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TABLE OF CONTENTS
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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TravelCenters of America Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined)
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(5) Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of its filing.
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Table of Contents
Notice of 2021 Annual Meeting
of Stockholders and Proxy Statement
Thursday, June 10, 2021 at 9:30 a.m., Eastern
time
Live Webcast Accessible at
https://www.viewproxy.com/TravelCentersofAmerica/2021/
Table of Contents
LETTER TO OUR STOCKHOLDERS FROM YOUR BOARD OF DIRECTORS
Dear Fellow Stockholders,
Please
join us for our 2021 Annual Meeting of Stockholders, which will be held virtually at 9:30 a.m. on Thursday, June 10, 2021. The business to be conducted at the
meeting is explained in the attached Notice of Meeting and Proxy Statement. We believe furnishing these materials over the internet expedites stockholders' receipt of these important materials while
lowering cost and reducing the environmental impact of our annual meeting.
We
were proud to have continued to service the essential trucking business throughout the COVID-19 pandemic. Despite the business challenges posed by the pandemic, we are also proud
that we continued to successfully implement our turnaround strategy. Some of our key accomplishments include:
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Continued implementation of our transformation plan to improve operational efficiency and profitability through aggressive
cost discipline and an expansion strategy focused on franchising opportunities;
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Reorganization of our team, including significant leadership changes and a corporate headcount reduction;
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Raised capital through an $85 million equity offering and a $200 million term loan;
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Improved fourth quarter operating results, largely due to decreased expenses; and
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Added two Independent Directors to our Board to create more skill mix and increase the Board's diversity.
Your
Board takes seriously our role in the oversight of our Company's long term business strategy, which is the best path to long term value creation for you, our stockholders. We
continue to monitor changing events and circumstances with an eye to managing for the global good, mitigating the negative impact on our business and best positioning us for stability and recovery
when the pandemic is behind us.
We
thank you for your investment in our Company and for the confidence you put in this Board to oversee your interests in our business.
April 6, 2021
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Barbara D. Gilmore
Lisa Harris Jones
Joseph L. Morea
Rajan C. Penkar
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Jonathan M. Pertchik
Elena B. Poptodorova
Adam D. Portnoy
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Table of Contents
NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS
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Location:
Live Webcast Accessible at
https://www.viewproxy.com/
TravelCentersofAmerica/
2021/
Date:
Thursday, June 10, 2021
Time:
9:30 a.m., Eastern time
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Agenda:
Elect the Director nominees identified in the accompanying Proxy Statement to our Board of Directors;
Advisory vote to approve executive compensation;
Approve an amendment to
the Second Amended and Restated TravelCenters of America Inc. 2016 Equity Compensation Plan;
Ratify the appointment of RSM
US LLP as our independent auditors to serve for the 2021 fiscal year; and
Transact such other business as
may properly come before the meeting and at any postponements or adjournments of the meeting.
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Record Date: You can vote if you were a stockholder of record as of the close of business on March 24, 2021.
Attending the Annual Meeting: Due to the public health impact of the COVID-19 pandemic and to protect the health and well-being of our stockholders and other stakeholders, the Annual Meeting will be a completely
virtual meeting of stockholders, which will be conducted exclusively by webcast. No physical meeting will be held.
Record
Owners: If you are a stockholder as of the record date who holds shares directly, you may participate in the Annual Meeting via internet webcast by visiting the following website and following the registration and
participation instructions contained therein: https://www.viewproxy.com/TravelCentersofAmerica/2021/. Please have the control number located on your proxy card or voting information form available.
Beneficial Owners: If you are a stockholder as of the record date who holds shares indirectly through a brokerage firm,
bank or other nominee, you must register in advance to attend the Annual Meeting. You will need to present evidence of your beneficial ownership of shares. You will not be able to vote your shares at the Annual Meeting without a legal proxy.
Beneficial owners should complete the registration process at least three days in advance of the Annual Meeting to ensure that all documentation and verifications are in order.
Please see the accompanying Proxy Statement for additional information.
By Order of our Board of Directors,
Jennifer B. Clark
Secretary
April 6, 2021
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Table of Contents
TABLE OF CONTENTS
Table of Contents
PLEASE
VOTE
Please vote to play a part in our future. The Nasdaq Stock Market LLC (the "Nasdaq") rules do not allow a broker, bank or other nominee
who holds shares on your behalf to vote on nondiscretionary matters without your instructions.
PROPOSALS THAT REQUIRE YOUR VOTE
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PROPOSAL
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MORE
INFORMATION
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BOARD
RECOMMENDATION
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VOTES REQUIRED
FOR APPROVAL
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1
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Election of Directors
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Page 10
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✓
FOR
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Plurality of all votes cast
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2
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Advisory vote to approve executive compensation*
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Page 24
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✓
FOR
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Majority of all votes cast
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3
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Approval of an Amendment to the Second Amended and Restated 2016 Equity Compensation Plan
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Page 25
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✓
FOR
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Majority of all votes cast
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4
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Ratification of independent auditors*
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Page 33
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✓
FOR
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Majority of all votes cast
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-
*
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Non-binding
advisory vote.
You can vote in advance in one of three ways:
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via the internet
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Visit www.proxyvote.com and enter your 16-digit control number provided in your Notice Regarding the Availability of Proxy Materials, proxy card or voting
instruction form before 11:59 p.m., Eastern time, on June 9, 2021 to authorize a proxy VIA THE INTERNET.
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by phone
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Call 1-800-690-6903 if you are a stockholder of record and 1-800-454-8683 if you are a beneficial owner before 11:59 p.m., Eastern time, on June 9, 2021 to authorize a proxy BY TELEPHONE. You
will need the 16-digit control number provided on your Notice Regarding the Availability of Proxy Materials, proxy card or voting instruction form.
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by mail
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Sign, date and return your proxy card if you are a stockholder of record or voting instruction form if you are a beneficial owner to authorize a proxy BY MAIL.
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If
the meeting is postponed or adjourned, these times will be extended to 11:59 p.m., Eastern time, on the day before the reconvened meeting.
PLEASE VISIT: www.proxyvote.com
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To review and download easy to read versions of our Proxy Statement and Annual Report.
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To sign up for future electronic delivery to reduce the impact on the environment.
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 1
Table of Contents
April 6, 2021
PROXY STATEMENT
The
Board of Directors (our "Board") of TravelCenters of America Inc., a Maryland corporation (the "Company," "we," "us" or "our") is furnishing this proxy statement (the "Proxy Statement") and
accompanying proxy card (or voting instruction form) to you in connection with the solicitation of proxies by our Board for our 2021 annual meeting of stockholders. Due to the public health impact of
the COVID-19 pandemic and to protect the health and well-being of our stockholders and other stakeholders, our annual meeting will be held virtually via live webcast on Thursday, June 10, 2021,
at 9:30 a.m., Eastern time, subject to any adjournments or postponements thereof (the "2021 Annual Meeting"). We are first making these proxy materials available to stockholders on or about
April 6, 2021.
Only
owners of record of shares of common stock of the Company ("Common Shares") as of the close of business on March 24, 2021, the record date for our 2021 Annual Meeting, are entitled to
notice of, and to vote at, the meeting and at any postponements or adjournments of the meeting. Holders of Common Shares are entitled to one vote for each Common Share held on the record date. Our
Common Shares are listed on The Nasdaq Stock Market LLC (the "Nasdaq"). On March 24, 2021, there were 14,568,693 Common Shares issued and outstanding.
The
mailing address of our principal executive office is 24601 Center Ridge Road, Westlake, Ohio 44145.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR OUR 2021 ANNUAL MEETING TO BE HELD ON THURSDAY, JUNE 10, 2021.
The
Notice of 2021 Annual Meeting, Proxy Statement and Annual Report to Stockholders for the fiscal year ended December 31, 2020 are available at www.proxyvote.com.
2 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
CORPORATE GOVERNANCE PRINCIPLES AND BOARD
MATTERS
We
are currently governed by a seven member Board of Directors. Ensuring our Board is comprised of Directors who bring diverse viewpoints and perspectives, exhibit a variety
of skills, professional experience and backgrounds and effectively represent the long-term interests of stockholders is a top priority of our Board and our Nominating and Governance Committee. Our
Board added Elena Poptodorova and Rajan Penkar in February 2020 as Independent Directors to expand and refresh our Board's composition for several reasons, including to increase the ratio of
Independent Directors to Managing Directors and to create more skill mix and diversity.
OUR BOARD BELIEVES THAT ITS MEMBERS SHOULD:
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exhibit high standards of integrity and ethics;
have business acumen, practical wisdom, ability to exercise sound judgment in a congenial manner and be able to make independent analytical inquiries;
have a strong record of achievements;
have knowledge of the travel center and its related businesses and factors impacting those businesses;
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have diverse perspectives, backgrounds and experiences, including professional background, gender, ethnicity, nationality and skills; and
be committed to serving on our
Board over a period of years in order to develop knowledge about the Company's operations and have sufficient time and availability to devote to Board and committee matters.
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addition, our Board has determined that our Board, as a whole, should strive to have the right mix of characteristics and skills necessary to effectively perform its oversight responsibilities. Our
Board believes that Directors with one or more of the following professional skills or experiences can assist in meeting this goal:
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work experience with a proven record of success in his or her field;
risk oversight/management expertise;
accounting and finance,
including a high level of financial literacy and understanding of the impact of financial market trends on the service retail industry, including the travel center and restaurant businesses;
operating business and/or
transactional experience;
management/leadership experience;
knowledge of the Company's historical business activities;
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familiarity with travel centers and ancillary businesses;
experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing;
service on other public company boards and committees;
qualifying as a Managing Director in accordance with the requirements of our governing documents; and
qualifying as an
Independent Director in accordance with the requirements of the Nasdaq, the Securities and Exchange Commission ("SEC") and our governing documents.
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Our
Nominating and Governance Committee and our Board consider the qualifications, characteristics and skills of Directors and Director candidates individually and in the broader context of our
Board's overall composition when evaluating potential nominees for election as Director.
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 3
Table of Contents
Key Responsibilities of our Board
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Oversight of Strategy
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Oversight of Risk
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Succession Planning
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✓
Our Board oversees and monitors strategic planning.
✓
Business strategy is a
key focus of our Board and embedded in the work of Board committees.
✓
Company management is charged with executing business strategy and provides regular
performance updates to our Board.
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✓
Our Board oversees risk management.
✓
Board committees, which meet
regularly and report back to our full Board, play significant roles in carrying out the risk oversight function.
✓
Company management is charged with managing
risk, through robust internal processes and effective internal controls.
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✓
Our Board oversees succession planning and talent development for senior executive positions.
✓
Our Nominating and Governance Committee makes an annual report to our Board on succession planning.
✓
In the event of a succession, our entire Board may work with our Nominating and Governance Committee, or the Independent Directors, as applicable, to nominate and evaluate
potential successors.
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Our Board's Role in Oversight of Risk Management
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Our
Board is elected by our stockholders to oversee our business and long term strategy. As part of fulfilling its responsibilities, our Board oversees the safeguarding of our
assets, the maintenance of appropriate financial and other internal controls and our compliance with applicable laws and regulations. Inherent in these responsibilities is our Board's understanding
and oversight of the
various risks we face. Our Board considers that risks should not be viewed in isolation and should be considered in virtually every business decision and as part of our business strategy.
Our
Board oversees risk as part of its general oversight of our Company. Oversight of risk is addressed as part of various Board and Board committee activities and through regular and special Board
and Board committee meetings. Our day to day business is conducted by management, and management is responsible for incorporating risk management in its activities. Our Director of Internal Audit
reports to our Audit Committee and provides us with advice and assistance with our risk management function.
In
discharging their oversight responsibilities, our Board and Board committees review regularly a wide range of reports provided to them by management, internal audit and service providers,
including:
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reports on market and industry conditions;
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reports on the impact of the COVID-19 pandemic on our business;
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operating and regulatory compliance reports;
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financial reports;
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reports on risk management activities;
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regulatory and legislative updates that may impact us;
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reports on the security of our information technology processes and our data; and
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legal proceedings updates and reports on other business related matters.
Our
Board and Board committees discuss these matters among themselves and with our management, our Director of Internal Audit, legal counsel, our independent auditors and other professionals, as
appropriate.
4 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
Our
Audit Committee takes a leading role in helping our Board fulfill its responsibilities for oversight of our financial reporting, internal audit function, risk management, including cybersecurity,
and our compliance with legal and regulatory requirements. Our Board and Audit Committee review periodic reports from our independent auditors regarding potential risks, including risks related to our
internal control over financial reporting. Our Audit Committee also reviews, approves and oversees an internal audit plan developed by our Director of Internal Audit with the goal of helping us
systematically evaluate the effectiveness of our risk management, control and governance processes on an annual basis. Our Audit Committee meets at least quarterly and reports its findings to our
Board. Our Audit Committee also meets periodically with our Director of Internal Audit to review the results of our internal audits, and directs or recommends to our
Board actions or changes it determines appropriate to enhance or improve the effectiveness of our risk management.
Our
Audit Committee considers risks related to cybersecurity, and receives regular reports from our management regarding cybersecurity risks and countermeasures being undertaken or considered by us,
including updates on the internal and external cybersecurity landscape and relevant technical developments.
Our
Compensation Committee, whose duties are detailed in its charter, among other duties, evaluates the performance of our Director of Internal Audit and the performance of The RMR Group LLC
("RMR LLC") under our business management agreements. Also, our Compensation Committee and our Board consider that we have a share award program that requires share awards to executive officers
to vest over a period of years. We believe that the use of share awards vesting over time rather than stock options mitigates the incentives for our management to undertake undue risks and encourages
management to make long term and appropriately risk balanced decisions.
It
is not possible to identify all of the risks that may affect us or to develop processes and controls to eliminate all risks and their possible effects, and processes and controls employed to
address risks may be limited in their effectiveness. Moreover, it is necessary for us to bear certain risks to achieve our objectives. As a result of the foregoing and other factors, our ability to
manage risk is subject to substantial limitations.
To
learn more about the risks we face, you can review the matters discussed in Part I, "Item 1A. Risk Factors" and "Warning Concerning Forward-Looking Statements" in our Annual Report to
Stockholders for the fiscal year ended December 31, 2020 (the "Annual Report"). The risks described in our Annual Report are not the only risks we face. Additional risks and uncertainties not
currently known or that may currently be deemed to be immaterial also may materially adversely affect our business, financial condition or results of operations in future periods.
Under
the corporate governance listing standards of the Nasdaq, to be considered independent:
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a director must not have a disqualifying relationship, as defined in the corporate governance section of the Nasdaq rules;
and
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our Board must affirmatively determine that the director otherwise has no relationship which would interfere with the
exercise of independent judgment in carrying out the responsibilities of a director. To facilitate the director independence assessment process, our Board has adopted written Governance Guidelines as
described below.
Our
Board is comprised of seven Directors, including five Independent Directors and two Managing Directors. Under our Bylaws, so long as the number of directors is less than five, at least one
director must meet the qualifications of a Managing Director and, so long as the number of directors is five or greater, at least two directors must meet the qualifications of a Managing Director. Our
Bylaws require that a majority of our Board be Independent Directors. Under our Bylaws, Independent Directors are Directors who are not employees of the Company or RMR LLC, are not involved in
the Company's day to day activities and are persons who qualify as an independent director under the applicable rules of the Nasdaq and the SEC. As set forth in our Bylaws, Managing Directors are
Directors who are not
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 5
Table of Contents
Independent
Directors and who have been employees or officers of the Company or RMR LLC or involved in the day to day activities of the Company for at least one year prior to such Director's
election.
Our
Board affirmatively determines whether Directors have a direct or indirect material relationship with us, including our subsidiaries, other than serving as our Directors or trustees or directors
of our subsidiaries. In making independence determinations, our Board observes the Nasdaq and SEC criteria, as well as the criteria set forth in our governing documents. When assessing a Director's
relationship with us, our Board considers all relevant facts and circumstances, not merely from the Director's standpoint, but also from that of the persons or organizations with which the Director
has an affiliation. Prior to Mr. Penkar's election to the board of directors of USA Truck Inc. ("USA Truck"), our Board reviewed our relationship with USA Truck, including the annual
revenues received from this customer of ours. Based on its review, our Board determined that our business with USA Truck is not material to us and that Mr. Penkar's service on the board of
directors of USA Truck does not create a conflict of interest or impair Mr. Penkar's judgment with respect to his responsibilities as an Independent Director. Our Board will continue to monitor
our relationship with USA Truck in regards to Mr. Penkar's continued service on both Boards. Based on or Board's review, our Board has determined that Barbara D. Gilmore, Lisa Harris Jones,
Joseph L. Morea, Rajan C. Penkar and Elena B. Poptodorova currently qualify as independent directors under applicable Nasdaq and SEC criteria and as Independent Directors under our Bylaws. In making
these independence determinations, our Board reviewed and discussed additional information provided by us and our Directors with regard to each of the Directors' relationships with us, RMR LLC
or The RMR Group Inc. ("RMR Inc."), the managing member of RMR LLC, and the other companies to which RMR LLC or its subsidiaries provide management services. Our Board has
concluded that none of these five Directors possessed or currently possesses any relationship that could impair his or her judgment in connection with his or her duties and responsibilities as a
Director or that could otherwise be a direct or indirect material relationship under applicable Nasdaq and SEC standards.
Executive Sessions of Independent Directors
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Pursuant
to our Governance Guidelines, our Independent Directors are expected to meet at least twice per year in regularly scheduled meetings at which only Independent Directors are
present. Our Independent Directors also meet separately with our officers, with our Director of Internal Audit and with our independent auditors. The presiding Director for purposes of leading
Independent Director sessions will be the Lead Independent Director, unless the Independent Directors determine otherwise.
Board Leadership Structure
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All
Directors play an active role in overseeing our business both at our Board and committee levels. As set forth in our Governance Guidelines, the core responsibility of our
Directors is to exercise sound, informed and independent business judgment in overseeing our Company and our strategic direction. Our Directors are skilled and experienced leaders and currently serve
or have served as members of senior management in public and private for profit and nonprofit organizations and law firms, and also have served as government officials. Our Directors may be called
upon to provide solutions to various complex issues and are expected to, and do, ask hard questions of our officers and advisers. Our Board is small, which facilitates informal discussions and
communication from management to our Board and among Directors.
Adam
D. Portnoy has served as Chair of our Board since 2019. One or more of our executive officers and our Director of Internal Audit regularly attend Board and Board committee meetings. Special
meetings of our Board may be called at any time by the Chair of our Board or on the written request to our Secretary by a majority of our Board. Our Managing Directors, in consultation with our
management and our Director of Internal Audit, set the agenda for Board meetings. Other Directors may suggest agenda items as well. Discussions at Board meetings are led by the Managing Director,
Independent Director or member of management who is most knowledgeable on a subject.
Five
of our Directors, including two of our nominees for election at our 2021 Annual Meeting, are independent under the applicable Nasdaq and SEC criteria and our governing documents. All of the
6 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
members
of our Audit Committee, Nominating and Governance Committee and Compensation Committee are independent under the applicable listing requirements and rules of the Nasdaq and other applicable
laws, rules and regulations, including those of the SEC. As set forth in our governing documents, two of our Directors are Managing Directors, persons who have been employees or officers of
RMR LLC or who have been involved in our day to day activities for at least one year prior to his, her or their election as Directors.
Lead Independent Director
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We
have a Lead Independent Director who is selected annually by the vote of a majority of our Independent Directors. Currently, Ms. Gilmore serves as our Lead Independent
Director. Our Lead Independent Director has well-defined, substantive responsibilities that include:
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presiding at all meetings of our Board at which the Chair or a Managing Director is not present;
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presiding at all meetings and executive sessions of the Independent Directors;
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having the authority to call meetings of the Independent Directors or executive sessions of the Independent Directors;
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serving as the principal liaison between the Independent Directors and the senior management team;
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arranging, together with the Chair of our Board, for appropriate information (including quality and quantity) to be timely
provided to our Board and the Independent Directors;
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assisting our Compensation Committee in its annual evaluation of the performance of our management and of our manager,
RMR LLC;
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assisting with setting Board meeting agendas and arranging meeting schedules, including to ensure that there is sufficient
time for discussion of all agenda items;
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considering suggestions for meeting agenda items from other Independent Directors;
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authorizing the retention of advisors and consultants who report directly to the Independent Directors when appropriate; and
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if requested, and in coordination with the Chair of our Board and our management, being reasonably available for consultation
and direct communication with stockholders.
Code of Business Conduct and Ethics and Committee Governance
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Our
Board is committed to corporate governance that promotes the long term interests of our stockholders. Our Board has established Governance Guidelines that provide a framework for
effective governance. Our Board regularly reviews developments in corporate governance and updates our Governance Guidelines and other governance materials as it deems necessary and appropriate.
We
have also adopted a Code of Business Conduct and Ethics (the "Code") to, among other things, provide guidance to our and our subsidiaries' directors, officers and employees and RMR LLC, its
officers and employees and its parent's and subsidiaries' directors, trustees, officers and employees to ensure compliance with applicable laws and regulations.
Our
Board has an Audit Committee, Compensation Committee and Nominating and Governance Committee. Our Audit Committee, Compensation Committee and Nominating and Governance Committee each have adopted
a written charter, and each Board committee reviews its written charter on an annual basis to consider whether any changes are required.
Our
Audit Committee, Compensation Committee and Nominating and Governance Committee are each comprised entirely of Independent Directors under applicable Nasdaq rules who also meet the independence
criteria applicable to audit committees under the Sarbanes Oxley Act and the SEC's implementing rules under that law.
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 7
Table of Contents
Our
corporate governance materials are available for review in the governance section of our website, including our Governance Guidelines, the charter for each Board committee, the Code and
information about how to report concerns or complaints about accounting, internal accounting controls or auditing matters and any violations or possible violations of the Code and how to communicate
with our Directors, individually or as a group. To access these documents on our website, visit www.ta-petro.com.
Our
Insider Trading Policies and Procedures expressly prohibit members of our Board and our officers from engaging in hedging transactions involving our securities and those of
RMR Inc. or any other public company to which RMR LLC or its affiliates provide management services.
Nominations for Directors
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Our
Nominating and Governance Committee is responsible for identifying and evaluating nominees for Director and for recommending to our Board nominees for election at each annual
meeting of stockholders. Our Nominating and Governance Committee may consider candidates suggested by our Directors, officers or stockholders or by others. Stockholders who would like to recommend a
Director nominee should submit their recommendations in writing by mail to the Chair of our Nominating and Governance Committee, c/o TravelCenters of America Inc., Secretary, at Two Newton
Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458 or by email to secretary@ta-petro.com. Any such recommendation should include a description of the candidate's
qualifications for Board service, the candidate's written consent to be considered for nomination and to serve if nominated and elected, as well as the addresses and telephone numbers for contacting
the stockholder and the candidate for more information. Our Nominating and Governance Committee may request additional information about the stockholder recommended nominee or about the stockholder
recommending the nominee. Recommendations by stockholders will be considered by our Nominating and Governance Committee in its discretion using the same criteria as other candidates it considers.
Communications with Our Board
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Our
Board has established a process to facilitate communication by stockholders and other stakeholders with our Directors. Communications should be addressed to Directors in care of
the Secretary, TravelCenters of America Inc., Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458 or by email to secretary@ta-petro.com.
We
understand the importance of leading a sustainable business and regularly consider ways to improve our internal culture and the communities in which we operate. Our environmental
sustainability and community engagement strategies focus on a complementary set of objectives, including the following:
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Embrace Our Communities: We seek to be a responsible corporate citizen and to
strengthen the communities in which we own or operate travel centers. We regularly encourage our employees to engage in a variety of charitable and community programs, including participation in an
annual nationwide fundraising effort benefiting the St. Christopher Truckers Relief Fund. We were the first company to launch a nationwide product promotion to bring attention to the work of
Truckers Against Trafficking.
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Environmental Stewardship: We support environmental practices that reduce the
impact we have on our planet. We believe this is important to all our stakeholders including investors, regulatory agencies, local communities, and employees. We seek to improve the environmental
footprint of our travel centers, including by reducing energy consumption and water usage at our travel centers, especially when doing so may reduce operating costs and improve our travel centers'
competitive positions.
8 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
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Diversity: We value a diversity of backgrounds, experience and perspectives.
Our Board is comprised of more than 40% women and 29% of our directors are from underrepresented communities. We are also a proud supporter of The Women in Trucking Association, a non-profit
organization with the mission to encourage the employment of women in the trucking industry, promote their accomplishments and minimize obstacles faced by women in the trucking industry.
Stockholder Nominations and Other Proposals
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Deadline to Submit Proposals pursuant to Rule 14a-8 for the 2022 Annual Meeting of Stockholders: Stockholder proposals pursuant
to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), must be received at our principal executive office on or before December 7, 2021 in order to be
eligible to be included in the proxy statement for the 2022 annual meeting of stockholders; provided, that, if the date of the 2022 annual meeting of stockholders is more than 30 days before or
after June 10, 2022, such a proposal must be submitted within a reasonable time before we begin to print our proxy materials. Under Rule 14a-8, we are not required to include stockholder
proposals in our proxy materials in certain circumstances or if conditions specified in the rule are not met.
Deadline to Submit Nominations and Other Proposals for the 2022 Annual Meeting of Stockholders Under our Bylaws: To be timely, stockholder nominations
and proposals intended to be made outside of Rule 14a-8 under the Exchange Act at the 2022 annual meeting must be received by our Secretary at our principal executive office, in accordance with
the requirements of our Bylaws, not later than 5:00 p.m., Eastern time, on December 7, 2021 and not earlier than November 7, 2021; provided, that, if the date of the 2022 annual
meeting of stockholders is more than 30 days earlier or later than June 10, 2022, then a stockholder's notice must be so delivered not later than 5:00 p.m., Eastern time, on the
tenth day following the earlier of the day on which (i) notice of the date of the 2022 annual meeting of stockholders is mailed or otherwise made available or (ii) public announcement of
the date of the 2022 annual meeting of stockholders is first made by us. Stockholders making such a nomination or proposal must comply with the advance notice and other requirements set forth in our
Charter and Bylaws, which include, among other things, requirements as to the stockholder's timely delivery of advance notice, continuous requisite ownership of Common Shares, holding of a share
certificate for such shares at the time of the advance notice and submission of specified information.
The
foregoing description of the deadlines and other requirements for stockholders to submit a nomination for election to our Board or proposal of other business for consideration at an annual meeting
of stockholders is only a summary and is not a complete listing of all requirements. Copies of our Bylaws, including the requirements for stockholder nominations and other stockholder proposals, may
be obtained by writing to our Secretary at TravelCenters of America Inc., Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458, or from the SEC's website, www.sec.gov. Any stockholder considering making a nomination or proposal should carefully review and comply with those provisions.
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 9
Table of Contents
PROPOSAL 1: ELECTION OF DIRECTORS
Upon the recommendation of our Nominating and Governance Committee, our Board has nominated Adam D. Portnoy for election as a Managing
Director and Barbara D. Gilmore and Elena B. Poptodorova for election as Independent Directors. Mr. Portnoy, Ms. Gilmore and Ms. Poptodorova currently serve on our Board. If
elected, each of Mr. Portnoy, Ms. Gilmore and Ms. Poptodorova would serve until our 2024 annual meeting of stockholders and until his, her or their successor is duly elected and
qualifies, subject to the individual's earlier death, resignation, retirement, disqualification or removal.
We
expect that each nominee for election as a Director will be able to serve if elected. However, if a nominee should become unable or unwilling to serve, proxies may be voted for the election of a
substitute nominee designated by our Board.
A
plurality of all the votes cast is required to elect a Director at our 2021 Annual Meeting.
The
names, principal occupations and certain other information regarding the Director nominees, as well as a summary of the key experiences, qualifications, attributes, skills and backgrounds that led
our Nominating and Governance Committee and our Board to conclude that such persons are currently qualified to serve as Directors, are set forth on the following pages.
Our Board of Directors recommends a vote "FOR" the election of all
Director nominees.
10 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
Directors and Director Nominees to be Elected at our 2021 Annual Meeting
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Barbara D. Gilmore
Age: 70
Independent Director since 2007
Lead Independent Director since 2019
Class/Term: Class II with a term expiring at our 2021 Annual Meeting
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Board Committees:
Audit
Compensation (Chair)
Nominating and Governance
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Other RMR Managed Public Company Boards(1):
Five Star Senior Living Inc.
(since 2004)
Office Properties Income Trust (since 2009)
RMR
Mortgage Trust (formerly known as RMR Real Estate Income Fund) (since 2020)
Other Non-RMR Managed Public Company Boards:
None
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Ms. Gilmore served as a professional law clerk at the United States Bankruptcy Court, Eastern Division of the District of Massachusetts, from 2015 until her retirement in 2018, and prior to that, at the United States
Bankruptcy Court, Central Division of the District of Massachusetts, from 2001 to 2015. Ms. Gilmore was a partner of the law firm of Sullivan & Worcester LLP from 1993 to 2000, during which time she was appointed and served as
trustee or examiner in various cases involving business finance matters.
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Specific Qualifications, Attributes, Skills and Experience:
Professional skills and experience
in legal and business finance matters;
Experience in public policy matters;
Experience as a lawyer, bankruptcy court clerk, bankruptcy trustee and bankruptcy examiner;
Insights gained and understanding
of government practices through government service;
Work on public company boards and board committees;
Institutional knowledge earned through prior service on our Board;
Identifies as Caucasian
and as female; and
Qualifying as an Independent Director in accordance with the requirements of the Nasdaq, the SEC and our Bylaws.
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(1)
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In addition to our Company, RMR LLC or its subsidiaries currently provide management services to seven
other public companies, including the following six public companies that do not have any employees of their own: Diversified Healthcare Trust (Nasdaq: DHC) Industrial Logistics Properties Trust
(Nasdaq: ILPT), Office Properties Income Trust (Nasdaq: OPI), Service Properties Trust (Nasdaq: SVC), Tremont Mortgage Trust (Nasdaq: TRMT) and RMR Mortgage Trust (Nasdaq: RMRM). For these companies
with no employees, RMR LLC or its subsidiaries provide all business operations and functions pursuant to the terms of the applicable business management agreements. RMR LLC also provides
business management services to one other public operating company, Five Star Senior Living Inc. (Nasdaq: FVE), which has its own employees but some members of the senior leadership of this
company are also RMR LLC employees.
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 11
Table of Contents
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Elena B. Poptodorova
Age: 69
Independent Director since 2020
Class/Term: Class II with a term
expiring at our 2021 Annual Meeting
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Board Committees:
Audit
Compensation
Nominating and Governance
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Other RMR Managed Public Company Boards(1):
Office Properties Income Trust
(since 2017)
Other Non-RMR Managed Public Company Boards: None
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Ms. Poptodorova has served as vice president and director for Euro-Atlantic affairs of the Atlantic Club of Bulgaria since April 2017, as vice president of the Atlantic Treaty Association since December 2017, and as a
board member of the U.S.Bulgarian Chamber in America since February 2020. Ms. Poptodorova served as director of the Shapiro-Silverberg AJC Central Europe Office from October 2016 until February 2017. Ms. Poptodorova was the ambassador
extraordinary and plenipotentiary of the Republic of Bulgaria to the United States from 2010 to 2016 and from 2002 to 2008. During this time, she facilitated foreign investments in Bulgaria's information technology sector and assisted the development
of transatlantic business association to support investment ventures. From 2009 to 2010, Ms. Poptodorova was the director of the Security Policy Directorate at the Ministry of Foreign Affairs and from 2008 to 2009 she served as the
ambassador-at-large for the Black Sea Region. From 2001 to 2002, Ms. Poptodorova served as a spokesperson of the Ministry of Foreign Affairs and director of the Human Rights and International Humanitarian Organizations Directorate.
Ms. Poptodorova was a member of the Bulgarian Parliament from 1990-2001, where she served on a variety of committees, including the national security, human rights, media and agriculture committees. During her service as a member of the
Bulgarian Parliament, Ms. Poptodorova worked extensively on communal property and industrial property matters with the local government of her electoral district. In addition to her extensive government service, Ms. Poptodorova is a current
member of the board of directors of the American Foundation for Bulgaria and the Institute for Cultural Diplomacy in Germany, and she was previously a member of the board of directors of the European Institute, the Executive Council on Diplomacy, the
Women's Foreign Policy Group and American University in Bulgaria.
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Specific Qualifications, Attributes, Skills and Experience:
Executive experience and
demonstrated leadership ability as a former diplomat;
Insights gained and understanding of government practices through government service;
Experience in communal property and industrial property matters;
Experience in public
policy matters;
Service on the boards of several private and charitable organizations;
Identifies as Caucasian and as female;
Bulgarian national; and
Qualifying as an Independent Director in accordance with the requirements of the Nasdaq, the SEC and our Bylaws
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12 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
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Adam D. Portnoy
Age: 50
Managing Director since 2018
Chair of our Board since 2019
Class/Term: Class II with a term expiring at our 2021 Annual Meeting
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Board Committees: None
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Other RMR Managed Public Company Boards(1):
Service Properties Trust (since 2007)
Diversified Healthcare Trust (since 2007)
Office Properties Income Trust
(since 2009)
RMR Mortgage Trust (formerly known as RMR Real Estate Income Fund) (since 2009)
The RMR Group Inc. (since 2015)
Industrial Logistics Properties
Trust (since 2017)
Tremont Mortgage Trust (since 2017)
Five Star
Senior Living Inc. (since 2018)
Other Non-RMR Managed Public Company Boards: None
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Mr. Portnoy has been president and chief executive officer of RMR Inc. since shortly after its formation in 2015. Mr. Portnoy has been president and chief executive officer of RMR LLC since 2005 and was
a director of RMR LLC from 2006 until June 5, 2015 when RMR LLC became a majority owned subsidiary of RMR Inc. and RMR Inc. became RMR LLC's managing member. Mr. Portnoy is the sole trustee and controlling
shareholder and an officer of ABP Trust. Mr. Portnoy is a director and controlling shareholder of Sonesta Holdco Corporation. Mr. Portnoy has been a director of Tremont Realty Advisors LLC since March 2016, and served as its president
and chief executive officer from March 2016 through December 2017. Mr. Portnoy served as a director of RMR Advisors LLC from 2007 to 2021 when it merged with Tremont Realty Advisors LLC and served as its president from 2007 to 2017 and
its chief executive officer from 2015 to 2017. Mr. Portnoy served as president and chief executive officer of RMR Mortgage Trust from 2007 to 2015 and as president of Office Properties Income Trust from 2009 to 2011. Mr. Portnoy was a
managing trustee of Select Income REIT from 2011 until it merged with a wholly owned subsidiary of Office Properties Income Trust in December 2018. Prior to joining RMR LLC in 2003, Mr. Portnoy held various positions in the finance industry
and public sector, including working as an investment banker at Donaldson, Lufkin & Jenrette and working in private equity at DLJ Merchant Banking Partners and at the International Finance Corporation (a member of The World Bank Group). In
addition, Mr. Portnoy previously founded and served as chief executive officer of a privately financed telecommunications company. Mr. Portnoy currently serves as the Honorary Consul General of the Republic of Bulgaria to Massachusetts and
as chair of the board of directors of the Pioneer Institute and as a member AJC New England's Leadership Board, and previously served on the board of governors for the National Association of Real Estate Investment Trusts and the board of trustees of
Occidental College.
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Specific Qualifications, Attributes, Skills and Experience:
Extensive experience in, and
knowledge of, the asset management and commercial real estate industries and REITs;
Key leadership position with
RMR LLC and demonstrated key management ability;
Knowledge of our businesses and industries;
Public company trustee and director service;
Experience in investment banking
and private equity;
Experience in starting a telecommunications company and serving as its senior executive;
Institutional knowledge earned through prior service on our Board and in leadership positions with RMR LLC;
Identifies as Caucasian and as male; and
Qualifying as a Managing Director
in accordance with the requirements of our Bylaws.
Our Nominating and Governance Committee and our Board believe that, because Mr. Portnoy is the president and chief
executive officer of RMR LLC and the business of all the companies (including our Company) for which he serves as a managing trustee or managing director is integral to his day to day work, his service on these additional boards does not impair
the amount of attention or time that Mr. Portnoy spends on service on our Board. Our Board believes that Mr. Portnoy's extensive familiarity with our day to day business provides valuable insight for our Board.
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TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 13
Table of Contents
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Lisa Harris Jones
Age: 53
Independent Director since 2013
Class/Term: Class III with a term expiring
at our 2022 annual meeting of stockholders
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Board Committees:
Audit
Compensation
Nominating and Governance (Chair)
Gaming Compliance Committee (Board
Liaison)
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Other RMR Managed Public Company Boards(1):
Diversified Healthcare Trust
(since 2015)
Industrial Logistics Properties Trust (since 2018)
Other Non-RMR Managed Public Company Boards: None
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Ms. Harris Jones is the founding member of Harris Jones & Malone, LLC, a law firm based in Maryland. Since founding Harris Jones & Malone, LLC in 2000, Ms. Harris Jones has
represented a wide range of clients, focusing her practice in government relations and procurement at both the state and local levels. Prior to founding Harris Jones & Malone, LLC, Ms. Harris Jones was associated with other
Maryland law firms from 1993 to 1999, and she has represented the City of Baltimore and many of its agencies and related quasi-public entities in various real estate development and financing transactions. In addition to her professional
accomplishments, Ms. Harris Jones has held leadership positions in many community service and civic organizations for which she has received recognitions and awards, including being the recipient of the YWCA Greater Baltimore Special Leadership
Award in 2012.
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Specific Qualifications, Attributes, Skills and Experience:
Professional skills and experience
in legal and business finance matters;
Experience in public policy matters;
Experience in real estate matters;
Demonstrated leadership capability as an entrepreneur and founding member of a law firm;
Work on public company boards and board committees;
Institutional knowledge earned
through prior service on our Board;
Identifies as African American and as female; and
Qualifying as an Independent Director in accordance with the requirements of the Nasdaq, the SEC and our Bylaws.
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Rajan C. Penkar
Age: 65
Independent Director since 2020
Class/Term: Class III with a term expiring
at our 2022 annual meeting of stockholders
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Board Committees:
Audit
Compensation
Nominating and Governance
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Other RMR Managed Public Company Boards(1): None
Other Non-RMR Managed Public Company Boards:
U.S. Concrete, Inc. (since 2020)
USA
Truck Inc. (since 2021)
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Mr. Penkar has served as president and founder of Supply Chain Advisory Services, LLC, which provides e-commerce and omni-channel supply chain design and optimization services to retailers, since 2014. From 2011
to 2014, Mr. Penkar served as senior vice president and president, supply chain for Sears Holding Corporation, an integrated retailer. In this position, Mr. Penkar was accountable for all aspects of the supply chain including global
sourcing, retail and e-commerce distribution and fulfillment, global transportation, inventory management, and inside-the-home delivery and installation of appliances and big-ticket merchandise. Before joining Sears Holding Corporation,
Mr. Penkar held various positions of increasing responsibility with United Parcel Service, Inc., or UPS, from 1987 to 2011, most recently serving as president, UPS Customer Solutions.
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Specific Qualifications, Attributes, Skills and Experience:
Experience in and knowledge of
supply chain, distribution, fulfillment and inventory management;
Demonstrated leadership and
management abilities;
Work on public company boards and board committees;
Patent and intellectual property knowledge, experience and skills;
Identifies as South Asian and as
male; and
Qualifying as an Independent Director in accordance with the requirements of the Nasdaq, the SEC and our Bylaws.
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14 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
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Joseph L. Morea
Age: 66
Independent Director since 2015
Class/Term: Class I with a Term expiring
at our 2023 annual meeting of stockholders
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Board Committees:
Audit (Chair)
Compensation
Nominating and Governance
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Other RMR Managed Public Company Boards(1):
Tremont Mortgage Trust (since
2017)
Industrial Logistics Properties Trust (since 2018)
Other Non-RMR Managed Public Company Boards:
First Eagle Senior Loan Fund
(since 2013)
Portman Ridge Finance Corporation (since 2020)
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Mr. Morea served as a director of Garrison Capital Inc. from 2015 to 2020, until it was acquired by Portman Ridge Finance Corporation, as a director of Eagle Growth & Income Opportunities Fund from 2015
to 2020 and as a trustee of RMR Mortgage Trust from 2016 to May 2020. Mr. Morea was a vice chairman and managing director, serving as head of U.S. Equity Capital Markets, at RBC Capital Markets, an international investment bank, from 2003 until
2012. From 2008 to 2009, Mr. Morea also served as the head of U.S. Investment Banking for RBC Capital Markets. Previously, Mr. Morea was employed as an investment banker, including as a managing director and the co-head of U.S. Equity
Capital Markets at UBS, Inc., the chief operating officer of the Investment Banking Division and head of U.S. Equity Capital Markets at PaineWebber, Inc. and a managing director of Equity Capital Markets at Smith Barney, Inc. Prior to
working as an investment banker, Mr. Morea was employed as a certified public accountant.
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Specific Qualifications, Attributes, Skills and Experience:
Experience in and knowledge of the
investment banking industry and public capital markets;
Demonstrated leadership and management abilities;
Experience in capital raising and strategic business transactions;
Experience as a public
company trustee and director and board committee member;
Professional training, skills and expertise in, among other things, finance matters;
Identifies as Caucasian and as male; and
Qualifying as an Independent
Director in accordance with the requirements of the Nasdaq, the SEC and our Bylaws
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Jonathan M. Pertchik
Age: 54
Managing Director since 2019
Chief Executive Officer since 2019
Class/Term: Class I with a term expiring at our 2023 annual meeting of stockholders
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Board Committees: None
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Other RMR Managed Public Company Boards(1): None
Other Non-RMR Managed Public Company Boards: None
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Mr. Pertchik has been an executive vice president of RMR LLC since 2019. Prior to joining our Company, Mr. Pertchik served as the chief executive officer of InTown Suites, Inc., a leading provider of
economy, extended stay living, from July 2014 to April 2019. From February 2013 to June 2014, Mr. Pertchik served as the chief executive officer of ST Residential, LLC, an owner and manager of luxury condominiums, apartment projects, hotels,
and office and retail spaces, where he had previously served as chief operating officer from March 2010 to February 2013. Prior to joining ST Residential, Mr. Pertchik held various executive management positions at WCI Communities, a luxury
homebuilder and developer from 2007 to January 2010, and had been a senior vice president and managing principal at The Staubach Company, a leading national real estate tenant representative, from 1999 to 2006. Additionally, Mr. Pertchik served
as a member of the board of directors of AV Homes, Inc., a publicly-traded homebuilder, from July 2014 until its sale in October 2018, and has served as a member of the board of directors of Lenkbar, Inc., a private inventor, designer,
engineer and manufacturer of medical device products since December 2014.
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Specific Qualifications, Attributes, Skills and Experience:
Extensive experience in, and
knowledge of, real estate matters;
Demonstrated leadership and management ability;
Experience in capital raising and strategic business transactions;
Experience as a public company
director and board committee member;
Professional skills and experience in business finance matters;
Identifies as Caucasian and as male; and
Qualifying as a Managing Director
in accordance with the requirements of our Bylaws
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TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 15
Table of Contents
Our
executive officers serve at the discretion of our Board. There are no family relationships among any of our Directors or executive officers.
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Jonathan M. Pertchik
Age: 54
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Chief Executive Officer of our Company since 2019
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Mr. Pertchik's background and qualifications are described above.
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Barry A. Richards
Age: 68
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President of our Company since 2018
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Mr. Richards served as our Executive Vice President from January 2010 through 2017. Previously, Mr. Richards served as our Chief Operating Officer from January 2018 until February 2020 and our Chief Senior Vice President, Food Operations
from March 2008 through December 2009, Vice President, Restaurants from September 2007 through February 2008 and as a Regional Vice President from January 2007 through August 2007. Prior to that time, he held various operations management positions
with our predecessor since 2000. Mr. Richards was also a senior vice president of RMR LLC from January 2018 until February 2020. Mr. Richards identifies as Caucasian and as male.
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Peter J. Crage
Age: 59
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Executive Vice President, Chief Financial Officer and Treasurer of our Company since 2020
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Mr. Crage has been a senior vice president of RMR LLC since 2020. From August 2017 through October 2018, he served as chief financial officer of Diamond Resorts, a $1 billion private equity-owned organization with 350 plus vacation
destinations in 35 countries around the world. He also previously served as chief financial officer of SeaWorld Entertainment Inc. (NYSE: SEAS), a $1 billion theme park operator with 22,000 employees located across the U.S., and from August
2004 through June 2011 as executive vice president and chief financial officer of Cedar Fair Entertainment Company (NYSE: FUN), an owner and operator of amusement parks, water parks and hotels located in the U.S. and Canada. Mr. Crage identifies
as Caucasian and as male.
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Mark R. Young
Age: 58
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Executive Vice President and General Counsel of our Company since 2007
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Mr. Young has been a senior vice president of RMR LLC since 2011. Previously, Mr. Young served as vice president of leasing and associate general counsel of RMR LLC from 2006 to 2007. Prior to that time, he served as assistant
vice president and associate general counsel of RMR LLC since 2001. Prior to 2001, Mr. Young held various positions at CMGI, Inc., Staples, Inc., Wilmer, Cutler, Pickering, Hale and Dorr LLP and Sullivan &
Worcester LLP. Mr. Young identifies as Caucasian, male and a member of the LGBTQ community.
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16 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
BOARD COMMITTEES
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Members
Joseph L. Morea (Chair)
Barbara D. Gilmore
Lisa Harris Jones
Rajan C. Penkar
Elena B. Poptodorova
8 meetings in the fiscal year ended December 31, 2020
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Our Audit Committee is comprised solely of Independent Directors. Its primary role is to help our Board fulfill its oversight responsibilities related to the integrity of our financial statements and financial reporting process, the qualifications,
independence and performance of our independent registered public accounting firm, the performance of our internal audit function, risk management and our compliance with legal and regulatory requirements. Our Audit Committee is responsible for the
appointment, compensation, retention and oversight, and the evaluation of the qualifications, performance and independence, of our independent auditors and the resolution of disagreements between management and our independent auditors. Our
independent auditors report directly to our Audit Committee. Our Audit Committee also has final authority and responsibility for the appointment and assignment of duties to our Director of Internal Audit. Our Audit Committee reviews the overall audit
scope and plans of the audit with our independent auditors. Our Audit Committee also reviews with management and our independent auditors our quarterly reports on Form 10-Q, annual reports on Form 10-K and earnings releases.
Our Board has determined that each member of our Audit Committee is financially literate and that Mr. Morea is our Audit Committee's "financial expert."
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Members
Barbara D. Gilmore (Chair)
Lisa Harris Jones
Joseph L. Morea
Rajan C. Penkar
Elena B. Poptodorova
8 meetings in the fiscal year ended December 31, 2020
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Our Compensation Committee is comprised solely of Independent Directors. Its primary responsibilities pertain to evaluating the performance and compensation of our business management services provider and of our
executive officers and our Director of Internal Audit, annually reviewing our agreement with our business management services provider and approving equity compensation awards. Our Compensation Committee recommends to our Board the cash compensation
payable to our Directors for Board and committee service and determines the compensation payable for service as our Lead Independent Director.
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Nominating and Governance Committee
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Members
Lisa Harris Jones (Chair)
Barbara D. Gilmore
Joseph L. Morea
Rajan C. Penkar
Elena B. Poptodorova
2 meetings in the fiscal year ended December 31, 2020
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Our Nominating and Governance Committee is comprised solely of Independent Directors. Its primary role is to identify individuals qualified to become Board members, consistent with criteria approved by our Board, and to
recommend candidates to our entire Board for nomination or selection as Board members for each annual meeting of stockholders or when vacancies occur; to perform certain assessments of our Board and Board committees, including to assess the
independence of Directors and Director nominees, and to develop and recommend to our Board governance principles for our Company. Under its charter, our Nominating and Governance Committee is also responsible for considering and reporting on our
succession planning to our Board.
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TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 17
Table of Contents
BOARD MEETINGS
In 2020, our Board held nine meetings. In 2020, each Director attended 75% or more of the aggregate of all meetings of our Board and the
committees on which he or she served or that were held during the period in which the Director served as a Director or committee member. All of the Directors attended last year's annual meeting of
stockholders. Our policy with respect to Board members' attendance at meetings of our Board and annual meetings of stockholders can be found in our Governance Guidelines, the full text of which
appears at our website, www.ta-petro.com.
DIRECTOR COMPENSATION
Compensation of Directors
|
Our
Board believes that competitive compensation arrangements are necessary to attract and retain qualified Independent Directors.
Under
the currently effective Director compensation arrangements, each Independent Director receives an annual fee of $75,000 for services as a Director. The annual fee for any new Independent
Director is prorated for the initial year. Each Independent Director who serves as a committee chair of our Audit Committee, Compensation Committee or Nominating and Governance Committee or as our
liaison to our Gaming Compliance Committee also receives an additional annual fee of $22,500, $12,500, $12,500 and $12,500, respectively, and the Lead Independent Director also receives an additional
annual cash retainer fee of $17,500 for serving in this role. Directors are reimbursed for travel expenses they incur in connection with their duties as Directors and for out of pocket costs they
incur in connection with their attending certain continuing education programs, if any.
Each
Independent Director and Managing Director also receives an award of Common Shares annually, which was 3,000 Common Shares in 2020. Managing Directors do not receive cash compensation for their
services as Directors.
Director Share Ownership Guidelines
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Our
Board believes it is important to align the interests of Directors with those of our stockholders, and for Directors to hold equity ownership positions in our Company.
Accordingly, each Director is expected to retain at least 10,000 Common Shares, whether vested or not, within five years following: (i) if elected by stockholders, the annual meeting of
stockholders of our Company at which such Director was initially elected or, (ii) if appointed by our Board, the first annual meeting of stockholders of our Company following the initial
appointment of such Director to our Board. Compliance with these ownership guidelines is measured annually. Any Director who is prohibited by law or by applicable regulation of his, her or their
employer from owning equity in our Company is exempt from this requirement. Our Nominating and Governance Committee may consider whether exceptions should be made for any Director on whom this
requirement could impose a financial hardship.
As
of March 24, 2021, all Directors have met or, within the applicable period, are expected to meet, these share ownership guidelines.
18 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
Fiscal Year 2020 Director Compensation
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The
following table details the total compensation of the Directors for the fiscal year ended December 31, 2020 for services as a Director.
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Name
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Fees Earned or
Paid in Cash ($)(1)
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Stock Awards ($)(2)
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All Other
Compensation ($)
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Total ($)
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Barbara D. Gilmore
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105,000
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33,300
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138,300
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Lisa Harris Jones
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100,000
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33,300
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133,300
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Joseph L. Morea
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97,500
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33,300
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130,800
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Rajan C. Penkar
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93,750
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80,940
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174,690
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Jonathan M. Pertchik(3)
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33,300
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33,300
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Elena B. Poptodorova
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93,750
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80,940
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174,690
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Adam D. Portnoy(3)
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33,300
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33,300
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-
(1)
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The
amounts reported in the Fees Earned or Paid in Cash column reflect the cash fees earned by each Independent Director in 2020, consisting of a $75,000 annual cash
fee and, for each of Ms. Gilmore, Ms. Harris Jones and Mr. Morea, an additional $12,500, $12,500 and $22,500, respectively, for service as a committee chair in 2020. In addition,
Ms. Harris Jones earned $12,500 for her service as our Board's liaison to the Gaming Compliance Committee in 2020. Ms. Gilmore also earned $17,500 in her role as Lead Independent
Director in 2020. Ms. Poptodorova and Mr. Penkar were elected to the Board in February 2020 and received pro-rated cash fees for their service on the Board during 2020.
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(2)
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With
respect to each Director, equals 3,000 Common Shares multiplied by the closing price of such shares on May 21, 2020 and includes an additional 3,000
Common Shares awarded to each of Ms. Poptodorova and Mr. Penkar in connection with their election to our Board multiplied by the closing price of such shares on February 24, 2020.
Amounts shown are also the compensation cost for the award recognized by us for financial reporting purposes pursuant to Financial Accounting Standards Board Accounting Standards Codification Topic
718, "CompensationStock Compensation" ("ASC 718") (which equals the closing price of the shares on the award date, multiplied by the number of shares subject to the award). No assumptions
were used in this calculation. All Common Share awards are fully vested on the award date.
-
(3)
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Managing
Directors do not receive cash compensation for their services as Directors. The compensation of Mr. Pertchik for his service as our Chief Executive
Officer is not included here and is described below under "Executive Compensation."
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 19
Table of Contents
OWNERSHIP OF OUR EQUITY SECURITIES
Directors and Executive Officers
|
The
following table sets forth information regarding the beneficial ownership of the outstanding Common Shares by each Director and Director nominee, each of our named executive
officers and our Directors, Director nominees, named executive officers and other executive officers as a group, all as of March 24, 2021. Unless otherwise noted, to our knowledge, voting power
and investment power in the Common Shares are exercisable solely by the named person and the principal business address of the named person is c/o TravelCenters of America Inc. 24601 Center
Ridge Road, Westlake, Ohio 44145.
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Name and Address
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Aggregate
Number of
Shares
Beneficially
Owned*
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Percent of
Outstanding
Shares**
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Additional Information
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Adam D. Portnoy
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655,506
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4.5%
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Includes 621,853 Common Shares owned by RMR LLC. Mr. Portnoy, ABP Trust and RMR Inc. may be deemed to beneficially own, and share voting and investment power over, the Common Shares owned by RMR LLC. RMR LLC is the majority
owned subsidiary of RMR Inc. and Mr. Portnoy is the controlling shareholder of RMR Inc. through ABP Trust. Mr. Portnoy holds shares of beneficial interests in and is the sole trustee of, ABP Trust. Mr. Portnoy is also the
president and chief executive officer of RMR LLC and RMR Inc. and a director of RMR Inc.
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As set forth in the below table, SVC beneficially owns 1,184,797 Common Shares. Adam Portnoy is a managing trustee of SVC and SVC is managed by RMR LLC. Mr. Portnoy and RMR LLC may not act to vote or sell the Common Shares owned by
SVC without the authorization of the board of trustees of SVC, which is comprised of seven trustees. As a result, Mr. Portnoy has determined that he does not beneficially own the Common Shares owned by SVC and therefore the Common Shares owned
by SVC are not referenced as beneficially owned by him in this table.
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Jonathan M. Pertchik
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113,000
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Less than 1%
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Barry A. Richards
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73,163
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Less than 1%
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Includes 26,770 Common Shares jointly owned.
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Mark R. Young
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65,379
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Less than 1%
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Barbara D. Gilmore
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27,900
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Less than 1%
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Includes 4,000 Common Shares owned by Ms. Gilmore's husband.
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Joseph L. Morea
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16,400
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Less than 1%
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Lisa Harris Jones
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15,900
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Less than 1%
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Rajan C. Penkar
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6,000
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Less than 1%
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Elena B. Poptodorova
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5,100
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Less than 1%
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All Directors, named executive officers and other executive officers as a group (10 persons)
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1,007,082
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6.9%
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-
*
-
Amounts
exclude fractional shares.
-
**
-
The
percentages indicated are based on 14,568,693 Common Shares outstanding as of the record date, March 24, 2021.
20 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
Set
forth in the table below is information about the number of Common Shares held by persons we know to be the beneficial owners of more than 5.0% of the outstanding Common Shares.
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Name and Address
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Aggregate
Number of
Shares
Beneficially
Owned*
|
|
|
Percent of
Outstanding
Shares**
|
|
Additional Information
|
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Nantahala Capital Management, LLC ("Nantahala")
130 Main Street, 2nd Floor
New Canaan, CT 06840
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1,291,003
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8.9
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%
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Based on a Schedule 13G filed with the SEC on February 16, 2021, by Nantahala, Nantahala beneficially owns 1,291,003 Common Shares and has shared voting and dispositive power over 1,291,003 Common Shares.
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Service Properties Trust
Two Newton Place
255 Washington Street, Suite 300
Newton, Massachusetts 02458
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1,184,797
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8.1
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%
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Based on a Schedule 13G/A filed with the SEC on January 19, 2021, by SVC, SVC beneficially owns and has sole voting and dispositive power over 1,184,797 Common Shares.
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-
*
-
Beneficial
ownership is shown as of December 31, 2020.
-
**
-
Our
Charter and Bylaws place restrictions on the ability of any person or group to acquire beneficial ownership of more than 5.0% of any class of our equity shares.
Additionally, the terms of our leases with SVC, our agreement with RMR LLC and our credit agreement contain provisions whereby our rights under these agreements may be cancelled upon the
acquisition by any person or group of more than 9.8% of our voting stock or upon other change in control events, as defined. If the violation of these ownership limitations causes a lease or contract
default, stockholders causing the default may become liable to the Company or to other stockholders for damages. The ownership limitation in our Charter and Bylaws helps facilitate our compliance with
our contractual obligations with SVC to not take actions that may conflict with SVC's status as a REIT under the Code and is intended to help us preserve the tax treatment of our net operating losses
and other tax benefits. Our governing documents generally provide that transfers of our shares to a person, entity or group that is then, or would become as a result, an owner of 5% or more of our
outstanding shares under applicable standards would be void in total for transferees then already owning 5% or more of our shares, and for transferees that would otherwise become owners of 5% or more
of our shares, to the extent the transfer would so result in such level of ownership by the proposed transferee and to the extent not approved by the Company. Nantahala and SVC, however, are each an
Excepted Holder, as defined in our Charter, and therefore are not subject to the ownership limits in our governing documents, subject to certain limitations.
The
percentages indicated are based on 14,568,693 Common Shares outstanding as of the record date, March 24, 2021.
DELINQUENT SECTION 16(A) REPORTS
Peter Crage, our Executive Vice President, Chief Financial Officer and Treasurer, did not timely file a Form 4 with respect to
his disposition of 871 Common Shares on March 2, 2020 for payment of a tax liability by withholding Common Shares. The Form 4/A was filed on April 15, 2020. Adam Portnoy, the
Chair of our Board and a Managing Director, did not timely file a Form 4 with respect to the purchase by RMR LLC of 218,577 Common Shares in our public equity offering on
July 6, 2020. The Form 4 was filed on September 23, 2020.
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 21
Table of Contents
EXECUTIVE COMPENSATION
The following tables and footnotes summarize the total compensation we paid to our Chief Executive Officer, President, and Executive Vice
President and General Counsel who were serving as such officers as of December 31, 2020 or our "named executive officers." The compensation information for the persons included in the
compensation tables are for services rendered to us and our subsidiaries and does not include information regarding any compensation received by such persons for services rendered to RMR LLC.
All applicable amounts have been adjusted to give effect to the one-for-five reverse stock split affected on our Common Shares as of August 1, 2019. Please see the "Certain Related Person
Transactions" section for further information regarding compensation received by the named executive officers. For information regarding the compensation paid by RMR LLC and RMR Inc. to
the named executive officers of RMR Inc., please see the documents filed by RMR Inc. with the SEC, including its Annual Report on Form 10-K for the fiscal year ended
September 30, 2020, and its Proxy Statement on Schedule 14A for its 2021 Annual Meeting of Shareholders. RMR Inc.'s filings with the SEC are not incorporated by reference into
this Proxy Statement.
Summary Compensation Table
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Name and Principal Position
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Year
|
|
Salary ($)
|
|
Bonus ($)
|
|
Stock
Awards ($)(1)
|
|
All Other
Compensation ($)(2)
|
|
Total ($)
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Jonathan M. Pertchik(3)
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2020
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|
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300,000
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1,600,000
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|
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1,690,300
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150,575
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3,740,875
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Chief Executive Officer
|
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2019
|
|
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12,500
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|
|
|
|
|
586,180
|
|
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|
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598,680
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|
Barry A. Richards
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2020
|
|
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300,000
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|
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600,000
|
|
|
497,100
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|
|
3,810
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|
1,400,910
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President
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2019
|
|
|
300,000
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|
|
600,000
|
|
|
218,640
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|
|
3,810
|
|
1,122,450
|
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Mark R. Young
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2020
|
|
|
300,000
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|
|
600,000
|
|
|
497,100
|
|
|
1,290
|
|
1,398,390
|
|
Executive Vice President and
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2019
|
|
|
300,000
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|
|
575,000
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|
|
163,980
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|
|
1,290
|
|
1,040,270
|
|
General Counsel
|
|
|
|
|
|
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|
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|
|
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|
|
|
|
|
|
|
-
(1)
-
Represents
the grant date fair value of Common Share awards in 2020 and 2019, as applicable, calculated in accordance with ASC 718 (which equals the closing price of
the shares on the award date multiplied by the number of shares subject to the grant). No assumptions were used in this calculation. The values listed in this column for Mr. Pertchik for 2019
include the value of 50,000 Common Shares we awarded to him in connection with his election as Chief Executive Officer and, 3,000 Common Shares awarded to him in connection with his election as a
Managing Director, effective December 16, 2019, and for 2020 include the value of 3,000 Common Shares awarded to him for services as a Managing Director and 50,000 shares awarded to him in
connection with his services as Chief Executive Officer.
-
(2)
-
The
amounts listed in this column represent the portion of executive officer life insurance premiums that we paid and also include $150,000 for relocation expenses
for Mr. Pertchik in 2020.
-
(3)
-
Our
Board elected Mr. Pertchik as a Managing Director and Chief Executive Officer, effective December 16, 2019.
2020 Outstanding Equity Awards at Fiscal Year End
|
Share
awards made by us to our Chief Executive Officer, to our President and to our Executive Vice President and General Counsel in 2020 provide that one fifth of each award vested
on the date of the award and an additional one fifth vests on each of the next four anniversaries of the award date. In the event a recipient who has been granted a Common Share award ceases
continuing to render significant services as an employee or otherwise, to the Company, RMR LLC or any company to which RMR LLC provides management services or that is affiliated with
RMR LLC during the vesting period, at the Company's option, the recipient shall forfeit the Common Shares that have not yet vested. Holders of vested and unvested Common Shares awarded under
the TravelCenters of America Inc. Second Amended and Restated 2016 Equity Compensation Plan, as amended (the "2016 Equity Compensation Plan"), or under any prior equity compensation plans
receive distributions that we make, if any, on our Common Shares on the same terms as other holders of the Common Shares.
22 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
The
following table shows the total Common Shares awarded by us to our named executive officers in their capacity as our officers that were unvested as of December 31, 2020.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
Name
|
|
Year Granted
|
|
Number of Shares or Units of
Stock That Have Not Vested (#)(1)
|
|
Market Value of Shares or Units of
Stock That Have Not Vested ($)(2)
|
|
|
|
Jonathan M. Pertchik
|
|
|
2020
|
|
|
40,000
|
|
|
1,304,000
|
|
|
|
|
2019
|
|
|
30,000
|
|
|
978,000
|
|
Barry A. Richards
|
|
|
2020
|
|
|
12,000
|
|
|
391,200
|
|
|
|
|
2019
|
|
|
14,400
|
|
|
469,440
|
|
|
|
|
2018
|
|
|
6,400
|
|
|
208,640
|
|
|
|
|
2017
|
|
|
2,400
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|
|
78,240
|
|
Mark R. Young
|
|
|
2020
|
|
|
12,000
|
|
|
391,200
|
|
|
|
|
2019
|
|
|
10,800
|
|
|
352,080
|
|
|
|
|
2018
|
|
|
4,800
|
|
|
156,480
|
|
|
|
|
2017
|
|
|
2,400
|
|
|
78,240
|
|
|
|
-
(1)
-
Unless
noted otherwise, Common Share awards granted by us to our executive officers provide that one fifth of each award vests on the date of the award and one fifth
vests on each of the next four anniversaries of the date of the award. The Common Shares granted in 2020, 2019, 2018 and 2017 were granted on December 2, 2020, December 4, 2019,
November 28, 2018 and November 29, 2017, respectively.
-
(2)
-
Equals
the number of Common Shares not vested multiplied by the closing price of the Common Shares on December 31, 2020.
Potential Payments upon Termination or Change in Control
|
The
2016 Equity Compensation Plan and the form of share award agreement for awards made to our named executive officers provide for acceleration of vesting of all share awards
(including those previously awarded) upon the occurrence of (i) a change in control of the Company (a "Change in Control") or (ii) RMR LLC ceasing to be the manager or shared
services provider to the Company or certain employment termination events (each, a "Termination Event").
The
following table describes the potential payments to our named executive officers upon a Change in Control or Termination Event, if such event had occurred, as of December 31, 2020.
|
|
|
|
|
|
|
|
|
Name
|
|
Number of Shares Vested Upon
Change in Control or Termination
Event (#)
|
|
Value Realized on Change in Control or
Termination Event as of
December 31, 2020 ($)(1)
|
|
|
|
Jonathan M. Pertchik
|
|
70,000
|
|
|
2,282,000
|
|
Barry A. Richards
|
|
35,200
|
|
|
1,147,520
|
|
Mark R. Young
|
|
30,000
|
|
|
978,000
|
|
|
|
-
(1)
-
Equals
the number of Common Shares multiplied by the closing price of the Common Shares on December 31, 2020.
Although
we have no formal policy, plan or arrangement for payments to employees of the Company or RMR LLC in connection with the termination of their employment with the Company or
RMR LLC, we may in the future provide on a discretionary basis for the acceleration of vesting of Common Shares previously awarded to them under the 2016 Equity Compensation Plan depending on
various factors we then consider relevant and if we believe it is in our best interests to do so.
For
a discussion of the consequences of a Change in Control or Termination Event under our business management agreement with RMR LLC, see the "Certain Related Person
Transactions" section.
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 23
Table of Contents
PROPOSAL 2: ADVISORY VOTE TO APPROVE EXECUTIVE
COMPENSATION
As required by Section 14A of the Exchange Act, we are seeking a non-binding advisory vote from our stockholders to approve the
compensation of our named executive officers as described in the "Executive Compensation" section beginning on page 22.
Our
Board recommends that stockholders vote "FOR" the following resolution:
RESOLVED:
That the stockholders of the Company approve, on a non-binding, advisory basis, the compensation paid by the Company to the Company's named executive officers, as disclosed pursuant to
Item 402 of Regulation S-K, in this Proxy Statement.
Because
your vote is advisory, it will not be binding upon our Board or Compensation Committee. However, our Board values stockholders' opinions and our Compensation Committee will take into account
the outcome of the vote when considering future executive compensation decisions.
Approval
of the advisory vote to approve executive compensation requires the affirmative vote of a majority of all the votes cast, in person or by proxy, at our 2021 Annual Meeting.
Our Board of Directors recommends a vote "FOR" the advisory vote to approve executive
compensation.
24 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
PROPOSAL 3: APPROVAL OF AN AMENDMENT TO THE SECOND
AMENDED AND RESTATED 2016 EQUITY COMPENSATION PLAN
Stockholders are being asked to approve an amendment (the "Amendment") to the Second Amended and Restated 2016 Equity Compensation Plan (the
"Second Amended and Restated 2016 Equity Compensation Plan"), to increase by 900,000 the total number of Common Shares available for grant under the plan.
The
Second Amended and Restated 2016 Equity Compensation Plan was approved by stockholders at the 2020 Annual Meeting of Stockholders and prior to the approval of the Second Amended and Restated 2016
Equity Compensation Plan, the 2016 Equity Compensation Plan, as amended (the "Predecessor Plan") was in effect. The Second Amended and Restated 2016 Equity Compensation Plan currently provides that an
aggregate of 1,285,000 Common Shares are available for grant under the plan pursuant to grants of options to acquire Common Shares ("Options"), Common Shares subject to restrictions ("Restricted
Shares") and other rights to receive compensation consisting of or determined by the value of the Common Shares ("Other Rights"). As of March 24, 2021, 264,587 Common Shares of such 1,285,000
aggregate Common Shares were available for grants of future awards pursuant to the Second Amended and Restated 2016 Equity Compensation Plan, and there were 338,017 unvested Restricted Shares
outstanding, which remain subject to possible forfeiture to, or repurchase for nominal consideration by, us as provided in the applicable restricted share award agreement.
Our
Board believes that equity and equity-based compensation is an important component of our compensation program and assists us in attracting, motivating and retaining talented Directors, officers,
employees and other service providers. The Second Amended and Restated 2016 Equity Compensation Plan is the only plan we have to provide equity and equity-based incentive compensation to eligible
individuals, and a limited number of Common Shares remain available for future award under it. The Board believes that increasing the number of Common Shares that are available for awards under the
Second Amended and Restated 2016 Equity Compensation Plan will better position us to attract, motivate
and retain talented Directors, officers, employees and other individuals (whether or not employees) who render services to us by providing opportunities for them to participate in our ownership and
future growth. Accordingly, our Board has approved the Amendment to the Second Amended and Restated 2016 Equity Compensation Plan, subject to stockholder approval as requested in this Proposal 3, to
increase the total number of Common Shares available for grant under the Second Amended and Restated 2016 Equity Compensation Plan from 1,285,000 to 2,185,000.
Key
factors considered by the Board in adopting this amendment to the 2016 Equity Compensation Plan and recommending it for stockholder approval include:
-
-
The Company believes that the number of Common Shares available for issuance under the Second Amended and Restated 2016
Equity Compensation Plan, as amended by the proposed amendment, is necessary to allow us to continue the Company's equity compensation program for up to the next five years based on current
expectations. As noted above, as of March 24, 2021, only 264,587 Common Shares remained available for future awards under the Second Amended and Restated 2016 Equity Compensation Plan.
-
-
The Second Amended and Restated 2016 Equity Compensation Plan contains a number of plan provisions favored by stockholders,
including:
-
-
A requirement that an independent plan administrator (consisting solely of our Compensation Committee or another
committee of independent Board members) administer the plan;
-
-
a prohibition on the re-pricing of stock options and stock appreciation rights;
-
-
a prohibition on "liberal share counting" (generally prohibiting the re-grant under the plan of shares tendered
or withheld in satisfaction of exercise price and tax withholding obligations);
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 25
Table of Contents
-
-
a prohibition on receipt of dividends on unvested performance awards;
-
-
a "clawback" provision that allows us, in certain circumstances, to reduce or reclaim awards in the event of a
material restatement of our financial statements; and
-
-
the ability of our Compensation Committee to impose mandatory post-vesting holding periods on shares acquired
pursuant to awards issued under the plan.
For
purposes of evaluating our equity compensation program, stockholders may wish to consider two key metrics: "historical burn rate" and "overhang."
Historical
Burn Rate. Our historical burn rate is equal to the number of Common Shares subject to equity awards granted during a period, in proportion to our weighted average outstanding Common
Shares. Our burn rate for the year ended December 31, 2020 was 2.32%, and our average annual burn rate for the three years ended December 31, 2020 was 2.69%.
Overhang.
Our overhang is the number of outstanding Common Shares that are subject to vesting requirements at year end plus the number of Common Shares available for future grants of equity awards
in proportion to our Common Shares outstanding at year end excluding the unvested Restricted Shares. As of the year ended December 31, 2020, our overhang was 7.38%.
Material Terms of the Second Amended and Restated 2016 Equity Compensation Plan (as
proposed to be amended)
A copy of the Second Amended and Restated 2016 Equity Compensation Plan, which reflects the proposed amendment, is set forth as Annex A to this Proxy
Statement. All references to the Second Amended and Restated 2016 Equity Compensation Plan hereafter are to the Second Amended and Restated 2016 Equity Compensation Plan as it would be amended by the
Amendment, unless otherwise indicated. The material features of the Second Amended and Restated 2016 Equity Compensation Plan are described below. The following description is intended to be a
summary, and does not purport to be a complete statement of the terms of the Second Amended and Restated 2016 Equity Compensation Plan. Accordingly, this summary is qualified in its entirety by
reference to Annex A.
Administration; Purpose
A committee of our Board comprised of independent Board members (such as our Compensation Committee) or our Board administers the Second Amended and Restated
2016 Equity Compensation Plan. Accordingly, descriptions below of determinations and actions of our Compensation Committee with respect to the Second Amended and Restated 2016 Equity Compensation Plan
may be made by our Board, or another Board committee, as well. The purpose of the Second Amended and Restated 2016 Equity Compensation Plan is to encourage employees, officers, Directors and other
individuals (whether or not employees) who render services to us or our subsidiaries to continue their association with the Company by providing opportunities for them to participate in the ownership
and future growth of the Company through the granting of equity and equity-based awards. Our Compensation Committee or our Board has the authority to waive vesting requirements in whole or in part in
its discretion in connection with a termination of employment.
Available Shares; Proposed Amendment
The Second Amended and Restated 2016 Equity Compensation Plan provides that a total of 2,185,000 Common Shares are available for awards under the plan, which
amount includes the 1,285,000 Common Shares previously available under the plan and the additional 900,000 Common Shares proposed to be added by the amendment.
Awards
of Options, Restricted Shares and Other Rights (including Share Appreciation Rights ("SARs") and unrestricted shares) may be issued pursuant to the Second Amended and Restated 2016 Equity
Compensation Plan.
26 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
Restricted
Shares that fail to vest, shares subject to an Option that is not fully exercised prior to its expiration or other termination and shares subject to Other Rights that are not delivered
pursuant to such award shall again become available for grant under the terms of the plan. Common Shares tendered or retained by us as full or partial payment of the exercise price of an award or to
satisfy tax withholding obligations are not available for re-grant under the plan, nor are shares subject to outstanding awards under the TravelCenters of America LLC 2007 Equity Compensation
Plan which are later forfeited. The maximum number of Common Shares subject to Options that may be granted to any individual in the aggregate in any calendar year may not exceed 100,000 Common Shares.
On April 5, 2021, the last reported sale price of the Common Shares on the Nasdaq was $27.96.
Term
The Second Amended and Restated 2016 Equity Compensation Plan is scheduled to expire on June 10, 2031, unless earlier terminated by our Board.
Eligibility
Employees, officers, Directors and other individuals who render services in connection with the management, operation or development of the Company or a
subsidiary and who have contributed or may be expected to contribute to the Company's or a subsidiary's success are eligible to receive awards of Options, Restricted Shares and Other Rights. As of
March 24, 2021, the Company had four executive officers and six non-employee Directors and the Company and its subsidiaries together had approximately 18,700 other employees and service
providers who would be eligible for awards under the Second Amended and Restated 2016 Equity Compensation Plan. During 2020, 176 eligible Directors, executive officers, other employees and service
providers received awards under the Second Amended and Restated 2016 Equity Compensation Plan.
Amending the Second Amended and Restated 2016 Equity Compensation Plan
Our Board may at any time amend the Second Amended and Restated 2016 Equity Compensation Plan; provided, however, that without stockholder approval there
shall be no: (i) change in the number of Common Shares that may be issued under the Second Amended and Restated 2016 Equity Compensation Plan, except for equitable or other adjustments as
provided by the terms of the plan; (ii) change in the class of persons eligible to receive Options, Restricted Shares or Other Rights; or (iii) other change in the Second Amended and
Restated 2016 Equity Compensation Plan that requires stockholder approval under applicable law. No amendment to the Second Amended and Restated 2016 Equity Compensation Plan shall adversely affect
outstanding Options, Restricted Shares or Other Rights without the consent of the holder of the award. The Second Amended and Restated 2016 Equity Compensation Plan may be terminated at any time by
action of our Board, but any such termination will not terminate any Option, Restricted Share grants or Other Rights then outstanding without the consent of the award holder.
Options
Options issued under the Second Amended and Restated 2016 Equity Compensation Plan will be evidenced by a written Share Option Agreement that shall specify
the number of Common Shares that may be purchased pursuant to the Option, the time or times at which the Option shall become exercisable in whole or in part, whether the Option is intended to be an
incentive stock option (an option eligible for special tax treatment, as further described below and referred to herein as an "ISO"), or a nonqualified stock option (any Option that is not an ISO,
hereinafter, an "NSO") and such other terms and conditions as our Compensation Committee shall approve. ISOs may be granted only to individuals who are employees of the Company or a subsidiary that is
a corporation.
With
the exception of certain awards of ISOs, each Option expires not more than ten years from its date of grant. The exercise price of each Option shall be at least 100% of the fair market value of
the Common Shares on the date of grant; except that the price with respect to an ISO granted to an employee who at
the time of grant owns shares representing more than 10% of the voting power of all classes of the Company's or any of its subsidiaries' shares shall be at least 110% of the fair market value of the
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 27
Table of Contents
Common
Shares on the date of grant (such ISOs also have a maximum term of five years). Under the plan, Options may not be repriced without the approval of our stockholders.
To
the extent that it has become exercisable under the terms of an Option agreement, an Option may generally be exercised by payment of the exercise price in cash or check payable to the Company or,
if the agreement so provides, other payment, including in whole or in part in certain Common Shares already owned by the participant. An Option may be exercised so long as it is outstanding from time
to time in whole or in part, to the extent and subject to the terms and conditions that our Compensation Committee in its discretion may provide in the Option agreement. An Option generally will cease
to be exercisable upon the expiration of 90 days following the termination of the participant's employment with, or the participant's other provision of services to, the Company or a
subsidiary. Proceeds from the sale of Common Shares pursuant to Options shall constitute the Company's general funds.
Options
generally are not transferable by the participant otherwise than by will or under the laws of descent and distribution and shall be exercisable during the participant's lifetime only by such
participant, except as otherwise provided by our Compensation Committee in an Option agreement for an NSO. A participant shall have no rights as a stockholder with respect to any Common Shares subject
to an Option until a share certificate or other evidence of legal and beneficial ownership is issued to him or her.
Restricted Shares
Our Compensation Committee may grant Restricted Shares in respect of such number of Common Shares, and subject to such terms or conditions as it shall
determine and specify in a Restricted Share Agreement.
A
holder of Restricted Shares generally shall have all of the rights of one of our stockholders, including the right to vote the shares and the right to receive any cash dividends on an unrestricted
basis. Restricted Shares granted under the Second Amended and Restated 2016 Equity Compensation Plan are not transferrable prior to vesting. In addition, at the time of termination for any reason of a
participant's employment or other service relationship with the Company or a subsidiary, we shall have the right, in the case of unvested Restricted Shares, to, among other things, cause the
forfeiture of such shares or to purchase all or any of such shares at a price equal to the lower of (a) the price paid to us for such shares (if any) or (b) the fair market value of such
shares at the time of repurchase.
SARs
Our Compensation Committee may grant SARs in respect of such number of Common Shares as it shall determine in its discretion and may grant SARs either
separately or in connection with Options. SARs granted in connection with an Option may be exercised only to the extent of the surrender of the related Option; with the exercise of the related Option,
the SAR shall terminate. Common Shares covered by an Option that terminates upon the exercise of a related SAR shall cease to be available under the 2016 Equity Compensation Plan. The terms and
conditions of a SAR related to an Option shall be contained in the Option agreement, and the terms of a SAR not related to any Option shall be contained in a SAR agreement. Upon the exercise of a SAR,
the participant will be entitled to receive from the Company an amount equal to the excess of the fair market value, on the exercise date, of the number of Common Shares as to which the SAR is
exercised, over the exercise price for those shares under a related Option or, if there is no related Option, over the base value stated in the SAR agreement. Any amount payable by the Company upon
the exercise of a SAR shall be paid in the form of cash or other property (including Common Shares), as provided in the respective Option agreement or SAR agreement. SARs cannot be repriced without
stockholder approval.
Other Rights
In addition to SARs, Other Rights granted under the plan shall be governed by the terms of the respective award agreement, if any. Other Rights may include
share awards that are not subject to vesting, forfeiture or transfer restrictions.
28 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
Equitable Adjustments
In the event that the outstanding Common Shares are changed for a different number or kind of shares or other securities of the Company by reason of a
reorganization, recapitalization, share exchange, share split, combination of shares, a dividend payable in shares or other securities or a similar corporate event, a corresponding adjustment may be
made by our Compensation Committee in the number and kind of shares or other securities covered by outstanding Options and Other Rights and for which Options and Other Rights may be granted under the
Second Amended and Restated 2016 Equity Compensation Plan. Any such adjustment in outstanding Options shall be made without change in the total price applicable to the unexercised portion of the
Option, but the exercise price per share specified in each Share Option Agreement shall be correspondingly adjusted; provided, however, that no adjustment shall be made with respect to an ISO that
would constitute a "modification," as defined in Section 424 of the U.S. Internal Revenue Code of 1986, as amended, (the "Internal Revenue Code") (and so cause the Option to fail to constitute
an ISO), without the consent of the holder.
If
we merge or consolidate with a wholly-owned subsidiary for the purpose of re-incorporating while unexercised Options remain outstanding under the Second Amended and Restated 2016 Equity
Compensation Plan, Option participants will be entitled to acquire shares of common stock of the re-incorporated company upon the same terms and conditions as were in effect immediately prior to such
re-incorporation (unless such re-incorporation involves a change in the number of shares or the capitalization of the Company, in which case proportional adjustments shall be made as provided above)
and the Second Amended and Restated 2016 Equity Compensation Plan, unless otherwise rescinded by our Board, will remain the plan of the re-incorporated company.
Except
as otherwise provided above, if we merge or consolidate with another corporation, whether or not it is the surviving entity, or if we are liquidated or sell or otherwise dispose of all or
substantially all of our assets to another entity while unexercised Options remain outstanding under the Second Amended and Restated 2016 Equity Compensation Plan, or if other circumstances occur in
which our Compensation Committee in its sole and absolute discretion deems it appropriate to act, our Compensation Committee has discretion to: (i) grant, upon exercise of the Option and in
lieu of Common Shares, stock or other securities or property as the participant would have received had such participant exercised or vested in the Option immediately prior to the event;
(ii) cancel all outstanding and unexercised Options; (iii) convert some or all Options into Options to purchase the stock or other securities of the surviving corporation; or
(iv) assume the outstanding and unexercised options to purchase stock or other securities of any corporation and convert such options into Options. Our Compensation Committee also has the
discretion to make certain adjustments or take other action with respect to the treatment of Restricted Shares or Other Rights.
Change in Control
Awards under the Second Amended and Restated 2016 Equity Compensation Plan will become fully vested upon the occurrence of a Change in Control or a
Termination Event, as those terms are defined in the plan.
Certain Vesting Guidelines; Holding Periods
Unless our Compensation Committee determines otherwise, if the vesting condition for any award made to a participant who is an employee of the Company, or one
of its subsidiaries, is based solely upon continued employment for a period of time, the vesting period shall not be less than 36 months for the vesting of the entire award (ratable portions of
such awards may vest periodically during such period including the grant date). In addition, unless our Compensation Committee determines otherwise, if the vesting condition for any award made to a
participant who is not an employee of the Company, or one of its subsidiaries, is based solely upon continued service for a period of time, such vesting period shall not be less than 12 months
for the vesting of the entire award (ratable portions of such awards may vest periodically during such period including the grant date). If the vesting of an award is based upon the attainment of
performance criteria, the minimum performance period for such award shall be 12 months, unless the Compensation Committee determines otherwise. These minimum vesting guidelines will not apply
to awards under the Plan to members of our Board in respect of Board service. Our Compensation
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 29
Table of Contents
Committee
is also authorized to impose post-vesting holding periods on Common Shares acquired under the Second Amended and Restated 2016 Equity Compensation Plan and to accelerate vesting.
Forfeiture for Dishonesty, Violation of Agreements or Termination for Cause;
Clawback
Our Compensation Committee may, subject to certain exceptions, terminate a participant's right to exercise an Option and cause him or her to forfeit all
unexercised Options, all unvested Restricted Shares or all unvested Other Rights, and we shall have the right to cause the forfeiture of or repurchase all or any part of the Common Shares acquired by
the participant upon any previous exercise of any Option or previous acquisition of Restricted Shares or Other Rights if our Compensation Committee determines that a participant has engaged in certain
types of misconduct with respect to the Company or a subsidiary. The Second Amended and Restated 2016 Equity Compensation Plan also authorizes the "clawback" of incentive compensation in the event
that the Company restates its financial statements due to material noncompliance with financial reporting requirements.
Second Amended and Restated 2016 Equity Compensation Plan Benefits
The future benefits or amounts that would be received under the Second Amended and Restated 2016 Equity Compensation Plan are discretionary and are therefore
not determinable at this time. If the amendment to the Second Amended and Restated 2016 Equity Compensation Plan had been in effect in 2020, there would have been no change in the awards that were
granted in 2020.
Certain Federal Income Tax Consequences in Respect of the Second Amended and Restated 2016
Equity Compensation Plan
The following is a summary of certain United States federal income tax consequences with respect to awards under the Second Amended and Restated 2016 Equity
Compensation Plan. Participants should consult with their own tax advisors and should not rely upon this summary.
Nonqualified Share Options
A participant in the Second Amended and Restated 2016 Equity Compensation Plan will not be taxed upon the grant of an NSO. Rather, at the time of exercise of
such NSO, the participant will generally recognize ordinary compensation income, subject to income tax and FICA (Social Security and Medicare) tax withholding, for federal income tax purposes in an
amount equal to the excess of the fair market value of the Common Shares purchased over the exercise price. A participant's tax basis in the Common Shares received will be equal to the amount paid on
exercise plus the ordinary compensation income recognized on the exercise of the NSO. The Company, as the recipient of the services rendered by the participant, will generally be entitled to a tax
deduction at the same time and in the same amount that the participant recognizes ordinary compensation income.
If
Common Shares acquired upon exercise of an NSO are later sold or exchanged, then the difference between the sales price and participant's tax basis will be taxable as long term or short term
capital gain or loss depending upon the length of time the Common Shares have been held.
Incentive Share Options
A participant in the Second Amended and Restated 2016 Equity Compensation Plan will not be taxed on grant of an ISO, nor taxed for regular federal income tax
purposes on the timely exercise of an ISO. Exercise of an ISO will generally be timely if it is exercised while the participant is an employee of the Company (or a corporate affiliate) or within three
months following termination of employment (one year in the case of a disabled participant). If an ISO remains exercisable outside the period described in the preceding sentence, the option will be
treated as an NSO at exercise. See "Certain Federal Income Tax Consequences in Respect of the Second Amended and Restated 2016 Equity Compensation PlanNonqualified Share Options."
If
Common Shares acquired pursuant to the timely exercise of an ISO are later disposed of, and the holding period requirements described in the next paragraph are satisfied, the participant will
recognize
30 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
long
term capital gain or loss equal to the difference between the amount realized upon such sale and the exercise price. The Company, under these circumstances, will not be entitled to any tax
deduction in connection with either the exercise of the ISO or the sale of such Common Shares by the participant.
If,
however, Common Shares acquired pursuant to the exercise of an ISO are disposed of by the participant prior to the expiration of two years from the date of the ISO's grant or within one year from
the
date such Common Shares are transferred on exercise (a disqualifying disposition), any gain realized by the participant generally will be taxable at the time of such disqualifying disposition as
follows: (i) at ordinary income rates to the extent of the difference between the exercise price and the lesser of the fair market value of the Common Shares on the date the ISO is exercised or
the amount realized on such disqualifying disposition; and (ii) as short term or long term capital gain (depending upon the length of time the Common Shares have been held) to the extent of any
excess of the amount realized on such disqualifying disposition over the fair market value of the Common Shares on the date which governs the determination of his or her ordinary income. Solely in the
case of a disqualifying disposition, the Company will generally be entitled to a tax deduction at the same time and in the same amount that the participant recognizes ordinary income.
The
amount by which the fair market value of the stock on the exercise date of an ISO exceeds the exercise price will be an item of adjustment for purposes of the "alternative minimum tax" imposed by
the Internal Revenue Code Section 55.
SARs
A participant in the Second Amended and Restated 2016 Equity Compensation Plan will recognize ordinary compensation income at such time as the value of a SAR
is actually paid in cash or Common Shares. The amount of such income will be the amount of cash distributed or the fair market value on the date of exercise of any Common Shares distributed less any
base value paid. A participant's tax basis in distributed Common Shares will be equal to the amount paid plus the ordinary compensation income recognized on the exercise of the SAR. Any gain or loss
on the subsequent sale of the Common Shares over the tax basis of the Common Shares will be taxable as long term or short term capital gain or loss depending upon the length of time the Common Shares
have been held. The Company will generally be entitled to a tax deduction at the same time and in the same amount that the participant recognizes ordinary compensation income.
Share Awards
A participant in the Second Amended and Restated 2016 Equity Compensation Plan receiving an unrestricted Common Share award (or the unrestricted portion of a
Restricted Share award) will be taxed as ordinary compensation income in an amount equal to the fair market value of the Common Shares at the time of the award.
A
participant generally will not be taxed upon the receipt of a Restricted Share award, but rather will recognize ordinary compensation income in an amount equal to the fair market value of the Common
Shares at the time the Common Shares are no longer subject to a substantial risk of forfeiture, as defined in the Internal Revenue Code. A participant may, however, elect under Internal Revenue Code
Section 83(b) and not later than 30 days after the transfer of such Common Shares to the participant to recognize ordinary compensation income at the time the Restricted Shares are
awarded in an amount equal to the fair market value at that time, notwithstanding the fact that such Common Shares are subject to restrictions and a substantial risk of forfeiture. If such an election
is made, no additional income will be
recognized by such participant at the time the restrictions lapse. However, if Common Shares subject to a Section 83(b) election are later forfeited, no tax deduction is allowable to the
participant for the forfeited Common Shares.
The
full amount of dividends or other distributions of property made with respect to Restricted Shares before the lapse of any applicable restrictions will constitute ordinary compensation income,
unless a Section 83(b) election has been made.
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 31
Table of Contents
The
Company, as the recipient of the services rendered by the participant, will be entitled to a deduction at the same time as and in the same amount that the participant recognizes ordinary
compensation income. If the participant makes a Section 83(b) election and later forfeits the Common Shares, the Company will be deemed to recognize ordinary income equal to the amount of the
deduction previously allowed.
Share Usage
The annual share usage under the Second Amended and Restated 2016 Equity Compensation Plan and the Predecessor Plan for the last three calendar years was as
follows:(1)
|
|
|
|
|
|
|
|
|
|
Year
|
|
Awards Granted
(number of shares)
|
|
Weighted Average
Shares Outstanding
|
|
|
|
|
|
|
|
2018
|
|
|
175,260
|
|
|
7,649,000
|
|
2019
|
|
|
270,575
|
|
|
7,783,000
|
|
2020
|
|
|
253,945
|
|
|
10,961,000
|
|
|
|
-
(1)
-
The
number of shares in the table reflects the one-for-five reverse stock split affected on our Common Shares as of August 1, 2019.
Second Amended and Restated 2016 Equity Compensation Plan Information
We may grant Options and Common Shares (including Restricted Shares) from time to time under the Second Amended and Restated 2016 Equity Compensation Plan to
our officers, Directors, employees and other individuals who render services to us or our subsidiaries. Upon stockholder approval of the amendment to the Second Amended and Restated 2016 Equity
Compensation Plan, an aggregate of 2,185,000 Common Shares will be reserved for issuance under the Second Amended and Restated 2016 Equity Compensation Plan. In 2020, we issued 253,945 Common Shares
to our Directors, officers, employees and others who provide services to us. The following table is as of December 31, 2020.
|
|
|
|
|
|
|
|
|
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(a)
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)
|
|
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column (a))
(c)
|
|
|
|
|
|
|
|
Equity compensation plans approved by security holders
|
|
None
|
|
None
|
|
262,058
|
Equity compensation plans not approved by security holders
|
|
None
|
|
None
|
|
None
|
Total
|
|
None
|
|
None
|
|
262,058
|
|
Other Information
Our Board believes that stockholder approval of the amendment to the Second Amended and Restated 2016 Equity Compensation Plan will better enable the Company
to encourage its employees, officers, Directors and other individuals (whether or not employees) who render services to the Company or a subsidiary to continue their association with the Company by
providing opportunities for them to participate in the ownership and future growth of the Company through the granting of Options, Restricted Shares and Other Rights. If the Amendment is not approved
by stockholders, our Compensation Committee may continue to grant awards under the Second Amended and Restated 2016 Equity Compensation Plan in its current form until the earlier of such time as there
are no longer any Common Shares that may be subject to awards or May 21, 2030, unless the Second Amended and Restated 2016 Equity Compensation Plan is earlier terminated by our Board.
Approval
of the Amendment to the Second Amended and Restated 2016 Equity Compensation Plan requires the affirmative vote of a majority of all the votes cast, in person or by proxy, at our 2021 Annual
Meeting.
Our Board of Directors recommends a vote "FOR" the approval of the Amendment to the Second Amended and Restated 2016
Equity Compensation Plan.
32 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
PROPOSAL 4: RATIFICATION OF THE APPOINTMENT OF RSM
US LLP AS INDEPENDENT AUDITORS
Our Audit Committee has the sole authority and responsibility to hire, evaluate and, when appropriate, replace our independent auditors and is
directly responsible for the appointment, compensation and general oversight of the work of our independent auditors. Our Audit Committee is responsible for approving the audit and permissible
non-audit services provided by our independent auditors and the associated fees.
Our
Audit Committee evaluates the performance of our independent auditors annually and determines whether to re-engage the current independent auditors or consider other audit firms. In doing so, our
Audit Committee considers the quality and efficiency of the services provided by the auditors, the auditors' technical expertise and knowledge of our operations and industry, the auditors'
independence, the results of Public Company Accounting Oversight Board ("PCAOB") inspections and peer quality reviews of the auditors and the auditors' reputation in the marketplace. In connection
with the mandated rotation of our independent auditors' lead engagement partner, our Audit Committee and its Chair consider the selection of the new lead engagement partner identified by our
independent auditors.
Based
on this evaluation, our Audit Committee has appointed RSM US LLP to serve as our independent auditors for the fiscal year ending December 31, 2021. RSM US LLP has served as
our independent auditors since October 6, 2014, and is considered by management and our Audit Committee to be well qualified.
Our
Audit Committee has determined to submit its selection of our independent auditors to our stockholders for ratification. This vote will ratify prior action by our Audit Committee and will not be
binding upon our Audit Committee. However, our Audit Committee may reconsider its prior appointment of our independent auditors or consider the results of this vote when it determines who to appoint
as our independent auditors in the future.
Audit Fees and All Other Fees
|
The
following table shows the fees for audit and other services provided to us by RSM US LLP for the fiscal years ended December 31, 2020 and 2019.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 Fees(1) ($)
|
|
2019 Fees ($)
|
|
Audit Fees
|
|
|
1,720,235
|
|
|
|
1,803,169
|
|
|
Audit Related Fees
|
|
|
|
|
|
|
|
|
|
Tax Fees
|
|
|
47,500
|
|
|
|
46,000
|
|
|
All Other Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
The
amount of audit fees for 2020 is based on the fees billed and paid to date and on the estimate for remaining fees provided by RSM US LLP to and approved
by our Audit Committee for services provided by RSM US LLP, including in connection with the audit of the Company's 2020 financial statements and internal control over financial reporting. The
final amount of the fees for those services may vary from the estimate provided.
Audit Fees. This category includes fees associated with the annual financial statements audit and related audit
procedures, the audit of internal control over financial reporting, work performed in connection with any registration statements and any applicable Current Reports on Form 8-K and the review
of any of our Quarterly Reports on Form 10-Q.
Audit Related Fees. This category consists of services that are reasonably related to the performance of the audit
or review of financial statements and are not included in "Audit Fees." These services principally include due diligence in connection with acquisitions, consultation on accounting and internal
control matters, audits in connection with proposed or consummated acquisitions, information systems audits and other attest services.
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 33
Table of Contents
Tax Fees. This category consists of fees for tax services, including tax compliance, tax advice and tax planning.
All Other Fees. This category consists of services that are not included in the above categories.
Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors
|
Our
Audit Committee has established policies and procedures that are intended to control the services provided by our independent auditors and to monitor their continuing
independence. Under these policies, our independent auditors may not undertake any services unless the engagement is specifically approved by our Audit Committee or the services are included within a
category that has been approved by our Audit Committee. The maximum charge for services is established by our Audit Committee when the specific engagement or the category of services is approved. In
certain circumstances, our management is required to notify our Audit Committee when approved services are undertaken and our Audit Committee or its Chair may approve amendments or modifications to
the engagement or the maximum fees. Our Director of Internal Audit is responsible for reporting to our Audit Committee regarding compliance with these policies and procedures.
Our
Audit Committee will not approve engagements of our independent auditors to perform non-audit services for us if doing so will cause our independent auditors to cease to be independent within the
meaning of applicable SEC or Nasdaq rules. In other circumstances, our Audit Committee considers, among other things, whether our independent auditors are able to provide the required services in a
more or less effective and efficient manner than other available service providers and whether the services are consistent with the rules of the PCAOB.
All
services for which we engaged our independent auditors in 2020 and 2019 were approved by our Audit Committee. The total fees for audit and non-audit services provided by RSM US LLP in 2020
and 2019 are set forth above and, for 2020, include estimated fee amounts. The tax fees charged by RSM US LLP during 2020 and 2019 were for tax compliance services, including those related to
the Company's income tax returns for the fiscal years ended December 31, 2019 and 2018, respectively. Our Audit Committee approved the engagement of RSM US LLP to provide these non-audit
services because it
determined that RSM US LLP providing these services would not compromise RSM US LLP's independence and that the firm's familiarity with our record keeping and accounting systems would
permit the firm to provide these services with equal or higher quality, more quickly and at a lower cost than we could obtain these services from other providers.
We
have been advised by RSM US LLP that neither the firm, nor any member of the firm, has any material interest, direct or indirect, in any capacity in us or our subsidiaries.
One
or more representatives of RSM US LLP will be present at our 2021 Annual Meeting. The representatives will have an opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.
Ratification
of the appointment of our independent auditors requires the affirmative vote of a majority of all the votes cast, in person or by proxy, at our 2021 Annual Meeting.
Our Board of Directors recommends a vote "FOR" the ratification of
the appointment of RSM US LLP as independent auditors.
34 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
REPORT OF OUR AUDIT COMMITTEE
In the course of oversight by our Audit Committee (our "Audit Committee") of our Board of Directors of TravelCenters of America Inc.
(the "Company") of our financial reporting process, our Audit Committee has: (i) reviewed and discussed with management the audited financial statements for the fiscal year ended
December 31, 2020; (ii) discussed with RSM US LLP, our independent auditors, the matters required to be discussed under PCAOB Auditing Standard No. 1301;
(iii) received the written
disclosures and the letter from our auditors required by applicable requirements of the PCAOB regarding our independent auditors' communications with our Audit Committee concerning independence;
(iv) discussed with our independent auditors their independence; and (v) considered whether the provision of non-audit services by our independent auditors is compatible with maintaining
their independence and concluded that it is compatible at this time.
Based
on the foregoing review and discussions, our Audit Committee recommended to our Board that the audited financial statements be included in the Annual Report on Form 10-K for the fiscal
year ended December 31, 2020, for filing with the Securities and Exchange Commission.
|
|
|
|
|
Joseph L. Morea, Chair
Barbara D. Gilmore
Lisa Harris Jones
Rajan C. Penkar
Elena B. Poptodorova
|
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 35
Table of Contents
FREQUENTLY ASKED QUESTIONS
Proxy Materials and Voting Information
1. What is included in the proxy materials? What is a proxy statement and what is a proxy?
|
The
proxy materials for our 2021 Annual Meeting include the Notice Regarding the Availability of Proxy Materials, Notice of 2021 Annual Meeting, this Proxy Statement and our Annual
Report to Stockholders for the year ended December 31, 2020 (collectively, the "proxy materials"). If you
request a paper copy of these materials, the proxy materials will also include a proxy card or voting instruction form.
A
proxy statement is a document that SEC regulations require us to give you when we ask you to return a proxy designating individuals to vote on your behalf. A proxy is your legal designation of
another person to vote the shares you own. That other person is called your proxy.
2. What is the difference between holding shares as a stockholder of record and as a beneficial owner?
|
If
your shares are registered directly in your name with our registrar and transfer agent, Equiniti Shareowner Services, you are considered a stockholder of record of those shares.
If you are a stockholder of record, you should receive only one notice or proxy card for all the Common Shares you hold, whether in certificate or book entry form.
If
your shares are held in an account you own at a bank or brokerage or you hold shares through another nominee, you are considered the "beneficial owner" of those shares. If you are a beneficial
owner, you will receive voting instruction information from the bank, broker or other nominee through which you own your Common Shares.
If
you hold some shares of record and some shares beneficially, you should receive a notice or proxy card for all the Common Shares you hold of record and a separate voting instruction form for the
shares from the bank, broker or other nominee through which you own Common Shares.
3. What different methods can I use to vote?
|
By Telephone or Internet. All stockholders of record can authorize a proxy to vote their shares by
touchtone telephone by calling 1-800-690-6903, or through the internet at www.proxyvote.com, using the procedures and instructions described in your
Notice Regarding the Availability of Proxy Materials or proxy card. Beneficial owners may authorize a proxy by telephone or internet if their bank, broker or other nominee makes those methods
available, in which case the bank, broker or nominee will include the instructions with the proxy voting materials. To authorize a proxy by telephone or internet, you will need the 16 digit control
number provided on your Notice Regarding the Availability of Proxy Materials, proxy card or voting instruction form. The telephone and internet proxy authorization procedures are designed to
authenticate stockholder identities, to allow stockholders to vote their shares and to confirm that their instructions have been recorded properly. Proxies submitted by telephone or through the
internet must be received by 11:59 p.m., Eastern time, on June 9, 2021 or, if the meeting is postponed or adjourned to a later date, by 11:59 p.m., Eastern time, on the day
immediately preceding the date of the reconvened meeting.
By Written Proxy. All stockholders of record also can submit voting instructions by written proxy card. If you are a
stockholder of record and receive a Notice Regarding the Availability of Proxy Materials, you may request a written proxy card by following the instructions included in the notice. If you are a
beneficial owner, you may request a written proxy card or a voting instruction form from your bank, broker
36 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
or
other nominee. Proxies submitted by mail must be received by 11:59 p.m., Eastern time, on June 9, 2021 or, if the meeting is postponed or adjourned to a later date, by
11:59 p.m., Eastern time, on the day immediately preceding the date of the reconvened meeting.
Electronically at our 2021 Annual Meeting.
-
-
All stockholders of record may vote electronically at the meeting, as described in the response to question
12. Even if you plan to attend our 2021 Annual Meeting, we recommend that you follow the voting directions described above, so that your vote will be counted if you later decide not to
attend our 2021 Annual Meeting.
-
-
Beneficial owners may vote electronically at our 2021 Annual Meeting if they have a legal proxy, as described in the response
to questions 11 and 12.
A
stockholder may revoke a proxy at any time before it is voted at our 2021 Annual Meeting, subject to the proxy voting deadlines described above, by authorizing a proxy again on a later date by
internet or by telephone, by signing and returning a later dated proxy card or by attending the meeting and voting electronically or by sending an original written statement revoking the prior proxy
to our Secretary at TravelCenters of America Inc., Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458, Attention: Secretary (or by hand delivery to the
Secretary before the taking of the vote at our 2021 Annual Meeting).
Beneficial
owners who wish to change their votes should contact the organization that holds their shares.
If
you have any questions or need assistance in voting your shares or authorizing your proxy, please call the firm assisting us in the solicitation of proxies:
Morrow
Sodali LLC
470 West Avenue
Stamford, Connecticut 06902
Stockholders Call Toll Free: (800) 662-5200
Banks and Brokers Call Collect: (203) 658-9400
4. Who may vote at our 2021 Annual Meeting?
|
Holders
of record of our Common Shares as of the close of business on March 24, 2021, the record date, may vote at the meeting. Holders of our Common Shares are entitled to
one vote for each Common Share held on the record date.
5. What if I authorize a proxy and do not specify how my shares are to be voted?
|
If
you submit a signed proxy card or authorize a proxy by internet or telephone, but do not indicate how your Common Shares should be voted on one or more proposals, then the proxies
will vote your shares as our Board recommends on those proposals. Other than the proposals listed on pages 10, 24, 25 and 33, we do not know of any other matters to be presented at the meeting. If any
other matters are properly presented at the meeting, the proxies may vote your shares in accordance with their discretion.
6. What is a quorum? How are abstentions and broker non-votes counted?
|
A
quorum of stockholders is required for stockholders to take action at our 2021 Annual Meeting. The presence, in person or by proxy, of holders of a majority of outstanding Common
Shares entitled to vote at our 2021 Annual Meeting constitutes a quorum.
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 37
Table of Contents
Abstentions
and broker non-votes (i.e., shares held by brokers or nominees as to which (i) instructions have not been received from the beneficial owner or the person entitled to vote
and (ii) the broker does not have discretionary voting power on a particular matter), if any, are included in determining whether a quorum is present. Abstentions are not votes cast and,
therefore, will not be included in vote totals and will have no effect on the outcome of any Proposal to be acted upon at our 2021 Annual Meeting. A proxy marked "WITHHOLD" with respect to Proposal 1
will have the same effect as an abstention and will not be counted for purposes of determining a plurality of votes cast. Broker non-votes are not votes cast and, therefore, will not be included in
vote totals and will have no effect on the outcome of Proposal 1, Proposal 2 or Proposal 3. There can be no broker non-votes on Proposal 4 as it is a matter on which, if you hold your
shares in street name and do not provide voting instructions to the broker, bank or other nominee that holds your shares, the nominee has discretionary authority to vote on your behalf.
7. Can I access the proxy materials on the internet? How can I sign up for the electronic proxy delivery service?
|
The
Notice of 2021 Annual Meeting, this Proxy Statement and the Annual Report are available at www.proxyvote.com. You may access these
proxy materials on the internet through the conclusion of our 2021 Annual Meeting.
Instead
of receiving future copies of our proxy materials by mail, stockholders of record and most beneficial owners may elect to receive these materials electronically. Opting to receive your future
proxy
materials electronically will reduce the environmental impact of our annual meeting, save us the cost of printing and mailing documents, and also will give you an electronic link to our proxy voting
site. Your Notice Regarding the Availability of Proxy Materials instructs you as to how you may request electronic delivery of future proxy materials.
8. How are proxies solicited and what is the cost?
|
We
bear all expenses incurred in connection with the solicitation of proxies. We have engaged Morrow Sodali LLC ("Morrow Sodali") to assist with the solicitation of proxies
for an estimated fee of $15,000 plus reimbursement of expenses. We have agreed to indemnify Morrow Sodali against certain liabilities arising out of our agreement with Morrow Sodali. We will request
banks, brokers and other nominees to forward proxy materials to the beneficial owners of Common Shares and to obtain their voting instructions. We will reimburse those firms for their expenses of
forwarding proxy materials.
Proxies
may also be solicited, without additional compensation, by our Directors and officers and by RMR LLC, its officers and employees and its parent's and subsidiaries' directors, trustees,
officers and employees, by mail, telephone or other electronic means or in person.
As
permitted by the Exchange Act, we may deliver only one copy of the Notice Regarding the Availability of Proxy Materials, Notice of 2021 Annual Meeting, this Proxy Statement and
the Annual Report to stockholders residing at the same address, unless the stockholders have notified us of their desire to receive multiple copies of those documents. This practice is known as
"householding."
We
will deliver a separate copy of any of those documents to you if you write to us at Investor Relations, TravelCenters of America Inc., Two Newton Place, 255 Washington Street,
Suite 300, Newton, Massachusetts 02458, or call us at (617) 219-1442. If you want to receive separate copies of our notices regarding the availability of proxy materials, notices of
annual meetings, proxy statements and annual reports in the future, or if you are receiving multiple copies and would like to receive only one copy per household, you should contact your bank, broker
or other nominee, or you may contact us at the above address or telephone number.
38 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
2021 Annual Meeting Information
10. Why is our 2021 Annual Meeting being held virtually?
|
Because
of the COVID-19 pandemic, we believe hosting our 2021 Annual Meeting virtually will help ensure the health and well-being of our stockholders and other stakeholders.
Stockholders attending our 2021 Annual Meeting virtually will be afforded the same rights and opportunities to participate as they would have had at an in-person meeting.
11. How do I attend our virtual 2021 Annual Meeting?
|
Attendance
at the meeting is limited to our Directors and officers, stockholders as of the record date (March 24, 2021) or their duly authorized representatives or proxies,
and other persons permitted by the Chair of the meeting.
-
-
Record
owners: If you are a stockholder as of the record date who holds shares directly, you may participate in our
2021 Annual Meeting via Internet webcast by visiting the following website and following the registration and participation instructions contained therein: https://www.viewproxy.com/TravelCentersofAmerica/2021/. Please have the control number located on your proxy card or voting information form available.
-
-
Beneficial
owners: If you are a stockholder as of the record date who holds shares indirectly through a brokerage firm,
bank or other nominee, you must register in advance to attend our 2021 Annual Meeting. You will need to present evidence of your beneficial ownership of shares. For this purpose, a copy of a letter or
account statement from the applicable brokerage firm, bank or other nominee confirming such ownership will be acceptable. If you are a beneficial owner and want to vote your shares at our 2021 Annual
Meeting, you must also provide a legal proxy from your bank, broker or other nominee. You will not be able to vote your shares at our 2021 Annual Meeting without a legal proxy, as described in the
response to question 12. Please follow the instructions from your bank, broker or nominee included with these proxy materials, or contact your bank, broker or nominee to
request a legal proxy form.
To
register, you must submit proof of your beneficial ownership of shares and legal proxy, as applicable, along with your name and address, to virtualmeeting@viewproxy.com. Upon successful
preregistration, you will receive a confirmation email from customercare@gotowebinar.com confirming registration and providing further instructions regarding attending our 2021 Annual Meeting.
Beneficial owners should complete the registration process noted above at least three days in advance of our 2021 Annual Meeting to ensure that all documentation and verifications are in order.
If
you have questions regarding these admission procedures, please call Investor Relations at (617) 219-1442.
12. How can I vote electronically at our 2021 Annual Meeting if I am a beneficial owner?
|
If
you are a beneficial owner and want to vote your shares at our 2021 Annual Meeting, you need to first obtain a valid legal proxy from your bank, broker or other nominee and then
register in advance to attend our 2021 Annual Meeting. Please follow the procedures described in the response to question 3 and question 11.
You
will not be able to vote your shares at the meeting without a legal proxy. If you do not have a legal proxy, you can still attend the meeting by following the procedures described in the response
to question 11. However, you will not be able to vote your shares at the meeting without a legal proxy. We encourage you to vote your shares in advance, even
if you intend to attend the meeting.
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 39
Table of Contents
13. How can I ask questions at our 2021 Annual Meeting?
|
Stockholders
as of the record date who attend and participate in our 2021 Annual Meeting at https://www.viewproxy.com/TravelCentersofAmerica/2021/ will have an opportunity to submit questions live via the Internet
during a designated portion of
the program. Stockholders must have available their control number provided on their proxy card or voting instruction form.
If
you experience any technical difficulties accessing our 2021 Annual Meeting or during the meeting, please call the toll-free number that will be available on our virtual stockholder login site for
assistance.
We will have technicians ready to assist you with any technical difficulties you may have beginning 15 minutes prior to the start of our 2021 Annual Meeting.
Company Documents, Communications and Stockholder Proposals
14. How can I view or request copies of our SEC filings and other documents?
|
You
can visit our website to view our Governance Guidelines, Board committee charters and the Code. To view these documents, go to www.ta-petro.com, click on "Investors," hover over "Corporate Governance,"
and then click on "Governance Documents." To view our SEC filings and
Forms 3, 4 and 5 filed by our Directors and executive officers, go to www.ta-petro.com, click on "Investors," hover over "Financials and Filings"
and then click on "SEC Filings."
We
will deliver free of charge, upon request, a copy of our Governance Guidelines, Board committee charters, Code or Annual Report to any stockholder requesting a copy. Requests should be directed to
Investor Relations at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458.
15. How can I communicate with our Directors?
|
Any
stockholder or other interested person who wants to communicate with our Directors, individually or as a group, should write to the party for whom the communication is intended,
c/o Secretary, TravelCenters of America Inc., Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458 or email secretary@ta-petro.com. The communication will then
be delivered to the appropriate party or parties.
16. How do I submit a nomination or other proposal for action at our 2022 annual meeting of stockholders?
|
A
proposal for action to be presented by any stockholder at our 2022 annual meeting of stockholders must be submitted as follows:
-
-
For a proposal to be eligible to be included in the proxy statement pursuant to Rule 14a-8 under the Exchange Act, the
proposal must be received at our principal executive office by December 7, 2021.
-
-
If the proposal is not to be included in the proxy statement pursuant to Rule 14a-8, the proposal must be made in
accordance with the procedures and requirements set forth in our Bylaws and must be received by us not later than 5:00 p.m., Eastern time, on December 7, 2021 and not earlier than
November 7, 2021.
Proposals
should be sent to our Secretary at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458.
For
additional information regarding how to submit a stockholder proposal, see page 9 of this Proxy Statement.
40 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
RELATED PERSON TRANSACTIONS
The descriptions of agreements in this "Related Person Transactions" section do not purport to be complete and are subject to, and qualified
in their entirety by, reference to the actual agreements, copies of certain of which are filed as exhibits to our Annual Report.
A
"related person transaction" is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) or a proposed transaction in which (i) we
were, are or will be a participant, (ii) the amount involved exceeds the lesser of $120,000 or 1.0% of the average of the Company's total assets at year end for the last two completed fiscal
years and (iii) any related person had, has or will have a direct or indirect material interest.
A
"related person" means any person who is, or at any time since January 1, 2020 was:
-
-
a Director, a nominee for Director or an executive officer of ours;
-
-
known to us to be the beneficial owner of more than 5.0% of the outstanding Common Shares when a transaction in which such
person had a direct or indirect material interest occurred or existed;
-
-
an immediate family member of any of the persons referenced in the preceding two bullets, which means any child, stepchild,
parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of any of the persons referenced in the preceding two bullets, and any
person (other than a tenant or employee) sharing the household of any of the persons referenced in the preceding two bullets; or
-
-
a firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position
or in which such person has a 10.0% or greater beneficial ownership interest.
We
have adopted written Governance Guidelines that describe the consideration and approval of related person transactions. Under these Governance Guidelines, we may not enter into a transaction in
which any Director or executive officer, any member of the immediate family of any Director or executive officer or other related person, has or will have a direct or indirect material interest unless
that transaction has been disclosed or made known to our Board and our Board reviews and approves or ratifies the transaction by the affirmative vote of a majority of the disinterested Directors, even
if the disinterested Directors constitute less than a quorum. If there are no disinterested Directors, the transaction must be reviewed, authorized and approved or ratified by both (i) the
affirmative vote of a majority of our Board and (ii) the affirmative vote of a majority of the Independent Directors. In determining whether to approve or ratify a transaction, our Board, or
disinterested Directors or Independent Directors, as the case may be, also act in accordance with any applicable provisions of our Charter and Bylaws, consider all of the relevant facts and
circumstances and approve only those transactions that they determine are fair and reasonable to us. All related person transactions described in Annex B to this Proxy Statement were reviewed
and approved or ratified by a majority of the disinterested Directors or otherwise in accordance with our policies, Charter and Bylaws, each as described above, and Maryland law. In the case of any
transactions with us by employees of the Company who are subject to the Code but who are not our Directors or executive officers, the employee must seek approval from an executive officer who has no
interest in the matter for which approval is being requested. Copies of our Governance Guidelines and the Code are available on our website, www.ta-petro.com.
Certain
related person transactions are set forth in Annex B to this Proxy Statement.
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement 41
Table of Contents
OTHER INFORMATION
At this time, we know of no other matters that will be brought before the meeting. If, however, other matters properly come before the meeting
or any postponement or adjournment thereof, the persons named in the accompanying proxy card intend to vote the shares for which they have been appointed or authorized as proxy in accordance with
their discretion on such matters to the maximum extent that they are permitted to do so by applicable law.
Jennifer B. Clark
Secretary
Newton,
Massachusetts
April 6, 2021
42 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
ANNEX ASECOND AMENDED AND RESTATED 2016 EQUITY
COMPENSATION PLAN, AS AMENDED
TRAVELCENTERS OF AMERICA INC.
SECOND AMENDED AND RESTATED 2016 EQUITY COMPENSATION PLAN, AS AMENDED
1. PURPOSE
The
purpose of this TravelCenters of America Inc. Second Amended and Restated 2016 Equity Compensation Plan, as amended (the "Plan") is to encourage employees, officers, directors and other
individuals (whether or not employees) who render services to TravelCenters of America Inc., a Maryland corporation (the "Company"), or its affiliates to continue their efforts for and
association with the Company or its affiliates by providing opportunities for them to participate in the ownership of the Company and in its future growth through the granting of options to acquire
shares of the Company's common stock ("Options"), grants of shares of the Company's common stock some of which may be subject to restrictions ("Restricted Stock") and other rights, (including stock
appreciation rights ("SARs")) to receive compensation in amounts determined by the value of the Company's common stock ("Other Rights"). The term "Subsidiary" as used in the Plan means a corporation
or other business entity of which the Company owns, directly or indirectly through an unbroken chain of ownership, fifty percent (50%) or more of the total combined voting power of all classes of
stock, in the case of a corporation, or fifty percent (50%) or more of the total combined interests by value, in the case of any other type of business entity. The Plan was first amended and restated
in order to reflect the conversion of TravelCenters of America LLC to TravelCenters of America Inc. under state law and the 1:5 reverse stock split effected in connection with that
conversion on August 1, 2019, and it was amended and restated again on May 21, 2020.
2. ADMINISTRATION OF THE PLAN
The
Plan shall be administered by the Compensation Committee of the Company's Board of Directors or such other committee of the Board of Directors as the Board of Directors may designate (the
"Independent Administrative Committee") except in instances where it is necessary or advisable (including to comply with applicable law or regulation) to provide for administration by the Company's
Board of Directors (the "Board") itself. The Independent Administrative Committee shall from time to time determine to whom awards shall be granted under the Plan, whether Options granted shall be
incentive stock options ("ISOs") or nonqualified stock options ("NSOs"), the terms of the Options (including vesting provisions) and the number of shares of Common Stock (as hereinafter defined) that
may be granted under Options, and the terms and number of Restricted Stock or Other Rights. The Independent Administrative Committee shall report to the Board the names of individuals to whom Options,
shares of Restricted Stock or Other Rights are to be granted, the number of shares of Common Stock covered and the terms and conditions of each grant. In instances where the Board is administering the
Plan, references in the Plan to the Independent Administrative Committee shall be deemed to refer to the Board.
The
Independent Administrative Committee shall have the authority to adopt, amend and rescind such rules and regulations as, in its opinion, may be advisable in the administration of the Plan, which
shall include, without limitation, the discretion to impose holding periods on shares of Common Stock acquired pursuant to awards granted hereunder. All questions of interpretation and application of
the Plan or such rules and regulations and of awards granted hereunder shall be subject to the discretionary determination of the Independent Administrative Committee, which shall be final and
binding. The Plan shall be administered in such a manner as to permit those Options granted hereunder and specially designated under Section 5 hereof as ISOs to qualify as incentive stock
options for purposes of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
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For
so long as Section 16 of the Securities Exchange Act of 1934, as amended from time to time (the "Exchange Act"), is applicable to the
Company, each member of the Independent Administrative Committee shall be a "non-employee director" or the equivalent within the meaning of Rule 16b-3 under the Exchange Act, and shall meet
such other requirements as the Board may determine to be necessary or appropriate.
With
respect to persons subject to Section 16 of the Exchange Act ("Insiders"), transactions under the Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successor under the Exchange Act. To the extent any provision of the Plan or action by the Independent Administrative Committee fails to so comply, it
shall be deemed to be modified so as to be in compliance with such Rule, or, if such modification is not possible, it shall be deemed to be null and void, to the extent permitted by law and deemed
advisable by the Independent Administrative Committee.
3. STOCK SUBJECT TO THE PLAN
The
total number of shares of common stock of the Company that may be subject to Options, Restricted Stock and Other Rights under the Plan shall be 2,185,000 shares of the Company's common stock, par
value $0.001 per share ("Common Stock"), from authorized but unissued shares of Common Stock. The maximum number of shares of Common Stock subject to Options that may be granted to any Optionee in the
aggregate in any calendar year shall not exceed 100,000 shares. The number of shares of Common Stock stated in this Section 3 shall be subject to adjustment in accordance with the provisions of
Section 11. Shares of Restricted Stock that fail to vest, shares of Common Stock subject to an Option that is not fully exercised prior to its expiration or other termination and shares of
Common Stock subject to Other Rights that are not delivered pursuant to such award shall again become available for grant under the terms of the Plan. The shares of Common Stock tendered for payment
of the exercise price of an Option or satisfaction of tax withholding obligations and the shares of Common Stock subject to a SAR which are not delivered upon the full exercise of the SAR will not
again become available for grant under the Plan. In the event that the Company uses the proceeds from exercises of Options under the Plan to repurchase shares of Common Stock in the market, any such
shares of Common Stock so repurchased shall not increase the number of shares of Common Stock available for grant under the Plan.
4. ELIGIBILITY
The
individuals who shall be eligible to receive grants of Options, Restricted Stock and Other Rights under the Plan shall be employees, officers, directors and other individuals who render services
in connection with the management, operation or development of the Company or a Subsidiary and who have contributed or may be expected to contribute to the success of the Company or a Subsidiary. ISOs
shall not be granted to any individual who is not an employee of the Company or a Subsidiary that is a corporation. The term "Optionee," as used in the Plan, refers to any individual to whom an Option
has been granted.
5. TERMS AND CONDITIONS OF OPTIONS
Every
Option shall be evidenced by a written Stock Option Agreement in such form as the Independent Administrative Committee shall approve from time to time, specifying the number of shares of Common
Stock that may be purchased pursuant to the Option, the time or times at which the Option shall become exercisable in whole or in part, whether the Option is intended to be an ISO or an NSO and such
other terms and conditions as the Independent Administrative Committee shall approve, and containing or incorporating by reference the following terms and conditions.
-
(a)
-
DURATION.
Each Option shall expire no more than ten years from its date of grant; provided, however, that
no ISO granted to an employee who owns (directly or under the attribution rules of Section 424(d) of the Code) shares of the Company's stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or any Subsidiary shall expire not later than five years from its date of grant.
-
(b)
-
EXERCISE
PRICE. The exercise price of each Option shall be specified by the Independent Administrative Committee in its discretion;
provided, however, that the exercise price shall be at
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least
100 percent of the Fair Market Value (as hereinafter defined) of the Common Stock on the date on which the Independent Administrative Committee awards the Option, which shall be
considered the date of grant of the Option for purposes of fixing the exercise price; and provided, further, that the exercise
price with respect to an ISO granted to an employee who at the time of grant owns (directly or under the attribution rules of Section 424(d) of the Code) stock representing more than ten
percent of the voting power of all classes of stock of the Company or of any Subsidiary shall be at least 110 percent of the Fair Market Value of the stock on the date of grant of the ISO. For
purposes of the Plan, except as may be otherwise explicitly provided in the Plan or in any Stock Option Agreement, the "Fair Market Value" of a share of
Common Stock at any particular date shall be determined according to the following rules: (i) if the shares of Common Stock are not at the time listed or admitted to trading on a stock
exchange, the Fair Market Value shall be the closing price of a share of Common Stock on the date in question in the over-the-counter market, as such price is reported in a publication of general
circulation selected by the Board and regularly reporting the price of the Common Stock in such market, including any market that is outside of the United States;
provided, however, that if the price of the Common Stock is not so reported, the Fair Market Value shall be determined in good faith by the
Board, which may take into consideration (1) the price paid for Common Stock in the most recent trade of a substantial number of shares known to the Board to have occurred at arm's length
between willing and knowledgeable investors, (2) an appraisal by an independent party or (3) any other method of valuation undertaken in good faith by the Board, or some or all of the
above as the Board shall in its discretion elect; or (ii) if the shares of Common Stock are at the time listed or admitted to trading on any stock exchange, including any market that is outside
of the United States, then the Fair Market Value shall be the closing sale price of the Common Stock on the date in question on the principal exchange on which the shares of Common Stock are then
listed or admitted to trading. If no reported sale of Common Stock takes place on the date in question on the principal exchange, then the most recent previous reported closing sale price (or, in the
Board's discretion, the reported closing asked price) of the Common Stock on such date on the principal exchange shall be determinative of Fair Market Value.
-
(c)
-
METHOD
OF EXERCISE. To the extent that it has become exercisable under the terms of the Stock Option Agreement, an Option may be exercised from time to time by
notice acceptable to the Chief Executive Officer of the Company, or his delegate, stating the number of shares of Common Stock with respect to which the Option is being exercised and accompanied by
payment of the exercise price in cash or check payable to the Company or, if the Stock Option Agreement so provides, other payment or deemed payment described in this Section 5(c). Such notice
shall be delivered in person to the Chief Executive Officer of the Company, or his delegate, or shall be sent by registered mail, return receipt requested, to the Chief Executive Officer of the
Company, or his delegate, in which case delivery shall be deemed made on the date such notice is deposited in the mail.
Alternatively,
payment of the exercise price may be made:
-
(i)
-
In
whole or in part in shares of Common Stock already owned by the Optionee or to be received upon exercise of the Option; provided,
however, that such shares of Common Stock are fully vested and free of all liens, claims and encumbrances of any kind; and provided,
further, that the Optionee may not make payment in shares of Common Stock that he acquired upon the earlier exercise of any ISO (or other
"incentive stock option"), unless he has held the shares of Common Stock for at least two years after the date the ISO was granted and at least one year
after the date the ISO was exercised. If payment is made in whole or in part in shares of Common Stock, then the Optionee shall deliver to the Company stock certificates or other evidence of legal and
beneficial ownership registered in his name representing a number of shares of Common Stock legally and beneficially owned by him, fully vested and free of all liens, claims and encumbrances of every
kind and having a Fair Market Value on the date of delivery that is not greater than the exercise price, such stock certificates or other evidence of legal and beneficial ownership to be duly
endorsed, or accompanied by stock powers duly endorsed, by the record holder of the shares of Common Stock being delivered. If the exercise price exceeds the Fair Market Value of the shares of Common
Stock so delivered, the Optionee shall also
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deliver
cash or a check payable to the order of the Company in an amount equal to the amount of that excess or, if the Stock Option Agreement so provides, his promissory note as described in
paragraph (2) of this Section 5(c); or
-
(ii)
-
By
payment of the exercise price in whole or in part by delivery of the Optionee's recourse promissory note, in a form specified by the Company, secured by the
shares of Common Stock acquired upon exercise of the Option and such other security as the Independent Administrative Committee may require; provided that this method of payment of the exercise price
shall not be available to the extent that such method of exercise is prohibited by Section 402 of the Sarbanes-Oxley Act of 2002 (generally prohibiting public companies from making loans to or
extending credit to directors and executive officers).
At
the time specified in an Optionee's notice of exercise, the Company shall, without issue or transfer tax to the Optionee, deliver to the Optionee at the main office of the Company, or such other
place as shall be mutually acceptable, a certificate for the shares of Common Stock or other evidence of legal and beneficial ownership as to which such Optionee's Option is exercised. If the Optionee
fails to pay for or to accept delivery of all or any part of the number of shares of Common Stock specified in the Optionee's notice upon tender of delivery thereof, the Optionee's right to exercise
the Option with respect to those shares of Common Stock shall be terminated, unless the Company otherwise agrees.
-
(d)
-
EXERCISABILITY.
An Option may be exercised so long as it is outstanding from time to time in whole or in part, to the extent and subject to the terms and conditions
that the Independent Administrative Committee in its discretion may provide in the Stock Option Agreement. Such terms and conditions shall include provisions for exercise within twelve
(12) months after the Optionee's death or disability (within the meaning of Section 22(e)(3) of the Code), provided that no Option shall be exercisable after the expiration of the period
described in paragraph (a) above. Except as the Independent Administrative Committee in its discretion may otherwise provide in the Stock Option Agreement, an Option shall cease to be
exercisable upon the expiration of ninety (90) days following the termination of the Optionee's employment with, or the Optionee's other provision of services to, the Company or a Subsidiary
(or such later date as may be established at grant or at a later date by the Independent Administrative Committee), subject to paragraph (a) above and Section 11 hereof.
-
(e)
-
NOTICE
OF ISO STOCK DISPOSITION. The Optionee must notify the Company promptly in the event that he sells, transfers, exchanges or otherwise disposes of any shares
of Common Stock issued upon exercise of an ISO before the later of (i) the second anniversary of the date of grant of the ISO and (ii) the first anniversary of the date the shares of
Common Stock were issued upon the exercise of the ISO.
-
(f)
-
NO
RIGHTS AS STOCKHOLDER. An Optionee shall have no rights as a stockholder with respect to any shares of Common Stock covered by an Option until the date of
issuance of a stock certificate or other evidence of legal and beneficial ownership to him for the shares of Common Stock. No adjustment shall be made for dividends or other rights for which the
record date is earlier than the date the stock certificate or other evidence of legal and beneficial ownership is issued, other than as required or permitted pursuant to Section 11.
-
(g)
-
TRANSFERABILITY
OF OPTIONS. Options shall not be transferable by the Optionee otherwise than by will or under the laws of descent and distribution, and shall be
exercisable during the Optionee's lifetime only by the Optionee, except that the Independent Administrative Committee may specify in a Stock Option Agreement that pertains to an NSO that the Optionee
may transfer such NSO to a member of the Immediate Family (as hereinafter defined) of the Optionee, to a trust solely for the benefit of the Optionee and the Optionee's Immediate Family, or to a
partnership or limited liability company whose only partners or members are the Optionee and members of the Optionee's Immediate Family. "Immediate
Family" shall mean, with respect to any Optionee, such Optionee's child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include adoptive relationships.
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-
(h)
-
NO
OPTION OR STOCK APPRECIATION RIGHT RE-PRICING. Without limitation of the authority set forth in Section 3 or Section 11 hereof, no Option (or SAR)
shall have its exercise or strike price lowered nor shall any Option or SAR be settled, cancelled, forfeited, exchanged or surrendered in exchange or otherwise in consideration for a new Option or SAR
with an exercise or strike price that is less than that of such settled, cancelled, forfeited, exchanged or surrendered Option or SAR (or in exchange for cash or another type of award or
consideration), unless the stockholders of the Company shall have approved of such transaction.
6. STOCK APPRECIATION RIGHTS
The
Independent Administrative Committee may grant SARs in respect of such number of shares of Common Stock subject to the Plan as it shall determine, in its discretion, and may grant SARs either
separately or in connection with Options, as described in the following sentence. SARs granted in connection with an Option may be exercised only to the extent of the surrender of the related Option,
and, to the extent of the exercise of the related Option, the SAR shall terminate. Shares of Common Stock covered by an Option that terminates upon the exercise of a related SAR shall cease to be
available under the Plan. The terms and conditions of a SAR related to an Option shall be contained in the Stock Option Agreement, and the terms of a SAR not related to any Option shall be contained
in a SAR Agreement.
Upon
exercise of a SAR, the Optionee shall be entitled to receive from the Company an amount equal to the excess of the Fair Market Value, on the exercise date, of the number of shares of Common Stock
as to which the SAR is exercised, over the exercise price for those shares under a related Option or, if there is no related Option, over the base value stated in the SAR Agreement. Any amount payable
by the Company upon exercise of a SAR shall be paid in the form of cash or other property (including shares of Common Stock), as provided in the Stock Option Agreement or SAR Agreement governing the
SAR.
7. RESTRICTED STOCK
The
Independent Administrative Committee may grant or award shares of Restricted Stock in respect of such number of shares of Common Stock, and subject to such terms or conditions, as it shall
determine and specify in a Restricted Stock Agreement, and may provide in a Stock Option Agreement for an Option to be exercisable for shares of Restricted Stock.
A
holder of Restricted Stock shall have all of the rights of a stockholder of the Company, including the right to vote the shares of stock and the right to receive any cash dividends, unless the
Independent Administrative Committee shall otherwise determine. Unless a grantee's Restricted Stock Agreement provides to the contrary, unvested Restricted Stock granted under the Plan shall not be
transferred without the written consent of the Board. In addition, at the time of termination for any reason of a grantee's employment or other service relationship with the Company or a Subsidiary,
the Company shall have the right, in the case of unvested Restricted Stock, (1) to cause the forfeiture of such shares of Restricted Stock for no consideration (2) to purchase all or any
of such shares of Restricted Stock at a price equal to the lower of (a) the price paid to the Company for such shares of Restricted Stock or (b) the Fair Market Value of such shares of
Restricted Stock at the time of repurchase, (3) to waive vesting requirements, (4) to permit continued vesting based on such criteria as the Independent Administrative Committee shall
determine or (5) to provide for such other treatment as the Independent Administrative Committee shall determine and set forth in the applicable agreement. Nothing in the Plan shall be
construed to give any person the right to require the Company to purchase any shares of Common Stock granted as Restricted Stock.
Stock
certificates, if any, representing Restricted Stock shall be imprinted with a legend to the effect that the shares of Restricted Stock represented may not be sold, exchanged, transferred,
pledged, hypothecated or otherwise disposed of except in accordance with the terms of the Restricted Stock Agreement and, if the Independent Administrative Committee so determines, the holder may be
required to deposit the stock certificates or other evidence of legal and beneficial ownership with the President, Treasurer, Secretary or other officer of the Company or with an escrow agent
designated by the Independent Administrative Committee, together with a stock power or other instrument of transfer appropriately endorsed in blank. In the event that the shares of Restricted Stock
are not represented by a
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stock
certificate, the Company shall direct the Company's registrar and transfer agent to make an appropriate notation of the restrictions on transfer to which the shares of Restricted Stock are
subject in the stock books and records of the Company.
8. OTHER RIGHTS
Subject
to the provisions of the Plan, the Independent Administrative Committee shall have sole and complete authority to determine the individuals to whom and the time or times at which such Other
Rights shall be granted. Each Participant who is granted an Other Right shall receive an award agreement, containing such terms and conditions as the Independent Administrative Committee shall
determine, in its sole discretion, which agreement shall set forth, among other things, the number of shares of Common Stock to be granted pursuant to such Other Right, or the manner in which such
Other Right shall be settled (e.g., in shares of Common Stock, cash or other property), or the conditions, if any, to the vesting and/or payment or settlement of such Other Right (which may
include, but not be limited to, achievement of performance criteria) and all other terms and conditions of such Other Right. The Independent Administrative Committee may make awards of Other Rights
consisting of unrestricted shares of Common Stock to such individuals and in such amounts as the Independent Administrative Committee may determine (subject to Section 13(d)). To the extent
that an Other Award is granted with a vesting condition based upon the attainment of performance criteria, any dividends payable with respect to the Common Stock subject to the award (or dividend
equivalents awarded with respect to such award) shall be subject to the same performance criteria as are applicable to the award to which the dividend or dividend equivalent relate and shall be paid
or forfeited, as the case may be, based on the attainment, or failure to attain, the applicable performance criteria.
9. METHOD OF GRANTING OPTIONS, RESTRICTED STOCK AND OTHER RIGHTS
The
grant of Options, shares of Restricted Stock and Other Rights shall be made by action of the Board or the Independent Administrative Committee, at a meeting at which a quorum of its members is
present, or by written consent of its members; provided, however, that if an individual to whom a grant has been made fails to execute and
deliver to the Independent Administrative Committee a Stock Option Agreement, Restricted Stock Agreement or SAR Agreement (or an agreement evidencing an Other Right) within thirty (30) days
after it is submitted to him, the Option, shares of Restricted Stock, SAR or Other Rights granted under the applicable agreement shall be voidable by the Company at its election, without further
notice to the grantee. No agreement is required to be executed in respect of awards of vested shares of Common Stock.
10. REQUIREMENTS OF LAW
The
Company shall not be required to transfer shares of Restricted Stock or to sell or issue any shares of Common Stock upon the exercise of any Option or the exercise or vesting of an award of Other
Rights (as applicable) if the issuance of such shares of Restricted Stock or shares of Common Stock will result in a violation by the recipient or the Company of any provisions of any law, statute or
regulation of any governmental authority. Specifically, in connection with the Securities Act of 1933, as amended from time to time (the "Securities
Act"), upon the transfer of shares of Restricted Stock or the exercise of any Option or the exercise or vesting of an award of Other Rights (as applicable), the Company shall
not be required to issue shares of Restricted Stock or shares of Common Stock, as the case may be, unless the Independent Administrative Committee has received evidence satisfactory to it to the
effect that the holder of the shares of Restricted Stock or the Option will not transfer such shares of Restricted Stock or shares of Common Stock except pursuant to a registration statement in effect
under the Securities Act or unless an opinion of counsel satisfactory to the Company has been received by the Company to the effect that registration is not required. Any determination in this
connection by the Independent Administrative Committee shall be conclusive. The Company shall not be obligated to take any other affirmative action in order to cause the transfer of shares of
Restricted Stock or the exercise of an Option or the delivery of shares of Common Stock with respect to the exercise or vesting of an award of Other Rights (as applicable) to comply with any law or
regulations of any governmental authority, including, without limitation, the Securities Act or applicable state securities laws.
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11. CHANGES IN CAPITAL STRUCTURE
In
the event that the outstanding shares of Common Stock are hereafter changed for a different number or kind of stock or other securities of the Company, by reason of a reorganization,
recapitalization, exchange of stock, stock split, combination of stock or dividend payable in stock or other securities or similar corporate event, the Independent Administrative Committee shall have
the right and discretion to make a corresponding adjustment in the number and kind of stock or other securities covered by outstanding Options and Other Rights and for which Options, shares of
Restricted Stock and Other Rights may be granted under the Plan. Any such adjustment in outstanding Options (and, if applicable, Other Rights) shall be made without change in the total price
applicable to the unexercised portion of the Option (or Other Right, if applicable), but the price per share specified in the applicable award agreement shall be correspondingly adjusted;
provided, however, that no adjustment shall be made with respect to an ISO that would constitute a modification as defined in
Section 424 of the Code which would cause the Option to fail to constitute an ISO without the consent of the holder. Any such adjustment made by the Independent Administrative Committee shall
be conclusive and binding upon all affected persons, including the Company and all Optionees and holders of Other Rights.
If
while unexercised Options or Other Rights remain outstanding under the Plan the Company merges or consolidates with a wholly-owned subsidiary for the purpose of re-incorporating itself, including
under the laws of another jurisdiction, the Optionees or holders of Other Rights will be entitled to acquire shares of common stock of the re-incorporated company upon the same terms and conditions as
were in effect immediately prior to such re-incorporation (unless such re-incorporation involves a change in the number of shares of common stock or the capitalization of the company, in which case
proportional adjustments shall be made as provided above) and the Plan, unless otherwise rescinded by the Board, will remain the Plan of the re-incorporated company.
Except
as otherwise provided in the preceding paragraph, if the Company or a Subsidiary is merged or consolidated with another corporation, whether or not the Company is the surviving entity, or if
the Company is liquidated or sells or otherwise disposes of all or substantially all of its assets to another entity while unexercised or unvested Options, shares of Restricted Stock or Other Rights
remain outstanding under the Plan, or if other circumstances occur in which the Independent Administrative Committee in its sole and absolute discretion deems it appropriate for the provisions of this
paragraph to apply (in each case, an "Applicable Event"), then: (a) in the discretion of the Independent Administrative Committee, each holder of
an outstanding Option or Other Right shall be entitled, upon exercise of the Option (or exercise or vesting of the Other Right), to receive in lieu of shares of Common Stock, such stock or other
securities or property as he would have received had he exercised or vested in the Option or Other Right immediately prior to the Applicable Event; or (b) the Independent Administrative
Committee may, in its sole and absolute discretion, cancel outstanding and unexercised Options and Other Rights as of the effective date of any such Applicable Event; or (c) the Independent
Administrative Committee may, in its sole discretion, convert some or all Options or Other Rights into Options or Other Rights with respect to the stock or other securities of the surviving
corporation pursuant to an Applicable Event; or (d) the Independent Administrative Committee may, in its sole and absolute discretion, assume the outstanding and unexercised options to purchase
stock or other securities of any corporation and convert such options into Options to purchase shares of Common Stock, whether pursuant to this Plan or not, pursuant to an Applicable Event;
provided, however, that notice of any cancellation pursuant to clause (b) shall be given to each holder of an Option or exercisable
Other Right not less than ten business days preceding the effective date of such Applicable Event; and provided, further, that the Independent
Administrative Committee may, in its sole and absolute discretion waive, generally or in one or more specific instances, any limitations imposed on exercise (including a change in any existing
exercise schedule) with respect to any Option or exercisable Other Right so that such Option shall be exercisable in full or in part, as the Independent Administrative Committee may, in its sole and
absolute discretion, determine, during such ten business day period. Notwithstanding the foregoing, immediately upon the occurrence of a "Change in Control" or
"Termination Event" (as each is defined on Exhibit A hereto) all awards issued and outstanding under the Plan shall become fully vested and exercisable (as the case
may be), whether or not the holder of the award experiences a termination of employment or service in connection with the Change in Control.
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Except
as expressly provided to the contrary in this Section 11, the issuance by the Company of shares of Common Stock or other equity securities of any class for cash or property or for
services, either upon direct sale or upon the exercise of rights or warrants, or upon conversion of stock or obligations of the Company convertible into such stock or other securities, shall not
affect the number, class or price of the shares of Common Stock then subject to outstanding Options or Other Rights.
12. FORFEITURE FOR DISHONESTY, VIOLATION OF AGREEMENTS OR TERMINATION FOR CAUSE
Notwithstanding
any provision of the Plan to the contrary (other than Section 13(c), which this Section 12 shall be subject to), if the Independent Administrative Committee determines,
after full consideration of the facts, that:
-
(a)
-
the
Optionee (or holder of shares of Restricted Stock or Other Rights) has been engaged in fraud, embezzlement or theft in the course of his employment by or
involvement with the Company or a Subsidiary, has made unauthorized disclosure of trade secrets or other proprietary information of the Company or a Subsidiary or of a third party who has entrusted
such information to the Company or a Subsidiary, or has been convicted of a felony, or crime involving moral turpitude or any other crime which reflects negatively upon the Company; or
-
(b)
-
the
Optionee (or holder of shares of Restricted Stock or Other Rights) has violated the terms of any employment, noncompetition, nonsolicitation, confidentiality,
nondisclosure or other similar agreement with the Company to which he is a party; or
-
(c)
-
the
employment or involvement with the Company or a Subsidiary of the Optionee (or holder of shares of Restricted Stock or Other Rights) was terminated for "cause,"
as defined in any employment agreement with the Optionee (or holder of shares of Restricted Stock or Other Rights), if applicable, or if there is no such agreement, as determined by the Independent
Administrative Committee, which may determine that "cause" includes among other matters the willful failure or refusal of the Optionee (or holder of shares of Restricted Stock or Other Rights) to
perform and carry out his assigned duties and responsibilities diligently and in a manner satisfactory to the Independent Administrative Committee; then the Optionee's right to exercise an Option
shall terminate as of the date of such act (in the case of (a) or (b)) or such termination (in the case of (c)), the Optionee shall forfeit all unexercised Options (or the holder shall forfeit
all unvested shares of Restricted Stock or unvested Other Rights) and the Company shall have the right to repurchase all or any part of the shares of Common Stock acquired by the Optionee upon any
previous exercise of any Option (or any previous acquisition by the holder of shares of Restricted Stock or Other Rights, whether then vested or unvested), at a price equal to the lower of
(a) the amount paid to the Company upon such exercise or acquisition (or to cause such stock to be forfeited without consideration if no amount was paid), or (b) the Fair Market Value of
such stock at the time of repurchase. If an Optionee whose behavior the Company asserts falls within the provisions of the clauses above has exercised or attempts to exercise an Option prior to
consideration of the application of this Section 12 or prior to a decision of the Independent Administrative Committee, the Company shall not be required to recognize such exercise until the
Independent Administrative Committee has made its decision and, in the event any exercise shall have taken place, it shall be of no force and effect (and shall be void AB INITIO) if the Independent
Administrative Committee makes an adverse determination; provided, however, that if the Independent Administrative Committee finds in favor of
the Optionee then the Optionee will be deemed to have exercised the Option retroactively as of the date he originally gave notice of his attempt to exercise or actual exercise, as the case may be. The
decision of the Independent Administrative Committee as to the cause of an Optionee's (or holder of shares of Restricted Stock or Other Rights) discharge and the damage done to the Company shall be
final, binding and conclusive. No decision of the Independent Administrative Committee, however, shall affect in any manner the finality of the discharge of such Optionee (or holder of shares of
Restricted Stock or Other Rights) by the Company. For purposes of this Section 12, reference to the Company shall include any Subsidiary.
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13. MISCELLANEOUS
-
(a)
-
NO
GUARANTEE OF EMPLOYMENT OR OTHER SERVICE RELATIONSHIP. Neither the Plan nor any Stock Option Agreement, Restricted Stock Agreement, SAR Agreement or other
agreement hereunder shall give an employee the right to continue in the employment of the Company or a Subsidiary or give the Company or a Subsidiary the right to require an employee to continue in
employment. Neither the Plan nor any Stock Option Agreement, Restricted Stock Agreement, SAR Agreement or other agreement hereunder shall give a director or other service provider the right to
continue to perform services for the Company or a Subsidiary or give the Company or a Subsidiary the right to require the director or service provider to continue to perform services.
-
(b)
-
TAX
WITHHOLDING. To the extent required by law, the Company shall withhold or cause to be withheld income and other taxes with respect to any income recognized by a
grantee by reason of the exercise or vesting of an Option or shares of Restricted Stock, or payments with respect to Other Rights, and as a condition to the receipt of any Option, shares of Restricted
Stock or Other Rights the grantee shall agree that if the amount payable to him by the Company and any Subsidiary in the ordinary course is insufficient to pay such taxes, then he shall upon the
request of the Company pay to the Company an amount sufficient to satisfy its tax withholding obligations.
Without
limiting the foregoing, the Independent Administrative Committee may in its discretion permit any grantee's withholding obligation to be paid in whole or in part in the form of shares of
Common Stock by withholding from the shares of Common Stock to be issued or by accepting delivery from the grantee of shares of Common Stock already owned by him. The Fair Market Value of the shares
of Common Stock for such purposes shall be determined as set forth in Section 5(b). An Optionee may not make any such payment in the form of shares of Common Stock acquired upon the exercise of
an ISO until such shares have been held by him for at least two years after the date the ISO was granted and at least one year after the date the ISO was exercised. If payment of withholding taxes is
made in whole or in part in shares of Common Stock, the grantee shall deliver to the Company stock certificates registered in his name or other evidence of legal and beneficial ownership representing
a number of shares of Common Stock owned by him, fully vested and free of all liens, claims and encumbrances of every kind, duly endorsed or accompanied by stock powers duly endorsed by the record
holder of the shares of Common Stock represented by such stock certificates. The Compensation Committee may approve comparable procedures to those set forth in the preceding sentence in the event of
shares held in book-entry form. If the grantee is subject to Section 16(a) of the Exchange Act, his ability to pay his withholding obligation in the form of shares of Common Stock shall be
subject to such additional restrictions as may be necessary to avoid any transaction that might give rise to liability under Section 16(b) of the Exchange Act.
-
(c)
-
RECOUPMENT
POLICY. If (1) the Company is required to prepare an accounting restatement due to the material non-compliance of the Company, as a result of
misconduct, with any financial reporting requirement under the securities laws and (2) a recipient of an award under the Plan knowingly engaged in such misconduct then the Independent
Administrative Committee may determine in its discretion that absent such non-compliance a lesser award would have been awarded under the Plan or that a lesser amount would have been realized with
respect to an award or awards under the Plan. In the event that the Independent Administrative Committee makes such a determination, the Independent Administrative Committee may cause, in its
discretion, any such award granted under the Plan to such a recipient which is unvested or unexercised to be reduced or eliminated and may require any such participant who has exercised or become
vested in such an award to repay all or a portion of such award to the Company. Any determination of the Independent Administrative Committee hereunder shall be conclusive and binding on the Company
and the applicable award recipient. The determination of the Independent Administrative Committee need not be uniform with respect to award recipients. Each recipient of an award under the Plan shall
conclusively be deemed to have consented to the authority of the Independent Administrative Committee hereunder. The provisions of this
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement A-9
Table of Contents
14. EFFECTIVE DATE, DURATION, AMENDMENT AND TERMINATION OF PLAN
The
Plan was originally effective as of May 19, 2016 (the "Effective Date") and the effective date of this amendment of the Plan is June 10, 2021, subject to
the approval of the Company's stockholders. The Independent Administrative Committee may grant Options, shares of Restricted Stock or Other Rights under the Plan from time to time until the close of
business on June 10, 2031. The Board may at any time amend the Plan; provided, however, that without approval of the Company's
stockholders there shall be no: (a) change in the number of shares of Common Stock that may be issued under the Plan, except by operation of the provisions of Section 11, either to any
one grantee or in the aggregate; (b) change in the class of persons eligible to receive Options, shares of Restricted Stock or Other Rights; or (c) other change in the Plan that requires
stockholder approval under applicable law. No amendment shall adversely affect outstanding Options (or shares of Restricted Stock or Other Rights) without the consent
of the Optionee (or holder of shares of Restricted Stock or Other Rights). The Plan may be terminated at any time by action of the Board, but any such termination will not terminate any Option, shares
of Restricted Stock or Other Rights then outstanding without the consent of the Optionee or the holder of such shares of Restricted Stock or Other Rights.
A-10 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
Exhibit A
A "Change in Control" shall be deemed to have occurred if any of the events set forth in any one of the following paragraphs shall have
occurred:
-
(a)
-
any
Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 50% or more of either the then outstanding shares of
common stock of the Company or the combined voting power of the Company's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction
described in paragraph (c)(i) below;
-
(b)
-
the
following individuals cease for any reason to constitute a majority of the number of Directors then serving: individuals who, as of June 10, 2021,
constitute the Board and any new Director (other than a Director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a
consent solicitation, relating to the election of Directors) whose appointment or election by the Board or nomination for election by the Company's stockholders was approved or recommended by a vote
of at least two-thirds (2/3) of the Directors then in office who either were Directors as of June 10, 2021 or whose appointment, election or nomination for election was
previously so approved or recommended;
-
(c)
-
there
is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other entity, other than (i) a
merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of the Company or such surviving
entity or any parent thereof outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar
transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any
securities acquired directly from the Company or its Affiliates) representing 50% or more of the combined voting power of the Company's then outstanding securities; or
-
(d)
-
the
stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 50% of
the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such
sale.
A
"Termination Event" shall occur if The RMR Group LLC (or any entity controlled by, under common control with or controlling the RMR Group LLC) ceases to be the manager or shared
services provider to the Company.
Notwithstanding
anything to the contrary set forth herein, a transaction involving the Company and an Excluded Entity (or Affiliate) in which the award of shares of Common Stock is to be assumed by
the successor (or replaced by a substantially equivalent award) shall not constitute a Change in Control.
For
purposes of the definitions set forth on this Exhibit A, the following definitions shall apply, with capitalized terms used but not defined in this Exhibit A having the meaning set
forth in the Plan:
"Affiliate"
shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.
"Beneficial
Owner" shall have the meaning set forth in Rule 13d-3 under the Exchange Act.
"Director"
is a member of the Board.
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement A-11
Table of Contents
"Exchange
Act" shall mean the Securities Exchange Act of 1934, as amended.
"Excluded
Entity" shall mean any entity to which The RMR Group LLC (or any entity controlled by, under common control with or controlling The RMR Group LLC) provides management, advisory
or shared services.
"Person"
shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include
(i) the Company or any of its Subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an
underwriter temporarily holding securities pursuant to an offering of such securities and (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially
the same proportions as their ownership of common stock of the Company.
A-12 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
ANNEX BCERTAIN RELATED PERSON
TRANSACTIONS
Relationship with SVC. The Company was a 100% owned subsidiary of SVC until SVC distributed the Common Shares it then owned to its stockholders in 2007.
We are SVC's largest tenant and SVC is our principal landlord and second largest stockholder. As of December 31, 2020, SVC owned 1.185 million Common Shares, representing approximately
8.1% of our outstanding Common Shares, which amount includes 500,797 Common Shares that SVC purchased in our underwritten public equity offering in July 2020 at the public offering price of $14 per
share.
The
Chair of our Board and one of our Managing Directors, Adam D. Portnoy, is the chair of the board of trustees and a managing trustee of SVC. Ethan S. Bornstein, Adam D. Portnoy's brother-in-law,
served as an executive officer of SVC until he resigned on December 31, 2020. RMR LLC provides management services to both the Company and SVC.
Spin-Off Transaction Agreement. In connection with our spin-off from SVC in 2007, we entered a transaction agreement with SVC and RMR LLC,
pursuant to which we granted SVC a right of first refusal to purchase, lease, mortgage or otherwise finance any interest we own in a travel center before we purchase, lease, mortgage or otherwise
finance that travel center to or with another party, and we granted SVC and any other company to which RMR LLC provides management services a right of first refusal to acquire or finance any
real estate of the types in which SVC or such other companies invest before we do. We also agreed that for so long as we are a tenant of SVC we will not permit: the acquisition by any person or group
of beneficial ownership of 9.8% or more of the voting shares or the power to direct our management and policies or any of our subsidiary tenants or guarantors under our leases with SVC; the sale of a
material part of our assets or of any such tenant or guarantor; or the cessation of certain of the Directors to continue to constitute a majority of our Board or any such tenant or guarantor. Also, we
agreed not to take any action that might reasonably be expected to have a material adverse impact on SVC's ability to qualify as a real estate investment trust and to indemnify SVC for any liabilities
it may incur relating to our assets and business.
SVC Leases. As of December 31, 2020, we leased from SVC a total of 179 properties under five leases, four of which we refer to as the TA Leases
and one of which we refer to as the Petro Lease, and which we refer to collectively as the SVC Leases. The number of properties leased, the terms, the annual minimum rent and the deferred rent
balances owed by us under the SVC Leases, as of December 31, 2020, were as follows (dollar amounts in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Properties
|
|
Initial Term End Date(1)
|
|
Annual
Minimum
Rent
|
|
Deferred
Rent(2)
|
|
|
|
|
|
|
|
|
|
|
|
TA Lease 1
|
|
|
36
|
|
December 31, 2032
|
|
|
$
|
49,707
|
|
$
|
10,487
|
|
TA Lease 2
|
|
|
36
|
|
December 31, 2031
|
|
|
44,077
|
|
9,740
|
|
TA Lease 3
|
|
|
35
|
|
December 31, 2029
|
|
|
42,409
|
|
9,603
|
|
TA Lease 4
|
|
|
37
|
|
December 31, 2033
|
|
|
46,067
|
|
9,804
|
|
Petro Lease
|
|
|
35
|
|
June 30, 2035
|
|
|
61,654
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
179
|
|
|
|
|
$
|
243,914
|
|
$
|
39,634
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
We
have two renewal options of 15 years each under each of the SVC Leases.
-
(2)
-
We
paid quarterly deferred rent to SVC during 2020 of $4.4 million ($17.6 million in the aggregate). Under our rent deferral agreement with SVC,
deferred rent shall be accelerated and interest shall begin to accrue thereon at 1.0% per month on the deferred rent amounts if certain events occur, including: our default under the SVC Leases; a
change of control of us, as defined in the rent deferral agreement; or our declaration or payment of a dividend or other distribution in respect of our Common Shares.
The
SVC Leases are "triple net" leases that require us to pay all costs incurred in the operation of the leased properties, including costs related to personnel, utilities, inventory acquisition and
provision of services to customers, insurance, real estate and personal property taxes, environmental related expenses, underground storage tank removal costs and ground lease payments at those
properties at which SVC leases the property and subleases it to us. We also are required generally to indemnify SVC for certain environmental matters and for liabilities that arise during the terms of
the leases from
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement B-1
Table of Contents
ownership
or operation of the leased properties and, at lease expiration, we are required to pay an amount equal to an estimate of the cost of removing underground storage tanks on the leased
properties.
The SVC Leases require us to maintain the leased properties, including structural and non-structural components.
We
recognized total rent expense of approximately $242.5 million for the year ended December 31, 2020 under the SVC Leases.
In
addition to the payment of annual minimum rent and deferred rent, the SVC Leases provide for payment to SVC of percentage rent, calculated at 3.5% of the increase in total nonfuel revenues at each
property over applicable base year levels. The percentage rent that we incurred during 2020 was approximately $2.8 million, which amount is included in the total rent expense noted above for
the year ending December 31, 2020.
Under
the SVC Leases, we may request that SVC purchase approved amounts of renovations, improvements and equipment at the leased properties in return for increases in our annual minimum rent according
to the following formula: the annual minimum rent will be increased by an amount equal to the amount paid by SVC multiplied by the greater of (i) 8.5% or (ii) a benchmark U.S. Treasury
interest rate plus 3.5%. During the year ended December 31, 2020, we did not sell to SVC any improvements we made to properties leased from SVC.
As
permitted by the SVC Leases, we sublease a portion of certain travel centers to third parties to operate other retail operations. These subleases are classified as operating leases. We recognized
sublease rental income of approximately $2.1 million for the year ended December 31, 2020.
Relationships with RMR LLC and Others Related to It. We have relationships and historical and continuing transactions with RMR LLC,
RMR Inc. and others related to them, including other companies to which RMR LLC or its subsidiaries provide management services and some of which have directors, trustees or officers who
are also our Directors or officers. The Chair of our Board and one of our Managing Directors, Adam D. Portnoy, as the sole trustee of ABP Trust, is the controlling shareholder of RMR Inc. and
is a managing director and the president and chief executive officer of RMR Inc. and an officer and employee of RMR LLC. Our other Managing Director and Chief Executive Officer,
Executive Vice President, Chief Financial Officer and Treasurer, Executive Vice President and General Counsel, and Secretary are officers and employees of RMR LLC. Some of our Independent
Directors also serve as independent trustees or independent directors of other public companies to which RMR LLC or its subsidiaries provide management services. RMR Inc. is the managing
member of RMR LLC. RMR LLC provides management services to both the Company and SVC, and Mr. Portnoy also serves as the chair of the boards of trustees or boards of directors of
several of the other public companies to which RMR LLC provides management services and as a managing trustee or managing director of all these companies, including serving as the chair of the
board of trustees and as a managing trustee of SVC. As of December 31, 2020, RMR LLC owned 621,853 Common Shares, representing approximately 4.3% of our Common Shares. This amount
includes 218,577 Common Shares that RMR LLC purchased in our underwritten public equity offering in July 2020 at the public offering price of $14 per share and 104,738 Common Shares that
RMR LLC purchased from our former Managing Director and Chief Executive Officer in September 2020, pursuant to a right of first refusal granted to RMR LLC in connection with Andrew
Rebholz's retirement.
Because
at least 80% of Messrs. Pertchik's, Crage's and Young's business time was devoted to services to us during 2020, 80% of Messrs. Pertchik's, Crage's and Young's total cash
compensation (that is, the combined base salary and cash bonus paid by the Company and RMR LLC) was paid by the Company
and the remainder was paid by RMR LLC. Messrs. Pertchik, Crage and Young and William E. Myers (our former Chief Financial Officer, Treasurer and Executive Vice President) are, or were,
as applicable, also eligible to participate in certain RMR LLC benefit plans and to receive share awards from RMR Inc. and other companies to which RMR LLC or its subsidiaries
provide management services. We believe the compensation we paid to these officers reasonably reflected their division of business time and efforts; however, periodically, these individuals may divide
their business time and efforts differently than they do currently and their compensation from us may become disproportionate to this division.
B-2 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
Additionally,
each of Messrs. Pertchik, Crage, and Young during 2020 received share awards from RMR Inc. and other companies to which RMR LLC or its subsidiaries provide
management services, including SVC, in their capacities as officers of RMR LLC.
During
2020, we purchased 84,311 Common Shares, at the closing price of the Common Shares on the Nasdaq on the date of purchase, from certain of our officers and employees and officers and employees
of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of Common Shares.
Former CEO Retirement. In December 2019, we and RMR LLC entered into a retirement agreement with the former Managing Director and Chief Executive
Officer, Andrew J. Rebholz. Pursuant to his retirement agreement, Mr. Rebholz continued to serve, through June 30, 2020, as a non-executive employee in order to assist in transitioning
his duties and responsibilities to his successor. During 2020, pursuant to Mr. Rebholz's retirement agreement, we continued to pay Mr. Rebholz an annual base salary of
$0.3 million until June 30, 2020, consistent with past practice, we paid Mr. Rebholz $1.0 million in cash in June 2020 and we fully accelerated the vesting of any unvested
Common Shares previously awarded to Mr. Rebholz.
In
February 2020, the Company and RMR LLC entered into a separation agreement with Mr. Myers. Pursuant to his separation agreement, in 2020, we paid Mr. Myers $0.3 million
and we fully accelerated the vesting of any unvested Common Shares previously awarded to Mr. Myers.
We
have a business management agreement with RMR LLC to provide management services to us that relate to various aspects of our business generally, including, but not limited to, services
related to compliance with various laws and rules applicable to our status as a public company, advice and supervision with respect to our travel centers, site selection for properties on which new
travel centers may be developed, identification of, and purchase negotiation for, travel center properties and companies, accounting and financial reporting, capital markets and financing activities,
investor relations and general oversight of our daily business activities, including legal matters, human resources, insurance programs, management information systems and the like. This agreement is
described below, see "Business Management Agreement with RMR LLC."
Business Management Agreement with RMR LLC. Under our business management agreement with RMR LLC, we pay RMR LLC an annual business
management fee equal to 0.6% of the sum of our fuel gross margin (which is our fuel revenues less our fuel cost of goods sold) plus our total nonfuel revenues. The fee is payable monthly and totaled
approximately $12.5 million for 2020.
The
current term of our business management agreement with RMR LLC ends on December 31, 2021, and automatically renews for successive one year terms unless we or RMR LLC gives
notice of non-renewal before the end of an applicable term. RMR LLC may terminate the business management agreement upon 120 days' written notice, and we have the right to terminate the
business management agreement upon 60 days' written notice, subject to approval by a majority vote of our Independent Directors. If we terminate or do not renew the business management
agreement other than for cause, as defined, we are obligated to pay RMR LLC a termination fee equal to 2.875 times the annual base management fee and the annual internal audit services expense,
which amounts are based on averages during the 24 consecutive calendar months prior to the date of notice of termination or nonrenewal.
Expense Reimbursement. Pursuant to our business management agreement, we are also generally responsible for all of our expenses and certain expenses
incurred or arranged by RMR LLC on our behalf. RMR LLC also provides internal audit services to us in return for our share of the total internal audit costs incurred by RMR LLC
for us and other publicly owned companies to which RMR LLC or its subsidiaries provide management services, which amounts are subject to approval by our Compensation Committee. Our Audit
Committee appoints our Director of Internal Audit and our Compensation Committee approves our portion of internal audit costs incurred by RMR LLC. The internal audit costs were approximately
$0.28 million for the year ended December 31, 2020. These amounts are in addition to the business management fees paid to RMR LLC.
TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement B-3
Table of Contents
Transition Services. In addition, RMR LLC has agreed to provide certain transition services to us for 120 days following termination by us
or notice of termination by RMR LLC.
Vendors. Pursuant to our business management agreement, RMR LLC may from time to time negotiate on our behalf with certain third party vendors
and suppliers for the procurement of services to us. As part of this arrangement, we may enter agreements with RMR LLC and other companies to which RMR LLC provides management services
for the purpose of obtaining more favorable terms from such vendors and suppliers.
Stock Awards to RMR LLC Employees. We award Common Shares to certain employees of RMR LLC under our equity compensation plan who are not
also Directors, officers or employees of the Company. During 2020, we awarded approximately 15,650 Common Shares to such persons. Those awards had an aggregate value of approximately
$0.52 million, based upon the closing prices of the Common Shares on the Nasdaq on the date of the award. One fifth of those stock awards vested on the date of the award and one fifth vests on
each of the next four anniversaries of the date of the award. These stock awards to RMR LLC employees are in addition to the fees we pay to RMR LLC and the stock awards to our Directors,
officers and employees (some of whom are also officers and employees of RMR LLC).
On
occasion, we have entered into arrangements with former employees of RMR LLC in connection with the termination of their employment with RMR LLC, providing for the acceleration of
vesting of Common Share awards previously awarded to them under our equity compensation plan. We did not accelerate any such Common Share awards for the year ended December 31, 2020.
Other. RMR LLC conducts a Leadership Development Program for which certain of its employees take part in a rotational program, working at each of
the Company, RMR LLC and certain other companies to which RMR LLC or its subsidiaries provide management services. The employee remains on RMR LLC's payroll during this rotational
program and we reimburse RMR LLC for the applicable employee costs for the period of time that the employee works for the Company. The amount recognized as expense for these costs for the year
ended December 31, 2020, was approximately $0.28 million.
Relationship with Affiliates Insurance Company ("AIC"). Until its dissolution on February 13, 2020, we, SVC and five other companies to which
RMR LLC provides management services each owned 14.3% of AIC, an Indiana insurance company. In connection with AIC's dissolution, we and each other AIC shareholder received an additional
liquidation distribution of $0.3 million in June 2020.
The
foregoing descriptions of our agreements with RMR LLC, SVC and AIC are summaries and are qualified in their entirety by the terms of the agreements. A further description of the terms of
certain of those agreements is included in the Annual Report. In addition, copies of certain of the agreements evidencing these relationships are filed with the SEC and may be obtained from the SEC's
website, www.sec.gov. We may engage in additional transactions with related persons, including businesses to which RMR LLC or its subsidiaries
provide management services.
B-4 TRAVELCENTERS OF AMERICA INC
2021 Proxy Statement
Table of Contents
THANK YOU
Thank you for being a stockholder of TravelCenters of America Inc.
AUTHORIZE YOUR PROXY BY INTERNET - www.proxyvote.com Use the internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m., Eastern time, on June 9, 2021. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to submit your voting instructions. AUTHORIZE YOUR PROXY BY TELEPHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m., Eastern time, on June 9, 2021. Have your proxy card in hand when you call and then follow the instructions. If the meeting is postponed or adjourned, the above times will be extended to 11:59 p.m., Eastern time, on the day before the reconvened meeting. TRAVELCENTERS OF AMERICA INC. C/O BROADRIDGE FINANCIAL SOLUTIONS, INC. P.O. BOX 1342 BRENTWOOD, NY 11717 AUTHORIZE YOUR PROXY BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to TravelCenters of America Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. VOTE BY VIRTUALLY ATTENDING THE MEETING During The Meeting - Go to https://www.viewproxy.com/TravelCentersofAmerica/2021/ You may attend the meeting via the Internet and vote during the meeting. Have your proxy card in hand when you access the website and follow the instructions provided on the website. ELECTRONIC DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS If you would like to reduce the costs incurred by TravelCenters of America Inc. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically by email or over the internet. To sign up for electronic delivery, please follow the instructions above to vote using the internet and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D47321-P53543 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. TRAVELCENTERS OF AMERICA INC. 1. Election of Directors. For Withhold Nominee (for Independent Director in Class II): Barbara D. Gilmore Nominee (for Independent Director in Class II): Elena B. Poptodorova Nominee (for Managing Director in Class II): Adam D. Portnoy ! ! ! ! ! ! For Against Abstain ! ! ! ! ! ! ! ! ! 2. Advisory vote to approve executive compensation. 3. Approval of an amendment to the Second Amended and Restated TravelCenters of America Inc. 2016 Equity Compensation Plan. 4. Ratification of the appointment of RSM US LLP as independent auditors to serve for the 2021 fiscal year. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR ALL NOMINEES FOR DIRECTOR IN PROPOSAL 1 AND FOR PROPOSALS 2, 3 AND 4. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE PROXIES, IN THEIR DISCRETION, ARE AUTHORIZED TO VOTE AND OTHERWISE REPRESENT THE UNDERSIGNED ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR AT ANY POSTPONEMENT OR ADJOURNMENT THEREOF. (NOTE: Please sign exactly as your name(s) appear(s) hereon. All holders must sign. When signing as attorney, executor, administrator or other fiduciary, please give full title as such. Joint owners should each sign personally. If a corporation, please sign in full corporate name by authorized officer, indicating title. If a partnership, please sign in partnership name by authorized person, indicating title.) Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date The Board of Directors Recommends a Vote FOR all Nominees for Director in Proposal 1 and FOR Proposals 2, 3 and 4.
TRAVELCENTERS OF AMERICA INC. ANNUAL MEETING OF STOCKHOLDERS June 10, 2021, 9:30 a.m., Eastern time TravelCenters of America Inc. Virtually via the Internet at https://www.viewproxy.com/TravelCentersofAmerica/2021/ Please see the Proxy Statement for attendance instructions. The 2021 Annual Meeting of Stockholders of TravelCenters of America Inc. will address the following items of business: 1. Election of the Directors named in the Proxy Statement to the Company's Board of Directors; 2. Advisory vote to approve executive compensation; 3. Approval of an amendment to the Second Amended and Restated TravelCenters of America Inc. 2016 Equity Compensation Plan; 4. Ratification of the appointment of RSM US LLP as independent auditors to serve for the 2021 fiscal year; and 5. Transaction of such other business as may properly come before the meeting and at any postponements or adjournments of the meeting. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES FOR DIRECTOR IN PROPOSAL 1 AND FOR PROPOSALS 2, 3 AND 4. D47322-P53543 Proxy TRAVELCENTERS OF AMERICA INC. ANNUAL MEETING OF STOCKHOLDERS June 10, 2021, 9:30 a.m., Eastern time Important Notice Regarding the Availability of Proxy Materials: The proxy materials for the 2021 Annual Meeting of Stockholders of TravelCenters of America Inc. (the "Company"), including the Company's annual report and proxy statement, are available on the internet. To view the proxy materials or vote online or by telephone, please follow the instructions on the reverse side hereof. This proxy is solicited on behalf of the Board of Directors of TravelCenters of America Inc. The undersigned stockholder of the Company hereby appoints Jennifer B. Clark and Adam D. Portnoy, or any of them, as proxies for the undersigned, with full power of substitution in each of them, to attend the 2021 Annual Meeting of Stockholders of the Company to be held virtually via the Internet at https://www.viewproxy.com/TravelCentersofAmerica/2021/, on June 10, 2021, at 9:30 a.m. Eastern time, and any postponement or adjournment thereof, to cast on behalf of the undersigned all the votes that the undersigned is entitled to cast at the meeting and otherwise to represent the undersigned at the meeting with all powers possessed by the undersigned if personally present at the meeting. The undersigned hereby acknowledges receipt of the annual report and the proxy statement, which includes the Notice of 2021 Annual Meeting of Stockholders, each of which is incorporated herein by reference, and revokes any proxy heretofore given with respect to the meeting. THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST AS INSTRUCTED ON THE REVERSE SIDE HEREOF. IF THIS PROXY IS EXECUTED, BUT NO INSTRUCTION IS GIVEN, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST FOR ALL NOMINEES FOR DIRECTOR IN PROPOSAL 1 AND FOR PROPOSALS 2, 3 AND 4. ADDITIONALLY, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST BY THE PROXIES, IN THEIR DISCRETION, ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING OR AT ANY POSTPONEMENT OR ADJOURNMENT THEREOF. See reverse for instructions on how to authorize a proxy.
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