Exhibit 10.1

 

TRAVELZOO INC.

NORTH AMERICA EXECUTIVE BONUS PLAN

As Amended and Restated Effective January 1, 2007

 

I.

PURPOSE

The purpose of the Travelzoo Inc. North America Executive Bonus Plan is to
provide an incentive plan, which is based upon achievement of specific
performance criteria established for the Company’s North American market, to
attract, motivate and retain key executives on a competitive basis in which
total compensation levels are closely linked to the accomplishment of the
Company’s financial and strategic objectives.

II.

DEFINITIONS

The following words shall have the following meanings unless the context clearly
requires otherwise:

A.           “Bonus” means the amount of compensation payable to a Participant
under the Plan.

B.           “Committee” means the Compensation Committee of the Board of
Directors of the Company.

 

C.

“Company” means Travelzoo Inc., a Delaware Corporation.

D.           “Fiscal Year” means the Fiscal Year of the Company, which is
currently the twelve-month period ending December 31.

E.           “Annual Operating Budget” means the budget adopted by the Company
and approved by the Chief Executive Officer for the applicable Fiscal Year
relating to its operations in North America, as amended by the Company at any
time and for any reason.

F.            “Participant” means an executives of the Company whom the
Committee designates as a Participant for a Fiscal Year.

 

G.

“Plan” means this North America Executive Bonus Plan.

H.           “Pro Forma Operating Income” means the operating income per the
Annual Operating Budget before any expenses for the Plan.

 

I.

“Revenue” means revenues from unaffiliated customers.

J.            “Significant Customer” means, for any quarter, a customer that,
together with its affiliates, accounts for 10% (rounded to the nearest 1%) or
more of Company’s worldwide consolidated revenues for the quarter.

K.           “Top 20 Subscribers” means those person who have subscribed for the
Company’s “Top 20” email notification service and who remain on the Company’s
list of such subscribers.

 

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III.

ELIGIBILITY

Participation in the Plan shall be limited to those executives of the Company
designated by the Committee, in its sole discretion. Additions or deletions to
the Plan during a Fiscal Year generally shall be made only in the event of an
unusual circumstance, such as a promotion or new hire.

IV.

DETERMINATION OF BONUS AWARD

The Bonus awarded to Participants shall be based upon the Company’s success in
achieving the quarterly targets specified in the Company’s Annual Operating
Budget for the applicable Fiscal Year. The amount of Bonus shall be determined
as follows:

A.           Subject to Section IV.C., a Participant shall be eligible for a
Bonus in the amount of $50,000 for each quarter in which the Company attains all
of the following:

 

(1)

100.0% of Revenue target;

 

(2)

100.0% of Pro Forma Operating Income target;

 

(3)

100.0% of the U.S. Top 20 Subscribers target; and

 

(4)

100.0% of the Canada Top 20 Subscribers target.

B.           In the event that a Participant is not eligible for a Bonus under
Section IV.A. due to the Company’s failure to reach one or more targets, he or
she shall be eligible for a reduced Bonus in the amount of $25,000, subject to
Section IV.C., if the Company attains all of the following:

 

(1)

98.0% of Revenue target;

 

(2)

90.0% of Pro Forma Operating Income target;

 

(3)

Within 50,000 subscribers of achieving the U.S. Top 20 Subscribers target or
exceeding the target; and

 

(4)

Within 25,000 subscribers of achieving the Canada Top 20 Subscribers target or
exceeding the target.

C.           No Bonus shall be payable to any Participant under Sections IV.A.
or IV.B. herein if there are more than two Significant Customers or if any
Significant Customer accounts for more than 17% of the worldwide consolidated
revenues for the quarter.

D.           A Bonus to any Participant may be denied or adjusted downward by
the Committee as, in the Committee’s sole judgment, is merited based upon its
assessment of the Participant’s performance during the quarter.

 

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V.

VESTING

A Participant must be employed with the Company through the last day of the
quarter in order to receive any Bonus attributable to such quarter. In the event
that, after the end of a quarter but prior to the date of payment of the Bonus
for such quarter, a Participant terminates or is terminated by the Company for
any reason, including, but not limited to, retirement, disability, or death, the
Committee shall have the sole discretion as to whether any such Bonus shall be
paid, and, if so, the amount of such payment.

VI.

PAYMENT OF AWARDS

The Bonus shall be paid to the Participant in a lump sum as soon as
administratively practicable following the end of the quarter to which it
relates but no later than sixty (60) days after the end of the quarter. The
Company shall deduct from any payments hereunder such amounts as may be
appropriate for customary withholdings, including without limitation, federal,
state and local taxes.

VII.

ADMINISTRATION OF THE PROGRAM

The Committee shall administer the Plan and interpret, construe and apply its
provisions in accordance with its terms and shall have discretionary authority
to interpret those terms. All decisions of the Committee shall be final and
binding.

VIII.

AMENDMENT OR TERMINATION

The Company reserves the right to amend or terminate this Plan at any time and
for any reason.

IX.

MISCELLANEOUS

A.           All payments under the Plan shall be made from the general assets
of the Company. To the extent any person acquires a right to receive payments
under the Plan, such right shall be no greater than that of an unsecured general
creditor of the Company.

B.           Nothing contained in the Plan and no action taken pursuant thereto
shall create or be construed to create a trust of any kind, or a fiduciary
relationship between the Company and any other person.

C.           No amount payable under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge, either voluntary or involuntary, and any attempt to so alienate,
anticipate, sell, transfer, assign, pledge, encumber or charge the same shall be
null and void.

D.           Nothing contained in the Plan shall be construed as conferring upon
any Participant the right to continue in the employ of the Company or to limit
the right of the Company to discharge the Participant at any time, with or
without cause.

 

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E.            If, at such time as a Participant becomes entitled to a Bonus
payment hereunder, he or she has any debt, obligation or other liability
representing an amount owing to the Company, and if such debt, obligation, or
other liability is due and owing at the time the Bonus is payable hereunder, the
Company may offset the amount owing it against the amount of Bonus otherwise
payable hereunder.

F.            In the event any provision of the Plan is held invalid, void or
unenforceable, the same shall not affect, in any respect whatsoever, the
validity of any other provisions of the Plan.

G.           The Plan shall be construed and administered in accordance with the
laws of the State of New York.

On this 6th day of April 2007, the Compensation Committee of the Board of
Directors hereby adopts this Plan restatement of as of January 1, 2007.

 

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