Document:

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                                  EXHIBIT 10.9

                             OFFSET WAIVER AGREEMENT

                  This Offset Waiver Agreement (the "Agreement") is made and
entered into as of September 5, 2003, by and among ESCALADE, INCORPORATED, an
Indiana corporation ("Escalade"); MARTIN YALE INDUSTRIES, INC., an Indiana
corporation ("Martin Yale"); INDIAN INDUSTRIES, INC., an Indiana corporation
("Indian Industries"); MASTER PRODUCTS MANUFACTURING COMPANY, INC., a Delaware
corporation ("Master Products"); HARVARD SPORTS, INC., a California corporation
("Harvard Sports"); U.S. WEIGHT, INC., an Illinois corporation ("U.S. Weight");
BEAR ARCHERY, Inc., a Florida corporation ("Bear Archery"); INDIAN-MARTIN, INC.,
a Nevada corporation ("Indian-Martin"); and BANK ONE, NATIONAL ASSOCIATION, a
national banking association with its principal office in Indianapolis, Indiana
("Bank").

                                    Recitals

                  A.       Escalade is the sole shareholder of Martin Yale,
Indian Industries and Indian-Martin. Martin Yale is the sole shareholder of
Master Products, and Indian Industries is the sole shareholder of Harvard
Sports, U.S. Weight and Bear Archery. (Hereinafter, Martin Yale, Indian
Industries, Master Products, Harvard Sports, U.S. Weight and Bear Archery shall
be referred to collectively as the "Domestic Subsidiaries," and individually as
a "Domestic Subsidiary.")

                  B.       Indian-Martin and Bank have entered into a Credit
Agreement as of even date (the "Credit Agreement"), that, among other things,
establishes a credit facility for Indian-Martin with the Bank authorizing a loan
to Indian-Martin from Bank of up to the aggregate principal sum of $45,000,000
(the "Loan"). The Loan is secured by the grant of a security interest and
assignment to Bank of all of Indian-Martin's rights, title and interests, now
owned or hereafter acquired by Indian-Martin, in and to that Collateral defined
and described in the Credit Agreement. (Hereinafter, all indebtedness,
Obligations and liabilities and any renewals or extensions thereof owed by
Indian-Martin to Bank under the Credit Agreement and Loan Documents shall be
referred to collectively as the "Indian-Martin/Bank One Obligations.") All
capitalized terms used, but not otherwise defined, herein shall have the
respective meanings ascribed to them in the Credit Agreement.

                  C.       In accordance with those six (6) certain Receivables
Purchase Agreements executed by Indian-Martin and each of the Domestic
Subsidiaries, respectively, before or concurrent with execution of the Credit
Agreement, the other Loan Documents and this Agreement, Indian-Martin shall
purchase certain accounts receivable of the Domestic Subsidiaries. Payment by
Indian-Martin for the purchase of such receivables shall be made with proceeds
of Indian-Martin's borrowings under the Loan. (Hereinafter, all indebtedness,
obligations and liabilities, and any renewals or extensions thereof, owed by
Indian-Martin to the Domestic Subsidiaries, respectively, arising out of the
Receivables Purchase Agreements shall be referred to collectively as the
"Indian-Martin/Domestic Subsidiaries Obligations".)

                  D.       Pursuant to the Receivables Purchase Agreements,
among other things, Indian-Martin shall have and be granted certain indemnities
and rights of limited recourse owing

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to it from the Domestic Subsidiaries, respectively, all of which indemnities and
rights are required to and shall be assigned by Indian-Martin to Bank, and Bank
shall be granted a security interest therein, under the Company Security
Agreement (hereinafter, collectively the "Domestic
Subsidiaries/Indian-Martin/Bank One Obligations").

                  E.       The permitted use of the proceeds of the Loan under
the Credit Agreement requires Indian-Martin, on a one time basis, to loan to
Escalade $14,000,000.00, for which Escalade shall issue the Escalade Note
payable to Indian-Martin evidencing such loan (the "Escalade/Indian-Martin
Loan"). The Escalade Note shall be pledged by Indian-Martin to Bank and shall be
a part of the Collateral given to secure the Indian-Martin/Bank One Obligations.
(Hereinafter, all indebtedness, obligations and liabilities, and all renewals
and extensions thereof, owed by Escalade to Indian-Martin arising out of the
Escalade/Indian-Martin Loan shall be referred to collectively as the
"Escalade/Indian-Martin Obligations.")

                  F.       Escalade intends to use the proceeds of the
Escalade/Indian-Martin Loan to repay existing indebtedness to Bank and/or fund
unsecured loans from Escalade to each of the Domestic Subsidiaries,
respectively, to finance their current ongoing operations (the "Domestic
Subsidiaries/Escalade Loans"). (Hereinafter, all indebtedness, obligations and
liabilities, and all renewals and extensions thereof, owed by the Domestic
Subsidiaries, individually and collectively, to Escalade arising out of the
Domestic Subsidiaries/Escalade Loans shall be referred to collectively as the
"Domestic Subsidiaries/Escalade Obligations".)

                  G.       As a condition precedent to execution and delivery of
the Credit Agreement, Bank requires the execution and delivery of this Agreement
whereby Escalade, the Domestic Subsidiaries and Indian-Martin each knowingly,
unconditionally and absolutely waive and terminate all rights of offset and
similar rights which may otherwise exist with respect to those obligations owing
by , to or among each other.

                  NOW THEREFORE, IN CONSIDERATION OF THE FOREGOING, AND FOR GOOD
AND VALUABLE CONSIDERATIONS, THE RECEIPT, SUFFICIENCY AND MUTUALITY OF WHICH ARE
HEREBY ACKNOWLEDGED, AND IN ORDER TO SATISFY THE CONDITIONS PRECEDENT OF THE
CREDIT AGREEMENT, ESCALADE, THE DOMESTIC SUBSIDIARIES AND INDIAN-MARTIN AGREE
WITH BANK AS FOLLOWS:

                  1.       Until such time as all Indian-Martin/Bank One
Obligations are fully and finally paid, performed and satisfied, and the credit
commitment under the Credit Agreement from Bank to Indian-Martin is no longer of
any force or effect, Indian-Martin hereby knowingly, unconditionally and
absolutely waives all rights, claims or privileges of offset, set off,
counterclaim, recoupment, abatement and any and all other similar rights, claims
or privileges which Indian-Martin may otherwise have, or hereafter claim or
assert, with respect to (i) any or all of the Escalade/Indian-Martin
Obligations, and (ii) any or all of the Indian-Martin/Domestic Subsidiaries
Obligations, whether or not such Indian-Martin/Domestic Subsidiaries Obligations
are assigned, sold or otherwise transferred by the Domestic Subsidiaries to
Escalade.

                  2.       Until such time as all Indian-Martin/Bank One
Obligations are fully and finally paid, performed and satisfied, and the credit
commitment under the Credit Agreement

                                       -2-
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from Bank to Indian-Martin is no longer of any force or effect, Escalade hereby
knowingly, unconditionally and absolutely waives all rights, claims or
privileges of offset, set off, counterclaim, recoupment, abatement and any and
all other similar rights, claims or privileges which Escalade may otherwise
have, or hereafter claim or assert, with respect to (i) any or all of the
Escalade/Indian-Martin Obligations, and (ii) any or all of the
Indian-Martin/Domestic Subsidiaries Obligations, whether or not such
Indian-Martin/Domestic Subsidiaries Obligations are assigned, sold or otherwise
transferred by the Domestic Subsidiaries to Escalade.

                  3.       Until such time as all Indian-Martin/Bank One
Obligations are fully and finally paid, performed and satisfied, and the credit
commitment under the Loan Agreement from Bank to Indian-Martin is no longer of
any force or effect, each Domestic Subsidiary hereby knowingly, unconditionally
and absolutely waives all rights, claims or privileges of offset, set off,
counterclaim, recoupment, abatement and any and all other similar rights, claims
or privileges which Domestic Subsidiaries may otherwise have, or hereafter claim
or assert, with respect to (i) any or all of the Indian-Martin/Domestic
Subsidiaries Obligations, whether or not such Indian-Martin/Domestic
Subsidiaries Obligations are assigned, sold or otherwise transferred by the
Domestic Subsidiaries to Escalade, and (ii) any or all of the Domestic
Subsidiaries/Indian-Martin/Bank One Obligations.

                  4.       Each of Indian-Martin, Escalade and the Domestic
Subsidiaries, respectively, hereby acknowledges and consents to the waivers and
agreements of each other as set forth in this Agreement.

                  IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.

INDIAN INDUSTRIES, INC.,                   INDIAN-MARTIN, INC.,
an Indiana corporation                     a corporation organized and existing
                                           under the laws of the State of Nevada

By: __________________________________     By: _________________________________
_____________________________________      _____________________________________
       (Printed Name and Title)                   (Printed Name and Title)

HARVARD SPORTS, INC.,                      ESCALADE, INCORPORATED,
a California corporation                   an Indiana corporation

By: __________________________________     By: _________________________________
_____________________________________      _____________________________________
       (Printed Name and Title)                  (Printed Name and Title)

                                       -3-
<PAGE>

U.S. WEIGHT, INC., an Illinois             MARTIN YALE INDUSTRIES, INC., an
corporation                                Indiana corporation

By: __________________________________     By: _________________________________
______________________________________     _____________________________________
       (Printed Name and Title)                  (Printed Name and Title)

BEAR ARCHERY, INC.,                        MASTER PRODUCTS MANUFACTURING
a Florida corporation                      COMPANY, INC., a Delaware corporation

By: __________________________________     By: _________________________________
______________________________________     _____________________________________
       (Printed Name and Title)                  (Printed Name and Title)

                                           BANK ONE, NATIONAL ASSOCIATION, a
                                           national banking association

                                           By: _________________________________
                                           _____________________________________
                                                  (Printed Name and Title)Exhibit 4.D

 

Exhibit 4(d)

Wendy’s International, Inc.

Deferred Compensation Plan

I. Introduction and Purpose

     Section 1.1
Statement of Purpose. The primary purposes of the Plan are to
(i) provide certain key employees and outside directors of Wendy’s
International, Inc. (the “Company”) and its participating subsidiaries with
recurrent opportunities to defer receipt of all or a portion of their base
compensation and certain incentive awards before they are earned and to
nominally invest such amounts in certain mutual funds and in the Company’s
common stock on a tax-deferred basis as a means of satisfying share ownership
guidelines, thereby aligning more closely key employee and director
compensation with the interests of the Company and its shareholders and (ii)
provide for a more competitive pay program to attract and retain key employee
and director talent.

     Section 1.2
Top Hat Plan. The Company intends that the Plan constitute an
unfunded “top hat” plan maintained for the purpose of providing deferred
compensation to a select group of management or highly compensated employees,
within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.

II. Definitions

     Account means the notional account established and maintained by the Plan
on behalf of each Participant to record such Participant’s interest under the
Plan.

     Account
Balance shall have the meaning specified in Section 6.1.

     Adjustment shall have the meaning specified in Section 6.1.

     Affiliate shall have the meaning specified in the Profit Sharing and
Savings Plan.

     Annual
Incentive Award means, with respect to an Eligible Individual, any
incentive award that may become payable to such Eligible Individual pursuant to
any annual incentive compensation plan of the Company or a Participating
Employer, less any applicable withholding taxes and any reductions to such
incentive compensation for contributions under any tax-qualified retirement
plan or any welfare plan or program sponsored by the Company or a Participating
Employer.

     Base
Compensation means (i) in respect of an Eligible Individual who is a
Covered Employee, such Eligible Individual’s regular annual base salary, less
any applicable withholding taxes and any reductions to base salary for
contributions under any tax-qualified retirement plan or any welfare plan or
program sponsored by the Company or a Participating Employer and (ii) in
respect of an Eligible Individual who is an Outside Director, such Eligible
Individual’s annual retainer and meeting fees.

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     Beneficiary has the meaning specified in Section 8.3.

     Board means the Board of Directors of the Company.

     Cause:

          (a) in the case of an Outside Director, means the commission of an act of
fraud or intentional misrepresentation or an act of embezzlement,
misappropriation or conversion of assets or opportunities of the Company or any
of its subsidiaries;

          (b) in the case of any other Participant, means the termination of a
Participant’s employment by reason of the Board’s good faith determination that
the Participant (1) willfully and continually failed to substantially perform
his or her duties with the Company or Participating Employer (other than a
failure resulting from the Participant’s incapacity due to physical or mental
illness) after a written demand for substantial performance is delivered to the
Participant by the Board which specifically identifies the manner in which the
Board believes that the Participant has not substantially performed his or her
duties and such failure substantially to perform continues for at least
fourteen (14) days, or (2) has willfully engaged in conduct which is
demonstrably and materially injurious to the Company or Participating Employer,
monetarily or otherwise, or (3) has otherwise materially breached the terms of
his or her employment agreement with the Company or Participating Employer, if
applicable (each, an “Employment Agreement”) (including, without limitation, a
voluntary termination of the Participant’s employment by the Participant during
the term of such Employment Agreement). No act, nor failure to act, on the
Participant’s part, shall be considered “willful” unless he or she has acted,
or failed to act, with an absence of good faith and without a reasonable belief
that his or her action or failure to act was in the best interest of the
Company. Notwithstanding the foregoing, the Participant’s employment shall not
be deemed to have been terminated for Cause unless and until (x) there shall
have been delivered to the Participant a copy of a written notice setting forth
that the Participant was guilty of conduct set forth above in clause (1), (2)
or (3) of the first sentence of this definition and specifying the particulars
thereof in detail, and (y) the Participant shall have been provided an
opportunity to be heard by the Board (with the assistance of Participant’s
counsel).

     Change
in Control means the occurrence of:

          (a) An acquisition (other than directly from the Company) of any Common
Stock or other voting 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 purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), immediately after which
such Person has “Beneficial Ownership” (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of thirty percent (30%) or more of the then
outstanding shares of the Common Stock or the combined voting power of the
Company’s then outstanding Voting Securities; provided, however, that, 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 Change in Control. A
“Non-Control Acquisition” shall mean an acquisition by (i) an employee benefit
plan (or a

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trust forming a part thereof) maintained by (A) the Company or (B)
any corporation or other Person of which a majority 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);

          (b) The individuals who, as of the Effective Date, are members of the
Board (the “Incumbent Board”), cease for any reason 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 at least two-thirds of the
Incumbent Board, such new director shall, for purposes of the Plan, be
considered as a member of the Incumbent Board; and provided further, however,
that no individual shall be considered a member of the Incumbent Board if such
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 intended to
avoid or settle any Proxy Contest; or

          (c) The consummation of:

               (i) 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 issued where:

                    (1) the stockholders of the Company immediately before such merger,
consolidation or reorganization own directly or indirectly immediately
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, consolidation or reorganization (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,
consolidation or 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

                    (3) no Person other than (i) the Company, (ii) any Subsidiary, (iii) any
employee benefit plan (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 or reorganization, 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 the Surviving Company’s then outstanding voting
securities or its

13

 

common stock;

               (ii) A complete liquidation or dissolution of the Company; or

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

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the “Subject Person”) 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 the number 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 this sentence) 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 which
increases the percentage of the then outstanding Voting Securities Beneficially
Owned by the Subject Person, then a Change in Control shall occur.

     Code means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated thereunder.

     Committee shall have the meaning specified in Section 3.1.

     Common
Stock means the common stock, without par, of the Company, or such
other securities into which shares of the Company’s common stock are changed or
for which shares of the Company’s common stock are exchanged.

     Company means Wendy’s International, Inc., an Ohio corporation.

     Company
Group means the Company and each Affiliate.

     Covered
Employee means:

          (a) Any person employed by the Company, with the title of “Vice President”
or above;

          (b) Any person employed by a Participating Employer, with such titles as
may be designated for that Participating Employer by the Board or a committee
thereof.

     Deferral
Agreement means the written or electronic deferral election form
prescribed from time to time by the Plan Administrator, which must be completed
by each Participant pursuant to Section 5.1.

     Effective
Date means the date the Plan is adopted by the Board or such
later date as the Board determines.

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     Eligible Individual means (i) each Covered Employee and (ii) each Outside
Director. Eligible Individuals are eligible to defer certain compensation in
accordance with Section 5.1.

     ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations thereunder.

     Good
Reason:

          (a) in the case of an employee whose employment with the Company or one of
its subsidiaries is subject to the terms of an employment agreement between
such individual and the Company or such subsidiary, which employment agreement
includes a definition of “Good Reason,” 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

          (b) in all other cases, means (i) a material diminution in position or
responsibilities, (ii) a material reduction of salary or aggregate incentive
compensation opportunities or (iii) a required relocation beyond fifty miles
from the present work location.

     Investment
Options means the hypothetical investment vehicles in which a
Participant’s deferrals shall be deemed invested pursuant to Article VI.
Investment Options shall be limited to those offered to participants in the
Profit Sharing and Savings Plan (other than the Company Stock Fund) and Stock
Units.

     Mandatory
Deferral Account shall have the meaning specified in Section
6.1.

     Outside
Director means a member of the Board who is not employed by the
Company or any of its Affiliates.

     Participant means any Eligible Individual who makes an election to
participate in accordance with Section 5.1. Participant shall also include any
former Eligible Individual who continues to have an Account maintained under
the Plan.

     Participating
Employer means an Affiliate that has adopted the Plan and
has been authorized to participate in the Plan by the Board or a committee
thereof.

     Plan means the Wendy’s International, Inc. Deferred Compensation Plan, as
the same may be amended from time to time.

     Plan
Administrator shall have the meaning specified in Section 3.1.

     Profit
Sharing and Savings Plan means the Wendy’s International, Inc.
Profit Sharing and Savings Plan, or its successor, as it may be amended from
time to time.

     Stock Unit means a unit representing the value of a share of Common Stock.

     Termination means (i) in the case of a Participant who is an employee, the
termination of such Participant’s employment with the Company or any Affiliate
for any reason, after which the

15

 

Participant is no longer on the payroll of any
member of the Company Group, and (ii) in the case
of a Participant who is an Outside Director, ceasing to be a member of the
Board.

     Total and Permanent Disability means a physical or mental condition which
qualifies a Participant for Social Security disability benefits or which
qualifies such Participant to continue to receive benefits under the Company’s
disability plan or under its workers’ compensation policy, after having
received such benefits for twelve (12) months.

     Trading Day means any day on which the New York Stock Exchange is open for
trading.

     Valuation Date means the last Trading Day in each month and such other
days designated by the Plan Administrator as Valuation Dates.

III. Plan Administration

     Section 3.1 Plan Administrator.

          (a) The Plan shall be administered by the Company (the “Plan
Administrator”). The Plan Administrator shall appoint a committee (the
“Committee”) to act as its agent or delegate in carrying out its administrative
duties.

          (b) The Committee shall consist of not fewer than three (3) members who
shall be appointed by the Company and may include individuals who are not
Participants in the Plan. The Company may remove or replace any member at any
time in its sole discretion, and any member may resign by delivering a written
resignation to the Company, which resignation shall become effective at its
delivery or at any later date specified therein.

     Section 3.2 Powers of The Plan Administrator. The Plan Administrator shall
be charged with the operation and administration of the Plan in accordance with
the terms hereof and shall have all the powers necessary to carry out the
provisions of the Plan. Any and all determinations, actions or decisions of
the Plan Administrator and Committee with respect to the administration of the
Plan, including without limitation the determination of benefit eligibility and
interpretation of Plan provisions, shall be final and conclusive and binding
upon all parties having an interest in the Plan.

     Section 3.3 Committee.

          (a) The Committee shall hold meetings upon such notice and at such times
and places as its members may from time to time deem appropriate, and may adopt
from time to time such bylaws and regulations for the conduct and transaction
of its business and affairs consistent with the terms of the Plan and the
delegation of duties and powers by the Company. A majority of its members at
the relevant time shall constitute a quorum for the transaction of business.
All action taken by the Committee shall be by vote of the majority of its
members present at such meeting, except that the Committee also may act without
a meeting by a written consent signed by a majority of its members. A member
shall not be disqualified from acting because of any personal interest, benefit
or advantage, inasmuch as a member may be a director of the Company, an
employee or a Participant, but no member shall vote or act in connection

16

 

with an action of the Committee relating exclusively to himself.

          (b) The Committee may allocate among its members such specific
responsibilities, obligations, powers or duties as shall be deemed appropriate.

     Section 3.4 Indemnification. The Company shall indemnify and defend each
member of the Committee and all officers, employees or representatives of the
Company to the greatest extent permitted by applicable law against any and all
claims, losses, damages, expenses (including reasonable attorneys’ fees) and
liability arising from any action or failure to act in connection with the
administration of the Plan.

IV. Eligibility

     Section 4.1
Eligibility. Each Eligible Individual shall be eligible to
become a Participant in this Plan on the later of the Effective Date and the
first day of the month following the date on which the individual becomes an
Eligible Individual (i.e., in the case of an employee, the date on which the
Board, or the board of directors of a Participating Employer, takes action to
appoint such individual to a Covered Employee position, and in the case of an
Outside Director, the date on which the individual is appointed to serve as a
director of the Company). The Plan is intended to limit eligibility to a
“select group of management or highly compensated employees” within the meaning
of ERISA.

     Section 4.2
Cessation of Eligibility. An individual shall cease to be an
Eligible Individual upon his or her Termination or, in the case of an Eligible
Individual who is not an Outside Director, upon ceasing to be a Covered
Employee.

V. Deferral Elections

     Section 5.1
Time and Form of Elections. To become a Participant in the
Plan an Eligible Individual must make an irrevocable election under this
Section 5.1 to defer Base Compensation, an Annual Incentive Award and/or other
compensation approved by the Plan Administrator. All elections made under this
Section 5.1 shall be made by submitting a Deferral Agreement to the Plan
Administrator or to such other individual or entity designated by the Plan
Administrator.

          (a) Base
Compensation. An Eligible Individual may elect to defer up to
one-hundred percent (100%) of his or her Base Compensation to be earned in a
calendar year by submitting an irrevocable Deferral Agreement in accordance
with this Section 5.1 by not later than the December 31 immediately preceding
such calendar year. Notwithstanding the previous sentence, if an individual
becomes an Eligible Individual after January 1 of a calendar year, he or she
may elect to defer up to 100% of his or her Base Compensation to be earned
during such calendar year following such election by submitting a Deferral
Agreement within 30 days of becoming an Eligible Individual.

          (b) Annual
Incentive Awards. An Eligible Individual may elect to defer up
to one-hundred percent (100%) of an Annual Incentive Award to be earned in a
fiscal year

17

 

commencing after the date of such election by submitting an irrevocable
Deferral Agreement in accordance with this Section 5.1 by not later than the
earlier of December 31 and the last day of the preceding fiscal year.

          (c) Other
Compensation. An Eligible Individual may elect to defer other
compensation that has not yet been earned and that is designated by the Board
as approved for deferral under the Plan by submitting an irrevocable Deferral
Agreement in accordance with this Section 5.1 within such period prior to the
commencement of the period in which such compensation will be earned as the
Plan Administrator may determine.

     Section 5.2
Suspension Due to Hardship Withdrawal. If an Eligible
Individual receives a hardship distribution from any tax-qualified defined
contribution plan sponsored by the Company or any of its Affiliates, then all
deferrals under the Plan shall automatically be suspended for six months
following the date of such hardship distribution.

     Section 5.3
Mandatory Deferrals. In the event an employee may become
entitled to compensation that would result in the Company or Participating
Employer being disallowed a federal income tax deduction pursuant to Section
162(m) of the Code, the Plan Administrator may, in its sole discretion, require
such employee to defer under the Plan any portion of such individual’s Base
Compensation and/or Annual Incentive Awards, to the extent the Company or
Participating Employer would otherwise be disallowed a deduction in respect of
such compensation. Notwithstanding the foregoing, the Plan Administrator may
not require an employee to defer any portion of his or her compensation below
the threshold under Section 162(m) of the Code.

VI. Deferral Accounts

     Section 6.1
Deferral Account. The Plan shall establish an Account on its
books and records in the name of each Participant, which shall reflect the
amount of actual deferrals pursuant to Article V plus any earnings and less any
losses thereon (the “Adjustment”) as described in Section 6.5 as an unfunded
liability of the Plan to such Participant (a Participant’s actual deferrals
plus or minus all Adjustments thereon and less any amounts distributed to such
Participant or his or her Beneficiary pursuant to Article VII are collectively
referred to herein as the Participant’s “Account
Balance”). To the extent a
Participant is required to defer amounts pursuant to Section 5.3 above, the
Plan shall establish a separate Account or sub-Account on its books and records
to track the Account Balance with respect to such mandatory deferrals (the
“Mandatory Deferral Account”). Unless otherwise specifically provided herein,
references to a Participant’s Account or Account Balance shall be deemed to
include the Mandatory Deferral Account. Each Account shall be designated by
the name of the Eligible Individual for whom it is established. Participants
shall be fully vested in their Account Balances at all times.

     Section 6.2
Investment Options. Each Participant shall elect the
Investment Options in which the Participant’s deferrals shall be deemed
invested. A Participant’s deferrals may be allocated in one percent increments
among one or more of the Investment Options. Notwithstanding the foregoing,
elections regarding Stock Units shall be governed by Section 6.4. If the
Participant allocates less than 100% of his or her deferrals pursuant to this
Section 6.2,

18

 

unallocated deferrals shall be deemed to be allocated to the default
investment option established under the Profit Sharing and Savings Plan.

     Section 6.3
Changing Investment Options. Each Participant will be able to
reallocate his or her future deferrals covered by a Deferral Agreement among
the available Investment Options in one percent increments no less frequently
than monthly by delivering to the Plan Administrator, or other person or entity
designated by the Plan Administrator, a new Investment Option election form
prescribed by the Plan Administrator. In addition to future deferrals, each
Participant will be able to reallocate his or her then existing Account Balance
among the available Investment Options in one percent increments no less
frequently than monthly by delivering to the Plan Administrator, or other
person or entity designated by the Plan Administrator, a new Investment Option
election form prescribed by the Plan Administrator; provided, however, that any
portion of a Participant’s Account Balance deemed invested in Stock Units shall
remain in Stock Units until distributed pursuant to Article VII; provided,
further, that any reallocation of all or a portion of a Participant’s Account
Balance into Stock Units shall be subject to Section 6.4. If a Participant
changes the allocation of his or her Account Balance or future deferrals among
the Investment Options (other than with respect to the portion of a
Participant’s Account Balance allocated to Stock Units), such change shall
supersede the previous designation effective on the next Valuation Date that is
at least five business days following the date on which the Participant
delivers the Investment Option election form to the Plan Administrator or other
person or entity designated by the Plan Administrator. Prior to such time, a
Participant’s previous designation shall control.

     Section 6.4
Investment in Stock Units. Elections with regard to any
investment in Stock Units may be made only in accordance with the exemptions
from short-swing profit recovery provided by the regulations promulgated under
Section 16 of the Exchange Act and the Company’s policies applicable to the
purchase of Common Stock. Any deferrals that a Participant has elected to be
deemed invested in Stock Units shall be credited to the money market Investment
Option until the first Trading Day following the close of the Company’s window
trading period following or during which such deferral is made or such other
date as may be designated by the Plan Administrator. Any reallocation of all
or any portion of a Participant’s Account Balance into Stock Units shall be
credited to the money market Investment Option until the first Trading Day
following the close of the Company’s window trading period during which the
reallocation election was made (or, if the election is permitted to be made
outside of the Company’s window trading period, following the date on which the
election was made). At that time, the balance in such money market fund
attributable to such deferrals or reallocations, including any deemed earnings
on such amounts through such date, shall be deemed invested in Stock Units.

     Section 6.5
Crediting a Participant Account. The Company shall credit a
Participant’s Account to reflect his or her deemed investment in the applicable
Investment Options in respect of the amounts deferred by such Participant as
of, or as soon as practicable after, the date on which the Base Compensation,
Annual Incentive Award or other compensation would have otherwise been paid.
The Company shall debit a Participant’s Account to reflect the deemed
liquidation of investments credited to his or her Account as of, or as soon as
practicable after, the date of each distribution made pursuant to Article VII
in respect of such Account. Each Account

19

 

shall be valued on each Valuation Date and shall reflect all Adjustments,
additional deferrals and distributions since the previous Valuation Date. On
each Valuation Date, the deemed investments reflected in a Participant’s
Account shall be credited and debited, if and as applicable, to reflect any
reallocation of the Investment Options in which the Account Balance is deemed
invested. The Plan Administrator shall use the Participant’s Investment Option
designations to calculate the Adjustment component of the Account Balance. The
amount of the Adjustment shall equal the amount that the Participant’s Account
Balance would have earned (or lost) for the period since the last Adjustment
had the Account actually been invested in the investment vehicles represented
by the Investment Options designated by the Participant for such period. For
purposes of determining the number of units or other interests in Investment
Options credited or debited to a Participant’s Account and/or the value of a
Participant’s Account on any date, the Plan Administrator shall value such
units or other interests as follows: (i) in the case of Stock Units, the value
shall be based on the mean of the high and low prices at which shares of the
Common Stock are traded on the New York Stock Exchange on such date, or if such
date is not a Trading Day, the most recent Trading Day and (ii) in the case of
an interest in an Investment Option that is a mutual or collective fund, the
value shall be based on the net asset value of such fund on such date.

     Section 6.6
Deemed Dividends Reinvested. With respect to any dividends or
other distributions that would have been paid to a Participant had his or her
Account actually been invested in an investment vehicle represented by an
Investment Option in which a portion of his or her Account is deemed invested,
the value of such dividends or distributions shall be deemed reinvested in the
applicable Investment Option. If such dividends or other distributions are in
a form other than cash, the value of such amounts shall be determined by the
Plan Administrator in its sole discretion. In the event of any
reclassification, recapitalization, reorganization, merger, consolidation,
spin-off, split-up, reverse stock split or other corporate transaction
affecting the Common Stock, the number of Stock Units allocated to a
Participant’s Account shall be appropriately adjusted to reflect such
transaction.

     Section 6.7
Unfunded Account. The Plan at all times shall be considered
entirely unfunded both for tax purposes and for purposes of ERISA. A
Participant shall have absolutely no ownership interest in any Investment
Option. The Plan, the Company or any Participating Employer may, but is not
required to, invest the amounts represented by the Account Balances in the
Investment Options or in any other investment. The Plan, Company or
Participating Employer shall be the sole owner of any funds invested by such
entity, as well as all amounts accounted for in the Accounts, all of which
shall at all times be subject to the claims of such entity’s creditors. A
Participant shall be entitled only to payment of an amount equal to the amount
in his or her Account Balance in accordance with Article VII.

VII. Distributions

     Section 7.1
Form and Order of Payments. The portion of a Participant’s
Account Balance allocated to Stock Units as an Investment Option shall be paid
in shares of Common Stock; provided, however, that a Participant will be paid
cash in lieu of any fractional shares otherwise payable in respect of Stock
Units. The portion of a Participant’s Account Balance allocated to any
Investment Option other than Stock Units shall be paid in cash. The portion of
a

20

 

Participant’s Account Balance that is deemed invested in cash and/or money
market funds shall be distributed first in time and the balance of a
Participant’s Account Balance shall be distributed on a pro-rata basis from
each other Investment Option. Any amounts required to be withheld in
accordance with Section 11.2 shall first reduce any amount payable to the
Participant in the form of cash, and, to the extent any such withholding
exceeds the amount of cash otherwise payable to the Participant, shall then
reduce the number of shares of Common Stock otherwise payable to the
Participant.

     Section 7.2
Distribution of Benefits.

          (a) Normal
Form. Unless a Participant elects one of the distribution
alternatives described in Section 7.2(b) in the manner set forth in Section
7.2(c), upon the Participant’s Termination (other than for death, Total and
Permanent Disability or a Termination described in Section 7.5), the
Participant will receive the distribution of his or her Account Balance in 40
quarterly installments commencing on, or as soon as practicable after, the
first anniversary of the date of such Termination, with the amount of each
installment equal to the amount of the Account Balance on the Valuation Date
immediately prior to the payment of such installment divided by the number of
installments remaining to be paid.

          (b) Alternative
Form. In the alternative, a Participant may elect to
receive his or her Account Balance (i) in the form of a lump sum payable on, or
as soon as practicable after, the six-month anniversary of the date of the
Participant’s Termination, or (ii) in quarterly installments payable over no
less than two years and no more than fifteen (15) years commencing on, or as
soon as practicable after, the six-month anniversary of the date of such
Termination, with the amount of each installment equal to the amount of the
Account Balance on the Valuation Date immediately prior to the payment of such
installment divided by the number of installments remaining to be paid.

          (c) Timing
and Manner of Elections. Distribution elections shall be made in such manner as may be
designated by the Plan Administrator and communicated to Participants. Any
election made within one year of the Participant’s date of Termination shall be
disregarded and benefits shall be paid in accordance with the preceding
distribution election, if any, selected by such Participant or, if no such
distribution election has been made, in accordance with Section 7.2(a).

     Section 7.3
Accelerated Distributions. Notwithstanding the foregoing, in
the event: (i) a Participant incurs a Termination by reason of such
Participant’s Total and Permanent Disability, (ii) within two years following a
Change in Control, a Participant’s employment with the Company and its
Affiliates or service as a director is involuntarily terminated without Cause
or, in the case of a Participant who is not an Outside Director, is terminated
by the Participant for Good Reason, (iii) a Participant dies, whether before or
after the payment of benefits has commenced hereunder or (iv) a Participant’s
total Account Balance at any time after such Participant’s Termination is less
than $25,000, the Participant’s total Account Balance shall be paid in a single
lump sum, which, in accordance with Section 7.1, shall be in cash and/or Common
Stock, as applicable, on the date that is on or as soon as practicable after,
the six-month anniversary of the date of such occurrence.

21

 

     Section 7.4 Distribution of Mandatory Deferrals. In the event the Plan
Administrator requires an employee to defer amounts pursuant to Section 5.3,
all or a portion of the Participant’s Mandatory Deferral Account shall be paid
in a lump sum during the first year the Plan Administrator determines, in its
sole discretion, that such amounts can be paid without the Company Group being
disallowed a federal income tax deduction in respect of any compensation paid
to such Participant under Section 162(m) of the Code.

     Section 7.5
Distribution Following a Termination for Cause.
Notwithstanding any other provision of the Plan, in the event a Participant’s
Termination is for Cause, the Plan Administrator may, notwithstanding any
distribution election made by the Participant, distribute the Participant’s
entire Account Balance in a lump sum.

     Section 7.6
Share Limit. Notwithstanding anything to the contrary
contained herein, the aggregate number of shares of Common Stock that may be
issued pursuant to the Plan shall not exceed 1,000,000; provided, however, that
such number of shares of Common Stock may be adjusted as the Board deems
appropriate to reflect any changes in the Company’s capital structure,
including, without limitation, by reason of a reclassification,
recapitalization, reorganization, merger, consolidation, spin-off, split-up,
stock-split, stock dividends or reverse stock split.

VIII. Participants’ Rights

     Section 8.1
Participant Rights in the Plan Unfunded. Any liability of the
Plan, the Company and any Participating Employer to any Participant with
respect to any benefit shall be based solely upon the contractual obligations
created by the Plan and the Deferral Agreements. No such obligation shall be
deemed to be secured by any pledge or any encumbrance on any property of the
Plan, Company or Participating Employer. The obligations under the Deferral
Agreements and the Plan shall be unfunded and unsecured promises to pay. No
Participant or Beneficiary shall have any rights under the Plan other than
those of a general unsecured creditor of the Company or Participating Employer.
The Company or a Participating Employer may establish a rabbi trust for the
benefit of Participants hereunder or otherwise segregate, identify or reserve
assets for the purpose of paying benefits hereunder; provided, however, that
assets segregated, identified or reserved for the purpose of paying benefits
pursuant to the Plan shall remain general corporate assets subject to the claim
of the Company’s, or applicable Participating Employer’s, creditors or in the
case of assets held in a rabbi trust established by the Company or any
Participating Employer, subject to the claims of general creditors to the
extent provided in such trust. Upon a Change in Control, the Company shall
transfer assets to an irrevocable rabbi trust, the fair market value of which,
together with the fair market value of the assets then in the trust, are at
least equal to the aggregate amount of all Participants’ Account Balances;
provided, however, that for purposes of this sentence, assets required to be
transferred in respect of that portion of Participants’ Account Balances
represented by Stock Units shall be shares of Common Stock. Neither the Plan
nor the Deferral Agreements create a trust or fiduciary relationship between
the Company and any Participant or Beneficiary.

     Section 8.2
Non-Assignability. Neither the Participant nor any
Beneficiary under the Plan or the Deferral Agreements shall have any power or
right to transfer, assign, anticipate,

22

 

hypothecate or otherwise encumber any part or all of the amounts payable
hereunder, which are expressly declared to be unassignable and nontransferable.
Any such attempted assignment or transfer by a Participant shall be void and
the Plan, Company and Participating Employer shall thereupon have no further
liability to such Participant or his or her Beneficiaries hereunder. No amount
payable hereunder shall, prior to actual payment thereof, be subject to seizure
by any creditor of any Participant or Beneficiary for the payment of any debt,
judgment or other obligation, by a proceeding at law or in equity, nor
transferable by operation of law in the event of the bankruptcy, insolvency or
death of the Participant or designated Beneficiary hereunder.

     Section 8.3
Designation of Beneficiary. Each Participant shall designate,
by giving a designation in approved form to the Plan Administrator, a
Beneficiary to receive any benefits which may become or continue to be payable
under the Plan upon or after such Participant’s death. Successive designations
may be made and the last designation received by the Plan Administrator prior
to the death of the Participant shall be effective and shall revoke all prior
designations.

     If a Participant shall fail to designate a Beneficiary, if such
designation shall for any reason be illegal or ineffective or if no Beneficiary
so designated survives the Participant, then his or her benefits shall be paid
to:

          (a) His or her surviving spouse; or

          (b) If there is no surviving spouse, to the executor or other personal
representative of the Participant to be distributed in accordance with the
Participant’s will, or, if he or she has no valid will, in accordance with
applicable state law.

IX. The Company’s Reservation of Rights

     Section 9.1
Termination or Amendment of Plan.

          (a) The Company retains the right, at any time and in its sole discretion,
to amend or terminate the Plan, in whole or in part. Any amendment of the Plan
shall be approved by the Board or a committee thereof, shall be in writing,
shall be executed by an officer of Company and shall be communicated to the
Participants. Except as provided in Sections 9(b) and (c), no amendment of the
Plan shall impair or curtail the Company’s or a Participating Employer’s
contractual obligations arising from Deferral Agreements previously entered
into for benefits accrued prior to such amendment.

          (b) In the event of Plan termination, payment of Accounts shall occur not
later than the last business day of the month following the month in which the
termination is made effective.

          (c) In the event of a change in law that would result in the Plan being
deemed to be a funded plan for tax purposes or for purposes of ERISA, the
Company retains the right to amend the Plan to the extent necessary to preserve
the status of the Plan as an unfunded plan.

     Section 9.2
Accelerated Distribution upon Loss of Tax Deferral. In the
event a

23

 

Participant becomes subject to federal income tax on all or any portion of
his or her Account Balance for which such Participant is not then scheduled to
receive a distribution under the Plan, notwithstanding any other provision of
the Plan or distribution election made by such Participant, the Plan
Administrator may, in its sole discretion, accelerate the payment of the
Participant’s entire Account Balance in a lump sum to a date determined by the
Plan Administrator.

X.     Claims
for Benefits

     Section 10.1
Claims Review. Any Participant, former Participant or
Beneficiary who wishes to request a review of a claim for benefits or who
wishes an explanation of a benefit or its denial may direct to the Plan
Administrator a written request for such review within one hundred twenty (120)
days of the denial. The Plan Administrator shall respond to the request by
issuing a notice to the claimant as soon as possible, but in no event later
than ninety (90) days (one hundred eighty (180) days in special cases) from the
date of receipt of the request. This notice furnished by the Plan
Administrator shall be written in a manner calculated to be understood by the
claimant and shall include the following:

     a) The specific reason or reasons for any denial of benefits;

     b) The specific Plan provisions on which any denial is based;

     c) A description of any further material or information which is necessary
for the claimant to perfect his or her claim and an explanation of why the
material or information is needed; and

     d) An explanation of the Plan’s claim appeals procedure.

If the Plan Administrator denies the claim or fails to respond to the
claimant’s written request for a review within one hundred eighty (180) days of
its receipt, the claimant shall be entitled to proceed to the claim appeals
procedure described in Section 10.2. If the claimant does not respond to the
notice, posted by first-class mail to the address of record of the claimant,
within sixty (60) days from receipt of the notice, the claimant shall be
considered satisfied in all respects.

     Section 10.2
Appeals Procedure. In the event that the claimant wishes to
appeal the claim review denial, the claimant or his or her duly authorized
representative may submit to the Plan Administrator, within sixty (60) days of
his or her receipt of the notice, a written notification of appeal of the claim
denial. The notification of appeal of the claim denial shall permit the
claimant or his or her duly authorized representative to utilize the following
claim appeals procedures:

     a) To review pertinent documents; and

     b) To submit issues and comments in writing to which the Plan
Administrator shall respond.

The Plan Administrator shall furnish a final written decision on formal
review not later

24

 

than sixty (60) days after receipt of the notification of appeal, unless
special circumstances require an extension of the time for processing the
appeal. In no event, however, shall the Plan Administrator respond later than
one hundred twenty (120) days after a request for an appeal. The decision on
the appeal shall be written in a manner calculated to be understood by the
claimant, shall include specific reasons for the decision, and shall contain
specific references to the pertinent Plan provisions on which the decision is
based.

     Section 10.3
Discretion Regarding Claims and Appeals. The Plan
Administrator, or any individual or committee to whom responsibility for claims
and appeals has been delegated, shall have complete discretion in deciding such
claims and appeals and any such decision shall be final, conclusive and binding
upon the claimant.

XI. Miscellaneous Provisions

     Section 11.1
Effect on Other Benefits. Except as otherwise required by
applicable law, the salary deferred by a Participant shall be included in the
Participant’s annual compensation for purposes of calculating the Participant’s
incentive bonuses, insurance and other employee benefits. Distributions made
under the Plan shall be excluded from compensation in years paid for purposes
of calculating a Participant’s incentive bonuses, insurance and other employee
benefits.

     Section 11.2
Tax Withholding. The Company or Participating Employer shall
withhold from any payment made by it under the Plan such amount or amounts as
may be required to be withheld by applicable federal, state or local laws.

     Section 11.3
Participant’s Incapacity. In the event benefits become
payable under the Plan after a Participant becomes incapacitated, such benefits
shall be paid to the Participant’s legal guardian or legal representative.

     Section 11.4
Independence of Plan. Except as otherwise expressly provided
herein, the Plan shall be independent of, and in addition to, any other
employment agreement or benefit plan or rights that may exist from time to time
between the parties hereto. The Plan shall not be deemed to constitute a
contract of employment between the a Participant and the Company or any
Participating Employer, nor shall any provision hereof restrict the right of
the Company or any Participating Employer at any time to discharge a
Participant, with or without assigning a reason therefor, or restrict the right
of a Participant to terminate his or her employment with the Company or a
Participating Employer.

     Section 11.5
Responsibility for Legal Effect. Neither the Plan
Administrator, the Company nor any Participating Employer makes any
representations or warranties, express or implied, or assumes any
responsibility concerning the legal, tax, or other implications or effects of
the Plan.

     Section 11.6
Successors, Acquisitions, Mergers, Consolidations. The terms
and conditions of the Plan and each Deferral Agreement shall inure to the
benefit of and bind the Company, each Participating Employer and the
Participants, and their successors, assigns, and

25

 

personal representatives.

     Section 11.7
Controlling Law. The Plan shall be governed by and construed
in accordance with the internal laws, and not the law of conflicts, of the
state of Ohio to the extent not preempted by laws of the United States of
America.

     Section 11.8
Captions. The captions of the various sections of the Plan
are solely for convenience and shall not control or affect the meaning or
construction of the Plan.

     Section 11.9
Canadian Participants. Annex I to the Plan contains
provisions applicable to certain Participants who are resident in Canada. With
respect to such Participants, any conflict between the provisions of Annex I
and the other provisions of the Plan shall be resolved in favor of the
provisions of Annex I.

ANNEX I

AMENDMENTS TO WENDY’S INTERNATIONAL, INC.

DEFERRED COMPENSATION PLAN

FOR

CANADIAN ELIGIBLE INDIVIDUALS

     Capitalized terms used herein, unless otherwise defined herein, have the
same meaning as in the Wendy’s International, Inc. Deferred Compensation Plan,
as the same may be amended from time to time.

     The following amendments to the Plan shall apply to (i) Eligible
Individuals resident in Canada and on the payroll of a Participating Employer
resident in Canada and (ii) Eligible

26

 

Individuals that are Outside Directors resident in Canada (collectively, “Canadian Eligible Individuals”):

1. Definitions:

     (i)  The definition of “Cause” set out in Article II is hereby amended by
deleting “or” at the end of paragraph (a) and the period after paragraph (b)
and replacing it with “; or” and inserting into said subsection immediately
following paragraph (b) the following:

		
	 	     "(c) as defined by common law.”

     (ii)  The following definitions shall replace the corresponding definition
set out in Article II:

     "Effective Date means the date on which all conditions applicable to
Canadian Eligible Individuals attached to the resolution of the board of
directors of the Participating Employer resident in Canada approving the Plan
have been satisfied or such other date as such board determines.”

     "Investment Option means Stock Units.”

     "Total and Permanent Disability means a physical or mental condition which
qualifies a Participant for Canadian Pension Plan disability benefits or which
qualifies such Participant to continue to receive benefits under the Company’s
disability plan or under its workers’ compensation policy, after having
received such benefits for twelve (12) months.”

2. Deferral Accounts:

     (i)  Section 6.2 shall be replaced by the following:

     “Section 6.2 Investment Option. Each Participant shall be deemed to have
elected 100% of his or her deferrals in the Investment Option and such deemed
election shall be governed by Section 6.4, subject to the amendments noted in
this Annex I.”

     (ii)  Section 6.3 shall not apply.

     (iii)  Section 6.4 shall be replaced by the following:

     “Section 6.4 Investment in Stock Units. The deemed investment in Stock
Units may be made only in accordance with the exemptions from short-swing
profit recovery provided by the regulations promulgated under Section 16 of the
Exchange Act and the Company’s policies applicable to the purchase of Common
Stock. On the first Trading Day following the close of the Company’s window
trading period following or during which such deferral is made or such other
date as may be designated by the Plan Administrator, the Company shall credit,
as additional

27

 

remuneration, to the Participant’s Account an amount equal to the
notional increase in value of such deferrals that would have accrued to the
Participant if the deferrals had been invested directly in the money market
Investment Option and the balance (deferrals plus additional amount paid
representing the increase in value of such deferral as a result of the notional
investment) shall be deemed invested in Stock Units.”

     (iv)  Section 6.6 shall be replaced by the following:

     “Section 6.6
Deemed Dividends Reinvested. With respect to any dividends or
other distributions that would have been paid to a Participant had his or her
Account actually been invested in Common Stock, the value of such dividends or
distributions in respect of only the whole number of Stock Units in a
Participant’s Account shall be deemed reinvested in Stock Units. If such
dividends or other distributions are in a form other than cash, the value of
such amounts shall be determined by the Plan Administrator in its sole
discretion. In the event of any reclassification, recapitalization,
reorganization, merger, consolidation, spin-off, split-up, reverse stock split
or other corporate transaction affecting the Common Stock, the number of Stock
Units allocated to a Participant’s Account shall be appropriately adjusted to
reflect such transaction.”

3. Distributions:

     (i)  Section 7.1 shall be replaced by the following:

     “Section 7.1 Form and Order of Payments. A Participant’s Account Balance
shall be paid in shares of Company Stock; provided, however, that a Participant
will be paid cash in lieu of any fractional shares otherwise payable in respect
of Stock Units.”

     (ii)  Section 7.2 shall be replaced by the following:

     “Section 7.2 Distribution of Benefits. The Participant will receive the
distribution of his or her Account Balance in the form of a single lump sum
payable (i) as soon as practicable after the date of the Participant’s
Termination, or (ii) if so elected by the Participant prior to the date of the
Participant’s Termination and in such manner as may be designated by the Plan
Administrator and communicated to Participants, during the month of December of
the calendar year commencing immediately after the date of such Termination.”

     (iii)  Section 7.3 shall be replaced by the following:

     “Section 7.3 Payment in Event Disabled, Change of Control or Death.
Notwithstanding the foregoing, in the event: (i) a Participant incurs a
Termination by reason of such Participant’s Total and Permanent Disability;
(ii) within two years following a Change in Control, a Participant’s employment
with the Company and its Affiliates or service as a director is involuntarily
terminated without Cause or, in the case of a Participant who is not an Outside
Director, is terminated by the Participant for Good Reason; or (iii) a
Participant dies whether before or after the payment of his or her Account
Balance, the Participant’s Total Account

28

 

Balance shall be paid in a single lump
sum, which, in accordance with Section 7.1, shall be in Common Stock and cash,
if applicable, on the date that is on or as soon as practicable after, the
six-month anniversary of such Termination.”

4. Participants’ Rights:

     With respect to Section 8.1, the option of using a rabbi trust referred to
therein shall not apply for Canadian Eligible Individuals and the second last
sentence of Section 8.1 shall not apply to Canadian Eligible Individuals.

29

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