Wendy's 2010 Annual Report Download - page 157

Item 9B. Other Information.
In January 2011, Wendy’s/Arby’s announced that it is exploring strategic alternatives for the Arby’s brand,
including a sale of the brand. To incent key members of senior management to remain with Wendy’s/Arby’s while
strategic alternatives are under consideration, to provide an orderly transition if the Arby’s brand is sold and, with
respect to Stephen E. Hare, Senior Vice President and Chief Financial Officer, to incentivize Mr. Hare to remain
employed for at least three years if Arby’s is sold and the headquarters is moved to Ohio, the Wendy’s/Arby’s
Compensation Committee has authorized Wendy’s/Arby’s to enter into retention agreements with Mr. Hare and Nils
H. Okeson, Senior Vice President, General Counsel and Secretary.
The retention agreement with Mr. Hare would provide that if Arby’s is sold, Mr. Hare would consent under
the terms of the December 18, 2008 letter agreement between Wendy’s/Arby’s and Mr. Hare to relocate to Ohio and
that he would not assert that a “triggering event” had occurred under such letter agreement due to his being required
to relocate to Ohio or due to the sale of Arby’s.
Within 30 days following a sale of Arby’s, Mr. Hare would receive $750,000. If within three years of receiving
this cash award Mr. Hare voluntarily terminates his employment or his employment is terminated without cause (as
defined in the December 18, 2008 letter agreement) by Wendy’s/Arby’s, he would be required to pay back a pro rata
portion of the net amount received. If Wendy’s/Arby’s does not renew Mr. Hare’s employment under the
December 18, 2008 letter agreement (which is subject to one year renewable terms) or if he remains employed by
Wendy’s/Arby’s for three years after receiving the cash award, he would not have to pay back any of the cash award.
Within 30 days following a sale of Arby’s, Mr. Hare would be awarded restricted stock with a value of
$750,000. The restricted stock would vest three years after it is awarded (the “Stated Vesting Date”). However, if
Mr. Hare’s employment is involuntarily terminated by Wendy’s/Arby’s without cause prior to the Stated Vesting
Date, the restricted stock would vest on a prorated basis. If Wendy’s/Arby’s does not renew Mr. Hare’s employment
under the December 18, 2008 letter agreement, all of the restricted stock would vest on his last day of employment.
If Arby’s is sold, Mr. Hare would receive a cash deal success bonus of $100,000 plus 0.15% of the consideration
received by Wendy’s/Arby’s. Consideration would exclude all liabilities for indebtedness of Arby’s assumed by the
buyer. Payment of the deal success fee would be made when consideration for the Arby’s sale is paid to the seller.
Wendy’s/Arby’s would also provide for Mr. Hare’s relocation from Atlanta in accordance with Wendy’s/Arby’s
standard relocation policy (which does not include loss protection on the sale of an executive’s home), as well as a
$130,000 moving bonus payable within 30 days of a sale of Arby’s. If Mr. Hare voluntarily terminates his
employment within 12 months of starting the relocation process he would be required to pay back benefits received
under the relocation policy.
If Arby’s is not sold, Mr. Hare would not be required to relocate to Ohio and no benefits would be payable
under the retention agreement. The December 18, 2008 letter agreement with Mr. Hare will remain in effect and the
provisions of the retention agreement are in addition to any other separation payments or benefits for which Mr. Hare
would be eligible in the event that Wendy’s/Arby’s terminated his employment without cause or elected not to renew
the letter agreement.
The retention agreement with Mr. Okeson would provide that Mr. Okeson agrees to remain employed with
Wendy’s/Arby’s for a period of 6 months after a sale of Arby’s, and that he would be paid a retention bonus in cash of
$500,000, one-third of which would be payable within 7 days of the sale of Arby’s with the remainder payable 6
months thereafter. If Mr. Okeson voluntarily terminates employment with Wendy’s/Arby’s or is terminated with
cause (as defined in the December 18, 2008 letter agreement between Wendy’s/Arby’s and Mr. Okeson) prior to 6
months after the sale of Arby’s, he would not receive any further retention bonus payments under the retention
agreement. If Mr. Okeson’s employment is involuntarily terminated without cause before either payment date, he
would receive the remaining payments.
If Arby’s is sold and Mr. Okeson remains employed through the date 6 months after such sale, or if his
employment is terminated without cause prior to that date, he would receive the compensation described in the
December 18, 2008 letter agreement and any currently outstanding stock options or time based restricted stock
awards would vest and Mr. Okeson would have 18 months to exercise vested stock options.
The December 18, 2008 letter agreement with Mr. Okeson will remain in effect and the provisions of the
retention agreement are in addition to any other separation payments or benefits for which Mr. Okeson would be
eligible in the event that Wendy’s/Arby’s terminated his employment without cause.
151