Market Risk." A copy of the 20172020 Annual Report accompanies this proxy statement. This document also incorporates by reference the Amended and Restated By-laws of the Company filed with the Current Report on Form 8-K on April 12, 2021.
The Company will amend this proxy statement to include or incorporate by reference any additional documents that the Company may file with the Securities and Exchange Commission under Section 13(a), 13(e), 14, or 15(d) of the Exchange Act after the date of this document to the extent required to fulfill our disclosure obligations under the Exchange Act.
The Company will provide, without charge, to each person to whom this proxy statement is delivered, upon written or oral request of such person and by first class mail or other equally prompt means within one business day of receipt of such request, a copy of any and all information that has been incorporated by reference in this proxy statement. You may obtain a copy of these documents and any amendments thereto by contacting Investor Relations, Travelzoo, 590 Madison Avenue, 37th35th Floor, New York, New York 10022 or by telephone at (212) 484-4900.(646) 889-1857. This proxy statement and the 20172020 Annual Report are available on the Internet at corporate.travelzoo.com/annualreport.http://ir.travelzoo.com/financials-filings/annual-reports-and-proxies. These documents are also included in our SEC filings, which you can access electronically at the SEC's website at http://www.sec.gov.www.sec.gov.
ADDITIONAL INFORMATION
We are subject to the information and reporting requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith, we file periodic reports, documents and other information with the SEC relating to our business, financial statements and other matters. Such reports and other information may be inspected and are available for copying at the offices of the SEC, 100 F Street, N.E., Washington, D.C. 20549 or may be accessed at www.sec.gov. Information regarding the operation of the public reference rooms may be obtained by calling the SEC at 1-800-SEC-0330. You are encouraged to review the annual report on Form 10-K, as amended, mailed along with these proxy materials, together with any subsequent information we filed or will file with the SEC and other publicly available information. A copy of any public filing is also available, at no charge, by contacting Investor Relations, Travelzoo, 590 Madison Avenue, 37th35th Floor, New York, New York 10022 or by telephone at (212) 484-4900.(646) 889-1857.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
No director, executive officer, nominee for election as a director or associate of any director, executive officer or nominee has any substantial interest, direct or indirect, by security holdings or otherwise, in the proposed matters to be acted upon, other than director elections and executive compensation, which is not shared by all other stockholders.
OTHER BUSINESS
The Board of Directors does not presently intend to bring any other business before the meeting, and, so far as is known to the Board, of Directors, no matters are to be brought before the meeting except as specified in the Notice of Annual Meeting of Stockholders. As to any business that may properly come before the meeting, however, it is intended that proxies, in the form enclosed, will be voted in respect thereof in accordance with the judgment of the persons voting such proxies.
STOCKHOLDER PROPOSALS FOR THE 20192022 ANNUAL MEETING
It is contemplated that the next annual meeting of stockholders will be held on or about May 15, 2019.June 1, 2022. Stockholders may submit proposals on matters appropriate for stockholder action at annual meetings in accordance with the rules and regulations adopted by the SEC. For a stockholder proposal to be included in the Company's proxy statement and identified in its form of proxy in connection with the Company's annual meeting of stockholders, it must be received by the Company at least 120 calendar days prior to the one-year anniversary of the date that the Company's proxy statement was released to the stockholders in connection with the previous year's annual meeting. As a result, stockholder proposals submitted for consideration at the 20192022 annual meeting must be received no later than November 27, 2018,December 31, 2021, to be included in the 20192022 proxy materials. Rule 14a-8 of the Exchange Act provides additional information regarding the content and the procedures applicable to the submission of stockholder proposals to be included in the Company's proxy materials for its next Annual Meeting.
If a stockholder wishes to present a proposal at Travelzoo's 20192022 Annual Meeting or to nominate one or more directors and the proposal is not intended to be included in Travelzoo's proxy statement relating to that meeting, the stockholder shall give advance written notice to Travelzoo no earlier than November 27, 2018December 31, 2021 and not later than February 18, 2019.March 4, 2021. These requirements are separate from and in addition to the requirements a stockholder must meet to have a proposal included in our proxy statement.
Any such notice must be delivered or mailed to our corporate secretary,Corporate Secretary, at Travelzoo, 800 W. El Camino Real, Suite 275, Mountain View, CA 94040.590 Madison Avenue, 35th Floor, New York, NY 10022.
HOUSEHOLDING
We have adopted a procedure approved by the SEC called "householding." Under this procedure, a householding notice will be sent to stockholders who have the same address and last name and do not participate in electronic delivery of proxy materials, and they will receive only one copy of our annual report and proxy statement unless one or more of these stockholders notifies us that they wish to not participate in householding and continue receiving individual copies. This procedure reduces our printing costs and postage fees. Each stockholder who participates in householding will continue to receive a separate proxy card.
The Company will promptly deliver, upon oral or written request, a separate copy of the proxy statement and annual report to any stockholder participating in householding. Stockholders who share an address with other stockholders and are eligible for householding, but currently receive multiple copies of our annual reports and proxy statements, or who have multiple accounts in their names, can authorize us to discontinue mailings of multiple annual reports and proxy statements. Requests for additional copies, or requests for a single copy to be delivered to a shared address should be directed to Investor Relations, Travelzoo, 590 Madison Avenue, 37th35th Floor, New York, New York 10022 or by telephone at (212) 484-4900.(646) 889-1857.
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RALPH BARTEL |
Chairman of the Board |
590 Madison Avenue, 37th35th Floor
New York, NY 10022
If you receive this proxy card via mail, please date and sign it, and return it in the postage paid envelope provided.
If you receive this proxy card via e-mail, please print the proxy card, date and sign it, and return it to:
Broadridge Financial Solutions, Inc.
U.S.A.
This proxy card is only valid only when signed and dated.
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| The Board of Directors recommends a vote FOR all the listed nominees under Proposal 1 |
1. ELECTION OF DIRECTORS | | | |
| For All | Withhold All | For All Except | | | To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number (s) of the nominee (s) on the line below. |
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| Nominees | | | | | | | | | |
| 01 Ralph Bartel 02 Rachel Barnett Christina Ciocca 03 Carrie Liqun Liu 04 Mary Reilly 05 Beatrice Tarka | |
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| The Board of Directors recommends you vote FOR Proposals 2 and 3:Proposal 2: | | For | Against | Abstain |
2. APPROVAL OFVOTE TO APPROVE OPTION GRANT TO EXECUTIVE OFFFICERKEY EMPLOYEE | | o | o | o |
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3. ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION | | o
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NOTE: Such other business as may properly come before the meeting or any adjournment thereof. | |
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| Please sign exactly as name (s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Join owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.
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Signature (Please sign within box) | Date | | Signature (Joint Owners) | Date |
Appendix A
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) is made this day of January 1, 2021, by and between Travelzoo, a Delaware corporation (the "Company") and William Brown ("Optionee").
WHEREAS, the Company and Optionee intend that Optionee will provide services to the Company effective January 1, 2021, pursuant to an Employment Agreement, dated January 1, 2021, by and between Optionee and Travelzoo (Canada) Inc. (“Travelzoo Canada”), a subsidiary of the Company (“Employment Agreement”); and
WHEREAS, the Company desires to grant to Optionee the option to purchase certain shares of its stock, in accordance with the terms of this Agreement, with such option intended to be a nonstatutory stock option that is not an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements hereinafter set forth, it is covenanted and agreed as follows:
1. Grant and Terms of Option. Pursuant to action of the Board of Directors of the Company (the “Board”), the Company grants, effective January 1, 2021 (“Date of Grant”) to Optionee the option to purchase all or any part of Fifty Thousand (50,000) shares of the common stock of the Company, par value of $0.01 each ("Common Stock"), to vest annually over a period of four (4) years as set forth in the table below, at the purchase price of $9.44 per share, which is the fair market value of the Common Stock determined as the official NASDAQ closing share price on the business day before the Date of Grant as the Date of Grant is a holiday; provided, however, that the right to exercise such option shall be, and is hereby, restricted as follows:
(a) No shares may be purchased prior to January 1, 2022. Subject to the terms of this Agreement, the 50,000 stock options shall vest annually as follows:
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Vesting Date | Percentage of Stock Options Vesting |
On January 1, 2022 | 25% |
On January 1, 2023 | 25% |
On January 1, 2024 | 25% |
On January 1, 2025 | 25% |
On or after January 1, 2025, during the term hereof, Optionee will become entitled to purchase the entire number of shares (50,000 shares) to which this option relates.
(b) In no event may this option or any part thereof be exercised after the expiration of five (5) years from the Date of Grant, which shall be the term of the option.
(c) The purchase price of the shares subject to the option may be paid for (i) in cash, (ii) in the discretion of the Board, by tender of shares of Common Stock already owned by Optionee, or (iii) in the discretion of the Board, by such other method as the Board may determine.
(d) The option may not be exercised for a fraction of a share.
(e) The option may not be exercised if Optionee is no longer employed by Travelzoo Canada subject to the provisions of section 4 of this Agreement.
(f) The option may not be exercised if shareholder approval is not received and may not be exercised prior to the registration of the shares being offered under the Agreement, which registration shall be filed by the Company with the United States Securities and Exchange Commission following the Company’s next annual shareholder meeting.
(g) The Board or the Committee shall also determine the methods by which shares of stock shall be delivered or deemed to be delivered to Optionee.
2. Anti-Dilution Provisions. In the event that, during the term of this Agreement, there is any change in the number of shares of outstanding Common Stock of the Company by reason of stock dividends, recapitalizations, mergers, consolidations, split-ups, combinations or exchanges of shares and the like, not including any issuances of shares for consideration or capital increases by the Company, the number of shares covered by this option agreement and the price thereof shall be adjusted, to the same proportionate number of shares and price as in this original agreement.
3. Non-Transferability. Neither the option hereby granted nor any rights thereunder or under this Agreement may be assigned, transferred or in any manner encumbered except by will or the laws of descent and distribution, and any attempted assignment, transfer, mortgage, pledge or encumbrance except as herein authorized, shall be void and of no effect.
The option may be exercised during Optionee's lifetime only by Optionee or his guardian or legal representative as set forth herein.
4. Termination of Employment. In the event of the termination of the Employment Agreement prior to its expiration, or to the extent Travelzoo Canada terminates employment of Optionee, including upon death or disability, Optionee’s (or, in the event of death, the legatee or legatees of Optionee under his last will, or his personal representatives or distributees) right to exercise the option, only to the extent it was vested and he was entitled to exercise it on the date of termination of services or employment, shall continue for 90 days after such termination but not after five (5) years from the Date of Grant. If Optionee (or, in the event of death, the legatee or legatees of Optionee under his last will, or his personal representatives or distributees) does not exercise the option within 90 days following such termination of Employment, any unexercised vested option shall be null and void.
5. Method of Exercise/Shares Issued on Exercise of Option. The option may be exercised (in whole or in part) at any time during the period specified in this Agreement, by delivering to the Secretary of the Company not less than thirty (30) days prior to the date of exercise (or such shorter period as the Company shall approve) (a) a written notice of exercise designating the number of shares to be purchased, signed by Optionee, and (b) payment of the full amount of the purchase price of the shares with respect to which the option is exercised. If the written notice of exercise is delivered by mail, or by any other means of delivery, the date of delivery and the date of exercise shall be the date the written notice is actually received by the Secretary. It is the intention of the Company that on any exercise of this option it will transfer to Optionee shares of its authorized but unissued stock or transfer Treasury shares or utilize any combination of Treasury shares and authorized but unissued shares, to satisfy its obligations to deliver shares on any exercise hereof. No rights of a shareholder shall exist with respect to the Common Stock under this option as a result of the mere grant of this option.
6. Board Administration. The Board, the Committee, or any successor or other committee authorized by the Board, subject to the express terms of this option, shall have plenary authority to interpret any provision of this option and to make any determinations necessary or advisable for the administration of this option and the exercise of the rights herein granted, and may waive or amend any provisions hereof in any manner not adversely affecting the rights granted to Optionee by the express terms hereof.
7. Option not an Incentive Stock Option. It is intended that this option shall not be treated as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended, or otherwise qualify for any special tax benefits to Optionee.
8. No Contract of Employment. Nothing contained in this Agreement shall be considered or construed as creating a contract of employment for any specified period of time.
9. Restrictions on Exercise. This option may not be exercised if the issuance of Common Stock upon Optionee’s exercise or the method of payment of consideration for such Common Stock would constitute a violation of any applicable Federal or state securities law or other applicable law or regulation. As a condition to the exercise of this option, the Company may require Optionee to make any representations and warranty to the Company as may be required by any applicable law or regulation.
10. Termination of Option. Notwithstanding anything to the contrary herein, this option shall not be exercisable after the expiration of the term of five (5) years from the Date of Grant, as set forth in section 1(b) hereof.
11. Withholding upon Exercise. The Company reserves the right to withhold, in accordance with any applicable laws, from any consideration payable to Optionee any taxes required to be withheld by Federal, state or local law as a result of the grant or exercise of this option. If the amount of any consideration payable to Optionee is insufficient to pay such taxes or if no consideration is payable to Optionee, upon request of the Company, Optionee shall pay to the Company in cash an amount sufficient for the Company to satisfy any Federal, state or local tax withholding requirements it may incur as a result of the grant or exercise of this option.
12. Severability. Any word, phrase, clause, sentence or other provision herein which violates or is prohibited by any applicable law, court decree or public policy shall be modified as necessary to avoid the violation or prohibition and so as to make this Agreement enforceable as fully as possible under applicable law, and if such cannot be so modified, the same shall be ineffective to the extent of such violation or prohibition without invalidating or affecting the remaining provisions herein.
13. Non-Waiver of Rights. The Company’s failure to enforce at any time any of the provisions of this agreement or to require at any time performance by Optionee of any of the provisions hereof shall in no way be construed to be a waiver of such provisions or to affect either the validity of this agreement, or any part hereof, or the right of the Company thereafter to enforce each and every provision in accordance with the terms of this agreement.
14. Entire Agreement; Amendments. No modification, amendment or waiver of any of the provisions of this agreement shall be effective unless in writing specifically referring hereto and signed by the parties hereto. This agreement supersedes all prior agreements and understandings between Optionee and the Company to the extent that any such agreements or understandings conflict with the terms of this agreement.
15. Assignment. This agreement shall be freely assignable by the Company to and shall inure to the benefit of, and be binding upon, the Company, its successors and assigns and/or any other entity which shall succeed to the business presently being conducted by the Company.
16. Governing Law. To the extent that Federal laws do not otherwise control, all determinations made, or actions taken pursuant hereto shall be governed by the laws of the state of New York, without regard to the conflict of laws rules thereof.
[Signature Page Follows]
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by the undersigned officer pursuant to due authorization, and Optionee has signed this Agreement to evidence his acceptance of the option herein granted and of the terms hereof, all as of the date hereof.
COMPANY:
TRAVELZOO
By: /s/ Ralph Bartel
Name: Ralph Bartel
Title: Chairman
Date: January 1, 2021
OPTIONEE:
By: /s/ William Brown
Name: William Brown
Title: General Manager, Canada
Date: January 1, 2021