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EXHIBIT 10.7
TRAVELCENTERS OF AMERICA, INC.
1997 STOCK INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
NONQUALIFIED STOCK OPTION AGREEMENT, dated as of January 1, 2000,
between TravelCenters of America, Inc., a Delaware corporation (the "Company"),
and _______________ (the "Optionee"), an officer, employee or director of the
Company or one of its Affiliates.
The Compensation Committee (the "Committee") of the Company's Board of
Directors (the "Board"), as administrator of the TravelCenters of America, Inc.
1997 Stock Incentive Plan (the "Plan"), has determined that the purposes of the
Plan will be furthered by awarding to the Optionee options under the Plan.
Capitalized terms defined in the Plan and not otherwise defined herein shall
have the meaning given such terms in the Plan.
In consideration of the foregoing and of the mutual undertakings set
forth in this Nonqualified Stock Option Agreement ("Agreement"), the Company and
the Optionee agree as follows:
SECTION 1. GRANT OF OPTION.
1.1. The Company hereby grants to the Optionee options to purchase the
number of shares of common stock, par value $.01 per share, of the Company
("Common Stock"), at the times, in the amounts and at the purchase prices set
forth on Exhibit A hereto (collectively, the "Options").
1.2. Each Option granted hereby is intended to be a nonqualified stock
option subject to the provisions of section 83 of the Internal Revenue Code of
1986, as amended (the "Code"), and is not intended to qualify for special tax
treatment as a statutory stock option subject to the provisions of section 422
of the Code.
SECTION 2. VESTING AND EXERCISABILITY.
2.1. Each Option shall vest and become exercisable, in whole or in
part, in accordance with Exhibit A attached hereto, with respect to the shares
of Common Stock subject thereto if and only if, and to the extent that, the
applicable performance target established by the Committee with respect to such
Option is determined by the Committee to be satisfied. If the applicable
performance target is not satisfied, then such Option shall not vest or become
exercisable and shall be forfeited.
2.2. The Options may be exercised at any time and from time to time in
whole or in part for the shares of Common Stock subject thereto, within the
limitations on exercisability set forth above.
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2.3. Unless terminated earlier, the unexercised portion of the Options
shall automatically and without notice terminate and become null and void on
December 31, 2006.
2.4. Plan Section 3.11(c) (providing for acceleration of vesting of
options upon a "Change of Control" and "IPO" as such terms are defined in Plan
Section 3.11(e)) shall not apply to the Option. As contemplated by Plan Section
3.11(c), this Section 2.4 shall be deemed to vary the provisions of Plan Section
3.11(c).
SECTION 3. METHOD OF EXERCISE. Each Option or any part thereof may be
exercised in accordance with Section 2 of this Agreement by giving written
notice of exercise to the Company, on a form to be provided by the Committee for
that purpose, and by specifying the number of whole shares of Common Stock with
respect to which the Option is being exercised, together with full payment of
the purchase price for the number of shares purchased. Payment of the purchase
price shall be made by certified or official bank check payable to the Company
(or the equivalent thereof acceptable to the Committee), or by cashless exercise
in accordance with Plan Section 2.6(c) provided that only shares of Common Stock
held by the Optionee for at least six months prior to the date of exercise may
be used for such purpose. As soon as practicable after it receives payment of
the purchase price, subject to the provisions of Plan Section 3.2, the Company
shall deliver to the Optionee a certificate or certificates for the shares of
Common Stock so purchased, which shares shall bear a restrictive legend in
accordance with Section 6 of this Agreement (or as otherwise determined by the
Committee). The shares of Common Stock so delivered automatically shall become
subject to the terms and conditions of the Supplemental Institutional and
Management Stockholders' Agreement, (the "Supplemental Stockholders' Agreement")
by and among the Company, the Optionee and the other parties thereto, as it may
be amended, copies of which are on file in the office of the Company and will be
furnished to the Optionee.
SECTION 4. TERMINATION OF EMPLOYMENT OR SERVICE.
4.1. IN GENERAL. Except as provided elsewhere herein, the non-vested
portion of any Option shall terminate and expire upon the Optionee's termination
of employment or service; the vested portion shall expire when it may no longer
be exercised pursuant to the provisions of the Plan and this Agreement
(including this Section 4). The "vested portion" of any Option shall mean the
portion thereof which is vested (whether or not then exercisable) immediately
prior to the Optionee's termination of employment for any reason.
4.2. IMPROPER ACTIVITY; QUIT.
(a) IMPROPER ACTIVITY. If the Optionee's employment is
terminated for cause, whether or not he is a party to a written employment
contract, the vested and exercisable portion of each Option granted hereunder
may be exercised until the earlier of (a) 30 days after his employment
terminates or (b) the date on which the Option otherwise terminates or expires
in accordance with the applicable provisions of the Plan and this Agreement. For
purposes of this Section 4, an Optionee's employment shall be deemed to be
terminated for "cause" if he is discharged for "cause" or any like term as
defined in a written employment contract with the Optionee, if any.
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(b) QUIT. If the Optionee quits employment, whether or not he
is a party to a written employment contract, each Option granted hereby shall
terminate and expire as of the close of business on the day the Optionee's
employment terminates.
4.3. REGULAR TERMINATION; PERMANENT DISABILITY. If the Optionee's
employment terminates for reasons other than as provided in Section 4.2 or 4.4
of this Agreement, including for "Permanent Disability," the vested and
exercisable portion of each Option granted hereunder may be exercised until the
earlier of (a) 60 days after his employment terminates or (b) the date on which
the Option otherwise terminates or expires in accordance with the applicable
provisions of the Plan and this Agreement.
4.4. DEATH. In the event that the Optionee's employment terminates by
reason of death, or if the Optionee's employment shall terminate as described in
Section 4.3 of this Agreement and he dies within the 60-day period described
therein and while some portion of any Option is vested and/or exercisable, the
portion, if any, of any such Options which were vested and exercisable
immediately prior to the Optionee's death shall be exercisable by the person to
whom the Options have passed under the Optionee's will (or, if applicable,
pursuant to the laws of descent and distribution) until the earlier of (a) one
year after the Optionee's death or (b) the date on which the Options otherwise
terminate or expire in accordance with the applicable provisions of the Plan and
this Agreement (disregarding Section 4.3 of this Agreement).
4.5. PAYMENT. For purposes of any post-employment exercisability of
each Option in accordance with this Section 4, payment of the purchase price in
accordance with Section 3 of this Agreement shall be satisfied if made in
accordance with Plan Section 2.6(b)(i) or (c).
SECTION 5. CALL AND PUT OPTIONS; LOOK BACK RIGHT.
5.1. CALL AND PUT OPTIONS. The shares of Common Stock issued upon
exercise of all or any portion of an Option shall be subject to a call right by
the Company, the other "Management Stockholders" and the "Investors" (as such
terms are defined in Plan Section 2.8) and shall be subject to a put right by
the Optionee (and his estate, legal representative and "Permitted Transferees"
(as such term is defined in Plan Section 3.3)) following the Optionee's
termination of employment, all in accordance with the provisions of Plan Section
2.8. Notwithstanding the preceding sentence and the provisions of Plan Section
2.8, no Option shall be subject to any call right or put right if, and to the
extent, that any such right would cause the Company, a Management Stockholder,
an Investor, or the Optionee (or his estate, legal representative or Permitted
Transferee) to incur any liability under Rule 16b-3 of the Act.
5.2. LOOK BACK RIGHT. The shares of Common Stock issued upon exercise
of all or any portion of an Option shall be entitled to participate in the look
back right following the Optionee's termination of employment in accordance with
the provisions of Plan Section 3.11(d).
SECTION 6. NON-TRANSFERABILITY.
6.1. No right granted to the Optionee under the Plan or this Agreement
shall be assignable or transferable (whether by operation of law or otherwise
and whether voluntarily or
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involuntarily), other than by will or by the laws of descent and distribution.
During the lifetime of the Optionee, all rights granted to the Optionee under
the Plan or under this Agreement shall be exercisable only by the Optionee.
Shares of Common Stock acquired upon exercise of any portion of an option
granted to an Optionee under the Plan shall not be transferable to any person
other than (i) to the Optionee's parent, spouse, ex-spouse or child (or any
trust for the benefit of any such person) or (ii) pursuant to the laws of
descent and distribution. Such shares shall remain subject to the call option as
set forth in Plan Section 2.8(a) and the put option as set forth in Plan Section
2.8(b) upon the Optionee's termination. Each transferee shall agree in writing
to be bound by all of the provisions of the Plan and this Agreement, and no such
transferee shall be permitted to make any transfer other than in accordance with
the terms of the Plan or this Agreement. Any sale, assignment, mortgage, pledge,
encumbrance or other transfer in violation of this Section 6 shall be null and
void and of no force and effect.
6.2. The certificate or certificates of shares of Common Stock issued
pursuant to the terms of this Agreement shall bear a legend in substantially the
following form:
"The securities represented by this certificate are subject to the
terms and condition (including forfeiture and restrictions against
transfer) contained in a nonqualified Stock Option Agreement entered
into between the registered holder hereof and TravelCenters of America,
Inc. Copies of such Nonqualified Stock Option Agreement are on file in
the Office of the Secretary of TravelCenters of America, Inc.
The securities represented by this certificate are further subject to a
Supplemental Institutional and Management Stockholders' Agreement among
the issuer of such securities (the "Company") and certain of the
Company's stockholders. A copy of such Supplemental Institutional and
Management Stockholders' Agreement will be furnished without charge by
the Company to the holder hereof upon written request. By acceptance of
this certificate, each holder hereof agrees to be bound by the
provisions of such agreements."
SECTION 7. RIGHT OF DISCHARGE RESERVED.
Nothing in the Plan or this Agreement shall confer upon the Optionee
the right to continue in the employment or service of the Company or any of its
Affiliates or affect any right that the Company or such Affiliate may have to
terminate the employment or service of the Optionee.
SECTION 8. NO STOCKHOLDER RIGHTS.
Neither the Optionee nor any person succeeding to the Optionee's rights
hereunder shall have any rights as a stockholder with respect to any shares
subject to an Option until the date of the issuance of a stock certificate or
certificates to him for such shares. Except for adjustments made pursuant to
Plan Section 3.5 (as described in Section 9 of this Agreement), no adjustment
shall be made for dividends, distributions or other rights (whether ordinary or
extraordinary, and whether in cash, securities or other property) for which the
record date is prior to the date such stock certificate is issued.
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SECTION 9. PLAN PROVISIONS TO PREVAIL.
This Agreement shall be subject to all of the terms and provisions of
the Plan, which are incorporated hereby and made a part hereof, including,
without limitation, the provisions of Plan Section 3.2 (generally relating to
consents required by securities and other laws), Plan Section 3.4 (generally
relating to tax withholding obligations), Plan Section 3.5 (generally relating
to adjustments to the number of shares of Common Stock subject to the Option and
the option exercise price, upon certain changes in capitalization, provided that
the Committee shall be required to make an appropriate adjustment in the
circumstances described in Plan Section 3.5) and, as varied herein, Plan Section
3.11 (generally relating to the effects of certain reorganizations and other
extraordinary transactions, provided that in such an event payment of the
purchase price in accordance with Section 3 of this Agreement shall be satisfied
if made in accordance with Plan Section 2.6(b)(i) or (c)). In the event there is
any inconsistency between any of the provisions of the Agreement and the Plan,
except as contemplated by the Plan, the provisions of the Plan shall govern.
SECTION 10. OPTIONEE'S ACKNOWLEDGMENTS.
By entering into this Agreement the Optionee agrees and acknowledges
that (a) he has received and read a copy of the Plan, including Plan Section
3.8(c) (generally relating to waivers of continued exercise or vesting of
awards, damages and severance entitlements related to non-continuation of
awards), and accepts this Option upon all of the terms thereof, (b) he agrees to
be bound by the provisions of the Supplemental Stockholders' Agreement described
in Section 3 of this Agreement and to execute such documents with respect
thereto as the Committee may require, and (c) that none of the Board, the
Committee, the Affiliates (including their respective parents and subsidiaries)
and their respective shareholders, officers, directors, employees, agents and
counsel shall be liable for any action or determination with respect to the Plan
or any award thereunder or this Agreement.
SECTION 11. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and the successors and assigns of the Company and, to the extent
set forth in Plan Section 3.3 and Section 6 of this Agreement, the heirs and
personal representatives of the Optionee.
SECTION 12. GOVERNING LAW.
THIS AGREEMENT IS DEEMED ADOPTED, MADE AND DELIVERED IN NEW YORK AND
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
SECTION 13. NOTICES.
Any notice or other communication required or which may be given
hereunder shall be given in writing and shall be delivered personally, sent by
facsimile transmission or overnight courier or sent by registered or certified
mail, return receipt requested, postage prepaid,
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and shall be deemed given when so delivered, personally or sent by facsimile
transmission or overnight courier, or if mailed, four days after the mailing, as
follows, to:
TravelCenters of America, Inc.
00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000-0000
Attention: Chief Financial Officer
Telecopy No.: (000) 000-0000
and a copy to:
The Clipper Group, L.P.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxx
Telecopy No.: (000) 000-0000
or at such other address as the Company may hereafter designate to the Optionee
by notice as provided herein. All notices to be given to the Optionee hereunder
shall be addressed to the Optionee at the address set forth below or at such
other address as the Optionee may hereafter designate to the Company by notice
as provided herein. Either party may give any notice or other communication
hereunder using any other means (including ordinary mail or electronic mail),
but no such notice or other communication shall be deemed to have been duly
given unless and until it actually is received by the individual for whom it is
intended. Either party may change the address to which notices and other
communications hereunder are to be delivered by giving the other party notice in
the manner herein set forth.
SECTION 14. CANCELLATION AND SUBSTITUTION OF OPTION.
The Committee may cancel any Option granted under the Plan and issue a
new award in substitution therefor upon such terms as the Committee may in its
sole discretion determine (provided that the substituted award shall satisfy all
applicable Plan requirements as of the date such new award is made) without the
Optionee's consent, where the substituted award confers upon the Optionee, until
exercised, substantially the same net-economic benefit inherent in the replaced
Option, taking into account any post-exercise puts and calls, etc., and with the
Optionee's consent if otherwise.
SECTION 15. SECTION HEADINGS.
The section headings contained herein are for the purposes of
convenience only and are not intended to define or limit the contents of said
sections.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
TravelCenters of America, Inc.
By: _____________________________________
Name: _______________________________
Title: ______________________________
ATTEST: __________________
-------------------------------------
(Employee)
TravelCenters of America, Inc.
00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000-0000
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EXHIBIT A
---------
The Optionee shall receive the following options to purchase shares of
Common Stock:
EXERCISE PRICE VESTING EVENT/
-------------- --------------
GRANT DATE NUMBER OF SHARES PER SHARE PERFORMANCE TARGET
---------- ---------------- --------- ------------------
January 1, 2000 __________ $33.30 Change of Control (as defined
below*) on or before December 31,
2000 (unless such date is
extended by the Committee)
TravelCenters of America, Inc.
By:
---------------------------------------
Name:
-------------------------------
Title:
-------------------------------
Signed:
----------------------------
(Employee)
*A "Change of Control" shall mean the occurrence of any of the following:
(a) any "person," as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), becomes the beneficial owner (as defined in
Rule 13d-3 promulgated under the Exchange Act) of fifty-one
percent (51%) or more of the voting power of the
then-outstanding voting securities of the Company; provided,
however, that the foregoing does not apply to any such
acquisition that is made by (i) the Company or any Affiliate
or (ii) any employee benefit plan maintained either by the
Company or any Affiliate; or
(b) the Company merges into itself, or is merged or consolidated
with, another corporation and as a result of such merger or
consolidation less than fifty-one (51%) of the voting power of
the then-outstanding voting securities of the surviving or
resulting corporation immediately after such transaction are
owned in the aggregate by the former shareholders of the
Company immediately prior to such transaction;
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(c) all or substantially all the assets accounted for on the
consolidated balance sheet of the Company and its Affiliates,
in the aggregate, are sold or transferred to one or more
corporations or persons, and as a result of such sale or
transfer less than fifty-one percent (51%) of the voting power
of the then-outstanding voting securities of such corporation
or person immediately after such sale or transfer is held in
the aggregate by the former shareholders of the Company
immediately prior to such transaction or series of
transactions;
(d) fifty-one percent (51%) or more of the assets accounted for in
the consolidated balance sheet of Company and its Affiliates,
in the aggregate, are sold or transferred to one or more
corporations or persons, whether such sale or transfer is
accomplished by the sale or transfer of assets directly, the
sale or transfer of stock of the Company or one or more of its
affiliates or otherwise with, in any case, an aggregate value
of fifty-one percent (51%) or more of the aggregate value of
the Company and its Affiliates, or any combination of methods
by which fifty-one percent (51%) or more of the aggregate
value of the Company and its Affiliates are sold or
transferred, if, immediately after such sale or transfer, the
purchaser or transferee is less than fifty-one percent (51%)
owned in the aggregate, by the persons who are the
shareholders of the Company immediately prior to such sale or
transfer; or
(e) during any period of two (2) consecutive years, including,
without limitation, the year 1999, individuals who at the
beginning of any such period constitute the Board of Directors
of the Company cease, for any reason, to constitute at least a
majority thereof, unless the election or nomination for
election of each Director first elected during such period was
approved by a vote of at least a majority of the members of
the Board of Directors of the Company who were members of the
Board of Directors of the Company on the date of the beginning
of any such period.
Without otherwise limiting the generality of the foregoing, an IPO (as such term
is defined in Plan Section 3.11(e)) shall not be deemed a "Change of Control"
for purposes of this Agreement.
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