Document:

exv10w4

 

Exhibit
10.4

EXECUTIVE SUPPLEMENTAL INCOME AGREEMENT

(as amended and restated as of October 1, 2007)

     This
Agreement, effective as of October 1, 2007 (the
“Effective Date”), is made by and between
THE PEOPLES BANK, BILOXI, MISSISSIPPI, a state-chartered commercial bank with its principal office
located in Biloxi, Mississippi (hereinafter referred to as the
“Company”), and LAURI A. WOOD
(hereinafter referred to as the “Executive”). This Agreement hereby amends and restates, in their
entirety, an agreement with an initial effective date of January 1, 1992, and a restated agreement
effective October 1, 2002 (hereinafter the “Prior
Agreements”), made by and between the Company and
the Executive.

INTRODUCTION

     The Company and the Executive entered into the Prior Agreements in order to provide certain
benefits to the Executive as an officer of the Company upon the Executive’s retirement.

     The Company and the Executive, by this current Agreement, desire to amend and desire to
restate the Prior Agreements in their entirety to include and reflect the terms set forth herein
and to incorporate the benefit accumulated to date by the Executive under the Prior Agreements, to
reflect the applicable provisions of Section 409A of the Internal Revenue Code of 1986, as amended,
and to clarify certain provisions of the Prior Agreements.

     Therefore, in order to encourage the Executive to remain an employee of the Company, the
Company is willing to provide salary continuation benefits to the Executive. The Company will pay
the benefits from its general assets.

AGREEMENT

     The Executive and the Company agree as follows:

Article 1

Definitions

     1.1 Definitions. Whenever used in this Agreement and except to the extent defined otherwise in
Code Section 409A or where the context clearly indicates otherwise, the following words and phrases
shall have the meanings specified:

     1.1.1 “Beneficiary” means the person or trust that an Executive designates in writing
in accordance with Section 4.1 hereof.

     1.1.2 “Change of Control” means:

     1.1.2.1 A change in the ownership of the capital stock of the Company
or Peoples Financial Corporation (the “Holding Company”), whereby a
corporation, person or group acting in concert (a “Person”) as described in
Section 14(d)(2) of the Securities Exchange Act of
1934, as

 

 

amended (the “Exchange Act”), holds or acquires, directly or indirectly, beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
a number of shares of capital stock of the Company or Holding Company which
constitutes fifty percent (50%) or more of the combined voting power of the
Company’s or Holding Company’s outstanding capital stock then entitled to vote
generally in the election of directors; or

     1.1.2.2 The persons who were members of the Board of Directors of the Company
or Holding Company immediately prior to a tender offer, exchange offer, contested
election or any combination of the foregoing, cease to constitute a majority of
such Board of Directors; or

     1.1.2.3 The adoption by the Board of Directors of the Company or of the
Holding Company of a merger, consolidation or reorganization plan involving the
Company or Holding Company in which the Company or the Holding Company is not the
surviving entity, or a sale of all or substantially all of the assets of the
Company or Holding Company. For purposes of this Agreement, a sale of all or
substantially all of the assets of the Company or Holding Company shall be deemed
to occur if any Person acquires (or during the 12-month period ending on the date
of the most recent acquisition by such Person, has acquired) gross assets of the
Company or Holding Company that have an aggregate fair market value equal to fifty
percent (50%) of the fair market value of all of the respective gross assets of the
Company or Holding Company immediately prior to such acquisition or acquisitions;
or

     1.1.2.4 A tender offer or exchange offer is made by any Person which, if
successfully completed, would result in such Person beneficially owning (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) either fifty percent
(50%) or more of the Company’s or Holding Company’s outstanding shares of Common
Stock or shares of capital stock having fifty percent (50%) or more of the combined
voting power of the Company’s or Holding Company’s then outstanding capital stock
(other than an offer made by the Company or the Holding Company), and sufficient
shares are acquired under the offer to cause such person to own fifty percent (50%)
or more of the voting power; or

     1.1.2.5 Any other transactions or series of related transactions occurring
which have substantially the same effect as the transactions specified in any of
the preceding clauses of this Subsection (1.1.2).

     1.1.2.6 Notwithstanding the preceding, a Shareholder, as hereinafter defined
in Subsection 1.1.14, may make the following transfers and such transfers shall be
deemed not to be a Change of Control under this Subsection 1.1.2:

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     1.1.2.6.1 To any trust, company, or partnership created solely for
the benefit of any Shareholder or any spouse of or any
lineal descendant of any Shareholder;

     1.1.2.6.2 To any individual or entity by bona fide gift;

     1.1.2.6.3 To any spouse or former spouse of any Shareholder pursuant
to the terms of a decree of divorce;

     1.1.2.6.4 To any officer or employee of the Company pursuant to any
incentive stock option plan established by the Shareholder;

     1.1.2.6.5 To any family member of any Shareholder;

     1.1.2.6.6 After receipt of any necessary regulatory approvals, to any
company or partnership, including, but not limited to, a family limited
partnership, a majority of the stock or interests of which company or
partnership are owned by any of the Shareholder; or

     1.1.2.6.7 To any existing Shareholder as of the Effective Date.

     Notwithstanding the preceding, for purposes of determining whether a distribution may be made
following a change of control, the change must be a change in the ownership or effective control of
the Company, or its parent, Peoples Financial Corporation, or a change in the ownership of a
substantial portion of the assets of the Company or its parent corporation, Peoples Financial
Corporation, all within the meaning of Treas. Reg. Section 1.409A-3(i)(5). In the event a change
constitutes a change under the preceding (without regard to this paragraph) but does not constitute
a change under Treas. Reg. Section 1.409A-3(i)(5), such distribution shall be made at the earliest
time permitted under Article 2 or 3.

     1.1.3 “Claimant” means the Executive or Beneficiary who believes he/she has not received the
benefits under this Agreement to which he/she is entitled to receive.

     1.1.4 “Code” means the Internal Revenue Code of 1986, as amended.

     1.1.5 “Company” means The Peoples Bank, Biloxi, Mississippi.

     1.1.6 “Disability” or “Disabled” means the Executive: (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a continuous period of not
less than twelve (12) months; or (ii) is, by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, receiving income replacement benefits for a
period of not less than three (3)

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months under an accident and health plan covering employees or directors of the Company. Medical
determination of Disability may be made by either the Social Security Administration or by the
provider of an accident or health plan covering employees or
directors of the Company provided that the definition of “disability” applied under such disability
insurance program complies with the requirements of the preceding sentence. Upon the request of
the plan administrator, the Executive must submit proof to the plan administrator of the Social
Security Administration’s or the provider’s determination.

     1.1.7 “Discount Rate” means the rate reviewed and determined at least annually by the Board of
Directors for purposes of calculating benefits hereunder. The rate determined by the Board of
Directors shall apply to all calculations thereafter until such rate is changed by the Board of
Directors.

     1.1.8 “Early Retirement Date” means the date the Executive: (i) attains at least age
fifty-five (55); (ii) attains at least her fifteen (15) year anniversary of employment at the
Company; and, (iii) has participated under this Agreement, including any amendment and restatement
of the Prior Agreements, for five (5) years.

     1.1.9 “ERISA” means the Employee Income Security Act of 1974, as amended.

     1.1.10 “Executive Benefit Accrual” means the amount accrued as a liability to the Executive by
the Company on its accounting records under Generally Accepted Accounting Principles (GAAP) by
virtue of the terms of the Prior Agreements and by virtue of the terms of this Agreement.

     1.1.11 “Normal Retirement Date” means the date the Executive attains age sixty-five (65).

     1.1.12 “Salary” means the base annual amount, without bonus or other benefits, paid to the
Executive by the Company as of the earlier to occur of: (i) Separation From Service; or, (ii) the
Company’s termination of the Agreement under Section 7.3.

     1.1.13 “Separation From Service” or “Separates From Service” means a cessation of services
rendered by the Executive within the meaning of Treas. Reg. Section 1.409A-1(h).

     1.1.14 “Shareholder” means the existing owners of all issued and outstanding stock of the
Company or Peoples Financial Corporation as of the date this Agreement is signed.

     1.1.15 “Specified Employee” means an employee who is described in Treas. Reg. Section
1.409A-1(i).

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Article 2 

Lifetime
Benefits

     2.1
Normal Retirement Benefit. If Separation From Service occurs
on or after the  Normal Retirement
Date and prior to a Change of Control, the Company shall pay to the Executive the benefit described in
this Section 2.1.

     2.1.1 Amount of Benefit. The benefit under this Section 2.1 is fifty percent (50%) of
the Executive’s Salary.

     2.1.2 Payment of Benefit. The Company shall pay the annual benefit
determined under subsection 2.1.1 for a period of fifteen (15) years, payable monthly
(one twelfth [1/12th] of the annual benefit) beginning on the last day of the month
commencing with the month following Separation From Service. The monthly payments under this
subsection 2.1.2 shall total one hundred eighty (180) substantially equal payments over a
period of one hundred eighty (180) months.

     2.2 Early Retirement Benefit. If Separation From Service occurs on or after the Early
Retirement Date and prior to the Normal Retirement Date and prior to a Change of Control, Company
shall pay to the Executive the benefit described in this Section 2.2 in lieu of any other benefit
under this Agreement.

     2.2.1 Amount of Benefit. The benefit under this Section 2.2 is the annual benefit set
forth in subsection 2.1.1 reduced by one-half of a percent (0.5%) for
each month or partial
month between Separation From Service and the Normal Retirement Date.
By way of example, assume
the Executive elects to retire at age 591/2, which is 66 months prior to the Normal Retirement
Date. Assume further the annual benefit under subsection 2.1.1 equals twenty percent (20%)
of Salary. Based on these assumptions the percentage of Salary payable under this subsection
2.2.1 would equal 20% times 67% (100% minus the product of 66 times 0.5%). The resulting
annual benefit under subsection 2.2.1, based on the assumptions in this example, would equal
13.4% (20% multiplied by 67%) of Salary.

     2.2.2 Payment of Benefit. The Company shall pay the annual benefit determined under
subsection 2.2.1 for a period of fifteen (15) years, payable monthly (one twelfth [1/12th]
of the annual benefit) beginning on the last day of the month commencing with the month
following Separation From Service. The monthly payments under this subsection 2.2.2 shall
total one hundred eighty (180) substantially equal payments over a period of one hundred
eighty (180) months.

     2.3 Separation From Service Prior to the Early Retirement Date or Prior to Normal Retirement
Date. Subject to the provisions of Sections 2.6 and 5.3, if Separation From Service occurs, for
reasons other than death or Disability, and prior to a Change of
Control and prior to either the Early
Retirement Date or to the Normal Retirement Date, the Company shall pay to the Executive the benefit
described in this Section 2.3 in lieu of any other benefit under this Agreement.

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     2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the Executive Benefit
Accrual as of Separation From Service.

     2.3.2 Payment of Benefit. The Company shall pay the Executive the benefit set forth in
subsection 2.3.1 in a single lump-sum within sixty (60) days of Separation From Service.

     2.4 Disability Benefit. Upon Disability prior to the Normal Retirement Date, the Company
shall pay to the Executive the benefit described in this Section 2.4 in lieu of any other benefit
under this Agreement.

     2.4.1 Amount of Benefit. Subject to the provisions of Section 2.6 and Section 5.3, the
annual benefit under this Section 2.4 is the annual benefit set
forth in subsection 2.1.1.

     2.4.2 Payment of Benefit. The Company shall pay the annual benefit determined under
subsection 2.4.1, in lieu of any other benefit under this Agreement, for a period of fifteen
(15) years, payable monthly (one-twelfth [1/12th] of the annual benefit) beginning on the
last day of the month commencing with the month following the Executive’s Normal Retirement
Date. The monthly payments under this subsection 2.4.2 shall total one hundred eighty (180)
substantially equal payments over a period of one hundred eighty (180) months.

     2.4.3 Death During Disability. In the event the Executive dies following Disability and
prior to receiving any payment under this Agreement, the Company shall pay the Beneficiary
the annual benefit set forth in Section 3.1.2 in lieu of any other benefit under this
Agreement.

     2.5 Change of Control Benefit. Upon a Change of Control prior to Separation From Service and
prior to Disability, the Company subject to the provisions of Section 2.6 and Section 5.3, shall
pay to the Executive the benefit described in this Section 2.5 in lieu of any other benefit under
this Agreement.

          2.5.1 Amount of Benefit. The benefit under this Section 2.5 shall be 100% of the normal
retirement benefit set forth in subsection 2.1.1.

          2.5.2 Payment of Benefit. The Company shall pay the annual benefit determined under
subsection 2.5.1 for a period of fifteen (15) years, payable monthly (one-twelfth [1/12th] of the
annual benefit) beginning on the last day of the month commencing with the month following the
Executive’s Normal Retirement Date, or, in the event the Executive has already attained the Normal
Retirement Date, the last day of the month following the month of Separation From Service. In the
event the Executive dies prior to reaching her Normal Retirement Date, the benefit is then payable
to her Beneficiary beginning on the last day of the month commencing with the month following the
Executive’s death.

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     2.6 Excess Parachute Payment. Notwithstanding any provision of this Agreement to the contrary,
the Company shall not pay any benefit under this Agreement to the extent the benefit would be a
non-deductible parachute payment under Section 280G of the Code.

     2.7 Restriction on Distributions to Specified Employees. Notwithstanding any provision of this
Agreement to the contrary, if the Executive is considered a Specified Employee at Separation From
Service, the provisions of this Section 2.7 shall govern all distributions hereunder. Benefit
distributions that are made due to a Separation From Service occurring while the Executive is a
Specified Employee shall not be made during the first six (6) months following Separation From
Service, rather any distribution which would otherwise be paid to the Executive during such period
shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month
following the Separation From Service. All subsequent distributions shall be paid in the manner
specified.

     2.8 Distributions Upon Income Inclusion Under Section 409A of the Code. If any amount is
required to be included in income by the Executive prior to receipt due to a failure
of this Agreement to meet the requirements of Code Section 409A, the Executive may petition
the plan administrator for a distribution of that portion of the Executive Benefit Accrual that is
required to be included in the Executive’s income. Upon the grant of such a petition, which grant
shall not be unreasonably withheld, the Company shall distribute to the Executive immediately
available funds in an amount equal to the portion of the Executive Benefit Accrual required to be
included in income as a result of the failure of this Agreement to meet the requirements of Code
Section 409A, which amount shall not exceed the Executive’s unpaid Executive Benefit Accrual. If
the petition is granted, such distribution shall be made within ninety (90) days of the date when
the Executive’s petition is granted. Such a distribution shall affect and reduce the Executive’s
benefits to be paid under this Agreement.

     2.9 No Suspension Upon Re-employment. Once benefit payments commence hereunder, such payments
shall continue to be made notwithstanding the re-employment of the Executive by the Company except
as provided in Section 5.1 or 5.2.

Article 3

Beneficiaries

     3.1 Death During Active Service. The Company shall pay to the Beneficiary the benefit
described in this Section 3.1 if the Executive dies: (i) prior to Separation From Service and prior
to Disability before the Normal Retirement Date and (ii) prior to a Change of Control.

     3.1.1 Amount of Benefit. The annual benefit under this Section 3.1 is the annual
benefit set forth in Section 2.1.1.

     3.1.2 Payment of Benefit. The Company shall pay the annual benefit determined under
subsection 3.1.1, in lieu of any other benefit under this Agreement, for a period of fifteen
(15) years, payable monthly (one-twelfth [1/12th] of the annual benefit) beginning on the
last day of the month commencing with the month following the Executive’s death. The monthly
payments under this subsection 3.1.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.

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     3.2 Death During Benefit Period. If benefit payments have commenced or were scheduled to
commence under Article 2 of this Agreement, but before receiving all such payments the Executive
dies, the Company shall then pay the remaining benefits to the Executive’s Beneficiary at the same
time and in the same amounts that would have been paid to the Executive had the Executive survived.
Notwithstanding the preceding, the Executive or her Beneficiary shall not be entitled to a benefit
under both Article 2 and 3 hereof, it being the intent that there shall not be any duplication of
benefits hereunder.

Article 4

Beneficiaries

     4.1 Beneficiary Designations. The Executive may designate or change her Beneficiary at any
time and from time to time (without the consent of any prior Beneficiary). An Executive’s
Beneficiary shall be as designated on a Beneficiary Designation in the form of Exhibit A to this
Agreement or another form acceptable to the Company. The Executive may
change her Beneficiary designation by properly executing a new Beneficiary Designation and
delivering that form to the Company, provided however, no change shall be effective until received
by the Company, and provided further, that no change shall be effective unless received by the
Company before the Executive’s death. Furthermore, each designation so made shall cancel and
supersede all previous designations. The designated Beneficiary, designated successor Beneficiary,
and any other person entitled to payments under this Agreement shall be referred to in this
Agreement as the “Beneficiary” irrespective of the number thereof. The divorce of the Executive
from her spouse shall, without any further action, automatically revoke the designation of such
spouse as a Beneficiary of the Executive’s benefits under this Agreement but shall not result in
the automatic revocation of any other Beneficiary designated by the Executive. The preceding
sentence shall not preclude the Executive from executing a new Beneficiary designation after her
divorce is final and naming her former spouse as a Beneficiary of all or part of her benefits. If
no Beneficiary shall have been properly designated, or if no Beneficiary shall survive the
Executive, the benefits shall be payable to the Executive’s estate. All rights of a Beneficiary
shall be derivative of the rights of the Executive, therefore, a Beneficiary shall not be entitled
to any benefits hereunder if the Executive is not entitled to any benefits hereunder. During the
lifetime of the Executive, a Beneficiary shall have no rights under this Agreement.

     4.2 Facility of Payment. If a benefit is payable to a minor, to a person declared incompetent,
or to a person incapable of handling the disposition of his or her property, the Company may pay
such benefit to the guardian, legal representative or person having the care or custody of such
minor, incompetent person or incapable person, or to a custodian selected by the Company under the
Mississippi Uniform Transfers to Minors Act for the benefit of such minor. The Company may require
proof of incompetency, minority or guardianship as it may deem appropriate prior to distribution of
the benefit. Such distribution shall completely discharge the Company from all liability with
respect to such benefit.

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Article 5

General Limitations

     Notwithstanding any provision of this Agreement to the contrary, the Company shall not pay any
benefit under this Agreement if any of the following occur:

     5.1 Termination for Cause. If the Company terminates the Executive’s employment for any of the
following reasons:

     5.1.1 Conviction in a court of competent jurisdiction of a felony; or

     5.1.2 Fraud, dishonesty, or embezzlement. Also, any willful violation of any law or
willful violation of a significant Company policy committed in connection with the
Executive’s employment, with either resulting in an adverse effect on the Company.

     5.2 Suicide. No benefits shall be payable if the Executive commits suicide within two (2)
years after the date of this Agreement, including any amendment and restatement of the Prior
Agreements, or if the Executive has made any material misstatement of fact on any application for
life insurance purchased by the Company.

     5.3 Golden Parachute Payment. Notwithstanding any provision of this Agreement to the contrary,
the Company shall not be required to pay any benefit under this Agreement if, upon the advice of
counsel, the Company determines that the payment of such benefit would be prohibited by 12 C.F.R.
Part 359 or any successor regulations regarding employee compensation promulgated by any regulatory
agency having jurisdiction over the Company or its affiliates or to the extent the benefit would be
a non-deductible excess parachute payment under Section 280G of the Code. To the extent possible,
such benefit payment shall be proportionately reduced to allow payment within the fullest extent
permissible under applicable law.

Article 6

Claims and Review Procedures

     6.1 Claims Procedure.

     6.1.1 Initiation — Written Claim. The Claimant initiates a claim by submitting to the
Company a written claim for the benefits.

     6.1.2 Timing of Company Response. The Company shall respond to such Claimant within 90
days after receiving the claim. If the Company determines that special circumstances require
additional time for processing the claim, the Company can extend the response period by an
additional 90 days by notifying the Claimant in writing, prior to the end of the initial
90-day period, that an additional period is required. The notice of extension must set forth
the special circumstances and the date by which the Company expects to render its decision.

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     6.1.3 Notice of Decision. If the Company denies part or all of the claim, the Company
shall notify the Claimant in writing of such denial. The Company shall write the
notification in a manner calculated to be understood by the Claimant. The notification shall
set forth:

     6.1.3.1 The specific reasons for the denial;

     6.1.3.2 A reference to the specific provisions of the Plan on which the denial
is based;

     6.1.3.3 A description of any additional information or material necessary for
the Claimant to perfect the claim and an explanation of why it is needed;

     6.1.3.4 An explanation of the Plan’s review procedures and the time limits
applicable to such procedures; and

     6.1.3.5 A statement of the Claimant’s right to bring a civil action under ERISA
Section 502(a) following an adverse benefit determination on review.

     6.2 Review Procedure. If the Company denies part or all of the claim, the Claimant shall have
the opportunity for a full and fair review by the Company of the denial, as follows:

     6.2.1 Initiation — Written Request. To initiate the review, the Claimant, within 60
days after receiving the Company’s notice of denial, must file
with the Company a written
request for review.

     6.2.2 Additional Submissions — Information Access. The Claimant shall then have the
opportunity to submit written comments, documents, records and other information relating to
the claim. The Company shall also provide the Claimant, upon request and free of charge,
reasonable access to, and copies of, all documents, records and other information relevant
(as defined in applicable ERISA regulations) to the Claimant’s claim for benefits.

     6.2.3 Considerations on Review. In considering the review, the Company shall take into
account all materials and information the Claimant submits relating to the claim, without
regard to whether such information was submitted or considered in the initial benefit
determination.

     6.2.4 Timing
of Company Response. The Company shall respond in writing to such Claimant
within 60 days after receiving the request for review. If the Company determines that
special circumstances require additional time for processing the claim, the Company can
extend the response period by an additional 60 days by notifying the Claimant in writing,
prior to the end of the initial 60-day period, that an additional period is required. The
notice of extension must set forth the special circumstances and the date by which the
Company expects to render its decision.

     6.2.5
Notice of Decision. The Company shall notify the Claimant in
writing of

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its decision on review. The Company shall write the notification in a manner calculated to
be understood by the Claimant. The notification shall set forth:

     6.2.5.1 The specific reasons for the denial;

     6.2.5.2 A reference to the specific provisions of the Plan on which the denial
is based;

     6.2.5.3 A statement that the Claimant is entitled to receive, upon request and
free of charge, reasonable access to, and copies of, all documents, records and
other information relevant (as defined in applicable ERISA regulations) to the
Claimant’s claim for benefits; and

     6.2.5.4 A statement of the Claimant’s right to bring a civil action under ERISA
Section 502(a).

Article 7

Amendments and Termination

     7.1 Amendments. This Agreement may be amended only by a written agreement signed by the
Company and the Executive, provided, however, the Company may unilaterally
amend this Agreement to conform with written directives to the Company from its auditors or
banking regulators or to comply with legislative changes or tax law, including, without limitation,
Code Section 409A, provided, however, any such unilateral amendment shall comply with Section 409A.

     7.2 Plan Termination Generally. This Agreement may be terminated by the Company. The benefit
hereunder shall be the Executive Benefit Accrual as of the date the Agreement is terminated,
except, however, in the event a Change of Control has occurred, the benefit shall be the benefit
described in Section 2.5. Except as provided in Section 7.3, the termination of this Agreement
shall not cause a distribution of benefits under this Agreement. Rather, after such termination
benefit distributions will be made at the earliest distribution event permitted under Article 2 or
Article 3.

     7.3 Plan Terminations Under Section 409A. Notwithstanding anything to the contrary in Section
7.2, if this Agreement terminates in accordance with the provisions of Treas. Reg. Section
1.409A-3(j)(4)(ix), the Company will distribute the Executive Benefit Accrual, determined as of the
date of the termination of the Agreement, to the Executive in a lump sum, subject to all of the
requirements of such regulations.

Article 8

Miscellaneous

     8.1 Binding Effect. This Agreement shall bind the Executive and the Company, and their
beneficiaries, survivors, executors, administrators and permitted transferees.

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     8.2 No Guaranty of Employment. This Agreement is not an employment policy or contract. It does
not give the Executive the right to remain an employee of the Company, nor does it interfere with
the Company’s right to discharge the Executive. It also does not require the Executive to remain an
employee nor interfere with the Executive’s right to terminate employment at any time.

     8.3 Non-Transferability. Benefits under this Agreement cannot be sold, transferred, assigned,
pledged, attached or encumbered in any manner, except in accordance with Article 4 with respect to
designation of beneficiaries.

     8.4 Tax Withholding. The Company shall withhold any taxes that are required to be withheld
from the benefits provided under this Agreement.

     8.5 Applicable Law. To the extent not preempted by ERISA, this Agreement and all rights
hereunder shall be governed by the laws of the State of Mississippi without regard to its conflicts
of laws provisions.

     8.6 Unfunded Arrangement. The Executive and Beneficiary are general unsecured creditors of the
Company for the payment of benefits under this Agreement. The benefits represent the mere promise
by the Company to pay such benefits. The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Executive’s life is a general asset of the Company
to which the Executive and Beneficiary have no preferred or secured claim.

     8.7 Severability. Without limitation of any other section contained herein, in case any one or
more provisions contained in this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any other respect, such invalidity, illegality or unenforceability shall not
affect the other provisions of this Agreement. In the event any one or more of the provisions found
in the Agreement shall be held to be invalid, illegal or unenforceable by any governmental
regulatory agency or court of competent jurisdiction, this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been a part of this Agreement and such
provision shall be deemed substituted by such other provisions as will most nearly accomplish the
intent of the parties to the extent permitted by applicable law.

     8.8 Administration. The Company shall have powers which are necessary to administer this
Agreement, including but not limited to:

     8.8.1 Interpreting the provisions of the Agreement, including making any factual
determinations;

     8.8.2 Establishing and revising the method of accounting for the Agreement;

     8.8.3 Maintaining a record of benefit payments; and

     8.8.4 Establishing rules and prescribing any forms necessary or desirable to administer
the Agreement.

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     8.9 Named Fiduciary. The Company shall be the named fiduciary and plan administrator under
this Agreement. It may delegate to others certain aspects of the management and operational
responsibilities including the employment of advisors and the delegation of ministerial duties to
qualified individuals.

     8.10 Full Obligation. Notwithstanding any provision to the contrary, when the Company has paid
either a lifetime benefit or a death benefit as appropriate under any section of the Agreement, the
Company has completed its obligation to the Executive and her Beneficiary, it being the intention
of the Company that there shall not be any duplication of benefits hereunder.

     8.11 Construction and Compliance with Section 409A. This Agreement shall be interpreted and
administered consistent with Code Section 409A. All references to a particular statute shall be
deemed to refer to all regulations and authoritative guidance issued thereunder and all references
to a particular statute, regulation, or guidance of general applicability shall be deemed to refer
to any superseding statute, regulation, or guidance of general applicability.

     IN WITNESS WHEREOF, the Executive and a duly authorized Company officer have executed this
Agreement as of the date indicated below, but effective as of October 1, 2007.

	 	 	 	 	 	 	 	 	 	 	 
	COMPANY:	 	 	 	EXECUTIVE:	 	 
	THE PEOPLES BANK, BILOXI, MISSISSIPPI	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	LAURI A. WOOD	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Its:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 

13

 

EXHIBIT A

TO THE

EXECUTIVE SUPPLEMENTAL INCOME AGREEMENT

(as amended and restated as of October 1, 2007)

BENEFICIARY DESIGNATION

Executive: LAURI A. WOOD

     The Beneficiary or beneficiaries of any payments to be made under this Agreement following my
death shall be:

Primary Beneficiary

     I designate the following as primary beneficiary (beneficiaries) of my benefits under this
Agreement if I die before the receipt of all of my benefits:

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Full Name:
	 	 	 	Relationship:	 	 	 	 
	 

	 	 	 	 

	 
	 	 

	 	 
	 	 	Address (No., Street, City, State, Zip Code):	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	SS#:	 
	 	 	 	Date of Birth:
	 	 	 	% of Benefits:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 

	 	 
	 	 

	 	 

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Full Name:
	 	 	 	Relationship:	 	 	 	 
	 

	 	 	 	 

	 
	 	 

	 	 
	 	 	Address (No., Street, City, State, Zip Code):	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	SS#:	 
	 	 	 	Date of Birth:
	 	 	 	% of Benefits:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 

	 	 
	 	 

	 	 

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Full Name:
	 	 	 	Relationship:	 	 	 	 
	 

	 	 	 	 

	 
	 	 

	 	 
	 	 	Address (No., Street, City, State, Zip Code):	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	SS#:	 
	 	 	 	Date of Birth:
	 	 	 	% of Benefits:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 

	 	 
	 	 

	 	 

(attach a separate sheet if additional space is needed)

14

 

Contingent
Beneficiary

     Should all of the primary beneficiaries designated above predecease me and I die before the
receipt of all of my Benefits, I designate the following as the contingent beneficiary
(beneficiaries) of my Benefits under this Agreement:

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Full Name:
	 	 	 	Relationship:	 	 	 	 
	 

	 	 	 	 

	 
	 	 

	 	 
	 	 	Address (No., Street, City, State, Zip Code):	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	SS#:	 
	 	 	 	Date of Birth:
	 	 	 	% of Benefits:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 

	 	 
	 	 

	 	 

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Full Name:
	 	 	 	Relationship:	 	 	 	 
	 

	 	 	 	 

	 
	 	 

	 	 
	 	 	Address (No., Street, City, State, Zip Code):	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	SS#:	 
	 	 	 	Date of Birth:
	 	 	 	% of Benefits:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 

	 	 
	 	 

	 	 

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Full Name:
	 	 	 	Relationship:	 	 	 	 
	 

	 	 	 	 

	 
	 	 

	 	 
	 	 	Address (No., Street, City, State, Zip Code):	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	SS#:	 
	 	 	 	Date of Birth:
	 	 	 	% of Benefits:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 

	 	 
	 	 

	 	 

(attach a separate sheet if additional space is needed)

     I understand that if I designate more than one beneficiary in a class above (i.e. primary or
contingent), each beneficiary in that class will receive an equal share of the benefits unless I
specify a different percentage. If I designate more than one beneficiary in a class above (i.e.
primary or contingent), the share of a beneficiary who predeceases me will be divided pro rata
among the remaining designated beneficiaries in that class unless I specify an alternate
disposition. Unless I specify an alternate disposition, I also understand that a beneficiary who
survives me but who dies before the complete distribution of his/her benefits shall be entitled to
designate the beneficiary of any benefits remaining after his/her death and that upon his/her
failure to properly designate a beneficiary, the beneficiary’s remaining benefits shall be paid to
his/her estate.

     I understand that this designation shall be subject to the terms of this Agreement.

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 
	Signature of Witness

	 	Date
	 	 	 	LAURI A. WOOD
	 	Date

15exv10w1

 

EXHIBIT 10.1

INDEMNIFICATION AGREEMENT

          This Indemnification Agreement, dated as of ___, 2007, is made by and between TRAVELZOO
INC., a Delaware corporation (the “Corporation”) and ___ (the “Indemnitee”).

RECITALS

          A. The Corporation recognizes that competent and experienced persons are increasingly
reluctant to serve or to continue to serve as directors or officers of corporations unless they are
protected by comprehensive liability insurance or indemnification, or both, due to increased
exposure to litigation costs and risks resulting from their service to such corporations, and due
to the fact that the exposure frequently bears no reasonable relationship to the compensation of
such directors and officers;

          B. The statutes and judicial decisions regarding the duties of directors and officers are
often difficult to apply, ambiguous, or conflicting, and therefore fail to provide such directors
and officers with adequate, reliable knowledge of legal risks to which they are exposed or
information regarding the proper course of action to take;

          C. The Corporation and Indemnitee recognize that plaintiffs often seek damages in such large
amounts and the costs of litigation may be so enormous (whether or not the case is meritorious),
that the defense and/or settlement of such litigation is often beyond the personal resources of
directors and officers;

          D. The Corporation believes that it is unfair for its directors and officers to assume the
risk of huge judgments and other expenses which may occur in cases in which the director or officer
received no personal profit and in cases where the director or officer was not culpable;

          E. The Corporation, after reasonable investigation, has determined that the liability
insurance coverage presently available to the Corporation may be inadequate in certain
circumstances to cover all possible exposure for which Indemnitee should be protected. The
Corporation believes that the interests of the Corporation and its stockholders would best be
served by a combination of such insurance and the indemnification by the Corporation of the
directors and officers of the Corporation;

          F. The Corporation’s Certificate of Incorporation requires the Corporation to indemnify its
directors and officers to the fullest extent permitted by the Delaware General Corporation Law (the
“DGCL”). The Certificate of Incorporation expressly provides that the indemnification provisions
set forth therein are not exclusive, and contemplate that contracts may be entered into between the
Corporation and its directors and officers with respect to indemnification;

          G. Section 145 of the DGCL (“Section 145”), under which the Corporation is organized, empowers
the Corporation to indemnify its officers, directors, employees and agents by agreement and to
indemnify persons who serve, at the request of the Corporation, as the directors, officers,
employees or agents of other corporations or enterprises, and expressly provides that the
indemnification provided by Section 145 is not exclusive;

          H. The Board of Directors has determined that contractual indemnification as set forth herein
is not only reasonable and prudent but also promotes the best interests of the Corporation and its
stockholders;

          I. The Corporation desires and has requested Indemnitee to serve or continue to serve as a
director or officer of the Corporation and/or one or more subsidiaries or affiliates of the
Corporation free from undue concern for unwarranted claims for damages arising out of or related to
such services to the Corporation and/or one or more subsidiaries or affiliates of the Corporation;
and

 

 

           J. Indemnitee is willing to serve, continue to serve or to provide additional service for or
on behalf of the Corporation on the condition that he is furnished the indemnity provided for
herein.

AGREEMENT

          NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, and
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
the parties hereto, intending to be legally bound, hereby agree as follows:

     Section 1. Generally.

     To the fullest extent permitted by the laws of the State of Delaware:

          (a) The Corporation shall indemnify Indemnitee if Indemnitee was or is a party or is
threatened to be made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact that Indemnitee is
or was or has agreed to serve at the request of the Corporation as a director, officer, employee or
agent of the Corporation, or while serving as a director or officer of the Corporation, is or was
serving or has agreed to serve at the request of the Corporation as a director, officer, employee
or agent (which, for purposes hereof, shall include a trustee, partner or manager or similar
capacity) of another corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, or by reason of any action alleged to have been taken or omitted in such capacity.

          (b) The indemnification provided by this Section 1 shall be from and against expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such action, suit or
proceeding and any appeal therefrom, but shall only be provided if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action, suit or proceeding, had no reasonable cause
to believe Indemnitee’s conduct was unlawful.

          (c) Notwithstanding the foregoing provisions of this Section 1, in the case of any threatened,
pending or completed action or suit by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that Indemnitee is or was a director, officer, employee or agent of
the Corporation, or while serving as a director or officer of the Corporation, is or was serving or
has agreed to serve at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise,
no indemnification shall be made in respect of any claim, issue or matter as to which Indemnitee
shall have been adjudged to be liable to the Corporation unless, and only to the extent that, the
Delaware Court of Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all the circumstances
of the case, Indemnitee is fairly and reasonably entitled to indemnity for such expenses which the
Delaware Court of Chancery or such other court shall deem proper.

          (d) The termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that Indemnitee’s conduct was
unlawful.

          Section 2. Successful Defense; Partial Indemnification. To the extent that Indemnitee
has been successful on the merits or otherwise in defense of any action, suit or proceeding
referred to in Section 1 hereof or in defense of any claim, issue or matter therein, Indemnitee
shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred
in connection therewith. For purposes of this Agreement and without limiting the foregoing, if
any action, suit or proceeding is disposed of, on the merits or otherwise (including a disposition
without prejudice), without (i) the disposition being adverse to Indemnitee, (ii) an adjudication
that Indemnitee was liable to the Corporation, (iii) a plea of guilty or nolo contendere by
Indemnitee, (iv) an adjudication that Indemnitee did not act in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation,
and (v) with respect to any criminal proceeding, an adjudication that Indemnitee had reasonable
cause to believe Indemnitee’s conduct was unlawful, Indemnitee shall be considered for the
purposes hereof to have been wholly successful with respect thereto.

          If Indemnitee is entitled under any provision of this Agreement to indemnification by the
Corporation for some or a portion of the expenses (including attorneys’ fees), judgments, fines or
amounts paid in settlement actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection with any action, suit, proceeding or investigation, or in defense of any
claim,

2

 

issue or matter therein, and any appeal therefrom but not, however, for the total amount thereof,
the Corporation shall nevertheless indemnify Indemnitee for the portion of such expenses
(including attorneys’ fees), judgments, fines or amounts paid in settlement to which Indemnitee is
entitled.

     Section 3. Determination That Indemnification Is Proper. Any indemnification
hereunder shall (unless otherwise ordered by a court) be made by the Corporation unless a
determination is made that indemnification of such person is not proper in the circumstances
because he or she has not met the applicable standard of conduct set forth in Section 1(b) hereof.
Any such determination shall be made (i) by a majority vote of the directors who are not parties
to the action, suit or proceeding in question (“disinterested directors”), even if less than a
quorum, (ii) by a majority vote of a committee of disinterested directors designated by majority
vote of disinterested directors, even if less than a quorum, (iii) by a majority vote of a quorum
of the outstanding shares of stock of all classes entitled to vote on the matter, voting as a
single class, which quorum shall consist of stockholders who are not at that time parties to the
action, suit or proceeding in question, (iv) by independent legal counsel, or (v) by a court of
competent jurisdiction.

     Section 4. Advance Payment of Expenses; Notification and Defense of Claim.

          (a) Expenses (including attorneys’ fees) incurred by Indemnitee in defending a threatened or
pending civil, criminal, administrative or investigative action, suit or proceeding, or in
connection with an enforcement action pursuant to Section 5(b), shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding within thirty (30) days after
receipt by the Corporation of (i) a statement or statements from Indemnitee requesting such advance
or advances from time to time, and (ii) an undertaking by or on behalf of Indemnitee to repay such
amount or amounts, only if, and to the extent that, it shall ultimately be determined that
Indemnitee is not entitled to be indemnified by the Corporation as authorized by this Agreement or
otherwise. Such undertaking shall be accepted without reference to the financial ability of
Indemnitee to make such repayment. Advances shall be unsecured and interest-free.

          (b) Promptly after receipt by Indemnitee of notice of the commencement of any action, suit or
proceeding, Indemnitee shall, if a claim thereof is to be made against the Corporation hereunder,
notify the Corporation of the commencement thereof. The failure to promptly notify the Corporation
of the commencement of the action, suit or proceeding, or Indemnitee’s request for indemnification,
will not relieve the Corporation from any liability that it may have to Indemnitee hereunder,
except to the extent the Corporation is prejudiced in its defense of such action, suit or
proceeding as a result of such failure.

          (c) In the event the Corporation shall be obligated to pay the expenses of Indemnitee with
respect to an action, suit or proceeding, as provided in this Agreement, the Corporation, if
appropriate, shall be entitled to assume the defense of such action, suit or proceeding, with
counsel reasonably acceptable to Indemnitee, upon the delivery to Indemnitee of written notice of
its election to do so. After delivery of such notice, approval of such counsel by Indemnitee and
the retention of such counsel by the Corporation, the Corporation will not be liable to Indemnitee
under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to
the same action, suit or proceeding, provided that (1) Indemnitee shall have the right to employ
Indemnitee’s own counsel in such action, suit or proceeding at Indemnitee’s expense and (2) if (i)
the employment of counsel by Indemnitee has been previously authorized in writing by the
Corporation, (ii) counsel to the Corporation shall have reasonably concluded that there may be a
conflict of interest or position, or reasonably believes that a conflict is likely to arise, on any
significant issue between the Corporation and Indemnitee in the conduct of any such defense or
(iii) the Corporation shall not, in fact, have employed counsel to assume the defense of such
action, suit or proceeding, then the fees and expenses of Indemnitee’s counsel shall be at the
expense of the Corporation, except as otherwise expressly provided by this Agreement. The
Corporation shall not be entitled, without the consent of Indemnitee, to assume the defense of any
claim brought by or in the right of the Corporation or as to which counsel for the Corporation
shall have reasonably made the conclusion provided for in clause (ii) above.

          (d) Notwithstanding any other provision of this Agreement to the contrary, to the extent that
Indemnitee is, by reason of Indemnitee’s corporate status with respect to the Corporation or any
corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which
Indemnitee is or was serving or has agreed to serve at the request of the Corporation, a witness or
otherwise participates in any action, suit or proceeding at a time when Indemnitee is not a party
in the action, suit or proceeding, the Corporation shall indemnify Indemnitee against all expenses
(including attorneys’ fees) actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection therewith

3

 

     Section 5. Procedure for Indemnification

          (a) To obtain indemnification, Indemnitee shall promptly submit to the Corporation a written
request, including therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. The Corporation shall, promptly upon receipt of such a
request for indemnification, advise the Board of Directors in writing that Indemnitee has requested
indemnification.

          (b) The Corporation’s determination whether to grant Indemnitee’s indemnification request
shall be made promptly, and in any event within 60 days following receipt of a request for
indemnification pursuant to Section 5(a). The right to indemnification as granted by Section 1 of
this Agreement shall be enforceable by Indemnitee in any court of competent jurisdiction if the
Corporation denies such request, in whole or in part, or fails to respond within such 60-day
period. It shall be a defense to any such action (other than an action brought to enforce a claim
for the advance of costs, charges and expenses under Section 4 hereof where the required
undertaking, if any, has been received by the Corporation) that Indemnitee has not met the standard
of conduct set forth in Section 1 hereof, but the burden of proving such defense by clear and
convincing evidence shall be on the Corporation. Neither the failure of the Corporation (including
its Board of Directors or one of its committees, its independent legal counsel, and its
stockholders) to have made a determination prior to the commencement of such action that
indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct set forth in Section 1 hereof, nor the fact that there has been an
actual determination by the Corporation (including its Board of Directors or one of its committees,
its independent legal counsel, and its stockholders) that Indemnitee has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has
or has not met the applicable standard of conduct. The Indemnitee’s expenses (including attorneys’
fees) incurred in connection with successfully establishing Indemnitee’s right to indemnification,
in whole or in part, in any such proceeding or otherwise shall also be indemnified by the
Corporation.

          (c) The Indemnitee shall be presumed to be entitled to indemnification under this Agreement
upon submission of a request for indemnification pursuant to this Section 5, and the Corporation
shall have the burden of proof in overcoming that presumption in reaching a determination contrary
to that presumption. Such presumption shall be used as a basis for a determination of entitlement
to indemnification unless the Corporation overcomes such presumption by clear and convincing
evidence.

     Section 6. Insurance and Subrogation.

          (a) The Corporation may purchase and maintain insurance on behalf of Indemnitee who is or was
or has agreed to serve at the request of the Corporation as a director or officer of the
Corporation, or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise against any liability asserted against, and incurred by, Indemnitee or on
Indemnitee’s behalf in any such capacity, or arising out of Indemnitee’s status as such, whether or
not the Corporation would have the power to indemnify Indemnitee against such liability under the
provisions of this Agreement. If the Corporation has such insurance in effect at the time the
Corporation receives from Indemnitee any notice of the commencement of a proceeding, the
Corporation shall give prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the policy. The Corporation shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all
amounts payable as a result of such proceeding in accordance with the terms of such policy.

          (b) In the event of any payment by the Corporation under this Agreement, the Corporation shall
be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee with
respect to any insurance policy, who shall execute all papers required and take all action
necessary to secure such rights, including execution of such documents as are necessary to enable
the Corporation to bring suit to enforce such rights in accordance with the terms of such insurance
policy. The Corporation shall pay or reimburse all expenses actually and reasonably incurred by
Indemnitee in connection with such subrogation.

          (c) The Corporation shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder (including, but not limited to, judgments, fines, ERISA excise
taxes or penalties, and amounts paid in settlement) if and to the extent that Indemnitee has
otherwise actually received such payment under this Agreement or any insurance policy, contract,
agreement or otherwise.

4

 

     Section 7. Certain Definitions. For purposes of this Agreement, the following
definitions shall apply:

          (a) The term “action, suit or proceeding” shall be broadly construed and shall include,
without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration
and appeal of, and the giving of testimony in, any threatened, pending or completed claim, action,
suit or proceeding, whether civil, criminal, administrative or investigative.

          (b) The term “by reason of the fact that Indemnitee is or was a director, officer, employee or
agent of the Corporation, or while serving as a director or officer of the Corporation, is or was
serving or has agreed to serve at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise” shall be broadly construed and shall include, without limitation, any actual or alleged
act or omission to act.

          (c) The term “expenses” shall be broadly and reasonably construed and shall include, without
limitation, all direct and indirect costs of any type or nature whatsoever (including, without
limitation, all attorneys’ fees and related disbursements, appeal bonds, other out-of-pocket costs
and reasonable compensation for time spent by Indemnitee for which Indemnitee is not otherwise
compensated by the Corporation or any third party, provided that the rate of compensation and
estimated time involved is approved by the Board, which approval shall not be unreasonably
withheld), actually and reasonably incurred by Indemnitee in connection with either the
investigation, defense or appeal of a proceeding or establishing or enforcing a right to
indemnification under this Agreement, Section 145 of the General Corporation Law of the State of
Delaware or otherwise.

          (d) The term “judgments, fines and amounts paid in settlement” shall be broadly construed and
shall include, without limitation, all direct and indirect payments of any type or nature
whatsoever including, without limitation, all penalties and amounts required to be forfeited or
reimbursed to the Corporation, as well as any penalties or excise taxes assessed on a person with
respect to an employee benefit plan).

          (e) The term “Corporation” shall include, without limitation and in addition to the resulting
corporation, any constituent corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that any person who is
or was a director, officer, employee or agent of such constituent corporation, or is or was serving
at the request of such constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, shall
stand in the same position under the provisions of this Agreement with respect to the resulting or
surviving corporation as he or she would have with respect to such constituent corporation if its
separate existence had continued.

          (f) The term “other enterprises” shall include, without limitation, employee benefit plans.

          (g) The term “serving at the request of the Corporation” shall include, without limitation,
any service as a director, officer, employee or agent of the Corporation which imposes duties on,
or involves services by, such director, officer, employee or agent with respect to an employee
benefit plan, its participants or beneficiaries.

          (h) A person who acted in good faith and in a manner such person reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner “not opposed to the best interests of the Corporation” as referred to in
this Agreement.

     Section 8. Limitation on Indemnification. Notwithstanding any other provision herein
to the contrary, the Corporation shall not be obligated pursuant to this Agreement:

          (a) Claims Initiated by Indemnitee. To indemnify or advance expenses to Indemnitee
with respect to an action, suit or proceeding (or part thereof) initiated by Indemnitee, except
with respect to an action, suit or proceeding brought to establish or enforce a right to
indemnification (which shall be governed by the provisions of Section 8(b) of this Agreement),
unless such action, suit or proceeding (or part thereof) was authorized or consented to by the
Board of Directors of the Corporation.

          (b) Action for Indemnification. To indemnify Indemnitee for any expenses incurred by
Indemnitee with respect to any action, suit or proceeding instituted by Indemnitee to enforce or
interpret this Agreement, unless Indemnitee is successful in establishing Indemnitee’s right to
indemnification in such action, suit or proceeding, in whole or in part, or unless and to the
extent that the court in such action, suit or proceeding shall determine that, despite Indemnitee’s
failure to establish their right to indemnification, Indemnitee is entitled to indemnity for such
expenses; provided, however, that nothing in this Section 8(b) is

5

 

intended to limit the Corporation’s obligation with respect to the advancement of expenses to
Indemnitee in connection with any such action, suit or proceeding instituted by Indemnitee to
enforce or interpret this Agreement, as provided in Section 4 hereof.

          (c) Section 16 Violations. To indemnify Indemnitee on account of any proceeding with
respect to which final judgment is rendered against Indemnitee for payment or an accounting of
profits arising from the purchase or sale by Indemnitee of securities in violation of Section 16(b)
of the Securities Exchange Act of 1934, as amended, or any similar successor statute.

          (d) Non-compete and Non-disclosure. To indemnify Indemnitee in connection with
proceedings or claims involving the enforcement of non-compete and/or non-disclosure agreements or
the non-compete and/or non-disclosure provisions of employment, consulting or similar agreements
(including, without limitation, the Corporation’s Detrimental Conduct Agreements and Proprietary
Information and Non-Solicitation Agreements) the Indemnitee may be a party to with the Corporation,
or any subsidiary of the Corporation or any other applicable foreign or domestic corporation,
partnership, joint venture, trust or other enterprise, if any.

     Section 9. Certain Settlement Provisions. The Corporation shall have no obligation
to indemnify Indemnitee under this Agreement for amounts paid in settlement of any action, suit or
proceeding without the Corporation’s prior written consent, which shall not be unreasonably
withheld. The Corporation shall not settle any action, suit or proceeding in any manner that would
impose any fine or other obligation on Indemnitee without Indemnitee’s prior written consent, which
shall not be unreasonably withheld.

     Section 10. Savings Clause. If any provision or provisions of this Agreement shall be
invalidated on any ground by any court of competent jurisdiction, then the Corporation shall
nevertheless indemnify Indemnitee as to costs, charges and expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding,
whether civil, criminal, administrative or investigative, including an action by or in the right of
the Corporation, to the full extent permitted by any applicable portion of this Agreement that
shall not have been invalidated and to the full extent permitted by applicable law.

     Section 11. Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for herein is held by a court of competent
jurisdiction to be unavailable to Indemnitee in whole or in part, it is agreed that, in such event,
the Corporation shall, to the fullest extent permitted by law, contribute to the payment of
Indemnitee’s costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts
paid in settlement with respect to any action, suit or proceeding, whether civil, criminal,
administrative or investigative, in an amount that is just and equitable in the circumstances,
taking into account, among other things, contributions by other directors and officers of the
Corporation or others pursuant to indemnification agreements or otherwise; provided, that, without
limiting the generality of the foregoing, such contribution shall not be required where such
holding by the court is due to (i) the failure of Indemnitee to meet the standard of conduct set
forth in Section 1 hereof, or (ii) any limitation on indemnification set forth in Section 6(c), 8
or 9 hereof.

     Section 12. Form and Delivery of Communications. Any notice, request or other
communication required or permitted to be given to the parties under this Agreement shall be in
writing and either delivered in person or sent by telecopy, telex, telegram, overnight mail or
courier service, or certified or registered mail, return receipt requested, postage prepaid, to
the parties at the following addresses (or at such other addresses for a party as shall be
specified by like notice):

If to the Corporation:

Travelzoo Inc.

800 West El Camino Real, Suite 180

Mountain View, California 94040

Attn: Chief Financial Officer

Facsimile: +1 (650) 943-2433

If to Indemnitee:

[name]

[address]

Facsimile:                                         

6

 

     Section 13. Subsequent Legislation. If the General Corporation Law of Delaware is
amended after adoption of this Agreement to expand further the indemnification permitted to
directors or officers, then the Corporation shall indemnify Indemnitee to the fullest extent
permitted by the General Corporation Law of Delaware, as so amended.

     Section 14. Nonexclusivity. The provisions for indemnification and advancement of
expenses set forth in this Agreement shall not be deemed exclusive of any other rights which
Indemnitee may have under any provision of law, the Corporation’s Certificate of Incorporation or
ByLaws, in any court in which a proceeding is brought, the vote of the Corporation’s stockholders
or disinterested directors, other agreements or otherwise, and Indemnitee’s rights hereunder shall
continue after Indemnitee has ceased acting as an agent of the Corporation and shall inure to the
benefit of the heirs, executors and administrators of Indemnitee. However, no amendment or
alteration of the Corporation’s Certificate of Incorporation or ByLaws or any other agreement shall
adversely affect the rights provided to Indemnitee under this Agreement

     Section 15. Enforcement. The Corporation shall be precluded from asserting in any
judicial proceeding that the procedures and presumptions of this Agreement are not valid, binding
and enforceable. The Corporation agrees that its execution of this Agreement shall constitute a
stipulation by which it shall be irrevocably bound in any court of competent jurisdiction in which
a proceeding by Indemnitee for enforcement of his rights hereunder shall have been commenced,
continued or appealed, that its obligations set forth in this Agreement are unique and special, and
that failure of the Corporation to comply with the provisions of this Agreement will cause
irreparable and irremediable injury to Indemnitee, for which a remedy at law will be inadequate. As
a result, in addition to any other right or remedy Indemnitee may have at law or in equity with
respect to breach of this Agreement, Indemnitee shall be entitled to injunctive or mandatory relief
directing specific performance by the Corporation of its obligations under this Agreement.

     Section 16. Interpretation of Agreement. It is understood that the parties hereto
intend this Agreement to be interpreted and enforced so as to provide indemnification to Indemnitee
to the fullest extent now or hereafter permitted by law.

     Section 17. Entire Agreement. This Agreement and the documents expressly referred to
herein constitute the entire agreement between the parties hereto with respect to the matters
covered hereby, and any other prior or contemporaneous oral or written understandings or agreements
with respect to the matters covered hereby are expressly superceded by this Agreement.

     Section 18. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

     Section 19. Successor and Assigns. All of the terms and provisions of this Agreement
shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto
and their respective successors, assigns, heirs, executors, administrators and legal
representatives. The Corporation shall require and cause any direct or indirect successor (whether
by purchase, merger, consolidation or otherwise) to all or substantially all of the business or
assets of the Corporation, by written agreement in form and substance reasonably satisfactory to
Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the
same extent that the Corporation would be required to perform if no such succession had taken
place.

     Section 20. Service of Process and Venue. For purposes of any claims or proceedings
to enforce this agreement, the Corporation consents to the jurisdiction and venue of any federal
or state court of competent jurisdiction in the states of Delaware and New Jersey, and waives and
agrees not to raise any defense that any such court is an inconvenient forum or any similar claim.

     Section 21. Supercedes Prior Agreement. This Agreement supercedes any prior
indemnification agreement between Indemnitee and the Corporation or its predecessors.

     Section 22. Governing Law. This Agreement shall be governed exclusively by and
construed according to the laws of the State of Delaware, as applied to contracts between Delaware
residents entered into and to be performed entirely within Delaware. If a court of competent
jurisdiction shall make a final determination that the provisions of the law of any state other
than Delaware govern indemnification by the Corporation of its officers and directors, then the
indemnification provided under this Agreement shall in all instances be enforceable to the fullest
extent permitted under such law, notwithstanding any provision of this Agreement to the contrary.

     Section 23. Employment Rights. Nothing in this Agreement is intended to create in
Indemnitee any right to employment or continued employment.

7

 

     Section 24. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original and all of which together shall be deemed to be one
and the same instrument, notwithstanding that both parties are not signatories to the original or
same counterpart.

     Section 25. Headings. The section and subsection headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.

     IN WITNESS WHEREOF, this Agreement has been duly executed and delivered to be effective as of
the date first above written.

TRAVELZOO INC.

By                                         

Name:                                         

Title:                                         

INDEMNITEE:

By                                         

Name:                                        

8

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