Exhibit 10.5
EMPLOYMENT AGREEMENT, made as of February 24, 2000 (the "Effective
Date"), between TRIARC COMPANIES, INC. ("Triarc") and Xxxxx X. Xxxxxx (the
"Employee").
1. Employment, Duties and Acceptance
1.1. Triarc hereby employs the Employee, for the Term (as
hereinafter defined) to render exclusive and full-time services to Triarc as a
senior executive officer of Triarc with the title of Executive Vice President
and General Counsel and, in connection therewith, to perform such duties
commensurate with such office, as shall be assigned to him by the Chairman and
Chief Executive Officer or the President and Chief Operating Officer. As
Executive Vice President and General Counsel, the Employee shall be the chief
(senior) legal officer of Triarc.
1.2. The Employee hereby accepts such employment and agrees to
render the exclusive, full-time services described above. The Employee further
agrees to accept election and to serve during all or any part of the Term as an
officer, director or representative of any subsidiary or affiliate of Triarc,
without any compensation therefor other than that specified in this Agreement.
Employee may (i) serve on corporate, civic, professional, educational,
philanthropic or charitable boards or committees and (ii) deliver lectures or
fulfill speaking engagements, as long as such activities do not significantly
interfere with the performance of Employee's responsibilities hereunder.
1.3. The duties to be performed by the Employee hereunder
shall be performed primarily in New York, New York, subject to reasonable travel
requirements on behalf of Triarc. Triarc shall not relocate the Employee outside
of New York, New York without his prior written consent. The Employee will be
entitled to such amounts of paid vacation time as are comparable to that
provided to other senior executives of Triarc (but in any event, not less than
four weeks per annum).
2. Term of Employment
The term of the Employee's employment under this Agreement
(the "Term") shall commence as of the Effective Date, and, subject to Section 4,
shall end on the third anniversary of the Effective Date; provided, however,
that the Term shall automatically be extended for successive one-year periods on
each annual anniversary of the Effective Date unless, not later than 180 days
preceding the date of any such extension, Triarc or the Employee shall have
given written notice to the other party that it does not wish to further extend
the Term (the Term and, unless the period of employment is not so extended (as
provided for in the above proviso), such additional period(s) of employment, are
collectively referred to herein as the "Term"). Each successive 12 month period
(commencing on the date hereof) during the Term of this Agreement is sometimes
referred to herein as a "Contract Year."
3. Compensation
3.1. During the Term, Triarc agrees to pay to the Employee as
his salary (the "Salary") for the services to be performed by him as provided
herein compensation at the rate of $475,000 per year, payable in equal monthly
installments or more frequently, less such deductions or amounts to be withheld
as shall be required by applicable law and regulations. Triarc may increase, but
not decrease the Salary from time to time during the Term.
3.2. In addition to the Salary, the Employee shall also be
eligible during each of Triarc's fiscal years (a "Fiscal Year") throughout the
Term to receive bonuses from time to time as appropriate, in the sole discretion
of Triarc, and to participate in the 1999 Executive Bonus Plan. The aggregate of
such bonus payments with respect to any such fiscal year shall be referred to
herein as that fiscal year's "Bonus".
3.3. Triarc agrees to reimburse the Employee for or to pay at
the Employees' direction all expenses reasonably incurred by the Employee in the
course of performing his duties under this Agreement. The Employee agrees to
submit such written documentation as Triarc may reasonably request in order to
verify the expenditure of such funds or the incurrence of such expenses to
Triarc's reasonable satisfaction, the submission of which shall be a condition
of reimbursement for or payment of same.
3.4. The Employee shall be entitled to all rights and benefits
for which he shall be eligible under any long or short-term management incentive
plan (whether cash or equity based, or otherwise), retirement, retirement
savings, profit-sharing, pension or welfare benefit plan, life, disability,
health, dental, hospitalization and other forms of insurance, and all other
so-called "fringe" benefits or perquisites which Triarc shall from time to time
provide for its senior executives. Without limitation, Triarc shall, in addition
to the life insurance coverage provided for in the previous sentence, continue
to pay the Employee as additional wages as it has been doing as of the date
hereof (either directly or to the Trustee of the Xxxxx X. Xxxxxx 1991 Insurance
Trust u/t/a dated March 31, 1991) an amount equal to the premiums of (i) a life
insurance policy (as to which the Employee names the beneficiary) in the face
amount of $1,000,000 and (ii) a life insurance policy (as to which the Employee
names the beneficiary) in the face amount of $2,830,000 and shall, with respect
to payments made under this Agreement, make maximum matching contributions under
Triarc's 401(k) plan to the extent permitted by applicable law and such plan.
3.5. The Employee will cooperate in assisting Triarc in
obtaining a key man life insurance policy on the life of Employee, the
beneficiary of which shall be named by Triarc, including completing all
necessary application materials and submitting to one or more physical
examinations with a physician of Triarc's choice.
3.6. Employee's Property. Triarc acknowledges that the desk,
chairs, bookcase, lamp, sports memorabilia and conference table (as well as
certain other furnishings and appointments in the Employee's office) were
purchased by the Employee and are the property of the Employee.
4. Termination
4.1. If the Employee shall die during the Term, this Agreement
shall terminate, except that the Employee's estate shall be entitled to receive
a lump sum payment in cash within 30 days of the date of death, of the following
amounts:
a. to the extent not theretofore paid, Employee's then
current Salary through the date of termination plus
any Bonus amounts which have become payable and
any accrued vacation pay;
b. two and one-half (2-1/2) times the sum of employer
contributions paid or accrued on Employee's behalf to
any qualified or nonqualified defined contribution
retirement plans during the calendar year immediately
preceding termination.
In addition, upon a termination of the Employee in accordance
with this Section 4.1, Triarc shall pay the Employee's estate at the time or
times determined by Triarc, but in no event less rapidly than three
substantially equal annual installments beginning no later than 30 days after
the date of death the following amounts: (i) Employee's then current Salary for
the remainder of the Term (but in no event for more than two and one-half
(2-1/2) years from the date of termination) and (ii) two and one-half (2-1/2)
times the Bonus Amount (as hereinafter defined). Furthermore, upon termination
of the Employee in accordance with this Section 4.1, Triarc shall (i) pay the
Employee's estate, in a lump sum in cash at the time the Employee would have
been entitled to receive his Bonus for the Fiscal Year in which his death
occurs, the Pro-Rata Bonus (as hereinafter defined) for such Fiscal Year; (ii)
continue to provide welfare benefits to the Employee and his family for the
remainder of the Term at least equal to those which were being provided to them
at any time within the six-month period ending on the date of termination and
(iii) credit the Employee with two and one-half (2-1/2) additional years of age
and service under each of Triarc's qualified and nonqualified defined benefit
pension plans in which the Employee participates at the time of termination;
provided that in the case of a qualified defined benefit pension plan, the
present value of the additional benefit the Employee would have accrued if
he had been credited with such additional years of age and service (computed
using the actuarial assumptions used for purposes of the most recent actuarial
report in respect of such plan) will be paid in a lump sum in cash within
thirty (30) days after the date of termination; further provided that, in
computing such additional benefit, the Employee shall be deemed to earn
compensation for such additional two and one-half (2-1/2) year period at
the same rate as in the calendar year immediately preceding such
termination. To the extent that the benefits provided for in clause (ii) are
not permissible after termination of employment under the terms of Triarc's
benefit plans in effect, Triarc shall pay to the Employee's estate in a
lump sum in cash within thirty (30) days after the date of termination
an amount equal to the after-tax cost of acquiring on a non-group basis,
for the remainder of the Term, those benefits lost to the Employee and/or to
the Employee's family as a result of the Employee's termination. Employee's
estate shall also be entitled to receive those death benefits to which the
Employee is entitled as of the date of the Employee's death under any
death benefit plans, policies or arrangements of Triarc.
"Bonus Amount" shall mean: the greatest of (a) the largest
Bonus paid to Employee in respect of the two Fiscal Years preceding the date of
termination minus, in the case of any Bonus being used for purposes of
calculating this clause (a) with respect to Fiscal Year 1998 or 1999, $175,000
(the "Look-Back Bonus"), (b) the Bonus which would have been paid to Employee in
respect of the Fiscal Year in which termination occurs if Triarc attained its
budgeted financial performance, and accomplished any other targeted goals for
such year, as reasonably determined by the Compensation Committee of the Board
of Directors (the "Target Bonus") or (c) the Bonus which would have been paid to
the Employee in respect of the Fiscal Year in which termination occurs based on
Triarc's actual performance, and actual accomplishment of any other targeted
goals, as reasonably determined by the Compensation Committee of the Board of
Directors (the "Actual Bonus").
"Pro-Rata Bonus" shall mean: the product of (x) the Bonus
Amount and (y) the number of days elapsed in such year proceeding the date of
termination divided by 365.
4.2. Triarc may terminate the Term of the Employee's
employment hereunder after having established Employee's Disability (pursuant to
the definition of "Disability" set forth below), by giving to Employee written
notice of its intention to terminate Employee's employment. In such a case,
Employee's employment with Triarc shall terminate effective on the 180th day
after receipt of such notice (the "Disability Effective Date"), provided that,
within 180 days after such receipt, Employee shall not have returned to full
performance of Employee's duties. For purposes of this Agreement, "Disability"
means personal injury, illness or other cause which, after the expiration of not
less than 180 days after its commencement, renders Employee unable to perform
his duties with substantially the same level of quality as immediately prior
to such incident and such disability is determined to be total and permanent
by a physician selected by Triarc or its insurers and acceptable to Employee
or Employee's legal representative (such agreement as to acceptability
not to be withheld unreasonably).
Notwithstanding such termination, the Employee shall be entitled to the
following amounts:
(a) the amounts described in clauses (a) and (b) of the first
paragraph of Section 4.1, paid in a lump sum in cash within 30 days of the date
of such termination;
(b) the Pro-Rata Bonus for the Fiscal Year in which the
effective date of the termination occurs, paid in a lump sum in cash at the time
the Employee would have been entitled to receive his Bonus for such Fiscal Year;
(c) the amount described in clause (iii) of the second
sentence of the second full paragraph of Section 4.1 and to receive the
benefits, or payment in lieu of benefits, described in clause (ii) of the second
sentence and third sentence, of the second full paragraph of Section 4.1, paid
in a lump sum in cash within 30 days of the date of such termination. In
addition, to the extent permitted by any plan, the Employee shall be entitled to
receive any disability payments to which he is eligible pursuant to any plan
referred to in Section 3.4 above; and
(d) the amounts described in clauses (i) and (ii) of the first
sentence of the second full paragraph of Section 4.1 payable to the Employee at
the time or times determined by the Corporation, but in no event less rapidly
then three substantially equal installments beginning on the 30th day after the
termination of the Term under this Section 4.2.
In addition, Triarc shall pay the Employee in a lump sum in
cash within 30 days of the date of such termination, the amount of the premiums
due during the remainder of the Term (assuming no termination, but in no event
for more than two and one-half (2-1/2) years) with respect to the life insurance
policies referred to in the second sentence of Section 3.4.
4.3. This Agreement may be terminated by Triarc prior to its
scheduled termination date only for Cause (as defined below). If this Agreement
shall be lawfully terminated by Triarc for Cause during the Term, Triarc's
obligation to pay compensation or other payments hereunder or otherwise to or
for the benefit of the Employee shall cease on the effective date of such
termination; provided, however, that within 30 days of the effectiveness of such
termination, Triarc shall pay the Employee all Salary, business expenses,
amounts payable under any plan or benefit program or other amounts that were
accrued or incurred but unpaid or unreimbursed (including vacation time) at the
effective date of such termination. As used herein the term "Cause" shall mean
only (i) the willful and continued failure of Employee to perform substantially
his duties with Triarc (other than any such failure resulting from Employee's
incapacity due to physical or mental illness or any such failure subsequent
to Employee being delivered a Notice of Termination (as defined in Section
12) without Cause by Triarc or Employee delivering a Notice of Termination
for Good Reason to Triarc) after a written demand for substantial performance
is delivered to Employee by the Board of Directors which specifically
identifies the manner in which the Board believes that Employee has not
substantially performed Employee's duties and Employee has failed to cure such
failure to the reasonable satisfaction of the Board, (ii) the willful
engaging by Employee in gross misconduct which results in substantial
damage to Triarc or its affiliates, or (iii) Employee's conviction (by a court
of competent jurisdiction, not subject to further appeal) of, or pleading
guilty to, a felony. For purpose of this Section 4.3, no act or failure to
act by Employee shall be considered "willful" unless done or omitted to be
done by Employee in bad faith and without reasonable belief that Employee's
action or omission was in the best interests of Triarc or its affiliates. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel for Triarc shall be
conclusively presumed to be done, or omitted to be done, by Employee in good
faith and in the best interests of Triarc. Cause shall not exist unless and
until Triarc has delivered to Employee, along with the Notice of Termination for
Cause, a copy of a resolution duly adopted by three-quarters (3/4) of the entire
Board (excluding Employee if Employee is a Board member) at a meeting of the
Board called and held for such purpose (after reasonable notice to Employee and
an opportunity for Employee, together with counsel, to be heard before the
Board), finding that in the good faith opinion of the Board an event set forth
in clauses (i) - (iii) above has occurred and specifying the particulars thereof
in detail. The Board must notify Employee of any event constituting Cause within
ninety (90) days following the Board's knowledge of its existence or such event
shall not constitute Cause under this Agreement.
4.4. This Agreement shall, at the option of the Employee, be
deemed to have been terminated by Triarc without Cause, following a Change in
Control (as defined herein). The term "Change in Control" shall mean:
(i) the acquisition by any person of more than 50% of
the combined voting power of the outstanding securities entitled to
vote generally in the election of directors of Triarc, followed by,
without the prior consent of the Employee, any meaningful diminution
in the Employee's duties or authority in effect immediately prior to
such acquisition;
(ii) a majority of the Board of Directors of Triarc
shall be individuals who are not nominated by the Board of Directors
of Triarc, followed by, without the prior consent of the Employee,
any meaningful diminution in the Employee's duties or authority in
effect immediately prior to such nomination; or
(iii) neither Messrs. Xxxxxx Xxxxx nor Xxxxx X. May
being Chairman and Chief Executive Officer and President and Chief
Operating Officer, respectively, of Triarc.
The ownership or acquisition of any portion of the combined voting power of
Triarc by DWG Acquisition Group, L.P., Xxxxxx Xxxxx or Xxxxx X. May or by any
person affiliated with such persons shall in no event constitute a Change in
Control. The merger, consolidation or sale of assets of Triarc or any subsidiary
of Triarc with or to any corporation or entity controlled by DWG Acquisition
Group, L.P., Xxxxxx Xxxxx or Xxxxx X. May or by any person affiliated with such
persons shall in no event constitute a Change in Control.
4.5. In the event of the termination of this Agreement in
accordance with Sections 4.1, 4.2 or 4.6, (A) all non-vested stock options and
any other non-vested stock or stock-based awards (whether issued by Triarc or a
subsidiary of Triarc) then owned by the Employee shall vest immediately and in
their entirety; provided, that, in the case of options or awards granted by
Triarc Beverage Holdings Corp., this Section 4.5 shall not be operative unless
and until such vesting would not constitute a default or an event of default or
result in a mandatory prepayment requirement under the terms of any agreement
for indebtedness for borrowed money (each a "Financing Limitation"); (B) all of
the Employee's (1) stock options or other stock based awards (whether issued by
Triarc or a subsidiary of Triarc) granted to Employee on or after the Effective
Date or (2) Triarc stock options (including those previously vested) granted
before the Effective Date if the exercise price thereof is greater than the
closing price of Triarc's common stock on the New York Stock Exchange on the
Effective Date, shall remain exercisable until the earlier of (i) one year
following such termination or (ii) their respective stated expiration dates; and
(C) any restricted stock then owned by the Employee shall vest immediately.
4.6. (A) In the event of the termination of this Agreement by
Triarc without Cause (including pursuant to Section 4.4) or by the Employee for
Good Reason (as hereinafter defined), the Employee shall be entitled to receive
in a lump sum in cash within ten (10) days after the date of termination the
aggregate of the following amounts:
(a) the amounts described in clauses (a) and (b) of the first
paragraph of Section 4.1;
(b) Employee's then current Salary for the remainder of the
Term (but in no event for more than two and one-half (2-1/2) years from the date
of termination; and
(c) two and one-half (2-1/2) times the Bonus Amount; provided
that for this purpose, the Bonus Amount shall be calculated using only the Look-
Back Bonus and the Target Bonus.
In addition, upon termination of the Employee in accordance
with this Section 4.6, the Employee shall: (i) be paid the Pro-Rata Bonus for
the Fiscal Year in which the effective date of the termination occurs, in a lump
sum in cash at the time the Employee would have been entitled to receive his
Bonus for such Fiscal Year; (ii) if the Actual Bonus for the Fiscal Year of
termination exceeds the Bonus Amount as determined in accordance with clause (c)
immediately above, be entitled to receive two and one-half (2-1/2) times the
amount by which the Actual Bonus exceeds such Bonus Amount in a lump sum in cash
at the time the Employee would have been entitled to receive his Bonus for such
Fiscal Year; (iii) be paid within 30 days of the date of termination, the amount
described in clause (iii) of the second sentence of the second full paragraph of
Section 4.1 and shall receive the benefits, or payment in lieu of benefits,
described in clause (ii) of the second sentence and third sentence, of the
second full paragraph of Section 4.1; and (iv) receive two and one-half (2-1/2)
additional years of age and service credit under each qualified and
non-qualified defined benefit pension plan of Triarc in which the Employee
participates at the time of termination.
In addition, Triarc shall pay the Employee in a lump sum in
cash within 30 days of the date of such termination, the amount of the premiums
due during the remainder of the Term (assuming no termination, but in no event
for more than two and one-half (2-1/2) years) with respect to the life insurance
policies referred to in the second sentence of Section 3.4.
(B) For purposes of this Agreement, "Good Reason" means:
(i) any failure by Triarc to comply with any of the
provisions of Section 3 of this Agreement;
(ii) Triarc requiring the Employee to be based at any office
or location other than that described in Section 1.3
hereof; or
(iii) any failure by Triarc to comply with and satisfy Section
7 of this Agreement by causing any successor to Triarc
to fail to expressly assume and agree to perform this
Agreement with the Employee, to the full extent set
forth in said Section 7;
provided that a termination by the Employee with Good Reason shall be effective
only if, within 30 days following the delivery of a Notice of Termination (as
defined in Section 9) for Good Reason by the Employee to Triarc, Triarc has
failed to cure the circumstances giving rise to Good Reason to the reasonable
satisfaction of the Employee. For purposes of this Section 4.6, a good faith
determination made by the Employee that a "Good Reason" for termination has
occurred, and has not been adequately cured, shall be conclusive and binding.
4.7. Triarc acknowledges and agrees that the Employee shall
have no duty at any time to seek other employment or to mitigate his damages
hereunder. The amounts payable to the Employee under this Agreement shall be
paid regardless of whether the Employee obtains other employment.
4.8. Nothing in this Agreement shall prevent or limit the
Employee's continuing or future participation in any benefit, bonus, incentive
(whether cash of equity based, or otherwise) or other plan or program provided
by Triarc or any of its affiliated companies and for which the Employee may
qualify, nor shall anything herein limit or otherwise affect such rights as the
Employee may have under any stock option or other agreements with Triarc or any
of its affiliated companies. Amounts which are vested benefits or which the
Employee is otherwise entitled to receive under any plan or program of Triarc or
any of its affiliated companies at or subsequent to the date on which the
Employee's employment is terminated shall be payable in accordance with such
plan or program. Anything herein to the contrary notwithstanding, if the
Employee becomes entitled to payments pursuant to Section 4.6 hereof, the
Employee agrees to waive payments under any severance plan or program of Triarc.
5. Inventions
The Employee agrees that all processes, technologies, designs
and inventions (but excluding any matters relating to limited liability
companies or limited liability partnerships) ("Inventions"), including new
contributions, improvements, ideas and discoveries, whether patentable or not,
conceived, developed, invented or made by him during the Term of this Agreement
shall belong to Triarc, provided that such Inventions grew out of the Employee's
work for Triarc, are related in any manner to the business (commercial or
experimental) of Triarc or are conceived or made on Triarc's time or with the
use of Triarc's facilities or materials. The Employee shall further: (a)
promptly disclose such Inventions to Triarc; (b) assign to Triarc, without
additional compensation, all patent and other rights to such Inventions for the
United States and foreign countries; (c) sign all papers necessary to carry out
the foregoing; and (d) give testimony in support of the status of the Employee
as the inventor of such inventions. The Employee agrees that he will not assert
any rights to any Invention as having been made or acquired by him prior to the
date of this Agreement, except for Inventions, if any, disclosed to Triarc in
writing prior to the date hereof.
6. Confidentiality
In order to maintain the fullest degree of confidentiality
with respect to the business and operations of Triarc:
6.1. The Employee shall be required to accept and fully comply
with all security and communications requirements imposed by Triarc. All
equipment and facilities that Triarc determines to be necessary or appropriate
for fulfilling such communications and security requirements shall be provided
to the Employee at Triarc's expense. Except as otherwise provided herein, such
equipment and facilities shall be returned to Triarc, as is (other than normal
wear and tear), upon the termination of this Agreement.
6.2. The Employee agrees that all memoranda, notes, records or
other documents made or compiled by the Employee in the fulfillment of his
obligations under this Agreement or otherwise made available to him concerning
any process, apparatus, service, or product manufactured, used, developed,
investigated or seriously considered by Triarc shall be Triarc's property and
shall be delivered to Triarc on the termination of this Agreement or at any
other time on Triarc's request. The Employee shall not knowingly use, for
himself or others, or divulge to others, other than in the ordinary course of
Triarc's business, any secret or confidential information, knowledge or data of
Triarc (including, without limitation, names of customers of Triarc) obtained by
him as a result of his performance of this Agreement, unless authorized by
Triarc.
7. Assignment
This Agreement is binding upon and shall inure to the benefit
of the parties hereto and their respective successors and assigns.
Notwithstanding the foregoing, neither party shall assign or transfer any rights
or obligations hereunder, except that, subject to Section 4.4 hereof, Triarc may
assign or transfer this Agreement to a successor partnership, limited liability
company, or corporation in the event of a merger, consolidation, or transfer or
sale of all or substantially all of the assets of Triarc, provided that Triarc
shall require any successor to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that Triarc would be
required to perform if no such succession had taken place. As used in this
Agreement, "Triarc" means Triarc, as hereinbefore defined and any successor to
its business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law or otherwise. Any purported assignment, other than
as provided above, shall be null and void.
8. Indemnification; Legal Fees
Triarc will indemnify the employee, to the maximum extent
permitted by applicable law, against all costs, charges and expenses incurred or
sustained by him in connection with any action, suit or proceeding to which he
may be made a party by reason of his being an officer, director or employee of
Triarc or of any subsidiary or affiliate of Triarc. Triarc shall pay directly
the fees and expenses of counsel and other experts incurred in connection with
the enforcement of this Agreement, as they may be incurred, provided that the
Employee shall be required to reimburse Triarc for any amounts so paid unless at
least one material matter in dispute is decided in favor of Employee.
9. Notices
A. Any termination by Triarc with or without Cause or by the
Employee with or without Good Reason or following a Change in Control shall be
communicated by Notice of Termination to the other party hereto given in
accordance with this Section 9. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Employee's employment under the provision so indicated and (iii) if the
termination date is other than the date of receipt of such notice specifies the
proposed termination date.
B. All notices, requests, consents and other communications,
required or permitted to be given hereunder, shall be in writing and shall be
delivered personally or sent by facsimile transmission, overnight courier or
mailed, first-class, postage prepaid, by registered or certified mail, as
follows:
if to Triarc:
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: President
Fax: 000-000-0000
if to the Employee:
Xxxxx X. Xxxxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
or to such other address as either party shall designate by notice in writing to
the other in accordance herewith. Any such notice shall be deemed given when so
delivered personally, by facsimile transmission (when the answer-back is
received), or if sent by overnight courier, one day after delivery to such
courier by the sender or if mailed, five days after deposit by the sender in the
U.S. mails.
10. Waiver
No waiver of any provision of this Agreement or modification
or amendment of the same shall be effective, binding or enforceable unless in
writing and signed by the party to be charged therewith.
11. Governing Law
This Agreement shall be governed by and administered in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely within such State.
12. Certain Additional Payments by Triarc. (A) If it is determined
(as hereafter provided) that any payment or distribution by Triarc to or for the
benefit of the Employee, 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
the Employee will be entitled to receive an additional payment or payments (a
"Gross-Up Payment") in an amount such that, after payment by the Employee of all
taxes (including any interest or penalties imposed with respect to such taxes),
including any Excise Tax, imposed upon the Gross-Up Payment, the Employee
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments.
(B) Subject to the provisions of Section 12(F) hereof, all
determinations required to be made under this Section 12, including whether an
Excise Tax is payable by the Employee 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 the Employee in his sole discretion. The
Employee will direct the Accounting Firm to submit its determination and
detailed supporting calculations to both Triarc and the Employee within 15
calendar days after the date of the Change in Control or the date of the
Employee's termination of employment, if applicable, and any other such time
or times as may be requested by Triarc or the Employee. If the Accounting Firm
determines that any Excise Tax is payable by the Employee, Triarc will pay the
required Gross-Up Payment to the Employee within five business days after
receipt of such determination and calculations. If the Accounting Firm
determines that no Excise Tax is payable by the Employee, it will, at the same
time as it makes such determination, furnish the Employee with an opinion
that he has substantial authority not to report any Excise Tax on his 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 Triarc and
the Employee. 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 Triarc should
have been made (an "Underpayment"), consistent with the calculations required to
be made hereunder. In the event that Triarc exhausts or fails to pursue its
remedies pursuant to Section 12(F) hereof and the Employee thereafter is
required to make a payment of any Excise Tax, the Employee 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
Triarc and the Employee as promptly as possible. Any such Underpayment will be
promptly paid by Triarc to, or for the benefit of, the Employee within five
business days after receipt of such determination and calculations.
(C) Triarc and the Employee will each provide the Accounting
Firm access to and copies of any books, records and documents in the possession
of Triarc or the Employee, 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
12(B) hereof.
(D) The federal, state and local income or other tax returns
filed by the Employee will be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the Excise Tax payable by
the Employee. The Employee will make proper payment of the amount of any Excise
Tax, and at the request of Triarc, provide to Triarc true and correct copies
(with any amendments) of his federal income tax return as filed with the
Internal Revenue Service and corresponding state and local tax returns, if
relevant, as filed with the applicable taxing authority, and such other
documents reasonably requested by Triarc, evidencing such payment. If prior to
the filing of the Employee's 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, the Employee will within five
business days pay to Triarc 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 12(B) and (D) hereof will be borne by Triarc. If such fees and expenses
are initially advanced by the Employee, Triarc will reimburse the Employee the
full amount of such fees and expenses within five business days after receipt
from the Employee of a statement therefor and reasonable evidence of his payment
thereof.
(F) The Employee will notify Triarc in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
Triarc of a Gross-Up Payment. Such notification will be given as promptly as
practicable but no later than 10 business days after the Employee actually
receives notice of such claim and the Employee will further apprise Triarc 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 the Employee). The Employee will not
pay such claim prior to the earlier of (i) the expiration of the 30-calendar-day
period following the date on which he gives such notice to Triarc and (ii) the
date that any payment of amount with respect to such claim is due. If Triarc
notifies the Employee in writing prior to the expiration of such period that it
desires to contest such claim, the Employee will:
(vi) provide Triarc with any written records or documents in his
possession relating to such claim reasonably requested by
Triarc;
(vii) take such action in connection with contesting such claim as
Triarc 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 Triarc;
(viii)cooperate with Triarc in good faith in order effectively to
contest such claim; and
(ix) permit Triarc to participate in any proceedings relating to
such claim; provided, however, that Triarc will bear and pay
directly all costs and expenses (including interest and
penalties) incurred in connection with such contest and will
indemnify and hold harmless the Employee, 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 12(F), Triarc will control all proceedings taken in
connection with the contest of any claim contemplated by this
Section 12(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 the Employee may participate therein at his own
cost and expense) and may, at its option, either direct the
Employee to
pay the tax claimed and xxx for a refund or contest the claim
in any permissible manner, and the Employee agrees 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 Triarc will determine;
provided, however, that if Triarc directs the Employee to pay
the tax claimed and xxx for a refund, Triarc will advance the
amount of such payment to the Employee on an interest-free
basis and will indemnify and hold the Employee 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 the taxable year of the Employee with
respect to which the contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, Triarc'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 the Employee 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 the Employee of an amount
advanced by Triarc pursuant to Section 12(F) hereof, the Employee receives any
refund with respect to such claim, the Employee will (subject to Triarc's
complying with the requirements of Section 12(F) hereof) promptly pay to Triarc
the amount of such refund (together with any interest paid or credited thereon
after any taxes applicable thereto). If, after the receipt by the Employee of an
amount advanced by Triarc pursuant to Section 12(F) hereof, a determination is
made that the Employee will not be entitled to any refund with respect to such
claim and Triarc does not notify the Employee 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 12.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
TRIARC COMPANIES, INC.
By: XXXXX X. MAY
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Name: Xxxxx X. May
Title: President
XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx
