Wendy's 2008 Annual Report Download - page 151

(17) Facilities Relocation and Corporate Restructuring
The facilities relocation and corporate restructuring charges are summarized below:
2008 2007 2006
Wendy’s Restaurants segment ................................... $3,101 $ — $ —
Arby’s Restaurants segment ..................................... 120 652 108
General Corporate . ............................................. 692 84,765 3,165
$3,913 $85,417 $3,273
The Company incurred facilities relocation and corporate restructuring charges in conjunction with the
Wendy’s Merger in 2008. The charges related primarily to severance costs. We expect to incur additional
facilities relocation and corporate restructuring charges with respect to the Wendy’s Merger of $6,436 in 2009
and 2010.
The facilities relocation charges incurred and recognized in our Arby’s restaurant segment for 2008, 2007
and 2006 represent additional costs principally related to the Company combining its existing restaurant
operations with those of RTM following the RTM Acquisition in 2005 including relocating the corporate
office of its restaurant group from Fort Lauderdale, Florida to new offices in Atlanta, Georgia. RTM and AFA
concurrently relocated from their former facilities in Atlanta to the new offices in Atlanta. The charges
consisted of severance and employee retention incentives, employer relocation costs, lease termination costs,
office relocation expenses, and changes in the estimated carrying costs for real estate we purchased under terms
of employee relocation agreements entered into as part of the RTM Acquisition. The project to combine the
RTM and Arby’s operations is completed; as such, we do not expect to incur additional facilities relocation
charges with respect to the RTM Acquisition.
The general corporate charges for 2008 and 2007 principally relate to the transfer of substantially all of
our senior executive responsibilities to the ARG executive team (the “Corporate Restructuring”). In April
2007, the Company announced that it would be closing its New York headquarters and combining the
corporate and restaurant operations in Atlanta, Georgia and completed this transfer of responsibilities in early
2008. Accordingly, to facilitate this transition, the Company had entered into contractual settlements (the
“Contractual Settlements”) with the Former Executives evidencing the termination of their employment
agreements and providing for their resignation as executive officers as of June 29, 2007 (the “Separation Date”).
Under the terms of the Contractual Settlements, the Chairman and former Chief Executive Officer agreed to a
payment obligation consisting of cash and investments with a fair value of $50,289 as of July 1, 2007 and the
Vice Chairman and former President and Chief Operating Officer agreed to a payment obligation (both
payment obligations collectively, the “Payment Obligations”) consisting of cash and investments with a fair
value of $25,144 as of July 1, 2007, both subject to applicable withholding taxes. The Company funded the
Payment Obligations to the Former Executives, net of applicable withholding taxes, by the transfer of cash and
investments to deferred compensation trusts (the “2007 Trusts”) held by the Company as of their separation
date (see Note 27 ). The fair values of the 2007 Trusts at their distribution on December 30, 2007 were
$47,429 for the Chairman and former Chief Executive Officer and $23,705 for the Vice Chairman and former
President and Chief Operating Officer. As the Company did not fund the applicable withholding taxes on the
Contractual Settlements until December 30, 2007 in an accommodation that provided us with additional
operating liquidity through the end of 2007, the Chairman and former Chief Executive Officer and Vice
Chairman and former President and Chief Operating Officer were paid additional amounts of $1,097 and
$548, respectively, in connection with the Contractual Settlements, net of applicable withholding taxes, on
December 30, 2007. The general corporate charge of $84,765 for the year ended December 30, 2007 includes
(1) the fair value of the Payment Obligations paid to the Former Executives, excluding the portion of the
Payment Obligations representing their 2007 bonus amounts of $2,349 and $1,150, respectively, which are
included in “General and administrative” but including related payroll taxes and the additional amounts,
(2) severance of $12,911 for two other former executives, excluding incentive compensation that is due to one
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Wendy’s/Arby’s Group, Inc. and Subsidiaries
(Formerly Triarc Companies, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)