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Exhibit
10(b)
AMENDMENT NO. 1 TO TAX
SHARING AGREEMENT
This AMENDMENT NO. 1 TO TAX
SHARING AGREEMENT (“ Amendment ”), dated as of
November 7, 2007, is made by and between Wendy’s
International, Inc., an Ohio corporation (“
Wendy’s ”) and Tim Hortons Inc., a Delaware
corporation (“ Tim Hortons ”). Wendy’s and
Tim Hortons are sometimes referred to herein as the “
Parties ” and each a “ Party
.”
WHEREAS, Wendy’s and
Tim Hortons are parties to a tax sharing agreement, dated
March 29, 2006 (the “Tax Sharing Agreement”
or “TSA” ), which sets forth the principles and
responsibilities of the Parties regarding the allocation of Taxes
and other related liabilities and adjustments with respect to
Taxes, audits and certain other Tax matters that affect the
Wendy’s Group and the Tim Hortons Group;
WHEREAS, the Parties hereto
desire to affirm the continuing application of the Tax Sharing
Agreement, as amended as set forth herein, and to agree on certain
tax matters arising in connection therewith;
WHEREAS, Article III of the
Tax Sharing Agreement requires Wendy’s in certain instances
to compensate Tim Hortons for the use by the Wendy’s Group of
tax attributes generated by the Tim Hortons Group in Affiliation
Years ending on or after January 1, 2006;
WHEREAS, under the Tax
Sharing Agreement, the occurrence of certain events in a
Non-Affiliation Year may affect the amount or usage of tax
attributes in an Affiliation Year and may result in a
redetermination by Wendy’s of the Parties’ liabilities
under Articles III and IV of the Tax Sharing Agreement, with the
result that Tim Hortons may be required to make a payment to
Wendy’s or Wendy’s may be required to make a payment to
Tim Hortons; and
WHEREAS, the Parties wish to
achieve greater certainty on amounts owed to and owing by the
Parties under the Tax Sharing Agreement by eliminating certain
circumstances that would necessitate a redetermination.
NOW THEREFORE, in
consideration of the mutual covenants and agreements contained
herein and intending to be legally bound hereby, the Parties hereby
agree as follows:
1. Definitions
.
a. “ 2006 Fiscal
Year ” shall mean the taxable year of the Wendy’s
Consolidated Return ending on December 31, 2006.
b. “ Non-Affiliation
Year ” shall mean any taxable year that begins on or
after the Distribution Date. For purposes of the Wendy’s
Consolidated Return, a Non-Affiliation Year is any taxable year
that begins on or after January 1, 2007.
c. “ Unadjusted
Reimbursable Wendy’s Group Benefit ” shall mean the
amount of the Reimbursable Wendy’s Group Benefit for the 2006
Fiscal Year that would have been due under the TSA determined
without regard to this Amendment.
d. Any capitalized terms not
defined herein shall have the same meaning as given such terms in
the TSA.
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2. Amendments .
Pursuant to Section 3.01(b) of the Tax Sharing Agreement,
Wendy’s is obligated to pay to Tim Hortons an amount equal to
the Reimbursable Wendy’s Group Benefits for any Affiliation
Year ending on or after January 1, 2006. Under
Section 8.01 of the Tax Sharing Agreement, if an Adjustment
occurs with respect to U.S. federal income Taxes for an Affiliation
Year, the liability of Tim Hortons or Wendy’s, as the case
may be, under Article III of the Tax Sharing Agreement shall be
redetermined by Wendy’s taking into account the Adjustment.
Similarly, under Section 4.06 of the Tax Sharing Agreement, if
an Adjustment occurs with respect to a taxable year beginning on or
after January 2, 2006, Wendy’s shall recompute the
liability of Tim Hortons taking into the account the Adjustment. In
order to limit certain of the circumstances in which such
redeterminations might be required, the Parties agree as
follows:
a. A new Section 2.06
will be added to the TSA as follows:
SECTION 2.06. Competent
Authority Proceedings . Notwithstanding any other provision
herein to the contrary, Wendy’s will use commercially
reasonable efforts to support Tim Hortons in applying for and
advocating competent authority adjustment requests, and all
subsequent related proceedings, as reasonably requested by Tim
Hortons, as a result of transfer pricing Adjustments arising from
the settlement of CRA Audits. Tim Hortons agrees to be responsible
for Wendy’s reasonable third party out-of-pocket expenses
incurred in connection with Wendy’s performance of its
obligations set forth immediately above.
b. Section 4.06(a) of
the Tax Sharing Agreement is stricken in its entirety and replaced
with the following:
SECTION 4.06.
Adjustments . (a) If an Adjustment occurs with respect
to a taxable year beginning on or after January 2, 2006,
Wendy’s shall in good faith recompute the Tim Hortons Group
State Tax Liability for the year in question, including all changes
to apportionment percentages that result from such Adjustment,
provided, however, that (i) an Adjustment shall not include
any carry back that is prohibited by Section 7.02 of the TSA
of any item of deduction, loss or Credit of the Wendy’s Group
or the Tim Hortons Group, as the case may be, arising in any
Non-Affiliation Year to any Combined Return filed by or with
respect to the Tim Hortons Combined Group for any Affiliation Year,
and (ii) no payments shall be required to be made by either
Party as a direct result of any changes (including Adjustments)
resulting from any amended Combined Return filed or caused to be
filed by Wendy’s with respect to the Tim Hortons Combined
Group for any Affiliation Year (other than a return filed by or at
the direction of Wendy’s in conjunction with a competent
authority proceeding or any related proceeding or as a direct
result of an Audit with respect to an Affiliation Year), unless
both Parties consent to t
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