EXHIBIT 10.16
EXECUTION COPY
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of January 1, 2006, by and among TA
Operating Corporation, a Delaware corporation (the "Company"), TravelCenters
of America, Inc., a Delaware corporation ("Holdings") and Xxxxxx X. Xxx (the
"Employee").
In consideration of the parties' desire to assure the Company
and Holdings of the services of the Employee, and the mutual covenants herein
contained, the parties agree as follows:
1. EMPLOYMENT.
1.1 EMPLOYMENT, ACCEPTANCE AND TERM. Subject to Section
5 hereof, the Company and Holdings hereby agree to employ the Employee, and
the Employee agrees to serve the Company and Holdings, during the term of
this Agreement (the "Term") which shall commence January 1, 2006 (the
"Effective Date") and end on December 31, 2007 (the "Initial Term"), and
shall be renewed automatically for successive one calendar year periods
thereafter through December 31 of the calendar year in which the Employee
reaches age sixty-five (65), unless the Company gives the Employee or the
Employee gives the Company written notice of its or his intent not to renew
this Agreement, which notice must be given not later than December 31, 2006
if this Agreement is to expire at the end of the Initial Term or December 31
of the year last preceding the final calendar year of the Term if this
Agreement is to expire after the Initial Term; provided, however, that no
such notice given by either the Company or the Employee after a "Change of
Control" as defined in Section 1.2 hereof shall have the effect of
terminating this Agreement prior to the December 31 coinciding with or next
following the second anniversary of the date on which such Change of Control
occurs. The Employee
acknowledges that neither the Company nor Holdings shall have any obligation
to extend the Term beyond the Initial Term or to renew the Agreement after
any extension, or to enter into a new employment agreement upon the
expiration of the Term. Unless otherwise agreed between the parties in
writing, any continuation of the Employee's employment beyond the expiration
of the Term shall constitute an employment at will and shall not extend the
terms of this Agreement.
1.2 CHANGE OF CONTROL. Any of the following events shall
constitute a "Change of Control":
(i) 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
Holdings; 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
(ii) Holdings 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 Holdings immediately prior to
such transaction;
(iii) all or substantially all the assets accounted
for on the consolidated balance sheet of the Company and the
Affiliates, in the aggregate, are sold or transferred to one or more
corporations or persons, and as a result of such sale or
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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 Holdings immediately prior to such transaction
or series of transactions;
(iv) 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 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 Holdings immediately prior to such
sale or transfer; or
(v) during any period of two (2) consecutive years,
including, without limitation, the year 2005, individuals who at the
beginning of any such period constitute the Board of Directors of
Holdings 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 Holdings
who were members of the Board of Directors of Holdings on the date of
the beginning of any such period.
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Without otherwise limiting the generality of the foregoing,
an initial public offering of the Common Stock of Holdings shall not be
deemed a "Change of Control" for purposes of this Agreement.
2. DUTIES AND AUTHORITY.
2.1 OFFICE. Subject to Section 5 hereof, during the Term
the Employee will serve as the Senior Vice President and General Counsel of
the Company and Holdings, in accordance with the Certificates of
Incorporation and By-Laws of the Company and Holdings, respectively, and
subject to the direction of, and in accordance with the authority delegated
to the Employee by, the Boards of Directors of the Company and Holdings, and
reporting to the President and Chief Executive Officer.
2.2 DUTIES. Subject to Section 5 hereof, during the Term
the Employee shall devote all of his full working time and energies to the
business and affairs of the Company and, in connection therewith, shall
perform such duties, functions and responsibilities as are commensurate with
and appropriate to the position of an officer of the Company. Throughout the
Term, the Employee will use his best efforts, skills and abilities to promote
the interests of the Company and its Affiliates. For purposes of this
Agreement, the term "Affiliates" shall mean, collectively, Holdings, TA
Franchise Systems Inc., a Delaware corporation ("TAFSI"), TA Licensing, Inc.,
a Delaware corporation ("Licensing"), and all subsidiaries and affiliates of
the Company, Holdings, TAFSI, and Licensing.
3. COMPENSATION.
3.1 BASE SALARY. As compensation for services to be
rendered during the Term pursuant to this Agreement, the Company shall pay
the Employee a base salary at the rate of Two Hundred Eight Thousand Dollars
($210,000) per annum (the "Base Salary"), which
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amount shall be reviewed not less frequently than annually and which may be
increased but not decreased by action of the Board of Directors of the
Company or the Compensation Committee (as defined in Section 3.2 hereof) in a
manner consistent with the treatment of other employees of the Company as
approved by the Compensation Committee and payable currently in equal
biweekly installments or otherwise in accordance with the payroll policies of
the Company as from time to time in effect.
3.2 ANNUAL BONUS. For each fiscal year of the Company
during the Term (a "Fiscal Year"), commencing with the Fiscal Year ending
December 31, 2006, the Company shall pay to the Employee an annual bonus (the
"Annual Bonus"). The amount of each Annual Bonus shall be determined by the
Compensation Committee of the Board of Directors of the Company (the
"Compensation Committee"), based fifty percent (50%) upon corporate
performance (EBITDA goals) and fifty percent (50%) upon the Employee's
individual performance (MBO targets), and shall range from zero (0) to
sixty-five percent (65%) of the Base Salary in effect as of the first day of
the Fiscal Year (sixty-five percent (65%) of such Base Salary being the
"Target Bonus"). The MBO targets for the following Fiscal Year shall be
presented to and approved by the Board of Directors or Compensation Committee
of the Company in December of each year in a manner consistent with past
practice. The Annual Bonus shall be paid within thirty (30) days after the
completion of the audit by the Company's independent auditors of the
financial statements of the Company and its Affiliates for the Fiscal Year to
which the Annual Bonus applies.
4. ADDITIONAL BENEFITS.
4.1 BENEFIT PLANS. The Employee shall be entitled during
the Term, if and to the extent eligible, to participate in all employee
benefit plans of the Company or
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Holdings which the Company or Holdings provides to its executive employees
or officers generally, including, without limitation, a health and medical
insurance plan, basic life insurance, supplemental life insurance, basic
disability benefit plan, supplemental disability benefit plan, relocation,
retirement or pension plan or similar benefit plans, whether now in existence
or hereafter adopted; PROVIDED, HOWEVER, that neither the Company nor
Holdings shall be obligated to adopt, maintain or contribute to any such
benefit plans which, in their discretion, the Company and Holdings believe
would be imprudently expensive or otherwise inappropriate. Any new benefit
plan which the Company or Holdings provides to its executive employees, and
any change to a benefit plan which the Company or Holdings provides to its
executive employees, shall be applied consistently to all such executive
employees.
4.2 DIRECTOR'S AND OFFICER'S INSURANCE. Holdings has
purchased and Holdings or the Company will use reasonable efforts to maintain
during the Term, at Holdings' or the Company's expense, Director's and
Officer's liability insurance in a reasonable amount covering all insurable
acts of the Employee pursuant to this Agreement provided that the Employee's
coverage will not be less extensive than that provided by Holdings or the
Company to any other director or officer of Holdings, the Company or any
Affiliate.
4.3 FRINGE BENEFITS. The Employee shall be entitled
during the Term to the following additional benefits: (i) a company-owned
automobile of a make and model approved by the Compensation Committee as
appropriate for an officer of the position of the Employee; (ii)
company-owned club membership (or to the extent the club does not permit
company membership, reimbursement for individual membership) for fees, dues
and fixed expenses only, paid by the Company and/or the Employee, which shall
not exceed Ten Thousand
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Dollars ($10,000.00) per year; and (iii) paid vacation days in accordance
with standard Company policy for similarly situated officers.
5. TERMINATION OF EMPLOYMENT. The Employee's employment with
the Company shall terminate upon the death of the Employee, and the Company
shall have the right, at any time during the Term, by delivery of written
notice to the Employee, to terminate the Employee's employment as a result of
the Employee's Permanent Disability (as such term is defined in Section 5.1
hereof), for Cause (as such term is defined in Section 5.3 hereof) or for any
other reason, and the Employee shall have the right to resign, the
consequences of any such termination or resignation being as specified in
this Section 5:
5.1 DEATH; DISABILITY. If the Employee's employment with
the Company is terminated by reason of the Employee's death or Permanent
Disability during the Term, the obligations of the Company and Holdings under
this Agreement shall be satisfied by providing the benefits set forth in the
Company's life insurance or disability benefit plan or plans, as the case may
be. The Employee shall not be entitled to any other payments or compensation
under this Agreement except for (i) Base Salary accrued and unpaid to the
date of death or Permanent Disability, (ii) any vested benefits as of the
date of death or termination for Permanent Disability under any awards to the
Employee pursuant to the TravelCenters of America, Inc. 2001 Stock Option
Plan, and any other such plan or individual agreement adopted after the date
of this Agreement (collectively, the "Stock Incentive Plans"), or any amount
payable under any other benefit plan of the Company or any Affiliate, in
accordance with the terms of any such plan, (iii) an amount equal to the
product of (x) the Annual Bonus, if any, determined by the Compensation
Committee for the year in which the termination occurs, MULTIPLIED BY (y) the
fraction, the numerator of which equals the number of days the Employee
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was employed by the Company during the Fiscal Year in which such termination
occurs and the denominator of which is three hundred sixty-five (365), and
(iv) if the Employee and/or his spouse and dependents properly elect
continued medical coverage ("COBRA") in accordance with Code section 4980B,
the Company will pay the entire cost of the premiums for such continued
medical coverage for the maximum required period of coverage under Code
section 4980B(f). "Permanent Disability," as used in this Section 5.1, shall
mean the physical or mental inability of the Employee to perform, consistent
with past practice, the essential functions of such Employee's duties as
specified in Section 2.1 hereof, with reasonable accommodation to the extent
required by the applicable requirements of the Americans with Disabilities
Act, for at least twelve (12) consecutive months. Determination of Permanent
Disability shall be made initially by the Board of Directors of the Company.
If there is a disagreement between the Employee and the Company as to the
existence of such a Permanent Disability, such disagreement shall be resolved
by the determination of two physicians, one selected by the Employee and one
selected by the Company. If such physicians shall disagree, the decision
shall be made by a third physician selected by the first two physicians. The
fees and expenses of all of the physicians shall be paid by the Company.
5.2 RESIGNATION. If the Employee's employment with the
Company is terminated during the Term by reason of the Employee's resignation
(other than for "Good Reason" as defined in Section 5.5 hereof), all
obligations of the Company and Holdings, including, without limitation, the
obligation to pay salary or other amounts payable under this Agreement to or
for the benefit of the Employee, shall terminate upon the effective date of
such resignation, and the Employee shall not be entitled to any compensation
under this Agreement except for Base Salary accrued and unpaid through, and
any vested benefits under any awards to
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the Employee pursuant to the Stock Incentive Plans, or any amount payable
under any other benefit plan of the Company or any Affiliate in accordance
with the terms of such plan, as of the effective date of such resignation.
The Employee agrees to give the Company one hundred twenty (120) days notice
of his resignation (other than for Good Reason).
5.3 COMPANY'S RIGHT TO TERMINATE FOR CAUSE. If the
Employee shall be discharged for "Cause" (as defined below) during the Term,
all obligations of the Company and Holdings, including, without limitation,
the obligation to pay salary or other amounts payable under this Agreement to
or for the benefit of the Employee, shall terminate upon the effective date
of such discharge, and the Employee shall not be entitled to any compensation
under this Agreement except for Base Salary accrued and unpaid through, and
vested benefits under any awards to the Employee pursuant to the Stock
Incentive Plans, or any amount payable under any other benefit plan of the
Company or any Affiliate in accordance with the terms of such plan, as of the
effective date of such discharge. As used in this Agreement, "Cause" shall
mean a discharge in one or more of the following events:
(i) the Employee's misappropriation of money or
other assets or property, breach of fiduciary duty, tortious conduct or
other act of dishonesty with respect to the Company or any Affiliate;
the Employee's conviction of, or plea of guilty or nolo contendere to,
any act of fraud, embezzlement, tortious conduct or any crime for an
offense that constitutes a felony, or the Employee's indictment for any
crime involving dishonesty or moral turpitude;
(ii) the Employee's continuing, repeated willful
failure or refusal to follow written directions of the Board of
Directors of the Company or Holdings which failure or refusal continues
following the Employee's receipt of written notice
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from such Board of Directors advising him of the acts or omissions that
constitute the failure to perform his duties as an officer of the
Company or Holdings, if such failure continues after the Employee shall
have had a reasonable opportunity to correct the act or omissions so
complained of;
(iii) the Employee's violation of the Company's drug
abuse or alcohol abuse policy; or
(iv) the Employee's breach of any covenant set forth
in Section 6 hereof.
5.4 TERMINATION FOR ANY OTHER REASON OR RESIGNATION FOR A
GOOD REASON. If (a) the Employee is discharged by the Company during the
Term for any reason (other than for "Cause" (as defined in Section 5.3
hereof) or by reason of the Employee's death or "Permanent Disability" (as
defined in Section 5.1 hereof)) or (b) the Employee's employment with the
Company is terminated by reason of the Employee's resignation for a "Good
Reason" (as defined in Section 5.5 hereof) occurring during the Term, then
all obligations of the Company and Holdings hereunder shall cease except that
the Employee shall be entitled to the following from the Company:
(i) any Base Salary accrued and unpaid to the date
of such discharge or resignation, which shall be payable within thirty
(30) days of such discharge or resignation, plus an amount equal to the
product of (A) multiplied by (B), where (A) equals his Annual Bonus, if
any, determined by the Compensation Committee for the year in which his
discharge or resignation occurred and where (B) equals a fraction, the
numerator of which equals the number of days in the calendar year
during which the Employee was employed by the Company, and the
denominator of which equals three
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hundred sixty-five (365), which amount shall be payable on the same
date that active officers are paid similar Annual Bonuses;
(ii) during the twenty-four (24) month period
following the date of his discharge or termination, a monthly amount
equal to the greater of (i) his monthly rate of Base Salary in effect
as of the date immediately preceding any Change of Control or (ii) his
monthly rate of Base Salary in effect as of the date of his discharge
or termination, which shall be payable in such manner and at such times
as active employees of the Company are paid base salaries;
(iii) an amount equal to two hundred percent (200%)
of the greater of the Employee's Target Bonus as set forth in Section
3.2 hereof for the Fiscal Year ended December 31, 2006 or the
Employee's Target Bonus as set forth in Section 3.2 hereof for the
Fiscal Year in which his Termination of Employment occurs, which amount
shall be payable in two separate payments each equal to one-half of
such amount (i.e., each payment equal to one hundred percent (100%) of
the Target Bonus amount). The first such payment shall be payable at
such time and in such manner as active officers of the Company
customarily are paid similar bonuses for the Fiscal Year next following
the Fiscal Year in which his discharge or resignation occurs (or in
accordance with past practice if such bonuses are not being paid to
such active officers), and the second such payment shall be payable at
such time and in such manner as active officers of the Company
customarily are paid similar bonuses for the second Fiscal Year
following the Fiscal Year in which his discharge or resignation occurs
(or in accordance with past practice if such bonuses are not being paid
to such active officers), provided
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that the second payment shall be made not later than the date of the
last scheduled payment payable pursuant to Section 5.4(ii) hereof;
(iv) any vested benefits as of the date of such
resignation or discharge under any awards to the Employee pursuant to
the Stock Incentive Plans, or any amount payable under any other
benefit plan of the Company or any Affiliate in accordance with the
terms of such plan; and
(v) if the Employee (and/or his spouse and/or
dependents) properly elect continued COBRA medical coverage, the
Company and the Employee (and/or his spouse and/or dependents) each
shall pay their same portions of the premiums for such medical coverage
as if the Employee had remained in the employ of the Company until the
Participant shall elect to discontinue such coverage, provided that the
obligation of the Company under this Section 5.4(v) shall cease upon
the expiration of the later of (A) the maximum required period of
coverage under Code Section 4980B(f), or (B) twenty-four (24) months
after the date of such discharge or resignation;
PROVIDED, HOWEVER, that, in each case in clauses (i) through (v) above in
this Section 5.4, if at any time during which the Company is obligated to
make payments thereunder the Employee engages in any activity violative of
Section 6 hereof, then, as of the date the Employee commences engaging in
such activity, all of the Company's obligations to pay compensation or other
amounts under this Agreement to or for the benefit of the Employee shall
terminate except for (i) Base Salary then accrued and unpaid, (ii) any vested
benefits under any awards to the Employee pursuant to the Stock Incentive
Plans, and (iii) any amount payable under any other benefit plan of the
Company or any Affiliate in accordance with the terms of such plan.
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5.5 RESIGNATION FOR GOOD REASON. As used in this
Agreement, "Good Reason" shall mean a resignation by the Employee as a result
of one or more of the following events occurring during the Term:
(i) a material reduction in the Employee's
compensation (including the additional benefits described in Section 4
hereof) in the aggregate or his duties or title with respect to the
Company or any of its Affiliates (other than nonsubstantive, titular or
nominal changes);
(ii) the Company requires the Employee to change his
principal location of work to any location which is outside of the
Cleveland, Ohio, metropolitan area, without his prior written consent;
or
(iii) a material breach of this Agreement by the
Company or any of its Affiliates unless such breach is substantially
cured within a reasonable period of time (hereby defined as thirty (30)
days) after written notice advising the Company of the acts or
omissions constituting such breach is actually received by the Company
in accordance with Section 9.5 hereof.
If the Employee claims the existence of a Good Reason, he must
notify the Company in writing of the event constituting Good Reason not later
than sixty (60) days following the later to occur of the occurrence of the
event (e.g., the actual reduction in compensation, the scheduled date of
relocation or the date of the breach) constituting Good Reason or his actual
knowledge thereof. If the event which the Employee claims to be a Good
Reason is not cured within thirty (30) days following the date of such
notice, the Employee must resign within ten (10) days following the thirty
(30) day cure period in order to invoke his right to resign for Good Reason.
If no such timely resignation occurs or no such timely written
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notices are given, the Employee's right to resign for Good Reason with
respect to such event shall be permanently waived.
5.6 EMPLOYEE BENEFIT PLANS. In addition to such payments
and benefits as may be provided to the Employee upon his termination of
employment during the Term as set forth herein, the Employee (or his estate,
legal representative or employee benefit plan beneficiary, as the case may
be) shall be entitled to receive such other benefits as are expressly so
provided under the terms of any employee benefit plan or other contractual
arrangement maintained by the Company or any Affiliate; PROVIDED, HOWEVER,
that the Compensation Committee may reduce benefits under any such other plan
or arrangement, if permissible thereunder, or may reduce benefits hereunder,
to the extent it both (i) determines in good faith that such benefits are
clearly duplicative or unintended (e.g., duplicative severance benefits or
more than one company car), and (ii) permits full payment of the better (in
the case of two duplicative benefits) or the best (in the case of more than
two duplicative benefits) of the benefits. This Section 5.6 shall not be
deemed to permit any reduction in any amount otherwise payable to the
Employee under any nonqualified deferred compensation plan of the Company or
any Affiliate.
6. COVENANTS OF THE EMPLOYEE.
6.1 COVENANTS AGAINST COMPETITION. The Employee
acknowledges that (a) the Company and its Affiliates are engaged in the
business of operating a truckstop network, with facilities that provide motor
fuel pumping along with one or more of the following services: truck care and
repair services, a fast food restaurant, a full-service restaurant, a
convenience store, showers, laundry facilities, telephones, recreation rooms,
truck weighing scales and other compatible business services approved by the
Company (the "Business"); (b)
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the Employee is one of the limited number of persons who developed the
Business; (c) such Business is conducted nationally; (d) the Employee's work
for the Business has given him, and will continue to give him, trade secrets
of, and confidential information concerning, the Business; (e) the Employee
acknowledges that the Employee's knowledge of such trade secrets and of, and
confidential information concerning, the Business would be of significant
assistance and value to any "TA Truck-Stop Competitor," which for purposes of
this Section 6 shall mean Petro, Flying J, AMBEST, PTP, Xxxx Bros., Giant,
All American, Rip Griffin, Bosselman's, Xxxxx Trucker's Home, Texaco/Equilon,
Pilot, Love's, Speedway (Emro), Little America, Total, Mapco, Coastal, Fuel
Mart and any other chain or network of national or regional "truck stops" as
such term is generally understood in the trucking industry, including any
affiliates or successors to any of the foregoing; and (f) the agreements and
covenants contained in this Section 6.1 are essential to protect the Business
and the goodwill associated with it. Accordingly, the Employee covenants and
agrees as follows:
6.1.1 NON-COMPETE. From the date hereof through the later
of (A) the last day of the Term and (B) the last date through which the
Employee is entitled to receive any payment pursuant to Section 5.4(ii)
hereof, the Employee shall not, in the United States of America, directly or
indirectly, (x) enter the employ of or render any services to any TA
Truck-Stop Competitor, or (y) have an interest in any TA Truck-Stop
Competitor, whether such interest is direct or indirect, and including any
interest as a partner, shareholder, trustee, consultant, officer or similarly
situated person; PROVIDED, HOWEVER, that in any case, the Employee may own,
solely as an investment, securities of any TA Truck-Stop Competitor that are
publicly traded if the Employee (a) is not a controlling person and (b) does
not, directly or indirectly, own five percent (5%) or more of any class of
securities of such person. After the date which is the later
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of (A) and (B) in the preceding sentence, the Employee shall be free to
engage in any lawful business activities, including activities for or related
to a TA Truck-Stop Competitor. The covenant contained in this Section 6.1.1
shall survive the termination of this Agreement.
6.1.2 CONFIDENTIAL INFORMATION. The Employee agrees that
neither during the Term nor at any time thereafter shall he (i) disclose to
any person not employed by the Company or an Affiliate, or not engaged to
render services to the Company or an Affiliate or (ii) use for the benefit of
himself or others, any confidential information of the Company, any of the
Company's Affiliates or of the Business obtained by him, including, without
limitation, "know-how," trade secrets, details of customers', suppliers',
manufacturers' or distributors' contracts with the Company or any of the
Company's Affiliates, pricing policies, financial data, operational methods,
marketing and sales information, marketing plans or strategies, product
development techniques or plans, plans to enter into any contract with any
person or any strategies relating thereto, technical processes, designs and
design projects, and other proprietary information of the Company, the
Company's Affiliates or of the Business or the business of any of the
Company's Affiliates; PROVIDED, HOWEVER, that this provision shall not
preclude the Employee from (a) making any disclosure required by law or court
order or (b) using or disclosing information (i) known generally to the
public (other than information known generally to the public as a result of a
violation of this Section 6.1.2 by the Employee), (ii) acquired by the
Employee outside of his affiliation with the Company or any of the Company's
Affiliates, or (iii) of a general nature (that is, not related specifically
to the Business) that ordinarily would be learned, developed or obtained by
individuals similarly active and/or employed in similar capacities by other
companies in the same Business as the Company or any of the Company's
Affiliates. The Employee agrees that all confidential information of the
Company or any of the
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Company's Affiliates shall remain the Company's or the Company's Affiliates',
as the case may be, property and shall be delivered to the Company or to the
Company's Affiliates, as the case may be, promptly upon the termination of
the Employee's employment with the Company or at any other time on request.
The covenant contained in this Section 6.1.2 shall survive the termination of
this Agreement.
6.1.3 NONSOLICITATION BY RESTRICTED PERSONS. From the date
hereof through the later of (A) the last day of the Term and (B) the last
date through which the Employee is entitled to receive any payment pursuant
to Section 5.4(ii) hereof, the Employee shall not, directly or indirectly,
(a) solicit any employee to leave the employment of the Company or the
employment of any of the Company's Affiliates or (b) hire any employee who
has left the employ of the Company or the employ of any of the Company's
Affiliates within six (6) months after termination of such employee's
employment with the Company or such employee's employment with any of the
Company's Affiliates, as the case may be (unless such employee was discharged
by the Company without Cause and excepting clerical and similar employees).
The covenant contained in this Section 6.1.3 shall survive the termination of
this Agreement.
7. RIGHTS AND REMEDIES UPON BREACH OF COVENANTS. If the
Employee breaches, or threatens to commit a breach of, any of the provisions
of Section 6 hereof (the "Restrictive Covenants"), the Company shall have the
following rights and remedies, each of which rights and remedies shall be
independent of the others and severally enforceable, and all of which rights
and remedies shall be in addition to, and not in lieu of, any other rights
and remedies available to the Company at law or in equity:
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7.1 SPECIFIC PERFORMANCE. The right and remedy to have
the Restrictive Covenants specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and that money
damages will not provide an adequate remedy to the Company.
7.2 SEVERABILITY OF COVENANTS. The Employee acknowledges
and agrees that the Restrictive Covenants are reasonable and valid in
geographical and temporal scope and in all other respects. If any court
determines that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable, the remainder of the Restrictive Covenants shall
not thereby be affected and shall be given full effect to the greatest extent
possible, without regard to the invalid portions.
7.3 BLUE PENCILING. If any court construes any of the
Restrictive Covenants, or any part thereof, to be unenforceable because of
the duration of such provision or the area covered thereby, such court shall
have the power to reduce the duration or area of such provision and, in its
reduced form, such provision shall be enforceable and shall be enforced to
the greatest extent possible.
7.4 ENFORCEABILITY IN JURISDICTIONS. The parties intend
to and hereby do limit jurisdiction to enforce the Restrictive Covenants upon
the courts of the jurisdiction of the Employee's last principal place of
business under this Agreement and the sites of the alleged breach of the
Restrictive Covenants.
7.5 SURVIVAL. The provisions of this Section 7 shall
survive the termination of this Agreement.
8. REPRESENTATIONS OF EMPLOYEE. The Employee hereby
represents and warrants to the Company (a) that there are no restrictions,
agreements or understandings
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whatsoever to which the Employee is a party which would prevent or make
unlawful the execution or performance of this Agreement or his employment
hereunder and (b) that the execution of this Agreement and the Employee's
employment hereunder shall not constitute a breach of any contract, agreement
or understanding to which he is a party or by which he is bound.
9. OTHER PROVISIONS.
9.1 CONFLICT. To the extent any provisions of this
Agreement conflict with the terms of any existing plan, policy or arrangement
affecting the compensation or benefits of the Employee, the provisions of
this Agreement will control.
9.2 WITHHOLDING. The Company may withhold from any
amounts payable under this Agreement such federal, state or local taxes or
other amounts as shall be required to be withheld pursuant to any applicable
law or regulation.
9.3 CODE SECTION 280G. The Employee's right to receive
any payment or benefit hereunder in connection with his termination of
employment or otherwise which may be characterized as a "parachute payment"
(within the meaning of Code section 280G), or deemed to constitute a payment
made in connection with or contingent upon a change of control of the Company
or Holdings for purposes of Code section 280G, is contingent upon and subject
to the approval of holders of record of stock of the Company or Holdings, as
applicable, representing more than seventy-five percent (75%) of the voting
power of all outstanding stock of the Company or Holdings, as the case may
be, immediately prior to such change of control (determined without regard to
any stock actually or constructively owned by the Employee and by certain
other persons as determined by the Company).
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The Company and Holdings covenant that they will present
this Agreement in a timely manner to the shareholders of the Company or
Holdings or both, as appropriate, with a unanimous recommendation of the
Boards of Directors of the Company and Holdings that it be approved by such
shareholders.
9.4 SUBSIDIARIES AND AFFILIATES. Notwithstanding any
contrary provision of this Agreement, to the extent it does not adversely
affect the Employee, the Company and Holdings may provide the compensation
and benefits to which the Employee is entitled hereunder through one or more
subsidiaries or affiliates, including, without limitation, Holdings.
9.5 NOTICES. Any notice or other communication required
or which may be given hereunder shall be 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, and
shall be deemed given when so delivered personally or sent by facsimile
transmission or overnight courier, or if mailed, four days after the date of
mailing, as follows:
(i) if to the Company or Holdings, to it at:
TravelCenters of America, Inc.
00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000-0000
Attention: General Counsel
Telecopy No: (000) 000-0000
and a copy to:
Xxxxxx, Halter & Xxxxxxxx LLP
1400 XxXxxxxx Investment Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopy No. (000) 000-0000
20
and, if prior to a Change of Control, a copy to:
Oak Hill Capital Management, Inc.
Park Avenue Tower
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Rowan X.X. Xxxxxx
Telecopy No.: (000) 000-0000
or at such other address as such person may
hereafter designate to the Employee by notice as
provided herein; and
(ii) if to the Employee, to him at the address set forth
below or at such other address as the Employee may
hereafter designate to each of the persons listed in
clause (i) above by notice as provided herein.
Xxxxxx X. Xxx
00000 Xxxxxx Xxxx
Xxx Xxxxxxx, Xxxx 00000
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.
9.6 ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, written or oral, with respect thereto,
including, without limitation, the employment agreement by and between the
Company, Holdings and the Employee dated as of January 1, 2002. The Employee
acknowledges that, as of the date this Agreement is executed, except for the
annual bonus for the Fiscal Year ending December 31, 2005, he has received
all amounts accrued or due
21
under any prior agreements, and that he is not entitled to receive any other
additional amounts pursuant to any such agreements.
9.7 WAIVERS AND AMENDMENTS. This Agreement may be
amended, modified, superseded, canceled, renewed or extended, and the terms
and conditions hereof may be waived, only by a written instrument signed by
the parties or, in the case of a waiver, by the party waiving compliance. No
delay on the part of any party in exercising any right, power or a privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part
of any party of any right, power or privilege hereunder, nor any single or
partial exercise of any right, power or privilege hereunder, preclude any
other or further exercise thereof or the exercise of any other right, power
or privilege hereunder. The rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies which any party
may otherwise have at law or in equity.
9.8 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Ohio applicable to
agreements made and to be performed entirely within such State.
9.9 ASSIGNMENT; BINDING EFFECT. This Agreement, and the
Employee's rights and obligations hereunder, may not be assigned by the
Employee. The Company and Holdings, jointly but not severally, may assign
this Agreement and their rights, together with their obligations, hereunder
to any entity that controls the Company or Holdings, is controlled by the
Company or Holdings, or is under common control with the Company or Holdings,
or in connection with any sale, transfer or other disposition of all or
substantially all of the assets or business of the Company and Holdings,
whether by merger, consolidation or otherwise. The Company and Holdings, or
any direct or indirect Successor to the Company or Holdings, shall
22
use its reasonable efforts to cause its successor in interest to assume
explicitly the obligations of the Company and Holdings or such direct or
indirect Successor to the Company or Holdings, as the case may be, hereunder.
9.10 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
9.11 HEADINGS. The headings in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
9.12 ARBITRATION. If requested by the Employee or the
Company, any claim or controversy arising out of or relating to the
interpretation, construction and performance of this Agreement, or any
alleged breach hereof, shall be finally resolved by arbitration conducted in
accordance with such rules as may be agreed upon by the parties within thirty
(30) days following written notice by either party to the other identifying
the issue in dispute and the position of the party giving notice, or failing
to achieve such agreement, in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association.
Any award rendered in connection with the foregoing arbitration shall be in
writing and shall be final and binding upon the parties, and judgment upon
any such award may be entered and enforced in any court of competent
jurisdiction. The forum for such arbitration shall be in Cleveland, Ohio and
the governing law shall be the laws of the State of Ohio without giving
effect to conflict of laws provisions. Notwithstanding any provision in this
Section 9.12 to the contrary, the Company shall have the right and power to
seek and obtain equitable relief in accordance with Section 7.1 hereof.
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IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the date first above written.
TRAVELCENTERS OF AMERICA, INC.
("Holdings")
By: /s/ Xxxxx X. Xxxxxx
---------------------
Name: Xxxxx X. Xxxxxx
---------------
Title: Executive Vice President, CFO and Secretary
-------------------------------------------
TA OPERATING CORPORATION
("Company")
By: /s/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx
---------------
Title: Executive Vice President, CFO and Secretary
-------------------------------------------
/s/ Xxxxxx X. Xxx
-----------------
Xxxxxx X. Xxx
("Employee")
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