Exhibit 10(a)
Executive Annual Performance
Plan, As Amended and Restated on November 5,
2008
TIM HORTONS INC.
EXECUTIVE ANNUAL PERFORMANCE
PLAN
(as amended and restated
effective November 5, 2008)
1. Purpose . The purpose of
the Executive Annual Performance Plan (the “Plan”) is
to enhance the ability of Tim Hortons Inc. (the
“Company”) and its subsidiaries to attract, motivate,
reward, and retain key employees, to strengthen their commitment to
the success of the Company and to align their interests with those
of the Company’s shareholders by providing additional
compensation to designated key employees of the Company based on
the achievement of performance objectives. To this end, the Plan
provides a means of rewarding participants based on the performance
of the Company and/or its Operating Units.
2. Administration . The Plan
shall be administered by the Committee and the CEO as provided
herein. The Committee shall have full authority to establish the
rules and regulations relating to the Plan, to interpret the Plan
and those rules and regulations, to determine the Performance
Objectives of the Company and/or Operating Units, to decide the
facts in any case arising under the Plan and to make all other
determinations and to take all other actions necessary or
appropriate for the proper administration of the Plan, including
the delegation of such authority or power, where appropriate. The
Committee’s administration of the Plan, including all such
rules and regulations, interpretations, selections, determinations,
approvals, decisions, delegations, amendments, terminations and
other actions, shall be final and binding on the Company, its
stockholders and the Participants and their beneficiaries. Subject
to the authority and discretion of the Committee, the CEO shall
have the full authority to determine the Participants in the Plan,
the Award opportunities for such Participants, and whether such
Award opportunities shall be based on the Performance Objectives of
the Company or based on a combination of Performance Objectives of
the Company and one or more Operating Units.
3. Eligible Employees .
Generally, all Employees are eligible to participate in the Plan
for any fiscal year. However, participation shall be limited to
those Employees selected by the CEO, subject to the authority and
discretion of the Committee, to participate in the Plan for each
fiscal year in accordance with Section 4.
4. Determination of Awards .
For each fiscal year, the Committee shall establish the Performance
Objectives of the Company and/or Operating Units. Subject to the
authority and discretion of the Committee, the CEO shall determine
(i) the Employees who shall be Participants during each fiscal
year, (ii) whether Awards for each Participant shall be based
solely upon the achievement of Performance Objectives of the
Company or on a combination of the achievement of Performance
Objectives for the Company and for one or more Operating Units, and
(iii) the Award opportunities for each Participant, including
the extent to which Awards will be payable for actual performance
between each level of the Performance Objectives. The CEO shall
provide to the Committee, for consideration in accordance with
its
delegated authority from the Board, a schedule
that indicates the Participants selected, their Award
opportunities, and whether such Awards will be based on the
Performance Objectives of the Company or a combination of the
Company and one or more Operating Units. The Company shall notify
each Participant of the applicable Performance Objectives for such
Participant and his or her corresponding Award opportunities for
each fiscal year.
5. Payment of
Awards . As soon as practicable after the determination of the
Company’s and, if applicable, the Operating Units’
financial performance for a fiscal year, but no later than the
15 th day of the third month following
the end of such fiscal year, each Award to the extent earned shall
be paid in a single lump sum cash payment, less applicable
withholding taxes. Notwithstanding the foregoing, a Participant may
elect to defer all or a portion of any Award that will otherwise
become payable in accordance with this Section, if permitted
pursuant to (and in accordance with) a deferred compensation plan
adopted by, or an agreement entered into with, the Company or any
of its subsidiaries.
6. Discretionary
Bonuses . In addition to any Awards payable under
Section 4, the CEO, after consultation with the Committee and
subject to the authority and discretion of the Committee, shall
have the authority to make additional cash incentive awards to any
Employees selected by the CEO in amounts determined by the CEO. Any
such award shall be paid to the applicable employee no later than
the 15 th day of the third month
following the end of the fiscal year in which the award is
determined.
7. Termination of Employment
. No Award for a fiscal year shall be payable to any Participant
unless he or she is employed by the Company or one of its
subsidiaries on the payment date for Awards payable in respect of
the fiscal year, unless the Participant’s employment was
terminated because of his or her (i) death,
(ii) disability or (iii) retirement after attaining age
60 and the completion of 10 years of continuous service with the
Company and/or its subsidiaries, in which event the Participant
will be entitled to a pro-rata portion (which shall be 100% if such
termination occurs after the end of the fiscal year and prior to
the payment date) of the Award otherwise payable in respect of that
fiscal year, subject to the Committee’s discretion as set
forth in Section 2 hereof. Provided, however, that for any
Participant who has reached the age of 55 and the completion of 10
years of continuous service with the Company and/or its
subsidiaries as of November 5, 2008, the applicable age in
(iii) above shall be “55,” as opposed to age
“60.” The foregoing proviso shall expire by its terms
and be void and of no further force and effect on and as of
November 5, 2013.
8. Change in Control .
Notwithstanding any provision in the Plan to the contrary, upon the
occurrence of a Change in Control of the Company, the following
provisions shall apply:
(i) The minimum Award payable to
each Participant under Section 5 in respect of the fiscal year
in which the Change in Control occurs shall be the greatest
of:
(A) the Award or other annual bonus
paid or payable to the Participant in respect of the fiscal year
prior to the year in which the Change in Control occurs;
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(B) the Award amount that would be
payable to the Participant assuming that the Company achieved the
target level of the Performance Objectives for such fiscal year;
and
(C) the Award amount that would be
payable to the Participant based on the Company’s actual
performance and achievement of applicable Performance Objectives
for such fiscal year through the date of the Change in
Control.
(ii) Notwithstanding anything to the
contrary contained herein, in the event that following the date of
a Change in Control and prior to the payment date for Awards
payable in respect of the fiscal year in which the Change in
Control occurs a Participant’s employment is terminated by
the Company and its subsidiaries without Cause or by the
Participant for Good Reason, such Participant shall be entitled to
receive the Award otherwise payable pursuant to the terms of the
Plan in respect of that fiscal year as if he or she had remained in
the employ of the Company through the payment date for Awards
payable in respect of such fiscal year.
(iii) If a Participant’s
employment is terminated by the Company and its subsidiaries
without Cause prior to the date of a Change in Control but the
Participant reasonably demonstrates that the termination
(A) was at the request of a third party who has indicated an
intention or taken steps reasonably calculated to effect a Change
in Control or (B) otherwise arose in connection with, or in
anticipation of, a Change in Control which has been threatened or
proposed, such termination shall be deemed to have occurred after a
Change in Control for purposes of this Plan provided a Change in
Control shall actually have occurred.
9. Adjustments . The
Committee may, at the time Performance Objectives are determined
for a fiscal year, or at any time prior to the final determination
of Awards in respect of such fiscal year, provide for the manner in
which performance will be measured against the Performance
Objectives or may adjust the Performance Objectives to reflect the
impact of specified corporate transactions (such as a stock split
or stock dividend), special charges, accounting or tax law changes
and other extraordinary or nonrecurring events.
10. Designation of
Beneficiary . In the event of a Participant’s death prior
to full payment of any Award hereunder, unless such Participant
shall have designated a beneficiary or beneficiaries in accordance
with this Section 10, payment of any Award due under the Plan
shall be made to the beneficiary or beneficiaries designated by the
Participant under the Company’s basic life insurance program,
or if no beneficiary has been designated under the basic life
insurance program, the Participant’s designated beneficiary
dies prior to receiving any payment of an Award or if such
designation shall for any reason be illegal or ineffective, Awards
payable under the Plan shall be paid to the Participant’s
estate. A beneficiary designation under this Plan, or revocation of
a prior beneficiary designation, will be effective only if it is
made in writing on a form provided by the Company, signed by the
Participant and received by the Benefits Department of the Company.
If a beneficiary has been designated under this Plan and such
beneficiary dies prior to receiving any payment of an Award or if
such designation shall for any reason be illegal or ineffective,
Awards payable under the Plan shall be paid to the
Participant’s estate.
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11. Amendm
