EXHIBIT 10.1
ARBY'S RESTAURANT GROUP, INC.
April 13, 2006
Mr. Xxxxxx Xxxxx
0000 Xxxx Xxxxx
Xxxxxx Xxx Xxx, XX 00000
Dear Xxxxxx:
It is with great pleasure that we hereby confirm your employment as
President and Chief Executive Officer of Arby's Restaurant Group, Inc.
("Arby's"), on the terms and conditions set forth in this letter agreement and
in the term sheet (the "Term Sheet") attached as Exhibit A, which Term Sheet is
hereby incorporated herein by reference. You further agree to accept election
and to serve as a director, officer, manager or representative of any subsidiary
of Arby's without any compensation therefor, other than as provided in this
letter agreement. You will report to the Board of Directors of Arby's (the
"Board") and your duties will be performed primarily at the corporate
headquarters of Arby's in Atlanta, Georgia.
1. Term. The term of your employment hereunder shall be effective as of
April 17, 2006 (the "Effective Date") and shall continue through the third
anniversary of the Effective Date (the "Initial Term"); provided, however, that
the term of your employment hereunder may be extended for additional one year
periods beyond the expiration of the Initial Term (the Initial Term together
with any extension shall be referred to hereinafter as the "Employment Term") if
(a) you provide written notice to Arby's (a "Renewal Notice") of your desire to
so extend your employment by no later than (i) in the case of the first one year
extension beyond the Initial Term, the second anniversary of the Effective Date
and (ii) in the case of any subsequent one year extension, the date that is one
year prior to the then scheduled expiration of the Employment Term, and (b)
Arby's delivers to you, within 35 days following such anniversary or date, as
applicable, a notice of acceptance (an "Acceptance Notice") of such extension.
In the event that either you do not deliver a timely Renewal Notice to Arby's or
Arby's does not deliver an Acceptance Notice to you (either because Arby's
delivered a notice to you rejecting your request to extend the Employment Term
or because Arby's failed to deliver any notice in a timely manner), then your
employment hereunder shall terminate as of the earlier of (a) the then scheduled
expiration of the Employment Term or (b) upon a termination of your employment
(i) by Arby's "without cause" (ii) by Arby's for "cause" or (iii) by you due to
a "Triggering Event" (each term as hereinafter defined).
2. Termination Without Cause; or following a Triggering Event or Special
Termination Event
(a) In the event your employment is terminated by Arby's without cause
or by you due to a Triggering Event:
(i) Arby's shall, within 30 days following the date of such
termination of employment, pay to you an amount equal to 1.5 times
your annual base rate of salary in effect as of the effective date of
such termination, payable in a lump sum; provided, that, if required
to comply with Section 409A of the Internal Revenue Code of 1986, as
amended (the "Code") and any Treasury Regulations or other guidance
promulgated thereunder, you will receive such amount in full on the
six-month anniversary of the date of your termination;
(ii) you shall receive a pro rata target bonus for the year of
termination, payable at such time as the bonus would otherwise have
been payable had you remained in the employ of Arby's; provided, that,
if required to comply with Section 409A of the Code and any Treasury
Regulations or other guidance promulgated thereunder, you will receive
such amount in full on the six-month anniversary of the date of your
termination;
(iii) at your election you will be entitled to continue your
coverage under all health and medical insurance policies maintained by
Arby's for eighteen (18) months following the termination of your
employment, in fulfillment of Arby's obligations to you under Section
4980B of the Code and under Part 6 of Title I of the Employee
Retirement Income Security Act of 1974, as amended, the cost of such
coverage to be allocated between you and Arby's in a manner consistent
with the percentage allocation of the costs thereof applicable
immediately prior to the termination of your employment;
(iv) you will automatically become vested in that number of
outstanding unvested stock options granted to you by Triarc in which
you would have been vested by giving you vesting credit for the
remainder of the Initial Term of this agreement or two years,
whichever is later, and any stock options that would have remained
unvested as of such date shall be automatically forfeited as of the
date of your termination. Each vested stock option must be exercised
within the earlier of one year following your termination and the date
on which such stock option expires, or be forfeited; and
(v) you will automatically become vested in 50% of the
outstanding unvested shares of restricted stock (without regard to
performance, time or other targets, if any) granted to you by Triarc,
with any remaining unvested shares of restricted stock being
forfeited.
(b) A termination by Arby's "without cause" shall mean the termination
of your employment by Arby's for any reason other than those reasons set
forth in clauses (i)-(ix) of Section 4 of this letter agreement. For
purposes of clarity, if this letter agreement is not renewed for any reason
other than as provided in Section 2(d)(v) below, your cessation of
employment with Arby's at the end of the Employment Term shall not be
considered a termination by you due to a Triggering Event or a termination
by Arby's "without cause."
(c) The payment of any monies and provision of any benefits to you
pursuant to this Section 2 shall be subject to your prior execution and
delivery to Arby's of a release substantially in the form set forth in
Exhibit B and, if applicable, your not having revoked such release during
the seven-day revocation period described therein, failing which, except to
the extent required by law, Arby's shall be relieved of all of its
obligations hereunder.
(d) For purposes of this letter agreement, "Triggering Event" shall
mean: (i) a material reduction in your responsibilities as President and
Chief Executive Officer of Arby's; (ii) a requirement that you report to
any person other than the Board; (iii) a reduction in your then current
base salary (as described in the Term Sheet) or target bonus percentage (as
described in the Term Sheet); (iv) without your consent, relocation to a
work situs not in the Atlanta, Georgia greater metropolitan area; (v) a
non-renewal of your employment with Arby's at the end of the Employment
Term first scheduled to occur on or after the date of any Change of
Control; or (vi) the occurrence of a Special Termination Event (as
hereinunder defined); provided that a Triggering Event shall only be deemed
to have occurred if, no later than thirty (30) days following the time you
learn of the circumstances constituting a Triggering Event (other than
pursuant to clause (v) or (vi) of this Section 2(d)), you provide a written
notice to Arby's containing reasonable details of such circumstances and
within thirty (30) days following the delivery of such notice to Arby's,
Arby's has failed to cure such circumstances.
(e) Special Termination Event. If, prior to the expiration of the
Employment Term, there is a Change of Control (as hereinafter defined), you
shall have the right to terminate your employment by giving notice to the
Company, within the 30-day period commencing 270 days following the Change
of Control, of your intention to terminate such employment and specifying
the effective date of such termination, which shall be no earlier than 90
days after the date of such termination notice and no later than the
earlier of 120 days after the date of such termination notice and the last
day of the Employment Term. Your decision to elect to terminate your
employment in accordance with this clause (e) is referred to in this letter
agreement as a "Special Termination Event."
For the purposes of this letter agreement, the term "Change of Control"
shall mean: (i) the acquisition by any means regardless of form, by any person
(other than the acquisition by any means regardless of form by Xxxxxx Xxxxx,
Xxxxx Xxx and/or by any person affiliated with such persons) of 50% or more of
the combined voting power of Arby's (or that of any parent entity which directly
or indirectly owns 50% or more of the combined voting power of Arby's) or Triarc
Companies, Inc.'s ("Triarc") outstanding securities entitled to vote generally
in the election of directors; (ii) a majority of the Directors of Arby's (or any
such direct or indirect parent entity) or Triarc being individuals who are not
nominated by the Board of Directors of Arby's (or any such direct or indirect
parent entity) or Triarc, as the case may be; or (iii) a majority of the
Directors of Arby's or Triarc being individuals who are not Xxxxxx Xxxxx, Xxxxx
Xxx and/or individuals nominated, recommended, designated or approved by them
(or by Triarc in the case of Arby's); provided, that each of the incumbent
directors of Arby's and Triarc as of the date of the execution of this letter
agreement shall be deemed to be individuals nominated, recommended, designated
or approved by Messrs. Xxxxx and/or May.
Notwithstanding the foregoing, (i) the acquisition of any portion of the
combined voting power of Arby's (or any such direct or indirect parent entity)
or Triarc by Xxxxxx Xxxxx, Xxxxx Xxx and/or by any person affiliated with such
persons, (ii) any transaction which results in or has the effect of the
continued possession (whether direct or indirect) by Triarc, Xxxxxx Xxxxx, Xxxxx
Xxx and/or an affiliate of any thereof, of the power to influence the management
or policies of Arby's, whether through the ownership of voting securities, by
contract or otherwise, (iii) the merger, consolidation or sale of assets of
Triarc or any subsidiary of Triarc (including Arby's) with or to any corporation
or entity controlled by Xxxxxx Xxxxx, Xxxxx Xxx and/or any person affiliated
with either of them, (iv) the distribution by means of a dividend, spin-off,
split-off or similar transaction of voting securities of Arby's, any such direct
or indirect parent entity of Arby's or Triarc or (v) any sale of securities by
Arby's, any direct or indirect parent entity of Arby's or Triarc, pursuant to a
public offering or securitization transaction, as the case may be, shall not
constitute a Change of Control unless it results in a Change of Control as
defined in the immediately preceding paragraph of this Section 2(e).
3.Treatment of Stock Options/Restricted Shares on Termination due to
Disability.
(a) In the event your employment is terminated by Arby's due
to Disability (as hereinafter defined), you will automatically become
vested in that number of outstanding unvested stock options granted to
you by Triarc in which you would have been vested by giving you credit
for the remainder of the Initial Term or two years, whichever is
later. Any stock options that would have remained unvested as of such
date shall be automatically forfeited as of the date of your
termination. Each vested stock option must be exercised within the
earlier of one year following your termination and the date on which
such stock option expires, or be forfeited.
In the event your employment is terminated by Arby's due to
Disability, you will automatically become vested in 50% of the
outstanding unvested shares of restricted stock (without regard to
performance, time or other targets, if any) granted to you by Triarc,
with any remaining unvested shares of restricted stock being forfeited
as of the date of your termination.
(b) Treatment of Stock Options/Restricted Shares on Change
of Control. Upon the occurrence of a Change of Control, all non-vested
stock options and/or restricted shares shall vest immediately in their
entirety.
4. Cause. For purposes of this letter agreement, "cause" means: (i)
commission of any act of fraud or gross negligence by you in the course of your
employment hereunder that, in the case of gross negligence, has a material
adverse effect on the business or financial condition of Arby's or any of its
affiliates; (ii) willful material misrepresentation at any time by you to the
Board; (iii) a purported voluntary termination by you of your employment (other
than on account of a Triggering Event), or the willful failure or refusal to
comply with any of your material obligations hereunder or to comply with a
reasonable and lawful instruction of the Board which failure to comply with such
instruction continues for a period of 10 days after your receipt of written
notice from the Board identifying in reasonable detail the objectionable action
or inaction; (iv) engagement by you in any conduct or the commission by you of
any act that is, in the reasonable opinion of the Board, materially injurious or
detrimental to the substantial interest of Arby's or any of its affiliates; (v)
your indictment for any felony, whether of the United States or any state
thereof or any similar foreign law to which you may be subject; (vi) any failure
substantially to comply with any written rules, regulations, policies or
procedures of Arby's or Triarc furnished to you that, if not complied with,
could reasonably be expected to have a material adverse effect on the business
of Arby's or any of its affiliates; (vii) any willful failure to comply with
Arby's or Triarc's policies regarding xxxxxxx xxxxxxx; (viii) your death; or
(ix) your inability to perform all or a substantial part of your duties or
responsibilities on account of your illness (either physical or mental) for more
than 90 consecutive calendar days or for an aggregate of 150 calendar days
during any consecutive nine month period ("Disability").
5. Return of Property. Upon any termination of your employment with Arby's,
you will promptly return to Arby's all property provided to you and owned by
Arby's or any of its affiliates, including, but not limited to, credit cards,
computers, personal data assistants, automobiles, cell phones and files.
6. Noncompete/Nonsolicitation/Employee No-Hire.
(a) You acknowledge that as Arby's President and Chief
Executive Officer you will be involved, at the highest level, in the
development, implementation, and management of Arby's business
strategies and plans, including those which involve Arby's finances,
marketing and other operations, and acquisitions and, as a result, you
will have access to Arby's most valuable trade secrets and proprietary
information. By virtue of your unique and sensitive position, your
employment by a competitor of Arby's represents a material unfair
competitive danger to Arby's and the use of your knowledge and
information about Arby's' business, strategies and plans can and would
constitute a competitive advantage over Arby's. You further
acknowledge that the provisions of this Section 6 are reasonable and
necessary to protect Arby's legitimate business interests.
(b) In view of clause(a) above, you hereby covenant and
agree that during your employment with Arby's (except in the
proper discharge of your duties hereunder) and for a period of
twenty-four(24) months following the termination of your employment
with Arby's:
(i) in any state or territory of the United States (and
the District of Columbia) where Arby's maintains restaurants, you will
not engage or be engaged in any capacity, "directly or indirectly" (as
defined below), except as a passive investor owning less than a two
percent (2%) interest in a publicly held company, in any business or
entity that owns and/or franchises more than 3,000 restaurant units in
the United States in which 50% or more of the revenues of such
business or entity (including, without limitation, royalties earned as
a franchisor) is derived from the sale of sandwiches;
(ii) you will not, directly or indirectly, without
Arby's prior written consent, hire or cause to be hired, solicit or
encourage to cease to work with Arby's or any of its subsidiaries or
affiliates, any person who is at the time of such activity, or who was
within the six (6) month period preceding such activity, an employee
of Arby's or any of its subsidiaries or affiliates at the level of
director or any more senior level (unless such person's employment was
terminated by Arby's or any of its subsidiaries or affiliates) or a
consultant under contract with Arby's or any of its subsidiaries or
affiliates and whose primary client is such entity or entities; and
(iii) you will not, directly or indirectly, solicit,
encourage or cause any franchisee or supplier of Arby's or any of its
subsidiaries or affiliates to cease doing business with Arby's or
subsidiary or affiliate, or to reduce the amount of business such
franchisee or supplier does with Arby's or such subsidiary or
affiliate.
(c) For purposes of this Section 6, "directly or indirectly"
means in your individual capacity for your own benefit or as a
shareholder, lender, partner, member or other principal, officer,
director, employee, agent or consultant of or to any individual,
corporation, partnership, limited liability company, business trust,
association or any other entity whatsoever; provided, however, that
you may own stock in Arby's and may operate, directly or indirectly,
Arby's restaurants as a franchisee without violating Sections 6(b)(i)
or 6(b)(iii).
(d) If any competent authority having jurisdiction over this
Section 6 determines that any provision of this Section 6 is
unenforceable because of the duration or geographical scope of such
provision, such competent authority shall have the power to reduce the
duration or scope, as the case may be, of such provision and, in its
reduced form, such provision shall then be enforceable.
7. Confidential Information. You agree to treat as confidential and not to
disclose to anyone other than Arby's and its subsidiaries and affiliates, and
their respective officers, directors, employees and agents, and you agree that
you will not at any time during your employment and for a period of four years
thereafter, without the prior written consent of Arby's, divulge, furnish, or
make known or accessible to, or use for the benefit of anyone other than Arby's,
its subsidiaries, and affiliates, any information of a confidential nature
relating in any way to the business of Arby's or its subsidiaries or affiliates,
or any of their respective franchisees, suppliers or distributors, unless (i)
you are required to disclose such information by requirements of law; (ii) such
information is in the public domain through no fault of yours; or (iii) such
information was previously or becomes available to you on a non-confidential
basis from a source other than Arby's, provided that such source was not known
by you to be bound by any agreement with Arby's to keep such information
confidential. You further agree that during the period referred to in the
immediately preceding sentence you will refrain from engaging in any conduct or
making any statement, written or oral that is disparaging of Arby's, any of its
subsidiaries or affiliates or any of their respective directors or officers.
Arby's agrees during the period referred to in the first sentence of this
Section 7 that each then current member of the Board and each of Arby's then
current executive officers shall refrain from making any statement, written or
oral, that is disparaging of you, your personal reputation or professional
competency.
8. Enforcement. You agree that, in addition to any other remedy provided at
law or in equity, (a) Arby's shall be entitled to a temporary restraining order,
and both preliminary and permanent injunctive relief restraining you from
violating any of the provisions of Sections 6 or 7 of this letter agreement (in
recognition of the fact that damages in the event of a breach by you of Sections
6 or 7 of this letter agreement would be difficult if not impossible to
ascertain and inadequate to remedy), (b) you will indemnify and hold Arby's and
its affiliates harmless from and against any and all damages or losses incurred
by Arby's or any of its affiliates (including reasonable attorneys' fees and
expenses) as a result of any willful or reckless violation by you of any such
provisions and (c) upon any such willful or reckless violation by you, Arby's'
remaining obligations under this letter agreement, if any, shall cease (other
than payment of your base salary through the date of termination of your
employment and any earned but unpaid vacation, and other than as may otherwise
be required by law).
9. Governing Law; Jurisdiction and Venue; Entire Agreement; Jury Trial
Waiver.
(a) It is the intent of the parties hereto that all
questions with respect to the construction of this letter agreement
and the rights and liabilities of the parties hereunder shall be
determined in accordance with the laws of the State of Delaware,
without regard to principles of conflicts of laws thereof that would
call for the application of the substantive law of any jurisdiction
other than the State of Delaware.
(b) Each party irrevocably agrees for the exclusive benefit
of the other that any and all suits, actions or proceedings relating
to Sections 6, 7, and, as it relates to Sections 6 and 7, Sections 8
and 9 of this letter agreement (collectively, "Proceedings" and,
individually, a "Proceeding") shall be maintained in either the courts
of the State of Delaware or the federal District Courts sitting in
Wilmington, Delaware (collectively, the "Chosen Courts") and that the
Chosen Courts shall have exclusive jurisdiction to hear and determine
or settle any such Proceeding and that any such Proceedings shall only
be brought in the Chosen Courts. Each party irrevocably waives any
objection that it may have now or hereafter to the laying of the venue
of any Proceedings in the Chosen Courts and any claim that any
Proceedings have been brought in an inconvenient forum and further
irrevocably agrees that a judgment in any Proceeding brought in the
Chosen Courts shall be conclusive and binding upon it and may be
enforced in the courts of any other jurisdiction.
(c) Each of the parties hereto agrees that this letter
agreement involves at least $100,000 and that this letter agreement
has been entered into in express reliance on Section 2708 of Title 6
of the Delaware Code. Each of the parties hereto irrevocably and
unconditionally agrees that, to the extent such party is not otherwise
subject to service of process in the State of Delaware, service of
process may be made on such party by pre-paid certified mail with a
validated proof of mailing receipt constituting evidence of valid
service sent to such party at the address set forth in this letter
agreement, as such address may be changed from time to time pursuant
hereto, and that service made pursuant to this Section 9(c) shall, to
the fullest extent permitted by applicable law, have the same legal
force and effect as if served upon such party personally within the
State of Delaware.
(d) This letter agreement and the Term Sheet contains the
entire agreement among the parties with respect to the matters covered
herein and, effective as of the Effective Date, supersedes all prior
agreements, written or oral, with respect thereto. This letter
agreement may only be amended, superseded, cancelled, extended or
renewed and the terms hereof waived, by a written instrument signed by
the parties hereto, or in the case of a waiver, by the party waiving
compliance. In the event of a conflict between this letter agreement
and the Term Sheet, this letter agreement shall govern.
(e) EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES
ANY RIGHT TO TRIAL BY JURY IN ANY PROCEEDING, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG THE PARTIES HERETO ARISING OUT OF
OR RELATED TO THIS LETTER AGREEMENT OR ANY OTHER AGREEMENT, DOCUMENT
OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR FOR ANY
COUNTERCLAIM THEREIN. THE PARTIES HERETO MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
10. Arbitration. Except to the extent specifically contemplated by Section
9(b) of this letter agreement, all disputes arising in connection with your
employment with Arby's (whether based on contract or tort or upon any federal,
state or local statute, including but not limited to claims asserted under the
Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964,
as amended, any state Fair Employment Practices Act and/or the Americans with
Disability Act) or any rights arising pursuant to this letter agreement shall,
at the election of either you or Arby's, be submitted to JAMS/ENDISPUTE for
resolution in arbitration in accordance with the rules and procedures of
JAMS/ENDISPUTE. Either party shall make such election by delivering written
notice thereof to the other party at any time (but not later than 45 days after
such party receives notice of the commencement of any administrative or
regulatory proceeding or the filing of any lawsuit relating to any such dispute
or controversy) and thereupon any such dispute or controversy shall be resolved
only in accordance with the provisions of this Section 10. Any such proceedings
shall take place in Atlanta, Georgia before a single arbitrator who shall have
the right to award to any party to such proceedings any right or remedy that is
available under applicable law (including, without limitation, ordering the
losing party to reimburse the reasonable legal fees and expenses incurred by the
winning party with respect to such proceedings). The resolution of any such
dispute or controversy by the arbitrator appointed in accordance with the
procedures of JAMS/ENDISPUTE shall be final and binding. Judgment upon the award
rendered by such arbitrator may be entered in any court having jurisdiction
thereof.
THIS SECTION 10 IS SPECIFICALLY ACKNOWLEDGED AND AGREED BY:
ARBY'S RESTAURANT
GROUP INC.
/s/XXXXX X. XXXXXX /S/XXXXXX XXXXX
------------------------------- --------------------------------
Name: Xxxxx X. Xxxxxx Xxxxxx Xxxxx
Title: Executive Vice President
11. Legal Fees. Subject to Section 10 above, each party shall pay his or
its own costs for any arbitration or litigation, as applicable, initiated in
connection with any disputes arising in connection with your employment with
Arby's, with the cost of the arbitrator, if applicable, to be equally divided
between the parties.
12. Survivability. The provisions of Sections 6, 7, 8, 9, 10, 11 and 13
shall specifically survive any termination of this letter agreement.
13. Notices. Any notice given pursuant to this letter agreement to any
party hereto shall be deemed to have been duly given when mailed by registered
or certified mail, return receipt requested, or by overnight courier, or when
hand delivered as follows:
If to Arby's:
Arby's Restaurant Group, Inc.
0000 Xxxxxxxxx Xxxxxx X
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
With a copy to:
Triarc Companies, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
If to you, at the address set forth on the first page of
this letter agreement.
With a copy to:
Xxxxxx Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx
or at such other address as either party shall from time to time designate by
written notice, in the manner provided herein, to the other party hereto.
14. Tax Withholding; Section 409A. You agree that Arby's may withhold from
any amounts payable to you hereunder all federal, state, local or other taxes
that Arby's determines are required to be withheld pursuant to any applicable
law or regulation. You further agree that if the Internal Revenue Service or
other taxing authority (each, a "Taxing Authority") asserts a liability against
Arby's for failure to withhold taxes on any payment hereunder, you will pay to
Arby's the amount determined by such Taxing Authority (other than penalty or
interest amounts unless such payment is made after 30 days of the delivery of
such notice to you, in which case you shall be responsible for such penalties
and interest) that had not been withheld within thirty (30) days of notice to
you of such determination. Such notice shall include a copy of any
correspondence received from a Taxing Authority with respect to such
withholding. To the extent any of the payments under this Agreement are governed
by Section 409A of the Code, the parties will work together in good faith to
amend any provisions as necessary for compliance in a manner that maintains the
basic financial provisions of this Agreement and is not otherwise economically
detrimental to Arby's or you.
15. Certain Additional Payments by Arby's. The following provisions of this
Section 15 shall apply to any parachute payments made in connection with a
Special Termination Event from and after any Change of Control.
(a) If it is determined (as hereafter provided) that any
payment or distribution by Arby's to you or for your benefit, whether
paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise pursuant to or by reason of any other
agreement, policy, plan, program or arrangement, including without
limitation any stock option, stock appreciation right or similar
right, or the lapse or termination of any restriction on or the
vesting or exercisability of any of the foregoing (a "Payment"), would
be subject to the excise tax imposed by Section 4999 of the Code (or
any successor provision thereto) or to any similar tax imposed by
state or local law, or any interest or penalties with respect to such
excise tax (such tax or taxes, together with any such interest and
penalties, are hereafter collectively referred to as the "Excise
Tax"), then you will be entitled to receive an additional payment or
payments (a "Gross-Up Payment") in an amount such that, after payment
by you of all taxes (including any interest or penalties imposed with
respect to such taxes), including any excise tax imposed by Section
4999 of the Code, imposed upon the Gross-Up Payment, you retain an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments.
(b) Subject to the provisions of Section 15(f) hereof, all
determinations required to be made under this Section 9, including
whether an Excise Tax is payable by you and the amount of such Excise
Tax and whether a Gross-Up Payment is required and the amount of such
Gross-Up Payment, will be made by a nationally recognized firm of
certified public accountants (the "Accounting Firm") selected by you
in your sole discretion. You will direct the Accounting Firm to submit
its determination and detailed supporting calculations to both Arby's
and you within 15 calendar days after the date of the Change in
Control or the date of your termination of employment, if applicable,
and any other such time or times as may be requested by Arby's or you.
If the Accounting Firm determines that any Excise Tax is payable by
you, Arby's will pay the required Gross-Up Payment to you within five
business days after receipt of such determination and calculations. If
the Accounting Firm determines that no Excise Tax is payable by you,
it will, at the same time as it makes such determination, furnish you
with an opinion that you have substantial authority not to report any
Excise Tax on your federal, state, local income or other tax return.
Any determination by the Accounting Firm as to the amount of the
Gross-Up Payment will be binding upon Arby's and you. As a result of
the uncertainty in the application of Section 4999 of the Code (or any
successor provision thereto) and the possibility of similar
uncertainty regarding applicable state or local tax law at the time of
any determination by the Accounting Firm hereunder, it is possible
that Gross-Up Payments which will not have been made by Arby's should
have been made (an "Underpayment"), consistent with the calculations
required to be made hereunder. In the event that Arby's exhausts or
fails to pursue its remedies pursuant to Section 15(f) hereof and you
thereafter are required to make a payment of any Excise Tax, you will
direct the Accounting Firm to determine the amount of the Underpayment
that has occurred and to submit its determination and detailed
supporting calculations to both Arby's and you as promptly as
possible. Any such Underpayment will be promptly paid by Arby's to, or
for the benefit of, you within five business days after receipt of
such determination and calculations.
(c) Arby's and you will each provide the Accounting Firm
access to and copies of any books, records and documents in the
possession of Arby's or you, as the case may be, reasonably requested
by the Accounting Firm, and otherwise cooperate with the Accounting
Firm in connection with the preparation and issuance of the
determination contemplated by Section 15(b) hereof.
(d) The federal, state and local income or other tax returns
filed by you will be prepared and filed on a basis consistent with the
determination of the Accounting Firm with respect to the Excise Tax
payable by you. You will make proper payment of the amount of any
Excise Tax, and at the request of Arby's, provide to Arby's true and
correct copies (with any amendments) of the relevant portions of your
federal income tax return as filed with the Internal Revenue Service
and corresponding portions of state and local tax returns, if
relevant, as filed with the applicable taxing authority, and such
other documents reasonably requested by Arby's, evidencing such
payment. If prior to the filing of your federal income tax return, or
corresponding state or local tax return, if relevant, the Accounting
Firm determines that the amount of the Gross-Up Payment should be
reduced, you will within five business days pay to Arby's the amount
of such reduction.
(e) The fees and expenses of the Accounting Firm for its
services in connection with the determinations and calculations
contemplated by Sections 15(b) and (d) hereof will be borne by Arby's.
If such fees and expenses are initially advanced by you, Arby's will
reimburse you the full amount of such fees and expenses within five
business days after receipt from you of a statement therefor and
reasonable evidence of your payment thereof.
(f) You will notify Arby's in writing of any claim by the
Internal Revenue Service that, if successful, would require the
payment by Arby's of a Gross-Up Payment. Such notification will be
given as promptly as practicable but no later than 10 business days
after you actually receive notice of such claim and you will further
apprise Arby's of the nature of such claim and the date on which such
claim is requested to be paid (in each case, to the extent known by
you). You will not pay such claim prior to the earlier of (i) the
expiration of the 30-calendar-day period following the date on which
you give such notice to Arby's and (ii) the date that any payment of
amount with respect to such claim is due. If Arby's notifies you in
writing prior to the expiration of such period that it desires to
contest such claim, you will:
(i) provide Arby's with any written records or
documents in your possession relating to such claim reasonably
requested by Arby's;
(ii) take such action in connection with contesting
such claim as Arby's will reasonably request in writing from time to
time, including without limitation accepting legal representation with
respect to such claim by an attorney competent in respect of the
subject matter and reasonably selected by Arby's;
(iii) cooperate with Arby's in good faith in order
effectively to contest such claim; and
(iv) permit Arby's to participate in any proceedings
relating to such claim; provided, however, that Arby's will bear and
pay directly all costs and expenses (including interest and penalties)
incurred in connection with such contest and will indemnify and hold
you harmless, on an after-tax basis, for and against any Excise Tax or
income tax, including interest and penalties with respect thereto,
imposed as a result of such representation and payment of costs and
expenses. Without limiting the foregoing provisions of this Section
15(f), Arby's will control all proceedings taken in connection with
the contest of any claim contemplated by this Section 15(f) and, at
its sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim (provided that you may participate
therein at your own cost and expense) and may, at its option, either
direct you to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and you agree to prosecute such
contest to a determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more appellate courts, as
Arby's will determine; provided, however, that if Arby's directs you
to pay the tax claimed and xxx for a refund, Arby's will advance the
amount of such payment to you on an interest-free basis and will
indemnify and hold you harmless, on an after-tax basis, from any
Excise Tax or income tax, including interest or penalties with respect
thereto, imposed with respect to such advance; and provided further,
however, that any extension of the statute of limitations relating to
payment of taxes for your taxable year with respect to which the
contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, Arby's control of any such contested
claim will be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and you will be entitled to settle
or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(g) If, after the receipt by you of an amount advanced by
Arby's pursuant to Section 15(f) hereof, you receive any refund with
respect to such claim, you will (subject to Arby's complying with the
requirements of Section 15(f) hereof) promptly pay to Arby's the
amount of such refund (together with any interest paid or credited
thereon after any taxes applicable thereto). If, after the receipt by
you of an amount advanced by Arby's pursuant to Section 15(f) hereof,
a determination is made that you will not be entitled to any refund
with respect to such claim and Arby's does not notify you in writing
of its intent to contest such denial or refund prior to the expiration
of 30 calendar days after such determination, then such advance will
be forgiven and will not be required to be repaid and the amount of
such advance will offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid pursuant to this Section 15.
(h) You agree to cooperate with Arby's to take actions
reasonably requested of you by Arby's to reduce the amount of Excise
Tax which may be incurred by you, so long as such actions are not
economically detrimental to you.
16. Expense Reimbursement. You will be entitled to reimbursement for all of
your reasonable and necessary business expenses, including reasonable cell
phone, travel, lodging and entertainment expenses, in accordance with Arby's
business expense reimbursement policy as in effect from time to time and upon
submission of appropriate documentation and receipts.
If you agree with the terms outlined above and in the Term Sheet, please
date and sign the copy of this letter agreement enclosed for that purpose and
return it to me.
Sincerely,
ARBY'S RESTAURANT GROUP, INC.
/s/XXXXX X. XXXXXX
------------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President
Agreed and Accepted as of the
13th day of April, 2006.
/s/XXXXXX XXXXX
------------------------------
Xxxxxx Xxxxx
EXHIBIT A
ARBY'S RESTAURANT GROUP
XXXXXX XXXXX EMPLOYMENT TERM SHEET
----------------------------- ------------------------------------------------------------------------
Executive Xxxxxx Xxxxx
----------------------------- ------------------------------------------------------------------------
Annual Base Salary $1,000,000
----------------------------- ------------------------------------------------------------------------
Annual Bonus Bonus target is 100% of base salary. Arby's and Executive performance
assessed for each fiscal year relative to objectives agreed to in
advance by Executive and Board; provided, however, that to the extent
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), may be applicable, such annual bonus, in the discretion of
the Arby's Board, shall be provided in accordance with, and be subject
to the terms and conditions of, the Triarc Companies, Inc. 1999
Executive Bonus Plan. Performance objectives for 2006 to be agreed
upon by the Arby's Board and Executive within 60 days following the
commencement of the employment term.
----------------------------- ------------------------------------------------------------------------
Benefits Benefits as are generally made available to
other senior executives, including
health/medical and insurance programs and a
car lease/car allowance program.
----------------------------- ------------------------------------------------------------------------
Vacation 5 weeks per year
----------------------------- ------------------------------------------------------------------------
Triarc Stock Initial grant of options for 220,000 shares of Triarc Class B
Options/Restricted Shares Common Stock, Series 1, and 100,000 restricted shares of Triarc Class B
Common Stock, Series 1, in connection with commencement of employment,
subject to Triarc Performance Compensation Subcommittee approval. Options
will have a ten year term and will vest 1/3 per year on the day before
each of the three consecutive anniversary dates from date of employment.
50% of the restricted shares will have performance vesting targets and 50%
of the restricted shares will have time vesting targets, all to be agreed
upon by the Arby's Board and Executive within 90 days following the execution
of the employment agreement; provided that if no agreement is reached within
90 days, in lieu of restricted shares, Executive shall be granted options
having a Black-Scholes value equal to the market price of such number of
restricted shares as of the date of commencement of the employment term.
Subsequent grants consistent with executive compensation policies of Arby's.
----------------------------- ------------------------------------------------------------------------
Relocation Arby's will be financially responsible for packing, shipping,
unloading and insurance for moving Executive's personal items from
California to the Atlanta, Georgia, metropolitan area. Arby's will
reimburse Executive for reasonable out-of-pocket lodging expenses (or
Arby's will rent for Executive's use furnished housing reasonably
acceptable to Executive) for up to 90 days if your permanent residence
in the Atlanta, Georgia, metropolitan area is not available for
Executive to move into. Executive and Executive's spouse will be
reimbursed for reasonable expenses for up to three house hunting trips
in accordance with Arby's travel expense reimbursement policies.
Executive will be also reimbursed for normal closing costs associated
with buying a new house. Such costs shall include those items which
by local custom are normally paid by the buyer. Typical costs may
include escrow fees, attorney's fees, appraisals, recording fees,
state transfer taxes and (owner's) title insurance fees.
----------------------------- ------------------------------------------------------------------------
----------------------------- ------------------------------------------------------------------------
Indemnification Executive will be entitled to enter into an
indemnification agreement with Arby's in form
customarily entered into between Arby's and
other senior executives and, subject to
applicable exclusions in any such D&O
insurance policy, will be covered by D&O
insurance in an amount consistent with D&O
insurance maintained by Arby's for directors
and other senior executive officers.
----------------------------- ------------------------------------------------------------------------
----------------------------- ------------------------------------------------------------------------
Legal Fees Arby's will reimburse Executive for
reasonable legal fees and expenses of up to
$20,000 in connection with the negotiation of
the employment agreement.
----------------------------- ------------------------------------------------------------------------
EXHIBIT B
GENERAL RELEASE
AND COVENANT NOT TO XXX
TO ALL WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW that:
Xxxxxx Xxxxx (the "Executive"), on his own behalf and on behalf of his
descendants, dependents, heirs, executors and administrators and permitted
assigns, past and present, in consideration for the amounts payable and benefits
to be provided to the undersigned under that Letter Agreement dated as of April
13, 2006 (the "Employment Agreement") between the Executive and Arby's
Restaurant Group, Inc., a Delaware corporation (the "Company"), does hereby
covenant not to xxx or pursue any litigation (or file any charge or otherwise
correspond with any Federal, state or local administrative agency), arbitration
or other proceeding against, and waives, releases and discharges the Company,
Triarc Companies, Inc. and their respective assigns, affiliates, subsidiaries,
parents, predecessors and successors, and the past and present shareholders,
employees, officers, directors, representatives and agents or any of them
(collectively, the "Company Group"), from any and all claims, demands, rights,
judgments, defenses, actions, charges or causes of action whatsoever, of any and
every kind and description, whether known or unknown, accrued or not accrued,
that the Executive ever had, now has or shall or may have or assert as of the
date of this General Release and Covenant Not to Xxx against any member of the
Company Group, including, without limiting the generality of the foregoing, any
claims, demands, rights, judgments, defenses, actions, charges or causes of
action related to employment or termination of employment or that arise out of
or relate in any way to the Age Discrimination in Employment Act of 1967
("ADEA," a law that prohibits discrimination on the basis of age), the National
Labor Relations Act, the Civil Rights Act of 1991, the Americans With
Disabilities Act of 1990, Title VII of the Civil Rights Act of 1964, the
Employee Retirement Income Security Act of 1974, the Family and Medical Leave
Act, the Xxxxxxxx-Xxxxx Act of 2002, all as amended, and other Federal, state
and local laws relating to discrimination on the basis of age, sex or other
protected class, all claims under Federal, state or local laws for express or
implied breach of contract, wrongful discharge, defamation, intentional
infliction of emotional distress, and any related claims for attorneys' fees and
costs; provided, however, that nothing herein shall release any member of the
Company Group from any of its obligations to the Executive under Section 2 of
the Employment Agreement or any rights the Executive may have to indemnification
and defense under any charter or by-laws, written indemnification agreement (or
similar documents) of any member of the Company Group. The Executive further
agrees that this General Release and Covenant Not to Xxx xxx be pleaded as a
full defense to any action, suit, arbitration or other proceeding covered by the
terms hereof which is or may be initiated, prosecuted or maintained by the
Executive, his heirs or assigns. Notwithstanding the foregoing, the Executive
understands and confirms that he is executing this General Release and Covenant
Not to Xxx voluntarily and knowingly, and this General Release and Covenant Not
to Xxx shall not affect the Executive's right to claim otherwise under ADEA. In
addition, the Executive shall not be precluded by this General Release and
Covenant Not to Xxx from filing a charge with any relevant Federal, State or
local administrative agency, but the Executive agrees not to participate in any
such administrative proceeding (other than any proceeding brought by the Equal
Employment Opportunity Commission), and agrees to waive the Executive's rights
with respect to any monetary or other financial relief arising from any such
administrative proceeding.
In consideration for the amounts payable and benefits to be provided to the
Executive under the Employment Agreement, the Executive agrees to cooperate, at
the expense of the Company Group, with the members of the Company Group with all
litigation relating to the activities of the Company and its affiliates during
the period of the Executive's employment with the Company including, without
limitation, being available to take depositions and to be a witness at trial,
help in preparation of any legal documentation and providing affidavits and any
advice or support that the Company or any affiliate thereof may reasonably
request of the Executive in connection with such claims.
In furtherance of the agreements set forth above, the Executive hereby
expressly waives and relinquishes any and all rights under any applicable
statute, doctrine or principle of law restricting the right to release claims
which the Executive does not know or suspect to exist at the time of executing a
release, which claims, if known, may have materially affected the Executive's
decision to give such a release. In connection with such waiver and
relinquishment, the Executive acknowledges that he is aware that he may
hereafter discover claims presently unknown or unsuspected, or facts in addition
to or different from those which he now knows or believes to be true, with
respect to the matters released herein. Nevertheless, it is the intention of the
Executive to fully, finally and forever release all such matters, and all claims
relating thereto which now exist, may exist or theretofore have existed, as
specifically provided herein. The Executive acknowledges and agrees that this
waiver shall be an essential and material term of the release contained above.
Nothing in this paragraph is intended to expand the scope of the release as
specified herein.
This General Release and Covenant Not to Xxx shall be governed by and
construed in accordance with the laws of the State of Delaware, applicable to
agreements made and to be performed entirely within such State.
To the extent that the Executive is forty (40) years of age or older, this
paragraph shall apply. The Executive acknowledges that he has been offered a
period of time of at least twenty-one (21) days to consider whether to sign this
General Release and Covenant Not to Xxx, which he has waived, and the Company
agrees that the Executive may cancel this General Release and Covenant Not to
Xxx at any time during the seven (7) days following the date on which this
General Release and Covenant Not to Xxx has been signed by all parties to this
General Release and Covenant Not to Xxx. In order to cancel or revoke this
General Release and Covenant Not to Xxx, the Executive must deliver to the
General Counsel of the Company written notice stating that the Executive is
canceling or revoking this General Release and Covenant Not to Xxx. If this
General Release and Covenant Not to Xxx is timely cancelled or revoked, none of
the provisions of this General Release and Covenant Not to Xxx shall be
effective or enforceable and the Company shall not be obligated to make the
payments to the Executive or to provide the Executive with the other benefits
described in the Employment Agreement and all contracts and provisions modified,
relinquished or rescinded hereunder shall be reinstated to the extent in effect
immediately prior hereto.
Each of the Executive and the Company Group agree that they will not make
disparaging or derogatory remarks, whether oral or written, about the Company
Group and the Executive, respectively.
Each of the Executive and the Company acknowledges and agrees that it has
entered into this General Release and Covenant Not to Xxx knowingly and
willingly and has had ample opportunity to consider the terms and provisions of
this General Release and Covenant Not to Xxx.
IN WITNESS WHEREOF, the parties hereto have caused this General Release and
Covenant Not to Xxx to be executed on this day of , 20 .
------------------------------
Xxxxxx Xxxxx
ARBY'S RESTAURANT GROUP, INC.
By:
---------------------------
Name:
Title:
