UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) June 27, 1995
TRIARC COMPANIES, INC.
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 1-2207 38-0471180
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
900 Third Avenue
New York, New York 10022
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 230-
3000
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(Former Name or Former Address, if
Changed Since Last Report)
<PAGE>
Item 5. Other Events.
On June 27, 1995, the Registrant entered into a letter
agreement (the "Letter of Intent") with Joseph Victori Wines,
Inc., a New York corporation ("JVWNY"), Best Flavors, Inc., a
Nevada corporation ("Best Flavors"), Nature's Own Beverage
Company, a Delaware corporation ("Nature's Own" and, together
with JVWNY and Best Flavors, collectively, the "Companies") and
Joseph Umbach, pursuant to which the Registrant proposes to
acquire (the "Acquisition"), directly or indirectly, all of the
tangible and intangible assets and operations of the Companies
other than the assets and operations of the Companies relating
to their alcoholic wine business. The aggregate purchase price
for the assets will be approximately $95 million. A copy of the
Letter of Intent and the press release with respect to the
Acquisition are being filed herewith as exhibits hereto and are
incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits
22.1 Letter of Intent dated June 27, 1995
99.1 Press release dated June 27, 1995
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
TRIARC COMPANIES, INC.
Date: June 28, 1995 By: JOSEPH A. LEVATO
-----------------------
Joseph A. Levato
Executive Vice President
and Chief Financial Officer
<PAGE>
Exhibit Index
Exhibit
No. Description Page No.
- -------- ------------ --------
22.1 Letter of Intent dated June 27, 1995 3
99.1 Press release dated June 27, 1995 16
<PAGE>
Exhibit 2.1
Triarc Companies, Inc.
900 Third Avenue
New York, NY 10022
June 27, 1995
Joseph Umbach
Joseph Victori Wines, Inc.
Best Flavors, Inc.
Nature's Own Beverage Company
2525 Palmer Avenue
New Rochelle, NY 10801
Gentlemen:
The purpose of this letter (the "Letter of Intent") is to
set forth the understanding of Triarc Companies, Inc., a
Delaware corporation ("Triarc"), on the one hand, and Joseph
Victori Wines, Inc., a New York corporation ("JVWNY"), Best
Flavors, Inc., a Nevada corporation ("Best Flavors"), Nature's
Own Beverage Company, a Delaware corporation ("Natures Own" and,
together with JVWNY and Best Flavors, collectively, the
"Companies") and Joseph Umbach ("Umbach" and, together with the
Companies, collectively, the "Sellers"), on the other hand,
regarding the proposed acquisition (the "Acquisition") by Triarc
or, at Triarc's option, one or more affiliates or designees of
Triarc (Triarc or such affiliates or designees, the "Buyer") of
all of the tangible and intangible assets and operations
(including, without limitation, cash, accounts receivable,
inventory, prepaid expenses, property, equipment, automobiles,
trademarks and tradenames (including, without limitation, the
Royal Mistic, Mistic, Grand Sunesta, Sunesta, Arctic Frost,
Fruitfest, Grape Escape, Jumpin' Gems, La Frost, Mango Mania,
Pitcher Perfect, Strawberry Bash, Royal Mist, Sports Cap, Sun
Valley Squeeze and Mitaca trademarks and tradenames) and good
will) of the Companies, as the same shall exist at the Closing
(as hereinafter defined), other than the assets and operations
of the Companies relating to their alcoholic wine business (the
"Acquired Assets").
The Sellers have informed Triarc that Mistic Beverage,
Inc., a Delaware corporation and Joseph Victori Wines, Inc., a
California corporation, were merged into JVWNY, and LVJ Sales
Company, a Connecticut general partnership, has been dissolved
and its assets have been distributed to the Companies, and all
of the nonalcoholic beverage business of the Sellers and their
affiliates are conducted by the Companies. From and after the
closing (the "Closing"), the Sellers and their affiliates will
agree not to use in any trademark, corporate name or tradename
any references to "Mistic," "Sunesta," and any of the Companies'
other trademarks and tradenames included among the Acquired
Assets and any derivations thereof. Any Acquired Assets in the
possession of Umbach or any affiliates or family members shall
be returned to the Companies immediately prior to the Closing
or, with Buyer's written consent, purchased by such parties from
the Companies at fair market value.
The purchase price (the "Purchase Price") for the
Acquired Assets will consist of (i) $93 million, subject to a
post-closing adjustment as described herein, payable at the
Closing by wire transfer of immediately available funds to an
account specified in writing by the Sellers and (ii) the
assumption by the Buyer of the Assumed Liabilities (as
hereinafter defined). In addition, in consideration for the
non-compete agreements referred to below, Buyer will pay the
Sellers in the aggregate $3 million of deferred payments (the
"Non-Compete Payments") payable in the amount of $900,000 in
cash on each of the first through third anniversary, and
$300,000 in cash four months after the third anniversary, of the
later of (a) the Closing, or (b) the date on which the
settlement of or judgment in the Arkansas Litigation (as
hereinafter defined) becomes final and is not subject to further
appeal.
Triarc and the Sellers agree that the Companies
collectively shall be entitled to make combined cash
distributions (the "Cash Distributions") to their shareholders
from January 1, 1995 through July 31, 1995 in an amount not to
exceed $4,750,000, in the aggregate. If the Closing occurs after
July 31, 1995, the Purchase Price will be (i) increased by an
amount equal to 45% of the Companies' combined "Net Income,"
determined in accordance with generally accepted accounting
principles consistently applied ("GAAP"), earned from August 1,
1995 through the Closing (the "Stub Period") and (ii) decreased
by an amount equal to 45% of the Companies' combined "Net
Losses," determined in accordance with GAAP, incurred during the
Stub Period. Such adjustment to the Purchase Price to reflect
the foregoing will be made after completion of an audit by
Buyer's independent certified public accountants of the
Companies' results of operations from January 1, 1995 through
the end of the Stub Period, subject to customary dispute
mechanism provisions to be negotiated.
Buyer will assume or repay up to $7.0 million of
outstanding bank borrowings under the Companies' Revolving
Credit Agreement (the "Credit Agreement") with The Bank of New
York (the "Bank Debt") and assume all other liabilities (the
Bank Debt and such other assumed liabilities, collectively, the
"Assumed Liabilities") existing at the Closing relating to the
Acquired Assets, excluding the following: liabilities of the
Companies to their shareholders or any affiliates or family
members of such shareholders (all such liabilities shall be
canceled at or prior to the Closing), liabilities for taxes of
any kind (including ERISA liabilities relating to businesses
other than the non-alcoholic beverage business) distributor
termination expenses (judgments, settlement payments, legal
expenses, etc., except as provided in the next paragraph) for
distributors terminated prior to the Closing, brokers fees (for
brokers or investment bankers retained by the Companies), legal
fees and expenses relating to previous proposed Business
Combinations (as hereinafter defined) or public offerings
involving the Companies or their subsidiaries or predecessors
and such other excluded liabilities as provided for in the
Definitive Agreements (as hereinafter defined). The Sellers
will jointly and severally indemnify Buyer against any
liabilities other than Assumed Liabilities.
Triarc agrees to pay, or cause Buyer to pay, 50% (up to a
maximum amount of $2,250,000) (the "Buyer Arkansas Payment") of
any judgment or settlement amount and legal expenses (the
"Arkansas Litigation Costs") of the litigation Raleigh Spring
Water d/b/a Clear Mountain Spring Water v. Joseph Victori Wines,
Inc. (the "Arkansas Litigation"). The Sellers agree to pay the
balance of all Arkansas Litigation Costs and the Arkansas
Litigation Costs, other than the Buyer Arkansas Payment, will
not be an Assumed Liability. The Sellers and the Buyer will
negotiate in good faith the substitution and allocation of costs
of a letter of credit to substitute for the letter of credit
issued under the Credit Agreement in connection with the
Arkansas Litigation. Notwithstanding the foregoing, if for any
reason, the Buyer becomes obligated to pay more than the Buyer
Arkansas Payment, at the Buyer's option the Buyer may set-off
such amounts in excess of the Buyer Arkansas Payment against
future Non-Compete Payments and Royalty Payments (as
hereinafter defined). To the extent such amounts exceed the
amount of the Non-Compete Payments and Royalty Payments, any
excess will be payable by the Sellers, in cash by wire transfer
of immediately available funds. Any amounts paid by Buyer in
excess of the Buyer Arkansas Payment and not immediately repaid
by the Sellers will bear interest at the rate of 9% per annum.
The Sellers agree that the Companies will not until the
earlier of the execution of the Definitive Agreements or the
Termination Date (as hereinafter defined) (i) without the prior
written consent of Triarc pledge, transfer, or otherwise dispose
of any Acquired Assets or any assets that would constitute
Acquired Assets nor will they assume any Assumed Liabilities or
liabilities that would constitute Assumed Liabilities to (x) pay
any liabilities other than Assumed Liabilities or (y) purchase
any assets other than Acquired Assets; (ii) incur or commit to
incur any sales, marketing or promotional allowances outside of
the ordinary course of business to distributors or co-packers or
enter into any agreements or change the terms of any existing
agreements with distributors or co-packers without giving
advance written notice to the Buyer; (iii) manage their
operations outside the ordinary course of business without the
prior written consent of the Buyer; (iv) enter into any
agreements requiring any payment to be made or incurred as a
result of any change of control; (v) incur advertising and
promotional expenses or other financial commitments in excess of
historical, ordinary or current plan levels; and (vi) increase
the compensation of any employee or consultant, other than
annual raises consistent with historical practice. In addition,
the Sellers agree to consult with Triarc on critical and/or
significant commitments and maintain an operating relationship
with Triarc.
Consummation of the Acquisition is subject to (1) the
negotiation and execution of mutually acceptable definitive
agreements relating to the Acquisition ("Definitive Agreements")
setting forth the terms and conditions of the Acquisition,
(2) the completion of a due diligence investigation in all
respects satisfactory to Triarc and (3) the availability to
Triarc of financing necessary to pay the Purchase Price and
repay or refinance the Bank Debt on terms that are satisfactory
to it in its sole discretion. Triarc is prepared to draft and
negotiate the Definitive Agreements and to commence its due
diligence investigation immediately. The Definitive Agreements
will contain customary terms and conditions for an acquisition
of this nature, including, without limitation, (i) represen-
tations and warranties from the Sellers with respect to (a) the
ownership of the capital stock of the Companies, (b) the
ownership of the Acquired Assets, (c) the power and authority to
convey the Acquired Assets free and clear of any liens (other
than liens relating to Assumed Liabilities), (d) the Companies'
ability to consummate the Acquisition, (e) compliance with laws
(including, without limitation, bulk sales laws, if applicable),
(f) the Companies' financial statements and the financial
statements relating to the Acquired Assets, (g) the business,
condition (financial or otherwise), results of operations,
assets, liabilities, properties and prospects of the Companies
and the absence of any material adverse changes with respect to
any of the foregoing since the date of the last regularly
prepared audited financial statements of the Companies, (h)
environmental issues, (i) tax issues (including ERISA), (j)
related party liabilities, (k) no-brokers, and (l) no
undisclosed non-alcoholic beverage non-ordinary course business
liabilities; (ii) covenants with respect to the operation of the
business of the Companies between the time of the execution of
the Definitive Agreements and the Closing; (iii) conditions to
the parties' obligations to close, including, without
limitation, (a) continued accuracy of representations and
warranties, (b) compliance with covenants, (c) receipt by all
parties of all corporate, regulatory and other third party
approvals and authorizations (including, without limitation, the
termination or expiration of the waiting period under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), and such consents as may be required under all
material agreements with the Companies' co-packers and
distributors) necessary to consummate the Acquisition,
(d) execution and delivery by the Sellers and their affiliates
of three year non-compete agreements (the "Non-Compete
Agreements") preventing them from competing, directly or
indirectly, in the non-alcoholic beverage business,
(e) execution and delivery by Umbach of a six-month consulting
agreement (the "Consulting Agreement") satisfactory in form and
substance to Triarc pursuant to which Umbach agrees not to
accept other full-time employment and agrees to remain available
to advise the Buyer as the Buyer shall request during normal
business hours, (f) an arrangement whereby at the Closing all
employees of the non-alcoholic beverage business of the
Companies, other than those employees agreed to by the Buyer,
shall become employees of the Buyer and shall cease to be
employees of the Companies and (g) an agreement by the Buyer to
adopt a severance policy in the form of Exhibit A hereto for any
employee terminated for reasons other than "cause" during the
first twelve months after the Closing, and (iv) indemnities from
the Sellers with respect to breaches of representations,
warranties, covenants and agreements contained in the Definitive
Agreements. The Consulting Agreement or the Non-Compete
Agreements will contain royalty arrangements for Sellers, the
principal terms, including the royalty payments (the "Royalty
Payments"), of which are set forth on Exhibit B attached hereto.
Pursuant to the Definitive Agreements, the Sellers will be
jointly and severally liable for any Losses (as defined in the
Definitive Agreements) in excess of $750,000 (the "Basket") that
are incurred by Buyer and its affiliates as a result of breaches
of representations and warranties made by the Sellers, subject
to a maximum liability of $15,000,000 (the "Cap"). The Sellers'
representations and warranties will generally survive for a two-
year period after the Closing. Notwithstanding the foregoing,
the Basket, Cap and/or survival periods referred to above shall
not apply to a limited number of customary representations and
warranties including, without limitation, title to the Acquired
Assets, power and authority to convey the Acquired Assets,
enforceability of the Definitive Agreements, environmental
issues, tax (including ERISA relating to the non-alcoholic
beverage business) issues, related party liabilities, no brokers
and no undisclosed non-alcoholic beverage non-ordinary course
business liabilities (including indebtedness for borrowed money
other than the working capital line) (which applicable basket,
cap and survival period will be negotiated by the parties);
provided, however, that with respect to the representations and
warranties relating to (x) no undisclosed non-alcoholic beverage
non-ordinary course business liabilities (i) there will be no
basket, (ii) the cap will be the Purchase Price and (iii) the
survival period will be five years from the date of the Closing
and (y) taxes (including ERISA to the extent it relates to
businesses other than the non-alcoholic beverage business)
(i) there will be no basket, (ii) the cap will be the Purchase
Price and (iii) the survival period will be until 6 months after
the expiration of the applicable statute of limitations. Non-
Compete Payments and Royalty Payments may be set-off, at the
Buyer's option, to satisfy the Sellers' indemnification
obligations and any downward adjustment to the Purchase Price.
As soon as practicable after the date hereof, the Sellers
and Triarc shall file or cause to be filed notification and
report forms in compliance with the HSR Act.
Promptly following your execution and delivery of this
Letter of Intent in the manner provided below and until the
Termination Date (as hereinafter defined), the Sellers will
provide Triarc and its affiliates and any person or organization
who is considering providing financing to Triarc in connection
with the Acquisition and their respective officers, directors,
employees, agents, counsel, accountants, financial advisors,
consultants and other representatives (collectively, the
"Representatives") with full access, upon reasonable prior
notice, to all officers, employees and accountants of the
Companies and to their assets, properties, contracts, books,
records, customers, suppliers and all such other information and
data concerning the business and operations of the Companies as
Triarc or any of such other persons reasonably may request in
connection with such investigation. Triarc acknowledges that it
has entered into a confidentiality agreement dated August 4,
1994 (the "Confidentiality Agreement") with you and agrees that
its due diligence will be conducted in accordance with and
governed by the terms thereof.
In consideration of the substantial expenditure of time,
effort and expense to be undertaken by Triarc and its
Representatives immediately upon your execution and delivery of
this Letter of Intent, the Sellers and Triarc hereby undertake
and agree to negotiate in good faith the terms of the Definitive
Agreements until the earlier of the execution of the Definitive
Agreements or the Termination Date. In addition, the Sellers
agree that until the Termination Date, the Sellers will not, nor
will the Sellers permit any of their affiliates (or authorize or
permit any of their respective Representatives) to take,
directly or indirectly, any action to initiate, assist, solicit,
negotiate, encourage or accept any offer or inquiry from any
person (a) to engage in any Business Combination, (b) to reach
any agreement or understanding (whether or not such agreement or
understanding is absolute, revocable, contingent or conditional)
for, or otherwise attempt to consummate, any Business
Combination or (c) to furnish or cause to be furnished any
information with respect to the Companies to any person (other
than as contemplated by this Letter of Intent) who the Sellers
or any affiliate or Representative knows or has reason to
believe is in the process of considering any Business
Combination. For purposes of this Letter of Intent,
(x) "Termination Date" shall mean the earliest of the following:
(i) 21 days from the date hereof unless Buyer has delivered to
Sellers a draft of the Definitive Agreements prior thereto and
(ii) 45 days from the date hereof, unless a Definitive
Agreements have been executed on or prior thereto, and
(y) "Business Combination" shall mean any merger, consolidation
or combination to which any of the Sellers is a party, any sale,
dividend, split, recapitalization or other disposition of
capital stock or other equity interest of any of the Companies
or any sale, dividend or other disposition of all or
substantially all of the assets and properties of any of the
Companies or any significant financing or refinancing by any of
the Companies. If any Seller or any such affiliate or
Representative receives from any person any offer, inquiry or
informational request referred to above, except for inadvertent
or immaterial oral offers, requests or inquiries, such Seller
will promptly advise such person, by written notice, of the
terms of this paragraph and will promptly, orally and in
writing, advise Triarc of such offer, inquiry or request and
deliver a copy of the foregoing notice to Triarc. The Sellers
agree that the Definitive Agreements will contain a
substantially identical agreement (without the exception for
inadvertent or immaterial oral offers, requests or inquiries) by
the Sellers with respect the period commencing on the date of
execution of such Definitive Agreements and terminating on the
earlier of the Closing or the termination of such Definitive
Agreements in accordance with their respective terms.
This Letter of Intent is intended to be a summary
evidencing the current intentions of the parties with respect to
the Acquisition as reflected in discussions between our
Representatives to date, and it is expressly understood and
agreed that (1) this Letter of Intent is not intended to, and
does not, constitute an agreement to consummate the Acquisition
or to enter into the Definitive Agreements and (2) the parties
hereto will have no rights or obligations of any kind whatsoever
relating to the Acquisition by virtue of (i) this Letter of
Intent, (ii) any past, present or future approvals by or conduct
of the management or board of directors of any party to the
Acquisition (or any affiliate thereof), (iii) any other past,
present or future written or oral indications of assent, or
indications of results of negotiations or agreement to some or
all matters then under discussion, or (iv) any other written or
oral expression by our respective Representatives unless and
until the Definitive Agreements are executed and delivered;
provided that the respective obligations of the Sellers and
Triarc contained in the seventh paragraph, the preceding two
paragraphs and in the following three paragraphs will be binding
on the Sellers and Triarc, as the case may be, when the Sellers
and Triarc each have signed a copy of this Letter of Intent in
the manner provided below.
Each of the parties hereto hereby represents and warrants
that it is free to enter into this Letter of Intent and to
consummate the Acquisition or any part thereof and that none of
them has induced the other to breach any agreements or
understandings with, or obligation to, any third party in
respect of the Acquisition or any other part thereof. Each of
the parties hereto hereby further represents and warrants that,
other than by virtue of this Letter of Intent: (a) it is not
under any obligation with respect to the Acquisition or any part
thereof; (b) no offer, commitment, undertaking, estoppel,
agreement or obligation of any nature whatsoever relating to
the Acquisition or any part thereof exists or may be implied in
fact, law, or equity; and (c) the execution and delivery by such
party of this Letter of Intent and the consummation of the
Acquisition or any part thereof will not violate the rights of
any third party (other than customer and supply contracts) or
give rise to any right or liability on the part of such party
based upon, or arising out of, or in respect of a violation of,
or interference with, the rights of any such third party.
Without the prior written consent of the other, except to
the extent required by applicable law or the rules and
regulations of any applicable stock exchange, neither the
Sellers nor Triarc will, and the Sellers and Triarc will cause
their respective Representatives not to, make any release to the
press or other public disclosure or make any statement to any
competitor, customer, client or supplier of any of the Companies
or any other person, with respect to either the fact that
discussions or negotiations are taking place concerning Triarc's
possible acquisition of the Companies or the existence or
contents of this Letter of Intent.
Whether or not the transactions contemplated hereby are
consummated, each of the Companies, Umbach and Triarc will pay
its or his own costs and expenses (including, without
limitation, brokers fees) incurred in connection with the
preparation and negotiation of this Letter of Intent and the
Definitive Agreements and Triarc's due diligence investigation.
This Letter of Intent shall be governed by and construed in
accordance with the laws of the State of New York, made and to
be performed entirely within such State.
This Letter of Intent and the Confidentiality Agreement set
forth the entire understanding and agreement of the parties
hereto and their affiliates with regard to the subject matter of
this Letter of Intent and supersede all prior and
contemporaneous agreements, arrangements or understandings
relating thereto, including, without limitation, the Summary of
Terms and Conditions dated June 6, 1995 and the draft Letter of
Intent executed by the Sellers on June 15, 1995.
This Letter of Intent may be modified or amended, and the
terms hereof may be waived, only by a written agreement executed
and delivered by each of the parties hereto. This Letter of
Intent may be executed in one or more counterparts, each
counterpart being deemed an original instrument and all such
counterparts together constituting the same agreement.
If you are in agreement with the foregoing, please so
indicate by signing two copies of this Letter of Intent in the
space set forth below and returning one of such signed copies to
the undersigned, whereupon this letter shall constitute our
binding agreement in accordance with the terms and provisions
set forth above.
Very truly yours,
TRIARC COMPANIES, INC.
By: LEON KALVARIA
--------------------------
Name: Leon Kalvaria
Title: Vice Chairman
Accepted and agreed to:
JOSEPH UMBACH
- ------------------------
JOSEPH UMBACH
JOSEPH VICTORI WINES, INC.
By: JOSEPH UMBACH
------------------------------
Name: Joseph Umbach
Title: President
BEST FLAVORS, INC.
By: JOSEPH UMBACH
--------------------------------
Name: Joseph Umbach
Title: President
NATURE'S OWN BEVERAGE COMPANY
By: JOSEPH UMBACH
--------------------------------
Name: Joseph Umbach
Title: President
<PAGE>
Exhibit A
SEVERANCE PAYMENT SCHEDULE FOR
EMPLOYEES TERMINATED BY BUYER WITHOUT CAUSE
WITHIN 12 MONTHS FROM CLOSING
Group I
Vice Presidents, Directors and Sales and Brand Managers
reporting directly to the President (10 people) :
Less than one (1) year of service (2 people):
- four (4) weeks severance pay
Over one (1) year of service (8 people):
- eight (8) weeks severance pay plus
- two (2) weeks severance pay for
each year of service* and,
- if after twelve (12) weeks
employee does not have employment,
severance pay will continue until
employment is found up to a
maximum of an additional twelve
(12) weeks provided employee has
displayed a good faith effort to
seek employment.
Group II
All other employees (138 people):
Less than one (1) year of service:
- two (2) weeks severance pay
Over one (1) year of service:
- two (2) weeks severance pay plus
- two (2) weeks severance pay for
each year of service<F1>.
<FN1>1 week for each completed 6 months of service.
</FN1>
<PAGE>
Exhibit B
Royalty Arrangements
1) $.25 case;
2) Have a threshold by product line (from Closing) before a
royalty is paid (goes back to case #1); e.g.:
Sports Cap (sports drink products<F2> not packaging): must
sell 300,000 cases per year before a royalty is paid.
Sunesta: must sell 750,000 yr.1/1 mil yr 2/1 mil yr 3
before a royalty is paid (look at each year separately).
Sun Valley Squeeze: must sell 250,000 cases per year
before a royalty is paid.
Other: number of cases to be negotiated before a royalty
is paid.
Any product line extension must be approved by Buyer.
3) Royalty payments will cover shipping of qualified products,
regardless of introduction date, through the third
anniversary date from closing date (i.e., 3 years).
4) To qualify for a royalty payment (beyond current 3
identified product lines):
A proposal must be submitted in writing by Sellers that
would include the specifics for formulation, packaging,
labeling, trademark, positioning and rationale.
Specifically, Sellers cannot submit a raw listing of
ideas to Buyer and claim proprietary rights;
Sellers must recognize that Buyer or Royal Crown
Company, Inc. ("RC") or one of their affiliates may be
working on similar ideas and the submission of a
proposal will not obligate the Buyer to either introduce
the product or pay a royalty if the new product ideas
was previously thought of by Buyer, RC or one of their
affiliates.
Product flavor extensions under the Royal Mistic product
line would be excluded from any royalty payment to
Sellers.
Buyer will maintain the right to refuse to distribute
new products developed or proposed by Sellers. Sellers
would still be subject to three-year non-compete even if
product rejected.
<FN2>Clear (sports) flavors: Lemonade-Lime; Orange Mango; Fruit
Punch; Raspberry Strawberry; Color (standard) flavors: Lemon
Tea; Fruit Punch; Kiwi-Strawberry (plus in each case line
extensions but excluding any new group of products with a Sports
Cap).
</FN2>
5) The use by Sellers of Buyer's R&D resources (staff and
facilities) must be approved in advance by Buyer and shall
remain under the control of the Buyer. Any products or
product enhancements initiated, developed or discovered
during the first three years from the Closing which are not
shipped by the end of this three-year period will belong to
Buyer and the Sellers will execute all appropriate
documentation requested by Buyer to evidence the Buyer's
ownership of such products or enhancements. Sellers will
advise Buyer in advance of all costs of raw materials, as
well as development costs of packaging material, designs
and concepts (bottle, label, caps, etc.), which will only
be borne by Buyer if approved by it in writing in advance
of any costs being incurred by Sellers.
6) Any royalty payments due Sellers will be paid quarterly in
arrears by Buyer and will be subject to setoff for any
amounts owed to Buyer under the Definitive Agreements.
7) At Sellers' option, the Buyer will provide Sellers with
office space at the Companies' New Rochelle offices which
shall be rented by Sellers at Buyer's cost. Sellers will
provide and pay for their own secretarial services, word
processing equipment, phone, fax and other support
services. The Buyer may terminate such rental arrangement
upon 60 days' notice with no further obligation to continue
or renew.
<PAGE>
Exhibit 99.1
CONTACT: John L. Cohlan Edward Falk
Triarc Companies, Inc. Joseph Victori Wines, Inc.
(212) 230-3095 (914) 637-0400
FOR IMMEDIATE RELEASE
TRIARC TO ACQUIRE MISTIC BEVERAGES
NEW YORK, NEW YORK -- June 27, 1995 -- Triarc Companies,
Inc. (NYSE:TRY) and Mistic Beverages announced today that they
have entered into a letter of intent pursuant to which Triarc
will acquire Mistic Beverages. The aggregate purchase price for
Mistic will be approximately $95 million. Mistic, a leader in
the growing New Age beverage segment, markets fruit drinks,
ready-to-drink brewed iced teas and naturally flavored sparkling
waters under the Mistic and Royal Mistic trademarks. Mistic had
1994 net sales of approximately $130 million and earnings before
interest, taxes, depreciation and amortization (EBITDA) of
approximately $16 million.
Triarc also announced that Michael F. Weinstein, former
President and Chief Operating Officer of A&W Brands, Inc., will
serve as Chief Executive Officer of Mistic and Ernest Cavallo,
the current Chief Financial Officer of Mistic and former
Executive Vice President and Chief Financial Officer of A&W,
will serve as President and Chief Financial Officer of Mistic.
Mr. Weinstein has over 20 years experience in senior management
positions in the beverage industry and Mr. Cavallo has over 30
years of experience in senior financial management positions,
including 10 years at A&W. Mistic will be part of Triarc's
Beverage Group, which is chaired by John C. Carson, President
and Chief Executive Officer of Triarc's Royal Crown Company,
Inc. subsidiary.
Commenting on the acquisition, Nelson Peltz, Chairman and
Chief Executive Officer of Triarc said, "Mistic's product
quality, its ability to develop new products, and its
distribution network give Triarc's Beverage Group a full
complement of beverage products. In addition, combined with
Triarc's previously announced strategic alliance with and
investment in Saratoga Beverages, the acquisition of Mistic will
make Triarc a leader in the fast growing New Age/Alternative
beverage business. Further, we are pleased to have as part of
our Mistic management team, Mike Weinstein and Ernie Cavallo,
two experienced and highly respected beverage executives. We
are also pleased that Joe Umbach, Mistic's founder and current
Chairman and Chief Executive Officer, will continue to provide
Mistic with valuable input in the area of new product
development."
Joe Umbach stated that "the proven ability of the current
organization, combined with the resources of Triarc and its new
management team, should provide a solid foundation for the
continued growth and profitability of Mistic."
The acquisition, expected to close in the third quarter, is
subject to execution of definitive documentation, the completion
by Triarc of financing arrangements, Hart-Scott-Rodino antitrust
clearance, and other customary closing conditions.
Through its four core businesses, restaurants (Arby's,
Inc.), soft drinks (Royal Crown Company, Inc.), textiles
(Graniteville Company) and liquefied petroleum gas (National
Propane Corporation), Triarc Companies, Inc., currently has
annual revenues of more than $1 billion.
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