Wendy's 2008 Annual Report Download - page 169

and all other costs related to the Helicopter Interest to the owner on behalf of the Company from July 1, 2007
until October 1, 2008.
All of these agreements with the Former Executives and the Management Company were negotiated and
approved by a special committee of independent members of the Company’s board of directors (the “Special
Committee”). The Special Committee was advised by independent outside counsel and worked with the
compensation committee and the performance compensation subcommittee of the Company’s board of directors
and its independent outside counsel and independent compensation consultant.
Investments in Equities Account
In December 2005, the Company invested $75,000 in the Equities Account which is managed by the
Management Company and generally co-invests on a parallel basis with the Equity Funds and had a carrying
value of $37,698 and $99,320 as of December 28, 2008 and December 30, 2007, respectively (see Note 8).
The carrying value of the Equities Account excludes $47,000 of restricted cash transferred from the Equities
Account to Wendy’s/Arby’s cash in 2008. The Principals and certain former employees have invested in the
Equity Funds. Beginning January 1, 2008, we began to pay management and incentive fees to the
Management Company in an amount customary for other unaffiliated third party investors. Prior thereto, we
were not charged any management fees.
On September 12, 2008, 251 shares of Wendy’s common stock, which were included in the Equities
Account, were sold to the Management Company at the closing market value as of the day we decided to sell
the shares. The sale resulted in a loss of $38.
RTM Acquisition
During 2007 the Company paid $1,600 to settle a post-closing purchase price adjustment provided for in
the agreement and plan of merger pursuant to which the Company acquired RTM. The sellers of RTM
included certain current officers of a subsidiary of the Company and a former director of the Company. The
Company has reflected such payment as an increase in “Goodwill” included in the accompanying consolidated
balance sheet (see Note 3).
At January 1, 2006, the Company had a note receivable of $519 from a selling stockholder of RTM who
became a non-executive officer of a subsidiary of the Company as a result of the RTM Acquisition. The
principal amount of the note was reported as the “Note receivable from non-executive officer” component of
“Stockholders’ equity” in the Company’s Consolidated Statement of Stockholders’ Equity as of January 1, 2006.
The note bore interest at a bank base rate plus 2%. The note together with $41 of accrued interest was repaid
by the officer in June 2006. The Company recorded $21 of interest income on this note during 2006.
Following the RTM Acquisition, the Company provided certain management services to certain affiliates
of RTM that the Company did not acquire including information technology, risk management, accounting,
tax and other management services through May 7, 2006. The Company charged a monthly fee of $36 plus
out-of-pocket expenses for such services which aggregated $150 during 2006 and was recognized as a reduction
of “General and administrative” expenses in the Consolidated Statements of Operations. The Company believes
that these fees approximated the cost to the Company of providing the management services. On May 7, 2006,
these affiliates of RTM were sold to an unrelated third party. In addition, the Company continued to have
limited transactions with certain of these affiliates through May 7, 2006 which resulted in the Company
recording during 2006 (1) rental income of $22 for a restaurant leased to one of the affiliates and (2) royalty
expense of $10 related to the use of a brand owned by one of these affiliates in four Company-owned
restaurants.
Management Interest in Franchisee
The Company’s Vice Chairman and former President and Chief Operating Officer had an equity interest
in a franchisee that owns an Arby’s restaurant. That franchisee was a party to a standard Arby’s franchise license
161
WENDY’S/ARBY’S GROUP, INC. AND SUBSIDIARIES
(FORMERLY TRIARC COMPANIES, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)