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EXHIBIT 10.13
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 James W.
George
(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
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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, Secretary and Chief Financial
Officer 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 F
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