Wendy's 2009 Annual Report Download - page 45

Services Agreement
Wendy’s/Arby’s and the Management Company entered into a new services agreement (the “New Services
Agreement”) which commenced on July 1, 2009 and will continue until June 30, 2011, unless sooner
terminated. Under the New Services Agreement, the Management Company will assist us with strategic
merger and acquisition consultation, corporate finance and investment banking services and related legal
matters. Pursuant to the terms of this agreement, we are paying the Management Company a service fee of
$0.25 million per quarter, payable in advance commencing July 1, 2009. In addition, in the event the
Management Company provides substantial assistance to us in connection with a merger or acquisition,
corporate finance and/or similar transaction that is consummated at any time during the period commencing
on the date the New Services Agreement was executed and ending six months following the expiration of its
term, we will negotiate a success fee to be paid to the Management Company which is reasonable and
customary for such transactions.
Under a prior services agreement which commenced on June 30, 2007 and expired on June 30, 2009, (the
“Services Agreement”) the Management Company provided a broader range of professional and strategic
services to us in connection with our corporate restructuring and the transition of all executive management
responsibilities as described above.
We paid approximately $5.4 million in fees for corporate finance advisory services in 2009 to the
Management Company in connection with the issuance of the Senior Notes.
Liquidation Services Agreement
On June 10, 2009, Wendy’s/Arby’s and the Management Company entered into a liquidation services
agreement (the “Liquidation Services Agreement”) whereby, the Management Company will assist us in the
sale, liquidation or other disposition of our cost investments and DFR Notes, (the “Legacy Assets”), which are
not related to the Equities Account. As of the date of the Liquidation Services Agreement, the Legacy Assets
were valued at $36.6 million (the “Target Amount”). The Liquidation Services Agreement, which expires
June 30, 2011, provides that we will pay the Management Company a fee of $0.9 million in two installments,
which is being recognized over the term of the agreement and included in “General and administrative.” In
addition, in the event that any or all of the Legacy Assets are sold, liquidated or otherwise disposed of and the
aggregate net proceeds to us are in excess of the Target Amount, then we will pay the Management Company a
success fee equal to 10% of the aggregate net proceeds in excess of the Target Amount.
Aircraft Agreements
During 2009, the time share agreements with the Principals and the Management Company for the use of
two of our aircraft expired. One of the aircraft was sold in 2009 to an unrelated third party.
Wendy’s/Arby’s and TASCO, LLC (an affiliate of the Management Company) (“TASCO”) entered into an
aircraft lease agreement (the “Aircraft Lease Agreement”) for the other aircraft that was previously under a time
share agreement. The Aircraft Lease Agreement provides that the Company will lease such corporate aircraft to
TASCO from July 1, 2009 until June 30, 2010. The Aircraft Lease Agreement provides that TASCO will pay
$10,000 per month for such aircraft plus substantially all operating costs of the aircraft including all costs of
fuel, inspection, servicing and storage, as well as operational and flight crew costs relating to the operation of
the aircraft, and all transit maintenance costs and other maintenance costs required as a result of TASCO’s
usage of the aircraft. We will continue to be responsible for calendar-based maintenance and any extraordinary
and unscheduled repairs and/or maintenance for the aircraft, as well as insurance and other costs. The Aircraft
Lease Agreement may be terminated by us without penalty in the event we sell the aircraft to a third party,
subject to a right of first refusal in favor of the Management Company with respect to such a sale.
Supply Chain Relationship Agreement
During the 2009 fourth quarter, Wendy’s and its franchisees entered into a purchasing co-op relationship
agreement (the “Co-op Agreement”) to establish a new Wendy’s purchasing co-op, Quality Supply Chain
Co-op, Inc. (“QSCC”). QSCC now manages food and related product purchases and distribution services for the
Wendy’s system in the United States and Canada. Through QSCC, Wendy’s and Wendy’s franchisees purchase
food, proprietary paper and operating supplies under national contracts with pricing based upon total system
volume.
38