Wendy's 2010 Annual Report Download - page 123

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WENDY’S/ARBY’S GROUP, INC. AND SUBSIDIARIES
WENDY’S/ARBY’S RESTAURANTS, LLC AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)
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 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. As such, we recorded
additional compensation expense in 2008 for this amount.
All discussions below related to option and restricted share activity for prior years include options or restricted
shares for Class B Common Stock which, if they were still outstanding as of the date of the Wendy’s Merger,
represent options exercisable into Common Stock or restricted Common Stock.
Stock Options
Prior to the date of the Conversion, Wendy’s/Arby’s 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, Wendy’s/Arby’s converted to a single class of common
stock. As such, all stock options outstanding subsequent to the date of the Wendy’s Merger (including those under
the Wendy’s Plans) are now exercisable for one share of Common Stock (three shares of Common Stock for Package
Options).
The tables below summarize 2010 activity and include certain additional information for Wendy’s/Arby’s
outstanding stock options.
Package Options Common Stock Options
Options
Weighted
Average
Exercise
Price
Aggregate
Intrinsic
Value Options
Weighted
Average
Exercise
Price
Aggregate
Intrinsic
Value
Outstanding at January 3, 2010 .................. 195 $23.82 $ — 22,880 $7.15 $2,504
Granted ..................................... — 6,617 $3.92
Exercised .................................... — (409) $3.42 $ 488
Forfeited /expired ............................. (62) $22.16 (1,414) $7.46
Outstanding at January 2, 2011 (a) ................ 133 $24.59 $ — 27,674 $6.42 $6,063
Vested or expected to vest at January 2, 2011 (b) ..... 133 $24.59 $ — 26,519 $6.50 $5,586
Exercisable at January 2, 2011 (c) ................. 133 $24.59 $ — 15,857 $7.75 $1,190
(a) The weighted average contractual life for the Package Options and Common Stock Options that were
outstanding at January 2, 2011 was 1.5 years and 7.5 years, respectively.
(b) The weighted average contractual life for the Package Options and Common Stock options that were vested or
expected to vest at January 2, 2011 was 1.5 years and 7.5 years, respectively.
(c) The weighted average contractual life for the Package Options and Common Stock Options that were exercisable
at January 2, 2011 was 1.5 years and 6.6 years, respectively.
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