Wendy's 2013 Annual Report Download - page 26

Stock, such that no such persons would be subject to the restrictions set forth in Section 203 solely as a result of such
ownership (such approval, the “Section 203 Approval”).
The Trian Agreement (other than the provisions relating to the Section 203 Approval and certain miscellaneous
provisions that survive the termination of the agreement) terminated pursuant to the termination provisions of the
Trian Agreement after funds affiliated with the Covered Persons sold 16.2 million shares of the Company’s Common
Stock on January 15, 2014, thereby decreasing the Covered Persons’ beneficial ownership to less than 25% of the
outstanding voting power of the Company as of that date. The terminated provisions of the Trian Agreement
included provisions restricting the Covered Persons in the following areas: (i) beneficial ownership of Company
voting securities; (ii) solicitation of proxies or submission of a proposal for the vote of stockholders under certain
circumstances; (iii) certain affiliate transactions with the Company; and (iv) voting of certain Company voting
securities.
This concentration of ownership gives Messrs. Peltz, May and Garden significant influence over the outcome of
actions requiring stockholder approval, including the election of directors and the approval of mergers, consolidations
and the sale of all or substantially all of the Company’s assets. They are also in a position to have significant influence
to prevent or cause a change in control of the Company. If in the future Messrs. Peltz, May and Garden were to
acquire more than a majority of the Company’s outstanding voting power, they would be able to determine the
outcome of the election of members of the Board of Directors and the outcome of corporate actions requiring
majority stockholder approval, including mergers, consolidations and the sale of all or substantially all of the
Company’s assets. They would also be in a position to prevent or cause a change in control of the Company.
The Company’s certificate of incorporation contains certain anti-takeover provisions and permits our Board of
Directors to issue preferred stock without stockholder approval and limits its ability to raise capital from
affiliates.
Certain provisions in the Company’s certificate of incorporation are intended to discourage or delay a hostile
takeover of control of the Company. The Company’s certificate of incorporation authorizes the issuance of shares of
“blank check” preferred stock, which will have such designations, rights and preferences as may be determined from
time to time by the Board of Directors. Accordingly, the Board of Directors is empowered, without stockholder
approval, to issue preferred stock with dividend, liquidation, conversion, voting or other rights that could adversely
affect the voting power and other rights of the holders of its common stock. The preferred stock could be used to
discourage, delay or prevent a change in control of the Company that is determined by the Board of Directors to be
undesirable. Although the Company has no present intention to issue any shares of preferred stock, it cannot assure
you that it will not do so in the future.
The Company’s certificate of incorporation prohibits the issuance of preferred stock to affiliates, unless offered
ratably to the holders of the Company’s Common Stock, subject to an exception in the event that the Company is in
financial distress and the issuance is approved by its audit committee. This prohibition limits the ability to raise
capital from affiliates.
Item 1B. Unresolved Staff Comments.
None.
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