Document:

ex10_1.htm

     

    

    DIRECTOR
AND OFFICER INDEMNIFICATION AGREEMENT

     

    This
Director and Officer Indemnification Agreement, dated as of ______________, ____
(this “Agreement”),
is made by and between CTS Corporation, an Indiana corporation (the “Company”),
and _______________________ (“Indemnitee”).

     

    RECITALS:

     

    A.           Ind.
Code Section 23-1-33-1 of the Indiana Business Corporation Law provides
that the business and affairs of a corporation shall be managed by or under the
direction of its board of directors.

     

    B.           Pursuant
to Ind. Code Sections 23-1-36-1, et seq., of the Indiana Business
Corporation Law, significant authority with respect to the management of the
Company may be delegated to the officers of the Company.

     

    C.           By
virtue of the managerial prerogatives vested in the directors and officers of an
Indiana corporation, directors and officers act as fiduciaries of the
corporation, its shareholders and other constituents.

     

    D.           Thus,
it is critically important to the Company that the Company be able to attract
and retain the most capable persons reasonably available to serve as directors
and officers of the Company.

     

    E.           In
recognition of the need for corporations to be able to induce capable and
responsible persons to accept positions in corporate management, Ind. Code
Section 23-1-37-8 of the Indiana Business Corporation Law authorizes (and Ind.
Code Sections 23-1-37-9 and 13 of the Indiana Business Corporation Law in most
instances mandate) corporations to indemnify their directors and officers, and
Ind. Code Section 23-1-37-14 authorizes corporations to purchase and maintain
insurance for the benefit of their directors and officers.

     

    F.           The
courts have generally recognized that indemnification by a corporation serves
the dual policies of (1) allowing corporate officials to resist unjustified
lawsuits, secure in the knowledge that, if vindicated, the corporation will bear
the expense of litigation and (2) encouraging capable women and men to
serve as corporate directors and officers, secure in the knowledge that the
corporation will absorb the costs of defending their honesty and
integrity.

     

    G.           The
number of lawsuits challenging the judgment and actions of directors and
officers of corporations, the costs of defending those lawsuits, and the threat
to directors’ and officers’ personal assets have all materially increased over
the past several years, chilling the willingness of capable women and men to
undertake the responsibilities imposed on corporate directors and
officers.

     

    H.           Recent
federal legislation and rules adopted by the Securities and Exchange Commission
and the national securities exchanges have imposed additional disclosure and
corporate governance obligations on directors and officers of public companies
and have exposed such directors and officers to new and substantially broadened
civil liabilities.

     

    I.           These
legislative and regulatory initiatives have also exposed directors and officers
of public companies to a significantly greater risk of criminal proceedings,
with attendant defense costs and potential criminal fines and
penalties.

     

    J.           Under
Indiana law, a director’s or officer’s right to be reimbursed for the costs of
defense of criminal actions, whether such claims are asserted under state or
federal law, does not depend upon the merits of the claims asserted against the
director or officer and is separate and distinct from any right to
indemnification the director or officer may be able to establish, and
indemnification of the director or officer against criminal fines and penalties
is permitted if the director or officer satisfies the applicable standard of
conduct.

     

    K.           Indemnitee
is a director or officer of the Company and his/her willingness to serve in such
capacity is predicated, in substantial part, upon the Company’s willingness to
indemnify him/her in accordance with the principles reflected above, to the
fullest extent permitted by the laws of the state of Indiana, and upon the other
undertakings set forth in this Agreement.

     

    L.           Therefore,
in recognition of the need to provide Indemnitee with substantial protection
against personal liability, to procure Indemnitee’s continued service as a
director or officer of the Company and to enhance Indemnitee’s ability to serve
the Company in an effective manner, and to provide such protection pursuant to
express contract rights (intended to be enforceable irrespective of, among other
things, any amendment to the Company’s articles of incorporation or bylaws
(collectively, the “Constituent
Documents”), any change in the composition of the Company’s Board of
Directors (the “Board”) or
any change-in-control or business combination transaction relating to the
Company), the Company wishes to provide in this Agreement for the
indemnification of and the advancement of Expenses (as defined in Section 1(e))
to Indemnitee as set forth in this Agreement and for the continued coverage of
Indemnitee under the Company’s directors’ and officers’ liability insurance
policies.

     

    M.           In
light of the considerations referred to in the preceding recitals, it is the
Company’s intention and desire that the provisions of this Agreement be
construed liberally, subject to their express terms, to maximize the protections
to be provided to Indemnitee hereunder.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    AGREEMENT:

     

    NOW,
THEREFORE, the parties hereby agree as follows:

     

    1. Certain
Definitions.  In addition to terms defined elsewhere herein,
the following terms have the following meanings when used in this Agreement with
initial capital letters:

     

    (a) “Change in
Control” means the occurrence after the date of this Agreement of any of
the following events:

     

    (i) the
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of aggregate beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 25% or more of the combined voting power of the then outstanding Voting Stock
of the Company (including, for this purpose, any Voting Stock of the Company
acquired prior to the Term); provided, however, that for
purposes of this Section 1(a)(i), the following will not be deemed to result in
a Change in Control:  (A) any acquisition of Voting Stock of the
Company directly from the Company that is approved by the Incumbent Board (as
defined below), (B) any acquisition of Voting Stock of the Company by the
Company or any Subsidiary and any change in the percentage ownership of Voting
Stock of the Company that results from such acquisition, (C) any acquisition of
Voting Stock of the Company by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Subsidiary, or (D) any acquisition
of Voting Stock of the Company by any Person pursuant to a Business Combination
that complies with clauses (I), (II) and (III) of Section ­­1(a)(iii);
or

     

    (ii) individuals
who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided, however, that any
individual becoming a Director subsequent to the date hereof whose election, or
nomination for election by the Company’s shareholders, was approved by a vote of
at least a majority of the Directors then comprising the Incumbent Board (either
by a specific vote or by approval of the proxy statement of the Company in which
such person is named as a nominee for director, without objection to such
nomination) will be deemed to have been a member of the Incumbent Board, but
excluding, for this purpose, any such individual becoming a Director as a result
of an actual or threatened election contest (as described in Rule 14a-12(c) of
the Exchange Act) with respect to the election or removal of Directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board (collectively, an “Election Contest”);
or

     

    (iii) consummation
of (A) a reorganization, merger or consolidation of the Company, or
(B) a sale or other disposition of all or substantially all of the assets
of the Company, (such reorganization, merger, consolidation or sale each, a
“Business Combination”), unless, in each case, immediately following such
Business Combination, (I) all or substantially all of the individuals and
entities who were the beneficial owners of Voting Stock of the Company
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 75% of the then outstanding shares of common stock and the
combined voting power of the then outstanding Voting Stock of the Company
entitled to vote generally in the election of Directors of the entity resulting
from such Business Combination (including, without limitation, an entity which
as a result of such transaction owns the Company or all or substantially all of
the Company’s assets either directly or through one or more subsidiaries), (II)
no Person (other than the Company, such entity resulting from such Business
Combination, or any employee benefit plan (or related trust) sponsored or
maintained by the Company, any Subsidiary or such entity resulting from such
Business Combination) beneficially owns, directly or indirectly, 15% or more of
the then outstanding shares of Voting Stock of the entity resulting from such
Business Combination, and (III) at least a majority of the members of the Board
of the entity resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement or of the
action of the Board providing for such Business Combination; or

     

    (iv) approval
by the shareholders of the Company of a complete liquidation or dissolution of
the Company, except pursuant to a Business Combination that complies with
clauses (I), (II) and (III) of Section 1(a)(iii).

     

    (b) “Claim” means (i) any
threatened, asserted, pending or completed claim, demand, action, suit or
proceeding, whether civil, criminal, administrative, arbitrative, investigative
or other, and whether made pursuant to federal, state or other law; and
(ii) any threatened, pending or completed inquiry or investigation, whether
made, instituted or conducted by the Company or any other person, including
without limitation any federal, state or other governmental entity, that
Indemnitee determines might lead to the institution of any such claim, demand,
action, suit or proceeding.

     

    (c) “Controlled
Affiliate” means any corporation, limited liability company, partnership,
joint venture, trust or other entity or enterprise, whether or not for profit,
that is directly or indirectly controlled by the Company.  For
purposes of this definition, “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of an entity or enterprise, whether through the ownership of voting
securities, through other voting rights, by contract or otherwise; provided that direct or
indirect beneficial ownership of capital stock or other interests in an entity
or enterprise entitling the holder to cast 10% or more of the total number of
votes generally entitled to be cast in the election of directors (or persons
performing comparable functions) of such entity or enterprise shall be deemed to
constitute control for purposes of this definition.

     

    (d) “Disinterested
Director” means a director of the Company who is not and was not a party
to the Claim in respect of which indemnification is sought by
Indemnitee.

     

    (e) “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

     

    (f) “Expenses” means attorneys’ and
experts’ fees and expenses and all other costs and expenses paid or payable in
connection with investigating, defending, being a witness in or participating in
(including on appeal), or preparing to investigate, defend, be a witness in or
participate in (including on appeal), any Claim.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (g) “Indemnifiable
Claim” means any
Claim based upon, arising out of or resulting from (i) any actual, alleged
or suspected act or failure to act by Indemnitee in his or her capacity as a
director, officer, employee or agent of the Company or as a director, officer,
employee, member, manager, trustee or agent of any other corporation, limited
liability company, partnership, joint venture, trust or other entity or
enterprise, whether or not for profit, as to which Indemnitee is or was serving
at the request of the Company as a director, officer, employee, member, manager,
trustee or agent, (ii) any actual, alleged or suspected act or failure to
act by Indemnitee in respect of any business, transaction, communication,
filing, disclosure or other activity of the Company or any other entity or
enterprise referred to in clause (i) of this sentence, or
(iii) Indemnitee’s status as a current or former director, officer,
employee or agent of the Company or as a current or former director, officer,
employee, member, manager, trustee or agent of the Company or any other entity
or enterprise referred to in clause (i) of this sentence or any actual,
alleged or suspected act or failure to act by Indemnitee in connection with any
obligation or restriction imposed upon Indemnitee by reason of such
status.  In addition to any service at the actual request of the
Company, for purposes of this Agreement, Indemnitee shall be deemed to be
serving or to have served at the request of the Company as a director, officer,
employee, member, manager, trustee or agent of another entity or enterprise if
Indemnitee is or was serving as a director, officer, employee, member, manager,
trustee or agent of such entity or enterprise and (i) such entity or
enterprise is or at the time of such service was a Controlled Affiliate,
(ii) such entity or enterprise is or at the time of such service was an
employee benefit plan (or related trust) sponsored or maintained by the Company
or a Controlled Affiliate, or (iii) the Company or a Controlled Affiliate
directly or indirectly caused or authorized Indemnitee to be nominated, elected,
appointed, designated, employed, engaged or selected to serve in such
capacity.

     

    (h) “Indemnifiable
Losses” means any and all Losses relating to, arising out of or resulting
from any Indemnifiable Claim.

     

    (i) “Independent
Counsel” means a law firm, or a member of a law firm, that is experienced
in matters of corporation law and neither presently is, nor in the past five
years has been, retained to represent:  (i) the Company (or any
Subsidiary) or Indemnitee in any matter material to either such party (other
than with respect to matters concerning the Indemnitee under this Agreement, or
of other indemnitees under similar indemnification agreements), or (ii) any
other named (or, as to a threatened matter, reasonably likely to be named) party
to the Indemnifiable Claim giving rise to a claim for indemnification
hereunder.  Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.

     

    (j) “Losses” means any and all Expenses,
damages, losses, liabilities, judgments, fines, penalties (whether civil,
criminal or other) and amounts paid in settlement, including without limitation
all interest, assessments and other charges paid or payable in connection with
or in respect of any of the foregoing.

     

    (k) “Subsidiary”
means an entity in which the Company directly or indirectly beneficially owns
50% or more of the outstanding Voting Stock.

     

    2. Indemnification
Obligation.  Subject to Section 7, the Company shall
indemnify, defend and hold harmless Indemnitee, to the fullest extent permitted
or required by the laws of the State of Indiana in effect on the date hereof or
as such laws may from time to time hereafter be amended to increase the scope of
such permitted indemnification, against any and all Indemnifiable Claims and
Indemnifiable Losses; provided, however, that, except as
provided in Sections 4 and 20, Indemnitee shall not be entitled to
indemnification pursuant to this Agreement in connection with any Claim
initiated by Indemnitee against the Company or any director or officer of the
Company unless the Company has joined in or consented to the initiation of such
Claim.

     

    3. Advancement of
Expenses.  Indemnitee shall have the right to advancement by
the Company prior to the final disposition of any Indemnifiable Claim of any and
all Expenses relating to, arising out of or resulting from any Indemnifiable
Claim paid or incurred by Indemnitee or which Indemnitee determines are
reasonably likely to be paid or incurred by Indemnitee.  Indemnitee’s
right to such advancement is not subject to the satisfaction of any standard of
conduct.  Without limiting the generality or effect of the foregoing,
within five business days after any request by Indemnitee, the Company shall, in
accordance with such request (but without duplication), (a) pay such
Expenses on behalf of Indemnitee, (b) advance to Indemnitee funds in an
amount sufficient to pay such Expenses, or (c) reimburse Indemnitee for such
Expenses; provided that
Indemnitee shall repay, without interest any amounts actually advanced to
Indemnitee that, at the final disposition of the Indemnifiable Claim to which
the advance related, were in excess of amounts paid or payable by Indemnitee in
respect of Expenses relating to, arising out of or resulting from such
Indemnifiable Claim.  In connection with any such payment, advancement
or reimbursement, Indemnitee shall execute and deliver to the Company (i) a
written affirmation of his/her good faith belief that he/she meets the standard
of conduct described in Ind. Code Section 23-1-37-8, and (ii) an undertaking,
which need not be secured and shall be accepted without reference to
Indemnitee’s ability to repay the Expenses, by or on behalf of the Indemnitee,
to repay any amounts paid, advanced or reimbursed by the Company in respect of
Expenses relating to, arising out of or resulting from any Indemnifiable Claim
in respect of which it shall have been determined, following the final
disposition of such Indemnifiable Claim and in accordance with Section 7,
that Indemnitee is not entitled to indemnification hereunder.

     

    4. Indemnification for Additional
Expenses.  Without limiting the generality or effect of the
foregoing, the Company shall indemnify and hold harmless Indemnitee against and,
if requested by Indemnitee, shall reimburse Indemnitee for, or advance to
Indemnitee, within five business days of such request, any and all Expenses paid
or incurred by Indemnitee or which Indemnitee determines are reasonably likely
to be paid or incurred by Indemnitee in connection with any Claim made,
instituted or conducted by Indemnitee for (a) indemnification or
reimbursement or advance payment of Expenses by the Company under any provision
of this Agreement, or under any other agreement or provision of the Constituent
Documents now or hereafter in effect relating to Indemnifiable Claims, and/or
(b) recovery under any directors’ and officers’ liability insurance
policies maintained by the Company, regardless in each case of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
reimbursement, advance or insurance recovery, as the case may be; provided, however, that Indemnitee
shall return, without interest, any such advance of Expenses (or portion
thereof) which remains unspent at the final disposition of the Claim to which
the advance related.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5. Partial
Indemnity.  If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of any
Indemnifiable Loss, but not for all of the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled.

     

    6. Procedure for
Notification.  To obtain indemnification under this Agreement
in respect of an Indemnifiable Claim or Indemnifiable Loss, Indemnitee shall
submit to the Company a written request therefor, including a brief description
(based upon information then available to Indemnitee) of such Indemnifiable
Claim or Indemnifiable Loss.  If, at the time of the receipt of such
request, the Company has directors’ and officers’ liability insurance in effect
under which coverage for such Indemnifiable Claim or Indemnifiable Loss is
potentially available, the Company shall give prompt written notice of such
Indemnifiable Claim or Indemnifiable Loss to the applicable insurers in
accordance with the procedures set forth in the applicable
policies.  The Company shall provide to Indemnitee a copy of such
notice delivered to the applicable insurers, and copies of all subsequent
correspondence between the Company and such insurers regarding the Indemnifiable
Claim or Indemnifiable Loss, in each case substantially concurrently with the
delivery or receipt thereof by the Company.  The failure by Indemnitee
to timely notify the Company of any Indemnifiable Claim or Indemnifiable Loss
shall not relieve the Company from any liability hereunder unless, and only to
the extent that, the Company did not otherwise learn of such Indemnifiable Claim
or Indemnifiable Loss and such failure results in forfeiture by the Company of
substantial defenses, rights or insurance coverage.

     

    7. Determination of Right to
Indemnification.

     

    (a) To the
extent that Indemnitee shall have been successful on the merits or otherwise in
defense of any Indemnifiable Claim or any portion thereof or in defense of any
issue or matter therein, including without limitation dismissal without
prejudice, Indemnitee shall be indemnified against all Indemnifiable Losses
relating to, arising out of or resulting from such Indemnifiable Claim in
accordance with Section 2 and no Standard of Conduct Determination (as
defined in Section 7(b)) shall be required.

     

    (b) To the
extent that the provisions of Section 7(a) are inapplicable to an
Indemnifiable Claim that shall have been finally disposed of, any determination
of whether Indemnitee has satisfied any applicable standard of conduct under
Indiana law that is a legally required condition precedent to indemnification of
Indemnitee hereunder against Indemnifiable Losses relating to, arising out of or
resulting from such Indemnifiable Claim (a “Standard of
Conduct Determination”) shall be made as follows:  (i) if
a Change in Control shall not have occurred, or if a Change in Control shall
have occurred but Indemnitee shall have requested that the Standard of Conduct
Determination be made pursuant to this clause (i), (A) by a majority vote
of the Disinterested Directors, even if less than a quorum of the Board,
(B) if such Disinterested Directors so direct, by a majority vote of a
committee of Disinterested Directors designated by a majority vote of all
Disinterested Directors, or (C) if there are no such Disinterested
Directors, by Independent Counsel in a written opinion addressed to the Board, a
copy of which shall be delivered to Indemnitee; and (ii) if a Change in
Control shall have occurred and Indemnitee shall not have requested that the
Standard of Conduct Determination be made pursuant to clause (i), by
Independent Counsel in a written opinion addressed to the Board, a copy of which
shall be delivered to Indemnitee.  Indemnitee will cooperate with the
person or persons making such Standard of Conduct Determination, including
providing to such person or persons, upon reasonable advance request, any
documentation or information which is not privileged or otherwise protected from
disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination.  The Company shall indemnify and hold
harmless Indemnitee against and, if requested by Indemnitee, shall reimburse
Indemnitee for, or advance to Indemnitee, within five business days of such
request, any and all costs and expenses (including attorneys’ and experts’ fees
and expenses) incurred by Indemnitee in so cooperating with the person or
persons making such Standard of Conduct Determination.

     

    (c) The
Company shall use its reasonable best efforts to cause any Standard of Conduct
Determination required under Section 7(b) to be made as promptly as
practicable.  If (i) the person or persons empowered or selected
under Section 7 to make the Standard of Conduct Determination shall not
have made a determination within 30 days after the later of
(A) receipt by the Company of written notice from Indemnitee advising the
Company of the final disposition of the applicable Indemnifiable Claim (the date
of such receipt being the “Notification
Date”) and (B) the selection of an Independent Counsel, if such
determination is to be made by Independent Counsel, that is permitted under the
provisions of Section 7(e) to make such determination and
(ii) Indemnitee shall have fulfilled his/her obligations set forth in the
second sentence of Section 7(b), then Indemnitee shall be deemed to have
satisfied the applicable standard of conduct; provided that such 30-day
period may be extended for a reasonable time, not to exceed an additional
30 days, if the person or persons making such determination in good faith
requires such additional time for the obtaining or evaluation or documentation
and/or information relating thereto.

     

    (d) If
(i) Indemnitee shall be entitled to indemnification hereunder against any
Indemnifiable Losses pursuant to Section 7(a), (ii) no determination
of whether Indemnitee has satisfied any applicable standard of conduct under
Indiana law is a legally required condition precedent to indemnification of
Indemnitee hereunder against any Indemnifiable Losses, or (iii) Indemnitee
has been determined or deemed pursuant to Section 7(b) or (c) to have
satisfied any applicable standard of conduct under Indiana law which is a
legally required condition precedent to indemnification of Indemnitee hereunder
against any Indemnifiable Losses, then the Company shall pay to Indemnitee,
within five business days after the later of (x) the Notification Date in
respect of the Indemnifiable Claim or portion thereof to which such
Indemnifiable Losses are related, out of which such Indemnifiable Losses arose
or from which such Indemnifiable Losses resulted and (y) the earliest date
on which the applicable criterion specified in clause (i), (ii) or (iii) above
shall have been satisfied, an amount equal to the amount of such Indemnifiable
Losses.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (e) If a
Standard of Conduct Determination is to be made by Independent Counsel pursuant
to Section 7(b)(i), the Independent Counsel shall be selected by the Board
of Directors, and the Company shall give written notice to Indemnitee advising
him or her of the identity of the Independent Counsel so selected.  If
a Standard of Conduct Determination is to be made by Independent Counsel
pursuant to Section 7(b)(ii), the Independent Counsel shall be selected by
Indemnitee, and Indemnitee shall give written notice to the Company advising it
of the identity of the Independent Counsel so selected.  In either
case, Indemnitee or the Company, as applicable, may, within five business days
after receiving written notice of selection from the other, deliver to the other
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 satisfy the criteria set forth in the definition of “Independent Counsel” in
Section 1(h), and the objection shall set forth with particularity the
factual basis of such assertion.  Absent a proper and timely
objection, the person or firm so selected shall act as Independent
Counsel.  If such written objection is properly and timely made and
substantiated, (i) the Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court has
determined that such objection is without merit and (ii) the non-objecting
party may, at its option, select an alternative Independent Counsel and give
written notice to the other party advising such other party of the identity of
the alternative Independent Counsel so selected, in which case the provisions of
the two immediately preceding sentences and clause (i) of this sentence
shall apply to such subsequent selection and notice.  If applicable,
the provisions of clause (ii) of the immediately preceding sentence shall
apply to successive alternative selections.  If no Independent Counsel
that is permitted under the foregoing provisions of this Section 7(e) to
make the Standard of Conduct Determination shall have been selected within
30 days after the Company gives its initial notice pursuant to the first
sentence of this Section 7(e) or Indemnitee gives its initial notice
pursuant to the second sentence of this Section 7(e), as the case may be,
either the Company or Indemnitee may petition the Circuit or Superior Court of
Elkhart County in the State of Indiana for resolution of any objection which
shall have been made by the Company or Indemnitee to the other’s selection of
Independent Counsel and/or for the appointment as Independent Counsel of a
person or firm selected by the Court or by such other person as the Court shall
designate, and the person or firm with respect to whom all objections are so
resolved or the person or firm so appointed will act as Independent
Counsel.  In all events, the Company shall pay all of the reasonable
fees and expenses of the Independent Counsel incurred in connection with the
Independent Counsel’s determination pursuant to Section 7(b).

     

    8. Presumption of
Entitlement.  In making any Standard of Conduct Determination,
the person or persons making such determination shall presume that Indemnitee
has satisfied the applicable standard of conduct, and the Company may overcome
such presumption only by its adducing clear and convincing evidence to the
contrary.  Any Standard of Conduct Determination that is adverse to
Indemnitee may be challenged by the Indemnitee in the Circuit or Superior Court
of Elkhart County in the State of Indiana.  No determination by the
Company (including by its directors or any Independent Counsel) that Indemnitee
has not satisfied any applicable standard of conduct shall be a defense to any
Claim by Indemnitee for indemnification or reimbursement or advance payment of
Expenses by the Company hereunder or create a presumption that Indemnitee has
not met any applicable standard of conduct.

     

    9. No Other
Presumption.  For purposes of this Agreement, the termination
of any Claim by judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere or its
equivalent, will not create a presumption that Indemnitee did not meet any
applicable standard of conduct or that indemnification hereunder is otherwise
not permitted.

     

    10. Non-Exclusivity.  The
rights of Indemnitee hereunder will be in addition to any other rights
Indemnitee may have under the Constituent Documents, or the substantive laws of
the Company’s jurisdiction of incorporation, any other contract or otherwise
(collectively, “Other Indemnity
Provisions”); provided, however, that (a) to the
extent that Indemnitee otherwise would have any greater right to indemnification
under any Other Indemnity Provision, Indemnitee will be deemed to have such
greater right hereunder and (b) to the extent that any change is made to
any Other Indemnity Provision which permits any greater right to indemnification
than that provided under this Agreement as of the date hereof, Indemnitee will
be deemed to have such greater right hereunder.  The Company will not
adopt any amendment to any of the Constituent Documents the effect of which
would be to deny, diminish or encumber Indemnitee’s right to indemnification
under this Agreement or any Other Indemnity Provision.

     

    11. Liability Insurance and
Funding.  For the duration of Indemnitee’s service as a
director and/or officer of the Company, and thereafter for so long as Indemnitee
shall be subject to any pending or possible Indemnifiable Claim, the Company
shall use commercially reasonable efforts (taking into account the scope and
amount of coverage available relative to the cost thereof) to cause to be
maintained in effect policies of directors’ and officers’ liability insurance
providing coverage for directors and/or officers of the Company that is at least
substantially comparable in scope and amount to that provided by the Company’s
current policies of directors’ and officers’ liability insurance.  The
Company shall provide Indemnitee with a copy of all directors’ and officers’
liability insurance applications, binders, policies, declarations, endorsements
and other related materials, and shall provide Indemnitee with a reasonable
opportunity to review and comment on the same.  Without limiting the
generality or effect of the two immediately preceding sentences, the Company
shall not discontinue or significantly reduce the scope or amount of coverage
from one policy period to the next (i)  without the prior approval thereof
by a majority vote of the Incumbent Directors, even if less than a quorum, or
(ii) if at the time that any such discontinuation or significant reduction
in the scope or amount of coverage is proposed there are no Incumbent Directors,
without the prior written consent of Indemnitee (which consent shall not be
unreasonably withheld or delayed).  In all policies of directors’ and
officers’ liability insurance obtained by the Company, Indemnitee shall be named
as an insured in such a manner as to provide Indemnitee the same rights and
benefits, subject to the same limitations, as are accorded to the Company’s
directors and officers most favorably insured by such policy.  The
Company may, but shall not be required to, create a trust fund, grant a security
interest or use other means, including without limitation a letter of credit, to
ensure the payment of such amounts as may be necessary to satisfy its
obligations to indemnify and advance expenses pursuant to this
Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    12. Subrogation.  In the
event of payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the related rights of recovery of Indemnitee
against other persons or entities (other than Indemnitee’s successors),
including any entity or enterprise referred to in clause (i) of the definition
of “Indemnifiable Claim” in Section 1(f).  Indemnitee shall
execute all papers reasonably required to evidence such rights (all of
Indemnitee’s reasonable Expenses, including attorneys’ fees and charges, related
thereto to be reimbursed by or, at the option of Indemnitee, advanced by the
Company).

     

    13. No Duplication of
Payments.  The Company shall not be liable under this Agreement
to make any payment to Indemnitee in respect of any Indemnifiable Losses to the
extent Indemnitee has otherwise actually received payment (net of Expenses
incurred in connection therewith) under any insurance policy, the Constituent
Documents and Other Indemnity Provisions or otherwise (including from any entity
or enterprise referred to in clause (i) of the definition of “Indemnifiable
Claim” in Section 1(f)) in respect of such Indemnifiable Losses otherwise
indemnifiable hereunder.

     

    14. Defense of
Claims.  The Company shall be entitled to participate in the
defense of any Indemnifiable Claim or to assume the defense thereof, with
counsel reasonably satisfactory to the Indemnitee; provided that if Indemnitee
believes, after consultation with counsel selected by Indemnitee, that
(a) the use of counsel chosen by the Company to represent Indemnitee would
present such counsel with an actual or potential conflict, (b) the named
parties in any such Indemnifiable Claim (including any impleaded parties)
include both the Company and Indemnitee and Indemnitee shall conclude that there
may be one or more legal defenses available to him or her that are different
from or in addition to those available to the Company, or (c) any such
representation by such counsel would be precluded under the applicable standards
of professional conduct then prevailing, then Indemnitee shall be entitled to
retain separate counsel (but not more than one law firm plus, if applicable,
local counsel in respect of any particular Indemnifiable Claim) at the Company’s
expense.  The Company shall not be liable to Indemnitee under this
Agreement for any amounts paid in settlement of any threatened or pending
Indemnifiable Claim effected without the Company’s prior written
consent.  The Company shall not, without the prior written consent of
the Indemnitee, effect any settlement of any threatened or
pending Indemnifiable Claim to which the Indemnitee is, or could have been,
a party unless such settlement solely involves the payment of money and includes
a complete and unconditional release of the Indemnitee from all liability on any
claims that are the subject matter of such Indemnifiable
Claim.  Neither the Company nor Indemnitee shall unreasonably withhold
its consent to any proposed settlement; provided that Indemnitee may
withhold consent to any settlement that does not provide a complete and
unconditional release of Indemnitee.

     

    15. Successors and Binding
Agreement.  

     

           (a)  The Company
shall require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the
business or assets of the Company, by agreement in form and substance
satisfactory to Indemnitee and his or her counsel, expressly to assume and agree
to perform this Agreement in the same manner and to the same extent the Company
would be required to perform if no such succession had taken
place.  This Agreement shall be binding upon and inure to the benefit
of the Company and any successor to the Company, including without limitation
any person acquiring directly or indirectly all or substantially all of the
business or assets of the Company whether by purchase, merger, consolidation,
reorganization or otherwise (and such successor will thereafter be deemed the
“Company”
for purposes of this Agreement), but shall not otherwise be assignable or
delegatable by the Company.

     

    (b) This
Agreement shall inure to the benefit of and be enforceable by the Indemnitee’s
personal or legal representatives, executors, administrators, heirs,
distributees, legatees and other successors.

     

    (c) This
Agreement is personal in nature and neither of the parties hereto shall, without
the consent of the other, assign or delegate this Agreement or any rights or
obligations hereunder except as expressly provided in Sections 15(a) and
15(b).  Without limiting the generality or effect of the foregoing,
Indemnitee’s right to receive payments hereunder shall not be assignable,
whether by pledge, creation of a security interest or otherwise, other than by a
transfer by the Indemnitee’s will or by the laws of descent and distribution,
and, in the event of any attempted assignment or transfer contrary to this
Section 15(c), the Company shall have no liability to pay any amount so
attempted to be assigned or transferred.

     

    16. Notices.  For all
purposes of this Agreement, all communications, including without limitation
notices, consents, requests or approvals, required or permitted to be given
hereunder shall be in writing and shall be deemed to have been duly given when
hand delivered or dispatched by electronic facsimile transmission (with receipt
thereof orally confirmed), or five business days after having been mailed by
United States registered or certified mail, return receipt requested, postage
prepaid or one business day after having been sent for next-day delivery by a
nationally recognized overnight courier service, addressed to the Company (to
the attention of the Secretary of the Company) and to Indemnitee at the
applicable address shown on the signature page hereto, or to such other address
as any party may have furnished to the other in writing and in accordance
herewith, except that notices of changes of address will be effective only upon
receipt.

     

    17. Governing Law.  The
validity, interpretation, construction and performance of this Agreement shall
be governed by and construed in accordance with the substantive laws of the
State of Indiana, without giving effect to the principles of conflict of laws of
such State.  The Company and Indemnitee each hereby irrevocably
consent to the jurisdiction of the Circuit or Superior Court of Elkhart County
in the State of Indiana for all purposes in connection with any action or
proceeding which arises out of or relates to this Agreement and agree that any
action instituted under this Agreement shall be brought only in the Circuit or
Superior Court of Elkhart County in the State of
Indiana.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    18. Validity.  If any
provision of this Agreement or the application of any provision hereof to any
person or circumstance is held invalid, unenforceable or otherwise illegal, the
remainder of this Agreement and the application of such provision to any other
person or circumstance shall not be affected, and the provision so held to be
invalid, unenforceable or otherwise illegal shall be reformed to the extent, and
only to the extent, necessary to make it enforceable, valid or
legal.  In the event that any court or other adjudicative body shall
decline to reform any provision of this Agreement held to be invalid,
unenforceable or otherwise illegal as contemplated by the immediately preceding
sentence, the parties thereto shall take all such action as may be necessary or
appropriate to replace the provision so held to be invalid, unenforceable or
otherwise illegal with one or more alternative provisions that effectuate the
purpose and intent of the original provisions of this Agreement as fully as
possible without being invalid, unenforceable or otherwise illegal.

     

    19. Miscellaneous.  No
provision of this Agreement may be waived, modified or discharged unless such
waiver, modification or discharge is agreed to in writing signed by Indemnitee
and the Company.  No waiver by either party hereto at any time of any
breach by the other party hereto or compliance with any condition or provision
of this Agreement to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.  No agreements or representations, oral or otherwise,
expressed or implied with respect to the subject matter hereof have been made by
either party that are not set forth expressly in this
Agreement.  References to Sections are to references to Sections of
this Agreement.

     

    20. Legal Fees and
Expenses.  It is the intent of the Company that Indemnitee not
be required to incur legal fees and or other Expenses associated with the
interpretation, enforcement or defense of Indemnitee’s rights under this
Agreement by litigation or otherwise because the cost and expense thereof would
substantially detract from the benefits intended to be extended to Indemnitee
hereunder.  Accordingly, without limiting the generality or effect of
any other provision hereof, if it should appear to Indemnitee that the Company
has failed to comply with any of its obligations under this Agreement or in the
event that the Company or any other person takes or threatens to take any action
to declare this Agreement void or unenforceable, or institutes any litigation or
other action or proceeding designed to deny, or to recover from, Indemnitee the
benefits provided or intended to be provided to Indemnitee hereunder, the
Company irrevocably authorizes the Indemnitee from time to time to retain
counsel of Indemnitee’s choice, at the expense of the Company as hereafter
provided, to advise and represent Indemnitee in connection with any such
interpretation, enforcement or defense, including without limitation the
initiation or defense of any litigation or other legal action, whether by or
against the Company or any director, officer, stockholder or other person
affiliated with the Company, in any jurisdiction.  Notwithstanding any
existing or prior attorney-client relationship between the Company and such
counsel, the Company irrevocably consents to Indemnitee’s entering into an
attorney-client relationship with such counsel, and in that connection the
Company and Indemnitee agree that a confidential relationship shall exist
between Indemnitee and such counsel.  Without respect to whether
Indemnitee prevails, in whole or in part, in connection with any of the
foregoing, the Company will pay and be solely financially responsible for any
and all attorneys’ and related fees and expenses incurred by Indemnitee in
connection with any of the foregoing.

     

    21. Certain Interpretive
Matters.  Unless the context of this Agreement otherwise
requires, (a) “it” or “its” or words of any gender include each other
gender, (b) words using the singular or plural number also include the
plural or singular number, respectively, (c) the terms “hereof,” “herein,”
“hereby” and derivative or similar words refer to this entire Agreement,
(d) the terms “Article,” “Section,” “Annex” or “Exhibit” refer to the
specified Article, Section, Annex or Exhibit of or to this Agreement,
(e) the terms “include,” “includes” and “including” will be deemed to be
followed by the words “without limitation” (whether or not so expressed), and
(f) the word “or” is disjunctive but not exclusive.  Whenever
this Agreement refers to a number of days, such number will refer to calendar
days unless business days are specified and whenever action must be taken
(including the giving of notice or the delivery of documents) under this
Agreement during a certain period of time or by a particular date that ends or
occurs on a non-business day, then such period or date will be extended until
the immediately following business day.  As used herein, “business
day” means any day other than Saturday, Sunday or a United States federal
holiday.

     

    22. Counterparts.  This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original but all of which together shall constitute one and the
same agreement.

     

    IN
WITNESS WHEREOF, Indemnitee has executed and the Company has caused its duly
authorized representative to execute this Agreement as of the date first above
written.

     

    

    CTS
CORPORATION

    

    

    By:                          

    [Company
Representative]

    [Title]

    

    

    [INDEMNITEE]

     

     

                    

    [Indemnitee
Name]

    [Title]exhibit10-1_111208.htm

    EXHIBIT
10.1

     

    EXECUTION
COPY

     

    

      AGREEMENT

       

       

      THIS
AGREEMENT, dated as of this 5th day of November, 2008 (the “Agreement”), is by
and among Wendy’s/Arby’s Group, Inc., a Delaware corporation (the “Company”), and Trian
Partners, L.P., a Delaware limited partnership, Trian Partners Master Fund,
L.P., a Cayman Islands limited partnership, Trian Partners Parallel Fund I,
L.P., a Delaware limited partnership, and Trian Partners Parallel Fund II, L.P.,
a Delaware limited partnership (collectively, the “Stockholders”), Trian
Fund Management, L.P., a Delaware limited partnership (the “Management Company”),
the general partner of which is Trian Fund Management GP, LLC, a Delaware
limited liability company (“Trian GP”), Nelson
Peltz, an individual and resident of the State of New York, Peter W. May, an
individual and resident of the State of New York, and Edward P. Garden, an
individual and resident of the State of Connecticut, who, together with Nelson
Peltz and Peter W. May, are the members of Trian GP (the “Members”) (the
Stockholders, the Management Company, Trian GP, the Members and their respective
controlled affiliates and associates are hereinafter referred to collectively as
the “Trian
Group”).

       

      WHEREAS,
the Stockholders have indicated their intention to commence a tender offer (the
“Tender Offer”)
to purchase up to 40,000,000 shares of the issued and outstanding shares of
common stock of the Company (the “Common Stock”) at a
price of $4.15 per share;

       

      WHEREAS,
assuming that the Stockholders purchase the maximum number of shares of Common
Stock in the Tender Offer, the Trian Group will, immediately upon consummation
of the Tender Offer, Beneficially Own (as hereinafter defined) 19.6% of the
Combined Voting Power (as hereinafter defined) of Company Voting Securities (as
hereinafter defined);

       

      WHEREAS,
the Independent Directors (as hereinafter defined) have agreed, at the
recommendation of the Audit Committee of the Board of Directors of the Company
(the “Audit
Committee”), to grant the prior approval of the Independent Directors
pursuant to Section 203(a)(1) of the General Corporation Law of the State of
Delaware, such that the consummation of the Tender Offer by the Stockholders and
the subsequent acquisition by the Trian Group or any Affiliate or Associate of
the Trian Group of Beneficial Ownership of up to, but not more than, the Maximum
Percentage (as hereinafter defined) of the Combined Voting Power of Company
Voting Securities, shall not be subject to the restrictions set forth in Section
203 of the Delaware General Corporation Law, subject to the terms and conditions
of this Agreement (the “203 Approval”);

       

      WHEREAS,
the Independent Directors have approved the transactions contemplated by this
Agreement upon the terms and conditions contained herein; and

       

      WHEREAS,
the parties hereto believe that it is desirable to establish certain provisions
with respect to the shares of Common Stock which may be acquired by, or which
are currently held by, the Trian Group.

       

      NOW,
THEREFORE, in consideration of the mutual covenants and premises contained
herein and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:

       

      
        	
                Section
      1.  

              	
                Definitions.

              

      

       

      Capitalized
terms used herein shall have the following meanings:

       

      “13D/G Group” shall
mean two or more persons acting together for the purpose of acquiring, holding,
voting or disposing of Company Voting Securities, which persons would be
required under the Exchange Act to file a statement on Schedule 13D or 13G with
the SEC as a “person” within the meaning of Section 13(d)(3) of the Exchange Act
if such person beneficially owned sufficient securities to require such a filing
under the Exchange Act.

       

      “Affiliate” of any
person shall mean any person directly or indirectly controlling, or controlled
by such person or under common control with such person.  For purposes
of this Agreement, members of the Trian Group, on the one hand, and the Company
(and its affiliates other than members of the Trian Group), on the other, shall
not be deemed to be affiliates of each other.

       

      “Associate” shall
mean, with respect to any Person, (i) any corporation, partnership,
unincorporated association or other entity of which such Person is a director,
officer or partner or is, directly or indirectly, the owner of 20% or more of
any class of voting stock; (ii) any trust or other estate in which such Person
has at least a 20% beneficial interest or as to which such Person serves as
trustee or in a similar fiduciary capacity; and (iii) any relative or spouse of
such Person, or any relative of such spouse, who has the same residence as such
Person.  Notwithstanding the foregoing, no corporation or other entity
in which a fund or account managed by the Management Company has an investment
shall be deemed an “Associate” of any member of the Trian Group unless the
aggregate investment by all such funds and accounts represents not less than 20%
of any class of voting stock of such corporation or other entity.

       

      
        
          
          

        

        
          - 1
-

          
            

          

        

        
          
          

        

      

      “Audit Committee”
shall have the meaning set forth in the Recitals.

       

      “Beneficial Ownership”
shall have the meaning ascribed to such term pursuant to Regulation 13D-G of the
Exchange Act.

       

      “Beneficially Own”
shall mean, with respect to any security, having direct or indirect (including
through any subsidiary or affiliate) “beneficial ownership” of such security, as
determined pursuant to Rule 13d-3 under the Exchange Act and “Beneficially Owned”
shall have a corresponding meaning.

       

      “Combined Voting
Power” shall mean, at any measurement date, the total number of votes of
Company Voting Securities that could have been cast in an election of directors
of the Company had a meeting of the stockholders of the Company been duly held
based upon a record date as of the measurement date if all Company Voting
Securities then outstanding and entitled to vote at such meeting were present
and voted to the fullest extent possible at such meeting.

       

      “Common Stock” shall
have the meaning set forth in the Recitals.

       

      “Company” shall have
the meaning set forth in the Recitals.

       

      “Company Voting
Securities” shall mean, collectively, Common Stock, any preferred stock
of the Company that is entitled to vote generally for the election of directors,
any other class or series of Company securities that is entitled to vote
generally for the election of directors and any other securities, warrants or
options or rights of any nature (whether or not issued by the Company) that are
convertible into, exchangeable for, or exercisable for the purchase of, or
otherwise give the holder thereof any rights in respect of, Common Stock, or any
other class or series of Company securities that is entitled to vote generally
for the election of directors.

       

      “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

       

      “Group” shall mean a
“group” as such term is used in Section 13(d)(3) of the Exchange
Act.

       

      “Independent Director”
shall mean a director of the Company who (i) is not an employee of the Company
and (ii) is not an Affiliate or Associate of the Trian Group.  Without
limiting the foregoing, a director that is nominated by the Nominating and
Corporate Governance Committee of the Company’s Board of Directors that is not
an Affiliate or Associate of the Trian Group and that would be deemed
“independent” under the applicable rules of the New York Stock Exchange shall be
deemed to be an Independent Director.

       

      “Management Company”
shall have the meaning set forth in the Recitals.

       

      “Maximum Percentage”
shall mean 25% of the Combined Voting Power of Company Voting
Securities.

       

      “Members” shall have
the meaning set forth in the Recitals.

       

      “Person” shall mean
any individual, corporation, partnership, limited partnership, limited liability
company, joint venture, trust, unincorporated organization, other form of
business, or legal entity or government authority.

       

      “SEC” shall mean the
Securities and Exchange Commission.

       

      “Stockholders” shall
have the meaning set forth in the Recitals.

       

      “Trian GP” shall have
the meaning set forth in the Recitals.

       

      “Trian Group” shall
have the meaning set forth in the Recitals.

       

      
        
           

        

        
          - 2
-

          
            

          

        

        
           

        

      

       

      
        	
                Section
      2.  

              	
                Representations and
      Warranties.

              

      

       

      2.1. The
applicable members of the Trian Group represent and warrant to the Company as
follows:

       

      (a) Each of
the Stockholders and the Management Company is a validly existing limited
partnership under the laws of its jurisdiction of organization and has the full
legal right, power and authority to enter into this Agreement and perform its
obligations hereunder.

       

      (b) Each of
the Members is an individual having the full legal right, power and authority to
enter into this Agreement and perform his respective obligations
hereunder.

       

      (c) This
Agreement has been duly authorized, executed and delivered by each of the
Stockholders, the Management Company and the Members and constitutes the legally
valid and binding agreement of each of the Stockholders, the Management Company
and the Members, enforceable against each of them in accordance with the terms
hereof.

       

      (d) Neither
the execution and delivery of this Agreement by each of the Stockholders, the
Management Company and the Members nor the performance of their respective
obligations hereunder will conflict with or result in a breach of or constitute
a default under any law, rule, regulation, judgment, order or decree of any
court, arbitrator or governmental agency or instrumentality, or of any agreement
or instrument to which any of the Stockholders, the Management Company or the
Members is bound or affected or of any organizational documents of each of
them.

       

      (e) Except
for 52,059,387 shares of Common Stock beneficially owned by the Trian Group as
of the date hereof, no shares of Company Voting Securities are beneficially
owned by any member of the Trian Group.

       

      (f) Other
than this Agreement, certain Pledge and Security Agreements entered into by each
of Messrs. Peltz and May in favor of Bank of America, N.A., the Voting Agreement
between Mr. Peltz and Mr. May, dated as of July 23, 2004, and the other
agreements contemplated hereby, no member of the Trian Group has any agreement,
arrangement or understanding with any other Person or Group who is not a member
of the Trian Group with respect to acquiring, holding, voting or disposing of
Company Voting Securities.

       

      2.2. The
Company represents and warrants to the Trian Group as follows:

       

      (a) The
Company is a validly existing corporation under the laws of the State of
Delaware and has the power and authority to enter into this Agreement and
perform its obligations hereunder.

       

      (b) This
Agreement has been duly authorized, executed and delivered by the Company and
constitutes the legally valid and binding agreement of the Company, enforceable
against the Company in accordance with the terms hereof.

       

      (c) Neither
the execution and delivery of this Agreement nor the performance of its
obligations hereunder will conflict with or result in a breach of or constitute
a default under, any law, rule, regulation, judgment, order or decree of any
court, arbitrator or governmental agency or instrumentality, or of any agreement
or instrument to which the Company is bound or affected or of any organizational
documents of the Company.

       

      (d) The
Company shall file with the SEC a Schedule 14D-9 within the time period
prescribed by the rules of the SEC with respect to the Tender Offer and state
therein that the Board of Directors of the Company is remaining neutral with
respect to the Tender Offer.

       

      
        
          
          

        

        
          - 3
-

          
            

          

        

        
          
          

        

      

      
        	
                Section
      3.  

              	
                Covenants with Respect
      to Company Voting
Securities.

              

      

       

      3.1. Acquisition of Company
Voting Securities.

       

      (a) If any
member of the Trian Group shall directly or indirectly acquire, offer to
acquire, agree to acquire, become the Beneficial Owner of or obtain any rights
in respect of any Company Voting Securities, by purchase or otherwise, or take
any action in furtherance thereof, if the effect of such acquisition, agreement
or other action would be (either immediately or upon consummation of any such
acquisition, agreement or other action, or upon the expiration of any period of
time provided in any such acquisition, agreement or other action) to increase
the aggregate Beneficial Ownership of Company Voting Securities by the Trian
Group to such number of Company Voting Securities that represents or possesses
greater than the Maximum Percentage of the Combined Voting Power of Company
Voting Securities, then no member of the Trian Group nor any of their respective
Affiliates or Associates shall be able to engage in any business combination
(within the meaning of Section 203 of the Delaware General Corporation Law) for
a period of three years following the date on which the Trian Group became the
owner of more than the Maximum Percentage of the Combined Voting Power of
Company Voting Securities.  Notwithstanding the foregoing Maximum
Percentage limitation, (A) no member of the Trian Group shall be obligated to
dispose of any Company Voting Securities Beneficially Owned in violation of such
Maximum Percentage limitation to the extent that, its Beneficial Ownership is or
will be increased solely as a result of a repurchase, redemption or other
acquisition of any Company Voting Securities by the Company or any of its
subsidiaries or any acquisition of Company Voting Securities permitted by clause
(B) of this paragraph, and (B) the foregoing Maximum Percentage limitation shall
not prohibit any acquisition of Company Voting Securities by any member of the
Trian Group directly from the Company (including pursuant to the grant or
exercise of stock options, rights, subscription rights or standby purchase
obligations in connection with rights offerings by the Company or pursuant to
any election to receive director fees and/or retainers in stock), provided such
acquisition is approved by a majority of the Independent Directors or is
pursuant to an equity participation plan currently in effect or approved by the
Independent Directors.  For the avoidance of doubt, nothing contained
herein shall prohibit any member of the Trian Group or any Affiliate or
Associate of the Trian Group from acquiring more than the Maximum Percentage of
the Combined Voting Power of Company Voting Securities.

       

      (b) The
restrictions contained in Section 3.1(a) of this Agreement shall not apply if
the Trian Group would be entitled to rely on the exceptions set forth in Section
203(b)(3) through (7) of the Delaware General Corporation Law (it being
understood that for this purpose, references in the definition of “interested
stockholder” contained in Section 203 to 15% shall be read to be references to
25%).

       

      (c) The Trian
Group shall not amend the Tender Offer to reduce the price per share payable to
tendering stockholders.

       

      3.2. Proxy Solicitations,
etc.  For so long as the Company shall have a class of equity
securities that is listed for trading on the New York Stock Exchange or any
other national securities exchange, no member of the Trian Group shall solicit
proxies, assist, encourage or participate with any other person in any way,
directly or indirectly, in the solicitation of proxies, become a “participant”
in a “solicitation,” or assist any “participant” in, a “solicitation” (as such
terms are defined in Rule 14a-1 of Regulation 14A under the Exchange Act), or
submit any proposal for the vote of stockholders of the Company, or recommend or
request or induce or attempt to induce any other person to take any such
actions, or seek to advise, encourage or influence any other person with respect
to the voting of Company Voting Securities, in each case, if the result of any
such proposal or solicitation would be to cause the Board of Directors of the
Company to be comprised of less than a majority of Independent
Directors.  For the avoidance of doubt, the foregoing shall not
prohibit any member of the Trian Group from (i) exercising its right as a
director to vote in favor of the nomination of any person approved by the
Nominating and Corporate Governance Committee of the Board of Directors or (ii)
voting its shares of Company Voting Securities in favor of the election of any
person nominated by the Board of Directors for election to the Board of
Directors.

       

      3.3. Affiliate
Transactions.  For so long as the Company shall have a class of
equity securities that is listed for trading on the New York Stock Exchange or
any other national securities exchange, no member of the Trian Group shall
engage in any transaction with the Company that, if consummated, would be
required to be disclosed by the Company in its annual report pursuant to Item
404 of Regulation S-K without the prior approval of a majority of the Audit
Committee or other committee of the Board of Directors that is comprised of
Independent Directors; provided that the
foregoing provision shall not apply to transactions contemplated by any other
agreement as in effect on the date hereof.

       

      3.4. Waiver of
Requirements.

       

      Notwithstanding
anything in this Section 3 to the contrary, any of the terms of Subsections 3.1
through Subsection 3.3 may be waived, in whole or in part and as to particular
transactions or matters or as to one or more members of the Trian Group, if (a)
in the case of a waiver of an obligation of a member of the Trian Group, a
majority of the Independent Directors shall have approved such waiver or (b) in
the case of a waiver of an obligation of the Company provided for the benefit of
a member of the Trian Group, such member of the Trian Group shall have consented
in writing to such waiver.

       

      
        	
                Section
      4.  

              	
                Effectiveness of
      Agreement; Term; Effect of Certain
  Waivers.

              

      

       

      If the
Tender Offer shall expire or otherwise terminate without the Trian Group
purchasing shares of Common Stock pursuant thereto in an amount that results in
the Trian Group, immediately upon consummation of the Tender Offer, Beneficially
Owning at least 15% of the Combined Voting Power of Company Voting Securities,
then this Agreement shall be null and void ab initio and the 203 Approval shall
be of no force and effect, it being understood that, in such event, any further
acquisitions of Common Stock by the Trian Group, or business combinations
between the Company and the Trian Group, shall remain subject to the limitations
of Section 203 of the General Corporation Law of the State of
Delaware.  This Agreement shall terminate on the earliest to occur of
(i) if the Trian Group shall, at any time, sell or otherwise dispose of or cease
to own any Company Voting Securities so that the Trian Group beneficially owns,
in the aggregate less than 15% of the Combined Voting Power of Company Voting
Securities; (ii) the third anniversary of the date hereof; (iii) at such time as
any Person that is not an Affiliate or Associate of, or member of a 13D/G Group
with, the Trian Group shall make an offer to purchase an amount of shares which
when added to the shares already beneficially owned by such Person and its
Affiliates and Associates equals or exceeds 50% or more of the Combined Voting
Power of Company Voting Securities (whether by way of tender offer, merger,
consolidation, recapitalization or otherwise) or all or substantially all of the
Company’s assets or shall solicit proxies with respect to a majority slate of
directors.  In the event that the Company shall allow any other Person
(other than a member of the Trian Group) to acquire shares of Company Voting
Securities without compliance with the limitations on business combinations set
forth in Section 203 of the Delaware General Corporation Law on terms more
favorable to such Person than those set forth herein, then the Company shall
give the Trian Group the benefit of such more favorable terms.

       

      
        
          
          

        

        
          - 4
-

          
            

          

        

        
          
          

        

      

      
        	
                Section
      5.  

              	
                Remedies.

              

      

       

      Each
respective member of the Trian Group and the Company acknowledge and agree that
(i) the provisions of this Agreement are reasonable and necessary to protect the
proper and legitimate interests of the parties hereto, and (ii) the parties
would be irreparably damaged in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached.  It is accordingly agreed that the parties shall
be entitled to preliminary and permanent injunctive relief to prevent breaches
of the provisions of this Agreement by the other parties without the necessity
of proving actual damages or of posting any bond, and to enforce specifically
the terms and provisions hereof, which rights shall be cumulative and in
addition to any other remedy to which the parties may be entitled hereunder or
at law or equity.

       

      
        	
                Section
      6.  

              	
                General
      Provisions.

              

      

       

      6.1. Choice of Law; Forum
Selection.  This Agreement shall be construed, interpreted and
the rights of the parties determined in accordance with the laws of the State of
Delaware without reference to the choice of laws provisions
thereof.  Each of the parties to this Agreement hereby irrevocably and
unconditionally (i) agrees to be subject to, and hereby consents and submits to,
the jurisdiction of the Court of Chancery of the State of Delaware for any
litigation arising out of or relating to this Agreement, (ii) waives any
objection to the laying of venue of any such litigation in the Court of Chancery
of the State of Delaware, and (iii) agrees not to plead or claim in the Court of
Chancery of the State of Delaware that such litigation brought therein has been
brought in an inconvenient forum.  The Company hereby appoints
RL&F Service Corp., One Rodney Square, 10th and King Streets, P.O. Box 551,
Wilmington, DE 19899, and each of the Stockholders, the Management Company and
the Members hereby appoints Corporation Service Company, 2711 Centerville Road,
Wilmington, DE 19808, as its agent for service of process in the State of
Delaware and agrees to service of process in any litigation arising out of or
relating to this Agreement by service upon such agent or by certified mail,
return receipt requested, postage prepaid to it at its address for notice as
provided in this Agreement.

       

      6.2. Additional Parties; Joint
and Several Obligations.  All of the obligations of the Trian
Group and its members hereunder shall be joint and several.  Each
controlled affiliate of a member of the Trian Group that shall become or have
the right to become the beneficial owner, within the meaning and scope of
Section 3 hereof, of Company Voting Securities shall, promptly upon becoming
such owner or holder, execute and deliver to the Company a joinder agreement,
agreeing to be legally bound by this Agreement as an original signatory as a
member of the Trian Group; provided that failure
to execute such agreement shall not excuse such person's non-compliance with any
provision of this Agreement.  No member of the Trian Group shall
transfer Company Voting Securities to any of its affiliates not already a party
hereto unless the transferee shall agree to be bound by this Agreement in the
manner specified above in this Subsection 6.2.

       

      6.3. Notices.  All
notices, consents, requests, instructions, approvals and other communications
provided for herein and all legal process in regard hereto shall be in writing
and shall be decreed to be validly given, made or served when delivered
personally, transmitted by telex or telecopier, or deposited in the U.S. mail,
postage prepaid, for delivery by express, registered or certified mail, or
delivered to a recognized overnight courier service, addressed as
follows:

       

      If to the
Company:

      1155
Perimeter Center West

      Atlanta,
Georgia 30338

      Attention:
General Counsel

       

      With a
copy to:

      Proskauer
Rose LLP

      1585
Broadway

      New York,
New York 10036

      Attention:
Julie M. Allen, Esq.

       

      If to the
Stockholders or any other member of the Trian Group:

      c/o Trian
Fund Management, L.P.

      280 Park
Avenue

      New York,
New York 10017

      Attention:
Brian L. Schorr

      Chief
Legal Officer

       

      With a
copy to:

      Cadwalader,
Wickersham & Taft LLP

      One World
Financial Center

      New York,
New York 10281

      Attention:
Dennis J. Block, Esq.

       

      or to
such other address as may be specified in a notice given pursuant to this
Section 6.3.  All such notices and communications shall be deemed to
have been duly given:  At the time delivered by hand, if personally
delivered; five (5) business days after being deposited in the mail, postage
prepaid, if mailed; when answered back if telexed; when receipt acknowledged, if
telecopied; and the next business day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery.  The
parties may change the address to which notices are to be given by giving five
(5) days' prior notice of such change in accordance herewith.

       

      6.4. Severability.  If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions shall remain in
full force and effect and shall in no way be affected, impaired or
invalidated.

       

      
        
          
          

        

        
          - 5
-

          
            

          

        

        
          
          

        

      

      6.5. Amendments,
Waivers.  Any provision of this Agreement may be amended or
waived if, and only if, such amendment or waiver is in writing and signed by
each party hereto; provided that no such
amendment or waiver by the Company shall be effective without the approval of a
majority of the Independent Directors.  No failure or delay by any
party hereto in exercising any right, power or privilege hereunder shall operate
as a waiver thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege.  The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by
law.

       

      6.6. Descriptive
Headings.  Descriptive headings are for convenience only and
shall not control or affect the meaning or construction of any provision of this
Agreement.  References in this Agreement to Sections or Subsections
are to Sections of Subsections of this Agreement.  All pronouns and
any variations thereof refer to the masculine, feminine or neuter, singular or
plural, as the identity of the applicable person or persons may
require.

       

      6.7. Entire Agreement:
Amendment.  This Agreement and the other instruments and
agreements referred to herein embody the entire agreement of the parties hereto
with respect to the subject matter hereof and supersede all prior agreements
with respect thereto.

       

      6.8. Counterparts.  This
Agreement shall become binding when one or more counterparts hereof,
individually or taken together, bears the signatures of each of the parties
hereto.  This Agreement may be executed in any number of counterparts,
each of which shall be an original as against the party whose signature appears
thereon, or on whose behalf such counterpart is executed, but all of which taken
together shall be one and the same agreement.

       

      6.9. No
Partnership.  No partnership, joint venture or joint
undertaking is intended to be, or is, formed between the parties hereto or any
of them by reason of this Agreement or the transactions contemplated
herein.

       

      6.10. Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the successors and assigns of the parties
hereto.  All of the terms, covenants and agreements contained in this
Agreement are solely for the benefit of the parties hereto, and their respective
successors and assigns, and no other parties (including, without limitation, any
other stockholder or creditor of the Company, or any director, officer or
employee of the Company) are intended to be benefitted by, or entitled to
enforce, this Agreement.

       

      [SIGNATURE
PAGE FOLLOWS]

       

      
        
           

        

        
          - 6
-

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, the parties hereto intending to be legally bound have duly
executed this Agreement, all as of the day and year first above
written.

       

      STOCKHOLDERS

      

      
        	
                 
      

              	
                TRIAN
      PARTNERS, L.P.

              

      

      

      
        	
                 
      

              	
                By:
      Trian Partners GP, L.P.,

              

      

      
        	
                 
      

              	
                its
      general partner

              

      

      

      
        	
                 
      

              	
                By:
      Trian Partners General Partner, LLC, its general
  partner

              

      

       

      
        	
                 
      

              	
                By:
      /s/ Edward P.
      Garden

              

      

      
        	
                 
      

              	
                Name:
      Edward P. Garden

              

      

      
        	
                 
      

              	
                Title:
      Member

              

      

      

      

      
        	
                 
      

              	
                TRIAN
      PARTNERS MASTER FUND, L.P.

              

      

      

      
        	
                 
      

              	
                By:
      Trian Partners GP, L.P., its general
partner

              

      

      

      
        	
                 
      

              	
                By:
      Trian Partners General Partner, LLC, its general
  partner

              

      

       

      
        	
                 
      

              	
                By:
      /s/ Edward P.
      Garden

              

      

      
        	
                 
      

              	
                Name:
      Edward P. Garden

              

      

      
        	
                 
      

              	
                Title:
      Member

              

      

      

      

      
         

        
          - 7
-

          
            

          

        

         

      

      
        	
                 
      

              	
                TRIAN
      PARTNERS PARALLEL FUND I, L.P.

              

      

      

      
        	
                 
      

              	
                By:
      Trian Partners Parallel Fund I General Partner LLC, its general
      partner

              

      

       

      
        	
                 
      

              	
                By:
      /s/ Edward P.
      Garden

              

      

      
        	
                 
      

              	
                Name:
      Edward P. Garden

              

      

      
        	
                 
      

              	
                Title:
      Member

              

      

      

       

                                              
TRIAN PARTNERS PARALLEL FUND II, L.P.

                                               
By: Trian Partners Parallel Fund II GP, L.P., its general partner

       

                                                By:
Trian Partners Parallel Fund II General Partner, LLC, its general
partner

       

      
        	
                 
      

              	
                By:
      /s/ Edward P.
      Garden

              

      

      
        	
                 
      

              	
                Name:
      Edward P. Garden

              

      

      
        	
                 
      

              	
                Title:
      Member

              

      

      

      

      MANAGEMENT
COMPANY

      

       TRIAN
FUND MANAGEMENT, L.P.

      

       
By: Trian Fund Management GP, L.P.,

      
        	
                 
      

              	
                its
      general partner

              

      

      

      
        	
                 
      

              	
                By:
      /s/ Edward P.
      Garden

              

      

      
        	
                 
      

              	
                Name:
      Edward P. Garden

              

      

      
        	
                 
      

              	
                Title:
      Member

              

      

      

      

      MEMBERS

      

      /s/ Nelson
Peltz

      Nelson
Peltz

      

      /s/ Edward P.
Garden

      Edward P.
Garden

      

      Peter W.
May

      Peter W.
May

      

       

      COMPANY

      WENDY’S/ARBY’S
GROUP, INC.

       

      By: /s/ Nils H.
Okeson

      Name:  Nils
H. Okeson

      Title:  Senior
VP and General Counsel

      
        
           

        

        
          - 8
-

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