Exhibit 10.1

 

EMPLOYMENT AGREEMENT

This Employment Agreement is entered into as of November 5, 2007 (the “Effective
Date”), by and between Travelzoo Inc., a Delaware corporation (the “Company”)
with principal corporate offices at 590 Madison Avenue, 21st Floor, New York, NY
10022, and Max Rayner, whose address is currently xxxxxxxx, xxxxxxxx, xx xxxxx
(“Employee”). The Company and Employee are at certain times each referred to
herein as a Party, and collectively referred to herein as “the Parties.”

WHEREAS, the Company desires to retain Employee as Chief Information Officer
(“CIO”), and Employee desires to perform such service for the Company, on the
terms and conditions as set forth herein;

NOW, THEREFORE, in consideration of the promises and mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is mutually agreed by the
Parties as follows:

 

1.

Duties and Scope of Employment.

(a)       Position. Employee shall be employed as CIO in the Company’s Mountain
View, California office.

(b)       Duties. During the term of Employee’s employment with the Company,
Employee shall devote his full time, skill and attention to his duties and
responsibilities as CIO, which Employee shall perform faithfully, diligently and
competently, and Employee shall use his best efforts to further the business of
the Company. During the term of the Agreement, Employee agrees not to actively
engage in any other employment, occupation or consulting activity for any direct
or indirect remuneration without the prior approval of the Company, except that
this provision shall not be interpreted to prohibit Employee from involvement in
any charitable or community activity/organization that he is currently involved
in and that does not materially interfere with his ability to perform his duties
under this Agreement. Employee shall be permitted, to the extent such activities
do not materially and adversely affect the ability of Employee to fully perform
his duties and responsibilities hereunder, to (i) manage Employee’s personal,
financial and legal affairs, (ii) serve on civic or charitable boards or
committees, (iii) independently perfect prior personal intellectual property in
the areas described in Exhibit A, and (iv) with the consent of the Company
(which consent shall not be unreasonably withheld and is given herein for the
cases listed in Exhibit B), serve as an adviser or a member or non-executive
chairman of the board of directors of any noncompeting business.

2.   Term of Employment. The term of this Agreement shall be for the period (the
“Term”) commencing on the Effective Date and terminating on the date which is
nineteen (19) months after the Effective Date (the “Expiration Date”).
Notwithstanding the foregoing, this Agreement shall expire on the date the
Employee dies, and may be terminated by the Company during the Term, by delivery
of written notice to Employee, for Cause (as hereinafter defined), because of
Disability (as

 

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hereinafter defined), or without Cause. If Employee continues in employment
after the Expiration Date, any such employment will be on an at will basis.

 

(a)       Termination by Company without Cause. If Employee is terminated by the
Company during the Term for reasons other than Cause (as defined in Section
2(b)) or Disability (as defined in Section 2(c)), Employee shall receive his
Base Salary and benefits earned through the date of termination, plus a lump-sum
payment equal to Base Salary for a period of twelve months (as defined herein)
and COBRA payments for a period of twelve months (“Severance Pay”), subject to
Section 2(f).

(b)       Termination for Cause. Notwithstanding any provision of this Agreement
to the contrary, if Employee is terminated for “Cause” as defined herein or dies
at any time, Employee will receive only payment of his Base Salary and benefits
through the date of termination or death. For purposes of this Agreement,
“Cause” shall mean that the Employee has (i) continually failed to perform his
duties under this Agreement for a period of 30 days after written notice from
the Company setting forth with particularity such failure, (ii) committed an act
of fraud upon the Company or breached his duty of loyalty to the Company, (iii)
committed a felony or a crime of dishonesty, fraud or moral turpitude under the
laws of the United States or any state thereof; (iv) misappropriated any funds,
property or rights of the Company; (v) violated the Company’s policies regarding
workplace conduct, discrimination, or sexual harassment; (vi) willfully failed
or refused, following receipt of an explicit directive from the Company, to
comply with the material terms of this Agreement; or (vii) failed or refused to
cooperate with the Company, or at the Company’s request any governmental,
regulatory or self-regulatory agency or entity, in providing information with
respect to any act or omission in performing his duties as an employee of the
Company, if such request is made connection with any criminal or civil actions,
administrative or regulatory proceedings or investigations against or relating
to the Company by any governmental, regulatory or self-regulatory agency or
entity.

(c)       Termination because of Disability. Notwithstanding any provision of
this Agreement to the contrary, if Employee is terminated as a result of a
“Disability” (as defined herein) during the Term, Employee will receive only
payment of his Base Salary, and benefits through the date of termination, and
pro rata bonuses pursuant to Sections 3(b) and 3(c), if any, for the calendar
quarter in which Employee ceased performing services for the Company (“Active
Employment”) based on performance through the last day of Active Employment. For
purposes of this Agreement, “Disability” shall mean a physical or mental
impairment that prevents or can be reasonably expected to prevent the
performance by the Employee of his duties hereunder for a continuous period of
120 calendar days or longer, or that prevents the performance by Employee of his
duties hereunder for more than a total of 85 business days, in any 12-month
period, subject to the reasonable accommodation requirements of the Americans
with Disabilities Act and other applicable laws.

(d)       Employee Resignation.

(1)      If the Company fails to make a Bona Fide Offer within eighteen (18)
months from the Effective Date for Employee to enter into an employment
agreement

 

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to serve as Chief Executive Officer of the Company (“CEO”), Employee may resign
within thirty (30) calendar days after the Expiration Date by delivering a
written notice to the Company within twenty calendar days after the Expiration
Date. For purposes of this Section 2(d)(1), a Bona Fide Offer means an offer to
serve as CEO beginning no later than 19 months from the Effective Date, for at
least three years at the Company’s New York headquarters on terms at least as
favorable to Employee as the CEO compensation that an independent compensation
consultant recommends to the Company’s Board of Directors (“Board”) or the
Board’s Compensation Committee.

(2)      Employee may resign for Good Reason if at any time during the Term (i)
his responsibilities, title, duties and/or stature are materially diminished;
(ii) his Base Salary or the potential amount of his Performance Bonus or
Discretionary Bonus are materially reduced; (iii) his place of work is relocated
to more than 30 miles from Mountain View, California; or (iv) the Company is in
material breach of its obligations under this Agreement. Employee may exercise
the right to resign for Good Reason pursuant to this Section 2(d)(2) only if the
Company fails to cure any such deficiency within thirty (30) calendar days of
receiving timely written notice from Employee. Employee must provide said
written notice to the Company within thirty (30) calendar days after receiving
notice of an event triggering the right to resign for Good Reason under this
Section (2)(d)(2).

(3)      If Employee resigns pursuant to this Section 2(d) (1) or (2), Employee
shall receive Severance Pay after such resignation, subject to Section 2(f)

(e)       Employee Resignation Following a Change of Control. If, after a Change
of Control, as hereinafter defined, occurs, Employee is not offered a position
of comparable compensation, responsibilities, and stature within the Company
(including a Bona Fide Offer of the CEO position as provided in Section 2(d)(1))
in the same geographic area in which he worked immediately prior to a Change of
Control (unless relocated to New York City as provided in Section 2(d)(1) or by
mutual consent), and Employee resigns within thirty (30) calendar days after the
Change in Control, Employee shall receive Severance Pay subject to Section 2(f).
For purposes of this Agreement, “Change of Control” means (i) a merger,
consolidation, reorganization or other transaction in which the Company does not
survive and in which securities possessing more than 50% of the total combined
voting power of the Company’s outstanding voting securities are transferred or
issued to a person or persons different from the persons holding those
securities immediately prior to such transaction, or (ii) the sale, transfer or
other disposition of all or substantially all of the Company’s assets.

(f)        Severance Pay Conditions. Employee shall be required to sign, deliver
and not revoke a General Release in the form attached hereto as Exhibit C as a
condition precedent to payment of any Severance Pay pursuant to any provision of
Section 2 of this Agreement. Any Severance Pay shall be paid immediately upon
the expiration of any revocation period and the Employee’s delivery of the
signed General Release to Company and shall be subject to the usual and
applicable required withholdings and payroll taxes.

 

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(g)       Exceptions to Termination because of Disability or Death.
Notwithstanding any other provisions, if death or disability occur in the course
of Company business or Company related travel and activities by whatever means
(natural, un-natural, criminal acts, terrorism, or acts of god), an amount equal
to Severance Pay as defined in 2(a) shall be paid to Employee’s beneficiary or
beneficiaries as designated in Exhibit D, or designated subsequent to this
agreement via Notice to the Company.

 

3.

Compensation and Fringe Benefits.

(a)       Base Salary. Employee will receive a base salary at the annualized
rate of $450,000 per year (the “Base Salary”), which shall be paid periodically
in accordance with normal Company payroll practices and subject to the usual and
applicable required withholdings. Employee understands and agrees that neither
his job performance nor promotions, commendations, bonuses or the like from the
Company give rise to or in any way serve as the basis for modification,
amendment, or extension, by implication or otherwise, of this Agreement.

(b)       Performance Bonus. Employee will be eligible to participate in the
North America Executive Bonus Plan (“Performance Bonus Plan”) approved by the
board’s Compensation Committee. Under the Performance Bonus Plan, Employee may
receive, in addition to his Base Salary, a quarterly performance bonus in an
amount between zero and $50,000 per calendar quarter, provided, however, if
either the first or last calendar quarter of the Term is less than a full
quarter, the bonus for such quarter shall be pro rated. Any bonus payments, if
applicable, shall be made at the time specified in the Performance Bonus Plan
and will be subject to the usual and applicable withholding and payroll taxes.
The Company shall notify Employee of any changes to the Performance Bonus Plan
in writing.

(c)       Discretionary Bonus. In addition to Base Salary and any Performance
Bonus payable under the Performance Bonus Plan, Employee shall be eligible to be
considered for a Discretionary CIO Bonus in an amount between zero and $50,000
per calendar quarter to be determined by the CEO in his sole and absolute
discretion. In exercising such discretion, the CEO will take into consideration
to what extent Employee achieves the following strategic goals: (i) transform
the national IT organization into a fast and efficient global IT function with
24/7 support; (ii) improve organizational structure of IT department and agility
of IT staff; (iii) create the ability to support a frequency of new product
releases of three new products in twelve months; (iv) deliver the ability to
launch Travelzoo Web sites in Japan, China, India, South Korea, Australia, and
Taiwan; (v) implement a management information system that allows Company to
better monitor delivery of ad campaigns and more accurately forecast revenue;
and (vi) identify successor to lead IT function. If either the first or last
calendar quarter of the Term is less than a full quarter, the bonus for such
quarter shall be pro rated.

(d)       Vacation and Holiday Pay. Employee shall receive four (4) weeks of
paid vacation per year, which accrues over the course of the year. In addition,
the Company

 

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provides eight (8) paid holidays each year, along with two (2) “floating
holidays” which can be used by Employee at any time.

(e)       Other Benefits. Employee will be entitled to participate in or receive
such benefits under the Company’s employee benefit plans and policies and such
other benefits which may be made available as in effect from time to time and as
are provided to similarly situated employees of the Company, subject in each
case to the generally applicable terms and conditions of the plans and policies
in question.

4.   Expenses. The Company will pay or reimburse Employee for reasonable travel,
entertainment or other expenses incurred by Employee in the furtherance of or in
connection with the performance of Employee’s duties hereunder in accordance
with the Company’s established policies.

 

5.

Certain Covenants.

(a)       Intellectual Property Rights.

(i)        Employee agrees that the Company will be the sole owner of any and
all of Employee’s “Discoveries” and “Work Product,” hereinafter defined, made
during the term of his employment with the Company, whether pursuant to this
Agreement or other duties performed on behalf of the Company, except for
discoveries or intellectual property development made during the term of
employment in the areas described in Exhibit A, and except for those that the
employee developed entirely on his own time without using the Company’s
equipment, supplies, facilities, or trade secret information and unrelated at
the time of conception or reduction to practice to the Company’s business, or
actual or demonstrably anticipated research or development and not resulting
from any work performed by the Employee for the Company.

For purposes of this Agreement, “Discoveries” means all inventions, discoveries,
improvements, and copyrightable works (including, without limitation, any
information relating to the Company’s software products, source code, know-how,
processes, designs, algorithms, computer programs and routines, formulae,
techniques, developments or experimental work, work-in-progress, or business
trade secrets) made or conceived or reduced to practice by Employee during the
term of his employment by the Company, whether or not potentially patentable or
copyrightable in the United States or elsewhere. For purposes of this Agreement,
“Work Product” means any and all work product relating to Discoveries.

(ii)       Employee shall promptly disclose to the Company all Discoveries and
Work Product. All such disclosures must include complete and accurate copies of
all source code, object code or machine-readable copies, documentation, work
notes, flow-charts, diagrams, test data, reports, samples, and other tangible
evidence or results (collectively, “Tangible Embodiments”) of such Discoveries
or Work Product. All Tangible Embodiments of any Discoveries or Work Project

 

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will be deemed to have been assigned to the Company as a result of the act of
expressing any Discovery or Work Product therein.

(iii)      Employee hereby assigns and agrees to assign to the Company all of
his interest in any country in any and all Discoveries and Work Product, whether
such interest arises under patent law, copyright law, trade-secret law,
semiconductor chip protection law, or otherwise. Without limiting the generality
of the preceding sentence, Employee hereby authorizes the Company to make any
desired changes to any part of any Discovery or Work Product, to combine it with
other materials in any manner desired, and to withhold Employee’s identity in
connection with any distribution or use thereof alone or in combination with
other materials. This assignment and assignment obligation applies to all
Discoveries and Work Product arising during Employee’s employment with the
Company (or its predecessors), whether pursuant to this Agreement or otherwise.
Employee’s agreement to assign to the Company any of his rights as set forth in
this Section 5(a)(iii) applies to all inventions other than an invention (a) in
which no equipment, supplies, facility or trade secret information of the
Company was used (b) was developed entirely upon Employee’s own time (c) does
not relate to Company business or to the Company’s actual or anticipated
research or development and (d) does not result from any work performed by
Employee for the Company.

(iv)      At the request of the Company, Employee shall promptly and without
additional compensation execute any and all patent applications, copyright
registration applications, waivers of moral rights, assignments, or other
instruments that the Company deems necessary or appropriate to apply for or
obtain Letters Patent of the United States or any foreign country, copyright
registrations or otherwise to protect the Company’s interest in such Discovery
and Work Product, the expenses for which will be borne by the Company. Employee
hereby irrevocably designates and appoints the Company and its duly authorized
officers and agents as his agents and attorneys-in-fact to, if the Company is
unable for any reason to secure Employee’s signature to any lawful and necessary
document required or appropriate to apply for or execute any patent application,
copyright registration application, waiver of moral rights, or other similar
document with respect to any Discovery and Work Product (including, without
limitation, renewals, extensions, continuations, divisions, or continuations in
part), (i) act for and in his behalf, (ii) execute and file any such document,
and (iii) do all other lawfully permitted acts to further the prosecution of the
same legal force and effect as if executed by him; this designation and
appointment constitutes an irrevocable power of attorney coupled with an
interest.

(v)       To the extent that any Discovery or Work Product constitutes
copyrightable or similar subject matter that is eligible to be treated as a
“work made for hire” or as having similar status in the United States or
elsewhere, it will be so deemed. This provision does not alter or limit
Employee’s other obligations to assign intellectual property rights under this
Agreement.

 

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(vi)      The obligations of Employee set forth in this Section 5 (including,
without limitation, the assignment obligations) will continue beyond the
termination of Employee’s employment with respect to Discoveries and Work
Product conceived or made by Employee alone or in concert with others during
Employee’s employment with the Company, whether pursuant to this Agreement or
otherwise. Those obligations will be binding upon Employee, his assignees
permitted under this Agreement, executors, administrators, and other
representatives.

(b)       Exposure to Proprietary Information.

(i)        As used in this Agreement, “Proprietary Information” means all
information of a business or technical nature that relates to the Company
including, without limitation, all information about software products whether
currently released or in development, all inventions, discoveries, improvements,
copyrightable work, source code, know-how, processes, designs, algorithms,
computer programs and routines, formulae and techniques, and any information
regarding the business of any customer or supplier of the Company or any other
information that the Company is required to keep confidential. Notwithstanding
the preceding sentence, the term “Proprietary Information” does not include
information that is or becomes publicly available through no fault of Employee,
or information that Employee learned prior to the Effective Date.

(ii)       In recognition of the special nature of his employment under this
Agreement, including his special access to the Proprietary Information, and in
consideration of his employment pursuant to this Agreement, Employee agrees to
the covenants and restrictions set forth in Section 5 of this Agreement.

(c)       Use of Proprietary Information; Restrictive Covenants.

(i)        Employee acknowledges that the Proprietary Information constitutes a
protectible business interest of the Company, and covenants and agrees that
during the term of his employment, whether under this Agreement or otherwise,
and after the termination of such employment, he will not, directly or
indirectly, disclose, furnish, make available or utilize any of the Proprietary
Information, other than in the proper performance of his duties for the Company.

(ii)       Employee will not, during the term of this Agreement, anywhere within
the United States (the “Restricted Territory”), directly or indirectly (whether
as an owner, partner, shareholder, agent, officer, director, employee,
independent contractor, consultant, or otherwise), perform services for, or
engage in, any business or segment of a business which generates its revenues
primarily from the development, publishing, or sale of online advertisements for
travel companies (the “Products”);

 

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(iii) Employee will not, during the term of this Agreement or, for a period of
one year thereafter (the “Restricted Period”), anywhere within the United States
(the “Restricted Territory”), directly or indirectly (whether as an owner,
partner, shareholder, agent, officer, director, employee, independent
contractor, consultant, or otherwise):

1.         except on behalf of the Company, use Company Proprietary Information
to solicit any person or entity who is, or was at any time during the
twelve-month period immediately prior to the termination of Employee’s
employment with the Company, a customer of the Company for the sale of the
Products or any product or service of a type then sold by the Company for which
Employee provided any assistance in planning, development, marketing, training,
support, or maintenance; or

2.         solicit for employment any person who is, or was at any time during
the twelve-month period immediately prior to the termination of Employee’s
employment with the Company, an employee of the Company.

(d)       Scope/Severability. The Parties acknowledge that the business of the
Company is and will be national and international in scope and thus the
covenants in this Section 5 would be particularly ineffective if the covenants
were to be limited to a particular geographic area of the United States. If any
court of competent jurisdiction at any time deems the Restricted Period
unreasonably lengthy, or the Restricted Territory unreasonably extensive, or any
of the covenants set forth in this Section 5 not fully enforceable, the other
provisions of this Section 5, and this Agreement in general, will nevertheless
stand and to the full extent consistent with law continue in full force and
effect, and it is the intention and desire of the parties that the court treat
any provisions of this Agreement which are not fully enforceable as having been
modified to the extent deemed necessary by the court to render them reasonable
and enforceable and that the court enforce them to such extent (for example,
that the Restricted Period be deemed to be the longest period permissible by
law, but not in excess of the length provided for in Section 5(c), and the
Restricted Territory be deemed to comprise the largest territory permissible by
law under the circumstances).

(e)       Return of Company Materials upon Termination. Employee acknowledges
that all records, documents, and Tangible Embodiments containing or of
Proprietary Information prepared by Employee or coming into his possession by
virtue of his employment by the Company are and will remain the property of the
Company. Upon termination of his employment with the Company, Employee shall
immediately return to the Company all such items in his possession and all
copies of such items.

 

6.

Equitable Remedies.

 

(a)       Employee acknowledges and agrees that the agreements and covenants set
forth in Sections 5(a), (b), (c), (d) and (e) are reasonable and necessary for
the protection

 

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of the Company’s business interests, that irreparable injury will result to the
Company if Employee breaches any of the terms of said covenants, and that in the
event of Employee’s actual or threatened breach of any such covenants, the
Company will have no adequate remedy at law. Employee accordingly agrees that,
in the event of any actual or threatened breach by him of any of said covenants,
the Company will be entitled to immediate injunctive and other equitable relief.
Nothing in this Section 6 will be construed as prohibiting the Company from
pursuing any other remedies available to it for such breach or threatened
breach, including the recovery of any damages that it is able to prove. Employee
agrees that notwithstanding the arbitration provision in Section 11, the Company
may apply to a court of competent jurisdiction, in accordance with Section 11(c)
of this Agreement, to obtain the equitable relief referenced in this Section 6.

(b)       Each of the covenants in Sections 5(a), (b), (c), (d) and (e) will be
construed as independent of any other covenants or other provisions of this
Agreement.

(c)       In the event of any judicial determination that any of the covenants
in Sections 5(a), (b), (c), (d), and (e) are not fully enforceable, it is the
intention and desire of the parties that the court treat said covenants as
having been modified to the extent deemed necessary by the court to render them
reasonable and enforceable, and that the court enforce them to such extent.

7.   Assignment. This Agreement shall be binding upon and inure to the benefit
of (a) the heirs, executors and legal representatives of Employee upon
Employee’s death and (b) any successor of the Company. Any such successor of the
Company shall be deemed substituted for the Company under the terms of this
Agreement for all purposes. As used herein, “successor” shall include any
person, firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly, acquires all or
substantially all of the assets or business of the Company. None of the rights
of Employee to receive any form of compensation payable pursuant to this
Agreement shall be assignable or transferable except through a testamentary
disposition or by the laws of descent. Any attempted assignment, transfer,
conveyance or other disposition (other than as aforesaid) of any interest in the
rights of Employee to receive any form of compensation hereunder shall be null
and void.

8.   Notices. All notices, requests, demands and other communications called for
hereunder shall be in writing and shall be deemed given if delivered personally,
one (1) day after mailing via Federal Express overnight or a similar overnight
delivery service, or three (3) days after being mailed by registered or
certified mail, return receipt requested, prepaid and addressed to the parties
or their successors in interest at the addresses listed above, or at such other
addresses as the parties may designate by written notice in the manner
aforesaid.

9.   Severability. In the event that any provision hereof becomes or is declared
by a court of competent jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without said provision.

10.   Entire Agreement. This Agreement represent the entire agreement and
understanding between the Company and Employee concerning Employee’s employment

 

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relationship with the Company, and supersede in their entirety any and all prior
agreements and understandings concerning Employee’s employment relationship with
the Company. This Agreement also supersedes any Company Employee Handbook, to
the extent its terms may differ from those of the Handbook.

 

11.

Resolution of Disputes Regarding Employment.

(a)       The Parties agree to submit any dispute or controversy arising out of,
relating to, or in connection with this Agreement, or the interpretation,
validity, construction, performance, breach, or termination thereof, or to any
aspect of the employer/employee relationship or the termination of that
relationship, to mediation. The Parties shall mutually select the mediator and
shall equally pay for the costs of the mediator.

(b)       If and only if a mediation is unsuccessful, and the dispute or
controversy is not resolved within 30 days after a mediation, either party may
submit the matter to binding arbitration, to the extent permitted by law, to be
held in or near San Jose, California in accordance with the National Rules for
the Resolution of Employment Disputes then in effect of the American Arbitration
Association (the “Rules”). The Company agrees to pay all costs of the arbitrator
and the arbitration. The arbitrator may grant injunctions or other relief in
such dispute or controversy. The decision of the arbitrator shall be final,
conclusive and binding on the parties to the arbitration. Judgment may be
entered on the arbitrator’s decision in any court having jurisdiction. The
arbitrator may award the prevailing party in any such arbitration attorneys’
fees and costs incurred in connection therewith, except for those the Company
shall bear, as set forth above.

(c)       The arbitrator shall apply California law to the merits of any dispute
or claim, without reference to rules of conflict of law. The Parties hereby
expressly consent to the personal jurisdiction of the state and federal courts
located in Santa Clara County, California or the Northern District of California
for any action or proceeding arising from or relating to this Agreement and/or
relating to any arbitration in which the Parties are participants.

(d)       The Parties have read and understand Section 11, which discusses
arbitration. The Parties understand that by signing this agreement, the Parties
agree to submit any future claims arising out of, relating to, or in connection
with this agreement, or the interpretation, validity, construction, performance,
breach, or termination thereof to binding arbitration to the extent permitted by
law, and that this arbitration clause constitutes a waiver of the Parties’ right
to a jury trial and relates to the resolution of all disputes relating to all
aspects of the employer/employee relationship, including but not limited to, the
following claims:

(i)        Any and all claims for wrongful discharge of employment; breach of
contract, both express and implied; breach of the covenant of good faith and
fair dealing, both express and implied; negligent or

 

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intentional infliction of emotional distress; negligent or intentional
misrepresentation; negligent or intentional interference with contract or
prospective economic advantage; misappropriation of Proprietary Information or
other breaches covenants set forth in Section 5, and defamation;

(ii)       Any and all claims for violation of any federal, state or municipal
statute, including, but not limited to the California Fair Employment and
Housing Act, the Civil Rights Act of 1991, the Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act of 1990, and the Fair Labor
Standards Act;

(iii)      Any and all claims arising out of any other laws and regulations
relating to employment or employment discrimination.

(e)       The Parties may apply to any court of competent jurisdiction for a
temporary restraining order, preliminary injunction, or other interim or
conservatory relief, as necessary, without breach of this arbitration agreement
and without abridgment of the powers of the arbitrator.

12.       No Oral Modification, Cancellation or Discharge. This Agreement may
only be amended, canceled or discharged in writing signed by Employee and the
Company.

13.       Governing Law. This Agreement shall be governed by the laws of the
State of California.

14.       Acknowledgment. Employee acknowledges that he has had the opportunity
to discuss this matter with and obtain advice from his private attorney, has had
sufficient time to, and has carefully read and fully understands all the
provisions of this Agreement, and is knowingly and voluntarily entering into
this Agreement.

IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
respective dates set forth below.

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
BOTH PARTIES.

 

TRAVELZOO INC.

 

MAX RAYNER

 

 

 

 

 

By:

/s/ Ralph Bartel

 

By:

/s/ Max Rayner

 

 

 

 

 

Title:

Chairman and CEO

 

Date:

October 16, 2007

 

 

 

 

 

Date:

October 16, 2007

 

 

 

 

 

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EXHIBIT A

PERSONAL INTELLECTUAL PROPERTY

A.

A potential Method/Process patent or publication on the use of specific data
replication techniques to provide disaster recovery and business continuance
with minimum data loss.

B.

A potential patent or publication elucidating quantified best practices for
tying business requirements to optimal cost effectiveness of technical solutions
in enterprise computing and service oriented architectures.

C.

An enterprise infrastructure management framework capable of maintaining both
operational control and a complete map of component/service relationships.

D.

A flexible system clustering framework ranging from basic capabilities such as
device driver sharing to a single system image across nodes.

E.

A software-as-a-service system seeking to instantiate key corporate
transactional, process and knowledge needs as a “company-in-a-box”.

 

 

TRAVELZOO INC.

____________________________________

By:________________________________

 

[Employee]

Print Name:_________________________

 

Title:_______________________________

 

____________________________________

___________________________________

 

Date Signed

Date Signed

 

 

 

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EXHIBIT B

OUTSIDE RELATIONSHIPS / BOARDS

Company reserves the right to reasonably withdraw approval for one or more of
these relationships if they should prove to affect the ability of Employee to
fully perform his duties and responsibilities.

A

Technical Advisory Board member: AggregateKnowledge.com, a leading company in
the emerging field of real-time collective discovery, merchandising and
navigation enhancement. Compensation: none.

B.

Advisor to the Chief Executive Officer and Chief Technical Officer: WeBot.com,
an early stage startup devoted to on-demand personal media management.
Compensation: 24,000 options to purchase shares of the Company’s common stock.

C.

Angel investor: Startup in formation to explore enterprise infrastructure
management and flexible system clustering frameworks. (See Exhibit A, items C
and D) Compensation: When defined it will be in the form of stock rights.

 

 

TRAVELZOO INC.

____________________________________

By:________________________________

 

[Employee]

Print Name:_________________________

 

Title:_______________________________

 

____________________________________

___________________________________

 

Date Signed

Date Signed

 

 

 

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EXHIBIT C

SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release is entered into by and between
___________________ (“Employee”) and Travelzoo Inc. (“Employer”) (collectively
referred to herein as “the Parties”).

RECITALS

A.        Employee is employed by Employer in the position of __________________
pursuant to a written employment agreement dated ____________________ (the
“Employment Agreement”).

B.        Pursuant to the provisions of the Employment Agreement, Employer was
notified on ______________________ that Employee’s employment with Employer will
terminate as of ______________________ (the “Termination Date”). Employee shall
receive his wages and any unused vacation time accrued through
___________________, less deductions required by law, in accordance with
Employer’s customary payroll practices.

C.        In consideration of Employee’s service and to assist him in the
transition to new employment, Employer is hereby offering Employee severance
pay, subject to the terms and conditions set forth below.

ACCORDINGLY, in consideration of the terms, conditions and agreements set forth
below, Employer and Employee agree as follows:

AGREEMENTS

1.         Severance Payment. Subject to Employee’s execution of this Agreement,
Employer will pay Employee a lump sum severance payment in the gross amount of
$_______________ or [    ] months salary, less applicable taxes and
withholdings, on the next proceeding payroll date following the Revocation
Period set forth in Section 17 of this Agreement, in accordance with Employer’s
customary payroll practices. Employee acknowledges that such payment is more
than Employer is required to pay under its normal policies and procedures and
its contractual arrangements with Employee.

2.         Unemployment Benefits. Employer will not contest Employee’s
eligibility for unemployment benefits.

3.          Non-Disparagement. Employee agrees that he will not directly or
indirectly, publish or disseminate to the media or any individual or entity
information that is critical, derogatory or otherwise intended to disparage
Employer or Employer’s business, senior executives or officers, whether such
information is acquired during or after his employment with

 

 

 

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Employer. In addition, Employee agrees that he will not make any defamatory
remarks which may damage or discredit the reputation of Employer’s products, or
otherwise adversely affect the goodwill of its business, or be harmful to its
business relationships.

4.         General Release. Subject only to Section 6 and except for the rights
and benefits specifically provided in this Agreement, Employee releases and
discharges Employer, and each of its respective past, present and future
shareholders, officers, directors, employees, agents, insurers, attorneys and
parent, affiliated or related entities, and their respective successors and
assigns (“Released Parties”), from all claims, demands, actions, rights,
damages, costs, losses, expenses, compensation and other legal responsibilities,
known or unknown, of any kind, which Employee may own or hold against any of the
Released Parties at any time through the effective date of this Agreement. The
rights and claims released by this Agreement include, but are not limited to,
all claims of whatever kind or nature that may exist relating to, arising out of
or in connection with Employee’s employment or the termination of such
employment, whether such claims are presently known or are hereafter discovered
or whether they are foreseen or unforeseen as of the date hereof. This release
applies, without limitation, to any and all claims for employment
discrimination, harassment or retaliation under Title VII of the Civil Rights
Act of 1964, as amended, the Age Discrimination in Employment Act (including the
Older Worker Benefit Protection Act); the Fair Labor Standards Act, the Family
and Medical Leave Act, the Employee Retirement Income Security Act, the Workers
Adjustment and Retraining Notification Act; the Sarbanes-Oxley Act, the
California Fair Employment & Housing Act, the Americans with Disabilities Act of
1990, the California Labor Code, the California Health & Safety Code, the New
York Human Rights Law, the New York City Human Rights Laws, the New York Aids
Testing Confidentiality Act, the New York Equal Pay Law, the New York Persons
With Disabilities Law, Civil Rights Law, the New York Genetic Testing
Confidentiality Law, the New York Nondiscrimination Against Genetic Disorders
Law, the New York Smokers Rights Law, the New York Equal Rights Law, the New
York Discrimination by Employment Agencies Law, the New York Bone Marrow Leave
Law, the New York Adoptive Parents Child Care Leave Law, the New York Cancer
Victim Bias Law, Article 1, Section 11 of the New York State Constitution; N.Y.
Workers’ Compensation Law, or any other state, federal or local statute or
regulation applicable to Employer, including any claim for intentional or
negligent infliction of emotional distress, physical injury, violation of any
public policy, breach of any implied or express contract, any claim for stock
options, any claim for wrongful termination, fraud, intentional or negligent
misrepresentation, and all other legal and equitable causes of action whatsoever
and all remedies for such claims. The release of claims made by Employee in this
Agreement does not apply to claims that arise after the date this Agreement is
executed. Employee certifies that as of the date of this Release, he has
reported all accidents, injuries or illnesses relating to or arising from his
employment with the Employer. This release also does not apply to any claims of
indemnity, statutory, contractual or otherwise, which Employee may have as a
former employee of the Employer.

5.         Unknown Claims. Employee understands that the release set forth above
includes claims which Employee knows about and those Employee may not know
about. Employee expressly waives any rights under California Civil Code Section
1542 which provides as follows:

 

 

 

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“A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release which if
known by him must have materially affected his settlement with the debtor.”

For purposes of Section 1542, “creditor” refers to Employer and “debtor” refers
to the Released Parties.

6.         Claims Not Affected by Release. This Release does not affect
Employee’s right to apply for continuation or conversion of insurance coverage
to the extent that the Employer’s insurance plans or applicable law provide for
such continuation or conversion, or to any claim for disability or unemployment
compensation to which Employee is entitled by law.

7.         Agreement Not To Sue and Warranty. Employee promises that he has not
and will not file any suit, charge, complaint, grievance, action or other
proceeding with any federal, state or local agency, court, organization,
judicial forum or other tribunal asserting any claim that is released in Section
4 above, and warrants that he has not assigned to any other person or entity the
right to file any claims that are released in Section 4 above, nor will he
permit any person, group of persons, or organization to take such action on his
behalf

8.         Non-Admissions. It is understood that by offering or entering into
this Agreement, neither Employee nor Employer has admitted any liability or
wrongdoing whatsoever. No final findings or final judgements have been made and
Employee does not purport and will not claim to be prevailing party, to any
degree or extent, nor will this Agreement or its terms be admissible in any
proceeding other than a proceeding for breach of the terms contained herein.

9.         Return of Property. Employee promises to return all of Employer’s
property, including all work in progress, files, photographs, notes, records,
credit cards, keys, access cards, computer, and other company or customer
documents, products or property which he has received in the course of his
employment, or which reflect in any way any confidential or proprietary
information of Employer.

10.       Confidentiality Obligations Do Not Terminate. Employee understands
that after the Termination Date, Employee remains bound to comply with the terms
and conditions of paragraph 5 of the Employment Agreement.

11.       Confidentiality of Severance Offer and Benefits. Except to the extent
required by law (e.g., to submit a tax return or compliance with a lawful
subpoena), or as necessary to enforce this Agreement, Employee warrants that he
has not disclosed, and promises that he will not disclose, the offer or payment
of severance benefits for any reason to any person other than members of his
immediate family and professional representatives, who shall be informed of and
bound by the same promise of confidentiality.

12.       Consequences of Violation of Agreement. If either party violates his
or its promises in this Agreement, the other party shall be entitled to recover,
in addition to any other

 

 

 

--------------------------------------------------------------------------------

 

damages or remedies, such party’s attorneys’ fees and costs in defending against
the claim or enforcing the terms of this Agreement.

13.       Reemployment or Reinstatement: Employee hereby waives any right to and
agrees not to apply or reapply for employment and agrees that Employer has no
obligation, contractual or otherwise, to rehire, reemploy or recall him in the
future. The existence of this Agreement shall be a valid, non-discriminatory
basis for rejecting any such application or, in the event Employee obtains such
employment, to terminate such employment.

14.       Entire Agreement. This Agreement sets forth all agreements and
understandings between Employee and Employer and supersedes any prior
agreements, understandings or promises between them, except for paragraph 5 of
the Employment Agreement. Employee acknowledges that he has not relied on any
inducements that are not set forth herein.

15.       Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.

16.       Severability. If any term, provision, or portion of this Agreement is
held unenforceable by any tribunal, it shall be deemed automatically adjusted to
the extent necessary to conform to the requirements for validity as declared at
such time and, as adjusted, shall be deemed a provision of this Agreement as if
originally included herein. In the event that an invalidated provision is of
such a nature that it cannot be so adjusted, the provision shall be deemed
deleted from this Agreement as if it had never been included herein. In either
case, the remaining provisions shall remain in full force and effect.

17.       Consultation with Attorney. Employee hereby acknowledges that he has
been advised by and consulted his attorney, that he has had a reasonable period
of time in which to consider the terms of this Waiver and Release, and he has
specifically consulted (or has the opportunity to consult) his attorneys
regarding this Waiver and Release and all of its terms. Employee specifically
acknowledges that he was counseled by a representative of Employer to seek the
advice of counsel concerning this Waiver and Release and its meaning and effect.

18.       Time for Consideration and Employee’s Right to Revoke Agreement.
Employee hereby acknowledges that he has been given twenty-one (21) days to
consider this Waiver and Release and that he has been advised that he may revoke
this Waiver and Release within seven (7) days of his execution. Revocation can
be made by delivering a written notice of revocation to Travelzoo Inc.,
Attention: HR Department, 590 Madison Avenue, 21” Floor, New York, NY 10022. For
the revocation to be effective, written notice must be actually received at the
designated address no later than the close of business on the seventh calendar
day after Employee signs this Agreement. If Employee revokes this Agreement, it
shall not be effective or enforceable and Employee will not receive the payment
described in paragraph 2.2. Employee hereby acknowledges that his execution of
this agreement and release is made knowingly, and that he has been advised of
and afforded the proper time for consideration and revocation of this Agreement
and Release, as specified by the Older Worker Benefit Protection Act. In the
event that Employee

 

 

 

--------------------------------------------------------------------------------

 

revokes the Waiver and Release, the waiver included in Section 1 will be of no
further force or effect.

EMPLOYEE ACKNOWLEDGES THAT HE HAS HAD AN ADEQUATE OPPORTUNITY TO REVIEW THIS
AGREEMENT AND ALL OF ITS TERMS AND IS ENTERING INTO IT VOLUNTARILY ON THE DATE
SHOWN BELOW HIS NAME. HE HAS CAREFULLY READ THIS AGREEMENT AND UNDERSTANDS ALL
OF ITS TERMS INCLUDING THE FULL AND FINAL RELEASE OF CLAIMS SET FORTH ABOVE. HE
FURTHER ACKNOWLEDGES THAT HE HAS VOLUNTARILY ENTERED INTO THIS AGREEMENT, THAT
HIS AGREEMENT IS NOT THE RESULT OF ANY FRAUD, DURESS, COERCION, PRESSURE OR
UNDUE INFLUENCE EXERCISED BY OR ON BEHALF OF EMPLOYER, THAT HE HAS NOT RELIED
UPON ANY REPRESENTATION OR STATEMENT, WRITTEN OR ORAL, NOT SET FORTH IN THIS
AGREEMENT, AND THAT HE HAS HAD THIS AGREEMENT REVIEWED BY HIS ATTORNEY AND HIS
TAX ADVISOR, OR HAS BEEN GIVEN THE OPPORTUNITY BY EMPLOYER TO DO SO.

 

 

TRAVELZOO INC.

____________________________________

By:________________________________

 

[Employee]

Print Name:_________________________

 

Title:_______________________________

 

____________________________________

___________________________________

 

Date Signed

Date Signed

 

 

 

--------------------------------------------------------------------------------

 

EXHIBIT D

 

Beneficiary:

Michelle M. Chen

xxxxxxxxx

xxxxxxxxxx, xx xxxxx

Contingent Beneficiary:

The Rayner-Chen Living Trust

Retained for safekeeping by Robert K. Roskoph

Roskoph Associates Professional Corporation

xxxxxxxxxxxxxxx

xxxxxxxxx, xx xxxxx