Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Option Grants to Holger Bartel, Chief Executive Officer
On September 5, 2019, with approval from the Board of Directors (the “Board”), Travelzoo (the “Company”) entered into a Nonqualified Stock Option Agreement (the “HB Option Agreement”) with Holger Bartel, Global Chief Executive Officer, pursuant to which the Company granted Mr. Bartel the option to purchase 400,000 shares of the Company’s common stock (such option being hereinafter referred to as the “HB Option”). The HB Option began to partially vest on March 31, 2020, but was not exercisable unless and until the stockholders of the Company approved.
The exercise price of the HB Option was $10.79 per share (subject to the HB Repricing, as set forth below). The HB Option is expected to vest quarterly over two years in equal installments of 12.5% beginning on March 31, 2020. The HB Option cannot be exercised after the expiration of the term of the HB Option, which is five (5) years from the date of grant.
On May 29, 2020, the stockholders of the Company approved the HB Option Agreement and the HB Option.
On March 30, 2020, with approval from the Board, the Company entered into Amendments (collectively, the “HB Option Agreement Amendments”) to (1) the Nonqualified Stock Option Agreement, dated as of September 28, 2015 (the “2015 Option Agreement”), (2) the Nonqualified Stock Option Agreement, dated as of October 30, 2017 (the “2017 Option Agreement”) and (3) the HB Option Agreement (together with the 2015 Option Agreement and the 2017 Option Agreement, the “Original HB Option Agreements”), in each case, with Mr. Bartel. The Board approved the HB Option Agreement Amendments in order to compensate Mr. Bartel for his service as the Global Chief Executive Officer during the Coronavirus pandemic, especially as Mr. Bartel agreed to voluntarily reduce his salary during this period.
Pursuant to the HB Option Agreement Amendments, the Company granted Mr. Bartel the option to purchase an additional: (a) 400,000 shares of the Company’s common stock pursuant to the 2015 Option Agreement, (b) 150,000 shares of the Company’s common stock pursuant to the 2017 Option Agreement, and (c) 400,000 shares of the Company’s common stock pursuant to the HB Option Agreement (such options being hereinafter referred to collectively as the “HB Amended Options”), for a total of 950,000 additional shares for Mr. Bartel. The exercise price for the HB Amended Options is $3.49 per share.
Additionally, as part of the HB Option Agreement Amendments, the Company agreed to reprice all outstanding, unexercised options granted pursuant to the Original HB Option Agreements (950,000 total) to the fair market value of the common stock of the Company, determined as the official NASDAQ closing share price on March 30, 2020, which was $3.49 (the “HB Repricing”). However, the HB Repricing would not take effect until the stockholders approve. Upon approval by the stockholders, this would result in a total of 1,900,000 shares granted to Mr. Bartel pursuant to the Original HB Option Agreements and the HB Option Agreement Amendments.
On May 29, 2020, the stockholders of the Company approved the HB Option Agreement Amendments, the HB Amended Options and the HB Repricing.
The information set forth above relating to the Original HB Option Agreements and the HB Option Agreement Amendments between Travelzoo and Mr. Bartel is qualified in its entirety by reference to the full text of the applicable agreements, which were all attached as appendices or incorporated by reference to the Company’s Schedule 14A, filed with the Securities and Exchange Commission (SEC) on April 16, 2020, and which are all incorporated by reference herein.
Option Grant to Lisa Su, Chief Accounting Officer
On March 30, 2020, with approval from the Board, the Company entered into a Nonqualified Stock Option Agreement (the “LS Option Agreement”) with Lisa Su, Chief Accounting Officer, pursuant to which the Company granted Ms. Su the option to purchase up to 100,000 shares of the Company’s Common Stock (such option being hereinafter referred to as the “LS Option”), subject to stockholder approval.
The exercise price of the LS Option is $3.49 per share. The LS Option is expected to vest over four years in equal installments of 25% on March 30, 2021, March 30, 2022, March 30, 2023 and March 30, 2024. The LS Option cannot be exercised after the expiration of the term of the LS Option, which is five (5) years from the date of grant.
On May 29, 2020, the stockholders of the Company approved the LS Option Agreement and the LS Option.
The information set forth above relating to the LS Option Agreement between Travelzoo and Ms. Su is qualified in its entirety by reference to the full text of the agreement, which was attached as an appendix to the Company’s Schedule 14A, filed with the Securities and Exchange Commission (SEC) on April 16, 2020, and which is incorporated by reference herein.