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exv10w6

 

EXHIBIT 10.6

TIM HORTONS INC.

EXECUTIVE ANNUAL PERFORMANCE PLAN

     1.
Purpose. The purpose of the Executive Annual Performance Plan (the “Plan”) is to
enhance the ability of Tim Hortons Inc. (the “Company”) and its subsidiaries to attract, motivate,
reward, and retain key employees, to strengthen their commitment to the success of the Company and
to align their interests with those of the Company’s shareholders by providing additional
compensation to designated key employees of the Company based on the achievement of performance
objectives. To this end, the Plan provides a means of rewarding participants based on the
performance of the Company and/or its Operating Units.

     2.
Administration. The Plan shall be administered by the Committee and the CEO as
provided herein. The Committee shall have full authority to establish the rules and regulations
relating to the Plan, to interpret the Plan and those rules and regulations, to determine the
Performance Objectives of the Company and/or Operating Units, to decide the facts in any case
arising under the Plan and to make all other determinations and to take all other actions necessary
or appropriate for the proper administration of the Plan, including the delegation of such
authority or power, where appropriate. The Committee’s administration of the Plan, including all
such rules and regulations, interpretations, selections, determinations, approvals, decisions,
delegations, amendments, terminations and other actions, shall be final and binding on the Company,
its stockholders and the Participants and their beneficiaries. The CEO shall have the full
authority to determine the Participants in the Plan, the Award opportunities for such Participants,
and whether such Award opportunities shall be based on the Performance Objectives of the Company or
based on a combination of Performance Objectives of the Company and one or more Operating Units.

     3.
Eligible Employees. Generally, all Employees are eligible to participate in the
Plan for any fiscal year. However, participation shall be limited to those Employees selected by
the CEO to participate in the Plan for each fiscal year in accordance with Section 4.

     4.
Determination of Awards. For each fiscal year, the Committee shall establish the
Performance Objectives of the Company and/or Operating Units. The CEO shall determine (i) the
Employees who shall be Participants during each fiscal year, (ii) whether Awards for each
Participant shall be based solely upon the achievement of Performance Objectives of the Company or
on a combination of the achievement of Performance Objectives for the Company and for one or more
Operating Units, and (iii) the Award opportunities for each Participant, including the extent to
which Awards will be payable for actual performance between each level of the Performance
Objectives. The CEO shall provide to the Committee a schedule that indicates the Participants
selected, their Award opportunities, and whether such Awards will be based on the Performance
Objectives of the Company or a combination of the Company and one or more Operating Units. The
Company shall notify each Participant of the applicable Performance Objectives for such Participant
and his or her corresponding Award opportunities for each fiscal year.

 

 

     5.
Payment of Awards. As soon as practicable after the determination of the Company’s
and, if applicable, the Operating Units’ financial performance for a fiscal year, each Award to the
extent earned shall be paid in a single lump sum cash payment, less applicable withholding taxes.
Notwithstanding the foregoing, a Participant may elect to defer all or a portion of any Award
otherwise payable in accordance with this Section, if permitted pursuant to a deferred compensation
plan adopted by, or an agreement entered into with, the Company or any of its subsidiaries.

     6.
Discretionary Bonuses. In addition to any Awards payable under Section 4, the CEO,
after consultation with the Committee, shall have the authority to make additional cash incentive
awards to any Employees selected by the CEO in amounts determined by the CEO.

     7.
Termination of Employment. No Award for a fiscal year shall be payable to any
Participant unless he or she is employed by the Company or one of its subsidiaries on the payment
date for Awards payable in respect of the fiscal year, unless the Participant’s employment was
terminated because of his or her (i) death, (ii) disability or (iii) retirement after attaining age
55 and the completion of 10 years of continuous service with the Company, in which event the
Participant will be entitled to a pro-rata portion (which shall be 100% if such termination occurs
after the end of the fiscal year and prior to the payment date) of the Award otherwise payable in
respect of that fiscal year, subject to the Committee’s discretion as set forth in Section 2
hereof.

     8.
Change in Control. Notwithstanding any provision in the Plan to the contrary, upon
the occurrence of a Change in Control of the Company, the following provisions shall apply:

          (i) The minimum Award payable to each Participant in respect of the fiscal year in which the
Change in Control occurs shall be the greatest of:

               (A) the Award or other annual bonus paid or payable to the Participant in respect of the
fiscal year prior to the year in which the Change in Control occurs;

               (B) the Award amount that would be payable to the Participant assuming that the Company
achieved the target level of the Performance Objectives for such fiscal year; and

               (C) the Award amount that would be payable to the Participant based on the Company’s actual
performance and achievement of applicable Performance Objectives for such fiscal year through the
date of the Change in Control.

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          (ii) Notwithstanding anything to the contrary contained herein, in the event that following
the date of a Change in Control and prior to the payment date for Awards payable in respect of the
fiscal year in which the Change in Control occurs a Participant’s employment is terminated by the
Company and its subsidiaries without Cause or by the Participant for Good Reason, such Participant
shall be entitled to receive the Award otherwise payable pursuant to the terms of the Plan in
respect of that fiscal year as if he or she had remained in the employ of the Company through the
payment date for Awards payable in respect of such fiscal year.

          (iii) If a Participant’s employment is terminated by the Company and its subsidiaries without
Cause prior to the date of a Change in Control but the Participant reasonably demonstrates that the
termination (A) was at the request of a third party who has indicated 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 be deemed to have occurred after a Change in Control for purposes of this Agreement provided
a Change in Control shall actually have occurred.

     9.
Adjustments. The Committee may, at the time Performance Objectives are determined
for a fiscal year, or at any time prior to the final determination of Awards in respect of such
fiscal year, provide for the manner 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.

     10.
Designation of Beneficiary. In the event of a Participant’s death prior to full
payment of any Award hereunder, unless such Participant shall have designated a beneficiary or
beneficiaries in accordance with this Section 10, payment of any Award due under the Plan shall be
made to the beneficiary or beneficiaries designated by the Participant under the Company’s basic
life insurance program, or if no beneficiary has been designated under the basic life insurance
program, the Participant’s designated beneficiary dies prior to receiving any payment of an Award
or if such designation shall for any reason be illegal or ineffective, Awards payable under the
Plan shall be paid to the Participant’s estate. A beneficiary designation under this Plan, or
revocation of a prior beneficiary designation, will be effective only if it is made in writing on a
form provided by the Company, signed by the Participant and received by the Benefits Department of
the Company. If a beneficiary has been designated under this Plan and such beneficiary dies prior
to receiving any payment of an Award or if such designation shall for any reason be illegal or
ineffective, Awards payable under the Plan shall be paid to the Participant’s estate.

     11.
Amendment or Termination. The Board may amend or terminate the Plan at any time
in its discretion; provided, however, that no amendment or termination of the Plan
may affect any Award made under the Plan prior to that time; and provided further,
however, that the Plan may not be amended or terminated through and including the fiscal
year in which a Change in Control occurs (i) at the request of a third party who has indicated an
intention or taken steps reasonably calculated to effect a Change in Control or (ii) otherwise in
connection with, or in anticipation of, a Change in Control which has been threatened or proposed,
in either case provided a Change in Control shall actually have occurred.

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12. Miscellaneous Provisions

          (a) Neither the establishment of this Plan, nor any action taken hereunder, shall be construed
as giving any Employee or any Participant any right to be retained in the employ of the Company or
any of its subsidiaries.

          (b) A Participant’s rights and interests under the Plan may not be assigned or transferred,
except as provided in Section 10, and any attempted assignment or transfer shall be null and void
and shall extinguish, in the Company’s sole discretion, the Company’s obligation under the Plan to
pay Awards with respect to the Participant.

          (c) The Plan shall be unfunded. The Company shall not be required to establish any special or
separate fund, or to make any other segregation of assets, to assure payment of Awards.

          (d) The Company shall have the right to deduct from Awards paid any taxes or other amounts
required by law to be withheld.

          (e) Nothing contained in the Plan shall limit or affect in any manner or degree the normal and
usual powers of management, exercised by the officers and the Board or committees thereof, to
change the duties or the character of employment of any employee of the Company or any of its
subsidiaries or to remove the individual from the employment of the Company or any of its
subsidiaries at any time, all of which rights and powers are expressly reserved.

     13. Definitions.

          (a) “Award” shall mean the cash incentive award earned by a Participant under the Plan
for any fiscal year.

          (b) “Base Salary” shall mean the Participant’s annual base salary actually paid by the
Company and/or any of its subsidiaries and received by the Participant during the applicable fiscal
year. Annual base salary does not include (i) Awards under the Plan, (ii) long-term incentive
awards, (iii) signing bonuses or any similar bonuses, (iv) imputed income from such programs as
executive life insurance, or (v) nonrecurring earnings such as moving expenses, and is based on
salary earnings before reductions for such items as contributions under Sections 125 or 401(k) of
the Code or pursuant to any nonqualified deferred compensation plan or agreement or any retirement
savings plans.

          (c) “Board” shall mean the Board of Directors of the Company.

          (d) “Cause” shall mean the termination of a Participant’s employment by reason of the
Board’s good faith determination that the Participant (a) willfully and continually failed to
substantially perform his or her duties with the Company (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

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or her duties and such failure substantially to perform continues for at least fourteen (14)
days, or (b) has willfully engaged in conduct which is demonstrably and materially injurious to the
Company, monetarily or otherwise, or (c) has otherwise materially breached the terms of his or her
employment agreement with the Company, 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 (1) 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 (a), (b) or (c) of the first sentence of this
definition and specifying the particulars thereof in detail, and (2) the Participant shall have
been provided an opportunity to be heard by the Board (with the assistance of Participant’s
counsel).

          (e) “CEO” shall mean the Chief Executive Officer of the Company.

          (f) “Change in Control” shall mean the occurrence during the term of the Plan of:

               (i) 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 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 Change in Control. A “Non-Control Acquisition” shall mean an
acquisition by (A) an employee benefit plan (or a trust forming a part thereof) maintained by (1)
the Company or (2) 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”) (B) the Company or its Subsidiaries, or (C) any Person
in connection with a “Non-Control Transaction” (as hereinafter defined);

               (ii) The
individuals who, as of the date the Board adopted the Plan, 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 this 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 if such individual initially
assumed office as a result of an actual or threatened solicitation of proxies or

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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

               (iii) The consummation of:

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

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

                              (2) the individuals who were members of the Incumbent Board immediately prior to the execution
of the agreement providing for such Merger constitute at least two-thirds of the members of the
board of directors of the Surviving Corporation, or a corporation beneficially directly or
indirectly owning a majority of the Voting Securities of the Surviving Corporation, 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 was maintained by the
Company or any Subsidiary, or (iv) any Person who, immediately prior to such Merger 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 Corporation’s then outstanding voting securities or its common stock.

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

                         (C) 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 increase the percentage
of the then outstanding Voting Securities Beneficially Owned by the Subject Person, then a Change
in Control shall occur.

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          (g) “Code” shall mean the Internal Revenue Code of 1986, as amended.

          (h) “Committee” shall mean the Board or such other committee of the Board appointed by
the Board from time to time to administer the Plan and to perform the functions set forth herein.
Until such time as the Committee consists of a committee of the Board, the compensation committee
of the board of directors of Wendy’s International, Inc. shall serve in an advisory role to the
Committee and may make recommendations to the Committee relating to administration of the plan as
set forth herein.

          (i) “Employee” shall mean any employee of the Company or any of its subsidiaries.

          (j) “Good Reason” shall mean the occurrence after a Change in Control of any of the
following events or conditions without the Participant’s express written consent:

               (i) a change in the Participant’s status, title, position or responsibilities (including
reporting responsibilities) which, in the Participant’s reasonable judgment, does not represent a
promotion from his or her status, title, position or responsibilities as in effect immediately
prior thereto; the assignment to the Participant of any duties or responsibilities which, in the
Participant’s reasonable judgment, are inconsistent with such status, title, position or
responsibilities; or any removal of the Participant from or failure to reappoint or reelect him or
her to any of such positions, except in connection with the termination of his or her employment
for disability, for Cause, as a result of his or her death or by the Participant other than for
Good Reason;

               (ii) a reduction by the Company in the Participant’s Base Salary as in effect immediately
prior to the Change in Control or as the same may be increased from time to time, or a failure to
increase Participant’s Base Salary as of his or her established annual salary review date in any
calendar year by a percentage at least as great as the annual increase in the Consumer Price Index
for All Items most recently published by Statistics Canada prior to such salary review date;

               (iii) the Company’s requiring the Participant to be based at any place outside a 50-kilometer
radius from the Participant’s business office location immediately prior to the Change in Control,
except for reasonably required travel on Company business which is not materially greater than such
travel requirements prior to the Change in Control;

               (iv) the failure by the Company to continue to provide the Participant with compensation and
benefits substantially similar (in terms of benefit levels and/or reward opportunities) to those
provided for under the Participant’s Employment Agreement, if applicable, and those provided to him
or her under any of the employee benefit plans in which the Participant becomes a participant, or
the taking of any action by the Company which would directly or indirectly materially reduce any of
such benefits or deprive the Participant of any material fringe benefit enjoyed by him or her at
the time of the Change in Control;

               (v) any material breach by the Company of any provision of the Participant’s Employment
Agreement with the Company, if applicable; and

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               (vi) the failure of the Company to notify the Participant within the 30-day period following
any transfer of business and assets to any other person by merger, consolidation, sale of assets or
otherwise, that the Company has obtained a satisfactory agreement from a successor or assign of the
Company to assume and agree to perform the Participant’s employment agreement with the Company, if
any.

          (k) “Operating Unit”, for any fiscal year, shall mean a division, Company subsidiary,
group, product line or product line grouping for which an income statement reflecting sales and
operating income is produced. 

          (l) “Participant”, for any fiscal year, shall mean an Employee selected by the
Committee to participate in the Plan for such fiscal year.

          (m) “Performance Objectives”, for any fiscal year, shall mean one or more financial
performance objectives of the Company and/or Operating Unit(s) established by the Committee in
accordance with Section 4, which may include threshold Performance Objectives, target Performance
Objectives and maximum Award Performance Objectives. Performance Objectives may be expressed in
terms of earnings per share, earnings (which may be expressed as 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 expressed as a
combination of Company and/or Operating Unit(s) Performance Objectives and may be absolute or
relative (to prior performance or to the performance of one or more other entities or external
indices) and may be expressed in terms of a progression within a specified range.

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EXHIBIT 10.7

INDEMNIFICATION AGREEMENT

     This
Indemnification Agreement (this “Agreement”) is made as of this ___day of      ,
20___, by and between Tim Hortons Inc., a Delaware
corporation (the “Company”), and                     , an
individual (“Indemnitee”).

RECITALS

     A. The
bylaws (the “Bylaws”) of the Company provide for the indemnification of the officers of
the Company to the greatest extent permitted by Delaware law, including the Delaware General
Corporation Law, as amended (the “DGCL”) and permit indemnification of other employees of the
Company.

     B. The Bylaws and the DGCL permit contracts between the Company and the officers or other
employees of the Company with respect to indemnification of such officers or other employees.

     C. The Company recognizes that capable and qualified individuals are becoming increasingly
reluctant to serve as officers of or in certain other employee capacities at public corporations as
a result of the recent and ongoing enactment of statutes and regulations pertaining to officers’
and other employees’ responsibilities and the increasing risk of lawsuits against officers and
other employees in the current corporate climate, unless such individuals are provided with more
certain and secure protection against exposure to unreasonable personal risk arising from their
service and activities on behalf of a corporation.

     D. The Company is aware that individuals recruited to serve as officers of or in certain other
employee capacities at public corporations generally are more likely to agree to provide services
to corporations that provide for separate indemnification agreements because, unlike
indemnification provisions contained in the certificate of incorporation or the bylaws of a company
or state statutory provisions, the indemnification provisions contained in a separate agreement
generally may not be amended or rescinded without the consent of the individual who is a party to
the agreement.

     E. The Company recognizes that it is in the best interests of the Company and its shareholders
to attract and retain capable and qualified individuals to serve as officers and in certain other
employment positions and to enable such officers and other employees to exercise their judgment in
the best interests of the Company without being affected by the threat of exposure to unreasonable
personal risk.

     F. To induce Indemnitee to serve and/or continue to serve as an officer or other employee of
the Company, the Company desires Indemnitee to be indemnified and advanced expenses as set forth
herein.

 

 

AGREEMENT

     In consideration of Indemnitee’s service as an officer or other employee of the Company after
the date hereof, the Company and Indemnitee hereby agree as follows:

     1. Certain Definitions. Capitalized terms used but not otherwise defined in this Agreement
shall have the meanings set forth below:

     “Corporate Status” means the fact that a person is or was an officer or other employee of the
Company. A Proceeding shall be deemed to have been brought by reason of a person’s “Corporate
Status” if it is brought because of the status described in the preceding sentence or because of
any action or inaction on the part of such person in connection with such status.

     “Disinterested Director” means a director of the Company who is not and was not a party to or
threatened with a Proceeding in respect of which indemnification is sought by Indemnitee.

     “Expenses” shall include all reasonable attorneys’ fees, disbursements and retainers, court
costs, transcript costs, fees of experts, witness fees, travel and deposition costs, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service fees and all other
disbursements or expenses of the types customarily incurred in connection with (a) prosecuting,
defending, preparing to prosecute or defend, investigating, settling or appealing a Proceeding
(including the cost of any appeal bond or its equivalent), (b) for purposes of Section 2.1
only, being prepared to be a witness or otherwise participating in a Proceeding or (c) enforcing a
right under this Agreement (including any right to indemnification or advancement of expenses under
this Agreement).

     “Independent Counsel” means an attorney, or a firm having associated with it an attorney, who
neither currently is nor in the past five years has been retained by or performed services for the
Company or any person to be indemnified by the Company.

     “Proceeding” includes any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other
actual, threatened or completed proceeding, whether civil, criminal, administrative or
investigative, in which Indemnitee was, is or would be involved as a party or otherwise (including
as a witness) by reason of the Indemnitee’s Corporate Status, including one pending on or before
the date of this Agreement; but excluding one initiated by an Indemnitee pursuant to Section
7 of this Agreement to enforce Indemnitee’s rights under this Agreement. For purposes of this
definition, the term “threatened” shall be deemed to include, but not be limited to, Indemnitee’s
good faith belief that a claim or other assertion may lead to initiation of a Proceeding.

     “Reviewing Party” means the person, persons or entity selected to make the determination of
the entitlement to indemnification pursuant to Section 5.3 hereof.

 

 

     2. Indemnification.

          2.1 Proceedings not by or in Right of Company. The Company hereby agrees to hold harmless and
indemnify Indemnitee to the greatest extent permitted by Delaware law, including the provisions of
the DGCL, and by the Bylaws, as such may be amended from time to time, if Indemnitee was or is a
party, witness, or other participant, or is threatened to be made a party, witness, or other
participant, to any Proceeding, other than a Proceeding by or in the right of the Company, by
reason of Indemnitee’s Corporate Status, against all Expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection
with such Proceeding, if Indemnitee acted in good faith and in a manner Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company and, with respect to any
criminal Proceeding, had no reasonable cause to believe that his or her conduct was unlawful. The
termination of any Proceeding by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that Indemnitee did not
satisfy the foregoing standard of conduct to the extent applicable thereto.

          2.2 Proceedings by or in Right of Company. The Company hereby agrees to hold harmless and
indemnify Indemnitee to the greatest extent permitted by Delaware law, including the provisions of
the DGCL, and by the Bylaws, as such may be amended from time to time, if Indemnitee was or is a
party or is threatened to be made a party to any Proceeding by or in the right of the Company, by
reason of Indemnitee’s Corporate Status, against all Expenses actually and reasonably incurred by
Indemnitee or on Indemnitee’s behalf in connection with the defense or settlement of such
Proceeding, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be
in or not opposed to the best interests of the Company; provided, however, that, if
applicable law so provides, no indemnification against such Expenses shall be paid in respect of
any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be
liable to the Company unless, and only to the extent that, the Court of Chancery of the State of
Delaware (the “Court”) determines, upon application, that, despite the adjudication of liability
but in view of all of the circumstances of the case, Indemnitee is fairly and reasonably entitled
to indemnity for such Expenses as such Court shall deem proper.

          2.3 Indemnification for Expenses of an Indemnitee Who is Wholly or Partly Successful. To the
extent that Indemnitee has been successful on the merits or otherwise in defense of any Proceeding
referred to in Section 2.1 or 2.2 of this Agreement, or in defense of any claim,
issue or matter in such Proceeding, Indemnitee shall be indemnified against Expenses actually and
reasonably incurred by the Indemnitee or on Indemnitee’s behalf in connection with such Proceeding.

 

 

     3. Advancement of Expenses.

          3.1 Advancement Obligation. The Company shall advance all Expenses incurred by or on behalf
of Indemnitee in connection with any Proceeding prior to the final disposition of such Proceeding
upon receipt of an undertaking by or on behalf of Indemnitee to repay such amount if it shall
ultimately be determined that Indemnitee is not entitled to be indemnified by the Company. Any
advances and undertakings to repay pursuant to this Section 3.1 shall not be secured, shall
not bear interest and shall provide that, if Indemnitee has commenced or thereafter commences legal
proceedings in the Court to secure a determination that Indemnitee should be indemnified under
applicable law with respect to such Proceeding, Indemnitee shall not be required to reimburse the
Company for any advancement of Expenses in respect of such Proceeding until a final judicial
determination is made with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed).

          3.2 Timing and Contents. Any advancement of Expenses pursuant to Section 3.1 hereof
shall be made within ten days after the receipt by the Company of a written statement from
Indemnitee requesting such advancement from time to time and accompanied by or preceded by the
undertaking referred to in Section 3.1 above. Each statement requesting advancement shall
reasonably evidence the Expenses incurred by or on behalf of the Indemnitee in connection with such
Proceeding for which advancement is being sought. 

     4. Contribution in the Event of Joint Liability. Whether or not the indemnification provided
in this Agreement is available, in respect of any Proceeding in which the Company is jointly liable
with Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the
amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably
incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the
Company, on the one hand, and Indemnitee, on the other hand, from the transaction from which such
Proceeding arose; provided, however, that the proportion determined on the basis of
relative benefit may, to the extent necessary to conform to law, be further adjusted by reference
to the relative fault of the Company, on the one hand, and Indemnitee, on the other hand, in
connection with the events that resulted in such Expenses, judgments, fines or settlement amounts,
as well as any other equitable considerations that applicable law may require to be considered.
The relative fault of the Company, on the one hand, and Indemnitee, on the other hand, shall be
determined by reference to, among other things, the degree to which their actions were motivated by
intent to gain personal profit or advantage, the degree to which their liability is primary or
secondary, and the degree to which their conduct is active or passive.

     5. Procedures and Presumptions for Determination of Entitlement to Indemnification.

          5.1 Timing of Payments. All payments of Expenses, judgments, fines, amounts paid in
settlement and other amounts by the Company to Indemnitee pursuant to this Agreement shall be made
as soon as practicable after written demand therefor by Indemnitee is presented to the Company, but
in no event later than (a) 30 days after such demand is presented or (b) such later date as may be
permitted for the determination of entitlement to indemnification

 

 

pursuant to Section 5.7 hereof, if applicable; provided, however, that
advances of Expenses shall be made within the time period provided in Section 3.2 hereof.

          5.2 Request for Indemnification. Whenever Indemnitee believes that he or she is entitled to
indemnification pursuant to this Agreement, Indemnitee shall submit to the Company a written
request, including therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. Indemnitee shall submit such claim for Indemnification
within a reasonable time, not to exceed five years, after any judgment, order, settlement,
dismissal, arbitration award, conviction, acceptance of a plea of nolo contendere (or its
equivalent) or other full or partial final determination or disposition of the Proceeding (with the
latest date of the occurrence of any such event to be considered the commencement of the five-year
period). The Secretary of the Company shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors of the Company (the
“Board”) in writing that
Indemnitee has requested indemnification.

          5.3 Reviewing Party. Upon written request by Indemnitee for indemnification pursuant to the
first sentence of Section 5.2 hereof, to the extent that the Indemnitee’s entitlement to
such indemnification is governed by Section 2.1 or 2.2 of this Agreement, a
determination with respect to Indemnitee’s entitlement thereto shall be made in the specific case
by one of the following methods: (a) so long as there are Disinterested Directors with respect to
such Proceeding, a majority vote of the Disinterested Directors, even though less than a quorum of
the Board, (b) so long as there are Disinterested Directors with respect to such Proceeding, a
committee of such Disinterested Directors designated by a majority vote of such Disinterested
Directors, even though less than a quorum, or (c) if there are no Disinterested Directors or if a
majority of Disinterested Directors so direct, Independent Counsel (designated for such purpose by
the Board) in a written opinion delivered to the Board, a copy of which shall also be delivered to
Indemnitee. The person, persons or entity chosen to make a determination under this Agreement of
the Indemnitee’s entitlement to indemnification shall act reasonably and in good faith in making
such determination.

          5.4 Selection of Independent Counsel. If the determination of entitlement to indemnification
is to be made by Independent Counsel pursuant to Section 5.3 hereof, the Independent
Counsel shall be selected as provided in this Section 5.4. The Independent Counsel shall
be selected by the Board, and the Company shall promptly give written notice to Indemnitee advising
him or her of the identity of the Independent Counsel so selected. Indemnitee may, within ten days
after such written notice of selection shall have been given, deliver to the Company a written
objection to such selection; provided, however, that such objection may be asserted
only on the ground that the Independent Counsel so selected does not meet the requirements of
“Independent Counsel” as defined in this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and timely objection, the
person so selected shall act as Independent Counsel. If a written objection is made and
substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and
until such objection is withdrawn or the Court has ruled against such objection. If, within 30
days after submission by Indemnitee of a written request for indemnification pursuant to
Section 5.2 hereof, no Independent Counsel shall have been selected or an Independent
Counsel shall have been selected but an objection thereto shall have been properly made and

 

 

remained unresolved, either the Company or Indemnitee may petition the Court for resolution of
any objection that shall have been made by the Indemnitee to the selection of Independent Counsel
and/or for the appointment as Independent Counsel of a person selected by the Court or by such
other person as the Court shall designate, and the person with respect to whom all objections are
so resolved or the person so appointed shall act as Independent Counsel under Section 5.3
hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel
incurred by such Independent Counsel in connection with acting pursuant to Section 5.3
hereof.

          5.5 Burden of Proof. In making a determination with respect to entitlement to indemnification
hereunder, the Reviewing Party shall presume that Indemnitee is entitled to indemnification under
this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the
burden of persuasion, by clear and convincing evidence. In making a determination with respect to
entitlement to indemnification hereunder which under this Agreement or applicable law requires a
determination of Indemnitee’s good faith, and/or whether Indemnitee acted in a manner which he or
she reasonably believed to be in or not opposed to the best interests of the Company, and, with
respect to any criminal Proceeding, if Indemnitee had no reasonable cause to believe that
Indemnitee’s conduct was unlawful, the Reviewing Party shall presume that Indemnitee has at all
times acted in good faith and in a manner he or she reasonably believed to be in or not opposed to
the best interests of the Company and, with respect to any criminal Proceeding, that Indemnitee had
no reasonable cause to believe that Indemnitee’s conduct was unlawful. Anyone seeking to overcome
this presumption shall have the burden of proof and the burden of persuasion, by clear and
convincing evidence. Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action
or inaction is based solely on Indemnitee’s reliance upon the records of the Company and upon such
information, opinions, reports or statements, including financial statements and other financial
data, that were prepared or presented by one or more officers or employees of the Company or
committees of the Board or by any other person as to matters that Indemnitee reasonably believed
were within such person’s professional or expert competence and who was selected by or on behalf of
the Company; provided, however, this sentence shall not be deemed to limit in any way the other
circumstances in which Indemnitee may be deemed to have met such standard of conduct. In addition,
the knowledge and/or actions, or failure to act, of any other director, officer, agent or employee
of the Company shall not be imputed to Indemnitee for purposes of determining the right to
indemnification under this Agreement.

          5.6 No Presumption in Absence of Determination or as Result of Adverse Determination. Neither
the failure of any Reviewing Party to have made a determination as to whether Indemnitee has met
any particular standard of conduct or had any particular belief, nor an actual determination by any
Reviewing Party that Indemnitee has not met such standard of conduct or did not have such belief,
prior to the commencement of legal proceedings by Indemnitee to secure a judicial determination
under this Agreement or applicable law that Indemnitee should be indemnified under this Agreement,
shall be a defense to Indemnitee’s claim or create a presumption that Indemnitee has not met any
particular standard of conduct or did not have any particular belief.

          5.7 Timing of Determination. If the Reviewing Party shall not have made a determination
within 30 days after receipt by the Company of the request therefor, the requisite

 

 

determination of entitlement to indemnification shall be deemed to have been made and
Indemnitee shall be entitled to such indemnification, absent (a) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee’s statement not
materially misleading, in connection with the request for indemnification, or (b) a prohibition of
such indemnification under applicable law; provided, however, that such 30-day
period may be extended for a reasonable time, not to exceed an additional 45 days, if the Reviewing
Party in good faith requires such additional time for obtaining or evaluating documentation and/or
information relating thereto.

          5.8 Cooperation. Indemnitee shall cooperate with the Reviewing Party with respect to
Indemnitee’s entitlement to indemnification, including providing to such Reviewing Party upon
reasonable advance request any documentation or information that is not privileged or otherwise
protected from disclosure and that is reasonably available to Indemnitee and reasonably necessary
to such determination. The Reviewing Party shall act reasonably and in good faith in making a
determination under this Agreement of Indemnitee’s entitlement to indemnification.

     6. Liability Insurance. If Indemnitee is an officer of the Company, the Company shall, from
time to time, make the good faith determination whether or not it is practicable for the Company to
obtain and maintain a policy or policies of directors’ and officers’ liability insurance with one
or more reputable insurance companies. Among other considerations, the Company will weigh the
costs of obtaining such insurance coverage against the protection afforded by such coverage. In
all policies of directors’ and officers’ liability insurance obtained by the Company, if Indemnitee
is an officer, Indemnitee shall be named as an insured party in such manner as to provide
Indemnitee with the same rights and benefits as are afforded to similarly situated officers of the
Company. Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain
such insurance if the Company determines in good faith that such insurance is not reasonably
available, if the premium costs for such insurance are disproportionately high compared to the
amount of coverage provided, or if the coverage provided by such insurance is limited by exclusions
so as to provide an insufficient benefit. If applicable, the Company shall promptly notify
Indemnitee of any such determination not to provide insurance coverage. In the event that the
Company does maintain such insurance for the benefit of Indemnitee, the right to indemnification
and advancement of Expenses as provided herein shall apply only to the extent that Indemnitee has
not been indemnified and actually reimbursed pursuant to such insurance.

     7. Remedies of Indemnitee Relating to Indemnification and Advancement of Expenses.

          7.1 Enforcement of Rights. In the event that (a) a determination is made pursuant to
Section 5 of this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (b) advancement of Expenses is not timely made pursuant to Section 3.2 of this
Agreement, (c) no determination of entitlement to indemnification shall have been made within the
time period specified in Section 5.7 of this Agreement, or (d) payment of indemnified
amounts is not made within the applicable time periods specified in Section 5.1 of this
Agreement, Indemnitee shall thereafter be entitled under this Agreement to commence a proceeding in
the Court, seeking an adjudication of Indemnitee’s entitlement to such indemnification, payment of
indemnified amounts, or advancement of Expenses. Indemnitee

 

 

shall commence such proceeding seeking an adjudication within 180 days following the date on
which Indemnitee first has the right to commence such proceeding pursuant to this Section
7.1. The Company shall not oppose Indemnitee’s right to seek any such adjudication.

          7.2 Standard of Review. In the event that a determination shall have been made pursuant to
Section 5 of this Agreement that Indemnitee is not entitled to indemnification, any
judicial proceeding commenced pursuant to this Section 7 shall be conducted in all respects
as a de novo review on the merits and Indemnitee shall not be prejudiced by reason of that
adverse determination under Section 5.

          7.3 Effect on Company. If a determination shall have been made pursuant to Section 5
of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by
such determination in any judicial proceeding commenced pursuant to this Section 7, absent
(a) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to
make Indemnitee’s statement not misleading, in connection with the request for indemnification or
(b) a prohibition of such indemnification under applicable law.

          7.4 Binding Agreement. Both the Company and the Indemnitee shall be precluded from asserting
in any judicial proceeding commenced pursuant to this Section 7 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in the
Court that the Company and the Indemnitee are bound by all the provisions of this Agreement.

          7.5 Indemnitee’s Success on Merits or Otherwise. In the event that Indemnitee commences a
proceeding pursuant to this Section 7 to enforce a right of Indemnitee under this
Agreement, then, to the extent that Indemnitee is successful on the merits or otherwise in such
proceeding, or in connection with any claim, issue or matter therein, Indemnitee shall be
indemnified by the Company against Expenses actually and reasonably incurred by the Indemnitee in
connection with such proceeding.

     8 Exceptions to Right of Indemnification. Notwithstanding any other provision of this
Agreement, Indemnitee shall not be entitled to indemnification under this Agreement:

          8.1 Claims by Indemnitee. With respect to any claim (whether an original claim, counterclaim,
cross-claim or third-party claim) brought or made by Indemnitee in a Proceeding, unless the
bringing or making of such claim shall have been approved or ratified by the Board;
provided, however, that the foregoing shall not apply to any claims brought or made
by Indemnitee to enforce Indemnitee’s rights hereunder.

          8.2 Bad Faith or Frivolous Defenses. For Expenses incurred by Indemnitee with respect to any
action instituted by or in the name of the Company against the Indemnitee to enforce or interpret
this Agreement, if and to the extent that the Court declares or otherwise determines in a final,
unappealable judgment that each of the material defenses asserted by Indemnitee was made in bad
faith or was frivolous.

          8.3 Purchase and Sale of Securities. For Expenses and other liabilities arising from the
purchase and sale by Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, or any similar state or successor statute.

 

 

          8.4 Unlawful Payments. For Expenses and other liabilities if and to the extent that the Court
declares or otherwise determines in a final, unappealable judgment that the Company is prohibited
by applicable law from making such indemnification payment or that such indemnification payment is
otherwise unlawful.

     9 Notification and Defense of Claim.

          9.1 Notification. Indemnitee agrees promptly to notify the Company in writing upon being
served with any summons, citation, subpoena, complaint, indictment, information or other document
relating to any Proceeding or matter that may be subject to indemnification covered hereunder. The
failure to so notify the Company shall not relieve the Company of any obligation that it may have
to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or
delay materially prejudices the Company.

          9.2 Defense of Claim. With respect to any Proceeding (other than a Proceeding brought by or
in the right of the Company) as to which Indemnitee notifies the Company of the commencement
thereof:

               (a) The Company may participate therein at its own expense;

               (b) The Company, jointly with any other indemnifying party similarly notified, may assume the
defense thereof, with counsel reasonably satisfactory to Indemnitee. After notice from the Company
to Indemnitee of its election to assume the defense thereof, the Company shall not be liable to
Indemnitee under this Agreement for any Expenses subsequently incurred by Indemnitee in connection
with the defense thereof unless (i) the employment of counsel by Indemnitee or the incurrence of
any other Expense has been authorized by the Company, (ii) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company (or any other person or
persons included in the joint defense) and Indemnitee in the conduct of the defense of such
Proceeding, or (iii) the Company shall not, in fact, have employed counsel to assume the defense of
such Proceeding;

               (c) The Company shall not be liable to Indemnitee under this Agreement for any amounts paid in
settlement in any Proceeding effected without the Company’s written consent;

               (d) The Company shall not settle any Proceeding in any manner that would impose any penalty or
limitation on Indemnitee without Indemnitee’s written consent; and

               (e) Neither the Company nor Indemnitee shall unreasonably withhold its consent to any proposed
settlement; provided, however, that Indemnitee may withhold consent to any
settlement that does not provide a complete release of Indemnitee.

     10 Duration of Agreement. All agreements, rights and obligations of the Company and
Indemnitee contained herein shall continue during the period Indemnitee is an officer or other
employee of the Company and shall continue thereafter so long as Indemnitee shall be subject under
applicable law to the assertion of any Proceeding (or any proceeding commenced under Section
7 hereof) by reason of Indemnitee’s Corporate Status, whether or not Indemnitee

 

 

is acting or serving in any such capacity at the time any liability or expense is incurred for
which indemnification can be provided under this Agreement.

     11 Miscellaneous.

          11.1 No Employment Agreement. Nothing contained in this Agreement shall be construed as
giving Indemnitee any right to be retained in the employment of the Company or any of its
subsidiaries or affiliated entities.

          11.2 Entire Agreement. This Agreement constitutes the entire agreement and understanding of
the Company and Indemnitee in respect of its subject matter and supersedes all prior
understandings, agreements and representations by or among the Company and Indemnitee, written or
oral, to the extent they relate in any way to the subject matter hereof.

          11.3 Successors. All of the terms, agreements, covenants, representations, warranties and
conditions of this Agreement are binding upon, and inure to the benefit of and are enforceable by,
the Company and Indemnitee and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.

          11.4 Assignment. Neither the Company nor Indemnitee may assign either this Agreement or any
of its rights, interests or obligations hereunder without the prior written approval of the other;
provided, however, that the Company may assign all (but not less than all) of its
rights and interests hereunder to any direct or indirect successor to all or substantially all of
the business or assets of the Company by purchase, merger, consolidation or otherwise.

          11.5 Merger or Consolidation. In the event that the Company shall be a constituent
corporation in a consolidation, merger or other reorganization, the Company, if it shall not be the
surviving, resulting or acquiring entity therein, shall require as a condition thereto that the
surviving, resulting or acquiring entity agree to assume all of the obligations of the Company
hereunder and to indemnify Indemnitee to the full extent provided herein. Whether or not the
Company is the resulting, surviving or acquiring entity in any such transaction, Indemnitee shall
also stand in the same position under this Agreement with respect to the resulting, surviving or
acquiring entity as the Indemnitee would have with respect to the Company if its separate existence
had continued.

          11.6 Notices. All notices, requests, demands, claims and other communications hereunder shall
be in writing. Any notice, request, demand, claim or other communication hereunder shall be deemed
duly given if (and then three business days after) it is sent by registered or certified mail,
return receipt requested, postage prepaid, and addressed to the intended recipient as set forth
below:

 

 

If to the Company:

Tim Hortons Inc.

874 Sinclair Road

Oakville, Ontario L6K 2Y1

ATTN:                                         

Facsimile No.                              

If to Indemnitee:

                                                            

                                                            

                                                            

          Either party may send any notice, request, demand, claim or other communication hereunder to
the intended recipient at the address, facsimile number or electronic mail address set forth above
using any other means (including personal delivery, expedited courier, messenger service, telecopy,
telex, ordinary mail or electronic mail), but no such notice, request, demand, claim or other
communication will be deemed to have been duly given unless and until it actually is received by
the intended recipient. Either party may change the address, facsimile number or electronic mail
address to which notices, requests, demands, claims and other communications hereunder are to be
delivered by giving the other parties notice in the manner herein set forth.

          11.7 Specific Performance. Each of the Company and Indemnitee acknowledges and agrees that
the other would be damaged irreparably if any provision of this Agreement is not performed in
accordance with its specific terms or is otherwise breached. Accordingly, each party agrees that
the other party shall be entitled to an injunction or injunctions to prevent beaches of the
provisions of this Agreement and to enforce specifically this Agreement and its terms and
provisions in any action instituted in the Court, in addition to any other remedy to which such
party may be entitled at law or in equity.

          11.8 Counterparts. This Agreement may be executed in two counterparts, each of which shall be
deemed an original but both of which together shall constitute one and the same instrument.

          11.9 Governing Law; Jurisdiction. This Agreement and the performance of the parties’
obligations hereunder shall be governed by and construed in accordance with the laws of the State
of Delaware, without giving effect to any choice of law principles.

          In the event of any dispute, claim, action, or controversy arising out of the terms or
conditions of this Agreement, including but not limited to a determination regarding advances or
the payment of amounts in indemnification in accordance with the terms hereof, each party hereto
agrees that such dispute, claim, action or controversy shall be brought and heard exclusively in
the Court, and all applicable appellate courts thereof, and each party hereby waives any objection
to jurisdiction, venue, or forum non conveniens that such party may have otherwise had if
this provision were not included herein.

 

 

          11.10 Amendments and Waivers. No amendment, modification, replacement, termination or
cancellation of any provision of this Agreement will be valid, unless the same is in writing and
signed by the parties. No waiver by either party of any default, misrepresentation or breach of
warranty or covenant hereunder, whether intentional or not, may be deemed to extend to any prior or
subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any
way any rights arising because of any prior or subsequent such occurrence.

          11.11 Nonexclusivity of Rights; Survival of Rights; Severability.

               (a) The rights provided by this Agreement (including rights to indemnification, advancement of
expenses and contribution) (i) shall not be exclusive of, and shall be in addition to, any other
rights to indemnification, advancement of expenses or contribution to which Indemnitee may at any
time be entitled under the Certificate, the Bylaws, applicable law (including the DGCL), any
insurance policy, agreement, vote of shareholders or Disinterested Directors or otherwise, as to
any actions or failures to act by Indemnitee, (ii) shall continue pursuant to Section 10
after the Indemnitee has ceased to be an officer or other employee, as applicable, of the
Company and (iii) shall inure to the benefit of the Indemnitee’s heirs, executors, administrators
and personal representatives. In the event of any changes, after the date of this Agreement, in
any applicable law which expands the right of the Company to indemnify an officer or other
employee, as applicable, such changes shall be deemed to be within the purview of Indemnitee’s
rights and the Company’s obligations under this Agreement. In the event of any change in any
applicable law which narrows the right of the Company to indemnify an officer or other employee, as
applicable, such changes, to the extent not otherwise required by applicable law to be applied to
this Agreement, shall have no effect on this Agreement or the parties’ rights and obligations
hereunder.

               (b) The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or enforceability of the other
provisions hereof; provided, however, that if any provision of this Agreement, as
applied to any party or to any circumstance, is adjudged by the Court not to be enforceable in
accordance with its terms, the parties agree that the Court shall have the power to modify the
provision in a manner consistent with its objectives (and only to the extent necessary) such that
it is enforceable, and/or to delete specific words or phrases, and in its reduced form, such
provision shall then be enforceable and shall be enforced.

          11.12 Subrogation; No Duplicative Payments.

               (a) In the event of payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers
required and shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to bring suit to enforce
such rights.

               (b) The Company shall not be liable to make any payment under this Agreement to Indemnitee if
and to the extent that Indemnitee has actually received payment

 

 

under any insurance policy, contract, the Bylaws or otherwise of the amounts otherwise payable
hereunder.

          11.13 Expenses. Except as otherwise expressly provided in this Agreement, each party shall
bear its own costs and expenses incurred in connection with the preparation, execution and
performance of this Agreement, including all fees and expenses of agents, representatives,
financial advisors, legal counsel and accountants.

          11.14 Construction. If any provision of this Agreement should be deemed to exceed the
authority granted to the Company by Delaware law in effect as of February 1, 2006, 2006, then such
provision shall be deemed to be amended to the extent (and only to the extent) necessary to comply
with Delaware law. The parties have participated jointly in the negotiation and drafting of this
Agreement. If an ambiguity or question of intent or interpretation arises, no presumption or
burden of proof shall arise favoring or disfavoring any Party because of the authorship of any
provision of this Agreement. Any reference to any federal, state, local or foreign law shall be
deemed also to refer to such law as amended and all rules and regulations promulgated thereunder,
unless the context requires otherwise. The words “include,” “includes,” and “including” shall be
deemed to be followed by “without limitation.” Pronouns in masculine, feminine and neuter genders
shall be construed to include any other gender, and words in the singular form shall be construed
to include the plural and vice versa, unless the context otherwise requires. The words “this
Agreement,” “herein,” “hereof,” “hereby,” “hereunder” and words of similar import refer to this
Agreement as a whole and not to any particular subdivision unless expressly so limited. The
parties intend that each representation, warranty and covenant contained herein will have
independent significance. If either party has breached any representation, warranty or covenant
contained herein in any respect, the fact that there exists another representation, warranty or
covenant relating to the same subject matter (regardless of the relative levels of specificity)
that the party has not breached shall not detract from or mitigate the fact that the party is in
breach of the first representation, warranty or covenant. The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

          11.15 Remedies. Except as expressly provided herein, the rights and remedies created by this
Agreement are cumulative and in addition to any other rights or remedies now or hereafter available
at law or in equity or otherwise. Except as expressly provided herein, nothing herein shall be
considered an election of remedies. The assertion or employment of any right or remedy shall not
prevent the concurrent assertion or employment of any other remedy.

          11.16 Mutual Acknowledgement. Nothing in this Agreement is intended to require or shall be
construed as requiring the Company to do or fail to do any act in violation of applicable law.
Both the Company and Indemnitee acknowledge that in certain instances, Federal or state law or
applicable public policy may prohibit the Company from indemnifying the Indemnitee under this
Agreement or otherwise. Indemnitee understands and acknowledges that the Company has undertaken
and may be required in the future to undertake with the Securities and Exchange Commission to
submit the question of indemnification to the Court in certain circumstances for a determination of
the Company’s right under public policy to indemnify Indemnitee. The Company’s inability, pursuant
to court order, to perform its obligations under this Agreement shall not constitute a breach of
this Agreement.

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement as of the
date first hereinabove written.

	 	 	 	 	 
	TIM HORTONS INC.
	 
	 	 	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 	 	 
	 	 	Paul D. House
	 	 	Chief Executive Officer & President
	 
	 	 	 	 
	 
	 	 	 	 
	INDEMNITEE
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 

	 	 	 	                , an individual

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