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EXHIBIT 10.9
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of January 1, 2000, by and among
TA
Operating Corporation, a Delaware corporation (the "Company"),
TravelCenters
of America, Inc., a Delaware corporation ("Holdings") and Timothy
L. Doane
(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, 2000 (the "Effective Date")
and end on
December 31, 2001 (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, 2000 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
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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 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
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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 1999, 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.
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.
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2. Duties and Authority.
2.1 Office. Subject to Section 5 hereof, during the Term the
Employee will
serve as the Senior Vice President - Development 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, National
Auto/Truckstops, Inc., a Delaware corporation ("National"), TA
Franchise
Systems, Inc., a Delaware corporation ("TAFSI"), TA Licensing,
Inc., a
Delaware corporation ("Licensing"), and all subsidiaries and
affiliates of
the Company, Holdings, National, 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 Seventy Thousand Dollars
($270,000) per annum
(the "Base Salary"), which 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
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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,
2000, 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 seventy-five percent
(75%) of the
Base Salary in effect as of the first day of the Fiscal Year
(seventy-five
percent (75%) 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 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,
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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
Dollars
($10,000.00) per year; (iii) paid vacation days in accordance with
standard
Company policy for similarly situated officers; and (iv)
participation in a
nonqualified unfunded elective salary deferral plan adopted or to
be adopted by
the Compensation Committee having such terms
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as the Compensation Committee determines in its sole discretion are
appropriate
for the purpose of providing certain benefits in excess of the
benefits
otherwise available under the Company's employee benefit plan
established
pursuant to Code sections 401(a) and 401(k) of the Internal Revenue
Code of
1986, as amended (the "Code"), which nonqualified plan provides or
is expected
to provide tax-deferred savings opportunities through elective
salary deferrals
in excess of certain of the limits set forth in Subchapter D of
Chapter I of
Subtitle A of the Code.
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
National
Auto/Truckstops Holdings Corporation 1993 Stock Incentive Plan,
the
TravelCenters of America, Inc. 1997 Stock Incentive Plan, and any
other such
plan or individual agreement
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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 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
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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
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
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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 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
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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 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, 2000 or
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