CHANGE IN CONTROL AGREEMENT FOR KEY
EMPLOYEES
WENDY’S INTERNATIONAL,
INC.
This Agreement is
made and entered into as of
,
, by and between WENDY’S
INTERNATIONAL, INC., an Ohio corporation
(“WENDY’S”), and
(the “EXECUTIVE”), who are the parties to this
Agreement.
(1) WENDY’S
is engaged, directly and through subsidiaries, in the business of
owning, operating and franchising fast food restaurants and
carrying on ancillary activities incident thereto.
(2) The
EXECUTIVE possesses unique skills, knowledge and experience
relating to WENDY’S business.
(3) The
EXECUTIVE is currently employed by WENDY’S directly or
through a subsidiary of WENDY’S, and desires to continue to
be so employed.
(4) WENDY’S
desires to be assured of the continued services of the EXECUTIVE
and to afford him the job security this Agreement provides without,
however, increasing the compensation he would otherwise obtain were
it not for the occurrence of events foreseen by this Agreement, and
the EXECUTIVE desires to be assured that, in the event of a
material change in WENDY’S management, occasioned by a
substantial change in the control of WENDY’S, the terms,
conditions and environment of his employment will not be
unreasonably affected.
(5) WENDY’S
desires to be assured of the objectivity of the EXECUTIVE in
evaluating a potential offer the effect of which would be a change
of control of WENDY’S, and advising whether or not he
believes a potential change of control is in the best interests of
WENDY’S and its shareholders. WENDY’S further desires
to be assured of the dedication of the EXECUTIVE to maximizing the
value to be received by the shareholders of WENDY’S in the
circumstances of negotiating or otherwise responding to a proposed
change of control, and to be assured of the continuity of services
of the EXECUTIVE during such time as a proposed change of control
is under negotiation or otherwise pending.
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In consideration
of their mutual covenants expressed herein, the parties, intending
to be legally bound hereby, agree as follows:
Section 1.
EXECUTIVE’S Rights to Continued Employment in the event of
a CHANGE IN CONTROL of WENDY’S.
For purposes of
this Agreement a “CHANGE IN CONTROL” shall mean the
occurrence of:
(a) An
acquisition (other than directly from WENDY’S) of any common
stock or other voting securities of WENDY’S entitled to vote
generally for the election of directors (the “Voting
Securities”) by any “Person” (as the term person
is used for purposes of Section 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), immediately after which such Person
has “Beneficial Ownership” (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of thirty
percent (30%) or more of the then outstanding shares of
WENDY’S common stock or the combined voting power of
WENDY’S then outstanding Voting Securities; provided ,
however , in determining whether a CHANGE IN CONTROL has
occurred, Voting Securities which are acquired in a
“Non-Control Acquisition” (as hereinafter defined)
shall not constitute an acquisition which would cause a CHANGE IN
CONTROL. A “Non-Control Acquisition” shall mean an
acquisition by (i) an employee benefit plan (or a trust
forming a part thereof) maintained by (A) WENDY’S or
(B) any corporation or other Person of which a majority of its
voting power or its voting equity securities or equity interest is
owned, directly or indirectly, by WENDY’S (for purposes of
this definition, a “Subsidiary”)
(ii) WENDY’S or its Subsidiaries, or (iii) any
Person in connection with a “Non-Control Transaction”
(as hereinafter defined);
(b) The
individuals who, as of
,
, are members of the Board (the “Incumbent
Board”), cease for any reason to constitute at least seventy
percent (70%) of the members of the Board; provided ,
however , that if the election, or nomination for election
by WENDY’S common stockholders, of any new director was
approved by a vote of at least two-thirds of the Incumbent Board,
such new director shall, for purposes of this Plan, be considered
as a member of the Incumbent Board; provided further
, however , that no individual shall be considered a member
of the Incumbent Board if such individual initially assumed office
as a result of either an actual or threatened “Election
Contest” (as described in Rule 14a-11 promulgated under
the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the
Board (a “Proxy Contest”) including by reason of any
agreement intended to avoid or settle any Election Contest or Proxy
Contest; or
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(i) A merger,
consolidation or reorganization with or into WENDY’S or in
which securities of WENDY’S are issued, unless such merger,
consolidation or reorganization is a “Non-Control
Transaction.” A “Non-Control Transaction” shall
mean a merger, consolidation or reorganization with or into
WENDY’S or in which securities of WENDY’S are issued
where:
(A) the
stockholders of WENDY’S, immediately before such merger,
consolidation or reorganization, own directly or indirectly
immediately following such merger, consolidation or reorganization,
at least seventy percent (70%) of the combined voting power of the
outstanding voting securities of the corporation resulting from
such merger or consolidation or reorganization (the
“Surviving WENDY’S”) in substantially the same
proportion as their ownership of the Voting Securities immediately
before such merger, consolidation or reorganization,
(B) the
individuals who were members of the Incumbent Board immediately
prior to the execution of the agreement providing for such merger,
consolidation or reorganization constitute at least two-thirds of
the members of the board of directors of the Surviving
WENDY’S, or a corporation beneficially directly or indirectly
owning a majority of the Voting Securities of the Surviving
WENDY’S, and
(C) no Person
other than (i) WENDY’S, (ii) any Subsidiary,
(iii) any employee benefit plan (or any trust forming a part
thereof) that, immediately prior to such merger, consolidation or
reorganization, was maintained by WENDY’S or any Subsidiary,
or (iv) any Person who, immediately prior to such merger,
consolidation or reorganization had Beneficial Ownership of thirty
percent (30%) or more of the then outstanding Voting Securities or
common stock of WENDY’S, has Beneficial Ownership of thirty
percent (30%) or more of the combined voting power of the Surviving
WENDY’S then outstanding voting securities or its common
stock;
(ii) A complete
liquidation or dissolution of WENDY’S; or
(iii) The sale or
other disposition of all or substantially all of the assets of
WENDY’S to any Person (other than a transfer to a
Subsidiary).
Notwithstanding
the foregoing, a CHANGE IN CONTROL shall not be deemed to occur
solely because any Person (the “Subject Person”)
acquired Beneficial Ownership of more than the permitted amount of
the then outstanding common stock or Voting Securities as a result
of the acquisition of common stock or Voting Securities by
WENDY’S which, by reducing the number of shares of common
stock or Voting
30
Securities then
outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Persons, provided that if a
CHANGE IN CONTROL would occur (but for the operation of this
sentence) as a result of the acquisition of common stock or Voting
Securities by WENDY’S, and after such share acquisition by
WENDY’S, the Subject Person becomes the Beneficial Owner of
any additional common stock or Voting Securities which increases
the percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a CHANGE IN CONTROL
shall occur.
If the
EXECUTIVE’S employment is terminated by WENDY’S without
CAUSE prior to the date of a CHANGE IN CONTROL but the EXECUTIVE
reasonably demonstrates that the termination (A) was at the
request of a third party who has indicated an intention or taken
steps reasonably calculated to effect a CHANGE IN CONTROL or
(B) otherwise arose in connection with, or in anticipation of,
a CHANGE IN CONTROL which has been threatened or proposed, such
termination shall be deemed to have occurred after a CHANGE IN
CONTROL for purposes of this Agreement provided a CHANGE IN CONTROL
shall actually have occurred.
1.1 From and
after the date of occurrence of a CHANGE IN CONTROL, WENDY’S
shall cause the EXECUTIVE to be employed, and the EXECUTIVE shall
accept employment, with the duties, nature and place of such
employment as described in Section 2 of this Agreement. The
term of such employment, referred to hereinafter as the
“EMPLOYMENT TERM,” shall commence on the date when the
CHANGE IN CONTROL shall have occurred and shall end on the earlier
of:
(a) the
third anniversary of:
(i) the
date when the occurrence of an event described in subparagraph
(a) of Section 1 hereof shall be disclosed in a
Schedule 13D or other such similar or successor form
promulgated by the Securities and Exchange Commission, filed with
the Securities and Exchange Commission of Washington, D. C., and
the duplicate of which is actually received by WENDY’S,
or
(ii) the
date on which a transaction described in subparagraph (c) of
Section 1 of this Agreement (other than a Non-Control
Transaction) shall be consummated, or
(iii) the
first date on which at least thirty percent (30%) of the members of
the Board of Directors of WENDY’S are not INCUMBENT
DIRECTORS; or
(b) the
date when the EMPLOYMENT TERM shall be terminated by WENDY’S
for CAUSE or by the EXECUTIVE without GOOD REASON (as such terms
are defined in Section 4 of this Agreement); or
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(c) the death
of the EXECUTIVE.
Section 2.
Duties, Nature and Place of Employment . During the
EMPLOYMENT TERM, the EXECUTIVE shall provide WENDY’S with
such executive, financial, administrative, and consulting services
in managing and directing WENDY’S business as may be required
by the EXECUTIVE’S job description, as attached hereto, or as
amended by the agreement of the parties hereafter, or reasonably
requested and directed from time to time by action of WENDY’S
Board of Directors. The EXECUTIVE shall at all times faithfully,
industriously and to the best of his ability and talent perform all
of the duties that may be required or requested of him pursuant to
the express terms and conditions of this Agreement. Such duties
shall be performed in Franklin County, Ohio and, on a temporary
basis, at such other place or places as the interests, needs,
business and opportunities of WENDY’S and of its subsidiaries
shall reasonably require.
Section 3.
Remuneration during the EMPLOYMENT TERM . During the
EMPLOYMENT TERM, the EXECUTIVE shall receive from WENDY’S, as
a minimum, the salary, benefits and perquisites being paid to or
afforded him immediately prior to the date of occurrence of the
CHANGE IN CONTROL provided that such salary shall be increased as
of the EXECUTIVE’S established annual salary review date in
each calendar year by a percentage at least as great as the annual
increase in the Consumer Price Index for All Urban Consumers for
All Items most recently published by the United States Bureau of
Labor Statistics prior to such salary review date. Such salary
shall be paid to the EXECUTIVE on the same days of each month as
WENDY’S pays its other employees. The EXECUTIVE shall also
receive an annual bonus each year at least equal to the same annual
bonus he received in the twelve months preceding the CHANGE IN
CONTROL; provided , however , that if the bonus plan
in which the EXECUTIVE participated during the twelve months
preceding the CHANGE IN CONTROL is not the same as the bonus plan
in which the EXECUTIVE is participating following the CHANGE IN
CONTROL, with respect to the twelve month period preceding the
CHANGE IN CONTROL, the EXECUTIVE will be deemed to have received a
bonus equal to that received by the EXECUTIVE’S predecessor
in his position, (or, where there was not a predecessor in the same
position, equal to the average of the bonuses received by bonus
plan participants in comparable positions to the EXECUTIVE’S
then current position). The EXECUTIVE shall also be entitled to all
rights afforded him under the terms of any outstanding stock
options granted him by WENDY’S and all incentive compensation
and deferred compensation programs maintained by WENDY’S in
which the EXECUTIVE was entitled to participate immediately
preceding the CHANGE IN CONTROL, or successors to such
programs.
3.1
WENDY’S Board of Directors shall review annually the
performance of the EXECUTIVE, the results of operations and
financial condition of WENDY’S, together with prevailing
economic conditions and other factors, and consider and act
upon:
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(a) whether to pay the EXECUTIVE an
increase in salary above the aforesaid minimum annual salary,
and
(b) whether to pay the EXECUTIVE a bonus in
excess of the minimum bonus required aforesaid; provided, however,
if WENDY’S pays a bonus to any of its other full-time exempt
employees, WENDY’S shall pay the EXECUTIVE a bonus computed
on the same basis as the bonus paid to such other employees if the
bonus so computed is in excess of the minimum bonus required to be
paid the EXECUTIVE pursuant to this Section 3.
3.2
WENDY’S shall cause the EXECUTIVE, his spouse and dependent
children to be enrolled in and covered by group life,
hospitalization, major medical and disability income insurance
coverages under insurance plans and executive medical reimbursement
plans not less favorable to the EXECUTIVE than the plans of such
description in effect immediately prior to the date of occurrence
of the CHANGE IN CONTROL.
3.3
WENDY’S shall cause the EXECUTIVE to be a participant in one
or more retirement income (pension) plans which afford
participation and benefits to the EXECUTIVE on a basis not less
favorable to the EXECUTIVE than the plans of such description in
effect immediately prior to the date of occurrence of the CHANGE IN
CONTROL; provided, however, that if WENDY’S extends to any
executive officer of WENDY’S (or of any of its subsidiaries)
one or more retirement income (pension) plans affording
participation and benefits more favorable than those required by
the preceding sentence, then WENDY’S shall cause the
EXECUTIVE to be a participant in the latter plan(s).
3.4
WENDY’S shall cause reimbursement to be paid promptly to the
EXECUTIVE for all expenses reasonably incurred by him in connection
with performing his duties pursuant hereto.
3.5 In the
event that the insurance and reimbursement plan benefits required
by paragraph 3.2, above, or the retirement income
(pension) plan benefits required by paragraph 3.3, above, are
not actually available to the EXECUTIVE under the terms of the
plan(s) or applicable law, then WENDY’S shall make available
to the EXECUTIVE an equivalent benefit, or an amount of cash
consideration sufficient to fund or purchase an equivalent benefit,
computed as if he had received a full year of service (for vesting
and benefit purposes) for each of his years of service with
WENDY’S or any affiliate or subsidiary, including any years
for which he is entitled to payment under Section 3 during the
EMPLOYMENT TERM.
Section 4.
Termination of Employment of the EXECUTIVE during the EMPLOYMENT
TERM . The EXECUTIVE’S employment hereunder may be
terminated under the following circumstances:
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4.1
Cause . WENDY’S may terminate the EXECUTIVE’S
employment under this Agreement for “CAUSE.” A
termination for CAUSE is a termination by reason of the
Board’s good faith determination that the EXECUTIVE
(a) willfully and continually failed to substantially perform
his duties with WENDY’S (other than a failure resulting from
the EXECUTIVE’S incapacity due to physical or mental illness)
after a written demand for substantial performance is delivered to
the EXECUTIVE by the Board of Directors which specifically
identifies the manner in which the Board of Directors believes that
the EXECUTIVE has not substantially performed his duties and such
failure substantially to perform continues for at least fourteen
(14) days, or (b) has willfully engaged in conduct which
is demonstrably and materially injurious to WENDY’S,
monetarily or otherwise, or (c) has otherwise materially
breached this Agreement (including, without limitation, a voluntary
termination of the EXECUTIVE’S employment by the EXECUTIVE
during the EMPLOYMENT TERM). No act, nor failure to act, on the
EXECUTI
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