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CABLE CAR BEVERAGE CORPORATION
717 17TH STREET
DENVER, COLORADO 80202
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November 25, 1997
Mr. Samuel M. Simpson
3005 Cherry Ridge Road
Cherry Hills Village, Colorado 80110
Dear Sam:
It is with great pleasure that we hereby confirm your employment as President
and Chief Executive Officer of Cable Car Beverage Corporation (the "Company"), a
subsidiary of Triarc Companies, Inc. ("Triarc"), and of its wholly owned
subsidiaries, including Fountain Classics, Inc. and Old San Francisco Seltzer,
Inc., and as a representative of the Triarc Beverage Group for the western
United States, on the terms and conditions set forth in this letter and in the
attached term sheet (the "Term Sheet").
This letter agreement supersedes in its entirety the Employment Agreement dated
as of December 15, 1994, as amended, between you and the Company. This letter
agreement contains the entire agreement between the parties with respect to the
matters covered herein and 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 This letter agreement may only be amended, superseded,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, only by a written
instrument signed by the parties hereto, or in the case of a waiver, by the
party waiving compliance.
You will report to the Board of Directors of the Company (the "Board") and the
Chief Executive Officer of the Triarc Beverage Group and your duties will be
performed primarily at the principal place of business of the Company in Denver,
Colorado or in the Denver, Colorado metropolitan area. The Company shall furnish
sufficient facilities, services, staffing and assistance to enable you to
perform your duties hereunder. The Company agrees that it cannot require you to
relocate outside of the Denver, Colorado metropolitan area or to travel outside
the Denver, Colorado metropolitan area more than
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ten (10) business days each month. The term of your employment shall continue
through the third anniversary of the date hereof, provided that such term shall
be automatically extended for successive one year periods unless either you or
the Company gives written notice to the other, at least ninety (90) days before
such extension is to take effect, that they do not wish the term to be extended.
This Agreement may be terminated prior to the expiration of the original term,
or any extension thereof: (i) in the event that you shall die; (ii) in the event
that you shall become Disabled (for purposes of this clause (ii), "Disabled"
shall mean that you shall have failed, due to illness or other physical or
mental incapacity, to render services of the character contemplated by this
Agreement for an aggregate of more than ninety (90) calendar days during any
twelve (12) month period); (iii) for cause (as hereafter defined); or (iv) in
the event that you give written notice to the Company of your resignation.
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
which, in the case of gross negligence, has a materially adverse effect on the
business or financial condition of the Company or any of its affiliates; (ii)
willful material misrepresentation at any time by you to any superior executive
officer of Triarc, the Triarc Beverage Group or any of their affiliates; (iii)
willful failure or refusal to comply with any of your material obligations
hereunder or to substantially comply with a reasonable and lawful instruction of
any executive officer of Triarc or the Triarc Beverage Group, or the Board of
Directors of either Triarc or the Company; (iv) engagement by you in any conduct
or the commission by you of any act which is materially injurious or detrimental
to the substantial interest of Triarc or the Company; (v) conviction 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 to substantially comply with
any written rules, regulations, policies or procedures of Triarc or the Company
furnished to you which, if not complied with, could reasonably be expected to
have a material adverse effect on the business of Triarc or the Company or any
of their affiliates; or (vii) any willful failure to comply with the Company's,
Triarc's or any of their affiliates' policies regarding insider trading;
provided, that in the cases of clauses (iii), (iv) and (vi) of the definition of
"cause" set forth in this paragraph, if your failure or refusal referred to
therein is curable by you, then "cause" shall not be deemed to exist unless you
fail or refuse to so cure within three (3) business days of your receipt from
Triarc or the Company of a request for such cure and such request to cure is the
first such request delivered under this paragraph.
You acknowledge that as the Company's President and Chief Executive Officer you
will be involved, at the highest level, in the development, implementation, and
management of the Company's and its subsidiaries' business strategies and plans,
including those which involve the Company's and its subsidiaries' finances,
marketing operations, industrial relations, operations and acquisitions. By
virtue of your unique and sensitive position, your employment by a competitor of
the Company represents a serious competitive danger to the Company and the use
of your talent, knowledge, and information about the Company's business,
strategies, and plans can and would constitute a valuable competitive advantage
over the Company. In view of the foregoing, and in
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consideration of (i) the enhanced compensation, (ii) the other benefits being
provided to you hereunder, (iii) the payment to you of $10,000 per month,
payable monthly for twenty-four (24) months commencing with the month after the
Early Termination Date (as defined below) if your employment with the Company
terminates prior to the second anniversary of the date hereof for any of the
reasons set forth in clause (a) of this sentence, and (iv) to induce the Company
to execute this letter agreement, you agree that if (a) either your employment
with the Company ends prior to the end of the then current term by reason of
your resignation, or your employment is terminated by the Company for cause (the
date of such resignation or termination being referred to herein as the "Early
Termination Date"), then you covenant and agree that in either case for a period
of twenty-four (24) months following the termination of your employment with the
Company, or (b) you choose to deliver a written notice to the Company not to
extend the term of this letter agreement in accordance with the terms of the
fourth sentence of the third paragraph of this letter agreement, then you
covenant and agree that for a period of eighteen (18) months following the
expiration of the then current term of this letter agreement, you will not
engage or be engaged in any capacity, directly or indirectly, including, but not
limited to, as an employee, agent, consultant, manager, executive, owner or
stockholder (except as a passive investor owning less than two percent interest
in a publicly held company) in any business or entity that is engaged in the
beverage business.
You agree to treat as confidential and not to disclose to anyone other than the
Company and its subsidiaries and affiliated companies, and you agree that you
will not at any time during your employment and for a period of four (4) years
thereafter, without the prior written consent of the Company, divulge, furnish,
or make known or accessible to, or use of the benefit of anyone other than the
Company, its subsidiaries and affiliated companies, any information of a
confidential nature relating in any way to the business of the Company or its
subsidiaries or affiliated companies, or any of their respective direct business
customers, 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 has been lawfully acquired by you from
other sources unless you know that such information was obtained in violation of
an agreement of confidentiality.
You agree that in addition to any other remedy provided at law or in equity, (a)
the Company shall be entitled to a temporary restraining order, and both
preliminary and permanent injunctive relief restraining you from violating the
provisions of the preceding two paragraphs, (b) you will indemnify and hold the
Company harmless from and against any and all damages or loss incurred by Triarc
or the Company or any of their affiliates (including reasonable attorneys' fees
and expenses) as a result of any willful or reckless violation of such
provisions; and (c) the Company's remaining obligations under this letter
agreement, if any, shall cease (other than payment of your base salary through
the date of such violation and any earned but unpaid vacation or except as may
be required by law) as a result of any willful or reckless violation of such
provisions.
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You agree that the Company may withhold from any amounts payable to you
hereunder all federal, state, local or other taxes that the Company 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
asserts a liability against the Company for failure to withhold taxes on any
payment hereunder, you will pay to the Company the amount determined by such
taxing authority that had not been withheld, together with any interest imposed
by such taxing authority on such amount, within ninety (90) days of notice to
you of such determination.
This letter agreement shall be governed by the laws of the State of Colorado
applicable to agreements made and to be performed entirely within such State.
If you agree with the terms outlined above and in the Term Sheet, please date
and sign the copy of this letter enclosed for that purpose and return it to me.
Sincerely,
CABLE CAR BEVERAGE CORPORATION
By: /s/ Peter W. May
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Name: Peter W. May
Title: Vice Chairman
Agreed and Accepted this
25th day of November, 1997:
/s/ Samuel M. Simpson
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Samuel M. Simpson
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SAMUEL M. SIMPSON
PRESIDENT AND CHIEF EXECUTIVE OFFICER
OF
CABLE CAR BEVERAGE CORPORATION
AND ITS SUBSIDIARIES, INCLUDING
FOUNTAIN CLASSICS, INC.
OLD SAN FRANCISCO SELTZER, INC.
AND A REPRESENTATIVE OF THE TRIARC BEVERAGE GROUP
FOR THE WESTERN UNITED STATES
EMPLOYMENT TERM SHEET
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PROVISION TERM COMMENTS
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CONTRACT TERM Three years, subject to Automatic one year extensions unless the
renewal. Company or executive gives 90 days' notice
of nonrenewal.
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BASE SALARY $284,300/year, to be paid on Subject to increase, but not decrease,
a regular basis in accordance during the original term and any extension
with the Company's payroll in an amount determined by the Board.
procedures and policies.
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ANNUAL CASH INCENTIVE Incentive compensation with With respect to the fiscal year ending
respect to fiscal year 1997: December 31, 1997:
Any annual cash incentive
bonus payable hereunder The executive shall be paid a bonus of
shall be paid to the $20,000 per point. The executive shall
executive not later than 15 earn points for the Company's 1997 net
business days following the sales as follows:
delivery of the Company's
audited financial $18,000,000 - $19,999,999= 1 point
statements for the fiscal $20,000,000 - $22,999,999= 2 points
year with respect to which $23,000,000 - $25,999,999= 3 points
such bonus is payable. $26,000,000 and above = 4 points
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PROVISION TERM COMMENTS
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ANNUAL CASH INCENTIVE Incentive compensation with The executive shall also earn points for
(cont'd) respect to fiscal year 1997 the Company's 1997 "Adjusted Net Income"
(cont'd): (as defined below) as follows:
$1,000,000 - $1,249,999= 1 point
$1,250,000 - $1,499,999= 2 points
$1,500,000 - $1,799,999= 3 points
$1,800,000 and above = 4 points
Points are not cumulative - e.g., if the
Company's 1997 net sales are $27 million
and the Company's 1997 Adjusted Net Income
is $1.9 million, the executive earns 8
points, not 20 points.
"Adjusted Net Income" shall be defined as
the Company's net income for the fiscal
year except that any bonuses payable to the
executive pursuant to this letter agreement
shall not be included in salary expense for
purposes of calculating Adjusted Net
Income. Except for the exclusion of
bonuses payable hereunder, net income shall
be determined in accordance with generally
accepted accounting principles applied on a
consistent basis.
To the extent that Adjusted Net Income
reflects any deductions for management fees
payable to Triarc or any fees or expenses
payable in connection with the acquisition
of the Company, such amounts shall be added
back to Adjusted Net Income for the
purposes of determining the executive's
eligibility for incentive cash compensation
with respect to fiscal year 1997.
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PROVISION TERM COMMENTS
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ANNUAL CASH INCENTIVE Incentive compensation with All calculations of net sales and Adjusted
(cont'd) respect to fiscal year 1997 Net Income shall be based on the Company's
(cont'd): audited financial statements for the year
ended December 31, 1997.
In addition, the executive shall earn 2
points if the Company acquires royalty-free
ownership of the Stewart's trademark (for
all uses other than Stewart's Restaurants)
on terms approved by the Board.
Incentive cash compensation The executive shall be eligible to receive
commencing with fiscal year annual incentive cash bonuses and shall be
1998: treated in a manner comparable to that of
other senior executives of Triarc's
operating subsidiaries with respect to such
cash bonuses based on Company and
individual performance assessed for each
fiscal year relative to objectives agreed
to in advance between the executive and the
Board, taking into account the financial
profile of the Company compared to that of
such other operating subsidiaries.
Additional cash compensation With respect to the fiscal years ending
with respect to fiscal years December 31, 1998, 1999 and 2000:
1998, 1999 and 2000:
The executive shall be paid $120,000 in
each of fiscal years 1998, 1999 and 2000 if
the Company's net sales (calculated on the
basis of the Company's audited financial
statements for such fiscal years) for such
fiscal year exceed the amount of net sales
set forth for such fiscal year below:
1998 $25,000,000
1999 $27,500,000
2000 $30,000,000
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PROVISION TERM COMMENTS
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TRIARC STOCK OPTIONS Participation in Triarc's
stock option plan during term
of employment in amounts
comparable to that of other
senior executives of Triarc's
operating subsidiaries,
taking into account the
financial profile of the
Company compared to that of
such other operating
subsidiaries.
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BENEFITS Benefits as are made
available to other executives
of the Company, including
participation in the
Company's health/medical and
insurance programs.
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DISABILITY BENEFITS The Company shall provide to
the executive and the
executive shall pay premiums
on a disability insurance
policy providing benefits to
the executive of $5,000/mo.
in the event of the
executive's "disability" as
defined in such policy.
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PROVISION TERM COMMENTS
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"STAY BONUS" $400,000, payable on signing;
provided, however, that if
the executive has resigned or
been terminated for "cause"
(as defined in the attached
letter agreement) prior to
the first anniversary of his
employment hereunder, the
executive shall be obligated
to refund to the Company,
immediately upon such
resignation or termination, a
percentage of such "stay
bonus" equal to the
percentage of such one year
period (from the date of
employment hereunder to the
first anniversary thereof)
which remains after the date
of such resignation or
termination.
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VACATION 5 weeks per year.
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AUTOMOBILE ALLOWANCE $800 per month.
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DEATH BENEFIT Upon death of the executive,
the Company shall pay a death
benefit to the executive's
estate in an amount equal to
one year of the executive's
then current base salary.
Payment shall be made within
30 days following the
executive's death.
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PROVISION TERM COMMENTS
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EXPENSES Reasonable and necessary
out-of-pocket expenses
incurred in the performance
of duties shall be reimbursed
by the Company in accordance
with its policies.
In addition, the Company
shall provide the executive
with reimbursement of dues
paid to professional
associations.
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