UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): May 19, 2017

 

TravelCenters of America LLC

(Exact Name of Registrant as Specified in Its Charter)

 

Delaware

(State or Other Jurisdiction of Incorporation)

 

001-33274

 

20-5701514

(Commission File Number)

 

(IRS Employer Identification No.)

 

 

 

24601 Center Ridge Road, Westlake, Ohio

 

44145

(Address of Principal Executive Offices)

 

(Zip Code)

 

440-808-9100

(Registrant’s Telephone Number, including Area Code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

 

o             Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o             Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o             Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o             Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

o             Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o

 

 

 



 

In this Current Report on Form 8-K, the term “the Company” refers to TravelCenters of America LLC.

 

Item 5.02.                 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

The Company held its annual meeting of shareholders on May 19, 2017. The voting results of that meeting are noted in Item 5.07 below.

 

At the 2017 annual meeting, the Company’s shareholders approved the TravelCenters of America LLC Management Incentive Plan (the “MIP”), the purpose of which is to encourage the executive officers of the Company to continue their efforts for the Company by providing opportunities for them to earn cash bonuses and share-based awards which constitute “qualified performance-based compensation” under Section 162(m) of the Internal Revenue Code of 1986, as amended. The performance objective under the MIP is the Company’s “EBITDAR” which is defined in the MIP as the Company’s earnings excluding interest expense, income tax provision or benefit, depreciation and amortization expenses (including gain or loss on sales of fixed assets), real estate rent expense, gain or loss on extinguishment of debt, results of discontinued operations, unusual or infrequently occurring items, executive compensation under the MIP and litigation settlements. Each element of EBITDAR will be calculated in accordance with generally accepted accounting principles. The maximum amount payable under the plan is 5% of EBITDAR for each twelve month performance period under the MIP (which periods run annually from October 1 to the following September 30). The Compensation Committee has the discretionary authority to reduce amounts otherwise payable to MIP participants. Eligibility to participate in the MIP is limited to individuals who are executive officers of the Company on the date the Compensation Committee (which administers the MIP) determines the participants in the MIP for the applicable plan year. Participants in the MIP shall be selected by the Compensation Committee from those executive officers. The MIP will remain in effect until terminated by the Compensation Committee or the Board of Directors.

 

Additional information about the MIP is included under the heading “ Approval of The TravelCenters of America LLC Management Incentive Plan (Item 2) ” in the Company’s proxy statement for the 2017 annual meeting of shareholders filed with the Securities and Exchange Commission (the “SEC”) on March 1, 2017. That proxy statement is available at the SEC’s website at www.sec.gov.

 

The above description of the MIP does not purport to be complete and is qualified in its entirety by reference to the MIP, a copy of which is filed as Exhibit 10.1 hereto and incorporated herein by reference.

 

Item 5.07.                 Submission of Matters to a Vote of Security Holders.

 

The Company’s shareholders elected Joseph L. Morea as the Independent Director in Group I of the Board of Directors for a three year term of office until the Company’s 2020 annual meeting of shareholders and to serve until his successor is elected and qualifies. Mr. Morea received the following votes:

 

For

 

Withhold

 

Broker Non-Votes

16,449,395

 

7,719,400

 

9,965,605

 

The Company’s shareholders also elected Barry M. Portnoy as the Managing Director in Group I of the Board of Directors for a three year term of office until the Company’s 2020 annual meeting of shareholders and to serve until his successor is elected and qualifies. Mr. Portnoy received the following votes:

 

For

 

Withhold

 

Broker Non-Votes

14,058,593

 

10,110,202

 

9,965,605

 

The Company’s shareholders also approved the adoption of the MIP. The MIP received the following votes:

 

For

 

Against

 

Abstain

 

Broker Non-Votes

20,142,834

 

3,881,762

 

144,199

 

9,965,605

 

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The Company’s shareholders also ratified the appointment of RSM US LLP as the Company’s independent auditors to serve for the 2017 fiscal year. This proposal received the following votes:

 

For

 

Against

 

Abstain

 

Broker Non-Votes

31,879,609

 

1,844,548

 

410,243

 

 

The results reported above are final voting results.

 

Item 8.01.                 Other Events.

 

On May 19, 2017, the Company updated its Director compensation arrangements. A summary of the Company’s currently effective Director compensation arrangements is filed as Exhibit 10.2 hereto and is incorporated herein by reference.

 

Consistent with the Company’s Director compensation arrangements, on May 19, 2017, the Company granted each of the Company’s Directors an award of 10,000 shares representing common limited liability company interests in the Company (“Common Shares”) valued at $3.95 per share, the closing price of the Common Shares on The NASDAQ Stock Market LLC on that date.

 

Item 9.01.                 Financial Statements and Exhibits.

 

(d)                                  Exhibits.

 

10.1                         The TravelCenters of America LLC Management Incentive Plan

 

10.2                         Summary of Director Compensation

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

TRAVELCENTERS OF AMERICA LLC

 

 

 

 

 

By:

/s/ Andrew J. Rebholz

 

Name:

Andrew J. Rebholz

 

Title:

Executive Vice President, Chief Financial Officer and Treasurer

 

Date:  May 22, 2017

 


Exhibit 10.1

 

TRAVELCENTERS OF AMERICA LLC
MANAGEMENT INCENTIVE PLAN

 

I.                                         Purpose of the Plan

 

The purpose of the TravelCenters of America LLC Management Incentive Plan (the “Plan”) is to encourage the executive officers of TravelCenters of America LLC (the “Company”) to continue their efforts for the Company by providing opportunities for them to earn cash bonuses and share-based awards (shares issued with respect to any share-based award hereunder shall be issued pursuant to the TravelCenters of America LLC 2016 Equity Compensation Plan or a successor plan) which constitute “qualified performance-based compensation” under Section 162(m) of the Internal Revenue Code of 1986, as amended (together with the regulations issued thereunder, “Section 162(m)”).

 

II.                                    Administration

 

The Plan shall be administered by the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of the Company. All members of the Committee shall qualify at all relevant times as “outside directors” (as that term is defined in Section 162(m)). Without limitation, the Committee shall have the sole power and authority, consistent with the express terms of the Plan and the requirements of the qualified performance-based compensation exemption from the application of Section 162(m):

 

(a)                                  to select, subject to the eligibility requirements of Section IV, those employees of the Company or a subsidiary who shall receive awards under the Plan (“Participants”);

 

(b)                                  to determine all of the terms and conditions of awards (which need not be identical for each Participant or any award);

 

(c)                                   to make adjustments to the terms and conditions applicable to awards in accordance with Section VII;

 

(d)                                  to determine final award amounts to be paid to Participants (including the ability to exercise the discretion to reduce (but not increase) the amount of the award otherwise payable to a Participant);

 

(e)                                   to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall from time to time deem advisable;

 

(f)                                    to construe and interpret the terms and provisions of the Plan and any award in its sole discretion; and

 

(g)                                   to make all other determinations deemed necessary or advisable for the administration of the Plan.

 



 

All decisions made by the Committee pursuant to the provisions of the Plan shall be final, conclusive and binding on all persons, including the Company and the Participants. No member of the Committee, nor any officer or employee of the Company or a subsidiary acting on behalf of the Committee, shall be personally liable for any action, determination for consistency or interpretation taken or made in good faith with respect to the Plan, and all members of the Committee and each and any officer or employee of the Company or a subsidiary acting on their behalf shall, to the extent permitted by law, be fully indemnified by the Company in respect of any such action, determination or interpretation.

 

III.                              Term

 

The Plan was adopted by the Board on November 30, 2016 (the “Effective Date”), subject to approval by the Company’s shareholders at the 2017 Annual Meeting of Shareholders. Subject to obtaining such approval, the Plan shall remain in effect until terminated by the Board or the Committee.

 

IV.                               Eligibility and Participation

 

Eligibility to participate in the Plan shall be limited to individuals who are executive officers of the Company on the date the Committee determines the Participants in the Plan for the applicable Plan year. Participants in the Plan shall be selected by the Committee from those executive officers eligible to participate in the Plan.

 

V.                                    Performance Period; Maximum Plan Funding Amount

 

Unless otherwise determined by the Committee, the performance period under the Plan shall be the twelve month period commencing on October 1 of each year and ending on September 30 of the following year. For each such twelve month period (whether or not the Committee uses such twelve month period or a different performance period or periods), the maximum amount payable with respect to awards under the Plan shall be 5% of the Company’s EBITDAR, if any, for such twelve month period (the “Plan Pool”). For purposes of applying the foregoing limit, amounts payable with respect to a performance period shall be counted toward the limit applicable to the twelve month period (October 1 to September 30) in which the performance period ends. For purposes of the Plan, EBITDAR is defined as on Appendix A hereto, and each element of EBITDAR shall be determined in accordance with generally accepted accounting principles (and shall be subject to adjustment pursuant to Section VII).

 

VI.                               Determination of Participants and Awards for a Performance Period; Contemplated Procedures

 

(a)                                  Not later than the 90 th  day of each performance period, or if shorter, prior to the time that 25% of the applicable performance period has elapsed (such 90 day or shorter period, the “Window Period”), the Committee shall establish in writing (i) the identity of each of the executive officers who will be Participants in the Plan for such performance period and (ii) the percentage of the aggregate Plan Pool which each Participant is eligible to earn for such performance period (referred to

 

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herein as the Participant’s “Maximum Bonus Allocation”). In no event shall the aggregate Maximum Bonus Allocations to Participants for a performance period exceed 100% of the Plan Pool.

 

(b)                                  Notwithstanding anything in the Plan to the contrary, no Participant shall receive an award under the Plan for any one performance period in excess of fifty percent (50%) of the Plan Pool. Neither the termination of a Participant’s employment prior to the payment of awards with respect to such performance period, the failure of a Participant to earn or be awarded some or all of his or her bonus hereunder (such as in the case of an exercise of the Committee’s authority to reduce the amount of a bonus otherwise payable hereunder) nor any other event shall result in an increase in any other Participant’s Maximum Bonus Allocation for a performance period.

 

(c)                                   As soon as practicable following the end of the applicable performance period, the Committee shall (i) certify in writing the amount of the Company’s EBITDAR for the performance period (if any), (ii) calculate the amount of the Plan Pool based on such EBITDAR results and (iii) calculate each Participants’ Maximum Bonus Allocation for the performance period. Following such certification and calculation, the Committee shall determine the Participants’ annual cash bonus and annual share awards for the completed performance period. The value of the annual cash bonus and annual share awards for the completed performance period may not exceed the Participant’s Maximum Bonus Allocation and may be reduced to a value less than the Participant’s Maximum Bonus Allocation if the Committee determines in its sole discretion to reduce the amount payable (which determination need not be uniform as between Participants). For purposes of determining whether the value of the annual award exceeds the Participant’s Maximum Bonus Allocation for the performance period, bonus awards shall be measured at their cash value and share awards, whether restricted or not, shall be valued at the closing price of the Company’s common shares on the last trading day prior to the date upon which the Committee makes its final bonus determination.

 

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VII.                          Equitable Adjustment

 

Solely to the extent consistent with the requirements of the qualified performance-based compensation exemption from the application of Section 162(m), the Committee shall have the authority to make equitable adjustments to the performance measure hereunder in recognition of unusual or nonrecurring events affecting the Company or any subsidiary or affiliate or the financial statements of the Company or any subsidiary or affiliate, in response to changes in applicable laws or regulations, or to account for items of gain, loss or expense determined to be unusual in nature or infrequent in occurrence or related to the disposal of a segment of a business or related to a change in accounting principles.

 

VIII.                     Payment of Awards

 

Cash awards for a performance period will, to the extent earned and established by the Committee under Section VI be paid (subject to applicable withholding) as soon as practicable following the Committee’s determination of awards for that performance period, and in no event later than March 15 th  of the year immediately following the performance period. Portions of awards payable in shares shall be paid in the form of restricted or unrestricted of the Company’s common shares, which may be subject to service based vesting conditions which extend beyond the applicable performance period.

 

IX.                               Code Section 409A

 

The intent of the Company is that payments and benefits under the Plan be exempt from the requirements of Section 409A of the Internal Revenue Code and the Plan shall be interpreted and administered in accordance with such intention.

 

X.                                    Other Provisions

 

(a)                                  Except as the Committee may otherwise determine in its sole discretion (subject in all cases to compliance with the performance-based compensation exemption to Section 162(m)), termination of employment of a Participant for any reason prior to the payment of the award for a performance period shall result in such Participant ceasing to be eligible for an award under the Plan for such performance period.

 

(b)                                  The rights and interests of a participant under the Plan shall not be assigned, encumbered or transferred. No employee or other person shall have any claim or right to be granted an award under the Plan. Neither the Plan, nor any action taken thereunder, shall be construed as giving a Participant or other person any right to be retained in the employ of the Company or a subsidiary.

 

(c)                                   The Company shall have the right to deduct from all payments made under the Plan any taxes required by law to be withheld with respect to such payment.

 

(d)                                  All questions pertaining to the validity, construction and administration of the Plan and any award hereunder shall be determined in conformity with the laws of the state in which the Company is organized.

 

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(e)                                   The Board, in its sole discretion, may modify or amend any or all of the Plan at any time and, without notice, may suspend or terminate the Plan entirely.

 

(f)                                    All obligations of the Company under the Plan with respect to awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business or assets of the Company.

 

(g)                                   Awards granted under the Plan shall be subject to any “claw-back” or recoupment policy of the Company in effect from time to time.

 

(h)                                  This Plan shall be unfunded and the Company shall not be required to establish any segregation of assets to assure payment of any awards made hereunder.

 

(i)                                      All amounts paid or payable under this Plan shall be subject to the Plan being approved by the Company’s shareholders in accordance with the requirements of Section 162(m); provided that awards may be made hereunder in advance of, and subject to, such approval.

 

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APPENDIX A

 

For purposes of the Plan, the Company’s EBITDAR shall mean the Company’s earnings excluding interest expense, income tax provision or benefit, depreciation and amortization expenses (including gain or loss on sales of fixed assets), real estate rent expense, gain or loss on extinguishment of debt, results of discontinued operations, unusual or infrequently occurring items, executive compensation under this Plan and litigation settlements. Each element of EBITDAR listed in the previous sentence shall be calculated in accordance with GAAP.

 

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Exhibit 10.2

 

TRAVELCENTERS OF AMERICA LLC

 

Summary of Director Compensation

 

Annual Retainer for Independent Directors:

 

$40,000

 

 

 

Meeting Fees for Independent Directors:

 

$1,250 per day per board or committee meeting, with a maximum fee of $2,500 for any one day with multiple board and committee meetings

 

 

 

Share Grants for all Directors:

 

10,000 annually to be granted on the day of the first board meeting following the Annual Meeting of Shareholders (or, for Directors who are first elected or appointed at other times, on the day of the first board meeting attended)

 

 

 

Chair of the Audit Committee:

 

$20,000 per year

 

 

 

Chair of the Nominating and Governance Committee:

 

$10,000 per year

 

 

 

Chair of the Compensation Committee:

 

$10,000 per year

 

 

 

Board Liaison to the Gaming Compliance Committee

 

$10,000 per year

 

The Company generally reimburses all Directors for travel expenses incurred in connection with their duties as Directors and for out of pocket costs incurred in connection with their attending certain continuing education programs.