exv10w1



 







EXHIBIT 10.1









Memo




	 	 	 
	To:

	 	North America Executive Team
	From:

	 	Ralph Bartel—CEO
	CC:

	 	Compensation Committee of the Board of Directors
	Date:

	 	June 13, 2006
	Re:

	 	North America Executive Bonus Plan — Revised
	 
	 	 




 




          To all:




          This Amendment supersedes the Executive Bonus Plan dated May 16, 2005 and is effective July 1,
2006.




          The purpose of the plan is to reward qualifying members of Travelzoo’s North America executive
team for achieving their quarterly targets as set per the North America Master Budget. Executives
with a minimum of twelve months of service are eligible to participate in the Executive Bonus Plan.
The twelve month minimum service requirement is subject to waiver upon approval by the
Compensation Committee of the Board of Directors. Individual discretionary rewards will not be
made under this plan.




          The following executives are eligible for the Executive Bonus Plan:




          North America Executives




	 	 	 	 	 
	 

	 	Ralph Bartel
	 	CEO
	 

	 	Holger Bartel
	 	EVP
	 

	 	Steve Ledwith
	 	CTO
	 

	 	Wayne Lee
	 	VP Finance
	 

	 	Shirley Tafoya
	 	SVP Sales






          The bonus plan has two sets of goals that must be achieved in order to be rewarded.




          The first set of goals is based upon success of achieving both of the following
quarterly targets as specified in the North America Master Budget:





	 	•	 	Revenue — There is also a customer concentration criteria which must be met whereby
there cannot be more than two “significant customers,” defined as a customer that accounts
for 10% (rounded to the nearest 1%) or more of worldwide consolidated revenues for the
quarter. Each of the significant customers also cannot account for more than 15% of
worldwide revenues for the quarter (see Exhibit A for examples).




 









 






	 	•	 	Operating income





          If both of the revenue and operating income targets are not met, the executive team is not
eligible for the bonus even if all secondary goals are achieved that quarter.




          The second set of goals is based upon achieving at least two of the following three quarterly
targets as specified each quarter in the North America Master Budget:





	 	•	 	Collections
	 
	 	•	 	Subscriber targets
	 
	 	•	 	Staffing goals*





          * Staffing goals can be within +10% of the targeted headcount (calculated by taking
the sum of the absolute values of the differences between actual and targeted headcount for each
department and dividing by the targeted headcount for the quarter.)




          Each executive will be eligible to receive a bonus of $50,000 for the quarter upon the
attainment of these goals, in addition to their current base salary.




          The bonus would be paid out approximately 45 days after the quarter closes. The bonus is
subject to applicable tax withholdings.




          The Company reserves the right to amend its North America Master Budget and/or this Executive
Bonus Plan at anytime and for any reasons.




 









 








          Exhibit A  — Customer Concentration




          For all three examples below, the quarterly consolidated worldwide revenues are $20,000,000.




          Example A – Revenue for Customer ABC is $2,300,000, revenue for Customer XYZ is
$1,950,000. No other customers have revenues greater than $1,900,000 (rounds to 10% of revenue).




	 	 	 	 	 
	 	 	% of
	 	 	Revenue
	Customer ABC
	 	 	12	%
	Customer XYZ
	 	 	10	%






          Revenue Goal met – There are no more than two significant customers (Customer ABC and
Customer XYZ) and each is under 15%.




          Example B – Revenue for Customer ABC is $2,300,000, revenue for Customer XYZ is
$1,950,000, revenue for Customer QRS is $2,000,000. No other customers have revenues greater than
$1,900,000 (rounds to 10% of revenue).




	 	 	 	 	 
	 	 	% of
	 	 	Revenue
	Customer ABC
	 	 	12	%
	Customer XYZ
	 	 	10	%
	Customer QRS
	 	 	10	%






          Revenue
Goal not met – there are more than two significant customers.




          Example C — Revenue for Customer ABC is $3,500,000 and Customer XYZ is $1,950,000. No
other customers have revenues greater than $1,900,000 (rounds to 10% of revenue).




	 	 	 	 	 
	 	 	% of
	 	 	Revenue
	Customer ABC
	 	 	18	%
	Customer XYZ
	 	 	10	%






          Revenue Goal not met – there are only two significant customers but one of the
significant customers is over 15% of revenue.