<PAGE>
Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
TRIARC COMPANIES, INC.
.................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction
applies:
............................................................
(2) Aggregate number of securities to which transaction
applies:
.......................................................
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):
.......................................................
(4) Proposed maximum aggregate value of transaction:
.......................................................
(5) Total fee paid:
.......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
.......................................................
(2) Form, Schedule or Registration Statement No.:
.......................................................
(3) Filing Party:
.......................................................
(4) Date Filed:
.......................................................
<PAGE>
TRIARC COMPANIES, INC.
NOTICE OF ANNUAL
MEETING OF
STOCKHOLDERS AND
PROXY STATEMENT
PLEASE COMPLETE, SIGN, DATE AND RETURN
YOUR PROXY PROMPTLY
[TRIARC LOGO]
THURSDAY, SEPTEMBER 23, 1999
AT 11:00 A.M.
AT THE CHASE MANHATTAN BANK
270 PARK AVENUE
NEW YORK, NEW YORK
<PAGE>
[TRIARC LOGO]
TRIARC COMPANIES, INC.
280 PARK AVENUE
NEW YORK, NEW YORK 10017
(212) 451-3000
August 18, 1999
Dear Stockholders:
It is our pleasure to invite you to join us at the 1999 Annual Meeting of
Stockholders of Triarc Companies, Inc. which will be held at 11:00 a.m., on
Thursday, September 23, 1999, in the third floor auditorium of The Chase
Manhattan Bank, 270 Park Avenue, New York, New York.
We will report to you at the meeting on the Company's current operations
and outlook. The meeting will also include a question and discussion period. The
Board of Directors and management hope that many of you will be able to attend
in person.
At the meeting, you will be asked to consider and vote on the election of
nine (9) directors, the approval of the Company's 1999 Executive Bonus Plan and
the ratification of the appointment of Deloitte & Touche LLP as the Company's
independent certified public accountants. The Board of Directors has unanimously
approved these proposals and recommends that you vote FOR each of them.
You may also be asked to consider and vote upon a stockholder proposal. The
Board of Directors opposes the stockholder proposal and recommends that you vote
AGAINST it.
The formal notice of Annual Meeting and the Proxy Statement follow. It is
important that your shares be represented and voted, regardless of the size of
your holdings. Accordingly, whether or not you plan to attend the meeting in
person, please complete, sign, date and return the enclosed proxy. If you attend
the meeting and wish to vote your shares personally, you may revoke your proxy.
Sincerely,
Nelson Peltz Peter W. May
NELSON PELTZ PETER W. MAY
Chairman and Chief President and Chief
Executive Officer Operating Officer
<PAGE>
[TRIARC LOGO]
TRIARC COMPANIES, INC.
NOTICE OF 1999 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY, SEPTEMBER 23, 1999
11:00 A.M., LOCAL TIME
------------------------
The 1999 Annual Meeting of Stockholders of Triarc Companies, Inc. will be
held on Thursday, September 23, 1999, at 11:00 a.m., local time, in the third
floor auditorium of The Chase Manhattan Bank, 270 Park Avenue, New York, New
York, for the following purposes:
(1) to elect nine (9) directors to hold office as specified in the
accompanying Proxy Statement;
(2) to consider and take action upon the Triarc Companies, Inc. 1999
Executive Bonus Plan;
(3) to ratify the appointment of Deloitte & Touche LLP as the
Company's independent certified public accountants;
(4) to consider, if properly brought before the meeting, a proposal
from a stockholder; and
(5) to transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Stockholders entitled to vote at the meeting or any adjournment or
postponement thereof are holders of record of the Company's Class A Common Stock
at the close of business on August 11, 1999.
By Order of the Board of Directors
Stuart Rosen
STUART I. ROSEN
Vice President and
Associate General Counsel, and
Secretary
August 18, 1999
YOUR VOTE IS IMPORTANT! STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE
MEETING. WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE COMPLETE, SIGN AND DATE THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. YOU MAY
NEVERTHELESS VOTE IN PERSON IF YOU ATTEND THE MEETING.
<PAGE>
TRIARC COMPANIES, INC.
280 PARK AVENUE
NEW YORK, NEW YORK 10017
(212) 451-3000
------------------------
PROXY STATEMENT
------------------------
INTRODUCTION
GENERAL
The accompanying proxy is solicited by the Board of Directors (the 'Board
of Directors' or the 'Board') of Triarc Companies, Inc. (the 'Company' or
'Triarc') in connection with the 1999 Annual Meeting of Stockholders of the
Company (the 'Meeting'), to be held on Thursday, September 23, 1999, at 11:00
a.m., local time, in the third floor auditorium of The Chase Manhattan Bank, 270
Park Avenue, New York, New York and at any adjournment or postponement of the
Meeting. This Proxy Statement and a proxy are first being mailed to stockholders
on or about August 19, 1999. The mailing address of the Company's principal
executive office is 280 Park Avenue, New York, New York 10017.
When a proxy is returned properly dated and signed, the shares represented
thereby will be voted by the persons named as proxies in accordance with each
stockholder's directions. Stockholders may specify their choices by marking the
appropriate boxes on the enclosed proxy. If a proxy is dated, signed and
returned without specifying choices, the shares will be voted as recommended by
the Board of Directors FOR the election of each of the nine (9) nominees for
directors named below, FOR Proposals (2) and (3), and AGAINST Proposal (4). The
Company does not have cumulative voting in the election of directors. Under the
Company's By-Laws (the 'By-Laws'), business transacted at the Meeting is
confined to the purposes stated in the Notice of the Meeting. The proxy being
solicited does, however, convey discretionary authority to the persons named
therein as proxies to vote on matters incident to the conduct of the Meeting.
The proxy may be revoked by the stockholder at any time prior to the time it is
voted by giving notice of such revocation either personally or in writing to the
Secretary of the Company at the address provided above.
VOTING SECURITIES
All holders of record of the Company's Class A Common Stock, par value $.10
per share (the 'Class A Common Stock'), at the close of business on August 11,
1999 are entitled to vote on all business of the Meeting. At the close of
business on such day, the Company had 19,577,867 shares of Class A Common Stock
outstanding and entitled to vote at the Meeting. Each share of Class A Common
Stock entitles the holder to one vote per share. The presence, in person or by
proxy, of stockholders entitled to cast at least a majority of the votes which
all stockholders are entitled to cast shall constitute a quorum.
Under the General Corporation Law of the State of Delaware, the state in
which the Company is incorporated, the Company's Certificate of Incorporation
and the By-Laws, if a quorum is present at the
<PAGE>
Meeting, the affirmative vote of a plurality of the votes cast is required for
the election of directors and the affirmative vote of a majority of the voting
power present (in person or by proxy) and entitled to vote at the Meeting is
required for approval of Proposal (3) and Proposal (4). With respect to
Proposal (2), the treasury regulations under Section 162(m) of the Internal
Revenue Code of 1986, as amended, require the affirmative vote of a majority of
the votes cast on the issue to approve Proposal (2) in accordance with such
treasury regulations. Under Delaware law, an abstention is not deemed to be a
'vote cast.' As a result, abstentions and broker 'non-votes' are not included in
the tabulation of the voting results on the election of directors
(Proposal (1)) or issues requiring approval of a majority of the votes cast
(Proposal (2)) and, therefore, do not have the effect of votes in opposition in
such tabulations. Abstentions are included in the tabulation of the voting
results on issues requiring the affirmative vote of a majority of the voting
power present (in person or by proxy) and entitled to vote at the Meeting
(Proposal (3) and Proposal (4)) and have the effect of votes in opposition in
such tabulations, while broker 'non-votes' are not included in the tabulation of
the voting results on such issues and therefore do not have the effect of votes
against in such tabulations. A broker 'non-vote' occurs when a nominee holding
shares for a beneficial owner does not vote on a particular proposal because the
nominee does not have discretionary voting power with respect to that item and
has not received instructions from the beneficial owner. Broker 'non-votes' and
the shares as to which a stockholder abstains are included for purposes of
determining whether a quorum of shares is present at the Meeting.
The Company has been informed that the 5,982,867 shares of Class A Common
Stock (constituting approximately 30.6% of the outstanding shares of Class A
Common Stock as of August 11, 1999) owned by DWG Acquisition Group, L.P., a
Delaware limited partnership of which Nelson Peltz and Peter W. May are the sole
general partners ('DWG Acquisition'), will be voted in accordance with the
recommendation of the Board of Directors FOR the election of each of the nine
(9) nominees for director named below, FOR Proposal (2), FOR Proposal (3) and
AGAINST Proposal (4).
PROPOSAL 1.
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION
It is recommended that the nine (9) nominees herein named be elected as
directors of the Company, with each director to hold office until the next
Annual Meeting of Stockholders, and until his successor is elected and qualified
or until his prior death, resignation or removal. All of the nine (9) nominees
are presently serving as directors of the Company and were elected directors at
the last Annual Meeting of Stockholders held on May 6, 1998 (except Mr.
Silverman, who was elected as a director on May 28, 1999), to serve until the
next annual meeting of the Company's stockholders and until such director's
successor is duly chosen and qualified or until his prior death, resignation or
removal. The Company is unaware of any reason why any of the nominees named
herein would be unwilling or unable to serve as a director. Should, however, any
nominee for director be unwilling or unable to serve at the time of the Meeting
or any adjournment or postponement thereof, the persons named in the proxy will
vote for the election of such other person for such directorship as the Board of
Directors may recommend.
Certain information regarding each person nominated by the Board of
Directors, including his principal occupation during the past five years and
current directorships, is set forth below. Unless otherwise indicated, all
nominees have had the indicated principal occupations for the past five years.
2
<PAGE>
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING PAST
NAME OF DIRECTOR FIVE YEARS, AGE AND OTHER INFORMATION
---------------- -------------------------------------
<S> <C>
Nelson Peltz......................... Mr. Peltz has been a director and Chairman and Chief
Executive Officer of the Company since April 1993. Since
then, he has also been a director and Chairman of the
Board and Chief Executive Officer of certain of the
Company's subsidiaries. He is also a general partner of
DWG Acquisition, whose principal business is ownership of
securities of the Company. From its formation in January
1989 to April 1993, Mr. Peltz was Chairman and Chief
Executive Officer of Trian Group, Limited Partnership
('Trian'), which provided investment banking and
management services for entities controlled by Mr. Peltz
and Mr. May. From 1983 to December 1988, he was Chairman
and Chief Executive Officer and a director of Triangle
Industries, Inc. ('Triangle'), which, through wholly-owned
subsidiaries, was, at that time, a manufacturer of
packaging products, copper electrical wire and cable and
steel conduit and currency and coin handling products. Mr.
Peltz has also served as a director of MCM Capital Group,
Inc. since February 1998. Mr. Peltz is 57 years of age.
Peter W. May......................... Mr. May has been a director and President and Chief
Operating Officer of the Company since April 1993. Since
then, he has also been a director and President and Chief
Operating Officer of certain of the Company's
subsidiaries. He is also a general partner of DWG
Acquisition. From its formation in January 1989 to April
1993, Mr. May was President and Chief Operating Officer of
Trian. He was President and Chief Operating Officer and a
director of Triangle from 1983 until December 1988. Mr.
May has also served as a director of Ascent Entertainment
Group, Inc. since June 1999 and of MCM Capital Group, Inc.
since February 1998. Mr. May is 56 years of age, and the
father of Jonathan P. May, Chief Executive Officer of the
Triarc Restaurant Group.
Hugh L. Carey........................ Mr. Carey has been a director of the Company since July
1994. He was an Executive Vice President of W.R. Grace & Co.
('Grace') from 1987 to December 31, 1995. From 1993 to
December 1995, he served Grace as director of its
Government Relations Division, and from 1987 until 1993,
he ran Grace's office of environmental policy. Mr. Carey
was the Governor of the State of New York from 1975 until
1983 and a member of Congress from 1960 until 1975. From
1991 until 1993, he was Chairman of the National Institute
of Former Governors. Mr. Carey is also a director of China
Trust Bank and PhyMatrix, Inc., and of Counsel to Whitman
Breed Abbott & Morgan. Mr. Carey is 80 years of age.
Clive Chajet......................... Mr. Chajet has been a director of the Company since July
1994. He has been Chairman of Chajet Consultancy, L.L.C., a
consulting firm specializing in identity and image
management, since January 1997. Prior thereto, Mr. Chajet
was Chairman of Lippincott & Margulies Inc., also a
consulting firm specializing in identity and image
management, from 1983 to January 1997. Mr. Chajet is 62
years of age.
Joseph A. Levato..................... Mr. Levato has been a director of the Company since July
1996. Mr. Levato served as Executive Vice President and
Chief Financial
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING PAST
NAME OF DIRECTOR FIVE YEARS, AGE AND OTHER INFORMATION
---------------- -------------------------------------
<S> <C>
Officer of Triarc from April 1993 to August 1996. He also
served as Executive Vice President and Chief Financial
Officer of certain of Triarc's subsidiaries from April
1993 to August 1996. Prior to April 1993, he was Senior
Vice President and Chief Financial Officer of Trian from
January 1992 to April 1993. From 1984 to December 1988, he
served as Senior Vice President and Chief Financial
Officer of Triangle. Mr. Levato is 58 years of age.
David E. Schwab II................... Mr. Schwab has been a director of the Company since October
1994. Mr. Schwab has been a Senior Counsel of Cowan,
Liebowitz & Latman, P.C., a law firm, since January 1,
1998. Prior thereto he was a partner of Schwab Goldberg
Price & Dannay, a law firm, for more than five years. Mr.
Schwab also serves as Chairman of the Board of Trustees of
Bard College. Mr. Schwab is 68 years of age.
Jeffrey S. Silverman................. Mr. Silverman has been a director of the Company since May
1999. Mr. Silverman has been Chairman of LTS Capital
Partners, L.L.C., an investment firm, since August 1997.
From January 1983 until August 1997, Mr. Silverman served
as Chief Executive Officer of PLY GEM Industries, Inc., a
home improvement building products supplier, and he served
as its Chairman from February 1986 through August 1997.
Mr. Silverman is 53 years of age.
Raymond S. Troubh.................... Mr. Troubh has been a director of the Company since July
1994. He has been a financial consultant since prior to
1989. Mr. Troubh is a director of ARIAD Pharmaceuticals,
Inc., Becton, Dickinson & Co., Diamond Offshore Drilling,
Inc., Foundation Health Systems, Inc., General American
Investors Company, Olsten Corporation, Starwood Hotels &
Resorts, Inc. and WHX Corporation. He is also a trustee of
MicroCap Liquidating Trust and Petrie Stores Liquidating
Trust. Mr. Troubh is 73 years of age.
Gerald Tsai, Jr...................... Mr. Tsai has been a director of the Company since October
1993. Mr. Tsai is a private investor. From February 1993 to
October 1997, he was Chairman of the Board, President and
Chief Executive Officer of Delta Life Corporation, a life
insurance and annuity company with which Mr. Tsai became
associated in 1992. Mr. Tsai also serves as a director of
Rite Aid Corporation, Sequa Corporation, Zenith National
Insurance Corporation, Saks Incorporated and United
Rentals Inc. He is a trustee of Boston University, the
Mount Sinai-NYU Medical Center Board and the New York
University School of Medicine Foundation Board. Mr. Tsai
is 70 years of age.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
NINE (9) NOMINEES NAMED ABOVE.
4
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth certain information regarding the executive
officers of Triarc, all of whom are U.S. citizens.
<TABLE>
<CAPTION>
NAME AGE POSITIONS
---- --- ---------
<S> <C> <C>
Nelson Peltz....................... 57 Director; Chairman and Chief Executive Officer
Peter W. May....................... 56 Director; President and Chief Operating Officer
Michael Weinstein.................. 50 Chief Executive Officer of the Triarc Beverage Group
Jonathan P. May.................... 33 Chief Executive Officer of the Triarc Restaurant
Group
John L. Barnes, Jr................. 52 Executive Vice President and Chief Financial Officer
Eric D. Kogan...................... 36 Executive Vice President -- Corporate Development
Brian L. Schorr.................... 40 Executive Vice President, General Counsel, and
Assistant Secretary
Francis T. McCarron................ 42 Senior Vice President -- Taxes
Anne A. Tarbell.................... 41 Senior Vice President -- Corporate Communications
and Investor Relations
Stuart I. Rosen.................... 40 Vice President and Associate General Counsel, and
Secretary
Fred H. Schaefer................... 54 Vice President and Chief Accounting Officer
</TABLE>
Set forth below is certain additional information concerning the persons
listed above (other than Messrs. Peltz and May, for whom such information has
been provided under 'Nominees for Election' above).
Michael Weinstein has been Chief Executive Officer of the Triarc Beverage
Group and Royal Crown since October 1996. Mr. Weinstein has also served as Chief
Executive Officer of Snapple Beverage Corp. ('Snapple') and Mistic Brands, Inc.
('Mistic') since they were acquired by Triarc in May 1997 and August 1995,
respectively. Prior to August 1995, he was president of Liquid Logic, a private
beverage consulting business he founded in 1994. From 1981 until the end of
1993, he served in various executive capacities at A&W Brands, Inc., lastly as
President/Chief Operating Officer.
Jonathan P. May has been Chief Executive Officer of the Triarc Restaurant
Group and certain of its subsidiaries since July 1999. From 1996 to July 1999,
Mr. May was Vice President, Concept Development of the Triarc Restaurant Group.
From 1995 to 1996, Mr. May was Vice President, Worldwide Planning of the Triarc
Restaurant Group. Previously, Mr. May was Director, Corporate Development of the
Company from 1993 to 1995. Mr. May is the son of Peter W. May.
John L. Barnes, Jr. has been Executive Vice President and Chief Financial
Officer of Triarc and certain of its subsidiaries since March 1998 and prior
thereto was Senior Vice President and Chief
5
<PAGE>
Financial Officer of Triarc since August 1996. From April 1996 to August 1996
Mr. Barnes was a Senior Vice President of Triarc. Prior to April 1996, Mr.
Barnes had served as Executive Vice President and Chief Financial Officer of
Graniteville Company (which was sold by the Company in April 1996) for more than
five years.
Eric D. Kogan has been Executive Vice President -- Corporate Development of
Triarc and certain of its subsidiaries since March 1998 and prior thereto was
Senior Vice President -- Corporate Development of Triarc since March 1995. Prior
to March 1995 Mr. Kogan was Vice President -- Corporate Development of Triarc
since April 1993. Prior thereto, Mr. Kogan was a Vice President of Trian from
September 1991 to April 1993. Mr. Kogan has also served as a director of MCM
Capital Group, Inc. since February 1998.
Brian L. Schorr has been Executive Vice President and General Counsel of
Triarc and certain of its subsidiaries since June 1994. Prior thereto, Mr.
Schorr was a partner of Paul, Weiss, Rifkind, Wharton & Garrison, a law firm
which he joined in 1982 and subsequent to June 1994 through April 1995 he was Of
Counsel to that firm in connection with limited liability company and limited
liability partnership matters. That firm provides legal services to Triarc and
its subsidiaries.
Francis T. McCarron has been Senior Vice President -- Taxes of Triarc and
certain of its subsidiaries since April 1993. Prior thereto, he was Vice
President -- Taxes of Trian from its formation in January 1989 to April 1993. He
joined Triangle in February 1987 and served as Director of Tax Planning &
Research until December 1988.
Anne A. Tarbell has been Senior Vice President -- Corporate Communications
and Investor Relations of Triarc and certain of its subsidiaries since May 1998.
From July 1995 to April 1998, Ms. Tarbell was Vice President and
Director -- Investor Relations of ITT Corporation and served as Assistant
Director -- Investor Relations of ITT Corporation from August 1991 to May 1995.
Stuart I. Rosen has been Vice President and Associate General Counsel, and
Secretary of Triarc and certain of its subsidiaries since August 1994. Prior
thereto, he was associated with Paul, Weiss, Rifkind, Wharton & Garrison since
1985.
Fred H. Schaefer has been Vice President and Chief Accounting Officer of
Triarc and certain of its subsidiaries since April 1993. Prior thereto, he was
Vice President and Chief Accounting Officer of Trian from its formation in
January 1989 to April 1993.
The term of office of each executive officer is until the organizational
meeting of the Board following the next annual meeting of Triarc stockholders
and until his successor is elected and qualified or until his prior death,
resignation or removal.
BOARD MEETINGS AND CERTAIN COMMITTEES OF THE BOARD
Nine meetings of the full Board of Directors were held during the fiscal
year ended January 3, 1999. Each incumbent director who is a nominee for
reelection attended more than 75% of the meetings of the Board of Directors and
its committees that he was eligible to attend in 1998.
The Company has standing audit, nominating, and compensation committees
whose current functions and members are described below. It is anticipated that
at its first meeting following the Meeting, the Board will designate the
directors to serve on each of these committees until the next annual meeting of
stockholders.
6
<PAGE>
Audit Committee. The Audit Committee is composed of Messrs. Raymond S.
Troubh (Chairman), David E. Schwab II and Gerald Tsai, Jr. This committee is
charged with the responsibility of overseeing the financial reporting process of
the Company. In the course of performing its functions, the Audit Committee
(i) reviews the Company's internal accounting controls and its annual
consolidated financial statements, (ii) reviews with the Company's independent
certified public accountants the scope of their audit, their report and their
recommendations, (iii) considers the possible effect on the independence of such
accountants in approving non-audit services requested of them, and
(iv) recommends the action to be taken with respect to the appointment of the
Company's independent certified public accountants. The Audit Committee met five
times during 1998.
Nominating Committee. The Nominating Committee is composed of Messrs. Peter
W. May (Chairman), Nelson Peltz and Hugh L. Carey. This committee is charged
with the responsibility of considering and recommending individuals to be
considered by the Board for membership on the Board of Directors. The Nominating
Committee met once during 1998.
The Nominating Committee will consider nominations for Board membership by
stockholders. The Nominating Committee has adopted the following rules with
respect to considering such nominations: (i) the nominating stockholder must
have owned for at least six months prior to the date the nomination is submitted
shares of (x) Class A Common Stock or (y) other classes of common stock or
preferred stock, if any, entitled to vote for directors; (ii) the nomination
must be received by the Nominating Committee 120 days before the mailing date
for proxy material applicable to the annual meeting for which such nomination is
proposed for submission; and (iii) a detailed statement setting forth the
qualifications, as well as the written consent, of each party nominated must
accompany each nomination submitted.
Compensation Committee and Performance Compensation Subcommittee. The
Compensation Committee is composed of Messrs. David E. Schwab II (Chairman),
Clive Chajet, Joseph A. Levato and Jeffrey S. Silverman. The Compensation
Committee is charged with the responsibility of (i) reviewing, advising and
making recommendations with respect to employee salary and compensation plans,
benefits and standards applicable to the executive officers of the Company,
(ii) taking all actions with respect thereto that are not specifically reserved
for the Board of Directors, (iii) administering the Triarc Companies, Inc. 1997
Equity Participation Plan (the '1997 Plan') and the Triarc Companies, Inc. Stock
Option Plan for Cable Car Employees (the 'Cable Car Plan'), and (iv) such other
salary or compensation plans as the Compensation Committee is designated to
administer. The Compensation Committee met six times during 1998.
The Performance Compensation Subcommittee (the 'Subcommittee' or the
'Performance Committee') of the Compensation Committee is composed of Messrs.
Schwab, Chajet and Silverman. The Subcommittee was established in August 1997 to
assume certain functions which were previously the responsibility of the
Compensation Committee. The Subcommittee's principal function is to administer
the Triarc Companies, Inc. 1993 Equity Participation Plan, as amended (the '1993
Plan'), the Triarc Beverage Holdings Corp. 1997 Stock Option Plan (the 'TBHC
Option Plan'), the 1998 Equity Participation Plan (the '1998 Plan') and, if
approved by the Company's stockholders, the 1999 Executive Bonus Plan (the '1999
Executive Bonus Plan' or the '1999 Plan'). The Subcommittee met three times in
1998.
7
<PAGE>
COMPENSATION OF DIRECTORS
Each non-management director of the Company receives an annual retainer of
$25,000 for serving on the Board. In addition, each non-management director of
the Company also receives $1,000 for each meeting of the Board or of a committee
(or subcommittee) of the Board that such director attends. Under the 1998 Plan
each non-management director may elect to have all or a portion of the annual
retainer and these fees paid in shares of Class A Common Stock rather than in
cash. See 'Executive Compensation -- Certain Employment Arrangements with
Executive Officers' below for certain information relating to compensation of
the Company's management directors.
In addition, pursuant to the 1998 Plan, each director of the Company who is
not also an employee of the Company or any subsidiary receives options to
purchase 15,000 shares of Class A Common Stock on the date of his initial
election or appointment to the Board of Directors. On the date of each
subsequent annual meeting of stockholders of the Company at which a director is
reelected, such director receives options to purchase 3,000 shares of Class A
Common Stock.
For information concerning certain (i) litigation involving certain current
and former directors and (ii) fees paid to certain current and former directors
of Triarc and related matters, see 'Item 3. Legal Proceedings' in the Company's
Annual Report on Form 10-K for the fiscal year ended January 3, 1999 (the 'Form
10-K') and 'Item 1. Legal Proceedings' in the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended July 4, 1999 (the 'Form 10-Q'), which
information is incorporated by reference herein.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
'Exchange Act'), requires Triarc's directors, executive officers, and persons
who own more than ten percent of Triarc's common stock, to file reports of
ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and
Exchange Commission (the 'SEC') and the New York Stock Exchange. Directors,
executive officers and greater than ten percent stockholders are required by SEC
regulations to furnish Triarc with copies of all Forms 3, 4 and 5 they file.
Based solely on Triarc's review of the copies of such forms it has
received, or written representations from certain reporting persons that no Form
5s were required for these persons, Triarc believes that all its directors,
executive officers, and greater than ten percent beneficial owners complied with
all filing requirements applicable to them with respect to 1998.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth the beneficial ownership as of August 11,
1999 by each person known by the Company to be the beneficial owner of more than
5% of the outstanding shares of Class A Common Stock (constituting the only
class of voting capital stock of the Company), each director of the Company and
nominee for director of the Company who has such ownership, each executive
officer whose name appears in the Summary Compensation Table below (the 'Named
Officers') who was an executive officer of the Company as of August 11, 1999 and
all directors and executive officers as a group. Except as otherwise indicated,
each person has sole voting and dispositive power with respect to such shares.
8
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND
NAME AND ADDRESS OF NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
---------------- -------------------- ----------------
<S> <C> <C>
DWG Acquisition Group, L.P. ........................ 5,982,867 shares(1) 30.6%
1201 North Market Street
Wilmington, DE 19801
Nelson Peltz ....................................... 7,265,233 shares(1)(2)(3) 34.9%
280 Park Avenue
New York, NY 10017
Peter W. May ....................................... 6,856,334 shares(1)(2) 33.6%
280 Park Avenue
New York, NY 10017
William Ehrman ..................................... 2,279,022 shares(4) 11.6%
Frederick Ketcher
Jonas Gerstl
Frederic Greenberg
James McLaren
William D. Lautman
300 Park Avenue
New York, NY 10022
Hugh L. Carey....................................... 37,622 shares *
Clive Chajet........................................ 33,300 shares(5) *
Joseph A. Levato.................................... 172,500 shares *
David E. Schwab II.................................. 30,000 shares *
Jeffrey S. Silverman................................ 37,691 shares *
Raymond S. Troubh................................... 45,500 shares *
Gerald Tsai, Jr..................................... 42,070 shares *
John L. Barnes, Jr.................................. 190,667 shares 1.0%
Eric D. Kogan....................................... 209,667 shares 1.1%
Brian L. Schorr..................................... 228,657 shares 1.2%
Directors and Executive Officers as a group
(18 persons)...................................... 9,376,091 shares 41.3%
</TABLE>
- ------------
* Less than 1%
(1) The Company is informed that DWG Acquisition has pledged such shares to a
financial institution on behalf of Messrs. Peltz and May to secure loans
made to them.
(2) Includes 5,982,867 shares held by DWG Acquisition, of which Mr. Peltz and
Mr. May are the sole general partners.
(footnotes continued on next page)
9
<PAGE>
(footnotes continued from previous page)
(3) Includes 21,200 shares owned by a family trust of which Mr. Peltz is a
trustee and 2,600 shares owned by minor children of Mr. Peltz. Mr. Peltz
disclaims beneficial ownership.
(4) The information set forth herein with respect to Messrs. Ehrman, Greenberg,
Ketcher, Gerstl, McLaren and Lautman is based solely on information
contained in a Schedule 13G/A filed with the Securities and Exchange Act on
May 13, 1999 under the Exchange Act. The shares reflected include an
aggregate of 2,147,045 shares of Class A Common Stock that Messrs. Ehrman,
Ketcher, Gerstl, Greenberg, McLaren and Lautman may be deemed to
beneficially own as general partners of EGS Associates, L.P., a Delaware
limited partnership, EGS Partners, L.L.C., a Delaware limited liability
company, Bev Partners, L.P., a Delaware limited partnership, and FK
Investments, L.P., a Delaware limited partnership. The shares reflected also
include (i) 56,650 shares of Class A Common Stock owned directly by Mr.
Ehrman and 55,927 shares of Class A Common Stock owned by members of Mr.
Ehrman's immediate family and his sister-in-law; (ii) 8,400 shares of
Class A Common Stock owned directly by Mr. Ketcher (iii) 1,500 shares of
Class A Common Stock owned directly by Mr. Gerstl and his wife and 4,500
shares of Class A Common Stock owned by a member of Mr. Gerstl's immediate
family; and (iv) 2,000 shares of Class A Common Stock owned directly by Mr.
Greenberg and 3,000 shares of Class A Common Stock owned by a member of Mr.
Greenberg's immediate family.
(5) Includes 1,300 shares owned by Mr. Chajet's wife, as to which shares Mr.
Chajet disclaims beneficial ownership.
------------------------
The above beneficial ownership table includes options to purchase shares of
Class A Common Stock which have vested or will vest within 60 days of
August 11, 1999 by the following persons:
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME OF BENEFICIAL OWNER REPRESENTED BY OPTIONS
------------------------ ----------------------
<S> <C>
Nelson Peltz................................................ 1,231,666 shares
Peter W. May................................................ 826,667 shares
Hugh L. Carey............................................... 25,500 shares
Clive Chajet................................................ 25,500 shares
Joseph A. Levato............................................ 144,500 shares
David E. Schwab II.......................................... 25,500 shares
Jeffrey S. Silverman........................................ --
Raymond S. Troubh........................................... 25,500 shares
Gerald Tsai, Jr............................................. 28,500 shares
John L. Barnes, Jr.......................................... 186,667 shares
Eric D. Kogan............................................... 195,667 shares
Brian L. Schorr............................................. 221,667 shares
Directors and Executive Officers as a group
(18) persons.............................................. 3,139,500 shares
</TABLE>
10
<PAGE>
The beneficial ownership table does not include 5,997,622 shares of
Triarc's non-voting Class B Common Stock owned as of August 11, 1999 by entities
controlled by Victor Posner (collectively, the 'Posner Entities'). All such
shares of Class B Common Stock are convertible without restriction into an equal
number of shares of Class A Common Stock if they are sold to a third party
unaffiliated with the Posner Entities. If such 5,997,622 shares of the Class B
Common Stock had been converted into shares of Class A Common Stock as of
August 11, 1999, such shares would have constituted approximately 23.5% of the
then outstanding shares of Class A Common Stock. Subsequent to August 11, 1999,
Triarc entered into a definitive agreement with the Posner Entities to acquire
all of the Class B Common Stock. It is anticipated that one-third of such shares
will be acquired by Triarc in August 1999. The agreement further provides that
one-half of the remaining shares of Class B Common Stock will be acquired by
Triarc on or before the first anniversary of the initial purchase and the
balance of such shares will be purchased on or before the second anniversary of
the initial purchase. (Each of the purchase dates is subject to extension in
certain limited circumstances.) None of the directors or nominees for directors
of the Company or the Named Officers beneficially owned any Class B Common Stock
as of August 11, 1999. Except for the arrangements relating to the shares
described in footnote (1) to the beneficial ownership table, there are no
arrangements known to the Company the operation of which may at a subsequent
date result in a change in control of the Company.
11
<PAGE>
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE AND PERFORMANCE COMPENSATION SUBCOMMITTEE
Introduction. This report to stockholders presents an overview of the
charter of the Compensation Committee of the Board of Directors (the
'Compensation Committee') and of the Company's compensation philosophy. It also
discusses the Compensation Committee's compensation related decisions in respect
of fiscal 1998 performance. Because certain functions of the Compensation
Committee were transferred to the Performance Compensation Subcommittee (the
'Subcommittee' or the 'Performance Committee') beginning in August 1997, the
Subcommittee joins in this report.
The Compensation Committee's Role. The Compensation Committee is
responsible for reviewing and approving the compensation program for the
executive officers of the Company (the 'Executive Compensation Program') and
administering the 1997 Plan and the Cable Car Plan. The Compensation Committee
administered the 1993 Plan until August 1997 when the Subcommittee was
established. The Subcommittee's principal function is to administer the 1998
Plan, the TBHC Option Plan and the 1993 Plan (which expired by its terms in
April 1998). The Subcommittee will administer the 1999 Executive Bonus Plan if
approved by the stockholders.
The Company's Executive Compensation Program is designed to motivate
executives to achieve the Company's business objectives, with a particular
emphasis on building the value of the Company. Certain of the Company's
executive officers were in 1998, and are currently, employed pursuant to
multi-year employment agreements, the purpose of which is to retain the services
of such officers for extended periods. The minimum salary to which each such
executive officer is entitled is specified in the employment agreement, but the
cash bonuses for such executive officers, which is a major part of an executive
officer's cash compensation, and awards of stock options for executive officers,
are approved by either the Compensation Committee or the Subcommittee, each of
which are comprised entirely of non-management directors; and in the case of
Mr. Roland C. Smith (the former President and Chief Executive Officer of the
Triarc Restaurant Group), his annual bonus and mid-term cash incentive plan
payment were made pursuant to plans which provide that payments are made if,
among other things, certain predetermined financial goals are met. The principal
terms of the employment agreements of certain executive officers are described
under 'Certain Employment Arrangements with Executive Officers,' below.
To fulfill its principal function, the Compensation Committee specifically
reviews and approves each of the elements of the Executive Compensation Program
and will continually assess the effectiveness of the program as a whole. This
includes reviewing the design of the Company's various incentive plans for
executive officers and assessing the competitiveness of the overall Executive
Compensation Program. From time to time, the Company retains external
compensation consultants to advise it with respect to competitive pay levels and
the development and design of compensation plans.
Overall Objectives of the Executive Compensation Program. The Executive
Compensation Program is designed to help the Company retain, motivate and
recruit the executive officers needed to build the value of the Company. The
Company's explicit objective is to pay at levels required to secure the
exceptionally talented executive officers, in particular, and employees, in
general, necessary to achieve long-term financial, strategic and stock price
growth. Since one of the Company's objectives is rapid growth, both by internal
expansion and through acquisitions, the Company has recruited the executive
talent required to run a company which is larger than the Company in its present
form.
12
<PAGE>
Toward that end, the Executive Compensation Program is designed to provide:
Levels of compensation that are highly competitive with those provided in
the various markets in which the Company competes for its executive
resources.
Incentive compensation that:
varies in a consistent and predictable manner with the financial
performance of the Company and/or its various business units;
varies in a consistent and predictable manner with the stock price
performance of the Company; and
effectively rewards individual performance.
In approving and administering the Executive Compensation Program, the
Compensation Committee, acting on behalf of the stockholders, seeks an
appropriate balance among these objectives, the most important of which are
discussed in greater detail below.
Providing Highly Competitive Levels of Compensation. The Company provides
its executive officers with a total compensation package that -- at expected
levels of performance -- is generally intended to be highly competitive with
compensation packages provided to executives in the consumer products and food
and beverage industries (as adjusted to reflect the Company's size, inclusive of
system-wide franchise sales and the sale of carbonated soft drinks in the
finished goods market) who hold comparable positions or have similar
qualifications. In addition, such compensation takes into account the highly
unusual roles and combinations of responsibilities undertaken by Triarc's
executive officers, as well as their individual performance and contribution to
the success of the Company. The Company has designed salary and incentive
programs intended to attract exceptionally high-caliber executives and is
committed to paying these same executives a substantial portion of their
compensation based on the Company and business unit performance.
To establish appropriate competitive frames of reference, the Company looks
toward pay levels offered by leading-performance companies in the relevant
markets for executive talent. The Company periodically assesses an executive's
competitive level of compensation based on information drawn from a variety of
sources, including proxy statements, compensation surveys and external
compensation consultants. The Company's review of competitive compensation
levels incorporates a case-by-case approach that considers each position's
relative content, accountabilities and scope of responsibility. The Company also
takes into account its businesses, current size and expected growth, expected
contributions from specific executives and other similar factors. For senior
executive corporate officers, this review includes an examination of pay data
for comparable positions within the food and beverage industries, as well as
data for general industry companies and pay data for individuals with
backgrounds comparable to such officers. Comparisons for senior unit officers
were made to compensation rates for analogous positions in general industry, as
appropriate to each unit's business, viewing each unit's senior executive
officer as a senior executive officer of a stand alone company. The Compensation
Committee paid particular attention to each position's specific mix and scope of
responsibilities relative to those for the surveyed positions.
The Compensation Committee is aware that companies selected for
compensation comparison purposes differ from those used for relative stockholder
return comparison purposes in this proxy statement's performance graph. The
Compensation Committee believes stockholders' interests are best served by
providing compensation necessary to attract needed exceptional executive talent
from relevant labor markets and that, in many cases, this talent will be
attracted from companies that are not
13
<PAGE>
included in the peer group index in the performance graph set forth below. The
Compensation Committee believes this executive resources strategy will help
enable the Company to exhibit attractive long-term stockholder returns.
While the expected value of an executive's compensation package is set at a
highly competitive level, each executive officer's pay package places a
significant portion of pay at risk, and the actual value of the package will
exceed or fall below this level depending on actual Company results. The Company
is committed to the pay-for-performance philosophy and has implemented an
Executive Compensation Program which ensures that stockholders receive
performance-for-pay.
Ensuring Incentive Compensation Varies With Performance. The Executive
Compensation Program is designed to ensure that incentive compensation varies in
a consistent and predictable manner with the financial performance of the
Company and/or its business units and strategic accomplishments. Awards paid
under the Company's annual and long-term incentive plans will be tied to the
Company's and its business units' short- and long-term financial performance and
strategic accomplishments of the Company.
The Company's various incentive plans each serve slightly different
purposes and, as such, employ different measures of performance and cover
different periods of time. Accordingly, an executive officer's total
compensation will not typically vary based on any single measure of Company or
business unit performance over a particular period of time. However, in
combination, these plans provide a powerful incentive -- focusing management
attention on those measures important to stockholders and rewarding participants
based on the Company's performance and their individual achievements.
The Company also believes that effectively rewarding individual performance
helps drive managers to contribute in ways that enhance the financial and stock
performance of the Company and its various business units. Although the
Executive Compensation Program provides compensation that varies with financial
performance and strategic accomplishments, an executive officer's incentive
awards may also be influenced by qualitative assessments of Company, business
unit and individual performance, as appropriate. For all executive officers,
these assessments are made by either the Compensation Committee or the
Subcommittee, as appropriate.
Overview of the Executive Compensation Program. The Executive Compensation
Program is comprised of three principal elements: (i) the base salary program,
(ii) the annual incentive program and (iii) the long-term incentive program
(consisting of the mid-term plans for certain subsidiary executive officers and
key employees discussed below and equity based awards). Each of these is
designed and administered with the explicit purpose of furthering the
stockholders' interests by facilitating the employment of highly-talented
executives and motivating them to achieve exceptional levels of performance. An
overview of each of these elements and how each is intended to support
stockholder interests is provided below.
Base Salary Compensation. The Company's base salary program is
intended to provide base salary levels that are competitive in the external
market for executive talent and reflect an individual's ongoing
performance. Base salaries are periodically adjusted based on the
executive's performance, the Company's overall financial performance and
expected salary increases in the market for executive talent.
The Company believes the mix of elements in the Executive Compensation
Program is appropriate, and will periodically review base salary levels, their
relationship to the competitive market and to the other components of the
program.
14
<PAGE>
Annual Incentive Compensation. The annual cash incentive plans for
executive officers and key employees of certain of the Company's principal
business units (each an 'Annual Plan') provide competitive annual pay
opportunities with amounts payable being linked to the Company's and/or
business unit's annual financial performance, and to the individual's
annual performance. Each Annual Plan sets annual incentive target awards at
levels that are competitive in the context of the Company's total Executive
Compensation Program, and the appropriate mix of variable and fixed
compensation. Financial performance is assessed annually against pre-set
financial and strategic objectives.
Each such executive's or key employee's individual performance award is
tied to performance measures most appropriate to his or her responsibilities. To
reinforce the need for teamwork and focus attention on overall Company
objectives, all participants have a significant portion of their award tied to
corporate or unit financial performance, as defined by operating income and
other measures selected at the outset of each plan year. For additional
information regarding the Annual Plan, see 'Certain Employment Arrangements with
Executive Officers -- Cash Incentive Plans,' below.
In addition, annual incentives for the Company's executive officers (other
than the Chairman and Chief Executive Officer and President and Chief Operating
Officer) are determined by the Compensation Committee on a discretionary basis,
based on interim and year-end reviews of performance relative to strategic and
financial objectives and stock price growth. From time to time, the Compensation
Committee may award discretionary bonuses based on performance to the Company's
executive officers. The amounts of such bonuses will be based on the
Compensation Committee's evaluation of such individual's contribution.
The Compensation Committee believes that the Annual Plan plays a critical
role in the Company's ability to attract desired executives and motivate them
toward aggressive levels of performance.
Long-Term Incentive Compensation. The Company provides the executive
officers and key employees of its principal business units with incentives
linked to longer-term business unit and corporate performance through the
1998 Plan, the 1997 Plan, and, in the case of key employees of the Triarc
Restaurant Group (Arby's), through a mid-term cash incentive plan (the
'Mid-Term Plan'). In addition, in August 1997, Triarc Beverage Holdings
Corp. ('TBHC'), a wholly owned subsidiary of Triarc, adopted the TBHC
Option Plan which provides for the grant of options to purchase shares of
TBHC common stock. In 1998, grants were made under the TBHC Option Plan to
executive officers and certain key employees of TBHC, including the
individuals named in the Summary Compensation Table below (other than Mr.
Roland Smith). Each of these plans is intended to provide competitive
long-term incentive opportunities, enable participants to build significant
wealth when meaningful stockholder wealth has been created, and link a
significant portion of total pay to the Company's long-term stock
performance and, as appropriate, to business unit longer-term financial
performance and value.
The Mid-Term Plan for executive officers and key employees of the Triarc
Restaurant Group provides for cash awards to participants based on the unit's
profit over a three-year period. A pool is created based upon the amount by
which the unit's actual profit reaches or exceeds a targeted level.
The 1998 Plan, which replaced the 1993 Plan, provides senior corporate and
business unit managers and key employees, including the individuals named in the
Summary Compensation Table below, with stock-based incentives. Similarly, the
1997 Plan provides incentives to non-officer key employees of the Company and
key employees of the Company's subsidiaries. Although the 1998 Plan and the 1997
Plan are generally designed to provide periodic grants of options on the Class A
Common Stock, the 1998
15
<PAGE>
Plan also provides for the use of restricted stock awards. No restricted stock
awards were made in respect of fiscal 1998. Overall, these plans are intended to
provide competitive long-term incentive opportunities and tie long-term
financial gain to increases in the Company's stock price.
Other Executive Compensation. In addition, the Company provides executive
officers with benefits and perquisites such as a 401(k) plan, health and life
insurance benefits and, in certain cases, tax and financial planning advice,
automobile allowances and club dues. Overall, the Compensation Committee
believes the provided levels of benefits and perquisites are necessary and
competitive and, in combination with the previously mentioned compensation
elements, facilitate the Company's ability to secure the needed executive
talents.
Adoption of CEO and COO Compensation Arrangements. In April 1993, the
Compensation Committee adopted compensation arrangements for the Company's
Chairman and Chief Executive Officer and President and Chief Operating Officer
that included base salaries of $1 per year and incentive compensation on a
discretionary basis. In addition, at that time, the Compensation Committee
approved for such executives up-front stock option grants. The employment and
compensation arrangements for Messrs. Peltz and May expired by their terms in
April 1999. In June 1999, the Subcommittee, pursuant to a delegation of
authority from the Board of Directors, adopted the 1999 Executive Bonus Plan,
subject to stockholder approval. Messrs. Peltz and May will, and other senior
executives are expected to, participate in such Plan. The Company is in the
process of negotiating new long term employment and compensation arrangements
with each of Messrs. Peltz and May. For additional information, see 'Certain
Employment Arrangements with Executive Officers.'
In April 1994, the Compensation Committee approved, subject to approval by
the stockholders of appropriate amendments to the 1993 Plan (which amendments
were approved by Triarc's stockholders on July 9, 1994), grants for the Chairman
and Chief Executive Officer and the President and Chief Operating Officer of
'performance stock options' for an aggregate of 3,500,000 shares of Class A
Common Stock. These options were granted in lieu of base salary, annual
performance bonus and long term compensation for a six-year period commencing
April 1993. The options have an exercise price of $20.125 per share and will
vest and become exercisable as follows: if the closing price of a share of
Class A Common Stock is at least $27.1875 (approximately 135% of the exercise
price) for 20 out of 30 consecutive trading days ending on or prior to
March 30, 1999, each such option will vest and become exercisable as to one
third of the shares subject to the option (the stock price required for such
accelerated vesting was not met); if the closing price of a share of Class A
Common Stock is at least $36.25 (approximately 180% of the exercise price) for
20 out of 30 consecutive trading days ending on or prior to March 30, 2000, each
such option will vest and become exercisable as to one third of the shares
subject to the option; and if the closing price of a share of Class A Common
Stock is at least $45.3125 (approximately 225% of the exercise price) for 20 out
of 30 consecutive trading days ending on or prior to March 30, 2001, the options
will vest and become exercisable as to one third of the shares subject to the
option. In addition to early vesting in the event such closing price levels are
attained, each such option initially was to vest and become exercisable after 14
years and 6 months even if Class A Common Stock did not so appreciate and to
have a term of 15 years from the date of grant. In March 1995, in order to meet
certain requirements of the Securities and Exchange Commission necessary to
obtain favorable accounting treatment with respect to the performance stock
options, the Compensation Committee and the Board of Directors each unanimously
approved (with Messrs. Peltz and May abstaining) amendments to the performance
stock options granted to Messrs. Peltz and May, which amendments provided that
(a) such options will vest in 9 years and 6 months, rather than 14 years and
6 months, if the closing price levels described above are not obtained and
(b) such options will have a
16
<PAGE>
term of 10 years, rather than 15 years, from the date of grant. Additionally,
the performance stock options that are exercisable immediately prior to
termination of the optionee's employment remain exercisable after termination of
the optionee's employment during the period of 90 days immediately following
such termination, except upon termination for cause. Upon the optionee's death
while employed by Triarc or upon the optionee's death during the 90 days
following the optionee's termination of employment (other than for cause), the
portion of the options exercisable immediately prior to death will remain
exercisable until the earlier of one year after the optionee's death or the
expiration of the option.
Consistent with the discussion above, the Chairman and Chief Executive
Officer and the President and Chief Operating Officer each received a base
salary of $1 during fiscal 1998 but did not receive any annual incentive bonuses
with respect to fiscal 1998, nor did they receive any Triarc stock option grants
with respect to such fiscal year. However, Messrs. Peltz and May did receive
grants of options under the TBHC Option Plan (which are set forth in the Summary
Compensation Table). The factors considered in determining the size of the TBHC
stock option grants to Messrs. Peltz and May were the stock option guidelines
established for all participants in the TBHC Option Plan (see 'Grant of
Equity-Based Incentives for Fiscal 1998,' below), as well as Messrs. Peltz's and
May's respective performance and contribution to the Triarc Beverage Group. The
Compensation Committee believes that the grants of such TBHC stock options
provide a meaningful and compelling incentive to the Chairman and Chief
Executive Officer and the President and Chief Operating Officer to take actions
that result in increases in stockholder value.
The Omnibus Budget Reconciliation Act of 1993 (the 'Tax Act') included a
provision (Section 162(m)) which may preclude a publicly held corporation from
deducting annual compensation in excess of $1,000,000 paid to certain of its
highly compensated officers. There are, however, certain exceptions for
qualified performance based compensation (including stock options and stock
appreciation rights) if certain conditions are met. Although the Company
intended that the 'performance stock options' granted to the Chairman and Chief
Executive Officer and the President and Chief Operating Officer satisfy these
conditions, there can be no assurance that they do satisfy such conditions. The
Compensation Committee is convinced that the performance incentive provided by
the performance stock options is in the stockholders' best interest,
irrespective of their treatment under the Tax Act.
Bonuses for Fiscal 1998. The Compensation Committee reviewed the fiscal
1998 performance of executive corporate officers (other than the Chairman and
Chief Executive Officer and the President and Chief Operating Officer) and
approved bonuses for such executives. The bonuses primarily reflected individual
qualitative executive contributions based upon the level of the executive's
responsibilities, the efficiency and effectiveness with which the executive
oversaw the matters under such executive's supervision, and the degree to which
such executive contributed to the accomplishment of the Company's goals. Since
these officers have overall corporate policy-making and administrative
responsibilities, and do not directly oversee principal operating units of the
Company, the Compensation Committee's assessment of these executives relates
generally to their performance and accomplishment of personal goals and the
Company's achievements as a whole. In fiscal 1998, the Company had significant
strategic and financial accomplishments. These accomplishments had a significant
impact on the assessment of the annual incentive compensation for all of the
Company's executive corporate officers (other than the Chairman and Chief
Executive Officer and President and Chief Operating Officer). The Compensation
Committee considered a variety of factors, including these accomplishments, in
making its compensation decisions and no specific weighting was assigned to any
17
<PAGE>
one of those factors or those accomplishments over others in determining bonuses
paid to the executive officers with respect to fiscal 1998; however, the
Compensation Committee did compare accomplishments with respect to fiscal 1998
(in particular, the size, number and complexity of strategic accomplishments)
with those with respect to fiscal 1997 and, accordingly, awarded bonuses with
respect to fiscal 1998 that were approximately 10% less than those awarded with
respect to the prior fiscal year.
Grant of Equity-Based Incentives for Fiscal 1998. The Subcommittee approved
stock option grants under the 1998 Plan and the TBHC Option Plan in respect of
fiscal 1998 performance to selected corporate and business unit managers because
of the services performed by these individuals on behalf of the Triarc Beverage
Group and the Subcommittee's determination that it was in the best interest of
stockholders to provide significant equity incentives to the Company's
management team. Accordingly, in March 1999 the Subcommittee approved stock
option grants under the 1998 Plan to selected officers and certain key
employees, but not to Messrs. Peltz and May. In addition, in July 1998, the
Subcommittee approved stock option grants under the TBHC Option Plan to
executive officers and certain key employees of TBHC (including the individuals
named in the Summary Compensation Table below (other than Mr. Roland Smith)). In
light of the fact that TBHC is a wholly owned subsidiary of the Company and
there is no public market for TBHC common stock, these grants were made at the
fair market value of $191.00 as determined by an independent third-party
appraiser. In May 1999, in accordance with the terms of the TBHC Option Plan,
the Subcommittee equitably adjusted the exercise price of all outstanding
options under the TBHC Option Plan to reflect the effects of the transfer of
cash and deferred tax assets from TBHC to Triarc and the transfer of Cable Car
Beverage Corporation ('Cable Car') to TBHC. As a result, the exercise price of
the TBHC options granted in July 1998 was equitably adjusted from $191.00 per
share to $138.83 per share, and holders of such options may be entitled to a
cash payment of $39.40 per share if they exercise their options or their right
to resell their shares to TBHC. One-third of these initial grants will vest on
each of July 1, 1999, 2000 and 2001, and such options will expire on the tenth
anniversary of the date of grant. The option grants to named executive officers
under the TBHC Option Plan are included in the Summary Compensation Table below.
Such awards were made after a review of the exercise prices, numbers and dates
of their previous option awards and the option awards made to other executive
officers. Although there are no precise targets with respect to the number of
stock options, the Subcommittee believes that the higher the level of an
executive's responsibilities, the larger the stock based component of his
compensation should be.
Section 162(m) Considerations. The Company's general policy is to award
compensation to individuals pursuant to plans that satisfy the requirements of
Section 162(m) of the Code. Nevertheless, each of the Compensation Committee and
Subcommittee believes it is important to maintain the discretion to authorize
compensation that does not satisfy the requirements of Section 162(m). Further,
because of ambiguities and uncertainties as to the application and
interpretation of Section 162(m), no assurance can be given, notwithstanding the
Company's efforts, that compensation intended by the Company to satisfy the
requirements for deductibility under Section 162(m) does in fact do so. The
Company anticipates that all of the compensation paid to executive officers with
respect to fiscal 1998 will qualify for income tax deductibility under
Section 162(m).
Summary. The Compensation Committee believes the Executive Compensation
Program, through the Compensation Committee's administration of the elements of
the program, will help ensure the Company's ability to retain, motivate and
attract the executive resources required to maximize stockholder returns. The
Company's competitive pay philosophy facilitates the employment of talented
executives. The emphasis on variable pay and the link to both short- and
long-term results, as well as
18
<PAGE>
financial and stock performance, links this competitive pay to critical measures
of Company performance. In combination, all these elements act in the best
interests of the Company's stockholders.
The Compensation Committee Performance Compensation Subcommittee
David E. Schwab II, Chairman David E. Schwab II, Chairman
Clive Chajet Clive Chajet
Joseph A. Levato Raymond S. Troubh
Raymond S. Troubh
19
<PAGE>
INTRODUCTION TO SUMMARY COMPENSATION TABLE
The Summary Compensation Table sets forth salary of, cash bonus awards as
well as non-cash awards granted under the 1993 Plan, the 1998 Plan and the TBHC
Option Plan with respect to the year ended December 31, 1996, the fiscal year
ended December 28, 1997 and the fiscal year ended January 3, 1999 to, Triarc's
Chairman and Chief Executive Officer, President and Chief Operating Officer and
to four of the other executive officers of Triarc who constituted Triarc's most
highly compensated executive officers during fiscal 1998 (the 'Named Officers').
Messrs. Peltz and May serve as directors and officers of Triarc and several
of its subsidiaries, and Messrs. Barnes, Kogan and Schorr serve as officers of
Triarc and officers and directors of several of its subsidiaries. All
compensation set forth in the Summary Compensation Table for Messrs. Peltz, May,
Barnes, Kogan and Schorr (other than the options granted under the TBHC Option
Plan) was paid by Triarc and represents amounts paid for services rendered to
Triarc and its subsidiaries, except that Mr. Barnes was employed by, and
substantially all of his compensation was paid by, Graniteville Company until it
was sold by the Company in April 1996. Mr. Smith served as a director and
officer of the Triarc Restaurant Group until his resignation effective May 7,
1999. All compensation set forth in the Summary Compensation Table for Mr. Smith
was paid by the Triarc Restaurant Group for services rendered to it. All
non-cash awards granted to any Named Officer were made by Triarc except for
certain awards made pursuant to the TBHC Option Plan. Additional information
with respect to the compensation arrangements for the Chairman and Chief
Executive Officer and the Named Officers is set forth below under 'Certain
Employment Arrangements with Executive Officers.' No restricted stock awards
were made to any of the Named Officers during 1996, 1997, or fiscal 1998.
20
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
---------------------------------------------------
OTHER ANNUAL
NAME AND PRINCIPAL POSITION PERIOD SALARY($) BONUS($) COMPENSATION($)
--------------------------- ------ --------- -------- ---------------
<S> <C> <C> <C> <C>
Nelson Peltz ................. 1998 1 -- 329,067(7)
Chairman and Chief Executive 1997 1 -- 429,872(7)
Officer of Triarc 1996 1 2,000,000(2) 339,490(7)
Peter W. May ................. 1998 1 -- 134,173(8)
President and Chief 1997 1 -- 153,288(8)
Operating Officer of Triarc 1996 1 1,000,000(2) 164,469(8)
Roland C. Smith* ............. 1998 381,250 360,000 (9)
Former President and Chief 1997 317,552 270,00 (9)
Executive Officer of Triarc 1996 222,917 175,000 (9)
Restaurant Group
John L. Barnes, Jr. .......... 1998 300,000 585,000(3) (9)
Executive Vice President and
Chief Financial Officer of 1997 300,000 650,000(3) (9)
Triarc 1996 271,554 970,000(4) 269,893(10)
Eric D. Kogan ................ 1998 289,583 595,417(3) (9)
Executive Vice President --
Corporate Development of 1997 250,000 700,000(3) (9)
Triarc 1996 250,000 450,000(5) (9)
Brian L. Schorr .............. 1998 312,500 585,000(3) (9)
Executive Vice President and
General Counsel of Triarc 1997 312,500 650,000(3)(6) (9)
1996 312,500 450,000(5) (9)
<CAPTION>
LONG TERM COMPENSATION
-------------------------------------------------
AWARDS PAYOUTS
------------------ ----------
SECURITIES
UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL POSITION OPTIONS/SARS(#)(1) PAYOUTS($) COMPENSATION($)
--------------------------- ------------------ ---------- ---------------
<S> <C> <C> <C>
Nelson Peltz ................. 26,000(11) -- --
Chairman and Chief Executive 150,000 -- --
Officer of Triarc 175,000 -- --
Peter W. May ................. 13,000(11) -- --
President and Chief 100,000 -- --
Operating Officer of Triarc 125,000 -- --
Roland C. Smith* ............. 50,000 335,000 4,000(12)
Former President and Chief 50,000 -- 3,200(12)
Executive Officer of Triarc 35,000 -- 1,500(12)
Restaurant Group
John L. Barnes, Jr. .......... 50,000 -- 7,200(12)
Executive Vice President and 6,600(11)
Chief Financial Officer of 50,000 -- 6,400(12)
Triarc 150,000 28,667 8,187(13)
Eric D. Kogan ................ 50,000 -- 7,200(12)
Executive Vice President -- 6,600(11)
Corporate Development of 50,000 -- 6,400(12)
Triarc 150,000 69,000 5,250(12)
Brian L. Schorr .............. 50,000 -- 11,187(14)
Executive Vice President and 6,600(11)
General Counsel of Triarc 50,000 -- 10,387(14)
120,000 57,500 7,115(14)
</TABLE>
- ------------
* Mr. Smith resigned effective May 7, 1999 as President and Chief Executive
Officer of the Triarc Restaurant Group.
(1) Except as otherwise noted, all stock option grants were made pursuant to
the 1993 Plan or 1998 Plan. The option grants under the 1998 Plan with
respect to fiscal 1998 were made on March 15, 1999.
(2) Represents special bonuses paid to Messrs. Peltz and May in connection with
the completion of certain transactions. Mr. Peltz' bonus was paid one-half
in August 1996 and one-half in March 1997.
(3) Includes special bonuses paid to each of Messrs. Barnes, Kogan and Schorr
in connection with the completion of certain transactions.
(4) Includes a one-time special payment of $890,000 paid in 1996 to Mr. Barnes
in his capacity as Executive Vice President and Chief Financial Officer of
the Company's textile business in connection with the sale of such business
in April 1996. In March 1997, Mr. Barnes chose to receive additional stock
options instead of a cash bonus that might otherwise have been granted to
him at that time with respect to fiscal 1996. Such stock options are
included under the heading 'Long Term Compensation -- Securities Underlying
Options/SARs.'
(5) Includes special bonuses paid to each of Messrs. Kogan and Schorr in 1996
in connection with the completion of certain transactions. In March 1997,
each of Messrs. Kogan and Schorr chose to receive additional stock options
instead of a cash bonus that might otherwise have been granted to
(footnotes continued on next page)
21
<PAGE>
(footnotes continued from previous page)
them at that time with respect to fiscal 1996. Such stock options are
included under the heading 'Long Term Compensation -- Securities Underlying
Options/SARs.'
(6) Such amount constitutes Mr. Schorr's aggregate bonus with respect to fiscal
1997, $600,000 of which was paid in January 1998 as an advance against such
bonus, with the balance being paid in March 1998.
(7) Includes imputed income of $266,837, $233,856 and $225,668 arising out of
the use of corporate aircraft in fiscal 1998, fiscal 1997 and 1996,
respectively.
(8) Includes imputed income of $77,138, $85,841 and $98,729 arising out of the
use of corporate aircraft in fiscal 1998, 1997 and 1996, respectively, and
fees of $40,000 paid by Triarc on behalf of Mr. May for tax and financial
planning services in each of fiscal 1998, 1997 and 1996.
(9) Perquisites and other personal benefits did not exceed the lesser of either
$50,000 or 10% of the total annual salary and bonus reported under the
headings of 'Salary' and 'Bonus.'
(10) Includes a payment of $111,500 made to Mr. Barnes in his capacity as
Executive Vice President and Chief Financial Officer of the Company's
textile business in connection with the sale of such business in April
1996, and relocation related costs of $154,018.
(11) Represents grants of options made pursuant to the TBHC Option Plan.
(12) Represents amounts contributed to 401(k) plan by Triarc (Arby's, in the
case of Mr. Smith) on behalf of the Named Officer.
(13) Represents amounts contributed to 401(k) plan by Triarc of $5,250 for 1996
and by Graniteville Company of $2,937 in 1996.
(14) Includes $7,200, $6,400 and $3,128 contributed to 401(k) plan by Triarc on
behalf of Mr. Schorr in fiscal 1998, 1997 and 1996, respectively, and
$3,987, $3,987 and $3,987 of other compensation paid by Triarc in an amount
equal to premiums for term life insurance in fiscal 1998, fiscal 1997 and
1996, respectively.
CERTAIN EMPLOYMENT ARRANGEMENTS WITH EXECUTIVE OFFICERS
Nelson Peltz and Peter W. May. Since April 1993, Nelson Peltz and Peter W.
May have been serving Triarc as its Chairman and Chief Executive Officer and its
President and Chief Operating Officer, respectively. Under the terms of their
original employment and compensation arrangements, which expired by their terms
in April 1999, each of them received an annual base salary of $1.00. In
addition, Messrs. Peltz and May participated in the incentive compensation and
welfare and benefit plans made available to Triarc's corporate officers. See
'Report of the Compensation Committee -- Adoption of CEO and COO Compensation
Arrangements' above. The Company is currently negotiating new long term
employment and compensation arrangements with Messrs. Peltz and May. Under the
agreements, which will have 5 year terms, subject to automatic renewal, Messrs.
Peltz and May will receive annual base salaries of $1,400,000 and $1,200,000,
respectively. In addition, the new employment agreements will provide, among
other things, that Mr. Peltz and Mr. May are eligible to: participate in the
1999 Executive Bonus Plan (see 'Proposal 2. Approval of the Triarc Companies,
Inc. 1999 Executive Bonus Plan'); receive discretionary bonuses, as may be
awarded from time to time; participate in equity based
22
<PAGE>
incentive plans of Triarc and it subsidiaries; and participate in the incentive
compensation and welfare and benefit plans made available to Triarc corporate
officers.
John L. Barnes, Jr. Pursuant to an employment agreement dated as of
April 29, 1996 (as amended), Mr. Barnes is employed as Executive Vice President
and Chief Financial Officer of the Company for a term ending June 29, 2000,
unless otherwise terminated as provided therein. Mr. Barnes receives an annual
base salary of $300,000 per year, subject to increase but not decrease from time
to time. In addition, Mr. Barnes is eligible to receive annual cash bonuses and
stock option awards on a basis comparable to other senior executives of Triarc.
In the event Mr. Barnes' employment with the Company is terminated prior to
June 29, 2000 without good cause, the Barnes Employment Agreement provides that
Triarc shall pay Mr. Barnes (1) a lump sum within thirty days of the date of his
termination equal to one-half of his then current base salary that would
otherwise have been payable to him through June 29, 2000, and (2) commencing six
months after the date of his termination a sum equal to one-half of his annual
base salary in effect on the date of termination that would otherwise have been
paid to him from the date of termination through June 29, 2000, such amount to
be payable semi-monthly through June 29, 2000. Mr. Barnes will also be
reimbursed for any loss on the sale of his home, up to $150,000 and will be
eligible for certain relocation expenses in the event his employment is
terminated without cause or Triarc does not renew the Barnes Employment
Agreement at the end of its term. In addition, if Mr. Barnes' employment is
terminated without cause each stock option granted to him which had not vested
as of the termination date shall vest immediately as of such date and each stock
option which has vested prior to or as of the termination date may be exercised
by Mr. Barnes within the earlier of one year or on the date of which such option
expires. The Barnes Employment Agreement further provides that in the event of a
'change of control' under the agreement, the Company is obligated to employ Mr.
Barnes as an Executive Vice President, and he is obligated to accept and
continue in the employment thereunder until the first anniversary of such change
in control. Mr. Barnes has the right to resign as an officer and employee of
Triarc effective as of the first anniversary of the change of control by giving
written notice to Triarc not less than thirty days before such date and receive
payments and other benefits as to which he would have been entitled had Triarc
terminated his employment without good cause.
Brian L. Schorr. On June 29, 1994, Triarc entered into an employment
agreement with Brian L. Schorr providing for the employment of Mr. Schorr as
Executive Vice President and General Counsel of the Company. The Schorr
Employment Agreement expires on June 29, 2000. The Schorr Employment Agreement
provides for an annual base salary of $312,500, which is subject to increase,
but not decrease. Mr. Schorr is also eligible to receive annual incentive
bonuses. The Schorr Employment Agreement also provides that if Mr. Schorr dies
during the term of the agreement, his legal representative will be entitled to
receive a 'Base Amount' calculated at an annual rate equal to the sum of
(1) Mr. Schorr's then current base salary plus (2) $250,000, for the remaining
term of the agreement, if Triarc is able to procure, at a reasonable rate, term
insurance on Mr. Schorr's life to pay such obligation, or if Triarc is not able
to produce such insurance, an amount calculated at the annual rate of the Base
Amount for the three-month period following Mr. Schorr's death. Triarc obtained
such insurance to fund this obligation at an annual premium of approximately
$3,000. Triarc has transferred ownership of such insurance policy to a trust
established by Mr. Schorr and Mr. Schorr has, under certain circumstances, given
up his right to have Triarc pay the Base Amount after his death. Pursuant to the
Schorr Employment Agreement, if Mr. Schorr's employment terminates for any
reason other than 'cause' under the agreement, options and restricted stock
awards previously granted to Mr. Schorr will immediately vest in their entirety
and remain exercisable for a period of one year following the date
23
<PAGE>
of such termination. The Schorr Employment Agreement also provides that if
Triarc terminates Mr. Schorr's employment without cause, Mr. Schorr will receive
a lump sum payment, discounted to present value, in an amount equal to (1) all
base salary amounts due for the year of termination and for each remaining year
of the Schorr Employment plus (2) an amount equal to the number of years of the
Schorr Employment Agreement multiplied by $250,000. The Schorr Employment
Agreement further provides that at the option of Mr. Schorr, the Schorr
Employment Agreement shall be deemed to have been terminated by Triarc without
cause following a 'change in control' under the agreement.
CASH INCENTIVE PLANS
The Triarc Beverage Group and the Triarc Restaurant Group have annual cash
incentive plans (each, an 'Annual Incentive Plan') and the Triarc Restaurant
Group has a mid-term cash incentive plan (the 'Mid-Term Incentive Plan') for
executive officers and key employees.
Each Annual Incentive Plan is designed to provide annual incentive awards
to participants, with amounts payable being linked to whether the applicable
company has met certain pre-determined financial goals and the performance of
the participant during the preceding year. Under each Annual Incentive Plan,
participants may receive awards of a specified percentage of their then current
base salaries, which percentage varies depending upon the level of seniority and
responsibility of the participant. Such percentage is set by the company's
management in consultation with management of Triarc. The board of directors of
each company, in consultation with management of Triarc and the Compensation
Committee of the Triarc Board of Directors, may elect to adjust awards on a
discretionary basis to reflect the relative individual contribution of the
executive or key employee, to evaluate the 'quality' of the company's earnings
or to take into account external factors that affect performance results. The
board of directors of each company may also decide that multiple performance
objectives related to the company's and/or the individual's performance may be
appropriate and in such event, such factors would be weighted in order to
determine the amount of the annual incentive awards. Each Annual Incentive Plan
is administered by the respective company's board of directors and Triarc's
management and may be amended or terminated at any time.
Under the Mid-Term Incentive Plan, incentive awards are granted to
participants if the Triarc Restaurant Group achieves an agreed upon profit over
a three year performance cycle. During each plan year, an amount is accrued for
each participant based upon the amount by which the company's profit for such
year exceeds a certain minimum return. A new three-year performance cycle begins
each year, such that after the third year the annual cash amount paid to
participants pursuant to the Mid-Term Incentive Plan should equal the target
award if the Triarc Restaurant Group's profit goals have been achieved for the
full three-year cycle. Except as may otherwise be set forth in a participant's
employment agreement, the board of directors of the Triarc Restaurant Group,
together with Triarc's management and the Compensation Committee of Triarc's
Board of Directors, may adjust an individual's award, upward or downward, based
upon an assessment of the individual's relative contribution to the company's
longer-term profit performance. The Mid-Term Incentive Plan may be amended or
terminated at any time.
In July 1999, the Performance Committee, pursuant to a delegation of
authority from the Board of Directors, adopted the 1999 Executive Bonus Plan,
subject to stockholder approval. For additional information regarding this
proposed plan, see 'Proposal 2. Approval of the Triarc Companies, Inc. 1999
Executive Bonus Plan.'
24
<PAGE>
From time to time, the Compensation Committee of the Triarc Board may award
discretionary bonuses based on performance to certain executive officers. The
amounts of such bonuses will be based on the Compensation Committee's evaluation
of each such individual's contribution.
1993 EQUITY PARTICIPATION PLAN
The 1993 Plan, which expired on April 24, 1998, provided for the grant of
options to purchase Class A Common Stock (including performance stock options,
which are described in 'Report of the Compensation Committee -- Adoption of CEO
and COO Compensation Arrangements' above), stock appreciation rights ('SARs'),
restricted shares of Class A Common Stock and, to non-employee directors of
Triarc, at their option, shares of Class A Common Stock in lieu of annual
retainer fees and/or Board of Directors or committee meeting attendance fees
('Fees') that would otherwise be payable in cash. Directors, selected officers
and key employees of, and key consultants to, Triarc and its subsidiaries were
eligible to participate in the 1993 Plan. A maximum of 10,000,000 shares of
Class A Common Stock (subject to certain adjustments) were authorized to be
delivered by the Company pursuant to options, SARs and restricted shares granted
under the 1993 Plan. As of August 11, 1999, options to acquire a total of
8,330,682 shares of Class A Common Stock were outstanding under the 1993 Plan.
The plan is administered by the Performance Compensation Subcommittee of the
Triarc Board. The 1993 Plan was adopted on April 24, 1993, amended and restated
on July 22, 1993, and, as amended and restated, was approved by Triarc's
stockholders on October 27, 1993. The 1993 Plan was also amended on April 19,
1994, with further amendments which were approved by Triarc's stockholders on
July 9, 1994 and on July 8, 1995. In addition, the 1993 Plan was amended by the
Triarc Board during 1995, 1996 and 1997, which amendments did not require
stockholder approval.
1998 EQUITY PARTICIPATION PLAN
The 1998 Plan was approved by Triarc's Board of Directors on March 10, 1998
and was approved by the stockholders on May 6, 1998. The 1998 Plan replaced the
1993 Plan which expired on April 24, 1998. The 1998 Plan provides for the
granting of stock options, SARs and restricted stock to officers and key
employees of, and consultants to, Triarc and its subsidiaries and affiliates.
The 1998 Plan provides for automatic awards of options to non-employee directors
of Triarc and permits non-employee directors to elect to receive all or a
portion of their Fees in shares of Class A Common Stock. Subject to certain
antidilution adjustments, a maximum of 5,000,000 aggregate shares of Class A
Common Stock may be granted on the exercise of options or SARs or upon a
director's election to receive Fees in Triarc shares pursuant to the 1998 Plan.
In addition, the maximum number of shares of Class A Common Stock that may be
granted to any individual in a calendar year is 1,000,000 shares. As of
August 11, 1999, options to acquire 731,250 shares of Class A Common Stock were
outstanding under the 1998 Plan. The 1998 Plan is administered by the
Performance Compensation Subcommittee of Triarc Board of Directors. The term
during which awards may be granted under the 1998 Plan will expire on April 30,
2003.
TRIARC BEVERAGE HOLDINGS CORP. 1997 STOCK OPTION PLAN
The TBHC Option Plan was approved by the Board of Directors of TBHC and by
the Performance Compensation Subcommittee on August 19, 1997 and provides for
the grant of options to acquire common stock of TBHC, a wholly owned subsidiary
of the Company. Key employees, officers, directors and consultants of TBHC and
its subsidiaries and affiliates, and of Triarc and its other subsidiaries and
25
<PAGE>
affiliates, are eligible to participate in the TBHC Plan. A maximum of 150,000
shares of TBHC common stock (subject to certain adjustments) are authorized to
be delivered by TBHC pursuant to options granted under the plan, representing
15% of the outstanding shares of TBHC common stock determined on a fully-diluted
basis. As of August 11, 1999, options to acquire 148,675 shares of TBHC common
stock were outstanding under the TBHC Option Plan. The TBHC Option Plan is
administered by the Performance Compensation Subcommittee. The term during which
options may be granted under the TBHC Option Plan expires on August 18, 2007.
1997 EQUITY PARTICIPATION PLAN
The 1997 Plan was approved by the Executive Committee of the Board of
Directors on December 11, 1997 and provides for the granting of stock options to
purchase shares of Class A Common Stock. Participants in the 1997 Plan are
limited to selected key employees and consultants of Triarc, its subsidiaries
and affiliates who are important to the success and growth of the Company, its
subsidiaries and affiliates, but who are not 'directors,' 'executive officers'
or 'officers' of Triarc. A total of 500,000 shares of Class A Common Stock are
reserved for issuance under the 1997 Plan. As of August 11, 1999, options to
acquire 392,083 shares of Class A Common Stock were outstanding under the 1997
Plan. The 1997 Plan is administered by the Compensation Committee of the Board
of Directors. The term during which options may be granted under the 1997 Plan
expires on December 11, 2002.
OPTIONS GRANTED IN FISCAL 1998
The following table sets forth certain information with respect to options
to purchase shares of TBHC common stock granted to the Named Officers in the
fiscal year ended January 3, 1999. No grants of options to purchase shares of
Class A Common Stock were made under the 1993 Plan or the 1998 Plan to any Named
Officer during fiscal 1998, although grants were made in March 1999 with respect
to fiscal 1998 to each of the Named Officers, other than Messrs. Peltz and May.
No SARs were granted to any of the Named Officers, and no stock options were
exercised by any Named Officer during fiscal 1998.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
GRANT DATE
INDIVIDUAL GRANTS VALUE
------------------------------------------------------------------- ----------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS EXERCISE
UNDERLYING GRANTED TO OR BASE GRANT DATE
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME GRANTED(#)(1) FISCAL YEAR(2) ($ PER SHARE)(3) DATE VALUE(4)
- ----------------------------------------- ------------- -------------- ---------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Nelson Peltz............................. 26,000 36% $191.00 06/10/08 $1,558,986
Peter W. May............................. 13,000 18% $191.00 06/10/08 $ 779,493
Roland C. Smith.......................... 0 0% $-- -- $ --
John L. Barnes, Jr....................... 6,600 9% $191.00 06/10/08 $ 395,743
Eric D. Kogan............................ 6,600 9% $191.00 06/10/08 $ 395,743
Brian L. Schorr.......................... 6,600 9% $191.00 06/10/08 $ 395,743
</TABLE>
- ------------
(1) These options consist solely of options to purchase shares of TBHC common
stock which were granted under the TBHC Option Plan on July 10, 1998.
One-third of such options will vest on each of July 1, 1999, 2000, and 2001,
and such options will be exercisable at any time between the date of vesting
and the tenth anniversary of the date of grant.
(footnotes continued on next page)
26
<PAGE>
(footnotes continued from previous page)
(2) The percentages are based on the aggregate number of options granted in the
fiscal year ending January 3, 1999 to purchase shares of TBHC common stock.
(3) In May 1999, in accordance with the terms of the TBHC Option Plan, the
Subcommittee equitably adjusted the exercise price of all outstanding
options under the TBHC Option Plan to reflect the effects of the transfer of
cash and deferred tax assets from TBHC to Triarc and the transfer of Cable
Car to TBHC. As a result, the exercise price of the TBHC options granted in
July 1998 was equitably adjusted from $191.00 per share to $138.83 per
share, and holders of such options may be entitled to a cash payment of
$39.40 per share if they exercise their options or their right to resell
their shares to TBHC.
(4) These values were calculated using a Black-Scholes option pricing model. The
actual value, if any, that an executive may realize will depend on the
excess, if any, of the stock price over the exercise price on the date the
options are exercised, and no assurance exists that the value realized by an
executive will be at or near the value estimated by the Black-Scholes model.
The following assumptions were used to calculate the present value of the
option grants with respect to TBHC common stock:
(a) assumed option term of seven years;
(b) stock price volatility factor of .0001;
(c) annual discount rate of 5.5%; and
(d) no dividend payment.
No discount to the Black-Scholes ratio was used with respect to each year an
option remains unvested. The exercise price reflects the fair market value of
the TBHC common stock on the date of grant as determined by an independent
third party appraiser, and the volatility factor reflects the fact that, as a
privately held subsidiary, the TBHC common stock does not have a public
trading market. These estimated option values, including the underlying
assumptions used in calculating them, constitute 'forward-looking statements'
within the meaning of the Private Securities Litigation Reform Act of 1995
and involve risks, uncertainties and other factors which may cause the actual
value of the options to be materially different from those expressed or
implied herein.
27
<PAGE>
OPTION VALUES AT END OF FISCAL 1998
The following table sets forth certain information concerning the value as
of January 3, 1999 of unexercised in-the-money options to purchase shares of
Class A Common Stock and shares of TBHC common stock granted to the Named
Officers outstanding as of the end of fiscal 1998.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
AT FISCAL AT FISCAL
SHARES YEAR-END YEAR-END
ACQUIRED 1998(#) 1998($)(1)
ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
---- -------- -------- ------------- -------------
<S> <C> <C> <C> <C>
Nelson Peltz
Triarc Options................................. -0- -0- 1,173,333/2,316,667 2,287,041/389,084
TBHC Options................................... -0- -0- -0-/ 26,000 -0-/ -0-
Peter W. May
Triarc Options................................. -0- -0- 785,000/1,550,000 1,533,959/277,916
TBHC Options................................... -0- -0- -0-/ 13,000 -0-/ -0-
Roland C. Smith
Triarc Options................................. -0- -0- 54,665/ 60,335 184,776/130,949
TBHC Options................................... -0- -0- -0-/ -0- -0-/ -0-
John L. Barnes, Jr.
Triarc Options................................. -0- -0- 136,667/ 123,333 382,775/295,550
TBHC Options................................... -0- -0- -0-/ 6,600 -0-/ -0-
Eric D. Kogan
Triarc Options................................. -0- -0- 145,667/ 133,333 411,000/333,500
TBHC Options................................... -0- -0- -0-/ 6,600 -0-/ -0-
Brian L. Schorr
Triarc Options................................. -0- -0- 181,667/ 113,333 417,775/266,800
TBHC Options................................... -0- -0- -0-/ 6,600 -0-/ -0-
</TABLE>
- ------------
(1) On December 31, 1998 (the last trading day during fiscal 1998), the closing
price of Class A Common Stock on the New York Stock Exchange was $15.875 per
share. TBHC common stock is not publicly traded. The per share value
($191.00) as of January 3, 1999 is based on a July 10, 1998 valuation
provided to TBHC by an independent third party. Each of the grants made to
Named Officers was made at such per share value. In May 1999, in accordance
with the terms of the TBHC Option Plan, the Subcommittee equitably adjusted
the exercise price of all outstanding options under the TBHC Option Plan to
reflect the effects of the transfer of cash and deferred tax assets from
TBHC to Triarc and the contribution of Cable Car to TBHC. As a result, the
exercise price of each of the TBHC options granted in 1998 at an exercise
price of $191.00 per share was equitably adjusted to $138.83 per share and
the exercise price of each TBHC option granted in 1997 at an exercise price
of $147.30 per share was equitably adjusted to $107.05 per share (no Named
Officers received TBHC option grants in 1997). In addition, holders of
options with an original exercise price of $147.30 per share may be entitled
to a cash payment of $51.34 per share, and holders of options with an
original exercise price of $191.00 per share may be entitled to a cash
payment of $39.40 per share, if they exercise their options or their right
to resell their shares to TBHC.
28
<PAGE>
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR
The following table shows specified information with respect to awards made
during fiscal 1998 to Roland C. Smith under the Mid-Term Incentive Plan. No
other Named Officer received awards in 1998 under the Mid-Term Incentive Plan.
For additional information regarding the Mid-Term Incentive Plan, see ' -- Cash
Incentive Plans.'
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
PERFORMANCE OF UNDER NON-STOCK PRICE
OTHER PERIOD BASED PLANS(1)
UNTIL -------------------------------
MATURATION OR THRESHOLD TARGET MAXIMUM
NAME PAYOUT ($ OR #) ($ OR #) ($ OR #)
---- ------ -------- -------- --------
<S> <C> <C> <C> <C>
Roland C. Smith.................................. 1998-2000 -0- $300,000 $450,000
</TABLE>
- ------------
(1) Awards were made in fiscal 1998 under the Mid-Term Incentive Plan to
participants (including Mr. Smith) approved by the Board of Directors of
Triarc Restaurant Group with respect to the three-year performance period
1998-2000. Each participant's target incentive is set at a percentage of his
or her annual base salary and is based on meeting certain operating profit
targets over the three year performance cycle. Pursuant to Mr. Smith's
employment agreement, his target incentive was set at 75% of his annual base
salary. No amount will be payable if operating profits are less than 80% of
the specified performance objective for the three year cycle. If a
participant is terminated without cause, such participant will be entitled
to amounts accrued under the plan as of the date of termination. If a
participant is not employed by the Triarc Restaurant Group on the last day
of the three year performance cycle for reasons other than death, an
approved absence or certain transfers, the participant is not entitled to
any incentive compensation under the plan unless the Board of Directors of
Triarc Restaurant Group determines otherwise. Mr. Smith resigned effective
May 7, 1999 as President and Chief Executive Officer of the Triarc
Restaurant Group and will not receive any further payments under the
Mid-Term Incentive Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Levato was appointed to the Compensation Committee of the Board of
Directors in July 1997. Mr. Levato has been a director of the Company since July
1996 and retired as Executive Vice President and Chief Financial Officer of the
Company in August 1996. Mr. Levato is not a member of the Performance
Compensation Subcommittee.
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STOCK PRICE PERFORMANCE GRAPH
TRIARC COMPANIES, INC.
COMPARISON OF CUMULATIVE TOTAL RETURN:
TRIARC VS. S&P 500 INDEX AND S&P SMALL CAP 600 INDEX
The following graph compares the cumulative five and one-half year total
return of Triarc's Class A Common Stock with the S&P 500 Index and the S&P Small
Cap 600 Index (the 'Peer Group'). The Peer Group has been selected because the
Company does not believe it can reasonably identify a peer group comprised of
publicly-traded companies focused on non-alcoholic beverages and restaurants
that are comparable to the Company in terms of revenues or product mix.
Accordingly, the Company has chosen the Peer Group on the basis of comparing the
Company's performance to that of the companies with similar market
capitalizations comprising the S&P Small Cap 600 Index. The stockholders'
returns set forth below assume an initial investment of $100 and that all
dividends have been reinvested.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
PERIOD ENDING DEC 93 DEC 94 DEC 95 DEC 96 DEC 97 DEC 98 JAN 99
------------- ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
TRIARC CLASS A COMMON STOCK 100.00 47.00 44.00 46.00 109.00 63.50 85.00
S&P 500 INDEX 100.00 101.32 139.40 171.40 228.59 293.91 330.30
S&P SMALL CAP 600 INDEX 100.00 95.23 123.76 150.14 188.56 186.10 195.47
</TABLE>
30
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CERTAIN TRANSACTIONS
CERTAIN TRANSACTIONS WITH AFFILIATES
The Company leases aircraft owned by Triangle Aircraft Services Corporation
('TASCO'), a company owned by the Chairman and Chief Executive Officer and the
President and Chief Operating Officer of the Company (the 'Executives'), for a
base annual rent, commencing at $3,258,000 as of May 21, 1997, plus an
October 1, 1997 cost of living adjustment and annual cost of living adjustments
thereafter. Prior thereto, the rental payments were based on a base rental
payment of $1,800,000 effective October 1, 1993, which was also indexed for
annual cost of living adjustments. In addition, in 1997 the Company paid TASCO
$2,500,000 for (i) an option to continue the lease for an additional five years
effective September 30, 1997 and (ii) the agreement by TASCO to replace one of
the aircraft covered under the lease. In connection with such lease and the
amortization of the option, the Company had rent expense of $1,973,000,
$2,876,000 and $3,885,000 for 1996, 1997 and 1998, respectively. Pursuant to
this arrangement, the Company also pays the operating and maintenance expenses
of the aircraft directly to third parties.
The Company subleased through January 31, 1996 from an affiliate of the
Executives approximately 26,800 square feet of furnished office space in New
York, New York owned by an unaffiliated third party. Rental expense for January
1996 for such subleases, including operating expenses, net of a $106,000 deposit
applied to the rent and excluding $30,000 received by the Company for its
sublease of a portion of such space, was $61,000. Such amount is less than the
rent such affiliates paid to the unaffiliated landlords but represents an amount
the Company believes it would have paid an unaffiliated third party for similar
improved office space.
As of August 14, 1998, the Company acquired certain furniture located at
the Company's offices from an entity owned solely by the Executives for an
aggregate purchase price of $1,201,800. The Company had been using such
furniture on a rent-free basis since April 1993. The purchase price was
determined, on an arms-length basis, by the Audit Committee of the Board of
Directors which negotiated and approved the transaction and was equal to the
lower of two appraisals of the furniture prepared by independent third party
appraisers.
On February 25, 1999, Triarc Consumer Products Group, LLC ('TCPG'), a
subsidiary of the Company, completed the sale of $300.0 million principal amount
of 10.25% senior subordinated notes due 2009 pursuant to Rule 144A of the
Securities Act. Upon the closing of such sale, the Executives purchased an
aggregate $20.0 million of such notes. The Company has been advised by the
Executives that they no longer hold any of such notes.
Mr. May has an equity interest in a franchisee that owns an Arby's
restaurant in New Milford, CT. That franchisee is a party to a standard Arby's
franchise license agreement and pursuant thereto pays to Arby's fees and royalty
payments that unaffiliated third-party franchisees pay.
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PROPOSAL 2.
APPROVAL OF TRIARC COMPANIES, INC. 1999 EXECUTIVE BONUS PLAN
GENERAL
The Performance Committee of the Board of Directors of the Company,
pursuant to a delegation of authority from the Board of Directors, has adopted,
and in this proposal is requesting stockholder approval of the material terms
of, the Triarc Companies, Inc. 1999 Executive Bonus Plan.
The Performance Committee believes it is in the best interests of the
Company and its stockholders to adopt a bonus plan that allows the Company to
attract, retain, and provide appropriate performance incentives for designated
officers and key employees of the Company while also permitting the Company to
continue to obtain tax deductions for compensation paid or awarded to them.
Section 162(m) of the Code generally does not allow publicly held companies
to obtain tax deductions for compensation of more than $1 million paid in any
year to their chief executive officer, or any of their other four most highly
compensated executive officers, unless such payments are 'performance-based' in
accordance with conditions specified under Section 162(m) and the related
Treasury Regulations. One of those conditions requires the Company to obtain
stockholder approval of the material terms of the performance goals set by a
committee of outside directors. The Performance Committee is recommending that
the stockholders approve the material terms of the 1999 Plan as described below.
Subject to such approval, and if the applicable performance goals are satisfied,
this proposal would enable the Company to pay performance-based compensation to
executive officers of the Company and to obtain tax deductions for such
payments, without regard to the limitations of Section 162(m). The 1999 Plan is
not intended to be subject to the Employee Retirement Income Security Act of
1974, as amended ('ERISA').
SUMMARY OF THE 1999 EXECUTIVE BONUS PLAN
The following description of the 1999 Plan is merely a summary of certain
provisions thereof and is qualified in its entirety by the full text of the 1999
Plan attached hereto as Exhibit A. Such Exhibit A is a part of this Proxy
Statement and should be read in conjunction with the following summary.
Purpose. The purpose of the 1999 Plan is to establish a program of
incentive compensation for designated executive officers and key employees of
the Company and its subsidiaries that is directly related to the financial
performance of the Company. The 1999 Plan provides for Formula Bonus Awards and
Performance Goal Bonus Awards to be awarded to eligible employees, each as
described below.
Administration. The 1999 Plan is administered by a committee (the
'Committee') that is selected by the Board and is composed of two or more
members of the Board, each of whom is required to be an 'outside director'
(within the meaning of Section 162(m)). The Committee is currently the
Performance Committee and will be the Compensation Committee if it meets the
preceding requirements.
The Committee has and will have all the authority that may be necessary or
helpful to enable it to discharge its responsibilities with respect to the 1999
Plan. Without limiting the generality of the foregoing, and in addition to any
authority or responsibility specifically granted to the Committee elsewhere in
the 1999 Plan, the Committee has the exclusive right to (a) interpret the 1999
Plan, (b) determine eligibility for participation in the 1999 Plan, (c) decide
all questions concerning eligibility for
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and the amount of awards payable under the 1999 Plan, (d) construe any ambiguous
provision of the 1999 Plan, (f) correct any default, (g) supply any omission,
(h) reconcile any inconsistency, (i) issue administrative guidelines as an aid
to administer the 1999 Plan, (j) make regulations for carrying out the 1999 Plan
and to make changes in such regulations as they from time to time deem proper,
and (k) decide any and all questions arising in the administration,
interpretation and application of the 1999 Plan.
The Committee will have full discretionary authority in all matters related
to the discharge of its responsibilities and the exercise of its authority under
the 1999 Plan including, without limitation, its construction of the terms of
the 1999 Plan and its determination of eligibility for participation and awards
under the 1999 Plan. It is the intent of the Company in establishing the 1999
Plan that the decisions of the Committee and its action with respect to the 1999
Plan will be final, binding and conclusive upon all persons having or claiming
to have any right or interest in or under the 1999 Plan. However, except to the
extent otherwise prohibited by law or to the extent such delegation would cause
any award to fail to satisfy the requirements of Section 162(m), the Committee
may delegate in writing to one or more persons some or all of its authority;
provided, however, that awards to participants who are 'covered employees'
within the meaning of section 162(m) of the Code ('Covered Employees') must be
made by the Committee.
Effective Date. The 1999 Plan shall be effective as of May 3, 1999, subject
to approval of the stockholders, as requested herein.
FORMULA BONUS AWARDS
Eligibility. Participants eligible for a Formula Bonus Award are Mr. Peltz
and Mr. May.
Formula Bonus Award. For each 'Plan Year' (as defined below), each eligible
participant shall be entitled to a Formula Bonus Award which shall be the sum of
the participant's 'Annual Bonus' and 'Improvement Bonus' (each as described
below). The Plan Year is defined in the 1999 Plan as the accounting fiscal year
of the Company, provided that the 1999 Plan Year shall exclude the first four
fiscal months thereof (i.e., through May 2, 1999) (or with respect to
Performance Goal Bonus Awards (as described below) such other period as the
Committee shall, in its sole discretion, determine).
The Annual Bonus shall be an amount equal to (i) with respect to Mr. Peltz,
his 'Applicable Percentage' (as defined below) of the Annual Bonus Pool and (ii)
with respect to Mr. May, his 'Applicable Percentage' (as defined below) of the
Annual Bonus Pool for such year. The Annual Bonus Pool is three percent (3%) of
the 'Economic Profit' (as defined below) for the Plan Year, subject to
adjustment as set forth below.
The Improvement Bonus shall be an amount equal to the participant's
Applicable Percentage of the Improvement Bonus Pool for such Plan Year. The
Improvement Bonus Pool for any Plan Year shall mean fifteen percent (15%) of the
'Improvement In Economic Profit' (as defined below) in such Plan Year, subject
to adjustment as described below, and provided that if in any Plan Year the
Improvement in Economic Profit is negative, no Improvement Bonuses will be paid
in respect of such Plan Year nor with respect to any subsequent Plan Year until
Economic Profit for a Plan Year is greater than it was for the Plan Year with
respect to which an Improvement Bonus was last paid.
'Applicable Percentage' means 66.667% with respect to Mr. Peltz and 33.333%
with respect to Mr. May.
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'Economic Profit' with respect to any Plan Year means 'Adjusted EBITDA' (as
defined below) for such Plan Year minus 'Capital Charges' (as defined below) for
such Plan Year.
'Adjusted EBITDA' for any Plan Year means operating income for such Plan
Year (or other referenced period), as reflected on its consolidated audited
financial statements, adjusted to exclude the impact of:
(1) depreciation and amortization expenses;
(2) any amounts accrued pursuant to management bonus plans including,
but not limited to, the 1999 Plan, and related employer payroll taxes for
the applicable period;
(3) any discretionary or matching contributions to the Company's
401(k) Plan and other deferred compensation plans for the applicable
period;
(4) all items of gain, loss or expense determined to be extraordinary
or unusual in nature or infrequent in occurrence or related to the disposal
of a segment of a business or related to a change in accounting principles,
all as determined in accordance with standards established by opinion
No. 30 of the Accounting Principles Board ('APB Opinion No. 30');
(5) all items of gain, loss or expense related to restructuring
charges of subsidiaries whose operations are not included in operating
income for the applicable period;
(6) all items of gain, loss or expense related to discontinued
operations that do not qualify as a segment of a business as defined under
APB Opinion No. 30;
(7) any profit or loss attributable to the business operations of any
entity acquired by the Company or any consolidated subsidiary during the
applicable period;
(8) the reduction in carrying value of long-lived assets, in
accordance with FASB Pronouncement No. 121; and
(9) all items of expense related to equity-based compensation
determined in accordance with the standards established by Opinion No. 25
of the Accounting Principles Board or FASB Pronouncement No. 123.
In addition, operating income will not be adjusted for a minority interest
holder's share of a consolidated subsidiary's operating income or loss.
'Capital Charge' means ten percent (10%) (the 'Cost of Capital') multiplied
by the sum of (i) Net Stock Issued (as defined below) in such Plan Year plus
(ii) the increase (decrease) in Net Debt (as defined below) since the last day
of the Company's first four fiscal months of 1999 (i.e., since May 2, 1999).
'Net Stock Issued' is defined as the 'Value of Stock Issued' (as defined
below) minus the 'Value of Stock Repurchased' (as defined below).
'Net Debt' means (i) all debt recorded on the audited consolidated balance
sheet of the Company, including current maturities of long term debt, minus (ii)
cash, cash equivalents, short term investments and long term investments in the
amount that such assets are carried on such balance sheet, and as adjusted to
fair value for any assets carried at other than fair value.
'Value of Stock Issued' means the gross proceeds received for any equity
issued by the Company or its subsidiaries after the last day of the Company's
first four fiscal months of 1999, increased as of the last day of each Plan Year
by the Cost of Capital (prorated for the Plan Year in which such issuance
occurs). Notwithstanding the above, the Value of Stock Issued in connection with
an acquisition of new
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businesses by the Company (an 'Acquisition') shall be deemed to be no greater
than ten times the acquired company's Adjusted EBITDA for the 12-month period
ending on the last day of the acquired company's most recently completed fiscal
quarter ended prior to the date of the execution of the definitive agreement
relating to such Acquisition, less the sum of (i) any debt assumed in connection
with the Acquisition plus (ii) any consideration as part of the purchase price
not paid in the form of equity.
'Value of Stock Repurchased' means the purchase price paid for any equity
repurchased by the Company after the last day of the Company's first four fiscal
months of 1999 (including for this purpose, the value of equity distributed to
the Company's stockholders in connection with a spinoff of a business which is
not consolidated with the Company immediately following such distribution, such
value to be determined by the closing price of such equity on its primary public
market on the effective date of such distribution), and increased as of the last
day of each Plan Year by the Cost of Capital (prorated for the Plan Year in
which such repurchase occurs).
'Improvement in Economic Profit' with respect to any Plan Year means the
excess, if any, of (i) the Economic Profit for such Plan Year over (ii) the
Economic Profit for the preceding Plan Year; provided, that for the first Plan
Year, Improvement in Economic Profit means the excess, if any, of (i) the
Economic Profit for such Plan Year over (ii) the Economic Profit for the period
beginning with the first day of the fifth month of the Company's 1998 fiscal
year (i.e. beginning with May 3, 1998) and ending on the last day of such fiscal
year (i.e. ending on January 3, 1999); further provided, that for the second
Plan Year, Improvement in Economic Profit means the excess, if any, of (i) the
Economic Profit for such Plan Year over (ii) the Economic Profit for the
Company's entire 1999 fiscal year.
In the event that the Company makes any Acquisition and the 'Acquisition
Multiple' (as defined below) is greater than ten, then the Capital Charge
relating to such Acquisition will be adjusted for the first two Plan Years
following such Acquisition by multiplying the Capital Charge attributable to
such Acquisition by a fraction, the numerator of which is ten and the
denominator of which is the Acquisition Multiple.
'Acquisition Multiple' means with respect to any Acquisition, the quotient
of (i) the purchase price paid in connection with such Acquisition divided by
(ii) the Adjusted EBITDA of the acquired business for the 12-month period ending
on the last day of the acquired company's most recently completed fiscal quarter
ended prior to the date of the execution of the definitive agreement relating to
such Acquisition.
As soon as practicable following the end of the applicable Plan Year, the
Committee shall determine the amount of the Formula Bonus Award payable to each
participant eligible for a Formula Bonus Award and shall certify the amounts of
Economic Profit and Economic Profit Improvement for such Plan Year. Formula
Bonus Awards earned during any Plan Year shall be paid as soon as practicable
after the end of such Plan Year, following the Committee's certification and
determination of the amounts payable to each eligible participant and following
the delivery of the audited consolidated financial statements of the Company
with respect to such Plan Year. Payment of Formula Bonus Awards shall be made in
the form of cash. Formula Bonus Awards earned but not yet paid will not accrue
interest. Notwithstanding the above, unless otherwise specified in an employment
agreement between the Company (or the applicable subsidiary of the Company) and
a participant, (i) a participant must be employed by the Company or a subsidiary
on the last day of a Plan Year in order to receive payment of a Formula Bonus
Award in respect of such Plan Year, and (ii) a participant who is employed by
the Company or a subsidiary on the last day of a Plan Year shall be entitled to
receive payment of a
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Formula Bonus Award in respect of such Plan Year notwithstanding a subsequent
termination of the participant's employment.
PERFORMANCE GOAL BONUS AWARDS
Eligibility. The 1999 Plan provides that the Committee shall designate for
each Plan Year which executive officers and key employees of the Company and its
subsidiaries, if any, will be eligible for a Performance Goal Bonus Award for
such Plan Year. The Committee shall designate such individuals prior to the date
on which the Committee establishes the Performance Goals for a Plan Year (as
discussed below).
Performance Goal Bonus Awards. Each Performance Goal Bonus Award shall be
payable only upon achievement over the Plan Year of pre-established objective
performance goals established by the Committee for such Plan Year (the
'Performance Goals'). The Committee may designate one or more Performance Goals
with respect to Performance Goal Bonus Awards available under the 1999 Plan. The
Performance Goals will be based on attainment of specific levels of performance
of the Company (or operational units of the Company) with reference to one or
more of the following criteria:
(1) earnings per share
(2) market share
(3) margins (limited to gross margin, Adjusted EBITDA (as defined
above) margin, and Adjusted EBITDA (as defined above but excluding clause
(1) thereof) margin)
(4) productivity improvement
(5) costs or expenses
(6) successful completion of acquisitions, dispositions,
recapitalizations, financings or refinancings
(7) total return on investment portfolio
(8) pre-tax net realized capital gains
(9) stock price
(10) net investment income
The Committee will establish the Performance Goals as to each participant
and, if more than one Performance Goal is established, the weighting of the
Performance Goals, no later than 90 days after the commencement of the Plan Year
or such earlier date as may be required in order for the Performance Goal Bonus
Awards in respect of such Plan Year to qualify as 'performance based
compensation' for purposes of Section 162(m) of the Code (the 'Performance Goals
Date'). On or before the Performance Goals Date as to each Plan Year, the
Committee shall establish a written schedule of the amount of a Performance Goal
Bonus Award that will be payable to a participant under the 1999 Plan if the
Performance Goals are satisfied.
As soon as practicable following the end of the applicable Plan Year, the
Committee will certify in writing the attainment of the Performance Goals
established for the Plan Year and will calculate the Performance Goal Bonus
Award, if any, payable to each participant under the schedule established above.
Performance Goal Bonus Awards shall be paid in a lump sum cash payment, as soon
as practicable after the amount thereof has been determined and certified by the
Committee and following the delivery of the audited consolidated financial
statements of the Company with respect to such Plan Year.
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The Committee may at any time prior to the Performance Goals Date for a
Plan Year, or, subject to the following paragraph at any time thereafter in its
sole and absolute discretion, adjust or modify the calculation of a Performance
Goal for such Plan Year in order to prevent the dilution or enlargement of the
rights of participants (a) in the event or in anticipation of any unusual or
extraordinary corporate item, transaction, event or development; (b) in
recognition or in anticipation of any other unusual or nonrecurring events
affecting the Company, or the financial statements of the Company, or in
response to or in anticipation of changes in applicable laws, regulations,
accounting principles or business conditions; and (c) in view of the Committee's
assessment of the business strategy of the Company, performance of comparable
organizations, economic and business conditions, and any other circumstances
deemed relevant.
The Committee may exercise such discretion set forth in the preceding
paragraph after the Performance Goals Date only if it reasonably determines that
such exercise would not cause the payment of a Performance Goal Bonus Award to
fail to qualify as 'performance-based compensation' under Section 162(m) of the
Code. In determining entitlement to payment in respect of a Performance Goal
Bonus Award, the Committee may through use of negative discretion reduce or
eliminate such award, provided such discretion is permitted under Section 162(m)
of the Code.
Notwithstanding any provision to the contrary, in no event will a
Performance Goal Bonus Award be paid for a Plan Year in which performance fails
to attain or exceed the minimum level for any of the Performance Goals, and in
no event shall any Performance Goal Bonus Award in respect of any Plan Year
exceed $5 million to any single participant.
AMENDMENT TO PLAN
The Committee may amend, suspend, or terminate the 1999 Plan or any portion
thereof at any time; provided that no such amendment or alteration shall be made
that would impair the rights of any participant without the participant's
consent. No amendment will be made that shall cause the compensation payable
under the Plan in respect of any Formula Bonus Award or Performance Goal Bonus
Award previously granted or pending to fail to satisfy the requirements of the
performance-based compensation exception of Section 162(m) of the Code. No
amendment will be made without stockholder approval to the extent stockholder
approval is necessary to cause any Formula Bonus Award or Performance Goal Bonus
Award previously granted or pending to satisfy the performance-based
compensation exception of Section 162(m) of the Code.
NEW PLAN BENEFITS
Because amounts payable under the 1999 Plan are based on satisfaction of
certain performance goals in each Plan Year, it cannot be determined at this
time what amounts, if any, will be received by any participants with respect to
the 1999 fiscal year under the 1999 Plan or, with respect to Performance Goal
Bonus Awards, what amounts would have been received in the last fiscal year
(i.e., the 1998 fiscal year) if the 1999 Plan had been in effect. However, with
respect to Formula Bonus Awards, if the 1999 Plan had been in effect for the
1998 fiscal year, Mr. Peltz would have been entitled to a Formula Bonus Award of
approximately $2.3 million and Mr. May would have been entitled to a Formula
Bonus Award of approximately $1.1 million. In addition, based on current
projections of operating results for the 1999 fiscal year and assuming
stockholder approval of the 1999 Plan, the Company currently estimates that it
will recognize compensation expense for accounting purposes for the 1999 fiscal
year relating to the Formula Bonus Awards of approximately $3.9 million for
Mr. Peltz and $1.9 million for Mr. May.
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REQUIRED VOTE
The Treasury Regulations require the affirmative vote of a majority of the
votes cast on the issue at the Meeting to approve the 1999 Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE 1999
EXECUTIVE BONUS PLAN.
PROPOSAL 3.
RATIFICATION OF APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
INTRODUCTION
The Board of Directors has selected Deloitte & Touche LLP ('Deloitte') to
be the Company's independent certified public accountants for fiscal 1999.
Deloitte has acted as the Company's independent certified public accountants
since July 9, 1994.
Representatives of Deloitte will be present at the Meeting with the
opportunity to make a statement if they desire to do so and will be available to
respond to appropriate questions.
REQUIRED VOTE
Ratification of the appointment of the independent certified public
accountant requires the affirmative vote of a majority of the voting power
present (in person or by proxy) and entitled to vote at the Meeting. In the
event that the Company's stockholders fail to ratify the appointment of
Deloitte, the selection of the Company's independent certified public
accountants will be submitted to the Company's Board of Directors for
reconsideration.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF
APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS.
PROPOSAL 4.
STOCKHOLDER PROPOSAL
INTRODUCTION
The following proposal, which is opposed by the Board of Directors, would
require the affirmative vote of a majority of the voting power present (in
person or by proxy) and entitled to vote at the Meeting to be approved.
Mr. Burton R. Abrams, 480 Central Avenue, Northfield, Illinois, who is the
beneficial owner of 3,998 shares of Triarc's Class A Common Stock and has held
such shares continuously for at least one year, has submitted the following
resolution and supporting statement for inclusion in this Proxy Statement and
has indicated that he, or his representative, will introduce the resolution at
the Annual Meeting of Stockholders:
RESOLUTION
RESOLVED that the shareholders of Triarc recommend that the Directors of
Triarc engage a New York Stock Exchange brokerage firm for the purpose of
investigating the sale of individual business segments of Triarc and/or the
entire company.
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REASONS FOR THE RESOLUTION
Approximately four months after Messrs. Peltz and May gained control of DWG
Corporation (the predecessor to Triarc), Oppenheimer & Co., Inc., issued a buy
recommendation estimating pretax asset value per share at $25-$32, which
Oppenheimer stated should increase significantly by 1994-1995.
Since Messrs. Peltz and May obtained control, they have shed business units
unrelated to Triarc's core business and purchased related units. In my opinion,
the company today is more valuable than when Messrs. Peltz and May took control.
However, in my opinion, the stock price does not reflect the true value of our
company.
Through the Compensation Committee that Messrs. Peltz and May indirectly
help elect, in my opinion, Messrs. Peltz and May have been granted generous
amounts of options and received expense accounts exceeding what I believe is
fair and reasonable.
In addition and as Forbes described in a May 18, 1998 article, executives,
including Messrs. Peltz and May, and other employees of Triarc and its
subsidiaries, have been granted 10 million shares in options. As the article
pointed out, 'In all, Peltz and May are in a position to grab a lion's share of
any gains in the value of the company.' The Forbes article concluded by stating,
'. . . we wouldn't want to be minority shareholders in this one.'
In my opinion, as a result of the leadership of Messrs. Peltz and May, Wall
Street undervalues our company.
In my opinion, the time is opportune to put the company 'in play' and
obtain a fair price for our company. As fiduciaries, the Directors of our
company are responsible for serving the best interests of all shareholders, not
just a select few. In my opinion, by putting this company on the market, we will
be assured of obtaining our fair share of our company's value.
BOARD OF DIRECTORS' STATEMENT IN OPPOSITION
TO THE STOCKHOLDER PROPOSAL
The Board of Directors is highly aware of its fiduciary responsibilities to
its stockholders and strives to discharge these responsibilities in a manner
that the Board believes is in the best interests of its stockholders and the
Company. The Board of Directors has been, and continues to be, active in
exploring ways of maximizing shareholder value. As significant stockholders
themselves, Board members beneficially own an aggregate 39.0% of the outstanding
shares of Class A Common Stock, and thus have a strong financial incentive to
maximize shareholder value.
The Board of Directors consists of individuals who are familiar with the
Company and its business, and have diverse and broad business backgrounds and
expertise on which to draw. As part of its duties, the Board regularly reviews
with senior management the Company's strategic business plans and operating
policies to establish long-term goals for the Company and methods of attaining
them. This process includes evaluating the economic and business conditions
affecting the Company and consulting regularly with financial advisors and other
experts concerning alternatives for the Company, including acquisition
prospects, the benefits of different business structures and the possibilities
of selling, refinancing, recapitalizing and/or restructuring existing
businesses. Using this process, the Company has over the last several years
transformed itself into a consumer products company with leading brands focused
on beverages and restaurant franchising. During the past four years, the Company
has made over $400 million of strategic acquisitions (including Snapple and
Stewart's (Cable Car) in 1997 and Mistic in 1995) and divested more than $500
million of non-core assets (including National Propane in
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1999, company-owned Arby's restaurants and C.H. Patrick (dyes and chemicals) in
1997 and Graniteville (textiles) in 1996).
The Board of Directors will continue to review and make determinations, as
it has from time to time, as to what it believes are the best actions to
maximize shareholder value. To assist the Board in doing this, the Company
maintains close relationships with several nationally recognized investment
banking firms (each of which is also a member firm of the New York Stock
Exchange) and regularly obtains their expert advice on financial and strategic
matters relating to maximizing shareholder value. Accordingly, the Board
believes it is appropriately advised and capable of reaching the strategic
decisions that are in the best interest of all stockholders and the stockholder
proposal, therefore, is unnecessary.
With respect to the Company's policy on stock options granted to Messrs.
Peltz and May and other employees of Triarc and its subsidiaries, the Board
believes that such long-term incentive compensation appropriately links a
significant portion of such employee's total compensation to increases in the
Company's stock price. Moreover, a substantial portion of Messrs. Peltz' and
May's stock options are performance-based options that are subject to early
vesting only if Triarc's Class A Common Stock trades at certain levels
representing a premium to the stock price at the date of grant, for specified
periods of time and were granted in lieu of base salary, annual performance
bonus and long-term compensation for a six-year period commencing April 1993.
These performance-based options, as well as other stock options for Class A
Common Stock, were granted to senior management under stockholder-approved plans
and require the Company to deliver value to stockholders before management is
rewarded for their efforts. The Company's compensation philosophy, of which
stock options are an important component, is discussed in more detail under
'Executive Compensation -- Report of the Compensation Committee and the
Performance Compensation Sub-committee.'
In conclusion, the Board of Directors does not believe that a vote for the
proposal would be in the best interest of the Company and its stockholders.
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS
PROPOSAL.
OTHER MATTERS
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. In addition to
the solicitation of proxies by use of the mails, some of the officers, directors
and regular employees of the Company and its subsidiaries, none of whom will
receive additional compensation therefor, may solicit proxies in person or by
telephone, telegraph or other means. Solicitation will also be made by employees
of Georgeson & Company, which firm will be paid a fee of $8,000, plus expenses.
As is customary, the Company will, upon request, reimburse brokerage firms,
banks, trustees, nominees and other persons for their out-of-pocket expenses in
forwarding proxy materials to their principals.
STOCKHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
From time to time, stockholders present proposals which may be proper
subjects for inclusion in the proxy statement and for consideration at the
Annual Meeting. To be considered, proposals must be submitted on a timely basis.
It is currently expected that the next Annual Meeting will be held during
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the latter part of May, 2000, with the related proxy statement being first
mailed to stockholders on or about April 14, 2000, in which case proposals for
such Annual Meeting must be received by the Company no later than December 16,
1999, and must otherwise comply with Rule 14a-8 under the Exchange Act.
Triarc's Certificate of Incorporation currently imposes certain additional
procedural requirements for submitting stockholder proposals to meetings of
stockholders. Any such proposals must be specified in a written notice given by
or on behalf of a stockholder of record on the record date for such meeting
entitled to vote thereat or a duly authorized proxy for such stockholder, in
accordance with all of the following requirements. Such notice must be delivered
personally to, or mailed to and received at, the principal executive office of
the Company addressed to the attention of the Secretary, not less than 45 days
nor more than 60 days prior to the meeting; provided, however, that in the event
that less than 55 days' notice or prior public disclosure of the date of the
meeting is given or made to stockholders, notice by the stockholder to be timely
must be so received not later than the close of business on the 10th day
following the day on which such notice of the date of the annual or special
meeting was mailed or such public disclosure was made, whichever first occurs.
Such notice must set forth (i) a full description of each such item of business
proposed to be brought before the meeting and the reasons for conducting such
business at such meeting, (ii) the name and address of the person proposing to
bring such business before the meeting, (iii) the class and number of shares
held of record, held beneficially and represented by proxy by such person as of
the record date for the meeting (if such date has then been made publicly
available) and as of the date of such notice, (iv) if any item of such business
involves a nomination for director, all information regarding each such nominee
that would be required to be set forth in a definitive proxy statement filed
with the SEC pursuant to Section 14 of the Exchange Act, or any successor
thereto, and the written consent of each such nominee to serve if elected, (v)
any material interest of the stockholder in such item of business and (vi) all
other information that would be required to be filed with the SEC if, with
respect to the business proposed to be brought before the meeting, the person
proposing such business was a participant in a solicitation subject to Section
14 of the Exchange Act, or any successor thereto. The Company may require a
proposed nominee for director to furnish such other information as may be
required to be set forth in a stockholder's notice of nomination which pertains
to the nominee or which may be reasonably required to determine the eligibility
of such proposed nominee to serve as a director of the Company. At the request
of the Board of Directors, any individual nominated by the Board of Directors
for election as a director shall furnish to the Secretary of the Company that
information required to be set forth in a stockholder's notice of nomination
which pertains to a nominee. The Nominating Committee has adopted certain rules
with respect to nominations for Board membership. See 'Proposal 1. Election of
Directors -- Board Meetings and Certain Committees of the Board -- Nominating
Committee' above. The Chairman of the meeting may, if the facts warrant,
determine that a nomination or stockholder proposal was not made in accordance
with the foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination or proposal shall be disregarded.
Any questions relating to stockholder proposals should be submitted in writing
to the Secretary of the Company, at 280 Park Avenue, New York, New York 10017.
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INFORMATION INCORPORATED BY REFERENCE
The Company hereby incorporates by reference into this Proxy Statement
'Item 3. Legal Proceedings' of the Company's Form 10-K, a copy of which was
previously provided to stockholders, and 'Item 1. Legal Proceedings' of the
Company's Form 10-Q. The Company will provide copies of the Form 10-K, as
amended, and the Form 10-Q without charge, upon a written or oral request, by
first class mail or other equally prompt means within one business day of such
request. Such copies may be obtained by contacting the Company at 280 Park
Avenue, New York, New York, Attn: Investor Relations; Telephone:
(212) 451-3000. Copies may also be obtained from the Company's website at
http://www.triarc.com.
By Order of the Board of Directors
Stuart Rosen
STUART I. ROSEN
Secretary
New York, New York
August 18, 1999
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EXHIBIT A
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TRIARC COMPANIES, INC.
1999 EXECUTIVE BONUS PLAN
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TRIARC COMPANIES, INC.
1999 EXECUTIVE BONUS PLAN
SECTION 1. Purpose. The purpose of this Plan is to establish a program of
incentive compensation for designated executive officers and key employees of
the Company and its subsidiaries that is directly related to the financial
performance of the Company.
SECTION 2. Definitions. As used in this Plan, the following capitalized
terms shall have the following meanings:
(a) 'Acquisition' shall mean the acquisition of new business
operations by the Company, whether by stock or asset purchase, merger or
any other means.
(b) 'Acquisition Multiple' shall mean, with respect to any
Acquisition, the quotient of (i) the purchase price paid in connection with
such Acquisition over (ii) the Adjusted EBITDA of the acquired business for
the 12-month period ending on the last day of the acquired company's most
recently completed fiscal quarter ended prior to the date of the execution
of the definitive agreement relating to such Acquisition.
(c) 'Adjusted EBITDA' for any Plan Year or other referenced period
shall mean the Company's (or with respect to an acquired company, the
acquired company's) operating income for such Plan Year or other referenced
period, as reflected on its consolidated audited financial statements,
adjusted to exclude the impact of:
(1) depreciation and amortization expenses;
(2) any amounts accrued pursuant to management bonus plans
including, but not limited to, this Plan, and related employer payroll
taxes for the applicable period;
(3) any discretionary or matching contributions to the Company's
401(k) Plan and other deferred compensation plans for the applicable
period;
(4) all items of gain, loss or expense determined to be
extraordinary or unusual in nature or infrequent in occurrence or
related to the disposal of a segment of a business or related to a
change in accounting principles, all as determined in accordance with
standards established by opinion No. 30 of the Accounting Principles
Board ('APB Opinion No. 30');
(5) all items of gain, loss or expense related to restructuring
charges of subsidiaries whose operations are not included in operating
income for the applicable period;
(6) all items of gain, loss or expense related to discontinued
operations that do not qualify as a segment of a business as defined
under APB Opinion No. 30;
(7) any profit or loss attributable to the business operations of
any entity acquired by the Company or any consolidated subsidiary during
the applicable period;
(8) the reduction in carrying value of long-lived assets, in
accordance with FASB Pronouncement No. 121; and
(9) all items of expense related to equity-based compensation
determined in accordance with the standards established by Opinion
No. 25 of the Accounting Principles Board or FASB Pronouncement
No. 123.
In addition, operating income will not be adjusted for a minority interest
holder's share of a consolidated subsidiary's operating income or loss.
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(d) 'Annual Bonus Pool' shall have the meaning ascribed to it in
Section 3(b)(ii).
(e) 'Applicable Percentage' for any Participant shall mean the portion
of the Annual Bonus Pool and the Improvement Bonus Pool to which the
Participant is entitled, as determined by the Committee and set forth on
Exhibit A hereto.
(f) 'Board' or 'Board of Directors' shall mean the Board of Directors
of the Company, as constituted from time to time.
(g) 'Capital Charge' shall mean the Cost of Capital multiplied by
Incremental Capital for the prior Plan Year.
(h) 'Code' shall mean the Internal Revenue Code of 1986, as amended.
(i) 'Committee' shall mean a committee selected by the Board of
Directors to administer the Plan and composed of not less than two
directors, each of whom must be an 'outside director' (within the meaning
of Section 162(m) of the Code). The Committee shall be the Compensation
Committee of the Board of Directors, as long as it meets the preceding
requirements. If the Compensation Committee does not meet those
requirements, then the Committee shall be the Performance Compensation
Subcommittee of the Board of Directors, as long as it meets those
requirements.
(j) 'Company' shall mean Triarc Companies, Inc., a Delaware
corporation, or any successor corporation.
(k) 'Cost of Capital' shall mean 10%.
(l) 'Covered Employee' shall mean a Participant who is a 'covered
employee' within the meaning of Section 162(m) of the Code.
(m) 'Designated Beneficiary' shall mean the beneficiary or
beneficiaries designated in accordance with Section 8(g) hereof to receive
the amount, if any, payable under the Plan on the Participant's death.
(n) 'Economic Profit' with respect to any Plan Year shall mean
(i) Adjusted EBITDA for such Plan Year minus (ii) Capital Charges in such
Plan Year.
(o) 'Formula Bonus Award' shall mean the award payable to a
Participant pursuant to Section 3 of the Plan.
(p) 'FASB' shall mean the Financial Accounting Standards Board.
(q) 'Formula Bonus Award' shall mean the award payable to a
Participant pursuant to Section 3 of the Plan.
(r) 'Incremental Capital' for any Plan Year shall mean the sum of
(i) Net Stock Issued in such Plan Year plus (ii) New Net Debt in such Plan
Year. Incremental Capital may be positive or negative.
(s) 'Improvement Bonus Pool' shall the meaning ascribed to it in
Section 3(b)(iii).
(t) 'Improvement in Economic Profit' with respect to any Plan Year
shall mean the excess, if any, of (i) the Economic Profit for such Plan
Year over (ii) the Economic Profit for the preceding Plan Year; provided,
that for the first Plan Year, Improvement in Economic Profit shall mean the
excess, if any, of (i) the Economic Profit for such Plan Year over
(ii) the Economic Profit for the period beginning with the first day of the
fifth month of the Company's 1998 fiscal year (i.e.
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beginning with May 3, 1998) and ending on the last day of such fiscal year
(i.e. ending on January 3, 1999); further provided, that for the second
Plan Year, Improvement in Economic Profit shall mean the excess, if any, of
(i) the Economic Profit for such Plan Year over (ii) the Economic Profit
for the Company's entire 1999 fiscal year.
(u) 'Net Debt' shall mean (i) all debt recorded on the audited
consolidated balance sheet of the Company, including current maturities of
long term debt, minus (ii) cash, cash equivalents, short term investments
and long term investments in the amount that such assets are carried on
such balance sheet, and as adjusted to fair value for any assets carried at
other than fair value.
(v) 'Net Stock Issued' shall mean the Value of Stock Issued minus the
Value of Stock Repurchased. Net Stock Issued may be positive or negative.
(w) 'New Net Debt' shall mean the increase (decrease) in Net Debt
since the last day of the Company's first four fiscal months of 1999 (i.e.
since May 2, 1999). New Net Debt may be positive or negative.
(x) 'Participant' shall mean each person designated to participate in
the Plan pursuant to Sections 3(a) and/or 4(a) hereof.
(y) 'Performance Goal Bonus Award' shall mean the award, as determined
by the Committee, to be granted to a Participant based on the level of
attainment of the Performance Goal in accordance with Sections 4(b) and
4(c) hereof.
(z) 'Performance Goal' shall have the meaning ascribed to such term in
Section 4(b).
(aa) 'Performance Goals Date' shall mean the date on which the
Committee establishes the Performance Goals for a Plan Year in accordance
with Section 4(b). The Performance Goals Date for any Plan Year shall be no
later than the 90th day of such Plan Year, or such earlier date as may be
required in order for the Performance Goal Bonus Awards in respect of such
Plan Year to qualify as 'performance-based compensation' for purposes of
Section 162(m) of the Code.
(bb) 'Plan' shall mean this 1999 Executive Bonus Plan, as may be
amended from time to time.
(cc) 'Plan Year' shall mean the accounting fiscal year of the Company,
provided that the 1999 Plan Year shall exclude the first four fiscal months
thereof (i.e. through May 2, 1999) or, with respect to the Performance Goal
Bonus Awards, such other period as the Committee may, in its sole
discretion, determine.
(dd) 'Value of Stock Issued' shall mean the gross proceeds received
for any equity issued by the Company or its subsidiaries after the last day
of the Company's first four fiscal months of 1999, increased as of the last
day of each Plan Year by the Cost of Capital (prorated for the Plan Year in
which such issuance occurs). Notwithstanding the above, the Value of Stock
Issued in connection with an Acquisition shall be deemed to be no greater
than ten times the acquired company's Adjusted EBITDA for the 12-month
period ending on the last day of the acquired company's most recently
completed fiscal quarter ended prior to the date of the execution of the
definitive agreement relating to such Acquisition, less the sum of (i) any
debt assumed in connection with the Acquisition plus (ii) any consideration
as part of the purchase price, not paid in the form of equity.
(ee) 'Value of Stock Repurchased' shall mean the purchase price paid
for any equity repurchased by the Company after the last day of the
Company's first four fiscal months of 1999 (including for this purpose, the
value of equity distributed to the Company's shareholders in connection
with a spinoff of a business which is not consolidated with the Company
immediately
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following such distribution, such value to be determined by the closing
price of such equity on its primary public market on the effective date of
such distribution), and increased as of the last day of each Plan Year by
the Cost of Capital (prorated for the Plan Year in which such repurchase
occurs).
SECTION 3. Formula Bonus Awards
(a) Eligibility. Participants eligible for a Formula Bonus Award shall
consist of all executive officers and key employees of the Company and its
subsidiaries who have been chosen by the Committee to be eligible for a Formula
Bonus Award whose names are listed on Exhibit A hereto.
(b) Formula Bonus Awards. Formula Bonus Awards to Participants under the
Plan are potential awards that are based on the Economic Profit of the Company.
(i) Formula Bonus Awards. Subject to the other provisions of the Plan,
for each Plan Year, each Participant under the Plan chosen as eligible
pursuant to Section 3(a) above shall be entitled to a Formula Bonus Award
which shall be the sum of the Participant's Annual Bonus and Improvement
Bonus (each as defined below) for each Plan Year. The payment of the
Formula Bonus Award shall be paid at the time and in the manner set forth
in Section 3(c) below.
(ii) Annual Bonus. In each Plan Year, each Participant shall be
eligible for an Annual Bonus in an amount equal to the Participant's
Applicable Percentage of the 'Annual Bonus Pool' for such Plan Year. The
Annual Bonus Pool for any Plan Year shall mean three percent (3%) of the
Economic Profit for such Plan Year, subject to adjustment as provided for
in Subsection (iv) below.
(iii) Improvement Bonus. For each Plan Year, each Participant shall be
eligible for an Improvement Bonus equal to the Participant's Applicable
Percentage of the 'Improvement Bonus Pool' for such Plan Year. The
Improvement Bonus Pool for any Plan Year shall mean fifteen percent (15%)
of the Improvement in Economic Profit for such Plan Year, subject to
adjustment as provided for in Subsection (iv) below, and provided that if
in any Plan Year the Improvement in Economic Profit is negative, no
Improvement Bonuses will be paid in respect of such Plan Year nor with
respect to any subsequent Plan Year until Economic Profit for a Plan Year
is greater than it was for the Plan Year with respect to which an
Improvement Bonus was last paid. For example, if Economic Profit in fiscal
1999 is $150 million and Economic Profit in fiscal 2000 is $140 million, no
Improvement Bonus will be payable to any Participant in 2001 unless
Economic Profit exceeds $150 million. If Economic Profit is $160 million in
2001, the Improvement Bonus will be the Participant's Applicable Percentage
of $1.5 million (15% of $10 million).
(iv) The Acquisition Adjustment In the event that the Company makes an
Acquisition and the Acquisition Multiple is greater than the quotient of
(i) one over (ii) the Cost of Capital (the 'Base Multiple'), then the
Capital Charge relating to such Acquisition will be adjusted for the first
two Plan Years following such Acquisition by multiplying the Capital Charge
attributable to such Acquisition by a fraction, the numerator of which is
the Base Multiple and the denominator of which is the Acquisition Multiple.
(c) Form and Time of Determination of Award Payments. As soon as
practicable following the end of the applicable Plan Year, the Committee shall
determine the amount of the Formula Bonus Award payable to each Participant
eligible for a Formula Bonus Award and shall certify the amounts of Economic
Profit and Economic Profit Improvement for such Plan Year. Annual Bonus Awards
earned during any Plan Year shall be paid as soon as practicable after the end
of such Plan Year, following the Committee's certification and determination of
the amounts payable to each eligible Participant and
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following the delivery of the audited consolidated financial statements of the
Company with respect to such Plan Year. Payment of Formula Bonus Awards shall be
made in the form of cash. Formula Bonus Awards earned but not yet paid will not
accrue interest. Notwithstanding the above, unless otherwise specified in an
employment agreement between the Company (or the applicable subsidiary of the
Company) and a Participant, (i) a Participant must be employed by the Company or
a subsidiary on the last day of a Plan Year in order to receive payment of a
Formula Bonus Award in respect of such Plan Year, and (ii) a Participant who is
employed by the Company or a subsidiary on the last day of a Plan Year shall be
entitled to receive payment of a Formula Bonus Award in respect of such Plan
Year notwithstanding a subsequent termination of the Participant's employment.
SECTION 4. Performance Goal Bonus Awards.
(a) Eligibility and Participation
(i) Designation. The Committee shall, in its sole discretion,
designate for each Plan Year which executive officers and key employees of
the Company and its subsidiaries, if any, will be eligible for a
Performance Goal Bonus Award for such Plan Year. The Committee shall
designate such individuals prior to the Performance Goals Date with respect
to such individual for such Plan Year. Each Participant will be notified of
the selection as soon after approval as is practicable.
(ii) Participation for Employees Hired After Commencement of Plan
Year. An executive officer or key employee whose employment with the
Company commences after the first day of a Plan Year and who remains
actively employed through the end of the Plan Year may, at the Committee's
discretion, be eligible for a Performance Goal Bonus Award for such Plan
Year on a pro rata basis.
(iii) No Right to Participate. No person has or at any time will have
any right to be selected for current or future eligibility for a
Performance Goal Bonus Award.
(b) Performance Measurement.
(i) Definition of Performance Goals. The performance criteria for a
Plan Year (the 'Performance Goals') will be based on objective,
quantifiable measures for the Company as a whole, or the operating units of
the Company, with respect to such Plan Year and may include, and will be
limited to:
1. earnings per share;
2. market share;
3. margins (limited to gross margin, Adjusted EBITDA (as defined in
Section 2(c)) margin, and Adjusted EBITDA (as defined in
Section 2(c) but excluding clause (1) thereof) margin);
4. productivity improvement;
5. costs or expenses;
6. successful completion of acquisitions, dispositions,
recapitalizations, financings or refinancings;
7. total return on investment portfolio;
8. pre-tax net realized capital gains;
9. stock price;
10. net investment income.
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(ii) Establishment of Performance Goals. For each Plan Year, the
Committee will, on or before the Performance Goals Date, establish (a) the
Performance Goals and (b) if more than one Performance Goal is established,
the weighting of the Performance Goals.
(iii) Adjustments to Performance Goals. The Committee may at any time
prior to the Performance Goals Date for a Plan Year, or, subject to the
second paragraph of this Section 4(b)(iii), at any time thereafter in its
sole and absolute discretion, adjust or modify the calculation of a
Performance Goal for such Plan Year in order to prevent the dilution or
enlargement of the rights of Participants (a) in the event or in
anticipation of any unusual or extraordinary corporate item, transaction,
event or development; (b) in recognition or in anticipation of any other
unusual or nonrecurring events affecting the Company, or the financial
statements of the Company, or in response to or in anticipation of changes
in applicable laws, regulations, accounting principles or business
conditions; and (c) in view of the Committee's assessment of the business
strategy of the Company, performance of comparable organizations, economic
and business conditions, and any other circumstances deemed relevant.
The Committee may exercise such discretion set forth in the preceding
paragraph after the Performance Goals Date only if it reasonably determines that
such exercise would not cause the payment of a Performance Goal Bonus Award to
fail to qualify as 'performance-based compensation' under Section 162(m) of the
Code.
(c) Awards.
(i) Establishment of Amount. On or before the Performance Goals Date
as to each Plan Year, the Committee shall establish a written schedule of
the amount of a Performance Goal Bonus Award that will be payable to a
Participant under the Plan if the Performance Goals are satisfied.
(ii) Calculation and Approval. As soon as practicable following the
end of the applicable Plan Year, the Committee will certify in writing the
attainment of the Performance Goals established for the Plan Year and will
calculate the Performance Goal Bonus Award, if any, payable to each
Participant under the schedule established pursuant to Section 4(c)(i)
hereof. If a Participant's base salary is adjusted after the Performance
Goals Date for the Plan Year, and the Award is expressed as a percentage of
the Participant's base salary, such Participant's Performance Goal Bonus
Award shall be prorated as of the date of adjustment.
(iii) Payment. Performance Goal Bonus Awards shall be paid in a lump
sum cash payment, as soon as practicable after the amount thereof has been
determined by the Committee and certified in accordance with Section
4(c)(ii) above and following the delivery of the audited consolidated
financial statements of the Company with respect to such Plan Year.
(iv) Limitations. Notwithstanding any provision herein to the
contrary:
1. no Performance Goal Bonus Award will be paid for a Plan Year in
which performance fails to attain or exceed the minimum level for any of
the Performance Goals; and
2. no Performance Goal Bonus Award to any Participant in respect of
any Plan Year shall exceed $5 million.
(d) Negative Discretion. Notwithstanding anything to the contrary set forth
herein, the Committee may reduce a Performance Goal Bonus Award to an amount
less than the amount determined under Section 4(c)(ii) above or pay no
Performance Goal Bonus Award at all even if certain Performance Goals have been
satisfied if it, in its sole discretion, determines.
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SECTION 6. Administration. The Committee has and will have all the
authority that may be necessary or helpful to enable it to discharge its
responsibilities with respect to the Plan. Without limiting the generality of
the foregoing, and in addition to any authority or responsibility specifically
granted to the Committee elsewhere in the Plan, the Committee has the exclusive
right to (a) interpret the Plan, (b) determine eligibility for participation in
the Plan, (c) decide all questions concerning eligibility for and the amount of
awards payable under the Plan, (d) construe any ambiguous provision of the Plan,
(f) correct any default, (g) supply any omission, (h) reconcile any
inconsistency, (i) issue administrative guidelines as an aid to administer the
Plan, (j) make regulations for carrying out the Plan and to make changes in such
regulations as they from time to time deem proper, and (k) decide any and all
questions arising in the administration, interpretation and application of the
Plan.
The Committee shall have full discretionary authority in all matters
related to the discharge of its responsibilities and the exercise of its
authority under the Plan including, without limitation, its construction of the
terms of the Plan and its determination of eligibility for participation and
awards under the Plan. It is the intent of the Company in establishing the Plan
that the decisions of the Committee and its action with respect to the Plan will
be final, binding and conclusive upon all persons having or claiming to have any
right or interest in or under the Plan.
Only the Committee may select and grant awards to Participants who are
Covered Employees. Except for such limitation and to the extent otherwise
prohibited by law or to the extent such delegation would cause any award to fail
to satisfy the requirements of Section 162(m), the Committee may delegate some
or all of its authority under the Plan to any person or persons provided that
any such delegation be in writing.
SECTION 7. Termination or Amendment of Plan. The Committee may amend,
suspend or terminate the Plan at any time, but no amendment or alteration shall
be made that shall impair the rights of any Participant hereunder without the
Participant's consent. No amendment will be made that shall cause the
compensation payable under the Plan in respect of any Formula Bonus Award or
Performance Goal Bonus Award previously granted or pending to fail to satisfy
the requirements of the performance-based compensation exception of
Section 162(m) of the Code. No amendment will be made without shareholder
approval to the extent shareholder approval is necessary to cause any Formula
Bonus Award or Performance Goal Bonus Award previously granted or pending to
satisfy the performance-based compensation exception of Section 162(m) of the
Code.
SECTION 8. Miscellaneous.
(a) No Right to Awards or Continued Employment. No employee shall have any
claim or right to be granted an award under the Plan. Neither this Plan nor any
action taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or a subsidiary thereof.
(b) Taxes. The Company shall have the right to deduct from all awards paid
under the Plan any federal, state or local taxes required by law to be withheld
with respect to such payments.
(c) Non-Transferability. No award made hereunder may be assigned, pledged
or transferred, except, in the event of death of a Participant, by will or the
laws of descent and distribution, and any attempt to assign, pledge or transfer
such rights shall be void.
(d) Relationship to Other Benefits. No payment under the Plan shall be
taken into account in determining any benefits under any pension, profit
sharing, group insurance or other benefit plan of the Company or any of its
Subsidiaries.
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(e) Governing Law. This Plan shall be governed by and construed in
accordance with laws of the State of New York applicable to agreements made and
to be performed entirely within such state (without regard to any conflict of
law provisions that might indicate the applicability of any other laws).
(f) Successors and Assigns. This Plan and the obligations hereunder shall
be binding upon and inure to the benefit of any successors in interest to the
business of the Company and may be assigned to any company which acquires
substantially all the business operations or assets of the Company provided that
such successor assumes the obligations hereunder.
(g) Designation and Change of Beneficiary. Each Participant may designate
one or more persons as the Designated Beneficiary who shall be entitled to
receive his or her Performance Goal Bonus Award or Formula Bonus Award, if any,
payable under the Plan upon the death of the Participant. Such designation shall
be in writing to the Committee. A Participant may, from time to time, revoke or
change his or her Designated Beneficiary without the consent of any prior
Designated Beneficiary by filing a written designation with the Committee. The
last such designation received by the Committee shall be controlling; provided,
however, that no designation, or change or revocation thereof, shall be
effective unless received by the Committee prior to the Participant's death, and
in no event shall it be effective as of a date prior to such receipt.
(h) Payments to Persons Other Than the Participant. If the Committee shall
find that any person to whom any amount is payable under the Plan is unable to
care for his or her affairs because of illness or accident, or is a minor, or
has died, then any payment due to such person or his or her estate (unless a
prior claim therefor has been made by a duly appointed legal representative)
may, if the Committee so directs, be paid to his or her spouse, a child, a
relative, an institution maintaining or having custody of such person, or any
other person deemed by the Committee, in its sole discretion, to be a proper
recipient on behalf of such person otherwise entitled to payment. Any such
payment shall be a complete discharge of the liability of the Company therefor.
(i) No Liability of Committee Members. No member of the Committee shall be
personally liable by reason of any contract or other instrument related to the
Plan executed by such member or on his or her behalf in his or her capacity as a
member of the Committee, nor for any mistake of judgment made in good faith, and
the Company shall indemnify and hold harmless each employee, officer, or
director of the Company to whom any duty or power relating to the administration
or interpretation of the Plan may be allocated or delegated, against any cost or
expense (including legal fees, disbursements and other related charges) or
liability (including any sum paid in settlement of a claim with the approval of
the Board of Directors) arising out of any act or omission to act in connection
with the Plan unless arising out of such person's own fraud or bad faith.
(j) Compliance With Section 162(m). With regard to all Covered Employees,
the Plan shall for all purposes be interpreted and construed in accordance with
Section 162(m) of the Code. Unless otherwise specifically determined by the
Committee, if any provision of the Plan would cause the awards granted to a
Covered Employee not to constitute qualified 'performance-based compensation'
under Section 162(m) of the Code, that provision, insofar as it pertains to the
Covered Employee, shall be severed from, and shall be deemed not to be a part of
this Plan, but the other provisions hereof shall remain in full force and
effect.
(k) Unfunded Plan. Participants shall have no right, title, or interest
whatsoever in or to any investments which the Company may make to aid it in
meeting its obligations under the Plan. Nothing contained in the Plan, and no
action taken pursuant to its provisions, shall create or be construed to create
a trust of any kind, or a fiduciary relationship between the Company and any
Participant,
A-9
<PAGE>
beneficiary, legal representative or any other person. To the extent that any
person acquires a right to receive payments from the Company under the Plan,
such right shall be no greater than the right of an unsecured general creditor
of the Company. All payments to be made hereunder shall be paid from the general
funds of the Company and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of such amounts except as
expressly set forth in the Plan.
The Plan is not intended to be subject to the Employee Retirement Income
Security Act of 1974, as amended ('ERISA').
SECTION 9. Effective Date. This Plan shall become effective as of the first
day of the first Plan Year, subject to approval by the stockholders of the
Company in a manner which complies with the requirements of Section 162(m) of
the Code.
A-10
<PAGE>
EXHIBIT A
The Participants in the Triarc Companies, Inc. 1999 Executive Bonus Plan
eligible for a Formula Bonus Award and their Applicable Percentages are as
follows:
<TABLE>
<CAPTION>
APPLICABLE
PARTICIPANT NAME PERCENTAGE
- ---------------- ----------
<S> <C>
Nelson Peltz............................................. 66.667%
Peter May................................................ 33.333%
</TABLE>
A-11
<PAGE>
APPENDIX 1
TRIARC COMPANIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Nelson Peltz and Peter W. May and each of
them, with power of substitution, attorneys and proxies to represent and to
vote all shares of Class A Common Stock of Triarc Companies, Inc. (the
"Company") which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of Triarc Companies, Inc. to be held on Thursday, September 23,
1999, at 11:00 A.M., local time, in the third floor auditorium of The Chase
Manhattan Bank, 270 Park Avenue, New York, New York, and at any adjournment
or postponement thereof.
The Board of Directors recommends a vote FOR the election of the nominees
named on the reverse side and FOR Proposals 2 and 3. The Board of Directors
recommends a vote AGAINST Proposal 4, the stockholder proposal, if properly
brought before the meeting. This Proxy when properly executed will be voted
in the manner directed herein by the undersigned stockholder. If no direction
is made, this Proxy will be voted FOR the election of the nominees named on
the reverse side, FOR Proposals 2 and 3 and AGAINST Proposal 4. Under the
Company's By-Laws, business transacted at the Annual Meeting of Stockholders is
confined to the purposes stated in the Notice of the Meeting. This Proxy will,
however, convey discretionary authority to the persons named herein as proxies
to vote on matters incident to the conduct of the Meeting.
PLEASE DATE, SIGN AND RETURN TODAY IN THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
Dear Stockholder:
On the reverse side of this card are instructions on how to vote by
telephone. Please consider voting by telephone. Your vote is recorded as if
you mailed in your proxy card. We believe voting this way is convenient and
it also saves the Company money.
<PAGE>
[ ]
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS For Withhold For All
Nominees: Nelson Peltz, Peter W. May, Hugh L. Carey, All All (Except nominee(s) written below)
Clive Chajet, Joseph A. Levato, David E. Schwab II, [ ] [ ] [ ]
Jeffrey S. Silverman, Raymond S. Troubh and
Gerald Tsai, Jr. ---------------------------
For Against Abstain
2. Proposal to consider and take action upon the Triarc [ ] [ ] [ ]
Companies, Inc. 1999 Executive Bonus Plan, as
described in the Proxy Statement.
3. Proposal to ratify the appointment of Deloitte &
Touche LLP as the Company's independent For Against Abstain
certified public accountants, as described in [ ] [ ] [ ]
the Proxy Statement.
4. Proposal to consider, if properly brought before For Against Abstain
the meeting, a proposal from a stockholder as [ ] [ ] [ ]
described in the Proxy Statement.
</TABLE>
Dated: ________________________________, 1999
Signature(s) ___________________________________________________________________
________________________________________________________________________________
This Proxy should bear your signature(s) exactly as your name(s) appear in the
stencil to the left. When signing as attorney, executor, administrator, personal
representative, trustee, guardian or corporate officer, please give full
title. For joint accounts, each joint owner should sign.
CONTROL NUMBER FOLD AND DETACH HERE
TELEPHONE VOTING INSTRUCTIONS
Dear Stockholders:
Your vote is important to us. We have provided an automated telephone option
for granting your proxy which you may access 24 hours a day by dialing this TOLL
FREE NUMBER: 1-800-214-7371 (if located within the U.S.) on a touch-tone
telephone.
After dialing 1-800-214-7371, you will hear the following instructions:
Please enter your six digit control number which appears directly
above the words "Dear Stockholders".
Please press 1 if you wish to vote for the recommendations of the
Board of Directors.
Please press 0 if you wish to vote on each proposal separately and the
system will prompt you for your vote with instructions.
Once this is completed, the telephone option will automatically hang-up and
your proxy will be voted as you directed. THERE IS NO NEED FOR YOU TO MAIL BACK
YOUR PROXY CARD.
