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Exhibit 10
EMPLOYMENT AGREEMENT
Between
WENDY'S INTERNATIONAL, INC.
And
THE TDL GROUP LTD.
And
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This Agreement is made and entered into as of _____________, _____, by
and between WENDY'S INTERNATIONAL, INC., an Ohio corporation ("WENDY'S"), The
TDL Group Ltd., an Ontario corporation, and ____________________ (the
"EXECUTIVE"), who are the parties to this Agreement.
RECITALS
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(1) WENDY'S is engaged, through subsidiaries, in the business of
owning, operating and franchising Xxx Hortons retail outlets and carrying on
ancillary activities incident thereto.
(2) The EXECUTIVE possesses unique skills, knowledge and experience
relating to WENDY'S business.
(3) The EXECUTIVE is currently employed by The TDL Group Ltd., and
desires to continue to be employed by such company or another direct or indirect
subsidiary of WENDY'S (the "EMPLOYER").
(4) WENDY'S desires to be assured of the continued services of the
EXECUTIVE and to afford him the job security this Agreement provides without,
however, increasing the compensation he would otherwise obtain were it not for
the occurrence of events foreseen by this Agreement, and the EXECUTIVE desires
to be assured that, in the event of a material change in WENDY'S management,
occasioned by a substantial change in the control of WENDY'S, the terms,
conditions and environment of his employment will not be unreasonably affected.
(5) This Agreement is intended to be in addition to any other
agreements the parties may have entered into prior to the date hereof, or may
enter into prior to a CHANGE IN CONTROL as defined herein, regarding the
EXECUTIVE'S employment.
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(6) WENDY'S desires to be assured of the objectivity of the EXECUTIVE
in evaluating a potential offer the effect of which would be a change of control
of WENDY'S, and advising whether or not he believes a potential change of
control is in the best interests of WENDY'S and its shareholders. WENDY'S
further desires to be assured of the dedication of the EXECUTIVE to maximizing
the value to be received by the shareholders of WENDY'S in the circumstances of
negotiating or otherwise responding to a proposed change of control, and to be
assured of the continuity of services of the EXECUTIVE during such time as a
proposed change of control is under negotiation or otherwise pending.
CONSIDERATION
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In consideration of their mutual covenants expressed herein, the
parties, intending to be legally bound hereby, agree as follows:
SECTION 1. EXECUTIVE'S RIGHTS TO CONTINUED EMPLOYMENT IN THE EVENT OF A
CHANGE IN CONTROL OF WENDY'S.
For purposes of this Agreement a "CHANGE IN CONTROL" shall mean the
occurrence of:
(a) An acquisition (other than directly from WENDY'S) of any common
stock or other voting securities of WENDY'S 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 WENDY'S common stock or the combined voting power of WENDY'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 (i) an employee benefit plan (or a trust forming a
part thereof) maintained by (A) WENDY'S or (B) any corporation or other Person
of which a majority of its voting power or its voting equity securities or
equity interest is owned, directly or indirectly, by WENDY'S (for purposes of
this definition, a "Subsidiary") (ii) WENDY'S or its Subsidiaries, or (iii) any
Person in connection with a "Non-Control Transaction" (as hereinafter defined);
(b) The individuals who, as of March ___, 1999 are members of the Board
of WENDY'S (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 WENDY'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
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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 either an actual or threatened "Election Contest" (as
described in Rule 14a-11 promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board (a "Proxy Contest") including by reason of any agreement intended
to avoid or settle any Election Contest or Proxy Contest; or
(c) The consummation of:
(i) A merger, consolidation or reorganization with or into
WENDY'S or in which securities of WENDY'S are issued, unless such
merger, consolidation or reorganization is a "Non-Control Transaction."
A "Non-Control Transaction" shall mean a merger, consolidation or
reorganization with or into WENDY'S or in which securities of WENDY'S
are issued where:
(A) the stockholders of WENDY'S, immediately before
such merger, consolidation or reorganization, own directly or
indirectly immediately following such merger, consolidation or
reorganization, at least seventy percent (70%) of the combined
voting power of the outstanding voting securities of the
corporation resulting from such merger or consolidation or
reorganization (the "Surviving WENDY'S") in substantially the
same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation or
reorganization,
(B) the individuals who were members of the Incumbent
Board immediately prior to the execution of the agreement
providing for such merger, consolidation or reorganization
constitute at least two-thirds of the members of the board of
directors of the Surviving WENDY'S, or a corporation
beneficially directly or indirectly owning a majority of the
Voting Securities of the Surviving WENDY'S, and
(C) no Person other than (i) WENDY'S, (ii) any
Subsidiary, (iii) any employee benefit plan (or any trust
forming a part thereof) that, immediately prior to such
merger, consolidation or reorganization, was maintained by
WENDY'S or any Subsidiary, or (iv) any Person who, immediately
prior to such merger, consolidation or reorganization had
Beneficial Ownership of thirty percent (30%) or more of the
then outstanding Voting Securities or common stock of WENDY'S,
has Beneficial Ownership of thirty percent (30%) or more of
the combined voting power of the Surviving WENDY'S then
outstanding voting securities or its common stock;
(ii) A complete liquidation or dissolution of WENDY'S; or
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(iii) The sale or other disposition of all or substantially
all of the assets of WENDY'S 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 WENDY'S 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 WENDY'S, and after such
share acquisition by WENDY'S, the Subject Person becomes the Beneficial Owner of
any additional common stock or Voting Securities which increases the percentage
of the then outstanding Voting Securities Beneficially Owned by the Subject
Person, then a CHANGE IN CONTROL shall occur.
If the EXECUTIVE'S employment is terminated by WENDY'S or the EMPLOYER
without CAUSE prior to the date of a CHANGE IN CONTROL but the EXECUTIVE
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.
Notwithstanding anything in this Agreement to the contrary, if WENDY'S
ceases to own directly or indirectly at least 50% of the total voting power
exercisable by all of the shareholders of the EMPLOYER which are ordinarily
entitled to vote prior to a CHANGE IN CONTROL, this Agreement shall terminate
and be of no further force or effect.
1.1 From and after the date of occurrence of a CHANGE IN CONTROL, the
EMPLOYER shall cause the EXECUTIVE to be employed, and the EXECUTIVE
shall accept employment, with the duties, nature and place of such
employment as described in Section 2 of this Agreement. Solely for
purposes of this Agreement, the term of such employment, referred to
hereinafter as the "EMPLOYMENT TERM," shall commence on the date when
the CHANGE IN CONTROL shall have occurred and shall end on the earlier
of:
(a) the fifth anniversary of the first to occur of:
(i) the date when the occurrence of an event described in
subparagraph (a) of Section 1 hereof shall be disclosed in a
Schedule 13D or other such similar or successor form
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promulgated by the Securities and Exchange Commission, filed
with the Securities and Exchange Commission of Washington,
D.C., and the duplicate of which is actually received by
WENDY'S, or
(ii) the date on which a transaction described in subparagraph
(c) of Section 1 of this Agreement (other than a Non-Control
Transaction) shall be consummated, or
(iii) the first date on which at least thirty percent (30%) of
the members of the Board of Directors of WENDY'S are not
INCUMBENT DIRECTORS; or
(b) the date when the EMPLOYMENT TERM shall be terminated by
the EMPLOYER for CAUSE or by the EXECUTIVE without GOOD REASON
(as such terms are defined in Section 4 of this Agreement); or
(c) the death of the EXECUTIVE.
Section 2. DUTIES, NATURE AND PLACE OF EMPLOYMENT. During the
EMPLOYMENT TERM, the EXECUTIVE shall provide WENDY'S and the EMPLOYER with such
executive, financial, administrative, and consulting services in managing and
directing WENDY'S business or the EMPLOYER'S business as may be required by the
EXECUTIVE'S job description, as attached hereto, or as amended by the agreement
of the parties hereafter, or reasonably requested and directed from time to time
by action of the EMPLOYER'S Board of Directors. The EXECUTIVE shall at all times
faithfully, industriously and to the best of his ability and talent perform all
of the duties that may be required or requested of him pursuant to the express
terms and conditions of this Agreement. Such duties shall be performed in
Oakville, Ontario and, on a temporary basis, at such other place or places as
the interests, needs, business and opportunities of WENDY'S and of its
subsidiaries shall reasonably require.
Section 3. REMUNERATION DURING THE EMPLOYMENT TERM. During the
EMPLOYMENT TERM, the EXECUTIVE shall receive from the EMPLOYER, as a minimum,
the salary, benefits and perquisites being paid to or afforded him immediately
prior to the date of occurrence of the CHANGE IN CONTROL provided that such
salary shall be increased as of the EXECUTIVE'S established annual salary review
date in each calendar year by a percentage at least as great as the annual
increase in the All Items Consumer Price Index for Canada, 1992=100 (or any
successor index thereto). Such salary shall be paid to the EXECUTIVE on the same
days of each month as the EMPLOYER pays its other employees. The EXECUTIVE shall
also receive an annual bonus each year at least equal to the same annual bonus
he received in the twelve months preceding the CHANGE IN CONTROL; provided,
however, that if the bonus plan in which the EXECUTIVE participated during the
twelve months preceding the CHANGE IN CONTROL is not the same as the bonus plan
in which the EXECUTIVE is
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participating following the CHANGE IN CONTROL, with respect to the twelve month
period preceding the CHANGE IN CONTROL, the EXECUTIVE will be deemed to have
received a bonus equal to that received by the EXECUTIVE'S predecessor in his
position, (or, where there was not a predecessor in the same position, equal to
the average of the bonuses received by bonus plan participants in comparable
positions to the EXECUTIVE'S then current position). The EXECUTIVE shall also
be entitled to all rights afforded him under the terms of any outstanding stock
options granted him by WENDY'S and all incentive compensation and deferred
compensation programs maintained by the EMPLOYER in which the EXECUTIVE was
entitled to participate immediately preceding the CHANGE IN CONTROL, or
successors to such programs.
3.1 During the EMPLOYMENT TERM, the EMPLOYER'S Board of Directors shall
review annually the performance of the EXECUTIVE, the results of
operations and financial condition of the EMPLOYER, together with
prevailing economic conditions and other factors, and consider and act
upon:
(a) whether to pay the EXECUTIVE an increase in salary above
the aforesaid minimum annual salary, and
(b) whether to pay the EXECUTIVE a bonus in excess of the
minimum bonus required aforesaid; PROVIDED, HOWEVER, if the
EMPLOYER pays a bonus to any of its other full-time exempt
employees, the EMPLOYER shall pay the EXECUTIVE a bonus
computed on the same basis as the bonus paid to such other
employees if the bonus so computed is in excess of the minimum
bonus required to be paid the EXECUTIVE pursuant to this
Section 3.
3.2 During the EMPLOYMENT TERM, the EMPLOYER shall cause the EXECUTIVE,
his spouse and dependent children to be enrolled in and covered by
group life, hospitalization, major medical and disability income
insurance coverages under insurance plans and executive physical
examination plans not less favorable to the EXECUTIVE than the plans of
such description in effect immediately prior to the date of occurrence
of the CHANGE IN CONTROL.
3.3 During the EMPLOYMENT TERM, the EMPLOYER shall cause the EXECUTIVE
to be a participant in one or more retirement income (pension) plans
which afford participation and benefits to the EXECUTIVE on a basis not
less favorable to the EXECUTIVE than the plans of such description in
effect immediately prior to the date of occurrence of the CHANGE IN
CONTROL; PROVIDED, HOWEVER, that if the EMPLOYER extends to any
executive officer of the EMPLOYER one or more retirement income
(pension) plans affording participation and benefits more favorable
than those required by the preceding sentence, then the EMPLOYER shall
cause the EXECUTIVE to be a participant in the latter plan(s).
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3.4 During the EMPLOYMENT TERM, the EMPLOYER shall cause reimbursement
to be paid promptly to the EXECUTIVE for all expenses reasonably
incurred by him in connection with performing his duties pursuant
hereto.
3.5 During the EMPLOYMENT TERM, in the event that the insurance and
physical examination plan benefits required by paragraph 3.2, above, or
the retirement income (pension) plan benefits required by paragraph
3.3, above, are not actually available to the EXECUTIVE under the terms
of the plan(s) or applicable law, then the EMPLOYER shall make
available to the EXECUTIVE an equivalent benefit, or an amount of cash
consideration sufficient to fund or purchase an equivalent benefit,
computed as if he had received a full year of service (for vesting and
benefit purposes) for each of his years of service with WENDY'S or any
affiliate or subsidiary, including any years for which he is entitled
to payment under Section 3 during the EMPLOYMENT TERM.
Section 4. TERMINATION OF EMPLOYMENT OF THE EXECUTIVE DURING THE
EMPLOYMENT TERM. The EXECUTIVE'S employment hereunder may be terminated during
the EMPLOYMENT TERM under the following circumstances:
4.1 CAUSE. The EMPLOYER may terminate the EXECUTIVE'S employment under
this Agreement for "CAUSE." A termination for CAUSE is a termination by
reason of the Board's good faith determination that the EXECUTIVE (a)
willfully and continually failed to substantially perform his duties
with the EMPLOYER (other than a failure resulting from the EXECUTIVE'S
incapacity due to physical or mental illness) after a written demand
for substantial performance is delivered to the EXECUTIVE by the Board
of Directors which specifically identifies the manner in which the
Board of Directors believes that the EXECUTIVE has not substantially
performed his 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
EMPLOYER or WENDY'S, monetarily or otherwise, or (c) has otherwise
materially breached this Agreement (including, without limitation, a
voluntary termination of the EXECUTIVE'S employment by the EXECUTIVE
during the EMPLOYMENT TERM). No act, nor failure to act, on the
EXECUTIVE'S part, shall be considered "willful" unless he has acted, or
failed to act, with an absence of good faith and without a reasonable
belief that his action or failure to act was in the best interest of
the EMPLOYER and WENDY'S. Notwithstanding the foregoing, the
EXECUTIVE'S employment shall not be deemed to have been terminated for
CAUSE unless and until (1) there shall have been delivered to the
EXECUTIVE a copy of a written notice setting forth that the EXECUTIVE
was guilty of conduct set forth above in clause (a), (b) or (c) of the
first sentence of this Section 4.1 and specifying the particulars
thereof in detail, and (2) the
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EXECUTIVE shall have been provided an opportunity to be heard by the
Board of Directors of the EMPLOYER (with the assistance of EXECUTIVE'S
counsel).
4.2 (a) GOOD REASON. The EXECUTIVE may terminate his employment for
"GOOD REASON." For purposes of this Agreement, GOOD REASON shall mean
the occurrence after a CHANGE IN CONTROL of any of the events or
conditions described in Subsections (1) through (6) hereof without the
EXECUTIVE'S express written consent:
(1) a change in the EXECUTIVE'S status, title, position or
responsibilities (including reporting responsibilities) which,
in the EXECUTIVE'S reasonable judgment, does not represent a
promotion from his status, title, position or responsibilities
as in effect immediately prior thereto; the assignment to the
EXECUTIVE of any duties or responsibilities which, in the
EXECUTIVE'S reasonable judgment, are inconsistent with such
status, title, position or responsibilities; or any removal of
the EXECUTIVE from or failure to reappoint or reelect him to
any of such positions, except in connection with the
termination of his employment for DISABILITY, CAUSE, as a
result of his death or by the EXECUTIVE other than for GOOD
REASON;
(2) a reduction by the EMPLOYER in the EXECUTIVE'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 EXECUTIVE'S annual base salary as of his established
annual salary review date in any calendar year by a percentage
at least as great as the annual increase in the All Items
Consumer Price Index for Canada, 1992=100 (or any successor
index thereto);
(3) the EMPLOYER requiring the EXECUTIVE to be based at any
place outside a 50 kilometer radius from the EXECUTIVE'S
business office location immediately prior to the CHANGE IN
CONTROL, except for reasonably required travel on the
EMPLOYER'S or WENDY'S (or its successor's) business (or the
business of any successor to WENDY'S as the controlling voting
shareholder of the EMPLOYER) which is not materially greater
than such travel requirements prior to the CHANGE IN CONTROL;
(4) the failure by the EMPLOYER to continue to provide the
EXECUTIVE with the compensation and benefits substantially
similar (in terms of benefit levels and/or reward
opportunities) to those provided for under this Agreement and
those provided to him under any of the employee benefit plans
in which the EXECUTIVE becomes a participant, or the taking of
any action by the EMPLOYER which would directly or indirectly
materially reduce any of such benefits or deprive the
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EXECUTIVE of any material fringe benefit enjoyed by him at the
time of the CHANGE IN CONTROL;
(5) any material breach by WENDY'S or the EMPLOYER of any
provision of this Agreement; and
(6) the failure of WENDY'S or the EMPLOYER to notify the
EXECUTIVE within the 30-day period specified in Section 16
hereof that WENDY'S or the EMPLOYER has obtained a
satisfactory agreement from a successor or assign of WENDY'S
or the EMPLOYER to assume and agree to perform this Agreement,
as contemplated in such Section 16.
(b) The EXECUTIVE'S right to terminate his employment pursuant to this
Section 4.2 shall not be affected by his incapacity due to physical or
mental illness.
4.3 NOTICE OF TERMINATION. Any purported termination by the EMPLOYER or
by the EXECUTIVE shall be communicated by written NOTICE OF TERMINATION
to the other. For purposes of this Agreement, a "NOTICE OF TERMINATION"
shall mean a notice which indicates the specific termination provision
in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination
of the EXECUTIVE'S employment under the provision so indicated. If the
EXECUTIVE'S employment is terminated by the EMPLOYER for any reason,
NOTICE OF TERMINATION must be given at least 30 days prior to the
EXECUTIVE'S TERMINATION DATE (as defined below). For purposes of this
Agreement, no such purported termination shall be effective without
such NOTICE OF TERMINATION.
4.4 TERMINATION DATE, ETC. "TERMINATION DATE" shall mean if the
EXECUTIVE'S employment is terminated for any reason other than due to
death, the date specified in the Notice of Termination.
Section 5. COMPENSATION UPON TERMINATION. Upon termination of the
EXECUTIVE'S employment during the EMPLOYMENT TERM, the EXECUTIVE shall be
entitled to the following benefits:
5.1 If the EXECUTIVE'S employment shall be terminated by the EMPLOYER
for CAUSE or by the EXECUTIVE other than for GOOD REASON, the EMPLOYER
shall pay the EXECUTIVE his full base salary and accrued vacation pay
through the TERMINATION DATE, plus any benefits or awards which
pursuant to the terms of any compensation or benefit plan have been
earned or become payable, but which have not yet been paid to the
EXECUTIVE and WENDY'S and the EMPLOYER shall have no further
obligations to the EXECUTIVE under this Agreement. The EXECUTIVE'S
benefits thereafter
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shall be determined in accordance with the EMPLOYER'S employee benefit
plans and other applicable programs and practices then in effect.
5.2 If the EXECUTIVE'S employment terminates by reason of the
EXECUTIVE'S death, the EMPLOYER shall pay the EXECUTIVE'S beneficiaries
his full base salary and accrued vacation pay through the TERMINATION
DATE, plus any benefits or awards which pursuant to the terms of any
compensation or benefit plan have been earned or become payable, but
which have not yet been paid to the EXECUTIVE and a pro rata portion of
any bonus or incentive award that the EXECUTIVE would have been
entitled to receive in respect of the calendar year in which the
EXECUTIVE'S TERMINATION DATE occurs had he continued in employment
until the end of such calendar year, payable at the same time that such
bonuses or awards are payable to other employees of the EMPLOYER. In
the case of the EXECUTIVE'S death, the EXECUTIVE'S beneficiaries'
benefits shall be determined in accordance with the EMPLOYER'S employee
benefit plans and other applicable programs and practices then in
effect.
5.3 If the EXECUTIVE'S employment by the EMPLOYER shall be terminated
(i) by the EMPLOYER other than for CAUSE or death, or (ii) by the
EXECUTIVE for GOOD REASON, then the EXECUTIVE shall be entitled to the
benefits provided below:
(a) the EMPLOYER shall pay the EXECUTIVE his full base salary and
accrued vacation pay through the TERMINATION DATE, plus the maximum
benefits or awards which pursuant to the terms of any of the EMPLOYER'S
compensation or benefit plans have been earned or become payable as if
all objectives including the completion of the award cycle thereunder
had been met, but which have not yet been paid to the EXECUTIVE, and a
pro rata portion of any bonus or incentive award that the EXECUTIVE
would have been entitled to receive in respect of the calendar year in
which the EXECUTIVE'S TERMINATION DATE occurs had he continued in
employment until the end of such calendar year, calculated (i) if the
EXECUTIVE is participating in the Xxx Hortons Earnings Maximization
Plan ("THEMP") with the bonus pool being determined (A) as if the
target level two (2) entry point had been achieved by WENDY'S and the
EMPLOYER for such year, (B) if actual performance is measurable against
the targeted performance over a period of less than one year, based on
the actual WENDY'S and the EMPLOYER'S performance up to the EXECUTIVE'S
TERMINATION DATE (or if the TERMINATION DATE occurs in the year in
which a CHANGE IN CONTROL occurs, up to the date of the CHANGE IN
CONTROL, if later), or (C) at the level established in the preceding
year, whichever is greater, and as if the EXECUTIVE'S percentage
interest in the plan's bonus pool had been equal to his percentage
interest in the pool in the preceding year (or if he was not a
participant in the bonus pool in the preceding year, the EXECUTIVE will
be deemed to have had a percentage interest equal to
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the percentage interest of the EXECUTIVE'S predecessor in his position,
or, where there was not a predecessor in the same position, equal to
the average of the percentage interests of bonus plan participants in
comparable positions to the Executive's then current position) and/or
(ii) if the EXECUTIVE is not participating in the THEMP, as if all
performance targets under the applicable plan had been fully met at the
highest level by WENDY'S, by the EMPLOYER and/or by the EXECUTIVE, and,
if applicable, the EXECUTIVE'S percentage interest in any bonus pool
had been at least equal to his percentage interest in the preceding
year (or if he was not a participant in the plan in the preceding year,
the EXECUTIVE will be deemed to have had a percentage interest equal to
the percentage interest of the EXECUTIVE'S predecessor in his position,
or, where there was not a predecessor in the same position, equal to
the average of the percentage interests of bonus plan participants in
comparable positions to the Executive's then current position);
PROVIDED, HOWEVER, that the bonus payment provided for in this Section
5.3(a) shall be reduced (but not below zero) by the amount, if any,
payable to the EXECUTIVE in respect of the year in which the
EXECUTIVE'S TERMINATION DATE occurs under the provisions of THEMP or
any other bonus or incentive plan, as applicable.
(b) as severance pay and in lieu of any further salary for periods
subsequent to the TERMINATION DATE, the EMPLOYER shall pay to the
EXECUTIVE in a single payment an amount in cash equal to three times
the sum of (A) the EXECUTIVE'S base salary at the rate in effect at the
time Notice of Termination is given and (B) one third of the sum of the
annual bonuses paid or payable to the EXECUTIVE in respect of the three
calendar years preceding the calendar year in which the EXECUTIVE'S
TERMINATION DATE occurs; PROVIDED, HOWEVER, that if the EXECUTIVE had
not been a participant in each of those three calendar years in the
annual bonus plan in which he was participating as of his TERMINATION
DATE, then with respect to any calendar year during the relevant
three-year period for which the EXECUTIVE was not so participating, the
EXECUTIVE will be deemed to have received a bonus equal to that
received by the EXECUTIVE'S predecessor in his position, (or, where
there was not a predecessor in the same position, equal to the average
of the bonuses received by bonus plan participants in comparable
positions to the Executive's then current position).
(c) as additional severance, the EMPLOYER shall pay to the EXECUTIVE in
a single payment an amount equal to the present value of the employer
contributions the EXECUTIVE would have accrued under the EMPLOYER'S
registered pension plan and supplemental plan, if any, if he had
remained an employee for three years following the TERMINATION DATE.
For purposes of this determination, the base salary of the EXECUTIVE
over this period shall be equal to his base salary in effect at the
TERMINATION DATE, and the employee contribution rate of the EXECUTIVE
under the registered pension plan shall be equal to the contribution
rate in effect at the TERMINATION DATE.
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Present values shall be determined using a discount rate equal to the
interest rate recommended by the Canadian Institute of Actuaries for
the computation of transfer values from a registered pension plan.
(d) for the three years following the TERMINATION DATE, the EMPLOYER
shall at its expense continue on behalf of the EXECUTIVE and his
dependents and beneficiaries the life insurance, disability, medical,
dental and hospitalization benefits which were being provided to the
EXECUTIVE at the time NOTICE OF TERMINATION is given. The benefits
provided in this Section 5.3(d) shall be no less favorable to the
EXECUTIVE, in terms of amounts and deductibles and costs to him, than
the coverage provided the EXECUTIVE under the EMPLOYER'S plans
providing such benefits at the time NOTICE OF TERMINATION is given (or,
if the EXECUTIVE'S employment is terminated after a CHANGE IN CONTROL,
at the time of the CHANGE IN CONTROL if more favorable to the
EXECUTIVE). The EMPLOYER'S obligation hereunder with respect to the
foregoing benefits shall be limited to the extent that the EXECUTIVE
obtains any such benefits pursuant to a subsequent employer's benefit
plans, in which case the EMPLOYER may reduce the coverage of any
benefits it is required to provide the EXECUTIVE hereunder as long as
the aggregate coverage of the combined benefit plans is no less
favorable to the EXECUTIVE in terms of amounts and deductibles and
costs to him, than the coverage which would be provided hereunder by
the EMPLOYER to the EXECUTIVE at the time the NOTICE OF TERMINATION is
given (or, if the EXECUTIVE'S employment is terminated after a CHANGE
IN CONTROL, at the time of the CHANGE IN CONTROL if more favorable to
the EXECUTIVE). This paragraph (d) shall not be interpreted so as to
limit any benefits to which the EXECUTIVE or his dependents may be
entitled under any of the EMPLOYER'S employee benefit plans, programs
or practices following the EXECUTIVE'S termination of employment.
(e) the EMPLOYER shall offer to sell to the EXECUTIVE at book value the
automobile provided to the EXECUTIVE at the time of the EXECUTIVE'S
termination of employment.
5.4 The amounts provided for in Sections 5.1, 5.2 and 5.3(a), (b) and
(c) shall be paid within five days after the EXECUTIVE'S TERMINATION
DATE.
5.5 The EXECUTIVE shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or
otherwise and no such payment shall be offset or reduced by the amount
of any compensation or benefits provided to the EXECUTIVE in any
subsequent employment.
SECTION 6. EFFECT OF A CHANGE IN CONTROL. Upon the occurrence of any
CHANGE IN CONTROL, (a) any options to purchase shares of common stock of
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WENDY'S and any stock appreciation rights granted by WENDY'S to the EXECUTIVE
which are not yet fully vested and exercisable shall become fully vested and
exercisable, and (b) any restrictions remaining at that time on any stock
awarded to the EXECUTIVE by WENDY'S shall lapse.
Section 7. FEES AND EXPENSES. The EMPLOYER shall pay all reasonable
legal fees and related expenses (including the costs of experts, evidence and
counsel) incurred in good faith by the EXECUTIVE as they become due as a result
of (a) the termination of the EXECUTIVE'S employment by the EMPLOYER or by the
EXECUTIVE for GOOD REASON (including all such fees and expenses, if any,
incurred in contesting, defending or disputing the basis for any such
termination of employment), (b) the EXECUTIVE'S hearing before the Board of
Directors of the EMPLOYER as contemplated in Section 4.1 of this Agreement, or
(c) the EXECUTIVE seeking to obtain or enforce any right or benefit provided by
this Agreement or by any other plan or arrangement maintained by the EMPLOYER
under which the EXECUTIVE is or may be entitled to receive benefits.
Section 8. BENEFITS PROTECTION TRUST. The EMPLOYER shall establish a
BENEFITS PROTECTION TRUST for the benefit of the EXECUTIVE and other executives
with employment agreements with an independent corporate trustee. Such BENEFITS
PROTECTION TRUST shall be established pursuant to a separate TRUST AGREEMENT.
The terms and conditions of the BENEFITS PROTECTION TRUST shall be governed, in
all respects, by the TRUST AGREEMENT. Prior to a CHANGE IN CONTROL, the EMPLOYER
shall transfer to the BENEFITS PROTECTION TRUST assets at least equal to (after
payment of any applicable withholding taxes) the sum of (a) the present value of
all benefits that would be payable to the EXECUTIVE and all the other executives
with employment agreements if they were all terminated by the EMPLOYER without
CAUSE immediately following a CHANGE IN CONTROL and (b) the estimated amount
needed to pay for any legal fees the EXECUTIVE and the other executives may
incur in enforcing their rights under their employment agreements. In lieu of
transferring assets to the BENEFITS PROTECTION TRUST in the amounts specified
above, the EMPLOYER may, in its sole discretion, pay to the BENEFITS PROTECTION
TRUST such amount as the trustee of the trust considers necessary in order to
obtain from the principal banker of the EMPLOYER an unconditional irrevocable
letter of credit payable to the trustee in an amount equal to the amounts
specified in clauses (a) and (b) above. The trustee shall not call for payment
from the bank under the letter of credit so long as the EMPLOYER is not in
default in making payments to executives under the employment agreements. The
letter of credit shall contain such other reasonable terms as the trustee
considers advisable for the purpose of protecting the benefits payable under the
employment agreements. All payments required under this Agreement on account of
the EXECUTIVE'S termination of employment by the EMPLOYER without CAUSE
following a CHANGE IN CONTROL shall be paid from the BENEFITS PROTECTION TRUST
to the extent not otherwise paid by the EMPLOYER.
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Section 9. PROTECTION OF BUSINESS. Notwithstanding anything to the
contrary in this Agreement:
9.1 At all times during the EMPLOYMENT TERM while the EXECUTIVE is
employed by the EMPLOYER, the EXECUTIVE will not participate as a
partner, joint venturer, officer, director, employee, or
representative, or have any direct financial interest in, any business
or enterprise conducting a quick service restaurant business in the
United States or Canada, other than a business or enterprise engaged in
operating restaurants under a franchise granted by the EMPLOYER,
WENDY'S or any of its subsidiaries; provided, that the ownership by
EXECUTIVE of securities of a public corporation shall not be a
violation of this subparagraph so long as (a) the EXECUTIVE does not
own, directly or indirectly, more than five percent (5%) of any class
of the securities of such corporation, and (b) the value of such
securities does not exceed ten percent (10%) of the net worth of the
EXECUTIVE; and provided further that ownership by EXECUTIVE of
securities of WENDY'S or any successor to WENDY'S by merger or other
form of transaction contemplated by subparagraph (b) or (c) of Section
1 hereof shall not be a violation of this subparagraph.
9.2 The EXECUTIVE will not at any time (during or after the expiration
of the EMPLOYMENT TERM) divulge, disclose, reveal or communicate to any
person, firm, corporation, partnership, joint venture or other entity,
directly or indirectly, any trade secrets or other information which
the EXECUTIVE may have obtained during the course of his employment by
the EMPLOYER in respect of any matters affecting or relating to the
fast food restaurant or Xxx Hortons businesses of the EMPLOYER and
WENDY'S or its subsidiaries, including, without limitation, any of
their plans, policies, business practices, finances, recipes, methods
of operation, franchises or other information known to the EXECUTIVE to
be considered by the EMPLOYER, WENDY'S or its subsidiaries to be
confidential information.
9.3 The restrictions on competition and other restrictions imposed upon
the EXECUTIVE by this Section 9 may be enforced by the EMPLOYER,
WENDY'S or any of its subsidiaries by an action for an injunction, it
being agreed (in view of the general practical impossibility of
determining by computation or legal proof the exact amount of damages,
if any, resulting to the EMPLOYER, WENDY'S or any of its subsidiaries
from a violation by the EXECUTIVE of the provisions of this Section 9)
that there would be no adequate remedy at law for any breach by the
EXECUTIVE of any such restriction.
Section 10. NOTICES AND PAYMENTS. All payments required or permitted to
be made under the provisions of this Agreement, and all notices and other
communications required or permitted to be given or delivered under this
Agreement to WENDY'S, to the EMPLOYER or to the EXECUTIVE, which notices or
communications must be in
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writing, shall be deemed to have been given if delivered by hand, or mailed by
first class mail, addressed as follows:
10.1 if to WENDY'S, to:
Chief Executive Officer
WENDY'S INTERNATIONAL, INC.
0000 Xxxx Xxxxxx-Xxxxxxxxx Xxxx
P. O. Box 256
Xxxxxx, Xxxx 00000 XXX
With a copy (except as to payments) to:
General Counsel
WENDY'S INTERNATIONAL, INC.
0000 Xxxx Xxxxxx-Xxxxxxxxx Xxxx
X. X. Xxx 000
Xxxxxx, Xxxx 00000 XXX
10.2 if to the EMPLOYER, to:
General Counsel
The TDL Group Ltd.
000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx X0X 0X0 XXXXXX
10.3 if to EXECUTIVE, to:
--------------------------
--------------------------
--------------------------
--------------------------
WENDY'S, the EMPLOYER or the EXECUTIVE may, by notice given to the
other from time to time, designate a different address for making payments
required to be made, and for the giving of notices or other communications
required or permitted to be given, to the party designating such new address.
Any payment, notice or other communication required or permitted to be given in
accordance with this Agreement shall be deemed to have been given if and when
placed in the U.S. or Canadian Mail (as applicable), addressed and mailed as
provided above.
Section 11. PAYROLL TAXES. Any payment required or permitted to be
made or given to the EXECUTIVE pursuant to this Agreement shall be subject to
the withholding and other requirements of applicable laws, and to the deduction
requirements of any benefit plan maintained by the EMPLOYER in which the
EXECUTIVE is a participant,
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and to all reporting, filing and other requirements in respect of such payments,
and the EMPLOYER or WENDY'S, as applicable, shall promptly satisfy all such
requirements.
Section 12. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the Province of Ontario.
Section 13. DUPLICATE ORIGINALS. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be a duplicate original,
but all of which, taken together, shall constitute a single instrument.
Section 14. CAPTIONS. The captions contained in this Agreement are
included only for convenience of reference and do not define, limit, explain or
modify this Agreement or its interpretation, construction or meaning.
Section 15. SEVERABILITY. If any provision of this Agreement or the
application of any provision to any person or any circumstances shall be
determined to be invalid or unenforceable, then such determination shall not
affect any other provision of this Agreement or the application of said
provision to any other person or circumstance, all of which other provisions
shall remain in full force and effect. It is the intention of WENDY'S, the
EMPLOYER and the EXECUTIVE that if any provision of this Agreement is
susceptible of two or more constructions, one of which would render the
provision enforceable and other or others of which would render the provision
unenforceable, then the provision shall have the meaning which renders it
enforceable.
Section 16. NUMBER AND GENDER. When used in this Agreement, the number
and gender of each pronoun shall be construed to be such number and gender as
the context, circumstances or its antecedent may require.
Section 17. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns (including successive,
as well as immediate, successors and assigns) of WENDY'S and the EMPLOYER;
provided, however, that the obligations of this Agreement may not be transferred
by WENDY'S or the EMPLOYER; provided, however, that if WENDY'S or the EMPLOYER
transfers to any other person substantially all of its business and assets by
merger, consolidation, sale of assets or otherwise, WENDY'S or the EMPLOYER, as
applicable, must transfer its obligations hereunder to such other person and
such other person must accept such transfer and assume the obligations of the
EMPLOYER, and of WENDY'S if applicable, imposed hereby. WENDY'S or the EMPLOYER
shall notify the EXECUTIVE in writing within the thirty-day period following any
transfer of business and assets that the transferee has accepted the transfer
and assumption of the EMPLOYER'S, and of WENDY'S if applicable, obligations
under this Agreement. This Agreement shall inure to the benefit of and be
binding upon the heirs and assigns (including successive, as well as immediate,
assigns) of the EXECUTIVE; provided, however, that the rights of the EXECUTIVE
under this Agreement may be assigned only to his personal representative or by
will or pursuant to applicable laws of descent and distribution.
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Section 18. ARBITRATION. Any dispute arising under or in connection
with this Agreement shall be submitted to arbitration by the American
Arbitration Association in Columbus, Ohio, and the determination of the American
Arbitration Association shall be final and absolute. The arbitrator shall be
governed by the duly promulgated commercial arbitration rules of the American
Arbitration Association and the pertinent provisions of the laws of the State of
Ohio relating to arbitration. During the pendency of such arbitration
proceedings, the EXECUTIVE shall be entitled to the full benefits provided by
the Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed to be effective as of the date first above written.
WENDY'S:
Wendy's International, Inc.
By_________________________________
EMPLOYER:
The TDL Group Ltd.
By_________________________________
Its________________________________
EXECUTIVE:
---------------------------------
an individual
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