Exhibit 10.1
Final
Travelzoo UK Limited
Christopher Loughlin
Service Agreement

             
Date:
  16 May 2005    
Document Number:
    159453.5      
Matter Number:
  [                    ]    

(BRYAN CAVE LOGO) [c97808c9780800.gif]
33 Cannon Street London EC4M 5TE
tel: (+44) (0) 20 7246 5800 — fax: (+44) (0) 20 7246 5858

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CONTENTS

             
1.
  Definitions     1  
2.
  Commencement and Term     2  
3.
  Role and Duties of the Executive     2  
4.
  Place of Work     3  
5.
  Remuneration     3  
6.
  Expenses     3  
7.
  Holidays     4  
8.
  Sickness Benefit     4  
9.
  Pension and Medical Expenses Insurance     4  
10.
  Relocation Arrangements and Expenses     4  
11.
  Restrictions During His Employment     5  
12.
  Confidential Information and Company Property     6  
13.
  Inventions and Other Intellectual Property     6  
14.
  Termination     7  
15.
  Garden Leave     9  
16.
  Restrictive Covenants     10  
17.
  Disciplinary and Grievance Procedure     11  
18.
  Data Protection and Communications     11  
19.
  Notices     11  
20.
  Deductions     12  
21.
  Former Contracts of Employment     12  
22.
  General     12  
23.
  Choice of Law and Submission to Jurisdiction     13   Schedule 1     14  
Schedule 2     16  

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THIS AGREEMENT is made the 16th day of May 2005
BETWEEN:

(1)   Travelzoo UK Limited (registered number 05442657) whose registered office
is at 90 Long Acre, Covent Garden, London WC2E 9RZ (the “Company”);   (2)  
Christopher Loughlin of 53b Fulham Park Gardens, Fulham, London SW6 4LB (the
“Executive”).

THE PARTIES AGREE as follows:

1.   Definitions   1.1   Definitions       In this Agreement unless the context
otherwise requires the following expressions have the following meanings:

         
 
  “Act”   The Employment Rights Act 1996 as amended;
 
       
 
  “Annual Bonus Plan”   an individual bonus plan which applies to the Executive,
subject to the terms described in Schedule 1, for the following periods only:
(1) the period from May 16, 2005, to December 31, 2005; (2) the period from
January 1, 2006, to December 31, 2006; (3) the period from January 1, 2007, to
December 31, 2007; and (4) the period from January 1, 2008, to May 15, 2008;
 
       
 
  “Board”   the board of directors for the time being of the Company or any
committee of directors appointed by the board for the time being;
 
       
 
  “Confidential Information”   personnel information, or any information
relating to the business, clients/customers, products, users, subscribers,
affairs and finances, internal processes, systems and organisation of the
Company or of any Group Company for the time being confidential to it or to them
or treated by it or them as such and trade secrets (including, without
limitation, technical data and know-how) relating to the business of the Company
or of any Group Company or of any of its or their suppliers or
clients/customers;
 
       
 
  “Executive Bonus Plan”   the bonus plan for senior executives of Travelzoo USA
as amended on 18 May 2005;
 
       
 
  “Group”   the Company and the Group Companies;
 
       
 
  “Group Company”   any company (including Travelzoo USA) which is for the time
being a subsidiary or holding

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      company of the Company and any subsidiary of any such holding company and
for the purposes of this Agreement the terms “subsidiary” and “holding company”
shall have the meanings ascribed to them by sections 736 and 736A Companies Act
1985;
 
       
 
  “Quarterly Bonus Plan”   an individual bonus plan which applies to the
Executive during the term of the Agreement;
 
       
 
  “Travelzoo USA”   Travelzoo Inc., a company incorporated according to the laws
of the State of Delaware and the parent company of the Company.

1.2   References to clauses and schedules are unless otherwise stated to clauses
of and schedules to this Agreement.   1.3   The headings to the clauses are for
convenience only and shall not affect the construction or interpretation of this
Agreement.   1.4   Unless the context otherwise requires, references in this
Agreement to the masculine gender shall, where appropriate, be deemed to include
the feminine and vice versa.   2.   Commencement and Term   2.1   This Agreement
shall be deemed to commence on May 16 2005 and shall continue (except as
provided in Clause 14) for a fixed period of two years. After the initial fixed
period of two years, the Agreement may be terminated at any time by either party
giving to the other one year’s notice in writing.   2.2   For the purposes of
the Act, the Executive’s period of continuous employment commenced on
November 15, 2001.   3.   Role and Duties of the Executive   3.1   The Executive
shall serve the Company as Managing Director. He shall also serve Travelzoo USA
as Senior Vice President and General Manager, Travelzoo UK.   3.2   During his
employment the Executive shall:

  3.2.1   devote the whole of his time, attention and skill to the business and
affairs of the Company both during normal business hours and during such
additional hours as are necessary for the proper performance of his duties or as
the Board may reasonably require from time to time;     3.2.2   faithfully and
diligently perform such duties and exercise such powers consistent with his
position as may from time to time be assigned to him to a standard that is
acceptable to the Board;     3.2.3   obey the reasonable and lawful directions
of the Board;     3.2.4   comply with all the Company’s rules, regulations,
policies and procedures from time to time in force; and

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  3.2.5   keep the Board at all times promptly and fully informed (in writing if
so requested) of his conduct of the business of the Company and any Group
Company and provide such explanations in connection with it as the Board may
require.

3.3   The Executive agrees, for the purposes of Regulation 5 of The Working Time
Regulations 1998 (the “Regulations”), that Regulation 4 of the Regulations does
not apply to him. The Company and the Executive agree that the Executive’s
consent, for the purpose of this Clause 3.3, shall continue indefinitely
provided that the Executive may withdraw such consent at any time by giving the
Company three months’ notice of his wish to do so.   3.4   The Executive shall,
if and so long as the Company requires and without any further remuneration
other than is specified in this Agreement:  

  3.4.1   carry out duties on behalf of any Group Company; and     3.4.2   act
as a director or officer of any Group Company.  

3.5   The Company may at its sole discretion transfer this Agreement to any
Group Company at any time.   4.   Place of Work       The Executive’s place of
work will be the Company’s offices at 90 Long Acre, Covent Garden, London WC2E
9RZ, but the Company may require the Executive to work at any place (whether
inside or outside the United Kingdom) for such periods as the Company may from
time to time require.   5.   Remuneration   5.1   The Company shall pay to the
Executive, by credit transfer to his bank account, an annual salary of £118,500
payable by equal monthly instalments in arrears for the previous month on or
before the first day of each calendar month.   5.2   The Executive shall also be
entitled to participate in a Quarterly Performance Bonus Plan, an Annual Bonus
Plan, and the Executive Bonus Plan of Travelzoo USA, the terms of which are set
out in the Schedule to this Agreement.   5.3   Salary and any bonus payable
shall be inclusive of any fees to which the Executive may be entitled as a
director of the Company or any Group Company.   5.4   Payment of salary and
bonus (if applicable) to the Executive shall be made either by the Company or by
a Group Company and, if by more than one company, in such proportions as the
Board may from time to time think fit.   6.   Expenses   6.1   The Company shall
reimburse the Executive in respect of all expenses reasonably incurred by him in
the proper performance of his duties, subject to the Company’s policies and his
providing such receipts or other appropriate evidence as the Company may
require.

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7.   Holidays   7.1   The Executive shall be entitled, in addition to all Bank
and public holidays normally observed in England, to 20 working days’ paid
holiday in each holiday year (being the period from 1 January to 31 December).
This entitlement is subject to the following provisions of this clause.   7.2  
The Executive may take his holiday only at such times as are agreed with the
Chairman of the Company. Such agreement is to be obtained before the Executive
commits himself to bookings or other positive arrangements.   7.3   No holiday
may be carried forward to the next holiday year, except with the express written
consent of the Company.   7.4   The Executive will not be entitled to pay for
any unused holiday entitlement (except on the termination of his employment).  
8.   Sickness Benefit   8.1   There is no contractual right to payment in
respect of periods of absence due to sickness or incapacity, but such payments
are at the discretion of the Company.   8.2   Any payment to the Executive
pursuant to Clause 8.1 shall be deemed to include any Statutory Sick Pay and any
Social Security Sickness Benefit or other benefits to which the Executive may be
entitled.   8.3   If so required, the Executive agrees to supply the Company
with medical certificates covering any period of sickness or incapacity
exceeding seven days (including weekends) and to undergo, at the Company’s
expense, a medical examination by a doctor appointed by the Company (and the
Executive agrees that copies of any medical reports prepared by such doctor
shall be sent directly to the Company).   9.   Pension and Medical Expenses
Insurance   9.1   During his employment, the Executive shall be eligible to join
the Company’s stakeholder pension scheme, currently planned to be with Scottish
Widows and to take effect from June 1, 2005. The pension scheme is contracted in
to the state earnings-related pension scheme and a contracting out certificate
under the Pension Scheme Act 1993 is not in force.   9.2   During his
employment, the Executive and his spouse shall be entitled to participate in any
private health insurance scheme that may be arranged by the Company for its
executives subject to the insurer accepting the Executive for cover under the
relevant policy at normal rates and subject to the rules of such scheme or
policy from time to time in force.   10.   Relocation Arrangements and Expenses
  10.1   The Company and the Executive agree that his employment constitutes a
local hire position.

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10.2   The Company will reimburse the Executive’s reasonable moving expenses up
to a total value of £4,100 upon submission of valid receipts. Receipts must be
submitted within 30 calendar days of the expenses being incurred.   10.3   The
Company will pay for the Executive’s temporary housing in London for the period
from May 1 2005 to October 31 2005 (the first six months), subject to an upper
limit of £8,316 and subject to the production of valid receipts.   10.4   The
Company will use reasonable efforts to try to obtain a UK visa for the
Executive’s spouse and will pay for the legal expenses in this regard (not to
exceed a total of £5,500).   10.5   The Company will pay for six economy class
tickets from the US to London between the period May 16 2005 and May 31 2006 for
the Executive’s spouse.   10.6   The above expenses and allowances will be
provided on the condition that the Executive relocates to London on or before
June 1 2005, and are to be repaid to the Company by the Executive if the
Executive should leave the Company’s employment voluntarily, or if his
employment terminates on any of the grounds set out in Clause 14.1, within
twelve months of the commencement of this Agreement.   11.   Restrictions During
His Employment   11.1   During his employment, the Executive shall not directly
or indirectly:

  11.1.1   be employed, engaged, concerned or interested in any other business
or undertaking; or     11.1.2   engage in any activity which the Board
reasonably considers may be, or become, harmful to the interests of the Company
or of any Group Company or which might reasonably be considered to interfere
with the performance of the Executive’s duties under this Agreement.

11.2   The Executive agrees that he will not at any time during the course of
his employment take any preparatory steps to become engaged or interested in any
capacity whatsoever in any business or venture which is in or is intended to
enter into competition with any business of the Company.   11.3   During the
term of this Agreement, the Executive shall not whether alone or jointly with or
on behalf of any other person, firm or company and whether as principal,
partner, manager, employee, contractor, director, consultant, investor or
otherwise (except as a representative or nominee of the Company or any Group
Company or otherwise with the prior consent in writing of the Board) be engaged,
concerned or interested in any other business or undertaking which is wholly or
partly in competition with any business carried on by the Company or any Group
Company provided that the Executive may hold (directly or through nominees) by
way of bona fide personal investment any units of any authorised unit trust and
up to one per cent of the issued shares, debentures or other securities of any
class of any company whose shares are listed on a recognised investment exchange
within the meaning of section 285 of the Financial Services and Markets Act 2000
(“FSMA”) or dealt in the Alternative Investment Market or any such other
exchange as may be specified by the Board from time to time.

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12.   Confidential Information and Company Property   12.1   The Executive shall
neither during his employment (except in the proper performance of his duties)
nor at any time (without limit) after the termination of his employment except
in compliance with an order of a competent court:

  12.1.1   divulge or communicate to any person, company, business entity or
other organisation any Confidential Information;     12.1.2   use any
Confidential Information for his own purposes or for any purposes other than
those of the Company or any Group Company; or     12.1.3   through any failure
to exercise due care and diligence, permit or cause any unauthorised disclosure
of any Confidential Information.

12.2   The Executive acknowledges that all books, notes, memoranda, records,
lists of clients/customers and suppliers and employees and users and
subscribers, correspondence, documents, computer and other discs and tapes, data
listings, codes and other documents and material whatsoever (whether made or
created by the Executive or otherwise) relating to the business of the Company
or any Group Company (and any copies of the same):

  12.2.1   shall be and remain the property of the Company or the relevant Group
Company; and

  12.2.2   shall be handed over by the Executive to the Company or to the
relevant Group Company on demand and in any event on the termination of his
employment and the Executive shall certify that all such property has been
handed over on request by the Board and agrees that he will take all reasonable
steps to prevent the disclosure of the same.

13.   Inventions and Other Intellectual Property   13.1   The parties foresee
that the Executive may make inventions or create other intellectual property in
the course of his duties and agree that in this respect the Executive has a
special responsibility to further the interests of the Company and the Group
Companies.   13.2   Any invention, improvement, design, process, information,
copyright work, trade mark or trade name or get-up made, created or discovered
by the Executive in the course of his employment (whether capable of being
patented or registered or not and whether or not made or discovered in the
course of his employment) in conjunction with or in any way affecting or
relating to the business of the Company or of any Group Company or capable of
being used or adapted for use in or in connection with such business
(“Intellectual Property Rights”) shall be disclosed immediately to the Company
and shall (subject to sections 39 to 43 Patents Act 1977) belong to and be the
absolute property of the Company or such Group Company as the Company may
direct.   13.3   If and whenever required so to do by the Company, the Executive
shall at the expense of the Company or such Group Company as the Company may
direct:

  13.3.1   apply or join with the Company or such Group Company in applying for
letters patent or other protection or registration for any other Intellectual
Property Rights in the United Kingdom and in any other part of the world; and

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  13.3.2   execute all instruments and do all things necessary for vesting all
such right, title and interest in such letters patent or other Intellectual
Property Rights in the Company or such Group Company or such other person as the
Company may specify absolutely as sole beneficial owner.

13.4   The Executive irrevocably and unconditionally waives all rights under
Chapter IV of Part I of the Copyright, Designs and Patents Act 1988 in
connection with his authorship of any existing or future copyright work in the
course of his employment, in whatever part of the world such rights may be
enforceable including, without limitation:

  13.4.1   the right conferred by section 77 of that Act to be identified as the
author of any such work; and

  13.4.2   the right conferred by section 80 of that Act not to have any such
work subjected to derogatory treatment.

13.5   The Executive irrevocably appoints the Company to be his Attorney in his
name and on his behalf to execute any such instrument or do any such thing and
generally to use his name for the purpose of giving to the Company the full
benefits of this Clause 13. A certificate in writing in favour of any third
party signed by any director or by the Secretary of the Company that any
instrument or act falls within the authority conferred by this Agreement shall
be conclusive evidence that such is the case.

13.6   Nothing in this Clause 13 shall be construed as restricting the rights of
the Executive or the Company under sections 39 to 43 Patents Act 1977.

14.   Termination

14.1   Notwithstanding any other provisions of this Agreement, in any of the
following circumstances, the Company may terminate the Executive’s employment
summarily and without further payment (save for any sums accrued due as at the
relevant date) if the Executive:

  14.1.1   commits any serious breach of this Agreement or is guilty of any
gross misconduct or any wilful neglect in the discharge of his duties;    
14.1.2   repeats or continues (after warning) any breach of this Agreement;    
14.1.3   is guilty of any fraud, dishonesty or any conduct tending to bring
himself, the Company, or any Group Company into disrepute;     14.1.4   has a
petition presented for a bankruptcy order to be made in respect of him, enters
into (or proposes to enter into) an individual voluntary arrangement or other
composition with his creditors or takes advantage of any other legislation for
the time being in force offering relief for insolvent debtors;     14.1.5   is
convicted of any criminal offence (other than minor offences under the Road
Traffic Acts or the Road Safety Acts for which a fine or non-custodial penalty
is imposed) which might reasonably be thought to affect adversely the
performance of his duties;

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  14.1.6   is disqualified from holding office in the Company or in any other
company by reason of any order made under the Company Directors Disqualification
Act 1986 or any other enactment;     14.1.7   resigns as or otherwise ceases to
be or becomes prohibited by law from being a director of the Company, otherwise
than at the Company’s request; or

    Any delay by the Company in exercising such right of termination shall not
constitute a waiver of it.   14.2   If at any time the Executive is unable to
perform his duties properly because of ill health, accident or otherwise for a
period or periods totalling at least 130 working days in any period of 12
calendar months, or becomes incapable by reason of mental disorder of managing
and administering his property and affairs, then the Company may terminate his
employment by giving him not less than statutory minimum written notice to that
effect and the Executive will have no entitlement, in such circumstances, to
payment other than in respect of statutory minimum notice.   14.3   If the
Company believes that it may be entitled to terminate his employment pursuant to
Clause 14.1, it shall be entitled (but without prejudice to its right
subsequently to terminate his employment on the same or any other ground) to
suspend the Executive on full pay and other benefits for so long as it may think
fit.   14.4   The Company reserves the right, at its absolute discretion, to
terminate the Executive’s employment at any time by making a payment in lieu of
any notice of termination and/or in lieu of the balance of the fixed term of
employment corresponding either to the applicable period(s) as set out in Clause
2, or Clause 14.2 in the case of serious incapacity. For this purpose, the
Executive agrees that pay in lieu will consist of basic salary only (and no
bonus payments) for the fixed term and/or notice period which is accrued due as
at the date of termination of his employment.   14.5   On the termination of his
employment or upon either the Company or the Executive having served notice of
such termination, the Executive shall, at the request of the Company, resign
from office as a director of the Company and all offices held by him in any
Group Company provided however that such resignation shall be without prejudice
to any claims which the Executive may have against the Company or any Group
Company arising out of the termination of his employment; and the Executive
irrevocably authorises the Company to appoint any person in his name and on his
behalf to sign any documents and do any things necessary or requisite to give
effect to his obligations under this Clause 14.5.   14.6   If (a) the Company in
a general meeting shall remove the Executive from the office of director of the
Company or any Group Company, or (b) under the Articles of Association for the
time being of the Company or any Group Company, the Executive shall be obliged
to retire by rotation or otherwise and the Company in general meeting shall fail
to re-elect the Executive as a director of the relevant Group Company (either
such case being referred to in this Clause 14.6 as an “Event”), then the
Executive’s employment under this Agreement shall automatically terminate with
effect from the date of the Event, and no payment in lieu of notice or in lieu
of the balance of a fixed term shall be due to him.

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14.7   The Executive acknowledges the right of the Company to monitor and
control the performance of its employees and acknowledges the fiduciary
obligations attaching to his position including obligations to inform the Board
forthwith upon his becoming aware that any of his colleagues engaged in the
business of any Group Company of which he is a director is intending or
contemplating the termination of his contract of employment with the Company of
any other company in the Group.   14.8   Without prejudice to any other
provisions of this Agreement, the Executive may not (except in the legitimate
performance of his duties as an employee) at any time and specifically not on
the termination of his employment, delete, copy, forward to a third party or
interfere in any way with any Company information (including e-mails or
documents relating to Company business) held on a laptop or computer or other
electronic device and any attempt to do so will be regarded as gross misconduct.
  15.   Garden Leave   15.1   At any time including after notice to terminate
employment has been given by the Executive or the Company, the Board may for all
or part of the duration of the notice period in its absolute discretion require
the Executive:

  15.1.1   to perform only such duties (including without limitation research
projects) as it may allocate to the Executive;     15.1.2   not to perform any
duties;     15.1.3   not to have any contact with clients/customers of the
Company or any Group Company;     15.1.4   not to have any contact with such
employees or suppliers of the Company or any Group Company as the Board shall
determine;     15.1.5   to disclose to the Board any attempted contact (other
than purely social contact) with him made by any client, employee or supplier
with whom the Executive has been required to have no contact pursuant to this
sub-clause;     15.1.6   to take any accrued holiday entitlement;     15.1.7  
not to enter any premises of the Company or any Group Company nor to visit the
premises of any of the Company’s or any Group Company’s suppliers or customers;
    15.1.8   to resign as a director of the Company or from any other office
held by him in the Company or any other Group Company;

    provided always that throughout the period of any such action and subject to
the other provisions of this Agreement the Executive’s salary and contractual
benefits shall not cease to accrue or be paid (subject to Clause 15.3 below) and
provided further that the period of garden leave shall not be for a period
exceeding six months in total.   15.2   The Executive acknowledges that such
action as set out above taken on the part of the Company shall not constitute a
breach of this Agreement of any kind whatsoever nor shall the Executive have any
claim against the Company in respect of any such action.

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15.3   During any period of garden leave, the Executive shall owe a duty of the
utmost good faith to the Company and its Group Companies, must not work for any
other person or on his own account and shall remain readily contactable and
available to work for the Company or any Group Company. Should the Executive
work for any other person or on his own account or fail to be available for work
at any time having been requested by the Company to do so or otherwise be in
breach of any of the provisions of this Agreement, the Executive’s right to
salary and contractual benefits in respect of such period of non compliance
shall be forfeit notwithstanding any other provision of this Agreement.

16.   Restrictive Covenants

16.1   The Executive will not for a period of six months (less any period during
which the Executive has been on garden leave) after the termination of his
employment whether as principal or agent, and whether alone or jointly with, or
as a director, manager, partner, shareholder, employee or consultant of any
other person, directly or indirectly:

  16.1.1   solicit or canvass (or seek to canvass or solicit) any business,
order or custom of any Client of the Company. For the purposes of this clause,
“Client” shall mean any person, firm or entity who shall have advertised
products or services in any of the Company’s or Group Company’s publications or
products and with whom the Executive has had material dealings at any time in
the six months prior to the termination of the his employment. “Client” shall
also include any prospective client, which shall mean any potential advertiser
in any of the Company’s or Group Company’s publications or products with whom
the Executive has had material dealings at any time in the last six months
before the termination of his employment and in relation to which there were
material prospects of obtaining business at the time his employment terminated;
    16.1.2   perform services for or engage in any business that generates
revenue principally from the development, publication or sale of online
advertisements for travel companies.

16.2   None of the restrictions contained in Clause 16.1 shall prohibit any
activities by the Executive which are not in direct or indirect competition with
any on-line travel advertisement business being carried on by the Company or by
any Group Company at the date of the termination of his employment.   16.3  
Nothing in Clause 16.1 shall preclude the Executive from holding (directly or
through nominees) investments in the amount and of the type specified in Clause
11.3.   16.4   At no time after the termination of his employment shall the
Executive directly or indirectly represent himself as being interested in or
employed by or in any way connected with the Company or any Group Company, other
than as a former employee of the Company.   16.5   The Executive acknowledges
and agrees that he shall be obliged to draw the provisions of this clause to the
attention of any third party who may at any time before or after the termination
of the Executive’s employment offer to employ or engage the Executive and for
whom or with whom the Executive intends to work at any time during 12 months
after the termination of his employment.

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16.6   The Executive agrees that, having regard to all the circumstances and
having taken independent legal advice, the restrictions contained in this clause
are reasonable and necessary for the protection of the Company and the Group
Companies and that they do not bear harshly upon him and the parties agree that:

  16.6.1   each restriction shall be read and construed independently of the
other restrictions so that if one or more are found to be void or unenforceable
as an unreasonable restraint of trade or for any other reason the remaining
restrictions shall not be affected; and     16.6.2   if any restriction is found
to be void but would be valid and enforceable if some part of it were deleted,
that restriction shall apply with such deletion as may be necessary to make it
valid and enforceable.

17.   Disciplinary and Grievance Procedure       The Executive is referred to
Schedule 2 to this Agreement for the Company’s Disciplinary and Grievance
Procedure.   18.   Data Protection and Communications   18.1   The Executive
consents to the Company or any Group Company holding and processing both
electronically and manually the data (including personal sensitive data and
information contained in e-mail and e-mail attachments) it collects, stores
and/or processes, which relates to the Executive for the purposes of the
administration and management of its business. It may also be necessary for the
Company to forward such personal information to other offices or any Group
Company may have outside the European Economic Area (and, in particular, to the
United States) where such company has offices or storage for the processing for
administrative purposes and the Executive consents to the Company doing so as
may be necessary from time to time.   18.2   To ensure the protection of its
workers, clients/customers and business, the Company reserves the right to
monitor, intercept, review and access the Executive’s telephone log, internet
usage, voicemail, e-mail and other communication facilities provided by the
Company which he may use during his employment with the Company. The Company
will use this right of access reasonably, but it is important that the Executive
is aware that all communications and activities on the Company’s/any Group
Company’s equipment or premises cannot be presumed to be private.   19.  
Notices       A notice may be given by any party hereto to any other party
hereto either personally or by sending it by prepaid first class post or airmail
to his address stated in this Agreement or to any other address supplied by him
to the other parties hereto for the giving of notice to him. A properly
addressed and prepaid notice sent by post shall be deemed to have been served at
an address within the United Kingdom at the expiry of 48 hours after the notice
is posted and to have been served at an address outside the United Kingdom at
the expiry of 72 hours after the notice is posted.

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20.   Deductions   20.1   The Executive shall pay to the Company any sums owing
by him to the Company upon demand by the Company at any time (whether during the
Executive’s employment by the Company or after the termination Date).   20.2  
For the purposes of the Act and otherwise, the Executive consents to the
deduction from his wages or from any other sums owed to the Executive by the
Company of any sums owing by him to the Company at any time.   20.3   This
clause is without prejudice to the rights of the Company to recover any sums or
balance of sums owing by the Executive to the Company by legal proceedings.  
21.   Former Contracts of Employment       This Agreement shall be in
substitution for any previous contracts, whether by way of letters of
appointment, agreements or arrangements, whether written, oral or implied,
relating to the employment of the Executive (including all bonus arrangements),
(whether by Travelzoo USA or by the Company or any other Group Company) which
shall be deemed to have been terminated by mutual consent as from the date of
this Agreement and the Executive acknowledges to the Company for itself and on
behalf of each Group Company that he has no outstanding claims of any kind
against the Company or any Group Company in respect of any such contract.   22.
  General   22.1   The Executive acknowledges that the provisions of Clauses 12,
13 and 16 constitute separate undertakings given for the benefit of each Group
Company and may be enforced by any of them.   22.2   The expiration or
termination of this Agreement shall not prejudice any claim which either party
may have against the other in respect of any pre-existing breach of or
contravention of or non-compliance with any provision of this Agreement nor
shall it prejudice the coming into force or the continuance in force of any
provision of this Agreement which is expressly or by implication intended to or
has the effect of coming into or continuing in force on or after such expiration
or termination.   22.3   This Agreement constitutes the written statement of the
terms of employment of the Executive provided in compliance with Part I of the
Act.   22.4   Save as otherwise herein provided, there are no terms or
conditions of employment relating to hours of work or to normal working hours or
to entitlement to holiday (including public holidays) or holiday pay or to
incapacity for work due to sickness or injury or to pensions or pension schemes
or to requirements to work abroad and no collective agreement has any effect
upon the Executive’s employment under this Agreement.   22.5   No term in this
Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999
but this does not affect any right or remedy of a third party which exists or is
available apart from that Act.

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23.   Choice of Law and Submission to Jurisdiction   23.1   This Agreement shall
be governed by and interpreted in accordance with English law.   23.2   The
parties submit to the exclusive jurisdiction of the English courts, but this
Agreement may be enforced by the Company in any court of competent jurisdiction.

IN WITNESS whereof this Agreement has been executed as a deed by the Executive
the day and year first written above.

             
Signed by Ralph Bartel for and
    )      
on behalf of the Company
    )      
 
         
 
Director
 
           
Executed and delivered as a Deed by
    )      
the Executive in the presence of
    )    
 
 
           

Witness Signature
Witness name:
Witness address:

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Schedule 1
Quarterly Performance Bonus Plan
The Executive will be eligible to participate in a quarterly performance bonus
plan which provides up to £20,000 per calendar quarter. The performance bonus
depends to the extent of which the Company meets its business goals as
determined by the Board of the Company and the Chief Financial Officer of
Travelzoo USA and the assessment of the Executive’s performance by the Chairman
of the Company. The calculation of the quarterly performance bonus will be based
on the official budget for the Company (to be approved by the Chairman of the
Company and by the Chief Financial Officer of Travelzoo USA), which will include
quarterly targets for revenues, net income and subscribers, and a quarterly
assessment of the Executive’s performance by the Chairman of the Company, which
will focus on the Executive’s motivation and the quality of the UK Company’s
publications and products and advertiser base.
The following criteria will apply in relation to the quarterly performance bonus
plan:

                  Criteria   Quarterly Bonus Payment
Revenue goal as defined in official budget for Travelzoo UK met?
          £ 5,000  
Net income goal as defined in official budget for Travelzoo UK met?
          £ 5,000  
Subscriber goal as defined in official budget for Travelzoo UK met?
          £ 5,000  
Performance evaluation by the Chairman of the Company
      Up to £ 5,000  
Total
      Up to £ 20,000  

The quarterly bonus will be paid less statutory deductions, within 45 days after
the end of the quarter, on condition that the Executive is in employment on the
relevant bonus payment date, or in the case of the quarter covering May 15,
2008, he must be in employment on that date.
Any bonus payments for periods beginning after the first day of a calendar
quarter or ending before the last day of a calendar quarter will be pro rata.
Annual Bonus Plan
In addition, for (1) the period from May 16, 2005, to December 31, 2005; (2) the
period from January 1, 2006, to December 31, 2006; (3) the period from
January 1, 2007, to December 31, 2007; and (4) the period from January 1, 2008,
to May 15, 2008 only under an Annual Bonus Plan, the Executive will be eligible
to receive a 15% profit share based on the Company’s pro forma operating income
(before expenses relating to the profit sharing plan and before taxes) generated
from sales and/or operations in the UK. The Annual Bonus will be calculated for
the following four periods: (1) the period from May 16, 2005, to December 31,
2005; (2) the period from January 1, 2006, to December 31, 2006; (3) the period
from January 1, 2007, to December 31, 2007; and (4) the period from January 1,
2008, to May 15, 2008. The Annual Bonus will be

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determined within 30 days after the end of each period by the Chief Financial
Officer of Travelzoo USA and the Company’s Chairman and is payable within
60 days after the end of the respective period.
The profit share under the Annual Bonus Plan is capped at £667,000 in the year
2005, £1,000,000 in each of the years 2006 and 2007, and £333,000 in the year
2008. In order to be eligible for the Annual Bonus Plan for any of the four
periods as defined above, the Executive must be employed by the Company on the
last day of the respective period. The profit share under the Annual Bonus Plan
will be paid less statutory deductions.
For the avoidance of doubt the Annual Bonus Plan will only apply to the
following four periods during the Executive’s employment: (1) the period from
May 16, 2005, to December 31, 2005; (2) the period from January 1, 2006, to
December 31, 2006; (3) the period from January 1, 2007, to December 31, 2007;
and (4) the period from January 1, 2008, to May 15, 2008. No Annual Bonus will
be paid for any periods after May 15, 2008.
Executive Bonus Plan of Travelzoo USA
As a member of Travelzoo USA’s Executive Team, the Executive will also
participate in the current Executive Bonus Plan of Travelzoo USA, subject to the
terms of the Executive Bonus Plan and continuation of that plan. Travelzoo USA
reserves the right to amend or withdraw the Executive Bonus Plan at any time.
Any bonus payable under the Executive Bonus Plan will be paid, less statutory
deductions, within 45 days after the end of the calendar quarter.

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Schedule 2
Procedures in relation to
Dismissal/Disciplinary Action
In relation to any proposed dismissal or disciplinary action, the Company will
observe the standard or modified dismissal and disciplinary procedure, as may be
required in the relevant case. These procedures are set out below:
Standard Dismissal and Disciplinary Procedure
Step 1: Statement of grounds for action and invitation to meeting

•   The Company will set out in writing your alleged conduct or characteristics,
or other circumstances, which led it to contemplate dismissing or taking
disciplinary action against you.   •   The Company will send the statement or a
copy of it to you and invite you to attend a meeting to discuss the matter.

Step 2: Meeting

•   The meeting will take place before action is taken, except in the case where
the disciplinary action consists of suspension.   •   The meeting will not take
place unless:

  (a)   the Company has informed you what the basis was for including in the
statement under Step 1 the ground or grounds given in it; and     (b)   you have
had a reasonable opportunity to consider your response to that information.

•   You must take all reasonable steps to attend the meeting.   •   After the
meeting, the Company will inform you of its decision and notify you of the right
to appeal against the decision if you are not satisfied with it.   •   You have
the right to be accompanied at the meeting by a work colleague or a trade union
representative.

Step 3: Appeal

•   If you wish to appeal, you must inform the Company in writing.   •   If you
inform the Company of your wish to appeal, the Company will invite you to attend
a further meeting.   •   You must take all reasonable steps to attend the
meeting.

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•   The appeal meeting need not take place before the dismissal or disciplinary
action takes effect.   •   After the appeal meeting, the Company will inform you
of its final decision.   •   Where reasonably practicable, the appeal should be
dealt with by a more senior manager than attended the first meeting (unless the
most senior manager attended that meeting).   •   You have the right to be
accompanied at the meeting by a work colleague or a trade union representative.

Modified Dismissal and Disciplinary Procedure
Step 1: Statement of grounds for action

•   The Company will set out in writing — (i) your alleged misconduct which has
led to the dismissal (ii) the reasons for thinking at the time of the dismissal
that you were guilty of the alleged misconduct and (iii) your right to appeal
against dismissal.   •   The Company will send the statement, or a copy of it,
to you.

Step 2: Appeal

•   If you wish to appeal, you must inform the Company.   •   If you inform the
Company of your wish to appeal, the Company will invite you to attend a meeting.
  •   You must take all reasonable steps to attend the meeting.   •   After the
appeal meeting, the Company will inform you of its final decision.   •   Where
reasonably practicable, the appeal should be dealt with by a more senior manager
not involved in the earlier decision to dismiss.   •   You have the right to be
accompanied at the appeal meeting by a work colleague or a trade union
representative.

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Grievance Procedure
Step 1: statement of grievance

•   You must set out the grievance in writing and send the statement or a copy
of it to the Company.

Step 2: meeting

•   The Company must invite you to attend a meeting to discuss the grievance.  
•   The meeting must not take place unless:

  (a)   you have informed the Company what the basis for the grievance was when
you made the statement under Step 1 above; and     (b)   the Company has had a
reasonable opportunity to consider its response to that information.

•   You must take all reasonable steps to attend the meeting.   •   After the
meeting, the Company must inform you of its decision as to its response to the
grievance and notify you of the right to appeal against the decision if you are
not satisfied with it.   •   You have the right to be accompanied at the meeting
by a work colleague or a trade union representative.

Step 3: appeal    

•   If you do wish to appeal, you must inform the Company.   •   If you inform
the Company of your wish to appeal, the Company must invite you to attend a
further meeting.   •   You must take all reasonable steps to attend the meeting.
  •   After the appeal meeting, the Company must inform you of its final
decision.   •   Where reasonably practicable, the appeal should be dealt with by
a more senior manager than attended the first meeting (unless the most senior
manager attended that meeting).   •   You have the right to be accompanied at
the meeting by a work colleague or a trade union representative.

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Modified Grievance Procedure
Step 1: statement of grievance

•   You must:

  (a)   set out in writing — (i) the grievance, and (ii) the basis for it, and  
  (b)   send the statement, or a copy of it, to the Company.

Step 2: response

•   The Company must set out its response in writing and send the statement or a
copy of it to you.

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