Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
TRIARC COMPANIES, INC.
..................................................................
(Name of Registrant as Specified In Its Charter)
..................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction
applies:
............................................................
(2) Aggregate number of securities to which transaction
applies:
.......................................................
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):
.......................................................
(4) Proposed maximum aggregate value of transaction:
.......................................................
(5) Total fee paid:
.......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
.......................................................
(2) Form, Schedule or Registration Statement No.:
.......................................................
(3) Filing Party:
.......................................................
(4) Date Filed:
.......................................................
[TRIARC LOGO]
TRIARC COMPANIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND
PROXY STATEMENT
--------------------------------------------------------------------------------
PLEASE COMPLETE, SIGN, DATE AND RETURN
YOUR PROXY PROMPTLY
--------------------------------------------------------------------------------
TUESDAY, JUNE 4, 2002
AT 12:00 NOON
AT THE OFFICES OF BEAR STEARNS & CO., INC.
383 MADISON AVENUE, 2ND FLOOR
NEW YORK, NEW YORK
[TRIARC LOGO]
TRIARC COMPANIES, INC.
280 PARK AVENUE
NEW YORK, NEW YORK 10017
(212) 451-3000
April 25, 2002
Dear Stockholders:
It is our pleasure to invite you to join us at the 2002 Annual Meeting of
Stockholders of Triarc Companies, Inc. which will be held at 12:00 noon, local
time, on Tuesday, June 4, 2002, in Auditoriums C and D, at the offices of Bear
Stearns & Co., Inc., 2nd Floor, 383 Madison Avenue, New York, New York 10167.
The Board of Directors and management hope that many of you will be able to
attend in person.
At the meeting, we will report to you on the Company's current operations
and outlook and hold a question and discussion period. In addition, you will be
asked to consider and vote on the election of nine (9) directors, approval of
the 2002 Equity Participation Plan and the ratification of the appointment of
Deloitte & Touche LLP as the Company's independent certified public accountants.
The Board of Directors has unanimously approved these proposals and recommends
that you vote FOR each of them.
The formal notice of Annual Meeting and the Proxy Statement follow. It is
important that your shares be represented and voted, regardless of the size of
your holdings. Accordingly, whether or not you plan to attend the meeting in
person, please complete, sign, date and return the enclosed proxy. If you attend
the meeting and wish to vote your shares personally, you may revoke your proxy.
Sincerely,
NELSON PELTZ PETER W. MAY
NELSON PELTZ PETER W. MAY
Chairman and Chief President and Chief
Executive Officer Operating Officer
[TRIARC LOGO]
TRIARC COMPANIES, INC.
NOTICE OF 2002 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, JUNE 4, 2002
12:00 NOON, LOCAL TIME
-------------------
The 2002 Annual Meeting of Stockholders of Triarc Companies, Inc. will be
held on Tuesday, June 4, 2002, at 12:00 noon, local time, in Auditoriums C and
D, at the offices of Bear Stearns & Co., Inc., 2nd Floor, 383 Madison Avenue,
New York, New York 10167, for the following purposes:
(1) to elect nine (9) directors to hold office as specified in the
accompanying Proxy Statement;
(2) to take action with respect to the adoption of the Company's 2002
Equity Participation Plan;
(3) to ratify the appointment of Deloitte & Touche LLP as the Company's
independent certified public accountants; and
(4) to transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Stockholders entitled to vote at the meeting or any adjournment or
postponement thereof are holders of record of the Company's Class A Common Stock
at the close of business on April 8, 2002. All such stockholders of record are
invited to attend the Meeting. As a result of heightened security concerns,
admission to the Meeting will be by ticket only and packages and bags may be
inspected and required to be checked in at the registration desk. You also will
be required to present identification containing a photograph. If you are a
registered stockholder (your shares are held in your name) and plan to attend
the Meeting, please check the appropriate box on the proxy card and retain the
top portion of your proxy card, which serves as your admission ticket. If you
are a beneficial owner (your shares are held by a bank, broker or other holder
of record) and you plan to attend the Meeting, the left side of your voting
information form is your admission ticket. The Proxy Statement also includes
information on how to obtain a ticket from the Company. Stockholders who do not
obtain tickets in advance may obtain them upon verification of ownership at the
registration desk on the day of the Meeting.
By Order of the Board of Directors
STUART I. ROSEN
STUART I. ROSEN
Secretary
April 25, 2002
--------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT! STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE
MEETING. WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE COMPLETE, SIGN AND DATE THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. YOU MAY
NEVERTHELESS VOTE IN PERSON IF YOU ATTEND THE MEETING.
--------------------------------------------------------------------------------
TRIARC COMPANIES, INC.
280 PARK AVENUE
NEW YORK, NEW YORK 10017
(212) 451-3000
-------------------
PROXY STATEMENT
-------------------
INTRODUCTION
GENERAL
The accompanying proxy is solicited by the Board of Directors (the 'Board of
Directors' or the 'Board') of Triarc Companies, Inc. (the 'Company' or 'Triarc')
in connection with the 2002 Annual Meeting of Stockholders of the Company (the
'Meeting'), to be held on Tuesday, June 4, 2002, at 12:00 noon, local time, in
Auditoriums C and D, at the offices of Bear Stearns & Co., Inc., 2nd Floor,
383 Madison Avenue, New York, New York and at any adjournment or postponement of
the Meeting. This Proxy Statement and a proxy are first being mailed to
stockholders on or about April 26, 2002. The mailing address of the Company's
principal executive office is 280 Park Avenue, New York, New York 10017.
When a proxy is returned properly dated and signed, the shares represented
thereby will be voted by the persons named as proxies in accordance with each
stockholder's directions. Stockholders may specify their choices by marking the
appropriate boxes on the enclosed proxy. If a proxy is dated, signed and
returned without specifying choices, the shares will be voted as recommended by
the Board of Directors FOR the election of each of the nine (9) nominees for
directors named below and FOR Proposals (2) and (3). The Company does not have
cumulative voting in the election of directors. Under the Company's By-Laws (the
'By-Laws'), business transacted at the Meeting is confined to the purposes
stated in the Notice of the Meeting. The proxy being solicited does, however,
convey discretionary authority to the persons named therein as proxies to vote
on matters incident to the conduct of the Meeting. The proxy may be revoked by
the stockholder at any time prior to the time it is voted by giving notice of
such revocation either personally or in writing to the Secretary of the Company
at the address provided above.
Only holders of the Company's Class A Common Stock, par value $.10 per share
(the 'Class A Common Stock'), at the close of business on April 8, 2002, their
authorized representatives and guests of the Company will be able to attend the
Meeting. As a result of heightened security concerns, admission to the Meeting
will be by ticket only. If you are a registered stockholder (your shares are
held in your name) and plan to attend the Meeting, please check the appropriate
box on the enclosed proxy card. Your admission ticket can be detached from the
bottom portion of the proxy card. If you are a beneficial owner (your shares are
held in the name of a bank, broker or other holder of record) and plan to attend
the meeting, your admission ticket is the left side of your voting information
form. In addition, you can obtain an admission ticket in advance by writing to
Investor Relations, Triarc Companies, Inc., 280 Park Avenue, New York, New York
10017. Please be sure to enclose proof of ownership, such as a bank or brokerage
account statement or a letter from the bank or broker verifying
such ownership. Stockholders who do not obtain tickets in advance may obtain
them upon verification of ownership at the registration desk on the day of the
Meeting.
Tickets may be issued to others at the discretion of the Company.
VOTING SECURITIES
All holders of record of the Company's Class A Common Stock, at the close of
business on April 8, 2002 are entitled to vote on all business of the Meeting.
At the close of business on such day, the Company had 20,460,429 shares of Class
A Common Stock outstanding and entitled to vote at the Meeting. Each share of
Class A Common Stock entitles the holder to one vote per share. The presence, in
person or by proxy, of stockholders entitled to cast at least a majority of the
votes which all stockholders are entitled to cast shall constitute a quorum.
Broker 'non-votes' and the shares as to which a stockholder abstains are
included for purposes of determining whether a quorum of shares is present at
the Meeting. A broker 'non-vote' occurs when a nominee holding shares for a
beneficial owner does not vote on a particular proposal because the nominee does
not have discretionary voting power with respect to that proposal and has not
received instructions from the beneficial owner.
Under the General Corporation Law of the State of Delaware (the 'Delaware
Law'), the state in which the Company is incorporated, the Company's Certificate
of Incorporation and the By-Laws, if a quorum is present at the Meeting, the
affirmative vote of a plurality of the votes cast is required for the election
of directors and the affirmative vote of a majority of the voting power present
(in person or by proxy) and entitled to vote at the Meeting is required for
approval of Proposals (2) and (3). Under the Delaware Law, an abstention is not
deemed to be a 'vote cast.' As a result, abstentions and broker 'non-votes' are
not included in the tabulation of the voting results on the election of
directors (Proposal (1)) and, therefore, do not have the effect of votes in
opposition in such tabulations. Abstentions are included in the tabulation of
the voting results on issues requiring the affirmative vote of a majority of the
voting power present (in person or by proxy) and entitled to vote at the Meeting
(Proposals (2) and (3)) and have the effect of votes in opposition in such
tabulations, while broker 'non-votes' are not included in the tabulation of the
voting results on such issues and therefore do not have the effect of votes
against in such tabulations.
The Company has been informed that the 5,982,867 shares of Class A Common
Stock (constituting approximately 29.2% of the outstanding shares of Class A
Common Stock as of April 8, 2002) owned by DWG Acquisition Group, L.P., a
Delaware limited partnership of which Nelson Peltz and Peter W. May are the sole
general partners ('DWG Acquisition'), will be voted in accordance with the
recommendation of the Board of Directors FOR the election of each of the nine
(9) nominees for director named below and FOR Proposals (2) and (3).
PROPOSAL 1.
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION
It is recommended that the nine (9) nominees herein named be elected as
directors of the Company, with each director to hold office until the next
Annual Meeting of Stockholders, and until his successor is elected and qualified
or until his prior death, resignation or removal. All of the nine (9) nominees
are presently serving as directors of the Company and were elected directors at
the Annual
2
Meeting of Stockholders held on June 21, 2001 to serve until the next annual
meeting of the Company's stockholders and until such director's successor is
duly chosen and qualified or until his prior death, resignation or removal. The
Company is unaware of any reason why any of the nominees named herein would be
unwilling or unable to serve as a director. Should, however, any nominee for
director be unwilling or unable to serve at the time of the Meeting or any
adjournment or postponement thereof, the persons named in the proxy will vote
for the election of such other person for such directorship as the Board of
Directors may recommend.
Certain information regarding each person nominated by the Board of
Directors, including his principal occupation during the past five years and
current directorships, is set forth below. Unless otherwise indicated, all
nominees have had the indicated principal occupations for the past five years.
BUSINESS EXPERIENCE DURING PAST
NAME OF DIRECTOR FIVE YEARS, AGE AND OTHER INFORMATION
---------------- -------------------------------------
Nelson Peltz......................... Mr. Peltz has been a director and the Chairman and Chief
Executive Officer of the Company since April 1993. Since
then, he has also been a director or manager and officer
of certain of the Company's subsidiaries. He is also a
general partner of DWG Acquisition, whose principal
business is ownership of securities of the Company. From
its formation in January 1989 to April 1993, Mr. Peltz was
Chairman and Chief Executive Officer of Trian Group,
Limited Partnership ('Trian'), which provided investment
banking and management services for entities controlled by
Mr. Peltz and Mr. May. From 1983 to December 1988, he was
Chairman and Chief Executive Officer and a director of
Triangle Industries, Inc. ('Triangle'), which, through
wholly-owned subsidiaries, was, at that time, a
manufacturer of packaging products, copper electrical wire
and cable and steel conduit and currency and coin handling
products. Mr. Peltz is the father of Andrew Peltz, Vice
President -- Investment Services of Triarc. Mr. Peltz is
59 years of age.
Peter W. May......................... Mr. May has been a director and the President and Chief
Operating Officer of the Company since April 1993. Since
then, he has also been a director or manager and officer
of certain of the Company's subsidiaries. He is also a
general partner of DWG Acquisition. From its formation in
January 1989 to April 1993, Mr. May was President and
Chief Operating Officer of Trian. He was President and
Chief Operating Officer and a director of Triangle from
1983 until December 1988. Mr. May has also served as a
director of Encore Capital Group, Inc. (formerly MCM
Capital Group, Inc.) since February 1998. Mr. May is the
father of Jonathan P. May, a Senior Vice President of
Triarc and Chairman of the Triarc Restaurant Group. Mr.
May is 59 years of age.
3
BUSINESS EXPERIENCE DURING PAST
NAME OF DIRECTOR FIVE YEARS, AGE AND OTHER INFORMATION
---------------- -------------------------------------
Hugh L. Carey........................ Mr. Carey has been a director of the Company since June
1994. He was an Executive Vice President of W.R. Grace & Co.
('Grace') from 1987 to December 31, 1995. From 1993 to
December 1995, he served Grace as director of its
Government Relations Division, and from 1987 until 1993,
he ran Grace's office of environmental policy. Mr. Carey
was the Governor of the State of New York from 1975 until
1983 and a member of Congress from 1960 until 1975. From
1991 until 1993, he was Chairman of the National Institute
of Former Governors. Mr. Carey is also a director of China
Trust Bank, and Of Counsel to Winston & Strawn. Mr. Carey
is 83 years of age.
Clive Chajet......................... Mr. Chajet has been a director of the Company since June
1994. He has been Chairman of Chajet Consultancy, L.L.C., a
consulting firm specializing in identity and image
management, since January 1997. Prior to that time, Mr.
Chajet was Chairman of Lippincott & Margulies Inc., also a
consulting firm specializing in identity and image
management, from 1983 to January 1997. Mr. Chajet is 65
years of age.
Joseph A. Levato..................... Mr. Levato has been a director of the Company since June
1996. Mr. Levato served as Executive Vice President and
Chief Financial Officer of Triarc from April 1993 to
August 1996. He also served as Executive Vice President
and Chief Financial Officer of certain of Triarc's
subsidiaries from April 1993 to August 1996. Prior to
April 1993, he was Senior Vice President and Chief
Financial Officer of Trian from January 1992 to April
1993. From 1984 to December 1988, he served as Senior Vice
President and Chief Financial Officer of Triangle. Mr.
Levato is 61 years of age.
David E. Schwab II................... Mr. Schwab has been a director of the Company since October
1994. Mr. Schwab has been a Senior Counsel of Cowan,
Liebowitz & Latman, P.C., a law firm, since January 1,
1998. Prior to that time, he was a partner of Schwab
Goldberg Price & Dannay, a law firm, for more than five
years. Mr. Schwab also serves as Chairman of the Board of
Trustees of Bard College. Mr. Schwab is 70 years of age.
4
BUSINESS EXPERIENCE DURING PAST
NAME OF DIRECTOR FIVE YEARS, AGE AND OTHER INFORMATION
---------------- -------------------------------------
Jeffrey S. Silverman................. Mr. Silverman has been a director of the Company since May
1999. Mr. Silverman has been Chairman and co-founder of JLS
Capital Partners, LLC, an investment firm, since August
1997, and since January 2000, Chairman and Chief Executive
Officer of BrandPartners Group, Inc., which, through its
subsidiaries, provides merchandising, branch planning,
creative services and online database solutions to its
clients. From January 1983 until August 1997, Mr.
Silverman served as Chief Executive Officer of PLY-GEM
Industries, Inc., a home improvement building products
supplier, and he served as its Chairman from February 1986
through August 1997. Mr. Silverman is 56 years of age.
Raymond S. Troubh.................... Mr. Troubh has been a director of the Company since June
1994. He has been a financial consultant since prior to
1989. Mr. Troubh is a director of ARIAD Pharmaceuticals,
Inc., Diamond Offshore Drilling, Inc., General American
Investors Company, Gentiva Health Services, Inc., Health
Net, Inc., Hercules Incorporated, Starwood Hotels &
Resorts, Inc. and WHX Corporation. He is also a trustee of
Petrie Stores Liquidating Trust. Mr. Troubh was appointed
to the Enron Corp. board of directors after the events
that led to its filing on December 2, 2001 for protection
under Chapter 11 of the United States Bankruptcy Code. Mr.
Troubh is, in fact, one of co-authors of the 'Powers
Report,' which investigated those events. Mr. Troubh is 75
years of age.
Gerald Tsai, Jr. .................... Mr. Tsai has been a director of the Company since October
1993. Mr. Tsai is a private investor. From February 1993 to
October 1997, he was Chairman of the Board, President and
Chief Executive Officer of Delta Life Corporation, a life
insurance and annuity company with which Mr. Tsai became
associated in 1992. Mr. Tsai also serves as a director of
Sequa Corporation, Zenith National Insurance Corporation
and Saks Incorporated. He is a trustee of Boston
University, the Mount Sinai-NYU Medical Center Board and
the New York University School of Medicine Foundation
Board. Mr. Tsai is 73 years of age.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
NINE (9) NOMINEES NAMED ABOVE.
5
EXECUTIVE OFFICERS
The following table sets forth certain information regarding the executive
officers of Triarc, all of whom are U.S. citizens.
NAME AGE POSITIONS
---- --- ---------
Nelson Peltz....................... 59 Director; Chairman and Chief Executive Officer
Peter W. May....................... 59 Director; President and Chief Operating Officer
Michael C. Howe.................... 49 President and Chief Executive Officer of the Triarc
Restaurant Group
Brian L. Schorr.................... 43 Executive Vice President, General Counsel, and
Assistant Secretary
Jonathan P. May.................... 35 Senior Vice President; Chairman of the Triarc
Restaurant Group
Francis T. McCarron................ 45 Senior Vice President and Chief Financial Officer
Jarrett B. Posner.................. 32 Senior Vice President -- Corporate Finance
Stuart I. Rosen.................... 42 Senior Vice President and Associate General Counsel,
and Secretary
Fred H. Schaefer................... 57 Senior Vice President and Chief Accounting Officer
Anne A. Tarbell.................... 43 Senior Vice President -- Corporate Communications
and Investor Relations
Set forth below is certain additional information concerning the persons
listed above (other than Messrs. Peltz and May, for whom such information has
been provided under 'Nominees for Election' above).
Michael C. Howe has been the President and Chief Executive Officer of the
Triarc Restaurant Group since January 2001. From July 1999 to January 2001 he
served as President and Chief Operating Officer of the Triarc Restaurant Group
and certain of its subsidiaries. From February 1997 to July 1999, Mr. Howe was
Senior Vice President, Operations of the Triarc Restaurant Group. From August
1995 to February 1997, Mr. Howe was a Regional Vice President for the Southeast
Region of the Triarc Restaurant Group. He also served in a variety of positions
within the KFC Division of PepsiCo from July 1990 to August 1995 including Vice
President, Restaurant Support. Prior to entering the restaurant industry,
Mr. Howe was employed for 12 years with Procter & Gamble in a number of
different positions within the sales management functions.
Brian L. Schorr has been Executive Vice President and General Counsel of
Triarc and certain of its subsidiaries since June 1994. Prior thereto, Mr.
Schorr was a partner of Paul, Weiss, Rifkind, Wharton & Garrison, a law firm
which he joined in 1982. That firm provides legal services to Triarc and its
subsidiaries.
Jonathan P. May has been Senior Vice President of Triarc and Chairman of the
Triarc Restaurant Group since January 2001. From July 1999 to January 2001 he
served as Chief Executive Officer of the Triarc Restaurant Group and certain of
its subsidiaries. From 1996 to July 1999, Mr. May was Vice President, Concept
Development of the Triarc Restaurant Group. From 1995 to 1996, Mr. May was Vice
President, Worldwide Planning of the Triarc Restaurant Group. Mr. May was
Director, Corporate
6
Development of the Company from 1993 to 1995. Previously, Mr. May was employed
by McKinsey & Co., Inc. from September 1989 to June 1991. Mr. May is the son of
Peter W. May.
Francis T. McCarron has been Senior Vice President and Chief Financial
Officer of Triarc since June 30, 2001. Prior thereto, he was Senior Vice
President -- Taxes of Triarc and certain of its subsidiaries since April 1993.
Mr. McCarron served as Vice President -- Taxes of Trian from its formation in
January 1989 to April 1993.
Jarrett B. Posner has been Senior Vice President -- Corporate Finance of
Triarc and Senior Vice President of certain of its subsidiaries since November
16, 2000. Prior thereto, he was Vice President, Corporate Development of Triarc
since March 1998. Mr. Posner has held various corporate finance positions at
Triarc since May 1993.
Stuart I. Rosen has been Senior Vice President and Associate General
Counsel, and Secretary of Triarc and certain of its subsidiaries since November
16, 2000. From August 1994 to November 2000 he served as Vice President and
Associate General Counsel, and Secretary of Triarc and certain of its
subsidiaries. Prior thereto, he was an associate with Paul, Weiss, Rifkind,
Wharton & Garrison since 1985.
Fred H. Schaefer has been Senior Vice President and Chief Accounting Officer
of Triarc and certain of its subsidiaries since November 16, 2000. From April
1993 to November 2000 he served as Vice President and Chief Accounting Officer
of Triarc and certain of its subsidiaries. Prior thereto, he was Vice President
and Chief Accounting Officer of Trian from its formation in January 1989 to
April 1993.
Anne A. Tarbell has been Senior Vice President -- Corporate Communications
and Investor Relations of Triarc, and Senior Vice President of certain of its
subsidiaries, since May 1998. From June 1995 to April 1998, Ms. Tarbell was Vice
President and Director -- Investor Relations of ITT Corporation and served as
Assistant Director -- Investor Relations of ITT Corporation from August 1991 to
May 1995.
The term of office of each executive officer is until the organizational
meeting of the Board following the next annual meeting of the Company's
stockholders and until his or her successor is elected and qualified or until
his or her prior death, resignation or removal.
BOARD MEETINGS AND CERTAIN COMMITTEES OF THE BOARD
Seven meetings of the full Board of Directors were held during the fiscal
year ended December 30, 2001. Each incumbent director who is a nominee for
reelection attended 75% or more of the meetings of the Board of Directors and
its committees that he was eligible to attend in 2001.
The Company has standing audit, nominating, and compensation committees
whose current functions and members are described below. It is anticipated that
at its first meeting following the Meeting, the Board will designate the
directors to serve on each of these committees until the next annual meeting of
stockholders.
Audit Committee. The Audit Committee is composed of Messrs. Raymond S.
Troubh (Chairman), Joseph A. Levato, David E. Schwab II and Jeffrey S.
Silverman. This committee is charged with the responsibility of assisting the
Board of Directors in overseeing the financial reporting process of the Company.
In the course of performing its functions, the Audit Committee (i) reviews the
Company's internal accounting controls and its annual consolidated financial
statements, (ii) reviews with the
7
Company's independent certified public accountants the scope of their audit,
their report and their recommendations, (iii) considers the possible effect on
the independence of such accountants in approving non-audit services requested
of them, (iv) recommends the action to be taken with respect to the appointment
of the Company's independent certified public accountants and (v) reviews
matters brought to its attention within the scope of its duties, including
financial, legal or ethical matters relating to conflict of interest
transactions. The Audit Committee met four times during 2001. The formal report
of the Audit Committee with respect to fiscal year 2001 begins on page 25
herein.
Nominating Committee. The Nominating Committee is composed of Messrs. Joseph
A. Levato (Chairman), Hugh L. Carey, David E. Schwab II, and Gerald Tsai, Jr.
This committee is charged with the responsibility of considering and
recommending individuals to be considered by the Board for membership on the
Board of Directors. The Nominating Committee met once during 2001.
The Nominating Committee will consider nominations for Board membership by
stockholders. The Nominating Committee has adopted the following rules with
respect to considering such nominations: (i) the nominating stockholder must
have owned, for at least six months prior to the date the nomination is
submitted, shares of (x) Class A Common Stock or (y) other classes of common
stock or preferred stock, if any, entitled to vote for directors; (ii) the
nomination must be received by the Nominating Committee at least 120 days before
the mailing date for proxy material applicable to the annual meeting for which
such nomination is proposed for submission; and (iii) a detailed statement
setting forth the qualifications, as well as the written consent, of each party
nominated must accompany each nomination submitted.
Compensation Committee and Performance Compensation Subcommittee. The
Compensation Committee is composed of Messrs. David E. Schwab II (Chairman),
Clive Chajet, Joseph A. Levato and Jeffrey S. Silverman. The Compensation
Committee is charged with the responsibility of (i) reviewing, advising and
making recommendations with respect to employee salary and compensation plans,
benefits and standards applicable to the executive officers of the Company, (ii)
taking all actions with respect thereto that are not specifically reserved for
the Board of Directors, and (iii) administering the Triarc Companies, Inc. 1997
Equity Participation Plan (the '1997 Plan'), the Deferral Plan for Senior
Executive Officers of Triarc Companies, Inc. (the 'Deferral Plan') and such
other salary or compensation plans as the Compensation Committee is designated
to administer. The Compensation Committee met two times during 2001.
The Performance Compensation Subcommittee (the 'Subcommittee' or the
'Performance Committee') of the Compensation Committee is composed of Messrs.
Schwab (Chairman), Chajet and Silverman. The Subcommittee was established in
August 1997 to assume certain functions which were previously the responsibility
of the Compensation Committee. The Subcommittee's principal function is to
administer the Triarc Companies, Inc. 1993 Equity Participation Plan, as amended
(the '1993 Plan'), the 1998 Equity Participation Plan (the '1998 Plan'), the
1999 Executive Bonus Plan (the '1999 Executive Bonus Plan' or the '1999 Plan')
and such other salary or compensation plans as the Subcommittee is designated to
administer. Prior to the sale of the Snapple Beverage Group in October 2000, the
Subcommittee also administered the Snapple Beverage Group, Inc. 1997 Stock
Option Plan (the 'SBG Option Plan'). If the 2002 Equity Participation Plan is
approved at the Meeting, it will be administered by the Performance Compensation
Subcommittee. The Subcommittee met two times in 2001.
8
COMPENSATION OF DIRECTORS
Each non-management director of the Company receives an annual retainer of
$30,000 for serving on the Board. In addition, each non-management director of
the Company receives $1,500 for each meeting of the Board or of a committee (or
subcommittee) of the Board that such director attends. Under the 1998 Plan, each
non-management director may elect to have all or a portion of the annual
retainer and these meeting attendance fees paid in shares of Class A Common
Stock rather than in cash. If approved at the Meeting, under the 2002 Plan each
non-management director will continue to have the right to elect to have all or
a portion of the annual retainer and the meeting attendance fees paid in shares
of Class A Common Stock, rather than in cash (See Proposal 2. below). See
'Executive Compensation -- Certain Employment Arrangements with Executive
Officers' below for certain information relating to compensation of the
Company's management directors.
In addition, pursuant to the 1998 Plan, each director of the Company who is
not also an employee of the Company or any subsidiary receives options to
purchase 15,000 shares of Class A Common Stock on the date of such director's
initial election or appointment to the Board of Directors. On the date of each
subsequent annual meeting of stockholders of the Company at which a director is
reelected, such director receives options to purchase 4,000 shares of Class A
Common Stock. If approved at the Meeting, upon the termination of the
effectiveness of the foregoing provisions of the 1998 Plan, each director would
be eligible to receive a similar number of options to purchase Class A Common
Stock under the 2002 Plan upon his or her initial election or appointment to the
Board of Directors or upon any reelection. (See Proposal 2. below).
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
'Exchange Act'), requires Triarc's directors, executive officers, and persons
who own more than ten percent of Triarc's common stock, to file reports of
ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and
Exchange Commission (the 'SEC') and the New York Stock Exchange. Directors,
executive officers and greater than ten percent stockholders are required by SEC
regulations to furnish Triarc with copies of all Forms 3, 4 and 5 they file.
Based solely on Triarc's review of the copies of such forms it has received,
or written representations from certain reporting persons that no Form 5s were
required for these persons, Triarc believes that all its directors, executive
officers and greater than ten percent beneficial owners complied with all filing
requirements applicable to them with respect to 2001, except for the inadvertent
omission by Mr. Silverman to file a report with respect to two transactions on a
timely basis. When the inadvertent omission of the two transactions was
discovered, Mr. Silverman promptly filed the appropriate report.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth the beneficial ownership as of April 8, 2002
by each person known by the Company to be the beneficial owner of more than 5%
of the outstanding shares of Class A Common Stock (constituting the only class
of voting capital stock of the Company), each director of the Company and
nominee for director of the Company who has such ownership, each executive
officer whose name appears in the Summary Compensation Table below (the 'Named
Officers') who was an executive officer of the Company as of April 8, 2002 and
all directors and executive officers as a group.
9
Except as otherwise indicated, each person has sole voting and dispositive power
with respect to such shares.
AMOUNT AND
NAME AND ADDRESS OF NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
---------------- -------------------- ----------------
DWG Acquisition Group, L.P. ....................... 5,982,867 shares(1) 29.2%
1201 North Market Street
Wilmington, DE 19801
Nelson Peltz ....................................... 7,656,851 shares(1)(2)(3) 34.7%
280 Park Avenue
New York, NY 10017
Peter W. May ....................................... 7,081,333 shares(1)(2) 32.9%
280 Park Avenue
New York, NY 10017
Neuberger Berman Inc. .............................. 1,021,175 shares(4) 5.0%
Neuberger Berman, LLC
605 Third Avenue
New York, NY 10158
Hugh L. Carey....................................... 50,126 shares *
Clive Chajet........................................ 39,800 shares(5) *
Joseph A. Levato.................................... 51,200 shares *
David E. Schwab II.................................. 40,063 shares *
Jeffrey S. Silverman................................ 23,526 shares *
Raymond S. Troubh................................... 52,000 shares *
Gerald Tsai, Jr. ................................... 9,729 shares *
Eric D. Kogan....................................... 124,000 shares *
Brian L. Schorr..................................... 116,290 shares(6) *
Francis T. McCarron................................. 78,333 shares *
Directors and Executive Officers as a group
(18 persons)...................................... 9,723,720 shares 40.5%
---------
* Less than 1%
(1) The Company is informed that DWG Acquisition has pledged such shares to a
financial institution on behalf of Messrs. Peltz and May to secure loans
made to them.
(2) Includes 5,982,867 shares held by DWG Acquisition, of which Mr. Peltz and
Mr. May are the sole general partners. The Company is informed that (i) a
Peltz family limited partnership has pledged 21,200 shares owned by it to a
financial institution to secure loans made to Mr. Peltz and (ii) Mr. May has
pledged 9,000 shares owned by him to a financial institution to secure loans
made to him.
(3) Includes 23,750 shares owned by a family limited partnership of which
Mr. Peltz is a general partner. Mr. Peltz disclaims beneficial ownership of
these shares.
(4) The information set forth herein with respect to Neuberger Berman, LLC
('Neuberger LLC') and Neuberger Berman, Inc. (the parent holding company of
Neuberger LLC, 'Neuberger Inc.') is based solely on information contained in
a Schedule 13G/A filed with the SEC on February 12, 2002 pursuant to the
Exchange Act. Neuberger LLC and Neuberger Berman Management Inc.
(footnotes continued on next page)
10
(footnotes continued from previous page)
('Neuberger Management'), serve as subadviser and investment manager,
respectively, of Neuberger Inc.'s various mutual funds. Neuberger LLC and
Neuberger Management are deemed to be beneficial owners of 1,021,175 shares
of Class A Common Stock. These shares are included as shares over which
Neuberger LLC and Neuberger Management have shared voting and dispositive
power. Neuberger LLC and Neuberger Management disclaim beneficial ownership
of an additional 103,100 shares of Class A Common Stock owned by employees
in their own personal securities accounts.
(5) Includes 1,300 shares owned by Mr. Chajet's wife, as to which shares
Mr. Chajet disclaims beneficial ownership.
(6) Includes 100 shares owned by a minor child of Mr. Schorr, as to which shares
Mr. Schorr disclaims beneficial ownership.
-------------------
The above beneficial ownership table includes options to purchase shares of
Class A Common Stock which have vested or will vest within 60 days of April 8,
2002 by the following persons:
NUMBER OF SHARES
NAME OF BENEFICIAL OWNER REPRESENTED BY OPTIONS
------------------------ ----------------------
Nelson Peltz................................................ 1,623,334 shares
Peter W. May................................................ 1,051,666 shares
Hugh L. Carey............................................... 32,000 shares
Clive Chajet................................................ 32,000 shares
Joseph A. Levato............................................ 41,000 Shares
David E. Schwab II.......................................... 32,000 shares
Jeffrey S. Silverman........................................ 20,000 shares
Raymond S. Troubh........................................... 32,000 shares
Gerald Tsai, Jr. ........................................... 6,000 shares
Eric D. Kogan............................................... 110,000 shares
Brian L. Schorr............................................. 110,000 shares
Francis T. McCarron......................................... 78,333 shares
Directors and Executive Officers as a group (18 persons).... 3,549,667 shares
-------------------
Except for the arrangements relating to the shares described in footnote
(1) to the beneficial ownership table, there are no arrangements known to the
Company the operation of which may at a subsequent date result in a change in
control of the Company.
11
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE AND
PERFORMANCE COMPENSATION SUBCOMMITTEE(*)
The Compensation Committee's Role. The Compensation Committee of the Board
of Directors (the 'Compensation Committee') is responsible for setting policy
for compensation of executive officers of the Company, for reviewing and
approving compensation programs for the executive officers of the Company (the
'Executive Compensation Program') and for administering the 1997 Plan and the
Deferral Plan. The Performance Compensation Subcommittee's (the 'Subcommittee'
or the 'Performance Committee') principal function is to administer the 1998
Plan, the 1999 Executive Bonus Plan and the 1993 Plan. Accordingly, the
Subcommittee joins the Compensation Committee in this report.
The Company's Executive Compensation Program is designed to motivate
executives to achieve the Company's business objectives, with a particular
emphasis on building the value of the Company. Key components of the Executive
Compensation Program consist of base salaries, performance-based cash bonus
plans, stock-based compensation plans, deferred compensation plans and
discretionary bonuses. To fulfill its principal function, the Compensation
Committee reviews and approves each of the elements of the Executive
Compensation Program and assesses the effectiveness of the Executive
Compensation Program as a whole. This includes reviewing the design of the
Company's various incentive plans for executive officers and assessing the
competitiveness of the overall Executive Compensation Program. From time to
time, the Company retains external compensation consultants to advise it with
respect to competitive pay levels and the development and design of compensation
plans.
The Company provides its executive officers with a total compensation
package that -- at expected levels of performance -- is generally intended to be
highly competitive with compensation packages provided to similarly situated
executives in the consumer products, restaurants and food industries and in
investment management and mergers and acquisitions firms. The Company
periodically assesses an executive's competitive level of compensation based on
comparable information drawn from a variety of sources, including proxy
statements, compensation surveys and external compensation consultants. In
addition, such compensation takes into account the various roles and
combinations of responsibilities undertaken by Triarc's executive officers, as
well as their individual performance and contribution to the success of the
Company.
The Compensation Committee is aware that companies selected for compensation
comparison purposes differ from those used for relative stockholder return
comparison purposes in this proxy statement's performance graph. The
Compensation Committee believes stockholders' interests are best served by
providing compensation necessary to attract needed exceptional executive talent
from relevant labor markets and that, in many cases, this talent will be
attracted from companies or institutions that are not included in the peer group
index in the performance graph set forth below.
Incentive Compensation Varies With Performance and Other Factors. While the
expected value of an executive's total compensation package is set at a highly
competitive level, each executive officer's pay package places a significant
portion of total compensation at risk, and the actual value of the package may
exceed or fall below such competitive compensation levels, both annually and
over time, based on various factors, including:
---------
(*) This Report does not constitute soliciting material and should not be deemed
filed or incorporated by reference into any Company filing under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as amended, except to the extent the Company specifically incorporates this
Report by reference into such other filing.
12
the Company's financial and operating performance;
the Company's common stock performance;
the successful completion of acquisitions, dispositions, financings and
other significant transactions;
the return on the Company's investment portfolio;
the performance of the executive's area of responsibility;
individual executive performance; and
the executive's experience in his or her role.
Awards paid under annual and long-term incentive plans to senior operating unit
officers are also tied to that business unit's short- and long-term financial
performance and strategic accomplishments of the Company.
The Company also believes that effectively rewarding individual performance
helps drive managers to contribute in ways that enhance the financial and stock
performance of the Company and its various business units. Although the
Executive Compensation Program provides compensation that varies with financial
performance and strategic accomplishments, an executive officer's incentive
awards may also be influenced by qualitative assessments of Company, business
unit and individual performance, as appropriate. For all executive officers,
these assessments are made by either the Compensation Committee or the
Subcommittee, as appropriate.
Overview of the Executive Compensation Program. Key components of the
Executive Compensation Program include: (i) the base salary program, (ii) the
annual incentive program, including awards under the 1999 Executive Bonus Plan,
discretionary bonuses and special deferred compensation and (iii) the long-term
incentive program.
Base Salary Compensation. The Company's base salary program is intended
to provide base salary levels that are competitive in the external market
for executive talent and reflect an individual's ongoing performance. Base
salaries are periodically adjusted based on the executive's performance, the
Company's overall financial performance and expected salary increases in the
market for executive talent.
Annual Incentive Compensation. During 1999, the Company's stockholders
approved the 1999 Executive Bonus Plan which seeks to provide compensation
opportunities to eligible executive officers and key employees of the
Company and its subsidiaries that are directly related to the financial and
operating performance of the Company. During 2001, five executive officers
(including the Chairman and Chief Executive Officer and President and Chief
Operating Officer) participated in the 1999 Executive Bonus Plan. The 1999
Executive Bonus Plan provides for two types of bonuses: formula bonus awards
and performance goal bonus awards. Formula bonus awards are based solely on
the Company's financial performance using certain predetermined earnings and
capitalization related criteria outlined in the 1999 Executive Bonus Plan.
Performance goal bonus awards are based on the attainment of specific levels
of performance by the Company (or operating units of the Company) with
reference to one or more objective criteria outlined in the 1999 Executive
Bonus Plan. The Subcommittee establishes the performance bonus award targets
for each participant eligible for such an award no later than 90 days after
the commencement of each 1999 Executive Bonus Plan year. The Subcommittee
determines whether the formula based criteria and performance goals were met
and, based on such determinations, the actual amount of
13
each formula bonus award and each performance goal bonus award and whether
payment of all or a portion of such bonus will be deferred. Performance goal
bonus awards may not exceed $5.0 million to any single participant for any
1999 Executive Bonus Plan year. The Subcommittee may also exercise 'negative
discretion' and reduce performance goal bonuses otherwise payable under the
objective criteria. Bonus payments under the 1999 Plan are intended to be
exempt from the tax deduction limitation of Section 162(m) of the Internal
Revenue Code of 1986, as amended ('Code').
In addition, from time to time the Compensation Committee may award
discretionary bonuses to the Company's executive officers. The amount of
such bonuses are based on the Compensation Committee's evaluation of such
individual's performance and contribution to the Company's overall
performance. The Compensation Committee may defer payment of discretionary
bonuses in accordance with the terms of the Deferral Plan described below.
The annual cash incentive plan for executive officers of the Triarc
Restaurant Group (Arby's), the Company's principal business unit (the
'Annual Plan'), provides competitive annual pay opportunities with amounts
payable being linked to the business unit's annual financial performance,
and to the individual's annual performance. The Annual Plan sets annual
incentive target awards at levels that are competitive in the context of the
Company's total Executive Compensation Program, and the appropriate mix of
variable and fixed compensation. Financial performance is assessed annually
against financial and strategic objectives. Each such executive's individual
performance award is related to performance measures most appropriate to his
or her responsibilities. To reinforce the need for teamwork and focus
attention on overall Company objectives, all participants have a significant
portion of their award linked to corporate financial performance, as defined
by operating income and other measures.
Annual Bonus Awards for 2001. Substantially all of the annual bonus
compensation for 2001 for the Named Officers (as defined in the Introduction
to the Summary Compensation Table below), was provided pursuant to the 1999
Executive Bonus Plan. In 2001, the Company did not complete any significant
strategic or financial transactions and no special discretionary bonuses
were paid to the Named Officers. In addition, in accordance with the terms
of the 1999 Executive Bonus Plan, and notwithstanding the fact that certain
specified levels of performance goals had been attained by the Company, the
Subcommittee, in consultation with management, exercised 'negative
discretion' and reduced the performance goal bonus awards that would
otherwise have been payable to such participating Named Officers.
In addition, the Compensation Committee reviewed the fiscal 2001
performance of executive corporate officers not participating in the 1999
Plan and took into account that the Company did not complete any significant
strategic or financial transactions in 2001. Accordingly, no special
discretionary bonuses were paid to executive corporate officers with respect
to 2001, and therefore, total cash compensation payable to such officers was
generally lower with respect to 2001 as compared to the prior year. The
annual bonuses primarily reflected individual qualitative executive
contributions based upon the level of the executive's responsibilities, the
efficiency and effectiveness with which the executive oversaw the matters
under such executive's supervision, and the degree to which such executive
contributed to the accomplishment of the Company's goals. Since these
officers have overall corporate policy-making and administrative
responsibilities, and do not directly oversee principal operating units of
the Company, the Compensation Committee's assessment of these executives
relates generally to their performance and accomplishment of
14
personal goals and the Company's achievements as a whole. No specific
weighting was assigned to any one factor over others in determining bonuses
paid to such executive officers with respect to fiscal 2001.
Long-Term Incentive Compensation. The Company provides executive
officers and key employees of its principal business units with incentives
linked to longer-term business unit and corporate performance through the
Deferral Plan and the 1998 Plan, which provides for the grant of options to
purchase shares of Company Stock and restricted stock of the Company. The
Subcommittee believes equity ownership among executives aligns management's
interests with those of stockholders and provides long-term incentives for
the Company's officers.
In addition, executive officers and key employees of the Triarc
Restaurant Group participate in a mid-term cash incentive plan (the
'Mid-Term Plan'), which provides for cash awards to participants based on
the unit's profit over a three year period. A pool is created based upon the
amount by which the unit's actual profit reaches or exceeds a targeted
level.
Grant of Equity-Based Incentives for Fiscal 2001. The Subcommittee
approved stock option grants under the 1998 Plan in respect of fiscal 2001
performance to selected corporate and business unit managers because of the
services performed by these individuals on behalf of the Company and the
Triarc Restaurant Group and the Subcommittee's determination that it was in
the best interest of stockholders to provide equity incentives to the
Company's management team. Accordingly, in December 2001, the Subcommittee
approved stock option grants under the 1998 Plan to selected officers and
certain key employees. The option grants to Named Officers under the 1998
Plan are included in the Summary Compensation Table below. Such awards were
made after a review of the exercise prices, numbers and dates of their
previous option awards and the option awards made to other executive
officers of the Company, as well as the total cash compensation paid to such
executive officers.
CEO and COO Compensation Arrangements. The Company is a party to employment
agreements effective as of May 1, 1999 with Nelson Peltz, the Company's Chairman
and Chief Executive Officer, and Peter W. May, the Company's President and Chief
Operating Officer. The agreements are described in 'Certain Employment
Arrangements with Executive Officers.' Pursuant to such agreements, in addition
to receiving their base salaries, Messrs. Peltz and May are entitled to
participate in the 1999 Plan. Pursuant to the 1999 Plan, Mr. Peltz and Mr. May
were awarded approximately $7.2 million and $3.35 million, respectively, in
respect of fiscal 2001 based on the earnings and capitalization related criteria
primarily resulting from the sale by the Company of the Snapple Beverage Group
and the attainment of the performance goals described above. The formula bonus
awards under the 1999 Plan were based solely on the Company's financial
performance using certain predetermined factors outlined in the 1999 Plan. As
noted above under 'Annual Bonus Awards for 2001', the Subcommittee exercised
'negative discretion' and significantly reduced the performance goal awards that
would otherwise have been payable to the participating Named Officers, including
Messrs. Peltz and May. In addition, for the same reasons stated above under
'Annual Bonus Awards for 2001', no special discretionary bonuses were awarded in
respect to fiscal 2001 to Messrs. Peltz and May. No deferred bonuses were
awarded to Messrs Peltz and May with respect to fiscal 2001.
Messrs. Peltz and May also received grants of options under the 1998 Plan
(which are set forth in the Summary Compensation Table). The factors considered
in determining the size of the stock option grants to Messrs. Peltz and May were
the stock option guidelines established for all participants in the
15
1998 Plan (see 'Grant of Equity-Based Incentives for Fiscal 2001' above),
including Messrs. Peltz's and May's respective performance and contributions to
the Company.
Other Executive Compensation. In addition, the Company provides executive
officers with benefits and perquisites such as a 401(k) plan, health and life
insurance benefits and, in certain cases, tax and financial planning advice,
automobile allowances and other transportation related benefits. Overall, the
Compensation Committee believes the provided levels of benefits and perquisites
are necessary and competitive and, in combination with the previously mentioned
compensation elements, facilitate the Company's ability to secure the needed
executive talents.
Section 162(m) Considerations. The Company's general policy is to award
incentive compensation to Named Officers which is exempt from the deduction
limits of Section 162(m) of the Code. Nevertheless, each of the Compensation
Committee and Subcommittee believes it is important to maintain the flexibility
to authorize compensation that is not exempt from Section 162(m). Further,
because of ambiguities and uncertainties as to the application and
interpretation of Section 162(m), no assurance can be given, notwithstanding the
Company's efforts, that compensation intended by the Company to be exempt from
the deduction limits of Section 162(m) will in fact be so.
The Compensation Committee: The Performance Compensation Subcommittee:
David E. Schwab II, Chairman David E. Schwab II, Chairman
Clive Chajet Clive Chajet
Joseph A. Levato Jeffrey S. Silverman
Jeffrey S. Silverman
INTRODUCTION TO SUMMARY COMPENSATION TABLE
The Summary Compensation Table sets forth salary of, cash bonus awards,
deferred compensation awards as well as non-cash awards granted under the 1993
Equity Participation Plan (the '1993 Plan'), the 1998 Equity Participation Plan
(the '1998 Plan'), the 1999 Executive Bonus Plan and the Snapple Beverage Group,
Inc. 1997 Stock Option Plan (the 'SBG Option Plan') with respect to the fiscal
year ended January 2, 2000, the fiscal year ended December 31, 2000 and the
fiscal year ended December 30, 2001 to Triarc's Chairman and Chief Executive
Officer, President and Chief Operating Officer and the other executive officers
of Triarc who constituted Triarc's most highly compensated executive officers
during fiscal 2001 (the 'Named Officers').
Messrs. Peltz and May serve as directors and officers of Triarc and several
of its subsidiaries, and Messrs. Schorr and McCarron serve as officers of Triarc
and officers and directors of many of its subsidiaries. Mr. Kogan resigned,
effective April 19, 2002, as the Company's Executive Vice President -- Corporate
Development. All compensation set forth in the Summary Compensation Table for
Messrs. Peltz, May, Kogan, Schorr and McCarron was paid by Triarc (other than
the options granted in 1998 under the SBG Option Plan that were equitably
adjusted in 1999) and represents amounts paid for services rendered to Triarc
and its subsidiaries. All non-cash awards granted to any Named Officer were made
by Triarc except for the options granted in 1998 under the SBG Option Plan (and
equitably adjusted in 1999) and payments made with respect to those options.
Additional information with respect to the compensation arrangements for the
Chairman and Chief Executive Officer and the other Named Officers is set forth
below under 'Certain Employment Arrangements with Executive Officers.' No
restricted stock awards were made to any of the Named Officers during fiscal
1999, fiscal 2000, or fiscal 2001.
16
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
---------------------------------------------------
OTHER ANNUAL
NAME AND PRINCIPAL POSITION PERIOD SALARY($) BONUS($) COMPENSATION($)
--------------------------- ------ --------- -------- ---------------
Nelson Peltz ................. 2001 1,400,000 7,209,000 453,776(6)
Chairman and Chief Executive 2000 1,400,000 4,016,000(2) 350,000(6)
Officer of Triarc 1999 933,333 5,554,350(4) 300,034(6)
Peter W. May ................. 2001 1,200,000 3,354,000 202,344(7)
President and Chief Operating 2000 977,794 1,508,000(2) 106,000(7)
Officer of Triarc 1999 800,000 2,664,650(4) 148,285(7)
Eric D. Kogan ................ 2001 475,000 525,000 --
Former Executive Vice 2000 448,526 1,025,000(4) -- (8)
President -- Corporate 1999 300,000 800,000(5) -- (8)
Development of Triarc
Brian L. Schorr .............. 2001 475,000 525,000 --
Executive Vice President and 2000 450,417 1,025,000(4) -- (8)
General Counsel of Triarc 1999 312,500 800,000(5) -- (8)
Francis T. McCarron .......... 2001 294,856 575,000 -- (8)
Senior Vice President and 2000 190,462 655,000(5) -- (8)
Chief Financial Officer of 1999 165,000 300,000(5) -- (8)
Triarc
LONG TERM COMPENSATION
-------------------------------------------------
AWARDS PAYOUTS
------------------ ----------
SECURITIES
UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL POSITION OPTIONS/SARS(#)(1) PAYOUTS($) COMPENSATION($)
--------------------------- ------------------ ---------- ---------------
Nelson Peltz ................. 250,000 -- 10,200(10)
Chairman and Chief Executive 300,000 -- 15,010,200(3)
Officer of Triarc 226,000(9) -- 8,800(10)
Peter W. May ................. 125,000 -- 10,200(10)
President and Chief Operating 150,000 -- 7,510,200(3)
Officer of Triarc 113,000(9) -- 8,800(10)
Eric D. Kogan ................ 25,000 -- 10,200(10)
Former Executive Vice 30,000 -- 10,200(10)
President -- Corporate 56,600(9) -- 8,800(10)
Development of Triarc
Brian L. Schorr .............. 25,000 -- 13,574(11)
Executive Vice President and 30,000 -- 13,574(11)
General Counsel of Triarc 56,600(9) -- 12,787(11)
Francis T. McCarron .......... 40,000 -- 10,200(10)
Senior Vice President and 20,000 -- 10,200(10)
Chief Financial Officer of 26,750(9) -- 8,800(10)
Triarc
---------
(1) Except as otherwise noted, all stock option grants were made pursuant to
the 1998 Plan.
(2) Does not include special deferred compensation awarded to Messrs. Peltz and
May included under 'All Other Compensation.'
(3) Includes special deferred compensation of $15.0 million for Mr. Peltz and
$7.5 million for Mr. May that was awarded in connection with the completion
of certain transactions, payment of which was deferred until January 2004
pursuant to the Deferral Plan for Senior Executive Officers of Triarc
Companies, Inc. described below. These amounts may be paid prior to January
2004 under certain circumstances. See 'Deferral Plan for Senior Executive
Officers of Triarc Companies, Inc.' below. Also includes $10,200 for each
of Mr. Peltz and Mr. May representing amounts contributed to a 401(k) plan
by Triarc on their behalf.
(4) Includes special bonuses paid in connection with the completion of certain
transactions and payments made pursuant to the 1999 Executive Bonus Plan.
(5) Includes special bonuses paid in connection with the completion of certain
transactions.
(6) Includes imputed income of $326,073, $268,767 and $227,801 arising out of
the use of corporate aircraft in fiscal 2001, fiscal 2000 and fiscal 1999,
respectively.
(7) Includes imputed income of $52,947, $33,225 and $94,791 arising out of the
use of corporate aircraft in fiscal 2001, fiscal 2000 and fiscal 1999,
respectively, fees of $40,000 and $40,000 paid by Triarc on behalf of
Mr. May for tax and financial planning services in each of fiscal 2000 and
fiscal 1999 and $90,402 and $32,806 for other transportation related
benefits for Mr. May in fiscal 2001 and fiscal 2000, respectively.
(8) Perquisites and other personal benefits did not exceed the lesser of either
$50,000 or 10% of the total annual salary and bonus reported under the
headings of 'Salary' and 'Bonus.'
(footnotes continued on next page)
17
(footnotes continued from previous page)
(9) Includes 26,000, 13,000, 6,600, 6,600 and 1,750 options granted in 1998
under the SBG Option Plan to Messrs. Peltz, May, Kogan, Schorr and
McCarron, respectively, the exercise prices of which were equitably
adjusted in 1999. (See 'Snapple Beverage Group, Inc. 1997 Stock Option
Plan' below.)
(10) Represents amounts contributed to a 401(k) plan by Triarc on behalf of the
Named Officer.
(11) Includes $10,200, $10,200, $8,800 contributed to a 401(k) plan by Triarc on
behalf of Mr. Schorr in fiscal 2001, fiscal 2000 and fiscal 1999,
respectively, and $3,374, $3,374 and $3,987 of other compensation paid by
Triarc in an amount equal to premiums for life insurance in fiscal 2001,
fiscal 2000 and fiscal 1999, respectively.
CERTAIN EMPLOYMENT ARRANGEMENTS WITH EXECUTIVE OFFICERS
Nelson Peltz and Peter W. May. Employment agreements were entered into by
the Company and Messrs. Peltz and May, effective as of May 1, 1999. The
agreements, which currently extend through April 30, 2007, provide for a five
year term, unless otherwise terminated as provided therein, with automatic
annual one year extensions unless either the Company or the executive gives
written notice not later than 180 days preceding the date of any such extension
that such party does not wish to extend the term. The agreements provide for
annual base salaries of $1,400,000 per year for Mr. Peltz and $1,200,000 per
year for Mr. May, subject to increase but not decrease from time to time. In
addition, the executives will receive an annual bonus for each fiscal year at
least equal to the Formula Bonus Award actually earned under the stockholder
approved 1999 Executive Bonus Plan; provided that the Board of Directors
(including the Performance Committee of the Board of Directors) may award
Performance Goal Bonus Awards under the stockholder approved 1999 Executive
Bonus Plan and additional bonuses in its discretion. In the event employment is
terminated by the Company without 'cause,' or by the executive for 'good reason'
(as each such term is defined in the agreements), or at the executive's option
following a 'change of control,' the agreements provide that each executive will
be entitled to receive within ten days of termination, among other things, an
amount equal to the sum of: (i) the executive's then current base salary through
the date of termination, any bonus amounts payable, and accrued vacation pay;
(ii) the executive's then current base salary through the remainder of the
employment term; (iii) five times the highest bonus as calculated under the
agreements; and (iv) five times the sum of Company contributions paid or accrued
on the executive's behalf to any defined contribution retirement plans during
the year preceding termination. In addition, the executives will be entitled to
receive a pro rata bonus for the year in which the termination occurs. 'Change
of control' would generally include the following events: (i) a majority of the
Company's directors being replaced; (ii) any 'person,' as defined in the
Exchange Act, acquires 50% or more of the combined voting power of the Company's
voting securities; (iii) a sale of all or substantially all of the assets of the
Company; (iv) a merger or similar transaction that requires stockholder
approval, unless the Company's stockholders continue to own 50% or more of the
combined voting power of the resulting entity's voting securities; (v) the
Company's stockholders approve a plan of complete liquidation or dissolution of
the Company; or (vi) such other events as may be designated by the Board of
Directors. Under the agreements, in the event that any benefit paid to Messrs.
Peltz and May becomes subject to excise tax imposed under Section 4999 of the
Internal Revenue Code, the Company will indemnify Messrs. Peltz and May so that
after payment of such excise taxes, Messrs. Peltz and May will be in the same
after-tax position as if no excise tax had been imposed. The agreements also
provide that in the event that employment is terminated without 'cause' by the
Company, by Messrs. Peltz or May for 'good reason,'
18
or under other specified circumstances (including a change of control), all
non-vested stock options and other non-vested stock or stock-based awards then
owned by the executives will, subject to certain limitations, vest immediately
and (i) subject to certain limitations, all of such awards granted on or after
February 24, 2000 and (ii) all of the Company stock options granted before
February 24, 2000 with an exercise price greater than $17.6875 per share (the
closing price of the Company's common stock on such date), will remain
exercisable until the earlier of one year following termination or the award's
stated expiration date.
Brian L. Schorr. Mr. Schorr, the Company's Executive Vice President and
General Counsel, is a party to an employment agreement with the Company entered
into effective as of February 24, 2000. The agreement, which currently extends
through February 24, 2005, provides for a three year term, unless otherwise
terminated as provided therein, with automatic annual one year extensions unless
either the Company or Mr. Schorr gives written notice not later than 180 days
preceding the date of any such extension that such party does not wish to extend
the term. The agreement provides for an annual base salary of $475,000 per year,
subject to increase but not decrease from time to time. In addition, Mr. Schorr
is eligible to receive bonuses during each of the Company's fiscal years from
time to time as appropriate, in the sole discretion of the Company, and to
participate in the 1999 Executive Bonus Plan. In the event employment is
terminated by the Company without 'cause,' or by Mr. Schorr for certain
specified reasons (including following a 'change of control' or for 'good
reason'), the agreement provides that Mr. Schorr will be entitled to receive
within ten days of termination, among other things, an amount equal to the sum
of: (i) Mr. Schorr's then current base salary through the date of termination,
any bonus amounts payable, accrued vacation pay, and two and one-half times the
sum of Company contributions paid or accrued on Mr. Schorr's behalf to any
defined contribution retirement plans during the year preceding termination;
(ii) Mr. Schorr's then current salary through the remainder of the employment
term (but in no event for more than two and one-half years); and (iii) two and
one-half times the highest bonus, as calculated under the agreements. In
addition, Mr. Schorr will be entitled to receive a pro rata bonus for the year
in which the termination occurs. Under the agreement, in the event that any
benefit paid to Mr. Schorr becomes subject to excise tax imposed under Section
4999 of the Internal Revenue Code, the Company will indemnify Mr. Schorr so that
after payment of such excise taxes, Mr. Schorr will be in the same after-tax
position as if no excise tax had been imposed. The agreement also provides that
in the event that employment is terminated without 'cause' by the Company, or by
Mr. Schorr for certain specified reasons (including following a 'change of
control' or for 'good reason'), all non-vested stock options and other
non-vested stock or stock-based awards of the Company or any subsidiary then
owned by Mr. Schorr will, subject to certain limitations, vest immediately and
(i) all of such awards granted on or after February 24, 2000 and (ii) all of the
Company stock options granted before February 24, 2000 with an exercise price
greater than $17.6875 per share (the closing price of the Company's common stock
on such date), will remain exercisable until the earlier of one year following
termination or the award's stated expiration date.
Until his resignation, Mr. Kogan, the Company's former Executive Vice
President -- Corporate Development, was a party to an employment agreement with
the Company that was substantially identical to Mr. Schorr's employment
agreement.
1999 EXECUTIVE BONUS PLAN
The Company's 1999 Executive Bonus Plan is designed to provide incentive
compensation for designated executive officers and key employees of the Company
and its subsidiaries that is directly related to the financial performance of
the Company. The plan was approved by the Company's
19
stockholders on September 23, 1999. The 1999 Executive Bonus Plan, which became
effective as of May 3, 1999, provides for two types of bonuses to be awarded to
designated participants: 'Formula Bonus Awards' and 'Performance Goal Bonus
Awards'. Formula Bonus Awards are based solely on the Company's financial
performance using certain predetermined earnings and capitalization related
criteria outlined in the plan. Performance Goal Bonus Awards are based on the
Company (or operating units of the Company) achieving certain specific levels of
performance with reference to one or more objective criteria outlined in the
1999 Executive Bonus Plan. Performance bonus award targets are established
annually by the Performance Committee, based on specific categories of criteria
set forth in the 1999 Executive Bonus Plan. Such criteria include the successful
completion of acquisitions, dispositions, recapitalizations, financings and
refinancings, return on the Company's investment portfolio and other market and
operating performance measures, including, among other things, earnings per
share, market share, margins, productivity improvement and stock price. The
Performance Committee establishes the performance goals as to each participant
for each plan year and, if more than one performance goal is established, the
weighting of the performance goals. Messrs. Peltz and May are eligible to
receive Formula Bonus Awards and each of Messrs. Peltz, May, Schorr and McCarron
has, and certain other senior Company executives have, been designated by the
Performance Committee as being eligible to receive a Performance Goal Bonus
Award under the 1999 Executive Bonus Plan for plan year 2002. Performance Goal
Bonus Awards may not exceed $5,000,000 to any single participant for any plan
year. The Performance Committee may, in its sole and absolute discretion, adjust
or modify the calculation of the performance goals in certain circumstances. In
addition, the 1999 Executive Bonus Plan provides that the Performance Committee
may reduce or eliminate a Performance Goal Bonus Award even if certain
performance goals have been achieved if the Performance Committee, in its sole
discretion, determines to do so. The Performance Committee may also amend,
suspend, or terminate the 1999 Executive Bonus Plan or any portion thereof at
any time; provided that no such amendment or alteration shall be made that would
impair the rights of any participant without the participant's consent. Payments
of awards under the 1999 Executive Bonus Plan are intended to be exempt from the
tax deduction limitation of Section 162(m) of the Internal Revenue Code, which
generally limits deductions for compensation paid to senior executive officers
to $1,000,000 per year.
DISCRETIONARY BONUSES
From time to time, the Compensation Committee of the Board may award
discretionary or special bonuses or deferred compensation based on performance
to certain executive officers. The amounts of such bonuses or deferred
compensation will be based on the Compensation Committee's evaluation of each
such individual's contribution.
DEFERRAL PLAN FOR SENIOR EXECUTIVE OFFICERS OF TRIARC COMPANIES, INC.
The Deferral Plan for Senior Executive Officers of Triarc Companies, Inc.
(the 'Deferral Plan') was approved by the Compensation Committee of the Board of
Directors effective December 14, 2000. Pursuant to the Deferral Plan, the
Company establishes one or more bookkeeping accounts to reflect bonuses awarded
to participants the payment of which has been deferred. These accounts are
adjusted from time to time for earnings and investment gains and losses.
Deferred bonus accounts for each participant are deemed invested in certain
approved investments selected by the participant or an investment manager chosen
by the Company and reasonably acceptable to the participant. The Company may
replicate any deferred bonus account in a trust, in which event the value of the
deferred
20
bonus account on the books of the Company will be equal to the value of the
actual approved investments related to such account in the trust. A participant
may receive the value of a deferred bonus account, in cash or approved
investments, or any combination thereof, from the Company upon the earliest of:
(i) the first business day in January of the fourth calendar year following the
calendar year in which the related bonus was awarded to the participant;
(ii) no later than five business days following the participant's 'separation
from service' (as defined in the Deferral Plan) and (iii) such time as the
payment would be deductible by the Company for Federal income tax purposes
without regard to the limitation of Section 162(m) of the Internal Revenue Code.
On or before the June 30 preceding the payment date specified in clause
(i) above, a participant may elect to defer such date for up to three additional
whole years. A participant may make such an election more than one time.
Although a participant is at all times fully vested in his or her deferred bonus
accounts, participants have the status of general unsecured creditors of the
Company with respect the Company's obligation to make payment to them under the
Deferral Plan and any assets contained in a trust formed under the Deferral Plan
are subject to claims by creditors of the Company. As of April 8, 2002, deferred
bonus accounts have been established for Messrs. Peltz and May.
EQUITY PARTICIPATION PLAN INFORMATION
The following table gives information about our three existing equity
participation plans as of December 30, 2001. The table does not include the
shares that would be reserved for issuance under the 2002 Equity Participation
Plan if stockholders approve the proposal to adopt that plan, which is described
under 'Proposal 2.' below.
(A) (B) (C)
NUMBER OF
NUMBER OF SECURITIES
SECURITIES TO REMAINING
BE ISSUED AVAILABLE FOR
UPON WEIGHTED-AVERAGE FUTURE ISSUANCE
EXERCISE OF EXERCISE PRICE OF UNDER EQUITY
OUTSTANDING OUTSTANDING COMPENSATION
OPTIONS, OPTIONS, PLANS (EXCLUDING
WARRANTS AND WARRANTS AND SECURITIES REFLECTED
PLAN CATEGORY RIGHTS RIGHTS IN COLUMN (a))
------------- ------ ------ --------------
Equity compensation plans approved by security holders(1)... 8,197,167 $19.7011 1,405,874(2)
Equity compensation plans not approved by security
holders(3)................................................. 392,417 $22.0297 583
--------- ---------
Total.................................................... 8,589,584 1,406,457
--------- ---------
--------- ---------
---------
(1) 1993 and 1998 Equity Participation Plans
(2) Includes securities issuable to directors as fees in lieu of cash
(3) 1997 Equity Participation Plan
1993 EQUITY PARTICIPATION PLAN
The 1993 Plan provided for the grant of options to purchase Class A Common
Stock, stock appreciation rights ('SARs'), restricted shares of Class A Common
Stock and, to non-employee directors of Triarc, at their option, shares of Class
A Common Stock in lieu of annual retainer fees and/or Board of Directors or
committee meeting attendance fees ('Fees') that would otherwise be payable in
cash. Directors, selected officers and key employees of, and key consultants to,
Triarc and its subsidiaries were eligible to participate in the 1993 Plan. A
maximum of 10,000,000 shares of Class A
21
Common Stock (subject to certain adjustments) were authorized to be delivered by
the Company pursuant to options, SARs and restricted shares granted under the
1993 Plan. The term during which awards could be granted under the 1993 Plan
expired on April 24, 1998. As of April 8, 2002, options to acquire a total of
5,474,169 shares of Class A Common Stock were outstanding under the 1993 Plan.
The plan is administered by the Performance Committee.
1998 EQUITY PARTICIPATION PLAN
The 1998 Plan was approved by the Board of Directors on March 10, 1998 and
was approved by the Company's stockholders on May 6, 1998. The 1998 Plan
replaced the 1993 Plan pursuant to which awards could no longer be granted after
April 24, 1998. The 1998 Plan provides for the granting of stock options, SARs
and restricted stock to officers and key employees of, and consultants to,
Triarc and its subsidiaries and affiliates. The 1998 Plan provides for automatic
awards of options to non-employee directors of Triarc and permits non-employee
directors to elect to receive all or a portion of their Fees in shares of Class
A Common Stock. Subject to certain antidilution adjustments, a maximum of
5,000,000 aggregate shares of Class A Common Stock may be granted on the
exercise of options or SARs or upon a director's election to receive Fees in
Triarc shares pursuant to the 1998 Plan. In addition, the maximum number of
shares of Class A Common Stock that may be granted to any individual in a
calendar year is 1,000,000 shares. As of April 8, 2002, options to acquire
2,655,665 shares of Class A Common Stock were outstanding under the 1998 Plan.
The 1998 Plan is administered by the Performance Committee. The term during
which awards may be granted under the 1998 Plan will expire on April 30, 2003.
1997 EQUITY PARTICIPATION PLAN
The 1997 Equity Participation Plan (the '1997 Plan') was approved by the
Executive Committee of the Board of Directors on December 11, 1997 and provides
for the granting of stock options to purchase shares of Class A Common Stock.
Participants in the 1997 Plan are limited to selected key employees and
consultants of Triarc, its subsidiaries and affiliates who are important to the
success and growth of the Company, its subsidiaries and affiliates, but who are
not 'directors,' 'executive officers' or 'officers' of Triarc. A total of
500,000 shares of Class A Common Stock are reserved for issuance under the 1997
Plan. As of April 8, 2002, options to acquire 350,419 shares of Class A Common
Stock were outstanding under the 1997 Plan. The 1997 Plan is administered by the
Compensation Committee. The term during which options may be granted under the
1997 Plan expires on December 11, 2002.
SNAPPLE BEVERAGE GROUP, INC. 1997 STOCK OPTION PLAN
The SBG Option Plan was adopted in August 1997 and amended in May 1999, and
provided for the grant of options to acquire common stock of Snapple Beverage
Group, Inc. ('SBG') which, prior to its sale in October 2000, was a 99.9% owned
subsidiary of the Company. Key employees, officers, directors and consultants of
SBG and its subsidiaries and affiliates, and of Triarc and its other
subsidiaries and affiliates, were eligible to participate in the SBG Option
Plan. All of the 149,284 outstanding options remained the responsibility of SBG
following the completion of the sale of the Snapple Beverage Group to Cadbury
Schweppes plc. The Company has been advised that all of such options were either
exercised subsequent to the sale of the Snapple Beverage Group or, in the case
of certain employees of SBG, exchanged for the right to receive shares of
Cadbury Schweppes plc. Prior to
22
the sale of the Snapple Beverage Group, the SBG Option Plan was administered by
the Performance Committee.
OPTIONS GRANTED IN FISCAL 2001
The following table sets forth certain information with respect to options
to purchase shares of Class A Common Stock granted to the Named Officers in the
fiscal year ended December 30, 2001. No SARs were granted to any of the Named
Officers.
OPTION GRANTS IN LAST FISCAL YEAR
GRANT DATE
INDIVIDUAL GRANTS VALUE
----------------------------------------------- ----------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS EXERCISE
UNDERLYING GRANTED TO OR BASE GRANT DATE
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME GRANTED(#)(1) FISCAL YEAR(2) ($ PER SHARE DATE VALUE(3)
---- ------------- -------------- ------------- ---- --------
Nelson Peltz........................ 250,000 27.40% $24.60 12/6/11 $2,015,000
Peter W. May........................ 125,000 13.70% $24.60 12/6/11 $1,007,500
Eric D. Kogan....................... 25,000 2.80% $24.60 12/6/11 $ 201,500
Brian L. Schorr..................... 25,000 2.80% $24.60 12/6/11 $ 201,500
Francis T. McCarron................. 40,000 4.40% $24.60 12/6/11 $ 322,400
---------
(1) All options granted to Named Officers during fiscal 2001 were granted under
the 1998 Plan. One third of the options granted under the 1998 Plan will
vest on each of the first, second and third anniversaries of the date of
grant and the options will be exercisable at any time between the date of
vesting and the tenth anniversary of the date of grant. The option
agreements evidencing options to purchase shares of Class A Common Stock
awarded to directors of Triarc, the Chairman and Chief Executive Officer,
the President and Chief Operating Officer, and all officers of Triarc at the
level of Senior Vice President or above provide that the options may be
transferred by the optionee pursuant to a domestic relations order or to
certain permitted transferees.
(2) The percentages are based on the aggregate number of options granted in
fiscal 2001 to purchase Class A Common Stock.
(3) These values were calculated using a Black-Scholes option pricing model. The
actual value, if any, that an executive may realize will depend on the
excess, if any, of the stock price over the exercise price on the date the
options are exercised, and no assurance exists that the value realized by an
executive will be at or near the value estimated by the Black-Scholes model.
The following assumptions were used to calculate the present value of the
option grants with respect to Class A Common Stock:
(a) assumed option term of seven years;
(b) stock price volatility factor of .1701;
(c) annual discount rate of 4.70%; and
(d) no dividend payment.
The Black-Scholes option pricing model has limitations on its effectiveness
including that it was developed for use in estimating the fair value of
traded options which have no vesting restrictions and are fully transferable
and that the model requires the use of highly subjective assumptions
(footnotes continued on next page)
23
(footnotes continued from previous page)
including expected stock price volatility. Because the Company's stock-based
awards to employees have characteristics significantly different from those
of traded options and because changes in the subjective input assumptions can
materially affect the fair value estimate, in the opinion of the Company, the
existing models do not necessarily provide a reliable single measure of the
fair value of its stock-based awards to employees.
These estimated option values, including the underlying assumptions used in
calculating them, constitute 'forward-looking statements' within the meaning
of the Private Securities Litigation Reform Act of 1995 (the 'Reform Act')
and involve risks, uncertainties and other factors which may cause the actual
value of the options to be materially different from those expressed or
implied herein. For those statements, Triarc claims the protection of the
safe-harbor for forward-looking statements contained in the Reform Act.
OPTION VALUES AT END OF FISCAL 2001
The following table sets forth certain information concerning each exercise
of options by the Named Officers during fiscal 2001, as well as the value as of
December 30, 2001 of unexercised in-the-money options to purchase shares of
Class A Common Stock granted to the Named Officers and outstanding as of the end
of fiscal 2001.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
AT FISCAL AT FISCAL
SHARES YEAR-END YEAR-END
ACQUIRED 2001(#) 2001($)(1)
ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED($) UNEXERCISABLE UNEXERCISABLE
---- -------- ----------- ------------- -------------
Nelson Peltz(2)................................ -0- -0- 1,623,334/2,151,666 13,170,713/8,066,037
Peter W. May(2)................................ -0- -0- 1,051,666/1,348,334 8,726,662/5,293,338
Eric D. Kogan.................................. -0- -0- 93,334/78,332 319,797/251,657
Brian L. Schorr................................ -0- -0- 93,334/78,332 319,797/251,657
Francis T. McCarron............................ -0- -0- 69,999/70,001 302,594/129,968
---------
(1) On December 30, 2001 (the last trading day during fiscal 2001), the closing
price of Class A Common Stock on the New York Stock Exchange was $24.75 per
share.
(2) The information contained in this chart does not include 465,000
unexercisable options that were surrendered by Mr. Peltz, and 310,000
unexercisable options that were surrendered by Mr. May, in March 2001. (See
'Certain Relationships and Related Transactions,' below.)
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Levato was appointed to the Compensation Committee of the Board of
Directors in July 1997. Mr. Levato has been a director of the Company since July
1996 and retired as Executive Vice President and Chief Financial Officer of the
Company in August 1996. Mr. Levato is not a member of the Performance Committee.
24
AUDIT COMMITTEE REPORT*
In accordance with its written charter, the Audit Committee assists the
Board in oversight of the accounting, auditing, and financial reporting
practices of the Company. The Audit Committee consists of four independent
members (as independence is defined by the rules of the New York Stock
Exchange). The Company's management is responsible for the financial reporting
process and for preparing the Company's financial statements and the Company's
outside auditors are responsible for performing an independent audit of such
financial statements in accordance with generally accepted auditing standards
and for issuing a report thereon. The members of the Audit Committee are not
professionally engaged in the practice of accounting or auditing and are not
experts in the fields of accounting or auditing. The Audit Committee relies,
without independent verification, on the information provided to it and on the
representations made by management and the independent auditors that the
financial statements have been prepared in conformity with generally accepted
accounting principles.
In performing its oversight function, the Audit Committee reviewed and
discussed the audited consolidated financial statements of the Company as of and
for the fiscal year ended December 30, 2001 with management and Deloitte &
Touche LLP, the Company's independent auditors. The Audit Committee also
discussed with Deloitte & Touche all matters required to be discussed by
Statement on Auditing Standards No. 61, 'Communication with Audit Committees,'
as amended, and, with and without management present, discussed and reviewed the
results of Deloitte & Touche's examination of the Company's financial
statements.
The Audit Committee received from Deloitte & Touche a written statement
regarding all relationships between Deloitte & Touche and the Company that might
bear on Deloitte & Touche's independence consistent with Independence Standards
Board Standard No. 1, 'Independence Discussions with Audit Committees,' as
amended. The Audit Committee discussed with Deloitte & Touche any relationships
that may have an impact on their objectivity and independence. The Audit
Committee also considered whether the provision of services by Deloitte & Touche
to the Company not related to the audit of the financial statements referred to
above and to the reviews of the interim financial statements included in the
Company's Forms 10-Q is compatible with maintaining Deloitte & Touche's
independence.
Based on the above-mentioned review and discussions with management and
Deloitte & Touche, and subject to the limitations on the role of the Audit
Committee and the Audit Committee's responsibility described above and in the
Audit Committee's written charter, the Audit Committee recommended to the Board
of Directors that the Company's audited consolidated financial statements be
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 30, 2001.
The Audit Committee:
Raymond S. Troubh (Chairman)
Joseph A. Levato
David E. Schwab II
Jeffrey S. Silverman
---------
* This Audit Committee Report does not constitute soliciting material and should
not be deemed filed or incorporated by reference into any Company filing under
the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, except to the extent the Company specifically incorporates
this Audit Committee Report by reference into such other filing.
25
STOCK PRICE PERFORMANCE GRAPH(*)
TRIARC COMPANIES, INC.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN:
TRIARC VS. S&P 500 INDEX AND S&P SMALL CAP 600 INDEX
The following graph compares the cumulative five year total return of
Triarc's Class A Common Stock with the S&P 500 Index and the S&P Small Cap 600
Index (the 'Peer Group'). The Peer Group has been selected because the Company
does not believe it can reasonably identify a peer group comprised of
publicly-traded companies focused, during the applicable period, on
non-alcoholic beverages and restaurants that are comparable to the Company in
terms of revenues or product mix. Accordingly, the Company has chosen the Peer
Group on the basis of comparing the Company's performance to that of the
companies with similar market capitalizations comprising the S&P Small Cap 600
Index. The stockholders' returns set forth below assume an initial investment of
$100 and that all dividends have been reinvested.
[PERFORMANCE GRAPH]
DEC 96 DEC 97 JAN 99 JAN 00 DEC 00 DEC 01
Triarc COS Inc.-CL A 100.00 236.96 138.04 159.78 210.87 211.30
S&P 500 Index 100.00 133.36 171.48 207.56 188.66 166.24
S&P Small Cap 600 Index 100.00 125.58 123.95 139.32 155.76 165.94
---------
(*) The stock price performance graph does not constitute soliciting material
and should not be deemed filed or incorporated by reference into any Company
filing under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, except to the extent the Company specifically
incorporates the stock price performance graph by reference into such other
filing.
26
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company currently owns approximately 8.4% of the outstanding common
stock of Encore Capital Group, Inc. (formerly known as MCM Capital Group, Inc.)
('Encore'). Encore is a financial services company specializing in the
collection, restructuring, resale and securitization of receivable portfolios
acquired at deep discounts. On January 12, 2000 the Company entered into a
guaranty (the 'Note Guaranty') of $10,000,000 principal amount of senior notes
maturing 2007 (the 'Encore Notes') issued by Encore to a major financial
institution in consideration of a fee of $200,000 and warrants to purchase
100,000 shares of Encore common stock at $.01 per share with an estimated fair
value on the date of grant of $305,000. At April 25, 2002, the $10,000,000
guaranteed amount has been reduced to $6,698,000 and will be further reduced by
(i) any repayments of the Encore Notes, (ii) any purchases of the Encore Notes
by the Company and (iii) the amount of certain investment banking or financial
advisory services fees paid to the financial institution or its affiliates or,
under certain circumstances, other financial institutions by the Company, Encore
or another significant stockholder of Encore or any of their affiliates. Certain
officers and former officers of the Company, including entities controlled by
them and immediate family members, collectively own 19.3% of the outstanding
common stock of Encore as of April 1, 2002. These officers are not parties to
the Note Guaranty. In addition to the Note Guaranty, the Company and certain
other stockholders of Encore, including certain of the officers of the Company
referred to above, on a joint and several basis, have entered into guaranties
(the 'Bank Guaranties') and certain related agreements to guarantee up to
$15,000,000 of revolving credit borrowings of a subsidiary of Encore. The
Company would be responsible for approximately $1,800,000, assuming the full
$15,000,000 was borrowed and all of the parties other than the Company to the
Bank Guaranties and the related agreements fully perform thereunder. The Company
has approximately $15,000,000 in an account at the financial institution which,
under the Bank Guaranties, is subject to set off under certain circumstances if
the parties to the Bank Guaranties and related obligations fail to perform their
obligations thereunder.
On October 31, 2000 the Company, certain of the Company's officers who
invested in Encore and certain other stockholders of Encore, through a then
newly formed limited liability company, CTW Funding, LLC ('CTW'), entered into
an agreement, as amended, to make available to Encore a $2,000,000 revolving
credit facility (the 'Encore Revolver') through December 31, 2001 for working
capital requirements. The Company owns an 8.7% interest in CTW and, had any
borrowings under the Encore Revolver occurred, all members of CTW would have
been required to fund such borrowings in accordance with their percentage
ownership interests. In return, CTW received warrants to purchase a total of
250,000 shares of Encore common stock at $.01 per share with an aggregate
estimated fair value on the dates of the grant of $108,000. The Encore Revolver
expired on December 31, 2001, without any borrowings being made thereunder. CTW
is in the process of being dissolved and each of its members is expected to
receive its proportionate share of the Encore common stock underlying the Encore
warrants held by CTW.
Encore had encountered cash flow and liquidity difficulties in the past.
Subsequent to December 30, 2001, Encore's liquidity was positively impacted by a
capital investment and a debt forgiveness. Certain existing stockholders of
Encore made an aggregate $5,000,000 investment in newly-issued convertible
preferred stock of Encore, of which the Company invested $873,000 and certain of
its present and former officers, including Messrs. Peltz, May, Kogan and Schorr,
and/or entities controlled by them, invested an aggregate of $1,627,000.
27
As part of its overall retention efforts, the Company provides certain of
its officers and employees with the opportunity to co-invest in some of the
investment opportunities available to the Company. In connection therewith, the
Company advanced a portion of the funds for the purchases by certain of its
officers and employees in four co-investments, EBT Holding Company, LLC, 280 KPE
Holdings, LLC ('280 KPE'), K12 Inc. and 280 BT Holdings LLC. In connection with
these four investments, the Company received notes due the Company in the
original face amount of $4,046,000, in the aggregate (of which $2,537,772 was
outstanding as of April 1, 2002), of which one-half of the principal amount of
these notes (or $1,288,886 as of April 1, 2002), is non-recourse. The notes bear
interest at the prime rate adjusted annually. During 2001, the largest
outstanding principal amount owed to the Company by Messrs. Peltz, May, Kogan,
Schorr and Posner pursuant to the notes was $1,327,071, $1,107,980, $238,728,
$94,314 and $90,877, respectively, in connection with these investments (of
which $1,069,867, $979,378, $85,245, $60,108 and $53,098, respectively, was
outstanding as of April 1, 2002). In March 2002, the loans related to the
investment in 280 KPE became due. In accordance with the terms of such notes,
each of the executives repaid, in full, the recourse portion of such executive's
note (plus interest thereon) and the non-recourse portion of such notes
(approximately $72,352 for Mr. Peltz, $36,176 for Mr. May, $32,679 for Mr.
Kogan, $10,853 for Mr. Schorr and $13,265 for Mr. Posner) were forgiven. In
connection therewith, each of the executives transferred to Triarc all of their
right, title and interest in and to 67.11% of such executive's membership
interest in 280 KPE.
Through April 5, 2002 the Company leased a helicopter from a subsidiary of
Triangle Aircraft Services Corporation ('TASCO'), a company owned by the
Chairman and Chief Executive Officer and President and Chief Operating Officer
of the Company. Annual rent for the helicopter was $382,000 from October 1, 2000
through September 30, 2001, and increased to $392,000 as of October 1, 2001 as a
result of an annual cost of living adjustment. Pursuant to the lease, the
Company paid the operating expenses, including repairs and maintenance, of the
helicopter directly to third parties. On April 5, 2002, the helicopter lease was
terminated and Triarc paid $150,000 to the subsidiary of TASCO in lieu of paying
rent for the remaining six months of the initial term of the lease and in
consideration for the release of the Company from all of its obligations under
the lease, including the obligation to make required repairs to the helicopter
upon the termination of the lease. The termination of the lease and the related
payment by Triarc were approved by the Audit Committee of the Board of
Directors.
Mr. May has an equity interest in a franchisee that owns an Arby's
restaurant in New Milford, Connecticut. That franchisee is a party to a standard
Arby's franchise license agreement and pays to Arby's fees and royalty payments
that unaffiliated third-party franchisees pay.
In connection with the court-approved settlement of the Malekan litigation,
described in 'Item 3. Legal Proceedings' in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2000, Messrs. Peltz and May
delivered a Promissory Note in the aggregate principal amount of $5,000,000,
dated as of April 1, 2000. As of April 1, 2002, the note bears interest at the
rate of 1.7475% per annum, subject to annual adjustments based on the prevailing
LIBOR interest rate, payable annually. The note initially bore interest at the
rate of 6.0% per annum and was adjusted to 4.92% per annum on April 2, 2001.
One-third of the principal of the note (with interest) was due on each of
March 31, 2001 and March 31, 2002 (and has been paid) and the remaining
principal balance is due March 31, 2003. The entire remaining amount of the note
is due 30 days after the occurrence of a change of control transaction. The note
may be prepaid by Messrs. Peltz and May at any time. In connection with this
court-approved settlement, Messrs. Peltz and May also surrendered an aggregate
of 775,000 performance stock options that had been awarded to them in 1994.
28
PROPOSAL 2.
APPROVAL OF 2002 EQUITY PARTICIPATION PLAN
GENERAL
The 2002 Equity Participation Plan (the '2002 Plan') was approved by the
Board of Directors on April 25, 2002 and if approved by the stockholders will
become effective on the date of such stockholder approval. The 2002 Plan
provides for the granting of stock options, SARs and restricted stock to
officers, key employees of, and consultants to, the Company and its subsidiaries
and affiliates. The 2002 Plan provides for automatic awards of options to
non-employee directors of the Company and permits non-employee directors to
elect to receive all or a portion of their annual retainer fees and/or Board of
Directors or committee meeting attendance fees, if any ('Fees'), in shares of
Class A Common Stock, as described below. The 2002 Plan is intended to augment
and replace the 1997 Equity Participation Plan, the term during which options
may be granted thereunder expires on December 11, 2002, and the 1998 Equity
Participation Plan (the '1998 Plan'), the term during which options may be
granted thereunder expires on April 30, 2003.
SUMMARY OF THE 2002 EQUITY PARTICIPATION PLAN
The following description of the 2002 Plan is merely a summary of certain
provisions thereof and is qualified in its entirety by the full text of the 2002
Plan attached hereto as Exhibit A. Such Exhibit A is a part of this Proxy
Statement and should be read in conjunction with the following summary.
Purpose. The purpose of the 2002 Plan is to promote the interests of the
Company and its stockholders by (i) securing for the Company and its
stockholders the benefits of the additional incentive inherent in the ownership
of the capital stock of the Company by directors and selected officers, key
employees of, and consultants to, the Company and its subsidiaries and
affiliates, including the individuals named in the Summary Compensation Table,
who are important to the success and growth of the business of the Company and
its subsidiaries and (ii) assisting the Company to secure and retain the
services of such persons. The 2002 Plan provides for granting such persons
(a) options for the purchase of shares of Class A Common Stock, (b) tandem SARs
and (c) restricted shares of Class A Common Stock that are both restricted as to
transferability and subject to a substantial risk of forfeiture ('Restricted
Shares'). The 2002 Plan also provides for automatic grants of options to
non-employee directors and for non-employee directors to elect to have their
Fees paid in shares. Approximately 200 officers and key employees and seven
non-employee directors currently would be eligible to participate under the 2002
Plan.
Administration. The 2002 Plan will be administered by a committee (the
'Committee') consisting of two or more directors appointed from time to time by
the Board of Directors of the Company. It is intended that the directors
appointed to serve on the Committee will be 'non-employee directors' within the
meaning of Rule 16b-3 promulgated under the Exchange Act and 'outside directors'
within the meaning of Section 162(m) of the Code, to the extent Rule 16b-3 and
Section 162(m), respectively, are applicable to the Company and the 2002 Plan;
however, the fact that a Committee member shall fail to qualify under either of
the foregoing requirements will not invalidate any award which is otherwise
validly made under the 2002 Plan. The current members of the Committee (who
constitute the Performance Compensation Subcommittee) are Messrs. Schwab
(Chairman), Chajet and Silverman. The members of the Committee may be changed at
any time and from time to time in the discretion of the Board of Directors.
Subject to the limitations and conditions of the 2002 Plan, the Committee has
29
authority to determine the amounts, times, forms and terms and conditions of
grants under the plan, except with respect to automatic grants to non-employee
directors, as discussed below. The Committee has the authority to construe and
interpret the 2002 Plan and any related award agreement, and its determinations
on all matters related to the 2002 Plan shall be conclusive.
Shares Subject to the Plan. Subject to certain antidilution adjustments, the
maximum number of shares of Class A Common Stock that may be granted as
Restricted Shares or delivered on the exercise of options or SARs or upon a
Director's election to receive Fees in shares pursuant to the 2002 Plan is an
aggregate of 5,000,000. In addition, in no event may Restricted Shares intended
to qualify as '162(m) Performance-Based Awards' (as defined below), options
and/or SARs be granted under the 2002 Plan to any individual in any one calendar
year in an amount exceeding an aggregate of 1,000,000 shares of Class A Common
Stock. The shares of Class A Common Stock issued under the 2002 Plan may be
either authorized but unissued shares or treasury shares, including such shares
reacquired by the Company.
If an option expires or terminates for any reason during the term of the
2002 Plan and prior to the exercise in full of such option or the related SAR,
if any, or if Restricted Shares are forfeited as provided in the grant of such
Restricted Shares, the number of shares of Class A Common Stock previously
subject to but not delivered under such option, related SAR or grant of
Restricted Shares will be available for awards thereafter. An option that
terminates upon the exercise of a tandem SAR will be deemed to have been
exercised at the time of the exercise of such tandem SAR, and the shares of
Class A Common Stock subject thereto will not be available for further grants
under the 2002 Plan.
Certain Provisions Relating to Options and SARs Granted to Officers. For
Federal income tax purposes, options granted pursuant to the 2002 Plan will be
'nonqualified' options, i.e., they will not be 'incentive stock options' as such
term is defined in Section 422 of the Code. The price per share to be paid by
the optionee on the date an option is exercised may not be less than 85% of the
'fair market value' (as defined in the 2002 Plan) on the date such option is
granted. The period after which options granted under the 2002 Plan may not be
exercised will be determined by the Committee with respect to each option
granted but may not exceed ten years from the date on which the option is
granted and further provided that each option will expire upon the termination
of the optionee's employment or services if such termination constitutes or is
attributable to a breach by the optionee of any employment agreement or if the
optionee is discharged or terminated 'for cause' (as determined by the Committee
or the Board of Directors of the Company). The purchase price of the shares of
Class A Common Stock as to which an option is exercised is to be paid in cash or
by check, except that the Committee may in its discretion allow such payment to
be made by surrender of shares of capital stock of the Company (at their fair
market value on the date of exercise) which have either been held for at least
six months or were previously acquired by the optionee on the open market, are
not subject to a pledge or other security interest and are not Restricted Shares
subject to the transferability restrictions set forth in Section 13 of the 2002
Plan ('Mature Shares'), or by a combination of cash, check and such shares of
capital stock. If determined by the Committee, an optionee may also elect to
purchase shares of Class A Common Stock on exercise of an option by assigning to
the Company a sufficient amount of the proceeds from the sale of shares upon
such exercise to pay for the purchase price of all such exercised options,
through a cashless exercise program (as more fully described in the 2002 Plan)
or by any combination of the foregoing.
No option or SAR granted under the 2002 Plan will be assignable or otherwise
transferable by the optionee, either voluntarily or involuntarily, except by
will or the laws of descent and distribution and
30
an option or SAR shall be exercisable during the optionee's lifetime only by the
optionee; provided, however, that the Committee may in the applicable option
agreement or at any time thereafter in an amendment to an option agreement
provide that options may be transferred with or without consideration by the
optionee, subject to such rules as the Committee may adopt to preserve the
purpose of the 2002 Plan, (i) pursuant to a domestic relations order or (ii) to
certain Permitted Transferees (as defined in the 2002 Plan), pursuant to the
terms of the plan.
The Committee may in its discretion grant SARs in connection with any
option, either at the time the option is granted or at any time thereafter while
the option remains outstanding, to any person who at that time is eligible to be
granted an option. The number of SARs granted to a person which will be
exercisable during any given period of time will not exceed the number of shares
of Class A Common Stock which he or she may purchase upon the exercise of the
related option or options during such period of time. Upon the exercise of an
option pursuant to the 2002 Plan, the SARs relating to the shares of Class A
Common Stock covered by such exercise shall terminate. Upon the exercise of SARs
pursuant to the 2002 Plan, the related option to the extent of an equal number
of shares of Class A Common Stock shall terminate.
Upon an optionee's exercise of some or all of his or her SARs, the optionee
will receive in settlement of such SARs an amount equal to the value of the
stock appreciation for the number of SARs exercised payable in cash, shares of
Class A Common Stock or a combination thereof, as determined in the sole
discretion of the Committee. The stock appreciation for an SAR will be the
difference between (i) the fair market value of the underlying share of Class A
Common Stock on the date of the exercise of such SAR and (ii) the option price
per share of Class A Common Stock specified for the related option.
An SAR will be exercisable only during the period determined by the
Committee, which must be within the period that the option to which it is
related is also exercisable.
The Committee, at its discretion, may issue replacement or reload options to
an option holder who has utilized shares of Class A Common Stock to pay the
exercise price of an option granted under the 2002 Plan and/or to pay any
withholding taxes applicable to such exercise. If granted, a replacement or
reload option will be exercisable for the same number of shares as were utilized
by the exercising option holder to pay such exercise price and/or withholding
taxes. Any such replacement or reload option will have an exercise price equal
to the fair market value of a share of Class A Common Stock on the date such
replacement or reload option is granted, and, unless the Committee determines
otherwise, all other terms and conditions of such replacement or reload option
(including the date or dates on which such option shall become exercisable and
the term of the option) will be identical to the terms and conditions of the
exercised option with respect to which the replacement or reload option is
granted. No replacement or reload option may be granted in respect of the
exercise of any option granted pursuant to the 2002 Plan as an automatic grant
to a non-employee director (see 'Automatic Grants to Non-Employee Directors,'
below).
Automatic Grants to Non-Employee Directors. Each director of the Company who
is initially elected or appointed as a director after the date the Board of
Directors adopts the 2002 Plan and who is not then an employee of the Company or
any subsidiary or affiliate will receive under the 2002 Plan on the later of
(i) the date of his or her initial election or appointment to the Board of
Directors or (ii) the date of the approval of the 2002 Plan by the stockholders,
nonqualified options to purchase 15,000 shares of Class A Common Stock. On the
date of each annual meeting of stockholders of the Company at which a director
is reelected, such director will receive options to purchase 4,000 shares of
Class A
31
Common Stock. Each such option will have a term of ten years, subject to earlier
termination upon the option holder's termination of service to the Company, as
provided in the 2002 Plan. Each such option will become exercisable to the
extent of one-half thereof on each of the two immediately succeeding
anniversaries of the date of grant, subject to continued Board membership. The
exercise price per share of Class A Common Stock to be paid by the holder of
such an option is equal to the fair market value (as defined in the plan) of one
share of Class A Common Stock on the date the option is granted. The purchase
price of the shares of Class A Common Stock as to which such an option is
exercised may be paid in cash, and, by check, by delivery of Mature Shares,
through the cashless exercise program described above under 'Certain Provisions
Relating to Options and SARs Granted to Officers' or by a combination of the
foregoing at the director's election.
Elective Purchase of Shares. Directors may elect to receive in shares of
Class A Common Stock all or any portion of the annual retainer fees and/or Board
or committee meeting attendance fees that otherwise would be payable to him or
her in cash pursuant to the procedures set forth in the 2002 Plan.
Any election other than an 'Initial Election' (as defined in the 2002 Plan)
to receive shares of Class A Common Stock rather than cash must be made at least
six months in advance of payment and shall continue in effect until revoked by
an election made at least six months in advance. There will be no limit on the
number of elections or revocations that may be made by a director, except that
no such election (other than an Initial Election) or revocation may take effect
until at least six months after such election or revocation shall have been
delivered to the Secretary of the Company. Any shares of Class A Common Stock
payable under such an election will be issued on the same date that the Fees
would have been paid in cash. The number of shares of Class A Common Stock to be
issued on account of an election to receive shares of Class A Common Stock in
payment of Fees will be based on the average of the closing prices of the shares
of Class A Common Stock for the 20 consecutive trading days immediately
preceding the date as of which the Fees are payable. Cash will be paid in lieu
of issuing any fractional share of Class A Common Stock. The most recent
election, if any, by a director who or is a participant under the Company's 1993
Equity Participation Plan or the 1998 Plan will be deemed to continue under the
2002 Plan as an 'Initial Election' and will remain in effect so long as no new
election by such director is received by the Company within 10 days following
approval of the 2002 Plan by stockholders.
The foregoing provisions relating to automatic grants of options to
non-employee directors and to issuances of Shares in lieu of Fees will become
effective only when, as and to the extent that similar provisions under the 1998
Plan become ineffective due to (a) there being insufficient shares available
under the 1998 Plan, (b) the expiration of the 1998 Plan or (c) for any other
reason.
Certain Provisions Applicable to Restricted Shares. The Committee may grant
Restricted Shares to certain eligible persons at any time. In granting
Restricted Shares, the Committee will determine in its sole discretion the
period or periods during which the restrictions on transferability applicable to
such Restricted Shares will be in force (the 'Restricted Period'). During the
Restricted Period applicable to each grant of Restricted Shares, such Restricted
Shares may not be sold, assigned, transferred or otherwise disposed of, or
mortgaged, pledged or otherwise encumbered. Furthermore, a grantee's eventual
right, if any, to such Restricted Shares may not be assigned or transferred
except by will or by the laws of descent and distribution. With respect to each
grant of Restricted Shares, the Committee will determine in its sole discretion
the restrictions on vesting which will apply to the Restricted Shares for the
Restricted Period. If the Committee deems restrictions on vesting inappropriate
for any grantee, it may approve the award and delivery to such grantee of all or
any portion of the Restricted Shares
32
free and clear of all restrictions on transferability. The Company will not be
obligated to deliver any Restricted Shares free and clear of the restrictions on
transferability until the Company has satisfied itself that such delivery
complies with all applicable laws and regulations.
Stockholder Rights. A grantee of shares and, except for the restrictions on
transferability, a grantee of Restricted Shares will have the rights of a holder
of the shares of Class A Common Stock, as applicable, including the right to
receive dividends paid on such shares and the right to vote such shares at
meetings of stockholders of the Company. However, no optionee will have any of
the rights of a stockholder with respect to any shares of Class A Common Stock
unless and until he or she has exercised his or her option with respect to such
shares of Class A Common Stock and has paid the full purchase price therefor.
Changes in Shares. In the event of a change in the class or series of shares
which may be delivered pursuant to the Plan due to a split, reverse split,
combination of shares, reclassification, recapitalization, dividend or
distribution payable in shares, extraordinary dividend payable in cash, merger,
consolidation or other reorganization or any similar event, the Committee shall,
to the extent it deems it to be consistent with such event and necessary or
equitable to carry out the purposes of the 2002 Plan, appropriately adjust
(a) the maximum number of shares of and the classes or series of shares which
may be delivered pursuant to the 2002 Plan, (b) the number of shares and the
classes or series of shares subject to outstanding Options or SARs, (c) the
Option price per share of outstanding Options, and (d) any other provisions of
the 2002 Plan, provided that (i) any adjustments made in accordance with clauses
(b) and (c) shall make any such outstanding Option or SAR as nearly as
practicable, equivalent to such Option or SAR, as the case may be, immediately
prior to such change and (ii) no such adjustment shall give any optionee any
additional benefits under any outstanding Option. Further, with respect to
awards intended to qualify as 'performance-based compensation' under Section
162(m) of the Code, such adjustments or substitutions will be made only to the
extent that the Committee determines that such adjustments or substitutions may
be made without causing such awards to fail to qualify as 'performance-based
compensation' for purposes of Section 162(m) of the Code.
Changes in Control or Reorganizations. The 2002 Plan also provides that upon
(i) the acquisition by any person of 50% or more of the combined voting power of
the Company's outstanding securities entitled to vote generally in the election
of directors, or (ii) a majority of the directors of the Company being
individuals who are not nominated by the Board of Directors (a 'Plan Change of
Control'), any outstanding options granted under the 2002 Plan shall become
fully and immediately exercisable and any restrictions on vesting applicable to
any Restricted Shares will lapse and such Restricted Shares will be delivered
free and clear of all transferability restrictions. The acquisition of any
portion of the combined voting power of the Company by DWG Acquisition, Nelson
Peltz or Peter W. May or by any person affiliated with such persons will not
constitute a Plan Change of Control. In addition, the 2002 Plan provides that in
the event that the Company is merged or consolidated with another corporation,
or in the event that all or substantially all of the assets of the Company are
acquired by another corporation, or in the event of a reorganization or
liquidation of the Company (each such event being hereinafter referred to as a
'Reorganization Event') or in the event that the Board of Directors shall
propose that the Company enter into a Reorganization Event, then the Committee
may in its discretion take any or all of the following actions: (i) by written
notice to each optionee, provide that his or her Options and/or SARs will be
terminated or repurchased by the Company unless exercised within thirty days (or
such longer period as the Committee shall determine in its sole discretion)
after the date of such notice (without acceleration of the exercisability of
such Options); and (ii) advance the date or dates upon which any or all
outstanding Options shall be exercisable.
33
162(m) Performance-Based Awards. The Committee may determine that an award
of Options, SARs or Restricted Shares which would not otherwise qualify as
'performance-based compensation' under Section 162(m) of the Code shall be made
to so qualify by the implementation of additional vesting conditions based on
the attainment of performance standards in accordance with rules set forth in
the 2002 Plan. The performance standards will be based on objective,
quantifiable measures for the Company as a whole, or the operating units of the
Company, with respect to a period established by the Committee (a 'Performance
Period') and may include, and will be limited to, one or more of the following:
1. earnings per share;
2. market share;
3. margins (limited to gross margin, 'Adjusted EBITDA' (as defined below)
margin, and Adjusted EBITDA (as defined below, but excluding clause (1)
thereof) margin);
4. productivity improvement;
5. costs or expenses;
6. successful completion of acquisitions, dispositions, recapitalizations,
financings or refinancings;
7. total return on investment portfolio;
8. pre-tax net realized capital gains;
9. stock price; or
10. net investment income.
No award under the 2002 Plan which is intended to qualify as
'performance-based compensation' under Section 162(m) of the Code will vest in
respect of a period in which performance fails to attain or exceed the minimum
level for any of the performance standards.
For purposes of the performance goals described above, 'Adjusted EBITDA' for
any referenced period shall mean the Company's (or with respect to an acquired
company, the acquired company's) operating income for such period, as reflected
on its consolidated audited financial statements, adjusted to exclude the impact
of:
(1) depreciation and amortization expenses;
(2) any amounts accrued pursuant to management bonus plans and related
employer payroll taxes for the fiscal year;
(3) any discretionary or matching contributions to the Company's 401(k) Plan
and other deferred compensation plans for the applicable fiscal year;
(4) all items of gain, loss or expense determined to be extraordinary or
unusual in nature or infrequent in occurrence or related to the disposal
of a segment of a business or related to a change in accounting
principles, all as determined in accordance with standards established
by Opinion No. 30 of the Accounting Principles Board, and any amendment,
restatement, modification, supplement or successor thereto ('APB Opinion
No. 30');
(5) all items of gain, loss or expense related to restructuring charges of
subsidiaries whose operations are not included in operating income for
the fiscal year;
(6) all items of gain, loss or expense related to discontinued operations
that do not qualify as a segment of a business as defined under APB
Opinion No. 30;
34
(7) any profit or loss attributable to the business operations of any entity
acquired by the Company or any consolidated subsidiary during the Plan
Year;
(8) the reduction in carrying value of long-lived assets, in accordance with
FASB Pronouncement No. 121 and/or FASB Pronouncement No. 144, and any
amendment, restatement, modification, supplement or successor thereto;
and
(9) all items of expense related to equity-based compensation determined in
accordance with the standards established by Opinion No. 25 of the
Accounting Principles Board or FASB Pronouncement No. 123, and any
amendment, restatement, modification, supplement or successor thereto.
In addition, operating income will not be adjusted for a minority interest
holder's share of a consolidated subsidiary's operating income or loss.
Amendment and Discontinuance. The 2002 Plan provides that the Board of
Directors may amend, alter, suspend, discontinue, or terminate the Plan or any
portion thereof at any time; provided that no such amendment, alteration,
suspension, discontinuation or termination shall be made without stockholder
approval if such approval is necessary to comply with any regulatory requirement
applicable to the Plan and provided further that any such amendment, alteration,
suspension, discontinuance or termination that would impair any rights under any
award theretofore made under the 2002 Plan shall not to that extent be effective
without the consent of the person to whom such award was made.
Effective Date and Duration of the 2002 Plan. The 2002 Plan was approved by
the Board of Directors on April 25, 2002 and will become effective on the date
of its approval by the stockholders. The term during which awards may be granted
under the 2002 Plan, if approved, will expire on June 4, 2012.
NEW PLAN BENEFITS
No awards have been made under the 2002 Plan. Other than with respect to
non-employee directors' automatic awards and shares received in lieu of Fees,
awards under the 2002 Plan will be determined by the Committee in its discretion
and it is, therefore, not possible to predict the awards that will be made to
particular officers in the future under the 2002 Plan. For information regarding
option grants made to the Named Officers for fiscal 2001 under the 1998 Plan,
see 'Options Granted in Fiscal 2001.' Set forth below are the automatic option
awards that will be received by non-employee directors in fiscal 2002 under the
1998 Plan or, if the 2002 Plan is approved by the stockholders, under the 2002
Plan:
NUMBER OF SHARES
OF CLASS A
ESTIMATED OPTION COMMON STOCK
EXERCISE PRICE(1) OPTIONS(2)
----------------- ----------
Non-Employee Directors.................... $27.55 28,000
---------
(1) Exercise price is based on the closing price of the Class A Common Stock on
April 15, 2002. The actual exercise price will be based on the 'fair market
value' of the shares of Class A Common Stock on the date of the Meeting.
(footnotes continued on next page)
35
(footnotes continued from previous page)
(2) Assumes all seven incumbent non-management directors nominated for election
at the Meeting are elected and no additional directors are elected or
appointed in fiscal 2002. Directors may also elect to have some or all of
their Fees paid in shares of Class A Common Stock under the 2002 Plan.
FEDERAL TAX CONSEQUENCES OF OPTIONS
The following summary of the Federal income tax consequences of the grant
and exercise of nonqualified options awarded under the 2002 Plan, and the
disposition of shares purchased pursuant to the exercise of such stock options,
is intended to reflect the current provisions of the Code and the regulations
thereunder. This summary is not intended to be a complete statement of
applicable law, nor does it address state and local tax considerations.
No income will be realized by an optionee upon grant of a nonqualified stock
option. Upon exercise of a nonqualified stock option, the optionee will
recognize ordinary compensation income in an amount equal to the excess, if any,
of the fair market value of the underlying stock over the option exercise price
(the 'Spread') at the time of exercise. The Spread will be deductible by the
Company for federal income tax purposes subject to the possible limitations on
deductibility under sections 280G and 162(m) of the Code of compensation paid to
executives designated in those sections. The optionee's tax basis in the
underlying shares acquired by exercise of a nonqualified stock option will equal
the exercise price plus the amount taxable as compensation to the optionee. Upon
sale of the shares received by the optionee upon exercise of the nonqualified
stock option, any gain or loss is generally long-term or short-term capital gain
or loss, depending on the holding period. The optionee's holding period for
shares acquired pursuant to the exercise of a nonqualified stock option will
begin on the date of exercise of such option.
Pursuant to currently applicable rules under Section 16(b) of the Exchange
Act, the grant of an option (and not its exercise) to a person who is subject to
the reporting and short-swing profit provisions under Section 16 of the Exchange
Act (a 'Section 16 Person') begins the six-month period of potential short-swing
liability. However, the six month period of potential short-swing liability may
be eliminated if the option grant (i) is approved in advance by the Company's
board of directors (or a committee composed solely of two or more non-employee
directors) or (ii) approved in advance, or subsequently ratified, by the
Company's stockholders no later than the next annual meeting of stockholders. If
the grant satisfies either of the conditions described in clauses (i) or (ii)
above, the taxable event will ordinarily be the date of exercise. However, if an
option is exercised by a Section 16 Person within six months after the date of
grant and neither of the conditions described in clauses (i) or (ii) above are
satisfied, taxation will be deferred until the date which is six months after
the date of grant, unless the person has filed a timely election pursuant to
Section 83(b) of the Code to be taxed on the date of exercise.
The payment by an optionee of the exercise price, in full or in part, with
previously acquired shares will not affect the tax treatment of the exercise
described above. No gain or loss generally will be recognized by the optionee
upon the surrender of the previously acquired shares to the Company, and shares
received by the optionee, equal in number to the previously surrendered shares,
will have the same tax basis as the shares surrendered to the Company and will
have a holding period that includes the holding period of the shares
surrendered. The value of shares received by the optionee in excess of the
number of shares surrendered to the Company will be taxable to the optionee.
Such additional
36
shares will have a tax basis equal to the fair market value of such additional
shares as of the date ordinary income is recognized, and will have a holding
period that begins on the date ordinary income is recognized.
REQUIRED VOTE
Approval of the proposed 2002 Plan will require the affirmative vote of a
majority of the voting power present (in person or by proxy) and entitled to
vote at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE 2002 EQUITY
PARTICIPATION PLAN.
PROPOSAL 3.
RATIFICATION OF APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
INTRODUCTION
The Board of Directors has selected Deloitte & Touche LLP ('Deloitte') to be
the Company's independent certified public accountants for fiscal 2002. Deloitte
has acted as the Company's independent certified public accountants since July
9, 1994.
Representatives of Deloitte will be present at the Meeting with the
opportunity to make a statement if they desire to do so and will be available to
respond to appropriate questions.
REQUIRED VOTE
Ratification of the appointment of the independent certified public
accountants requires the affirmative vote of a majority of the voting power
present (in person or by proxy) and entitled to vote at the Meeting. In the
event that the Company's stockholders fail to ratify the appointment of
Deloitte, the selection of the Company's independent certified public
accountants will be submitted to the Company's Board of Directors for
reconsideration.
AUDITOR FEES
The following is a description of the fees billed to the Company by Deloitte
during the fiscal year ended December 30, 2001:
Audit Fees: Audit fees paid by the Company to Deloitte in connection with
Deloitte's review and audit of the Company's annual financial statements for the
fiscal year ended December 30, 2001 and Deloitte's review of the Company's
interim financial statements included in the Company's Quarterly Reports on Form
10-Q during the fiscal year ended December 30, 2001 totaled approximately
$550,000.
Financial Information Systems Design and Implementation Fees: The Company
did not engage Deloitte to provide advice to the Company regarding financial
information systems design and implementation during the fiscal year ended
December 30, 2001.
All Other Fees: Fees billed to the Company by Deloitte for all other
non-audit services rendered to the Company during the fiscal year ended
December 30, 2001 totaled approximately $1,488,000, including approximately
$1,110,000 for audit related services (principally related to the sale of the
Snapple Beverage Group), $360,000 for tax related services and $18,000 for other
services.
37
As noted in the Audit Committee Report (see page 25), the Audit Committee
has considered whether the provision of services by Deloitte that were not
related to the audit of the Company's consolidated financial statements referred
to above and to the reviews of the interim financial statements included in the
Company's Forms 10-Q is compatible with maintaining Deloitte's independence.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF APPOINTMENT
OF DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS.
OTHER MATTERS
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. In addition to
the solicitation of proxies by use of the mails, some of the officers, directors
and regular employees of the Company and its subsidiaries, none of whom will
receive additional compensation therefor, may solicit proxies in person or by
telephone, telegraph or other means. Solicitation will also be made by employees
of Georgeson & Company, which firm will be paid a fee of $8,000, plus expenses.
As is customary, the Company will, upon request, reimburse brokerage firms,
banks, trustees, nominees and other persons for their out-of-pocket expenses in
forwarding proxy materials to their principals.
STOCKHOLDER PROPOSALS FOR THE 2003 ANNUAL MEETING
From time to time, stockholders present proposals which may be proper
subjects for inclusion in a proxy statement and for consideration at an annual
meeting. To be considered, proposals must be submitted on a timely basis. It is
currently expected that the next Annual Meeting will be held during the early
part of June 2003, with the related proxy statement being first mailed to
stockholders on or about May 1, 2003. To be considered for the 2003 Annual
Meeting of Stockholders of the Company, proposals must be received by the
Company no later than December 28, 2002, and must otherwise comply with Rule
14a-8 under the Exchange Act.
Stockholders who do not wish to follow Rule 14a-8 under the Exchange Act in
proposing a matter for action at the next annual meeting may also submit a
proposal pursuant to the procedural requirements set forth in Triarc's
Certificate of Incorporation. Any such proposals must be specified in a written
notice given by or on behalf of a stockholder of record on the record date for
such meeting entitled to vote thereat or a duly authorized proxy for such
stockholder, in accordance with all of the following requirements. Such notice
must be delivered personally to, or mailed to and received at, the principal
executive office of the Company addressed to the attention of the Secretary, not
less than 45 days nor more than 60 days prior to the meeting; provided, however,
that in the event that less than 55 days' notice or prior public disclosure of
the date of the meeting is given or made to stockholders, notice by the
stockholder to be timely must be so received not later than the close of
business on the 10th day following the day on which such notice of the date of
the annual or special meeting was mailed or such public disclosure was made,
whichever first occurs. Such notice must set forth (i) a full description of
each such item of business proposed to be brought before the meeting and the
reasons for conducting such business at such meeting, (ii) the name and address
of the person proposing to bring such business before the meeting, (iii) the
class and number of shares held of record, held beneficially and represented by
proxy by such person as of the record date for the meeting (if such date has
then been made publicly available) and as of the date of such notice, (iv) if
any item of such business involves a nomination for director, all information
regarding each such nominee that would be
38
required to be set forth in a definitive proxy statement filed with the SEC
pursuant to Section 14 of the Exchange Act, or any successor thereto, and the
written consent of each such nominee to serve if elected, (v) any material
interest of the stockholder in such item of business and (vi) all other
information that would be required to be filed with the SEC if, with respect to
the business proposed to be brought before the meeting, the person proposing
such business was a participant in a solicitation subject to Section 14 of the
Exchange Act, or any successor thereto. The Company may require a proposed
nominee for director to furnish such other information as may be required to be
set forth in a stockholder's notice of nomination which pertains to the nominee
or which may be reasonably required to determine the eligibility of such
proposed nominee to serve as a director of the Company. At the request of the
Board of Directors, any individual nominated by the Board of Directors for
election as a director shall furnish to the Secretary of the Company that
information required to be set forth in a stockholder's notice of nomination
which pertains to a nominee. The Nominating Committee has adopted certain rules
with respect to nominations for Board membership. See 'Proposal 1. Election of
Directors -- Board Meetings and Certain Committees of the Board -- Nominating
Committee' above. The Chairman of the meeting may, if the facts warrant,
determine that a nomination or stockholder proposal was not made in accordance
with the foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination or proposal shall be disregarded.
Any questions relating to stockholder proposals should be submitted in writing
to the Secretary of the Company, at 280 Park Avenue, New York, New York 10017.
ANNUAL REPORT ON FORM 10-K
The Company will provide copies of the Form 10-K, as amended, without
charge, upon a written or oral request, by first class mail or other equally
prompt means within one business day of such request. Such copies may be
obtained by contacting the Company at 280 Park Avenue, New York, New York 10017,
Attn: Investor Relations; Telephone: (212) 451-3000. Copies of the Form 10-K may
also be obtained from the Company's website at http://www.triarc.com.
By Order of the Board of Directors
STUART I. ROSEN
STUART I. ROSEN
Secretary
New York, New York
April 25, 2002
39
EXHIBIT A
TRIARC COMPANIES, INC.
2002 EQUITY PARTICIPATION PLAN
1. Purpose. The purpose of the 2002 Equity Participation Plan (the 'Plan')
of Triarc Companies, Inc. ('Company') is to promote the interests of the Company
and its stockholders by (i) securing for the Company and its stockholders the
benefits of the additional incentive inherent in the ownership of the capital
stock of the Company (the 'Capital Stock') by selected officers, directors
('Directors') and key employees of, and consultants to, the Company and its
Subsidiaries and Affiliates who are important to the success and growth of the
business of the Company and its Subsidiaries and Affiliates and (ii) assisting
the Company to secure and retain the services of such persons. The Plan provides
for granting such persons (a) options ('Options') for the purchase of shares of
Capital Stock (the 'Shares'), (b) tandem stock appreciation rights ('SARs') and
(c) Shares which are both restricted as to transferability and subject to a
substantial risk of forfeiture ('Restricted Shares'). The Plan also provides for
automatic grants of Options to non-employee Directors and permits such
non-employee Directors to elect to receive all or a portion of their annual
retainer fees and/or board of directors or committee meeting attendance fees in
Shares.
2. Administration. The Plan shall be administered by a Committee (the
'Committee') consisting of two or more Directors appointed by the Board of
Directors of the Company. It is intended, but not required, that the directors
appointed to serve on the Committee shall be 'Non-Employee Directors' (within
the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934,
as amended (the 'Act')), and 'outside directors' within the meaning of Section
162(m) of the Internal Revenue Code of 1986, as amended (the 'Code'), to the
extent Rule 16b-3 and Section 162(m), respectively, are applicable to the
Company and the Plan; however, the fact that a Committee member shall fail to
qualify under either of the foregoing requirements shall not invalidate any
award which is otherwise validly made under the Plan. The members of the
Committee may be changed at any time and from time to time in the discretion of
the Board of Directors of the Company. Subject to the limitations and conditions
hereinafter set forth, and except with respect to automatic grants to
non-employee Directors pursuant to Section 11.1 hereof, the Committee shall have
authority to grant Options hereunder, to determine the number of Shares for
which each Option shall be granted and the Option price or prices, to determine
any conditions pertaining to the exercise or to the vesting of each Option, to
grant tandem SARs in connection with any Option either at the time of the Option
grant or thereafter, to make awards of Restricted Shares, to determine the
number of Restricted Shares to be granted, and to establish in its discretion
the restrictions to which any such Restricted Shares shall be subject. The
Committee shall have full power to construe and interpret the Plan and any Plan
agreement executed pursuant to the Plan, to establish and amend rules for its
administration, to establish in its discretion terms and conditions applicable
to the exercise of Options and SARs and the grant of Restricted Shares and to
make any other determination and take any other action that the Committee deems
necessary or desirable for the administration of the Plan. The determination of
the Committee on all matters relating to the Plan or any Plan agreement shall be
conclusive. No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any award
hereunder.
3. Shares Subject to the Plan. The Shares to be transferred or sold pursuant
to the grant of Restricted Shares or the exercise of Options or SARs granted
under the Plan or pursuant to the election by a Director to receive all or a
portion of their annual retainer fees and/or board of directors or committee
meeting attendance fees, if any ('Fees'), in Shares shall be authorized Shares,
and may be
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issued Shares reacquired by the Company and held in its treasury or may be
authorized but unissued Shares. Subject to the provisions of Section 19 hereof
(relating to adjustments in the number and classes or series of Capital Stock to
be delivered pursuant to the Plan), the maximum aggregate number of Shares to be
granted as Restricted Shares or to be delivered on the exercise of Options or
SARs or upon a Director's election to receive Fees in Shares shall be 5,000,000
and all such shares shall be shares of the Company's Class A Common Stock, par
value $0.10 per share (the 'Class A Common Stock').
If an Option expires or terminates for any reason during the term of the
Plan and prior to the exercise in full of such Option or the related SAR, if
any, or if Restricted Shares are forfeited as provided in the grant of such
Shares, the number of Shares previously subject to but not delivered under such
Option, related SAR or grant of Restricted Shares shall be available to be
awarded thereafter. An Option that terminates upon the exercise of a tandem SAR
shall be deemed to have been exercised at the time of the exercise of such
tandem SAR, and the Shares subject thereto shall not be available for further
grants under the Plan.
4. Eligibility. Options, SARs or Restricted Shares may be granted from time
to time to selected officers, and subject to the provisions of Section 2 hereof,
Directors (including non-employee Directors) and key employees of, and
consultants to, the Company or any consolidated Subsidiary or Affiliate, each as
defined in this Section 4; provided that a consultant shall be eligible for the
grant of Options, SARs and Restricted Shares only if such person is a consultant
to the Company, a Subsidiary or Affiliate who is entitled to participate in an
'employee benefit plan' within the meaning of 17 CFR 'SS' 230.405 (which, as of
the effective date of the Plan, includes those who (A) are natural persons and
(B) provide bona fide services to the Company or a Subsidiary or Affiliate of
the Company other than in connection with the offer or sale of securities in a
capital-raising transaction, and do not directly or indirectly promote or
maintain a market for the Company's securities). From time to time, the
Committee shall designate from such eligible persons those who will be granted
Options, SARs or Restricted Shares, and in connection therewith, the number of
Shares to be covered by each grant of Options or Restricted Shares. In addition,
Options shall be granted automatically to non-employee Directors and
non-employee Directors shall be entitled to receive all or a portion of their
Fees in Shares as provided in Section 11 hereof. Persons granted Options are
referred to hereinafter as 'optionees,' and persons granted Restricted Shares
are referred to hereinafter as 'grantees.' Nothing in the Plan, or in any grant
of Options, SARs, Restricted Shares or Shares pursuant to the Plan, shall confer
on any person any right to continue in the employ or service of the Company or
any of its Subsidiaries or Affiliates, nor in any way interfere with the right
of the Company or any of its Subsidiaries or Affiliates to terminate the
person's employment or service at any time.
The term 'Subsidiary' shall mean, at the time of reference, any entity
organized or acquired (other than the Company) in an unbroken chain of entities
beginning with the Company if each of the entities (including the Company) other
than the last entity in the unbroken chain owns stock or other ownership
interests possessing 50% or more of the total combined voting power of all
classes of stock or other ownership interests in one of the other entities in
such chain. The term 'Affiliate' shall mean any person or entity which, at the
time of reference, directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, the Company.
Notwithstanding any other provision of the Plan to the contrary, in no event may
Restricted Shares intended to qualify as '162(m) Performance-Based Awards' (as
defined in Section 23), Options and/or SARs be granted under the Plan to any
individual in any one calendar year in an amount exceeding an aggregate of
1,000,000 shares of Class A Common Stock.
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PROVISIONS RELATING TO OPTIONS AND SARS
5. Character of Options. Options granted hereunder shall not be incentive
stock Options as such term is defined in Section 422 of the Code. Options
granted hereunder shall be 'non-qualified' stock options subject to the
provisions of Section 83 of the Code.
If an Option granted under the Plan (other than an Option granted pursuant
to Section 11 of the Plan) is exercised by an optionee, then, at the discretion
of the Committee, the optionee may receive a replacement or reload Option
hereunder to purchase a number of Shares equal to the number of Shares utilized
to pay the exercise price and/or withholding taxes on the Option exercise, with
an exercise price equal to the 'fair market value' (as defined in Section 7 of
the Plan) of a Share on the date such replacement or reload Option is granted,
and, unless the Committee determines otherwise, with all other terms and
conditions (including the date or dates on which the Option shall become
exercisable and the term of the Option) identical to the terms and conditions of
the Option with respect to which the reload Option is granted. No replacement or
reload Option shall be granted in respect of the exercise of any Option granted
pursuant to Section 11 of the Plan.
6. Stock Option Agreement. Each Option granted under the Plan, whether or
not accompanied by SARs, shall be evidenced by a written stock option agreement,
which shall be executed by the Company and by the person to whom the Option is
granted. The agreement shall contain such terms and provisions, not inconsistent
with the Plan, as shall be determined by the Committee.
7. Option Exercise Price. The price per Share to be paid by the optionee on
the date an Option is exercised shall not be less than 85 percent of the fair
market value of one Share on the date the Option is granted. In no event shall
the price per Share to be paid by the optionee on the date an Option is
exercised be less than its par value.
For purposes of this Plan, the 'fair market value' as of any date in respect
of any Shares of Class A Common Stock shall mean either (i) the closing price
per share of Class A Common Stock, on such date or (ii) the average of the high
and low sales prices of a share of Class A Common Stock, on such date, as
determined by the Committee in its sole discretion. The closing price for such
day shall be (a) as reported on the composite transactions tape for the
principal exchange on which the Class A Common Stock, is listed or admitted to
trading (the 'Composite Tape'), or if the Class A Common Stock is not reported
on the Composite Tape or if the Composite Tape is not in use, the last reported
sales price regular way on the principal national securities exchange on which
the Class A Common Stock shall be listed or admitted to trading (which shall be
the national securities exchange on which the greatest number of the shares of
Class A Common Stock has been traded during the 30 consecutive trading days
commencing 45 trading days before such date), or, in either case, if there is no
transaction on any such day, the average of the bid and asked prices regular way
on such day, or (b) if the Class A Common Stock is not listed on any national
securities exchange, the closing price, if reported, or, if the closing price is
not reported, the average of the closing bid and asked prices, as reported on
the National Association of Securities Dealers Automated Quotation System
('NASDAQ'). If on any such date the Class A Common Stock is not quoted by any
such exchange or NASDAQ, the fair market value of the Class A Common Stock on
such date shall be determined by the Committee in its sole discretion.
8. Option Term. The period after which Options granted under the Plan (other
than Options granted pursuant to Section 11) may not be exercised shall be
determined by the Committee with respect to each Option granted, but may not
exceed ten years from the date on which the Option is granted, subject to the
third paragraph of Section 9 hereof.
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9. Exercise of Options. The time or times at which or during which Options
granted under the Plan may be exercised, and any conditions pertaining to such
exercise or to the vesting in the optionee of the right to exercise Options or
SARs, shall be determined by the Committee in its sole discretion, except as
otherwise specifically set forth herein. Subsequent to the grant of an Option
which is not immediately exercisable in full, the Committee, at any time before
complete termination of such Option, may accelerate or extend the time or times
at which such Option and the related SAR, if any, may be exercised in whole or
part.
Except as provided in this paragraph, no Option or SAR granted under the
Plan shall be assignable or otherwise transferable by the optionee, either
voluntarily or involuntarily, except by will or the laws of descent and
distribution and an Option or SAR shall be exercisable during the optionee's
lifetime only by the optionee. The Committee may in the applicable Option
agreement or at any time thereafter in an amendment to an Option agreement
provide that Options granted hereunder may be transferred with or without
consideration by the Optionee, subject to such rules as the Committee may adopt
to preserve the purposes of the Plan, (i) pursuant to a domestic relations order
or (ii) to one or more of:
(x) the optionee's spouse, children or grandchildren (including adopted
children, stepchildren and grandchildren) (collectively, the 'Immediate
Family');
(y) a trust solely for the benefit of the optionee and/or his or her
Immediate Family;
(z) a partnership or limited liability company, the partners or members of
which are limited to the optionee and his or her Immediate Family; or
(zz) any other person or entity authorized by the Committee.
(each transferee is hereinafter referred to as a 'Permitted Transferee');
provided, however, that the optionee gives the Committee advance written notice
describing the terms and conditions of the proposed transfer and the Committee
notifies the optionee in writing that such a transfer would comply with the
requirements of the Plan, any applicable Option agreement and any amendments
thereto.
The terms and conditions of any Option transferred in accordance with the
immediately preceding sentence shall apply to the Permitted Transferee and any
reference in the Plan or in an Option agreement or any amendment thereto to an
optionee or grantee shall be deemed to refer to the Permitted Transferee, except
that (a) Permitted Transferees shall not be entitled to transfer any Options,
other than by will or the laws of descent and distribution; (b) Permitted
Transferees shall not be entitled to exercise any transferred Options unless
there shall be in effect a registration statement on an appropriate form
covering the shares to be acquired pursuant to the exercise of such Option if
the Committee determines that such a registration statement is necessary or
appropriate; (c) the Committee or the Company shall not be required to provide
any notice to a Permitted Transferee, whether or not such notice is or would
otherwise have been required to be given to the optionee under the Plan or
otherwise; and (d) the events of termination of employment by, or services to,
the Company under clause (b) of the third paragraph of Section 9 and Section
11.1, as the case may be, hereof shall continue to be applied with respect to
the original optionee, following which the Options shall be exercisable by the
Permitted Transferee only to the extent, and for the periods, specified in
Section 9 and Section 11.1, as the case may be.
The unexercised portion of any Option (other than Options granted pursuant
to Section 11) or SAR granted under the Plan shall automatically and without
notice terminate and become null and void at the time of the earliest to occur
of the following:
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(a) the expiration of the period of time determined by the Committee
upon the grant of such Option; provided that such period shall not exceed
ten years from the date on which such Option was granted;
(b) the termination of the optionee's employment by, or services to, the
Company and its Subsidiaries or Affiliates if such termination constitutes
or is attributable to a breach by the optionee of an employment or
consulting agreement with the Company or any of its Subsidiaries or
Affiliates, or if the optionee is discharged or if his or her services are
terminated for cause; or
(c) the expiration of such period of time or the occurrence of such
event as the Committee in its discretion may provide upon the granting
thereof.
The Committee and the Board of Directors shall have the right to determine
what constitutes cause for discharge or termination of services, whether the
optionee has been discharged or his or her services terminated for cause and the
date of such discharge or termination of services, and such determination of the
Committee or the Board of Directors shall be final and conclusive.
In the event of the death of an optionee, Options or SARs, if any,
exercisable by the optionee at the time of his or her death may be exercised
within one year thereafter by the person or persons to whom the optionee's
rights under the Options or SARs, if any, shall pass by will or by the
applicable law of descent and distribution. However, in no event may any Option
or SAR be exercised by anyone after the earlier of (a) the final date upon which
the optionee could have exercised it had the optionee continued in the
employment of, or continued to provide services to, the Company or its
Subsidiaries or Affiliates to such date, or (b) one year after the optionee's
death.
An Option may be exercised only by a notice in writing complying in all
respects with the applicable Option agreement. Such notice may instruct the
Company to deliver Shares due upon the exercise of the Option to any registered
broker or dealer approved by the Company (an 'approved broker') in lieu of
delivery to the optionee. Such instructions shall designate the account into
which the Shares are to be deposited. The optionee may tender such notice,
properly executed by the optionee, together with the aforementioned delivery
instructions, to an approved broker. The purchase price of the Shares as to
which an Option is exercised shall be paid in cash or by check, except that the
Committee may, in its discretion, allow such payment to be made by surrender of
Shares which are not Restricted Shares subject to the 'Transferability
Restrictions' set forth in Section 13 (at their fair market value on the date of
exercise); provided, however, that such Shares are not subject to any pledge or
other security interest and have either been held by the optionee for at least
six months, previously acquired by the optionee on the open market or meet such
other requirements as the Committee may determine necessary in order to avoid an
accounting charge to the earnings of the Company in respect of the Option (such
eligible Shares being referred to herein as 'Mature Shares'), or by a
combination of cash, check and Mature Shares.
Payment in accordance with Section 9 may be deemed to be satisfied, if and
to the extent provided in the applicable Option agreement, by delivery to the
Company of an assignment of a sufficient amount of the proceeds from the sale of
Shares acquired upon exercise to pay for all of the Shares acquired upon
exercise and an authorization to the broker or selling agent to pay that amount
to the Company, which sale shall be made at the grantee's direction at the time
of exercise, provided that the Committee may require the grantee to furnish an
opinion of counsel acceptable to the Committee to the effect that such delivery
would not result in the grantee incurring any liability under Section 16 of the
Securities Exchange Act of 1934, as amended, and does not require the consent,
clearance or approval
A-5
of any governmental or regulatory body (including any securities exchange or
similar self-regulatory organization).
Wherever in this Plan or any Option agreement an optionee is permitted to
pay the exercise price of an Option or taxes relating to the exercise of an
Option by delivering Shares, the optionee may, subject to procedures
satisfactory to the Committee, satisfy such delivery requirement by presenting
proof of beneficial ownership of such Shares, in which case the Company shall
treat the Option as exercised without further payment and shall withhold such
number of Shares from the Shares acquired by the exercise of the Option (or if
the Option is paid in cash, cash in an amount equal to the fair market value of
such shares on the date of exercise).
10. Stock Appreciation Rights. The Committee may in its discretion grant
SARs in connection with any Option, either at the time the Option is granted or
at any time thereafter while the Option remains outstanding, to any person who
at that time is eligible to be granted an Option. The number of SARs granted to
a person which shall be exercisable during any given period of time shall not
exceed the number of Shares which such optionee may purchase upon the exercise
of the related Option or Options during such period of time. Upon the exercise
of an Option pursuant to the Plan, the SARs relating to the Shares covered by
such exercise shall terminate. Upon the exercise of SARs pursuant to the Plan,
the related Option to the extent of an equal number of Shares shall terminate.
Upon an optionee's exercise of some or all of such optionee's SARs, the
optionee shall receive in settlement of such SARs an amount equal to the value
of the stock appreciation for the number of SARs exercised, payable in cash,
Shares or a combination thereof, as determined in the sole discretion of the
Committee. The stock appreciation for an SAR is the difference between (i) the
fair market value, as determined by the Committee as set forth in the underlying
agreement, of the underlying Share on the date of the exercise of such SAR and
(ii) the Option price specified for the related Option. At the time of such
exercise, the optionee shall have the right to elect the portion of the amount
to be received that shall consist of cash and the portion that shall consist of
Shares which, for purposes of calculating the number of Shares to be received,
shall be valued at their fair market value on the date of the exercise of such
SARs. The Committee in its sole discretion shall have the right to disapprove an
optionee's election to receive cash in full or partial settlement of the SARs
exercised, and to require the Shares to be delivered in lieu of cash. If Shares
are to be received upon exercise of an SAR, cash shall be delivered in lieu of
any fractional share.
An SAR shall be exercisable only during the period determined by the
Committee, which period shall be within the period that the related Option is
exercisable.
11. Automatic Grants to Non-Employee Directors; Elective Purchase of Shares.
11.1 Automatic Grants to Non-Employee Directors. Notwithstanding any
other provision of the Plan, but subject to Section 11.3, each Director who
is initially elected or appointed as a Director after the date of the
adoption of the Plan by the Board of Directors and who is not then an
employee of the Company, any Subsidiary or any Affiliate shall receive on
the later of (i) the date of the approval of the Plan by the stockholders,
or (ii) the date of such Director's initial election or appointment to the
Board of Directors, nonqualified Options to purchase 15,000 Shares. On the
date of each annual meeting of stockholders of the Company held after the
Plan is adopted by the Board of Directors at which a Director is reelected,
such Director shall receive nonqualified Options to purchase 4,000 Shares.
Each such Option shall have a term of ten years, subject to the provisions
of this Section 11.1 below. Each such Option shall become exercisable to the
extent of one-half thereof on each of the two immediately succeeding
anniversaries of the date of grant,
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subject to continued service on the Board. The price per Share to be paid by
the holder of such an Option shall equal the fair market value of one Share
on the date the Option is granted. The purchase price of the Shares as to
which such an Option is exercised shall be paid in cash, by check, by the
delivery of Mature Shares, through the cashless exercise program described
in Section 9, or any combination thereof, at the Director's election. Any
Director holding Options granted under this Section 11.1 who is a member of
the Committee shall not participate in any action of the Committee with
respect to any claim or dispute involving such Director.
Subject to the provisions of the applicable Plan agreement, the unexercised
portion of any such Option shall automatically and without notice terminate and
become null and void at the time of the earliest to occur of the following:
(a) the expiration of ten years from the date on which such Option was
granted;
(b) the termination of the optionee's services to the Company and its
Subsidiaries or Affiliates if the optionee's services are terminated for
'cause.' For purposes of this section, 'cause' shall mean that the
Optionee's services are terminated (i) on account of fraud, embezzlement or
other unlawful or tortious conduct, whether or not involving or against the
Company or any Subsidiary or Affiliate, (ii) for violation of a policy of
the Company or any Subsidiary or Affiliate, (iii) for serious and willful
acts or misconduct detrimental to the business or reputation of the Company
or any Subsidiary or Affiliate or (iv) for 'cause' or any like term as
defined in any written contract between the Company and the optionee;
(c) if the optionee's service terminates for reasons other than as
provided in subsection (a), (b) or (d) of this Section 11.1, the portion of
Options granted to such optionee which were not exercisable immediately
prior to such termination shall immediately terminate and expire and the
portion which was exercisable immediately prior to such termination may be
exercised until the earlier of (i) 90 days after his termination of service
or (ii) the date on which such Options terminate or expire in accordance
with the provisions of the Plan (other than this Section 11.1) and the Plan
agreement; or
(d) if the optionee's service terminates by reason of his death, or if
the optionee's service terminates in the manner described in Subsection (c)
of this Section 11.1 and he dies within such period for exercise provided
for therein, the portion of Options not exercisable immediately prior to
such termination shall immediately terminate and expire and the portion
which was exercisable by him immediately prior to his death shall be
exercisable by the person to whom such Options pass under such optionee's
will (or, if applicable, pursuant to the laws of descent and distribution)
until the earlier of (i) one year after the optionee's death or (ii) the
date on which such Options terminate or expire in accordance with the
provisions of the Plan (other than this Section 11.1) and the Plan
agreement.
11.2 Elective Purchase of Shares. In addition to any other benefit to
which any Director may be entitled under the terms of the Plan, a Director
shall be permitted to elect to receive all or any portion of the Fees that
otherwise would be payable in cash to such Director, in Shares rather than
cash in accordance with the provisions of this Section 11.2.
Any Director may elect to receive all or any portion of his or her Fees in
Shares rather than cash by delivering a written election (an 'Election Notice,'
the election set forth therein being referred to as the 'Election') to the
Secretary of the Company. An Election shall continue in effect until it is
revoked by delivery to the Secretary of the Company of a written revocation
notice (a 'Revocation') or modified by delivery to the Secretary of the Company
of a new Election Notice. Any Election or
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Revocation under this Section 11.2 shall be effective with respect to Fees that
otherwise would be paid after the later of (x) with respect to an Initial
Election (as defined below), the date of receipt by the Secretary of the Company
of the Election Notice or, if later, the date specified in such Election Notice,
and (y) with respect to any Revocation or any Election, other than an Initial
Election, six months after the date of receipt by the Secretary of the Company
of such Revocation or Election Notice. There shall be no limit on the number of
Elections or Revocations that may be made by a Director. A Director who does not
elect that all or a portion of his Fees be paid in Shares shall receive his Fees
in cash on the date that such Fees are otherwise due. Any Shares payable under
this Section 11.2 shall be issued to the Director on the same date that the Fees
would have been paid in cash. The number of Shares to be issued to a Director
who makes an Election under this Section 11.2 shall be determined by dividing:
(i) The amount of the Director's Fees for which such Director has made
an Election under this Section 11.2, by
(ii) the average of the fair market value of the Shares (as defined in
Section 7 of the Plan) for the twenty (20) consecutive trading days
immediately preceding the date as of which the Fees otherwise would be
payable. Only full Shares shall be issued pursuant to this Section. If the
formula set forth above would result in a Director receiving any fractional
Share, then, in lieu of such fractional Share, the Director shall be paid
cash.
For purposes of this Section 11.2 an 'Initial Election' means an Election
received by the Secretary of the Company from a Director on a date not later
than the later of (a) ten days following approval of the Plan by the
stockholders, and (b) ten days after a Director is first elected a director of
the Company; provided, however, that with respect to Directors who were
participants in the Triarc Companies, Inc. 1993 Equity Participation Plan (the
'1993 Plan') or the Triarc Companies, Inc. 1998 Equity Participation Plan (the
'1998 Plan'), the most recent outstanding election under the 1993 Plan or the
1998 Plan, if any, shall be deemed to continue under this Plan as an 'Initial
Election' and shall continue to be effective so long as no new Election Notice
is received within 10 days following approval of the Plan by the stockholders.
11.3. Effectiveness of Section 11. Notwithstanding anything in this Plan to
the contrary, Section 11.1 and Section 11.2 shall become effective only when, as
and to the extent that Section 11.1 and 11.2 of the 1998 Plan, respectively,
become ineffective due to (a) there being insufficient shares of Class A Common
Stock available under the 1998 Plan, (b) the expiration of the 1998 Plan or (c)
for any other reason.
PROVISIONS RELATING TO RESTRICTED SHARES
12. Granting of Restricted Shares. The Committee may grant Restricted Shares
to eligible persons at any time. In granting Restricted Shares, the Committee
shall determine in its sole discretion the period or periods during which the
restrictions on transferability applicable to such Shares will be in force (the
'Restricted Period'). The Restricted Period may be the same for all such Shares
granted at a particular time or to any one grantee or may be different with
respect to different grantees or with respect to various of the Shares granted
to the same grantee, all as determined by the Committee in its sole discretion.
Each grant of Restricted Shares under the Plan shall be evidenced by an
agreement which shall be executed by the Company and by the person to whom the
Restricted Shares are granted. The agreement shall contain such terms and
provisions, not inconsistent with the Plan, as shall be determined by the
Committee.
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13. Restrictions on Transferability. During the Restricted Period applicable
to each grant of Restricted Shares, such Shares may not be sold, assigned,
transferred or otherwise disposed of, or mortgaged, pledged or otherwise
encumbered. Furthermore, a grantee's eventual right, if any, to such Shares may
not be assigned or transferred except by will or by the laws of descent and
distribution. The restrictions on the transferability of Restricted Shares
imposed by this section are referred to in this Plan as the 'Transferability
Restrictions.'
14. Determination of Vesting Restrictions. With respect to each grant of
Restricted Shares, the Committee shall determine in its sole discretion the
restrictions on vesting which will apply to the Shares for the Restricted
Period, which restrictions as initially determined and as they may be modified
pursuant to the Plan, are referred to hereinafter as the 'Vesting Restrictions.'
By way of illustration but not by way of limitation, any such determination of
Vesting Restrictions by the Committee may provide (a) that the grantee will not
be entitled to any such Shares unless he or she is still employed by, or
providing services to, the Company or its Subsidiaries or Affiliates at the end
of the Restricted Period; (b) the grantee will become vested in such Shares
according to such schedule as the Committee may determine; (c) that the grantee
will become vested in such Shares at the end of or during the Restricted Period
based upon the achievement (in such manner as the Committee may determine) of
such performance standards as the Committee may determine; (d) that the grantee
will become vested in such Shares in any combination of the foregoing or under
such other terms and conditions as the Committee in its sole discretion may
determine; and (e) how any such Vesting Restrictions will be applied, modified
or accelerated in the case of the grantee's death, total and permanent
disability (as determined by the Committee), retirement or under any other
circumstances.
The performance standards, if any, set by the Committee for any grantee may
be individual performance standards applicable to the grantee, may be
performance standards for the Company or the division, business unit or
Subsidiary by which the grantee is employed or to which the grantee is providing
services, may be performance standards set for the grantee under any other plan
providing for incentive compensation for the grantee, or may be any combination
of such standards. Performance standards set at the time of the grant of any
Restricted Shares may be revised at any time prior to the beginning of the last
year of the Restricted Period, but only to take into account significant changes
in circumstances as determined by the Committee in its sole discretion.
If the Committee deems the Vesting Restrictions inappropriate for any
grantee, it may approve the award and delivery to such grantee of all or any
portion of the Restricted Shares then held in escrow pursuant to Section 15. Any
Restricted Shares so awarded and delivered to a grantee shall be delivered free
and clear of the Transferability Restrictions.
15. Manner of Holding and Delivering Restricted Shares. Each certificate
issued for Restricted Shares granted hereunder will be registered in the name of
the grantee, will contain such legend(s) as the Committee shall determine
appropriate, if any, and will be deposited with the Company or its designee in
escrow, accompanied by a stock power executed in blank by the grantee covering
such Shares. The certificates for such Shares will remain in escrow until the
earlier of the end of the applicable Restricted Period, or, if the Committee has
provided for earlier termination of the Transferability Restrictions following a
grantee's death, total and permanent disability, retirement or earlier vesting
of such Shares, such earlier termination of the Transferability Restrictions. At
whichever time is applicable, the certificates representing the number of such
Shares to which the grantee is then entitled will be released from escrow and
delivered to the grantee free and clear of the Transferability Restrictions,
provided that in the case of a grantee who is not entitled to receive the full
number of such Shares evidenced by the certificates then being released from
escrow because of the application of the
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Vesting Restrictions, such certificates will be returned to the Company and
canceled, and a new certificate representing the Shares, if any, to which the
grantee is entitled pursuant to the Vesting Restrictions, will be issued and
delivered to the grantee, free and clear of the Transferability Restrictions.
16. Transfer in the Event of Death, Disability or Retirement.
Notwithstanding a grantee's death, total and permanent disability or retirement,
the certificates for his or her Restricted Shares will remain in escrow and the
Transferability Restrictions will continue to apply to such Shares unless the
Committee determines otherwise. Upon the release of such Shares from escrow and
the termination of the Transferability Restrictions, either upon any such
determination by the Committee or at the end of the applicable Restricted
Period, as the case may be, the portion of such grantee's Restricted Shares to
which he or she is entitled, determined pursuant to his or her applicable
Vesting Restrictions, will be awarded and delivered to the grantee or to the
person or persons to whom the grantee's rights, if any, to the Shares shall pass
by will or by the applicable law of descent and distribution, as the case may
be. However, the Committee may, in its sole discretion, award and deliver all or
any greater portion of the Restricted Shares to any such grantee or to such
person or persons.
17. Limitations on Obligation to Deliver Shares. The Company shall not be
obligated to deliver any Restricted Shares free and clear of the Transferability
Restrictions until the Company has satisfied itself that such delivery complies
with all laws and regulations by which the Company is bound.
GENERAL PROVISIONS
18. Stockholder Rights. Except for the Transferability Restrictions, a
grantee of Restricted Shares shall have the rights of a holder of the Shares,
including the right to receive dividends paid on such Shares and the right to
vote such Shares at meetings of stockholders of the Company; provided that the
Committee may provide at the time of any grant of Restricted Shares that cash
dividends and stock dividends with respect to the Restricted Shares may be
withheld by the Company for the grantee's account, and interest may be credited
on the amount of cash dividends withheld at a rate and subject to such terms as
determined by the Committee. The cash dividends or stock dividends so withheld
by the Company and attributable to any particular Restricted Share (and earnings
thereon, if applicable) shall be distributed to the grantee upon the release of
restrictions on such Restricted Share and, if such Restricted Share is
forfeited, the grantee shall have no right to such cash dividends or stock
dividends. No optionee shall have any of the rights of a stockholder with
respect to any Shares unless and until he or she has exercised his or her Option
with respect to such Shares and has paid the full purchase price therefor.
19. Changes in Shares. In the event of (i) any split, reverse split,
combination of shares, reclassification, recapitalization or similar event which
involves, affects or is made with regard to any class or series of Capital Stock
which may be delivered pursuant to the Plan ('Plan Shares'), (ii) any dividend
or distribution on Plan Shares payable in Capital Stock, or extraordinary
dividend payable in cash, or (iii) a merger, consolidation or other
reorganization as a result of which Plan Shares shall be increased, reduced or
otherwise changed or affected, then in each such event the Committee shall, to
the extent it deems it to be consistent with such event and necessary or
equitable to carry out the purposes of the Plan, appropriately adjust (a) the
maximum number of shares of Capital Stock and the classes or series of such
Capital Stock which may be delivered pursuant to the Plan, (b) the number of
shares of Capital Stock and the classes or series of Capital Stock subject to
outstanding Options or SARs, (c) the Option price per share of all Capital Stock
subject to outstanding Options, and (d) any
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other provisions of the Plan, provided, however, that (i) any adjustments made
in accordance with clauses (b) and (c) shall make any such outstanding Option or
SAR as nearly as practicable, equivalent to such Option or SAR, as the case may
be, immediately prior to such change and (ii) no such adjustment shall give any
optionee any additional benefits under any outstanding Option. Further, with
respect to awards intended to qualify as 'performance-based compensation' under
Section 162(m) of the Code, such adjustments or substitutions shall be made only
to the extent that the Committee determines that such adjustments or
substitutions may be made without causing such awards to fail to qualify as
'performance-based compensation' for purposes of Section 162(m) of the Code.
20. Reorganization. In the event that the Company is merged or consolidated
with another corporation, or in the event that all or substantially all of the
assets of the Company are acquired by another corporation, or in the event of a
reorganization or liquidation of the Company (each such event being hereinafter
referred to as a 'Reorganization Event') or in the event that the Board of
Directors shall propose that the Company enter into a Reorganization Event, then
the Committee may in its discretion take any or all of the following actions:
(i) by written notice to each optionee, provide that his or her Options and/or
SARs will be terminated or repurchased by the Company unless exercised within
thirty (30) days (or such longer period as the Committee shall determine in its
sole discretion) after the date of such notice (without acceleration of the
exercisability of such Options); and (ii) advance the date or dates upon which
any or all outstanding Options shall be exercisable.
Whenever deemed appropriate by the Committee, any action referred to in the
preceding paragraph may be made conditional upon the consummation of the
applicable Reorganization Event. The provisions of this Section 20 shall apply
notwithstanding any other provision of the Plan.
21. Change of Control. Notwithstanding anything in the Plan to the contrary,
upon (i) the acquisition by any person of 50% or more of the combined voting
power of the Company's outstanding securities entitled to vote generally in the
election of directors, or (ii) a majority of the directors of the Company being
individuals who are not nominated by the Board of Directors (a 'Change of
Control'), any outstanding Options granted under the Plan shall be fully and
immediately exercisable and any Vesting Restrictions applicable to any
Restricted Shares shall lapse and such Restricted Shares shall be delivered free
and clear of all Transferability Restrictions. The acquisition of any portion of
the combined voting power of the Company by DWG Acquisition Group, L.P., Nelson
Peltz or Peter May or by any person affiliated with such persons (or the
acquisition or disposition by any person or persons who receive any award under
Section 11 hereof) shall in no event constitute a Change of Control.
22. Withholding Taxes. Whenever under the Plan shares of Common Stock are to
be delivered pursuant to an award, the Committee may require as a condition of
delivery that the optionee or grantee remit an amount sufficient to satisfy all
federal, state and other governmental holding tax requirements related thereto.
Whenever cash is to be paid under the Plan (whether upon the exercise of an SAR
or otherwise), the Company may, as a condition of its payment, deduct therefrom,
or from any salary or other payments due to the grantee, an amount sufficient to
satisfy all federal, state and other governmental withholding tax requirements
related thereto or to the delivery of any shares of Common Stock under the Plan.
Notwithstanding any provision of this Plan to the contrary, in connection with
the transfer of an Option to a Permitted Transferee pursuant to Section 9 of the
Plan, the optionee shall remain liable for any withholding taxes required to be
withheld upon the exercise of such Option by the Permitted Transferee.
Without limiting the generality of the foregoing, (i) an optionee or grantee
may elect to satisfy all or part of the foregoing withholding requirements by
delivery of Mature Shares having a fair market
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value (determined as of the date of such delivery by the optionee or grantee)
equal to all or part of the amount to be so withheld, provided that the
Committee may require, as a condition of accepting any such delivery, the
optionee or grantee to furnish an opinion of counsel acceptable to the Committee
to the effect that such delivery would not result in the optionee or grantee
incurring any liability under Section 16(b) of the Act; and (ii) the Committee
may permit any such delivery to be made by withholding Shares from the Shares
otherwise issuable pursuant to the award giving rise to the tax withholding
obligation (in which event the date of delivery shall be deemed the date such
award was exercised).
23. 162(m) Performance-Based Awards. The Committee may determine that an
award of Options, SARs or Restricted Shares which would not otherwise qualify as
'performance-based compensation' under Section 162(m) of the Code shall be made
to so qualify by the implementation of additional vesting conditions based on
the attainment of performance standards in accordance with the rules set forth
below. Such an award is referred to hereunder as a '162(m) Performance-Based
Award.' The performance standards applicable to a 162(m) Performance-Based Award
will be based on objective, quantifiable measures for the Company as a whole, or
the operating units of the Company, with respect to a period established by the
Committee (a 'Performance Period') and may include, and will be limited to, one
or more of the following:
1. earnings per share;
2. market share;
3. margins (limited to gross margin, 'Adjusted EBITDA' (as defined
below) margin, and Adjusted EBITDA (as defined below, but excluding clause
(1) thereof) margin);
4. productivity improvement;
5. costs or expenses;
6. successful completion of acquisitions, dispositions,
recapitalizations, financings or refinancings;
7. total return on investment portfolio;
8. pre-tax net realized capital gains;
9. stock price; or
10. net investment income.
For each Performance Period, the Committee will, on or before the date as
may be required in order for a 162(m) Performance-Based Award to qualify as
'performance-based compensation' for purposes of Section 162(m) of the Code (the
'Performance Goals Date'), establish (a) the performance standards and (b) if
more than one performance standard is established, the weighting of the
performance standards. The Committee may at any time prior to the Performance
Goals Date for a period or, subject to the next paragraph, at any time
thereafter in its sole and absolute discretion, adjust or modify the calculation
of a performance standard for such period in order to prevent the dilution or
enlargement of the rights of grantees (X) in the event or in anticipation of any
unusual or extraordinary corporate item, transaction, event or development;
(Y) in recognition or in anticipation of any other unusual or nonrecurring
events affecting the Company, or the financial statements of the Company, or in
response to or in anticipation of changes in applicable laws, regulations,
accounting principles or business conditions; and (Z) in view of the Committee's
assessment of the business strategy of the Company, performance of comparable
organizations, economic and business conditions, and any other circumstances
deemed relevant.
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The Committee may exercise such discretion set forth in the preceding
paragraph to the extent the exercise of such authority after the Performance
Goals Date would not cause the 162(m) Performance-Based Award to fail to qualify
as 'performance-based compensation' under Section 162(m) of the Code. If such
discretion would cause such 162(m) Performance-Based Award to fail to qualify as
performance-based compensation, then such authority shall only be exercised with
respect to those grantees who are determined by the Committee to be not persons
subject to Section 162(m) of the Code.
On or before the Performance Goals Date as to each applicable period, the
Committee shall establish a written schedule of the amount of Shares subject to
the 162(m) Performance-Based Award that will vest if the performance standards
are satisfied. As soon as practicable following the end of the applicable
period, the Committee will certify in writing the attainment of the performance
standards established for the applicable period and will calculate the number of
amount of Shares subject to the 162(m) Performance-Based Award, if any, that
will vest pursuant to the schedule previously established by the Committee.
Notwithstanding any provision herein to the contrary, no 162(m)
Performance-Based Award will vest in respect of a period in which performance
fails to attain or exceed the minimum level for any of the performance
standards.
For purposes of this Section 23, 'Adjusted EBITDA' for any referenced period
shall mean the Company's (or with respect to an acquired company, the acquired
company's) operating income for such period, as reflected on its consolidated
audited financial statements, adjusted to exclude the impact of:
(1) depreciation and amortization expenses;
(2) any amounts accrued pursuant to management bonus plans and related
employer payroll taxes for the fiscal year;
(3) any discretionary or matching contributions to the Company's 401(k)
Plan and other deferred compensation plans for the applicable fiscal year;
(4) all items of gain, loss or expense determined to be extraordinary or
unusual in nature or infrequent in occurrence or related to the disposal of
a segment of a business or related to a change in accounting principles, all
as determined in accordance with standards established by Opinion No. 30 of
the Accounting Principles Board, and any amendment, restatement,
modification, supplement or successor thereto ('APB Opinion No. 30');
(5) all items of gain, loss or expense related to restructuring charges
of subsidiaries whose operations are not included in operating income for
the fiscal year;
(6) all items of gain, loss or expense related to discontinued
operations that do not qualify as a segment of a business as defined under
APB Opinion No. 30;
(7) any profit or loss attributable to the business operations of any
entity acquired by the Company or any consolidated subsidiary during the
Plan Year;
(8) the reduction in carrying value of long-lived assets, in accordance
with FASB Pronouncement No. 121 and/or FASB Pronouncement No. 144, and any
amendment, restatement, modification, supplement or successor thereto; and
(9) all items of expense related to equity-based compensation determined
in accordance with the standards established by Opinion No. 25 of the
Accounting Principles Board or FASB Pronouncement No. 123, and any
amendment, restatement, modification, supplement or successor thereto.
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In addition, operating income will not be adjusted for a minority interest
holder's share of a consolidated subsidiary's operating income or loss.
24. Additional Provisions of an Award. Awards under the Plan also may be
subject to such other provisions (whether or not applicable to the benefit
awarded to any other optionee or grantee) as the Committee determines
appropriate including, without limitation, provisions to assist the optionee or
grantee in financing the purchase of Shares upon the exercise of Options,
provisions for the forfeiture of or restrictions on resale or other disposition
of shares of Shares acquired under any Option, provisions giving the Company the
right to repurchase Restricted Shares or Shares acquired under any Option in the
event the optionee or grantee elects to dispose of such Shares and provisions
allowing the optionee or grantee to elect to defer the receipt of payment in
respect of awards for a specified period or until a specified event.
25. Amendment and Discontinuance. The Board of Directors may amend, alter,
suspend, discontinue, or terminate the Plan or any portion thereof at any time;
provided that no such amendment, alteration, suspension, discontinuation or
termination shall be made without stockholder approval if such approval is
necessary to comply with any regulatory requirement applicable to the Plan
(including as necessary to prevent awards which are intended to qualify as
'performance-based compensation' for purposes of Section 162(m) of the Code to
fail to so qualify) and provided further that any such amendment, alteration,
suspension, discontinuance or termination that would impair any rights under any
award theretofore made under the Plan shall not to that extent be effective
without the consent of the person to whom such award was made.
26. Applicable Laws. The obligation of the Company to deliver Shares shall
be subject to all applicable laws, rules and regulations, and to such approvals
by governmental agencies as may be deemed appropriate by the Committee,
including, among others, such steps as counsel for the Company shall deem
necessary or appropriate to comply with requirements of relevant securities
laws. Such obligation shall also be subject to the condition that the Shares
reserved for issuance upon the exercise of Options granted under the Plan shall
have been duly listed on any national securities exchange which then constitutes
the principal trading market for the Shares.
27. Governing Laws. The Plan shall be applied and construed in accordance
with and governed by the law of the State of Delaware without regard to the
principles of conflicts of law thereof, or principals of conflicts of laws of
any other jurisdiction which could cause the application of the laws of any
jurisdiction other than the State of Delaware, to the extent such law is not
superseded by or inconsistent with Federal law.
28. Effective Date and Duration of Plan. The Plan shall become effective on
the date of its approval by the stockholders of the Company in a manner intended
to comply with the shareholder approval requirements of Section 162(m) of the
Code. The term during which awards may be granted under the Plan shall expire on
June 4, 2012.
29. Amendments to Agreements. Notwithstanding any other provision of the
Plan, the Board of Directors, or any authorized committee thereof, may amend the
terms of any agreement entered into in connection with any award granted
pursuant to the Plan, provided that the terms of such amendment are not
inconsistent with the terms of the Plan.
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APPENDIX 1
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
TRIARC COMPANIES, INC.
Tuesday, June 4, 2002
ADMISSION TICKET
TRIARC COMPANIES, INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, JUNE 4, 2002
The 2002 Annual Meeting of Stockholders of Triarc Companies, Inc. will be
held on Tuesday, June 4, 2002, at 12:00 noon, local time, in Auditoriums C and
D, at the offices of Bear Stearns & Co., Inc., 2nd floor, 383 Madison Avenue,
New York, New York, for the purposes listed on the reverse side:
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE
SIDE
ANNUAL MEETING OF STOCKHOLDERS OF
TRIARC COMPANIES, INC.
Tuesday, June 4, 2002
Co. #____________ Acct.#_____________
PROXY VOTING INSTRUCTIONS
TO VOTE BY MAIL
---------------
Please date, sign and mail your proxy card in the envelope provided as soon as
possible.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
--------------------------------------------
Please call toll-free 1-800-PROXIES and follow the instructions. Have your
control number and the proxy card available when you call.
ADMISSION TICKET
YOUR CONTROL NUMBER IS [ ]
Please Detach and Mail in the Envelope Provided
A [X] Please mark your
votes as in this
example using
dark ink only.
FOR all nominees WITHHOLD
listed at right (except AUTHORITY
as marked to the to vote for all nominees
contrary below) listed at right.
1. To elect nine [ ] [ ]
(9) directors to
hold office as
specified in
the accompanying Proxy Statement.
To withhold authority to vote for an individual
nominee, write such nominee's name on the line provided.
---------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE NINE
(9) NOMINEES NAMED BELOW AND FOR PROPOSALS 2 AND 3 BELOW.
Nominees:
Nelson Peltz
Peter W. May
Hugh L. Carey
Clive Chajet
Joseph A. Levato
David E. Schwab II
Jeffrey S. Silverman
Raymond S. Troubh
Gerald Tsai, Jr.
FOR AGAINST ABSTAIN
2. To take action with respect to to the adoption
of the Company's 2002 Equity Participation Plan. [ ] [ ] [ ]
3. To ratify the appointment of Deloitte & Touche LLP
as the Company's independent certified
public accountants. [ ] [ ] [ ]
4. To transact such other matters as may properly
come before the meeting or any adjournment or
postponement thereof. [ ] [ ] [ ]
Stockholders entitled to vote at the meeting or any adjournment or postponement
thereof are holders of record of the Company's Class A Common Stock at the close
of business on April 8, 2002.
Your vote is important! Stockholders are cordially invited to attend the
meeting. Whether or not you plan to attend, please complete, sign and date the
enclosed proxy card and return it promptly in the You may enclosed envelope.
nevertheless vote in person if you attend the
meeting.
I plan to attend the Annual Meeting [ ]
Signature:____________________________________ Date:___________________
Signature:____________________________________ Date:___________________
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREIN. WHEN SIGNING AS ATTORNEY,
ADMINISTRATOR, EXECUTOR, GUARDIAN OR TRUSTEE, PLEASE GIVE YOUR FULL TITLE
AS SUCH. IF A CORPORATION, PLEASE SIGN BY PRESIDENT OR OTHER AUTHORIZED
OFFICER AND INDICATE TITLE. IF SHARES ARE REGISTERED IN THE NAMES OF JOINT
TENANTS OR TRUSTEES, EACH TENANT OR TRUSTEE IS REQUIRED TO SIGN.