EXHIBIT 10.17
TRAVELCENTERS OF AMERICA, INC.
1997 STOCK INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
NONQUALIFIED STOCK OPTION AGREEMENT, dated as of January 1, 1997, 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.
The Optionee may have previously received options to acquire common stock
of the Company pursuant to the National Auto/Truckstops Holdings Corporation
1993 Stock Incentive Plan. Such options are currently exercisable to the
extent vested as of December 31, 1996, but shall not become further vested or
exercisable.
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; CHANGE OF CONTROL; IPO.
2.1. No portion of any Option shall be vested or exercisable prior to
December 31, 1997, except in the event of a "Change of Control" or "IPO", as
described in Section 2.5 hereof, or subsequent to December 31, 2006.
2.2. Each Option shall vest and become exercisable, in whole or in part,
in accordance with Exhibit B attached hereto, with respect to the shares of
Common Stock subject thereto if and only if, and to the extent that, the
applicable performance targets established by the Committee with respect to
such Option are determined by the Committee to be satisfied. If the
applicable performance targets are not satisfied, then such Option shall not
vest or become exercisable and shall be forfeited, subject to the following
sentence. To the extent that an Option shall not vest or become exercisable,
in whole or in part, solely because the applicable performance targets have
not been satisfied, then the shares of Common Stock covered by such Option
shall again become available for awards to be granted to the Optionee on or
before December 31, 2000, for options to purchase shares of Common Stock at
an option exercise price at or greater than the then Fair Market Value of
Common Stock on the respective date of grant, as determined by the Committee,
as evidenced by a written agreement executed by the Company and the Optionee,
and on such other terms and conditions as determined by the Committee in its
sole discretion, subject to the terms of the Plan.
2.3. 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.
2.4. Unless terminated earlier, the unexercised portion of the Options
shall automatically and without notice terminate and become null and void on
December 31, 2006.
2.5. If a "Change of Control" or initial public offering ("IPO") (as such
terms are defined in Plan Section 3.11(e)) is effective prior to January 1,
2001, and the Optionee is an "Eligible Grantee" (as such term is defined in
Plan Section 3.11(c)), then effective upon the consummation of the Change of
Control or IPO (a) each outstanding Option granted with respect to the
calendar year in which the Change of Control or IPO is effective (including
any Option which was granted with respect to a prior calendar year and which
did not then vest and become exercisable, which was regranted with respect to
the calendar year in which such Change of Control or IPO is effective) shall
immediately become fully vested and exercisable, and (b) each Option to be
granted with respect to each calendar year thereafter shall immediately be
granted and become fully vested and exercisable. The option exercise price
for each such option described in clause (b) of the preceding sentence shall
be the option exercise price for the most recent option granted under the
Plan in the event of a Change of Control, or the price per share at which
shares of Common Stock are offered in the IPO in the event of an IPO. There
shall be no acceleration of the grant or vesting of any Option if a Change of
Control or IPO becomes
effective after December 31, 2000. A Change of Control or IPO shall not
cause any Option granted with respect to any calendar year prior to the
calendar year in which the Change of Control or IPO becomes effective to
become further vested or exercisable.
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, dated
as of April __, 1997 (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. 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.
(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 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, and shall not be exercisable prior to
December 31, 1997, except in the event of a "Change of Control" or "IPO", as
described in Section 2.5 hereof. 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 conditions (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 dated as of April
__, 1997 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.
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 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, 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, 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.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and a copy to:
The Clipper Group, L.P.
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Attention: ▇▇▇▇ ▇. ▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
TravelCenters of America, Inc.
By:
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Name:
--------------------------
Title:
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ATTEST:
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(Optionee)
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(Address)
EXHIBIT A
The Optionee shall receive options to purchase shares of Common Stock as
determined by the Committee. Subject to Section 2.5 of this Agreement, such
options are granted as of January 1, 1997 (the "1997 Option"), January 1,
1998 (the "1998 Option"), January 1, 1999 (the "1999 Option") and January 1,
2000 (the "2000 Option"), each at the then Fair Market Value of Company Stock
on the respective date of grant, as determined by the Committee, as follows:
Grant Date Number of Shares
---------- ----------------
January 1, 1997 (1997 Option)
------
January 1, 1998 (1998 Option)
------
January 1, 1999 (1999 Option)
------
January 1, 2000 (2000 Option)
------
By:
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Name:
-----------------------
Title:
----------------------
Signed:
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EXHIBIT B
Highest Percent Percent of Shares Becoming
of Performance Vested and Exercisable if Percent of
Targets Met Performance Targets Met*
---------------- ------------------------
100% or more 100%
99% 80%
98% 64%
97% 48%
96% 32%
95% 20%
less than 95% 0
* Each Option shall vest and become exercisable on the December 31 in the
year of grant in accordance with the above schedule (and to the extent the
applicable performance targets have not been met then such Option shall not
vest or become exercisable and shall be forfeited); provided, however, that
the percent of shares becoming vested and exercisable (a) will be
proportionately adjusted on a straight line basis if actual performance falls
between the percentages listed on the above schedule, and (b) in all events,
the Committee, in its sole discretion, may reduce (but not increase) the
percent of performance targets to be met and may increase (but not reduce)
the percent of shares becoming vested and exercisable if performance targets
are met.