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Exhibit
10(a)
AMENDED AND RESTATED
INDEMNIFICATION AGREEMENT
This Amended and Restated
Indemnification Agreement (this
“Agreement” ) is made as of the
·
day of · , 200 · , by and between Tim Hortons Inc., a Delaware corporation
(the “Tim Hortons” ), and •, an
individual ( “Indemnitee” ).
RECITALS
A. The bylaws (the
“Bylaws” ) of Tim Hortons provide for the
indemnification of the officers, directors and employees of Tim
Hortons and/or its subsidiaries (“Subsidiaries”) and
affiliates (Tim Hortons and its subsidiaries and affiliates being
collectively referred to herein as the “
Company ”) to the greatest extent
permitted by Delaware law, including the Delaware General
Corporation Law, as amended (the “DGCL”
).
B. The Bylaws and the DGCL
permit contracts between Tim Hortons and the officers, directors or
other employees of the Company with respect to indemnification of
such officers, directors or other employees.
C. Tim Hortons recognizes
that capable and qualified individuals are becoming increasingly
reluctant to serve as officers or directors of or in certain other
employee capacities at public corporations as a result of the
recent and ongoing enactment of statutes and regulations pertaining
to officers’, directors’ and other employees’
responsibilities and the increasing risk of lawsuits against
officers, directors and other employees in the current corporate
climate, unless such individuals are provided with more certain and
secure protection against exposure to unreasonable personal risk
arising from their service and activities on behalf of a
corporation.
D. Tim Hortons is aware that
individuals recruited to serve as officers or directors of or in
certain other employee capacities at public corporations generally
are more likely to agree to provide services to corporations that
provide for separate indemnification agreements because, unlike
indemnification provisions contained in the certificate of
incorporation or the bylaws of a company or state statutory
provisions, the indemnification provisions contained in a separate
agreement generally may not be amended or rescinded without the
consent of the individual who is a party to the
agreement.
E. Tim Hortons recognizes
that, in furtherance of its objectives and in order to enhance Tim
Hortons’ investments in its Subsidiaries and affiliates, it
is in the best interests of Tim Hortons and its shareholders to
attract and retain capable and qualified individuals to serve as
officers, directors and in certain other employment positions with
Tim Hortons and with the Subsidiaries and affiliates of Tim Hortons
and to enable such officers, directors and other employees to
exercise their judgment in the best interests of the Company
without being affected by the threat of exposure to unreasonable
personal risk.
F. To induce Indemnitee to
serve and/or continue to serve as an officer of Tim Hortons, and,
if applicable, as an officer, director or other employee of a
Subsidiary or affiliate of Tim Hortons, Tim Hortons entered into an
indemnity agreement (the “ Original Tim Hortons
Indemnity Agreement ”) on September 29, 2006
with Indemnitee to indemnify Indemnitee and advance expenses to
Indemnitee as set forth therein.
G. On February 6, 2007,
the Board of Directors of Tim Hortons approved changes to the form
of Original Tim Hortons Indemnity Agreement to make certain
clarifying changes and, therefore, Tim Hortons and Indemnitee
desire to enter into this Agreement to amend and restate the
Original Tim Hortons Indemnity Agreement in its entirety, except to
the extent set forth in Section 11.17 hereof. This Agreement
shall be supplemental to any indemnity provided to the Indemnitee
under applicable law or any rights of indemnity to which the
Indemnitee is entitled under a separate agreement; provided that
Indemnitee shall not be required to first proceed against any other
entity before enforcing the Indemnitee’s rights under this
Agreement.
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AGREEMENT
In consideration of
Indemnitee’s service as an officer of Tim Hortons and/or as
an officer, director or employee of a Subsidiary or affiliate of
Tim Hortons after the date of the Original Tim Hortons Indemnity
Agreement, Tim Hortons and Indemnitee hereby agree as
follows:
1. CERTAIN
DEFINITIONS. Capitalized terms used but not otherwise defined
in this agreement shall have the meanings set forth
below:
“Corporate
Status” means the fact that a person is or was
(i) an officer of Tim Hortons, (ii) an officer, director
or employee of a Subsidiary or affiliate of Tim Hortons,
(iii) serving at the request of the Company on the board of
directors or other governing body of a Subsidiary or affiliate of
Tim Hortons or as an officer, employee, partner or in a similar
function with a Subsidiary or affiliate of Tim Hortons, or
(iv) serving at the request of Tim Hortons as an officer,
employee or director of an association or non-profit organization
affiliated with Tim Hortons. A Proceeding shall be deemed to have
been brought by reason of a person’s “Corporate
Status” if it is brought because of the status described in
the preceding sentence or because of any action or inaction on the
part of such person in connection with such status.
“Disinterested
Director” means a director of Tim Hortons who is not
and was not a party to or threatened with a Proceeding in respect
of which indemnification is sought by Indemnitee.
“Expenses” shall include all
reasonable attorneys’ fees, disbursements and retainers,
court costs, transcript costs, fees of experts, witness fees,
travel and deposition costs, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees
and all other disbursements or expenses of the types customarily
incurred in connection with (a) prosecuting, defending,
preparing to prosecute or defend, investigating, settling or
appealing a Proceeding (including the cost of any appeal bond or
its equivalent), (b) for purposes of Section 2.1
only, being prepared to be a witness or otherwise participating in
a Proceeding or (c) enforcing a right under this Agreement
(including any right to indemnification or advancement of expenses
under this Agreement).
“Independent
Counsel” means an attorney, or a firm having
associated with it an attorney, who neither currently is nor in the
past five years has been retained by or performed services for the
Company or any person to be indemnified by the Company.
“Proceeding” includes any threatened,
pending or completed action, suit, arbitration, alternate dispute
resolution mechanism, investigation, inquiry, administrative
hearing or any other actual, threatened or completed proceeding,
whether civil, criminal, administrative or investigative, in which
Indemnitee was, is or would be involved as a party or otherwise
(including as a witness) by reason of the Indemnitee’s
Corporate Status, including one pending on or before the date of
this Agreement; but excluding one initiated by an Indemnitee
pursuant to Section 7 of this Agreement to enforce
Indemnitee’s rights under this Agreement. For purposes of
this definition, the term “threatened” shall be deemed
to include, but not be limited to, Indemnitee’s good faith
belief that a claim or other assertion may lead to initiation of a
Proceeding.
“Reviewing
Party” means the person, persons or entity selected
to make the determination of the entitlement to indemnification
pursuant to Section 5.3 hereof.
2.
INDEMNIFICATION.
2.1 Proceedings not by or
in Right of the Company. Tim Hortons hereby agrees to hold
harmless and indemnify Indemnitee to the greatest extent permitted
by Delaware law, including the provisions
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of the DGCL, and by the Bylaws, as such
may be amended from time to time, if Indemnitee was or is a party,
witness, or other participant, or is threatened to be made a party,
witness, or other participant, to any Proceeding, other than a
Proceeding by or in the right of the Company, by reason of
Indemnitee’s Corporate Status, against all Expenses,
judgments, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf
in connection with such Proceeding, if Indemnitee acted in good
faith and in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of the Company and, with respect
to any criminal Proceeding, had no reasonable cause to believe that
his or her conduct was unlawful. The termination of any Proceeding
by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not satisfy the foregoing standard
of conduct to the extent applicable thereto.
2.2 Proceedings by or in
Right of the Company. Tim Hortons hereby agrees to hold
harmless and indemnify Indemnitee to the greatest extent permitted
by Delaware law, including the provisions of the DGCL, and by the
Bylaws, as such may be amended from time to time, if Indemnitee was
or is a party or is threatened to be made a party to any Proceeding
by or in the right of the Company, by reason of Indemnitee’s
Corporate Status, against all Expenses actually and reasonably
incurred by Indemnitee or on Indemnitee’s behalf in
connection with the defense or settlement of such Proceeding, if
Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests
of the Company; provided , however , that, if
applicable law so provides, no indemnification against such
Expenses shall be paid in respect of any claim, issue or matter in
such Proceeding as to which Indemnitee shall have been adjudged to
be liable to the Company unless, and only to the extent that, the
Court of Chancery of the State of Delaware (the
“Court”) determines, upon application, that, despite
the adjudication of liability but in view of all of the
circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for such Expenses as such Court shall deem
proper.
2.3 Indemnification for
Expenses of an Indemnitee Who is Wholly or Partly Successful.
To the extent that Indemnitee has been successful on the merits or
otherwise in defense of any Proceeding referred to in
Section 2.1 or 2.2 of this Agreement, or in
defense of any claim, issue or matter in such Proceeding,
Indemnitee shall be indemnified against Expenses actually and
reasonably incurred by the Indemnitee or on Indemnitee’s
behalf in connection with such Proceeding.
3. ADVANCEMENT OF
EXPENSES.
3.1 Advancement
Obligation. Tim Hortons shall advance all Expenses incurred by
or on behalf of Indemnitee in connection with any Proceeding prior
to the final disposition of such Proceeding upon receipt of an
undertaking by or on behalf of Indemnitee to repay such amount if
it shall ultimately be determined that Indemnitee is not entitled
to be indemnified by Tim Hortons. Any advances and undertakings to
repay pursuant to this Section 3.1 shall not be
secured, shall not bear interest and shall provide that, if
Indemnitee has commenced or thereafter commences legal proceedings
in the Court to secure a determination that Indemnitee should be
indemnified under applicable law with respect to such Proceeding,
Indemnitee shall not be required to reimburse Tim Hortons for any
advancement of Expenses in respect of such Proceeding until a final
judicial determination is made with respect thereto (as to which
all rights of appeal therefrom have been exhausted or
lapsed).
3.2 Timing and
Contents. Any advancement of Expenses pursuant to
Section 3.1 hereof shall be made within ten days after
the receipt by Tim Hortons of a written statement from Indemnitee
requesting such advancement from time to time and accompanied by or
preceded by the undertaking referred to in Section 3.1
above. Each statement requesting advancement shall reasonably
evidence the Expenses incurred by or on behalf of the Indemnitee in
connection with such Proceeding for which advancement is being
sought.
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4. CONTRIBUTION IN THE
EVENT OF JOINT LIABILITY. Whether or not the indemnification
provided in this Agreement is available, in respect of any
Proceeding in which the Company is jointly liable with Indemnitee
(or would be if joined in such Proceeding), Tim Hortons shall
contribute to the amount of Expenses, judgments, fines and amounts
paid in settlement actually and reasonably incurred and paid or
payable by Indemnitee in proportion to the relative benefits
received by the Company, on the one hand, and Indemnitee, on the
other hand, from the transaction from which such Proceeding arose;
provided , however , that the proportion determined
on the basis of relative benefit may, to the extent necessary to
conform to law, be further adjusted by reference to the relative
fault of the Company, on the one hand, and Indemnitee, on the other
hand, in connection with the events that resulted in such Expenses,
judgments, fines or settlement amounts, as well as any other
equitable considerations that applicable law may require to be
considered. The relative fault of the Company, on the one hand, and
Indemnitee, on the other hand, shall be determined by reference to,
among other things, the degree to which their actions were
motivated by intent to gain personal profit or advantage, the
degree to which their liability is primary or secondary, and the
degree to which their conduct is active or passive.
5. PROCEDURES AND
PRESUMPTIONS FOR DETERMINATION OF ENTITLEMENT TO
INDEMNIFICATION.
5.1 Timing of
Payments. All payments of Expenses, judgments, fines, amounts
paid in settlement and other amounts by Tim Hortons to Indemnitee
pursuant to this Agreement shall be made as soon as practicable
after written demand therefor by Indemnitee is presented to Tim
Hortons, but in no event later than (a) 30 days after such
demand is presented or (b) such later date as may be permitted
for the determination of entitlement to indemnification pursuant to
Section 5.7 hereof, if applicable; provided ,
however , that advances of Expenses shall be made within the
time period provided in Section 3.2 hereof.
5.2 Request for
Indemnification. Whenever Indemnitee believes that he or she is
entitled to indemnification pursuant to this Agreement, Indemnitee
shall submit to Tim Hortons a written request, including therein or
therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to
indemnification. Indemnitee shall submit such claim for
Indemnification within a reasonable time, not to exceed five years,
after any judgment, order, settlement, dismissal, arbitration
award, conviction, acceptance of a plea of nolo contendere (or its
equivalent) or other full or partial final determination or
disposition of the Proceeding (with the latest date of the
occurrence of any such event to be considered the commencement of
the five-year period). The Secretary of Tim Hortons shall, promptly
upon receipt of such a request for indemnification, advise the
Board of Directors of Tim Hortons (the
“Board” ) in writing that Indemnitee has
requested indemnification.
5.3 Reviewing Party.
Upon written request by Indemnitee for indemnification pursuant to
the first sentence of Section 5.2 hereof, to the extent
that the Indemnitee’s entitlement to such indemnification is
governed by Section 2.1 or 2.2 of this
Agreement, a determination with respect to Indemnitee’s
entitlement thereto shall be made in the specific case by one of
the following methods: (a) so long as there are Disinterested
Directors with respect to such Proceeding, a majority vote of the
Disinterested Directors, even though less than a quorum of the
Board, (b) so long as there are Disinterested Directors with
respect to such Proceeding, a committee of such Disinterested
Directors designated by a majority vote of such Disinterested
Directors, even though less than a quorum, or (c) if there are
no Disinterested Directors or if a majority of Disinterested
Directors so direct, Independent Counsel (designated for such
purpose by the Board) in a written
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opinion delivered to the Board, a copy
of which shall also be delivered to Indemnitee. The person, persons
or entity chosen to make a determination under this Agreement of
the Indemnitee’s entitlement to indemnification shall act
reasonably and in good faith in making such
determination.
5.4 Selection of
Independent Counsel. If the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
Section 5.3 hereof, the Independent Counsel shall be
selected as provided in this Section 5.4 . The
Independent Counsel shall be selected by the Board, and Tim Hortons
shall promptly give written notice to Indemnitee advising him or
her of the identity of the Independent Counsel so selected.
Indemnitee may, within ten days after such written notice of
selection shall have been given, deliver to Tim Hortons a written
objection to such selection; provided , however ,
that such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of
“Independent Counsel” as defined in this Agreement, and
the objection shall set forth with particularity the factual basis
of such assertion. Absent a proper and timely objection, the person
so selected shall act as Independent Counsel. If a written
objection is made and substantiated, the Independent Counsel
selected may not serve as Independent Counsel unless and until such
objection is withdrawn or the Court has ruled against such
objection. If, within 30 days after submission by Indemnitee of a
written request for indemnification pursuant to
Section 5.2 hereof, no Independent Counsel shall have
been selected or an Independent Counsel shall have been selected
but an objection thereto shall have been properly made and remained
unresolved, either Tim Hortons or Indemnitee may petition the Court
for resolution of any objection that shall have been made by the
Indemnitee to the selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person selected by the
Court or by such other person as the Court shall designate, and the
person with respect to whom all objections are so resolved or the
person so appointed shall act as Independent Counsel under
Section 5.3 hereof. Tim Hortons shall pay any and all
reasonable fees and expenses of Independent Counsel incurred by
such Independent Counsel in connection with acting pursuant to
Section 5.3 hereof.
5.5 Burden of Proof.
In making a determination with respect to entitlement to
indemnification hereunder, the Reviewing Party shall presume that
Indemnitee is entitled to indemnification under this Agreement.
Anyone seeking to overcome this presumption shall have the burden
of proof and the burden of persuasion, by clear and convincing
evidence. In making a determination with respect to entitlement to
indemnification hereunder which under this Agreement o
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