**Exhibit 10 (e)**

**TIM HORTONS INC.**

**2006 STOCK INCENTIVE PLAN**

**Amended and Restated as of February 19, 2008**

**Section 1. Purpose**. The purpose of this Tim Hortons Inc. 2006 Stock Incentive Plan (the “Plan”) is to strengthen Tim Hortons Inc. (the “Company”) by providing an incentiveto the employees and directors of the Company and its subsidiaries (the “Subsidiaries”) and thereby encouraging them to devote their abilities and industry to the success of the Company’s and that of its Subsidiaries’business enterprises. It is intended that this purpose be achieved by extending to Eligible Individuals (as defined herein) an added long-term incentive for high levels of performance and unusual efforts through the grant of Restricted Stock,Options, Stock Appreciation Rights, Dividend Equivalent Rights, Performance Awards, Share Awards, Formula Restricted Stock Units and Stock Units (as each term is herein defined). 

**Section 2. Administration of the Plan**. 

2.1. Committee Composition; Powers. The Plan shall be administered by the Human Resource and Compensation Committee (“Committee”) of the Board. The members of the Committee shall serve at the pleasure of the Board,which shall have the power at any time, or from time to time, to remove members from the Committee or to add members thereto. Each member of the Committee shall be a Nonemployee Director and shall satisfy any applicable stock exchange requirements.The Committee shall construe and interpret the Plan, establish such operating guidelines and rules as it deems necessary for the proper administration of the Plan and make such determinations and take such other action in connection with the Plan asit deems necessary and advisable. It shall determine the Eligible Individuals to whom and the time or times at which Awards and Options shall be granted, the number of Shares to be subject to each Award and Option, the terms and conditions of eachAward and Option and the duration of leaves of absence which may be granted to Grantees and Optionees without constituting a termination of their employment, or status as a director for purposes of the Plan. Any such construction, interpretation,rule, determination or other action taken by the Committee pursuant to the Plan shall be final, binding and conclusive on all interested parties, including without limitation the Company and all Grantees and Optionees. With respect to Options andother Awards that are intended to be Performance-Based Compensation, the Committee shall be comprised of individuals who qualify as “outside directors” within the meaning of Section 162(m) of the Code and the regulations promulgatedthereunder. 

2.2. Committee Action. Actions by a majority of the Committee at a meeting at which a quorum is present, or actionsapproved in writing by all of the members of the Committee, shall be the valid acts of the Committee. No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Award orOption granted under it. 

**Section 3. Maximum Number of Shares Subject to Plan**. 

3.1. Number of Shares Authorized for Issuance. Subject to any adjustment as provided in the Plan, the Shares to be issued under the Plan may be, inwhole or in part, 

authorized but unissued Shares, issued Shares which shall have been reacquired by the Company and held by it as treasury shares, Shares which have beenotherwise acquired by or on behalf of the Company, a Subsidiary, or a Trust established by either of the Company or a Subsidiary and held for future delivery, or Shares acquired by delivery of cash to a broker to acquire Shares on behalf ofemployees and/or directors. The aggregate number of Shares that may be made the subject of Awards or Options granted under the Plan shall not exceed 2,900,000, and not more than 1,000,000 Shares may be made the subject of Incentive Stock OptionAwards under the Plan. The number of Shares that may be the subject of Options and Stock Appreciation Rights granted to an Eligible Individual in any calendar year may not exceed 250,000 Shares. The number of Shares that may be the subject ofPerformance Shares granted to an Eligible Individual in any calendar year may not exceed 250,000 Shares. The dollar amount of cash or the Fair Market Value of Shares that any Eligible Individual may receive in any calendar year in respect ofPerformance Units denominated in dollars may not exceed U.S. $4,000,000. 

3.2. Calculating Shares Available. 

(i) Upon the granting of an Award or an Option, the number of Shares available under this Section 3 for the granting of further Awards and Optionsshall be reduced as follows: 

(a) In connection with the granting of an Award or an Option (other than the granting of a Performance Unitdenominated in dollars or Dividend Equivalent Rights), the number of Shares available under this Section 3 for the granting of further Options and Awards shall be reduced by the number of Shares in respect of which the Option or Award isgranted or denominated; *provided, however*, that if any Option is exercised by tendering Shares, either actually or by attestation, to the Company as full or partial payment of the Option Price, the maximum number of Shares available underthis Section 3 shall be increased by the number of Shares so tendered. 

(b) In connection with the granting of a Performance Unitdenominated in dollars, the number of Shares available under this Section 3 for the granting of further Options and Awards initially shall be reduced by an amount equal to the quotient of (i) the dollar amount in which the Performance Unitis denominated, divided by (ii) the Fair Market Value of a Share on the date the Performance Unit is granted, with a corresponding adjustment if the Performance Unit is ultimately settled in whole or in part with a different number of Shares.

(c) In connection with the granting of a Dividend Equivalent Right, the number of Shares available under this Section 3 shall not bereduced; *provided, however*, that if Shares are issued in settlement of a Dividend Equivalent Right, the number of Shares available for the granting of further Options and Awards under this Section 3 shall be reduced by the number ofShares so issued. 

(ii) Whenever any outstanding Option or Award or portion thereof expires, is canceled, is settled in cash (includingthe settlement of tax withholding obligations using Shares) or is otherwise terminated for any reason without having been exercised or payment having been made in respect of the entire Option or Award, the Shares allocable to the expired, canceled,settled or otherwise terminated portion of the Option or Award may again be 

 

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the subject of Options or Awards granted hereunder. In addition, upon settlement of a Stock Appreciation Right in Shares, the excess of the number of Sharescovered by the Stock Appreciation Right over the number of Shares issued in settlement of the Stock Appreciation Right may again be the subject of Options or Awards granted hereunder. 

**Section 4. Restricted Stock; Stock Units**. 

4.1. Restricted Stock. The Committee, from time to time, subject to the terms and provisions of the Plan, may grant to any Eligible Individual an Award of Restricted Stock, which shall be evidenced by anAgreement. Each Agreement shall contain such restrictions, terms and conditions as the Committee may, in its discretion, determine and (without limiting the generality of the foregoing) such Agreements may require that an appropriate legend beplaced on Share certificates. Awards of Restricted Stock shall be subject to the terms and provisions set forth below in this Section 4.1. 

(i) Rights of Grantee. Shares of Restricted Stock granted pursuant to an Award hereunder shall be issued in the name of the Grantee as soon as reasonably practicable after the Award is granted, *provided* that the Grantee hasexecuted any and all documents which the Committee may require as a condition to the issuance of such Shares, which may include an Agreement evidencing the Award, the appropriate blank stock powers and an escrow agreement. If a Grantee shall fail toexecute any documents which the Committee may require within the time period prescribed by the Committee at the time the Award of Restricted Stock is granted, the Award shall be null and void. At the discretion of the Committee, Shares issued inconnection with an Award of Restricted Stock shall be deposited together with the stock powers with an escrow agent (which may be the Company) designated by the Committee. Unless the Committee determines otherwise as set forth in the Agreement, upondelivery of the Shares to the escrow agent (which may be in the form of book entry Shares), the Grantee shall have all of the rights of a stockholder with respect to such Shares, including the right to vote the Shares and to receive all dividends orother distributions paid or made with respect to the Shares. 

(ii) Non-Transferability. Until all restrictions upon the Shares ofRestricted Stock awarded to a Grantee shall have lapsed in the manner set forth in Section 4.1(iii), such Shares shall not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated. 

(iii) Lapse of Restrictions. 

(a)Generally. Restrictions upon Shares of Restricted Stock awarded hereunder shall lapse at such time or times and on such terms and conditions as the Committee may determine. The Agreement evidencing the Award shall set forth any suchrestrictions. 

(b) Effect of Change in Control. Upon a Change in Control, the restrictions upon Shares of Restricted Stock shalllapse. 

(iv) Treatment of Dividends. At the time an Award of Shares of Restricted Stock is granted, the Committee may, in itsdiscretion, determine that the payment to 

 

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the Grantee of dividends, or a specified portion thereof, declared or paid on such Shares by the Company shall be (a) deferred until the lapsing of therestrictions imposed upon such Shares and (b) held by the Company for the account of the Grantee until such time. In the event that dividends are to be deferred, the Committee shall determine whether such dividends are to be reinvested inShares (which shall be held as additional Shares of Restricted Stock) or held in cash. If deferred dividends are to be held in cash, there may be credited interest on the amount of the account at such times and at a rate per annum as the Committee,in its discretion, may determine. Payment of deferred dividends in respect of Shares of Restricted Stock (whether held in cash or as additional Shares of Restricted Stock), together with interest accrued thereon, if any, shall be made upon thelapsing of restrictions imposed on the Shares in respect of which the deferred dividends were paid, and any dividends deferred (together with any interest accrued thereon) in respect of any Shares of Restricted Stock shall be forfeited upon theforfeiture of such Shares. 

(v) Delivery of Shares. Upon the lapse of the restrictions on Shares of Restricted Stock, the Committeeshall cause a stock certificate or evidence of book entry Shares to be delivered to the Grantee with respect to such Shares of Restricted Stock, free of all restrictions hereunder. 

4.2. Stock Unit Awards. 

(i)Grant. The Committee, from time to time, may grant to any Eligible Individual an Award of Stock Units, which shall be evidenced by an Agreement. Any Award of Stock Units shall be subject to the terms and provisions of the Plan, and furthersubject to such other conditions as may be established by the Committee in connection with such Award, including, but not limited to, the attainment of performance objectives prior to the anticipated grant date of the Award. Each Agreement shallcontain such restrictions, terms and conditions as the Committee may, in its discretion, determine. 

(ii) Payment of Awards. EachStock Unit shall represent the right of the Grantee to receive a payment upon vesting of the Stock Unit or on any later date specified by the Committee equal to the Fair Market Value of a Share as of the date the Stock Unit was granted, the vestingdate or such other date as determined by the Committee at the time the Stock Unit was granted. The Committee may, at the time a Stock Unit is granted, provide a limitation on the amount payable in respect of each Stock Unit. The Committee mayprovide for the settlement of Stock Units in cash or with Shares having a Fair Market Value equal to the payment to which the Grantee has become entitled, or a combination thereof. 

(iii) Effect of Change in Control. Upon a Change in Control, Stock Units shall become fully vested. 

**Section 5. Non-Employee Director Restricted Stock Unit Grants**. 

5.1. Formula Restricted Stock Unit Grants. In 2006, each Eligible Director shall be granted 2,730 Formula Restricted Stock Units. Each Formula Restricted Stock Unit shall be accompanied by one (1) relatedDividend Equivalent Right. Such Formula Restricted Stock Units and related Dividend Equivalent Rights were granted on May 1, 2006. 

 

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5.2. Formula Restricted Stock Unit and Dividend Equivalent Right Agreements. All FormulaRestricted Stock Units and related Dividend Equivalent Rights shall be evidenced by an Agreement, which shall include the following terms and conditions: 

(i) Grantee and Number of Units. Each Agreement shall state the name of the Eligible Director to whom the Formula Restricted Stock Units have been granted and shall state the number of Formula Restricted StockUnits and Dividend Equivalent Rights granted. 

(ii) Dividend Equivalent Units Accompanying Formula Restricted Stock Units. EachDividend Equivalent Right shall provide that any dividends or distributions that are paid with respect to Shares subject to the Formula Restricted Stock Units to which the Dividend Equivalent Right relates shall be automatically converted intoadditional Formula Restricted Stock Units based on the Fair Market Value of a Share on the date such dividend is paid (provided that no fractional Formula Restricted Stock Units shall be granted). The amount of any cash dividends or distributionsremaining in respect of a fractional Share shall be added to any subsequent cash dividends or distributions paid in respect of Shares subject to Formula Restricted Stock Units and converted into additional Formula Restricted Stock Units or, ifearlier, paid to the Eligible Director upon the vesting of the Formula Restricted Stock Unit in respect of which such dividend or distribution was paid, in accordance with Section 5.2(iv) below. 

(iii) Non-Transferability. Until the Formula Restricted Stock Units awarded to the Grantee have vested in the manner set forth inSection 5.2(iv), such units shall not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated. 

(iv) Vesting; Issuance of Shares. 

(a) General Vesting. One-third of the Formula Restricted Stock Units shall veston each of the first two anniversaries of the grant date of such Formula Restricted Stock Units, and the remainder shall vest on November 1 following the second anniversary of the grant date of such Formula Restricted Stock Units. 

(b) Vesting Upon Certain Terminations of Service. In the event a Grantee’s services as a director of the Company is terminated by reasonof the Grantee’s death, the Grantee’s becoming Disabled, or by reason of the Grantee’s Retirement, then all Formula Restricted Stock Units (including all Dividend Equivalent Rights granted in respect of such units) held by the Granteeshall become immediately vested as of the date of such termination. 

(c) Effect of Change in Control. Upon a Change in Control, therestrictions upon Formula Restricted Stock Units shall lapse. 

(d) Issuance of Shares. Upon vesting of Formula Restricted StockUnits pursuant to Section 5.2(iv), (A) the Committee shall cause a stock certificate or evidence of book entry Shares to be delivered to the Grantee with respect to the Shares subject to the vested Formula Restricted Stock Units, free ofall restrictions hereunder and (B) the Dividend Equivalent Rights related to the vested Formula Restricted Stock Units shall terminate. 

 

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(v) Termination of Services by Grantee. Except as otherwise set forth in Section 5.2(iv),upon the termination of a Grantee’s services as a director, for any reason whatsoever, the unvested Formula Restricted Stock Units (including any Dividend Equivalent Rights granted in respect of such units) shall be forfeited as of the date ofsuch termination. 

(vi) Amendment of Section 5. No Formula Restricted Stock Units shall be granted under this Section 5for 2007 or any year thereafter. Notwithstanding the foregoing sentence, the provisions of this Section 5 will govern all outstanding grants of Formula Restricted Stock Units that were made in 2006. Subject to the other terms of this Plan, theamendment of this Section 5 shall not preclude grants of any other Awards under this Plan to Eligible Directors. 

**Section 6.Option Grants to Eligible Individuals**. 

6.1. Selection of Optionees. The Committee, from time to time, subject to the terms andprovisions of the Plan, may grant Options to any Eligible Individual. In determining the persons to whom Options shall be granted and the number of Shares to be covered by each Option, the Committee may take into account the nature of the servicesrendered by such persons, their present and potential contribution to the success and growth of the Company and its Subsidiaries, and such other factors as the Committee, in its discretion, shall deem relevant. Any Eligible Individual who has beengranted an Option under a prior stock option plan of the Company may be granted an additional Option or Options under the Plan if the Committee shall so determine. 

6.2. Option Requirements. The Options granted pursuant to this Section 6 shall be authorized by the Committee and shall be evidenced by an Agreement, which Agreement shall include the following terms andconditions: 

(i) Optionee. Each Agreement shall state the name of the Optionee to whom the Option has been granted. 

(ii) Number of Shares. Each Agreement shall state the number of Shares to which that Option pertains. 

(iii) Purchase Price. Each Agreement shall state the Option Price, which shall be not less than one hundred percent (100%) of the FairMarket Value of the Shares covered by such Option on the date of grant of such Option. 

(iv) Length of Option. Except as otherwiseprovided in Section 6.3, each Option granted pursuant to this Section 6 shall be granted for a period to be determined by the Committee but in no event to exceed more than ten (10) years. However, each Option shall be exercisable onlyduring such portion of its term as the Committee shall determine and, subject to Section 11, only if the Optionee is employed by the Company or a Subsidiary at the time of such exercise. The Committee may, subsequent to the granting of anyOption, extend the exercise period thereof, but in no event shall the exercise period as so extended exceed the 

 

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earlier of (1) the latest date upon which the Option could have expired by its original terms under any circumstances (including the circumstancesdescribed in Section 6.2(v)) or (2) the tenth anniversary of the date of grant of the Option. 

(v) Exercise of Option.Each Optionee shall have the right to exercise his or her Option at the time or times and in the manner specified in the Plan or in the Agreement evidencing such Option. The Committee may accelerate the exercisability of any Option granted to anEligible Individual or any portion thereof at any time. Notwithstanding anything to the contrary contained in this Plan, unless otherwise specified in the Agreement evidencing the Option, if an Option (other than an Incentive Stock Option) expiresoutside of a Trading Window, then the expiration of the term of such Option shall be the later of (I) the date the Option would have expired by its original terms (including the terms set forth in Section 11 of this Plan) or (II) the endof the tenth trading day of the immediately succeeding Trading Window during which the Company would allow the Optionee to trade in its securities; provided, however, that in no event shall the Option expire beyond the tenth anniversary of the dateof grant of the Option. 

6.3. Types of Stock Options. The Options granted under the Plan may be Nonqualified Stock Options orIncentive Stock Options. Incentive Stock Options may be granted only to Eligible Individuals who are employees of the Company or its “parent corporation” or a “subsidiary corporation” (as such terms are defined inSection 424 of the Code). Notwithstanding anything to the contrary contained in this Section 6, no Incentive Stock Option shall be granted to an individual owning stock possessing more than ten percent (10%) of the total combinedvoting power of the Company, or its parent corporation or subsidiary corporations unless (i) the Option Price at the time such Option is granted is equal to at least one hundred ten percent (110%) of the Fair Market Value of the Sharessubject to the Option, and (ii) such Option by its terms is not exercisable after the expiration of five (5) years from the date such Option is granted. Further, the aggregate Fair Market Value (determined at the time the Option isgranted) of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Optionee during any calendar year (under all such plans of the Company and its subsidiary corporations) shall not exceed one hundredthousand dollars (U.S. $100,000.00). 

6.4. Method of Exercise of Options. Each Option shall be exercised pursuant to the terms ofsuch Option as set forth in the applicable Agreement and pursuant to the terms of the Plan by giving notice to the Company at its principal place of business or other address designated by the Company or in such other manner as is acceptable to theCommittee. Payment of the Option Price for the number of Shares specified in the notice of exercise in the form of cash, certified check, bank draft or other property acceptable to the Committee shall accompany the notice of exercise. From time totime the Committee may establish procedures relating to the exercise of Options, including procedures for cashless exercises, including through a registered broker-dealer. No fractional Shares (or cash in lieu thereof) shall be issued as a result ofexercising an Option. The Company shall make delivery of such Shares as soon as possible; *provided, however,* that if any law or regulation or securities exchange rule requires the Company to take action with respect to the Shares specified insuch notice before issuance thereof, the date of delivery of such Shares shall then be extended for the period necessary to take such action. 

 

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6.5. Non-Transferability of Options. Except to the extent that, pursuant to the terms of the Planor an Agreement, an Optionee’s legal representative or estate is permitted to exercise an Option, an Option is exercisable during an Optionee’s lifetime only by the Optionee. The Options shall not be transferable except by will or the lawsof descent and distribution. 

6.6. Change in Control. In the event of a Change in Control, all Options outstanding on the date ofsuch Change in Control shall become immediately and fully exercisable. 

6.7. Buy Out of Option Gains. At any time after any Optionbecomes exercisable, the Committee shall have the right to elect, in its sole discretion and without the consent of the holder thereof, to cancel such Option and pay to the Optionee the excess of the Fair Market Value of the Shares covered by suchOption over the Option Price of such Option at the date the Committee provides written notice (the “Buy Out Notice”) of the intention to exercise such right. Buy outs pursuant to this provision shall be effected by the Company aspromptly as possible after the date of the Buy Out Notice. Payments of buy out amounts may be made in cash, in Shares, or partly in cash and partly in Shares, as the Committee deems advisable. To the extent payment is made in Shares, the number ofShares shall be determined by dividing the amount of the payment to be made by the Fair Market Value of a Share at the date of the Buy Out Notice. In no event shall the Company be required to deliver a fractional Share in satisfaction of this buyout provision. For greater certainty, the Company may only deliver a Buy Out Notice in respect of Options that have not already been exercised by the Optionee. 

**Section 7. Stock Appreciation Rights**. 

7.1. Grant. The Committee, from time to time,subject to the terms and provisions of the Plan, may, either alone or in connection with the grant of an Option, grant to any Eligible Individual Stock Appreciation Rights in accordance with the Plan, the terms and conditions of which shall be setforth in an Agreement. A Stock Appreciation Right may be granted (a) at any time if unrelated to an Option, or (b) if related to an Option, at the time of grant of the Option. 

7.2. Stock Appreciation Right Related to an Option. If granted in connection with an Option, a Stock Appreciation Right shall cover the sameShares covered by the Option (or such lesser number of Shares as the Committee may determine) and shall, except as provided in this Section 7, be subject to the same terms and conditions as the related Option. 

(i) Exercise. A Stock Appreciation Right granted in connection with an Option shall be exercisable at such time or times and only to the extentthat the related Options are exercisable, and will not be transferable except to the extent the related Option may be transferable. A Stock Appreciation Right granted in connection with an Incentive Stock Option shall be exercisable only if the FairMarket Value of a Share on the date of exercise exceeds the exercise price specified in the related Incentive Stock Option Agreement. 

 

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(ii) Amount Payable. Upon the exercise of a Stock Appreciation Right related to an Option, theGrantee shall be entitled to receive an amount determined by multiplying (A) the excess of the Fair Market Value of a Share on the date of exercise of such Stock Appreciation Right over the Option Price under the related Option, by (B) thenumber of Shares as to which such Stock Appreciation Right is being exercised. Notwithstanding the foregoing, the Committee may limit in any manner the amount payable with respect to any Stock Appreciation Right by including such a limit in theAgreement evidencing the Stock Appreciation Right at the time it is granted. 

(iii) Treatment of Related Options and Stock AppreciationRights Upon Exercise. Upon the exercise of a Stock Appreciation Right granted in connection with an Option, the Option shall be canceled to the extent of the number of Shares as to which the Stock Appreciation Right is exercised, and upon theexercise of an Option granted in connection with a Stock Appreciation Right, the Stock Appreciation Right shall be canceled to the extent of the number of Shares as to which the Option is exercised or surrendered. 

7.3. Stock Appreciation Right Unrelated to an Option. A Stock Appreciation Right unrelated to an Option shall cover such number of Shares as theCommittee shall determine. 

(i) Terms; Duration. Stock Appreciation Rights unrelated to Options shall contain such terms andconditions as to exercisability, vesting and duration as the Committee shall determine, but in no event shall they have a term of greater than ten (10) years. However, each Stock Appreciation Right shall be exercisable only during such portionof its term as the Committee shall determine and, subject to Section 11, only if the Grantee is employed by the Company or a Subsidiary at the time of such exercise. Notwithstanding anything to the contrary contained in this Plan, unlessotherwise specified in the Agreement evidencing the Stock Appreciation Rights unrelated to Options, if a Stock Appreciation Right unrelated to an Option expires outside of a Trading Window, then the expiration of the term of such Stock AppreciationRight shall be the later of (A) the date the Stock Appreciation Right would have expired by its original terms (including the terms set forth in Section 11 of this Plan) or (II) the end of the tenth trading day of the immediatelysucceeding Trading Window during which the Company would allow the Grantee to trade in its securities; provided, however, that in no event shall the Stock Appreciation Right expire later than the tenth anniversary of the date of grant of the StockAppreciation Right. 

(ii) Amount Payable. Upon exercise of a Stock Appreciation Right unrelated to an Option, the Grantee shall beentitled to receive an amount determined by multiplying (a) the excess of the Fair Market Value of a Share on the date of exercise of such Stock Appreciation Right over the Fair Market Value of a Share on the date the Stock Appreciation Rightwas granted, by (b) the number of Shares as to which the Stock Appreciation Right is being exercised. Notwithstanding the foregoing, the Committee may limit in any manner the amount payable with respect to any Stock Appreciation Right byincluding such a limit in the Agreement evidencing the Stock Appreciation Right at the time it is granted. 

 

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(iii) Non-Transferability. No Stock Appreciation Right unrelated to an Option shall betransferable by the Grantee otherwise than by will or the laws of descent and distribution, and such Stock Appreciation Right shall be exercisable during the lifetime of such Grantee only by the Grantee or his or her guardian or legalrepresentative. 

7.4. Method of Exercise. Stock Appreciation Rights shall be exercised by a Grantee only by giving written notice tothe Company at its principal place of business or other address designated by the Company, specifying the number of Shares with respect to which the Stock Appreciation Right is being exercised. If requested by the Committee, the Grantee shalldeliver the Agreement evidencing the Stock Appreciation Right being exercised and the Agreement evidencing any related Option to the Company, which shall endorse thereon a notation of such exercise and return such Agreement to the Grantee.

7.5. Form of Payment. Payment of the amount determined under Section 7.2(ii) or 7.3(ii) may be made in the discretion of theCommittee solely in whole Shares in a number determined at their Fair Market Value on the date of exercise of the Stock Appreciation Right, or solely in cash, or in a combination of cash and Shares. If the Committee decides to make full payment inShares and the amount payable results in a fractional Share, payment for the fractional Share will be made in cash. 

7.6. Effect ofChange in Control. In the event of a Change in Control, all Stock Appreciation Rights shall become immediately and fully exercisable. 

**Section 8. Dividend Equivalent Rights**. The Committee, from time to time, subject to the terms and provisions of the Plan, may grant Dividend Equivalent Rights to any Eligible Individual in tandem with an Option or Award or as aseparate Award. The terms and conditions applicable to each Dividend Equivalent Right shall be specified in the Agreement under which the Dividend Equivalent Right is granted. Except as provided in Section 5, amounts payable in respect ofDividend Equivalent Rights may be payable currently or, if applicable, deferred until the lapsing of restrictions on such Dividend Equivalent Rights or until the vesting, exercise, payment, settlement or other lapse of restrictions on the Option orAward to which the Dividend Equivalent Rights relate. In the event that the amounts payable in respect of Dividend Equivalent Rights are to be deferred, the Committee shall determine whether such amounts are to be held in cash or reinvested inShares or deemed (notionally) to be reinvested in Shares. If amounts payable in respect of Dividend Equivalent Rights are to be held in cash, there may be credited at the end of each year (or portion thereof) interest on the amount of the account atthe beginning of the year at a rate per annum as the Committee, in its discretion, may determine. Dividend Equivalent Rights may be settled in cash or Shares or a combination thereof, in a single installment or multiple installments as determined bythe Committee. Notwithstanding the foregoing, amounts payable in respect of a Dividend Equivalent Right granted in connection with an Option or a Stock Appreciation Right may not be contingent upon, or otherwise payable on, the exercise of theOption or the Stock Appreciation Right, and shall be granted in a manner and on such terms as will not result in the related Option or Stock Appreciation Right as being treated as providing for deferred compensation under Section 409A of theCode and the regulations promulgated thereunder. 

 

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**Section 9. Performance Awards**. 

9.1. Performance Units. The Committee, from time to time, subject to the terms and provisions of the Plan, may grant to any Eligible Individual anAward of Performance Units, the terms and conditions of which shall be set forth in an Agreement. Performance Units may be denominated in Shares or a specified dollar amount and, contingent upon the attainment of specified Performance Objectiveswithin the Performance Cycle, each Unit represents the right to receive payment as provided in Sections 9.1(i) and (ii) of (a) in the case of Share-denominated Performance Units, the Fair Market Value of a Share on the date the PerformanceUnit was granted, the date the Performance Unit became vested or any other date specified by the Committee, (b) in the case of dollar-denominated Performance Units, the specified dollar amount or (c) a percentage (which may be more than100%) of the amount described in clause (a) or (b) depending on the level of Performance Objective attainment; *provided, however,* that the Committee may at the time a Performance Unit is granted specify a maximum amount payable inrespect of a vested Performance Unit. Each Agreement shall specify the number of Performance Units to which it relates, the Performance Objectives which must be satisfied in order for the Performance Units to vest and the Performance Cycle withinwhich such Performance Objectives must be satisfied. 

(i) Vesting and Forfeiture. Subject to Sections 9.3(iii) and 9.4, a Granteeshall become vested with respect to the Performance Units to the extent that the Performance Objectives set forth in the Agreement are satisfied for the Performance Cycle. 

(ii) Payment of Awards. Subject to Sections 9.3(iii) and 9.4, payment to Grantees in respect of vested Performance Units shall be made as soon aspracticable after the last day of the Performance Cycle to which such Award relates. Subject to Section 9.4, such payments may be made entirely in Shares valued at their Fair Market Value, entirely in cash, or in such combination of Shares andcash as the Committee in its discretion shall determine at any time prior to such payment; *provided, however,* that if the Committee in its discretion determines to make such payment entirely or partially in Shares of Restricted Stock, theCommittee must determine the extent to which such payment will be in Shares of Restricted Stock and the terms of such Restricted Stock at the time the Award is granted. 

9.2. Performance Shares. The Committee, from time to time, subject to the terms and provisions of the Plan, may grant to any Eligible Individual an Award of Performance Shares, the terms and conditions of whichshall be set forth in an Agreement. Each Agreement may require that an appropriate legend be placed on Share certificates. Awards of Performance Shares shall be subject to the following terms and provisions: 

(i) Rights of Grantee. Performance Shares shall be issued in the name of the Grantee as soon as reasonably practicable after the Award is granted,or on such other date as the Committee may determine, *provided* that the Grantee has executed all documents which the Committee may require as a condition to the issuance of such Performance Shares, which may include an Agreement evidencingthe Award, the appropriate blank stock powers and an escrow agreement. If a Grantee shall fail to execute any documents which the Committee may require within the time period prescribed by the Committee at the time the Award of Performance Shares isgranted, the Award shall be null and void. At the discretion 

 

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of the Committee, Shares issued in connection with an Award of Performance Shares shall be deposited together with the stock powers with an escrow agent(which may be the Company) designated by the Committee. Unless the Committee determines otherwise as set forth in the Agreement, upon delivery of the Shares to the escrow agent (which may be in the form of book entry Shares), the Grantee shall haveall of the rights of a stockholder with respect to such Shares, including the right to vote the Shares and, subject to Section 9.2(iv), to receive all dividends or other distributions paid or made with respect to the Shares. 

(ii) Non-Transferability. Until any restrictions upon the Performance Shares awarded to a Grantee shall have lapsed in the manner set forth inSection 9.2(iii) or 9.4, such Performance Shares shall not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated. 

(iii) Lapse of Restrictions. Subject to Sections 9.3(iii) and 9.4, restrictions upon Performance Shares awarded hereunder shall lapse and such Performance Shares shall become vested at such time or times and onsuch terms, conditions and satisfaction of Performance Objectives as the Committee may, in its discretion, determine at the time an Award is granted. Performance Shares with respect to which Performance Objectives have been attained may also besubject to additional vesting conditions based on continued service or such other conditions as may be established by the Committee at the time the Award is granted. 

(iv) Treatment of Dividends. At the time the Award of Performance Shares is granted, the Committee may, in its discretion, determine that the payment to the Grantee of dividends, or a specified portion thereof,declared or paid on Shares represented by such Award which have been issued by the Company to the Grantee shall be (A) deferred until the lapsing of the restrictions imposed upon such Performance Shares and (B) held by the Company for theaccount of the Grantee until such time. In the event that dividends are to be deferred, the Committee shall determine whether such dividends are to be reinvested in Shares (which shall be held as additional Performance Shares) or held in cash. Ifdeferred dividends are to be held in cash, there may be credited interest on the amount of the account at such times and at a rate per annum as the Committee, in its discretion, may determine. Payment of deferred dividends in respect of PerformanceShares (whether held in cash or in additional Performance Shares), together with interest accrued thereon, if any, shall be made upon the lapsing of restrictions imposed on the Performance Shares in respect of which the deferred dividends were paid,and any dividends deferred (together with any interest accrued thereon) in respect of any Performance Shares shall be forfeited upon the forfeiture of such Performance Shares. 

(v) Delivery of Shares. Upon the lapse of the restrictions on Performance Shares awarded hereunder, the Committee shall cause a stock certificateor evidence of book entry Shares to be delivered to the Grantee with respect to such Performance Shares, free of all restrictions hereunder. 

 

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9.3. Performance Objectives

(i) Establishment. Performance Objectives for Performance Awards may be expressed in terms of earnings per share, earnings (which may be expressedas earnings before specified items), return on assets, return on invested capital, revenue, operating income, cash flow, total shareholder return or any combination thereof. Performance Objectives may be in respect of the performance of the Company,any of its Subsidiaries, any of its Operating Units or any combination thereof. Performance Objectives may be absolute or relative (to prior performance of the Company or to the performance of one or more other entities or external indices) and maybe expressed in terms of a progression within a specified range. The Performance Objectives with respect to a Performance Cycle shall be established in writing by the Committee by the earlier of (x) the date on which twenty-five percent(25%) of the Performance Cycle has elapsed or (y) the date which is ninety (90) days after the commencement of the Performance Cycle, and in any event while the performance relating to the Performance Objectives remain substantiallyuncertain. 

(ii) Effect of Certain Events. At the time of the granting of a Performance Award, or at any time thereafter, in eithercase to the extent permitted under Section 162(m) of the Code and the regulations thereunder without adversely affecting any Performance Award that is intended to constitute Performance-Based Compensation, the Committee may provide for themanner in which performance will be measured against the Performance Objectives (or may adjust the Performance Objectives) to reflect the impact of specified corporate transactions (such as a stock split or stock dividend), special charges,accounting or tax law changes and other extraordinary or nonrecurring events. 

(iii) Determination of Performance. Prior to thevesting, payment, settlement or lapsing of any restrictions with respect to any Performance Award that is intended to constitute Performance-Based Compensation made to a Grantee who is subject to Section 162(m) of the Code, the Committee shallcertify in writing that the applicable Performance Objectives have been satisfied to the extent necessary for such Award to qualify as Performance-Based Compensation. The Committee shall not be entitled to exercise any discretion otherwiseauthorized hereunder with respect to such Options or Awards if the ability to exercise such discretion or the exercise of such discretion itself would cause the compensation attributable to such Options or Awards to fail to qualify asPerformance-Based Compensation. 

9.4. Effect of Change in Control. Unless the Committee determines otherwise at the time of grant ofa Performance Award, in the event of a Change in Control: 

(i) With respect to Performance Units, the Grantee shall (A) become vestedin all outstanding Performance Units as if all Performance Objectives had been satisfied at the highest level by the Company and the Grantee and (B) be entitled to receive in respect of all Performance Units which become vested as a result of aChange in Control a cash payment within ten (10) days after such Change in Control. 

 

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(ii) With respect to Performance Shares, all restrictions shall lapse immediately on all outstandingPerformance Shares as if all Performance Objectives had been satisfied at the highest level by the Company and the Grantee. 

9.5.Non-Transferability. Until the vesting of Performance Units or the lapsing of any restrictions on Performance Shares, as the case may be, such Performance Units or Performance Shares shall not be sold, transferred or otherwise disposed of andshall not be pledged or otherwise hypothecated. 

9.6. Performance-Based Compensation Treatment.****At the time of grant of anyPerformance Award intended to constitute Performance-Based Compensation, the Committee shall so designate such Award. 

**Section 10.Share Awards**. The Committee, from time to time, subject to the terms and provisions of the Plan, may grant to any Eligible Individual a Share Award on such terms and conditions as the Committee may determine in its sole discretion. Share Awardsmay be made as additional compensation for services rendered by the Eligible Individual or may be in lieu of cash or other compensation to which the Eligible Individual is entitled from the Company. 

**Section 11. Effect of a Termination of Employment on Options and Awards**. 

11.1. Earlier Termination of Employment. Upon the termination of an Optionee’s or Grantee’s employment with the Company and itsSubsidiaries, for any reason whatsoever, except as otherwise set forth in this Section 11, in an Agreement or, with the consent of such individual, as determined by the Committee at any time prior to or after such termination, Options andAwards granted to such individual will be treated as follows: 

(i) Any Options and Stock Appreciation Rights will (A) to the extentnot vested and exercisable as of the date of such termination of employment, terminate on the date of such termination of employment and (B) to the extent vested and exercisable as of the date of such termination of employment, remainexercisable for a period of ninety (90) days following the date of such termination of employment or, in the event of such Optionee’s or Grantee’s death during such ninety (90) day period, remain exercisable by the estate of thedeceased individual until the end of the period of one year following the date of such termination of employment (but in no event beyond the maximum term of the Option or Stock Appreciation Right). 

(ii) Any unvested portion of any Restricted Stock or Stock Units will be immediately forfeited. 

(iii) Any Performance Shares or Performance Units will terminate. 

(iv) Any other Awards to the extent not vested will terminate. 

 

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11.2. Upon Death or Disability. Except as otherwise provided in an Agreement, in the event of atermination of an Optionee’s or Grantee’s employment with the Company and its Subsidiaries as a result of such individual’s death or such individual becoming Disabled, Options and Awards granted to such individual will be treated asfollows: 

(i) Any Options or Stock Appreciation Rights shall become immediately exercisable as of the date of such termination ofemployment, and the Optionee or Grantee, or in the event the Optionee or Grantee is incapacitated and unable to exercise the rights granted hereunder, the individual’s legal guardian or legal representative, or in the event the Optionee orGrantee dies, the estate of the deceased individual, shall have the right to exercise any rights the Optionee or Grantee would otherwise have had under the Plan for a period of four years after the date of such termination (but in no event beyondthe maximum term of the Option or Stock Appreciation Right). Notwithstanding the foregoing, in the event that an Optionee does not exercise the vested portion of an Incentive Stock Option within the period required under Section 422 of theCode, such Option shall be treated as a Nonqualified Stock Option upon exercise. 

(ii) Any unvested portion of any Restricted Stock orStock Units will become immediately vested. 

(iii) Any Performance Shares or Performance Units will remain outstanding and the Grantee orthe Grantee’s estate will be entitled to a pro-rata portion of the payment otherwise payable in respect of the Award (based on the number of full weeks the Grantee was employed by the Company or a Subsidiary during the applicable PerformanceCycle over the total number of weeks in such Performance Cycle), which will be paid on the date the Award would have been paid if the Grantee had remained employed with the Company or a Subsidiary. 

11.3. Upon Retirement. Except as otherwise provided in an Agreement, in the event of a termination of an Optionee’s or Grantee’semployment with the Company and its Subsidiaries by reason of such individual’s Retirement, Options and Awards granted to such individual will be treated as follows: 

(i) With respect to any Option or Stock Appreciation Right, for a period of four years following the date of such Retirement (but in no event beyond the maximum term of the Option or Stock Appreciation Right), theOption or Stock Appreciation Right, as applicable, shall remain outstanding and (A) to the extent not then fully vested, shall continue to vest in accordance with its applicable vesting schedule, and (B) the Optionee or the Grantee, asapplicable, shall have the right to exercise any rights the individual would otherwise have had under the Plan prior to the expiration of the four-year period (or, if earlier, the maximum term of the Option or Stock Appreciation Right).Notwithstanding the foregoing, in the event that an Optionee does not exercise the vested portion of an Incentive Stock Option prior to the expiration of the three-month period after the date of the Optionee’s Retirement, such Option shall betreated as a Nonqualified Stock Option upon exercise. 

(ii) Any unvested portion of any Restricted Stock will become immediately vested.

 

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(iii) Any unvested Stock Units will remain outstanding and will continue to vest in accordance withtheir applicable vesting schedules. 

(iv) Any Performance Shares or Performance Units will remain outstanding and the Grantee will beentitled to a pro-rata portion of the payment otherwise payable in respect of the Award (based on the number of full weeks the Grantee was employed by the Company or a Subsidiary during the applicable Performance Cycle over the total number of weeksin such Performance Cycle), which will be paid on the date the Award would have been paid if the Grantee had remained employed with the Company or a Subsidiary. 

11.4. Upon Termination of Employment in Connection with Certain Dispositions. Except as otherwise provided in an Agreement, in the event an Optionee’s or Grantee’s employment with the Company and itsSubsidiaries is terminated without Cause in connection with a sale or other disposition of a Subsidiary, the Options and Awards granted to such individual will be treated as follows: 

(i) With respect to Options and Stock Appreciation Rights, such Award will remain outstanding and (A) to the extent not then fully vested, willcontinue to vest in accordance with the applicable vesting schedule, and (B) the Optionee or Grantee will have the right to exercise any rights the individual would otherwise have had under the Plan for a period of one year following the dateof such termination (but in no event beyond the maximum term of the Option or Stock Appreciation Right). Notwithstanding the foregoing, in the event that an Optionee does not exercise the vested portion of an Incentive Stock Option prior to theexpiration of the three-month period after the date of the Optionee’s termination, such Option shall be treated as a Nonqualified Stock Option upon exercise. 

(ii) Any unvested portion of any Restricted Stock or Stock Units will become immediately vested. 

(iii)Any Performance Shares or Performance Units will remain outstanding and the Grantee will be entitled to a pro-rata portion of the payment otherwise payable in respect of the Award (based on number of full weeks the Grantee was employed by theCompany or a Subsidiary during the applicable Performance Cycle over the total number of weeks in such Performance Cycle), which will be paid on the date the Award would have been paid if the Grantee had remained employed with the Company or aSubsidiary. 

11.5. Definition of Termination. To the extent an Award is subject to Section 409A of the Code,“termination” means a “separation from service” as defined under Section 409A of the Code. 

**Section 12.Effect of Change in Common Shares Subject to the Plan**. 

12.1. In the event of a Change in Capitalization, the Committee shallconclusively determine the appropriate adjustments, if any, to (i) the maximum number and class of Shares or other stock or securities with respect to which Options or Awards may be granted under the Plan, (ii) the maximum number and classof Shares or other stock or securities with respect to which Options or Awards may be granted to any Eligible Individual in any calendar year, (iii) the number and class of Shares or other stock or securities which are subject to 

 

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outstanding Options or Awards granted under the Plan and the exercise price therefor, if applicable, (iv) the number and class of Shares or othersecurities in respect of which Formula Restricted Stock Units are to be granted under Section 5 and (v) the Performance Objectives. 

12.2. Any such adjustment in the Shares or other stock or securities: (i) subject to outstanding Incentive Stock Options (including any adjustments in the exercise price) shall be made in such manner as not to constitute a modificationas defined by Section 424(h)(3) of the Code and only to the extent otherwise permitted by Sections 422 and 424 of the Code; (ii) subject to outstanding Options or Awards that are intended to qualify as Performance-Based Compensation shallbe made in such a manner as not to adversely affect the treatment of the Options or Awards as Performance-Based Compensation; or (iii) subject to outstanding Nonqualified Stock Options or Stock Appreciation Rights shall be made consistent withthe requirements of Treasury Regulation Section 1.409A-1(b)(5)(v). 

12.3. If, by reason of a Change in Capitalization, a Grantee of anAward shall be entitled to, or an Optionee shall be entitled to exercise an Option with respect to, new, additional or different shares of stock or securities of the Company or any other corporation, such new, additional or different shares shallthereupon be subject to all of the conditions, restrictions and performance criteria which were applicable to the Shares subject to the Award or Option, as the case may be, prior to such Change in Capitalization. 

**Section 13. Effect of Certain Transactions**. Subject to Sections 4.1(iii)(b), 4.2(iii), 6.6, 7.6 and 9.4 or as otherwise provided in anAgreement, following (a) the liquidation or dissolution of the Company or (b) a merger or consolidation of the Company (a “Transaction”), either (i) each outstanding Option or Award shall be treated as provided for inthe agreement entered into in connection with the Transaction or (ii) if not so provided in such agreement, each Optionee and Grantee shall be entitled to receive in respect of each Share subject to any outstanding Options or Awards, as thecase may be, upon exercise of any Option or payment or transfer in respect of any Award, the same number and kind of stock, securities, cash, property or other consideration that each holder of a Share was entitled to receive in the Transaction inrespect of a Share; *provided, however,* that such stock, securities, cash, property, or other consideration shall remain subject to all of the conditions, restrictions and performance criteria which were applicable to the Options and Awardsprior to such Transaction. The treatment of any Option or Award as provided in this Section 13 shall be conclusively presumed to be appropriate for purposes of Section 12. Notwithstanding anything to the contrary in this Section 13,an adjustment to an Option or Award as provided in this Section 13 shall be made only to the extent such adjustment complies with the requirements of Section 409A of the Code. 

**Section 14. Listing and Registration of Common Shares**. If at any time the Board shall determine that listing, registration or qualificationof the Shares covered by an Option or Award upon any securities exchange or under any state, provincial or federal law or the consent or the approval of any governmental regulatory body is necessary or desirable as a condition of or in connectionwith the purchase of Shares under the Option, the Option may not be exercised in whole or in part, and Shares shall not be delivered in connection with any other Award, unless and until such listing, registration, qualification, consent or approvalshall have been effected or obtained free of any conditions not acceptable to the Board. Any person 

 

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exercising an Option or receiving Shares in connection with any other Award shall make such representations and agreements and furnish such information asthe Board or the Committee may request to assure compliance with the foregoing or any other applicable legal requirements. 

**Section 15. Misconduct**. In the event that an Optionee or Grantee has (i) used for profit or disclosed to unauthorized persons, confidential information or trade secrets of the Company or its Subsidiaries, or(ii) breached any contract with or violated any fiduciary obligation to the Company or its Subsidiaries, or (iii) engaged in unlawful trading in the securities of the Company or its Subsidiaries or of another company based on informationgained as a result of that Optionee’s or Grantee’s employment with, or status as a director to, the Company or its Subsidiaries, then that Optionee or Grantee shall forfeit all rights under any outstanding Option or Award granted under thePlan and all of that Optionee’s or Grantee’s outstanding Options or Awards shall automatically terminate, unless the Committee shall determine otherwise. 

**Section 16. Payment Following Death or Incapacity**. In the event any amounts or Shares become payable or issuable pursuant to an Award or Option after the Grantee or Optionee dies or becomes incapacitated,such amounts or Shares shall be paid or issued, in the case of death, to the decedent’s estate or, in the case of incapacity, to the Grantee’s or Optionee’s legal guardian or legal representative. 

**Section 17. Foreign Employees**. Without amending the Plan, the Committee may grant Options or Awards to Eligible Individuals who are foreignnationals on such terms and conditions different from those specified in the Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the purposes of the Plan, and, in furtherance of such purposes,the Committee may make such modifications, amendments, procedures, and the like as may be necessary or advisable to comply with provisions of laws of other countries in which the Company or its Subsidiaries operate or have employees. 

**Section 18. Deferral of Payments or Vesting**. Notwithstanding anything to the contrary contained herein, and except with respect to an Optionor a Stock Appreciation Right, the Committee may provide for the deferral of the issuance or vesting of Shares or the payment of cash in respect of an Award granted under the Plan; *provided* that such deferral shall be provided at the time ofgrant of the Award. The terms and conditions of any such deferral shall be set forth in the Agreement evidencing such Award. 

**Section 19. No Rights to Options, Awards or Employment**. No individual shall have any claim or right to be granted an Option or Award under the Plan. Having received an Option or Award under the Plan shall not give an individualany right to receive any other grant under the Plan. No Optionee or Grantee shall have any rights to or interest in any Option or Award except as set forth herein. Neither the Plan nor any action taken herein shall be construed as giving anyindividual any right to be retained in the employ of the Company or its Subsidiaries, or as a member of the Board. 

**Section 20.Multiple Agreements**. The terms of each Option or Award may differ from other Options or Awards granted under the Plan at the same time, or at some other time. 

 

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The Committee may also grant more than one Option or Award to a given Eligible Individual during the term of the Plan, either in addition to, or insubstitution for, one or more Options or Awards previously granted to that Eligible Individual. 

**Section 21. Withholding ofTaxes**. 

21.1. At such times as an Optionee or Grantee recognizes taxable income in connection with the receipt of Shares or cashhereunder (a “Taxable Event”), the Optionee or Grantee shall pay to the Company, a Subsidiary, or a Trust established by the Company or a Subsidiary to deliver Shares under an Award, as applicable, an amount equal to the federal,state, provincial and local income taxes and other amounts as may be required by law to be withheld by the Company, Subsidiary or Trust, as applicable, in connection with the Taxable Event (the “Withholding Taxes”) prior to theissuance, or release from escrow, of such Shares or the payment of such cash. The Company, Subsidiary or Trust, as the case may be, shall have the right to deduct from any payment of cash to an Optionee or Grantee an amount equal to the WithholdingTaxes in satisfaction of the obligation to pay Withholding Taxes. In satisfaction of the obligation to pay Withholding Taxes to the Company, Subsidiary or Trust, as the case may be, an Optionee or Grantee may elect to have withheld a portion of theShares then issuable or deliverable to him or her having an aggregate Fair Market Value equal to the Withholding Taxes. 

21.2. If anOptionee makes a disposition, within the meaning of Section 424(c) of the Code and regulations promulgated thereunder, of any Share or Shares issued to such Optionee pursuant to the exercise of an Incentive Stock Option within the two-yearperiod commencing on the day after the date of the grant or within the one-year period commencing on the day after the date of transfer of such Share or Shares to the Optionee pursuant to such exercise, the Optionee shall, within ten (10) daysof such disposition, notify the Company thereof, by delivery of written notice to the Company at its principal executive office. 

**Section 22. Amendment or Termination; Duration**. Except as provided below and except as may otherwise be provided by applicable tax and regulatory requirements, including stock exchange requirements, the Board may from time totime make any amendments or changes to the Plan or outstanding Awards that the Board sees fit in its sole discretion without shareholder approval. The following amendments to the Plan or outstanding Awards will require the approval of both the Boardand the Company’s shareholders: 

(i) an increase in the maximum number of Shares that may be made the subject of Awards or Optionsunder the Plan; 

(ii) any adjustment (other than in connection with a stock dividend, recapitalization or other transaction where anadjustment is permitted or required under the terms of the Plan) or amendment that reduces or would have the effect of reducing the exercise price of an Option or Stock Appreciation Right previously granted under the Plan, whether through amendment,cancellation or replacement grants, or other means; 

(iii) an increase in the limits on Awards that may be granted to any EligibleIndividual under Sections 3.1 and 31 of the Plan; and 

 

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(iv) an extension of the term of an outstanding Option or Stock Appreciation Right beyond the expirydate thereof, except as set forth in Sections 6.2(v) and 7.3(i) of the Plan as they relate to Options or Stock Appreciation Rights that expire outside of a Trading Window. 

Furthermore, no change to an outstanding Award that will impair the rights of the Optionee or Grantee may be madewithout the consent of the Optionee or Grantee. This Plan shall terminate and no Option or Award may be granted or made after the tenth (10th) anniversary of the date the Plan was originally adopted. 

**Section 23. Other Actions**. The Plan shall notrestrict the authority of the Committee, the Board or the Company or its Subsidiaries for proper corporate purposes to grant or assume stock options, other than under the Plan, to or with respect to any employee, director or other person. Theadoption of the Plan by the Board shall not be construed as amending, modifying or rescinding any previously approved incentive arrangement or as creating any limitations on the power of the Board to adopt such other incentive arrangements as it maydeem desirable, including, without limitation, the granting of stock options otherwise than under the Plan and such arrangements may be either applicable generally or only in specific cases. 

**Section 24. Costs and Expenses**. Except as provided in Section 21 hereof with respect to taxes, the costs and expenses of administeringthe Plan shall be borne by the Company, or by one or more of its Subsidiaries and shall not be charged to any grant nor to any Eligible Individual receiving a grant. 

**Section 25. Plan Unfunded**. Except with respect to Shares which have been acquired by or on behalf of the Company, a Subsidiary, or a Trust established by either of the Company or a Subsidiary and held forfuture delivery as described in Section 3.1, the Plan shall be unfunded. Except for reserving a sufficient number of authorized Shares to the extent required by law to meet the requirements of the Plan, the Company shall not be required toestablish any special or separate fund or to make any other segregation of assets to assure payment of any grant under the Plan. 

**Section 26. Laws Governing Plan**. The Plan shall be construed under and governed by the laws of the State of Delaware. 

**Section 27. Captions**. The captions to the several sections hereof are not a part of the Plan, but are merely guides or labels to assist in locating and reading the several sections hereof. 

**Section 28. Effective Date**. The effective date of the Plan, as determined by the Board, shall be the date of the Company’s initialpublic offering of its common stock. 

**Section 29. Definitions**. Unless the context clearly indicates otherwise, the followingterms (or forms thereof), when used in the Plan, shall have the respective meanings set forth below: 

29.1. “Agreement”means the written agreement between the Company and an Optionee or Grantee evidencing the grant of an Option or Award and setting forth the terms and conditions thereof. 

 

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29.2. “Award” means a grant of Restricted Stock, a Stock Unit, a Formula RestrictedStock Unit, a Stock Appreciation Right, a Performance Award, a Dividend Equivalent Right, a Share Award or any or all of them. 

29.3.“Board” means the Board of Directors of the Company. 

29.4. “Cause” means: 

(i) in the case of an Eligible Director, the commission of an act of fraud or intentional misrepresentation or an act of embezzlement, misappropriationor conversion of assets or opportunities of the Company or any of its Subsidiaries; and 

(ii) in the case of an Optionee or Grantee whoseemployment with the Company or a Subsidiary is subject to the terms of an employment agreement between such Optionee or Grantee and the Company or Subsidiary, which employment agreement includes a definition of “Cause,” the term“Cause” as used in the Plan or any Agreement shall have the meaning set forth in such employment agreement during the period that such employment agreement remains in effect following a Change in Control; and 

(iii) in all other cases, (a) intentional failure to perform reasonably assigned duties, (b) dishonesty or willful misconduct in theperformance of duties, (c) intentional violation of Company or applicable Subsidiary policy, (d) involvement in a transaction in connection with the performance of duties to the Company or any of its Subsidiaries which transaction isadverse to the interests of the Company or any of its Subsidiaries and which is engaged in for personal profit or (e) willful violation of any law, rule or regulation in connection with the performance of duties (other than traffic violationsor similar offenses); *provided, however,* that following a Change in Control clause (a) of this Section 29.4(iii) shall not constitute “Cause.” 

29.5. “Change in Capitalization” means any increase or reduction in the number of Shares, or any change (including, but not limited to, in the case of a spin-off, dividend or other distribution inrespect of Shares, a change in value) in the Shares or exchange of Shares for a different number or kind of shares or other securities of the Company or another corporation, by reason of a reclassification, recapitalization, merger, consolidation,reorganization, spin-off, split-up, issuance of warrants or rights or debentures, stock dividend, stock split or reverse stock split, cash dividend, property dividend, combination or exchange of shares, repurchase of shares, change in corporatestructure or otherwise. 

29.6. Except as otherwise provided in an Agreement to comply with Section 409A of the Code, “Changein Control” shall mean the occurrence of: 

(i) An acquisition (other than directly from the Company) of any common stock or othervoting securities of the Company entitled to vote generally for the election of directors (the “Voting Securities”) by any “Person” (as the term person is used for 

 

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purposes of Section 13(d) or 14(d) of the Exchange Act, immediately after which such Person has “Beneficial Ownership” (within themeaning of Rule 13d-3 promulgated under the Exchange Act) of thirty percent (30%) or more of the then outstanding shares of the Company’s common stock or the combined voting power of the Company’s then outstanding Voting Securities;*provided, however,* in determining whether a Change in Control has occurred, Voting Securities which are acquired in a “Non-Control Acquisition” (as hereinafter defined) shall not constitute an acquisition which would cause a Changein Control. A “Non-Control Acquisition” shall mean an acquisition by (i) an employee benefit plan (or a trust forming a part thereof) maintained by (A) the Company or (B) any corporation or other Person of which amajority of its voting power or its voting equity securities or equity interest is owned, directly or indirectly, by the Company (for purposes of this definition, a “Subsidiary”), (ii) the Company or its Subsidiaries, or(iii) any Person in connection with a “Non-Control Transaction” (as hereinafter defined); 

(ii) The individuals who, as ofthe Effective Date, are members of the Board (the “Incumbent Board”), cease for any reason (other than directors resigning and transitioning in connection with a complete spin-off of Shares owned by Wendy’s to its shareholders)to constitute at least seventy percent (70%) of the members of the Board; *provided, however,* that if the election, or nomination for election by the Company’s common stockholders, of any new director was approved by a vote of atleast two-thirds of the Incumbent Board, such new director shall, for purposes of the Plan, be considered as a member of the Incumbent Board; *provided further, however*, that no individual shall be considered a member of the Incumbent Board ifsuch individual initially assumed office as a result of an actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board (a “Proxy Contest”) including by reason of any agreement intendedto avoid or settle any Proxy Contest; or 

(iii) The consummation of: 

(a) A merger, consolidation or reorganization with or into the Company or in which securities of the Company are issued, unless such merger,consolidation or reorganization is a “Non-Control Transaction.” A “Non-Control Transaction” shall mean a merger, consolidation or reorganization with or into the Company or in which securities of the Company are issuedwhere: 

(1) the stockholders of the Company, immediately before such merger, consolidation or reorganization, own directly or indirectlyimmediately following such merger, consolidation or reorganization, at least seventy percent (70%) of the combined voting power of the outstanding voting securities of the corporation resulting from such merger or consolidation orreorganization (the “Surviving Company”) in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, consolidation or reorganization, 

(2) the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidationor reorganization constitute at least two-thirds of the members of the board of directors of the Surviving Company, or a corporation beneficially directly or indirectly owning a majority of the Voting Securities of the Surviving Company, and

 

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(3) no Person other than (i) the Company, (ii) any Subsidiary, (iii) any employee benefitplan (or any trust forming a part thereof) that, immediately prior to such merger, consolidation or reorganization, was maintained by the Company or any Subsidiary, or (iv) any Person who, immediately prior to such merger, consolidation orreorganization had Beneficial Ownership of thirty percent (30%) or more of the then outstanding Voting Securities or common stock of the Company, has Beneficial Ownership of thirty percent (30%) or more of the combined voting power of theSurviving Company’s then outstanding voting securities or its common stock; 

(b) A complete liquidation or dissolution of theCompany; or 

(c) The sale or other disposition of all or substantially all of the assets of the Company to any Person (other than atransfer to a Subsidiary). 

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person (the “SubjectPerson”) acquired Beneficial Ownership of more than the permitted amount of the then outstanding common stock or Voting Securities as a result of the acquisition of common stock or Voting Securities by the Company which, by reducing thenumber of shares of common stock or Voting Securities then outstanding, increases the proportional number of shares Beneficially Owned by the Subject Persons, *provided* that if a Change in Control would occur (but for the operation of thissentence) as a result of the acquisition of common stock or Voting Securities by the Company, and after such share acquisition by the Company, the Subject Person becomes the Beneficial Owner of any additional common stock or Voting Securities whichincreases the percentage of the then outstanding Voting Securities Beneficially Owned by the Subject Person, then a Change in Control shall occur. 

If anEligible Individual’s employment is terminated by the Company without Cause prior to the date of a Change in Control but the Eligible Individual reasonably demonstrates that the termination (A) was at the request of a third party who hasindicated an intention or taken steps reasonably calculated to effect a Change in Control or (B) otherwise arose in connection with, or in anticipation of, a Change in Control which has been threatened or proposed, such termination shall bedeemed to have occurred after a Change in Control for purposes of the Plan provided a Change in Control shall actually have occurred. 

29.7. “Code” means the U.S. Internal Revenue Code of 1986, as amended. 

29.8. Except as otherwise provided in anAgreement to comply with Section 409A of the Code, “Disabled,” with regard to any particular Optionee or Grantee, shall have the meaning (i) set forth in Section 22(e)(3) of the Code, in the context of determining theperiod during which Incentive Stock Options granted to an Optionee may be exercised and (ii) set forth in the Company’s long term disability program applicable to such Optionee or Grantee in all other contexts or, if no long termdisability program is applicable to such Optionee or Grantee, as set forth in the Company’s long term disability program generally applicable to officers of the Company. 

 

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29.9. “Dividend Equivalent Right” means a right to receive all or some portion of thecash dividends that are or would be payable with respect to Shares. 

29.10. “Eligible Director” means a member of theBoard who is not an employee of the Company or any of its Subsidiaries. 

29.11. “Eligible Individual” means any of thefollowing individuals who is designated by the Committee as eligible to receive Options or Awards subject to the conditions set forth herein: (a) any Eligible Director, (b) any employee of the Company or a Subsidiary, or (c) anyindividual to whom the Company or a Subsidiary has extended a formal, written offer of employment. 

29.12. “Exchange Act”means the U.S. Securities Exchange Act of 1934, as amended. 

29.13. “Fair Market Value” on any date shall be equal to themean of the high and low prices at which Shares are traded on the Toronto Stock Exchange on such date or the mean of the high and low prices at which the Shares are traded on the New York Stock Exchange, as designated by the Committee on or prior tosuch date. 

29.14. “Formula Restricted Stock Units” means Formula Restricted Stock Units granted pursuant toSection 5. 

29.15. “Grantee” means a person to whom an Award has been granted under the Plan. 

29.16. “Incentive Stock Option” means an Option satisfying the requirements of Section 422 of the Code and designated by theCommittee as an Incentive Stock Option. 

29.17. “Nonemployee Director” means a director of the Company who is a“nonemployee director” within the meaning of Rule 16b-3 promulgated under the Exchange Act. 

29.18. “Nonqualified StockOption” means an Option which is not an Incentive Stock Option. 

29.19. “Operating Unit” means any operating unitor division of the Company designated as an Operating Unit by the Committee. 

29.20. “Option” means a Nonqualified StockOption or an Incentive Stock Option or either of them. 

29.21. “Optionee” means a person to whom an Option has beengranted under the Plan. 

 

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29.22. “Option Price” means the price at which a Share covered by an Option grantedhereunder may be purchased. 

29.23. “Performance Awards” means Performance Units, Performance Shares or either or both ofthem. 

29.24. “Performance-Based Compensation” means any Option or Award that is intended to constitute“performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code and the regulations promulgated thereunder. 

29.25. “Performance Cycle” means the time period specified by the Committee at the time Performance Awards are granted during which the performance of the Company, a Subsidiary or an Operating Unit will be measured.

29.26. “Performance Objectives” has the meaning set forth in Section 9.3. 

29.27. “Performance Shares” means Shares issued or transferred to an Eligible Individual under Section 9.2. 

29.28. “Performance Units” means Performance Units granted to an Eligible Individual under Section 9.1. 

29.29. “Plan” means this Tim Hortons Inc. 2006 Stock Incentive Plan, as amended and restated from time to time. 

29.30. “Restricted Stock” means Shares issued or transferred to an Eligible Individual pursuant to Section 4.1. 

29.31. “Retirement” means (i) in the case of an employee of the Company or a Subsidiary, the definition provided for such term inan Agreement and (ii) in the case of an Eligible Director, termination of membership on the Board at or after attaining age 55 with at least three (3) years of service as a member of the Board, other than by reason of death, Disability orfor Cause. 

29.32. “Share Award” means an Award of Shares granted pursuant to Section 10. 

29.33. “Shares” means shares of the common stock, par value U.S.$.001 per share, of the Company and any other securities into which suchshares are changed or for which such shares are exchanged. 

29.34. “Stock Appreciation Right” means a right to receive allor some portion of the increase in the value of the Shares as provided in Section 7 hereof. 

29.35. “Stock Unit”means a right granted to an Eligible Individual under Section 4.2 representing a number of hypothetical Shares. 

 

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29.36. “Trading Window” means the periods of time within which, if opened, directors,officers and certain employees of the Company and its Subsidiaries are permitted to trade in the Company’s securities, as set out in the Company’s Insider Trading and Window Trading Policies. 

**Section 30. Toronto Stock Exchange Definitions.** For the purposes of Sections 30 and 31, “insider”, “security basedcompensation arrangements” and “service provider” have the following meanings: 

30.1 “Insider” means,

(i) every director or senior officer of the Company; 

(ii) every director or senior officer of a company that is itself an insider or subsidiary of the Company; 

(iii) any person or company who beneficially owns, directly or indirectly, voting securities of the Company or who exercises control or direction over voting securities of the Company or a combination of both carrying more than 10% of thevoting rights attached to all voting securities of the Company for the time being outstanding other than voting securities held by the person or company as underwriter in the course of a distribution; and 

(iv) the Company where it has purchased, redeemed or otherwise acquired any of its securities, for so long as it holds any of its securities.

30.2 “Security Based Compensation Arrangements” include: 

(i) stock option plans for the benefit of employees, insiders, service providers or any one of such groups; 

(ii) individual stock options granted to employees, service providers or insiders if not granted pursuant to a plan previously approved by theCompany’s securityholders; 

(iii) stock purchase plans where the Company provides financial assistance or where the Company matchesthe whole or a portion of the securities being purchased; 

(iv) stock appreciation rights involving issuances of securities from treasury;

(v) any other compensation or incentive mechanism involving the issuance or potential issuances of securities of the Company; and

(vi) security purchases from treasury by an employee, insider or service provider which is financially assisted by the Company by anymeans whatsoever. 

 

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For greater certainty, arrangements which do not involve the issuance from treasury or potential issuance from treasuryof securities of the Company do not constitute security based compensation arrangements. 

30.3 “Service provider” is aperson or company engaged by the Company to provide services for an initial, renewable or extended period of twelve months or more. 

**Section 31. Toronto Stock Exchange Requirements.** The number of shares of common stock issuable to Insiders, at any time, under all Security Based Compensation Arrangements of the Company, may not exceed 10% of the Company’sissued and outstanding shares of common stock; and the number of shares of common stock issued to Insiders within any one year period, under all Security Based Compensation Arrangements of the Company, may not exceed 10% of the Company’s issuedand outstanding shares of common stock. 

**Section 32. Compliance with Section 409A of the Code.** Notwithstanding anything tothe contrary, to the extent that the Committee determines that any Award granted under the Plan is subject to Section 409A of the Code, the Agreement evidencing such Award shall incorporate the terms and conditions necessary for such Award toavoid the consequences described in Section 409A(a)(1) of the Code, and to the maximum extent permitted under applicable law, the Plan and the Award Agreement shall be interpreted in a manner that results in their conforming to the requirementsof Section 409A of the Code and any Department of Treasury or Internal Revenue Service regulations or other guidance issued under Section 409A of the Code. Notwithstanding anything to the contrary in this Plan, to the extent a Grantee hasbeen granted an Award that constitutes “deferred compensation” under Section 409A of the Code and such Grantee is a “specified employee” as defined under Section 409A of the Code, no distribution, settlement or paymentof any amount shall be made before a date that is six months following the date of such Grantee’s “separation from service” as defined under Section 409A of the Code or, if earlier, the date of the Grantee’s death.

 

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