Wendy's 2008 Annual Report Download - page 144

common shares of Wendy’s. Pursuant to the merger agreement, each outstanding Wendy’s option as of the
merger date was converted into 4.25 options for one share of Wendy’s/Arby’s Class A Common Stock. We
performed valuations on the Wendy’s options both before and after the Conversion and determined that the
value of the options after the Conversion was $1,923 higher than the pre-merger value included in the
consideration in the Wendy’s Merger (see Note 3). As such, we recorded additional compensation expense in
2008 for this amount. The total value of the Wendy’s options after the Conversion, including the $1,923
mentioned above, was $18,896. This amount differs from the Wendy’s stock option value used in the purchase
accounting adjustment to goodwill (see Note 3) because that value of $18,495 was calculated as of the
announcement date of the Wendy’s Merger.
Stock Options
Prior to the date of the Conversion, our outstanding stock options were exercisable for either (1) a package
(the “Package Options”) of one share of Class A Common Stock and two shares of Class B Common Stock, (2)
one share of Class A Common Stock (the “Class A Options”) or (3) one share of Class B Common Stock (the
“Class B Options”). As of the date of the Wendy’s Merger, as discussed in Note 3, we converted to a single
class of common stock. As such, all stock options outstanding as of December 28, 2008 (including those under
the Wendy’s Plans) are now exercisable for one share of Class A Common Stock (three shares of Class A
Common Stock for Package Options). Summary information regarding Wendy’s/Arby’s outstanding stock
options, including changes therein, is as follows:
Options
Weighted
Average
Exercise
Price
Aggregate
Intrinsic
Value Options
Weighted
Average
Exercise
Price
Aggregate
Intrinsic
Value Options
Weighted
Average
Exercise
Price
Aggregate
Intrinsic
Value
Package Options Class A Options Class B Options
Outstanding at January 1, 2006 . . . . . . 2,548 23.39 1,300 16.55 9,388 13.96
Granted during 2006 . . . . . . . . . . . . . . . . — 116 20.20 1,899 16.85
Exercised during 2006 . . . . . . . . . . . . . . . (2,280) 21.88 $86,304 (1,214) 16.33 $5,839 (7,090) 14.28 $35,453
Forfeited during 2006. . . . . . . . . . . . . . . . — — (242) 13.79
Outstanding at December 31, 2006 . . . 268 23.89 202 17.06 3,955 13.76
Granted during 2007 . . . . . . . . . . . . . . . . — 32 16.40 1,026 15.82
Exercised during 2007 . . . . . . . . . . . . . . . (43) 23.11 $ 1,269 — $ — (432) 12.38 $ 2,697
Forfeited during 2007. . . . . . . . . . . . . . . . — (33) 21.45 (222) 16.68
Outstanding at December 30, 2007 . . . 225 24.04 $ 657 201 16.22 $ — 4,327 14.24 $ 1,692
Conversion of Class B Options to
Class A Options. . . . . . . . . . . . . . . . . . . 4,902 12.99 (4,902) 12.99
Options assumed with the Wendy’s
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . — 16,341 6.68 —
Granted during 2008 . . . . . . . . . . . . . . . . — 5,549 5.08 741 6.60
Exercised during 2008 . . . . . . . . . . . . . . . — (5) 3.35 $ 4 — $ —
Forfeited during 2008. . . . . . . . . . . . . . . . (15) 25.26 (895) 6.63 (166) 13.43
Outstanding at December 28, 2008 . . . 210 23.54 $ — 26,093 7.60 $2,557 —
Vested or expected to vest at
December 28, 2008 (a) . . . . . . . . . . . . 210 23.54 $ — 23,783 7.67 2,501 —
Exercisable:
December 31, 2006 . . . . . . . . . . . . . . . 268 23.89 148 17.33 2,315,396 12.43
December 30, 2007 . . . . . . . . . . . . . . . 225 24.04 153 16.11 2,457,326 12.90
December 28, 2008 . . . . . . . . . . . . . . . 210 23.54 $ — 12,451 8.60 $2,229 — — N/A
136
Wendy’s/Arby’s Group, Inc. and Subsidiaries
(Formerly Triarc Companies, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)