Wendy's 2008 Annual Report Download - page 23

Messrs. Peltz and May may, from time to time, acquire beneficial ownership of additional shares of
common stock. On November 5, 2008, in connection with the tender offer of Trian Fund Management, L.P.
and certain affiliates thereof for up to 40 million shares of our common stock, we entered into an agreement
(the “Trian Agreement”) with Messrs. Peltz and May and several of their affiliates (the “Covered Persons”)
thereof which provides, among other things, that: (i) to the extent the Covered Persons acquire any rights in
respect of our common stock so that the effect of such acquisition would increase their aggregate beneficial
ownership in our common stock to greater than 25%, the Covered Persons may not engage in a business
combination (within the meaning of Section 203 of the Delaware General Corporation Law ) for a period of
three years following the date of such occurrence unless such transaction would be subject to the exceptions set
forth in Section 203(b)(3) through (7) (assuming for these purposes that 15% in the definition of interested
stockholder contained in Section 203 was deemed to be 25%); (ii) for so long as we have a class of equity
securities that is listed for trading on the New York Stock Exchange or any other national securities exchange,
none of the Covered Persons shall solicit proxies or submit any proposal for the vote of our stockholders or
recommend or request or induce any other person to take any such actions or seek to advise, encourage or
influence any other person with respect to our common stock, in each case, if the result of such action would be
to cause the Board of Directors to be comprised of less than a majority of independent directors; and (iii) for so
long as we have a class of equity securities that is listed for trading on the New York Stock Exchange or any
other national securities exchange, none of the Covered Persons shall engage in certain affiliate transactions
with us without the prior approval of a majority of the Audit Committee or other committee of the Board of
Directors that is comprised of independent directors. The Trian Agreement will terminate upon the earliest to
occur of (i) the Covered Persons beneficially owning less than 15% of our common stock, (ii) November 5,
2011 and (iii) at such time as any person not affiliated with the Covered Persons makes an offer to purchase an
amount of our common stock which when added to our common stock already beneficially owned by such
person and its affiliates and associates equals or exceeds 50% or more of our common stock or all or
substantially all of our assets or solicits proxies with respect to a majority slate of directors.
This concentration of ownership gives Messrs. Peltz and May significant influence over the outcome of
actions requiring majority stockholder approval. If in the future Messrs. Peltz and May were to acquire more
than a majority of our outstanding voting power, they would be able to determine the outcome of the election
of members of the board of directors and the outcome of corporate actions requiring majority stockholder
approval, including mergers, consolidations and the sale of all or substantially all of our assets. They would also
be in a position to prevent or cause a change in control of us.
Our success depends substantially upon the continued retention of certain key personnel.
We believe that over time our success has been dependent to a significant extent upon the efforts and
abilities of our senior management team. The failure by us to retain members of our senior management team
could adversely affect our ability to build on the efforts we have undertaken to increase the efficiency and
profitability of our businesses.
Acquisitions have been a key element of our business strategy, but we cannot assure you that we will
be able to identify appropriate acquisition targets in the future and that we will be able to
successfully integrate any future acquisitions into our existing operations.
Acquisitions involve numerous risks, including difficulties assimilating new operations and products. In
addition, acquisitions may require significant management time and capital resources. We cannot assure you
that we will have access to the capital required to finance potential acquisitions on satisfactory terms, that any
acquisition would result in long-term benefits to stockholders or that management would be able to manage
effectively the resulting business. Future acquisitions, if any, may result in the incurrence of additional
indebtedness, which could contain restrictive covenants, or the issuance of additional equity securities, which
could dilute our existing stockholders.
Our investment of excess funds in accounts managed by third parties is subject to risks associated with
the underlying investment strategy of the accounts.
From time to time we place our excess cash in investment funds or accounts managed by third parties
(including the Management Company). These funds or accounts are subject to inherent risks associated with
the underlying investment strategy, which may include significant exposure to the equity and credit markets,
the use of leverage and a lack of diversification.
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