As filed with the Securities and Exchange Commission on July 11, 2008
Registration No. 333-151336
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 1 to
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TRIARC COMPANIES, INC.
(Exact Name of Registrant as Specified in its Charter)
|
|
|
|
|
Delaware |
5812 |
38-0471180 |
1155 Perimeter Center West
Atlanta, Georgia 30338
(678) 514-4100
(Address, including zip code, and telephone number, including area code,
of registrant’s principal executive offices)
Nils H. Okeson
Senior Vice President, General Counsel and Secretary
Triarc Companies, Inc.
1155 Perimeter Center West
Atlanta, Georgia 30338
(678) 514-4100
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
|
|
|
|
|
Paul D. Ginsberg |
Leon M. McCorkle, Jr. |
Rick L. Burdick |
Approximate date of commencement of proposed sale to the public: At the effective time of the merger referred to herein.
If the securities being registered on this form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. £
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer S Accelerated filer £ Non-accelerated filer £ Smaller reporting company £
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold
nor may offers to buy be accepted prior to the time the registration statement becomes effective. This document shall not constitute an offer to sell or the solicitation of any offer to buy nor shall there be any sale of
these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. PRELIMINARY—SUBJECT TO COMPLETION—DATED JULY 11, 2008 MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT As we previously announced, the boards of directors of Triarc Companies, Inc. and Wendy’s International, Inc. have each approved a definitive merger agreement for an all-stock transaction in
which Wendy’s shareholders will receive a fixed ratio of 4.25 shares of Triarc Class A common stock for each Wendy’s common share they own. When the merger is completed, Triarc will change its
name to Wendy’s/Arby’s Group, Inc., which we refer to as “Wendy’s/Arby’s.” In connection with the merger, existing shares of Triarc Class B common stock, Series 1 will be converted into shares of
Wendy’s/Arby’s common stock on a one-for-one basis. Existing shares of Triarc Class A common stock will remain outstanding as shares of Wendy’s/Arby’s common stock. Wendy’s/Arby’s common
stock is expected to be quoted on the New York Stock Exchange, which we refer to as the NYSE, under the symbol “WEN.” In the merger, approximately 377 million shares of Wendy’s/Arby’s common stock will be issued to Wendy’s shareholders. Based on the number of outstanding shares of Triarc Class A common
stock and Triarc Class B common stock, and the number of outstanding Wendy’s common shares as of , 2008, Wendy’s shareholders are expected to hold approximately 80.6%, in the
aggregate, of the outstanding Wendy’s/Arby’s common stock following the completion of the merger. On April 23, 2008, the last full trading day before the merger agreement was signed, the closing sales price of Triarc Class A common stock, which trades on the NYSE under the symbol
“TRY,” was $6.30 per share, the closing sales price of Triarc Class B common stock, which trades on the NYSE under the symbol “TRY.B,” was $6.50 per share, and the closing sales price of
Wendy’s common shares, which trade on the NYSE under the symbol “WEN,” was $25.32 per share. For a discussion of the risks relating to the merger, see “Risk Factors” beginning on page 29. An annual meeting of Triarc’s stockholders and a special meeting of Wendy’s shareholders are being held to approve the transactions and related matters contemplated by the merger agreement.
Triarc’s stockholders also will elect directors and act on other matters normally considered at Triarc’s annual meeting. Information about these meetings and the merger is contained in this joint proxy
statement/prospectus. We encourage you to read this entire joint proxy statement/prospectus carefully, as well as the annexes and information incorporated by reference. The Triarc board of directors unanimously recommends that the Triarc stockholders vote for the proposals to amend Triarc’s certificate of incorporation and to approve the issuance of Wendy’s/
Arby’s common stock, all of which are necessary to effect the merger. The Wendy’s board of directors unanimously (with four abstentions due to actual or perceived conflicts of interest) recommends
that the Wendy’s shareholders vote for the proposal to adopt the merger agreement.
Roland C. Smith
Kerrii B. Anderson Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the merger described in this joint proxy statement/prospectus or the
securities to be issued pursuant to the merger or determined that this joint proxy statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense. This joint proxy statement/prospectus is dated , 2008 and, together with the accompanying proxy card and annual report for Triarc, is first being mailed to Triarc stockholders and Wendy’s
shareholders on or about , 2008.
Chief Executive Officer
Triarc Companies, Inc.
Chief Executive Officer and President
Wendy’s International, Inc.
TRIARC COMPANIES, INC. NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Time:
Place:
Purpose:
•
To adopt the amendment to Triarc’s certificate of incorporation to increase the number of authorized shares of Triarc Class A common stock to 1,500,000,000, in connection with the merger (shares of
Triarc Class A common stock are referred to as Wendy’s/Arby’s common stock following completion of the merger);
•
To adopt the amendment to Triarc’s certificate of incorporation to convert each issued and outstanding share of Triarc Class B common stock into one share of Wendy’s/Arby’s common stock and to
provide that there shall only be one class of authorized common stock of Wendy’s/Arby’s, in connection with the merger; and
•
To adopt certain additional amendments to Triarc’s certificate of incorporation, in connection with the merger, to: (a) change the name of Triarc to “Wendy’s/Arby’s Group, Inc.,” (b) prohibit the
issuance of preferred stock of Wendy’s/Arby’s to affiliates of Wendy’s/Arby’s unless offered ratably to the holders of Wendy’s/Arby’s common stock, subject to an exception in the event that
Wendy’s/Arby’s is in financial distress and the issuance is approved by the audit committee of Wendy’s/Arby’s board of directors, (c) amend the definition of “Interested Stockholder”, which is used in
the certificate of incorporation in connection with requiring increased stockholder approval thresholds for transactions with affiliates, to remove the exception for DWG Acquisition Group L.P., a
dissolved partnership formerly controlled by Nelson Peltz and Peter W. May, Triarc’s non-executive Chairman and Vice Chairman, respectively, (d) provide that Wendy’s/Arby’s board of directors shall
not have the power or authority to amend, alter or repeal Section 3 of Article I of the Wendy’s/Arby’s bylaws, which provides that the headquarters of the Wendy’s brand will be in the greater
Columbus, Ohio area for a ten-year period following the completion of the merger, and (e) provide that the purpose of Wendy’s/Arby’s is to engage in the restaurant business and complementary,
incidental or ancillary businesses.
(A copy of Triarc’s current certificate of incorporation and a copy of the form of amendment to Triarc’s certificate of incorporation described above are attached as Annexes D and E, respectively, to this
joint proxy statement/prospectus. For more details about the proposed amendment, see “The Amendment to Triarc’s Certificate of Incorporation.”)
•
To approve the issuance of Wendy’s/Arby’s common stock, pursuant to the Agreement and Plan of Merger, dated as of April 23, 2008, among Triarc, Green Merger Sub, Inc., a wholly-owned subsidiary
of Triarc, and Wendy’s, a copy of which is attached as Annex A to this joint proxy statement/prospectus, in connection with the merger;
•
To approve any motion to adjourn the Triarc annual meeting to another time or place, if necessary, to solicit additional proxies if there are insufficient votes at the time of the Triarc annual meeting to
approve the proposals related to the merger;
• To elect eleven directors to hold office as specified in the accompanying joint proxy statement/ prospectus;
•
To approve an amendment to Triarc’s Amended and Restated 2002 Equity Participation Plan to increase the number of shares reserved for issuance under the plan by an additional 7,400,000 shares of
Triarc Class B common stock, prohibit the repricing of outstanding awards without prior stockholder approval and eliminate the ability of Triarc to grant reload option awards or stock options or SARs
with exercise prices below fair market value on the date of grant;
•
To ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for 2008; and
•
To conduct any other business that properly comes before the meeting and any adjournment or postponement of the meeting. Each of the first four proposals listed above relating to the merger is conditioned upon approval of each of the other three and the approval of each such proposal is required for completion of the merger. None of
the three proposals relating to the adoption of the amendment to Triarc’s certificate of incorporation or the proposal to issue Wendy’s/Arby’s common stock in the merger will be implemented unless all four proposals
related to the merger are approved by the Triarc stockholders and the merger is completed. This joint proxy statement/prospectus, including the annexes, contains further information with respect to the business to be transacted at the Triarc annual meeting. Record Date: Triarc stockholders of record at the close of business on , 2008 may vote at the Triarc annual meeting. Your vote is important. Whether or not you plan to attend the annual meeting, please promptly complete and return your proxy card in the enclosed envelope, or authorize the individuals named on your proxy card
to vote your shares by calling the toll-free telephone number or by using the Internet as described in the instructions included with your proxy card.
By order of the board of directors,
Atlanta, Georgia
Nils H. Okeson
1155 Perimeter Center West
Atlanta, Georgia 30338
www.triarc.com
, 2008
Senior Vice President, General Counsel and Secretary
Triarc Companies, Inc.
1155 Perimeter Center West
Atlanta, Georgia 30338
WENDY’S INTERNATIONAL, INC. NOTICE OF SPECIAL MEETING OF SHAREHOLDERS Time: Place: A map showing the location of the meeting is printed on Annex L to this joint proxy statement/prospectus. Purpose:
•
To adopt the Agreement and Plan of Merger, dated as of April 23, 2008, among Triarc, Green Merger Sub, Inc., a wholly-owned subsidiary of Triarc, and Wendy’s, a copy of which is attached
as Annex A to this joint proxy statement/prospectus; and • To approve any motion to adjourn the Wendy’s special meeting to another time or place, if necessary, to solicit additional proxies if there are insufficient votes at the time of the Wendy’s
special meeting to adopt the merger agreement. Record Date: Wendy’s shareholders of record at the close of business on , 2008 may vote at the Wendy’s special meeting. Wendy’s shareholders have the right to dissent from the merger and assert dissenters’ rights under Ohio law. In order to assert dissenters’ rights, Wendy’s shareholders must comply with the
requirements of Ohio law as described under “The Merger—Dissenters’ Rights” beginning on page 80. Your vote is important. Whether or not you plan to attend the special meeting, please promptly complete and return your proxy card in the enclosed envelope, or authorize the individuals named
on your proxy card to vote your shares by calling the toll-free telephone number or by using the Internet as described in the instructions included with your proxy card.
By order of the board of directors,
Dublin, Ohio
Leon M. McCorkle, Jr.
4288 West Dublin-Granville Road
Dublin, Ohio 43017-0256
www.wendys-invest.com
, 2008
Executive Vice President,
General Counsel and Secretary
Wendy’s International, Inc.
4288 West Dublin-Granville Road
Dublin, Ohio 43017-0256
THIS JOINT PROXY STATEMENT/PROSPECTUS INCORPORATES This joint proxy statement/prospectus incorporates important business and financial information about Triarc and Wendy’s from other documents filed with the Securities and Exchange
Commission, which we refer to as the SEC, that are not included in or delivered with this joint proxy statement/prospectus. For a listing of the documents incorporated by reference into this joint
proxy statement/prospectus, see “Where You Can Find More Information” beginning on page 223. In this joint proxy statement/prospectus, “Triarc,” “Triarc Class A common stock” and “Triarc Class B common stock” refer to Triarc Companies, Inc. and its Class A common stock and Class B
common stock, Series 1, respectively, prior to the completion of the merger. Upon the consummation of the merger and thereafter, Triarc is referred to as “Wendy’s/Arby’s” and Triarc Class A
common stock is referred to as “Wendy’s/Arby’s common stock.” You may obtain documents incorporated by reference into this joint proxy statement/prospectus, without charge, by requesting them in writing or by telephone from the appropriate company at
the following addresses and telephone numbers:
TRIARC COMPANIES, INC.
WENDY’S INTERNATIONAL, INC. You may also obtain documents incorporated by reference into this joint proxy statement/prospectus by requesting them in writing or by telephone from Innisfree M&A Incorporated, Triarc’s
proxy solicitor, or Georgeson Inc., Wendy’s proxy solicitor, at the following addresses and telephone numbers:
Innisfree M&A Incorporated
Georgeson Inc.
To receive timely delivery of the documents before your annual or special meeting, you must request them no later than , 2008.
ADDITIONAL INFORMATION
1155 Perimeter Center West
Atlanta, Georgia 30338
(678) 514-4100
Attention: Investor Relations
4288 West Dublin-Granville Road
Dublin, Ohio 43017-0256
(614) 764-3100
Attention: Investor Relations Department
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders Call Toll-Free: (888) 750-5834
Banks and Brokers Call Collect: (212) 750-5833
199 Water Street, 26th Floor
New York, NY 10038
Shareholders Call Toll-Free: (866) 346-1016
Banks and Brokers Call Collect: (212) 440-9800
TABLE OF CONTENTS
Page
1
4
20
24 SELECTED UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENT DATA OF WENDY’S/ARBY’S
25
27
29
29
34
35
35
51
53
55
57
65 Interests of Triarc Directors and Wendy’s Directors and Executive Officers in the Merger
73
79 Listing of Additional Shares of Class A Common Stock to be Issued
79
80
82
85
85
85
85
86
87
89
90
93
95
95
96 Treatment of Wendy’s Stock Options and Other Stock Based Awards
96
97
98
98
98
99
103
104
104
105
107
108
108
108 i
Page
109
109
110
110
112
112
113
113
113
118
119
120
120 PROPOSAL 5. POSSIBLE ADJOURNMENT OF THE TRIARC ANNUAL
121
121
125
126
133
133
147
149
151
152
153
154
161 CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS OF TRIARC
163
166 PROPOSAL 8. RATIFICATION OF INDEPENDENT REGISTERED PUBLIC
174
177
177
177
177
178
178
178
178
179 ii
MEETING
ACCOUNTING FIRM
Page
185
186 PROPOSAL 2. POSSIBLE ADJOURNMENT OF THE WENDY’S SPECIAL
186 UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS OF WENDY’S/ARBY’S
187
200 COMPARISON OF RIGHTS OF STOCKHOLDERS/SHAREHOLDERS OF TRIARC,
206
206
207
207
208
208
209
209
211
212
213
213
214
215 Limitation of Personal Liability of Directors and Indemnification
215
216
218
218
219
220
221
221 STOCKHOLDER PROPOSALS FOR THE 2009 WENDY’S/ARBY’S ANNUAL
221
222
223
223
223 Annex D copy of Triarc Companies, Inc. Certificate of Incorporation Annex E form of Amendment to Triarc Companies, Inc. Certificate of Incorporation iii
MEETING
WENDY’S AND WENDY’S/ARBY’S
MEETING
QUESTIONS AND ANSWERS ABOUT THE MEETINGS
Q:
Why am I receiving this document?
A: We are delivering this document to you as both a joint proxy statement of Triarc and Wendy’s and a prospectus of Triarc. It is a joint proxy statement because each of our boards of directors
is soliciting proxies from its stockholders/shareholders. It is a prospectus because Triarc will issue shares of Wendy’s/Arby’s common stock in exchange for Wendy’s common shares in the
merger and convert shares of its Triarc Class B common stock into shares of Wendy’s/Arby’s common stock in connection with the merger.
Q: What do I need to do now? A: After carefully reading and considering the information contained in this joint proxy statement/prospectus, please vote your shares as soon as possible to ensure that your shares will be
represented at your company’s annual or special meeting, as the case may be. You may vote your shares prior to the meeting, even if you plan to attend your company’s meeting in person.
Please follow the instructions set forth on the proxy card or on the voting instruction form provided by the record holder if your shares are held in the name of your broker or other nominee. Q: How do I vote? A: You may vote before your annual or special meeting, as the case may be, in one of the following ways:
•
use the toll-free number shown on your proxy card; • visit the website shown on your proxy card to vote via the Internet; or • complete, sign, date and return the enclosed proxy card in the enclosed postage-paid envelope. You may also vote your shares in person at your meeting.
Q:
What voting requirements must be met in order for the matters relating to the merger to be approved? A: For the matters to be approved by Triarc stockholders:
•
the affirmative vote of a majority of the total voting power of the outstanding shares of Triarc Class A common stock (for purposes of the class vote, holders of Triarc Class A common
stock have one full vote for each share of that stock), voting together as a separate class, and the affirmative vote of a majority of the total voting power of the outstanding shares of
Triarc Class A common stock and Triarc Class B common stock entitled to vote (for purposes of this vote, holders of Triarc Class B common stock have 1/10 vote for each share of that
stock and holders of Triarc Class A common stock have one full vote for each share of that stock), voting together as a single class, are required to adopt the amendment to Triarc’s
certificate of incorporation to increase the number of authorized shares of Triarc Class A common stock; • the affirmative vote of a majority of the total voting power of the outstanding shares of Triarc Class B common stock (for purposes of the class vote, holders of Triarc Class B common
stock have one full vote for each share of that stock), voting together as a separate class, and the affirmative vote of a majority of the total voting power of the outstanding shares of
Triarc Class A common stock and Triarc Class B common stock entitled to vote (for purposes of this vote, holders of Triarc Class B common stock have 1/10 vote for each share of that
stock and holders of Triarc Class A common stock have one full vote for each share of that stock), voting together as a single class, are required to adopt the amendment to Triarc’s
certificate of incorporation to convert each issued and outstanding share of Triarc Class B common stock into one share of Wendy’s/Arby’s common stock and provide that there shall only
be one class of authorized common stock of Wendy’s/Arby’s; 1
• the affirmative vote of a majority of the total voting power of the outstanding shares of Triarc Class A common stock and Triarc Class B common stock (for purposes of this vote, holders
of Triarc Class B common stock have 1/10 vote for each share of that stock and holders of Triarc Class A common stock have one full vote for each share of that stock), voting together
as a single class, is required to adopt the additional amendments to Triarc’s certificate of incorporation; and
• the affirmative vote of a majority of the votes cast on the proposal by holders of shares of Triarc Class A common stock and Triarc Class B common stock (for purposes of this vote,
holders of Triarc Class B common stock have 1/10 vote for each share of that stock and holders of Triarc Class A common stock have one full vote for each share of that stock), voting
together as a single class, is required to approve the issuance of Wendy’s/Arby’s common stock in the merger to Wendy’s shareholders, provided that the total votes cast on the proposal
represent over 50% of the total voting power of the outstanding shares of Triarc Class A common stock and Triarc Class B common stock (for this purpose, holders of Triarc Class B
common stock have 1/10 vote for each share of that stock and holders of Triarc Class A common stock have one full vote for each share of that stock), voting together as a single class,
entitled to vote on the proposal to approve the issuance of Wendy’s/Arby’s common stock in the merger to Wendy’s shareholders.
For the matters to be approved by Wendy’s shareholders:
•
the affirmative vote of a majority of the outstanding Wendy’s common shares entitled to vote at the Wendy’s special meeting is required to adopt the merger agreement.
For more details concerning the voting requirements, see “Triarc Annual Meeting—Voting Requirements” and “Wendy’s Special Meeting—Voting Requirements.”
If my shares are held in “street name” by a broker or other nominee, will my broker or nominee vote my shares for me? A: If you are a Wendy’s shareholder, your broker or other nominee does not have authority to vote on the merger proposal. If you are a Triarc stockholder, your broker or other nominee does
not have authority to vote on the three proposals relating to the adoption of the amendment to Triarc’s certificate of incorporation (for a summary of these proposals, see “Triarc Annual
Meeting–Purpose of the Annual Meeting”) or the proposal to issue Wendy’s/Arby’s common stock in the merger. Your broker or other nominee will vote your shares held by it in “street name”
with respect to these matters only if you provide instructions to it on how to vote. You should follow the directions your broker or other nominee provides. Q: What if I do not vote on the matters relating to the merger? A: If you are a Wendy’s shareholder and you fail to respond with a vote or fail to instruct your broker or other nominee how to vote on the merger proposal, it will have the same effect as a
vote against the proposal to adopt the merger agreement. If you respond but do not indicate how you want to vote on the proposal to adopt the merger agreement, your proxy will be counted
as a vote in favor of the proposal to adopt the merger agreement. If you respond and abstain from voting on the proposal to adopt the merger agreement, your proxy will have the same effect
as a vote against the proposal to adopt the merger agreement. If you are a Triarc stockholder and you fail to respond with a vote or fail to instruct your broker or other nominee how to vote on the three proposals relating to the adoption of the
amendment to Triarc’s certificate of incorporation (for a summary of these proposals, see “Triarc Annual Meeting—Purpose of the Annual Meeting”) or the proposal to issue Wendy’s/Arby’s
common stock in the merger, it will have the same effect as a vote against these proposals, each of which must be approved for the merger to occur. If you respond but do not indicate how
you want to vote on the proposals, your proxy will be counted as a vote in favor of these proposals. If you respond and abstain from voting, your proxy will have the same effect as a vote
against these proposals. 2
Q:
Q: May I change my vote after I have delivered my proxy or voting instruction card? A: Yes. You may change your vote at any time before your proxy is voted at your annual or special meeting, as the case may be. You may revoke your proxy by giving notice of revocation in writing, by accessing the internet site stated on the form of proxy, by using the toll-free telephone number stated on the form of
proxy, or by attending, and voting at, the annual or special meeting. Your attendance at the annual or special meeting alone will not revoke any proxy. If your shares are held in an account at a broker or other nominee, you should contact your broker or other nominee to change your vote. Q: Do I have dissenters’ rights?
A: Wendy’s shareholders who do not vote in favor of the merger proposal and otherwise comply with the requirements and procedures of Section 1701.85 of the Ohio Revised Code, a copy of
which is attached as Annex I to this joint proxy statement/prospectus, are entitled to exercise their dissenters’ rights, which generally entitle shareholders to receive a cash payment equal to the
fair value of their Wendy’s common shares in connection with the merger. A detailed description of the dissenters’ rights and procedures available to Wendy’s shareholders is included in “The
Merger—Dissenters’ Rights” beginning on page 80. Triarc stockholders do not have appraisal or dissenters’ rights in connection with the merger or any of the proposals to be considered at the annual meeting.
Q: Should I send in my stock certificates now? A: No. Please do not send your stock certificates with your proxy card. If you are a holder of Wendy’s common shares, you will receive written instructions from the exchange agent after the merger is completed on how to exchange your stock certificates for the
merger consideration. If you are a Triarc stockholder, you will keep your existing stock certificates, which will continue to represent the number of shares of Wendy’s/Arby’s common stock equal to the number of
shares of Triarc Class A common stock or Triarc Class B common stock, as the case may be, you now hold. If you wish, you may exchange your existing Triarc stock certificates for certificates
with the new Wendy’s/Arby’s name. Q: Whom should I call with questions? A: Triarc’s stockholders should call Innisfree M&A Incorporated, Triarc’s proxy solicitor, at (888) 750-5834 with any questions about the merger and related transactions. Banks and brokers can call
collect at (212) 750-5833. Wendy’s shareholders should call Georgeson Inc., Wendy’s proxy solicitor, at (866) 346-1016 with any questions about the merger and related transactions. Banks and brokers can call collect at
(212) 440-9800. 3
This summary highlights selected information contained in this joint proxy statement/prospectus and may not contain all the information that is important to you. Triarc and Wendy’s urge you to
read carefully this joint proxy statement/prospectus in its entirety, as well as the annexes in their entirety. Additional important information is also contained in the documents incorporated by reference
into this joint proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 223. The Companies Triarc Companies, Inc. Triarc’s corporate predecessor was incorporated in Ohio in 1929. Triarc reincorporated in Delaware in June 1994. Triarc is a holding company and, through its subsidiary Arby’s Restaurant
Group, Inc., which we refer to as “Arby’s Restaurant Group” or “ARG,” is the franchisor of Arby’s® restaurants. Arby’s is the second largest quick service sandwich chain in the U.S. (according to
QSR magazine) and specializes in roast beef and Market Fresh® premium sandwiches, subs, wraps and salads. As of April 27, 2008, the Arby’s restaurant system consisted of 3,700 restaurants of which
1,159 were company-owned and operated. Of the 2,541 restaurants owned by 462 franchisees, 2,419 are operated within the U.S. and 122 are operated outside of the U.S., principally in Canada. Wendy’s International, Inc. Wendy’s International, Inc. was incorporated in 1969 under the laws of the State of Ohio. Wendy’s® is primarily engaged in the business of operating, developing and franchising a system of
distinctive quick service restaurants serving high quality food. As of March 30, 2008, there were 6,622 Wendy’s restaurants in operation in the United States and in 19 other countries and territories.
Of these restaurants, 1,407 were operated by Wendy’s and 5,215 by Wendy’s franchisees. The Merger A copy of the Agreement and Plan of Merger, dated as of April 23, 2008, is attached as Annex A to this joint proxy statement/prospectus. References throughout this joint proxy
statement/prospectus to the merger agreement refer to the Agreement and Plan of Merger. We encourage you to read the entire merger agreement carefully because it contains all of the terms and
conditions governing the merger. The merger agreement provides for, among other things, the merger of Green Merger Sub, Inc., a wholly-owned Ohio subsidiary of Triarc and referred to herein as Merger Sub, with and into
Wendy’s. Following completion of the merger, Wendy’s will continue as the surviving entity and will be a wholly-owned subsidiary of Triarc. The combined company will be named “Wendy’s/Arby’s
Group, Inc.” At the completion of the merger, each outstanding common share of Wendy’s, including restricted shares, will be converted into the right to receive 4.25 fully paid and non-assessable
shares of Wendy’s/Arby’s common stock. The merger agreement contains customary representations and warranties made by Triarc, Merger Sub and Wendy’s. Under the merger agreement, each of Wendy’s and Triarc has agreed to use
commercially reasonable efforts to preserve substantially intact its current business organizations, to keep available the services of its current officers and employees and to preserve its business
relationships. Each of Triarc and Wendy’s has also agreed to use its reasonable best efforts to obtain 4
1155 Perimeter Center West
Atlanta, Georgia 30338
(678) 514-4100
4288 West Dublin-Granville Road
Dublin, Ohio 43017-0256
(614) 764-3100
all approvals, consents or third party waivers necessary to consummate the merger, to contest or resist any judicial or administrative action or proceeding which challenges the merger and to cause the
merger to qualify as a reorganization as described in Section 368(a) of the Internal Revenue Code. Each party’s obligation to effect the merger is subject to the satisfaction or waiver of various conditions at or prior to the time of the completion of the merger. Subject to certain exceptions,
each of Triarc and Wendy’s has agreed that it will not directly or indirectly solicit an alternate takeover proposal. In the event that the merger agreement is terminated, under certain circumstances,
Wendy’s may be required to reimburse Triarc for $10 million of its expenses incurred in connection with the merger. For a further discussion of the terms and conditions of the merger agreement, see
“The Merger Agreement” beginning on page 85. Consideration to be Received in the Merger by Wendy’s Shareholders Upon consummation of the merger, each outstanding Wendy’s common share will be converted into 4.25 shares of Wendy’s/Arby’s common stock. We refer to the number of shares of
Wendy’s/Arby’s common stock to be delivered in respect of each Wendy’s common share in the merger as the exchange ratio. Treatment of Stock Options and Other Stock-based Awards Triarc Triarc stock options and other equity-based awards will remain outstanding and will not be affected by the merger, except that, following the merger, the shares of Triarc Class B common stock
and Triarc Class A common stock that would otherwise be issuable upon the exercise of stock options and other equity-based awards will instead all be shares of Wendy’s/Arby’s common stock. Wendy’s In the merger, all outstanding Wendy’s employee stock options and other stock-based awards, other than performance units, will be converted into options and stock-based awards of
Wendy’s/Arby’s, and those options and awards will entitle the holder to receive Wendy’s/Arby’s common stock. The number of shares issuable under those options and awards, and the exercise prices
for those options and awards, will be adjusted based on an exchange ratio of 1:4.25. Wendy’s outstanding performance units, whether vested or unvested, will be converted into the right to receive an amount in cash in U.S. dollars equal to the fair market value per share of
Wendy’s common shares at the time of the merger multiplied by the number of Wendy’s common shares that are deemed to have vested in connection with the merger. For a more complete discussion of the treatment of Wendy’s stock options and other stock-based awards, see “The Merger Agreement—Treatment of Wendy’s Stock Options and Other Stock-
based Awards” beginning on page 96. Directors and Executive Management of Wendy’s/Arby’s Immediately Following the Merger The board of directors of Wendy’s/Arby’s will initially be composed of 12 members, consisting of (i) ten (10) members of Triarc’s current board of directors, including Roland C. Smith, the
current Chief Executive Officer of Triarc, and Nelson Peltz and Peter W. May, the current Chairman and Vice Chairman of Triarc, respectively, and (ii) two members of Wendy’s current board of
directors designated by Wendy’s and reasonably acceptable to Triarc. At the Triarc annual meeting, Triarc stockholders will elect eleven directors. At the effective time of the merger, one of the Triarc directors elected at the annual meeting will resign and Wendy’s/Arby’s will take all requisite action to cause the two nominees
designated by Wendy’s that are reasonably acceptable to Triarc to be appointed to the Wendy’s/Arby’s board of directors. 5
Wendy’s/Arby’s will have a consolidated support center based in Atlanta which will oversee all public company responsibilities of Wendy’s/Arby’s and shared service functions. The headquarters
of the Wendy’s brand will remain in the greater Columbus, Ohio area following the merger. The headquarters of the Arby’s brand will remain based in Atlanta. For a more complete discussion of the management of Wendy’s/Arby’s, including expected directors and senior management, see “The Merger—Interests of Triarc Directors and Wendy’s Directors
and Executive Officers in the Merger” beginning on page 73. Recommendations of the Boards of Directors Relating to the Merger Triarc The Triarc board of directors unanimously recommends that holders of Triarc Class A common stock and Triarc Class B common stock vote for the proposals:
•
to adopt the amendment to Triarc’s certificate of incorporation to increase the authorized number of shares of Triarc Class A common stock to 1,500,000,000 in connection with the merger
(which shares are referred to as Wendy’s/Arby’s common stock following completion of the merger); • to adopt the amendment to Triarc’s certificate of incorporation to convert each issued and outstanding share of Triarc Class B common stock into a share of Wendy’s/Arby’s common stock and
provide that there shall only be one class of authorized common stock of Wendy’s/Arby’s, in connection with the merger; • to adopt certain additional amendments to Triarc’s certificate of incorporation, in connection with the merger, to: (a) change the name of Triarc to “Wendy’s/Arby’s Group, Inc.,” (b) prohibit
the issuance of preferred stock of Wendy’s/Arby’s to affiliates of Wendy’s/Arby’s unless offered ratably to the holders of Wendy’s/Arby’s common stock, subject to an exception in the event
that Wendy’s/Arby’s is in financial distress and the issuance is approved by the audit committee of Wendy’s/Arby’s board of directors, (c) amend the definition of “Interested Stockholder”,
which is used in the certificate of incorporation in connection with requiring increased stockholder approval thresholds for transactions with affiliates, to remove the exception for DWG
Acquisition Group L.P., a dissolved partnership formerly controlled by Nelson Peltz and Peter W. May, (d) provide that Wendy’s/Arby’s board of directors shall not have the power or authority
to amend, alter or repeal Section 3 of Article I of the Wendy’s/Arby’s bylaws, which provides that the headquarters of the Wendy’s brand will be in the greater Columbus, Ohio area for a ten-
year period following the completion of the merger, and (e) provide that the purpose of Wendy’s/Arby’s is to engage in the restaurant business and complementary, incidental or ancillary
businesses. • to approve the issuance of Wendy’s/Arby’s common stock in the merger. For
a more complete description of Triarc’s reasons for the merger and the
recommendation of the Triarc board of directors, see “The Merger—Strategic
and Financial Rationale” and “—Triarc
Board of Directors’ Recommendation” beginning on pages 51 and
53, respectively. For more details about the proposed amendment, see “The
Amendment to Triarc’s Certificate of Incorporation”
beginning on page 103. Wendy’s The Wendy’s board of directors unanimously recommends (with four abstentions, due to actual or perceived conflicts of interest, from Jerry W. Levin, Peter H. Rothschild and Stuart I. Oran, because of their designation as nominees for election to the Wendy’s board of directors by Trian Partners Master Fund L.P., Trian Partners GP, L.P., Trian Partners, L.P., Trian Partners Parallel
Fund I, L.P., Trian Partners Parallel Fund II, L.P. and Trian Fund Management, L.P., which are collectively referred to as the Trian funds, and Kerrii B. Anderson, the current Chief Executive
Officer and President of Wendy’s, because of her employment as Chief Executive Officer and President of Wendy’s, resulting in interests that are different, or in addition to, the interests of Wendy’s
shareholders) that Wendy’s shareholders vote for the adoption of the merger agreement. 6
For a more complete description of Wendy’s reasons for the merger and the recommendation of the Wendy’s board of directors, see “The Merger—Wendy’s Board of Directors’ Recommendation”
beginning on page 55. Reasons for the Merger Triarc In making its determination, the Triarc board of directors considered a number of strategic and financial benefits of a proposed merger. Among other factors, the Triarc board of directors
focused on its belief that the merger is likely to:
• revitalize the Wendy’s brand through the application of Arby’s quick service restaurant managerial experience to the Wendy’s business; • improve trading characteristics of the Wendy’s/Arby’s common stock; • create a combined company which could compete more effectively than Triarc on a standalone basis; and • create synergies from consolidation at the corporate level resulting in reduced overhead and administrative costs. In making its determination, Triarc’s board of directors considered a number of risks of the proposed merger. Among the risks considered were:
• the possibility that the merger may not be completed; • the risk that the synergies and benefits sought in the merger may not be fully achieved; • the interests that certain Triarc directors may have with respect to the merger in addition to their interests as stockholders of Triarc generally; and • the differing geographic locations of each of the Wendy’s and Arby’s headquarters. Wendy’s In making its determination, the Wendy’s board of directors considered a variety of factors with respect to the merger. The reasons for the Wendy’s board of directors recommending the merger
included:
• the merger consideration represented a premium over the trading price of the Wendy’s common shares; • Greenhill’s opinion that the merger consideration was fair from a financial point of view; • the risks related to a standalone plan and concerns regarding the ability of the current Wendy’s board of directors and management to achieve its financial projections; and • the determination of the Wendy’s special committee that the merger and the merger consideration would result in greater value to Wendy’s shareholders than other strategic alternatives. In making its determination, the Wendy’s board of directors considered a number of risks of the proposed merger. Among the risks considered were:
• Wendy’s common shares traded in excess of the value of the merger consideration at various times over the past several years; • the possibility that, under certain circumstances, Wendy’s may be required to reimburse Triarc for fees and expenses of $10 million in the event that the merger agreement is terminated; • that the failure to complete the merger could negatively impact Wendy’s stock price; and • the risk that the merger may not be completed as a result of a failure to satisfy the closing conditions. For
a discussion of the reasons why Triarc and Wendy’s agreed to enter into
the merger, see “The Merger—Strategic and Financial Rationale” beginning
on page 51, “—Triarc Board of 7
Directors Recommendation” beginning
on page 53 and “—Wendy’s Board of Directors Recommendation” beginning
on page 55. Opinions of Financial Advisors Triarc’s Financial Advisor In connection with the merger, the Triarc board of directors received an opinion, dated April 23, 2008, from Triarc’s financial advisor, Wachovia Capital Markets, LLC, referred to in this joint
proxy statement/prospectus as Wachovia Securities, as to the fairness, from a financial point of view and as of the date of such opinion, to Triarc of the exchange ratio provided for in the merger.
The full text of Wachovia Securities’ written opinion, dated April 23, 2008, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the
review undertaken in connection with such opinion, is attached as Annex B to this joint proxy statement/prospectus and is incorporated by reference in its entirety into this joint proxy
statement/prospectus. This summary is qualified in its entirety by reference to the full text of the opinion. Wachovia Securities provided its opinion for the information and assistance of the Triarc
board of directors in connection with its evaluation of the exchange ratio from a financial point of view to Triarc. Wachovia Securities’ opinion does not address any other aspect of the merger, does
not address the merits of the underlying decision by Triarc to enter into the merger agreement or the relative merits of the merger compared with other business strategies or transactions available or
that were or might be considered by Triarc’s management or board of directors and does not constitute a recommendation as to how any stockholder should vote or act in connection with the merger
or any other matters. For a more complete description, see “The Merger—Opinion of Triarc’s Financial Advisor” beginning on page 57. Wendy’s Financial Advisor In connection with the merger, at the request of the Wendy’s special committee, on April 23, 2008, Greenhill & Co., LLC (referred to herein as Greenhill) delivered its oral opinion, subsequently
confirmed in writing, to the Wendy’s board of directors that, as of the date of the opinion and based upon and subject to the limitations and assumptions stated in its opinion, the 4.25 shares of
Triarc Class A common stock (as adjusted pursuant to the terms of the merger agreement, referred to herein as the consideration) to be received by holders of Wendy’s common shares (other than
Wendy’s or any of its subsidiaries, Triarc or any of its affiliates or dissenting holders) is fair, from a financial point of view, to such shareholders (referred to herein as unaffiliated holders). The full
text of Greenhill’s written opinion dated April 23, 2008, which contains the assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with
the opinion, is attached as Annex C to this joint proxy statement/prospectus and is incorporated herein by reference. The summary of Greenhill’s opinion in this joint proxy statement/prospectus is
qualified in its entirety by reference to the full text of the opinion. You are urged to read the opinion in its entirety. Greenhill’s written opinion was addressed to the Wendy’s board of directors. It
was not a recommendation to the Wendy’s board of directors as to whether it should approve the merger or the merger agreement nor is it a recommendation as to how the shareholders of Wendy’s
should vote with respect to the merger or any other matter. Greenhill’s opinion did not address the underlying business decision of Wendy’s to engage in the merger or the relative merits of the
merger as compared to any other alternative transaction, nor did it address the relative merits of or consideration offered in any such transaction as compared to the transactions contemplated by the
merger agreement. Greenhill has not expressed any opinion as to any aspect of the transactions contemplated by the merger agreement other than the fairness, from a financial point of view, of the
consideration to the unaffiliated holders. For a more complete description, see “The Merger—Opinion of Wendy’s Financial Advisor” beginning on page 65. See also Annex C to this joint proxy statement/prospectus. 8
Interests of Triarc Directors and Wendy’s Directors and Executive Officers in the Merger Triarc Certain of Triarc’s directors have interests in the merger that are different from, or are in addition to, the interests of Triarc’s stockholders. These interests include the fact that Nelson Peltz,
Peter W. May and Edward P. Garden may be deemed to beneficially own % of Wendy’s common shares as of the Wendy’s record date through their ownership interest in the Trian funds. For a further discussion, see “The Merger—Interests of Triarc Directors and Wendy’s Directors and Executive Officers in the Merger” beginning on page 73. Wendy’s Wendy’s directors and certain executive officers have interests in the merger that are different from, or are in addition to, the interests of Wendy’s shareholders. These interests include:
•
the accelerated vesting of options as a result of a change in control for 762,412 Wendy’s common shares with a weighted average exercise price of $28.705 held by Wendy’s directors and certain
executive officers with an aggregate value of $224,912, based on the closing price per Wendy’s common share of $29.00 on April 30, 2008; • the accelerated award and/or vesting of other equity based awards for Wendy’s board of directors and certain executive officers valued at $9,611,414, based on the closing price per Wendy’s
common share of $29.00 on April 30, 2008; • payment of performance bonuses of up to $2,303,721 for certain executive officers; and • potential severance payments of up to $13,982,085 for certain executive officers. The
following table summarizes the total value of payments that may be received
by Wendy’s directors and executive officers under various agreements
assuming the merger is consummated and they no longer serve in such positions
as a result of the merger. The total value of payments is compiled from the
table on page 75 summarizing the equity awards, other than the resulting
value of Wendy’s common stock and the value related to Tim Hortons restricted
stock, and the tables summarizing deferred compensation and estimated benefits
on pages 77 and 78, respectively, of this joint
proxy statement/prospectus: Directors (excluding Kerrii B. Anderson)
$
4,555,997 Executive Officers
$
26,532,074 Total
$
31,088,071 The amounts described above are based on an assumed merger completion date of September 28, 2008, which is not necessarily representative of the actual effective time of the merger and do
not take into account additional shares that will be acquired in connection with the dividend reinvestment provisions of existing equity awards for dividends payable after April 30, 2008. Stock options
with an exercise price above $29.00 per share were excluded from these calculations. Dissenters’ Rights Triarc stockholders do not have appraisal or dissenters’ rights in connection with the merger or any proposals to be considered at the Triarc annual meeting. Under Ohio law, if the merger is consummated, any Wendy’s shareholder that does not vote for the adoption of the merger agreement may be entitled to seek relief as a dissenting shareholder
under Section 1701.85 of the Ohio Revised Code. To perfect dissenters’ rights, a record holder must:
•
not vote their Wendy’s common shares in favor of the proposal to approve and adopt the merger agreement at the Wendy’s special meeting; • deliver a written demand for payment of the fair cash value of their Wendy’s common shares on or before the tenth day following the Wendy’s special meeting; and • otherwise comply with the statute. 9
Wendy’s common shares held by any person who desires to dissent but fails to perfect or who effectively withdraws or loses the right to dissent as of the effective time of the merger under
Section 1701.85 of the Ohio Revised Code will be converted into, as of the effective time, the right to receive the merger consideration, without interest. A copy of Section 1701.85 of the Ohio
Revised Code is attached as Annex I to this joint proxy statement/prospectus and is incorporated herein by reference. For a discussion of dissenters’ rights, including the statutory procedure to be
followed by dissenting shareholders in order to perfect such rights, see “The Merger—Dissenters’ Rights” beginning on page 80. Material U.S. Federal Income Tax Consequences of the Conversion and the Merger The conversion of each share of Triarc Class B common stock into one share of Wendy’s/Arby’s common stock will qualify for U.S. federal income tax purposes either as a reorganization, a tax
free exchange of stock for stock of the same corporation, or both. The merger will qualify as a reorganization for U.S. federal income tax purposes. Holders of Wendy’s common shares will not recognize income, gain or loss on the exchange of their Wendy’s
common shares for Wendy’s/Arby’s common stock, but may recognize income, gain or loss from the receipt of cash in exchange for fractional shares of their Wendy’s common shares. It is a condition
to each of Triarc’s and Wendy’s respective obligations to complete the merger that it receive a separate legal opinion, at the effective time of the merger, that confirms that the merger will qualify as
a reorganization for U.S. federal income tax purposes. For a more complete description of the material U.S. federal income tax consequences of the merger, see “Material U.S. Federal Income Tax Consequences” beginning on page 82. The tax consequences of the conversion and the merger to you may depend on your own situation. In addition, you may be subject to state, local or foreign tax laws that are not addressed in
this joint proxy statement/prospectus. You are urged to consult with your own tax advisor for a full understanding of the tax consequences of the conversion and the merger to you. Regulatory Matters The merger is also subject to the expiration or termination of the applicable waiting period under the U.S. antitrust laws. The merger agreement requires Triarc and Wendy’s to make any
required filings with governmental entities and use reasonable best efforts to take any action to resolve any regulatory objection in order to enable the closing of the merger to occur as soon as
reasonably possible. On May 28, 2008, the United States Federal Trade Commission granted Wendy’s and Triarc’s request for early termination of the Hart-Scott-Rodino Act waiting period. Conditions to Completion of the Merger Each party’s obligation to complete the merger is subject to the satisfaction or waiver of various conditions, including the following:
•
receipt of the required stockholder/shareholder approvals; • obtaining all necessary legal and regulatory approvals, consents and waivers, including the expiration or termination of the waiting period applicable to the merger under the Hart-Scott-Rodino
Act and a declaration of effectiveness by the SEC of the registration statement of which this joint proxy statement/prospectus forms a part; • no law, judgment, injunction, order or decree by any court or other tribunal of competent jurisdiction which prohibits the consummation of the merger shall have been adopted or entered and
shall continue to be in effect; • approval for listing on the NYSE of Wendy’s/Arby’s common stock to be issued in the merger; • accuracy of the other party’s representations and warranties in the merger agreement; • the other party’s compliance with its obligations under the merger agreement; 10
• receipt of opinions of counsel relating to the U.S. federal income tax treatment of the merger; and • the other party having prepared amendments to all of its domestic and international franchise agreements where required by law and filed registrations for application of each of such amended
domestic and international franchise agreements. Wendy’s obligation to effect the merger is also subject to the satisfaction or waiver of various additional conditions, including the following:
•
Triarc having deposited with the exchange agent a sufficient amount of Wendy’s/Arby’s common stock to issue the merger consideration to Wendy’s shareholders upon consummation of the
merger; and • effectiveness of an amendment to Triarc’s bylaws providing that the Wendy’s brand shall be headquartered in the greater Columbus, Ohio area for at least ten years from the date the merger is
consummated. Triarc’s obligation to effect the merger is also subject to the satisfaction or waiver of various additional conditions, including the following:
•
the total number of Wendy’s dissenting shares not exceeding 5% of the aggregate issued and outstanding Wendy’s common shares as of the date of the merger.
The merger agreement provides that any or all of these conditions may be waived, in whole or in part, by Triarc or Wendy’s, to the extent legally allowed. Neither Triarc nor Wendy’s currently
expects to waive any material condition to the completion of the merger. For a more complete discussion of the conditions to the merger, see “The Merger Agreement—Conditions to Completion of
the Merger” beginning on page 90. Material Events Following Completion of the Merger Certain material events may occur as a result of the completion of the merger. These events could have a material effect on Wendy’s/Arby’s. See “Risk Factors” beginning on page 29. These
events include:
Realization of the anticipated benefits in the merger will depend on Wendy’s/Arby’s ability to successfully integrate corporate and administrative business functions and improve and grow the
restaurant operations of Wendy’s and Arby’s. The resulting company will be required to devote significant management attention and resources to integrating its business practices and support
functions. • Triarc stockholders and Wendy’s shareholders will have a reduced ownership and voting interest after the merger and will exercise less influence over management. Triarc stockholders and
Wendy’s shareholders currently have the right to vote in the election of the board of directors of Triarc and Wendy’s, respectively, and on other matters affecting Triarc and Wendy’s,
respectively. When the merger occurs, each Wendy’s shareholder that receives shares of Wendy’s/Arby’s common stock will become a stockholder of Wendy’s/Arby’s with a percentage
ownership that is smaller than such shareholder’s percentage ownership of Wendy’s. Similarly, when the merger occurs, because each Wendy’s shareholder will become a stockholder of
Wendy’s/Arby’s, the percentage ownership of a Triarc stockholder in Wendy’s/Arby’s will be smaller than such stockholder’s percentage ownership of Triarc. Termination of the Merger The merger agreement may be terminated by Triarc or Wendy’s before completion of the merger in certain circumstances, including after stockholder/shareholder approval is obtained. In
addition, the merger agreement provides that Wendy’s may be required to pay the expenses of Triarc in an amount equal to $10 million in the circumstances generally described below:
•
if, prior to receiving the approval of the Wendy’s shareholders, Wendy’s terminates the merger agreement after its board of directors approves a “superior proposal” and promptly 11
•
following such termination, enters into a definitive agreement in connection with such superior proposal, provided that Wendy’s shall have complied with its obligations under the non-
solicitation provisions of the merger agreement; or • if Triarc terminates the merger agreement because Wendy’s (1) withdraws its recommendation that the shareholders of Wendy’s adopt the merger agreement, (2) fails to include its
recommendation in the proxy statement, (3) recommends or approves any alternative takeover proposal of Wendy’s, (4) fails to publicly reaffirm its recommendation following the receipt of an
alternative takeover proposal or (5) materially breaches its obligations under the non-solicitation provisions of the merger agreement or fails to hold the meeting of the Wendy’s shareholders or
to use reasonable best efforts to solicit proxies in favor of the adoption of the merger agreement and to obtain the approval of the Wendy’s shareholders. If the merger agreement is terminated upon the occurrence of certain events, the Trian funds will be bound for up to three years by certain provisions that, among other things, restrict their
ability to directly or indirectly acquire additional securities of Wendy’s, enter or propose to enter into any business combination with Wendy’s or make, or in any way participate or engage in, any
solicitation of proxies or consents to vote with respect to any voting securities of Wendy’s. See “The Voting Agreements” beginning on page 99. See “The Merger Agreement—Termination Events; Expense Reimbursement Required” and “—Termination Events; No Expense Reimbursement” each beginning on page 95 for a discussion of the
circumstances under which the parties may terminate and under which expense reimbursement will be required to be paid. Voting Agreements Concurrently with the execution of the merger agreement, (i) Nelson Peltz and Peter W. May entered into a voting agreement with Triarc and (ii) the Trian funds entered into a voting
agreement with Wendy’s. Mr. Peltz and Mr. May have agreed to vote all of their shares of Triarc Class A common stock and Triarc Class B common stock in favor of the proposals relating to the adoption of the
amendments to Triarc’s certificate of incorporation and in favor of the issuance of the Wendy’s/Arby’s common stock to be issued in the merger. Mr. Peltz and Mr. May also agreed to certain
restrictions on their ability to transfer their shares of Triarc common stock. As of the Triarc record date, Mr. Peltz and Mr. May may be deemed to beneficially own, in the aggregate, approximately % of the outstanding shares of Triarc Class A common stock and % of the outstanding shares of Triarc Class B common stock, representing approximately % of the total voting
power of Triarc. The Trian funds have agreed to vote their Wendy’s shares in favor of adoption of the merger agreement. The Trian funds have also agreed to certain restrictions on their ability to transfer their
Wendy’s shares. As of the Wendy’s record date, the Trian funds may be deemed to beneficially own, in the aggregate, approximately % of the total voting power of Wendy’s. The Trian funds have also agreed that if the merger agreement is terminated upon the occurrence of certain events, the Trian funds will be bound for up to three years by certain provisions that,
among other things, restrict the Trian funds’ ability to directly or indirectly acquire additional securities of Wendy’s, enter or propose to enter into any business combination with Wendy’s or make, or
in any way participate or engage in, any solicitation of proxies or consents to vote with respect to any voting securities of Wendy’s. For a more complete description, see “The Voting Agreements” beginning on page 99. Comparison of Rights of Stockholders/Shareholders of Triarc, Wendy’s and Wendy’s/Arby’s Triarc is a Delaware corporation. Wendy’s is an Ohio corporation. The shares of Wendy’s/Arby’s common stock that Wendy’s shareholders will receive in the merger will be stock of a Delaware
corporation. Stockholder rights under Delaware law and shareholder rights under Ohio 12
law are different. In addition, the certificate of incorporation, as amended, and bylaws, as amended, of Wendy’s/Arby’s will contain provisions that are different from the articles or certificate of
incorporation and regulations or bylaws of Wendy’s and Triarc, respectively. At the Triarc annual meeting, Triarc stockholders will be asked, among other things, to adopt several amendments to
Triarc’s certificate of incorporation which, upon consummation of the merger, will be the certificate of incorporation of Wendy’s/Arby’s. The Wendy’s/Arby’s certificate of incorporation, as amended,
will include material changes to Triarc’s certificate of incorporation, which are necessary to effect the merger. For a more detailed description of the terms of Wendy’s/Arby’s certificate of
incorporation, as amended, see “Authorized Capital Stock of Wendy’s/Arby’s” beginning on page 200. Triarc stockholders are not being asked to vote on Wendy’s/Arby’s bylaws. Although Wendy’s
shareholders will be asked to adopt the merger agreement at the Wendy’s special meeting, the approval by Wendy’s shareholders of Wendy’s/Arby’s certificate of incorporation and bylaws, by
themselves, is not required. For a summary of certain differences among the rights of holders of Triarc Class A common stock, Triarc Class B common stock, Wendy’s common shares and Wendy’s/Arby’s common stock,
see “Comparison of Rights of Stockholders/Shareholders of Triarc, Wendy’s and Wendy’s/Arby’s” beginning on page 206. Matters to be Considered at the Meetings
Triarc Annual Meeting
Triarc stockholders will be asked to vote on the following proposals:
•
to adopt the amendment to Triarc’s certificate of incorporation to increase the authorized number of shares of Triarc Class A common stock to
1,500,000,000 in connection with the merger (which shares of Triarc Class A common stock are referred to as shares of Wendy’s/Arby’s common stock
following completion of the merger);
•
to adopt the amendment to Triarc’s certificate of incorporation to convert each issued and outstanding share of Triarc Class B common stock into one
share of Wendy’s/Arby’s common stock and provide that there shall only be one class of authorized common stock of Wendy’s/Arby’s, in connection with
the merger;
•
to adopt certain additional amendments to Triarc’s certificate of incorporation, in connection with the merger, to: (a) change the name of Triarc to
“Wendy’s/Arby’s Group, Inc.,” (b) prohibit the issuance of preferred stock of Wendy’s/Arby’s to affiliates of Wendy’s/Arby’s unless offered ratably to the
holders of Wendy’s/Arby’s common stock, subject to an exception in the event that Wendy’s/Arby’s is in financial distress and the issuance is approved by
the audit committee of Wendy’s/Arby’s board of directors, (c) amend the definition of “Interested Stockholder”, which is used in the certificate of
incorporation in connection with requiring increased stockholder approval thresholds for transactions with affiliates, to remove the exception for DWG
Acquisition Group L.P., a dissolved partnership formerly controlled by Nelson Peltz and Peter W. May, (d) provide that Wendy’s/Arby’s board of
directors 13
shall not have the power or authority to amend, alter or repeal Section 3 of Article I of the Wendy’s/Arby’s bylaws, which provides that the
headquarters of the Wendy’s brand will be in the greater Columbus, Ohio area for a ten-year period following the completion of the merger, and (e)
provide that the purpose of Wendy’s/Arby’s is to engage in the restaurant business and complementary, incidental or ancillary businesses.
(A copy of Triarc’s current certificate of incorporation and a copy of the form of amendment to Triarc’s certificate of incorporation described above are
attached as Annexes D and E, respectively, to this joint proxy statement/prospectus. For more details about the proposed amendment, see “The Amendment to
Triarc’s Certificate of Incorporation.”)
•
to approve the issuance of Wendy’s/Arby’s common stock in the merger;
•
to approve any motion to adjourn the Triarc annual meeting to another time or place, if necessary, to solicit additional proxies if there are insufficient
votes at the time of the Triarc annual meeting to approve the proposals related to the merger;
• to elect eleven directors to hold office as specified in this joint proxy statement/prospectus;
•
to approve an amendment to Triarc’s Amended and Restated 2002 Equity Participation Plan to increase the number of shares reserved for issuance under
the plan by an additional 7,400,000 shares of Triarc Class B common stock, prohibit the repricing of outstanding awards without prior stockholder
approval and eliminate the ability of Triarc to grant reload option awards or stock options or SARs with exercise prices below fair market value on the
date of grant;
•
to ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for 2008; and
•
to conduct other business that properly comes before the Triarc annual meeting and any adjournment or postponement of the meeting.
Each of the first four proposals listed above relating to the merger is conditioned upon approval of each of the other three and the approval of each such
proposal is required for completion of the merger. None of the three proposals relating to the adoption of the amendment to Triarc’s certificate of
incorporation or the proposal to issue Wendy’s/Arby’s common stock in the merger will be implemented unless all four proposals related to the merger are
approved by the Triarc stockholders and the merger is completed.
Recommendation of Triarc’s board
of directors: The Triarc board of directors unanimously recommends that Triarc stockholders vote to approve all of the proposals set forth above, as more fully described
under “Triarc Annual Meeting” beginning on page 108. 14
Wendy’s Special Meeting
Wendy’s shareholders will be asked to vote on the following proposals:
•
to adopt the merger agreement; and
•
to approve any motion to adjourn the Wendy’s special meeting to another time or place, if necessary, to solicit additional proxies if there are insufficient
votes at the time of the Wendy’s special meeting to adopt the merger agreement.
Recommendation of Wendy’s board
of directors: The Wendy’s board of directors unanimously recommends (with four abstentions due to actual or perceived conflicts of interest, from Jerry W. Levin, Peter H.
Rothchild and Stuart I. Oran, because of their designation to the Wendy’s board of directors by the Trian funds, and Kerrii B. Anderson, the current Chief
Executive Officer and President of Wendy’s, because of her employment as Chief Executive Officer and President of Wendy’s, resulting in interests that are
different, or in addition to, the interests of Wendy’s shareholders) that Wendy’s shareholders vote to approve the proposals set forth above, as more fully
described under “Wendy’s Special Meeting” beginning on page 177. Required Vote Triarc For the matters to be approved by Triarc stockholders:
• the amendment to the Triarc certificate of incorporation increasing the number of authorized shares of Triarc Class A common stock requires the affirmative vote of a majority of the total
voting power of the outstanding shares of Triarc Class A common stock (for purposes of the class vote, holders of Triarc Class A common stock have one full vote for each share of that stock),
voting together as a separate class, and the affirmative vote of a majority of the total voting power of the outstanding shares of Triarc Class A common stock and Triarc Class B common stock
entitled to vote (for purposes of this vote, holders of Triarc Class B common stock have 1/10 vote for each share of that stock and holders of Triarc Class A common stock have one full vote
for each share of that stock), voting together as a single class; • the amendment to Triarc’s certificate of incorporation to convert each issued and outstanding share of Triarc Class B common stock into one share of Wendy’s/Arby’s common stock and
provide that there shall be one class of authorized common stock of Wendy’s/Arby’s requires the affirmative vote of a majority of the total voting power of the outstanding shares of Triarc
Class B common stock (for purposes of the class vote, holders of Triarc Class B common stock have one full vote for each share of that stock), voting together as a separate class, and the
affirmative vote of a majority of the total voting power of the outstanding shares of Triarc Class A common stock and Triarc Class B common stock entitled to vote (for purposes of this vote,
holders of Triarc Class B common stock have 1/10 vote for each share of that stock and holders of Triarc Class A common stock have one full vote for each share of that stock), voting
together as a single class; • the additional amendments to Triarc’s certificate of incorporation requires the affirmative vote of a majority of the total voting power of the outstanding shares of Triarc Class A common stock
and Triarc Class B common stock (for purposes of this vote, holders of Triarc Class B common stock have 1/10 vote for each share of that stock and holders of Triarc Class A common stock
have one full vote for each share of that stock), voting together as a single class, and
15
• the issuance of Wendy’s/Arby’s common stock in the merger to Wendy’s shareholders requires the affirmative vote of a majority of the votes cast on the proposal by holders of shares of Triarc
Class A common stock and Triarc Class B common stock (for purposes of this vote, holders of Triarc Class B common stock have 1/10 vote for each share of that stock and holders of Triarc
Class A common stock have one full vote for each share of that stock), voting together as a single class, provided that the total votes cast on the proposal represent over 50% of the total
voting power of the outstanding shares of Triarc Class A common stock and Triarc Class B common stock (for this purpose, holders of Triarc Class B common stock have 1/10 vote for each
share of that stock and holders of Triarc Class A common stock have one full vote for each share of that stock), entitled to vote on the proposal. Wendy’s For the matters to be approved by Wendy’s shareholders:
• the proposal to adopt the agreement and plan of merger requires the affirmative vote of a majority of the outstanding Wendy’s common shares entitled to vote at the Wendy’s special meeting. For more details concerning the voting requirements, see “Triarc Annual Meeting—Votes Required” beginning on page 110 and “Wendy’s Special Meeting—Voting Requirements” beginning on page
178. Voting by Triarc and Wendy’s Directors and Executive Officers On the Triarc record date, Messrs. Peltz and May, directors of Triarc, were entitled to vote shares of Triarc Class A common stock, representing % of the outstanding shares of
Triarc Class A common stock and shares of Triarc Class B common stock, representing % of the outstanding shares of Triarc Class B common stock, and representing in the aggregate,
approximately % of the total voting power of the outstanding shares of Triarc Class A common stock and Triarc Class B common stock entitled to vote at the Triarc annual meeting. Pursuant
to a voting agreement with respect to the merger entered into with Triarc on April 23, 2008, Messrs. Peltz and May have agreed, subject to the terms of the voting agreement, to vote their shares in
favor of Proposals 1, 2, 3 and 4. For more details about the voting agreement, see “The Voting Agreements” beginning on page 99. Triarc has been informed that Messrs. Peltz and May will also vote
their shares in accordance with the recommendation of the Triarc board of directors, in favor of Proposals 5, 6, 7 and 8. On the Triarc record date, directors and executive officers of Triarc and their
affiliates (excluding Messrs. Peltz and May) owned and were entitled to vote shares of Triarc Class A common stock, representing % of the outstanding shares of Triarc Class A
common stock, and shares of Triarc Class B common stock, representing % of the outstanding shares of Triarc Class B common stock, and representing in the aggregate approximately % of the total voting power of the outstanding shares of Triarc Class A common stock and Triarc Class B common stock entitled to vote at the Triarc annual meeting. See “Triarc Annual
Meeting—Voting by Triarc Directors and Executive Officers.” On the Wendy’s record date, directors and executive officers of Wendy’s and their affiliates owned and were entitled to vote Wendy’s common shares, representing % of the
outstanding Wendy’s common shares. See “Wendy’s Special Meeting—Voting Power of Wendy’s Directors and Executive Officers” beginning on page 178. 16
Comparative Per Share Information (Unaudited) The following unaudited comparative per share data is derived from the historical consolidated financial statements of each of Triarc and Wendy’s and the Unaudited Pro Forma Combined
Condensed Financial Statements of Wendy’s/Arby’s provided in this joint proxy statement/ prospectus. The information below should be read in conjunction with the financial statements and
accompanying notes of Triarc and Wendy’s, which are incorporated by reference into this joint proxy statement/prospectus. We urge you also to read “Unaudited Pro Forma Combined Condensed
Financial Statements of Wendy’s/Arby’s” beginning on page 187.
As of and for
As of and Triarc-Historical: Book value per share Class A common stock
$
4.85
$
3.92 Class B common stock
$
4.85
$
3.92 Basic and diluted income (loss) per share from continuing operations: Class A common stock
$
0.15
$
(0.73
) Class B common stock
$
0.17
$
(0.73
) Cash dividends per share Class A common stock
$
0.32
$
0.08 Class B common stock
$
0.36
$
0.09 Wendy’s-Historical: Book value per share
$
9.20
$
9.11 Earnings per share from continuing operations: Basic
$
0.97
$
0.05 Diluted
$
0.96
$
0.05 Cash dividends per share
$
0.46
$
0.125 Wendy’s Equivalent(1): Book value per share
$
2.16
$
2.14 Earnings per share from continuing operations Basic
$
0.23
$
0.01 Diluted
$
0.23
$
0.01 Cash dividends per share
$
0.11
$
0.03 Wendy’s/Arby’s Pro Forma: Book value per share
$
6.08 Income (loss) per share from continuing operations Basic
$
0.09
$
(0.15
) Diluted
$
0.09
$
(0.15
) Cash dividends per share(2)
$
0.16
$
0.04
(1)
Represents Wendy’s historical data as adjusted by the exchange ratio. (2) Based on historical dividends paid by Triarc and Wendy’s. See “Market Prices and Dividends and Other Distributions.” 17
the year ended
December 30, 2007
for the three
months ended
March 30, 2008
Market Prices and Dividends and Other Distributions Stock Prices The table below presents the closing sales price per share of Triarc Class A common stock, which trades on the NYSE under the symbol “TRY,” the closing sales price per share of Triarc Class
B common stock which trades on the NYSE under the symbol “TRY.B,” the closing sales price per Wendy’s common share, which trades on the NYSE under the symbol “WEN,” and the market
value of one Wendy’s common share on an equivalent per share basis based on the exchange ratio. These prices are presented on four dates:
•
March 12, 2008, 30 trading days prior to the public announcement of the signing of the merger agreement; • April 17, 2008, 5 trading days prior to the public announcement of the signing of the merger agreement; • April 23, 2008, the last trading day before the public announcement of the signing of the merger agreement; and
• July 10, 2008, the latest practicable date before the date of this joint proxy statement/prospectus.
Triarc
Triarc
Wendy’s
Wendy’s March 12, 2008
7.06
7.26
23.91
30.02 April 17, 2008
6.64
6.86
25.10
28.22 April 23, 2008
6.30
6.50
25.32
26.78 July 10, 2008
5.66
5.71
24.18
24.06
(1) The above table shows only historical comparisons. These comparisons may not provide meaningful information to Triarc stockholders or Wendy’s shareholders in determining whether to approve
the proposals relating to the merger. Triarc stockholders and Wendy’s shareholders are urged to obtain current market quotations for Triarc Class A common stock, Triarc Class B common stock and
Wendy’s common shares and to review carefully the other information contained in this joint proxy statement/prospectus or incorporated by reference herein before voting at the annual or special
meeting, as the case may be. Dividends and Other Distributions Triarc paid aggregate cash dividends of $0.32 per share on Triarc Class A common stock and of $0.36 per share on Triarc Class B common stock in 2007. In accordance with the certificate of
designation for Triarc Class B common stock, and resolutions adopted by the board of directors on June 5, 2007, Triarc Class B common stock was entitled, through December 30, 2007, to receive
regular quarterly cash dividends equal to at least 110% of any regular quarterly cash dividends paid on Triarc Class A common stock. However, the Triarc board of directors determined that for the
first and second fiscal quarters of 2008 it would continue to pay regular quarterly cash dividends at that higher rate on Triarc Class B common stock when regular quarterly cash dividends are paid
on Triarc Class A common stock. Thereafter, each share of Triarc Class B common stock is entitled to at least 100% of the regular quarterly cash dividend paid on each share of Triarc Class A
common stock. In addition, Triarc Class B common stock has a $0.01 per share preference in the event of any liquidation, dissolution or winding up of Triarc and, after each share of Triarc Class A
common stock also receives $0.01 per share in any such liquidation, dissolution or winding up, Triarc Class B common stock would thereafter participate equally on a per share basis with Triarc Class
A common stock in any remaining assets of Triarc. On March 14, 2008 and June 16, 2008, Triarc paid regular quarterly cash dividends of $0.08 and $0.09 per share on Triarc Class A common stock and Triarc Class B common stock, respectively,
to 18
Class A
common stock($)
Class B
common stock($)
common stock($)
Equivalent
Per Share(1)($)
The equivalent data per Wendy’s common share has been determined by multiplying the closing price on the applicable date of one share of Triarc Class A common stock by 4.25.
holders of record on March 1, 2008 and June 2, 2008 respectively. In addition, on April 4, 2008, Triarc paid a special dividend on its Triarc Class A common stock and Triarc Class B common stock
consisting of 0.106028 shares of Deerfield Capital Corp. common stock for each share of Triarc Class A common stock outstanding and each share of Triarc Class B common stock outstanding to
holders of record on March 29, 2008. This dividend represented the distribution of 9,629,368 shares of Deerfield Capital Corp. common stock Triarc had received in connection with the sale of its
majority interest in Deerfield & Company LLC, a Chicago-based asset management firm which we refer to as Deerfield, to Deerfield Capital Corp. and all other shares of Deerfield Capital Corp.
common stock held by Triarc. Wendy’s paid aggregate cash dividends of $0.46 per share in 2007. In February 2007, Wendy’s announced that based on its cash position and strategic direction, it intended to increase its
aggregate annual common stock dividend rate by 47% to $0.50 per share from the aggregate annual rate of $0.34 per share established in the fourth quarter of 2006 following the spin-off of Tim
Hortons Inc. Prior to the spin-off, the aggregate annual common stock dividend had been $0.68 per share. On May 19, 2008, Wendy’s paid a cash dividend of $0.125 per share to shareholders of
record as of May 5, 2008. There can be no assurance that any regular quarterly cash dividends will be declared or paid by Wendy’s/Arby’s or the amount or timing of such dividends, if any. Any future dividends will be
made at the discretion of Wendy’s/Arby’s board of directors and will be based on such factors as earnings, financial condition, cash requirements and other factors. See “Risk Factors—Risk Factors
Relating to the Merger—There can be no assurance regarding whether or to what extent Wendy’s/Arby’s will pay dividends on its common stock in the future.” 19
SELECTED HISTORICAL FINANCIAL DATA OF TRIARC The following table sets forth selected historical financial data for Triarc. The following data at and for each of the five years ended December 30, 2007 has been derived from Triarc’s audited
consolidated financial statements. The following data at March 30, 2008 and for the three months ended April 1, 2007 and March 30, 2008 has been derived from Triarc’s unaudited consolidated
financial statements, which in the opinion of Triarc’s management, include all adjustments considered necessary for a fair presentation. The following information should be read together with Triarc’s
audited consolidated financial statements for the year ended December 30, 2007 and Triarc’s unaudited consolidated financial statements for the three months ended March 30, 2008, and the notes
related to those financial statements, which are incorporated by reference into this joint proxy statement/prospectus. The information set forth below is not necessarily indicative of the results of
future operations.
As of and for the
As of or for the year ended(1)
March 30,
April 1,
December 30,
December 31,
January 1,
January 2,
December 28,
(in millions except per share amounts) Revenues
$
303
$
302
$
1,264
$
1,243
$
727
$
329
$
294 Operating profit (loss)
8
8
20
(10)
45
(31
)(8)
3
—
(6) Income (loss) from continuing operations
(67
)(11)
7
15
(10)
(11
)(9)
(58
)(8)
1
(7)
(12
)(6) Income (loss) from discontinued operations
—
(0
)
1
(0
)
3
12
2 Net income (loss)
(67
)(11)
7
16
(10)
(11
)(9)
(55
)(8)
14
(7)
(10
)(6) Basic and diluted income (loss) per share(4) from continuing operations: Class A common stock
(.73
)
.07
.15
(.13
)
(.84
)
.02
(.21
) Class B common stock
(.73
)
.08
.17
(.13
)
(.84
)
.02
(.21
) Cash dividends per share Class A common stock
.08
.08
.32
.77
.29
.26
.13 Class B common stock
.09
.09
.36
.81
.33
.30
.15 Working capital (deficit)
(57
)
148
(37
)
161
296
463
611 Total assets
1,405
1,520
1,455
1,560
2,809
1,067
1,043 Long-term debt
728
706
712
702
895
446
483 Stockholders’ equity
364
465
449
478
398
305
290 Weighted average shares outstanding (in thousands)(5): Class A common stock
28,884
28,760
28,836
27,301
23,766
22,233
20,003 Class B common stock
63,660
63,288
63,523
59,343
46,245
40,840
40,010
(1)
Triarc Companies, Inc. and its subsidiaries report on a fiscal year consisting of 52 or 53 weeks ending on the Sunday closest to December 31. Deerfield, in which Triarc held a 63.6% capital
interest from July 22, 2004 through its sale on December 21, 2007, Deerfield Opportunities Fund, LLC (the “Opportunities Fund”), which commenced on October 4, 2004 and in which Triarc’s
investment was effectively redeemed on September 29, 2006, and DM Fund LLC, which commenced on March 1, 2005 and in which Triarc’s investment was effectively redeemed on December
31, 2006, reported on a calendar year ending on December 31 through their respective sale or redemption dates. In accordance with this method, each of Triarc’s fiscal years presented above
contained 52 weeks except for the 2004 fiscal year which contained 53 weeks. All references to years relate to fiscal years rather than calendar years. (2) Selected financial data reflects the changes related to the adoption of the following new accounting standards: (a) Triarc adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”) as of January 1, 2007. FIN 48 clarifies how
uncertainties in income taxes should be reflected in financial statements in accordance with SFAS 109, “Accounting for Income Taxes.” FIN 48 prescribes a recognition 20
three months ended
2008
2007
2007(2)(3)
2006(2)(3)
2006(2)(3)
2005(2)
2003
threshold and measurement attribute for financial statement recognition and measurement of potential tax benefits associated with tax positions taken or expected to be taken in income tax
returns. FIN 48 prescribes a two-step process of evaluating a tax position, whereby an entity first determines if it is more likely than not that a tax position will be sustained upon examination,
including resolution of any related appeals or litigation processes, based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is then
measured for purposes of financial statement recognition as the largest amount of benefit that is greater than 50 percent likely of being realized upon being effectively settled. There was no
effect on the 2007 statement of operations from the adoption of FIN 48. However, there was a net reduction of $2.3 in stockholders’ equity as of January 1, 2007. (b) In conjunction with the adoption of the provisions of Financial Accounting Standards Board Staff Position No. AUG AIR-1, “Accounting for Planned Major Maintenance Activities” (“FSP
AIR-1”), Triarc now accounts for scheduled major aircraft maintenance overhauls in accordance with the direct expensing method under which the actual cost of such overhauls is recognized as
expense in the period it is incurred. Previously, Triarc accounted for scheduled major maintenance activities in accordance with the accrue-in-advance method under which the estimated cost of
such overhauls was recognized as expense in periods through the scheduled date of the respective overhaul with any difference between estimated and actual cost recorded in results from
operations at the time of the actual overhaul. In accordance with the retroactive application of FSP AIR-1, Triarc has credited (charged) $0.6, $0.7, ($0.2) and $1.3 to operating profit (loss) and
$0.4, $0.5, ($0.1) and $0.8 to income (loss) from continuing operations and net income (loss) for 2006, 2005, 2004 and 2003, respectively. (c) Triarc adopted SFAS No. 123 (revised 2004), “Share-Based Payment” “SFAS 123(R)”, which revised SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”) effective
January 2, 2006. As a result, Triarc measures the cost of employee services received in exchange for an award of equity instruments, including grants of employee stock options and restricted
stock, based on the fair value of the award at the date of grant. Triarc previously used the intrinsic value method to measure employee share-based compensation. As Triarc used the modified
prospective adoption method under SFAS 123(R), there was no effect from the adoption of this standard on the financial statements for all periods presented prior to the adoption date. (3) Selected financial data reflects the operations of RTM Restaurant Group (“RTM”) commencing with its acquisition by Triarc on July 25, 2005. (4) Income (loss) per share amounts reflect the effect of a stock distribution (the “Stock Distribution”) on September 4, 2003 of two shares of Triarc’s Class B common stock, for each share of
Triarc’s Class A common stock issued as of August 21, 2003, as if the Stock Distribution had occurred at the beginning of the year ended December 28, 2003. For the purposes of calculating
income per share, net income subsequent to the date of the Stock Distribution was allocated between the shares of Triarc Class A common stock and Triarc Class B common stock based on the
actual dividend payment ratio. For the purposes of calculating loss per share, the net loss for any year was allocated equally. (5) The weighted average shares outstanding reflect the effect of the Stock Distribution. The number of shares used in the calculation of diluted income (loss) per share are the same as basic income
(loss) per share for the years 2003, 2005 and 2006 since all potentially dilutive securities would have had an antidilutive effect based on the loss from continuing operations for each of those
years. The number of shares used in the calculation of diluted income per share of Triarc Class A and Triarc Class B common stock for 2004 are 23,415 and 43,206, respectively. The numbers of
shares used in the calculation of diluted income per share of Triarc Class A and Triarc Class B common stock for 2007 are 28,965 and 64,282, respectively. These shares used for the calculation of
diluted income per share in 2004 and 2007 consist of the weighted average common shares outstanding for each class of common stock and potential common shares reflecting the effect of
dilutive stock options and nonvested restricted shares of 21
1,182 for Triarc Class A common stock and 2,366 for Triarc Class B common stock in 2004 and, in 2007, 129 for Triarc Class A common stock and 759 for Triarc Class B common stock. (6) Reflects certain significant charges and credits recorded during 2003 as follows: $22.0 charged to operating loss representing an impairment of goodwill; $11.8 charged to loss from continuing
operations representing the aforementioned $22.0 charged to operating loss partially offset by (1) a $5.8 gain on sale of unconsolidated business arising principally from the sale by Triarc of a
portion of its investment in an equity method investee and a non-cash gain to Triarc from the public offering by the investee of its common stock and (2) $4.4 of income tax benefit relating to
the above net charges; and $9.6 charged to net loss representing the aforementioned $11.8 charged to loss from continuing operations partially offset by a $2.2 credit to income from discontinued
operations principally resulting from the release of reserves, net of income taxes, in connection with the settlement of a post-closing sales price adjustment related to the sale of Triarc’s beverage
businesses. (7) Reflects certain significant credits recorded during 2004 as follows: $17.3 credited to income from continuing operations representing (1) $14.6 of income tax benefit due to the release of income
tax reserves which were no longer required upon the finalization of the examination of Triarc’s Federal income tax returns for the years ended December 31, 2000 and December 30, 2001, the
finalization of a state income tax examination and the expiration of the statute of limitations for the examination of certain of Triarc’s state income tax returns and (2) a $2.7 credit, net of a $1.6
income tax provision, representing the release of related interest accruals no longer required; and $29.8 credited to net income representing the aforementioned $17.3 credited to income from
continuing operations and $12.5 of additional gain on disposal of Triarc’s beverage businesses sold in 2000 resulting from the release of income tax reserves related to discontinued operations
which were no longer required upon finalization of an Internal Revenue Service examination of the Federal income tax returns for the years ended December 31, 2000 and December 30, 2001
and the expiration of the statute of limitations for examinations of certain of Triarc’s state income tax returns. (8) Reflects certain significant charges and credits recorded during 2005 as follows: $58.9 charged to operating loss representing (1) share-based compensation charges of $28.3 representing the
intrinsic value of stock options which were exercised by the Chairman and then Chief Executive Officer and the Vice Chairman and then President and Chief Operating Officer and subsequently
replaced on the date of exercise, the grant of contingently issuable performance-based restricted shares of Triarc Class A and Triarc Class B common stock and the grant of equity interests in
two of Triarc’s subsidiaries, (2) a $17.2 loss on settlements of unfavorable franchise rights representing the cost of settling franchise agreements acquired as a component of the acquisition of
RTM with royalty rates below the current 4% royalty rate that Triarc receives on new franchise agreements and (3) facilities relocation and corporate restructuring charges of $13.5; $67.5
charged to loss from continuing operations representing the aforementioned $58.9 charged to operating loss and a $35.8 loss on early extinguishments of debt upon a debt refinancing in
connection with the acquisition of RTM, both partially offset by $27.2 of income tax benefit relating to the above charges; and $64.2 charged to net loss representing the aforementioned $67.5
charged to loss from continuing operations partially offset by income from discontinued operations of $3.3 principally resulting from the release of reserves for state income taxes no longer
required. (9) Reflects a significant charge recorded during 2006 as follows: $9.0 charged to loss from continuing operations and net loss representing a $14.1 loss on early extinguishments of debt related to
conversions or effective conversions of Triarc’s 5% convertible notes due 2023 and prepayments of term loans under Triarc’s senior secured term loan facility, partially offset by an income tax
benefit of $5.1 related to the above charge. (10) Reflects certain significant charges and credits recorded during 2007 as follows: $45.2 charged to operating profit; consisting of facilities relocation and corporate restructuring costs of $85.4 less
$40.2 from the gain on sale of Triarc’s interest in Deerfield; $16.6 charged to income from 22
continuing operations and net income representing the aforementioned $45.2 charged to operating profit offset by $15.8 of income tax benefit related to the above charge; and a $12.8 previously
unrecognized prior year contingent tax benefit related to certain severance obligations to certain of Triarc’s former executives. (11) Reflects a significant charge recorded in the three months ended March 30, 2008 as follows: an other than temporary loss of $68.1 which was charged to loss from continuing operations from the
impairment in the carrying value of Triarc’s investment in common shares of Deerfield Capital Corp. The majority of the common shares had been received upon the March 11, 2008 conversion
of the convertible preferred stock that was included in the non-cash consideration Triarc received in connection with its sale of Deerfield, Triarc’s former asset management segment, to Deerfield
Capital Corp. on December 21, 2007. The balance of the common shares in the investment had been distributed to Triarc in connection with the sale of Deerfield. All such Deerfield Capital
Corp. shares were subsequently distributed to Triarc stockholders of record as of March 29, 2008 as approved by Triarc’s board of directors on March 11, 2008. As a result of the dividend, the tax
loss that resulted from the decline in value of Triarc’s investment is not deductible for tax purposes and no tax benefit was recorded related to this loss. 23
SELECTED HISTORICAL FINANCIAL DATA OF WENDY’S The following table sets forth selected historical financial data for Wendy’s. The following data at and for each of the five years ended December 30, 2007 has been derived from Wendy’s audited
consolidated financial statements. The following data at March 30, 2008 and for the three months ended April 1, 2007 and March 30, 2008 has been derived from Wendy’s unaudited consolidated
financial statements, which in the opinion of Wendy’s management, include all adjustments considered necessary for a fair presentation. The following information should be read together with
Wendy’s consolidated financial statements for the year ended December 30, 2007 and Wendy’s unaudited consolidated financial statements for the three months ended March 30, 2008, and the notes
related to those financial statements, which are incorporated by reference into this joint proxy statement/prospectus. The information set forth below is not necessarily indicative of the results of
future operations.
As of and for the As of and for the year ended March 30,
April 1,
December 30,
December 31,
January 1,
January 2,
December 28,
(in millions, except per share amounts) Selected Financial Data: Revenues(2)
$
582
$
590
$
2,450
$
2,439
$
2,455
$
2,502
$
2,252 Sales(2)
513
523
2,160
2,155
2,138
2,194
1,960 Income from continuing operations before income taxes
7
22
126
42
137
176
182 Income from continuing operations
4
15
87
37
85
106
120 Income (loss) from discontinued operations(3)
—
—
1
57
139
(54
)
116 Net income(3)
4
15
88
94
224
52
236 Capital expenditures
30
24
134
110
181
166
214 Diluted earnings per common share from continuing operations
.05
.15
.96
.32
.73
.92
1.04 Diluted earnings (loss) per common share from discontinued operations
—
—
.01
.50
1.19
(.47
)
1.01 Total diluted earnings per common share (including discontinued operations)
.05
.15
.97
.82
1.92
.45
2.05 Dividends declared and paid per common share(4)
.125
.085
.46
.60
.58
.48
.24 Market price per share at period end(4)
22.84
31.30
26.01
33.09
55.26
39.26
39.24 Total assets (including discontinued operations)
1,762
1,799
1,789
2,060
3,440
3,198
3,133 Property and equipment, net
1,237
1,225
1,247
1,226
1,348
1,512
1,462 Long-term obligations
543
540
543
556
540
539
639 Shareholders’ equity (including discontinued operations)
797
744
804
1,012
2,059
1,716
1,759
(1)
Fiscal year includes 53 weeks. (2) During 2006, Wendy’s revised its presentation of the sale of kids’ meal toys to reflect the sales on a gross versus net basis under the provisions of Emerging Issues Task Force (“EITF”) 99-19.
“Reporting Revenue Gross as a Principal versus Net as an Agent”. The revised presentation had no impact on operating income or net income. Amounts related to the prior years were not
material, but were revised for purposes of comparability. The revisions increased sales and cost of sales by $59.4 million, $61.6 million, $69.1 million and $61.0 million for fiscal years 2006, 2005,
2004 and 2003, respectively. (3) Includes results of operations for Tim Hortons Inc., Baja Fresh and Cafe Express. (4) On September 29, 2006, Wendy’s distributed 1.3542759 shares of Tim Hortons Inc. common stock for each outstanding share of Wendy’s common stock in the form of a pro rata stock dividend.
After the distribution, the market price of Wendy’s common shares reflected the value of Wendy’s excluding Tim Hortons Inc. After the spin-off of Tim Hortons Inc., Wendy’s lowered its annual
dividend rate to reflect the reduced earnings of Wendy’s excluding Tim Hortons Inc. 24
three months
ended
2008
2007
2007
2006
2006
2005(1)
2003
SELECTED UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENT DATA OF WENDY’S/ARBY’S The following table sets forth certain selected unaudited pro forma combined condensed financial statement data of Wendy’s/Arby’s after giving effect to the merger of Triarc and Wendy’s as if
the merger occurred on March 30, 2008 for balance sheet data and on December 31, 2006 (the first day of Triarc’s 2007 fiscal year) for statement of operations data. The unaudited pro forma combined condensed financial statement data in the table below should be read in conjunction with the historical financial statements and managements’ discussion and
analysis of Triarc and Wendy’s, which are incorporated by reference in this joint proxy statement/prospectus, the selected historical financial data contained in this joint proxy statement/prospectus and
the unaudited pro forma combined condensed balance sheet and statements of operation and accompanying notes to the unaudited pro forma combined condensed financial statements beginning on
page 187. The unaudited pro forma combined condensed financial statements are provided for informational purposes only and are not necessarily indicative of the operating results or financial
position that would have occurred if the merger had been completed as of the dates set forth above, nor are they indicative of the future results or financial position of the combined company.
Year ended
As of and for the
(in thousands except per share data) Statement of Operations Data: Sales
$
3,273,461
$
794,596 Franchise revenues
377,673
90,614 Total revenues
3,651,134
885,210 Cost of sales
2,572,483
645,834 Advertising
191,312
45,114 General and administrative expenses
458,536
117,751 Depreciation and amortization
236,023
62,171 Facilities relocation and corporate restructuring(1)
95,174
1,141 Wendy’s special committee costs(1)
24,670
6,657 Settlement of preexisting business relationships
263
(487
) Other income net
(9,424
)
(2,164
)
3,569,037
876,017 Operating profit
82,097
9,193 Interest expense
(95,121
)
(21,562
) Investment income (loss), net(1)
59,077
(65,922
) Other income (expense), net(1)
476
(4,446
) Income (loss) from continuing operations before income taxes
46,215
(82,737
) (Provision for) benefit from income taxes
(2,834
)
10,881 Minority interests in income of consolidated subsidiaries
(2,152
)
(14
) Income (loss) from continuing operations
$
41,229
$
(71,870
) Income (loss) from continuing operations per share Basic
$
0.09
$
(0.15
) Diluted
$
0.09
$
(0.15
) Weighted average number of shares outstanding: Basic
474,706
467,327 Diluted
478,751
467,327 Cash dividends per share(2)
$
0.16
$
0.04 Balance Sheet Data: Working capital deficit
$
(4,673
) Total assets(3)
5,451,522 Long-term debt, including current portion
1,255,057 Stockholders’ equity
2,844,444 25
December 30, 2007
three months ended
March 30, 2008
(1)
Includes the following historical charges and credits in the unaudited combined condensed pro forma statement of operations data:
Year ended
Three months ended
(in thousands) Description Corporate restructuring costs—Triarc
$
84,765
$
767 Corporate restructuring costs—Wendy’s
9,757
206 Wendy’s special committee costs
24,670
6,657 Investment loss—other than temporary losses on Triarc investment in Deerfield Capital Corp.
—
68,086 Other (income) expense—Triarc deferred cost write off for financing alternative not pursued
—
5,110 Other (income) expense—Wendy’s gain from insurance recoveries
(9,018
)
—
(2)
Based on historical dividends paid by Triarc and Wendy’s. See “Market Prices and Dividends and Other Distributions.” (3) Includes $14,457 of Triarc equity investments in Deerfield Capital Corp. which were distributed on April 4, 2008 to Triarc stockholders of record as of March 29, 2008. 26
December 30, 2007
March 30, 2008
Triarc’s
management believes that EBITDA, which is defined as earnings before interest,
taxes, depreciation and amortization (which is the same as operating profit
plus depreciation and amortization), provides useful information to investors
since it is used by management as a performance measure for benchmarking
Triarc against its peers and competitors. Triarc’s
management also utilizes EBITDA and adjusted EBITDA extensively in internal
financial reporting as a basis upon which Triarc’s management measures
operating performance and a variation of adjusted EBITDA as the basis for
incentive compensation programs, including those applicable to its named
executive officers. Adjusted EBITDA, as defined, is also used to determine
compliance with certain key financial covenants in ARG’s
credit agreement dated July 25, 2005. Triarc’s management believes that pro forma combined adjusted EBITDA provides a meaningful perspective of the underlying operating performance of the current Triarc and Wendy’s
businesses combined. Pro forma combined adjusted EBITDA excludes 2007 pro forma amounts related to (1) Triarc and Wendy’s corporate restructuring charges and (2) Wendy’s special committee
charges. Pro forma combined EBITDA and pro forma combined adjusted EBITDA are not recognized terms under GAAP. Because all companies do not calculate pro forma combined EBITDA, pro
forma combined adjusted EBITDA or similarly titled financial measures in the same way, those measures for other companies may not be consistent with the way management calculates them.
Neither pro forma combined EBITDA nor pro forma combined adjusted EBITDA should be considered as an alternative to pro forma operating profit or net income (loss) from continuing
operations. The presentation of pro forma combined EBITDA, pro forma combined adjusted EBITDA and other non-GAAP measures is not intended to replace the presentation of pro forma financial
results in accordance with GAAP. Additionally, neither pro forma combined EBITDA nor pro forma combined adjusted EBITDA is intended to be a measure of free cash flow for the combined
entity’s discretionary use, as neither measure considers certain cash requirements, such as capital expenditures, contractual commitments, interest payments, tax payments and debt service
requirements. 27
Pro Forma Combined:
Year ended
Three months ended
(in thousands) Operating profit(1)
$
82,097
$
9,193 Plus: Depreciation and amortization
236,023
62,171 EBITDA(1)
318,120
71,364 Adjustments to EBITDA: Corporate restructuring costs—Triarc
84,765
767 Corporate restructuring costs—Wendy’s
9,757
206 Special committee costs
24,670
6,657 Total adjustments to EBITDA
119,192
7,630 Pro forma adjusted EBITDA(1)
437,312
78,994 Less: Adjustments to adjusted EBITDA
119,192
7,630 Depreciation and amortization
236,023
62,171 Operating profit(1)
82,097
9,193 Interest expense
(95,121
)
(21,562
) Investment income (loss), net
59,077
(65,922
) Other income (expense), net
476
(4,446
) Income (loss) from continuing operations before income taxes and minority interests(1)
46,215
(82,737
) (Provision for) benefit from income taxes
(2,834
)
10,881 Minority interests in income of consolidated subsidiaries
(2,152
)
(14
) Income (loss) from continuing operations(1)
$
41,229
$
(71,870
)
(1) 28
December 30, 2007
March 30, 2008
Pro forma combined adjusted EBITDA and the other captions referenced in the above table include certain Triarc corporate overhead costs of $43,744 in 2007, a majority of which have been
designated for elimination.
Triarc’s and Wendy’s businesses are, and Wendy’s/Arby’s business will be, subject to the risks described below relating to the merger. If any of the risks described below actually occurs, the respective
businesses, financial results, financial condition or stock prices of Triarc, Wendy’s or Wendy’s/Arby’s could be materially adversely affected. Risk Factors Related to the Merger Because the market price of Triarc’s common stock may fluctuate, the value of the Wendy’s/ Arby’s common stock to be issued in the merger will fluctuate. Upon completion of the merger, each Wendy’s common share will be converted into 4.25 shares of Wendy’s/Arby’s common stock. The exchange ratio will not be adjusted due to any increase or
decrease in the price of Triarc or Wendy’s common shares before completion of the merger. The market price of Wendy’s/Arby’s common stock will likely be different, and may be lower, on the
date Wendy’s shareholders receive shares of Wendy’s/Arby’s common stock than it was on the date the merger agreement was signed, the date of this joint proxy statement/prospectus or the date of
the stockholder/shareholder meetings. Changes in the price of Wendy’s/Arby’s common stock before completion of the merger will affect the value that Wendy’s shareholders will receive in the
merger. These variations in the market price of Wendy’s/Arby’s common stock may be caused by a variety of factors including changes in the business, operations and prospects of Triarc and
Wendy’s, market reaction to the proposed merger, regulatory considerations, general market and economic conditions and other factors, many of which are beyond the control of Triarc and Wendy’s.
Neither Triarc nor Wendy’s is permitted to terminate the merger agreement solely because of changes in the market price of either company’s common stock. The market price of Wendy’s/Arby’s common stock after the merger may be affected by factors different from those affecting the shares of Triarc or Wendy’s currently. The businesses of Triarc and Wendy’s differ in important respects and, accordingly, the results of operations of the combined company and the market price of Wendy’s/Arby’s common stock
may be affected by factors different from those currently affecting the independent results of operations of Triarc and Wendy’s. For a discussion of the businesses of Triarc and Wendy’s and of
certain factors to consider in connection with those businesses, see the documents incorporated by reference in this document and referred to under “Where You Can Find More Information”
beginning on page 223. Triarc and Wendy’s may be subject to business uncertainties and contractual restrictions while the merger is pending. Uncertainty about the effect of the merger on employees and customers may have an adverse effect on Triarc and Wendy’s and consequently on Wendy’s/Arby’s. These uncertainties may impair
Triarc’s and Wendy’s ability to retain and motivate key personnel, and could cause franchisees, suppliers and other third parties that deal with Triarc and Wendy’s to defer decisions concerning Triarc
or Wendy’s or seek to change existing business relationships with Triarc or Wendy’s. If key employees depart because of uncertainty about their future roles and the potential complexities of
integration or third parties adversely change their existing relationship with Wendy’s or Triarc, the business of Wendy’s/Arby’s following the merger could be harmed. In addition, Triarc’s and
Wendy’s franchisees may experience uncertainty about their relationship with their respective franchisors or the combined company following the merger and these uncertainties may impair Triarc’s
and Wendy’s ability to retain or attract franchisees. Further, the merger agreement restricts Triarc and Wendy’s from making certain acquisitions and taking other specified actions without the consent
of the other until the merger occurs. These restrictions may prevent Triarc and/or Wendy’s from pursuing attractive business opportunities that may arise prior to the completion of the merger. Please
see the section entitled “The Merger Agreement—No Solicitation” beginning on page 93. If the merger is completed, the resulting company may not be able to successfully consolidate business operations and realize the anticipated benefits of the merger. 29
Realization of the anticipated benefits of the merger, including anticipated synergies and overhead savings, will depend, in large part, on Wendy’s/Arby’s’ ability to successfully eliminate
redundant corporate functions and consolidate all public company and shared service responsibilities at the Wendy’s/Arby’s level. The resulting company will be required to devote significant
management attention and resources to the consolidation of its business practices and support functions while maintaining the independence of the Arby’s and Wendy’s standalone brands. The
challenges Wendy’s/Arby’s may encounter include the following:
•
preserving franchisee, supplier and other important relationships and resolving potential conflicts between the standalone brands that may arise as a result of the merger; • consolidating redundant operations, including corporate functions; and • addressing differences in business cultures between Arby’s and Wendy’s, preserving employee morale and retaining key employees, maintaining focus on providing consistent, high quality
customer service, meeting the operational and financial goals of the resulting company and maintaining the operational goals of each of the standalone brands. The process of consolidating Triarc’s and Wendy’s corporate level operations could cause an interruption of, or loss of momentum in, the resulting company’s business and financial performance.
The diversion of management’s attention and any delays or difficulties encountered in connection with the merger and the development of corporate synergies through top-level consolidation could
have an adverse effect on the business, financial results, financial condition or stock price of the resulting company. The consolidation process may also result in additional and unforeseen expenses.
There can be no assurance that the contemplated expense savings, improvements in Wendy’s store-level margins and synergies anticipated from the merger will be realized. Failure to complete the merger could negatively impact the stock prices and the future business and financial results of Triarc and Wendy’s because of, among other things, the market
disruption that would occur as a result of uncertainties relating to a failure to complete the merger. Although Triarc and Wendy’s have agreed to use their reasonable best efforts to obtain stockholder/shareholder approval of the proposals relating to the merger, there is no assurance that these
proposals will be approved, and there is no assurance that Triarc and Wendy’s will receive the necessary regulatory approvals or satisfy the other conditions to the completion of the merger. If the
merger is not completed for any reason, Triarc and Wendy’s will be subject to several risks, including the following:
• Wendy’s will be required to reimburse Triarc for certain out of pocket fees and expenses of $10 million upon termination of the merger agreement under certain circumstances relating to
Wendy’s receipt and acceptance of a competing acquisition proposal for Wendy’s; see “The Merger Agreement—Termination Events; Expense Reimbursement Required” beginning on page 95;
and
• a lack of focus by the management of each company on the core business and strategic development of each respective company as a result of the increased focus by management directed
toward the merger and integration planning. In addition, each company would not realize any of the expected benefits of having completed the merger. If the merger is not completed, the price of Triarc’s common stock and Wendy’s common shares may decline to the extent that the current market price of that stock reflects a market
assumption that the merger will be completed and that the related benefits and synergies will be realized, or as a result of the market’s perceptions that the merger was not consummated due to an
adverse change in Triarc’s or Wendy’s business. In addition, Triarc’s business and Wendy’s business may be harmed, and the prices of their stock may decline as a result, to the extent that employees,
franchisees, suppliers and others believe that the companies cannot compete in the marketplace as effectively without the merger or otherwise remain uncertain about the companies’ future prospects
in the absence of the merger. For example, suppliers may delay or defer decisions, which could negatively affect the business and results of operations of Triarc and Wendy’s, regardless of whether
the merger is ultimately completed. Similarly, current and prospective employees of Triarc and 30
Wendy’s may experience uncertainty about their future roles with the resulting company and choose to pursue other opportunities that could adversely affect Triarc or Wendy’s, as applicable, if the
merger is not completed. This may adversely affect the ability of Triarc and Wendy’s to attract and retain key management, marketing and operations personnel, which could harm the companies’
businesses and results. Triarc stockholders and Wendy’s shareholders will have a reduced ownership and voting interest after the merger and will exercise less influence over management. Triarc stockholders and Wendy’s shareholders currently have the right to vote in the election of the board of directors of Triarc and Wendy’s, respectively, and on other matters affecting Triarc
and Wendy’s, respectively. When the merger occurs, each Wendy’s shareholder that receives shares of Wendy’s/Arby’s common stock will become a stockholder of Wendy’s/Arby’s with a percentage
ownership that is smaller than the stockholder’s percentage ownership of Wendy’s. Similarly, when the merger occurs, because each Wendy’s shareholder will become a stockholder of Wendy’s/Arby’s,
the percentage ownership of a Triarc stockholder in Wendy’s/Arby’s will be smaller than the stockholder’s percentage ownership of Triarc; and following the conversion of Triarc Class B common
stock to Triarc Class A common stock, shares of Triarc Class A common stock will no longer entitle holders to 10 times the voting power of the holders of Triarc Class B common stock on a per
share basis. It is expected that the former shareholders of Wendy’s as a group will own approximately 80.6% of the outstanding shares of Wendy’s/Arby’s common stock immediately after the merger
and the stockholders of Triarc as a group will own approximately 19.4% of the outstanding shares of Wendy’s/Arby’s common stock immediately after the merger. Because of this, Triarc’s
stockholders and Wendy’s shareholders will have less influence on the management and policies of Wendy’s/Arby’s than they now have on the management and policies of Triarc and Wendy’s,
respectively. The merger agreement limits Triarc’s and Wendy’s ability to pursue an alternative acquisition proposal to the merger. The merger agreement contains “no shop” provisions that, subject to limited exceptions, prohibit each of Triarc and Wendy’s from soliciting, initiating or knowingly encouraging certain alternative
acquisition proposals with any third party. See “The Merger Agreement—No Solicitation” beginning on page 93. The merger agreement also requires Wendy’s to reimburse Triarc for out of pocket fees
and expenses of $10 million if the merger agreement is terminated under certain circumstances in connection with a competing takeover proposal for Wendy’s. See “The Merger
Agreement—Termination Events; Expense Reimbursement Required” beginning on page 95. These provisions could limit each party’s ability to pursue offers from third parties that could result in
greater value to their stockholders/ shareholders. Wendy’s obligation to make the expense reimbursement payment described above also may discourage a potential competing acquiror that might have
an interest in pursuing an alternative takeover proposal of Wendy’s even if it were prepared to pay consideration with a higher per share market price than that proposed in the merger agreement, or
might result in a potential competing acquiror proposing to pay a lower per share price to acquire Wendy’s than it might otherwise have proposed to pay. The merger is subject to the receipt of consent from government entities, which may impose conditions on, jeopardize or delay completion of the merger. Completion of the merger is conditioned upon filings with and the receipt of required consents, approvals or clearances from the Federal Trade Commission, which we refer to as the FTC, and
the Antitrust Division of the U.S. Department of Justice. Triarc and Wendy’s have made initial filings with the FTC and the Antitrust Division; the applicable waiting period terminated on May 28,
2008. There is no assurance that all of these required consents, approvals and clearances will be obtained, and if they are obtained, they may not be obtained before Triarc stockholders and Wendy’s
shareholders vote on the merger. Moreover, if they are obtained, they may impose conditions on, or require divestitures relating to, the divisions, operations or assets of Triarc or Wendy’s. These
conditions or divestitures may jeopardize or delay completion of the merger or reduce the anticipated benefits of the merger. The merger agreement requires that Triarc and Wendy’s use reasonable
best efforts to satisfy any conditions imposed by such regulatory authorities. 31
Pending shareholder litigation could prevent or delay the closing of the merger or otherwise negatively impact the business and operations of Triarc and Wendy’s. Since the announcement of the proposed merger on April 24, 2008 through the date of this joint proxy statement/prospectus, several purported class action lawsuits have been filed by
shareholders of Wendy’s in Ohio and New York state courts. The plaintiffs assert claims of breach of fiduciary duty against Wendy’s and against certain of Wendy’s officers and directors in
connection with the merger. Additionally, two of the complaints name Triarc as a defendant and allege that Triarc aided in the breaching of fiduciary duties to Wendy’s shareholders. The complaints
seek, among other things, injunctive relief against consummation of the merger, declaratory judgments for breach of fiduciary duties, attorney’s fees and damages in an unspecified amount. The
defendants believe the claims are without merit and intend to vigorously defend against them. However, one of the conditions to the closing of the merger is that no law, injunction, order or decree
by any court of any competent jurisdiction which prohibits the consummation of the merger shall have been adopted or entered and shall continue to be in effect. No assurances can be given that this
litigation will not result in such an injunction being issued, which could prevent or delay the closing of the merger. It is possible that additional lawsuits may be filed against Wendy’s and Triarc
asserting similar or different claims. There can be no assurance that Wendy’s and Triarc will be successful in the outcome of any of these pending or future lawsuits. Some of the directors of Triarc and directors and executive officers of Wendy’s have interests in the merger that are different from Triarc stockholders and Wendy’s shareholders. When considering the recommendation of the Triarc board of directors to approve the proposals relating to the adoption of the amendment of Triarc’s certificate of incorporation and the
issuance of Wendy’s/Arby’s common stock required to be issued in the merger, as more fully described under “Triarc Annual Meeting” beginning on page 108 and “Interests of Triarc Directors and
Wendy’s Directors and Executive Officers in the Merger” beginning on page 73, stockholders of Triarc should be aware that some members of the Triarc board of directors have arrangements that
provide them with interests in the merger that are in addition to the interests of Triarc stockholders. These interests include the beneficial ownership by certain of Triarc’s directors of Wendy’s
common shares. When considering the recommendation of the Wendy’s board of directors with respect to the merger proposal, Wendy’s shareholders should be aware that some directors and certain executive
officers of Wendy’s have interests in the merger that are different from, or are in addition to, the interests of the shareholders of Wendy’s. These interests include the fact that the completion of the
merger results in (i) the accelerated vesting of unvested equity based awards, such as options and restricted stock units for Wendy’s directors and for certain executive officers, (ii) the potential
payments of severance upon termination in specified circumstances to certain executive officers, and (iii) other payments pursuant to existing plans, agreements and arrangements to which directors
and certain executive officers are entitled. Also, Wendy’s directors and executive officers, in addition to other officers and employees of Wendy’s will be entitled to continuation of indemnification
and insurance arrangements pursuant to the terms of the merger agreement. Stockholders/shareholders should consider these interests in conjunction with the recommendations of the directors of Triarc and Wendy’s that their respective stockholders/ shareholders vote in
favor of the adoption of the merger agreement. The Wendy’s/Arby’s common stock to be received by Wendy’s shareholders as a result of the merger will have different rights from Wendy’s common shares. Following completion of the merger, Wendy’s shareholders will no longer be shareholders of Wendy’s, an Ohio corporation, but will instead be stockholders of Wendy’s/Arby’s, a Delaware
corporation. There will be important differences between your current rights as a Wendy’s shareholder and the rights to which you will be entitled as a stockholder of Wendy’s/Arby’s. See
“Comparison of Rights of Stockholders/Shareholders of Triarc, Wendy’s and Wendy’s/Arby’s” beginning on page 206 for a discussion of the different rights associated with Wendy’s/Arby’s common
stock. 32
There can be no assurance regarding whether or to what extent Wendy’s/Arby’s will pay dividends on its common stock in the future. Holders of Wendy’s/Arby’s common stock will only be entitled to receive such dividends as the Wendy’s/Arby’s board of directors may declare out of funds legally available for such payments.
Any dividends will be made at the discretion of the Wendy’s/Arby’s board of directors and will depend on its earnings, financial condition, cash requirements and such other factors as the
Wendy’s/Arby’s board of directors may deem relevant from time to time. Because Wendy’s/Arby’s will be a holding company, its ability to declare and pay dividends will be dependent upon cash, cash equivalents and short-term investments on hand and cash flows
from its subsidiaries. The ability of any of Wendy’s/Arby’s subsidiaries to pay cash dividends and/or make loans or advances to Wendy’s/Arby’s will be dependent upon their respective abilities to
achieve sufficient cash flows after satisfying their respective cash requirements, including debt service, to enable the payment of such dividends or the making of such loans or advances. The ability of
any of Wendy’s/Arby’s subsidiaries to pay cash dividends or other payments to Wendy’s/Arby’s will also be limited by restrictions in debt instruments currently existing or subsequently entered into
by such subsidiaries. Although Triarc and Wendy’s have historically declared cash dividends on their shares of common stock and common shares, respectively, Wendy’s/Arby’s will not be required to do so and may
reduce dividends on its common stock from the rates historically paid by Triarc or Wendy’s, respectively, or eliminate dividends on its common stock in the future. This could adversely affect the
market price of Wendy’s/Arby’s common stock. 33
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This joint proxy statement/prospectus and the documents that are incorporated by reference into this joint proxy statement/prospectus include “forward-looking statements” within the meaning of
the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,”
“may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements
include, without limitation, Triarc’s and Wendy’s expectations with respect to the future financial or business performance; strategies or expectations; synergies, efficiencies, overhead savings, costs and
charges and capitalization and anticipated financial impacts of the merger transaction and related transactions; approval of the merger transaction and related transactions by shareholders; the
satisfaction of the closing conditions to the merger transaction and related transactions; and the timing of the completion of the merger transaction and related transactions. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside our
control and difficult to predict. Factors that may cause such differences include, but are not limited to, the possibility that the expected synergies or operating margin improvements will not be
realized, or will not be realized within the expected time period, due to, among other things: (1) increasing costs associated with food, supplies, energy, fuel, distribution and labor; (2) competition,
including price competition; (3) changes in the quick service restaurant industry; (4) prevailing economic, market and business conditions affecting Triarc and Wendy’s; (5) conditions beyond Triarc’s
or Wendy’s control such as weather, natural disasters, disease outbreaks, epidemics or pandemics impacting Triarc’s and/or Wendy’s customers or food supplies or acts of war or terrorism; (6) changes
in the interest rate environment; (7) changes in debt, equity and securities markets; (8) the availability of suitable locations and terms for the sites designated for development; (9) cost and availability
of capital; (10) adoption of new, or changes in, accounting policies and practices; and (11) other factors discussed from time to time in Triarc’s and Wendy’s news releases, public statements and/or
filings with the SEC, and those factors listed in this joint proxy statement/prospectus under “Risk Factors” beginning on page 29. Other factors include the possibility that the merger does not close,
including due to the failure to receive required stockholder/shareholder or regulatory approvals, or the failure of other closing conditions. Additional factors that could cause actual results to differ
materially from those expressed in forward-looking statements are discussed in reports filed with the SEC by Triarc and Wendy’s, especially the “Risk Factors” sections of Triarc’s and Wendy’s
Annual and Quarterly Reports on Forms 10-K and 10-Q. See “Where You Can Find More Information” beginning on page 223 for a list of the documents incorporated by reference into this joint
proxy statement/prospectus. Triarc and Wendy’s caution that the foregoing list of factors is not exclusive. All subsequent written and oral forward-looking statements concerning Triarc, Wendy’s, the merger, the related
transactions or other matters and attributable to Triarc or Wendy’s or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above. Triarc and
Wendy’s do not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this joint proxy statement/prospectus except to the
extent required by federal securities laws. 34
The following is a discussion of the merger and the material terms of the merger agreement between Triarc and Wendy’s. You are encouraged to read carefully in their entirety the documents which
are attached as annexes to this joint proxy statement/prospectus, including the merger agreement, which are incorporated by reference herein. Beginning in May 2005 and continuing through late 2007, Triarc’s board of directors and management reviewed Triarc’s strategic direction. Among the options considered were the separation of
Triarc’s asset management business from Triarc’s restaurant business as well as expanding Triarc’s restaurant business through the acquisition of other restaurant companies. As described in this
section, Nelson Peltz’s, Peter W. May’s and Edward P. Garden’s actions on behalf of Triarc were carried out in their capacity as executive officers and directors of Triarc until June 29, 2007 and
thereafter were carried out in their capacity as directors of Triarc and under the terms of an agreement entered into between Triarc and Trian Fund Management, L.P. (which we refer to as Trian) in
April 2007, pursuant to which Trian provides Triarc with certain professional and strategic services, including services in the areas of mergers and acquisitions/corporate development, capital markets/
finance, legal, accounting and investor relations/corporate communications. Trian provided such services to Triarc in connection with its consideration of the merger and related transactions and
negotiation and execution of the merger agreement. On December 13, 2005, Trian, Sandell Asset Management Corp. (which we refer to as Sandell) and certain related persons (which we refer to collectively as the Trian group) filed a Schedule
13D with the SEC, disclosing that on November 4, 2005, Sandell and Trian had entered into an agreement to coordinate their efforts with respect to the purchase of up to a 9.9% beneficial
ownership interest in Wendy’s and the proposal to Wendy’s of certain actions and transactions. The Schedule 13D also disclosed that the members of the Trian group had acquired beneficial
ownership of approximately 5.48% of Wendy’s common shares. Concurrently with the filing of the Schedule 13D, the Trian Group released “Wendy’s International, Inc.—A Recipe for Successful Value
Creation,” which set forth an action plan regarding strategic initiatives to be taken by Wendy’s, including (i) effecting a tax-free spin-off of Tim Hortons, (ii) selling Wendy’s ancillary brands,
including Baja Fresh, Café Express and Pasta Pomodoro, (iii) revisiting previously announced strategic initiatives, such as closing certain Wendy’s-owned restaurants and the sale of real estate and (iv)
significantly reducing the costs of Wendy’s business. The Trian group noted its intention to discuss its action plan with Wendy’s and, depending upon various factors, noted that it may take certain
actions with respect to its investment in Wendy’s, including conducting a proxy solicitation in connection with Wendy’s next annual meeting to solicit votes in favor of directors designated by Trian
that would constitute a minority of Wendy’s board of directors. Wendy’s then Chief Executive Officer, John T. Schuessler, and other officers of Wendy’s, met with representatives of the Trian group in February 2006. As a result of this and subsequent
meetings and communications among Trian representatives and Trian’s advisors, and Wendy’s and its advisors, on March 2, 2006, Wendy’s entered into an agreement with the Trian group (which we
refer to as the Standstill Agreement), under which Wendy’s agreed to, and did, increase the size of its board of directors by three members and appoint three directors designated by the Trian group
(Peter H. Rothschild, Stuart I. Oran and Jerry W. Levin) to the newly-created positions. The Standstill Agreement also provided for certain limitations, to be effective until June 30, 2007, on the
Trian group’s share ownership of, and ability to take actions with respect to the ownership and governance of, Wendy’s. Beginning in late 2005, Wendy’s management implemented a number of initiatives in order to increase shareholder value. In March 2006, Wendy’s completed the initial public offering of Tim
Hortons. During the one-year period beginning in August 2006, Wendy’s disposed of its ownership interests in three of its ancillary businesses in order to focus on the core Wendy’s brand. On
September 29, 2006, Wendy’s distributed to its shareholders on a tax-free basis the remaining shares of Tim Hortons’ common stock owned by Wendy’s. In November 2006, Wendy’s sold Baja Fresh 35
and in July 2007, Wendy’s sold its stake in Café Express. During 2005 and 2006, Wendy’s sold 237 company-owned restaurants and other real estate sites generating gross proceeds of approximately
$211 million. Also during 2006, Wendy’s management implemented a cost-cutting program that generated $90 million of annual savings on a run rate basis in general and administrative expenses. In
addition, in the fourth quarter of 2006 and the first quarter of 2007, Wendy’s repurchased approximately $1.1 billion of its own shares through a modified “Dutch Auction” tender offer and an
accelerated share repurchase program. In March 2007, a significant franchisee of Wendy’s reported to James V. Pickett, the Chairman of Wendy’s board of directors, that the franchisee and two significant Wendy’s shareholders had
recently attended a meeting with officers of Triarc, including Mr. Peltz, at which among other things, the franchisee said, Mr. Peltz stated that Triarc would be considering a range of strategic
alternatives for itself that could include an interest in Wendy’s following expiration of the standstill period. On April 3, 2007, at a meeting scheduled at Mr. Peltz’s request between Mr. Peltz, Mr.
May and Mr. Pickett, Mr. Peltz expressed his disappointment in the performance of Wendy’s senior management in attempting to improve Wendy’s financial performance. Mr. Peltz also expressed an
interest in having Triarc acquire Wendy’s promptly following the June 30, 2007 expiration of the standstill period in a negotiated transaction, which would be subject to appropriate Triarc board and
stockholder approvals. On April 12, 2007, at a meeting of Triarc’s board of directors, Mr. Peltz reported that he had spoken to Mr. Pickett about the possibility of an acquisition of Wendy’s by Triarc and that he was
waiting to hear whether the Wendy’s board of directors would be interested in pursuing such a transaction. On April 20, 2007, following the completion of its strategic review, Triarc announced that it
had entered into a definitive agreement for the sale of Deerfield, a Chicago-based fixed income asset manager in which Triarc owned a controlling interest. Triarc also stated that after such sale,
Triarc’s sole operating business would be the Arby’s restaurant business. Mr. Pickett discussed his April 3, 2007 conversation with Messrs. Peltz and May, and the March 2007 franchisee’s report to Mr. Pickett, with Wendy’s Chief Executive Officer and President,
Kerrii B. Anderson, Wendy’s Executive Vice President General Counsel and Secretary, Leon McCorkle, Jr., and Wendy’s outside counsel, Akin Gump Strauss Hauer & Feld LLP, in advance of the
Wendy’s board of directors’ regularly-scheduled April 24, 2007 meeting. Mr. Pickett reported on these matters at that meeting, and expressed the view that Mr. Peltz’s communications could adversely
impact the direction of Wendy’s, and the ability of management to achieve Wendy’s strategic plan. Mr. Pickett also discussed significant changes in circumstances from the time of adoption of the
strategic plan in the fall of 2006, and stated that each of these matters required careful evaluation. Mr. Pickett and Mr. McCorkle recommended formation of a special committee of the Wendy’s
board of directors with authority to consider Wendy’s strategic options in advance of the expiration of the standstill period. Following discussion of the scope of the proposed committee’s authority, the importance of its members being free from actual and perceived conflicts of interest, the compensation to be paid for
committee service and other relevant matters, the Wendy’s board of directors appointed James V. Pickett (as Chairman), Thomas F. Keller, David P. Lauer, James F. Millar and John R. Thompson
to a committee (which we refer to as the Special Committee, or the committee) charged with investigating strategic options available to Wendy’s, including but not limited to changes in the Wendy’s
capital structure and a possible sale, merger or other business combination. The Special Committee’s authority included recommending, rejecting or seeking to modify the terms of any possible
transaction and recommending to the Wendy’s board of directors what action, if any, should be taken with respect to any strategic option. The board authorized retainers of $50,000 per quarter for
the Special Committee’s Chairman and $10,000 per quarter for the other committee members, and payment to each committee member of $1,250 for each telephonic or in-person meeting attended
plus reimbursement of expenses incurred. Wendy’s announced publicly the formation of the Special Committee on April 25, 2007. Pursuant to the Standstill Agreement, Mr. Oran was nominated for
re-election to the Wendy’s board of directors at Wendy’s annual shareholders’ meeting held on April 26, 2007, and was so elected. 36
On April 25, 2007, the Special Committee met with representatives of Goldman Sachs & Co., JPMorgan Securities Inc. and Baker & Hostetler LLP to review the committee’s duties generally and
those entities’ independence and other qualifications for purposes of serving as advisors to the committee. On April 26, 2007, in light of Wendy’s announcement that it was exploring strategic options,
Mr. Peltz wrote to Mr. Pickett and requested that Wendy’s waive any applicable standstill provisions so that Triarc might make an acquisition proposal. On April 30, 2007, Triarc stated that following
its sale of Deerfield, Triarc would be a “pure-play” publicly traded restaurant company and was considering financing opportunities to further its goal of significantly increasing value through the
acquisition of other restaurant companies. Following additional review and discussions with the advisory candidates with which it had met on April 25, 2007 and with other potential advisors, including Lehman Brothers Inc., over the
succeeding several days, the Special Committee met on May 14, 2007 and formally engaged JPMorgan and Lehman Brothers as its financial advisors and Baker Hostetler as its counsel. At that
meeting, the Special Committee and its advisors reviewed the broad scope of the Special Committee’s authority set forth in the resolutions adopted by the Wendy’s board of directors establishing the
Special Committee, including the power and authority to, among other things, review and evaluate the advisability of a sale, merger or other business combination involving Wendy’s, recommend,
reject or negotiate the terms of such a transaction, determine whether such a transaction is fair and in the best interests of the shareholders of Wendy’s and, to the extent permitted by law, the other
stakeholders of Wendy’s, and recommend to the Wendy’s board of directors what action should be taken in respect of any potential transaction. In addition, the Special Committee and its advisors
discussed a range of strategic alternatives to be explored, including continued execution of Wendy’s strategic plan, a change in dividend payout policy, strategic acquisitions, refranchising company-
owned stores, a sale and leaseback of Wendy’s-owned real estate, a leveraged recapitalization and a sale of the enterprise. On May 10, 2007, at a meeting of Triarc’s board of directors, Mr. Peltz reported that Wendy’s had announced that it was evaluating strategic alternatives and that Mr. Pickett had told him that
he would discuss the potential acquisition of Wendy’s by Triarc with the Wendy’s board of directors. Mr. Garden noted that Triarc’s management had entered into preliminary discussions with
potential financial advisors regarding a potential acquisition of Wendy’s. Bear Stearns subsequently worked with Triarc as its financial advisor. At a meeting on May 31, 2007, the Special Committee and its advisors reviewed committee members’ discussions with certain Wendy’s shareholders and franchisees, financial due diligence on
Wendy’s conducted by JPMorgan and Lehman Brothers, and management’s financial forecasts, and discussed at length the strategic alternatives initially reviewed at the May 14, 2007 meeting of the
Special Committee. Lehman Brothers reviewed the evolution of asset-backed securitization financing (which we refer to as ABS financing) and the prospects for generating value for Wendy’s
shareholders through ABS financing if the Special Committee determined to pursue a sale or a leveraged recapitalization of Wendy’s. Baker Hostetler reviewed the Wendy’s charter requirement that,
in evaluating a possible sale or similar transaction, the Wendy’s board of directors must consider, in addition to the fairness of the price and financial terms of the proposal, the effect of the
transaction on Wendy’s employees, franchisees, customers and suppliers. The Special Committee met again on June 4 and June 7, 2007, and determined to explore a possible sale of Wendy’s, as one of the strategic alternatives to consider further, and authorized
Lehman Brothers and JPMorgan to investigate the viability of providing prospective bidders a “stapled” ABS financing package in light of the possibility of generating incremental value to
shareholders via that form of financing. An ABS stapled financing is a financing offered by a seller to prospective buyers using an asset-backed securitization (as opposed to bank and/or high yield
debt) to finance the purchase of a company. The ABS stapled financing contemplated provided that buyers would have used the proceeds of an asset-backed securitization of Wendy’s provided by
Lehman Brothers and/or JPMorgan to finance the purchase of Wendy’s. On June 17, 2007, the Special Committee updated the Wendy’s board of directors regarding its June 4 and June 7, 2007 determinations. The board discussed briefly the changing climate in the 37
financial markets, and approved downward-revised earnings guidance in light of input from Wendy’s management regarding Wendy’s expected financial performance for the balance of 2007. Wendy’s
announced the Special Committee’s decision to explore a possible sale, and the company’s revised financial guidance, on June 18, 2007. Following this announcement, the committee’s financial
advisors contacted 31 potential bidders (both strategic and financial), including Triarc. Between June 18 and July 13, 2007, 15 potential bidder groups executed confidentiality agreements, each of
which contained standstill provisions, and received a detailed confidential information memorandum regarding Wendy’s. On June 22, 2007, Triarc received a draft confidentiality agreement from
JPMorgan. On July 5, 2007, the first of an extended sequence of discussions among the Special Committee’s advisors and Trian’s and Triarc’s legal advisors commenced regarding the committee’s
proposed confidentiality agreement, including the committee’s request that Triarc and Trian agree to certain standstill provisions. Trian expressed the view, in the initial and subsequent discussions,
that the standstill provisions, in the form presented, were not appropriate for an existing significant shareholder of Wendy’s. On July 25, 2007, at the Wendy’s board of directors’ regularly-scheduled meeting, the Special Committee reported that bidders’ initial indications of interest in Wendy’s were due on July 31,
2007, management presentations and due diligence would be conducted during August and early September, information regarding the availability of stapled ABS financing was expected to be
communicated to bidders in early September, and a call for bids should be expected for mid- to late September. As of July 30, 2007, the Special Committee and Triarc and Trian had not reached
agreement on the terms of a confidentiality agreement, including standstill provisions and provisions relating to Triarc’s ability to pursue alternative financing sources, and Triarc and Trian had not
been provided with a confidential information memorandum. On July 30, 2007, Triarc and Trian sent a letter to Mr. Pickett and filed with the SEC an amendment to its Schedule 13D, stating that
Triarc “presently anticipates that it would be prepared” to offer $37 to $41 per share to Wendy’s shareholders, subject to satisfactory due diligence, negotiation of definitive documentation and other
customary closing conditions. The letter did not specify any proposed form or terms of a transaction, and did not include any indication of sources of funding for a transaction. The letter stated that
Triarc’s preferred form of a confidentiality agreement would be forthcoming separately and if the Special Committee would like to invite Triarc to participate in the sale process of Wendy’s, Triarc
suggested that Wendy’s execute a confidentiality agreement in the form that Triarc and Trian were prepared to execute by 5:00 p.m. on August 1, 2007 and stated that if they did not receive a
favorable response, Triarc and Trian would thereafter continue to review and evaluate their alternatives with respect to Wendy’s. In the view of Wendy’s advisors, the letter suggested that Triarc
would exit the auction process if its deadline was not met. The Special Committee’s financial advisors received indications of interest in an acquisition of Wendy’s from four separate bidding groups (which we refer to as Bidders A, B, C and D) on July
31, 2007. The committee and its advisors reviewed the indications of interest at a meeting of the committee held on August 2, 2007. Bidder A’s proposal indicated a value of $36 to $40 per share,
Bidder B’s proposal indicated a value of $37 to $39 per share, Bidder C’s proposal indicated a value of $37 to $40 per share, and Bidder D’s proposal indicated a value of $39 to $42.50 per share.
During the period August 6 through August 20, 2007: Wendy’s management made comprehensive presentations to Bidders A, B and C; a due diligence data room was opened to the bidders; and the
Special Committee’s advisors, Triarc and Trian continued to negotiate the terms of a proposed confidentiality agreement, including standstill provisions and provisions relating to Triarc’s access to
alternative financing sources. Also during this period, Bidder D declined to participate further because of difficulties in securing financial backing. On August 20, 2007, the Special Committee met with its advisors to review the status of the ABS financing efforts, and to discuss the viability of a sale and leaseback of certain of Wendy’s real
estate holdings as financing supplemental to the ABS financing for a possible purchase of Wendy’s. Based on that review, the committee authorized JPMorgan and Lehman Brothers to develop a sale
and leaseback financing package for consideration by bidders. On August 28, 2007, Triarc and Trian executed a confidentiality agreement with Wendy’s containing standstill provisions effective until
December 1, 2007, and were given the confidential information memorandum and access to the 38
Wendy’s due diligence data room. Triarc and its advisors, including Paul Weiss, Rifkind, Wharton & Garrison, LLP, Kaufman, Feiner, Yamin, Gildin & Robbins, LLP, Stikeman Elliott LLP, Jones Day
and Bear Stearns, began the process of reviewing the due diligence materials provided in the data room. The Special Committee met for an in-depth review of the ABS financing and an update on the Sale and Leaseback Financing efforts on August 30, 2007, including a detailed financial review and
a detailed review of legal considerations presented by Winston & Strawn, which had been engaged by Wendy’s with respect to financing and transactional due diligence matters in connection with the
Special Committee’s efforts. A confidential memorandum with respect to the sale and leaseback financing was distributed the day after that meeting to prospective real estate purchasers who had
executed a confidentiality agreement. During the period September 5 through September 24, 2007, Triarc requested from the Special Committee, and was granted, permission to pursue debt and equity financing from identified
sources, subject to the execution by those sources of appropriate confidentiality agreements. Wendy’s management made a comprehensive presentation to Triarc and Trian personnel on September 7,
2007. The Special Committee’s advisors distributed to Bidders A, B, C and Triarc a draft merger agreement on September 14, 2007, and draft disclosure schedules thereto on September 19, 2007.
Triarc and its legal advisors, including Paul Weiss, Kaufmann Feiner, Morris, Nichols, Arsht & Tunnell LLP and Jones Day, began to review potential transaction structures for a proposed transaction
between Wendy’s and Triarc. On September 10, 2007, at a meeting of Triarc’s board of directors, Mr. Garden reported that Triarc had reached an agreement with Wendy’s on the terms of a confidentiality agreement
governing Triarc’s participation in Wendy’s sale process and reported that Triarc representatives had begun conducting due diligence and evaluating potential acquisition financing. Roland C. Smith, a
director and Chief Executive Officer of Triarc, provided initial observations regarding the potential acquisition of Wendy’s, including some observations from the presentation made by Wendy’s
management to Triarc on September 7, 2007. The Special Committee’s financial advisors updated the committee on the sale process and on the ABS and sale and leaseback financing efforts on September 25, 2007, at which time the
committee approved the engagement of bond insurers to provide credit support for the ABS financing. The Special Committee met on October 5, 2007 for an update on Wendy’s financial
performance from Mrs. Anderson, and to interview three candidates for the role of independent financial advisor to the committee in light of the possibility that JPMorgan and Lehman Brothers
would be providing stapled ABS financing to the acquirer if a transaction occurred. On October 7, 2007, the Special Committee updated the Wendy’s board of directors on the committee’s activities
and on capital markets and other developments relevant to the sale process subsequent to July 25, 2007. During the week of October 8, 2007, the committee selected Greenhill & Co., LLC (which we
refer to as Greenhill) as its independent financial advisor. On October 16, 2007, at a meeting of Triarc’s board of directors, Mr. Smith and Stephen E. Hare, Senior Vice President and Chief Financial Officer of Triarc, provided a detailed presentation of
the potential acquisition of Wendy’s. The presentation included details regarding the Wendy’s sale process, proposed financing sources, on-going due diligence, opportunities for improved operating
results at Wendy’s, the integration of the Wendy’s business within Triarc’s organizational structure, potential cost savings and synergies presented by the proposed acquisition and Triarc’s pro forma
capitalization following the acquisition. On October 17, 2007, the Special Committee, JPMorgan, Lehman Brothers and Baker Hostetler met and discussed at length the current state of the credit markets, market confidence in the
financial strength of bond insurers, the possible terms of the Lehman Brothers and JPMorgan ABS financing and related bridge financing commitments to be delivered to bidders, the scheduled
December 1, 2007 expiration of the Triarc/Trian confidentiality agreement’s standstill obligations and the importance of maintaining a controlled competitive bidding environment for maximizing the
value to Wendy’s shareholders of any acquisition proposal. Members of the Special Committee also noted their belief that the continuation of the sale process was straining management resources and 39
undermining focus on normal business operations. The committee and its advisors discussed the relative benefits and detriments, in light of these considerations, of calling for definitive bids without
substantial further delay, suspending the sale process, and terminating the sale process. The committee determined tentatively to proceed toward a prompt call for bids. During the next several days, Mr. Pickett, on behalf of the Special Committee, approached two banks about their willingness to participate in the stapled financing commitment anticipated from
Lehman Brothers and JPMorgan, or alternatively to develop its own proposal for ABS or other financing. On October 22, 2007, Triarc announced that its definitive agreement for the sale of
Deerfield had been terminated by mutual agreement of the parties. On October 24, 2007, Lehman Brothers and JPMorgan delivered their ABS financing term sheet and related bridge financing (which we refer to as the stapled financing) commitment terms for
review by the Special Committee and its counsel. Numerous discussions ensued during the next several days among the committee, Baker Hostetler, Wendy’s management, Mr. McCorkle, Winston &
Strawn, Akin Gump, Lehman Brothers, JPMorgan and Greenhill, regarding the proposed terms of the stapled financing. The Special Committee met on October 25, 2007 and discussed at length,
separately with Lehman Brothers and JPMorgan, on one hand, and with Greenhill, on the other hand, the advantages and disadvantages, for purposes of maximizing shareholder value, of delivering
the stapled financing terms to prospective bidders and calling for final bids by mid-November. Baker Hostetler, Mr. McCorkle, Winston & Strawn, Akin Gump and Greenhill negotiated with Lehman
Brothers and JPMorgan regarding the stapled financing during the period October 26 through October 28, 2007, and the committee authorized delivery of the stapled financing terms to bidders on
October 29, 2007, together with a communication that other potential financing sources were working to propose financing commitments as alternatives to the stapled financing and that final bids
would be due on November 12, 2007. On November 2, 2007, Mr. Pickett reported to the Special Committee that one of the banks he had approached had declined to proffer alternative financing for a possible transaction, and
Messrs. Pickett and Lauer and Baker Hostetler met with representatives of the second bank to discuss its views on ABS financing availability and a timeline for its delivery of a financing commitment.
The second bank expressed an interest in providing a financing commitment as an alternative to the stapled financing. On November 6, 2007, the Special Committee and its advisors updated the
Wendy’s board of directors on developments in the committee’s process, including the delivery to bidders of the stapled financing terms, ongoing negotiations with respect to those terms, and the
setting of a November 12, 2007 bid deadline, and reviewed generally with the Wendy’s board of directors the other strategic alternatives that the committee had identified in May 2007. In the months leading up to the November 12, 2007 bid deadline, Triarc, working with Bear Stearns and potential lending sources, determined that due to declining credit market conditions, the
transaction terms proposed in the July 30, 2007 letter from Triarc and Trian to Wendy’s had become increasingly less attractive and a transaction consisting of a mix of cash and stock consideration
provided better certainty of closing. On November 12, 2007, at a meeting of Triarc’s board of directors, Mr. Peltz indicated that bids for the acquisition of Wendy’s were due by the close of business
that day. Triarc’s board of directors reviewed the contents of Triarc’s proposed bid letter, including the proposed price range per share of Wendy’s common stock, the form of the proposed
consideration and the conditions to which the offer would be subject. The Triarc board of directors unanimously approved the submission of a bid letter. On November 12, 2007, JPMorgan received from Bidder A a proposal for a recapitalization valued at $29 per share, with per share consideration to Wendy’s shareholders comprising $26.50 in
cash as a special dividend, and $2.50 in retained Wendy’s common shares. Bidder A proposed transaction funding in the form of $2.3 billion of debt financing and Bidder A’s investment of $524
million in exchange for Wendy’s common shares, but did not indicate the per share price at which the investment would be made. The proposal was premised on the availability of bridge financing to
be provided by Wendy’s financing sources and of the sale and leaseback financing, and was conditioned on the satisfactory completion of Bidder A’s due diligence and the preparation and execution
of acceptable transactional and debt financing documentation. 40
JPMorgan received from Triarc, on November 12, 2007, a letter proposing a merger of Wendy’s into Triarc valued at $32 to $36 per Wendy’s common share, comprising $20 to $25 per share in
cash with the remaining consideration in the form of Triarc’s Class B common stock (with voting rights of 1/10 vote per share), and indicating that if Wendy’s wished for a greater percentage of the
cash component of the merger consideration to be payable to its shareholders, Triarc would be prepared to work with certain large shareholders of Wendy’s to seek to have them agree to convert
their shares solely into shares of Triarc Class B common stock. The November 12 letter did not indicate an exchange ratio for the stock portion of the consideration. As to the cash portion of the
consideration, the letter stated that Triarc had intended to utilize the proceeds from an ABS transaction that it had finalized for Arby’s together with proceeds from the stapled financing but, because
the stapled financing had not materialized beyond the term sheet stage, Triarc was working with two major financial institutions on a combined Wendy’s/Triarc ABS financing and was also pursuing
bank and bond financing, and expressed Triarc’s intention to utilize the sale and leaseback financing. The letter indicated that Triarc would need stockholder approval to issue the Class B common
stock and that Triarc was continuing to examine the disposition of its interest in Deerfield with a view to conducting only restaurant industry operations in Triarc, and requested that Wendy’s conduct
discussions exclusively with Triarc for a 15-business day period. Bidders B and C did not submit bids on November 12, 2007, and withdrew from continuing discussions with the Special Committee
and its advisors. The Special Committee met with JPMorgan, Lehman Brothers and Baker Hostetler on November 13, 2007, to review the Bidder A and Triarc proposals. JPMorgan noted that neither bidder had
submitted a mark-up of the draft merger agreement or evidenced receipt of an acceptable financing commitment, and that the proposals constituted only confirmed indications of interest, rather than
the requested best and final bids. The committee determined not to grant the exclusivity requested by Triarc in light of the current state of its proposal and the value of maintaining a competitive
bidding environment, and instructed JPMorgan to obtain clarification from both Bidder A and Triarc regarding details of their respective proposals. The committee and its advisors met again on November 14, 2007. JPMorgan reported on the additional details that it had obtained regarding the proposals, that both proposals were premised on
an ABS financing package that Wendy’s was to provide, and that JPMorgan had been informed that Wendy’s financing sources would need until mid-December 2007 to deliver its financing
commitment. Following a review of these matters and of the considerations assessed by the committee at its October 17, 2007 meeting, the committee instructed JPMorgan to notify Bidder A and
Triarc that their respective proposals were not acceptable on their current terms, and that they should complete their due diligence and financing arrangements with Wendy’s financing sources and be
prepared to submit best and final bids by mid-December. The committee also directed JPMorgan to advise Triarc that the Class B common stock component of its bid was not acceptable and that it
should make an all-cash bid. The Special Committee, JPMorgan and Baker Hostetler met again on November 30 and December 6, 2007. JPMorgan reported that Triarc had repeated its request for exclusive negotiations and
indicated that it was close to securing traditional bank and bond financing for its proposal. JPMorgan further reported that Bidder A had been relying on the availability of the ABS financing but
that Wendy’s financing sources had recently concluded that they would be unable to deliver a financing commitment by mid-December because of credit market conditions. Following discussion of
these considerations and of the committee’s view regarding the continuing strain on Wendy’s operations arising from the sale process, the committee determined to reject Triarc’s request for
exclusivity and to defer receipt of final bids to the earliest practicable date on which fully-financed bids could be expected from both remaining bidders. On December 7, 2007, Triarc requested from the Special Committee, and was granted, permission to pursue equity financing from identified Wendy’s shareholders, subject to the execution by
those shareholders of appropriate confidentiality agreements. On December 18, 2007, JPMorgan, at the Special Committee’s direction, delivered to each of Bidder A and Triarc instructions to submit
a best and final offer, together with a financing commitment and a mark-up of the draft merger agreement submitted to bidders in September 2007, by January 10, 2008. 41
On December 18, 2007 Triarc announced that it had entered into a revised definitive agreement to sell its Deerfield asset management business to Deerfield Triarc Capital Corp. (now known as
Deerfield Capital Corp.), which transaction was consummated on December 21, 2007, resulting in Triarc’s sole operating business being the Arby’s restaurant business. Between December 18, 2007 and January 10, 2008, Bidder A and certain of its potential financing sources conducted substantial due diligence on Wendy’s, Wendy’s financing sources continued to
devote extensive efforts to developing an ABS financing package, and a draft purchase agreement for purposes of the sale and leaseback financing was distributed to qualified bidders. Shortly before
January 10, 2008, Wendy’s financing sources informed the Special Committee that they would be unable to deliver a viable ABS financing commitment in light of prevailing conditions in the credit
markets and the credit standing of certain bond insurers. Bidder A delivered to the Special Committee, on January 10, 2008, a detailed proposal for a leveraged recapitalization of Wendy’s, the principal features of which included: an investment by
Bidder A of $500 million in exchange for newly-issued convertible preferred shares (convertible into approximately 28% of Wendy’s common shares, assuming immediate conversion at a $24 per
share Wendy’s common share price); Wendy’s incurring a new $700 million term loan and entering into a $100 million revolving credit facility; the appointment of the principal owner and chief
executive officer of a significant Wendy’s franchisee as the new Chief Executive Officer of Wendy’s (who we refer to as the Bidder A Designee); the purchase by Wendy’s of that franchisee’s
business for $165 million in cash and Wendy’s common shares (for the stated purpose of eliminating conflicting focus for the Bidder A Designee and aligning his interest with common shareholders);
the payment to Wendy’s common shareholders of a special dividend of approximately $12.70 per share; and the election to a 15-member Wendy’s board of directors of the Bidder A Designee, three
additional Bidder A nominees, and four persons to be nominated in 2008 by agreement between Bidder A and Wendy’s. Bidder A’s proposal included a draft financing commitment from several
institutions. Triarc delivered to the Special Committee, on January 10, 2008, a letter indicating that in light of the state of the credit markets, it was not comfortable with the credit terms available in the
bank and fixed income markets. Triarc had explored various financing arrangements with approximately a dozen potential financing sources, including major financial institutions, monoline insurers
active in the ABS market, hedge funds and alternative financing sources. Triarc proposed that Wendy’s effect a tender offer for up to $1 billion of its outstanding common shares at a price of $30 per
share, stating that Trian had advised Triarc that Trian would “help finance” the tender offer, following which Wendy’s and Triarc would be combined, with the remaining Wendy’s shareholders either
receiving cash “at a significant premium” to the current market price or owning stock in the combined entity. The letter expressed Triarc’s belief, based on preliminary conversations that it had
conducted (with Wendy’s permission) with several large shareholders of Wendy’s, that those shareholders would want to convert their Wendy’s shares into shares of the combined entity. The letter
did not identify the amount or any proposed terms of the tender offer financing assistance and did not indicate any proposed structure for or pricing or other terms of the proposed combination. The Special Committee, Baker Hostetler and JPMorgan met on January 11, 2008 to review the materials received on January 10. The committee directed JPMorgan to obtain background
information and further detail from both Bidder A and Triarc regarding their respective bids. The committee requested that JPMorgan also explore Bidder A’s willingness to purchase common rather
than preferred shares, and the significance to Bidder A of the Bidder A Designee’s appointment as Chief Executive Officer and of the purchase of his franchise business. The Special Committee and its advisors convened again on January 14, 2008. JPMorgan reported Bidder A’s insistence on purchasing preferred rather than common shares, and on teaming with
the Bidder A Designee and effecting a purchase of his business for the stated purpose of assuring his sole focus on the Wendy’s business. JPMorgan also reported that Triarc had reiterated its desire
for a merger with Wendy’s but declined to provide any particulars beyond its January 10 letter. The committee determined to meet with Bidder A to obtain a better understanding of its proposal.
Following a review of the state of the financial markets and the nature and terms of the financing package included in Bidder A’s proposal, consideration of the absence of a definitive 42
proposal for an alternative transaction from Triarc or any third party, and a discussion of the committee’s concern about potential damage to Wendy’s operations from continuation of the sale
process, the committee determined that it would also be advisable to explore alternatives to a sale or recapitalization of Wendy’s that could facilitate alignment among Wendy’s shareholders, board of
directors and management and permit execution of an operating plan without disruption. To that end, the committee directed JPMorgan to meet with Mr. Peltz to gauge his interest in discussing
changes in Wendy’s board of directors and management if no sale of Wendy’s or similar transaction were pursued. On January 14, 2008, Mr. Peltz expressed to JPMorgan a lack of interest in discussing Wendy’s board of directors and management changes. However, in a conversation between Mr. Pickett and
Mr. Peltz on January 15, 2008, they engaged in a dialogue regarding Wendy’s board of directors and management changes, including a suggestion by Mr. Pickett that Mr. Peltz serve on Wendy’s
board of directors in the absence of a transaction. In a subsequent conversation on January 16, 2008, Mr. Peltz declined the opportunity to sit on Wendy’s board and reiterated his desire to only
complete a Triarc/Wendy’s merger. Based on this conversation, Mr. Pickett believed that Trian would likely conduct a proxy contest with respect to the composition of Wendy’s board of directors if a
Triarc/Wendy’s transaction could not be agreed to. On January 16, 2008, the Special Committee, Baker Hostetler, JPMorgan and Greenhill met with Bidder A for a detailed review of Bidder A’s
proposal. At the conclusion of this meeting, the committee instructed JPMorgan to examine further the economics of Bidder A’s proposal and to seek a more definitive transaction proposal from
Triarc. Between January 19 and January 22, 2008, Baker Hostetler, Akin Gump and JPMorgan developed a response to Bidder A’s proposal, and JPMorgan requested definitive information from Triarc
regarding Triarc’s proposed combination with Wendy’s, including the value Triarc ascribed to Wendy’s, the structure of the proposed transaction, the form of consideration to be paid, the governance
features of the surviving entity, the identity of post-closing management of the Arby’s and Wendy’s brands, the status and terms of any necessary financing, the transaction’s timing, conditions to
consummation of the transaction, the impact of the proposed transaction on Wendy’s franchisees, and the remaining due diligence to be conducted by Triarc. On January 23, 2008, JPMorgan, Baker Hostetler and Akin Gump met with Bidder A and its counsel to negotiate the terms of the preferred shares to be issued in Bidder A’s proposed
transaction. On the same day, Wendy’s executed a confidentiality agreement with Triarc to enable Wendy’s and the Special Committee and their respective advisors to obtain nonpublic information
regarding Triarc for purposes of exploring a possible transaction. On January 24, 2008, Trian requested an extension to February 11, 2008 of the original January 27, 2008 deadline for submission of shareholder proposals for the Wendy’s 2008 annual meeting.
Representatives of Trian, Triarc and Bear Stearns met with representatives of JPMorgan to discuss a proposed transaction and review the strategic rationale of a Wendy’s/Triarc (Arby’s) combination.
On the Special Committee’s recommendation, premised on its desire to develop Triarc’s intentions regarding a potential transaction as promptly as possible without the distraction of other initiatives,
the Wendy’s board of directors acted on January 26, 2008 to grant the requested extension, and JPMorgan requested that Triarc deliver to the Special Committee, in writing, the terms of Triarc’s
proposal. Triarc delivered to the Special Committee, on February 1, 2008, a letter proposal to merge a subsidiary of Triarc into Wendy’s, with Wendy’s surviving as a wholly-owned subsidiary of Triarc.
The proposal called for aggregate consideration to Wendy’s shareholders consisting of $500 million in cash, and Triarc common stock, without differentiating between Triarc’s Class A common stock
and its Class B common stock. The proposal indicated consideration of $27.00 per share to Wendy’s shareholders, comprising $6.39 in cash (if Trian, but no other Wendy’s shareholders, elected to
receive Triarc common stock as consideration) up to $10.00 in cash (if other large shareholders holding approximately 40% of Wendy’s outstanding shares also elected to receive only Triarc common
stock), with the remainder of the consideration consisting of Triarc common stock valued at $9.50 per share, which the letter stated was “the approximate current trading price” of Triarc 43
common stock. (The closing price of Triarc Class B common stock was $9.30 on January 31, 2008 and $9.67 on February 1, 2008 and the closing price of Triarc Class A common stock was $9.38 on
January 31, 2008 and $9.64 on February 1, 2008.) The February 1 Triarc proposal was premised on $675 million of debt financing to be secured by Wendy’s assets, and was accompanied by draft financing commitment letters from two financing
sources. Triarc’s proposal letter expressed confidence that Triarc’s management team could increase Wendy’s earnings before interest, taxes, depreciation and amortization (which we refer to as
EBITDA) significantly by improving Wendy’s-owned store profit margins, controlling expenses, and rationalizing overhead costs through synergies between the Triarc and Wendy’s operations. The
proposal contemplated a 15-member post-closing Triarc board of directors, three of whom would be designated by Wendy’s, and was conditioned on satisfactory completion of Triarc’s due diligence,
completion and execution of definitive transactional and financing documentation, approval by Triarc’s board of directors, receipt of the proposed financing, and other customary closing conditions.
The proposal letter indicated that the proposal would remain effective only until February 6, 2008, and requested that Wendy’s conduct negotiations exclusively with Triarc for a period of 15 business
days. The Special Committee, Baker Hostetler and JPMorgan met on February 2, 2008 to review the February 1, 2008 Triarc proposal in detail. In the context of this discussion, the committee noted
that the proposal had not included a mark-up of the draft merger agreement and schedules previously submitted to bidders, and that an important feature of the proposal was its premise that Triarc,
including Mr. Smith and other members of his management team, could effect significant improvement in Wendy’s operating results. The Special Committee requested that JPMorgan arrange
promptly for in-depth interviews by the committee of Mr. Smith and other Triarc management personnel, for an assessment of their capabilities and for a presentation of Triarc’s strategic rationale
for its proposal and of their views on the opportunities resulting from a combination of Wendy’s and Arby’s. The committee also requested that JPMorgan arrange for an in-depth interview of the
Bidder A Designee in the context of the committee’s continuing discussions with Bidder A, and that JPMorgan notify Triarc that the committee had declined its request for exclusive negotiations. On February 6, 2008, Trian requested an extension of the February 11, 2008 deadline for submission of shareholder proposals for the Wendy’s 2008 annual meeting. The Special Committee’s
interviews with Triarc’s management personnel were conducted on February 7 and 8, 2008. The Special Committee, Baker Hostetler and JPMorgan met again on February 9, 2008, to review the committee members’ interviews of Triarc personnel and of the Bidder A Designee. The
committee’s members reported favorably on their interviews of both the Triarc personnel and the Bidder A Designee. The committee also considered Trian’s February 6, 2008 request for a further
extension of the shareholder proposal deadline described above, but declined to make a recommendation to the Wendy’s board of directors in favor of the request, in light of the committee’s belief
that Triarc had not yet fully responded to all due diligence requests of the committee and its advisors and a perceived lack of clarity from Triarc on the brand focus and proposed location of Triarc
executives who would be charged with effecting improvements in Wendy’s performance. The Wendy’s board of directors met to discuss the requested extension but declined to grant it. On February
11, 2008, Trian submitted a proposal for action at the Wendy’s 2008 annual meeting, calling for, among other things, (a) an increase in the size of the Wendy’s board of directors to 15 members, (b)
the election of six board members in 2008, five in 2009 and four in 2010, and (c) the election to the board in 2008 of six Trian nominees. During the next several days, the Special Committee, Baker Hostetler, Winston & Strawn and Akin Gump, and consultants engaged by Wendy’s, initiated due diligence, which continued for several
weeks, on the Bidder A Designee’s business to be acquired in connection with Bidder A’s proposal. They also developed and delivered to Bidder A a detailed counterproposal addressing the financial
terms of Bidder A’s proposed investment and of the preferred shares to be issued, standstill considerations relating to share purchases and corporate governance initiatives, and other governance
matters. On February 14 and 15, 2008, Triarc delivered to the committee’s advisors further responses to the committee’s due diligence requests and provided clarification regarding the Triarc
executive 44
team. On February 20, 2008, Bidder A responded in writing to the Special Committee’s counterproposal, and the committee’s advisors summarized for the committee the Triarc due diligence items
that remained outstanding. On February 22, 2008, Bear Stearns submitted to JPMorgan responses to Wendy’s due diligence requests. At a meeting of the Special Committee held on February 22, 2008, the committee noted its continuing concern regarding the effect of the sale process on Wendy’s operations. The committee
directed its advisors to continue their due diligence with respect to Triarc and to obtain Wendy’s management’s views on the financial consequences to Wendy’s and its shareholders of accepting the
Bidder A proposal in its current form. The committee and its advisors also discussed Bidder A’s outlook for Wendy’s operating and financial performance and discussed Wendy’s current strategic
options, including a transaction with Bidder A, a transaction with Triarc, or continuing operations in the absence of a transaction. The Special Committee, Baker Hostetler and JPMorgan met again on March 6, 2008. The meeting participants reviewed the information that had been developed on the experience and track
record of the Triarc executive team to be responsible for Wendy’s operations, a preliminary Triarc model for Wendy’s financial performance, Triarc’s analysis of the synergies available in a
Triarc/Wendy’s combination, corporate governance considerations, and the potential impact of the proposed combination on Wendy’s employees and franchisees. JPMorgan responded to questions
from the committee regarding, among other things, the assumptions underlying Triarc’s financial model and the liquidity of the common stock to be issued in the proposed combination if the
consideration was other than cash. After discussion of the relative merits of the Bidder A proposal and the Triarc proposal, the Special Committee instructed JPMorgan and Baker Hostetler to
proceed promptly with the steps that would be necessary to bring both the Bidder A proposal and the Triarc proposal into best and final form as soon as practicable. During the next 10 days, Bidder A and JPMorgan conducted additional due diligence on Wendy’s recent financial performance; Triarc delivered to the Special Committee’s advisors a draft
merger agreement; the committee and its advisors (including JPMorgan and Greenhill in separate sessions with the committee) reviewed the relative advantages and disadvantages of proceeding with
Bidder A, proceeding with Triarc, and not undertaking any transaction; negotiations continued with Bidder A on the terms of its proposal (including its proposed debt financing documentation) and
with the Bidder A Designee’s counsel and executive team on the acquisition of the Bidder A Designee’s business; and the committee’s advisors delivered to Triarc a comprehensive due diligence
request. During the period March 17 through March 23, 2008, the Special Committee’s counsel and financial advisors and Wendy’s outside counsel and consultants continued their Triarc due diligence
investigation, and Wendy’s management team conducted due diligence calls with Triarc regarding Triarc’s business plan and model. In addition, in light of the committee’s assessment of the current
state of the Bidder A and Triarc proposals and the possibility of a proxy contest from Trian if no Triarc transaction were agreed to, Mr. Pickett undertook exploratory discussions with individuals
who had been identified as possible candidates for the Wendy’s Chief Executive Officer position and Wendy’s board of directors positions, including Chairman, if the Special Committee and Wendy’s
board of directors were unable ultimately to recommend any transaction for shareholder approval. At a meeting of the Special Committee, Baker Hostetler and JPMorgan on March 24, 2008, the meeting participants reviewed the Bidder A proposal, with a focus on its financial implications for
Wendy’s shareholders in light of the terms of the proposal’s preferred shares component, and discussed the proposal’s debt financing terms and financing fees and whether the proposal could be
deleveraged. Mr. Pickett reported that he had met with Mr. May, who was acting on behalf of Triarc, on March 21, 2008, at Mr. May’s request, and had requested that Triarc deliver promptly to the
committee’s advisors and Wendy’s management additional detail on Triarc’s projected post-transaction cost savings and on the financing of the cash component of Triarc’s proposal. Mr. Pickett also
reported on his discussions with possible Chief Executive Officer and Wendy’s board of director candidates. The committee’s advisors updated the committee on their due diligence investigation of
Triarc. 45
During the period March 25 through March 28, 2008, JPMorgan, Baker Hostetler, Akin Gump and Winston & Strawn negotiated with Bidder A and its advisors regarding the terms of the
preferred shares to be issued and Bidder A’s financing commitment terms and fees, exchanged drafts of and conducted in-person negotiations with Bidder A and its advisors on the purchase
agreement and related documentation for the Bidder A proposal, delivered to Triarc’s counsel a comprehensive revision of the Triarc draft merger agreement (which did not contain a counter
proposal to the economic terms of Triarc’s February 1, 2008 proposal), participated in a call among Wendy’s management and Bidder A’s financing sources regarding Wendy’s current business plan,
and communicated to Bidder A and Triarc the Special Committee’s intention to bring its process to completion in advance of Wendy’s regularly-scheduled board of directors meeting during the week
of April 21, 2008. On March 26, 2008, Triarc’s legal advisors and Bear Stearns submitted to Wendy’s advisors outstanding due diligence items. On March 31, 2008, members of Wendy’s management, Wendy’s
consultants, representatives of JPMorgan and Baker Hostetler, Mr. McCorkle and representatives of Akin Gump attended a Triarc management presentation at Triarc’s headquarters in Atlanta
regarding Triarc’s business plan and its model for improving Wendy’s operating and financial performance. Certain members of the Special Committee attended the presentation by telephone, and
representatives of Greenhill received and analyzed the presentation materials independently. During the first 10 days of April 2008, the Special Committee, its advisors and Wendy’s management continued discussions with Bidder A on Bidder A’s financial forecast for Wendy’s, and
continued internal discussions on Triarc’s financial outlook; the committee, JPMorgan, Baker Hostetler, Akin Gump and Winston & Strawn continued telephonic and in-person negotiations with Bidder
A and with the Bidder A Designee’s counsel and executive team regarding transaction and financing terms and documentation; and Mr. Pickett and members of Wendy’s management interviewed
potential candidates to become the Chairman of the board of directors and the Chief Executive Officer of Wendy’s if no transaction was recommended by the Special Committee, and began
discussions regarding potential employment arrangements with such candidates. On April 2, 2008, at a meeting of Triarc’s board of directors, Mr. Smith provided a report with respect to the presentation made by Triarc management to Wendy’s management and advisors on
March 31, 2008. On April 3, 2008, Mr. May, on behalf of Triarc, and representatives of JPMorgan met to discuss the possibility of a stock-for-stock transaction to address certain concerns raised by
Wendy’s regarding Triarc’s proposed transaction, including minimizing the effects of uncertain credit markets and providing greater certainty of closing. The Special Committee, Baker Hostetler and JPMorgan met on April 4, 2008 to review: the risks attendant to closing Bidder A’s proposed transaction; the Triarc March 31, 2008 management
presentation; issues relating to the Triarc draft merger agreement; the committee’s questions regarding Triarc’s ability to manage both the Arby’s and Wendy’s brands; the amount and form of
consideration for shareholders in a Triarc transaction; the post-closing liquidity of any common stock to be issued as merger consideration in a Triarc transaction; and the meeting participants’
expectations regarding the effect on shareholder value of continuing business in the absence of a transaction, with either the current management team and board configuration or with the addition or
substitution of one or more of the candidates engaged in discussions with Mr. Pickett. At the conclusion of this meeting, the Special Committee directed its advisors to formulate, for the committee’s
review, a counteroffer to Triarc’s February 1, 2008 proposal, and requested that they schedule a meeting for Bidder A to present to the committee its best and final proposal. On April 9, 2008, JPMorgan, Baker Hostetler and Akin Gump met in person with representatives of Bidder A and its counsel to resolve open issues and work toward finalizing the
documentation for Bidder A’s proposal. On the evening of April 9, 2008, the committee, Baker Hostetler and JPMorgan met to review the remaining open issues with respect to Bidder A’s proposal,
and to review the proposed counteroffer to Triarc’s February 1, 2008 proposal. At the committee’s direction, JPMorgan delivered to Triarc, on April 10, 2008, a term sheet proposing a Triarc/Wendy’s merger with consideration to Wendy’s shareholders of Triarc common
stock valued at $31 per share (with a variable share exchange ratio to ensure a fixed value), a 46
limited number of closing conditions, reciprocal break-up fees, and voting agreements from Trian and Messrs. Peltz and May with respect to the requisite Triarc and Wendy’s shareholder approvals of
the transaction. The term sheet also called for, among other things, certain corporate governance and heritage protection measures, including a single class of common stock in the post-closing
publicly-traded entity, a charter provision limiting the post-merger entity’s business to global restaurant operations, representation on that entity’s board of directors of Wendy’s designees, preservation
of the Wendy’s brand headquarters in the Columbus, Ohio area for a specified period, preservation of the Wendy’s identity in the traded entity’s name, post-signing and pre-closing Triarc interaction
with Wendy’s shareholders and franchisees, post-closing public disclosure levels and investor relations activities, and a three-year standstill agreement and resignation from Wendy’s board of directors
of Trian’s designees if the Wendy’s shareholders failed to approve the merger. In a related telephone conversation, JPMorgan informed Triarc that the Special Committee was preparing to make a
decision during the week of April 14, 2008 on its recommendation to the Wendy’s board of directors, that the committee would present its recommendation for action at the Wendy’s board of
directors meeting on April 22 and 23, 2008, and that the committee believed that it had actionable alternatives to a transaction with Triarc. On April 11, 2008, Bidder A and the Bidder A Designee met with the Special Committee, Baker Hostetler and representatives of JPMorgan and of Greenhill to review in detail the economic
terms of Bidder A’s proposal, the anticipated financial returns to Bidder A and to Wendy’s common shareholders from the implementation of Bidder A’s plans for Wendy’s, Bidder A’s debt
financing terms, its views on Wendy’s current operations and the changes it considered necessary, its proposed executive team and that team’s experience relative to heading the Wendy’s business, and
the proposed purchase of the Bidder A Designee’s business. In the course of discussion of these matters, Bidder A confirmed its recognition that the implicit immediate premium to Wendy’s existing
shareholders of its proposed investment was variable and potentially not significant, and that Bidder A would derive a return of six percent on its investment before Wendy’s common shareholders
derived a return. In that context, Bidder A expressed its belief that its proposal represented a substantial benefit to Wendy’s shareholders in the form of enterprise stability, continued current returns
and longer-term enterprise and share value appreciation, and stated that it was unwilling to and would be unable to offer economic terms more favorable to Wendy’s common shareholders than those
reviewed at the meeting. On April 15, 2008, Trian proposed to JPMorgan an acquisition of Wendy’s “through” Trian Acquisition I Corp., a publicly traded special purpose acquisition corporation affiliated with Trian,
with consideration valued at $27 per Wendy’s common share and payable in a combination of cash held in Trian Acquisition I Corp. and Trian Acquisition I Corp. common stock. Trian believed this
proposal would keep open the possibility of a transaction in which Wendy’s shareholders would be able to receive cash as part of the consideration. Following independent analyses, JPMorgan and
Greenhill expressed to the Special Committee their belief that Trian Acquisition I Corp. would not be able to pay the proposed consideration to Wendy’s shareholders and retain sufficient value for
that entity’s existing shareholders to obtain the requisite approval of the proposed transaction by those shareholders. Baker Hostetler expressed to the committee its belief that (i) the overlap that
existed among the directors, officers and principals of Trian, Triarc and Trian Acquisition I Corp., in conjunction with Trian’s and Triarc’s longstanding interest in acquiring Wendy’s, raised certain
fiduciary duty, business opportunity and contractual issues, that could delay or otherwise interfere substantially with pursuing a transaction with Trian Acquisition I Corp. and (ii) the involvement of a
special purpose acquisition corporation could lead to a potentially lengthier and more involved regulatory review process. These concerns, in combination with the introduction of Trian Acquisition I
Corp. to the process at this juncture, indicated to the committee’s advisors that consummating the current proposal involving Trian Acquisition I Corp. was not feasible, and that pursuing any
transaction involving that entity could delay significantly the conclusion of the committee’s process, with a corresponding significant risk of diminishing shareholder value. After discussion of these
concerns and risks, the Special Committee instructed JPMorgan to advise Trian and Triarc that their best opportunity to effect a transaction with Wendy’s in the time available for further action
would be to focus on a transaction that did not involve Trian Acquisition I Corp. 47
On April 16, 2008, Triarc (through Bear Stearns) proposed a Triarc/Wendy’s merger, with consideration of 3.2 shares of Triarc common stock for each Wendy’s common share, which Triarc
believed, based on the historical trading value of Triarc’s stock and an assumed range of industry multiples, represented a value for each Wendy’s common share ranging from $27.43 to $37.56. Based
on the closing price of Triarc’s Class A common stock on April 15, 2008, however, the proposed exchange ratio represented a value of $20.70 for each Wendy’s common share, and reflected a 9.3%
discount to the closing price of Wendy’s common shares on that date. JPMorgan informed Bear Stearns promptly that the Special Committee would be voting on its recommendation to the Wendy’s
board of directors the following day, and inquired whether that Triarc proposal constituted Triarc’s best and final offer; Bear Stearns stated that it should be so considered. On the evening of April
16, 2008, the Special Committee met with a Wendy’s Chief Executive Officer candidate with whom Mr. Pickett had been conducting discussions. The Special Committee, Baker Hostetler and representatives of JPMorgan and Greenhill met on April 17, 2008. JPMorgan reviewed in detail the latest Triarc proposal, the preceding Triarc
proposal involving Trian Acquisition I Corp., unresolved Triarc corporate governance and Wendy’s heritage issues, the potential risk to execution of a Triarc transaction because of possible Wendy’s
franchisee resistance, and the anticipated consequences of not accepting a Triarc proposal, including the possibility of a proxy contest or hostile acquisition attempt. Following a discussion of these considerations, JPMorgan reviewed in detail the latest Bidder A proposal, including its economic terms and their financial implications for Wendy’s common
shareholders; its debt financing terms and related fees; the plan and financial expectations for future operations articulated by Bidder A’s principals and the Bidder A Designee; the financial and
other terms of the acquisition of the Bidder A Designee’s franchise business; the risks to consummating the Bidder A proposal and the amounts that would be payable by Wendy’s in connection with
a failed transaction; and the issues remaining to be resolved with Bidder A before definitive documentation could be executed. The meeting participants discussed these matters, Triarc’s and Bidder
A’s awareness of the Wendy’s first quarter financial results to be announced during the week of April 21, 2008, the potential effect of those results on their respective bids, and the anticipated market
reaction and effect on Wendy’s shareholder value of recommending neither a Triarc nor Bidder A proposal and proceeding with changes in the composition of the executive team and the Wendy’s
board of directors. JPMorgan declined to recommend the April 16, 2008 Triarc proposal, and Greenhill expressed its concurrence with JPMorgan’s view. The Special Committee and its advisors then discussed the
terms of the Bidder A proposal and the prospects for Wendy’s on a stand-alone basis. Following this discussion and based on the committee’s analysis of the financial terms of the Bidder A proposal,
its belief that the Bidder A proposal would align the largest Wendy’s shareholder, Wendy’s board of directors and management, and its belief that the Bidder A proposal would generate more
Wendy’s shareholder value than would a Wendy’s stand-alone plan with the executive team and Wendy’s board of directors changes that had been discussed, particularly in light of potential
shareholder dissatisfaction that would accompany pursuing the latter alternative, the Special Committee determined to recommend to the Wendy’s board of directors that it approve the Bidder A
proposal. This recommendation was made subject to resolution of the remaining issues and finalization of definitive documentation for execution by the time of the forthcoming April 22 and 23
Wendy’s board of directors meeting, and the committee directed its advisors to work with Bidder A and its counsel to complete those matters. On April 18, 2008, Mr. May sent a letter to Mr. Pickett expressing concern about the current direction of Wendy’s and its sale process. On that same day, Mr. Pickett responded to Mr. May in a
letter that stated that all proposals received by the Special Committee had been given fair and proper consideration. Also on April 18, 2008, Bear Stearns ceased working as Triarc’s financial advisor to avoid any conflict resulting from the pending acquisition of Bear Stearns by JPMorgan, one of Wendy’s
financial advisors. Triarc subsequently engaged Wachovia Securities as its financial advisor based on, among other things, Wachovia Securities’ familiarity with the proposed transaction as a potential 48
financing source to Triarc for the transaction and Wachovia Securities’ investment banking experience in the restaurant industry. On April 19, 2008, the Special Committee delivered to the Wendy’s board of directors a written recommendation in favor of the Bidder A proposal, an outline of its terms (including summaries
of the material terms of the documentation therefor), a description of the steps the committee had taken in arriving at its recommendation, and the most recent drafts of the principal transaction
documentation. Also on that date, Mr. Garden informed JPMorgan by telephone that Triarc was interested in making a new proposal. JPMorgan advised Mr. Garden that any further proposal, in
order to be considered, must be delivered no later than Monday, April 21, 2008, in executable form, and must include all definitive documentation necessary to implement the proposal. On April 20, 2008, Mr. Smith submitted to representatives of JPMorgan a letter proposing a merger of a Triarc subsidiary into Wendy’s, in exchange for $28.50 per Wendy’s common share in the
form of 4.0 to 4.1 shares of Triarc common stock for each outstanding Wendy’s common share and stating that Triarc was prepared to meet immediately with Wendy’s and its advisors to finalize the
noneconomic terms of the transaction and negotiate definitive documentation. The proposal was made subject to the execution of definitive documentation, approval by Triarc’s board of directors and
stockholders, and the satisfactory completion of Triarc’s due diligence. By email communication later that day, Baker Hostetler advised Triarc that the committee would require, in order to consider
the proposal, definitive transaction documentation early on April 21, 2008; that the transaction protection, corporate governance and heritage protection elements of any proposal would be an
important focus for the committee; and that the committee would not accept any proposal conditioned on further due diligence. At a Special Committee meeting convened early on April 21, 2008, the committee, Baker Hostetler and JPMorgan discussed the merits of the April 20, 2008 Triarc proposal. Because of the
factors described above, the committee and its advisors did not consider the Triarc proposal to be actionable at that time. The committee determined to proceed with the scheduled April 22, 2008
presentation to the Wendy’s board of directors recommending the Bidder A proposal, with a view to requesting action on that proposal on April 23, 2008, subject to the possibility of a change in the
committee’s recommendation to the Wendy’s board of directors if the Triarc proposal became actionable in that time frame. In separate conversations later that day, Greenhill expressed its support of
that approach. Later on April 21, Mr. Smith supplemented his April 20 letter to JPMorgan, indicating that (among other things) on the closing of the proposed transaction, Triarc would have a “shareholder
friendly” corporate governance structure without a poison pill or classified board of directors, with a single class of common stock, a 12-member board of directors that would include two Wendy’s
designees and would continue to require independent director approval of related-party transactions. The letter further indicated that the transaction would not be subject to further due diligence, that
the post-merger publicly-traded entity would change its name to include “Wendy’s” as its first word, and that the Wendy’s brand would continue to be headquartered in the Columbus, Ohio area for
at least three years following consummation of the merger. The letter expressed objection to the committee’s April 10, 2008 term sheet requirements that Triarc pay a break-up fee to Wendy’s, and
that Trian agree to a three-year standstill and cause its Wendy’s board of directors designees to resign from the Wendy’s board of directors, if Wendy’s shareholders failed to approve the proposed
merger. In response, JPMorgan reiterated the Special Committee’s immediate need for definitive documentation. Late in the afternoon of April 21, 2008, Paul Weiss, on behalf of Triarc, delivered a
revised version of the Special Committee’s advisors’ latest draft merger agreement. Also on April 21, 2008, Wendy’s was advised that as an alternative to Triarc’s proposal, Trian Acquisition I Corp.
was prepared to offer $30 per Wendy’s common share, payable in a combination of cash and Trian Acquisition I Corp.’s common stock. The Special Committee and its advisors, in light of their
reservations about the viability of any transaction with Trian Acquisition I Corp., determined to focus only on the Triarc proposal. On April 21 and April 22, 2008, JPMorgan, Baker Hostetler, Akin Gump and Winston & Strawn continued work with Bidder A, the Bidder A Designee’s executive team and their respective 49
advisors on finalizing the documentation for the Bidder A proposal. Simultaneously, JPMorgan, Baker Hostetler, Akin Gump and Winston & Strawn worked with Triarc, Trian, Paul Weiss, Triarc’s
legal advisor, and Cadwalader, Trian’s legal advisor, and other legal advisors toward completing documentation for the Triarc proposal. The committee met early on the morning of April 22, 2008 for an update on the status of the Triarc proposal, and, in addition to the discussions focused on transaction documentation, the
committee’s advisors continued negotiations with Triarc, Trian, Paul Weiss and Cadwalader over the course of the day regarding the merger consideration, the transaction protection, corporate
governance and heritage protection issues referred to above, and matters relating to, among other things, the preservation of compensation and benefits for Wendy’s employees, and limitations on
departures by Triarc or Wendy’s from the ordinary course of business and on other actions between the execution of the merger agreement and consummation of the merger. In the course of these
negotiations, the committee’s advisors expressed a preference for merger consideration in the form of a fixed value for each outstanding Wendy’s common share, rather than in the form of a fixed
share exchange ratio. Triarc was not willing to agree to consideration of a fixed value, and indicated on April 22, 2008 that it would instead (subject to satisfactory resolution of all other outstanding
issues) increase its proposed exchange ratio to 4.2 shares of Triarc common stock for each outstanding Wendy’s common share, from the 4.0 to 4.1 range that it had last proposed. At the Wendy’s board of directors meeting on April 22, 2008, the Special Committee and its advisors presented to the Wendy’s board of directors a description of the Bidder A proposal’s
components and terms, a financial analysis of the proposal, and the committee’s rationale for recommending the proposal in lieu of the other alternatives considered by the committee. The committee
and its advisors indicated that they had received a very recent Triarc proposal that had not yet become actionable, that the committee’s advisors were working with Triarc with respect to that
proposal, and that the committee would advise the board of directors if the proposal became actionable before the board was asked to vote on the Bidder A proposal the next day. The Special
Committee and its advisors responded to questions from the board of directors regarding the Bidder A proposal, and following a break in the meeting, principals of Bidder A and the Bidder A
Designee made a presentation to, and responded to questions from, the board of directors. The Special Committee met with its advisors early on the morning of April 23, 2008 for a further update on the Triarc discussions. Negotiations on transaction terms and definitive documentation
for the Triarc proposal continued into late morning on April 23, 2008, at which time the parties agreed on a merger consideration of 4.25 shares of Triarc Class A common stock for each outstanding
Wendy’s common share, and the other terms described under “The Merger Agreement” beginning on page 85 became finalized, concluding the exchanges between the parties regarding price and other
terms. The committee then met with its advisors, and, after (a) considering the views of its financial and legal advisors with respect to the merger agreement and the relative financial and nonfinancial
advantages and disadvantages of the Triarc proposal, the Bidder A proposal (including confirmation that Bidder A would not improve on the proposal presented to the committee on April 11 and the
Wendy’s board of directors on April 22), and the other alternatives considered by the committee, (b) determining that the Triarc proposal would create more shareholder value than the other
alternatives considered by the committee and would be beneficial for Wendy’s other stakeholders, and (c) receiving an indication from Greenhill that Greenhill was prepared to render its written
opinion that the consideration to be received from Triarc by holders of Wendy’s common shares (other than Wendy’s or any of its subsidiaries, Triarc or any of its affiliates or dissenting holders) is
fair, from a financial point of view, to such shareholders, the committee determined unanimously to recommend that the Wendy’s board of directors approve the merger agreement negotiated with
Triarc and the transactions contemplated thereby, and that the Wendy’s board of directors present the agreement to the Wendy’s shareholders and recommend that the shareholders adopt the merger
agreement. Immediately following that meeting, the Wendy’s board of directors meeting was reconvened and the Special Committee and its advisors presented to the board of directors a description of the 50
price and other merger agreement terms that had been negotiated with Triarc; JPMorgan’s and Greenhill’s financial analyses of the proposed merger (including a description of the fairness opinion
that Greenhill was prepared to deliver to the Wendy’s board of directors); a summary of the merger agreement and related documentation; the committee’s view that consummation of the proposed
merger represented the best alternative available to the Wendy’s shareholders and other stakeholders and was in the best interest of shareholders; and the committee’s recommendation that the
Wendy’s board of directors approve the merger agreement and the transactions contemplated thereby and present the agreement and those transactions to the Wendy’s shareholders and recommend
that the shareholders adopt the merger agreement. The committee and its advisors responded to various questions from the board of directors regarding the matters presented. At the committee’s
invitation, Triarc’s Chief Executive Officer, Chief Operating Officer and Senior Vice President, Operations then joined the meeting and made a presentation to, and responded to questions from, the
Wendy’s board of directors regarding their expectations for the operations of the combined entity. The Triarc executives then left the meeting, following which additional discussion ensued regarding the relative advantages and disadvantages of the Triarc proposal and the other alternatives
considered by the Special Committee. At the conclusion of this discussion, the Wendy’s board of directors approved the Triarc merger agreement and the transactions contemplated thereby, and the
presentation of the agreement to Wendy’s shareholders and recommendation that the shareholders adopt the merger agreement, by a vote of nine votes in favor of, and no votes against, the action,
with abstentions by Mrs. Anderson and Messrs. Levin, Oran and Rothschild based on actual or perceived conflicts of interest with respect to the matter acted upon. Also on April 23, 2008, Triarc’s board of directors convened to discuss advantages and disadvantages of the proposed transaction. At this meeting, Wachovia Securities reviewed with the Triarc
board of directors its financial analysis of the exchange ratio and rendered to the Triarc board of directors an oral opinion, which opinion was confirmed by delivery of a written opinion, dated April
23, 2008, to the effect that, as of that date and based on and subject to various assumptions made, procedures followed, matters considered and limitations described in such opinion, the exchange
ratio provided for in the merger was fair, from a financial point of view, to Triarc. Also at the meeting, Messrs. Peltz, May and Garden reminded the Triarc board of directors that they have interests
in the merger that are in addition to the interests of Triarc stockholders, including that they may be deemed to beneficially own, in the aggregate, approximately 9.8% of Wendy’s common shares as
a result of their interests in Trian. At the conclusion of the meeting, Triarc’s board of directors unanimously approved the Triarc merger agreement and the transactions contemplated thereby and the
presentation to Triarc’s stockholders of certain amendments to Triarc’s certificate of incorporation and the issuance of Wendy’s/Arby’s common stock in connection with the merger and the
recommendation by Triarc’s board of directors that Triarc’s stockholders approve such amendment and issuance. The merger agreement was executed on the afternoon of April 23, 2008, and the parties distributed a press release announcing the merger on the morning of April 24, 2008. Strategic and Financial Rationale In
the course of their discussions, both Triarc and Wendy’s recognized
numerous strategic and financial benefits of a proposed merger. This section
summarizes the potential strategic and financial benefits that the combined
company would expect to realize as a result of the merger. For a discussion
of various factors that could prohibit or limit the combined company from
realizing some or all of these benefits, see “Risk Factors” beginning
on page 29, “—Triarc Board of Directors’ Recommendation” beginning
on page 53 and “—Wendy’s Board of Directors’ Recommendation”
beginning on page 55. The boards of directors of Triarc and Wendy’s believe that the merger will provide stockholders and shareholders an opportunity to realize long-term investment returns above what either
company might separately achieve. By leveraging the operating strengths of the Arby’s management team and both brands’ long traditions of high quality food and service, Wendy’s/Arby’s expects to
execute a 51
focused business plan designed to grow revenues and significantly improve profitability over the long term. In total, the combined company will have over 10,000 restaurant units in its two restaurant
systems and annual combined system sales of over $12 billion, positioning it as one of the leading quick service restaurant companies in the world. Wendy’s/Arby’s expects to capitalize on the
following major strategic opportunities:
•
Revitalize the Wendy’s Brand. The Wendy’s brand is iconic and well-established with a strong base of loyal customers. Wendy’s premium brand positioning of fresh, never frozen, all-beef
hamburgers is differentiated in the marketplace and provides a distinct competitive advantage. In recent years, Wendy’s product innovation and advertising campaigns have been less effective in
attracting customers. Wendy’s/Arby’s believes that a creative advertising campaign focused on key target customer groups, supported by successful new product introduction, and a re-definition
of value positioning are key elements of its plan to revitalize the brand, improve customer traffic, and increase sales. • Improve Company-Owned Store Margins at Wendy’s. The operating margins at Wendy’s company-owned restaurants have declined significantly in recent years and are lower than comparable
margins generated by many Wendy’s franchisees. Although the two companies compete in different segments of the quick service restaurant industry, the operating margins at Arby’s company-
owned restaurants are higher than Wendy’s and superior to most Arby’s franchisees. Wendy’s/Arby’s believes that by applying Arby’s successful restaurant management practices, instilling its
pay for performance and ownership culture, and drawing upon its track record of improving store level margins, Wendy’s/Arby’s should be able to realize over time an estimated $100 million
increase in annual operating income. This increase would be driven by approximately 500 basis points of potential margin improvement at company-owned restaurants. • Reduce Corporate Costs with a Consolidated Support Center. Wendy’s and Triarc are both publicly traded companies with separate corporate headquarters, information systems, infrastructure,
programs and staffing. To drive efficiencies of scale, Wendy’s/Arby’s intends to consolidate redundant administrative functions into a single corporate support center that will manage all public
company responsibilities and provide shared services. Cost savings from efficiencies, best management practices, and synergies are estimated to generate approximately $60 million of improved
profitability annually by the end of the three year period following the merger. • Leverage Established Franchisee Systems. 75% of the total combined system-wide restaurants for Wendy’s and Arby’s are owned by franchisees. This strong base of franchisee ownership and
investment in the brands is a competitive strength, and represents a foundation for future growth in both the U.S. and international markets. As Wendy’s/Arby’s focuses on Wendy’s brand
revitalization, strategic initiatives to improve marketing and new product development are also expected to enhance franchisee profitability and new unit economics resulting in increased system-
wide new unit development.
• Maintain Independent Brands Focused on Sales Growth and Profitability. The organizational plan for Wendy’s/Arby’s consists of two independent business units that will separately promote and
sustain the two brands and franchise systems. These independent business units will be responsible for brand operations, marketing, growth and profitability. The Wendy’s brand headquarters
will be in the greater Columbus, Ohio area and the Arby’s brand headquarters will be in Atlanta, Georgia.
• Enhanced Financial Resources and Flexibility. The merger will result in the nation’s third largest quick service restaurant operation. When the merger is completed, the combined company will
be moderately leveraged, with significant financial resources and flexibility to support long-term growth. • Improved Operating Cost Structure. Greater economies of scale of the combined brands are expected to enable Wendy’s/Arby’s to compete more effectively in the quick service restaurant
segment with an improved overall cost structure. 52
• Daypart Expansion. Both Wendy’s and Arby’s have begun to explore the national launch of breakfast programs at company-owned and franchisee stores. Recent market studies have
demonstrated that breakfast is the fastest growing daypart for quick service restaurants in terms of sales and customer traffic. Wendy’s/Arby’s will focus on this national opportunity as a key
growth initiative. Wendy’s/Arby’s believes that a strong differentiated product offering, capital investment in the restaurants, and daypart advertising are all critical to the successful expansion of
breakfast programs. • International Expansion. Less than 5% of Wendy’s system-wide restaurants are in international locations other than Canada and Arby’s currently has a minimal international market presence
outside of Canada. International markets have been a substantial growth opportunity for other quick service restaurant brands and Wendy’s/Arby’s believes that there is a significant global
franchise growth opportunity for both Wendy’s and Arby’s given their strong brand recognition and long history of successful operations in the U.S and Canada. Wendy’s/Arby’s also believes
there may be an opportunity to develop dual-branded units in some of these international markets which may improve the return on investment for franchisees, thereby encouraging
development even in higher-cost real estate markets. • Reinvest for the Future. Both Wendy’s and Arby’s generate attractive cash flows which include the long-term stability of high-margin royalty streams from each of the franchise systems in
addition to the cash flow from company-owned stores. Wendy’s/Arby’s anticipates that investment of capital in the brands in areas such as accelerated new unit development, remodeling and
upgrading of company-owned stores, restaurant technology, and targeted incentive programs for franchisees, will help produce attractive long-term returns on such investment and support
incremental growth of both the Wendy’s and Arby’s brands. The foregoing estimates were developed by the senior management of Triarc during its due diligence review of Wendy’s. The expected terms for realizing potential sources of synergies and cost
savings vary because of the variety of sources within each category, such that some are estimated to affect results of operations in the short-term and others over the long-term. The
actual synergistic benefits from the merger and costs of integration may
vary from the foregoing estimates and these differences could be material.
Accordingly, there can be no assurance that any of the potential benefits
described above or included in the factors considered by the Triarc board
of directors described under “—Triarc Board of Directors’ Recommendation” beginning
on page 53 or the Wendy’s board of directors described under “—Wendy’s
Board of Directors’ Recommendation” beginning on page 55 will
be realized. See “Risk Factors—Risk Factors Relating to the
Merger” and “Cautionary Statement Regarding Forward-Looking Statements” beginning
on pages 29 and 34, respectively. Triarc Board of Directors’ Recommendation At a meeting on April 23, 2008, the Triarc board of directors unanimously (1) determined that the merger is consistent with and in furtherance of the long-term business strategy of Triarc, and in
the best interests of Triarc and its stockholders and has approved, adopted and declared advisable, the merger agreement, the merger and the other transactions contemplated thereby, (2)
recommended that the stockholders of Triarc approve and adopt the amendments to Triarc’s certificate of incorporation and declared such amendments advisable, and recommended that the
stockholders of Triarc approve the issuance of the Wendy’s/Arby’s common stock in connection with the merger and (3) approved the voting agreement between Triarc and certain of its stockholders.
See “The Voting Agreements—Triarc Voting Agreement” beginning on page 99. Also at the meeting, Messrs. Peltz, May and Garden reminded the Triarc board of directors that they have interests in the merger that are in addition to the interests of Triarc stockholders,
including that they may be deemed to beneficially own, in the aggregate, approximately 9.8% of Wendy’s common shares as a result of their interests in Trian. In evaluating the merger, the Triarc board of directors consulted with Triarc’s management team, as well as Triarc’s outside legal and financial advisors, and considered the following material 53
factors in addition to
the specific reasons described above under “—Strategic and Financial
Rationale” beginning on page 51:
• current difficult industry, economic and market conditions and negative trends in the quick service restaurant industry, including escalating food costs and increased price competition;
• the synergies expected from consolidation at the corporate level resulting in reduced overhead and administrative costs; • the value of Wendy’s brand and opportunities to revitalize that brand, including the application of Arby’s quick service restaurant managerial experience to the Wendy’s business;
• the ability of the combined company to compete more effectively than Triarc on a standalone basis against other major quick service restaurant companies because of relatively greater financial
resources and flexibility;
• improved trading characteristics of the Wendy’s/Arby’s common stock, such as increased public float, increased trading volumes and increased analyst coverage; • the opportunity for a stock price trading multiple of the combined company that is higher and more consistent with other leading publicly traded quick service restaurant companies than the
prevailing multiples of either Triarc or Wendy’s prior to their entry into the merger agreement;
• the judgment, advice and analysis of Triarc’s senior management, including their favorable recommendation of the merger based, in part, on their consideration of the leverageable platform for
growth of both the Wendy’s and Arby’s brands and the advantages inherent in a larger, stronger company versus their evaluation of the alternative strategic options available only to Triarc;
• the oral opinion of Wachovia Securities to the Triarc board of directors, which opinion was confirmed by delivery of a written opinion, dated April 23, 2008, as to the fairness, from a financial
point of view as of the date of such opinion and based on and subject to the matters set forth in such opinion, to Triarc of the exchange ratio provided for in the merger, as more fully
described under the caption “Opinion of Triarc’s Financial Advisor”; • the strong management team of the resulting company and the cultural fit and organizational structure of both companies; • the ability to complete the merger as a tax-free reorganization for U.S. federal income tax purposes;
• ten members of the current Triarc board of directors remaining as directors of Wendy’s/Arby’s, as described under “—Interests of Triarc Directors and Wendy’s Directors and Executive Officers
in the Merger” beginning on page 73;
• the headquarters of the Wendy’s brand being located in the greater Columbus, Ohio area, while the headquarters of the Arby’s brand will continue to be maintained in Atlanta, Georgia; • the possibility that the merger may not be completed due to the risks associated with obtaining necessary regulatory approvals and the satisfaction of other conditions, even if the Triarc
stockholders and Wendy’s shareholders approve the merger; • the risk that the synergies and benefits sought in the merger may not be fully achieved;
• the interests that directors of Triarc may have with respect to the merger in addition to their interests as stockholders of Triarc generally. See “—Interests of the Triarc Directors and Wendy’s
Directors and Executive Officers in the Merger” beginning on page 73; and
• the Triarc board of directors being able, subject to the terms and conditions of the merger agreement, to consider potentially superior third party acquisition proposals. In view of the wide variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, the Triarc board of directors did not find it useful to and
did not attempt to quantify, rank or otherwise assign relative weights to these factors. 54
In addition, Triarc’s board of directors did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or
unfavorable to its ultimate determination, but rather the Triarc board of directors conducted an overall assessment of the factors described above, including discussions with Triarc’s management team
and outside legal and financial advisors. In considering the factors described above, individual members of the Triarc board of directors may have given different weight to different factors. Wendy’s Board of Directors’ Recommendation In reaching its decision to approve the merger and the terms of and transactions contemplated by the merger agreement and to recommend that the Wendy’s shareholders vote “FOR” the
adoption of the merger agreement, Wendy’s board of directors and special committee consulted with management and financial and legal advisors and considered a variety of factors with respect to
the merger. The Wendy’s board of directors unanimously recommends (with four abstentions due to actual or perceived conflicts of interest) that the Wendy’s shareholders vote for the adoption of the
merger agreement. The reasons for the Wendy’s board of directors recommending the merger and the merger agreement included without limitation the following:
•
based on the respective trading prices of Wendy’s common shares and Triarc Class A common stock on April 23, 2008, the merger consideration to be received by Wendy’s shareholders
represented:
a premium of approximately 8.1% over the closing price of Wendy’s common shares on April 23, 2008, the last trading day prior to announcement of the execution of the merger
agreement; • a premium of approximately 13.2% over the average closing price of Wendy’s common shares over the 5 trading days prior to announcement of the execution of the merger agreement;
and • a premium of approximately 26.7% over the average closing price of Wendy’s common shares over the 30 trading days prior to announcement of the execution of the merger agreement;
•
Greenhill’s opinion that the consideration to be received by holders of Wendy’s common shares (other than Wendy’s or any of its subsidiaries, Triarc or any of its affiliates or dissenting
shareholders) was fair, from a financial point of view, to such shareholders (the full text of the written opinion of Greenhill is attached as Annex C to this joint proxy statement/prospectus); • that the special committee conducted a comprehensive publicly announced sale process and only one other definitive offer (which the Wendy’s board of directors and special committee
determined was less favorable to Wendy’s shareholders) was received and no other potential purchasers had continued to express interest in an acquisition of Wendy’s; • the risks related to a standalone plan, including deteriorating sales and customer traffic at Wendy’s stores and concerns regarding the ability of the current board and management to take the
steps necessary to achieve its financial projections under existing circumstances, including possible diversion of management focus arising from shareholder and franchisee concerns relating to,
among other things, their perceptions of management performance and the potential outcome of the special committee’s review of strategic alternatives; • that the enterprise stability expected to be achieved as a result of the consummation of the merger presented an opportunity to enhance financial performance and benefit all of Wendy’s
stakeholders, including shareholders, franchisees, employees, customers and suppliers; • the Wendy’s special committee’s determination that the merger and the merger consideration would result in greater value to Wendy’s shareholders than any of the other strategic alternatives
to maximize shareholder value considered by the special committee, including 55
•
continued execution of Wendy’s strategic plan, a change in dividend payout policy, strategic acquisitions by Wendy’s, refranchising company-owned stores, a sale of Wendy’s-owned real estate
and a leveraged recapitalization;
• that the merger agreement is subject to limited conditions and that certain shareholders of Wendy’s and certain stockholders of Triarc entered into voting agreements to vote their shares of
Wendy’s and Triarc, respectively, in favor of the proposals necessary to consummate the merger, each of which provides a lower degree of execution risk if Wendy’s shareholders vote to adopt
the merger agreement. For a more complete description of the voting agreements see “The Voting Agreements” beginning on page 99; • the
strategic and financial considerations described in “Strategic and Financial
Rationale” beginning on page 51; • that, for U.S. federal income tax purposes, holders of Wendy’s common shares will not recognize income, gain or loss on the exchange of their Wendy’s common shares for Wendy’s/Arby’s
common stock, except with respect to cash that is received instead of fractional shares of Wendy’s/Arby’s common stock. For a more complete description of the material U.S. federal income
tax consequences of the merger, see “Material U.S. Federal Income Tax Consequences” beginning on page 82; and
• the belief of the Wendy’s board of directors and special committee that the process which culminated in Wendy’s entering into the merger agreement was competitive, thorough and fair. The Wendy’s board of directors and special committee were aware of and also considered the following adverse factors associated with the merger, among others:
•
at various times over the past several years, Wendy’s common shares have traded in excess of the value of the merger consideration (although the Wendy’s board of directors and special
committee believed it was unlikely that Wendy’s common shares would trade in excess of the value of the merger consideration in the near term and believed that the opportunity for
preservation of future upside gains as a result of the stock-for-stock merger consideration mitigated the adverse effects of this factor);
• that if the merger is not completed under certain circumstances, Wendy’s will be required to reimburse Triarc and its contemplated financing sources for certain out of pocket fees and expenses
of $10 million. For a more complete description of the circumstances under which Wendy’s would be required to pay certain expenses of Triarc, see “Termination Events; Expense
Reimbursement Required” beginning on page 95;
• that failure to complete the merger could negatively impact the stock price and the future business and financial results of Wendy’s because of, among other things, the market disruption that
would occur as a result of uncertainties relating to a failure to complete the merger; • the risk that the merger might not be completed as a result of the failure of the closing conditions to be satisfied or waived; and
• certain other risks relating to the merger described in “Risk Factors” beginning on page 29.
The foregoing discussion and the discussion under “Background of the Merger” are not intended to be exhaustive, but rather include the material factors considered by the Wendy’s board of
directors and special committee in evaluating the proposed merger. In view of the large number of factors considered by the Wendy’s board of directors and special committee in connection with the
evaluation of the merger and the merger agreement and the complexity of these matters, the Wendy’s board of directors and special committee did not consider it practicable, nor did it attempt, to
quantify, rank or otherwise assign relative weights to the specific factors it considered in reaching its decision, nor did it evaluate whether these factors were of equal importance. Rather, the Wendy’s
board of directors made its recommendation on the totality of information presented and the investigation conducted by it. In addition, individual directors may have given different weight to the 56
various factors. For the reasons set forth above, the Wendy’s board of directors recommends that you vote “FOR” the adoption of the merger agreement. Opinion of Triarc’s Financial Advisor Triarc retained Wachovia Securities to act as its financial advisor in connection with the merger. In connection with this engagement, Triarc requested that Wachovia Securities evaluate the
fairness, from a financial point of view, to Triarc of the exchange ratio provided for in the merger. In selecting Wachovia Securities as Triarc’s financial advisor, Triarc considered, among other things,
Wachovia Securities’ reputation and experience in similar transactions and its familiarity with Triarc and Wendy’s. Wachovia Securities, as part of its investment banking business, is continuously
engaged in the evaluation of businesses and debt and equity securities in connection with mergers and acquisitions; underwritings, private placements and other securities offerings; senior credit
financings; valuations; and general corporate advisory services. On April 23, 2008, at a meeting of the Triarc board of directors held to evaluate the merger, Wachovia Securities delivered to the Triarc board of directors an oral opinion, which was confirmed
in writing, to the effect that, as of April 23, 2008 and based on and subject to various assumptions made, procedures followed, matters considered and limitations on the review undertaken in
connection with the opinion, its experience as investment bankers and other factors it deemed relevant, the exchange ratio provided for in the merger was fair, from a financial point of view, to
Triarc. The full text of Wachovia Securities’ written opinion, dated April 23, 2008, to the Triarc board of directors, which sets forth, among other things, the assumptions made, procedures followed,
matters considered and limitations on the review undertaken in connection with such opinion, is attached as Annex B to this joint proxy statement/prospectus and is incorporated by reference in its
entirety into this joint proxy statement/prospectus. The following summary is qualified in its entirety by reference to the full text of the opinion. Wachovia Securities provided its opinion for the
information and assistance of the Triarc board of directors in connection with its evaluation of the exchange ratio from a financial point of view to Triarc. Wachovia Securities’ opinion does not
address any other aspect of the merger, does not address the merits of the underlying decision by Triarc to enter into the merger agreement or the relative merits of the merger compared with other
business strategies or transactions available or that were or might be considered by Triarc’s management or board of directors and does not constitute a recommendation as to how any stockholder
should vote or act in connection with the merger or any other matters. In arriving at its opinion, Wachovia Securities, among other things:
•
reviewed the merger agreement, including the financial terms of the merger agreement; • reviewed certain business, financial and other information regarding Triarc and Wendy’s that was publicly available; • reviewed certain business, financial and other information regarding Triarc that was furnished to Wachovia Securities by Triarc’s management, including financial forecasts relating to Triarc and
estimated synergies resulting from the merger prepared by Triarc’s management; • reviewed certain business, financial and other information regarding Wendy’s that was furnished to Wachovia Securities by the managements of Triarc and Wendy’s, including (i) financial
forecasts relating to Wendy’s for calendar year 2008 prepared by Wendy’s management (as adjusted by Triarc’s management) and (ii) financial forecasts relating to Wendy’s for calendar year
2009 through calendar year 2013 prepared by Triarc’s management after giving effect to potential margin enhancements and other growth opportunities anticipated by Triarc’s management; • discussed with Triarc’s management (i) the operations and prospects of Triarc and Wendy’s, including the historical financial performance and trends in the results of operations of Triarc and
Wendy’s, and (ii) the strategic rationale for the merger, including the assessments of Triarc’s management as to Triarc’s ability to integrate the businesses of Triarc and Wendy’s and to achieve
potential margin enhancements and other growth opportunities for Wendy’s and estimated synergies resulting from the merger; 57
• reviewed reported prices and trading activity for shares of Triarc Class A common stock and Wendy’s common shares; • compared certain financial data for each of Triarc and Wendy’s with similar data for certain other publicly traded companies that Wachovia Securities deemed relevant; • compared the proposed financial terms of the merger agreement with the financial terms of certain other business combinations and transactions that Wachovia Securities deemed relevant; • analyzed the estimated present value of the future cash flows of Triarc and Wendy’s based upon the financial forecasts relating to Triarc and Wendy’s referred to above and other assumptions
discussed with and confirmed as reasonable by Triarc’s management; • reviewed the potential pro forma impact of the merger on Triarc’s financial statements based upon the financial forecasts relating to Triarc and Wendy’s and estimated synergies resulting from
the merger referred to above and other assumptions discussed with and confirmed as reasonable by Triarc’s management; and • considered other information such as financial studies, analyses, and investigations, as well as financial and economic and market criteria, that Wachovia Securities deemed relevant. In connection with its review, Wachovia Securities assumed and relied upon the accuracy and completeness of the foregoing financial and other information, including all accounting, tax and legal
information, and Wachovia Securities did not make, and did not assume any responsibility for, any independent verification of such information. Wachovia Securities relied upon assurances of Triarc’s
management that it was not aware of any facts or circumstances that would make such information about Triarc or Wendy’s inaccurate or misleading in any material respect. In connection with the
proposed merger, Wachovia Securities was provided with limited access to Wendy’s management and, accordingly, Wachovia Securities relied upon, at Triarc’s direction, the assessments of, and
financial forecasts and other information provided by, Triarc’s management with respect to all matters relevant to Wachovia Securities’ analyses. With respect to the financial forecasts relating to
Triarc and Wendy’s and estimated synergies resulting from the merger, Wachovia Securities was advised and, at Triarc’s direction, assumed that such forecasts and estimates were reasonably prepared
and reflected the best current estimates, judgments and assumptions of Triarc’s management (and, in the case of calendar year 2008 forecasts for Wendy’s, including adjustments to such forecasts, the
best current estimates, judgments and assumptions of the managements of Triarc and Wendy’s) as to the future financial performance of Triarc and Wendy’s and such synergies. Wachovia Securities
further assumed, at Triarc’s direction, that such forecasts and estimates, including potential margin enhancements and other growth opportunities for Wendy’s reflected in such forecasts and estimates,
would be realized in the amounts and at the times contemplated thereby. Wachovia Securities assumed no responsibility for, and expressed no view as to, such forecasts or estimates or the judgments
or assumptions upon which they were based. In arriving at its opinion, Wachovia Securities did not conduct any physical inspection or assessment of the facilities or assets of Triarc or Wendy’s, and
Wachovia Securities did not make and was not provided with any evaluations or appraisals of the assets or liabilities, contingent or otherwise, of Triarc or Wendy’s. In rendering its opinion, Wachovia Securities assumed, with Triarc’s consent, that the merger would be consummated in accordance with the terms described in the merger agreement and in
compliance with all applicable laws, without waiver of any material terms or conditions, and that in the course of obtaining any necessary legal, regulatory or third party consents or approvals, no
restrictions would be imposed or action would be taken that would have an adverse effect on Triarc, Wendy’s or the merger. Wachovia Securities also assumed, with Triarc’s consent, that the merger
would qualify for federal income tax purposes as a reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended. Wachovia Securities’ opinion was
necessarily based on economic, market, financial and other conditions and the information made available to Wachovia Securities as of the date of its opinion. Although subsequent developments may
affect its opinion, Wachovia Securities does not have any obligation to update, revise or reaffirm its opinion. 58
Wachovia Securities’ opinion only addressed the fairness, from a financial point of view, of the exchange ratio to the extent expressly specified in the opinion, and did not address any other terms
or aspects of the merger or any related transaction. In addition, Wachovia Securities’ opinion did not address the fairness of the amount or nature of, or any other aspects relating to, any
compensation to be received by any officers, directors or employees of any parties to the merger, or any class of such persons, relative to the exchange ratio. Wachovia Securities was not requested
to, and it did not, participate in the negotiations of the terms of the merger. Wachovia Securities’ opinion did not address the merits of the underlying decision by Triarc to enter into the merger
agreement or the relative merits of the merger compared with other business strategies or transactions available or that were or might be considered by Triarc’s management or board of directors.
Wachovia Securities did not consider, and Wachovia Securities expressed no opinion with respect to, the price at which Wendy’s common shares might trade following the announcement of the
merger or the prices at which shares of Triarc Class A common stock would trade at any time. Except as described above, Triarc imposed no other instructions or limitations on Wachovia Securities
with respect to the investigations made or the procedures followed by it in rendering its opinion. The issuance of Wachovia Securities’ opinion was approved by an authorized committee of Wachovia
Securities. The summary set forth below does not purport to be a complete description of the analyses performed by Wachovia Securities, but describes, in summary form, the material analyses performed
by Wachovia Securities in connection with Wachovia Securities’ opinion. The preparation of an opinion is a complex process and is not necessarily susceptible to partial analysis or summary
description. In arriving at its opinion, Wachovia Securities considered the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor considered by it.
Accordingly, the analyses reflected in the tables and described below must be considered as a whole, and considering any portion of the analyses, without considering all analyses, could create a
misleading or incomplete view of the processes underlying Wachovia Securities’ analyses and opinion. For purposes of the financial analyses summarized below, “adjusted net income” and “adjusted
EPS” of Triarc and the combined company means net income and earnings per share (referred to as EPS), respectively, excluding certain Triarc corporate general and administrative expenses, and
“adjusted EBITDA” means, in the case of Wendy’s, EBITDA excluding Wendy’s non-cash compensation and non-recurring expenses and, in the case of Triarc, EBITDA excluding Triarc’s non-cash
compensation and non-recurring expenses and certain Triarc corporate general and administrative expenses. For purposes of the “Wendy’s Financial Analyses” summarized below, the “implied per
share merger consideration” refers to the $27.24 implied per share value of the merger consideration based on the exchange ratio provided for in the merger of 4.25x and the closing price of Triarc
Class A common stock on April 22, 2008. Wendy’s Financial Analyses Selected Company Trading Analysis. Using publicly available information, including research analysts’ estimates and public filings, Wachovia Securities reviewed financial and stock market
information for the following nine selected publicly held companies in the quick service restaurant industry, which is the industry in which both Wendy’s and Triarc operate, five of which had
enterprise values, calculated as equity market values based on closing stock prices on April 22, 2008, plus outstanding debt, less cash and cash equivalents, of more than $2.1 billion, referred to below
as “Larger Quick Service Restaurant Companies,” and four of which had enterprise values of less than $2.1 billion but more than $150 million, referred to below as “Other Quick Service Restaurant
Companies”: Larger Quick Service Restaurant Companies Other Quick Service Restaurant Companies
•
Burger King Holdings, Inc.
•
Jack in the Box Inc.
•
Domino’s Pizza, Inc.
•
AFC Enterprises, Inc.
•
McDonald’s Corporation
•
Papa John’s International, Inc.
•
Sonic Corp.
•
CKE Restaurants, Inc.
•
Yum! Brands, Inc. 59
Wachovia Securities reviewed, among other things, enterprise values of the selected companies as a multiple of their latest 12 months EBITDA, and calendar year 2008 projected EBITDA.
Wachovia Securities also reviewed closing stock prices of the selected companies on April 22, 2008 as a multiple of calendar year 2009 projected earnings per share, referred to as EPS. Wachovia
Securities then applied a range of selected multiples of latest 12 months EBITDA, calendar year 2008 projected EBITDA and calendar year 2009 projected EPS derived from the selected companies
to Wendy’s last 12 months (“LTM”) (as of June 30, 2008) projected adjusted EBITDA, calendar year 2008 projected adjusted EBITDA and calendar year 2009 projected EPS, respectively. Financial
data of the selected companies were based on publicly available research analysts’ estimates, public filings and other publicly available information. Last 12 months (as of June 30, 2008) projected
adjusted EBITDA data of Wendy’s were based on internal projections of Wendy’s management as adjusted by Triarc’s management. Other projected financial data of Wendy’s were based on internal
projections of Triarc’s management and, in the case of calendar year 2009 projected EPS, reflects potential margin enhancements and other growth opportunities anticipated by Triarc’s management
to be achieved in calendar year 2009. This analysis indicated the following implied per share equity reference ranges for Wendy’s, as compared to the implied per share merger consideration:
Wendy’s Financial Metric
Implied Per Share Equity
Implied Per Share LTM Projected Adjusted EBITDA
$35.62–$39.53 2008 Projected Adjusted EBITDA
$36.31–$38.30
$27.24 2009 Projected EPS
$23.45–$26.57 Selected Transactions Analysis. Using publicly available information, including public filings and equity research, Wachovia Securities reviewed the following 20 selected transactions consummated
since November 21, 2005 involving companies in the restaurant industry:
Date Closed
Acquiror
Target •
2/20/2008
•
Ruth’s Chris Steak House, Inc.
•
Cameron Mitchell Restaurants, Inc. •
11/29/2007
•
IHOP Corp.
•
Applebee’s International, Inc. •
11/5/2007
•
Cherokee Advisors LLC
•
Back Yard Burgers, Inc. •
10/22/2007
•
F&H Acquisition Corp.
•
Champps Entertainment, Inc. •
10/1/2007
•
Darden Restaurants, Inc.
•
RARE Hospitality International, Inc. •
8/30/2007
•
Sun Capital Partners, Inc.
•
Friendly Ice Cream Corporation •
8/29/2007
•
Patina Group LLC
•
The Smith & Wollensky Restaurant Group, Inc. •
6/14/2007
•
Bain Capital, LLC/Catterton Partners
•
OSI Restaurant Partners, Inc. •
5/16/2007
•
Kinderhook Industries, LLC
•
Mastro Group, LLC •
3/5/2007
•
Seminole Tribe of Florida, Inc.
•
Hard Rock Caf International, Inc. •
1/31/2007
•
MidOcean Partners
•
Sbarro, Inc. •
12/13/2006
•
Lone Star Funds
•
Lone Star Steakhouse & Saloon, Inc. •
12/6/2006
•
Bruckmann, Rosser, Sherrill & Co., L.L.C.
•
Logan’s Roadhouse, Inc. •
11/29/2006
•
Services Acquisition Corp. International
•
Jamba Juice Company •
11/1/2006
•
Buffets, Inc.
•
Ryan’s Restaurant Group, Inc. •
6/20/2006
•
Wellspring Capital Management, LLC
•
Checker’s Drive-In Restaurants, Inc. •
3/8/2006
•
Wellspring Capital Management, LLC
•
Dave & Buster’s, Inc. •
3/1/2006
•
Bain Capital, LLC/The Carlyle Group/
•
Dunkin’ Brands, Inc. •
2/24/2006
•
Newcastle Partners, LLC/Steel Partners LLC
•
Fox & Hound Restaurant Group •
11/21/2005
•
Trimaran Capital Partners
•
El Pollo Loco Holdings, Inc. 60
Reference Ranges for Wendy’s
Merger Consideration
(as of June 30, 2008)
Thomas H. Lee Partners, L.P.
Wachovia Securities reviewed, among other things, transaction values, calculated as the purchase prices paid for the target company’s equity, plus outstanding debt, less cash and cash equivalents,
in the selected transactions, as a multiple of the target companies’ latest 12 months EBITDA. Wachovia Securities then applied a range of selected multiples of latest 12 months EBITDA derived
from the selected transactions to Wendy’s last 12 months (as of June 30, 2008) projected adjusted EBITDA. Financial data for the selected transactions were based on public filings and publicly
available financial information at the time of announcement of the relevant transaction. Last 12 months (as of June 30, 2008) projected adjusted EBITDA data of Wendy’s were based on internal
projections of Wendy’s management as adjusted by Triarc’s management. This analysis indicated the following implied per share equity reference range for Wendy’s, as compared to the implied per
share merger consideration: Wendy’s Financial Metric
Implied Per Share Equity
Implied Per Share LTM Projected Adjusted EBITDA
$31.72–$35.62
$27.24 Discounted Cash Flow Analysis. Wachovia Securities calculated the estimated present value as of June 30, 2008 of the standalone unlevered, after-tax free cash flows that Wendy’s was forecasted
to generate during the second half of calendar year 2008 through the full calendar year 2013. Projected financial data of Wendy’s were based on internal projections of Wendy’s management as
adjusted by Triarc’s management in the case of the second half of calendar year 2008 and on internal projections of Triarc’s management in the case of subsequent periods. For calendar years 2009
through 2013, such projections reflect potential margin enhancements and other growth opportunities anticipated by Triarc’s management to be achieved during such years. Wachovia Securities
calculated a range of terminal values for Wendy’s by applying a range of terminal value multiples of 7.0x to 9.0x to Wendy’s calendar year 2013 projected adjusted EBITDA. The terminal values
were then discounted to present value as of June 30, 2008 using a range of discount rates of 8.5% to 10.5%. This analysis indicated the following implied per share equity reference range for
Wendy’s, as compared to the implied per share merger consideration: Implied Per Share Equity
Implied Per Share $38.27–$52.62
$27.24 Triarc Financial Analyses Selected Company Trading Analysis. Using publicly available information, including research analysts’ estimates and public filings, for the selected companies referred to above under “Wendy’s
Financial Analyses—Selected Company Trading Analysis,” Wachovia Securities reviewed enterprise values of the selected companies as a multiple of their latest 12 months EBITDA and calendar year
2008 projected EBITDA. Wachovia Securities also reviewed closing stock prices of the selected companies on April 22, 2008 as a multiple of calendar year 2009 projected EPS. Wachovia Securities
then applied a range of selected multiples of latest 12 months EBITDA, calendar year 2008 projected EBITDA and calendar year 2009 projected EPS derived from the selected companies to Triarc’s
last 12 months (as of June 30, 2008) projected adjusted EBITDA, calendar year 2008 projected adjusted EBITDA and calendar year 2009 projected adjusted EPS, respectively. Financial data of the
selected companies were based on publicly available research analysts’ estimates, public filings and other publicly available information. Projected financial data of Triarc were based on internal
projections of Triarc’s management. This analysis indicated the following implied per share equity reference ranges for Triarc, as compared to the closing price of Triarc Class A common stock on
April 22, 2008: Triarc Financial Metric
Implied Per Share Equity
Closing Price of Triarc Class A LTM Projected Adjusted EBITDA
$4.86–$9.06
$6.41 2008 Adjusted EBITDA
$4.68–$8.81 2009 Adjusted EPS
$7.16–$7.81 61
Reference Range for Wendy’s
Merger Consideration
(as of June 30, 2008)
Reference Range for Wendy’s
Merger Consideration
Reference Ranges for Triarc
Common Stock on April 22, 2008
(as of June 30, 2008)
Selected Transactions Analysis. Using publicly available information, including public filings and equity research, for the selected transactions referred to above under “Wendy’s Financial
Analyses–Selected Transactions Analysis,” Wachovia Securities reviewed transaction values in the selected transactions as a multiple of the target companies’ latest 12 months EBITDA. Wachovia
Securities then applied a range of selected multiples of latest 12 months EBITDA derived from the selected transactions to Triarc’s last 12 months (as of June 30, 2008) projected adjusted EBITDA.
Financial data of the selected transactions were based on public filings and publicly available financial information at the time of announcement of the relevant transaction. Last 12 months (as of June
30, 2008) projected adjusted EBITDA data of Triarc were based on internal projections of Triarc’s management. This analysis indicated the following implied per share equity reference range for
Triarc, as compared to the closing price of Triarc Class A common stock on April 22, 2008: Triarc Financial Metric
Implied Per Share Equity
Closing Price of Triarc Class A LTM Projected Adjusted EBITDA
$11.15–$13.25
$6.41 Discounted Cash Flow Analysis. Wachovia Securities calculated the estimated present value as of June 30, 2008 of the standalone unlevered, after-tax free cash flows that Triarc was forecasted to
generate during the second half of calendar year 2008 through the full calendar year 2013 based on internal projections of Triarc’s management taking into account net operating losses anticipated by
Triarc’s management to be utilized by Triarc in calendar years 2008 and 2009. Wachovia Securities calculated a range of terminal values for Triarc by applying a range of terminal value multiples of
7.0x to 9.0x to Triarc’s calendar year 2013 projected adjusted EBITDA. The terminal values were then discounted to present value as of June 30, 2008 using a range of discount rates of 11.0% to
13.0%. This analysis indicated the following implied per share equity reference range for Triarc, as compared to the closing price of Triarc Class A common stock on April 22, 2008: Implied Per Share Equity
Closing Price of Triarc Class A $10.13–$15.91
$6.41 Implied Exchange Ratio Analysis Relative Contribution Analysis. Wachovia Securities reviewed the relative contributions of Wendy’s and Triarc to the combined company’s projected adjusted EBITDA and adjusted net income
before interest and taxes, referred to as adjusted EBIT, for the last 12 months (as of June 30, 2008) and for calendar years 2008, 2009 and 2010. Wachovia Securities also reviewed the relative
contributions of Wendy’s and Triarc to the combined company’s projected adjusted net income for calendar years 2008, 2009 and 2010. Projected financial data of Wendy’s and Triarc were based on
internal projections of Wendy’s management as adjusted by Triarc’s management in the case of Wendy’s financial data for the last 12 months (as of June 30, 2008) and on internal projections of
Triarc’s management in the case of other financial data. Projected financial data of Wendy’s for calendar years 2009 and 2010 reflected potential margin enhancements and other growth opportunities
anticipated by Triarc’s management to be achieved during such years. Based on the implied equity ownership percentages of Wendy’s shareholders in the combined company derived from the relative
contributions of Wendy’s and Triarc for each of the periods reviewed, this analysis indicated an overall implied exchange ratio reference range of 1.45x to 2.74x, as compared to the exchange ratio
provided for in the merger of 4.25x, as indicated in the following table: Financial Metric
Implied Exchange
Merger Exchange Ratio Adjusted EBITDA
1.86x–2.15x Adjusted EBIT
1.45x–2.14x
4.25x Adjusted Net Income
1.75x–2.74x Wachovia Securities then adjusted the implied relative adjusted EBITDA and adjusted EBIT contributions of Wendy’s and Triarc to the combined company for the periods described above to
reflect the relative contributions of Wendy’s and Triarc to the combined company’s estimated net debt, calculated as outstanding debt less cash and cash equivalents. Based on the implied equity 62
Reference Range for Triarc
Common Stock on April 22, 2008
(as of June 30, 2008)
Reference Range for Triarc
Common Stock on April 22, 2008
Ratio Reference Range
ownership percentages of Wendy’s shareholders in the combined company derived from the relative contributions of Wendy’s and Triarc for each of the periods reviewed, after taking into account
relative contributions to the combined company’s estimated net debt, this analysis indicated an overall implied exchange ratio reference range of 1.87x to 3.21x, as compared to the exchange ratio
provided for in the merger of 4.25x, as indicated in the following table: Financial Metric
Implied Exchange
Merger Exchange Ratio Adjusted EBITDA
2.63x–3.21x
4.25x Adjusted EBIT
1.87x–3.20x Relative Discounted Cash Flow Analysis. Wachovia Securities reviewed the implied per share reference ranges derived for Wendy’s and Triarc from the separate discounted cash flow analyses of
Wendy’s and Triarc described above. Based on such per share reference ranges, this analysis indicated the following implied exchange ratio reference range, as compared to the exchange ratio
provided for in the merger: Implied Exchange Ratio
Merger Exchange Ratio 2.34x–2.37x
4.25x Relative Trading Exchange Ratio. Wachovia Securities compared the closing stock prices of Triarc Class A common stock and Wendy’s common shares on April 22, 2008, which indicated an
implied exchange ratio of 3.91x, as compared to the exchange ratio provided for in the merger of 4.25x. Illustrative Future Stock Price Analysis Wachovia Securities reviewed hypothetical future stock prices of the combined company assuming, following the consummation of the merger, that the combined company traded at a latest 12
months adjusted EBITDA multiple similar to the latest 12 months EBITDA multiples of the “Larger Quick Service Restaurant Companies” referred to above under “Wendy’s Financial
Analyses–Selected Company Trading Analysis.” These hypothetical future stock prices were then compared with hypothetical future stock prices of Triarc on a standalone basis assuming Triarc were to
continue to trade at its current last 12 months (as of June 30, 2008) adjusted EBITDA multiple. Hypothetical future stock prices of the combined company were calculated by applying illustrative
future trading multiples of 7.0x, 8.5x and 10.5x (derived, respectively, from the last 12 months (as of June 30, 2008) adjusted EBITDA multiple of Triarc, from the last 12 months (as of June 30, 2008)
adjusted EBITDA multiple of Wendy’s and from the latest 12 months EBITDA multiples of the “Larger Quick Service Restaurant Companies”), to the projected adjusted EBITDA of Triarc and
Wendy’s on a combined basis for calendar years 2010 and 2013 after giving effect to potential synergies anticipated by the management of Triarc to result from the merger. Corresponding
hypothetical future stock prices of Triarc on a standalone basis were calculated by applying an illustrative future trading multiple of 7.0x to the projected adjusted EBITDA of Triarc for the relevant
period. Projected financial data of Triarc and Wendy’s and projected synergies were based on internal projections of Triarc’s management. Projected financial data of Wendy’s reflected potential
margin enhancements and other growth opportunities anticipated by Triarc’s management to be achieved in calendar years 2010 and 2013. This analysis indicated the following hypothetical future
stock prices of the combined company, as compared to hypothetical future stock prices of Triarc on a standalone basis: Illustrative Multiple
Hypothetical Future Stock Prices
Hypothetical Future Stock Prices
2010 Adjusted EBITDA
2013 Adjusted EBITDA
2010 Adjusted EBITDA
2013 Adjusted EBITDA 7.0x
$10.55
$18.18
$11.68
$21.42 8.5x
$13.14
$21.83 10.5x
$16.60
$26.69 63
Ratio Reference Range
Reference Range
of Combined Company
of Triarc
Miscellaneous In performing its analyses, Wachovia Securities considered industry performance, general business and economic conditions and other matters, many of which are beyond Triarc’s and Wendy’s
control. No company, transaction or business used in the analyses described above is identical to Triarc, Wendy’s or the merger. A complete analysis of the results of the foregoing cannot be limited
to a quantitative review of such results and involves complex considerations and judgments concerning the differences in the financial characteristics of the selected companies, transactions or
businesses and other factors that could affect the value of the selected companies, transactions or businesses. Accordingly, such analyses did not necessarily utilize all companies, businesses or
transactions that could be deemed comparable to Wendy’s, Triarc or the merger. Any projections underlying Wachovia Securities’ analyses are not necessarily indicative of future results or actual
values, which may be significantly more or less favorable than those suggested by such projections. The analyses performed were prepared solely as a part of Wachovia Securities’ analysis of the fairness, from a financial point of view, of the exchange ratio provided for in the merger. These
analyses were conducted in connection with the delivery by Wachovia Securities of its opinion dated April 23, 2008 to the Triarc board of directors. The analyses do not purport to be appraisals or to
reflect the prices at which a company or business might actually be sold or the prices at which any securities have traded or may trade at any time in the future. The type and amount of
consideration payable in the merger were determined through negotiations between Triarc and Wendy’s. Wachovia Securities did not recommend any specific consideration to the Triarc board of
directors or that any given consideration constituted the only appropriate consideration for the merger. The decision to enter into the merger agreement was solely that of the Triarc board of
directors. As described above, Wachovia Securities’ opinion and analyses were only one of many factors taken into consideration by the Triarc board of directors in evaluating the merger. Wachovia
Securities’ analyses summarized above should not be viewed as determinative of the views of Triarc’s board of directors or management with respect to the merger or the exchange ratio provided for
in the merger. Wachovia Securities is a trade name of Wachovia Capital Markets LLC, an investment banking subsidiary and affiliate of Wachovia Corporation. Wachovia Securities has acted as financial
advisor to Triarc in connection with the merger and for its services will receive a fee of $2.0 million which was payable upon the rendering of Wachovia Securities’ opinion and is also entitled to
receive a fee upon the consummation of the merger, which fee is to be negotiated in good faith by Triarc and Wachovia Securities. In addition, Triarc has agreed to reimburse certain of Wachovia
Securities’ expenses and to indemnify it against certain liabilities that may arise out of its engagement. Wachovia Securities and its affiliates provide a full range of financial advisory, securities and
lending services in the ordinary course of business, for which Wachovia Securities and such affiliates receive customary fees. In connection with unrelated matters, Wachovia Securities or its affiliates
in the past have provided and currently are providing financial services to Triarc and its subsidiary, ARG, and to Wendy’s, for which Wachovia Securities and such affiliates have received and will
receive fees, including having acted and currently acting as co-documentation agent for, and as a lender under, a credit facility of ARG and as a lender under a credit facility of Wendy’s. Since July
1, 2006, Wachovia Securities and its affiliates have received aggregate fees of approximately $950,000 for certain commercial banking and other financial services provided to Triarc and ARG
unrelated to the merger. In the ordinary course of business, Wachovia Securities and its affiliates may actively trade or hold the securities or financial instruments (including bank loans or other
obligations) of Triarc or Wendy’s for its and such affiliates’ own account and for the accounts of its customers and, accordingly, may at any time hold a long or short position in such securities or
financial instruments. As of the date of Wachovia Securities’ opinion, certain of Wachovia Securities’ affiliates held approximately 5.64% of the outstanding shares of Triarc Class A common stock
and approximately 8.69% of the outstanding shares of Triarc Class B common stock. 64
Opinion of Wendy’s Financial Advisor General Greenhill has acted as financial advisor to the Wendy’s special committee in connection with the merger. At the request of the Wendy’s special committee, on April 23, 2008, Greenhill delivered
its oral opinion, subsequently confirmed in writing, to the Wendy’s board of directors that, as of the date of the opinion and based upon and subject to the limitations and assumptions stated in its
opinion, the consideration to be received by the unaffiliated holders is fair, from a financial point of view, to such shareholders. The full text of Greenhill’s written opinion dated April 23, 2008, which contains the assumptions made, procedures followed, matters considered and limitations on the review undertaken in
connection with the opinion, is attached as Annex C to this joint proxy statement/prospectus and is incorporated herein by reference. The summary of Greenhill’s opinion that follows is qualified in
its entirety by reference to the full text of the opinion. You are urged to read the opinion in its entirety. In arriving at its opinion, Greenhill, among other things, has:
•
reviewed the draft of the merger agreement presented to the Wendy’s board of directors at its meeting on April 23, 2008 and certain related documents; • reviewed certain publicly available financial statements of Wendy’s and Triarc; • reviewed certain other publicly available business and financial information relating to Wendy’s and Triarc that Greenhill deemed relevant; • reviewed certain information, including financial forecasts and other financial and operating data concerning Wendy’s and Triarc, prepared by the management of Wendy’s and Triarc,
respectively; • discussed the past and present operations and financial condition and the prospects of Wendy’s with senior executives of Wendy’s; • discussed the past and present operations and financial condition and the prospects of Triarc with senior executives of Triarc; • reviewed certain information regarding the amount and timing of potential cost efficiencies expected to result from the merger (referred to herein as synergies) prepared by management of
Wendy’s and Triarc; • reviewed the historical market prices and trading activity for Wendy’s common shares and the Triarc common stock and analyzed their implied valuation multiples; • compared the value of the consideration with that received in certain publicly available transactions that Greenhill deemed relevant; • compared the value of the consideration with the trading valuations of certain publicly traded companies that Greenhill deemed relevant; • compared the value of the consideration with the relative contribution of Wendy’s to the pro forma combined company based on a number of metrics that Greenhill deemed relevant; • compared the value of the consideration to the valuation derived by discounting future cash flows and a terminal value of the business at discount rates Greenhill deemed appropriate; and • performed such other analyses and considered such other factors as Greenhill deemed appropriate. Greenhill’s written opinion was addressed to the Wendy’s board of directors. It was not a recommendation to the Wendy’s board of directors as to whether it should approve the merger or the
merger agreement nor is it a recommendation as to how the shareholders of Wendy’s should vote with respect to the merger or any other matter. Greenhill’s opinion did not address the underlying
business decision of Wendy’s to engage in the merger or the relative merits of the merger as compared to any other alternative transaction, nor did it address the relative merits of or consideration
offered in any such transaction as compared to the transactions contemplated by the 65
merger agreement. Greenhill has not expressed any opinion as to any aspect of the transactions contemplated by the merger agreement other than the fairness, from a financial point of view, of the
consideration to the unaffiliated holders. Greenhill’s opinion did not address in any manner the price at which shares of Wendy’s/Arby’s common stock will trade following the consummation of the
merger. Greenhill’s opinion did not address the amount or nature of any compensation to any officers, directors or employees of Wendy’s, or any class of such persons relative to the consideration to
be received by the unaffiliated holders or with respect to the fairness of any such compensation. In conducting its review and analysis and rendering its opinion, Greenhill assumed and relied upon, without independent verification, the accuracy and completeness of the information publicly
available, supplied or otherwise made available to or discussed with it by representatives and management of Wendy’s and Triarc for the purposes of its opinion and further relied upon the assurances
of representatives and management of Wendy’s and Triarc, as applicable, that they were not aware of any facts (or omissions of facts) or circumstances that would make such information inaccurate
or misleading. With respect to synergies, the financial forecasts and projections and other data that have been furnished or otherwise provided to it, it assumed that such synergies, forecasts,
projections and other data were reasonably prepared on a basis reflecting the best currently available estimates and good faith judgments of the management of Wendy’s and Triarc, as applicable, as
to those matters, and it relied upon such synergies, forecasts, projections and other data in arriving at its opinion. Greenhill did not express an opinion with respect to such synergies, forecasts,
projections and other data or the assumptions on which they are based. Greenhill did not make any independent valuation or appraisal of the assets or liabilities of Wendy’s or Triarc, nor was
Greenhill furnished with any such appraisals. Greenhill assumed, with the Wendy’s board of director’s consent, that the merger will be treated as a tax-free reorganization for federal income tax
purposes. Greenhill assumed that the merger will be consummated in accordance with the terms set forth in the final, executed merger agreement, which Greenhill further assumed will be identical in
all material respects to the latest draft thereof that Greenhill reviewed, and without any waiver or amendment of any material terms or conditions set forth in the merger agreement. Greenhill further
assumed that all material governmental, regulatory and other consents and approvals necessary for the consummation of the merger will be obtained without any effect on Wendy’s, Triarc, the merger
or the contemplated benefits of the merger meaningful to its analysis. Greenhill’s opinion is necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to it, as of the date of its opinion. It should be
understood that subsequent developments may affect its opinion, and Greenhill does not have any obligation to update, revise, or reaffirm its opinion. The following is a summary of the material financial and comparative analyses provided by Greenhill to the Wendy’s board of directors in connection with rendering its opinion described above.
The summary set forth below does not purport to be a complete description of the analyses performed by Greenhill, nor does the order of analyses described represent relative importance or weight
given to those analyses by Greenhill. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each
summary and are not alone a complete description of Greenhill’s analyses. The analyses provided to the Wendy’s board of directors were based on an assumed exchange ratio of 4.20 shares of Wendy’s/Arby’s common stock for each Wendy’s common share, although
Greenhill’s opinion was given based on the agreed exchange ratio of 4.25 shares of Wendy’s/Arby’s common stock for each Wendy’s common share. As described in the “Background to the Merger,”
as a result of negotiations occurring prior to the Wendy’s board of directors meeting on April 23, 2008, which resulted in an increase in the exchange ratio from 4.20x to 4.25x, Greenhill did not have
an opportunity prior to that meeting to update the written materials it had prepared describing its financial analyses of the proposed merger based on an assumed exchange ratio of 4.20. At that
meeting, Greenhill discussed with the Wendy’s board of directors the effect of the increase in the exchange ratio on its financial analyses. 66
Stand-Alone Valuations of Wendy’s Wendy’s Comparable Company Analysis. Greenhill reviewed certain financial information for Wendy’s and compared such information to corresponding financial information, ratios and public
market multiples for the following publicly traded companies:
•
Burger King Holdings, Inc. • Chipotle Mexican Grill, Inc. • CKE Restaurants, Inc. • Domino’s Pizza, Inc. • Jack in the Box Inc. • McDonald’s Corporation • Red Robin Gourmet Burgers Inc. • Sonic Corp. • Triarc Companies, Inc. • Yum! Brands, Inc. Although no restaurant company is directly comparable to Wendy’s, Greenhill selected the above-listed restaurant companies based on their similarities in business and operations relative to
Wendy’s. Additionally, Greenhill selected each of the above-listed companies because they are each publicly-listed companies in a segment of the restaurant industry similar to that in which Wendy’s
operates, and used its judgment to determine which publicly-listed companies were most relevant for purposes of this analysis. Greenhill then reviewed the operating statistics and trading histories of
such companies relative to Wendy’s. Greenhill calculated and compared financial multiples and ratios for these selected companies based on publicly available data, including the Institutional Brokers’
Estimate System, public filings and other publicly available information. For purposes of this analysis, Greenhill analyzed the following statistics of each of these selected companies for comparison
purposes:
•
the ratio of (1) enterprise value, defined as the sum of market capitalization and total debt less cash and cash equivalents to (2) EBITDA for fiscal year 2007 and estimated fiscal year 2008;
and • the ratio of share price to estimated earnings for fiscal years 2008 and 2009. Based on these analyses, Greenhill selected a range of comparable enterprise value multiples of 2007 EBITDA of 7.5x to 9.5x and 2008 EBITDA of 7.0x to 8.5x and per share equity value
multiples of 2008 earnings of 16.0x to 18.0x and 2009 earnings of 14.0x to 16.0x. In selecting the range of EBITDA and earnings multiples, Greenhill took into account the operating performance of
the selected companies relative to that of Wendy’s, including revenue growth and the growth and level of profit margins. When applied to Wendy’s, this methodology resulted in a range of implied
value per Wendy’s common share of $21.69 to $26.20 based on Wendy’s management’s projections. Greenhill also compared this range to (i) the trading price of Wendy’s common shares as of
April 22, 2008, which was $25.08, (ii) the implied offer value per Wendy’s common share based on an exchange ratio of 4.20 and the weighted average price of Triarc Class A common stock and
Triarc Class B common stock as of April 22, 2008, which was $27.47, and (iii) the implied offer value per Wendy’s common share based on an exchange ratio of 4.20 and the 30-day average price of
a weighted average of Triarc Class A common stock and Triarc Class B common stock, which was $29.85. In light of possible risks to Wendy’s management’s projections, and the weakening
macroeconomic environment since the development of Wendy’s management’s projections and Wendy’s recent operating performance, Greenhill also provided an additional point of reference for the
Wendy’s board to illustrate certain downside sensitivities underlying Wendy’s management projections, including changes to assumptions discussed with Wendy’s management. The changes to such
assumptions included no growth in the aggregate number of U.S. company stores, 50% lower franchise store additions, a longer period of time for a rebound in transaction growth and no
improvement in company restaurant operating costs or labor costs (referred to herein as the stand alone downside sensitivity point of reference). Using the stand alone downside sensitivity point of 67
reference and the methodology described above, Greenhill applied a range of comparable enterprise value multiples of 2007 EBITDA of 7.0x to 8.0x and 2008 EBITDA of 6.0x to 7.0x and per share
equity value multiples of 2008 earnings of 14.0 to 16.0x and 2009 earnings of 12.0x to 14.0x, which resulted in a range of implied value per Wendy’s common share of $15.26 to $18.06. Wendy’s Discounted Cash Flow Analysis. Using discounted cash flow methodology, Greenhill calculated the present values of the projected unlevered future cash flows for Wendy’s to calculate a
range of implied per share values. Greenhill used Wendy’s management’s projections for 2009 to 2012, which were extrapolated using Greenhill estimates for 2013 to 2017. In this analysis, Greenhill
estimated a weighted average cost of capital for Wendy’s based on Greenhill’s review of, among other matters, the current weighted average cost of capital of Wendy’s, the equity betas and capital
structures of businesses deemed to be similar to those of Wendy’s, the current weighted average costs of capital of those businesses and the implications for the weighted average costs of capital of
various debt to market equity ratios, which Greenhill deemed appropriate. Based on these analyses, Greenhill calculated a range of discount rates for Wendy’s from 8.5% to 10.5%. For purposes of
its analysis, Greenhill calculated an assumed value of the cash flows for all periods after the projected period, which is referred to as a “terminal value.” Greenhill calculated a range of terminal
values for Wendy’s based on terminal multiples ranging from 6.0x to 8.0x of final projected period EBITDA, and utilizing perpetuity growth rates ranging from 1.5% to 3.5%. For any combination of
discount rate and terminal value, the sum of the present value of the cash flows of Wendy’s and the present value of the terminal value results in an implied enterprise value for Wendy’s. When
applied to Wendy’s, this methodology resulted in a range of equity values per Wendy’s common share of $30.15 to $39.29, based on Wendy’s management’s projections. Greenhill also compared this
range to (i) the trading price of Wendy’s common shares as of April 22, 2008, which was $25.08, (ii) the implied offer value per Wendy’s common share based on an exchange ratio of 4.20 and the
weighted average price of Triarc Class A common stock and Triarc Class B common stock as of April 22, 2008, which was $27.47, and (iii) the implied offer value per Wendy’s common share based
on an exchange ratio of 4.20 and the 30-day average price of a weighted average of Triarc Class A common stock and Triarc Class B common stock, which was $29.85. Using the stand alone
downside sensitivity point of reference and the methodology described above, Greenhill calculated a range of equity values per Wendy’s common share of $18.94 to $25.24. Precedent Transactions. Greenhill performed an analysis of selected business combinations involving target companies in the restaurant industry that in Greenhill’s judgment were relevant for its
analysis. Although Greenhill analyzed the multiples implied by the selected transactions, none of these transactions or associated companies is identical to the merger. Using publicly available information at the time of the announcement of the relevant transaction, including company filings and a third-party transaction database, Greenhill reviewed the
consideration paid in the transactions and analyzed the enterprise value implied by such consideration as a multiple of EBITDA for the 12-month period prior to the target company’s most recently
completed fiscal quarter end preceding announcement of the applicable transaction. 68
The following table identifies the transactions reviewed by Greenhill in this analysis, including transactions in the restaurant industry announced since December 2005 with value of $100 million
or greater: Announcement Date
Target
Acquiror 7/16/07
Applebee’s International Inc.
IHOP Corp. 8/16/07
Rare Hospitality International Inc.
Darden Restaurants Inc. 6/17/07
Friendly Ice Cream Corporation
Sun Capital Partners 11/22/06
Sbarro Inc.
MidOcean Partners 11/5/06
OSI Restaurant Partners, LLC
Bain Capital, LLC / Catterton Partners 10/30/06
Logan’s Roadhouse, Inc.
Bruckmann, Rosser, Sherrill & Co./ Canyon 10/25/06
Quick Restaurants S.A.
CDC Capital Partners 8/18/06
Lone Star Steakhouse & Saloon Inc.
Lone Star Funds 8/17/06
Real Mex Restaurants Inc.
Sun Capital Partners 7/24/06
Ryan’s Restaurant Group Inc.
Buffets, Inc. 5/19/06
Main Street Restaurant Group Inc.
The Briad Group 2/17/06
Checker’s Drive-In Restaurants, Inc.
Wellspring Capital Management LLC 12/18/05
Dave & Buster’s, Inc.
Wellspring Capital Management LLC 12/12/05
Dunkin’ Brands, Inc.
Bain Capital, LLC / The Carlyle Group / Thomas From this data, Greenhill derived a valuation range of 8.0x to 10.0x, which, based on Wendy’s 2007 adjusted EBITDA as provided by Wendy’s management, suggested a range of values of
Wendy’s common shares of $22.94 to $29.57 per share. Premia Analysis. Greenhill reviewed publicly available data from transactions involving U.S. listed companies since 2004 with transaction values between $1 billion and $7 billion. Specifically,
Greenhill reviewed the premiums represented by the acquisition price per share compared to the closing share price of the target company one day, one week and one month prior to the
announcement. Greenhill observed that for such transactions, the median premium over the closing price of the target on the day prior to announcement was on average 18.4%, the median premium
over the closing share price of the target one week prior to announcement was on average 20.3% and the median premium over the closing share price of the target one month prior to
announcement was on average 23.2%. Greenhill further observed that for all-stock transactions, the median premium over the closing price of the target on the day prior to announcement was 15.9%,
the median premium over the closing share price of the target one week prior to announcement was 17.3% and that the median premium over the closing share price of the target one month prior to
announcement was 17.8%. Based on this analysis, Greenhill applied a 10% to 20% premium to Wendy’s April 22, 2008 closing share price, and a 15% to 25% premium to Wendy’s one week and
one month prior share prices to derive an implied valuation range for Wendy’s common shares of $27.11 to $29.50 per share. Stand-Alone Valuations of Triarc Triarc Comparable Company Analysis. Greenhill undertook a comparable company analysis of Triarc similar to that described above under “Wendy’s Comparable Company Analysis”. Greenhill
reviewed implied enterprise value as a multiple of EBITDA for fiscal 2007 and 2008 and implied equity value as a multiple of estimated earnings for 2009. Based on these analyses, Greenhill selected
a range of comparable enterprise value multiples of 2007 EBITDA of between 7.0x and 8.5x and 2008 EBITDA of 6.5x to 7.5x and per share equity value multiples of 2009 earnings of 13.0x to 15.0x.
In selecting the range of EBITDA and earnings multiples, Greenhill took into account the operating performance of the selected companies relative to that of Triarc, including revenue growth and
the growth and level of profit margins. When applied to Triarc, this 69
Capital Advisors LLC
H. Lee Partners
methodology resulted in a range of implied equity value per share of $6.13 to $8.11, based on Triarc’s management’s projections (referred to herein as the Triarc management projections), and of
$4.91 to $6.90, based on a downside sensitivity case developed by Wendy’s management which took into account the weakening macroeconomic environment and incorporated lower percentage
increases in revenue and EBITDA and margin expansion (referred to herein as the Triarc downside sensitivity case) based on a range of comparable enterprise value multiples of 2007 EBITDA of
6.5x to 7.5x and 2008 EBITDA of 5.5x to 7.0x and per share equity value multiples of 2009 earnings of 12.0x to 14.0x. Greenhill also compared these ranges to the (i) weighted average share price of
Triarc Class A common stock and Triarc Class B common stock as of April 22, 2008, which was $6.54 and (ii) 30-day average price of a weighted average of Triarc Class A common stock and Triarc
Class B common stock, which was $7.11. Triarc Discounted Cash Flow Analysis. Using discounted cash flow methodology, Greenhill calculated the present values of the projected unlevered future cash flows for Triarc to calculate a
range of implied per share values. Greenhill used each of the Triarc management projections and the Triarc downside sensitivity case projections. The discounted cash flow analysis was based on the
present value of projected unlevered free cash flows for the years 2009 through 2013. Using methodologies similar to those utilized to perform a discounted cash flow analysis of Wendy’s, Greenhill
calculated values for Triarc by applying a range of discount rates for Triarc from 8.5% to 10.5% and terminal values based on terminal EBITDA multiples ranging from 5.0x to 7.0x and utilizing
perpetual growth rates ranging from 1.5% to 3.5%. This methodology resulted in a range of equity values per share of $6.36 to $10.46, based on the Triarc management projections, and of $5.01 to
$8.49, based on the Triarc downside sensitivity case. Greenhill also compared these ranges to the (i) weighted average share price of Triarc Class A common stock and Triarc Class B common stock
as of April 22, 2008, which was $6.54 and (ii) 30-day average price of a weighted average of Triarc Class A common stock and Triarc Class B common stock, which was $7.11. Relative Contribution of Wendy’s and Triarc Contribution Analysis. Greenhill examined the implied contribution of each of Wendy’s and Triarc to the combined company’s market capitalization, number of company-operated stores, number
of franchisee-operated stores, as well as revenues, EBITDA and net income for the years 2009 and 2010, in each case using projections prepared by management of Wendy’s and Triarc, respectively.
The following table sets forth the results of this analysis:
Wendy’s
Triarc Market Capitalization
78.4
%
21.6
% Company-Operated Stores
54.7
%
45.3
% Franchisee-Operated Stores
66.7
%
33.3
% Revenues 2009
65.2
%
34.8
% 2010
64.2
%
35.8
% EBITDA 2009
63.7
%
36.3
% 2010
62.9
%
37.1
% Net Income 2009
73.2
%
26.8
% 2010
69.7
%
30.3
% Greenhill noted that based on an exchange ratio of 4.20 stockholders of Wendy’s would have approximately 79.8% of the economic ownership and voting rights of the combined company. Greenhill analyzed the historical range of exchange ratios (the price of Wendy’s common shares divided by the price of Triarc Class B common stock). Using the daily closing prices of Wendy’s
common shares and Triarc Class B common stock, Greenhill calculated the historical average exchange ratio for the periods indicated in the table below. Greenhill also calculated that an 70
exchange ratio of 4.20 represented an 11.0% premium to the historical exchange ratio high of 3.80, which was the exchange ratio as of April 22, 2008. As of April 22, 2008
Historical Exchange Ratio(1) Three Year
2.085x One Year
2.757x Six Month
3.086x Three Month
3.020x One Month
3.297x One Week
3.568x Current
3.800x Offer
4.200x
(1)
Historical data is adjusted for dividends and stock splits.
Pro Forma Combined Company Valuation Greenhill analyzed certain financial data on a pro forma basis for Wendy’s and Triarc as a combined company following consummation of the merger. Greenhill based its valuation on
(i) projections for the combined company provided by Triarc’s management (referred to herein as the Triarc combination management case), and (ii) a Wendy’s combination management sensitivity
case, which assumed lower forecasted performance from Triarc relative to the Triarc combination management case, Wendy’s results in line with Wendy’s management’s projections and achievement
of 50% of the synergies projected in the Triarc combination management case (referred to herein as the Wendy’s combination management sensitivity case). Greenhill also provided an additional
point of reference for the Wendy’s board that incorporated into the Wendy’s combination management sensitivity case discussed above the stand alone downside sensitivity point of reference (referred
to herein as the combined company downside sensitivity point of reference). Combined Company Comparable Company Analysis. Greenhill undertook a comparable company analysis of the combined company similar to that described above under “Wendy’s Comparable
Company Analysis” and “Triarc Comparable Company Analysis”. Greenhill reviewed implied enterprise value as a multiple of estimated 2009 EBITDA and earnings. This methodology resulted in a
range of pro forma implied value per Wendy’s common share based on an exchange ratio of 4.20 of (i) $28.40 to $35.58, based on the Triarc combination management case and applying a range of
comparable enterprise value multiples of 2009 EBITDA of 7.0x to 8.5x and per share equity value multiples of 2009 earnings of 14.0x to 17.0x and (ii) $25.73 to $30.14, based on the Wendy’s
combination management sensitivity case applying a range of comparable enterprise value multiples of 2009 EBITDA of 7.0x to 8.0x and per share equity value multiples of 2009 earnings of 14.0 to
16.0x. Greenhill also compared these ranges to (i) the trading price of Wendy’s common shares as of April 22, 2008, which was $25.08, (ii) the implied offer value per Wendy’s common share based
on an exchange ratio of 4.20 and the weighted average price of Triarc Class A common stock and Triarc Class B common stock as of April 22, 2008, which was $27.47, and (iii) the implied offer
value per Wendy’s common share based on an exchange ratio of 4.20 and the 30-day average price of a weighted average of Triarc Class A common stock and Triarc Class B common stock, which
was $29.85. Using the combined company downside sensitivity point of reference and the methodology described above, Greenhill applied a range of comparable enterprise value multiples of 2009
EBITDA of 6.0x to 7.0x and per share equity value multiples of 2009 earnings of 12.0x to 14.0x, which resulted in a range of pro forma implied value per Wendy’s common share based on an
exchange ratio of 4.20 of $18.24 to $22.13. Combined Company Discounted Cash Flow Analysis. Using discounted cash flow methodology, Greenhill calculated the present values of the projected unlevered future cash flows for the
combined company to calculate a range of implied per share values. Greenhill calculated values for the combined company by applying a range of discount rates for the combined company of 8.5%
to 10.5% and terminal values based on terminal EBITDA multiples ranging from 6.0x to 8.0x and utilizing perpetual growth rates from 1.5% to 3.5%. This methodology resulted in a range of value
of pro forma implied value per Wendy’s common share based on an exchange ratio of 4.20 of (i) 71
$38.86 to $53.36, based on the Triarc combination management case and (ii) $26.20 to $36.57, based on the Wendy’s combination management sensitivity case. Greenhill also compared these ranges to
(i) the trading price of Wendy’s common shares as of April 22, 2008, which was $25.08, (ii) the implied offer value per Wendy’s common share based on an exchange ratio of 4.20 and the weighted
average price of Triarc Class A common stock and Triarc Class B common stock as of April 22, 2008, which was $27.47, and (iii) the implied offer value per Wendy’s common share based on an
exchange ratio of 4.20 and the 30-day average price of a weighted average of Triarc Class A common stock and Triarc Class B common stock, which was $29.85. Using the combined company
downside sensitivity point of reference and the methodology described above, Greenhill calculated a range of pro forma implied value per Wendy’s common share of $16.86 to $24.43. The summary set forth above does not purport to be a complete description of the analyses performed by Greenhill, but simply describes, in summary form, the material analyses that Greenhill
conducted in connection with rendering its opinion. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. In arriving
at its opinion, Greenhill did not attribute any particular weight to any analyses or factors considered by it and did not form an opinion as to whether any individual analysis or factor, considered in
isolation, supported or failed to support its opinion. Rather, Greenhill considered the totality of the factors and analyses performed in determining its opinion. Accordingly, Greenhill believes that the
summary set forth above and its analyses must be considered as a whole and that selecting portions thereof, without considering all of its analyses, could create an incomplete view of the processes
underlying its analyses and opinion. Greenhill based its analyses on assumptions that it deemed reasonable, including assumptions concerning general business and economic conditions and industry-
specific factors. Analyses based on forecasts or projections of future results are inherently uncertain, as they are subject to numerous factors or events beyond the control of the parties or their
advisors. Accordingly, Greenhill’s analyses are not necessarily indicative of actual values or actual future results that might be achieved, which values may be higher or lower than those indicated.
Moreover, Greenhill’s analyses are not and do not purport to be appraisals or otherwise reflective of the prices at which businesses actually could be bought or sold. In addition, no company or
transaction used in Greenhill’s analysis as a comparison is directly comparable to Wendy’s or the contemplated transaction. Because these analyses are inherently subject to uncertainty, being based
upon numerous factors or events beyond the control of the parties or their respective advisors, none of Wendy’s or Greenhill or any other person assumes responsibility if future results are materially
different from those forecasts or projections. The consideration was determined through arms’ length negotiations between Wendy’s and Triarc and was recommended by Wendy’s special committee to, and approved by, the Wendy’s board
of directors. Greenhill provided advice to Wendy’s during these negotiations. Greenhill did not, however, recommend any specific amount of consideration to Wendy’s, Wendy’s special committee or
Wendy’s board of directors or that any specific amount of consideration constituted the only appropriate consideration for the merger. Greenhill’s opinion did not in any manner address the
underlying business decision to proceed with or effect the merger. Wendy’s special committee retained Greenhill based on its qualifications and expertise in providing financial advice and on its reputation as a nationally recognized investment banking firm.
During the two years preceding the date of this opinion, Greenhill had no material relationship with Wendy’s or Triarc. Greenhill is entitled to receive a fee of $5,000,000 from Wendy’s in connection
with the merger and no portion of the fee is dependent on consummation of the merger. Wendy’s has also agreed to reimburse Greenhill for certain out-of-pocket expenses incurred by it in
connection with its engagement and will indemnify Greenhill against certain liabilities that may arise out of its engagement. Greenhill’s opinion was one of the many factors considered by Wendy’s board of directors in evaluating the merger and should not be viewed as determinative of the views of Wendy’s board of
directors with respect to the merger. 72
Interests of Triarc Directors and Wendy’s Directors and Executive Officers in the Merger Governance Structure and Management Positions Pursuant to the terms of the merger agreement, upon completion of the merger:
The board of directors of Wendy’s/Arby’s will initially be composed of 12 members, consisting of (i) ten members of Triarc’s current board of directors, including Roland C. Smith, the current
Chief Executive Officer of Triarc and Nelson Peltz and Peter W. May, the current Chairman and Vice Chairman of Triarc, respectively, and (ii) two members of Wendy’s current board of
directors designated by Wendy’s and reasonably acceptable to Triarc.
• At the first meeting of Wendy’s/Arby’s board of directors following the consummation of the merger, the board of directors will elect a chairman and a vice chairman. The persons accepted by Triarc to be designated to the Wendy’s/Arby’s board of directors by Wendy’s will be appointed as of the effective time of the merger and nominated by the
Wendy’s/Arby’s board of directors at the next meeting of Wendy’s/Arby’s stockholders at which directors are elected. It is currently expected that, subject to the completion of the merger:
•
Roland C. Smith, the current Chief Executive Officer of Triarc and Arby’s and a member of Triarc’s board of directors will be the Chief Executive Officer and a director of Wendy’s/Arby’s,
resign as chief executive officer of the Arby’s brand and become the Chief Executive Officer of the Wendy’s brand. • Tom Garrett, the current president of Arby’s, will become the Chief Executive Officer of the Arby’s brand. Arby’s will elect Mr. Garrett and Wendy’s will elect Mr. Smith to these executive officer positions to become effective upon completion of the merger. Determination of other members of senior
management of Wendy’s/Arby’s will be made using a best in class approach. For additional information concerning these officers, see “Triarc Annual Meeting” and “Wendy’s Special Meeting”
beginning on pages 108 and 177, respectively. Interests of Triarc Directors in the Merger In considering the recommendation of the board of directors of Triarc to approve the proposals relating to the adoption of the amendment of Triarc’s certificate of incorporation and the proposal
relating to the issuance of Wendy’s/Arby’s common stock required to be issued in the merger, as more fully described under “Triarc Annual Meeting” beginning on page 108, stockholders of Triarc
should be aware that members of the Triarc board of directors have arrangements that provide them with interests in the merger that are in addition to the interests of Triarc stockholders. These
interests include that as of the Wendy’s record date, Messrs. Peltz, May and Garden, each of whom is a director of Triarc, may be deemed to beneficially own through their interests in the Trian
Funds, in the aggregate, approximately % of Wendy’s common shares. During their deliberations in determining to recommend to the stockholders of Triarc that they vote in favor of the
matters described above, Triarc’s board of directors was aware of these interests. Interests of Wendy’s Directors and Executive Officers in the Merger In considering the recommendation of Wendy’s board of directors with respect to the adoption of the merger agreement, shareholders of Wendy’s should be aware that members of the Wendy’s
board of directors and certain of Wendy’s executive officers have agreements or arrangements that provide them with interests in the merger that are different from, or in addition to, the interest of
Wendy’s shareholders generally. These interests, to the extent material, are described below. The board of directors of Wendy’s was aware of these interests and considered them, among other
matters, in approving the merger agreement and the merger. 73
•
Treatment of Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units and Stock Options upon Consummation of the Merger Wendy’s has previously awarded various types of equity awards to its directors and executive officers, including restricted stock, restricted stock units, performance shares, performance units and
stock options. The consummation of the merger will constitute a change in control for the purposes of Wendy’s equity and other benefit plans. As a result, all outstanding, unvested equity awards will
vest as of the effective time of the merger and become vested equity of Wendy’s/Arby’s (except for certain stock options awarded to employees on May 1, 2008, which will vest over three years
except as described in footnote 5 to the table below). The number of shares issuable under the unvested options and the exercise price for the unvested options will be adjusted based on the
exchange ratio of 1:4.25. Outstanding performance units will be settled assuming that all performance objectives had been satisfied at the highest level by Wendy’s and the executive will be paid in
cash within 30 days following the effective time of the merger. The following table sets forth the types and amounts of outstanding equity awards that are estimated to vest as a result of the merger, which solely for the purpose of this table is assumed to
occur on September 28, 2008, which is the end of Wendy’s fiscal third quarter and not necessarily representative of the actual effective time of the merger, and the number of common shares
beneficially owned as of March 3, 2008 (except for Mrs. Anderson, which is as of May 22, 2008), for each director and executive officer. The assumed stock prices used for this calculation were $29.00
and $34.50 for Wendy’s and Tim Hortons Inc., respectively, which may not be representative of Wendy’s share price at the time the merger is consummated. 74
Name
Stock Options (1)
Restricted Stock and
Performance Units
Common Stock
THI Restricted Stock
Total
Vested
Weighted
Unvested
Weighted
Resulting
Unvested
Resulting
Unvested
Resulting
Common
Resulting Value
Unvested
Resulting
Estimated Kerrii B. Anderson
0
N/A
377,917
(5)
$
28.7050
$
111,486
82,616
$
2,395,864
60,144
$
1,744,176
341,127
$
9,892,674
32,556
$
1,123,182
$
29,358
$
15,296,740 Joseph J. Fitzsimmons
0
N/A
102,053
(5)
$
28.7050
$
30,106
6,753
$
195,837
13,003
$
377,087
0
$
0
0
$
0
$
0
$
603,030 Brendan P. Foley, Jr.
0
N/A
18,178
(5)
$
28.7050
$
5,363
7,744
$
224,576
2,724
$
78,996
6,888
$
199,752
167
$
5,762
$
512
$
514,961 Leon M. McCorkle, Jr.
0
N/A
71,593
(5)
$
28.7050
$
21,120
12,300
$
356,700
9,093
$
263,697
17,180
$
498,220
2,930
$
101,085
$
4,628
$
1,245,450 David J. Near
0
N/A
117,743
(5)
$
28.7050
$
34,734
10,810
$
313,490
16,900
$
490,100
7,290
$
211,410
0
$
0
$
0
$
1,049,734 Ann B. Crane
0
N/A
6,244
$
28.7050
$
1,842
5,082
$
147,378
0
0
8,045
$
233,305
704
$
24,288
$
960
$
407,773 Janet Hill
32,103
$
13.4132
6,244
$
28.7050
$
502,225
5,082
$
147,378
0
0
14,123
$
409,567
704
$
24,288
$
961
$
1,084,419 Thomas F. Keller
2,848
$
13.5100
6,244
$
28.7050
$
45,958
5,082
$
147,378
0
0
11,151
$
323,379
704
$
24,288
$
960
$
541,963 William E. Kirwan
14,517
$
14.7255
6,244
$
28.7050
$
209,065
5,082
$
147,378
0
0
7,416
$
215,064
704
$
24,288
$
960
$
596,755 David P. Lauer
26,925
$
13.1292
6,244
$
28.7050
$
429,163
5,082
$
147,378
0
0
17,050
$
494,449
704
$
24,288
$
960
$
1,096,238 Jerry W. Levin
0
N/A
6,244
$
28.7050
$
1,842
4,551
$
131,979
0
0
2,556
$
74,124
0
$
0
$
0
$
207,945 J. Randolph Lewis
0
N/A
6,244
$
28.7050
$
1,842
5,082
$
147,378
0
0
6,724
$
194,996
703
$
24,254
$
707
$
369,177 James F. Millar
16,569
$
14.6038
6,244
$
28.7050
$
240,373
5,082
$
147,378
0
0
6,545
$
189,805
704
$
24,288
$
960
$
602,804 Stuart I. Oran
0
N/A
6,244
$
28.7050
$
1,842
4,551
$
131,979
0
0
2,556
$
74,124
0
$
0
$
0
$
207,945 James V. Pickett
32,103
$
13.4132
6,244
$
28.7050
$
502,225
5,082
$
147,378
0
0
95,002
$
2,755,058
704
$
24,288
$
960
$
3,429,909 Peter H. Rothschild
0
N/A
6,244
$
28.7050
$
1,842
4,551
$
131,979
0
0
2,556
$
74,124
0
$
0
$
0
$
207,945 John R. Thompson
0
N/A
6,244
$
28.7050
$
1,842
5,082
$
147,378
0
0
9,124
$
264,596
703
$
24,254
$
707
$
438,777 75
Restricted Stock Units
Resulting
Value
Stock
Options
Average
Exercise
Price of
Vested
Options
Stock
Options
Average
Exercise
Price of
Unvested
Options
Value
Restricted
Shares or
Units (2)
Value
Performance
Units (based
on 150% of
target)
Value
Shares Held
THI
Restricted
Shares (3)
Value
Cash Value
in Broker
Account (4)
(1)
Stock options with an exercise price greater than the assumed stock price used in this table are excluded. The number of stock options excluded for each person listed in the table is as follows. The exercise price for all of these options is $37.63 per share.
Name
Vested
Unvested Kerrii B. Anderson
42,569
85,138 Joseph J. Fitzsimmons
10,423
20,848 Brendan P. Foley, Jr.
2,183
4,367 Leon M. McCorkle, Jr.
7,288
14,578 David J. Near
13,547
27,094 Ann B. Crane
1,436
2,874 Janet Hill
1,436
2,874 Thomas F. Keller
1,436
2,874 William E. Kirwan
1,436
2,874 David P. Lauer
1,436
2,874 Jerry W. Levin
1,436
2,874 J. Randolph Lewis
1,436
2,874 James F. Millar
1,436
2,874 Stuart I. Oran
1,436
2,874 James V. Pickett
1,436
2,874 Peter H. Rothschild
1,436
2,874 John R. Thompson
1,436
2,874
(2)
This column also includes earned performance shares. (3) Estimated value as of September 28, 2008 of unvested Tim Hortons Inc. restricted shares distributed in connection with the spin-off on September 29, 2006, which remain subject to the same restrictions as the underlying Wendy’s shares. (4) This column includes the value of a fractional Tim Hortons share as of September 29, 2006, accrued cash dividends earned on the Tim Hortons restricted shares and interest. (5) Stock options awarded on May 1, 2008 will not vest solely due to the consummation of the merger. However, those options will vest for each of the executive officers listed above pursuant to the terms of the change in control agreements described below. Treatment of Annual Incentive Plans, Supplemental Executive Retirement Plans and the Deferred Compensation Plan upon Change in Control and Termination Under the terms of Wendy’s annual incentive plans applicable to executive officers, the minimum amount payable to each participant for the year in which a change in control occurs will be the
greatest of (i) the amount paid to the participant for the prior year, (ii) the amount payable for the year in which such change of control occurs, assuming the target level of the performance
objectives is achieved and (iii) the amount that would be payable for the year in which such change of control occurs, based on Wendy’s actual performance through the date of the change in control. In addition, under the annual incentive plans, if following a change in control and prior to the payment of awards for the fiscal year in which the change in control occurs, a participant’s
employment is terminated by Wendy’s without “cause” or by the participant for “good reason” (as such terms are defined in the plans), the participant will be entitled to the award otherwise payable
for the fiscal year had the participant remained employed with Wendy’s through the payment date of awards for such year. Further, if a participant’s employment is terminated without cause prior to
a change in control, but the participant can reasonably demonstrate that the termination arose in connection with, or in anticipation of, a change in control, the termination will be treated as if it
occurred after a change in control, if a change in control actually occurs. Under the terms of Wendy’s non-qualified supplemental executive retirement plans, prior to a change in control, Wendy’s will be obligated to fund amounts payable under those plans,
approximately $8,561,000, into a rabbi trust. Benefits under Wendy’s Supplemental Executive Retirement Plan are not affected by a change in control. For benefits earned under Wendy’s other
supplemental executive retirement plans, if a participant’s employment is terminated by Wendy’s without “cause” or by the participant for “good reason” (as such terms are defined in the plans)
within three years following a change in control, the participant will be entitled to be paid in a single lump sum payable within 60 days of the first day of the calendar quarter following the six month
anniversary of the termination. Additionally, if an unvested participant’s employment is terminated without cause prior to a change in control, but the participant reasonably demonstrates that the
termination of employment (i) was at the request of a third party who had indicated an intention or taken steps reasonably calculated to effect a change in control, or (ii) otherwise occurred in
connection with, or in anticipation of, a change in control which had been threatened or proposed, then such termination will be deemed to have occurred after a change in control, provided 76
Stock
Options
Stock
Options
that a change in control shall actually have occurred. The participant will become vested and be entitled to a distribution of benefits in accordance with the plan with the date of the change in control
treated as the date of termination. Under Wendy’s Deferred Compensation Plan, a participant may elect to defer all or any part of his or her base compensation and/or annual bonus until termination of employment. A participant
will be credited with earnings as if invested in the deemed investments selected by the participant from a variety of investments selected by Wendy’s. The Deferred Compensation Plan generally does
not permit distributions prior to a participant’s termination. However, Wendy’s expects to terminate the Deferred Compensation Plan immediately prior to the effective time of the merger and
account balances will be distributed to participants as soon thereafter as is practicable. In addition to the equity compensation described above, the following directors would be entitled to receive their benefits under the Deferred Compensation Plan calculated assuming that each
director’s service as a director terminated immediately following the effective time of the merger, which solely for the purpose of this paragraph is assumed to occur on September 28, 2008, which is
the end of Wendy’s fiscal third quarter and not necessarily representative of the actual effective time of the merger.
Name
Deferred Thomas F. Keller
$
280,476 William E. Kirwan
$
43,808 J. Randolph Lewis
$
251,304 Stuart I. Oran
$
23,553 John R. Thompson
$
294,456 Change in Control Agreements with Executive Officers Wendy’s previously entered into key executive agreements with Mrs. Anderson and Messrs. Fitzsimmons, Foley, McCorkle and Near that provide for benefits to the executive if terminated
without “cause” (as such term is defined in the key executive agreement) after a change in control of Wendy’s, or by the executive officer “for good reason” (as such term is defined below). These
agreements only result in severance benefits after a change in control if the executive is terminated within five years after such an event (or three years in the case of Mr. Fitzsimmons), for benefits
other than unvested equity awards. Pursuant to the key executive agreements, unvested equity awards (stock options, restricted stock, restricted stock units, performance shares or performance units)
will vest immediately upon consummation of the merger, including the options awarded to executive officers on May 1, 2008. At the time of the merger, the executive officers will be entitled to continue to receive their annual salary, bonus and other benefits made available to them by Wendy’s immediately prior to the
merger for a period of five years (three years for Mr. Fitzsimmons) (the “employment term”). An executive officer may terminate his or her employment after a change in control during the employment term for good reason if Wendy’s (i) changes the executive officer’s status, title,
position or responsibilities in a way that does not represent a promotion, (ii) either reduces the executive officer’s base salary or provides an annual salary increase less than the increase in a defined
consumer price index, (iii) requires the executive officer to relocate beyond a 30 mile radius from the executive’s business office location immediately prior to the change in control, (iv) takes action
which results in a material reduction in compensation and benefits otherwise payable to the executive officer, (v) materially breaches the agreement, or (vi) fails to notify the executive officer within
30 days following a change of control that a successor to Wendy’s has agreed to assume and perform Wendy’s obligations under the agreement. If an executive officer’s employment is terminated by Wendy’s without cause prior to a change in control, but the executive officer reasonably demonstrates that the termination of employment
(i) was at the request of a third party who had indicated an intention or taken steps reasonably calculated to effect a change in control, or (ii) otherwise occurred in connection with, or in
anticipation of, a change in control which had been threatened or proposed, then such termination 77
Compensation
Plan Benefit
will be deemed to have occurred after a change in control, provided that a change in control shall actually have occurred. If the employment of an executive officer is terminated by the executive for good reason or by Wendy’s other than for cause, Wendy’s will be obligated to make a lump-sum payment to the
executive officer of three times the sum of the executive officer’s then-current salary plus average annual bonuses over the prior three years. If the executive officer had not previously received bonus
payments for three full plan years under the annual bonus plans and was an eligible participant under such plans at the time his or her employment was terminated, he or she will be deemed to have
received a bonus in prior years equal to the bonus paid to such executive officer’s predecessor in the same position. If there was not a predecessor in the same position, the executive officer will be
deemed to have received a bonus in prior years equal to the average of the bonuses paid to participants in positions comparable to the executive officer’s then-current position. The lump-sum
payment will not be subject to offset. Also, if the employment of the executive officer is terminated by the executive for good reason or by Wendy’s other than for cause, the executive officer will be entitled to (i) a pro rata portion
of the bonus for the year in which termination of employment occurs, determined as if all of that year’s performance targets had been fully met at the highest level by Wendy’s and the executive
officer, (ii) continuation of group insurance benefits for three years, subject to offset for any benefits from subsequent employment, if any, and (iii) a lump-sum payment equal to the present value of
accrued retirement benefits after adding three additional years of benefit accrual, reduced by any vested benefits. In addition, any stock options or stock appreciation rights granted under plans of
Wendy’s will become immediately vested and exercisable, and any restrictions on any stock awarded to the executive officer by Wendy’s shall lapse, as discussed above. If any payments or other benefits payable to an executive officer (other than Mr. Fitzsimmons) under the agreements discussed above or otherwise is subject to the excise tax under Code Section
4999 or any similar tax, Wendy’s is obligated to pay to the executive officer an additional amount which, after deduction of any income, withholding and excise tax thereon, equals the excise tax. Wendy’s has established a benefits protection trust to provide for the payment of the benefits to the executive officers and to provide for the payment of reasonable legal fees or expenses
incurred in good faith by the executive officers in enforcing their rights. The following table summarizes estimated benefits (other than equity compensation described above) that would be payable to each executive officer assuming such executive officer is terminated
without cause immediately following the effective time of the merger, which solely for the purpose of this table is assumed to occur on September 28, 2008, which is the end of Wendy’s fiscal third
quarter and not necessarily representative of the actual effective time of the merger.
Name
Severance
Incentive
Retirement
CIC
Health and
Total Kerrii B. Anderson
$
5,323,000
$
1,105,875
$
776,600
$
368,294
$
107,974
$
7,681,743 Joseph J. Fitzsimmons
$
3,015,284
$
392,745
$
154,495
$
72,265
$
67,960
$
3,702,749 Brendan P. Foley, Jr.
$
1,080,025
$
108,158
$
147,097
$
47,908
$
53,535
$
1,436,723 Leon M. McCorkle, Jr.
$
2,191,959
$
267,047
$
1,311,998
$
166,060
$
58,010
$
3,995,074 David J. Near
$
2,371,817
$
429,896
$
94,521
$
82,447
$
93,772
$
3,072,453
(1)
Severance provisions as stated in the agreement (as described above) between Wendy’s and each executive officer are three times base salary and the average of each of the prior three years’ incentive payments. (2) Maximum incentive payable under the executive plan or the agreement (as described above) for 2008. (3) On termination for any reason, employees are entitled to receive their vested benefits in the two qualified retirement plans, the supplemental executive retirement plans and the Deferred Compensation Plan sponsored by Wendy’s. (4) Present value of benefits under the qualified retirement and supplemental executive retirement plans calculated as of October 2, 2011 over the estimated value of those benefits (as of September 28, 2008) plus accelerated vesting of unvested benefits in the supplemental executive
retirement plans. (5) Anticipated cost of continuing for three years of life insurance, disability, medical, dental and hospitalization benefits, plus vacation benefits earned prior to September 28, 2008. 78
(1)
(2)
Benefits (3)
Retirement
Benefits (4)
Welfare Benefits
(5)
Indemnification and Insurance The merger agreement provides that, following the completion of the merger, Wendy’s, as the surviving corporation in the merger, will indemnify the current and former directors and officers of
Wendy’s and its subsidiaries, and certain of their employees who have executed individual indemnity agreements, for all claims arising prior to the completion of the merger until the expiration of the
applicable statute of limitations with respect to such claims. Additionally, Wendy’s articles of incorporation and code of regulations after the merger will contain indemnification provisions no less
favorable than those contained in the current Wendy’s articles of incorporation and code of regulations prior to the consummation of the merger, which will not be modified in any manner that would
adversely affect the rights of the indemnified individuals for a period of six years from the effective time of the merger. The merger agreement also provides that, following the completion of the merger, Wendy’s/Arby’s will, and will cause Wendy’s to, indemnify and hold harmless all of the Wendy’s indemnified
parties described above, to the fullest extent permitted by applicable law, in connection with any claims relating to the fact that those individuals are or were directors, officers or employees of
Wendy’s or any of its subsidiaries including with respect to the merger agreement or any transactions contemplated by it. The merger agreement also provides that with Triarc’s written consent Wendy’s may obtain a prepaid directors and officers “tail” insurance policy covering the six year period after the merger
for acts or omissions occurring at or prior to the merger, on terms not materially less favorable than the current insurance policies provided by Wendy’s, as long as Wendy’s, as the surviving
corporation in the merger, will not be required to spend in any one year period an amount in excess of 250% of the annual premiums paid by Wendy’s between September 30, 2007 and September
30, 2008 for such insurance. If Wendy’s does not obtain this “tail” insurance, then Wendy’s, as the surviving corporation in the merger, will maintain Wendy’s current directors’ and officers’ insurance
policies, or will substitute such policies with the policies of a different insurance provider (as long as such policies are on terms not materially less favorable than the policies of Wendy’s currently in
effect), covering the six year period after the merger for acts or omissions occurring at or prior to the merger, as long as Wendy’s, as the surviving corporation in the merger, will not be required to
pay annual premiums in excess of 250% of the last annual premium paid by Wendy’s and/or Triarc in respect of such coverage prior to signing of the merger agreement. Regulatory Approvals Required for the Merger United States Antitrust Laws Under the Hart-Scott-Rodino Act and the rules promulgated under that act by the Federal Trade Commission, the merger may not be completed until notifications have been given and
information furnished to the Federal Trade Commission and to the Antitrust Division and the specified waiting period has been terminated or has expired. Triarc and Wendy’s each filed notification
and report forms under the Hart-Scott-Rodino Act with the Federal Trade Commission and the Antitrust Division on May 14, 2008 and early termination of the waiting period was granted as of May
28, 2008. At any time before or after completion of the merger, the Federal Trade Commission or the Antitrust Division could take any action under the antitrust laws it deems necessary or desirable
in the public interest, including seeking to enjoin completion of the merger or seeking divestiture of substantial assets of Triarc and Wendy’s. The merger agreement requires Triarc and Wendy’s to
use reasonable best efforts to satisfy any conditions imposed upon them by regulatory authorities. The merger also is subject to review under state antitrust laws and could be the subject of challenges
by private parties under antitrust laws. Listing of Additional Shares of Class A Common Stock to be Issued Before the completion of the merger, Triarc has agreed to use its reasonable best efforts to cause the shares of Wendy’s/Arby’s common stock to be issued in the merger and upon conversion of
the Triarc Class B common stock to be authorized for listing on the NYSE, subject to official 79
notice of issuance Triarc will seek to have Wendy’s/Arby’s common stock trade on the NYSE under the ticker symbol “WEN.” Triarc stockholders do not have appraisal or dissenters’ rights in connection with the merger or any of the proposals to be considered at the Triarc annual meeting. Section 1701.84 of the Ohio Revised Code, or ORC, provides that all of Wendy’s shareholders entitled to vote on the adoption of the merger agreement may exercise dissenters’ rights with
respect to the merger. Each shareholder who does not vote in favor of adoption of the merger agreement and who complies with all of the requirements of Section 1701.85 of the ORC will be
entitled to receive the fair cash value of his, her or its shares upon perfecting their right of appraisal. The following is a summary of the principal steps a shareholder must take to perfect their dissenters’ rights under the ORC. This summary is qualified by reference to Section 1701.85 and other
provisions of the ORC. Any shareholder contemplating exercise of their dissenters’ rights is urged to carefully review the provisions of Section 1701.85 and to consult an attorney, since failure to
follow fully and precisely the procedural requirements of the statute may result in termination or waiver of such rights. A copy of Section 1701.85 of the ORC is attached to this joint proxy
statement/prospectus as Annex I and is incorporated herein by reference. To perfect the right of appraisal, a dissenting shareholder must satisfy each of the following conditions and must otherwise comply with Section 1701.85:
•
Must be a shareholder of record. A dissenting shareholder must be a record holder of the Wendy’s common shares on , 2008, the record date established for determining those Wendy’s
shareholders entitled to vote on the proposal to adopt the merger agreement. Because only shareholders of record on the record date may exercise dissenters’ rights, any person who beneficially
owns shares that are held of record by a broker, fiduciary, nominee or other holder and who desires to exercise dissenters’ rights must, in all cases, instruct the record holder of the shares to
satisfy all of the requirements outlined under Section 1701.85 of the ORC. • Does not vote in favor of the merger agreement. A dissenting shareholder must not vote their shares in favor of the proposal to adopt the merger agreement at the Wendy’s shareholders
meeting. Failing to vote or abstaining from voting does not waive a dissenting shareholder’s rights. However, a proxy returned to Wendy’s signed but not marked to specify voting instructions
will be voted in favor of the proposal to adopt the merger agreement and will be deemed a waiver of dissenters’ rights. A dissenting shareholder may revoke their proxy at any time before its
exercise by delivering to Wendy’s prior to the special meeting a written notice of revocation addressed to Wendy’s International, Inc., 4288 West Dublin-Granville Road, Dublin, Ohio 43017-
0256, Attention: Secretary; delivering to the Secretary of Wendy’s prior to the special meeting a properly executed proxy with a later date; or attending the special meeting and giving notice of
revocation in person. • File a written demand. Not later than ten days after the date upon which the Wendy’s shareholders vote upon the adoption of the merger agreement, any shareholder seeking to perfect the
dissenting shareholder’s rights must make a written demand upon Wendy’s for the fair cash value of those Wendy’s common shares so held by them. A negative vote alone is not sufficient to
perfect rights as a dissenter. Any written demand must specify the shareholder’s name and address, the number and class of shares held by them on the record date, and the amount claimed as
the “fair cash value” of the shares. Wendy’s will not notify shareholders of the expiration of this ten day period. Voting against the adoption of the merger agreement is not a written demand
as required by Section 1701.85 of the ORC. • Deliver certificates for placement of a legend. If Wendy’s so requests, a dissenting shareholder must submit their share certificates to Wendy’s within 15 days of such request for endorsement
thereon by Wendy’s that a demand for appraisal has been made. Such a request is not an admission by Wendy’s that a dissenting shareholder is entitled to relief. Wendy’s will 80
promptly return the share certificates to the dissenting shareholder. At the option of Wendy’s, a dissenting shareholder who fails to deliver their certificate upon request from Wendy’s may have
their dissenting shareholder’s rights terminated, unless a court for good cause shown otherwise directs.
If Wendy’s and any dissenting shareholder cannot agree upon the fair cash value of the common shares, then either Wendy’s or the dissenting shareholder may, within three months after delivery
of the dissenting shareholder’s demand for fair cash value, file a petition in the Court of Common Pleas of Franklin County, Ohio, for a determination that the shareholder is entitled to exercise
dissenters’ rights and to determine the fair cash value of the Wendy’s common shares. The cost of the proceeding, including reasonable compensation to the appraisers to be fixed by the court, will be
assessed as the court considers equitable. “Fair cash value” is the amount that a willing seller, under no compulsion to sell, would be willing to accept, and that a willing buyer, under no compulsion
to purchase, would be willing to pay. In no event will the fair cash value be in excess of the amount specified in the dissenting shareholder’s demand. Fair cash value is determined as of the day
before the meeting to adopt the merger agreement. The amount of the fair cash value excludes any appreciation or depreciation in market value of the shares resulting from the merger. The fair cash
value of the shares may be higher, the same as or lower than the market value of the shares on the date of the merger. Shareholders should be aware that investment banking opinions as to the
fairness, from a financial point of view, of the consideration payable in a merger are not opinions as to, and do not in any way address, fair cash value under Section 1701.85 of the ORC. Payment of the fair cash value must be made within 30 days after the later of the final determination of such value or the closing date of the merger. Such payment shall be made only upon
simultaneous surrender to Wendy’s of the share certificates for which such payment is made. A dissenting shareholder’s rights to receive the fair cash value of their Wendy’s common shares will terminate if:
the dissenting shareholder has not complied with Section 1701.85 of the ORC; • the merger is abandoned or is finally enjoined or prevented from being carried out, or the Wendy’s shareholders rescind their approval and adoption of the merger agreement; • the dissenting shareholder withdraws their demand with the consent of Wendy’s by its board of directors; or • the dissenting shareholder and Wendy’s board of directors have not agreed on the fair cash value per share and the dissenting shareholder has not filed a timely complaint within three months
after delivering his, her or its demand for fair cash value in the Court of Common Pleas of Franklin County, Ohio. All rights accruing from Wendy’s common shares, including voting and dividend and distribution rights, are suspended from the time a dissenting shareholder makes a demand for payment with
respect to such shares until the termination or satisfaction of the rights and obligations of the dissenting shareholder and Wendy’s arising from such demand. During this period of suspension, any
dividend or distribution paid on the common shares will be paid to the record owner as a credit upon the fair cash value thereof. If a shareholder’s dissenters’ rights are terminated other than by
purchase by Wendy’s of the dissenting shareholder’s common shares, then at the time of termination all rights will be restored and all distributions that would have been made, but for suspension,
will be made. 81
•
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES Federal Income Tax Consequences General The following general discussion describes the material U.S. federal income tax consequences of the conversion of each outstanding share of Triarc Class B common stock into a share of
Wendy’s/Arby’s common stock, which is referred to herein as the conversion, and the merger that are generally applicable to U.S. Holders (as defined below) of Triarc common stock and of Wendy’s
common shares, respectively. However, this discussion does not address all aspects of taxation that may be relevant to particular U.S. Holders in light of their personal investment or tax circumstances
or to persons that are subject to special tax rules. In addition, this discussion does not address the tax treatment of special classes of U.S. Holders, such as banks, insurance companies, tax-exempt
entities, financial institutions, broker-dealers, persons holding Wendy’s common shares and Triarc common stock as part of a hedging or conversion transaction or as part of a “straddle,” U.S.
expatriates, persons subject to the alternative minimum tax, and non-U.S. Holders. This discussion may not be applicable to holders who acquired Wendy’s or Triarc common stock pursuant to the
exercise of options or warrants or otherwise as compensation. Furthermore, this discussion does not give a detailed discussion of any state, local or foreign tax considerations. We urge you to consult
your own tax advisor as to the specific tax consequences of the merger, including the applicable federal, state, local and foreign tax consequences to you of the merger. As used herein, a “U.S. Holder” means a holder of common stock or common shares who or that holds such stock or shares as capital assets within the meaning of the Internal Revenue Code of
1986, as amended (the “Code”) and is for U.S. federal income tax purposes (i) a citizen or resident of the United States, (ii) a corporation or other entity taxable as a corporation organized under
the laws of the United States or any political subdivision thereof (including the States and the District of Columbia), (iii) a trust if a court within the United States is able to exercise primary
jurisdiction over its administration and one or more U.S. persons have authority to control all substantial decisions of the trust; or (iv) any person that is subject to U.S. federal income tax on its
worldwide income. As used herein, a “Non-U.S. Holder” means any holder of common stock who is not a “U.S. Holder.” This discussion and the opinions set forth herein are based on the Code, applicable Department of Treasury regulations, judicial authority, and administrative rulings and practice, all as of the
date of this proxy statement/prospectus, as well as representations and covenants (including representations and covenants regarding the absence of changes in existing facts and that the conversion
and the merger will be completed in accordance with this joint proxy statement/prospectus and the merger agreement) and including the representations contained in representation letters of Triarc
and Wendy’s. Future legislative, judicial, or administrative changes or interpretations, which may or may not be retroactive, or the failure of any such factual representation to be true, correct and
complete in all material respects, or the breach of any of the covenants, may adversely affect the accuracy of the statements and conclusions described in this document. Neither Triarc nor Wendy’s is
currently aware of any facts or circumstances that would cause any representations made by it to Paul, Weiss, Rifkind, Wharton & Garrison LLP or Winston & Strawn LLP to be untrue or incorrect in
any material respect. However, no ruling has been or will be sought from the Internal Revenue Service (“IRS”) as to the U.S. federal income tax consequences of the conversion or the merger, and
the opinions of counsel will not be binding on the IRS or any court. Material Tax Consequences of the Conversion In the opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP, the conversion will qualify for U.S. federal income tax purposes either as a reorganization under Section 368(a) of the Code, a
tax-free exchange of stock for stock of the same corporation under Section 1036 of the Code, or both. U.S. Holders who receive shares of Wendy’s/Arby’s common stock in exchange for their Triarc 82
Class B common stock in the conversion will not recognize gain or loss for U.S. federal income tax purposes. Each Triarc stockholder’s aggregate tax basis in the Wendy’s/Arby’s common stock
received in the conversion will be the same as his or her aggregate tax basis in the Triarc Class B common stock surrendered in the transaction. The holding period of the Wendy’s/Arby’s common
stock received in the conversion will include the holding period of the stockholder’s Triarc Class B common stock that such stockholder surrendered. If a Triarc stockholder has differing tax bases
and/or holding periods in respect of such stockholder’s Triarc Class B common stock, such stockholder should consult with a tax advisor in order to identify the tax bases and/or holding periods of
the particular shares of Wendy’s/Arby’s common stock that such stockholder receives. Material Tax Consequences of the Merger In the opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP and in the opinion of Winston & Strawn LLP, the material U.S. federal income tax consequences of the merger will be as follows:
•
The merger will constitute a reorganization within the meaning of Section 368(a) of the Code for U.S. federal income tax purposes, and Wendy’s, Triarc and Green Merger Sub, Inc. will each
be a party to such reorganization within the meaning of Section 368(b) of the Code; • A Wendy’s shareholder will not recognize gain or loss upon such shareholder’s receipt of Wendy’s/Arby’s common stock in exchange for such shareholder’s Wendy’s common shares, except
with respect to cash that is received instead of fractional shares of Wendy’s/Arby’s common stock; • The aggregate tax basis of the shares of Wendy’s/Arby’s common stock received in the merger, including fractional shares for which cash is ultimately received, will be the same as the
aggregate tax basis of the Wendy’s common shares exchanged therefor; • The holding period for shares of Wendy’s/Arby’s common stock that a Wendy’s shareholder receives in the merger will include the holding period of the Wendy’s common shares exchanged
therefor; • If a Wendy’s shareholder receives cash instead of a fractional share of Wendy’s/Arby’s common stock, such shareholder will generally recognize capital gain or loss equal to the difference, if
any, between such shareholder’s tax basis in the fractional share (as described in above) and the amount of cash received unless such shareholder actually or constructively owns Triarc stock
before the merger and the distribution of cash to such shareholder has the effect of the distribution of a dividend. In that case, some or all of the cash received could be taxed as dividend
income. Dissenting Shares A Wendy’s shareholder who receives cash in respect of dissenting Wendy’s common shares will generally recognize capital gain or loss equal to the difference between the amount of cash
received and such shareholder’s basis in the dissenting shares unless such shareholder actually or constructively owns Triarc common stock before the merger and the payment to such shareholder has
the effect of a distribution of a dividend. In such case, some or all of the payment could be taxed as dividend income. Wendy’s shareholders who dissent from the merger are urged to consult their
own tax advisors. Opinions Regarding Tax Treatment to be Delivered at the Time of Consummation of the Merger The obligation of Triarc to complete the merger is conditioned upon its receipt at the time of the consummation of the merger of an opinion from Paul, Weiss, Rifkind, Wharton & Garrison LLP
that the merger will be treated as a reorganization within the meaning of Section 368(a) of the Code. The obligation of Wendy’s to complete the merger is conditioned upon its receipt at the time of
the consummation of the merger of an opinion from Winston & Strawn LLP that the merger will be treated as a reorganization within the meaning of Section 368(a) of the Code. These opinions of
counsel will be based in part upon representations, made as of the time of the consummation of the 83
merger by Triarc, Green Merger Sub, Inc. and Wendy’s, which counsel will assume to be true, correct and complete. If the representations are inaccurate, the opinions of counsel could be adversely
affected. Backup Withholding Non-corporate holders of Wendy’s common shares may be subject to backup withholding on cash payments received instead of a fractional share interest in Wendy’s/Arby’s common stock.
Backup withholding will not apply, however, to a shareholder who:
•
furnishes a correct taxpayer identification number and certifies, under penalties of perjury, that such holder is not subject to backup withholding on a Form W-9, and otherwise complies with
applicable requirements of the backup withholding rules; • is a corporation or otherwise exempt from backup withholding and, when required, demonstrates this fact; or • provides a certification of foreign status on Form W-8BEN or a successor form. A shareholder who fails to provide the correct taxpayer identification number on Form W-9 may be subject to penalties imposed by the IRS. We will provide a Form W-9 to you after the
merger. Any amount withheld under these rules will be credited against the shareholder’s U.S. federal income tax liability. Reporting Requirements Certain significant Wendy’s shareholders and Triarc stockholders (generally those who own at least five percent of the relevant corporation) may be required to attach a statement to their tax
returns for the taxable year in which the conversion and merger are completed that contains the information set forth in Section 1.368-3(b) of the Department of Treasury regulations. The statement
attached by a Triarc stockholder would include such stockholder’s tax basis in the Triarc Class B common stock surrendered and a description of the Wendy’s/Arby’s common stock received in the
conversion. The statement attached by a Wendy’s shareholder would include such shareholder’s tax basis in the Wendy’s common shares surrendered and a description of the Wendy’s/Arby’s common
stock received in the merger. Wendy’s shareholders and Triarc stockholders are urged to consult their own tax advisors as to the necessity of attaching such a statement to their tax returns. 84
The following discussion summarizes material provisions of the merger agreement, a copy of which is attached as Annex A to this joint proxy statement/prospectus and is incorporated by reference
into this joint proxy statement/prospectus. The rights and obligations of the parties are governed by the express terms and conditions of the merger agreement and not by this summary or any other
information contained in this joint proxy statement/prospectus. We urge you to read the merger agreement carefully and in its entirety, as well as this joint proxy statement/prospectus, before making any
decisions regarding the merger. Form and Effective Time of the Merger Subject to the terms and conditions of the merger agreement and in accordance with Ohio law, at the effective time of the merger, Green Merger Sub, Inc., a wholly owned Ohio subsidiary of
Triarc and referred to herein as Merger Sub, will merge with and into Wendy’s. Wendy’s will survive the merger as a wholly owned subsidiary of Triarc, and Triarc will be renamed Wendy’s/Arby’s
Group, Inc. upon completion of the merger. The merger will become effective upon the filing of a certificate of merger with the Secretary of State of the State of Ohio and making all other filings or recordings required under the Ohio
General Corporation Law or at such later time as may be agreed upon by Triarc and Wendy’s and as specified in the certificate of merger. The filing of the certificate of merger will occur
immediately after the closing of the merger. Consideration to be Received in the Merger Wendy’s Common Shares Wendy’s Common Shares. At the completion of the merger, each outstanding common share of Wendy’s, including restricted shares, will be converted into and shall represent the right to receive
4.25 fully paid and non-assessable shares of Wendy’s/Arby’s common stock. Adjustments. If the number of shares of common stock of Triarc or Wendy’s common shares changes between the date of the merger agreement and the effective time of the merger because of a
reclassification, recapitalization, share split, share dividend or other similar event, then the exchange ratio will be equitably adjusted to reflect such change. Fractional Shares No fractional shares of Wendy’s/Arby’s common stock will be issued in the merger. Holders of Wendy’s common shares will receive cash (without interest) for any fractional shares which they
might otherwise receive in the merger in an amount determined by multiplying the fractional share interest by the closing price of Wendy’s/Arby’s common stock on the NYSE on the date the
merger becomes effective. Procedures for Exchange of Certificates The conversion of each Wendy’s common share into 4.25 shares of Wendy’s/Arby’s common stock, as described above under “—Consideration to be Received in the Merger,” will occur
automatically at the effective time of the merger. Prior to the mailing of this joint proxy statement/prospectus, Triarc will engage an exchange agent reasonably acceptable to Wendy’s to handle the
exchange of Wendy’s common share certificates for Wendy’s/Arby’s common stock certificates and the payment of cash for fractional shares in the merger. As soon as reasonably practicable after the
merger, the exchange agent will send a transmittal letter to each holder of Wendy’s common shares at the effective time of the merger. The transmittal letter will contain instructions with respect to
obtaining the merger consideration in exchange for Wendy’s common shares. Wendy’s shareholders should not send stock certificates with the enclosed proxy. 85
At the effective time of the merger, each certificate that previously represented Wendy’s common shares will represent only the right to receive the merger consideration described above under
“—Consideration to be Received in the Merger,” including cash for any fractional shares of Wendy’s/Arby’s common stock, or the right to receive cash for the fair value of those shares for which
dissenters’ rights have been perfected. Wendy’s shareholders have the right to dissent from the merger and assert dissenters’ rights under Ohio law. In order to assert dissenters’ rights, Wendy’s shareholders must comply with the
requirements of Ohio law as described under “The Merger—Dissenters’ Rights” beginning on page 80. None of Wendy’s, Triarc, the exchange agent, or any other person will be liable to holders of Wendy’s common shares for any amount properly delivered to a public official under applicable
abandoned property, escheat or similar laws. After completion of the merger, Wendy’s will not register any transfers of the Wendy’s common shares. Triarc stockholders need not exchange their stock certificates; however, Triarc
stockholders may exchange their Triarc stock certificates for new stock certificates reflecting the Wendy’/Arby’s Group, Inc. name after completion of the merger. Representations and Warranties The merger agreement contains customary representations and warranties made by Triarc, Merger Sub and Wendy’s. The representations and warranties of Triarc, Green Merger Sub, Inc. and
Wendy’s are qualified in their entirety by the information filed by Triarc or Wendy’s, as applicable, with the SEC in their respective Form 10-K Annual Reports, as amended, for the year ended
December 30, 2007 and any Form 8-K filed between the date of the filing the Form 10-K Annual Report and April 16, 2008, excluding any documents incorporated by reference, any risk factor
disclosure and any forward looking statement in such filings (which filings are available without charge at the SEC’s website at www.sec.gov). The assertions embodied in the representations and warranties were made for purposes of the merger agreement and are subject to qualifications and limitations agreed to by Triarc and Wendy’s
in connection with negotiating the terms of the merger agreement. In addition, certain representations and warranties were made as of a specified date, may be subject to a contractual standard of
materiality different from what might be viewed as material to stockholders or shareholders, or may have been used for the purpose of allocating risk between Triarc and Wendy’s rather than
establishing matters as facts. For the foregoing reasons, you should not rely on the representations and warranties as statements of factual information. The representations and warranties in the
merger agreement do not survive the merger or the termination of the merger agreement. These representations and warranties relate to, among other things:
•
qualification, corporate organization, subsidiaries and charter documents; • capitalization; • authorization, execution, delivery, performance and enforceability of, and required consents, approvals, orders and authorizations of governmental entities relating to, the merger agreement and
related matters; • financial statements and documents filed with the SEC and the accuracy of information contained in those documents; • internal controls and procedures and compliance with the Sarbanes-Oxley Act of 2002; • absence of undisclosed liabilities; • authorizations, permits and compliance with laws and government regulations; • compliance with environmental laws and regulations; • employee benefit plans; 86
• absence of certain changes or events from and after December 30, 2007; • investigations or legal proceedings; • accuracy of the information in this joint proxy statement/prospectus and other information; • filing of tax returns, payment of taxes and other tax matters; • matters relating to employees, including the Worker Adjustment and Retraining Notification Act; • intellectual property; • real property ownership and leasehold interests; • opinion from financial advisor; • the vote of Wendy’s shareholders required to adopt the merger agreement; • the vote of Triarc stockholders required to consummate the merger; • satisfaction of Ohio takeover statutes’ requirements; • satisfaction of conditions under the Wendy’s shareholder rights plan so that the execution and delivery of the merger agreement do not cause the rights granted under the rights plan to become
exercisable or give rise to any triggering event; • certain material contracts; • franchise matters; • joint ventures; • finders and brokers; • Triarc’s lack of ownership of Wendy’s common shares; • adequate insurance coverage; • affiliate transactions; and • unrestricted cash available to Wendy’s as of April 22, 2008. Conduct of Business Pending the Merger Under the merger agreement, each of Triarc and Wendy’s has agreed that, from the date of the merger agreement until the completion of the merger, subject to certain exceptions, the business
of it and its respective subsidiaries shall be conducted in the ordinary course of business and has agreed to use commercially reasonable efforts to preserve substantially intact its current business
organizations, to keep available the services of its current officers and employees and to preserve its relationships with significant franchisees, suppliers, licensors, licensees, distributors, lessors and
others having significant business dealings with it. In addition, each of Triarc and Wendy’s has agreed to the following:
•
if any form of anti-takeover statute or regulation shall become applicable to the merger agreement, then Triarc and Wendy’s shall take such actions as are reasonably necessary so that the
merger occurs as promptly as practicable and otherwise act to eliminate or minimize the effects of such statute or regulation; • Wendy’s and Triarc will consult with and provide each other the reasonable opportunity to review and comment upon any press release or public statement or comment prior to the issuance of
such press release, public statement or comment relating to the merger or the merger agreement; • Triarc will not have the right to control Wendy’s operations prior to the effective time of the mer