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SCHEDULE 14A
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
---------------------------
[X] Filed by the Registrant
[ ] 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 240.14a-11(c) or 240.14a-12
---------------------------
CABLE CAR BEVERAGE CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement if other than Registrant)
---------------------------
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) 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:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[X] 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 No.:
3) Filing Party:
4) Date Filed:
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[LETTERHEAD OF CABLE CAR BEVERAGE CORPORATION]
To our Stockholders:
You are cordially invited to attend a Special Meeting of Stockholders (the
'Special Meeting') of Cable Car Beverage Corporation ('Cable Car'), which will
be held on Tuesday, November 25, 1997, at 10:00 a.m., local time, at Norwest
Bank Building, 1740 Broadway, Forum Room, Denver, Colorado 80274. At the Special
Meeting, you will be asked to consider and vote upon the proposed acquisition by
Triarc Companies, Inc. ('Triarc') of Cable Car. The acquisition will be
accomplished by a merger (the 'Merger') of a wholly owned subsidiary of Triarc
into Cable Car, with Cable Car being the surviving corporation in the Merger.
After the effective time of the Merger, Cable Car will be a Wholly owned
subsidiary of Triarc. The terms of the Merger are described in detail in the
accompanying Proxy Statement/Prospectus.
In the Merger, each share of common stock, par value $.01 per share, of
Cable Car (the 'Cable Car Common Stock') issued and outstanding immediately
prior to the effective time of the Merger will be converted into the right to
receive 0.1722 of a share of Triarc's Class A common stock, par value $.10 per
share ('Triarc Common Stock'), subject to certain adjustments described in the
Proxy Statement/Prospectus, and any cash to be paid in lieu of fractional shares
of Triarc Common Stock.
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AND RECOMMENDS
A VOTE FOR APPROVAL OF THE MERGER AND THE RELATED AGREEMENT AND PLAN OF MERGER.
In reaching its determination to approve the Merger, the Board of Directors
consulted with Cable Car's management, as well as its legal counsel and
financial advisor, and considered several factors including those discussed at
pages 40-41 of the accompanying Proxy Statement/Prospectus under the caption
'The Proposed Merger and Related Matters -- Cable Car's Reasons for the Merger;
Recommendation of Cable Car's Board of Directors.' The Merger provides that the
Cable Car stockholders will receive stock in Triarc, which has a higher market
value than the recent trading value of the Cable Car Common Stock. Additionally,
the Merger affords holders of Cable Car Common Stock the opportunity to reduce
their exposure to the risks inherent in Cable Car's limited number of products,
which are primarily premium soft drinks and waters, and the opportunity to
achieve greater liquidity and stability through an equity interest in Triarc (a
New York Stock Exchange listed company). You are urged to, and should, read the
discussion set forth under the captions 'The Proposed Merger and Related
Matters -- Cable Car's Reasons for the Merger; Recommendations of Cable Car's
Board of Directors' at pages 40-41, ' -- Opinion of Financial Advisor to Cable
Car' at pages 42-46, and ' -- Background of the Merger' at pages 38-40 of the
accompanying Proxy Statement/Prospectus, each in its entirety.
The attached Notice of Special Meeting and Proxy Statement/Prospectus
contain detailed information concerning the Special Meeting. Please read the
Notice and the Proxy Statement/Prospectus and consider this information
carefully.
THE MERGER CANNOT BE EFFECTED UNLESS IT IS APPROVED BY THE HOLDERS OF A
MAJORITY OF THE SHARES OF CABLE CAR COMMON STOCK ENTITLED TO VOTE AT THE SPECIAL
MEETING. IT IS IMPORTANT THAT YOUR SHARES OF CABLE CAR COMMON STOCK BE
REPRESENTED AND VOTED AT THE SPECIAL MEETING, REGARDLESS OF THE SIZE OF YOUR
HOLDINGS. ACCORDINGLY, WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN
PERSON, PLEASE PROMPTLY MARK, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN
THE ACCOMPANYING POSTAGE PREPAID ENVELOPE. YOU MAY REVOKE YOUR PROXY IN THE
MANNER DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS AT ANY TIME
BEFORE IT IS EXERCISED AT THE SPECIAL MEETING.
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Returning the proxy does NOT deprive you of your right to attend the
Special Meeting and to vote your shares in person with respect to the matters to
be acted upon at the Special Meeting. This solicitation is made on behalf of the
Board of Directors of Cable Car.
PLEASE DO NOT SEND ANY STOCK CERTIFICATES WITH YOUR PROXY CARD.
We look forward to your attendance at the Special Meeting. Thank you for
your consideration and your continued support.
Sincerely,
SAMUEL M. SIMPSON
Chairman
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CABLE CAR BEVERAGE CORPORATION
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 25, 1997
To the Stockholders of
CABLE CAR BEVERAGE CORPORATION:
Notice is hereby given that a Special Meeting of Stockholders of Cable Car
Beverage Corporation, a Delaware corporation ('Cable Car'), will be held on
Tuesday, November 25, 1997, 10:00 a.m., local time, at Norwest Bank Building,
1740 Broadway, Forum Room, Denver, Colorado 80274 for the following purposes:
1. To consider and vote upon the approval of the Agreement and Plan of
Merger dated June 24, 1997, as amended (the 'Merger Agreement'), among
Triarc Companies, Inc., a Delaware corporation ('Triarc'), CCB Merger
Corporation, a Delaware corporation and a wholly owned subsidiary of Triarc
('Mergerco'), and Cable Car, that provides for the merger of Mergerco into
Cable Car (the 'Merger'). After the effective time of the Merger, Cable Car
will be the surviving corporation and a wholly owned subsidiary of Triarc.
Upon consummation of the Merger, each share of common stock, par value
$.01 per share, of Cable Car (the 'Cable Car Common Stock') issued and
outstanding immediately prior to the effective time of the Merger (other
than treasury shares and shares owned by Triarc and its subsidiaries and by
subsidiaries of Cable Car, which shares will be canceled, and shares with
respect to which the holder has properly exercised its appraisal rights
under Delaware law) will be converted into the right to receive 0.1722 of a
share (the 'Conversion Price') of Class A Common Stock, par value $.10 per
share, of Triarc ('Triarc Common Stock'), subject to the adjustment
described below, and any cash to be paid in lieu of fractional shares of
Triarc Common Stock. The Conversion Price is subject to adjustment as
follows: (i) if the Average Triarc Share Price (as defined under the
caption 'The Merger Agreement -- Conversion of Securities' in the
accompanying Proxy Statement/Prospectus) is less than $18.875, then the
Conversion Price shall be adjusted to equal the quotient obtained by
dividing $3.25 by such Average Triarc Share Price, and (ii) if the Average
Triarc Share Price is greater than $24.50, then the Conversion Price shall
be adjusted to equal the quotient obtained by dividing $4.22 by such
Average Triarc Share Price.
2. To transact such other business as may properly come before the
Special Meeting or any adjournment or postponement thereof. Cable Car does
not currently intend to bring any business other than the approval of the
Merger Agreement and the Merger before the Special Meeting or any
adjournments or postponements thereof.
THE BOARD OF DIRECTORS OF CABLE CAR HAS UNANIMOUSLY APPROVED THE MERGER AND
BELIEVES THAT THE TERMS OF THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF,
CABLE CAR AND ITS STOCKHOLDERS. THE BOARD OF DIRECTORS OF CABLE CAR RECOMMENDS
UNANIMOUSLY THAT CABLE CAR STOCKHOLDERS VOTE FOR APPROVAL OF THE MERGER
AGREEMENT AND THE MERGER AT THE SPECIAL MEETING.
Only stockholders of record at the close of business on October 23, 1997
are entitled to notice of, and to vote at, the Special Meeting and any
adjournments or postponements thereof.
Holders of Cable Car Common Stock have the right to dissent from the merger
and seek an appraisal of their shares pursuant to court proceedings by following
he procedures prescribed under Section 262 of the General Corporation Law of
the State of Delaware as further described under the caption 'Appraisal Rights'
in the accompanying Proxy Statement/Prospectus.
The accompanying Proxy Statement/Prospectus describes in detail the Merger
and the transactions contemplated by the Merger Agreement and contains certain
other information regarding Cable Car and Triarc. The Merger is of great
importance to Cable Car and its stockholders. Please read the Proxy
Statement/Prospectus carefully and then complete, sign and date the enclosed
proxy card and return it
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promptly in the enclosed self-addressed postage prepaid reply envelope whether
or not you plan to attend the Special Meeting.
By Order of the Board of Directors,
SAMUEL M. SIMPSON
Chairman
October 24, 1997
YOUR VOTE IS IMPORTANT.
------------------------
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING IN
PERSON. WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE MARK, SIGN, DATE AND RETURN
THE ENCLOSED PROXY CARD PROMPTLY IN THE ENCLOSED POSTAGE PREPAID REPLY ENVELOPE.
YOU MAY VOTE IN PERSON AT THE SPECIAL MEETING EVEN IF YOU HAVE PREVIOUSLY
RETURNED A PROXY CARD.
------------------------
PLEASE DO NOT SEND ANY STOCK CERTIFICATES WITH YOUR PROXY CARD.
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PROXY STATEMENT/PROSPECTUS
- --------------------------
[CABLE CAR LOGO] [TRIARC LOGO]
PROXY STATEMENT
FOR
SPECIAL MEETING OF STOCKHOLDERS
OF
CABLE CAR BEVERAGE CORPORATION
TO BE HELD ON NOVEMBER 25, 1997
------------------------
PROSPECTUS
OF
TRIARC COMPANIES, INC.
SHARES OF CLASS A COMMON STOCK
PAR VALUE $.10 PER SHARE
------------------------
This Proxy Statement/Prospectus ('Proxy Statement/Prospectus') is being
furnished to the stockholders of Cable Car Beverage Corporation, a Delaware
corporation ('Cable Car'), in connection with the solicitation of proxies by the
Board of Directors of Cable Car (the 'Cable Car Board') for use at the Special
Meeting of Stockholders of Cable Car to be held on Tuesday, November 25, 1997,
at 10:00 a.m., local time, at Norwest Bank Building, 1740 Broadway, Forum Room,
Denver, Colorado 80274, or any adjournments or postponements thereof
(the 'Special Meeting').
At the Special Meeting, holders of shares of Cable Car's common stock, par
value $.01 per share ('Cable Car Common Stock'), will vote upon a proposal to
approve the Agreement and Plan of Merger dated June 24, 1997, as amended (the
'Merger Agreement'), among Cable Car, Triarc Companies, Inc., a Delaware
corporation ('Triarc'), and CCB Merger Corporation, a Delaware corporation and
wholly owned subsidiary of Triarc ('Mergerco'), pursuant to which Mergerco will
merge into Cable Car (the 'Merger'). Cable Car will be the surviving corporation
of the Merger and will become a wholly owned subsidiary of Triarc. A copy of the
Merger Agreement is attached to this Proxy Statement/Prospectus as Appendix B-1
and is incorporated herein by reference. At the Special Meeting, stockholders of
Cable Car also will be asked to consider and vote upon such other business, if
any, as may properly be brought before the Special Meeting or any adjournments
or postponements thereof. Cable Car does not currently intend to bring any
business other than the adoption of the Merger Agreement before the Special
Meeting or any adjournments or postponements thereof.
Pursuant to the Merger, each share of Cable Car Common Stock issued and
outstanding immediately prior to the effective time of the Merger (other than
treasury shares and shares held by Triarc and its subsidiaries and subsidiaries
of Cable Car, all of which will be canceled, and shares with respect to which
the holder has properly exercised its appraisal rights under Delaware law) will
be converted into the right to receive 0.1722 of a share (the 'Conversion
Price') of Class A common stock, par value $.10 per share, of Triarc (the
'Triarc Common Stock'), subject to the adjustment described below, and any cash
to be paid in lieu of fractional shares of Triarc Common Stock. The Conversion
Price is subject to adjustment as follows: (i) if the Average Triarc Share Price
(as defined below in under the caption 'The Merger Agreement -- Conversion of
Securities') is less than $18.875, then the Conversion Price shall be adjusted
to equal the quotient obtained by dividing $3.25 by such Average Triarc Share
Price, and (ii) if the Average Triarc Share Price is greater than $24.50, then
the Conversion Price shall be adjusted to equal the quotient obtained by
dividing $4.22 by such Average Triarc Share Price (the Conversion Price as so
adjusted is referred to herein as the 'Adjusted Conversion Price'). For example,
if the Average Triarc Share Price is (i) $18.875 or greater, but not greater
than $24.50, then each share of Cable Car Common Stock will be converted at the
Effective Time into the right to receive 0.1722 of a share of Triarc Common
Stock; (ii) $18.00, then each share of Cable Car Common Stock will be converted
at the Effective Time into the right to receive 0.18056 of a share of Triarc
Common Stock; and (iii) $26.00, then each share of Cable Car Common Stock will
be converted at the Effective Time into the right to receive 0.16231 of a share
of Triarc Common Stock. Stockholders of Cable Car may obtain the most recent
stock prices of Cable Car Common Stock and Triarc Common Stock by calling Triarc
toll free at (800) 787-4272, Attention: Investor Relations. A description of the
terms of the Merger is set forth in this Proxy Statement/Prospectus under the
captions 'The Proposed Merger and Related Matters' and 'The Merger Agreement.'
------------------------
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY INVESTORS
IN EVALUATING THE MERGER AND THE SECURITIES OFFERED HEREBY, SEE 'RISK FACTORS,'
BEGINNING ON PAGE 27.
------------------------
This Proxy Statement/Prospectus also constitutes the prospectus for the
shares of Triarc Common Stock to be issued in the Merger. Triarc has filed a
Registration Statement on Form S-4 (together with any amendments thereto, the
'Registration Statement') with the Securities and Exchange Commission (the
'Commission') regarding the registration of such shares, of which this Proxy
Statement/Prospectus is a part.
------------------------
THE SHARES OF TRIARC COMMON STOCK TO BE ISSUED IN THE MERGER HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THIS PROXY STATEMENT/PROSPECTUS IS FIRST BEING MAILED TO CABLE CAR
STOCKHOLDERS ON OR ABOUT OCTOBER 24, 1997.
------------------------
THE DATE OF THIS PROXY STATEMENT/PROSPECTUS IS OCTOBER 22, 1997.
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TABLE OF CONTENTS
<TABLE>
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PAGE
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AVAILABLE INFORMATION...................................................................................... 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................................................ 2
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS................................................. 3
SUMMARY.................................................................................................... 5
The Companies......................................................................................... 5
The Special Meeting of Stockholders of Cable Car...................................................... 7
The Merger............................................................................................ 11
Risk Factors.......................................................................................... 19
Management............................................................................................ 19
COMPARATIVE MARKET PRICES AND DIVIDENDS -- TRIARC AND CABLE CAR....................................... 19
HISTORICAL AND PRO FORMA PER SHARE DATA -- TRIARC AND CABLE CAR....................................... 22
TRIARC -- SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA............................................. 23
CABLE CAR -- SUMMARY HISTORICAL FINANCIAL DATA........................................................ 26
RISK FACTORS............................................................................................... 27
Holding Company Structure............................................................................. 27
Substantial Leverage.................................................................................. 27
Net Losses............................................................................................ 28
Possible Price Volatility of Triarc Common Stock...................................................... 28
Dividends............................................................................................. 28
Successful Completion and Integration of Acquisitions................................................. 28
Environmental Liabilities............................................................................. 29
Weather Conditions Affect the Demand for Propane...................................................... 29
Energy Efficiency and Technology Trends May Affect Demand for Propane................................. 30
Royal Crown's Reliance on Certain Bottler's and Private Label Sales................................... 30
Competition........................................................................................... 30
Dependence on Key Personnel........................................................................... 31
Control by Certain Shareholders....................................................................... 31
Certain Federal Income Tax Consequences............................................................... 32
Additional Interests of Cable Car Management.......................................................... 32
Effect of Preferred Stock; Anti-Takeover Provisions................................................... 32
Effect of Triarc Stock Options........................................................................ 32
Comparative Rights of Cable Car Stockholders Before and After the Merger.............................. 33
COMPANIES.................................................................................................. 33
Triarc Companies, Inc................................................................................. 33
CCB Merger Corporation................................................................................ 34
Cable Car Beverage Corporation........................................................................ 34
Recent Developments................................................................................... 34
THE SPECIAL MEETING........................................................................................ 36
General............................................................................................... 36
Matters to Be Considered.............................................................................. 36
Vote Required......................................................................................... 36
Record Date; Proxies.................................................................................. 37
Solicitation of Proxies............................................................................... 37
THE PROPOSED MERGER AND RELATED MATTERS.................................................................... 37
General............................................................................................... 37
Background of the Merger.............................................................................. 38
Cable Car's Reasons for the Merger; Recommendation of Cable Car's Board of Directors.................. 40
Triarc's Reasons for the Merger....................................................................... 41
Effective Time........................................................................................ 41
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Conversion of Shares of Cable Car Common Stock........................................................ 42
Opinion of Financial Advisor to Cable Car............................................................. 42
Certain Federal Income Tax Consequences............................................................... 46
Accounting Treatment.................................................................................. 47
Resale of Triarc Common Stock by Affiliates........................................................... 47
Regulatory Approvals.................................................................................. 48
Section 203 of the DGCL............................................................................... 48
Stock Exchange Listing................................................................................ 49
Additional Interests of Cable Car Management.......................................................... 49
THE MERGER AGREEMENT....................................................................................... 52
Conversion of Securities.............................................................................. 52
Exchange Procedures................................................................................... 52
Distributions with Respect to Unexchanged Shares...................................................... 53
No Further Rights in Cable Car Common Stock........................................................... 53
No Fractional Shares.................................................................................. 53
Cable Car Stock Options............................................................................... 54
Termination of Exchange Fund.......................................................................... 54
Certain Representations and Warranties................................................................ 54
Conduct of Business Pending the Merger................................................................ 55
No Solicitation of Transactions....................................................................... 56
Indemnification of Directors and Officers............................................................. 57
Conditions to Consummation of the Merger.............................................................. 57
Termination........................................................................................... 59
Effect of Termination................................................................................. 60
Fees and Expenses..................................................................................... 60
Amendment and Waiver.................................................................................. 60
Stockholders Agreement................................................................................ 61
APPRAISAL RIGHTS........................................................................................... 61
MANAGEMENT OF SURVIVING CORPORATION........................................................................ 63
CERTAIN RELATIONSHIPS AMONG TRIARC, CABLE CAR AND THEIR AFFILIATES......................................... 65
DESCRIPTION OF TRIARC CAPITAL STOCK........................................................................ 65
PRINCIPAL HOLDERS OF CABLE CAR COMMON STOCK................................................................ 66
PRINCIPAL HOLDERS OF VOTING SECURITIES OF TRIARC COMPANIES, INC............................................ 67
TRIARC COMPANIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.... 69
CAPITALIZATION OF TRIARC................................................................................... 80
COMPARISON OF RIGHTS OF CABLE CAR AND TRIARC STOCKHOLDERS.................................................. 81
General............................................................................................... 81
Size and Classification of the Board of Directors..................................................... 81
Cumulative Voting for Directors....................................................................... 81
Removal of Directors.................................................................................. 81
Special Meetings of Stockholders...................................................................... 81
Preferred Stock....................................................................................... 82
Certain Voting Rights................................................................................. 82
Certain Business Combinations......................................................................... 82
Appraisal Rights...................................................................................... 83
Certain Anti-Takeover Provisions in the Triarc Charter................................................ 83
Amendment of Charter Documents........................................................................ 86
Indemnification of Officers and Directors............................................................. 87
LEGAL MATTERS.............................................................................................. 88
EXPERTS.................................................................................................... 88
STOCKHOLDER PROPOSALS...................................................................................... 88
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Appendix A-1 -- Cable Car's Annual Report on Form 10-K for the year ended December 31, 1996
Appendix A-2 -- Cable Car's amendment on Form 10-K/A filed with the Commission on May 1, 1997
Appendix A-3 -- Cable Car's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997
Appendix B-1 -- Agreement and Plan of Merger dated June 24, 1997 and Amendment No. 1 to Agreement and Plan of
Merger dated as of September 30, 1997
Appendix B-2 -- Stockholders Agreement dated June 24, 1997 and Amendment No. 1 to Stockholders Agreement dated
as of July 9, 1997
Appendix C -- Opinion of Montgomery Securities dated June 24, 1997
Appendix D -- Section 262 of the General Corporation Law of the State of Delaware
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LIST OF DEFINED TERMS
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1997 EBITDA................................................................................................ 44
1997 Transactions.......................................................................................... 6
Acquiring Person Termination............................................................................... 60
Acquisition Proposal....................................................................................... 57
Acquisition Proposal Termination........................................................................... 60
Adjusted Conversion Price.................................................................................. 1
AMCON...................................................................................................... 26
Antitrust Division......................................................................................... 48
Arby's Restaurants Sale.................................................................................... 5
Average Triarc Share Price................................................................................. 12
Beverage Companies......................................................................................... 44
Board Recommendation Termination........................................................................... 60
Business Combination....................................................................................... 85
C&C Sale................................................................................................... 6
Cable Car.................................................................................................. 1
Cable Car Acquisition...................................................................................... 69
Cable Car Board............................................................................................ 1
Cable Car Bylaws........................................................................................... 19
Cable Car Charter.......................................................................................... 19
Cable Car Common Stock..................................................................................... 1
Cable Car Default Termination.............................................................................. 60
Cable Car Options.......................................................................................... 12
Cable Car Subsidiaries..................................................................................... 6
Certificates............................................................................................... 53
Code....................................................................................................... 18
Commission................................................................................................. 1
Company.................................................................................................... 23
Competing Transaction Termination.......................................................................... 59
Consent Termination........................................................................................ 59
Continuing Director........................................................................................ 85
Conversion Price........................................................................................... 1
Cott....................................................................................................... 30
Cott Worldwide Agreement................................................................................... 30
Delaware Court............................................................................................. 61
DGCL....................................................................................................... 13
Dissenting Shares.......................................................................................... 52
DWG Acquisition............................................................................................ 31
EBITDA..................................................................................................... 44
Effective Time............................................................................................. 11
Equity Plan................................................................................................ 32
Exchange Act............................................................................................... 2
Exchange Agent............................................................................................. 52
Exchange Fund.............................................................................................. 52
Fractional Shares.......................................................................................... 53
FTC........................................................................................................ 48
HSR Act.................................................................................................... 18
Interested Shareholder..................................................................................... 85
IRS........................................................................................................ 32
Kelco...................................................................................................... 6
LTM EBITDA................................................................................................. 44
Merger..................................................................................................... 1
Merger Agreement........................................................................................... 1
Mergerco................................................................................................... 1
Mistic..................................................................................................... 5
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Mr. Natural................................................................................................ 65
National Propane........................................................................................... 5
Note....................................................................................................... 73
NYSE....................................................................................................... 2
Operating Partnership...................................................................................... 5
Option Average Share Price................................................................................. 9
Option Conversion Price.................................................................................... 8
Optional Termination....................................................................................... 59
Other Entity............................................................................................... 87
Partnership................................................................................................ 5
Proxy Statement/Prospectus................................................................................. 1
Quaker..................................................................................................... 28
Ratification Percentage.................................................................................... 84
Record Date................................................................................................ 10
Registration Statement..................................................................................... 1
Royal Crown................................................................................................ 5
RTM........................................................................................................ 35
Sales...................................................................................................... 69
Section 203................................................................................................ 48
Section 262................................................................................................ 61
Securities Act............................................................................................. 2
September 29, 1997 Market Price............................................................................ 73
Simpson Employment Agreement............................................................................... 13
Snapple.................................................................................................... 5
Snapple Acquisition........................................................................................ 5
Snapple Financial Statements............................................................................... 69
Snapple March 1997 Financial Statements.................................................................... 69
Snapple May 22, 1997 Financial Statements.................................................................. 69
Snapple 1996 Financial Statements.......................................................................... 69
Special Meeting............................................................................................ 1
Stewart's Fountain Agreement............................................................................... 35
Stewart's Master Agreement................................................................................. 35
Stewart's Restaurants...................................................................................... 7
Stockholders Agreement..................................................................................... 8
Stockholder Vote Termination............................................................................... 59
Subject Stock.............................................................................................. 8
Subject Stockholders....................................................................................... 8
Substitute Option.......................................................................................... 54
Surviving Corporation...................................................................................... 11
Transaction Notice......................................................................................... 56
Transactions............................................................................................... 40
Triarc..................................................................................................... 1
Triarc Board............................................................................................... 19
Triarc Bylaws.............................................................................................. 19
Triarc Charter............................................................................................. 19
Triarc Class A Common Stock................................................................................ 65
Triarc Class B Common Stock................................................................................ 65
Triarc Common Shares....................................................................................... 65
Triarc Common Stock........................................................................................ 1
Triarc Default Termination................................................................................. 59
Triarc Form 10-K........................................................................................... 69
Triarc Form 10-Q........................................................................................... 69
Triarc Preferred Stock..................................................................................... 65
Triarc Share Price Termination............................................................................. 17
Voting Shares.............................................................................................. 83
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AVAILABLE INFORMATION
Triarc and Cable Car are each subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the 'Exchange Act'), and in
accordance therewith file reports, proxy statements and other information with
the Commission. The reports, proxy statements and other information filed by
Triarc and Cable Car with the Commission may be inspected and copied at the
public reference facilities maintained by the Commission at Judiciary Plaza,
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and should be
available at the Commission's Regional Offices at 7 World Trade Center, 13th
Floor, New York, New York 10048, and 1801 California Street, Suite 4800, Denver,
Colorado 80202-2648. Copies of such material also can be obtained at prescribed
rates from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. The Commission maintains a site on the world wide
web that contains reports, proxy and information statements and other
information on registrants, such as Triarc and Cable Car, who must file such
material with the Commission electronically. The Commission's internet address
on the world wide web is http://www.sec.gov. Triarc Common Stock is listed on
the New York Stock Exchange, Inc. ('NYSE'), Cable Car Common Stock is quoted on
The Nasdaq SmallCap Market, and certain of Triarc's and Cable Car's reports,
proxy materials and other information may be available for inspection at the
offices of the NYSE at 20 Broad Street, New York, New York 10005, or of Nasdaq
at 1735 K Street, N.W., Washington, D.C. 20006, respectively.
Triarc has filed with the Commission a Registration Statement on Form S-4
under the Securities Act of 1933, as amended (the 'Securities Act'), with
respect to the Triarc Common Stock to be issued pursuant to the Merger. This
Proxy Statement/Prospectus does not contain all of the information set forth in
the Registration Statement and the exhibits thereto, certain parts of which were
omitted as permitted by the rules and regulations of the Commission. Such
additional information may be obtained from the Commission's principal office in
Washington, D.C. As to statements contained in this Proxy Statement/Prospectus
or in any document incorporated in this Proxy Statement/Prospectus by reference
pertaining to the content of any contract or other document referred to herein
or therein, in each instance reference is made to the copy of such contract or
other document filed as an exhibit to the Registration Statement or such other
document, each such statement being qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Triarc (File No.
1-2207) are incorporated by reference in this Proxy Statement/Prospectus:
1. Triarc's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, as amended by amendments thereto filed with the
Commission on April 30, 1997 and May 12, 1997;
2. Triarc's Quarterly Reports on Form 10-Q for the fiscal quarters
ended June 29, 1997, as amended by an amendment thereto filed with the
Commission on September 29, 1997, and March 30, 1997;
3. Triarc's Current Reports on Form 8-K filed with the Commission on
August 4, 1997, June 26, 1997, June 6, 1997 (as amended by an amendment
thereto filed with the Commission on August 5, 1997), May 20, 1997 (as
amended by an amendment thereto filed with the Commission on August 4,
1997), March 31, 1997, February 21, 1997 and January 10, 1997; and
4. The descriptions of Triarc Common Stock set forth in Triarc's
Registration Statement on Form 8-A filed pursuant to Section 12 of the
Exchange Act, and any amendment or report filed for the purpose of updating
any such description.
The following documents filed with the Commission by Cable Car (File No.
0-14784) are incorporated by reference in this Proxy Statement/Prospectus:
1. Cable Car's Annual Report on Form 10-K for the year ended December
31, 1996, as amended by an amendment thereto filed with the Commission on
April 30, 1997, copies of which are attached hereto as Appendices A-1 and
A-2, respectively;
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2. Cable Car's Quarterly Reports on Form 10-Q for the quarters ended
June 30, 1997, a copy of which is attached hereto as Appendix A-3, and
March 31, 1997; and
3. Cable Car's Current Reports on Form 8-K filed with the Commission
on August 21, 1997 and July 2, 1997.
All documents and reports filed by Triarc or Cable Car with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this Proxy Statement/Prospectus and prior to the date of the Special Meeting
shall be deemed to be incorporated by reference in this Proxy
Statement/Prospectus and to be a part hereof from the dates of filing of such
documents or reports. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Proxy Statement/Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Proxy Statement/Prospectus.
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH
ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS (OTHER THAN
EXHIBITS TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
BY REFERENCE TO SUCH DOCUMENTS) ARE AVAILABLE, WITHOUT CHARGE, TO ANY PERSON,
INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROXY STATEMENT/PROSPECTUS IS
DELIVERED, ON WRITTEN OR ORAL REQUEST, WITH RESPECT TO TRIARC DOCUMENTS, TO
TRIARC COMPANIES, INC., 280 PARK AVENUE, NEW YORK, NEW YORK 10017, ATTENTION:
INVESTOR RELATIONS, OR BY TELEPHONE AT (212) 451-3000; OR, WITH RESPECT TO CABLE
CAR DOCUMENTS, TO CABLE CAR BEVERAGE CORPORATION, 717 17TH STREET, SUITE 1475,
DENVER, COLORADO 80202, ATTENTION: INVESTOR RELATIONS, OR BY TELEPHONE AT (303)
298-9038. IN ORDER TO ENSURE DELIVERY OF THE DOCUMENTS PRIOR TO THE SPECIAL
MEETING, REQUESTS MUST BE RECEIVED BY NOVEMBER 14, 1997.
<R/>
All information set forth or incorporated by reference herein concerning
Cable Car has been furnished by Cable Car, and all information set forth or
incorporated by reference herein concerning Triarc and Mergerco has been
furnished by Triarc. All information set forth in this Proxy
Statement/Prospectus is qualified in its entirety by the information and
financial statements (including notes thereto) appearing in the documents
incorporated herein or deemed to be incorporated herein by reference.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS OR IN THE
DOCUMENTS INCORPORATED HEREIN BY REFERENCE IN CONNECTION WITH THE SOLICITATION
AND THE OFFERING MADE HEREBY AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY CABLE CAR
OR TRIARC. THIS PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO PURCHASE, THE SECURITIES OFFERED BY THIS PROXY
STATEMENT/PROSPECTUS OR THE SOLICITATION OF A PROXY FROM ANY PERSON IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER, SOLICITATION OF AN
OFFER OR PROXY SOLICITATION. NEITHER THE DELIVERY OF THIS PROXY
STATEMENT/PROSPECTUS NOR ANY DISTRIBUTION OF THE SECURITIES MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE INFORMATION SET FORTH HEREIN OR IN THE AFFAIRS OF CABLE CAR,
TRIARC OR MERGERCO OR ANY OF THEIR AFFILIATES OR SUBSIDIARIES SINCE THE DATE OF
THIS PROXY STATEMENT/PROSPECTUS OTHER THAN AS SET FORTH IN THE DOCUMENTS
INCORPORATED HEREIN BY REFERENCE.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This Proxy Statement/Prospectus contains forward-looking statements,
including, most importantly, information concerning possible or assumed future
results of operations of Triarc and Cable Car set forth under 'Risk Factors,'
'Companies' and 'The Proposed Merger and Related Matters,' and those preceded
by, followed by or that include the words 'may,' 'believes,' 'expects,'
'anticipates' or the
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negation thereof, or similar expressions. The achievement of the outcomes
described in such forward-looking statements is subject to both known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the industries in which they operate
generally, and of Triarc and Cable Car in particular, to be materially different
from any outcomes expressed or implied by such forward-looking statements. For
those statements, Triarc and Cable Car claim the protection of the safe harbor
for forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995. Several important factors, in addition to those discussed
under 'Risk Factors' herein and elsewhere in this document and in the documents
which are incorporated herein by reference, could affect the future results of
Triarc and Cable Car, and could cause those results to differ materially from
those expressed in the forward-looking statements contained herein. Such
additional factors include, among other things: success of operating
initiatives; development and operating costs; advertising and promotional
efforts; brand awareness; the existence or absence of adverse publicity; market
acceptance of new product offerings; changing trends in customer tastes; changes
in business strategy or development plans; quality of management; availability,
terms and deployment of capital; business abilities and judgment of personnel;
availability of qualified personnel; labor and employee benefit costs;
availability and cost of raw materials and supplies; changes in, or failure to
comply with, government regulations; the costs and other effects of legal and
administrative proceedings; pricing pressures resulting from competitive
discounting; general economic, business and political conditions in the
countries and territories where Triarc operates; the impact of such conditions
on consumer spending; and other risks and uncertainties affecting Triarc, Cable
Car and their competitors (including those that may be taken in contemplation of
the Merger), all of which are difficult or impossible to predict accurately and
many of which are beyond the control of Triarc and Cable Car. Each of Triarc and
Cable Car will not undertake and specifically declines any obligation to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events.
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SUMMARY
The following is a summary of certain information contained elsewhere in
this Proxy Statement/Prospectus and the Exhibits hereto. This Summary is
qualified in its entirety by the more detailed information and financial
statements and related notes appearing elsewhere in this Proxy
Statement/Prospectus or incorporated herein by reference. Stockholders are urged
to read carefully this Proxy Statement/Prospectus and the Appendices hereto, and
in particular the section herein entitled 'Risk Factors,' in their entirety.
THE COMPANIES
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Triarc Companies, Inc.
280 Park Avenue
New York, New York 10017
(212) 451-3000................................ Triarc is a holding company which, through its subsidiaries, is
engaged in the following businesses: beverages, restaurants,
dyes and specialty chemicals and liquefied petroleum gas. The
beverage operations are conducted by the Triarc Beverage
Group through Royal Crown Company, Inc. ('Royal Crown'),
Mistic Brands, Inc. ('Mistic') and Snapple Beverage Corp.
('Snapple'), which was acquired by Triarc in May 1997; the
restaurant operations are conducted by Arby's, Inc. (d/b/a
the Triarc Restaurant Group), which is the franchisor for
the Arby's restaurant system; the dyes and specialty chemical
operations are conducted through C.H. Patrick & Co., Inc.;
and the liquefied petroleum gas operations are conducted
through National Propane Partners, L.P. (the 'Partnership'),
and its operating subsidiary partnership, National Propane,
L.P. (the 'Operating Partnership'). National Propane Corporation
('National Propane'), an indirect wholly owned subsidiary of
Triarc, serves as the managing general partner of the Partnership
and the Operating Partnership and owns approximately 43% of their
combined equity interests with the remaining 57% owned by the
public. See 'The Companies -- Triarc Companies, Inc.'
On May 22, 1997, Triarc completed its acquisition of all of the
outstanding capital stock of Snapple from The Quaker Oats
Company (the 'Snapple Acquisition') for approximately $300
million in cash. Snapple, which markets and distributes
ready-to-drink brewed iced teas and juice drinks, had sales
in 1996 of approximately $550 million, and is considered a
market leader in the premium beverage category. See 'The
Companies -- Recent Developments -- Triarc.'
On May 5, 1997, certain indirect subsidiaries of Triarc
completed the sale of all of their 355 company owned Arby's
restaurants (the 'Arby's Restaurants Sale') to RTM Restaurant
Group, the largest franchisee in the
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Arby's system, for approximately $71 million. Arby's
continues as the franchisor of the more than 3,000 store
Arby's restaurant system. See 'The Companies -- Recent
Developments -- Triarc.'
On July 18, 1997, Royal Crown and TriBev Corporation,
subsidiaries of Triarc, completed the sale of their rights
relating to the C&C beverage line, including the C&C
trademark, to Kelco Sales & Marketing Inc. ('Kelco') (the
'C&C Sale'). In connection with the sale, Royal Crown also
agreed to sell to Kelco concentrate for C&C products and to
provide Kelco certain technical services for seven years. In
consideration for the foregoing, Royal Crown and TriBev
Corporation will receive an aggregate payment of
approximately $9.4 million, payable over seven years. See
'The Companies -- Recent Developments -- Triarc.' The Snapple
Acquisition, the Arby's Restaurants Sale and the C&C Sale are
referred to herein collectively as the '1997 Transactions.'
Triarc's corporate predecessor was incorporated in Ohio in
1929. Triarc was reincorporated in Delaware, by means of a
merger, in June 1994.
CCB Merger Corporation
c/o Triarc Companies, Inc.
280 Park Avenue
New York, New York 10017
(212) 451-3000................................ CCB Merger Corporation, a wholly owned subsidiary of Triarc
('Mergerco'), was formed under Delaware law in June 1997 by
Triarc solely for the purpose of effecting the Merger. Upon
consummation of the Merger, Mergerco will merge into Cable
Car, and the separate corporate existence of Mergerco will
thereupon cease.
Cable Car Beverage Corporation
717 17th Street, Suite 1475
Denver, Colorado 80202
(303) 298-9038................................ Cable Car Beverage Corporation is a beverage marketing company.
Cable Car's primary business is selling Stewart's premium
soft drinks (Root Beer, Orange N' Cream, Cream Ale, Ginger
Beer, Classic Key Lime and Cherries N' Cream) to beverage
distributors throughout the United States and Canada. Cable
Car also sells concentrate to soft drink bottlers who produce
and distribute beverages made from the concentrate. In
addition to Stewart's brand soft drinks, Cable Car also sells
Aspen Mountain Spring Water, Aspen flavored waters, San
Francisco Seltzer and Java Cola. Cable Car has two wholly
owned subsidiaries (the 'Cable Car Subsidiaries'), Fountain
Classics, Inc., which markets Stewart's fountain products,
and Old San Francisco Seltzer, Inc.
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On June 24, 1997, Cable Car entered into agreements amending
its licensing agreements with Stewart's Restaurants, Inc.
('Stewart's Restaurants'), as further amended on August 11,
1997. Among other things, these amendments (i) gave Cable Car
ownership of the formulas for and manufacturing rights to
concentrates used to make Stewart's soft drinks, (ii) provide
that Cable Car is permitted to use the Stewart's trademark on
any other product of any type and (iii) granted to Cable Car
the perpetual exclusive worldwide license to manufacture,
distribute and sell post-mix syrups and pre-mixes for
Stewart's beverages throughout the world (fountain-type
beverages), subject to certain rights retained by Stewart's
Restaurants. As consideration for these amendments, Cable Car
will issue to Stewart's Restaurants prior to the Effective
Time an aggregate of 150,000 shares of Cable Car Common
Stock. In addition, Cable Car will pay to Stewart's
Restaurants $400,000 in cash, of which $250,000 is payable on
March 31, 1998 and $150,000 is payable on March 31, 1999. See
'The Companies -- Recent Developments -- Cable Car.'
Cable Car was incorporated under the laws of the State of
Delaware on April 1, 1968.
THE SPECIAL MEETING OF
STOCKHOLDERS OF CABLE CAR
Time and Place.................................. The Special Meeting is scheduled to be held on Tuesday,
November 25, 1997, at 10:00 a.m., local time, at
Norwest Bank Building, 1740 Broadway, Forum Room, Denver,
Colorado 80274.
Matters To Be Considered........................ At the Special Meeting, holders of Cable Car Common Stock will
consider and vote upon a proposal to approve the Merger
Agreement and the Merger, and such other matters as may
properly be brought before the Special Meeting or any
adjournments or postponements thereof. Cable Car does not
currently intend to bring any business other than the
approval of the Merger Agreement and the Merger before the
Special Meeting or any adjournments or postponements thereof.
Vote Required................................... Approval of the Merger Agreement and the Merger requires the
affirmative vote of a majority of the outstanding shares of
Cable Car Common Stock. In determining whether the proposal
regarding the Merger Agreement and the Merger has been
approved, abstentions and broker nonvotes will be counted and
will have the same effect as a vote against such proposal.
Holders of Cable Car Common Stock are entitled to one vote at
the Special Meeting for each
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share of Cable Car Common Stock held of record at the close
of business on the Record Date (as defined in ' -- Record
Date; Shares Entitled to Vote' below). As of October 20, 1997,
directors and executive officers of Cable Car and their
affiliates, in the aggregate, were entitled to vote 1,803,609
shares of Cable Car Common Stock, representing approximately
20.2% of the total shares of Cable Car Common Stock entitled
to vote at the Special Meeting.
Stockholders Agreement.......................... As a condition to its entering into the Merger Agreement,
Triarc required Samuel M. Simpson, the President and Chief
Executive Officer of Cable Car, Susan L. Neff, Mr. Simpson's
wife, William H. Rutter, a director of Cable Car, and Susan
L. Fralick, Mr. Rutter's wife (collectively, the 'Subject
Stockholders'), to enter into a Stockholders Agreement, as
amended (the 'Stockholders Agreement'). As of October 20, 1997,
the Subject Stockholders owned an aggregate of 1,766,409
shares of Cable Car Common Stock, or approximately 19.7% of
the shares of Cable Car Common Stock entitled to vote at the
Special Meeting, which are subject to the terms of the
Stockholders Agreement (such amount does not include 12,200
shares owned by them but not subject to the Stockholders
Agreement). Each Subject Stockholder has agreed that at any
meeting of the holders of Cable Car Common Stock, he or she
will, until the effective time of the Merger or the
termination of the Merger Agreement, vote or cause to be
voted such Cable Car Common Stock and any Cable Car Common
Stock acquired by them after the date of the Stockholders
Agreement (collectively, the 'Subject Stock') in favor of
approval of the Merger Agreement and the Merger and against
certain other actions. Moreover, each Subject Stockholder has
also granted Triarc an irrevocable proxy to vote his or her
shares of Subject Stock as specified above in the event that
such Subject Stockholder fails to so vote his or her Subject
Stock in the agreed upon manner. A copy of the Stockholders
Agreement, including Amendment No. 1 thereto, is attached to
this Proxy Statement/Prospectus as Appendix B-2 and is
incorporated herein by reference. See 'The Proposed Merger
and Related Matters -- Additional Interests of Cable Car
Management -- Stockholders Agreement.'
In addition, pursuant to the Stockholders Agreement, each
Subject Stockholder has granted to Triarc an exclusive and
irrevocable option to purchase his or her Subject Stock in
whole but not in part under certain circumstances at a price
per share in cash equal to the product obtained by
multiplying 0.1722 (the 'Option
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Conversion Price') times the average (without rounding) of
the closing prices per share of Triarc Common Stock on the
New York Stock Exchange ('NYSE') on the NYSE Composite Tape
for the 15 consecutive NYSE trading days ending on the NYSE
trading day immediately preceding the date of the closing of
the exercise of the option (the 'Option Average Share
Price'), subject to the following adjustment: if the Option
Average Share Price is less than $18.875, then the Option
Conversion Price will be adjusted to equal the quotient
obtained by dividing $3.25 by the Option Average Share Price,
and if the Option Average Share Price is greater than $24.50,
then the Option Conversion Price will be adjusted to equal
the quotient obtained by dividing $4.22 by the Option Average
Share Price. See 'The Proposed Merger and Related
Matters -- Additional Interests of Cable Car
Management -- Stockholders Agreement.'
The Stockholders Agreement, including the options granted by
the Subject Stockholders thereunder, will terminate if (i)
the effective time of the Merger occurs or (ii) the Merger
Agreement is terminated pursuant to (A) a Consent
Termination, an Optional Termination, a Triarc Default
Termination or a Triarc Share Price Termination (as each such
term is defined in 'The Merger Agreement -- Termination'), or
(B) a Cable Car Default Termination or a Stockholder Vote
Termination (as each such term is defined in 'The Merger
Agreement -- Termination'), as long as Cable Car or its
stockholders shall not have received an Acquisition Proposal
(as defined in 'The Merger Agreement -- No Solicitation of
Transactions') and the Cable Car Board shall not have
withdrawn, or modified or changed in a manner adverse to
Triarc or Mergerco, its approval or recommendation of the
Merger Agreement or the Merger. See 'The Proposed Merger and
Related Matters -- Additional Interests of Cable Car
Management -- Stockholders Agreement.'
Voting of Proxies............................... A proxy in the form accompanying this Proxy
Statement/Prospectus is being solicited on behalf of the
Cable Car Board. Shares of Cable Car Common Stock represented
by properly executed proxy cards received prior to the vote
at the Special Meeting and that have not been revoked will be
voted in accordance with the instructions indicated thereon.
IF NO INSTRUCTIONS ARE INDICATED, SUCH PROXIES WILL BE VOTED
FOR APPROVAL OF THE MERGER AGREEMENT AND THE MERGER AND IN
THE DISCRETION OF THE PROXY HOLDER, AS TO ANY OTHER MATTER
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THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
Revocability of Proxies......................... A Cable Car stockholder who has given a proxy may revoke such
proxy at any time before it has been voted at the Special
Meeting by (i) giving written notice of revocation bearing a
later date than the proxy to the Secretary of Cable Car, (ii)
properly submitting to Cable Car a duly executed proxy card
relating to the same shares of Cable Car Common Stock and
bearing a later date, or (iii) attending the Special Meeting
and voting in person. Attendance at the Special Meeting will
not in and of itself revoke a proxy. All written notices of
revocation and other communications with respect to
revocation of proxies by Cable Car stockholders should be
addressed as follows: Cable Car Beverage Corporation, 717
17th Street, Suite 1475, Denver, Colorado 80202, Attention:
Secretary, or hand-delivered to the Secretary of Cable Car
before the vote is taken at the Special Meeting.
Solicitation of Proxies......................... Cable Car will bear the expense of the proxy solicitation. In
addition to the solicitation of proxies by mail, the
directors, officers and employees of Cable Car may solicit
proxies from stockholders personally or by telephone,
telegraph or facsimile transmission. Such directors, officers
and employees will not be compensated for such solicitation,
but may be reimbursed for reasonable out-of-pocket expenses.
Arrangements will also be made with banks, brokerage houses
and other custodians, nominees and fiduciaries for forwarding
proxy solicitation materials to beneficial owners of shares
held of record by such persons, and Cable Car will reimburse
such custodians, nominees and fiduciaries for their
reasonable out-of-pocket expenses in connection therewith.
Cable Car has engaged Georgeson & Company Inc. to assist in
the solicitation of proxies at an anticipated cost of approximately
$6,500 plus expenses. See 'The Special Meeting -- Solicitation
of Proxies.'
Record Date; Shares Entitled to Vote............ The close of business on October 23, 1997 has
been fixed as the record date (the 'Record Date') for
determining the holders of shares of Cable Car Common Stock
entitled to notice of and to vote at the Special Meeting. As
of September 30, 1997, 8,948,324 shares of Cable Car Common Stock
were outstanding and held of record by approximately 1,025 holders.
Quorum.......................................... The presence, in person or by proxy, of the holders of a
majority of the outstanding shares of Cable Car Common Stock
is necessary to constitute a quorum for the transaction of
business at the Special Meeting. The Special Meeting may be
adjourned if a quorum is not
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present for the purpose of obtaining additional proxies or
votes or for any other purpose and, at any subsequent
reconvening of the Special Meeting, all proxies will be voted
in the same manner as such proxies would have been voted at
the original convening of the Special Meeting (except for any
proxies that have theretofore been revoked or withdrawn),
notwithstanding that they may have been voted on at the same
or any other matter at a previous meeting.
THE MERGER
Terms of the Merger............................. At the effective time of the Merger (the 'Effective Time'),
Mergerco will merge into Cable Car, with Cable Car to be the
surviving corporation (the 'Surviving Corporation') and a
wholly owned subsidiary of Triarc. The Merger Agreement
(including Amendment No. 1 thereto) is attached as Appendix
B-1 to this Proxy Statement/Prospectus and is incorporated
herein by reference. See 'The Merger.'
Each share of Cable Car Common Stock issued and outstanding
immediately prior to the Effective Time (other than treasury
shares and shares held by Triarc and its subsidiaries and
subsidiaries of Cable Car, all of which will be canceled, and
shares with respect to which the holder has properly
exercised its appraisal rights under Delaware law) will be
converted into the right to receive 0.1722 of a share (the
'Conversion Price') of Class A Common Stock, par value $.10
per share, of Triarc ('Triarc Common Stock'), subject to the
adjustment described below, and any cash to be paid in lieu
of fractional shares of Triarc Common Stock. The Conversion
Price is subject to adjustment as follows: (i) if the Average
Triarc Share Price (as defined below) is less than $18.875,
then the Conversion Price shall be adjusted to equal the
quotient of $3.25 divided by such Average Triarc Share Price,
and (ii) if the Average Triarc Share Price is greater than
$24.50, then the Conversion Price shall be adjusted to equal
the quotient of $4.22 divided by such Average Triarc Share
Price (the Conversion Price, as so adjusted, is referred to
herein as the 'Adjusted Conversion Price'). For example, if
the Average Triarc Share Price is (i) $18.875 or greater, but
not greater than $24.50, then each share of Cable Car Common
Stock will be converted at the Effective Time into the right
to receive 0.1722 of a share of Triarc Common Stock; (ii)
$18.00, then each share of Cable Car Common Stock will be
converted at the Effective Time into the right to receive
0.18056 of a share of Triarc Common Stock; and (iii) $26.00,
then each share of
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Cable Car Common Stock will be converted at the Effective
Time into the right to receive 0.16231 of a share of Triarc
Common Stock. 'Average Triarc Share Price' means the average
(without rounding) of the closing prices per share of Triarc
Common Stock on the NYSE on the NYSE Composite Tape for the
15 consecutive NYSE trading days ending on the NYSE trading
day immediately preceding the closing date under the Merger
Agreement.
All outstanding options to purchase Cable Car Common Stock (the
'Cable Car Options'), whether or not vested or exercisable at
the Effective Time, will remain outstanding following the
Effective Time. At the Effective Time, the Cable Car Options
will, by virtue of the Merger and without any further action
on the part of Cable Car or the holder thereof, be assumed by
Triarc, and each Cable Car Option assumed by Triarc will
become and represent an option exercisable for shares of
Triarc Common Stock with the same vesting schedules, if any,
and expiration dates as such Cable Car Option immediately
prior to the Effective Time (but taking into account any
acceleration of the vesting of such Cable Car Option as a
result of the consummation of the Merger), except that (i)
each such Cable Car Option will be exercisable for that
number of shares of Triarc Common Stock (rounded to the
nearest whole share) into which the number of shares of Cable
Car Common Stock subject to such Cable Car Option immediately
prior to the Effective Time would have been converted under
the terms of the Merger Agreement applicable to the exchange
of Cable Car Common Stock for Triarc Common Stock, and (ii)
the option price per share of Triarc Common Stock will be an
amount equal to the option price per share of Cable Car
Common Stock subject to such Cable Car Option in effect
immediately prior to the Effective Time divided by the
Adjusted Conversion Price (rounded to the nearest full cent).
As discussed in 'The Proposed Merger and Related Matters --
Additional Interests of Cable Car Management -- Acceleration
of Vesting of Stock Options' below, all unvested Cable Car
Options will immediately vest at the Effective Time. Triarc
will file as soon as practicable after the Effective Time,
but in no event later than 45 days after the Effective Time,
and keep current, one or more registration statements on Form
S-8 (or any successor or appropriate form) with respect to
the shares of Triarc Common Stock subject to such substitute
options so long as such options remain outstanding. See 'The
Merger Agreement -- Cable Car Options.'
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The Cable Car Board has determined that the terms of the Merger
Agreement are fair to, and in the best interests of, Cable
Car and its stockholders. Accordingly, the Cable Car Board
has unanimously approved the Merger Agreement and the Merger
and unanimously recommends that the stockholders of Cable Car
vote FOR approval of the Merger Agreement and the Merger. The
Cable Car Board's recommendation is based on the factors
described in 'The Proposed Merger and Related
Matters -- Cable Car's Reasons for the Merger; Recommendation
of Cable Car's Board of Directors', ' -- Background of the
Merger' and ' -- Opinion of Financial Advisor to Cable Car.'
HOLDERS OF SHARES OF CABLE CAR COMMON STOCK ARE URGED TO, AND
SHOULD, READ SUCH SECTIONS, AS WELL AS APPENDIX C ATTACHED
HERETO, IN THEIR ENTIRETY.
Effective Time of the Merger.................... The Effective Time will occur as promptly as practicable after
the requisite approval of the Merger Agreement by Cable Car's
stockholders and the satisfaction or waiver of all other
conditions to the Merger. Upon the terms and subject to the
conditions of the Merger Agreement, the Effective Time will
occur at such time as the Certificate of Merger, in
accordance with the relevant provisions of the General
Corporation Law of the State of Delaware (the 'DGCL') shall
have been accepted for filing by the Secretary of State of
the State of Delaware (or at such later time as agreed to by
the parties to the Merger Agreement and specified in the
Certificate of Merger).
Additional Interests of Cable Car Management.... In considering the recommendation of the Cable Car Board with
respect to the Merger Agreement, holders of shares of Cable
Car Common Stock should be aware that certain members of
Cable Car's management and its Board of Directors have
interests in the Merger that are in addition to the interests
of Cable Car stockholders generally.
Samuel M. Simpson, the President and Chief Executive Officer
and a director of Cable Car, has a three-year employment
contract with Cable Car which provides for an annual salary
of $175,000 and annual bonuses based on Cable Car's revenues
and profits. Mr. Simpson has entered into an agreement with
Triarc that, upon the Effective Time, he will enter into an
employment agreement (the 'Simpson Employment Agreement')
with the Surviving Corporation which will supersede Mr.
Simpson's existing employment agreement with Cable Car and
provide for Mr. Simpson's employment as President and Chief
</TABLE>
13
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<S> <C>
Executive Officer of the Surviving Corporation and the Cable
Car Subsidiaries, as well as a representative for the Triarc
Beverage Group for the western United States. The Simpson
Employment Agreement will have a three-year term and provide
that Mr. Simpson will receive an annual salary of $284,300
per year (subject to increase but not decrease during the
initial term of the agreement) and be eligible to receive
additional cash incentive compensation, Triarc stock options
and other benefits as more fully described in 'Management of
Surviving Corporation -- Simpson Employment Agreement.' Mr.
Simpson will also be entitled to a $400,000 bonus upon
signing the Simpson Employment Agreement which will be
refundable on a pro rata basis should he leave his employment
prior to the first anniversary of the Effective Time. See
'Management of Surviving Corporation -- Simpson Employment
Agreement.'
In accordance with the terms of their grant, all unvested Cable
Car Options, including those granted to officers, directors
and non-director employees of Cable Car, shall become
immediately exercisable on the Effective Date of the Merger.
As described under the caption 'The Proposed Merger and Related
Matters -- Additional Interests of Cable Car
Management -- Stockholders Agreement,' Triarc required as a
condition to its entering into the Merger Agreement that the
Subject Stockholders enter into the Stockholders Agreement
for no additional consideration. The Subject Stockholders
have agreed to vote the Subject Stock in favor of approval of
the Merger Agreement and the Merger and against certain other
actions, have granted to Triarc an irrevocable proxy to vote
the Subject Stock as specified above in the event that such
Subject Stockholder fails to vote his or her Subject Stock in
the agreed upon manner, and have granted to Triarc an
exclusive and irrevocable option to purchase his or her
Subject Stock under certain circumstances.
Under the Merger Agreement, Triarc has agreed that the
certificate of incorporation and bylaws of the Surviving
Corporation and each of the Cable Car Subsidiaries will
contain provisions no less favorable with respect to the
indemnification of directors, officers, agents and employees
and other individuals than those set forth in the
certification of incorporation and bylaws of Cable Car and
the Cable Car Subsidiaries as in effect on the date of the
Merger Agreement, and further agreed that such provisions
will not be amended, repealed or otherwise modified for a
period of five years after the
</TABLE>
14
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Effective Time in any manner that would adversely affect the
rights thereunder of individuals who at or prior to the
Effective Time were directors, officers, agents or employees
of Cable Car or any of the Cable Car Subsidiaries or who were
otherwise entitled to indemnification pursuant to the
certificate of incorporation and bylaws of Cable Car or any
of the Cable Car Subsidiaries. If the Surviving Corporation
or any of the Cable Car Subsidiaries does not have the
financial resources to satisfy its indemnification
obligations to such persons as provided under its certificate
of incorporation and bylaws, Triarc has agreed that it will
provide such indemnification of such persons to the extent so
provided. See 'The Merger Agreement -- Indemnification of
Directors and Officers.'
The Cable Car Board was aware of these interests and considered
them, among other matters, in unanimously approving the
Merger Agreement. See 'The Proposed Merger and Related
Matters -- Additional Interests of Cable Car Management.'
Conditions to Consummation of the Merger........ The obligations of Triarc and Cable Car to consummate the
Merger are subject to various conditions, including the
approval of the Merger Agreement by Cable Car's stockholders
in accordance with the DGCL. See 'The Merger
Agreement -- Conditions to Consummation of the Merger.'
Termination..................................... The Merger Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, whether
before or after the stockholders of Cable Car have approved
the Merger Agreement: (a) by the mutual consent of the Boards
of Directors of each of Triarc and Cable Car; or (b) by
either of the Boards of Directors of Triarc or Cable Car if
(i) the Effective Time has not occurred on or before December
31, 1997, provided that the right to so terminate the Merger
Agreement will not be available to any party whose failure to
fulfill any obligation under the Merger Agreement has been
the cause of, or resulted in, the failure of the Effective
Time to occur on or before such date, (ii) any governmental
authority has issued an order, decree or ruling or taken any
other action (which order, decree, ruling or other action the
parties hereto shall use their best efforts to lift), in each
case permanently restraining, enjoining or otherwise
prohibiting the Merger and the other transactions
contemplated by the Merger Agreement and such order, decree,
ruling or other action shall have become final and non-
appealable, or (iii) the Merger Agreement and the
</TABLE>
15
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Merger have not been approved at the Special Meeting by the
requisite vote of the stockholders of Cable Car.
The Merger Agreement may also be terminated by the Cable Car
Board (a) if Triarc or Mergerco (i) breaches or fails in any
material respect to perform or comply with any of its
material covenants and agreements contained in the Merger
Agreement, or (ii) breaches its representations and
warranties in any material respect and such breach would have
or would be reasonably likely to have a material adverse
effect on Triarc and its subsidiaries taken as a whole, in
each case such that the conditions precedent to Cable Car's
obligations to consummate the Merger would not be satisfied,
provided that if such breach is curable by the breaching
party through the exercise of the breaching party's best
efforts and for so long as the breaching party is using its
best efforts to cure such breach, Cable Car may not so
terminate the Merger Agreement; (b) if the Cable Car Board
determines in good faith, after consultation with (i) outside
legal counsel, that termination of the Merger Agreement is
required for the Cable Car Board to satisfy its fiduciary
obligations to the Cable Car stockholders under applicable
law by reason of an unsolicited bona fide Acquisition
Proposal (as defined in 'The Merger Agreement -- No
Solicitation of Transactions') having been made, and (ii) its
financial advisor, that such Acquisition Proposal would
result in a transaction that is more favorable from a
financial point of view to the Cable Car stockholders than
the Merger, provided that Cable Car complies with certain
provisions of the Merger Agreement and notifies Triarc at
least five days in advance of its intention to terminate the
Merger Agreement or to enter into a definitive agreement with
respect to such Acquisition Proposal, and provided, further,
that within such five day period Triarc has not made a
competing proposal which is at least as favorable to the
Cable Car's stockholders from a financial point of view as
such Acquisition Proposal.
The Merger Agreement may also be terminated by the Board of
Directors of Triarc, (a) if Cable Car (i) breaches or fails
in any material respect to perform or comply with any of its
material covenants and agreements contained in the Merger
Agreement, or (ii) breaches its representations and
warranties in any material respect and such breach would have
or would be reasonably likely to have a material adverse
effect on Cable Car and its subsidiaries taken as a whole, in
each case such that the conditions precedent to Triarc's and
Mergerco's obligations to consummate the Merger would not be
satisfied, provided, that if such breach is
</TABLE>
16
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<S> <C>
curable by Cable Car through its exercise of best efforts and
for so long as Cable Car is using its best efforts to cure
such breach, Triarc may not so terminate the Merger
Agreement; (b) if (i) the Cable Car Board withdraws, modifies
or changes its approval or recommendation of the Merger
Agreement or the Merger in a manner adverse to Triarc or
Mergerco or recommends to the stockholders of Cable Car any
Acquisition Proposal or other business combination, (ii)
Cable Car receives a bona fide written Acquisition Proposal
which has not been rejected by the Cable Car Board within 14
days after receipt thereof, or (iii) prior to the
certification of the vote of Cable Car's stockholders to
approve the Merger at the Special Meeting, it shall have been
publicly disclosed or Triarc or Mergerco shall have learned
that any person, entity or 'group' (as that term is defined
in Section 13(d)(3) of the Exchange Act), other than Triarc
or its subsidiaries or any of their affiliates or the Subject
Stockholders, shall have acquired beneficial ownership
(determined pursuant to Rule 13d-3 promulgated under the
Exchange Act) of more than 20% of any class or series of
capital stock of Cable Car (including the Cable Car Common
Stock), through the acquisition of stock, the formation of a
group or otherwise, or shall have been granted any option,
right or warrant, conditional or otherwise, to acquire
beneficial ownership of more than 20% of any class or series
of capital stock of Cable Car (including the Cable Car Common
Stock) other than as disclosed in a Schedule 13D on file with
the Commission on the date of the Merger Agreement; or (c) if
the Average Triarc Share Price is less than $15.00 per share
(a 'Triarc Share Price Termination').
Fees and Expenses............................... All costs and expenses incurred in connection with the Merger
Agreement and the Merger will be paid by the party incurring
such costs and expenses, whether or not the Merger is
consummated; provided, however, that if the Merger Agreement
is terminated by Triarc pursuant to a Triarc Share Price
Termination, Triarc will reimburse Cable Car for its
reasonable costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) incurred in
connection with the Merger Agreement and the Merger in an
aggregate amount not to exceed $225,000. See 'The Merger
Agreement -- Fees and Expenses.'
Stock Exchange Listing.......................... Triarc will file an application to list the shares of Triarc
Common Stock to be issued in connection with the Merger on
the NYSE. Approval of such listing, subject to official
notice of issuance, is a condition to consummation of the
Merger.
</TABLE>
17
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Regulatory Approvals............................ Other than the Commission declaring effective the Registration
Statement containing this Proxy Statement/Prospectus,
approvals in connection with compliance with applicable Blue
Sky or state securities laws, expiration or termination of
the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the 'HSR
Act'), and the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware, neither the
management of Triarc nor the management of Cable Car believes
that any filing with or approval of any governmental
authority is necessary in connection with the consummation of
the Merger. Triarc and Cable Car received notice that the
waiting period under the HSR Act was terminated on October
15, 1997. See 'The Proposed Merger and Related
Matters -- Regulatory Approvals.'
Appraisal Rights................................ Holders of record of Cable Car Common Stock have the right to
dissent from the Merger and seek an appraisal of their shares
pursuant to Section 262 of the DGCL. See 'Appraisal Rights.'
Accounting Treatment............................ The Merger will be accounted for by Triarc under the 'purchase'
method of accounting in accordance with generally accepted
accounting principles. Therefore, the aggregate merger
consideration paid by Triarc will be allocated to the Cable
Car assets acquired and liabilities assumed based on their
fair values, and the results of operations of Cable Car will
be included in the results of operations of Triarc only for
periods subsequent to the Effective Time. See 'The Proposed
Merger and Related Matters -- Accounting Treatment' and
'Unaudited Pro Forma Condensed Financial Information.'
Certain Federal Income Tax Consequences......... The Merger is intended to qualify for federal income tax
purposes as a 'reorganization' within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the
'Code'), so that no gain or loss would be recognized by Cable
Car stockholders on the exchange of their Cable Car Common
Stock for Triarc Common Stock, except in respect of cash
received in lieu of fractional shares, and no gain or loss
would be recognized by Triarc or Cable Car. No ruling has
been (or will be) sought from the Internal Revenue Service as
to the anticipated federal income tax consequences of the
Merger. Under the Merger Agreement, Cable Car's obligation to
consummate the Merger is conditioned on the receipt of an
opinion from Sherman & Howard L.L.C. to the effect that the
Merger will constitute a reorganization within the meaning of
Section 368(a) of the Code.
</TABLE>
18
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<S> <C>
ALL STOCKHOLDERS SHOULD READ CAREFULLY THE DISCUSSION UNDER
'THE PROPOSED MERGER AND RELATED MATTERS -- CERTAIN FEDERAL
INCOME TAX CONSEQUENCES.' IN VIEW OF THE COMPLEXITIES OF
FEDERAL INCOME AND OTHER TAX LAWS, EACH CABLE CAR STOCKHOLDER
SHOULD CONSULT WITH HIS OR HER TAX ADVISOR REGARDING, AMONG
OTHER THINGS, THE FEDERAL, STATE AND LOCAL INCOME TAX
CONSEQUENCES OF THE MERGER APPLICABLE TO HIS OR HER SPECIFIC
CIRCUMSTANCES.
Comparison of Rights of Stockholders of Triarc
and Cable Car................................. Upon the consummation of the Merger, Cable Car stockholders
will become stockholders of Triarc and their rights as such
will be governed by Triarc's certificate of incorporation, as
amended to date (the 'Triarc Charter'), and Triarc's bylaws,
as amended to date (the 'Triarc Bylaws'), as well as by
Delaware law. For a description of the significant
differences between the provisions of Cable Car's certificate
of incorporation, as amended to date (the 'Cable Car
Charter'), and Cable Car's bylaws, as amended to date (the
'Cable Car Bylaws'), and the Triarc Charter and Triarc
Bylaws, see 'Comparison of Rights of Cable Car and Triarc
Stockholders.'
RISK FACTORS.................................... STOCKHOLDERS OF CABLE CAR SHOULD CAREFULLY EVALUATE THE MATTERS
SET FORTH UNDER 'RISK FACTORS.'
MANAGEMENT
Directors....................................... At the Effective Time, the directors of Mergerco will become
the directors of the Surviving Corporation. See 'Management
of Surviving Corporation.' The Merger will not result in any
change in the composition of the Board of Directors of Triarc
(the 'Triarc Board').
Officers........................................ At the Effective Time, the officers of Mergerco will become the
initial officers of the Surviving Corporation and, pursuant
to the Simpson Employment Agreement, Samuel M. Simpson will
become the President and Chief Executive Officer of the
Surviving Corporation. See 'Management of Surviving
Corporation.'
COMPARATIVE MARKET PRICES AND
DIVIDENDS -- TRIARC AND CABLE CAR............. The following tables set forth, for the quarters indicated
(ended March 31, June 30, September 30 and December 31 for
Cable Car, and for Triarc through
</TABLE>
19
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<TABLE>
<S> <C>
December 31, 1996, and ended March 30, June 29 and September 28
for Triarc in 1997), the high and low sales prices per share of
Triarc Common Stock as reported on the NYSE and the high and
low bid price per share of Cable Car Common Stock as quoted on
the Nasdaq SmallCap Market. Shares of Triarc Common Stock are
listed on the NYSE and shares of Cable Car Common Stock are
quoted on the Nasdaq SmallCap Market under the symbols 'TRY'
and 'DRNK,' respectively.
</TABLE>
<TABLE>
<CAPTION>
TRIARC COMMON STOCK
HIGH LOW
------------ ------------
<S> <C> <C>
FISCAL YEAR 1995
1st Quarter..................................... $13 1/4 $11 1/8
2nd Quarter..................................... 16 3/4 13 1/8
3rd Quarter..................................... 15 5/8 12 3/8
4th Quarter..................................... 14 1/4 9 1/2
FISCAL YEAR 1996
1st Quarter..................................... $14 3/8 $10 7/8
2nd Quarter..................................... 13 3/8 11 1/2
3rd Quarter..................................... 12 7/8 10
4th Quarter..................................... 12 3/4 10 3/4
FISCAL YEAR 1997
1st Quarter..................................... $18 $11 1/2
2nd Quarter (1)................................. 23 5/8 15 7/8
3rd Quarter..................................... 23 1/8 18
<CAPTION>
CABLE CAR COMMON STOCK
HIGH LOW
----- -----
<S> <C> <C>
FISCAL YEAR 1995
1st Quarter..................................... $1.41 $1.00
2nd Quarter..................................... 2.00 1.09
3rd Quarter..................................... 1.81 1.38
4th Quarter..................................... 1.66 1.19
FISCAL YEAR 1996
1st Quarter..................................... $1.88 $1.44
2nd Quarter..................................... 1.84 1.25
3rd Quarter..................................... 2.50 1.44
4th Quarter..................................... 2.84 2.00
FISCAL YEAR 1997
1st Quarter..................................... $2.69 $2.09
2nd Quarter (2)................................. 3.94 2.16
3rd Quarter..................................... 3.56 3.00
</TABLE>
- ------------
(1) The high and low sales prices per share of Triarc Common Stock as reported
on the NYSE between March 31, 1997 and June 23, 1997, the last full trading
day prior to the public announcement of the execution of the Merger
Agreement, were $23 5/8 and $16 1/8, respectively.
(2) The high and low bid prices per share of Cable Car Common Stock as quoted on
Nasdaq between April 1, 1997 and June 23, 1997, the last full trading day
prior to the public announcement of the execution of the Merger Agreement,
were $3.94 and $2.16, respectively.
20
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As of June 23, 1997, the last full trading day preceding the day of the
public announcement of the execution of the Merger Agreement, the closing sale
price per share of Triarc Common Stock was $20.75, the closing bid price per
share of Cable Car Common Stock was $3.88 and the equivalent pro forma price per
share of Cable Car Common Stock, calculated by multiplying the closing sale
price per share of Triarc Common Stock on such date by the Conversion Price of
0.1722, was $3.57. As of October 21, 1997, the closing sale price per share of
Triarc Common Stock was $20.06, the closing bid price per share of Cable Car
Common Stock was $3.25 and the equivalent pro forma price per share of Cable
Car Common Stock was $3.45.
No assurance can be given as to what the Conversion Price or Adjusted
Conversion Price or the market price of Triarc Common Stock will be if and when
the Merger is consummated.
CABLE CAR STOCKHOLDERS MAY OBTAIN THE MOST RECENT STOCK PRICES OF CABLE CAR
COMMON STOCK AND TRIARC COMMON STOCK BY CALLING TRIARC TOLL FREE AT (800)
787-4272, ATTENTION: INVESTOR RELATIONS.
Triarc has not paid a dividend on Triarc Common Stock in the three most
recently completed fiscal years or in the current fiscal year. Triarc currently
intends to reinvest all of its earnings for use in its business and to finance
future growth. Accordingly, Triarc does not anticipate paying cash dividends on
Triarc Common Stock in the foreseeable future.
Other than 266,469 shares of the common stock of Amcon Distributing Company
distributed to holders of record of Cable Car Common Stock as of July 5, 1995,
no dividends have been declared or paid on Cable Car Common Stock in 1995, 1996
or in the current year to date. Cable Car does not anticipate a change in this
policy in the foreseeable future.
21
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HISTORICAL AND PRO FORMA
PER SHARE DATA -- TRIARC AND CABLE CAR
The following table sets forth certain historical, pro forma and pro forma
equivalent information giving effect to the Merger and the 1997 Transactions
(see 'Summary Historical and Pro Forma Consolidated Financial Data'). The data
is based on the historical and pro forma financial statements.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996 SIX MONTHS ENDED JUNE 29, 1997
---------------------------------------- ---------------------------------------
CABLE CAR CABLE CAR
PRO PRO FORMA PRO PRO FORMA
HISTORICAL FORMA(1) EQUIVALENT(3) HISTORICAL FORMA(2) EQUIVALENT(3)
---------- -------- -------------- ---------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE(4)
Net income per share of
Common Stock
Before Extraordinary
Items
Triarc........................... $ (.28) $ (.34) -- $(1.08) $(1.10) --
Cable Car........................ $ .14 -- $ (.06) $ .07 -- $(.19)
Book value per share of
Common Stock
Triarc........................... $ .23 $ 1.14 -- $ (.81) $ .30 --
Cable Car........................ $ .67 -- $ .20 $ .75 -- $ .05
</TABLE>
- ------------
(1) The pro forma weighted average shares outstanding during the year ended
December 31, 1996 and the outstanding shares at December 31, 1996 used to
compute the pro forma data after giving effect to the Merger and 1997
Transactions was 31,465,000 and 31,450,000, respectively.
(2) The pro forma weighted average shares outstanding during the six months
ended June 29, 1997 and the outstanding shares at June 29, 1997 used to
compute the pro forma data after giving effect to the Merger and the 1997
Transactions was 31,498,000 and 31,564,000, respectively.
(3) The Cable Car pro forma equivalent per share amounts are calculated by
multiplying pro forma Net Income per Share of Common Stock Before
Extraordinary Items and pro forma Book Value per Share of Common Stock by
the Conversion Price (0.1722) so that the per share amounts are equated to
the respective values for one share of Triarc Common Stock.
(4) Triarc and Cable Car did not make any cash distributions for the periods
presented.
22
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TRIARC
SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA
The following table sets forth for the periods and as of the dates
indicated summary historical consolidated financial data for Triarc and its
subsidiaries (the 'Company') and summary consolidated pro forma financial data
for the Company after giving effect to the 1997 Transactions, as applicable, and
the Merger. The summary historical consolidated financial data of the Company
(i) as of December 31, 1996 and December 31, 1995 and for each of the years in
the three-year period ended December 31, 1996 are derived from the consolidated
financial statements audited by Deloitte & Touche LLP incorporated by reference
herein and should be read in conjunction therewith, (ii) as of December 31, 1994
are derived from the consolidated balance sheet audited by Deloitte & Touche LLP
not included herein and (iii) as of December 31, 1993, April 30, 1993 and April
30, 1992 and for the eight months ended December 31, 1993 and each of the years
in the two-year period ended April 30, 1993 are derived from the consolidated
financial statements audited by a firm other than Deloitte & Touche LLP not
included herein. The summary consolidated financial data presented as of and for
the six-month periods ended June 30, 1996 and June 29, 1997 are derived from the
unaudited condensed consolidated financial statements of the Company
incorporated by reference herein and should be read in conjunction therewith.
The Company's summary consolidated pro forma financial data are derived from the
Unaudited Pro Forma Condensed Consolidated Financial Statements of the Company
included elsewhere herein and should be read in conjunction therewith.
<TABLE>
<CAPTION>
PRO
HISTORICAL FORMA(10)
----------------------------------------------------------------------------- ------------
FISCAL YEAR ENDED EIGHT MONTHS
APRIL 30, ENDED YEAR ENDED DECEMBER 31,
----------------------- DECEMBER 31, ---------------------------------------------------
1992(1) 1993 1993(3) 1994 1995 1996 1996
---------- ---------- ------------ ---------- ---------- -------- ------------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA
Revenues.................... $1,074,703 $1,058,274 $703,541 $1,062,521 $1,184,221 $989,249 $1,328,909
Operating profit (loss)..... 58,552 34,459(4) 29,969(5) 68,933(6) 33,989(7) (6,979)(9) 10,696
Loss from continuing
operations................ (10,207) (44,549)(4) (30,439)(5) (2,093)(6) (36,994)(7) (8,485)(9) (10,547)
Income (loss) from
discontinued operations,
net....................... 2,705 (2,430) (8,591) (3,900) -- --
Extraordinary items......... -- (6,611) (448) (2,116) -- (5,416)
Cumulative effect of changes
in accounting principles,
net....................... -- (6,388) -- -- -- --
Net loss.................... (7,502) (59,978)(4) (39,478)(5) (8,109)(6) (36,994)(7) (13,901)(9)
Preferred stock dividend
requirements(2)........... (11) (121) (3,889) (5,833) -- -- --
Net loss applicable to
common stockholders....... (7,513) (60,099) (43,367) (13,942) (36,994) (13,901)
Income (loss) per share:
Continuing operations....... (.39) (1.73) (1.62) (.34) (1.24) (.28) (.34)
Discontinued operations..... .10 (.09) (.40) (.17) -- --
Extraordinary items......... -- (.26) (.02) (.09) -- (.18)
Cumulative effect of changes
in accounting
principles................ -- (.25) -- -- -- --
Net loss per share.......... (.29) (2.33) (2.04) (.60) (1.24) (.46)
Weighted-average common
shares outstanding........ 25,867 25,808 21,260 23,282 29,764 29,898 31,465
BALANCE SHEET DATA
Total assets................ 821,170 910,662 897,246 922,167 1,085,966 854,404
Long-term debt.............. 289,758 488,654 575,161 612,118 763,346 500,529
Redeemable preferred
stock..................... -- 71,794 71,794 71,794 --(8) --
Stockholders' equity
(deficit)................. 86,482 (35,387) (75,981) (31,783) 20,650(8) 6,765
</TABLE>
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<TABLE>
<CAPTION>
PRO
HISTORICAL FORMA(10)
--------------------------- ----------
SIX MONTHS ENDED
----------------------------------------------
JUNE 30, JUNE 29, JUNE 29,
1996 1997 1997
-------- ---------- ----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA
Revenues.................................................... $575,370 $ 431,523 $ 539,316
Operating profit (loss)..................................... 43,130 (11,337)(12) (7,662)
Loss from continuing operations............................. (1,798) (32,346)(12) (34,749)
Income (loss) from discontinued operations, net............. -- --
Extraordinary items......................................... (8,538) (2,954)
Cumulative effect of changes in accounting principles,
net....................................................... -- --
Net loss.................................................... (10,336)(11) (35,300)(12)
Preferred stock dividend requirements(2).................... -- --
Net loss applicable to common stockholders.................. (10,336) (35,300)
Income (loss) per share:
Continuing operations....................................... (.06) (1.08) (1.10)
Discontinued operations..................................... -- --
Extraordinary items......................................... (.29) (.10)
Cumulative effect of changes in accounting principles....... -- --
Net loss per share.......................................... (.35) (1.18)
Weighted-average common shares outstanding.................. 29,916 29,931 31,498
BALANCE SHEET DATA
Total assets................................................ 1,156,990 1,202,137
Long-term debt.............................................. 767,737 767,737
Redeemable preferred stock.................................. -- --
Stockholders' equity (deficit).............................. (24,396) 9,309
</TABLE>
- ------------
(1) Selected Financial Data for the fiscal year ended April 30, 1992 has been
retroactively restated to reflect the discontinuance of the Company's
utility and municipal services and refrigeration operations in 1993.
(2) The Company has not paid any dividends on its common shares during any of
the periods presented.
(3) The Company changed its fiscal year from a fiscal year ending April 30 to a
calendar year ending December 31 effective for the eight-month transition
period ended December 31, 1993 ('Transition 1993').
(4) Reflects certain significant charges recorded during the fiscal year ended
April 30, 1993 as follows: $51,689,000 charged to operating profit
representing $43,000,000 of facilities relocation and corporate
restructuring relating to a change in control of the Company and $8,689,000
of other net charges; $48,698,000 charged to loss from continuing
operations representing the aforementioned $51,689,000 charged to operating
profit, $8,503,000 of other net charges, less $19,391,000 of income tax
benefit and minority interest effect relating to the aggregate of the above
charges, and plus $7,897,000 of provision for income tax contingencies and
$67,060,000 charged to net loss representing the aforementioned $48,698,000
charged to operating profit, a $5,363,000 write-down relating to the
impairment of certain unprofitable operations and accruals for
environmental remediation and losses on certain contracts in progress, net
of income tax benefit and minority interests, a $6,611,000 extraordinary
charge from the early extinguishment of debt and $6,388,000 cumulative
effect of changes in accounting principles.
(5) Reflects certain significant charges recorded during Transition 1993 as
follows: $12,306,000 charged to operating profit principally representing
$10,006,000 of increased insurance reserves; $25,617,000 charged to loss
from continuing operations representing the aforementioned $12,306,000
charged to operating profit, $5,050,000 of certain litigation settlement
costs, $3,292,000 of reduction to net realizable value of certain assets
held for sale other than discontinued operations, less $2,231,000 of
(footnotes continued on next page)
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(footnotes continued from previous page)
income tax benefit and minority interest effect relating to the aggregate
of the above charges, and plus a $7,200,000 provision for income tax
contingencies; and $34,437,000 charged to net loss representing the
aforementioned $25,617,000 charged to loss from continuing operations and
an $8,820,000 loss on disposal of discontinued operations.
(6) Reflects certain significant charges recorded during 1994 as follows:
$9,972,000 charged to operating profit representing $8,800,000 of
facilities relocation and corporate restructuring and $1,172,000 of
advertising production costs that in prior periods were deferred;
$4,782,000 charged to loss from continuing operations representing the
aforementioned $9,972,000 charged to operating profit, $7,000,000 of costs
of a proposed acquisition not consummated less $6,043,000 of gain on sale
of natural gas and oil business, less income tax benefit relating to the
aggregate of the above charges of $6,147,000; and $10,798,000 charged to
net loss representing the aforementioned $4,782,000 charged to loss from
continuing operations, $3,900,000 loss on disposal of discontinued
operations and a $2,116,000 extraordinary charge from the early
extinguishment of debt.
(7) Reflects certain significant charges recorded during 1995 as follows:
$19,331,000 charged to operating profit representing a $14,647,000 charge
for a reduction in the carrying value of long-lived assets impaired or to
be disposed of, $2,700,000 of facilities relocation and corporate
restructuring and $1,984,000 of other net charges; and $15,199,000 charged
to loss from continuing operations and net loss representing the
aforementioned $19,331,000 charged to operating profit, $7,794,000 of
equity in losses and write-down of investments in affiliates, less
$15,088,000 of net gains consisting of $11,945,000 of gain on sale of
excess timberland and $3,143,000 of other net gains, less $2,938,000 of
income tax benefit relating to the aggregate of the above charges and plus
a $6,100,000 provision for income tax contingencies.
(8) In 1995 all of the redeemable preferred stock was converted into common
stock and an additional 1,011,900 common shares were issued resulting in an
$83,811,000 improvement in stockholders' equity (deficit).
(9) Reflects certain significant charges and credits recorded during 1996 as
follows: $73,100,000 charged to operating loss representing a $64,300,000
charge for a reduction in the carrying value of long-lived assets impaired
or to be disposed of and $8,800,000 of facilities relocation and corporate
restructuring; $1,279,000 charged to loss from continuing operations
representing the aforementioned $73,100,000 charged to operating loss,
$77,000,000 of gains on sale of businesses, net and plus $5,179,000 of
income tax provision on the above net credits; and $6,695,000 charged to
net loss representing the aforementioned $1,279,000 charged to loss from
continuing operations and a $5,416,000 extraordinary charge from the early
extinguishment of debt.
(10) For a description of the adjustments and the assumptions used in preparing
the Unaudited Pro Forma Summary Consolidated Financial Data, see Notes to
the Unaudited Pro Forma Condensed Consolidated Balance Sheet and Notes to
the Unaudited Pro Forma Condensed Consolidated Statements of Operations
included elsewhere herein.
(11) Reflects an $8,538,000 extraordinary charge from the early extinguishment
of debt recorded during the six-month period ended June 30, 1996.
(12) Reflects certain significant charges and credits recorded during the six
months ended June 29, 1997 as follows: $39,790,000 charged to operating
loss representing acquisition related costs of $32,440,000 related to the
acquisition of Snapple and $7,350,000 of facilities relocation and
corporate restructuring charges; $39,305,000 charged to loss from
continuing operations representing the aforementioned $39,790,000 charged
to operating loss and other net credits of $485,000; and $42,259,000
charged to net loss representing the aforementioned $39,305,000 charged to
loss from continuing operations and a $2,954,000 extraordinary charge from
the early extinguishment of debt.
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CABLE CAR BEVERAGE CORPORATION
SUMMARY HISTORICAL FINANCIAL DATA
The following data, insofar as it relates to Cable Car's consolidated
statement of operations for the years ended December 31, 1996, 1995 and 1994,
and the balance sheet as of December 31, 1996 and 1995, has been derived from
the consolidated financial statements audited by Price Waterhouse LLP,
independent accountants appearing in Part IV of Cable Car's Annual Report on
Form 10-K for the year ended December 31, 1996, as amended by an amendment
thereto filed with the Commission on May 1, 1997, each of which is incorporated
by reference in this Proxy Statement/Prospectus, and copies of which are
attached hereto as Appendices A-1 and A-2, respectively. The consolidated
statement of operations data for the six months ended December 31, 1993 and the
fiscal years ended June 30, 1993 and 1992, and the consolidated balance sheet
data as of December 31, 1994 and 1993, and June 30, 1993 and 1992 have been
derived from the historical consolidated financial statements of Cable Car for
such periods. The consolidated statements of operations data for the six months
ended June 30, 1997 and 1996 and the consolidated balance sheet data as of June
30, 1997 are derived from unaudited consolidated financial statements
incorporated by reference in this Proxy Statement/Prospectus, and copies of
which are attached hereto as Appendix A-3. The interim financial data has been
prepared on the same basis as the audited consolidated financial statements and,
in the opinion of Cable Car, include all adjustments (consisting of normal
recurring adjustments) necessary for a fair presentation of such information.
Historical results are not necessarily indicative of results for any future
period.
The following table data should be read in conjunction with the
consolidated financial statements and notes thereto, and management's commentary
thereon contained in Item 7 of Cable Car's Annual Report on Form 10-K for the
year ended December 31, 1996, as amended, attached hereto as Appendices A-1 and
A-2, and Cable Car's Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 1997, attached hereto as Appendix A-3.
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED JUNE 30, ENDED YEAR ENDED DECEMBER 31,
---------------------- DECEMBER 31, ----------------------------
1992 1993(1) 1993(2) 1994 1995(3) 1996
------------------- ------------------- ------------ ------ ------- -------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue................... $14,839 $15,538 $3,031 $8,322 $12,844 $18,873
Net income (loss)......... (22) (348) 143 722 883 1,257
Net income (loss) per
common share:........... (.05) .02 .09 .10 .14
Weighted average common
and common equivalent
shares outstanding...... 7,057 7,641 7,797 8,319 8,916 9,255
BALANCE SHEET DATA:
Total assets.............. 5,266 4,054 3,921 4,449 5,361 7,142
Long-term debt............ 108 3 10 6 -- --
Stockholders' equity...... 3,067 2,953 3,097 3,945 4,402 5,982
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-----------------------------------------------------------
1996 1997
---------------------------- ----------------------------
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue................... $8,933 $12,747
Net income (loss)......... 603 693
Net income (loss) per
common share:........... .07 .07
Weighted average common
and common equivalent
shares outstanding...... 9,022 9,603
BALANCE SHEET DATA:
Total assets.............. 9,173
Long-term debt............ --
Stockholders' equity...... 6,752
</TABLE>
- ------------
(1) On June 7, 1993, Cable Car sold its wholly owned subsidiary, Sheya Brothers
Specialty Beverages ('SBCC'), to AMCON Distributing Company ('AMCON') in
return for 12.5% of the then issued and outstanding shares of common stock
of AMCON. SBCC had contributed $10.4 million and $10.6 million to annual
revenue and a pretax loss of approximately $291,000 and pretax earnings of
approximately $89,000 for the fiscal years ended June 30, 1993 and 1992,
respectively.
(2) In 1993, Cable Car elected to change its fiscal year end from June 30 to
December 31.
(3) In the third quarter of 1995, Cable Car wrote down its investment in AMCON
stock and recorded a pretax charge of $848,342. Cable Car then distributed
266,469 shares of AMCON common stock as a dividend to Cable Car stockholders
of record as of July 5, 1995. Also during 1995, Cable Car determined that,
based upon Cable Car's then current and expected future earnings, it was
more likely than not that Cable Car would realize its future income tax
benefits. Based on this determination, Cable Car released its valuation
allowance against deferred tax assets and recorded a tax benefit of
$936,440.
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RISK FACTORS
This Proxy Statement/Prospectus contains forward-looking statements that
involve risks and uncertainties. See 'Cautionary Statement Concerning
Forward-Looking Statements.' Holders of Cable Car Common Stock should consider
carefully all the information contained in this Proxy Statement/Prospectus and,
in particular, the following risk factors:
HOLDING COMPANY STRUCTURE
Because Triarc is a holding company, its ability to service debt and pay
dividends, including dividends on the Triarc Common Stock, is primarily
dependent (in addition to its cash, cash equivalents and short-term investments
on hand) upon cash flows from its subsidiaries, including loans, cash dividends
and reimbursement by subsidiaries to Triarc in connection with its providing
certain management services and payments by subsidiaries under certain tax
sharing agreements. At June 29, 1997, Triarc's (parent only) cash, cash
equivalents and short-term investments were approximately $95.2 million.
Under the terms of various indentures and credit arrangements which govern
Triarc's principal subsidiaries and which will govern them in the future,
Triarc's principal subsidiaries are subject to certain restrictions on their
ability to pay dividends and/or make loans or advances to Triarc. The ability of
any of Triarc's subsidiaries to pay cash dividends and/or make loans or advances
to Triarc is also dependent upon the respective abilities of such entities to
achieve sufficient cash flows after satisfying their respective cash
requirements, including debt service, to enable the payment of such dividends or
the making of such loans or advances.
In addition, the equity interests of Triarc in its subsidiaries rank junior
to all of the respective indebtedness, whenever incurred, of such entities in
the event of their respective liquidation or dissolution. As of June 29, 1997,
the subsidiaries of Triarc had aggregate long-term indebtedness of approximately
$780.5 million (excluding intercompany indebtedness).
As a result of the foregoing contractual restrictions and structural
subordination, Triarc may be unable to gain access to the cash flow or the
assets of its subsidiaries in amounts sufficient to discharge its obligations
under its indebtedness. See ' -- Substantial Leverage.'
SUBSTANTIAL LEVERAGE
Triarc is highly leveraged. On a pro forma basis giving effect to the 1997
Transactions and the Merger, total consolidated indebtedness of Triarc as of
June 29, 1997, would have been approximately $783.5 million. On a pro forma
basis giving effect to the 1997 Transactions and the Merger, Triarc's
consolidated interest expense would have been approximately $93.5 million for
the year ended December 31, 1996 and $42.0 million for the six months ended June
29, 1997. As of June 29, 1997, Triarc's (parent only) indebtedness was
approximately $45.7 million (excluding intercompany indebtedness other than a
$40.7 million note owed to the Operating Partnership). As a consequence of such
leverage, (i) Triarc's ability to obtain additional financing in the future for
working capital, capital expenditures, future acquisitions or other general
corporate purposes may be limited; (ii) a substantial portion of Triarc's
consolidated cash flow from operations may be dedicated to payments in respect
of its indebtedness; (iii) Triarc's flexibility in responding to economic
downturns and competitive pressures may be limited; (iv) Triarc may have
difficulty discharging its obligations under its indebtedness, including,
without limitation, the $40.7 million loan to the Company by the Operating
Partnership and Triarc's guarantees of certain debt of its subsidiaries; and (v)
Triarc's ability to pay dividends on the Triarc Common Stock may be limited. In
addition, subject to any restrictions that may exist from time to time under
certain agreements, Triarc and its subsidiaries may incur additional
indebtedness in the future for general corporate purposes, which may include
acquisitions, investments or capital expenditures.
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NET LOSSES
Triarc reported net losses (after preferred dividend requirements for
fiscal years to 1994) for each fiscal year from 1989 through 1996 (including the
transition period ended December 31, 1993) and for the six-month period ended
June 29, 1997. Although the diversity of Triarc's business segments precludes
overall generalizations about its operating results, Triarc believes that the
losses for the three fiscal years ended December 31, 1996 were affected in large
part by write downs of operating assets as required by FASB 121 (an aggregate of
approximately $78.9 million for fiscal 1995 and 1996), charges related to the
relocation of offices and management restructurings (an aggregate of
approximately $20.3 million for the three years), extraordinary charges relating
to the early extinguishment of indebtedness (an aggregate of approximately $7.5
million for fiscal 1994 and 1996), and operating problems incurred during fiscal
1995 and 1996 relating to the introduction of new beverage products and the
operations of new restaurants that were unable to profitably cover their
carrying costs. There can be no assurance that Triarc's operating results will
improve in future periods.
POSSIBLE PRICE VOLATILITY OF TRIARC COMMON STOCK
The market price of Triarc Common Stock has been, and may continue to be,
volatile. The market price of Triarc Common Stock may be significantly affected
by factors such as actual or anticipated fluctuations in Triarc's operating
results, new product or concept development by Triarc or its competitors,
changing trends in customer tastes, changes in financial estimates by securities
analysts, general market conditions and other factors.
DIVIDENDS
Triarc has not paid a dividend on the Triarc Common Stock in the three most
recently completed fiscal years or in the current fiscal year. Triarc currently
intends to reinvest all of its earnings for use in its business and to finance
future growth. Accordingly, Triarc does not anticipate paying cash dividends on
Triarc Common Stock in the foreseeable future.
SUCCESSFUL COMPLETION AND INTEGRATION OF ACQUISITIONS
One element of Triarc's business strategy is to continuously evaluate
acquisitions and business combinations to augment its businesses. There can be
no assurance that Triarc will identify and complete suitable acquisitions or if
completed, that such acquisitions will be successfully integrated. Acquisitions
involve numerous risks, including difficulties assimilating new operations and
products. There can be no assurance that any acquisition would result in
long-term benefits to Triarc or that management would be able to manage
effectively the resulting business.
ACQUISITION AND INTEGRATION OF SNAPPLE
On May 22, 1997, Triarc acquired all of the outstanding capital stock of
Snapple from The Quaker Oats Company ('Quaker') for approximately $300 million
in cash. After being acquired by Quaker in December 1994 for approximately $1.7
billion, Snapple's performance deteriorated significantly. Case sales and
revenues declined from 72 million cases and $675.8 million, respectively, in
1994 to 49.6 million cases and $498.3 million, respectively, for the 12 months
ended March 1997. Triarc believes that Snapple's deteriorating results under
prior ownership were largely attributable to the following factors: (i)
Snapple's relationships with its distributors became strained because it failed
to develop strong relationships with them; (ii) Snapple's frequency of new
product introduction declined dramatically; (iii) Snapple replaced successful
advertising personae with expensive marketing campaigns which proved to be
ineffective; and (iv) Snapple attempted to expand international sales by
investing heavily in marketing and infrastructure, which expenditures did not
produce corresponding sales volumes. In order to stabilize and ultimately
increase Snapple's sales and profitability, Triarc intends to capitalize on
Snapple's continued strong brand equity, increase development of new products
and packaging, utilize creative and more effective advertising and marketing to
promote Snapple products and to develop stronger relationships with Snapple's
distributors, many of whom also distribute Mistic and/or Royal Crown products.
In addition, Triarc hopes to realize cost savings through more aggressive
purchasing of
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raw materials (such as glass bottles, flavors and other ingredients).
Furthermore, Snapple has historically spent significantly more on advertising
and marketing per case sold than the Triarc Beverage Group has spent with
respect to Mistic products. While the Triarc Beverage Group has plans to spend
significantly more per case on Snapple advertising and marketing than its
historical spending levels for Mistic, it still intends to spend significantly
less than the historical per case spending levels of Snapple's prior owner.
Snapple also spent significantly more per case on general and administrative
expenses than does the Triarc Beverage Group for its Mistic business. The Triarc
Beverage Group intends to spend significantly less on general and administrative
expenses than Snapple's prior owner. Triarc faces risks in integrating the
operations of Snapple into the Triarc Beverage Group. There can be no assurance
that case volume stabilization or growth or greater profitability can be
achieved or that cost savings will be realized, that there will not be delays in
achieving such cost savings or that the Triarc Beverage Group will not incur
unanticipated costs in implementing its post-acquisition strategy with respect
to Snapple.
ACQUISITION AND INTEGRATION OF CABLE CAR
Triarc faces risks associated with implementing its post-Merger strategy
and integrating the operations of Cable Car into the Triarc Beverage Group. The
Triarc Beverage Group hopes to be able to increase Cable Car's sales and
profitability through improved distribution and increased purchasing
efficiencies with respect to raw materials (such as glass bottles, flavors and
other ingredients). There can be no assurance, however, that such cost savings
will be realized, that there will not be delays in achieving such cost savings
or that the Triarc Beverage Group will not incur unanticipated costs in
implementing its post-Merger strategy and integrating the operations of Cable
Car into the Triarc Beverage Group.
ENVIRONMENTAL LIABILITIES
Certain of Triarc's operations are subject to federal, state and local
environmental laws and regulations concerning the discharge, storage, handling
and disposal of hazardous or toxic substances. Such laws and regulations provide
for significant fines, penalties and liabilities, in certain cases without
regard to whether the owner or operator of the property knew of, or was
responsible for, the release or presence of such hazardous or toxic substances.
In addition, third parties may make claims against owners or operators of
properties for personal injuries and property damage associated with releases of
hazardous or toxic substances. Although Triarc believes that its operations
comply in all material respects with all applicable environmental laws and
regulations, it cannot predict what environmental legislation or regulations
will be enacted in the future or how existing or future laws or regulations will
be administered or interpreted. Triarc cannot predict the amount of future
expenditures which may be required in order to comply with any environmental
laws or regulations or to satisfy any such claims. Triarc believes that its
operations comply in all material respects with all applicable environmental
laws and regulations.
WEATHER CONDITIONS AFFECT THE DEMAND FOR PROPANE
Weather conditions, which can vary substantially from year to year, have a
significant impact on the demand for propane for both heating and agricultural
purposes. Many customers of the Operating Partnership rely heavily on propane as
a heating fuel. Accordingly, the volume of propane sold is at its highest during
the six-month peak heating season of October through March and is directly
affected by the severity of the winter weather. Historically, approximately 66%
of the Operating Partnership's retail propane volume has been sold during this
peak heating season. Actual weather conditions, therefore, may significantly
affect the Operating Partnership's financial performance. For example, warm
weather during the winter of 1994-95 significantly decreased the overall demand
for propane, and adversely affected the Operating Partnership's operating
income. Furthermore, despite the fact that overall weather conditions may be
normal variations in weather in one or more regions in which the Operating
Partnership operates can significantly affect the total volume of propane sold
by the Operating Partnership, and consequently, the Operating Partnership's
results of operations. Variations in the weather in the Midwest, where the
majority of the Operating Partnership's retail volume is sold, and in the
Northeast, where the Operating Partnership has a greater concentration of higher
margin residential
29
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accounts, will generally have a greater impact on the Operating Partnership's
revenues than variations in the weather in other markets.
ENERGY EFFICIENCY AND TECHNOLOGY TRENDS MAY AFFECT DEMAND FOR PROPANE
The national trend toward increased energy conservation and technological
advances, including installation of improved insulation and the development of
more efficient furnaces and other heating devices, has adversely affected, and
may continue to adversely affect, demand for propane by retail customers. The
Operating Partnership cannot predict the effect of future conservation measures
or the effect that any technological advances in heating, conservation, fuel
efficiency, energy generation or other devices might have on its operations.
ROYAL CROWN'S RELIANCE ON CERTAIN BOTTLER'S AND PRIVATE LABEL SALES
Royal Crown sells its soft drink concentrate to a number of independent
bottlers who are granted exclusive licenses to sell RC Cola brand products
within a defined territory. Two of Royal Crown's bottlers, Chicago Bottling
Group and Beverage America, accounted for approximately 20.1% and 10.2%,
respectively, of Royal Crown's domestic unit sales of concentrate for branded
products during 1996. Royal Crown's ten largest bottler groups accounted for
63.6% and 68.4% of Royal Crown's domestic unit sales of concentrate for branded
products during 1995 and 1996, respectively. If one or more of these major
bottlers were to discontinue selling RC Cola brand products for any reason,
Royal Crown's sales would be adversely affected in the areas serviced by such
bottlers.
Royal Crown provides concentrate to Cott Corporation ('Cott') pursuant to a
concentrate supply agreement entered into in 1994 (the 'Cott Worldwide
Agreement'). Under the Cott Worldwide Agreement, Royal Crown is Cott's exclusive
worldwide supplier of cola concentrates for retailer-branded beverages in
various containers. In addition, Royal Crown also supplies Cott with non-cola
carbonated soft drink concentrates. Cott delivers the private label concentrate
and packaging materials to independent bottlers for bottling. The finished
private label product is then shipped to Cott's trade customers, including major
retailers such as Wal-Mart, A&P and Safeway. The Cott Worldwide Agreement
requires that Cott purchase at least 75% of its total worldwide requirements for
carbonated soft drink concentrates from Royal Crown. The initial term of the
Cott Worldwide Agreement is 21 years, with multiple six-year extensions.
Although the Cott Worldwide Agreement provides that Royal Crown may manufacture
and sell private label cola concentrate to other packagers or bottlers if Cott
does not meet certain minimum purchase requirements, there can be no assurance
that Royal Crown would be able to enter into satisfactory arrangements with an
alternative private label concentrate purchaser. In 1994, 1995 and 1996,
revenues from the Cott business represented approximately 14.2%, 12.1% and
12.6%, respectively, of Royal Crown's total revenues. If Cott's business
declines, or if the Cott Worldwide Agreement is terminated, Royal Crown's sales
could be adversely affected.
COMPETITION
Triarc's businesses operate in highly competitive industries. Triarc has
major competitors in each of its business segments, many of which have
significantly greater financial, marketing, personnel and other resources than
does Triarc.
The Triarc Beverage Group's premium and soft drink products compete
generally with all liquid refreshments and in particular with numerous
nationally-known soft drinks such as Coca-Cola and Pepsi-Cola. The Triarc
Beverage Group also competes with regional soft drink producers and other
'private label' soft drink suppliers. The Triarc Beverage Group competes with
other beverage companies not only for consumer acceptance but also for shelf
space in retail outlets and for marketing focus by the Triarc Beverage Group's
distributors, most of whom also distribute other beverage brands. The principal
methods of competition in the beverage industry include product quality and
taste, brand advertising, trade and consumer promotions, pricing, packaging and
the development of new products. In recent years, price competition has been
especially intense with respect to sales of beverages to food stores, with local
bottlers granting significant discounts and allowances off wholesale prices in
order to
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maintain or increase market share in the food store segment. While price
discounting by bottlers indirectly affects the Triarc Beverage Group's operating
results, Triarc cannot quantify the impact of such price competition.
Triarc completed the sale of all of its company owned Arby's restaurants in
May 1997. Subsequent to such sale, Arby's revenues are primarily dependent on
royalties based on sales at franchisees' restaurants. The Arby's restaurant
system faces direct and indirect competition from numerous well-established
competitors, including national and regional fast food chains. In addition,
Arby's competes with locally owned restaurants, drive-ins, diners and numerous
other establishments that offer low-priced food to the public. The principal
means of competition in the fast food industry are price, the quality of
products, quality and speed of service, advertising, name identification,
restaurant location and attractiveness of facilities. Triarc believes that a
number of fast food companies have in recent years experienced flattening growth
rates and declines in average sales per domestic restaurant. In response,
certain companies, including Arby's, have adopted price discounting strategies.
During past periods of discount promotions, Arby's has experienced increases in
sales, but, with respect to company owned restaurant operations, lower gross
margins. As a result, Triarc cannot quantify the net impact of price competition
on Arby's results of operations. Accordingly, continued price discounting in the
fast food industry could have an adverse effect on Arby's results of operations.
The Partnership, through its subsidiary partnership, the Operating
Partnership, competes in each of its marketing areas with numerous other propane
distributors. In addition, propane is sold in competition with all other
commonly used fuels and energy sources, including electricity, fuel oil and
natural gas. The primary competing energy source to propane is electricity,
which is available in substantially all of the market areas served by the
Partnership. Fuel oil is a major competitor for home heating and other purposes
and is sold by a diversified group of companies throughout the marketing areas
served by the Partnership.
C.H. Patrick has many competitors, including large chemical companies and
smaller concerns. No single manufacturer dominates the industry in which C.H.
Patrick participates. The principal elements of competition in the dyes and
specialty chemicals industry include quality, price and service.
DEPENDENCE ON KEY PERSONNEL
Triarc believes that its success has been and will continue to be dependent
to a significant extent upon the efforts and abilities of its senior management
team. The failure by Triarc to retain members of its senior management team
could adversely affect Triarc's ability to build on the efforts undertaken by
its current management to increase the efficiency and profitability of its
businesses. The loss of Nelson Peltz, the Chairman and Chief Executive Officer
of Triarc, or Peter May, the President and Chief Operating Officer of Triarc,
other senior members of Triarc's senior management or the senior management of
its subsidiaries could adversely affect Triarc.
CONTROL BY CERTAIN SHAREHOLDERS
DWG Acquisition Group, L.P. ('DWG Acquisition') owns directly or indirectly
approximately 24.9% of the outstanding Triarc Common Stock as of September 28,
1997. Messrs. Peltz and May, as the sole general partners of DWG Acquisition,
beneficially own all of the Triarc Common Stock owned by DWG Acquisition. In
addition, Messrs. Peltz and May individually beneficially own certain additional
shares of Triarc Common Stock which, when combined with the shares owned through
DWG Acquisition, would constitute approximately 27.9% and 27.0%, respectively,
of the Triarc Common Stock as of September 28, 1997. As a result of such
ownership, Messrs. Peltz and May are able to exercise significant influence over
the election of members of the Boards of Directors of Triarc and its
subsidiaries and may also be able to influence significantly the outcome of
certain corporate actions requiring stockholder approval, including, mergers,
consolidations and the sale of all or substantially all of Triarc's assets, and
may be in a position to prevent or cause a change in control of Triarc.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Merger is expected to be a tax-free reorganization within the meaning
of Section 368(a) of the Code for federal income tax purposes, so that no gain
or loss will be recognized by Cable Car's stockholders on the exchange of Cable
Car Common Stock for Triarc Common Stock, except in respect of cash received in
lieu of fractional shares. The receipt of a tax opinion regarding the
availability of such tax treatment is a condition to the consummation of the
Merger, although such condition may be waived. Cable Car stockholders should be
aware that such an opinion would not bind the Internal Revenue Service (the
'IRS'), and the IRS is therefore not precluded from asserting a contrary
opinion. A successful IRS challenge to the tax-free status of the Merger would
result in Cable Car stockholders recognizing taxable gain or loss with respect
to each share of Cable Car Common Stock surrendered equal to the difference
between the stockholder's tax basis in such share and the fair market value, as
of the Effective Time, of the Triarc Common Stock received in exchange therefor.
Cable Car stockholders are urged to consult their own tax advisors regarding the
tax consequences of the Merger. See 'The Proposed Merger and Related
Matters -- Certain Federal Income Tax Consequences.'
ADDITIONAL INTERESTS OF CABLE CAR MANAGEMENT
In considering the recommendation of the Cable Car Board with respect to
the Merger Agreement and the Merger, holders of Cable Car Common Stock should be
aware that certain directors and officers of Cable Car have certain interests in
respect of the Merger that are in addition to the interests of Cable Car
stockholders generally. The Cable Car Board was aware of these interests and
considered them, among other matters, in approving the Merger Agreement and the
Merger. See 'The Proposed Merger and Related Matters -- Additional Interests of
Cable Car Management.'
EFFECT OF PREFERRED STOCK; ANTI-TAKEOVER PROVISIONS
The Triarc Charter authorizes the issuance of shares of 'blank check'
preferred stock which will have such designations, rights and preferences as may
be determined from time to time by the Triarc Board. Accordingly, the Triarc
Board is empowered, without stockholder approval, to issue preferred stock with
dividend, liquidation, conversion, voting or other rights which could adversely
affect the voting power and other rights of the holders of Triarc Common Stock.
The preferred stock could be used to discourage, delay or prevent a change in
control of Triarc which is determined by the Triarc Board to be undesirable.
Although Triarc has no present intention to issue any shares of preferred stock,
there can be no assurance that Triarc will not do so in the future. See
'Description of Triarc Capital Stock.'
In addition, certain provisions in the Triarc Charter are intended to
discourage or delay a hostile takeover of control of Triarc and are summarized
in detail under the caption 'Comparison of Rights of Cable Car and Triarc
Stockholders -- Certain Anti-Takeover Provisions in the Triarc Charter.'
EFFECT OF TRIARC STOCK OPTIONS
Triarc maintains the 1993 Equity Participation Plan (the 'Equity Plan'),
which provides for the grant of stock options and restricted stock to certain
officers, key employees, consultants and non-employee directors. In addition,
non-employee directors are eligible to receive shares of Triarc Common Stock in
lieu of retainer or meeting attendance fees. The Equity Plan provides for a
maximum of 10,000,000 shares of Triarc Common Stock to be issued on the exercise
of options, to be granted as restricted stock or to be issued to non-employee
directors in lieu of fees. Under the Equity Plan, as of September 28, 1997,
options to acquire an aggregate of 8,798,170 shares of Triarc Common Stock were
outstanding, 500,775 restricted shares of Triarc Common Stock (the restrictions
on which have lapsed) had been issued, 22,812 shares of Triarc Common Stock had
been issued to non-employee directors and 521,750 shares of Triarc Common Stock
were available for future grants. The exercise of outstanding options or the
future issuance of options (and the exercise of such options) or restricted
stock will dilute the beneficial ownership of holders of Triarc Common Stock
after the Merger.
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COMPARATIVE RIGHTS OF CABLE CAR STOCKHOLDERS BEFORE AND AFTER THE MERGER
There are various differences between the rights of Cable Car's
stockholders and the rights of Triarc's stockholders. See 'Description of Triarc
Capital Stock' and 'Comparison of Rights of Cable Car and Triarc Stockholders.'
COMPANIES
TRIARC COMPANIES, INC.
Triarc is a holding company which, through its subsidiaries, is engaged in
the following businesses: beverages, restaurants, dyes and specialty chemicals
and liquefied petroleum gas. The beverage operations are conducted by the Triarc
Beverage Group through Royal Crown Company, Inc. ('Royal Crown'), Mistic Brands,
Inc. ('Mistic') and Snapple Beverage Corp., which was acquired by Triarc in May
1997; the restaurant operations are conducted by the Arby's (d/b/a the Triarc
Restaurant Group), which is the franchisor for the Arby's restaurant system; the
dyes and specialty chemical operations are conducted through C.H. Patrick & Co.,
Inc.; and the liquefied petroleum gas operations are conducted through the
Partnership and its operating subsidiary partnership, the Operating Partnership.
In addition, prior to April 29, 1996, Triarc was also engaged in the textile
business through Graniteville Company. On such date the textile related assets
of Graniteville Company were sold.
The Triarc Beverage Group oversees the operations of Triarc's beverage
subsidiaries, Snapple, Mistic and Royal Crown. Snapple, acquired from Quaker in
May 1997, markets and distributes ready-to-drink brewed iced teas and juice
drinks and is a market leader in the premium beverage category. Triarc has
undertaken and expects to continue to undertake measures designed to stabilize
and ultimately increase Snapple's sales and profitability. Such measures include
capitalizing on Snapple's continued strong brand equity, increasing the
development of new products and packaging, utilizing creative and more effective
advertising and marketing to promote Snapple products and developing stronger
relationships with Snapple's distributors, many of whom also distribute Mistic
and/or Royal Crown products. In addition, Triarc hopes to realize cost savings
through more aggressive purchasing of raw materials (such as glass bottles,
flavors and other ingredients) and increased efficiencies in advertising,
marketing and general and administrative expenses. Since acquiring Snapple,
Triarc has introduced four new products, including Orange Tropic -- Wendy's
Tropical Inspiration and three herbal or green teas. Snapple's performance had
deteriorated while owned by Quaker from December 1994 through May 1997.
Mistic's premium beverage business, acquired by Triarc in August 1995,
develops, produces and markets a wide variety of premium non-alcoholic
beverages, including non-carbonated and carbonated fruit drinks, ready to drink
brewed iced teas and naturally flavored sparkling waters under the Mistic, Royal
Mistic, Mistic Rain Forest and Mistic Breeze brand names. Since acquiring
Mistic, Triarc has introduced 34 new flavors, various bottle sizes and shapes
and numerous new package designs. Royal Crown produces and sells concentrates
used in the production of soft drinks which are sold domestically and
internationally to independent, licensed bottlers who manufacture and distribute
finished beverage products. Royal Crown's major products have significant
recognition and include: RC COLA, DIET RC COLA, DIET RITE COLA, DIET RITE
flavors, NEHI, UPPER 10 and KICK. Further, Royal Crown is the exclusive supplier
of cola concentrate to Cott Corporation which sells private label soft drinks to
major retailers in the United States, Canada, the United Kingdom, Australia,
Japan, Spain and South Africa.
Arby's is the world's largest franchise restaurant system specializing in
slow-roasted meat sandwiches. In addition, Triarc believes that Arby's is the
10th largest quick service restaurant chain in the United States based on
domestic system-wide sales. As of August 31, 1997, the Arby's restaurant system
consisted of 3,050 restaurants of which 2,881 operated within the United States
and 169 operated outside the United States. Currently, all of the Arby's
restaurants are owned and operated by franchisees. Triarc believes that, as a
franchisor, it will be able to reduce from recent historical levels the
operating costs of the restaurant segment, and substantially reduce capital
expenditure requirements, thereby improving the restaurant segment's cash flows.
Arby's continues to pursue the development of a multi-brand strategy, which
allows a single restaurant to offer the consumer distinct, but complemen-
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tary, brands in the same restaurant. Arby's currently multi-brands with T.J.
Cinnamons, Inc., which specializes in gourmet cinnamon rolls and related
products, and P.T. Noodle's, which offers a variety of Asian, Italian and
American dishes based on serving corkscrew noodles with a variety of different
sauces.
C.H. Patrick produces and markets dyes and specialty chemicals primarily to
the textile industry. The majority of C.H. Patrick's dye products are used in
the continuous dying of cotton and polyester/cotton blends. C.H. Patrick also
manufactures various textile softeners, surfactants, dying auxiliaries and
permanent press resins, as well as several acrylic polymers used in textile
finishing as soil release agents. As previously announced, Triarc continues to
review strategic alternatives to maximize the value of its dye and specialty
chemical operations. There can be no assurance that any transaction will result
from this review process.
The Partnership and the Operating Partnership are engaged primarily in the
retail marketing of liquefied petroleum gas ('propane') to residential,
commercial and industrial, and agricultural customers and to dealers that resell
propane to residential and commercial customers and the retail marketing of
propane related supplies and equipment, including home and commercial
appliances. Triarc believes that the Partnership is the sixth largest retail
marketer of propane in terms of volume in the United States. National Propane,
an indirect wholly owned subsidiary of Triarc, is the managing general partner
of the Partnership and the Operating Partnership and owns approximately 43% of
their combined equity interests with the remaining 57% owned by the public.
The mailing address of Triarc's principal executive offices is 280 Park
Avenue, New York, New York 10017, and its telephone number is (212) 451-3000.
CCB MERGER CORPORATION
Mergerco, a wholly owned subsidiary of Triarc, was formed in June 1997 by
Triarc solely for the purpose of effecting the Merger. Upon consummation of the
Merger, Mergerco will be merged into Cable Car, and Mergerco's separate
corporate existence will thereupon cease. The mailing address of Mergerco's
principal executive offices is c/o Triarc Companies, Inc., 280 Park Avenue, New
York, New York 10017, and its telephone number is (212) 451-3000.
CABLE CAR BEVERAGE CORPORATION
Cable Car Beverage Corporation is a beverage marketing company. Cable Car's
primary business is selling Stewart's brand premium soft drinks (Root Beer,
Orange N' Cream, Cream Ale, Ginger Beer, Classic Key Lime and Cherries N' Cream)
to beverage distributors throughout the United States and Canada. Cable Car also
sells concentrate to soft drink bottlers, who produce and distribute beverages
made from the concentrate. In addition to Stewart's brand soft drinks, Cable Car
also sells Aspen Mountain Spring Water, Aspen flavored waters, San Francisco
Seltzer and Java Cola. Cable Car has two wholly owned subsidiaries (the 'Cable
Car Subsidiaries'), Fountain Classics, Inc., which markets Stewart's fountain
products, and Old San Francisco Seltzer, Inc. The mailing address of Cable Car's
principal executive offices is 717 17th Street, Suite 1475, Denver, Colorado
80202, and its telephone number is (303) 298-9038.
Copies of Cable Car's Annual Report on Form 10-K for the year ended
December 31, 1996, and the amendment thereto filed with the Commission on April
30, 1997, are attached to this Proxy Statement/Prospectus as Appendices A-1 and
A-2, respectively. A copy of Cable Car's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997 is attached to this Proxy Statement/Prospectus as
Appendix A-3.
RECENT DEVELOPMENTS
TRIARC
On May 22, 1997, Triarc completed its acquisition of Snapple from Quaker
for approximately $300 million in cash. Snapple, which markets and distributes
ready-to-drink brewed iced teas and juice
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drinks, had sales for 1996 of approximately $550 million, and is a market leader
in the premium beverage category. Snapple, together with Mistic and Royal Crown,
operates as part of the Triarc Beverage Group.
On May 5, 1997, Triarc completed the sale of all of its 355 company owned
Arby's restaurants to RTM Restaurant Group ('RTM'), the largest franchisee in
the Arby's system, for approximately $71 million. As part of the transaction,
the selling companies received options to purchase an aggregate 20% interest in
each of the RTM affiliates that own the restaurants. Arby's, a subsidiary of
Triarc, continues as the franchisor of the more than 3,000 store Arby's
restaurant system.
On July 18, 1997, Royal Crown and TriBev Corporation, subsidiaries of
Triarc, completed the sale of their rights relating to the C&C beverage line,
including the C&C trademark, to Kelco Sales & Marketing Inc. ('Kelco'), a
beverage distribution business based in Cranford, New Jersey, which will do
business under the name of C&C Beverages, Inc. C&C is a line of mixers, colas
and flavors. In connection with the sale, Royal Crown also agreed to sell to
Kelco concentrate for C&C products and to provide Kelco certain technical
services for seven years. In consideration for the foregoing, Royal Crown and
TriBev Corporation will receive an aggregate payment of approximately $9.4
million, payable over seven years.
On October 13, 1997, Triarc announced that its management had been
authorized, when and if market conditions warrant, to purchase during the next
twelve months, up to $20 million of Triarc Common Stock. Purchases under this
program may not commence until after the consummation of the Merger and there
can be no assurance that any such purchases of Triarc Common Stock will be made
in the future.
CABLE CAR
On June 24, 1997, Cable Car entered into an agreement, as further amended
on August 11, 1997, with Stewart's Restaurants, Inc. ('Stewart's Restaurants')
amending and modifying its Master Agreement dated July 11, 1989 with Stewart's
Restaurants (as amended previously and as so amended, the 'Stewart's Master
Agreement'). Among other things, the amendment gave Cable Car ownership of the
formulas for and manufacturing rights to concentrates used to make Stewart's
soft drinks. The amendment also provides that Cable Car is permitted to use the
Stewart's trademark on any other product of any type, provided that such
products comply with certain quality standards, and that Stewart's Restaurants
shall not, without Cable Car's consent, use the Stewart's trademark except to
operate Stewart's Restaurants, Drive-Ins and mobile food and beverage
concessions and on certain other products.
On June 24, 1997, Cable Car also entered into an agreement, as further
amended on August 11, 1997, with Stewart's Restaurants amending and modifying
its agreement dated December 1, 1993 with Stewart's Restaurants (as amended
previously and as so amended, the 'Stewart's Fountain Agreement'). Among other
things the amendment to the Stewart's Fountain Agreement grants to Cable Car the
perpetual exclusive worldwide license to manufacture, distribute and sell post
mix syrups and pre mixes for Stewart's beverages throughout the world
(fountain-type beverages), except that Stewart's Restaurants retains such rights
in any of its company owned, licensed or franchised Stewart's Restaurants,
Drive-Ins or mobile food and beverage concessions and subject to Cable Car
meeting certain quality standards. Cable Car also agreed to certain minimum
annual royalty payments to Stewart's Restaurants.
As consideration for these amendments, Cable Car will issue to Stewart's
Restaurants prior to the Effective Time an aggregate of 150,000 shares of Cable
Car Common Stock. In addition, Cable Car will pay to Stewart's Restaurants
$400,000 in cash, of which $250,000 is payable on March 31, 1998 and $150,000 is
payable on March 31, 1999.
Cable Car has entered into a lease to move to new office space in Denver on
or about December 1, 1997. The new address of Cable Car's principal executive
offices will be 555 17th Street, Suite 3550, Denver, Colorado 80202.
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THE SPECIAL MEETING
GENERAL
This Proxy Statement/Prospectus is being furnished to stockholders of Cable
Car in connection with the solicitation of proxies by the Cable Car Board for
use at the Special Meeting to be held on Tuesday. November 25, 1997, at 10:00
a.m., local time, at Norwest Bank Building, 1740 Broadway, Forum Room,
Denver, Colorado 80274, and any adjournments or postponements thereof.
Representatives of Price Waterhouse L.L.P., Cable Car's independent
accountants, are expected to be present at the Special Meeting with the
opportunity to make a statement if they desire to do so and will be available to
respond to appropriate questions.
MATTERS TO BE CONSIDERED
At the Special Meeting, holders of Cable Car Common Stock will consider and
vote upon a proposal to approve the Merger Agreement, which provides for the
merger of Mergerco into Cable Car with Cable Car being the Surviving
Corporation, and such other matters as may properly be brought before the
Special Meeting or any adjournments or postponements thereof. Cable Car does not
currently intend to bring any business other than the approval of the Merger
Agreement and the Merger before the Special Meeting or any adjournments or
postponements thereof. See 'The Proposed Merger and Related Matters' and 'The
Merger.'
VOTE REQUIRED
Approval of the Merger Agreement and the Merger requires the affirmative
vote of a majority of the outstanding shares of Cable Car Common Stock. A vote
by a stockholder of Cable Car to approve the Merger Agreement will constitute a
vote to approve the terms of, and the transactions contemplated by, the Merger
Agreement (including the Merger).
A majority of the shares entitled to vote at the Special Meeting,
represented in person or by proxy, constitutes a quorum. The Special Meeting may
be adjourned if a quorum is not present for the purpose of obtaining additional
proxies or votes or for any other purpose, and, at any subsequent reconvening of
the Special Meeting, all proxies will be voted in the same manner as such
proxies would have been voted at the original convening of the Special Meeting
(except for any proxies that have theretofore been revoked or withdrawn),
notwithstanding that they may have been voted on the same or any other matter at
a previous meeting.
Under the DGCL, in determining whether the proposal regarding the approval
of the Merger Agreement has received the requisite number of affirmative votes,
abstentions and broker nonvotes will be counted and will have the same effect as
a vote against such proposal. Holders of Cable Car Common Stock are entitled to
one vote at the Special Meeting for each share of Cable Car Common Stock held of
record at the close of business on the Record Date. As of September 30, 1997,
directors and executive officers of Cable Car and their affiliates, in the
aggregate, were entitled to vote 1,803,609 shares of Cable Car Common Stock,
representing approximately 20.2% of the total shares entitled to vote at the
Special Meeting.
Triarc has entered into the Stockholders Agreement with the Subject
Stockholders, which governs an aggregate of approximately 19.7% of the
outstanding Cable Car Common Stock beneficially owned by the Subject
Stockholders (such amount does not include 12,200 shares of Cable Car Common
Stock owned by them but not subject to the Stockholders Agreement) as of
September 30, 1997. Each Subject Stockholder has agreed that at any meeting of
the holders of Cable Car Common Stock, he or she will, until the Effective Time
or the termination of the Merger Agreement, vote or cause to be voted the
Subject Stock in favor of approval of the Merger Agreement and the Merger and
against certain other actions. Moreover, each Subject Stockholder has also
granted Triarc an irrevocable proxy to vote his or her shares of Subject Stock
as specified above in the event that such Stockholder fails to so vote his or
her Subject Stock in the agreed upon manner. A copy of the Stockholders
Agreement is attached to this Proxy Statement/Prospectus as Appendix B-2 and
incorporated herein by reference. See 'The Proposed
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Merger and Related Matters -- Additional Interests of Cable Car
Management -- Stockholders Agreement.'
THE BOARD OF DIRECTORS OF CABLE CAR HAS UNANIMOUSLY APPROVED THE TERMS OF
THE MERGER AGREEMENT AND THE MERGER AND RECOMMENDS THAT THE STOCKHOLDERS OF
CABLE CAR VOTE FOR APPROVAL OF THE MERGER AGREEMENT AND THE MERGER.
RECORD DATE; PROXIES
The Cable Car Board has fixed the close of business on October 23, 1997
as the Record Date for determining the stockholders of Cable Car entitled to
notice of and to vote at the Special Meeting. As of September 30, 1997, there
were 8,948,324 shares of Cable Car Common Stock outstanding and entitled to
vote, held of record by approximately 1,025 holders. Holders of shares of Cable
Car Common Stock entitled to vote at the Special Meeting (including any
adjournments or postponements thereof) and which are represented by properly
executed proxies in the form enclosed with this Proxy Statement/Prospectus will,
unless such proxies have previously been revoked, be voted in accordance with
the instructions indicated in such proxies. To the extent instructions are not
indicated on an otherwise properly executed proxy, shares will be voted in favor
of the approval of the Merger Agreement and the Merger and in the discretion of
the proxy holder as to any other matter that may properly come before the
Special Meeting. A Cable Car stockholder who has given a proxy may revoke such
proxy at any time prior to its exercise at the Special Meeting by (i) giving
written notice of revocation bearing a later date than the proxy to the
Secretary of Cable Car, (ii) properly submitting to Cable Car a duly executed
proxy card relating to the same shares bearing a later date or (iii) attending
the Special Meeting and voting in person. Attendance at the Special Meeting will
not in and of itself revoke a proxy. All written notices of revocation and other
communications with respect to the revocation of proxies by Cable Car
stockholders should be addressed as follows: Cable Car Beverage Corporation,
717 17th Street, Suite 1475, Denver, CO 80202, Attention: Secretary, or
hand-delivered to the Secretary of Cable Car before the vote is taken at the
Special Meeting.
HOLDERS OF CABLE CAR COMMON STOCK SHOULD NOT SEND ANY STOCK CERTIFICATES
WITH THEIR PROXY CARDS. IF THE MERGER AGREEMENT AND THE MERGER ARE APPROVED,
HOLDERS OF CABLE CAR COMMON STOCK WILL BE SENT A LETTER OF TRANSMITTAL WITH
INSTRUCTIONS FOR SURRENDERING THEIR CERTIFICATES REPRESENTING SHARES OF CABLE
CAR COMMON STOCK.
SOLICITATION OF PROXIES
Cable Car will bear the expense of the proxy solicitation. In addition to
solicitation of proxies by mail, the directors, officers and employees of Cable
Car may solicit proxies from stockholders personally or by telephone, telegraph
or facsimile transmission. Such directors, officers and employees will not be
compensated for such solicitation but may be reimbursed for reasonable
out-of-pocket expenses. Arrangements will also be made with banks, brokerage
houses and other custodians, nominees and fiduciaries for forwarding proxy
solicitation materials to beneficial owners of shares held of record by such
persons, and Cable Car will reimburse such custodians, nominees and fiduciaries
for their reasonable out-of-pocket expenses in connection therewith. Cable Car
has engaged Georgeson & Company Inc. to assist in the solicitation of proxies
at an anticipated cost of approximately $6,500 plus expenses.
THE PROPOSED MERGER AND RELATED MATTERS
GENERAL
The discussion in this Proxy Statement/Prospectus of the Merger Agreement
and the Merger and the description of the principal terms of the Merger
Agreement and the Merger are subject to and qualified in their entirety by
reference to the Merger Agreement, a copy of which is attached to this Proxy
Statement/Prospectus as Appendix B-1 and is incorporated herein by reference.
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BACKGROUND OF THE MERGER
The terms and conditions of the Merger were agreed upon as a result of
arms'-length negotiations between the senior management and Boards of Directors
of Triarc and Cable Car. The following is a summary of the primary contacts,
meetings and negotiations which occurred in connection with this transaction:
On March 31, 1997, a representative of Triarc contacted Samuel M. Simpson,
President and Chief Executive Officer of Cable Car, and indicated to Mr. Simpson
that Nelson Peltz, Chairman and Chief Executive Officer of Triarc, wished to
schedule a meeting. This approach was made a few days following Triarc's March
27, 1997 announcement that it was acquiring the Snapple beverage business from
Quaker. A meeting was scheduled for April 7, 1997 at Triarc's offices in New
York City.
In attendance at the April 7 meeting were Mr. Simpson, Mr. Peltz, Peter
May, President of Triarc, and Eric Kogan, a Senior Vice President of Triarc. At
that meeting, Messrs. Peltz and May outlined Triarc's plans to develop a premium
beverage business consisting of Snapple, Mistic and other compatible brands. Mr.
Peltz said he thought that the Stewart's brand was an excellent strategic fit
with Triarc's premium beverage group and that Triarc would be interested in
acquiring Cable Car. Mr. Simpson acknowledged that Stewart's would be a
complementary brand for Triarc in light of the fact that a large percentage of
Stewart's distribution is with Snapple and Mistic distributors. The parties also
discussed the fact that if the Snapple acquisition were consummated, Triarc
would soon be the Stewart's distributor in New York City through Mr. Natural,
Inc., the Snapple owned distribution company that Triarc would be acquiring in
connection with the transaction.
Mr. Simpson relayed Triarc's interest in acquiring Cable Car to the Cable
Car Board and the Board authorized Mr. Simpson to explore the possibility of a
transaction with Triarc. Mr. Simpson met with Messrs. Peltz, May and Kogan again
on April 9, 1997 at Triarc's offices. During that meeting, Mr. Simpson informed
Triarc that Cable Car was interested in discussing a potential business
combination. At this meeting, the parties also exchanged certain publicly
available documents and information and it was agreed that a confidentiality
agreement would be prepared and signed to facilitate the future exchange of
non-public information. Mr. Kogan then spent time with Mr. Simpson discussing
and reviewing the operations of each of Triarc's business units.
For the next several days, Cable Car's management reviewed information on
Triarc and continued to assess the merits of merging with Triarc. Also during
that time, several discussions were held among the members of the Cable Car
Board about a potential transaction with Triarc. During these discussions it was
determined that a Cable Car/Triarc merger was potentially attractive, based upon
both brand and distribution synergies. The Cable Car Board discussed the fact
that Triarc does not currently own a beverage brand directly competitive with
the Stewart's brand and that a large percentage of Stewart's distributors are
either Snapple or Mistic distributors, or both. The Cable Car Board felt that by
combining with Triarc, Cable Car would also be able to increase Stewart's sales
in New York City, a very populous and important market, through Mr. Natural,
Inc., which would soon be acquired by Triarc in the Snapple acquisition. The
Cable Car Board further concluded that a Cable Car/Triarc merger should result
in increased distribution of Cable Car products with third party distributors
carrying Snapple or Mistic, based upon Triarc's access to and relationships with
these independent distributors. Cable Car's directors also discussed the fact
that Triarc could acquire or develop another brand to compete directly against
the Stewart's brand should Cable Car elect to remain an independent company.
Based on the foregoing, the Cable Car Board authorized Mr. Simpson to pursue a
transaction with Triarc and to engage the services of a financial advisor.
On April 17, 1997 Mr. Simpson contacted Montgomery Securities in San
Francisco, California regarding this transaction. Montgomery Securities was
asked to provide a limited financial review of Cable Car, Triarc and the
proposed transaction for the Cable Car Board, and was not retained or authorized
to consider alternatives for Cable Car to the proposed merger with Triarc or to
solicit proposals or indications of interest from financial or other strategic
buyers. On April 22, 1997 Mr. Simpson and Myron Stadler, Cable Car's chief
accounting officer, met with representatives from Montgomery Securities at Cable
Car's corporate headquarters in Denver, Colorado. Preliminary discussions were
held at this meeting regarding the reasons for and against a sale of Cable Car
to a strategic buyer such as Triarc. In the course of this discussion, Cable
Car's historical financial results and
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projected financial results were reviewed with Montgomery Securities. Cable
Car's general business plans and the potential synergies which could result from
a business combination with Triarc were also discussed at this meeting.
Over the next three weeks, Mr. Simpson had numerous conversations with Mr.
Kogan at Triarc regarding Cable Car's and Triarc's respective businesses. During
that time Cable Car and Triarc continued to review information and documents
relating to the other's company.
On May 7, 1997, Mr. Simpson met with Messrs. Peltz, May and Kogan in New
York. During this meeting, Triarc proposed the general terms of a merger
transaction between Cable Car and Triarc. Mr. Simpson, Mr. Kogan and Brian
Schorr, Triarc's Executive Vice President and General Counsel, also met on May
8, 1997 to discuss Triarc's proposal.
On May 12, 1997 the Cable Car Board held a special meeting to review the
proposed transaction. Mr. Simpson summarized the terms of Triarc's merger
proposal to the other members of the Board. The Cable Car Board also
participated in a conference call with Montgomery Securities to discuss the
proposed transaction. Following these discussions, the Cable Car Board
authorized Mr. Simpson to proceed with negotiations with Triarc.
From May 13 until June 17, 1997, senior management and counsel for Cable
Car and Triarc had several discussions and telephone conferences to negotiate
terms and conditions of a merger agreement and a stockholders agreement between
Triarc and the Subject Stockholders and to exchange due diligence related
information and documents. In light of the time and expense that Triarc would be
required to incur in connection with pursuing the proposed transaction with
Cable Car, Triarc insisted on obtaining an agreement with the Subject
Stockholders that provides that their shares of Cable Car Common Stock would be
voted in favor of the proposed merger and that grants to Triarc the option to
purchase such shares under certain circumstances. See 'The Proposed Merger and
Related Matters -- Additional Interests of Cable Car Management -- Stockholders
Agreement.' On June 3, the Cable Car Board held a special meeting to review the
status of the proposed merger agreement. At that time, the Board authorized Mr.
Simpson to schedule a meeting between the Cable Car Board, Montgomery Securities
and senior management of Triarc for purposes of concluding due diligence and
finalizing a merger agreement.
On June 18, 1997, the Cable Car Board, along with representatives from
Montgomery Securities, met with several members of Triarc's senior management
team. In those meetings, Triarc's management provided additional detailed
information about Triarc and responded to questions from Cable Car Board members
and Montgomery Securities regarding Triarc's business operations, business plans
and financial projections. During the June 18 meetings, the parties also
discussed the remaining open issues on the Merger Agreement.
On June 19, 1997, the Cable Car Board held a special meeting. At this board
meeting, Montgomery Securities presented its financial analysis of the proposed
merger with Triarc and its oral opinion to the Cable Car Board regarding the
fairness of the consideration to be received by Cable Car stockholders, from a
financial point of view. The Cable Car Board then reviewed the current draft of
the Merger Agreement and discussed certain issues which remained unresolved.
Following this review, and after considering the factors described in 'Cable
Car's Reasons for the Merger; Recommendation of Cable Car's Board of Directors'
below, the Cable Car Board unanimously (i) determined that the terms of the
Merger were fair to, and in the best interests of, the holders of Cable Car
Common Stock, (ii) approved the terms of the Merger Agreement (subject to
satisfactory resolution of certain open issues) and authorized Cable Car's
officers to execute the Merger Agreement and to undertake all acts necessary or
desirable to complete the Merger, (iii) recommended approval of the Merger
Agreement by holders of Cable Car Common Stock and (iv) approved and ratified
for the purposes of Section 203 of the DGCL the Merger Agreement, the Merger and
the other transactions contemplated thereby, including the execution, delivery
and performance of the Stockholders Agreement, and determined that neither
Triarc nor any of its affiliates would be subject to the restrictions of Section
203 as an 'interested stockholder' of Cable Car for purposes of Section 203 as
result of such agreements or transactions.
On June 20 and again on June 23, Samuel Simpson and William Rutter, a Cable
Car director, met with Brian Schorr regarding the Merger Agreement. Conference
calls were also held with Cable Car's
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legal counsel and Triarc's outside legal advisors to finalize the terms of the
Merger Agreement. On June 24, 1997, Montgomery Securities provided the Cable Car
Board with its written opinion confirming its June 19, 1997 oral opinion as
delivered previously to the Cable Car Board.
On June 24, the Merger Agreement and the Stockholders Agreement were
executed. On June 24, 1997, pursuant to a written consent in lieu of meeting,
the Cable Car Board unanimously approved the final Merger Agreement and ratified
and approved all actions taken previously by Cable Car's officers and directors
in connection with the Merger.
CABLE CAR'S REASONS FOR THE MERGER; RECOMMENDATION OF CABLE CAR'S BOARD OF
DIRECTORS
Cable Car has determined that the terms of the Merger Agreement and the
transactions contemplated thereby (the 'Transactions') are fair to, and in the
best interests of, Cable Car and its stockholders. Accordingly, the Cable Car
Board has unanimously approved the Merger Agreement and recommends unanimously
that the stockholders of Cable Car vote FOR approval of the Merger Agreement and
the Merger. In reaching its determination, the Cable Car Board consulted with
Cable Car's management, as well as its legal counsel and financial advisor, and
considered the following material factors:
1. the opportunity that the Merger affords Cable Car's stockholders to
reduce their exposure to the risks inherent in Cable Car's reliance on a
limited number of products, primarily premium soft drinks and waters, and
the difficulties in competing against larger companies with more
diversified product lines and greater financial resources, and the fact
that the consideration per share of Cable Car Common Stock appropriately
recognizes the significant value of Cable Car's business;
2. the opportunity for Cable Car to gain greater market strength and
market recognition for its products by combining with a large company; and
the opportunity for Cable Car as a result of the Merger to offer its
products as part of a broader range of premium beverages, including
Snapple;
3. the ability the Merger affords Cable Car to utilize the resources
of the combined companies to develop additional products and new flavors
and formulations for existing products and to develop those products more
rapidly;
4. potential revenue synergies, including the ability to market Cable
Car's products through Triarc's distribution channels and to sell Cable
Car's products together with Triarc's products;
5. potential cost synergies, through consolidation and integration of
certain manufacturing, distribution, sales and administrative operations
and functions;
6. the role that Cable Car's management, which the Cable Car Board
believes is experienced and proven in the beverage industry, will play in
the management of Triarc's Beverage Group;
7. the Merger would reduce the possibility of Cable Car losing
distributors and/or market share due to Triarc's potential development or
acquisition of a brand directly competitive with the Stewart's brand;
8. information concerning the financial performance and condition,
business operations and prospects of each of Triarc and Cable Car;
9. the fact that the Merger would allow holders of Cable Car Common
Stock (a Nasdaq SmallCap company) to obtain an equity interest in Triarc (a
New York Stock Exchange listed company) and to achieve greater liquidity
than could be achieved by continuing to hold Cable Car Common Stock;
10. the Conversion Price and the 1997 trading prices for Cable Car
Common Stock and Triarc Common Stock and the fact that the consideration
per share of Cable Car Common Stock that may be received under the Merger
Agreement represents a premium over trading prices, during the last year,
of Cable Car Common Stock and recognizes the significant value of Cable
Car's business;
11. the opportunity to permit the stockholders of Cable Car to benefit
from Triarc's anticipated turnaround of the Snapple business;
12. the expectation that the Merger will be nontaxable to the
stockholders of Cable Car for federal income tax purposes;
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13. the opinion of Montgomery Securities dated June 24, 1997 (see 'The
Proposed Merger and Related Matters -- Opinion of Financial Advisor to
Cable Car'); and
14. the opportunity for stockholders of Cable Car to vote on whether
to approve the Merger Agreement and the Merger.
In view of the wide variety of factors considered by the Cable Car Board,
it did not find it practicable to quantify, or otherwise attempt to assign
relative priorities or weights to the factors listed above. Consequently, the
Cable Car Board did not quantify the assumptions and results of its analysis in
reaching its determination that the terms of the Merger Agreement and the
Transactions are fair to, and in the best interests of, Cable Car and its
stockholders. THE CABLE CAR BOARD UNANIMOUSLY RECOMMENDS THAT CABLE CAR
STOCKHOLDERS VOTE FOR APPROVAL OF THE MERGER AGREEMENT AND THE MERGER.
TRIARC'S REASONS FOR THE MERGER
The Triarc Board has determined that the Merger Agreement and the
Transactions are fair to, and in the best interests of, Triarc. Accordingly, the
Triarc Board has unanimously approved the Merger Agreement and the Merger. In
reaching its determination, the Triarc Board consulted with Triarc's management,
as well as its legal counsel, and considered the following material factors:
1. the opportunity to add the premium brands distributed and marketed
by Cable Car, particularly the Stewart's brand, to the Triarc Beverage
Group's premium beverage offerings, as well as optimizing use of the
Stewart's trademark;
2. the potential to increase Cable Car's sales and profitability
through improved distribution and potential cost savings through increased
purchasing efficiencies;
3. that Cable Car's management, which Triarc believes is experienced
and proven in the beverage industry, will enhance the management of the
Triarc Beverage Group;
4. information concerning the financial performance and condition,
business operations and prospects of Cable Car;
5. the opportunity to acquire Cable Car in a stock for stock
transaction, thereby enabling Triarc to use its cash on hand to pursue
additional acquisitions in the future; and
6. the opportunity to have a physical presence in the Western United
States which will expand Triarc's exposure and access to new beverage
products and brands.
In connection with Triarc's review of Cable Car and in the course of the
negotiations described in ' -- Background of the Merger' above, Cable Car and
its representatives provided Triarc with certain financial projections, which
Triarc believes are not publicly available, which projections forecast, for the
year ended December 31, 1997, Cable Car's net sales, gross profit and net income
to be approximately $26.0 million, $7.2 million and $1.9 million, respectively.
EFFECTIVE TIME
If the Merger Agreement and the Merger are approved by the requisite vote
of Cable Car's stockholders and all other conditions to the Merger are satisfied
or waived (other than those conditions that can be satisfied on the closing
date), the Merger will be consummated and effected at such time as the
Certificate of Merger, in accordance with the relevant provisions of the DGCL,
shall have been accepted for filing by the Secretary of State of the State of
Delaware (or at such later time as agreed to by the parties to the Merger
Agreement and specified in the Certificate of Merger). The Merger Agreement
provides that Triarc and Cable Car will cause the Effective Time to occur as
promptly as practicable following the satisfaction or waiver of all of the
conditions (other than those conditions that can be satisfied on the closing
date) set forth in the Merger Agreement. The Merger Agreement also provides that
the officers and directors of Mergerco immediately prior to the Effective Time
will be the initial officers and directors of the Surviving Corporation, in each
case until their respective successors are duly elected or appointed and
qualified in the manner provided in the Certificate of Incorporation and Bylaws
of the Surviving Corporation, or as otherwise provided by law. Pursuant to the
Simpson Employment Agreement, Samuel M. Simpson will become the President and
Chief Executive Officer of
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the Surviving Corporation. See 'Management of Surviving Corporation -- Simpson
Employment Agreement.' Subject to the terms of the Merger Agreement, at the
Effective Time, (a) the Certificate of Incorporation of the Surviving
Corporation will be the Restated Certificate of Incorporation as set forth in
Exhibit A to the Merger Agreement and (b) the Bylaws of Mergerco, as in effect
immediately prior to the Effective Time, will be the Bylaws of the Surviving
Corporation until thereafter amended as provided by law, the Certificate of
Incorporation of the Surviving Corporation and such Bylaws. The Merger Agreement
may be terminated prior to the Effective Time by either Triarc or Cable Car in
certain circumstances, whether before or after approval of the Merger Agreement
by the Cable Car stockholders. See 'The Merger Agreement -- Termination.'
CONVERSION OF SHARES OF CABLE CAR COMMON STOCK
If the Merger Agreement and the Merger are approved by the requisite vote
of Cable Car's stockholders and all other conditions to the Merger are satisfied
or waived, then Mergerco will be merged into Cable Car, which will be the
Surviving Corporation and which will thereupon become a wholly owned subsidiary
of Triarc. In the Merger, each share of Cable Car Common Stock outstanding
immediately prior to the Effective Time (other than treasury shares and shares
held by Triarc and its subsidiaries and subsidiaries of Cable Car, all of which
will be canceled, and shares with respect to which the holder has properly
exercised its appraisal rights under Delaware law) will be converted into the
right to receive 0.1722 shares of Triarc Common Stock, subject to the adjustment
described below, and any cash to be paid in lieu of fractional shares of Triarc
Common Stock. The Conversion Price is subject to adjustment as follows: (i) if
the Average Triarc Share Price is less than $18.875, then the Conversion Price
shall be adjusted to equal the quotient of $3.25 divided by such Average Triarc
Share Price, and (ii) if the Average Triarc Share Price is greater than $24.50,
then the Conversion Price shall be adjusted to equal the quotient of $4.22
divided by such Average Triarc Share Price (the Conversion Price, as so
adjusted, is referred to herein as the 'Adjusted Conversion Price').
OPINION OF FINANCIAL ADVISOR TO CABLE CAR
In connection with its consideration of the Merger, the Cable Car Board
engaged Montgomery Securities to conduct a financial review of the Merger
Agreement and of the businesses of Cable Car and Triarc. Montgomery Securities
is an internationally recognized investment banking firm that regularly engages
in the valuation of businesses and their securities in connection with mergers
and acquisition transactions. The Cable Car Board selected Montgomery Securities
to conduct this review for use by the directors in connection with their
consideration of the Merger because Montgomery Securities is highly respected
and is experienced in financial matters as they relate to the Merger. Cable Car
had not previously retained Montgomery Securities to provide any valuation,
financial advisory or other services to Cable Car or its directors other than as
set forth above in connection with the Merger.
The engagement of Montgomery Securities was limited to its analysis of the
financial fairness of the aggregate consideration to be received by the holders
of Cable Car Common Stock in the Merger. Such engagement did not extend to any
other aspect of the Merger, including (without limitation) the relative merits
of the Merger, any alternatives to the Merger or Cable Car's underlying decision
to proceed with or effect the Merger. THE OPINION OF MONTGOMERY SECURITIES WAS
DIRECTED SOLELY TO THE CABLE CAR BOARD FOR ITS CONSIDERATION IN CONNECTION WITH
THE MERGER, AND IS NOT A RECOMMENDATION TO ANY HOLDER OF CABLE CAR COMMON STOCK
AS TO WHETHER THE MERGER IS IN SUCH HOLDER'S BEST INTERESTS OR AS TO WHETHER
HOLDERS OF CABLE CAR COMMON STOCK SHOULD VOTE FOR OR AGAINST THE MERGER. THE
FULL TEXT OF SUCH WRITTEN OPINION OF MONTGOMERY SECURITIES DATED JUNE 24, 1997
IS ATTACHED HERETO AS APPENDIX C, AND SETS FORTH CERTAIN IMPORTANT
QUALIFICATIONS, ASSUMPTIONS MADE, MATTERS CONSIDERED, AREAS OF RELIANCE ON
OTHERS AND LIMITATIONS ON THE REVIEW UNDERTAKEN IN CONNECTION WITH SUCH OPINION.
The summary description of such opinion set forth below is qualified in its
entirety by the full text of the opinion attached hereto as Appendix C.
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In connection with its opinion, Montgomery Securities (i) reviewed certain
publicly available financial and other data with respect to Cable Car and
Triarc, including the consolidated financial statements for recent years and
interim periods to March 31, 1997, and certain other relevant financial and
operating data relating to Cable Car and Triarc made available to it from
published sources and from the internal records of Cable Car and Triarc; (ii)
reviewed the financial terms and conditions of the Merger Agreement; (iii)
reviewed certain publicly available information concerning the trading of, and
the trading market for, Cable Car Common Stock and Triarc Common Stock; (iv)
compared Cable Car and Triarc from a financial point of view with certain other
companies in the beverage industry which Montgomery Securities deemed to be
relevant; (v) considered the financial terms, to the extent publicly available,
of selected recent business combinations of companies in the beverage industry
which Montgomery Securities deemed to be comparable, in whole or in part, to the
Merger; (vi) reviewed and discussed with representatives of the management of
Cable Car and Triarc certain information of a business and financial nature
regarding Cable Car and Triarc furnished by Cable Car and Triarc to Montgomery
Securities, including financial forecasts and related assumptions of Cable Car
and Triarc; (vii) made inquiries regarding and discussed the Merger and the
Merger Agreement and other matters related thereto with Cable Car's counsel; and
(viii) performed such other analyses and examinations as Montgomery Securities
deemed appropriate.
Based upon its review of the foregoing, but subject to the limitations set
forth below and in reliance upon the assumptions set forth below, Montgomery
Securities provided the Board of Directors with its opinion as investment
bankers that as of the date of their opinions (June 24, 1997 and June 19, 1997),
the aggregate consideration to be received by the holders of Cable Car Common
Stock pursuant to the Merger was fair to such holders of Cable Car Common Stock
from a financial point of view.
In connection with its review, Montgomery Securities did not assume any
obligation to verify the above described information reviewed by it, and relied
on its being accurate and complete in all material respects. With respect to the
financial forecasts for Cable Car and Triarc provided to Montgomery Securities
by Cable Car's and Triarc's respective managements, Montgomery Securities
assumed that the forecasts (including the assumptions made by Triarc's
management regarding the recent acquisition of Snapple by Triarc) had been
reasonably prepared on bases reflecting the best available estimates and
judgements of the respective managements as to the future financial performance
of Cable Car and Triarc, and that such projections provided a reasonable basis
upon which Montgomery Securities could form its opinion. Montgomery Securities
also assumed that there had been no material changes in Cable Car's or Triarc's
assets, financial condition, results of operations, business or prospects since
the respective dates of their last financial statements made available to
Montgomery Securities. Montgomery Securities relied on advice of the counsel and
the independent accountants to Cable Car as to all legal and financial reporting
matters with respect to Cable Car, the Merger and the Merger Agreement.
Montgomery Securities assumed that the Merger will be consummated in a manner
that complies in all respects with the applicable provisions of the Securities
Act, the Exchange Act and all other applicable federal and state statutes, rules
and regulations. In addition, Montgomery Securities did not assume
responsibility for making an independent evaluation, appraisal or physical
inspection of any of the assets or liabilities (contingent or otherwise) of
Cable Car or Triarc, nor was Montgomery Securities furnished with any such
appraisals. Finally, Montgomery Securities' opinion was based on economic,
monetary, market and other conditions as in effect on, and the information made
available to Montgomery Securities as of, the date of the opinion (June 24,
1997). Accordingly, although subsequent developments may affect this opinion,
Montgomery Securities did not assume and does not have any obligation to update,
revise or reaffirm this opinion.
Montgomery Securities further assumed that the Merger will be consummated
in accordance with the terms described in the Merger Agreement, without any
further amendments thereto, and without waiver by Cable Car of any of the
conditions to its obligations thereunder. The full text of the Merger Agreement
is attached hereto as Appendix B-1 and the terms described in the Merger
Agreement and the conditions to Cable Car's obligations thereunder should be
reviewed and understood by holders of Cable Car Common Stock in connection with
their consideration of the Merger.
Finally, Montgomery Securities did not and could not express any opinion
regarding the price at which the Triarc Common Stock may trade at any future
time. Since the aggregate consideration to be
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received by the holders of Cable Car Common Stock pursuant to the Merger is
based upon a fixed exchange ratio (subject to a collar), the market value of the
aggregate consideration that holders of Cable Car Common Stock will receive in
the Merger may vary significantly from what such holders would have received
when the opinion of Montgomery Securities was presented to the Cable Car Board.
Additionally, the market value of the aggregate consideration received by
holders of Cable Car Common Stock in the Merger can be expected to change after
the consummation of the Merger as the trading price of Triarc Common Stock
changes in the ordinary course (or otherwise) of purchases and sales in the open
market.
Set forth below is a brief summary of the report presented by Montgomery
Securities to the Cable Car Board on June 19, 1997 in connection with its
opinion described above.
Comparable Company Analysis. Using public and other available information,
Montgomery Securities calculated the imputed per share value of the Cable Car
Common Stock based on the multiples of last twelve months' earnings before
interest, taxes, depreciation and amortization ('LTM EBITDA') at which six
publicly traded beverage companies (the 'Beverage Companies') were trading on
June 17, 1997. The Beverage Companies were Boston Beer Company, Inc., Hansen
Natural Corp., National Beverage Corp., Odwalla, Inc., Redhook Ale Brewery and
Seven UP RC Bottling Co. The June 17, 1997 stock prices of the Beverage
Companies reflected a mean LTM EBITDA multiple of 9.8x and a median LTM EBITDA
multiple of 9.7x. Montgomery Securities applied the mean and median multiples of
LTM EBITDA for the Beverage Companies to the LTM EBITDA of Cable Car and to the
earnings before interest, taxes, depreciation and amortization ('EBITDA')
projected by Cable Car's management for its 1997 fiscal year (the '1997
EBITDA'). Montgomery Securities also made applicable adjustments to reflect that
Cable Car did not have any long term debt and had a positive cash position
(defined as cash minus debt) as of March 31, 1997 of $1.3 million. This analysis
indicated an imputed equity value (defined as aggregate value plus the positive
cash position) of Cable Car of between $27.9 million and $33.2 million, or
between $3.11 and $3.71 per share.
Comparable Transaction Analysis. Montgomery Securities reviewed the
consideration paid in merger and acquisition transactions in the beverage
industry that have been announced since 1990. Montgomery Securities analyzed the
consideration paid in such transactions as a multiple of the target companies'
LTM EBITDA. Such analysis yielded mean and median multiples of 10.9x and 11.5x
LTM EBITDA, respectively. Montgomery Securities then applied the foregoing
multiples to Cable Car's LTM EBITDA and 1997 EBITDA, and added Cable Car's
positive cash position as of March 31, 1997 ($1.3 million). This analysis
indicated an imputed equity value of Cable Car of between $31.1 million and
$38.9 million, or between $3.47 and $4.35 per share.
Premiums Paid Analysis. Montgomery Securities reviewed the consideration
paid in comparable U.S. acquisitions involving cash consideration of between $25
million and $60 million that have been announced since January 1, 1994.
Montgomery Securities calculated the premiums paid in these transactions over
the applicable stock prices of the target companies one week prior to the
announcement of the acquisition offer, and then calculated the mean and median
of those premiums (which were 40.6% and 36.8%, respectively). Montgomery
Securities then applied the mean and median premiums so derived to Cable Car's
closing stock prices on April 25, 1997 ($2.38) and June 17, 1997 ($3.69), and
added the positive cash position as of March 31, 1997 ($1.3 million). The share
price of Cable Car as of April 25, 1997, was selected for this analysis because
on that date an article appeared in Beverage Digest which discussed a potential
merger involving Cable Car and Triarc. This analysis indicated an imputed equity
value of Cable Car of between $30.4 million and $31.2 million, or between $3.40
and $3.49 per share, based on the price of Cable Car Common Stock prior to the
Beverage Digest article, and between $46.4 million and $47.7 million, or between
$5.18 and $5.33 per share, based on the price of Cable Car Common Stock on June
17, 1997.
No other company or transaction used in the comparable company analysis,
the comparable transactions analysis or the premiums paid analysis as a
comparison is identical to Cable Car or the Merger. Accordingly, an analysis of
the results of the foregoing is not mathematical; rather, it involves complex
considerations and judgments concerning differences in financial and operating
characteristics of the companies and other factors that could affect the public
trading value of the companies to which Cable Car and the Merger are being
compared.
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Discounted Cash Flow Analysis. Montgomery Securities applied a discounted
cash flow analysis to Cable Car's financial forecasts for 1997 (prepared by
Cable Car's management and provided to Montgomery Securities) and for 1998
through 2002 (prepared by Montgomery Securities using 10% growth in revenues and
constant margins as assumptions). Cable Car did not provide Montgomery
Securities with any financial forecasts for periods beyond 1997.
In conducting its discounted cash flow analysis, Montgomery Securities
first calculated the estimated future streams of free cash flows that Cable Car
would produce through 2002 (using Cable Car's management's 1997 financial
forecasts for 1997, and applying the mathematical assumptions with respect to
revenues and margins set forth above for 1998 through 2002). Second, Montgomery
Securities estimated Cable Car's aggregate value at the end of 2002 by applying
a range from multiples of 8.0x to 10.0x to Cable Car's estimated EBITDA
(calculated as set forth from the mathematical assumptions set forth above) in
2002. Such cash flow streams and aggregate values were discounted to present
values using discount rates ranging from 9.0% to 14.0%, chosen to reflect
different assumptions regarding Cable Car's cost of capital. The amount of Cable
Car's positive cash position was then added to such present values. This
analysis indicated an imputed equity value of Cable Car of between $31.2 million
and $44.9 million, or between $3.48 and $5.02 per share.
Pro Forma Merger Analysis. Holders of Cable Car Common Stock will receive
Triarc Common Stock in the Merger. Montgomery Securities reviewed and analyzed
the pro forma financial impact of the Merger on the projected earnings per share
for Triarc Common Stock forecast by Triarc's management for Triarc's 1997 fiscal
year. Assuming the accuracy of the financial forecasts provided to Montgomery
Securities by the management of Cable Car and Triarc, and without giving effect
to any operating synergies that might be realized following the Merger, this
analysis indicated that the Merger should be non-dilutive to Triarc's
anticipated 1997 earnings per share.
While the foregoing summary describes all analyses and examinations that
Montgomery Securities deemed material to the preparation of its opinion to the
Cable Car Board, it does not purport to be a comprehensive description of all
analyses and examinations actually conducted by Montgomery Securities. The
preparation of a fairness opinion necessarily is not susceptible to partial
analysis or summary description; and selecting portions of the analyses and of
the factors considered by Montgomery Securities, without considering all
analyses and factors, would create an incomplete view of the process underlying
the analyses set forth in the presentation of Montgomery Securities to the Cable
Car Board on June 19, 1997. In addition, Montgomery Securities may have given
some analyses more or less weight than other analyses, and may have deemed
various assumptions more or less probable than other assumptions. Accordingly,
the ranges of valuations resulting from any particular analysis described above
should not be taken to be Montgomery Securities' view of the actual value of
Cable Car or Cable Car Common Stock. To the contrary, Montgomery Securities
expressed no opinion on the actual value of Cable Car or Cable Car Common Stock,
and its opinion that is addressed and limited to the Cable Car Board extends
only to the belief expressed by Montgomery Securities that the immediate value
to holders of Cable Car Common Stock, from a financial point of view under the
Merger, is within the range of values that might fairly be ascribed to the Cable
Car Common Stock as of the date of the opinions of Montgomery Securities (June
24, 1997 and June 19, 1997).
In performing its analyses, the Montgomery Securities made numerous
assumptions with respect to industry performance, general business and economic
conditions and other matters, many of which are beyond the control of Cable Car
and Triarc. The analyses performed by Montgomery Securities are not necessarily
indicative of actual values or actual future results, which may be significantly
more or less favorable than those suggested by such analyses. Such analyses were
prepared solely as part of Montgomery Securities' analysis for the Cable Car
Board of the fairness of the Merger to Cable Car from a financial point of view,
and were provided solely to the Cable Car Board in connection with the Cable Car
Board's consideration of the Merger. The analyses do not purport to be
appraisals or to reflect the prices at which a company might actually be sold or
the prices at which any securities may trade at any time in the future.
Montgomery Securities used in its analyses various projections of future
performance prepared by the managements of Cable Car and Triarc. The projections
are based on numerous variables and assumptions which are inherently
unpredictable and must be considered not
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certain of occurrence as projected. Accordingly, actual results could vary
significantly from those set forth in such projections.
As described above, the opinion of Montgomery Securities and the
presentation to the Cable Car Board summarized above were among the many factors
taken into consideration by the Cable Car Board in making its determination to
approve, and to recommend that its stockholders approve the Merger. Montgomery
Securities, however, does not make any recommendation to holders of Cable Car
Common Stock (or to any other person or entity) as to whether such stockholders
should vote for or against the Merger.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary describes the material federal income tax
consequences of the Merger to Cable Car and holders of Cable Car Common Stock
who are citizens or residents of the United States. It does not discuss all the
tax consequences that may be relevant to Cable Car stockholders in special tax
situations (such as insurance companies, financial institutions, dealers in
securities, tax-exempt organizations or non-U.S. persons) or to Cable Car's
stockholders who acquired their shares of Cable Car Common Stock pursuant to the
exercise of employee stock options or warrants, or otherwise as compensation.
The summary also does not discuss tax consequences to holders of outstanding
Cable Car stock options.
Neither Triarc nor Cable Car has obtained a ruling from the IRS with regard
to any of the federal income tax consequences of the Merger. The opinion of
counsel to Cable Car as to the federal income tax consequences of the Merger set
forth in the next paragraph will not be binding on the IRS or the courts.
Sherman & Howard L.L.C., of Denver, Colorado, special tax counsel to Cable
Car, is of the opinion that, under present federal income tax law, and based on
(i) certain representations regarding factual matters and certain covenants as
to future actions made by Triarc, Cable Car and major holders of Cable Car
Common Stock, and (ii) the assumption that the Merger and related transactions
will take place as described in the Merger Agreement, the Merger will constitute
a reorganization for federal income tax purposes within the meaning of Section
368(a) of the Code. Cable Car stockholders should be aware that if these
representations are incorrect, if these covenants are not complied with, or if
the transactions do not occur as described in the Merger Agreement, the
conclusions reached by counsel in its opinion might be jeopardized. Under the
Merger Agreement, it is a condition precedent to Cable Car's obligation to
consummate the Merger that Sherman & Howard L.L.C. deliver to Cable Car an
opinion to the effect of the foregoing.
Provided that the Merger qualifies as a reorganization, (i) Cable Car will
not recognize any taxable gain or loss as a result of the Merger, (ii) no gain
or loss will be recognized by Cable Car's stockholders upon the conversion of
their shares of Cable Car Common Stock into shares of Triarc Common Stock
pursuant to the terms of the Merger (except to the extent cash is received in
lieu of fractional shares), (iii) the aggregate tax basis of the shares of
Triarc Common Stock into which shares of Cable Car Common Stock are converted
pursuant to the Merger will be the same as the aggregate tax basis of such Cable
Car Common Stock surrendered in the exchange (reduced by the portion of the
stockholder's tax basis properly allocated to the fractional share interest, if
any, for which the stockholder receives cash) and (iv) the holding period for
shares of Triarc Common Stock into which shares of Cable Car Common Stock are
converted pursuant to the Merger will include the period that such shares of
Cable Car Common Stock were held by the holder, provided that such shares were
held as a capital asset by the holder at the Effective Time.
Any Cable Car stockholder who receives cash in lieu of a fractional share
of Triarc Common Stock will be treated for federal income tax purposes as
receiving cash in redemption of the fractional share interest. The cash payment
will be treated as a distribution in redemption of Triarc Common Stock under
Section 302 of the Code, so that such Cable Car stockholder will generally
recognize gain or loss equal to the difference between the cash received and
such stockholder's tax basis in the fractional share. Such gain or loss will be
capital gain or loss if such Cable Car Common Stock is held as a capital asset
at the Effective Time. If such Cable Car Common Stock was held for more than 12
months prior
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to the Effective Time, such gain or loss recognized upon the receipt of cash in
lieu of a fractional share will generally be long-term capital gain or loss. The
distinction between capital gain or loss and ordinary income or loss is
important for purposes of the limitations on a stockholder's ability to offset
capital losses against ordinary income, and because Cable Car stockholders that
are individuals may be entitled to a preferential rate on long-term capital
gains. The Taxpayer Relief Act of 1997 further reduces tax rates on capital
gains recognized by individuals in respect of assets held for more than 18
months. Cable Car stockholders are advised to consult with their own tax
advisors regarding the application of the Taxpayer Relief Act of 1997 to their
particular circumstances.
A successful IRS challenge to the reorganization status of the Merger would
result in Cable Car stockholders recognizing taxable gain or loss with respect
to each share of Cable Car Common Stock surrendered equal to the difference
between the stockholder's tax basis in such share and the fair market value, as
of the Effective Time, of the Triarc Common Stock received in exchange therefor.
In such event, a stockholder's aggregate basis in the Triarc Common Stock so
received would equal the fair market value of such stock as of the Effective
Time, and the stockholder's holding period for such stock would begin the day
after the Effective Time.
THE DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY.
THE DISCUSSION IS BASED ON CURRENTLY EXISTING PROVISIONS OF THE CODE, EXISTING
AND PROPOSED TREASURY REGULATIONS, AND CURRENT ADMINISTRATIVE RULINGS AND COURT
DECISIONS. ALL THE FOREGOING IS SUBJECT TO CHANGE, AND ANY SUCH CHANGE COULD
AFFECT THE CONTINUING VALIDITY OF THIS DISCUSSION. NO INFORMATION IS PROVIDED
WITH RESPECT TO THE TAX CONSEQUENCES, IF ANY, OF THE MERGER UNDER APPLICABLE
FOREIGN, STATE AND LOCAL LAWS. CABLE CAR'S STOCKHOLDERS ARE URGED TO CONSULT
THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE
MERGER, INCLUDING TAX RETURN REPORTING REQUIREMENTS, THE APPLICABILITY AND
EFFECT OF FOREIGN, STATE, LOCAL AND OTHER APPLICABLE TAX LAWS AND THE POSSIBLE
EFFECT OF ANY PROPOSED CHANGES IN THE TAX LAWS.
ACCOUNTING TREATMENT
The Merger will be accounted for by Triarc under the 'purchase' method of
accounting in accordance with generally accepted accounting principles.
Therefore, the aggregate Merger Consideration paid by Triarc will be allocated
to the Cable Car assets acquired and liabilities assumed based on their fair
values; and the results of operations of Cable Car will be included in the
results of operations of Triarc only for periods subsequent to the Effective
Time.
RESALE OF TRIARC COMMON STOCK BY AFFILIATES
The shares of Triarc Common Stock to be issued in the Merger will be
registered under the Securities Act pursuant to the Registration Statement of
which this Proxy Statement/Prospectus is a part, thereby allowing such shares of
Triarc Common Stock to be freely transferable under the Securities Act, except
for shares issued pursuant to the terms of the Merger Agreement to any holder of
Cable Car Common Stock who may be deemed to be an 'affiliate' of Cable Car or
Triarc for purposes of Rule 145 under the Securities Act. Such affiliates may
not sell their shares of Triarc Common Stock acquired in connection with the
Merger, except pursuant to an effective registration statement under the
Securities Act covering such shares, or in compliance with Rule 145, Rule 144 or
another applicable exemption from the registration requirements of the
Securities Act. Persons who may be deemed to be affiliates of an entity
generally include individuals or entities that control, are controlled by or are
under common control with such entity, and includes the directors, the executive
officers and the principal stockholders of such entity.
Cable Car has agreed in the Merger Agreement to use its best efforts to
cause each director, executive officer and other person who may be deemed an
affiliate (for the purposes of Rule 145) of Cable Car to execute and deliver a
written agreement intended to ensure compliance with the Securities Act, the
form of which is attached to the Merger Agreement as Exhibit B.
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This Proxy Statement/Prospectus cannot be used for resales of Triarc Common
Stock received by any person who may be deemed an affiliate of Cable Car.
REGULATORY APPROVALS
Under the HSR Act and the rules thereunder promulgated by the Federal Trade
Commission (the 'FTC'), the Merger may not be consummated until notifications
have been given and certain information has been furnished to the FTC and the
Antitrust Division of the United States Department of Justice (the 'Antitrust
Division') and specified waiting period requirements have been satisfied. Triarc
and Cable Car filed the required notification and report forms under the HSR Act
with the FTC and the Antitrust Division with a request for early termination of
the waiting period with respect thereto and on October 15, 1997 were notified
that the waiting period had been terminated.
Other than the expiration or termination of the applicable waiting period
under the HSR Act, the Commission declaring effective the Registration Statement
containing this Proxy Statement/Prospectus, approvals in connection with
compliance with applicable Blue Sky or state securities laws and the filing of
the Certificate of Merger with the Secretary of State of the State of Delaware,
neither the management of Triarc nor the management of Cable Car believes that
any filing with or approval of any governmental authority is necessary in
connection with the consummation of the Merger. Pursuant to the Merger
Agreement, Triarc, Mergerco and Cable Car each have agreed to take all
reasonable actions necessary to comply promptly with all legal requirements
which may be imposed on it with respect to the Merger Agreement and the
consummation of the Merger. Each of Triarc, Mergerco and Cable Car have agreed
to take, and cause their subsidiaries to take, all reasonable actions necessary
to obtain any consent, authorization, order or approval of, any governmental
authority or other third party required to be obtained or made by Triarc,
Mergerco or Cable Car or any of their subsidiaries in connection with the Merger
and the transactions contemplated by the Merger Agreement.
SECTION 203 OF THE DGCL
Section 203 of the DGCL ('Section 203') prohibits a Delaware corporation
from engaging in a 'business combination' with an 'interested stockholder' for
three years following the time that such person becomes an interested
stockholder. With certain exceptions, an interested stockholder is an
individual, corporation, partnership, unincorporated association or other entity
who or which owns 15% or more of the corporation's outstanding voting stock or
is an affiliate or an associate of the corporation and was the owner of 15% or
more of the corporation's outstanding voting stock at any time within the
previous three years.
For purposes of Section 203, the term 'business combination' is defined
broadly to include mergers with or, with certain limitations, caused by the
interested stockholder; sales or other dispositions to the interested
stockholder (except proportionately with the corporation's other stockholders)
of assets of the corporation or a majority-owned subsidiary equal to ten percent
or more of the aggregate market value of the corporation's consolidated assets
or its outstanding stock; the issuance or transfer by the corporation or a
majority-owned subsidiary of stock of the corporation or of such subsidiary to
the interested stockholder, with certain enumerated exceptions; most
transactions involving the corporation or a majority-owned subsidiary having the
effect of directly or indirectly increasing the interested stockholder's
proportionate ownership of any class or series of the corporation's or such
subsidiary's stock; or any receipt by the interested stockholder (except
proportionately as a stockholder), directly or indirectly, of any loans,
advances, guarantees, pledges or other financial benefits provided by or through
the corporation or a majority-owned subsidiary.
The three-year moratorium imposed on business combinations by Section 203
does not apply if (i) prior to the time when such stockholder becomes an
interested stockholder the board of directors of the corporation approves either
the business combination or the transaction which resulted in the person
becoming an interested stockholder; (ii) upon consummation of the transaction
which made him or her an interested stockholder the interested stockholder owns
at least 85% of the voting stock of the corporation outstanding at the time the
transaction commenced (excluding from the calculation of outstanding shares
those shares owned by directors who are also officers of the corporation and
shares
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held by employee stock plans which do not afford employees the right to decide
confidentially whether to accept a tender or exchange offer); or (iii) on or
after the time when such person becomes an interested stockholder, the board
approves the business combination and it is also approved at the stockholder
meeting by sixty-six and two-thirds percent (66 2/3%) of the outstanding voting
stock not owned by the interested stockholder.
Section 203 applies only to Delaware corporations which have a class of
voting stock that is listed on a national securities exchange, authorized for
quotation on NASDAQ or held of record by more than 2,000 stockholders. However,
a Delaware corporation may elect not to be governed by Section 203 by a
provision in its original certificate of incorporation or an amendment thereto
or to the bylaws, which amendment must be approved by a majority of the shares
entitled to vote. The Cable Car Charter does not include such a provision.
The Cable Car Board believes that Section 203 will not be applicable to
Triarc or its affiliates, as, prior to the time when Triarc or its affiliates
would become an interested stockholder of Cable Car, the Cable Car Board
approved the transaction which would result in Triarc or its affiliates becoming
an interested stockholder. On June 19, 1997, the Cable Car Board approved the
Merger Agreement, the Merger and all other transactions contemplated thereby,
including the entering into and performance of the Stockholders Agreement,
which, individually or collectively, constitute the transactions which will make
Triarc or its affiliates an interested stockholder. In addition, on June 19,
1997, the Cable Car Board determined that neither Triarc nor any of its
affiliates would be subject to the restrictions of Section 203 as an 'interested
stockholder' of Cable Car as a result of the Merger Agreement, the Merger and
all other transactions contemplated thereby, including the Stockholders
Agreement.
STOCK EXCHANGE LISTING
Triarc will file an application to list the shares of Triarc Common Stock
to be issued in connection with the Merger on the NYSE. Approval of such
listing, subject to official notice of issuance, is a condition to consummation
of the Merger.
ADDITIONAL INTERESTS OF CABLE CAR MANAGEMENT
In considering the recommendation of the Cable Car Board with respect to
the Merger Agreement and the Transactions, holders of Cable Car Common Stock
should be aware that certain members of Cable Car's management and of the Cable
Car Board have interests in the Merger that are in addition to the interest of
Cable Car stockholders generally.
SIMPSON EMPLOYMENT AGREEMENT
Samuel M. Simpson, the President and Chief Executive Officer and a director
of Cable Car, currently has a three-year employment contract with Cable Car
providing for an annual salary of $175,000 and annual bonuses based on Cable
Car's revenues and profits. Mr. Simpson has entered into an agreement with
Triarc that, upon the Effective Time, he will enter into the Simpson Employment
Agreement with the Surviving Corporation which will supersede Mr. Simpson's
existing employment agreement with Cable Car and provide for Mr. Simpson's
employment as President and Chief Executive Officer of the Surviving Corporation
and the Cable Car Subsidiaries, and a representative for the Triarc Beverage
Group for the western United States. The Simpson Employment Agreement will have
a three-year term. Pursuant to its terms, Mr. Simpson will receive an annual
salary of $284,300 per year (subject to increase but not decrease during the
initial term of the agreement) and be eligible to receive additional incentive
cash compensation, Triarc stock options and other benefits as more fully
described in 'Management of the Surviving Corporation -- Simpson Employment
Agreement.' Mr. Simpson will also be entitled to a $400,000 bonus upon signing
the Simpson Employment Agreement which will be refundable on a pro rata basis
should he leave his employment prior to the first anniversary of the Effective
Time.
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ACCELERATION OF VESTING OF STOCK OPTIONS
In accordance with the terms of their grant, all unvested Cable Car Stock
Options, including those granted to officers, directors and non-director
employees of Cable Car, will become immediately exercisable on the Effective
Date of the Merger. The options for Triarc Common Stock to be issued by Triarc
in the Merger to replace such Cable Car Stock Options will be immediately
exercisable. See 'The Merger Agreement -- Cable Car Stock Options.'
STOCKHOLDERS AGREEMENT
In light of the time and expense Triarc would incur in pursuing the
proposed transaction with Cable Car, as a condition to Triarc's execution of the
Merger Agreement and for no separate consideration, Triarc required that Samuel
M. Simpson, the President and Chief Executive Officer of Cable Car, Susan L.
Neff, Mr. Simpson's wife, William H. Rutter, a director of Cable Car, and Susan
L. Fralick, Mr. Rutter's wife (collectively, the 'Subject Stockholders'),
execute the Stockholders Agreement with Triarc, which provides that the Cable
Car Common Stock held by the Subject Stockholders will be voted in favor of the
Merger. As of September 30, 1997, the Subject Stockholders owned an aggregate of
1,766,409 shares of Cable Car Common Stock, or approximately 19.7% of the shares
of Cable Car Common Stock entitled to vote at the Special Meeting, which are
subject to the terms of the Stockholders Agreement (such amount does not include
12,200 shares of Cable Car Common Stock owned by them but not subject to the
Stockholders Agreement). Each Subject Stockholder has agreed that at any meeting
of the holders of Cable Car Common Stock, he or she will, until the Effective
Time or the termination of the Merger Agreement, vote or cause to be voted such
Cable Car Common Stock and any Cable Car Common Stock acquired after the date of
the Stockholders Agreement (collectively, the 'Subject Stock') in favor of
approval of the Merger Agreement and the Merger and against any (i) action or
agreement that would result in a breach of any of Cable Car's representations or
warranties or obligations under the Merger Agreement, (ii) Acquisition Proposal,
(iii) change in a majority of the Subject Stockholders who constitute the Cable
Car Board, (iv) any change in the capitalization of Cable Car or any amendment
of Cable Car's certificate of incorporation or bylaws, (v) any other material
change in Cable Car's corporate structure or business, or (vi) any other action
which is intended, or could reasonably be expected, to prevent or delay beyond
December 31, 1997 the Merger or the other Transactions. Each Subject Stockholder
has also granted Triarc an irrevocable proxy to vote his or her shares of
Subject Stock as specified above in the event that such Stockholder fails to so
vote his or her Subject Stock.
In addition, pursuant to the Stockholders Agreement, each Subject
Stockholder has granted to Triarc an exclusive and irrevocable option to
purchase his or her Subject Stock in whole but not in part at any time after
Cable Car has delivered to Triarc a Transaction Notice (as defined in 'The
Merger Agreement -- No Solicitation of Transactions') or Cable Car has furnished
confidential information to any person or entered into negotiations with any
person with respect to an Acquisition Proposal (as defined in 'The Merger
Agreement -- No Solicitation of Transactions'), at a price per share in cash
equal to the product obtained by multiplying 0.1722 (the 'Option Conversion
Price') and the average (without rounding) of the closing prices per share of
Triarc Common Stock on the NYSE on the NYSE Composite Tape for the 15
consecutive NYSE trading days ending on the NYSE trading day immediately
preceding the date of the closing of the exercise of the option (the 'Option
Average Share Price'), subject to the following adjustment: if the Option
Average Share Price is less than $18.875, then the Option Conversion Price will
be adjusted to equal the quotient obtained by dividing $3.25 by the Option
Average Share Price, and if the Option Average Share Price is greater than
$24.50, then the Option Conversion Price will be adjusted to equal the quotient
obtained by dividing $4.22 by the Option Average Share Price. All options
granted to Triarc under the Stockholders Agreement must be exercised
simultaneously. If the Merger Agreement is terminated pursuant to a Cable Car
Default Termination or a Stockholder Vote Termination (as each such term is
defined in 'The Merger Agreement -- Termination') and the Stockholders Agreement
is not terminated as described in the next paragraph, then Triarc must exercise
the options within 10 business days following such termination of the Merger
Agreement, or the options will expire.
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The Stockholders Agreement, including the options granted by the Subject
Stockholders thereunder, will terminate if (i) the Effective Time occurs or (ii)
the Merger Agreement is terminated pursuant to a (A) Consent Termination, an
Optional Termination, a Triarc Default Termination or a Triarc Share Price
Termination (as each such term is defined in 'The Merger Agreement --
Termination') or (B) a Cable Car Default Termination or a Stockholder Vote
Termination (as each such term is defined in 'The Merger
Agreement -- Termination') so long as Cable Car or its stockholders shall not
have received an Acquisition Proposal (as defined in 'The Merger Agreement -- No
Solicitation of Transactions') and the Cable Car Board shall not have withdrawn,
or modified or changed in a manner adverse to Triarc or Mergerco its approval or
recommendation of the Merger Agreement or the Merger.
The Subject Stockholders received no separate consideration for executing
the Stockholders Agreement and did so at Triarc's insistence in order for Triarc
to agree to enter into the Merger Agreement.
The Stockholders Agreement is attached as Appendix B-2 to this Proxy
Statement/Prospectus and is incorporated herein by reference. The summary set
forth above is qualified in its entirety by reference to the Stockholders
Agreement.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under the Merger Agreement, Triarc and the Surviving Corporation have
agreed that the Certificate of Incorporation and Bylaws of the Surviving
Corporation and each of the Cable Car Subsidiaries will contain provisions no
less favorable with respect to indemnification of directors, officers, agents
and employees and other individuals than those set forth in the certification of
incorporation and Bylaws of Cable Car and the Cable Car Subsidiaries as in
effect on the date of the Merger Agreement, and further agreed that such
provisions will not be amended, repealed or otherwise modified for a period of
five years after the Effective Time in any manner that would adversely affect
the rights thereunder of individuals who at or prior to the Effective Time were
directors, officers, agents or employees of Cable Car or any of the Cable Car
Subsidiaries or who were otherwise entitled to indemnification pursuant to the
certificate of incorporation and Bylaws of Cable Car or any of the Cable Car
Subsidiaries. If the Surviving Corporation or any of the Cable Car Subsidiaries
will not have the financial resources to satisfy its indemnification obligations
to such persons as provided under its certificate of incorporation and Bylaws,
Triarc has agreed that it will provide such indemnification of such persons to
the extent so provided.
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THE MERGER AGREEMENT
The following is a summary of the material provisions of the Merger
Agreement not summarized elsewhere in this Proxy Statement/Prospectus. The
Merger Agreement is attached as Appendix B-1 to this Proxy Statement/Prospectus
and is incorporated herein by reference. This summary is qualified in its
entirety by reference to the Merger Agreement.
CONVERSION OF SECURITIES
At the Effective Time, by virtue of the Merger and without any action on
the part of Mergerco, Cable Car or the holders of any of Cable Car's securities,
each share of Cable Car Common Stock issued and outstanding immediately prior to
the Effective Time (other than any shares of Cable Car Common Stock owned by
Cable Car as treasury shares or by Triarc or any of its subsidiaries or any
subsidiaries of Cable Car, which will be canceled, and shares of Cable Car
Common Stock held by a person who has properly exercised his appraisal rights
under Section 262 of the DGCL (the 'Dissenting Shares')) will be converted into
the right to receive 0.1722 (the 'Conversion Price') of a share of Triarc Common
Stock, subject to the adjustment described below, and any cash to be paid in
lieu of fractional shares of Triarc Common Stock. The Conversion Price is
subject to adjustment as follows: (i) if the Average Triarc Share Price (as
defined below) is less than $18.875, then the Conversion Price shall be adjusted
to equal the quotient of $3.25 divided by such Average Triarc Share Price, and
(ii) if the Average Triarc Share Price is greater than $24.50, then the
Conversion Price shall be adjusted to equal the quotient of $4.22 divided by
such Average Triarc Share Price (the Conversion Price as so adjusted, is
referred to herein as the 'Adjusted Conversion Price'). For example, if the
Average Triarc Share Price is (i) $18.875 or greater, but not greater than
$24.50, then each share of Cable Car Common Stock will be converted at the
Effective Time into the right to receive 0.1722 of a share of Triarc Common
Stock; (ii) $18.00, then each share of Cable Car Common Stock will be converted
at the Effective Time into the right to receive 0.18056 of a share of Triarc
Common Stock; and (iii) $26.00, then each share of Cable Car Common Stock will
be converted at the Effective Time into the right to receive 0.16231 of a share
of Triarc Common Stock. Under the Merger Agreement, the 'Average Triarc Share
Price' means the average (without rounding) of the closing prices per share of
Triarc Common Stock on the NYSE Composite Tape for the 15 consecutive NYSE
trading days ending on the NYSE trading day immediately preceding the Closing
Date.
Holders of Dissenting Shares are entitled to exercise appraisal rights in
connection with the Merger. See 'Appraisal Rights.'
Each share of Cable Car Common Stock held in the treasury of Cable Car and
each share of Cable Car Common Stock owned by Triarc or any direct or indirect
wholly owned subsidiary of Triarc or any of the Cable Car Subsidiaries
immediately prior to the Effective Time will, by virtue of the Merger, and
without any action of the Company or the holder thereof, be canceled and
extinguished without any conversion thereof and no payment will be made with
respect thereto.
Each share of the common stock, par value $1.00 per share, of Mergerco
issued and outstanding immediately prior to the Effective Time will be converted
into one validly issued, fully paid and non-assessable share of common stock,
par value $1.00 per share, of the Surviving Corporation.
EXCHANGE PROCEDURES
As of the Effective Time, Triarc will deposit, or will cause to be
deposited, with Harris Trust Company of New York or such other bank or trust
company as may be designated by Triarc and approved by Cable Car, which approval
will not be unreasonably withheld (the 'Exchange Agent'), for the benefit of the
holders of Cable Car Common Stock, for exchange in accordance with the exchange
procedures of the Merger Agreement through the Exchange Agent, certificates
representing an aggregate number of shares of Triarc Common Stock as nearly as
practicable equal to the product of the Adjusted Conversion Price and the number
of outstanding shares of Cable Car Common Stock to be converted in accordance
with the Merger Agreement (the 'Exchange Fund').
As promptly as practicable after the Effective Time, Triarc will cause the
Exchange Agent to mail and/or make available to each holder of a certificate or
certificates which immediately prior to the
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Effective Time represented outstanding shares of Cable Car Common Stock (other
than shares to be canceled without consideration pursuant to the Merger
Agreement) (the 'Certificates') (i) a notice and letter of transmittal (which
will advise the holder of the effectiveness of the Merger) and (ii) instructions
for the procedure for effecting the surrender of the Certificates in exchange
for certificates representing shares of Triarc Common Stock and cash in lieu of
any fractional shares. Upon surrender to the Exchange Agent of a Certificate for
cancellation, together with such letter of transmittal, duly executed and
completed in accordance with the instructions thereon, and such other documents
as may be reasonably required pursuant to such instructions, the holder of such
Certificate will be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Triarc Common Stock which such
holder has the right to receive in respect of the shares of Cable Car Common
Stock formerly represented by such Certificate (after taking into account all
shares of Cable Car Common Stock then held by such holder), cash in lieu of
fractional shares of Triarc Common Stock to which such holder is entitled and
any dividends or other distributions to which such holder is entitled, and the
Certificate so surrendered will then be canceled. At the Effective Time, the
Cable Car Common Stock transfer books will be closed and no further transfer of
shares of Cable Car Common Stock will be made thereafter. Until surrendered as
contemplated by these provisions of the Merger Agreement, each Certificate will
be deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the certificate representing shares of Triarc Common
Stock, cash in lieu of any fractional shares of Triarc Common Stock to which
such holder is entitled and any dividends or other distributions to which such
holder is entitled.
DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES
No dividends or other distributions declared or made after the Effective
Time with respect to Triarc Common Stock with a record date at or after the
Effective Time will be paid to the holder of any unsurrendered Certificate with
respect to the shares of Triarc Common Stock represented thereby, and no cash
payment in lieu of fractional shares will be paid to any such holder until the
holder of such Certificate surrenders such Certificate. Upon surrender of any
such Certificate, there will be paid to the person in whose name the shares of
Triarc Common Stock is issued in exchange therefor, without interest, the amount
of any dividends which will have become payable with respect to such shares of
Triarc Common Stock between the Effective Time and the time of such surrender
and at the appropriate payment date, the amount of dividends or other
distributions, with a record date at or after the Effective Time but prior to
surrender and a payment date occurring after surrender, payable with respect to
such whole shares of Triarc Common Stock, subject in each case to deductions
required by applicable law to be withheld and any applicable escheat laws or
unclaimed property laws.
NO FURTHER RIGHTS IN CABLE CAR COMMON STOCK
All shares of Triarc Common Stock issued upon conversion of the shares of
Cable Car Common Stock in accordance with the terms of the Merger Agreement
(including any cash paid in respect of dividends, distributions and fractional
shares) will be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Cable Car Common Stock.
NO FRACTIONAL SHARES
Shares of the Triarc Common Stock shall be issued only in whole shares. A
holder of Cable Car Common Stock immediately prior to the Effective Time will
not be entitled to receive fractional shares of Triarc Common Stock (the
'Fractional Shares') but, instead, will be entitled to receive promptly from the
Exchange Agent a cash payment in lieu of Fractional Shares in an amount equal to
such stockholder's proportionate interest in the net proceeds from the sale or
sales in the open market by the Exchange Agent, on behalf of all such
stockholders, of the aggregate Fractional Shares. Such sales shall be made
promptly after the Effective Time, or in the case of Dissenting Shares the
holders of which have either withdrawn its demand for appraisal or failed to
establish or lost or forfeit its appraisal rights, which become exchangeable for
the Merger Consideration, promptly after such change in status of such
Dissenting Shares. Such cash payments will be made to each such stockholder only
upon proper
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surrender of such stockholder's Certificates, together with a properly completed
and duly executed transmittal form and any other required documents.
CABLE CAR STOCK OPTIONS
Each option issued by Cable Car that is exercisable for Cable Car Company
Stock and outstanding immediately prior to the Effective Time (a 'Cable Car
Option'), whether or not then vested or exercisable, shall, effective as of the
Effective Time, and without any action on the part of the holder thereof, be
assumed by Triarc and become and represent an option exercisable for shares of
Triarc Common Stock (a 'Substitute Option') with the same expiration dates as
such Cable Car Option immediately prior to the Effective Time (but taking into
account any acceleration of the vesting of such Cable Car Option as a result of
the consummation of the Merger), with the new exercise price thereof being
determined by dividing the exercise price of such Cable Car Option by the
Adjusted Conversion Price (with the result of such calculation rounded to the
nearest whole cent), and the number of shares of Triarc Common Stock issuable
upon exercise of the Substitute Options being determined by multiplying the
number of shares to be issued upon exercise of such Cable Car Option by the
Adjusted Conversion Price (with the result of such calculation rounded to the
nearest whole number). As discussed in 'The Proposed Merger and Related
Matters -- Additional Interests of Cable Car Management -- Acceleration of
Vesting of Stock Options,' all unvested Cable Car Options will vest at the
Effective Time. Triarc will file as soon as practicable after the Effective
Time, but in no event later than 45 days after the Effective Time, and keep
current, one or more registration statements on Form S-8 (or any successor or
appropriate form) with respect to the shares of Triarc Common Stock subject to
the Substitute Options so long as such Substitute Options remain outstanding.
TERMINATION OF EXCHANGE FUND
Any portion of the Exchange Fund which will not have been distributed to
the holders of Cable Car Common Stock prior to the second anniversary of the
Effective Time will be delivered to Triarc, and any holders of Cable Car Common
Stock who have not previously complied with the exchange procedures set forth in
the Merger Agreement will thereafter look only to Triarc for payment of the
Merger Consideration to which they are entitled under the Merger Agreement,
subject to escheat and similar laws.
CERTAIN REPRESENTATIONS AND WARRANTIES
The Merger Agreement contains various representations and warranties of
Triarc, Mergerco and Cable Car relating to, among other things, the following
matters (which representations and warranties are subject, in certain cases, to
specified exceptions): (i) the due organization, power, authority and good
standing of, and similar corporate matters with respect to, each of Triarc and
Cable Car and their respective subsidiaries; (ii) the authorization, execution,
delivery, performance and enforceability of the Merger Agreement by each party
thereto; (iii) each of Triarc's and Cable Car's capital structure; (iv) the
reports and other documents filed with the Commission and other regulatory
authorities, the financial statements included therein and the accuracy of the
information contained in each of them; (v) the absence of certain changes or
events prior to the date of the Merger Agreement having a material adverse
effect on Triarc and its subsidiaries, taken as a whole, or Cable Car and the
Cable Car Subsidiaries, taken as a whole, as the case may be; and (vi) with
respect to the Merger Agreement and the Merger, the absence of conflict with the
certificate of incorporation and bylaws of each of Cable Car and the Cable Car
Subsidiaries, the certificate of incorporation and bylaws of each of Triarc and
its subsidiaries, and with applicable law or any material contracts to which
Cable Car or Triarc or any of their respective subsidiaries, as the case may be,
is a party or by which they may be bound.
In addition, the Merger Agreement contains certain additional
representations and warranties of Cable Car and the Cable Car Subsidiaries
relating to (i) the vote required by Cable Car's stockholders to approve the
Merger Agreement; (ii) the absence of undisclosed liabilities; (iii) the
accuracy of the information provided by Cable Car for inclusion in the
Registration Statement (including this Proxy Statement/Prospectus); (iv)
compliance with laws; (v) the absence of pending or threatened litigation
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affecting Cable Car or any of the Cable Car Subsidiaries; (vi) the payment of
taxes, the filing of tax returns and other tax matters; (vii) compliance with
contractual obligations; (viii) the absence of defaults under Cable Car's and
the Cable Car Subsidiaries' contracts and the absence of contractual provisions
limiting their right to compete; (ix) Cable Car's and the Cable Car
Subsidiaries' ownership and right to use certain intellectual property and the
absence of (A) any challenges to their intellectual property rights, or (B) any
infringements or conflicts with their business and the intellectual property
rights of third parties; (x) certain employee benefit plans and ERISA matters;
(xi) the condition of Cable Car's inventory and receivables and the status of
Cable Car's and the Cable Car Subsidiaries' ongoing relationship with their
suppliers; (xii) historical case sales under the Stewart's Master Agreement and
the worldwide scope of the territory subject to exclusive license thereunder;
(xiii) transactions with affiliates; (xiv) the applicability of state takeover
statutes to the Merger; and (xv) the absence of any brokerage, finder's or other
fee due in connection with the Merger (except in the case of Montgomery
Securities).
The Merger Agreement contains certain additional representations and
warranties of Triarc and Mergerco relating to (i) the accuracy of information
contained in the Registration Statement (other than information provided by
Cable Car for inclusion therein) and (ii) certain issues in connection Section
368(a) of the Code.
CONDUCT OF BUSINESS PENDING THE MERGER
Pursuant to the Merger Agreement, Cable Car has agreed that, between the
date of the Merger Agreement and the Effective Time, except as provided in the
Merger Agreement or unless Triarc shall have otherwise agreed in writing, (i)
Cable Car's and the Cable Car Subsidiaries' business, including investment
practices and policies, will be conducted only in, and Cable Car and the Cable
Car Subsidiaries will not take any action except in, the ordinary course of
business and in a manner consistent in all material respects with past practice;
and (ii) each of Cable Car and the Cable Car Subsidiaries will use all
reasonable efforts to preserve intact its business organization, and to maintain
its existing relationships with material customers, distributors, suppliers,
employees, creditors and business partners.
Without limiting the generality of the foregoing, each of Cable Car and the
Cable Car Subsidiaries will not, except as specified in the Merger Agreement or
disclosed to Triarc on or before the date of the Merger Agreement, unless Triarc
shall have otherwise agreed in writing: (i) amend its certificate of
incorporation or bylaws or similar organizational documents; (ii) declare, set
aside or pay any dividend or other distribution payable in cash, stock or
property with respect to its capital stock other than dividends paid by Cable
Car's wholly owned Subsidiaries to the Cable Car; (iii) issue, sell, transfer,
pledge, dispose of or encumber any additional shares of, or securities
convertible into or exchangeable for, or options, warrants, calls, commitments
or rights of any kind to acquire, any shares of capital stock of any class of
Cable Car or the Cable Car Subsidiaries, other than issuances pursuant to the
exercise of stock options outstanding on the date of the Merger Agreement; (iv)
transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any
assets that are material to Cable Car and the Cable Car Subsidiaries taken as a
whole other than sales of investment assets in the ordinary course of business
consistent with past practice; (v) redeem, purchase or otherwise acquire
directly or indirectly any of its capital stock; (vi) grant any increase in the
compensation payable or to become payable by Cable Car or any of the Cable Car
Subsidiaries to any officer or employee other than scheduled annual increases in
the ordinary course of business consistent with past practice in an amount not
to exceed five percent for any individual; (vii) adopt any new, or amend or
otherwise increase, or accelerate the payment or vesting of the amounts payable
or to become payable under any benefit plan; (viii) enter into any, or amend any
existing, employment, consulting or severance agreement with or, except in
accordance with the existing written policies of Cable Car, grant any severance
or termination pay to any officer, director or employee of Cable Car or any of
the Cable Car Subsidiaries; (ix) make any additional contributions to any
grantor trust created by Cable Car to provide funding for non-tax-qualified
employee benefits or compensation; or (x) provide any severance program to any
Cable Car Subsidiary which does not have a severance program as of the date of
the Merger Agreement; (xi) modify, amend or terminate any of the material
contracts or waive, release or assign any material rights or claims; (xii)
permit any material
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insurance policy naming it as a beneficiary or a loss payable payee to be
canceled or terminated; (xii) subject to certain specified exceptions, (A) incur
or assume any debt except for borrowings under its existing credit facility in
an amount exceeding $100,000, (B) assume, guarantee, endorse or otherwise become
liable or responsible for the obligations of any other person, (C) make any
loans, advances or capital contributions to, or investments in, any other
person, or (D) enter into any material commitment (including, but not limited
to, any capital expenditure, 'take-or-pay' contract or purchase of assets) in
excess of $100,000; (xiii) change any of the accounting principles used by it
except as required by generally accepted accounting principles; (xiv) pay,
discharge or satisfy any material claims, liabilities or obligations; (xv)
except as permitted in the Merger Agreement, adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring, recapitalization
or other material reorganization of Cable Car or any of the Cable Car
Subsidiaries or any agreement relating to an Acquisition Proposal (as defined in
'No Solicitation of Transactions' below) (other than the Merger); (xvi) engage
in any transaction with, or enter into any agreement, arrangement, or
understanding with any of Cable Car's affiliates; (xvii) make any tax election
that would have a material adverse effect on Cable Car or any of the Cable Car
Subsidiaries; and (xviii) enter into any agreement, commitment or arrangement to
do any of the foregoing, or to authorize, recommend, propose or announce an
intention to do any of the foregoing.
Cable Car has also agreed that it will not, between the date of the Merger
Agreement and the Effective Time, intentionally take or cause to be taken any
action that would disqualify the Merger from constituting a tax-free
'reorganization' under Section 368(a) of the Code.
NO SOLICITATION OF TRANSACTIONS
Pursuant to the Merger Agreement, Cable Car has agreed that it will not
directly or indirectly, and will not authorize or permit any of the Cable Car
Subsidiaries or any officer, director, employee, agent, investment banker,
financial advisor, attorney, accountant, broker, finder or other representative
of Cable Car or any of the Cable Car Subsidiaries directly or indirectly to, (i)
solicit, initiate, encourage or induce the making, submission or announcement of
any Acquisition Proposal (as defined below) or take any action that could
reasonably be expected to lead to an Acquisition Proposal, (ii) furnish any
nonpublic information regarding any of Cable Car and the Cable Car Subsidiaries
to any person in connection with or in response to an Acquisition Proposal,
(iii) engage in discussions with any person with respect to any Acquisition
Proposal, (iv) approve, endorse or recommend (or agree to approve, endorse or
recommend) any Acquisition Proposal or (v) enter into any letter of intent or
similar document or any agreement contemplating or otherwise relating to any
Acquisition Proposal.
Notwithstanding the foregoing, the Merger Agreement permits Cable Car to
furnish nonpublic information regarding Cable Car and the Cable Car Subsidiaries
to, or enter into discussions with, any person in response to an unsolicited
bona fide written Acquisition Proposal submitted (and not withdrawn) by such
person if (1) the Cable Car Board concludes in good faith, based upon the advice
of its financial advisor, that such Acquisition Proposal would result in a
transaction that is more favorable from a financial point of view to Cable Car's
stockholders than the Merger, (2) the Cable Car Board concludes in good faith,
after consultation with outside legal counsel, that such action is required in
order for the Cable Car Board to comply with its fiduciary obligations to Cable
Car's stockholders under applicable law, (3) prior to furnishing any such
nonpublic information to, or entering into discussions with, such person, Cable
Car gives Triarc written notice of the identity of such person and of Cable
Car's intention to furnish nonpublic information to, or enter into discussions
with, such person, (4) Cable Car receives from such person an executed
confidentiality agreement, and (5) prior to furnishing any such nonpublic
information to such person, Cable Car furnishes such nonpublic information to
Triarc (to the extent such nonpublic information has not been previously
furnished).
The Merger Agreement also requires Cable Car to promptly advise Triarc
orally and in writing of any Acquisition Proposal (including the identity of the
person making or submitting such Acquisition Proposal and the terms thereof)
that is made or submitted by any person (a 'Transaction Notice') and agrees that
it will not furnish confidential information to any person or enter into
negotiations with any person with respect to an Acquisition Proposal until it
has delivered to Triarc a Transaction Notice and 48 hours have passed since
Triarc's receipt of such Transaction Notice.
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For the purposes of the Merger Agreement, 'Acquisition Proposal' means any
tender or exchange offer involving the capital stock of Cable Car, any proposal
for a merger, consolidation or other business combination involving Cable Car or
any of the Cable Car Subsidiaries, any proposal or offer to acquire in any
manner a substantial equity interest in, or a substantial portion of the
business or assets of, Cable Car or any of the Cable Car Subsidiaries, any
proposal or offer with respect to any recapitalization or restructuring with
respect to Cable Car or any of the Cable Car Subsidiaries or any proposal or
offer with respect to any other transaction similar to any of the foregoing with
respect to Cable Car or any of the Cable Car Subsidiaries, other than pursuant
to the transactions to be effected pursuant to the Merger Agreement or any other
transaction with Triarc or any of its subsidiaries.
The Merger Agreement provides that it may be terminated by the Cable Car
Board if the Cable Car Board determines in good faith, after consultation with
(i) outside legal counsel, that termination of the Merger Agreement is required
for the Cable Car Board to satisfy its fiduciary obligations to the Cable Car
stockholders under applicable law by reason of an unsolicited bona fide
Acquisition Proposal having been made, and (ii) its financial advisor, that such
Acquisition Proposal would result in a transaction that is more favorable than
the Merger from a financial point of view to the Cable Car stockholders,
provided that Cable Car has complied with the provisions of Section 5.4 of the
Merger Agreement (relating to Acquisition Proposals) and notifies Triarc at
least five days in advance of its intention to terminate the Merger Agreement or
to enter into a definitive agreement with respect to such Acquisition Proposal,
and provided, further, that within such five day period Triarc has not made a
competing proposal which is at least as favorable to the Cable Car stockholders
from a financial point of view as such Acquisition Proposal. The Merger
Agreement may be terminated by the Triarc Board if (i) the Cable Car Board
withdraws, modifies or changes its approval recommendation of the Merger
Agreement or the Merger in a manner adverse to Triarc or Mergerco or recommends
to the stockholders of Cable Car any Acquisition Proposal or other business
combination, or (ii) Cable Car receives a bona fide written Acquisition Proposal
which has not been rejected by the Cable Car Board within 14 days after receipt
thereof. See 'The Merger Agreement -- Termination.'
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under the Merger Agreement, Triarc has agreed that the certificate of
incorporation and bylaws of the Surviving Corporation and each of the Cable Car
Subsidiaries will contain provisions no less favorable with respect to the
indemnification of directors, officers, agents and employees and other
individuals than those set forth in the certification of incorporation and
bylaws of Cable Car and the Cable Car Subsidiaries as in effect on the date of
the Merger Agreement, and further agreed that such provisions will not be
amended, repealed or otherwise modified for a period of five years after the
Effective Time in any manner that would adversely affect the rights thereunder
of individuals who at or prior to the Effective Time were directors, officers,
agents or employees of Cable Car or any of the Cable Car Subsidiaries or who
were otherwise entitled to indemnification pursuant to the certificate of
incorporation and bylaws of Cable Car or any of the Cable Car Subsidiaries. If
the Surviving Corporation or any of the Cable Car Subsidiaries does not have the
financial resources to satisfy its indemnification obligations to such persons
as provided under its certificate of incorporation and bylaws, Triarc has agreed
that it will provide such indemnification of such persons to the extent so
provided.
CONDITIONS TO CONSUMMATION OF THE MERGER
The obligations of Cable Car, Triarc and Mergerco to consummate the Merger
are subject to the satisfaction or, if permitted by applicable law, waiver of
the following conditions: (i) the Merger Agreement and the Merger shall have
been approved and adopted by the affirmative vote of the stockholders of Cable
Car in accordance with the DGCL and the Cable Car Charter; (ii) no court,
arbitrator or governmental body, agency or official shall have issued any order,
decree or ruling and there shall not be any statute, rule or regulation,
restraining, enjoining or prohibiting the consummation of the Merger; (iii) the
Registration Statement shall have been declared effective, and no stop order
suspending the effectiveness of the Registration Statement will be in effect and
no proceedings for such purpose will have been initiated or threatened by the
Commission; (iv) any waiting period applicable to
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the Merger under the HSR Act shall have expired or been terminated; (e) all
actions by or in respect of or filing with any governmental authority required
to permit the consummation of the Merger will have been obtained and such
approval shall be in full force and effect; and (f) the shares of Triarc Common
Stock to be issued in the Merger shall have been approved for listing on the
NYSE, subject to official notice of issuance.
The obligations of Triarc and Mergerco to consummate the Merger are subject
to the satisfaction or, if permitted by applicable law, waiver of the following
further conditions: (i) (A) Cable Car will have performed in all material
respects all of its obligations under the Merger Agreement required to be
performed by it at or prior to the Effective Time, (B) each of the
representations and warranties of Cable Car contained in the Merger Agreement
will be true and correct as of the Effective Time as if made at and as of such
time (except for those representations and warranties that address matters only
as of a particular date or only with respect to a specific period of time which
need only be true and accurate as of such date or with respect to such period),
(C) since December 31, 1996, except as disclosed to Triarc pursuant to the
Merger Agreement, there will not have occurred any event, change or effect
having, or which would be reasonably likely to have, in the aggregate, a
material adverse effect on Cable Car and the Cable Car Subsidiaries, taken as a
whole, and (D) Triarc will have received a certificate signed by an executive
officer of Cable Car to the foregoing effect; (ii) there shall not have been any
action taken, or any statute, rule, regulation, legislation, interpretation,
judgment, order or injunction enacted, entered, enforced, promulgated, amended,
issued or deemed applicable to the Merger by any domestic legislative body,
court, government or governmental, administrative or regulatory authority or
agency (A) restraining or preventing the carrying out of the Merger and other
Transactions, (B) prohibiting Triarc's ownership or operation of any material
portion of Triarc's or Cable Car's businesses or assets, or compelling Triarc to
dispose of or hold separate all or any material portion of Triarc's or Cable
Car's businesses or assets as a result of the Transactions, (C) making
acquisition of the shares of Cable Car Common Stock pursuant to the Merger
illegal, (D) prohibiting Triarc effectively from acquiring or holding or
exercising full rights of ownership of the shares of Cable Car Common Stock,
including, without limitation, the right to vote the shares of Cable Car Common
Stock acquired by it pursuant to the Merger on all matters properly presented to
the stockholders of Cable Car, (E) prohibiting Triarc or any of its subsidiaries
or affiliates from effectively controlling in any material respect the
businesses or operations of Cable Car, Triarc or their respective subsidiaries,
or (F) which would impose any condition which would materially adversely affect
the business of the Cable Car or (as a condition of consummating the
Transactions) the business of Triarc and its subsidiaries taken as a whole;
(iii) the Cable Car Board will not have withdrawn or modified its position with
respect to the Merger; (iv) Triarc shall have received an opinion of Cable Car's
outside counsel in scope and substance substantially in the form agreed to prior
to the date of the Merger Agreement; (v) the Average Triarc Share Price (the
average (without rounding) of the closing prices per share of Triarc Common
Stock on the NYSE Composite Tape for the fifteen (15) consecutive NYSE trading
days ending on the NYSE trading day immediately preceding the Closing Date)
shall not be less than $15.00 per share; (vi) the holders of no greater than 6%
of the shares of Cable Car Common Stock outstanding on the Record Date shall
have demanded appraisal rights pursuant to, and otherwise complied with the
provisions of, subsection (d) of Section 262 of the DGCL, and shall not have
voted in favor of or consented to the Merger; and (vii) no suit, claim, action
or proceeding with respect to the Merger or the other Transactions, or Cable Car
or any of the Cable Car Subsidiaries or any of their properties or assets, shall
have been instituted or threatened which could reasonably be expected to have a
material adverse effect on Cable Car and the Cable Car Subsidiaries taken as a
whole or would, or would be reasonably likely to, materially impair the ability
of Cable Car to consummate the Merger or the other Transactions.
The obligations of Cable Car to consummate the Merger are subject to the
satisfaction of the following conditions: (i) (A) Triarc and Mergerco shall have
performed in all material respects all of their respective obligations under the
Merger Agreement required to be performed by them at or prior to the Effective
Time, (B) each of the representations and warranties of Triarc contained in the
Merger Agreement will be true and correct, in each case as of the Effective Time
as if made at and as of such time (except for those representations and
warranties that address matters only as of a particular date or only with
respect to a specific period of time which need only be true and accurate as of
such date or
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with respect to such period), (C) since December 31, 1996, there will not have
occurred any event, change or effect having, or which would be reasonably likely
to have, individually or in the aggregate, a material adverse effect on Triarc
and its subsidiaries taken as a whole, and (D) Cable Car shall have received a
certificate signed by an executive officer of Triarc to the foregoing effect;
(ii) Cable Car shall have received the opinion of outside counsel to Triarc and
Mergerco in scope and substance substantially in the form agreed to prior to the
date of the Merger Agreement; (iii) Cable Car shall have received an opinion of
Sherman & Howard L.L.C. to the effect that the Merger will be treated for
federal income tax purposes as a 'reorganization' within the meaning of Section
368(a) of the Code; and (iv) no suit, claim, action or proceeding with respect
to the Merger or the other Transactions, or Triarc or any of its subsidiaries or
any of their properties or assets, shall have been instituted which could
reasonably be expected to have a material adverse effect on Triarc and its
subsidiaries taken as a whole, or would be reasonably likely to materially
impair the ability of Triarc to consummate the Merger or the other Transactions.
TERMINATION
The Merger Agreement may be terminated and the Merger may be abandoned at
any time prior to the Effective Time, whether before or after the stockholders
of Cable Car have approved the Merger Agreement, (i) by the mutual consent of
the Boards of Directors of each of Triarc and Cable Car (a 'Consent
Termination'); (ii) by either of the Boards of Directors of Triarc or Cable Car
(in each case, an 'Optional Termination'), if (A) the Effective Time has not
occurred on or before December 31, 1997, provided that the right to so terminate
the Merger Agreement will not be available to any party whose failure to fulfill
any obligation under the Merger Agreement has been the cause of, or resulted in,
the failure of the Effective Time to occur on or before such date, or (B) any
governmental authority has issued an order, decree or ruling or taken any other
action (which order, decree, ruling or other action the parties hereto shall use
their best efforts to lift), in each case permanently restraining, enjoining or
otherwise prohibiting the Merger and the other Transactions and such order,
decree, ruling or other action shall have become final and non-appealable. The
Merger Agreement may also be terminated by either of the Boards of Directors of
Triarc or Cable Car if the Merger Agreement and the Merger has not been approved
and adopted at the Special Meeting by the affirmative vote of the stockholders
of Cable Car in accordance with the DGCL and the Cable Car Charter (a
'Stockholder Vote Termination').
The Merger Agreement may also be terminated by the Cable Car Board if (i)
Triarc or Mergerco (A) breaches or fails in any material respect to perform or
com ply with any of its material covenants and agreements contained in the
Merger Agreement or (B) breaches its representations and warranties in any
material respect and such breach would have or would be reasonably likely to
have a material adverse effect on Triarc and its subsidiaries taken as a whole,
in each case such that the conditions precedent to Cable Car's obligations to
consummate the Merger would not be satisfied, provided, that if such breach is
curable by the breaching party through the exercise of the breaching party's
best efforts and for so long as the breaching party is using its best efforts to
cure such breach, Cable Car may not so terminate the Merger Agreement pursuant
to this clause (a 'Triarc Default Termination'); and (ii) the Cable Car Board
determines in good faith, after consultation with (A) outside legal counsel,
that termination of the Merger Agreement is required for the Cable Car Board to
satisfy its fiduciary obligations to the Cable Car stockholders under applicable
law by reason of an unsolicited bona fide Acquisition Proposal having been made,
and (B) its financial advisor, that such Acquisition Proposal would result in a
transaction that is more favorable than the Merger from a financial point of
view to the Cable Car stockholders, provided that Cable Car has complied with
the provisions of Section 5.4 of the Merger Agreement (relating to Acquisition
Proposals) and notifies Triarc at least five days in advance of its intention to
terminate the Merger Agreement or to enter into a definitive agreement with
respect to such Acquisition Proposal, and provided, further, that within such
five day period Triarc has not made a competing proposal which is at least as
favorable to the Cable Car stockholders from a financial point of view as such
Acquisition Proposal (a 'Competing Transaction Termination').
The Merger Agreement may also be terminated by the Triarc Board, if (i)
Cable Car (A) breaches or fails in any material respect to perform or comply
with any of its material covenants and agreements
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contained in the Merger Agreement, or (B) breaches its representations and
warranties in any material respect and such breach would have or would be
reasonably likely to have a material adverse effect on Cable Car and its
subsidiaries taken as a whole, in each case such that the conditions precedent
to Triarc's and Mergerco's obligations to consummate the Merger would not be
satisfied, provided, that if such breach is curable by Cable Car through its
exercise of best efforts and for so long as Cable Car is using its best efforts
to cure such breach, Triarc may not terminate the Merger Agreement pursuant to
this clause (a 'Cable Car Default Termination'); (ii) (A) the Cable Car Board
withdraws, modifies or changes its approval recommendation of the Merger
Agreement or the Merger in a manner adverse to Triarc or Mergerco or recommends
to the stockholders of Cable Car any Acquisition Proposal or other business
combination (a 'Board Recommendation Termination'), (B) Cable Car receives a
bona fide written Acquisition Proposal which has not been rejected by the Cable
Car Board within 14 days after receipt thereof (an 'Acquisition Proposal
Termination'), or (C) prior to the certification of the vote of the Cable Car's
stockholders to approve the Merger at the Special Meeting, it shall have been
publicly disclosed or Triarc or Mergerco shall have learned that any person,
entity or 'group' (as that term is defined in Section 13(d)(3) of the Exchange
Act), other than Triarc or its subsidiaries or any of their affiliates or the
Subject Stockholders, shall have acquired beneficial ownership (determined
pursuant to Rule 13d-3 promulgated under the Exchange Act) of more than 20% of
any class or series of capital stock of Cable Car (including the Cable Car
Common Stock), through the acquisition of stock, the formation of a group or
otherwise, or shall have been granted any option, right or warrant, conditional
or otherwise, to acquire beneficial ownership of more than 20% of any class or
series of capital stock of Cable Car (including the Cable Car Common Stock)
other than as disclosed in a Schedule 13D on file with the Commission on the as
of the date of the Merger Agreement (an 'Acquiring Person Termination'); or
(iii) the Average Triarc Share Price is less than $15.00 per share (a 'Triarc
Share Price Termination').
EFFECT OF TERMINATION
Except as otherwise provided in the Merger Agreement, in the event of the
termination of the Merger Agreement as described above, the Merger Agreement
will become null and void and there will be no liability under the Merger
Agreement on the part of Triarc, Mergerco or Cable Car; provided, however, that
nothing in the Merger Agreement will relieve (i) any party from liability for
fraud or for willful breach of the Merger Agreement or (ii) Triarc from its
obligation to hold any nonpublic information pertaining to Cable Car or the
Cable Car Subsidiaries it has received in connection with the Merger Agreement
in confidence.
FEES AND EXPENSES
All costs and expenses incurred in connection with the Merger Agreement and
the Merger will be paid by the party incurring such costs and expenses, whether
or not the Merger is consummated; provided, however, that if the Merger
Agreement is terminated by Triarc pursuant to a Triarc Share Price Termination,
Triarc will reimburse Cable Car for its reasonable costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses)
incurred in connection with the Merger Agreement and the Merger in an aggregate
amount not to exceed $225,000.
AMENDMENT AND WAIVER
The Merger Agreement may be amended by the parties to the Merger Agreement
by action taken by their respective Boards of Directors at any time prior to the
Effective Time; provided, however, that after the approval of the Merger
Agreement by the stockholders of Cable Car, no amendment or modification may be
made which would alter or change the amount or kind of shares, securities, cash,
property and/or rights to be received in exchange for or on conversion of all or
any of the capital stock of Cable Car, alter or change any term of the
certificate of incorporation of the Surviving Corporation to be effected by the
Merger, or alter or change any of the terms and conditions of the Merger
Agreement if such alteration or change would adversely affect the holders of the
capital stock of Cable Car. The Merger Agreement may not be amended except by
written agreement signed by the parties to the Merger Agreement.
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At any time prior to the Effective Time, any party to the Merger Agreement
may, by action taken by its Board of Directors, extend the time for the
performance of any obligation or other act of any other party thereto, waive any
inaccuracy in the representations and warranties of the other party contained in
the Merger Agreement or in any document delivered by the other party pursuant
thereto, and waive compliance with any agreement or condition contained therein.
Any such extension or waiver will be valid if set forth in an instrument in
writing signed on behalf of such party.
STOCKHOLDERS AGREEMENT
As a condition to Triarc's execution of the Merger Agreement and to
facilitate the consummation of the Merger, Triarc required the Subject
Stockholders to enter into the Stockholders Agreement, the terms of which are
summarized in 'The Proposed Merger and Related Matters -- Additional Interests
of Cable Car Management -- Stockholders Agreement.'
APPRAISAL RIGHTS
Holders of Cable Car Common Stock who do not vote in favor of the approval
and adoption of the Merger Agreement and who have met the conditions of, and
properly complied with the requirements of, Section 262 of the DGCL ('Section
262') will be entitled to appraisal rights. To preserve their rights,
stockholders who wish to exercise their statutory appraisal rights must submit
to Cable Car a written demand for appraisal prior to the taking of the vote on
the Merger Agreement at the Special Meeting and comply with the other procedural
requirements of Section 262 described below.
SECTION 262 IS REPRINTED IN ITS ENTIRETY AS APPENDIX D TO THIS PROXY
STATEMENT/PROSPECTUS. THE FOLLOWING DISCUSSION OF THE MATERIAL TERMS OF THE LAW
RELATING TO APPRAISAL RIGHTS IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
APPENDIX D. THIS DISCUSSION AND APPENDIX D SHOULD BE REVIEWED CAREFULLY BY ANY
STOCKHOLDER WHO WISHES TO EXERCISE STATUTORY APPRAISAL RIGHTS, OR WHO WISHES TO
PRESERVE THE RIGHT TO DO SO, AS FAILURE TO COMPLY WITH THE PROCEDURES SET FORTH
IN SECTION 262 WILL RESULT IN THE LOSS OF APPRAISAL RIGHTS, IF AVAILABLE.
A record holder of shares of Cable Car Common Stock who holds such shares
of Cable Car Common Stock on the date of making the demand described below, who
makes the demand described below with respect to such shares, who continuously
is the record holder of such shares through the Effective Time, who otherwise
complies with the statutory requirements of Section 262 and who neither votes in
favor of the Merger Agreement nor consents thereto in writing may be entitled to
an appraisal by the Delaware Court of Chancery (the 'Delaware Court') of the
fair value of his or her shares of Cable Car Common Stock. All references in
this summary of appraisal rights to a 'stockholder' are to the record holder or
holders of shares of Cable Car Common Stock.
Under Section 262, Cable Car must notify stockholders not less than 20 days
prior to the Special Meeting that appraisal rights are available and must
include in each such notice a copy of Section 262. This Proxy
Statement/Prospectus shall constitute such notice to the record holders of Cable
Car Common Stock.
Holders of shares of Cable Car Common Stock who desire to exercise their
appraisal rights must not vote in favor of the Merger Agreement and must deliver
a separate written demand for appraisal to Cable Car prior to the vote by the
Cable Car stockholders on the Merger Agreement. A stockholder who signs and
returns a proxy without expressly directing, by checking the applicable boxes on
the reverse side of the proxy card enclosed herewith or otherwise, that his or
her shares of Cable Car Common Stock be voted against the proposal to approve
the Merger Agreement or that an abstention be registered with respect to his or
her shares of Cable Car Common Stock will not be entitled to appraisal rights as
to those shares of Cable Car Common Stock because, in the absence of express
contrary instructions, such shares of Cable Car Common Stock will be voted in
favor of the proposal to approve the Merger Agreement. Accordingly, a
stockholder who desires to perfect appraisal rights with respect to any of his
or her shares of Cable Car Common Stock must either (i) refrain from executing
and returning the enclosed proxy card and from voting, in person or otherwise,
in favor of the proposal
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to approve the Merger Agreement, or (ii) check either the 'Against' or the
'Abstain' box next to the proposal to approve the Merger Agreement on such card
or affirmatively vote in person against the proposal to approve the Merger
Agreement or register in person an abstention with respect thereto. However, an
abstention or a vote against the Merger does not in and of itself constitute a
demand for appraisal. A demand for appraisal must be executed by or on behalf of
the stockholder of record and must reasonably inform Cable Car of the identity
of the stockholder of record and that such record stockholder intends thereby to
demand appraisal of his or her shares of Cable Car Common Stock. A person having
a beneficial interest in shares of Cable Car Common Stock that are held of
record in the name of another person, such as broker, fiduciary or other
nominee, must act promptly to cause the record holder to follow the steps
summarized herein properly and in a timely manner to perfect whatever appraisal
rights are available. If the shares of Cable Car Common Stock are owned of
record by a person other than the beneficial owner, including a broker,
fiduciary (such as a trustee, guardian or custodian) or other nominee, such
demand must be executed by or on behalf of the record owner. If the shares of
Cable Car Common Stock are owned of record by more than one person, as in a
joint tenancy or tenancy in common, such demand must be executed by or on behalf
of all joint owners. An authorized agent, including an agent for two or more
joint owners, may execute the demand for appraisal for a stockholder of record;
provided, however, that the agent must identify the record owner and expressly
disclose the fact that, in exercising the demand, such person is acting as agent
for the record owner.
A record owner, such as a broker, fiduciary or other nominee, who holds
shares of Cable Car Common Stock as a nominee for others, may exercise appraisal
rights with respect to the shares held for all or less than all beneficial
owners of shares as to which such person is the record owner; provided, however,
that if exercising appraisal rights with respect to less than all beneficial
owners, the written demand should set forth the number of shares as to which
appraisal is sought. Where the number of shares is not expressly stated, the
demand will be presumed to cover all shares of Cable Car Common Stock
outstanding in the name of such record owner.
A stockholder who elects to exercise appraisal rights should mail or
deliver his or her written demand to: Cable Car Beverage Corporation, 717 17th
Street, Suite 1475, Denver, Colorado 80202, Attention: Secretary.
Within ten days after the Effective Time, the Surviving Corporation must
provide notice of the Effective Time to all stockholders who have complied with
Section 262 and who have not voted in favor of or consented to the Merger
Agreement. Within 120 days after the Effective Time, either the Surviving
Corporation or any stockholder who has complied with the required conditions of
Section 262, and who is otherwise entitled to appraisal rights, may file a
petition in the Delaware Court demanding a determination of the value of the
shares of all dissenting stockholders. There is no present intent on the part of
Cable Car to file an appraisal petition and stockholders seeking to exercise
appraisal rights should not assume that the Surviving Corporation will file such
a petition or that the Surviving Corporation will initiate any negotiations with
respect to the value of such shares. Accordingly, it is the obligation of all
stockholders who desire to have their shares appraised to initiate any petitions
or other actions necessary for the perfection of their appraisal rights within
the time period and in the manner prescribed in Section 262. Within 120 days
after the Effective Time, any stockholder who has theretofore complied with the
applicable provisions of Section 262 will be entitled, upon written request, to
receive from the Surviving Corporation a statement setting forth the aggregate
number of shares of Cable Car Common Stock not voting in favor of the Merger
Agreement and with respect to which demands for appraisal were received by Cable
Car and the number of holders of such shares. Such statement must be mailed
within ten days after the written request therefor has been received by the
Surviving Corporation or within ten days after the expiration of the period for
delivery of demands for appraisal, whichever is later.
If a petition for an appraisal is timely filed, the Delaware Court is
empowered, at the hearing on such petition, to determine which stockholders, if
any, are entitled to appraisal rights. The Delaware Court may require the
stockholders who have demanded an appraisal for their shares and who hold stock
represented by certificates to submit their certificates of stock to the
Register in Chancery for notation thereon of the pendency of the appraisal
proceedings; and if any stockholder fails to comply
62
<PAGE>
<PAGE>
with such direction, the Delaware Court may dismiss the proceedings as to such
stockholder. After determining the stockholders entitled to appraisal, the
Delaware Court will appraise the shares of Cable Car Common Stock owned by such
stockholders, determining the fair value of such shares (exclusive of any
element of value arising from the accomplishment or expectation of the Merger),
together with a fair rate of interest, if any, to be paid upon the amount
determined to be the fair value. In determining fair value, the Delaware Court
is to take into account all relevant factors. The Delaware Supreme Court has
stated that, in determining value in an appraisal proceeding, 'proof of value by
any techniques or methods which are generally considered acceptable in the
financial community and otherwise admissible in court' should be considered.
Holders of shares of Cable Car Common Stock considering seeking appraisal
should recognize that the fair value of their shares determined under Section
262 could be more than, the same as or less than the consideration they are
entitled to receive pursuant to the Merger Agreement if they do not seek
appraisal of their shares. The cost of the appraisal proceeding may be
determined by the Delaware Court and taxed against the parties as the Delaware
Court deems equitable in the circumstances. Each party must bear his or her own
expenses of the proceeding, although upon application of a dissenting
stockholder of Cable Car, the Delaware Court may order that all or a portion of
the expenses incurred by any dissenting stockholder in connection with the
appraisal proceeding, including, without limitation, reasonable attorney's fees
and the fees and expenses of experts, be charged pro rata against the value of
all shares of stock entitled to appraisal.
Any holder of shares of Cable Car Common Stock who has duly demanded
appraisal in compliance with Section 262 will not, after the Effective Time, be
entitled to vote for any purpose any shares subject to demand or to receive
payment of dividends or other distributions on such shares, except for dividends
or distributions payable to stockholders of record at a date prior to the
Effective Time.
At any time within 60 days after the Effective Time, any stockholder will
have the right to withdraw such demand for appraisal and to accept the terms
offered in the Merger Agreement; after this period, the stockholder may withdraw
such demand for appraisal only with the written consent of the Surviving
Corporation, provided that, no appraisal proceeding in the Delaware Court shall
be dismissed as to any stockholder without approval of the Delaware Court. If no
petition for appraisal is filed with the Delaware Court within 120 days after
the Effective Time, stockholders' rights to appraisal shall cease, and all
holders of shares of Cable Car Common Stock will be entitled to receive the
consideration offered pursuant to the Merger Agreement.
MANAGEMENT OF SURVIVING CORPORATION
EXECUTIVE OFFICERS AND DIRECTORS OF THE SURVIVING CORPORATION
Pursuant to the Merger Agreement, the officers and directors of Mergerco
immediately prior to the Effective Time will become the officers and directors
of the Surviving Corporation, each to hold office in accordance with the
certificate of incorporation and bylaws of the Surviving Corporation then in
effect and until the successor of each is duly elected and qualified.
The following table sets forth certain information regarding those persons
who will serve as the executive officers and directors of the Surviving
Corporation, who have held such positions with Mergerco since September 1, 1997,
all of whom are U.S. citizens:
<TABLE>
<CAPTION>
NAME AGE POSITIONS
---- --- ---------
<S> <C> <C>
John L. Barnes, Jr.................. 50 Director; Senior Vice President and Chief Financial
Officer
Brian L. Schorr..................... 39 Director; Executive Vice President and General
Counsel
Eric D. Kogan....................... 34 Director, President
Francis T. McCarron................. 40 Senior Vice President -- Taxes
Stuart I. Rosen..................... 38 Vice President and Secretary
</TABLE>
63
<PAGE>
<PAGE>
In addition, at the Effective Time, pursuant to the Simpson Employment
Agreement, Mr. Simpson will be appointed the President and Chief Executive
Officer of the Surviving Corporation to replace Mr. Kogan as President. It is
also expected that the other officers of Cable Car will remain in the same
offices with the Surviving Corporation. Additional information concerning
Messrs. Barnes, Kogan, McCarron, Schorr and Rosen is incorporated herein by
reference from Triarc's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, as amended by amendments thereto filed with the Commission on
April 30, 1997 and May 21, 1997. Additional information concerning Mr. Simpson
and the other current management of Cable Car is incorporated herein by
reference from Cable Car's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, as amended by an amendment thereto filed with the Commission
on May 1, 1997, copies of which are attached hereto as Appendices A-1 and A-2,
respectively.
SIMPSON EMPLOYMENT AGREEMENT
Samuel M. Simpson, the President and Chief Executive Officer and a director
of Cable Car, currently has a three-year employment contract which provides for
an annual salary of $175,000, an annual bonus based on Cable Car's revenues and
earnings and certain other benefits. He has entered into an agreement with
Triarc which provides that, upon the Effective Time, he will, and Triarc will
cause the Surviving Corporation to, enter into the Simpson Employment Agreement,
which will supersede Mr. Simpson's existing employment agreement with Cable Car
and provide for Mr. Simpson's employment as President and Chief Executive
Officer of the Surviving Corporation and the Cable Car Subsidiaries, and a
representative for the Triarc Beverage Group for the western United States. The
Simpson Employment Agreement will have a three year term, subject to renewal for
additional one year periods. Mr. Simpson will receive an annual salary of
$284,300 per year, which is subject to increase, but not decrease during the
original term of the Simpson Employment Agreement in amounts determined by the
Board of Directors of the Surviving Corporation, as well as certain other
benefits.
Mr. Simpson will also be eligible to receive cash incentive compensation,
which for fiscal year 1997 is based on specified targets for Cable Car's net
sales and adjusted net income and which for each of fiscal years 1998, 1999 and
2000 is comprised of a bonus of $120,000 for such year should Cable Car's net
sales for such year exceed $25 million, $27.5 million and $30 million,
respectively. Mr. Simpson will be eligible to receive additional cash incentive
compensation commencing with fiscal year 1998 comparable to that of other senior
executives of Triarc's operating subsidiaries, based on Cable Car's and Mr.
Simpson's performance assessed for each fiscal year relative to objectives
agreed to in advance between Mr. Simpson and the Cable Car Board, taking into
account the financial profile of Cable Car compared to that of Triarc's other
operating subsidiaries. Mr. Simpson will also participate in Triarc's stock
option plan during the term of his employment in amounts comparable to that of
other senior executives of Triarc's operating subsidiaries, taking into account
the financial profile of Cable Car compared to that of Triarc's other operating
subsidiaries. Mr. Simpson will also be entitled to a $400,000 cash bonus upon
signing the Simpson Employment Agreement which is refundable to Cable Car on a
pro rata basis should he leave his employment prior to the first anniversary of
the Effective Time. The Simpson Employment Agreement also provides for the
payment of a death benefit to Mr. Simpson's estate upon his death in an amount
equal to one year of his then current base salary.
The Simpson Employment Agreement may be terminated upon Mr. Simpson's
death, in the event that he becomes Disabled (as defined in the Simpson
Employment Agreement), for 'cause' (as defined in the Simpson Employment
Agreement) or upon Mr. Simpson's resignation. If Mr. Simpson's employment with
Cable Car terminates prior to the end of the then current term under the Simpson
Employment Agreement by reason of his resignation or termination for cause, he
will agree not to engage in (including as an employee, agent, consultant,
manager, executive, owner or stockholder, except as a passive investor owning
less than a two percent interest in a publicly held company) in any business or
entity that is engaged in the beverage business for a period of 24 months, and
if such termination occurs prior to the second anniversary of the Effective
Time, he will be paid $10,000 per month during the term of the non-competition
period. If Mr. Simpson chooses not to extend the Simpson Employment Agreement in
accordance with its terms, he will agree not to engage in the beverage business
for a period of 18 months. Mr. Simpson will also agree that he will keep
confidential
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<PAGE>
<PAGE>
all nonpublic information relating to Cable Car and its subsidiaries and
affiliates for a period of four years after the termination of his employment.
Mr. Simpson's current employment agreement with Cable Car does not include
similar non-competition and confidentiality provisions.
CERTAIN RELATIONSHIPS AMONG
TRIARC, CABLE CAR AND THEIR AFFILIATES
Cable Car is party to a Stewart's Brands Distributing Agreement, dated
February 23, 1997, with Mr. Natural, Inc., a Delaware corporation and wholly
owned subsidiary of Snapple ('Mr. Natural'). Pursuant to this agreement, Cable
Car appointed Mr. Natural its exclusive distributor for Stewart's brand soft
drinks packaged in bottles and cans for all five boroughs of New York City and
Westchester County, New York. Triarc acquired all of the outstanding capital
stock of Snapple on May 22, 1997. See 'The Companies -- Recent
Developments -- Triarc.'
DESCRIPTION OF TRIARC CAPITAL STOCK
The authorized capital stock of Triarc consists of 100,000,000 shares of
Triarc Class A common stock (referred to in this section as the 'Triarc Class A
Common Stock'), 25,000,000 shares of Triarc Class B common stock (the 'Triarc
Class B Common Stock' and, together with the Triarc Class A Common Stock, the
'Triarc Common Shares') and 25,000,000 shares of Preferred Stock (the 'Triarc
Preferred Stock'). As of the close of business on September 28, 1997, there were
outstanding 24,037,013 shares of Triarc Class A Common Stock, 5,997,662 shares
of Triarc Class B Common Stock and no shares of Triarc Preferred Stock.
The relative preferences and rights of the Triarc capital stock are set
forth in the Triarc Charter. Set forth below is a summary description of the
material terms of such rights and preferences, which is qualified by reference
to the Triarc Charter.
TRIARC COMMON SHARES
The holders of shares of Triarc Class A Common Stock are entitled to one
vote for each share held on record on all matters on which Triarc stockholders
are entitled to vote, including the election of directors. Except as required by
Delaware law, the holders of shares of Triarc Class B Common Stock are not
entitled to vote.
Shares of Triarc Class A Common Stock and Triarc Class B Common Stock share
equally in any dividends or other distributions payable in either cash, capital
stock of Triarc (other than Triarc Class A Common Stock or Triarc Class B Common
Stock) or other property of Triarc when, as and if declared by the Triarc Board.
If a dividend or distribution payable in Triarc Common Shares is declared on the
Triarc Common Shares, such dividend or distribution shall be made to the holders
of shares of Triarc Class A Common Stock in the form of shares of Triarc Class A
Common Stock and shall be made to the holders of shares of Triarc Class B Common
Stock in the form of shares of Triarc Class B Common Stock.
No dividend, other than a stock dividend payable in Triarc Common Shares,
may be paid on the Triarc Common Shares if Triarc is in arrears on the payment
of dividends on any outstanding Triarc Preferred Stock.
In the event that Triarc shall liquidate, dissolve or be wound up, whether
voluntarily or involuntarily, to the extent assets remain after payment of
creditors in full and after there shall have been paid or set aside for all
Triarc Preferred Stock then outstanding the full preferential amounts to which
they are entitled, the net assets of Triarc remaining will be divided ratably
among the holders of the Triarc Class A Common Stock and the Triarc Class B
Common Stock. The merger or consolidation of Triarc with or into any other
corporation, the merger or consolidation of any other corporation with or into
Triarc, or the sale, lease or conveyance of all or substantially all of its
assets would not be deemed to be a liquidation, dissolution or winding up for
this purpose.
65
<PAGE>
<PAGE>
The holders of Triarc Common Shares are not entitled as of right to
purchase or subscribe for any shares of stock of any class whether heretofore or
hereafter authorized or issued, whether issued for cash, property, services or
by way of a dividend.
Shares of Triarc Class A Common Stock are not convertible. Each share of
Triarc Class B Common Stock is convertible, on a one-to-one basis, into one
share of Triarc Class A Common Stock, provided that either (i) the holder of
such share upon conversion is not an affiliate or relative of Victor Posner, or
(ii) upon such conversion, such shares are placed into a voting trust and
certain other conditions are met.
TRIARC PREFERRED STOCK
The Triarc Charter authorizes the issuance of shares of 'blank check'
preferred stock, which will have such designations, rights and preferences as
may be determined from time to time by the Triarc Board. Accordingly, the Triarc
Board is empowered, without stockholder approval, to issue Triarc Preferred
Stock with dividend, liquidation, conversion, voting or other rights which may
adversely affect the voting power or other rights of the holders of Triarc
Common Shares. As of the date of this Proxy Statement/Prospectus, there are no
shares of Triarc Preferred Stock outstanding.
PRINCIPAL HOLDERS OF CABLE CAR COMMON STOCK
The following table sets the beneficial ownership as of September 30, 1997
by each person known by Cable Car to be the beneficial owner of more than 5% of
the outstanding shares of Cable Car Common Stock (constituting the only class of
capital stock of Cable Car), each director and 'named executive officer' (as
defined in Item 402(a)(3) of Regulation S-K) of Cable Car as of September 30,
1997, and all directors and officers of Cable Car as a group:
<TABLE>
<CAPTION>
AMOUNT OF SHARES AND
NAME AND ADDRESS OF BENEFICIAL OWNER NATURE OF OWNERSHIP(1) PERCENT OF CLASS
------------------------------------ ---------------------- ----------------
<S> <C> <C>
Triarc Companies, Inc. ....................................... 1,766,409(2) 19.7%
280 Park Avenue
New York, NY 10017
Samuel M. Simpson............................................. 1,104,877(3) 12.35
James P. McCloskey............................................ 0
William H. Rutter............................................. 673,732(4) 7.53
Myron D. Stadler.............................................. 25,000 *
Directors and Executive Officers as group (4 persons)......... 1,803,609 20.15%
</TABLE>
- ------------
* Less than 1%
(1) The amounts reflected do not include options to purchase Cable Car Common
Stock. The foregoing persons have each indicated that they intend to convert
their Cable Car Options into options for Triarc Common Stock.
(2) Comprised of the Subject Stock under the Stockholders Agreement, all of
which shares are also reflected in the number of shares shown as held by
Messrs. Simpson and Rutter.
(3) Includes 381,234 shares held by Mr. Simpson's spouse as to which he
disclaims beneficial ownership.
(4) Includes 7,200 shares held by Mr. Rutter's spouse as to which he disclaims
beneficial ownership.
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<PAGE>
<PAGE>
PRINCIPAL HOLDERS OF VOTING SECURITIES
OF TRIARC COMPANIES, INC.
The following table sets forth the beneficial ownership as of September 28,
1997 by each person known by Triarc 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 Triarc), each director and 'named executive officer'
(as defined in Item 402(a)(3) of Regulation S-K) of Triarc as of September 28,
1997, and all directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT OF SHARES AND
NAME AND ADDRESS OF BENEFICIAL OWNER NATURE OF OWNERSHIP(1) PERCENT OF CLASS
- ----------------------------------------------------------------- ---------------------- ----------------
<S> <C> <C>
DWG Acquisition Group, L.P. ..................................... 5,982,867(2) 24.9%
1201 North Market Street
Wilmington, DE 19801
Nelson Peltz .................................................... 6,975,767(2)(3)(4)(5) 27.9
280 Park Avenue
New York, NY 10017
Peter W. May .................................................... 6,653,000(2)(3)(6) 27.0
280 Park Avenue
New York, NY 10017
William Ehrman .................................................. 1,500,793(7)(8) 6.2
Frederick Ketcher
Jonas Gertsl
Frederic Greenberg
James McLaren
300 Park Avenue
New York, NY 10022
Hugh L. Carey.................................................... 28,036(9) *
Clive Chajet..................................................... 27,300(10) *
Stanley R. Jaffe................................................. 29,028(9) *
Joseph A. Levato................................................. 148,000(11) *
David E. Schwab II............................................... 23,000(9) *
Raymond S. Troubh................................................ 39,500(9) *
Gerald Tsai, Jr.................................................. 39,306(12) *
Brian L. Schorr.................................................. 111,990(13) *
John L. Cohlan................................................... 88,833(14) *
Eric D. Kogan.................................................... 68,000(15) *
Directors and Executive Officers as a group (22 persons)......... 8,668,460 32.8%
</TABLE>
- ------------
* Less than 1%
(1) Except as otherwise indicated, each person has sole voting and dispositive
power with respect to such shares.
(2) 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.
(3) Includes 5,982,867 shares held by DWG Acquisition, of which Mr. Peltz and
Mr. May are the sole general partners.
(4) Includes 200 shares owned by a family trust of which Mr. Peltz is a general
partner and 800 shares owned by minor children of Mr. Peltz. Mr. Peltz
disclaims beneficial ownership of these shares.
(5) Includes options to purchase 965,000 shares of Triarc Class A Common Stock
which have vested or will vest within 60 days of September 28, 1997.
(6) Includes options to purchase 643,333 shares of Triarc Class A Common Stock
which have vested or will vest within 60 days of September 28, 1997.
(footnotes continued on next page)
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<PAGE>
(footnotes continued from previous page)
(7) The information set forth herein with respect to Messrs. Ehrman, Greenberg,
Ketcher, Gertsl and McLaren is based solely on information contained in a
Schedule 13D, dated July 16, 1996, filed pursuant to the Securities
Exchange Act of 1934, as amended.
(8) Includes an aggregate of 1,365,793 shares of Triarc Class A Common Stock
that Messrs. Ehrman, Ketcher, Gertsl, Greenberg and McLaren 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 Jonas
Partners, L.P., a Delaware limited partnership. Also includes (i) 55,150
shares of Triarc Class A Common Stock owned directly by Mr. Ehrman and
39,150 shares of Triarc Class A Common Stock owned by members of Mr.
Ehrman's immediate family; (ii) 23,600 shares of Triarc Class A Common
Stock owned directly by Mr. Ketcher and 1,100 shares of Triarc Class A
Common Stock owned by a member of Mr. Ketcher's immediate family and his
mother-in-law, (iii) 2,500 shares of Triarc Class A Common Stock owned
directly by Mr. Gertsl and 8,500 shares of Triarc Class A Common Stock
owned by a member of Mr. Gertsl's immediate family; and (iv) 2,000 shares
of Triarc Class A Common Stock owned directly by Mr. Greenberg and 3,000
shares of Triarc Class A Common Stock owned by a member of Mr. Greenberg's
immediate family.
(9) Includes options to purchase 19,500 shares of Triarc Class A Common Stock
which have vested or will vest within 60 days of September 28, 1997.
(10) Includes options to purchase 19,500 shares of Triarc Class A Common Stock
which have vested or will vest within 60 days of September 28, 1997 and
1,300 shares owned by Mr. Chajet's wife, as to which shares Mr. Chajet
disclaims beneficial ownership.
(11) Includes options to purchase 120,000 shares of Triarc Class A Common Stock
which have vested or will vest within 60 days of September 28, 1997.
(12) Includes options to purchase 22,500 shares of Triarc Class A Common Stock
which have vested or will vest within 60 days of September 28, 1997.
(13) Includes options to purchase 105,000 shares of Triarc Class A Common Stock
which have vested or will vest within 60 days of September 28, 1997.
(14) Includes options to purchase 76,333 shares of Triarc Class A Common Stock
which have vested or will vest within 60 days of September 28, 1997. Mr.
Cohlan resigned as an officer of Triarc as of September 1, 1997.
(15) Includes options to purchase 59,000 shares of Triarc Class A Common Stock
which have vested or will vest within 60 days of September 28, 1997.
------------------------
The foregoing table does not include 5,997,622 shares of Triarc's
non-voting Class B Common Stock owned by Victor Posner and certain affiliates of
Victor Posner as a result of a Settlement Agreement dated January 9, 1995 by and
among Victor Posner, certain affiliates of Victor Posner and Triarc. For
information regarding this Settlement Agreement, see 'Item 1.
Business -- Introduction -- New Ownership; Posner Settlement' in Triarc's Annual
Report on Form 10-K for the year ended December 31, 1995. The shares of Triarc
Class B Common Stock can be converted without restriction into an equal number
of shares of Triarc Class A Common Stock following a transfer to a non-affiliate
of Mr. Posner. Triarc has certain rights of first refusal if such shares are
proposed to be sold to an unaffiliated party. If the 5,997,622 currently
outstanding shares of the Triarc Class B Common Stock were converted into shares
of Triarc Class A Common Stock, such shares would constitute approximately 20.0%
of the then outstanding shares of Triarc Class A Common Stock as of September
28, 1997. None of the directors or officers of Triarc beneficially owned any
Triarc Class B Common Stock as of September 28, 1997. Except for the
arrangements relating to the shares described in footnote (2) to the foregoing
table, there are no arrangements known to Triarc the operation of which may at a
subsequent date result in a change in control of Triarc.
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<PAGE>
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma (i) condensed consolidated balance sheet
of Triarc Companies, Inc. and subsidiaries (the 'Company') as of June 29, 1997
and (ii) condensed consolidated statement of operations of the Company for the
year ended December 31, 1996 and for the six months ended June 29, 1997 have
been prepared by adjusting such financial statements, as derived and condensed,
as applicable, from (i) the consolidated financial statements in Triarc's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996 (the 'Triarc
Form 10-K'), audited by Deloitte & Touche LLP and (ii) the unaudited condensed
consolidated financial statements in Triarc's Quarterly Report on Form 10-Q for
the fiscal quarter ended June 29, 1997 (the 'Triarc Form 10-Q'). Such
adjustments to the condensed consolidated balance sheet as of June 29, 1997
reflect first, the C&C Sale on July 18, 1997 as previously reported in Triarc's
Current Report on Form 8-K filed on August 4, 1997 and second, the proposed
Merger (referred to in these financial statements as the 'Cable Car
Acquisition'). Such adjustments for the condensed consolidated statement of
operations for the year ended December 31, 1996 and the six months ended June
29, 1997 reflect first, the 1997 Transactions, consisting of (a) the Arby's
Restaurants Sale on May 5, 1997 as previously reported in Triarc's Current
Report on Form 8-K/A filed on August 4, 1997, (b) the C&C Sale (collectively
with the Arby's Restaurants Sale, the 'Sales') and (c) the Snapple Acquisition
on May 22, 1997, and second, the Cable Car Acquisition.
The combined statements of certain revenues and operating expenses of
Snapple for the year ended December 31, 1996 and for the period from January 1,
1997 to the May 22, 1997 Acquisition date included in the unaudited pro forma
condensed consolidated financial statements have been derived and condensed, as
applicable, from (i) the combined financial statements for the year ended
December 31, 1996 (the 'Snapple 1996 Financial Statements') audited by Arthur
Andersen LLP and (ii) the combination of (a) unaudited combined financial
statements for the three months ended March 31, 1997 (the 'Snapple March 1997
Financial Statements' and collectively with the Snapple 1996 Financial
Statements, the 'Snapple Financial Statements') and (b) the Snapple unaudited
combined statement of certain revenues and operating expenses for the period
from April 1, 1997 to May 22, 1997 (the 'Snapple May 22, 1997 Financial
Statements'). The Snapple Financial Statements are included in Triarc's Current
Report on Form 8-K/A filed on August 5, 1997. The Snapple May 22, 1997 Financial
Statements were provided to the Company by Quaker.
The consolidated balance sheet of Cable Car as of June 30, 1997 and
consolidated statements of operations of Cable Car for the year ended December
31, 1996 and for the six months ended June 30, 1997 included in the unaudited
pro forma condensed consolidated financial statements have been derived and
condensed, as applicable, from: (i) the consolidated financial statements for
the year ended December 31, 1996 audited by Price Waterhouse L.L.P. as set forth
in Cable Car's Annual Report on Form 10-K for the fiscal year ended December 31,
1996, a copy of which is attached hereto as Appendix A-1, and (ii) the unaudited
consolidated financial statements for the six months ended June 30, 1997 as set
forth in Cable Car's Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1997, a copy of which is attached hereto as Appendix A-3.
The allocation of the purchase price of Snapple and the pro forma
adjustments for the allocation of the purchase price of Cable Car on the pro
forma condensed consolidated balance sheet and the effect thereof on pro forma
adjustments to the pro forma condensed consolidated statements of operations are
based on preliminary estimates and are subject to finalization. The pro forma
condensed consolidated financial statements have been prepared as if the Cable
Car Acquisition and the C&C Sale had occurred as of June 29, 1997 for the pro
forma condensed consolidated balance sheet and all of the above transactions had
occurred as of January 1, 1996 for the pro forma condensed consolidated
statements of operations. Such pro forma adjustments are described in the
accompanying notes to the pro forma condensed consolidated balance sheet and
statements of operations which should be read in conjunction with such
statements. The Unaudited Pro Forma Condensed Consolidated Financial Statements
should also be read in conjunction with the Company's audited consolidated
financial statements and management's discussion and analysis of financial
condition and results of operations appearing in the Triarc Form 10-K, the
Company's unaudited condensed consolidated financial
69
<PAGE>
<PAGE>
statements and management's discussion and analysis of financial condition and
results of operations appearing in the Triarc Form 10-Q, the Snapple Financial
Statements and the Cable Car Financial Statements. The Unaudited Pro Forma
Condensed Consolidated Financial Statements do not purport to be indicative of
the actual financial position or results of operations of the Company had such
transactions actually been consummated on June 29, 1997 and January 1, 1996,
respectively, or of the future financial position or results of operations of
the Company.
70
<PAGE>
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 29, 1997
<TABLE>
<CAPTION>
ADJUSTMENTS
ADJUSTMENTS PRO FORMA CABLE CAR FOR THE
AS FOR THE C&C FOR THE AS CABLE CAR
REPORTED SALE C&C SALE REPORTED ACQUISITION PRO FORMA
---------- ----------- ---------- --------- ----------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................... $ 71,349 $ 750(a) $ 72,099 $1,229 $ -- $ 73,328
Short-term investments...................... 59,724 -- 59,724 -- -- 59,724
Receivables, net............................ 133,570 703(a) 134,273 2,694 -- 136,967
Inventories................................. 87,669 -- 87,669 3,247 -- 90,916
Deferred income tax benefit................. 43,647 -- 43,647 520 -- 44,167
Prepaid expenses and other current assets... 12,039 -- 12,039 86 -- 12,125
---------- ----------- ---------- --------- ----------- ----------
Total current assets................... 407,998 1,453 409,451 7,776 -- 417,227
Investment in Cable Car.......................... -- -- -- -- 34,601(i) --
(34,601)(ii)
Properties, net.................................. 121,926 (2)(a) 121,924 128 -- 122,052
Unamortized costs in excess of net assets of
acquired companies............................. 290,593 -- 290,593 550 20,117(ii) 311,260
Trademarks....................................... 264,633 (1,575)(a) 263,058 193 11,107(ii) 274,358
Deferred costs, deposits and other assets........ 71,840 5,300(a) 77,140 121 (21)(ii) 77,240
---------- ----------- ---------- --------- ----------- ----------
$1,156,990 $ 5,176 $1,162,166 $8,768 $ 31,203 $1,202,137
---------- ----------- ---------- --------- ----------- ----------
---------- ----------- ---------- --------- ----------- ----------
</TABLE>
71
<PAGE>
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET -- (CONTINUED)
JUNE 29, 1997
<TABLE>
<CAPTION>
ADJUSTMENTS PRO FORMA
AS FOR THE FOR THE
REPORTED C&C SALE C&C SALE
---------- ----------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS'
EQUITY DEFICIT
Current liabilities:
Current portion of
long-term debt......... $ 15,777 $ -- $ 15,777
Accounts payable......... 60,905 -- 60,905
Accrued expenses and
other current
liabilities............ 177,879 681(a) 178,736
176(a)
---------- ----------- ----------
Total current
liabilities....... 254,561 857 255,418
Long-term debt................ 767,737 -- 767,737
Deferred income taxes......... 78,834 -- 78,834
Deferred income and other
liabilities................. 50,395 4,015(a) 54,410
Minority interests............ 29,859 -- 29,859
Stockholders' equity
(deficit):
Common stock............. 3,398 -- 3,398
Additional paid-in
capital................ 163,752 -- 163,752
Accumulated deficit...... (147,124) 304(a) (146,820)
Treasury stock........... (45,000) -- (45,000)
Other.................... 578 -- 578
---------- ----------- ----------
Total stockholders'
equity
(deficit)......... (24,396) 304 (24,092)
---------- ----------- ----------
$1,156,990 $ 5,176 $1,162,166
---------- ----------- ----------
---------- ----------- ----------
<CAPTION>
CABLE ADJUSTMENTS
CAR FOR THE
AS CABLE CAR
REPORTED ACQUISITION PRO FORMA
-------- ----------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS'
EQUITY DEFICIT
Current liabilities:
Current portion of
long-term debt.........$ -- $ -- $ 15,777
Accounts payable......... 795 -- 61,700
Accrued expenses and
other current
liabilities............ 1,625 1,200(i) 181,561
-------- ----------- ----------
Total current
liabilities....... 2,420 1,200 259,038
Long-term debt................ -- -- 767,737
Deferred income taxes......... (404) 3,354(ii) 81,784
Deferred income and other
liabilities................. -- -- 54,410
Minority interests............ -- -- 29,859
Stockholders' equity
(deficit):
Common stock............. 90 157(i) 3,555
(90)(ii)
Additional paid-in
capital................ 9,899 33,244(i) 196,996
(9,899)(ii)
Accumulated deficit...... (3,208) 3,208(ii) (146,820)
Treasury stock........... (29) 29(ii) (45,000)
Other.................... -- -- 578
-------- ----------- ----------
Total stockholders'
equity
(deficit)......... 6,752 26,649 9,309
-------- ----------- ----------
$ 8,768 $31,203 $1,202,137
-------- ----------- ----------
-------- ----------- ----------
</TABLE>
72
<PAGE>
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET
C&C SALE PRO FORMA ADJUSTMENTS
(a) To reflect the C&C Sale consisting of the C&C trademark and equipment
related to the operation of the C&C beverage line to Kelco for the
proceeds of $750,000 in cash and an $8,650,000 note (the 'Note') with
a discounted value of $6,003,000 consisting of $4,373,000 relating to
the C&C Sale and $2,380,000 relating to future revenues. The Note is
classified $703,000 as current receivables and $5,300,000 as
non-current deferred costs, deposits and other assets. The $2,380,000
of deferred revenues consists of (i) $2,096,000 relating to minimum
take-or-pay commitments for sales of concentrate for C&C products to
Kelco and (ii) $284,000 relating to future technical services to be
performed for Kelco by the Company, both under a contract with Kelco.
Such deferred revenues are classified $231,000 as 'Accrued expenses
and other current liabilities' and $2,149,000 as non-current 'Deferred
income and other liabilities'. The excess of the proceeds of
$4,373,000 over the carrying value of the C&C trademark of $1,575,000
and the related equipment of $2,000 resulted in a pretax gain of
$2,796,000 which is being recognized pro-rata between the gain on sale
and the carrying value of the assets sold based on the cash proceeds
and collections under the Note since realization of the Note is not
yet fully assured. As such, $480,000 of such pretax gain has been
recognized currently which, less taxes of $176,000 at the incremental
income tax rate of 36.6%, results in a net gain of $304,000. The
remaining $2,316,000 has been deferred, of which $450,000 is
classified as 'Accrued expenses and other current liabilities' and
$1,866,000 is classified as non-current 'Deferred income and other
current liabilities'.
CABLE CAR ACQUISITION PRO FORMA ADJUSTMENTS
(i) To reflect the Company's investment in Cable Car of $34,601,000
consisting of (a) the assumed value of $31,727,000 as of a recent date
of 1,566,731 shares (including 25,830 shares in respect of 150,000
shares of Cable Car Common Stock to be issued prior to the Effective
Time in connection with the amendment of Cable Car's license
agreements with Stewart's Restaurants) of Triarc Common Stock, par
value $.10 per share, to be issued in the Merger (based upon an
assumed average Triarc share price of $20 1/4, which was the closing
market price for Triarc Common Stock as reported in the consolidated
transaction reporting system as of September 29, 1997 (the 'September
29, 1997 Market Price'), (b) the assumed value of $2,274,000 of
155,411 options to purchase an equal number of shares of Triarc Common
Stock with below market option prices (as of the assumed issuance date
of September 29, 1997) based upon the September 29, 1997 Market Price
for Triarc Common Stock issued in exchange for all of the outstanding
Cable Car Options and (c) $600,000 of an aggregate $1,200,000 of
estimated expenses, of which the remaining $600,000 is attributable to
this registration of the 1,566,731 shares of Triarc Common Stock under
the Securities Act and, accordingly, charged to 'Additional paid-in
capital'. The number of shares of Triarc Common Stock actually issued
in the Merger may vary. See 'The Proposed Merger and Related
Matters -- Conversion of Shares of Cable Car Stock'.
73
<PAGE>
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET -- (CONTINUED)
(ii) To reflect the preliminary estimated allocation of the purchase price of
Cable Car as follows (in thousands):
<TABLE>
<CAPTION>
DEBIT
(CREDIT)
--------
<S> <C>
Adjust 'Trademarks' to write up the trademarks and tradenames ($7,000) and distribution
network ($4,107) to fair value in accordance with an independent appraisal................. $ 11,107
Adjust 'Deferred costs, deposits and other assets' to eliminate organization costs........... (21)
Adjust 'Deferred income taxes' for the adjustments above and the effect of the converted
Cable Car Options in (i) above............................................................. (3,354)
Eliminate the 'Common stock' ($90), 'Additional paid-in-capital' ($9,899), Accumulated
deficit' ($3,208) and 'Treasury stock' ($29) of Cable Car.................................. 6,752
Eliminate the Company's investment in Cable Car.............................................. (34,601)
Adjust 'Unamortized costs in excess of net assets of acquired companies' to eliminate the
historical Goodwill of Cable Car and record the excess of the Company's investment in Cable
Car over the adjusted net assets of Cable Car.............................................. 20,117
--------
$ --
--------
--------
</TABLE>
74
<PAGE>
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
ADJUSTMENTS PRO FORMA
FOR THE SALES FOR THE SALES
AS AND THE SNAPPLE AND THE SNAPPLE
REPORTED SNAPPLE ACQUISITION ACQUISITION
-------- --------- --------------- ---------------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Revenues:
Net sales................. $931,920 $ 550,800 $(228,031)(a) $ 1,243,526
444(f)
(11,607)(g)
Royalties, franchise fees
and other revenues...... 57,329 -- 9,121(b) 66,510
60(f)
-------- --------- --------------- ---------------
989,249 550,800 (230,013) 1,310,036
-------- --------- --------------- ---------------
Costs and expenses:
Cost of sales............. 652,109 352,900 (187,535)(a) 807,354
178(f)
(10,298)(g)
Advertising, selling and
distribution............ 139,662 188,400 (24,764)(a) 294,770
(1,702)(g)
(6,826)(j)
General and
administrative.......... 131,357 93,900 (9,913)(a) 169,588
(434)(g)
(45,322)(k)
Reduction in carrying
value of long-lived
assets impaired or to be
disposed of............. 64,300 -- (58,900)(a) 5,400
Facilities relocation and
corporate
restructuring........... 8,800 16,600 (2,400)(a) 23,000
-------- --------- --------------- ---------------
996,228 651,800 (347,916) 1,300,112
-------- --------- --------------- ---------------
Operating profit (loss)... (6,979) (101,000) 117,903 9,924
Interest expense.............. (73,379) -- 8,421(c) (93,505)
(273)(f)
(28,274)(m)
Gain on sale of businesses,
net......................... 77,000 -- -- 77,000
Other income, net............. 7,996 -- 16(g) 8,695
683(h)
-------- --------- --------------- ---------------
Income (loss) before
income taxes and
minority interests...... 4,638 (101,000) 98,476 2,114
Provision for income taxes.... (11,294) -- (28,406)(e) (11,321)
(578)(i)
28,957(n)
Minority interests in income
of consolidated
subsidiary.................. (1,829) -- -- (1,829)
-------- --------- --------------- ---------------
Income (loss) before
extraordinary items..... $ (8,485) $(101,000) $ 98,449 $ (11,036)
-------- --------- --------------- ---------------
-------- --------- --------------- ---------------
Income (loss) before
extraordinary items per
share................... $ (.28) $ (.37)
-------- ---------------
-------- ---------------
<CAPTION>
ADJUSTMENTS
CABLE CAR FOR THE
AS CABLE CAR
REPORTED ACQUISITION PRO FORMA
---------- ----------- ----------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
Revenues:
Net sales.................$ 18,873 $ -- $1,262,399
Royalties, franchise fees
and other revenues...... -- -- 66,510
---------- ----------- ----------
18,873 -- 1,328,909
---------- ----------- ----------
Costs and expenses:
Cost of sales............. 13,671 -- 821,025
Advertising, selling and
distribution............ 1,994 -- 296,764
General and
administrative.......... 1,197 1,239(i) 172,024
Reduction in carrying
value of long-lived
assets impaired or to be
disposed of............. -- -- 5,400
Facilities relocation and
corporate
restructuring........... -- -- 23,000
---------- ----------- ----------
16,862 1,239 1,318,213
---------- ----------- ----------
Operating profit (loss)... 2,011 (1,239) 10,696
Interest expense.............. -- -- (93,505)
Gain on sale of businesses,
net......................... -- -- 77,000
Other income, net............. 53 -- 8,748
---------- ----------- ----------
Income (loss) before
income taxes and
minority interests...... 2,064 (1,239) 2,939
Provision for income taxes.... (807) 471(ii) (11,657)
Minority interests in income
of consolidated
subsidiary.................. -- -- (1,829)
---------- ----------- ----------
Income (loss) before
extraordinary items.....$ 1,257 $ (768) $ (10,547)
---------- ----------- ----------
---------- ----------- ----------
Income (loss) before
extraordinary items per
share................... $ (.34)(iii)
----------
----------
</TABLE>
75
<PAGE>
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 29, 1997
<TABLE>
<CAPTION>
ADJUSTMENTS PRO FORMA ADJUSTMENTS
PREACQUISITION FOR THE SALES FOR THE SALES CABLE CAR FOR THE
AS PERIOD OF AND THE SNAPPLE AND THE SNAPPLE AS CABLE CAR
REPORTED SNAPPLE ACQUISITION ACQUISITION REPORTED ACQUISITION
-------- -------------- --------------- --------------- --------- -----------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Net sales...................... $401,882 $ 172,400 $ (74,195)(a) $ 493,930 $12,747 $ --
222(f)
(6,379)(g)
Royalties, franchise fees and
other revenues............... 29,641 -- 2,968(b) 32,639 -- --
30(f)
-------- -------------- --------------- --------------- --------- -----------
431,523 172,400 (77,354) 526,569 12,747 --
-------- -------------- --------------- --------------- --------- -----------
Costs and expenses:
Cost of sales.................. 255,406 100,600 (59,127)(a) 291,180 9,124 --
89(f)
(5,788)(g)
Advertising, selling and
distribution................. 80,792 58,700 (8,145)(a) 127,944 1,386 --
(396)(g)
(3,007)(j)
General and administrative..... 66,872 28,200 (3,319)(a) 81,542 997 612(i)
(256)(g)
(9,955)(k)
Facilities relocation and
corporate restructuring...... 7,350 -- (5,597)(a) 1,753 -- --
Acquisition related............ 32,440 -- -- 32,440 -- --
Loss on assets held for sale... -- 1,414,600 (1,414,600)(l) -- -- --
-------- -------------- --------------- --------------- --------- -----------
442,860 1,602,100 (1,510,101) 534,859 11,507 612
-------- -------------- --------------- --------------- --------- -----------
Operating profit (loss)........ (11,337) (1,429,700) 1,432,747 (8,290) 1,240 (612)
Interest expense................... (33,963) -- 2,756(c) (42,036) -- --
140(f)
(10,969)(m)
Other income, net.................. 6,912 -- 1,798(d) 8,427 31 --
69(g)
(352)(h)
-------- -------------- --------------- --------------- --------- -----------
Income (loss) before income
taxes and minority
interests.................... (38,388) (1,429,700) 1,426,189 (41,899) 1,271 (612)
Benefit from (provision for) income
taxes............................ 9,213 -- (3,701)(e) 10,007 (578) 233(ii)
(184)(i)
4,679(n)
Minority interests in income of
consolidated subsidiary.......... (3,171) -- -- (3,171) -- --
-------- -------------- --------------- --------------- --------- -----------
Income (loss) before
extraordinary items.......... $(32,346) $ (1,429,700) $ 1,426,983 $ (35,063) $ 693 $(379)
-------- -------------- --------------- --------------- --------- -----------
-------- -------------- --------------- --------------- --------- -----------
Income (loss) before
extraordinary items per
share........................ $ (1.08) $ (1.17)
-------- ---------------
-------- ---------------
<CAPTION>
PRO
FORMA
--------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C>
Revenues:
Net sales...................... $506,677
Royalties, franchise fees and
other revenues............... 32,639
--------
539,316
--------
Costs and expenses:
Cost of sales.................. 300,304
Advertising, selling and
distribution................. 129,330
General and administrative..... 83,151
Facilities relocation and
corporate restructuring...... 1,753
Acquisition related............ 32,440
Loss on assets held for sale... --
--------
546,978
--------
Operating profit (loss)........ (7,662)
Interest expense................... (42,036)
Other income, net.................. 8,458
--------
Income (loss) before income
taxes and minority
interests.................... (41,240)
Benefit from (provision for) income
taxes............................ 9,662
Minority interests in income of
consolidated subsidiary.......... (3,171)
--------
Income (loss) before
extraordinary items.......... $(34,749)
--------
--------
Income (loss) before
extraordinary items per
share........................ $ (1.10)(iii)
--------
--------
</TABLE>
76
<PAGE>
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
ARBY'S RESTAURANTS SALE PRO FORMA ADJUSTMENTS
(a) To reflect the elimination of the sales, cost of sales, advertising,
selling and distribution expenses and allocated general and
administrative expenses, the reduction in carrying value of long-lived
assets impaired or to be disposed of for the year ended December 31,
1996 related to the sold restaurants and the portion of the facilities
relocation and corporate restructuring charge associated with
restructuring the restaurant segment in connection with the Arby's
Restaurants Sale. The allocated general and administrative expenses
reflect the portion of the Company's total general and administrative
expenses allocable to the operating results associated with the
restaurants sold as determined by management of the Company. Such
allocated amounts consist of (i) salaries, bonuses, travel and
entertainment expenses, supplies, training and other expenses related
to area managers who had responsibility for the day-to-day operation
of the sold restaurants and (ii) the portion of general corporate
overhead (e.g. accounting, human resources, marketing, etc.) estimated
to be avoided as a result of the Company no longer operating
restaurants. Since the Company no longer owns Arby's restaurants but
continues to operate as an Arby's franchisor, it is undertaking a
reorganization of its restaurant segment eliminating 65 positions in
its corporate and field administrative offices and significantly
reducing leased office space. The effect of the elimination of income
and expenses of the sold restaurants is significantly greater in the
year ended December 31, 1996 as compared with the six months ended
June 29, 1997 principally due to two 1996 eliminations which did not
recur in the 1997 period for (i) the $58,900,000 reduction in carrying
value of long-lived assets associated with the restaurants sold and
(ii) depreciation and amortization on the long-lived restaurant assets
sold, which had been written down to their estimated fair values as of
December 31, 1996 and were no longer depreciated or amortized while
they were held for sale.
(b) To reflect royalties on the sales of the sold restaurants at the rate
of 4%.
(c) To reflect a reduction to interest expense relating to the debt
assumed by RTM.
(d) To reflect the elimination of the $2,342,000 loss on sale of
restaurants and a $544,000 (only the portion related to the restaurant
headquarters) gain on termination of a portion of the Fort Lauderdale,
Florida headquarters lease for space no longer required by the
restaurant segment as a result of the Arby's Restaurants Sale recorded
in the six months ended June 29, 1997.
(e) To reflect the income tax effects of the above at the incremental
income tax rate of 38.9%.
C&C SALE PRO FORMA ADJUSTMENTS
(f) To reflect (i) realization of deferred revenues based on the portion
of the minimum take-or-pay commitment for sales of concentrate for C&C
products to Kelco to be fulfilled and fees related to the technical
services to be performed, both under the contract with Kelco, (ii)
imputation of interest on the deferred revenues and (iii) recognition
of the estimated cost of the concentrate to be sold.
(g) To reflect the elimination of sales, cost of sales, advertising,
selling and distribution expenses, general and administrative expenses
and other expense related to the C&C beverage line.
(h) To reflect accretion of the discount on the portion of the Note
relating to the C&C Sale.
(i) To reflect the income tax effects of the above at the incremental
income tax rate of 36.6%.
77
<PAGE>
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS -- (CONTINUED)
SNAPPLE ACQUISITION PRO FORMA ADJUSTMENTS
(j) Represents adjustments to 'Advertising, selling and distribution'
expenses as follows (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, 1996 JUNE 29, 1997
----------------- ------------------
<S> <C> <C>
Record (reverse) net purchases (depreciation) of refrigerated
display cases expensed when purchased and placed in
service..................................................... $ 3,174 $ (879)
Reverse reported take-or-pay expense for obligations
associated with long-term production contracts as a result
of adjustment to fair value................................. (10,000) (2,128)
----------------- ----------
$(6,826) $(3,007)
----------------- ----------
----------------- ----------
</TABLE>
(k) Represents adjustments to 'General and administrative' expenses as
follows (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, 1996 JUNE 29, 1997
----------------- ------------------
<S> <C> <C>
Record amortization of trademarks and tradenames of $210,000
over an estimated life of 35 years.......................... $ 6,000 $ 2,334
Record amortization of Goodwill of $88,942 over an estimated
life of 35 years............................................ 2,541 989
Reverse reported amortization of intangibles for which no
amortization was recorded subsequent to March 31, 1997 when
they were written down to their estimated fair values....... (54,200) (13,400)
Record amortization relating to the excess of fair value of an
equity investment over the underlying book value over an
estimated life of 35 years.................................. 337 122
----------------- ------------------
$(45,322) $ (9,955)
----------------- ------------------
----------------- ------------------
</TABLE>
(l) To reverse the historical loss on sale of assets for the six months
ended June 29, 1997 related to the reduction of the carrying value of
Snapple in connection with its sale to Triarc.
(m) Represents adjustments to 'Interest expense' as follows (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, 1996 JUNE 29, 1997
----------------- ------------------
<S> <C> <C>
Record interest expense at weighted average rate of 10.2% on
$330,000 of borrowings associated with the Credit
Agreement................................................... $(33,424) $(12,811)
Record amortization on $11,200 of deferred financing costs
associated with the Credit Agreement........................ (1,889) (713)
Reverse reported interest expense on Mistic's former bank
facility.................................................... 6,086 2,231
Reverse reported amortization of deferred financing costs
associated with Mistic's former bank facility............... 953 324
----------------- ------------------
$(28,274) $(10,969)
----------------- ------------------
----------------- ------------------
</TABLE>
78
<PAGE>
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS -- (CONTINUED)
(n) Represents adjustments to 'Benefit from (provision for) income taxes'
(in thousands):
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, 1996 JUNE 29,1997
----------------- ------------------
<S> <C> <C>
To reflect an income tax benefit on the adjusted historical
pretax loss at 39% (exclusive of nondeductible Goodwill
write-off and/or amortization) since no income tax benefit
is reflected in the reported historical results of
operations.................................................. $26,286 $ 65,208
To reflect the estimated income tax effect of the above
adjustments (exclusive of nondeductible Goodwill write-off
and/or amortization) at 39%................................. 2,671 (60,529)
----------------- ----------
$28,957 $ 4,679
----------------- ----------
----------------- ----------
</TABLE>
CABLE CAR ACQUISITION PRO FORMA ADJUSTMENTS
(i) Represents adjustments to 'General and administrative' expenses as
follows (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, 1996 JUNE 29, 1997
----------------- ------------------
<S> <C> <C>
Record amortization of Goodwill of $20,667 over an estimated
useful life of 25 years..................................... $ 827 $413
Record amortization of trademarks and tradenames and
distribution network of $11,300 over an estimated useful
life of 25 years............................................ 452 226
Reverse reported amortization of intangibles.................. (40) (27)
------- ------
$1,239 $612
------- ------
------- ------
</TABLE>
(ii) To reflect the income tax effects of the above at the incremental
income tax rate of 38%.
(iii) The loss before extraordinary items per share has been determined by
dividing the loss before extraordinary items by the weighted average
shares outstanding (29,898,000 and 29,931,000 for the year ended
December 31, 1996 and the six-month period ended June 29, 1997,
respectively) plus the 1,567,000 shares to be issued in connection
with the Merger.
INTEGRATION OF ACQUISITIONS
The accompanying pro forma condensed consolidated statements of operations
do not reflect cost savings that the Company believes it will achieve from
changes in operating strategies subsequent to the acquisitions of Snapple and
Cable Car and operational synergies with Mistic. Such savings include cost
reductions in domestic advertising and marketing and general and administrative
expenses and more cost-efficient international operations. With respect to
Snapple's domestic advertising, the Company plans to reduce such expenditures to
approximately $1.90 per case from the pre-Snapple Acquisition 1996 level of
approximately $2.65 per case through elimination of programs, such as product
giveaways, which it considers non-effective, and the reduction of advertising
development costs including talent, production and agency costs. The Company
believes it can achieve such levels since the 1996 advertising and marketing
levels at Mistic were approximately $1.56 per case. Domestic general and
administrative expenses relating to Snapple are being reduced through space
reductions and elimination of excess personnel. The corporate office facilities
related to Snapple have been reduced from approximately 50,000 square feet at
the Quaker corporate facility to approximately 12,500 square feet at the Triarc
Beverage Group in White Plains, New York. Further, the Company has reduced
administrative personnel, facilitated in part by the integration with Mistic.
With respect to international operations, Snapple incurred significant losses in
1996. The Company intends to rationalize its international advertising and
marketing and general and administrative expenses similar to its domestic
operations to eliminate such losses.
79
<PAGE>
<PAGE>
CAPITALIZATION OF TRIARC
The following table sets forth the unaudited historical capitalization of
Triarc as of June 29, 1997, the pro forma capitalization of Triarc adjusted to
give effect to the C&C Sale and the pro forma capitalization of Triarc further
adjusted to give effect to the Cable Car Acquisition. The adjustments made to
Triarc's historical consolidated capitalization to arrive at the adjusted
consolidated capitalization are described under 'Triarc Companies, Inc. and
Subsidiaries -- Unaudited Pro Forma Condensed Consolidated Financial
Statements.' This table should be read in conjunction with the consolidated
financial statements of Triarc Companies, Inc. and its subsidiaries incorporated
by reference herein and 'Triarc Companies, Inc. and Subsidiaries -- Unaudited
Pro Forma Condensed Consolidated Financial Statements' and related notes thereto
included elsewhere in this Proxy Statement/Prospectus.
<TABLE>
<CAPTION>
PRO FORMA FOR
PRO FORMA THE CABLE CAR
ACTUAL FOR THE C&C SALE ACQUISITION
------ ---------------- -------------
(IN MILLIONS)
<S> <C> <C> <C>
Current portion of long-term debt................................. $ 15.8 $ 15.8 $ 15.8
------ ------- -------------
Long-term debt:
9 3/4% senior secured notes.................................. 275.0 275.0 275.0
8.54% first mortgage notes................................... 125.0 125.0 125.0
Term loans................................................... 323.0 323.0 323.0
Revolving loans.............................................. 38.5 38.5 38.5
Other........................................................ 6.2 6.2 6.2
------ ------- -------------
Total long-term debt.................................... 767.7 767.7 767.7
------ ------- -------------
Stockholders' equity (deficit).................................... (24.4) (24.1) 9.3
------ ------- -------------
Total capitalization............................... $759.1 $759.4 $792.8
------ ------- -------------
------ ------- -------------
</TABLE>
80
<PAGE>
<PAGE>
COMPARISON OF RIGHTS OF CABLE CAR
AND TRIARC STOCKHOLDERS
GENERAL
As a result of the Merger, holders of shares of Cable Car Common Stock will
own shares of Triarc Common Stock. The DGCL is the statute which governs
Delaware corporations. Both Triarc and Cable Car are corporations incorporated
under the laws of the State of Delaware, and there are no differences between
the rights of Triarc and Cable Car stockholders arising out of the DGCL. The
following is a summary of certain material similarities and differences between
the rights of holders of shares of Cable Car Common Stock and holders of shares
of Triarc Common Stock. These differences arise from differences between the
Cable Car Charter and the Cable Car Bylaws, and the Triarc Charter and the
Triarc Bylaws, the governing instruments of the two companies. The
identification of specific differences is not intended to indicate that other
equally or more significant differences do not exist. The summaries set forth
herein are qualified in their entirety by reference to the Cable Car Charter and
Cable Car Bylaws and the Triarc Charter and Triarc Bylaws.
SIZE AND CLASSIFICATION OF THE BOARD OF DIRECTORS
The Triarc Charter requires a Board comprised of not less than seven nor
more than 15 members; provided, however, that such maximum number may be
increased to reflect the right of holders of preferred stock to elect directors
in certain circumstances with the exact number of directors to be fixed by a
majority vote of the directors then in office and that such authority of the
Triarc Board is exclusive. Triarc currently has nine directors. Triarc does not
have a classified board and all directors stand for election on an annual basis.
Each director serves until his or her successor is elected and qualified.
The Cable Car Bylaws require a Board comprised of not less than three nor
more than seven members, which number may be increased or decreased within such
range by the Cable Car Board. Cable Car currently has three directors. Cable Car
does not have a classified board and all directors stand for election on an
annual basis. Each director serves until his or her successor is elected and
qualified.
CUMULATIVE VOTING FOR DIRECTORS
Neither the Triarc Charter nor the Cable Car Charter provides for
cumulative voting.
REMOVAL OF DIRECTORS
The Triarc Bylaws provide that a duly elected director of Triarc may be
removed, without cause, by the affirmative vote of the holders of two-thirds of
the voting power of the outstanding capital stock of Triarc entitled to vote in
the election of directors, voting as a single class. As the Cable Car Bylaws is
silent, Delaware law provides that a duly elected director of Cable Car may be
removed only for cause by the holders of a majority of the shares of the
outstanding capital stock of Cable Car entitled to vote in the election of
directors.
SPECIAL MEETINGS OF STOCKHOLDERS
Under the Triarc Bylaws, a special meeting of stockholders of Triarc may be
called only by the Chairman of the Board and Chief Executive Officer or the
President and Chief Operating Officer or the Triarc Board. Business transacted
at any special meeting is limited to the purposes stated in the notice of the
special stockholders' meeting given to stockholders.
Under the Cable Car Bylaws, a special meeting of stockholders may be called
by (i) the President of Cable Car, (ii) the request in writing or by vote of a
majority of the directors or (iii) the request in writing of stockholders
holding a majority of the capital stock of Cable Car outstanding and entitled to
vote.
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PREFERRED STOCK
The Triarc Charter authorizes the issuance of shares of 'blank check'
preferred stock, which will have such designations, rights and preferences as
may be determined from time to time by the Triarc Board. Accordingly, the Triarc
Board is empowered, without stockholder approval, to issue preferred stock with
dividend, liquidation, conversion, voting or other rights which may adversely
affect the voting power or other rights of the holders of Triarc Common Shares.
As of the date of this Proxy Statement/Prospectus, there are no shares of Triarc
Preferred Stock outstanding.
The Cable Car Charter does not authorize preferred stock for issuance by
the Cable Car Board.
CERTAIN VOTING RIGHTS
The DGCL generally requires approval of any merger, consolidation or sale
of substantially all of the assets of a corporation at a meeting of stockholders
by vote of the holders of a majority of all outstanding shares of the
corporation entitled to vote thereon, although a certificate of incorporation of
a Delaware corporation may provide for a greater vote. Neither the Cable Car
Charter nor Cable Car's By-laws address the vote required to approve a merger,
consolidation or sale of substantially all of the corporation's assets.
Accordingly, such transactions will be governed by the DGCL. The Triarc Charter
provides for a 75% vote of the stockholders entitled to vote thereon in order to
approve certain mergers or consolidations. See 'Description of Anti-Takeover
Provisions in Triarc Charter -- Business Combination Provision' below.
In addition to voting rights provided by Delaware law and under the Triarc
Charter, the rules of the NYSE, on which the Triarc Common Stock is listed, also
afford stockholders certain voting rights. For example, NYSE rules require
stockholder approval prior to the issuance by Triarc of any common stock, or any
securities convertible into common stock, if such shares are to be issued in
connection with any transaction or series of related transactions, other than a
public offering for cash, if (i) the voting power of such common stock would be
equal to at least 20% of the voting power of the shares outstanding prior to the
issuance of such shares, or (ii) the number of such shares would be equal to at
least 20% of the number of shares of common stock outstanding prior to the
issuance of such shares. The NYSE rules also require stockholder approval for
certain transactions in which Triarc's common stock, or securities convertible
into Triarc's common stock, are to be issued to a Triarc director, officer,
substantial stockholder, or an entity in which any such person holds a
substantial interest, if the number of shares of common stock so issued or into
which the securities so issued are convertible exceeds one percent of the number
of shares of common stock outstanding prior to such issuance or one percent of
the outstanding voting power prior to such issuance. The NYSE also requires
stockholder approval for any issuance of securities by Triarc that will result
in a change of control of Triarc.
CERTAIN BUSINESS COMBINATIONS
The DGCL prohibits a corporation which has securities traded on a national
securities exchange, authorized for quotation on Nasdaq or held of record by
more than 2,000 stockholders from engaging in certain business combinations,
including a merger, sale of substantial assets, loan or substantial issuance of
stock, with an interested stockholder, or an interested stockholder's
affiliates, for a three-year period beginning on the date the interested
stockholder acquires 15% or more of the outstanding voting stock of the
corporation. The restrictions on business combinations do not apply if the board
of directors gives prior approval to the transaction in which the 15% ownership
level is exceeded, the interested stockholder acquires at one time at least 85%
of the corporation's stock (excluding those shares owned by persons who are
directors and also officers as well as employee stock plans in which employees
do not have a confidential right to vote), or the business combination is
approved by the board of directors and authorized at a meeting of stockholders
by the holders of at least two-thirds of the outstanding voting stock, excluding
shares owned by the interested stockholder. Although a Delaware corporation may
elect, pursuant to its certificate of incorporation or bylaws, not to be
governed by this provision, none of the Triarc Charter, the Triarc Bylaws, the
Cable Car Charter or the Cable Car Bylaws contain such an election. With respect
to the Merger, the Cable Car Board approved the Merger Agreement and the Merger
prior to the time that Triarc entered into the Stockholders Agreement (pursuant
to
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which Triarc became an 'interested stockholder' of Cable Car under the
applicable provision of the DGCL).
APPRAISAL RIGHTS
Under the DGCL, a shareholder of a corporation participating in certain
merger transactions may, under certain circumstances, receive cash in the amount
of the fair market value of his shares (as determined by a court) in lieu of the
consideration he would otherwise receive in the merger. See 'Appraisal Rights.'
Unless a corporation's certificate of incorporation provides otherwise, the DGCL
does not require that such dissenters' rights of appraisal be afforded to
stockholders with respect to (i) a merger or consolidation by a corporation the
shares of which are either listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or widely held
(by more than 2,000 stockholders), if the stockholders of such corporation
receive only shares of the surviving corporation or of such a listed or widely
held corporation; or (ii) those stockholders who are the stockholders of the
surviving corporation in a merger if no vote of such stockholder is required
because, among other things, the number of shares to be issued in the merger
does not exceed 20% of the shares of the surviving corporation outstanding
immediately prior to the merger (if certain other conditions are met). The Cable
Car Common Stock is not listed on a national securities exchange or designated
as a national market system security, nor is such stock held by more than 2,000
stockholders. Accordingly, the holders of Cable Car Common Stock are not subject
to the exclusion from appraisal rights provided in Section 262. The Triarc
Common Stock is listed on the NYSE and the holders of such stock are not
afforded appraisal rights under Section 262 with respect to certain merger
transactions.
CERTAIN ANTI-TAKEOVER PROVISIONS IN THE TRIARC CHARTER
Certain provisions in the Triarc Charter are intended to discourage or
delay a hostile takeover of control of Triarc. These provisions, in general
terms, (i) provide that the number of directors shall not be less than seven nor
more than 15, with the exact number to be determined from time to time by a
majority of the board of directors then in office; (ii) provide that vacancies
on the Triarc Board resulting from an increase in size, removal of directors or
otherwise may be filled only by a majority of the remaining directors then in
office; and (iii) require the affirmative vote of the holders of shares
representing at least 75% of the voting power of the Voting Shares (defined
below) in order to enter into certain Business Combinations (defined below),
unless (A) such Business Combinations are approved by at least a majority of the
entire Triarc Board, but only if a majority of the directors acting favorably on
the matter are Continuing Directors (defined below), or (B) certain minimum
price, form of consideration and procedural requirements are met. The term
'Voting Shares' is defined in the provisions as any issued and outstanding
shares of capital stock of Triarc entitled to vote generally in the election of
directors. Each of these provisions has particular anti-takeover effects
associated with it, and these effects together with a more detailed description
of each provision are set forth below. In addition, the anti-takeover provisions
are interrelated and have cumulative anti-takeover effects as described herein.
Similar provisions are not included in the Cable Car Charter or the Cable Car
Bylaws.
The principal purpose of these provisions is to provide a measure of
assurance that a shareholder or group of shareholders owning a controlling
interest in the Triarc's stock do not exercise their voting power in a manner
which the Triarc Board believes would be to the detriment of the remaining
shareholders. The provisions are further intended to make it more difficult for
a hostile or unfriendly party to obtain control of Triarc by replacing the
Triarc Board.
SIZE OF THE BOARD OF DIRECTORS AND FILLING VACANCIES ON THE BOARD OF DIRECTORS
The Triarc Charter states that the Triarc Board consists of not less than
seven nor more than 15 members, provided, however, that such maximum number may
be increased to reflect the right of holders of preferred stock to elect
directors in certain circumstances with the exact number of directors to be
fixed by a majority vote of the directors then in office and that such authority
of the Triarc Board is exclusive. The Triarc Charter provides that vacancies
that may occur between annual meetings may
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be filled only by a majority of the remaining directors then in office, even if
less than a quorum, subject to the rights of holders of any class or series of
preferred stock to elect directors. In addition, the provision provides that any
new director elected to fill a vacancy on the Triarc Board will serve for the
remainder of the full term of that director for which the vacancy occurred and
no decrease in the number of directors shall shorten the term of any incumbent.
Vacancies caused by an increase in the number of directors would be filled by
the Triarc Board. The purpose of including these provisions with respect to the
size of the Triarc Board and the filling of vacancies in the Triarc Charter is
to prevent the elimination of such provisions through amendment of the Triarc
Bylaws by a shareholder or group owning or controlling a substantial voting
block so as to permit shareholders directly to increase the size of the Triarc
Board and to fill vacancies resulting therefrom or otherwise, which would enable
such shareholder or group of shareholders to elect its own nominees to the
vacancies. This would be possible because, under Delaware law, shareholders may
amend the Triarc Bylaws without prior approval of the Triarc Board, whereas the
Triarc Charter may be amended only if the Triarc Board first approves and
recommends such action to shareholders.
BUSINESS COMBINATION PROVISION
The Triarc Charter provides that the approval of the holders of shares
representing at least 75% of the voting power of the Voting Shares be required
in order to approve certain Business Combinations if an Interested Shareholder
(defined below) is a party to the transaction or its percentage equity interest
in Triarc or any subsidiary of Triarc would be increased by the transaction. The
required 75% approval of any Business Combination must include the affirmative
vote of the holders of shares representing at least a majority of the voting
power of the Voting Shares exclusive of those shares beneficially owned by any
Interested Shareholder.
The voting requirements outlined above will not apply, however, if: (i)
immediately prior to the time the Business Combination is consummated, Triarc is
the Beneficial Owner (defined below) of a majority of each class of the
outstanding equity securities of the Interested Shareholder; (ii) the Business
Combination was approved by at least a majority of the Board of Directors (even
though not the entire Board of Directors), but only if a majority of the
directors acting favorably upon such matter are Continuing Directors; or (iii)
the consideration to be received by the holders of each class of Triarc's
outstanding Voting Shares acquired by the Interested Shareholder is at least
equal to the greater of the highest per share price (including any brokerage
commissions, transfer taxes and soliciting dealers' fees) paid by the Interested
Shareholder for any shares of such class (A) within the two-year period
immediately prior to the first public announcement of the proposal of the
Business Combination or (B) in the transaction in which it became an Interested
Shareholder, and is in cash or in the same form of consideration as the
Interested Shareholder paid to acquire the largest number of Voting Shares
previously acquired by it. The pricing provision does not guarantee that a
shareholder will receive the highest market price paid for such shares, rather
it insures that a shareholder will receive the highest price paid for such
shares by an Interested Shareholder during the prior two years. If either the
ownership or form of consideration requirements set forth in clauses (i) and
(iii) above are satisfied, the Business Combination shall require the approval
of the holders of at least two-thirds of the votes entitled to be cast by the
holders of all the then outstanding Voting Shares (the 'Ratification
Percentage') (and the additional majority vote). If the Triarc Board approves
the Business Combination in accordance with the requirements set forth in clause
(ii) above, the Triarc Board may, again in accordance with the voting provisions
of such clause (ii), determine to require a vote of shareholders. If a
shareholder vote is required for such Business Combination under law (such as,
for example, in the case of a merger or liquidation), the Triarc Board shall
require the affirmative vote of the then outstanding Voting Shares equal to the
higher of: (1) the Ratification Percentage (such affirmative vote shall not
require the additional majority vote), and (2) such other percentage as is
required by law. If a shareholder vote is not required for such Business
Combination under law, the Triarc Board may, in its discretion, either decide
not to require a shareholder vote to approve the Business Combination or require
the affirmative vote of the outstanding Voting Shares equal to (i) the
Ratification Percentage (such affirmative vote shall not require the additional
majority vote) or (ii) such other percentage as it so determines.
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An 'Interested Shareholder' generally is defined under the Triarc Charter
as the Beneficial Owner of 10% or more of the voting power of the outstanding
Voting Shares (other than Triarc, its employee benefit plans, or its majority
owned subsidiaries), excluding, however, DWG Acquisition or any 'Affiliate' or
'Associate' (each as defined in the Triarc Charter) thereof. The Triarc Board
considers that a 10% holding, which causes a person to be classified as an
'insider' under Section 16 of the Exchange Act, and is double the percentage
ownership required to trigger reporting obligations under Section 13(d) of the
Exchange Act, for shareholders of public companies, is appropriate to define an
Interested Shareholder. At the present time, Triarc is not aware of the
existence of any shareholder or group of shareholders that would be an
Interested Shareholder. However, if the currently outstanding shares of the
Triarc Class B Common Stock were to be converted by a Beneficial Owner into
shares of Triarc Class A Common Stock, such Beneficial Owner (if other than DWG
Acquisition) would become, upon such conversion, an Interested Shareholder.
'Beneficial Owner' and 'Beneficial Ownership' are defined in accordance with the
definition of beneficial ownership under Rule 13d-3 of the General Rules and
Regulations under the Exchange Act, and include all shares as to which the
Interested Shareholder in question has sole or shared voting or investment
power. However, an Interested Shareholder is also deemed to own beneficially
shares owned, directly or indirectly, by any 'Affiliate' or 'Associate' (each as
defined in the Triarc Charter) of the Interested Shareholder, as well as (i)
shares which it or any such Affiliate or Associate has a right to acquire, (ii)
shares issuable upon the exercise of options or rights, or upon conversion of
convertible securities, held by the Interested Shareholder, and (iii) shares
beneficially owned by any other person with whom the Interested Shareholder or
any of such shareholder's Affiliates or Associates acts as a partnership,
syndicate or other group pursuant to an agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of shares of capital
stock of the Company.
A 'Business Combination' includes: (i) a merger or consolidation involving
Triarc or any of its subsidiaries and an Interested Shareholder or an Affiliate
or Associate of an Interested Shareholder, or an Affiliate thereof, (ii) a sale,
lease or other disposition (in one or a series of transactions) of a
'Substantial Part' (as defined in the Triarc Charter) of the assets of Triarc or
any of its subsidiaries to an Interested Shareholder or an Affiliate or
Associate of any Interested Shareholder, or an Affiliate thereof; (iii) any sale
or other disposition (in one or a series of transactions) to Triarc or any of
its subsidiaries of any assets (excluding any Voting Shares, but including
without limitation any securities whether outstanding, authorized but unissued
or in treasury, issued by an Interested Shareholder, or by an Affiliate or
Associate of an Interested Shareholder or by an Affiliate thereof) of (A) any
Interested Shareholder or (B) an Affiliate or Associate of an Interested
Shareholder, or an Affiliate thereof, if the amount paid therefor constitutes a
Substantial Part of the assets of Triarc or any subsidiary; or (iv) an issuance
(or a related series of issuances) of securities of Triarc or any of its
subsidiaries (except upon conversion of convertible securities as a result of a
pro rata stock dividend or stock split) to an Interested Shareholder or an
Affiliate or Associate of an Interested Shareholder or an Affiliate thereof, for
consideration aggregating $5,000,000 or more; (v) a liquidation, dissolution,
spinoff, split up or split off of Triarc (if as of the record date for the
determination of shareholders entitled to vote with respect thereto or, if no
vote would otherwise be required, the date the transaction is planned to be
consummated, any person is an Interested Shareholder); (vi) a reclassification
or recapitalization of securities (including, without limitation, any
combination of shares or reverse stock split) of Triarc or any of its
subsidiaries or a reorganization, in any case having the effect, directly or
indirectly, of increasing the percentage interest of an Interested Shareholder
in any class of equity securities of Triarc or such subsidiary; and (vii) any
agreement, contract or other arrangement providing for any of the transactions
described in this definition of Business Combination.
A 'Continuing Director' is defined as one serving as a director whose
election or appointment or recommendation by the Triarc Board for election by
Triarc's shareholders was approved of by at least a majority of the Continuing
Directors then on the Triarc Board.
The Business Combination provision described above is intended to provide
safeguards to Triarc's shareholders by requiring a higher shareholder vote than
required under Delaware law in the event another person first obtains a
substantial interest in Triarc and then wishes to accomplish a combination of
such person's business with that of Triarc, or otherwise eliminate the
shareholdings of the other shareholders. The federal securities law and
regulations issued thereunder govern the disclosure
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required to be made to minority shareholders in such transactions but do not
assure to shareholders the fairness of the terms of the Business Combination.
Moreover, the statutory right of the remaining shareholders of Triarc to dissent
in connection with certain Business Combinations and receive the 'fair value' of
their shares in cash may involve significant expense, delay and uncertainty to
dissenting shareholders. Further, the 'fair value' of a shareholder's shares, as
determined under this standard, may not be equivalent to the minimum price as
determined pursuant to the provisions.
The Business Combination provision is to close partially these gaps in the
federal and state laws and to minimize certain of the potential inequities of
those Business Combinations that involve two or more steps by requiring that in
order to complete a Business Combination that is not approved by the Continuing
Directors, such Interested Shareholder must obtain the affirmative votes of at
least 75% of the voting power of the outstanding Voting Shares prior to
proposing the Business Combination (including the affirmative vote of the
holders of shares representing at least a majority of the voting power of the
outstanding Voting Shares exclusive of those shares beneficially owned by the
Interested Shareholder), or meet the minimum price and procedural requirements
of the provision and obtain the approval of at least two-thirds of the voting
power of the outstanding Voting Shares (and the additional majority vote). The
provision also is designed to protect those shareholders who have not tendered
or otherwise sold their shares to a purchaser who is attempting to acquire
control by ensuring that at least the same price and form of consideration are
paid to such shareholders in a Business Combination as were paid to shareholders
in the initial step of the acquisition. In the absence of the provision, an
Interested Shareholder who acquired control of Triarc could subsequently, by
virtue of such control, force minority shareholders to sell or exchange their
shares at a price that would not reflect any premium such purchaser may have
paid in order to acquire its controlling interest, but rather at a price set by
such Interested Shareholder. Such a price might not only be lower than the price
paid by such purchaser in acquiring control, but also could be in a less
desirable form of consideration (e.g., equity or debt securities of the
purchaser).
In many situations, the minimum price, form of consideration and procedural
requirements of the provision would require that a purchaser pay shareholders a
higher price for their shares and/or structure the transaction differently from
what would be the case without the provision. Accordingly, to the extent a
Business Combination were involved as part of a plan to acquire control of
Triarc, this provision would increase the likelihood that a purchaser would
negotiate directly with the Triarc Board.
Triarc believes that the Triarc Board normally is in a better position than
the individual shareholders of Triarc to negotiate effectively on behalf of all
shareholders in that the Triarc Board is likely to be more knowledgeable than
any individual shareholder in assessing the business and prospects of Triarc.
Accordingly, Triarc is of the view that negotiations between the Triarc Board
and the purchaser would increase the likelihood that shareholders ultimately
will receive a higher price for their shares from anyone desiring to obtain
control of Triarc through a Business Combination or otherwise.
Although not all acquisitions of Triarc's capital stock are made with the
objective of acquiring control of Triarc through a subsequent Business
Combination, a purchaser in many cases desires to have the option to consummate
such a Business Combination. Assuming that to be the case, the provision would
tend to discourage purchasers whose objective is to seek control of Triarc at a
relatively low price, since acquiring the remaining equity interest may be
difficult unless the minimum price, form of consideration and procedural
requirements were satisfied or a majority of the Continuing Directors were to
approve the transaction. The provision also should discourage the accumulation
of large blocks of Triarc's capital stock, which Triarc believes to be
disruptive to the stability of Triarc, and which can sometimes precipitate a
change of control of Triarc on terms unfavorable to Triarc's other shareholders.
AMENDMENT OF CHARTER DOCUMENTS
The Triarc Charter may be amended in accordance with the DGCL, except that
the Triarc Charter provides that the Business Combination provision described
above may not be repealed, altered, changed or amended in any respect unless
such action is approved by the affirmative vote of the holders of at least 75%
of the Voting Shares (which 75% must include the affirmative vote of the holders
of shares representing at least a majority of the voting power of the Voting
Shares exclusive of those of which any Interested Shareholder is the Beneficial
Owner), unless approved by a vote of a majority of
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the entire Triarc Board (but only if a majority of the directors acting
favorably on the matter are Continuing Directors), in which case the Business
Combination provision may be amended by the affirmative vote of holders of at
least a majority of the voting power of the Voting Shares (such affirmative vote
does not require the additional majority vote); and provided, further, that the
Ratification Percentage may be amended, altered, changed or repealed by the
affirmative vote of the holders of at least two-thirds of the voting power of
the Voting Shares (such affirmative vote does not require the additional
majority vote). The Triarc Bylaws may be altered, amended or repealed, or new
by-laws adopted, by (i) the affirmative vote of stockholders holding not less
than two-thirds of the voting power of the shares entitled to vote on such
issue, or (ii) the affirmative vote of not less than a majority of all of the
directors then holding office and entitled to vote on such issue.
The Cable Car Charter may be amended in accordance with the DGCL. The Cable
Car Bylaws may be amended, altered or repealed or added to at any regular
meeting of the stockholders or board of directors or at any special meeting
called for such purpose, by the affirmative vote of a majority of the stock
issued and outstanding and entitled to vote or of a majority all of the
directors then holding office.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Triarc Charter provides indemnification to the fullest extent permitted
by Delaware law (including as such law may be amended in the future to be more
favorable to directors and officers).
The Triarc Charter (as well as the Triarc Bylaws) provides that, to the
extent not prohibited by law, Triarc shall indemnify its directors and officers
for expenses (including attorneys' fees and disbursements) and any liability or
loss paid or incurred if such person is or was made, or threatened to be made, a
party to any action by reason of the fact that such person is or was a director
or officer of Triarc, or is or was serving in any capacity at the request of
Triarc for any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise (an 'Other Entity'). Persons who are not
directors or officers of Triarc may be similarly indemnified in respect of
service to Triarc or to an Other Entity at the request of Triarc to the extent
the Triarc Board at any time specifies that such persons are entitled to the
benefits of the indemnification provisions of the Triarc Charter. The Triarc
Charter specifies that any director or officer of Triarc serving in any capacity
with a majority owned subsidiary or any employee benefit plan of Triarc or any
majority owned subsidiary corporation shall be deemed to be doing so at the
request of Triarc.
The Triarc Charter and the Triarc Bylaws permit indemnification whether the
basis of such proceeding is an alleged action in an official capacity or in any
other capacity while serving as an officer or director. However, this provision
is limited by reference to the DGCL, which specifically limits indemnification
in the case of derivative suits (suits brought in the name and on behalf of
Triarc) to the payment of expenses if the person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of Triarc. If a person is adjudged liable to Triarc in a derivative
suit (but not in other suits) no indemnification payments may be made unless a
court determines otherwise.
The Triarc Charter also provides that expenses are to be advanced prior to
the final disposition of a proceeding upon the receipt by Triarc of an
undertaking that the director or officer will repay such advances if he or she
is ultimately found not to be entitled to indemnification and provides that the
right to indemnity and to receive advances continues as to a director or officer
after such person has ceased to hold an office with Triarc. The right to
indemnification under the Triarc Charter is a contract right and, therefore,
cannot be retroactively eliminated by a later stockholder vote, and is not an
exclusive right and, therefore, Triarc may provide other indemnification, if
appropriate.
In addition, the Triarc Charter permits Triarc, as provided in the DGCL, to
purchase directors' and officers' liability insurance, and establish a trust
fund to ensure payments of indemnification claims.
Finally, the Triarc Charter permits a person entitled to indemnity to bring
an action in court to obtain such indemnity and requires that in any such suit
the court will not be bound by a decision of the Triarc Board, independent
counsel or stockholders that such person is not entitled to indemnification. The
purpose of this provision is to permit court determination of the issue,
notwithstanding a negative
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decision by the Triarc Board, its chosen counsel or the stockholders, which
decision might be made, for example, following a change of control in Triarc.
The Cable Car Bylaws provide that Cable Car will indemnify to the fullest
extent permitted by law any person who is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding by
reason of the fact that such person is or was a director or officer of the Cable
Car, or while a director or officer of Cable Car is or was serving at its
request as a director, officer, partner, trustee, employee or agent of any other
foreign or domestic entity, against all expenses and liabilities actually and
reasonably incurred by such person in connection with holding such positions.
The Cable Car Bylaws provide that Cable Car may, by determination of the Cable
Car Board, similarly indemnify any present or former employee or agent of Cable
Car to the fullest extent permitted by law or any lesser extent.
LEGAL MATTERS
The legality of the Triarc Common Stock being offered hereby will be passed
upon for Triarc by Paul, Weiss, Rifkind, Wharton & Garrison, New York, New York.
The federal income tax consequences in connection with the Merger will be passed
upon by Sherman & Howard, L.L.C., Denver, Colorado. Members of Paul, Weiss,
Rifkind, Wharton & Garrison own approximately 1,600 shares of Triarc Common
Stock.
EXPERTS
The consolidated financial statements of Triarc incorporated by reference
and the related financial statement schedule incorporated in this Proxy
Statement/ Prospectus by reference to Triarc's Annual Report on Form 10-K for
the year ended December 31, 1996 have been audited by Deloitte & Touche LLP,
independent auditors, as stated, which is in their report incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
The financial statements of Snapple Beverage Corp. incorporated by
reference in this Proxy Statement/Prospectus have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports with
respect thereto and are incorporated by reference herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.
The consolidated financial statements of Cable Car incorporated in this
Proxy Statement/Prospectus by reference to Cable Car's Annual Report on Form
10-K for the fiscal year ended December 31, 1996, have been so incorporated in
reliance on the report of Price Waterhouse LLP, independent accountants, given
on the authority of said firm as experts in accounting and auditing.
STOCKHOLDER PROPOSALS
If the Merger is not consummated, or is not consummated within the time
period currently contemplated, Cable Car will hold its 1997 Annual Meeting of
Stockholders. As described in Cable Car's proxy statement relating to its 1996
Annual Meeting of Stockholders, stockholder proposals for inclusion in Cable
Car's proxy statement and form of proxy relating to the Cable Car 1997 Annual
Meeting of Stockholders must have been received by Cable Car on or before
January 1, 1997.
88
<PAGE>
<PAGE>
PROXY
CABLE CAR BEVERAGE CORPORATION
717 17TH STREET, SUITE 1475
DENVER, COLORADO 80202
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS
SPECIAL MEETING OF STOCKHOLDERS,
NOVEMBER 25, 1997
The undersigned hereby appoints Samuel M. Simpson and Myron D. Stadler, and each
of them, with full power of substitution, the true and lawful attorneys in fact,
agents and proxies of the undersigned to vote on behalf of the undersigned all
of the shares of common stock, par value $.01 per share, of Cable Car Beverage
Corporation (the 'Company') which the undersigned is entitled to vote at the
special meeting (the 'Special Meeting') of Stockholders of the Company, to be
held on Tuesday, November 25, 1997, commencing at 10:00 a.m., local time, at
Norwest Bank Building, 1740 Broadway, Forum Room, Denver, Colorado 80274, and
any and all adjournments or postponements thereof, the following proposals more
fully described in the Notice of Special Meeting of Stockholders and the Proxy
Statement/Prospectus of the Company and Triarc Companies, Inc. ('Triarc'),
dated October 22, 1997 (the 'Proxy Statement/Prospectus').
THE BOARD OF DIRECTORS RECOMMENDS A VOTE 'FOR' PROPOSAL 1 LISTED BELOW.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN HEREIN, THIS PROXY WILL
BE VOTED 'FOR' PROPOSAL 1 BELOW, AND IN THE DISCRETION OF THE PROXIES IN ALL
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE SPECIAL MEETING AND ANY ALL
ADJOURNMENTS OR POSTPONEMENTS THEREOF.
1. To approve a proposal to adopt the Agreement and Plan of Merger dated June
24, 1997, as amended, among Triarc, CCB Merger Corporation, a wholly owned
subsidiary of Triarc ('Mergerco'), and the Company, which provides for the
merger of Mergerco with and into the Company (the 'Merger'), with the
Company as the surviving corporation, and to authorize the Merger and
certain related transactions, as more fully set forth in the Proxy
Statement/Prospectus.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. To transact such other business as may properly come before the Special
Meeting and any and all adjournments or postponements thereof.
<PAGE>
<PAGE>
Your signature on this proxy card is your acknowledgment of receipt of the
Notice of Special Meeting of Stockholders and the Proxy Statement/Prospectus.
The undersigned stockholder hereby revokes all proxies heretofore given by the
undersigned stockholder to vote at the Special Meeting or any adjournments or
postponements thereof.
Dated:____________________________, 1997
----------------------------------------
Signature
----------------------------------------
Signature if held jointly
Please sign exactly as name(s)
appear on this Proxy Card. When
shares are held by joint tenants,
both should sign. When signing as
attorney-in-fact, executor,
administrator, personal
representative, trustee, or
guardian, please give full title as
such. If a corporation, please sign
in full corporate name by authorized
officer. If a partnership, please
sign in partnership name by
authorized person. If you attend the
Special Meeting and decide to vote
by ballot, such vote will supersede
this proxy.
To help us in our planning, please check
here if you expect to attend the Special
Meeting [ ]
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
PLEASE DO NOT SEND ANY STOCK CERTIFICATES WITH THIS PROXY CARD.
<PAGE>
<PAGE>
APPENDIX A-1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________________ TO _________________
COMMISSION FILE NUMBER 0-14784
------------------------
CABLE CAR BEVERAGE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
DELAWARE 52-0880815
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
717 17TH STREET, SUITE 1475, DENVER, COLORADO 80202
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (303) 298-9038
------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
------------------- -----------------
None None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $.01 Par Value
(TITLE OF CLASS)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes __X__ No ______
The aggregate market value of equity securities held by non-affiliates of
the Registrant on March 25, 1997 was approximately $18,730,000.
As of March 25, 1997 there were 8,905,324 shares of common stock
outstanding.
===============================================================================
<PAGE>
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
1996 FORM 10-K ANNUAL REPORT
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I
Item 1. Business....................................................................................... 3
Item 2. Properties..................................................................................... 5
Item 3. Legal Proceedings.............................................................................. 5
Item 4. Submission of Matters to a Vote of Security Holders............................................ 5
PART II
Item 5. Market for the Registrant's Common Stock and Related Stockholder Matters....................... 5
Item 6. Selected Financial Data........................................................................ 6
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.......... 6
Item 8. Financial Statements and Supplementary Data.................................................... 9
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure........... 9
PART III
Item 10. Directors and Executive Officers of the Registrant............................................. 9
Item 11. Executive Compensation......................................................................... 9
Item 12. Security Ownership of Certain Beneficial Owners and Management................................. 9
Item 13. Certain Relationships and Related Transactions................................................. 9
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K................................ 9
</TABLE>
2
<PAGE>
<PAGE>
PART I
ITEM 1. BUSINESS.
GENERAL
Cable Car Beverage Corporation, (the 'Company') was incorporated under the
laws of Delaware on April 1, 1968. The Company's business consists of marketing
its line of proprietary soft drinks and waters throughout the United States and
in Canada. As discussed in more detail below, the Company's product line
consists of Stewart's brand soft drinks, JAVA COLA, Fountain Classics Seltzer,
San Francisco Seltzer, Aspen Mountain Spring Water and Aspen flavored waters.
During 1996, the Company began marketing two new Stewart's flavors (Stewart's
Classic Key Lime and Cherries N' Cream) as well as a new line of carbonated,
coffee-flavored cola under the name of JAVA COLA.
PROPRIETARY PRODUCTS MARKETING:
General: The Company initially entered its current business of marketing
beverages on August 27, 1987 when it acquired, through its subsidiary Old San
Francisco Seltzer, Inc. ('SFS'), the assets and business of Old San Francisco,
Inc. ('Old SF'), a California corporation that marketed a product line of
flavored seltzers.
The Company added to its line of beverages when, on July 11, 1989, it
entered into a licensing agreement with Stewart's Restaurants, Inc.
('Stewart's'), a New Jersey based franchiser of Stewart's Drive-In Root Beer
Stands, pursuant to which the Company has the exclusive right to produce and
market Stewart's brand beverages for the entire United States. Pursuant to an
addendum to the Stewart's licensing agreement dated April 11, 1994, the Company
was granted the exclusive rights for Canada, and once the Company achieves
cumulative sales of 4,000,000 cases, the license becomes worldwide provided the
Company maintains annual sales of 1,000,000 cases. The agreement provides for a
sliding scale royalty with a minimum annual royalty of $50,000. For the year
ended December 31, 1996, the royalty payments exceeded the minimum royalty due
and the Company expects the same in future years. Termination of the agreement
may occur if the Company's annual sales of Stewart's Root Beer are less than
500,000 cases for each year.
On December 1, 1993, the Company entered into a separate licensing
agreement with Stewart's, whereby the Company has the exclusive right to market
Stewart's brand beverages as a fountain product in 15 states. The agreement
provided for a one time licensing fee of $29,250 and payment of a sliding scale
royalty. The Company is marketing the Stewart's fountain product through its
wholly-owned subsidiary, Fountain Classics, Inc. ('FCI').
On November 22, 1989, the Company acquired the assets and business of Aspen
Mineral Water Corporation ('Aspen'), a Colorado corporation that marketed a
sparkling water. Currently, the Company markets a line of non-carbonated fruit
flavored beverages under the brand name of Aspen. The Company also markets a
non-carbonated spring water under the Aspen name.
Proprietary Products: The Company's proprietary product line currently
consists of Stewart's premium soft drinks (Root Beer, Orange N' Cream, Cream
Ale, Ginger Beer, Classic Key Lime, and Cherries N' Cream), JAVA COLA, San
Francisco Seltzer, Aspen Mountain Spring Water and Aspen flavored waters.
Stewart's products are packaged in original and diet and are sweetened using
non-sugar sweeteners -- fructose in the original line and NutraSweet brand
sweetener in the diet line. JAVA COLA is a unique coffee-flavored cola made with
real coffee and is sold in four different flavors: Original, Diet, Mocha and
Vanilla. San Francisco Seltzer is a naturally flavored soft drink which contains
no sodium or preservatives and is available in regular and diet flavors that are
sweetened with fructose and NutraSweet, respectively. Aspen Mountain Spring
Water is a non-carbonated water. Aspen flavored waters are non-carbonated, fruit
flavored beverages.
For the years ended December 31, 1996 and 1995, the Stewart's brand
accounted for approximately 98% and 96% of the Company's proprietary brand
sales, respectively. The Company anticipates that the Stewart's brand will
continue to account for a significant portion of sales for the year ending
December 31, 1997.
3
<PAGE>
<PAGE>
Marketing and Distribution: The brand products business consists of both
sales of concentrate to regional soft drink bottlers and the sale of finished
goods to distributors. Where the Company sells concentrate to bottlers, the
bottlers produce finished goods and sell through their own distribution network.
When the Company sells finished goods directly to distributors, the Company has
product produced for it by contract manufacturers. The Company does not directly
manufacture any of the products it sells. The Company's products are retailed
primarily in grocery, convenience and liquor stores and food service accounts.
Consumer marketing consists of newspaper, magazine, outdoor and radio
advertising, along with in-store product demonstrations and point of sale
promotions. The Company presently sells product to numerous bottlers and
distributors in the United States and Canada.
Competition: The soft drink business is extremely competitive and there are
numerous competing products. Most competitors are larger and have greater
financial resources than the Company. The Company's principal means for
competing within this category are its product line and flavors and through its
advertising, packaging and promotions.
Trademarks: The Company owns the trademark 'San Francisco Seltzer' which
was registered with the United States Patent and Trademark Office on March 1,
1988. The Company also owns the trademark 'Fountain Classics' which is used on
the Stewart's Premium Sodas line of products. The 'Fountain Classics' trademark
was registered with the United States Patent and Trademark Office on June 18,
1991. The Company owns the trademark 'Aspen' which was registered on May 31,
1994 with the United States Patent and Trademark Office. The foregoing
trademarks are registered for a 10-year period and may be extended thereafter
for additional 10-year periods subject to compliance with federal statutory and
regulatory provisions. Management is of the view that its trademarks are of
significant importance to its operations and loss of such trademarks could
adversely affect the Company to an indeterminable extent. The Company is taking
appropriate steps to protect its trademarks. Stewart's Restaurants, Inc. owns
the trademark 'Stewart's' which is registered with the United States Patent and
Trademark Office. The Company has an exclusive trademark license agreement with
Stewart's Restaurants. (See 'Proprietary Products Marketing -- General'.)
WHOLESALE DISTRIBUTION -- DIVESTED ON JUNE 7, 1993
General: From 1987 until 1993, the Company was also engaged in the business
of wholesale distribution of beverages through its former subsidiary, Sheya
Brothers Specialty Beverages, Inc. ('SBSB'). On June 7, 1993, SBSB was merged
into AMCON Distributing Company ('AMCON'), a then privately-held, Omaha-based
wholesale distributor.
In connection with the merger of SBSB into AMCON, the Company received
306,143 shares of common stock of AMCON. Pursuant to the Agreement and Plan of
Merger with AMCON, on July 31, 1995, the Company distributed 266,469 AMCON
shares to shareholders of the Company on a prorata basis. As of December 31,
1996, the Company holds 39,674 shares of AMCON.
SEASONALITY:
Due to the seasonality of the beverage industry, the Company's sales
volumes are normally at their highest in the second and third calendar quarters.
PROSPECTIVE PRODUCTS AND ACQUISITION ACTIVITIES:
The Company continues to develop line extensions under its various brand
names, primarily by adding new packages and flavors. As described above, the
Company introduced the following new products during 1996: Stewart's Classic Key
Lime and Cherries N' Cream. The Company intends to continue expanding into
beverage products, through both internal development and acquisition, that are
compatible with its existing brands and can be sold through the Company's
existing bottling and distribution network.
4
<PAGE>
<PAGE>
MAJOR CUSTOMERS:
For the year ended December 31, 1996, two customers, K.O.
Lester -- Lebanon, TN and Mid-State Beverage Company -- New Brunswick, NJ,
accounted for approxiamtely 14% and 18% of the Company's net sales,
respectively.
For the year ended December 31, 1995, the same two customers each accounted
for approximately 20% of the Company's net sales.
COMPANY EMPLOYEES:
As of December 31, 1996, the Company had 17 employees. In addition, the
Company has used certain consultants on an 'as needed' basis.
ITEM 2. PROPERTIES.
The Company is currently leasing, through September 1997, approximately
3,024 square feet of office space at 717 17th Street, Denver, Colorado 80202, at
an annual cost of $28,350.
ITEM 3. LEGAL PROCEEDINGS.
The Company and its subsidiaries are not parties to, nor are any of their
properties subject to, any pending legal proceedings which are expected to have
any materially adverse effect on the Company's results of operations or
financial position. Additionally, to the best of management's knowledge, no
material legal proceeding is contemplated or has been threatened against the
Company and its subsidiaries.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to a vote of all security holders during
the quarter ended December 31, 1996.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS.
The Company's Common Stock trades on the NASDAQ Small-Cap Market under the
symbol DRNK. The following table reflects the range of the high and low bid
prices per share of the Company's Common Stock as reported by NASDAQ through
December 31, 1996. These quotations represent inter-dealer quotations, without
adjustment for retail mark-ups, mark-downs or commissions and may not
necessarily represent market transactions. As of March 25, 1997, the Company had
approximately 1,100 holders of record of its shares and the Company is informed
that approximately 3,000 additional persons hold shares beneficially.
<TABLE>
<CAPTION>
COMMON STOCK
--------------
HIGH LOW
----- -----
<S> <C> <C>
Year Ended December 31, 1996:
December 1996 Quarter................................................... $2.84 $2.00
September 1996 Quarter.................................................. 2.56 1.44
June 1996 Quarter....................................................... 1.84 1.25
March 1996 Quarter...................................................... 1.88 1.44
Year Ended December 31, 1995:
December 1995 Quarter................................................... $1.66 $1.19
September 1995 Quarter.................................................. 1.81 1.38
June 1995 Quarter....................................................... 2.00 1.09
March 1995 Quarter...................................................... 1.41 1.00
</TABLE>
5
<PAGE>
<PAGE>
The Company has never declared or paid a cash dividend on its common stock
and does not anticipate a change in this policy in the foreseeable future. The
Board of Directors currently intends to retain earnings to finance the
acquisition and development of new products, expansion of markets and for other
corporate purposes.
ITEM 6. SELECTED FINANCIAL DATA.
The following data, insofar as they relate to the consolidated statement of
operations for the years ended December 31, 1996, 1995 and 1994; and the balance
sheet as of December 31, 1996 and 1995, have been derived from the consolidated
financial statements appearing in Part IV of this Form 10-K. The consolidated
statement of operations data for the six-months ended December 31, 1993 and the
fiscal years ended June 30, 1993 and 1992; and the consolidated balance sheet
data as of December 31, 1994 and 1993, and June 30, 1993 and 1992 have been
derived from the historical consolidated financial statements of the Company for
such periods.
The following table data should be read in conjunction with the
consolidated financial statements and notes thereto, and management's commentary
thereon contained in Item 7 of this report.
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED YEAR ENDED JUNE 30,
-------------------------------------- DECEMBER 31, -------------------------
1996 1995 1994 1993(1) 1993 1992
----------- ----------- ---------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Revenue................ $18,872,556 $12,843,620 $8,322,301 $ 3,030,982 $15,537,997 $14,838,598
----------- ----------- ---------- ------------ ----------- -----------
----------- ----------- ---------- ------------ ----------- -----------
Net income (loss)...... $ 1,257,132 $ 882,600 $ 721,695 $ 143,449 $ (348,176) $ (22,384)
----------- ----------- ---------- ------------ ----------- -----------
----------- ----------- ---------- ------------ ----------- -----------
Net income (loss) per
common share:........ $ .14 $ .10 $ .09 $ .02 $ (.05) $
----------- ----------- ---------- ------------ ----------- -----------
----------- ----------- ---------- ------------ ----------- -----------
Weighted average common
and common equivalent
shares outstanding... 9,255,479 8,915,666 8,318,909 7,796,799 7,640,780 7,057,416
----------- ----------- ---------- ------------ ----------- -----------
----------- ----------- ---------- ------------ ----------- -----------
Balance Sheet Data:
Total assets........... $ 7,141,782 $ 5,360,700 $4,448,832 $ 3,920,799 $ 4,054,120 $ 5,266,381
----------- ----------- ---------- ------------ ----------- -----------
----------- ----------- ---------- ------------ ----------- -----------
Long-term debt......... $ 0 $ 0 $ 5,970 $ 10,099 $ 2,817 $ 108,476
----------- ----------- ---------- ------------ ----------- -----------
----------- ----------- ---------- ------------ ----------- -----------
Stockholders' equity... $ 5,982,046 $ 4,402,421 $3,944,778 $ 3,096,886 $ 2,953,347 $ 3,066,613
----------- ----------- ---------- ------------ ----------- -----------
----------- ----------- ---------- ------------ ----------- -----------
</TABLE>
- ------------
(1) In 1993, the Company elected to change its fiscal year end from June 30 to
December 31.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
UNCERTAINTIES THAT MAY AFFECT FUTURE RESULTS
The Company's future operating results are subject to a number of
uncertainties, including the ability of the Company to market its beverage
products and to develop and introduce new products, and the number, quantity and
marketing forces behind products introduced by competitors. The Company expects
the level of competition in the beverage industry to become even more intense
and large beverage companies with greater resources have a competitive advantage
over the Company. In addition, general economic conditions, the cost of raw
materials and general conditions in the beverage business may have an impact on
the Company's future operations. There can be no assurance the Company will
continue to be successful nor that it will not encounter difficulties in
retaining its current market niche due to a variety of factors such as market
acceptance, costs of manufacturing and
6
<PAGE>
<PAGE>
marketing, and competition in the beverage industry, all of which are largely
beyond the Company's ability to reasonably predict, much less control.
GENERAL
The Company entered into the business of non-alcoholic beverage marketing
in fiscal 1988 when it acquired the assets and business of Old San Francisco
Seltzer, Inc. Since that time, the Company added Stewart's Root Beer and Aspen
Sparkling Mountain Spring Water to the proprietary brands that it markets
nationally and has continued to grow its line of Stewart's soft drinks (Root
Beer, Orange N' Cream, Cream Ale, Ginger Beer, Key Lime and Cherries N' Cream).
Stewart's soft drinks are currently sold in over 43 states and Canada. In
December 1993, the Company entered into a licensing agreement with Stewart's
Restaurants, Inc., whereby the Company has the exclusive right to sell Stewart's
brand beverages as a fountain product in 15 states.
FINANCIAL CONDITION
The Company's current ratio at December 31, 1996 is 5.0 to 1 as compared to
4.0 to 1 at December 31, 1995.
Stockholders' equity at December 31, 1996 increased by $1,579,625
principally from net income of $1,257,132 for the year ended December 31, 1996
and the exercise of options of $322,493 which includes a tax benefit.
LIQUIDITY AND CAPITAL RESOURCES
For the year ended December 31, 1996, cash increased by $832,538. Operating
activities provided cash of $773,658 primarily from net income of $1,257,132 and
increases in accrued income taxes and other current liabilities of $116,998 and
$239,209, respectively. These increases in cash were partially offset by
increases in accounts receivable and inventory of $317,848 and $622,639,
respectively and a decrease in accounts payable. Investing activities used cash
of $257,653, primarily from the purchase of short-term investments and the
acquisition of property and equipment. Financing activities generated $316,533,
primarily from the exercise of stock options. Working capital increased
$1,758,644 to a ratio of 5.0 to 1.
For the comparable twelve month period ended December 31, 1995, investing
and financing activities generated $14,004 and $365,653, respectively and
operating activities used $384,124 for a net decrease in cash of $4,467.
The Company intends to utilize cash from operations to meet its ongoing
obligations. The Company has also maintained a bank line of credit in the amount
of $500,000 which it may utilize from time to time to meet seasonal cash needs.
Management does not expect liquidity problems during 1997 assuming the Company
can maintain or exceed its current sales volume, and expenses as a percentage of
sales remain relatively constant.
RESULTS OF OPERATIONS
COMPARISON OF THE YEAR ENDED DECEMBER 31, 1996 TO THE COMPARABLE TWELVE MONTH
PERIOD ENDED DECEMBER 31, 1995:
The Company had net income of $1,257,132 for the year ended December
31, 1996 versus net income of $882,600 for the comparable twelve month
period ended December 31, 1995. This represents an increase in net income
for 1996 of $374,532 or 42%.
Revenue from the sale of products increased to $18,872,556 in 1996
from $12,843,620 in 1995. This increase of $6,028,936 or 47% was due
primarily to the general expansion of the Company's customer base and from
the introduction of two new Stewart's brand flavors: Key Lime and Cherries
N' Cream.
Cost of goods sold was $4,051,774 greater in 1996 than in 1995 due to
higher revenue. The cost of goods sold as a percentage of sales, however,
decreased from 75% to 72% primarily due to
7
<PAGE>
<PAGE>
increased unit sales price on certain Stewart's brand packages which was
intended to offset increasing material costs over the last two years.
General and administrative expense increased $297,221 from 1995 to
1996, and remained relatively constant as a percentage of total revenue at
6%. The increase in general and administrative expense in 1996 was
primarily the result of the addition of 4 new employees, increased cost
related to professional services, and an increase in bad debt expense.
Selling expense increased $593,358 from 1995 to 1996, and remained
relatively constant as a percentage of total revenue at 11%. The increased
selling expense in 1996 was primarily the result of increased promotional
spending and expenses related to development and introduction of two new
Stewart's flavors and the JAVA COLA line.
COMPARISON OF THE YEAR ENDED DECEMBER 31, 1995 TO THE COMPARABLE TWELVE MONTH
PERIOD ENDED DECEMBER 31, 1994:
The Company had net income of $882,600 for the year ended December 31,
1995 versus net income of $721,695 for the comparable twelve month period
ended December 31, 1994.
Revenue from the sale of products increased to $12,843,620 in 1995
from $8,322,301 in 1994. This increase of $4,521,319 or 54% was due
primarily to an expanded customer base for the Stewart's brand products.
Cost of goods sold was $3,588,613 greater in 1995 than in 1994 due to
higher revenue. The cost of goods sold as a percentage of sales, however,
increased from 73% to 75% primarily due to increased costs of certain raw
materials which were not passed on to its customers through increased sales
prices.
General and administrative expense increased $100,188 from 1994 to
1995, but decreased as a percentage of total revenue from 9% to 6%. This
percentage decrease is primarily a result of increased sales with nominal
increases in corporate overhead.
Selling expense increased $595,535 from 1994 to 1995, and increased as
a percentage of sales from 10% to 11%. The increase is primarily due to
increased promotional expenses used to introduce new brands and products,
and the addition of two new sales representatives during 1995.
Net income was impacted in the year 1995 by two non-recurring and
unrelated items: a write-down of an investment and the recording of a
deferred income tax benefit. During the third quarter 1995, the Company
wrote-down its investment in AMCON Distributing Company, Inc. to the market
price of AMCON common stock as reported by NASDAQ on August 4, 1995, the
date upon which the stock was initially included on NASDAQ. The write-down
resulted in a charge of $848,342.
During the third quarter of 1995, the Company recorded an income tax
benefit of $936,440 which primarily represents the future tax benefits
associated with the Company's net operating loss carryforwards. The Company
recorded the tax benefit based on management's determination in the third
quarter of 1995 that it was more likely than not that the Company would
utilize its future income tax benefits.
8
<PAGE>
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
See financial statements listed in the index on page F1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
Information required in items 10, 11, 12 and 13 of Part III will be
included in the Company's Proxy Statement for the Annual Meeting of Stockholders
and will be filed in not more than 120 days after the Company's fiscal year end.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this report:
FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The financial statements and financial statement schedules filed with this
report are listed in the Index to Financial Statements appearing on page F1.
EXHIBITS
The documents listed below have been filed as exhibits to this report:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBITS
- -------- --------
<C> <S>
(3)-A Certificate of Incorporation, as amended (Filed as Exhibit (3) with and incorporated by reference from
Form 10-K dated October 9, 1987)
(3)-B Certificate of Amendment -- July 20, 1989, changing name*
(3)-C Bylaws, as amended (Filed as Exhibit (3) with and incorporated by reference from Form 10-K dated
October 9, 1987)
(10)-G Stewart's Master Agreement -- Stewart's Restaurants, Inc. as amended by Addendum, dated April 11, 1994
and incorporated by reference from Form 10-K dated May 4, 1994
(10)-S Employment Agreement with executive, Samuel M. Simpson
(21) Subsidiaries of the Company (Filed as Exhibit (22) with and incorporated by reference to the current
Form 10-K, Note 1 to the Consolidated Financial Statements.)
</TABLE>
- ------------
* Incorporated by reference to Form S-1 filed September 25, 1989, SEC file
#33-30480.
------------------------
(b) Reports on Form 8-K
None.
9
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Cable Car Beverage Corporation has duly caused this report
to be signed on its behalf by the undersigned, hereunto duly authorized.
CABLE CAR BEVERAGE CORPORATION
By /s/ SAMUEL M. SIMPSON
..................................
SAMUEL M. SIMPSON
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
March 27, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------------------------ ----------------
<C> <S> <C>
/s/ SAMUEL M. SIMPSON Chairman of the Board & President March 27, 1997
.........................................
(SAMUEL M. SIMPSON)
/s/ JAMES P. MCCLOSKEY Director March 27, 1997
.........................................
(JAMES P. MCCLOSKEY)
/s/ WILLIAM H. RUTTER Director March 27, 1997
.........................................
(WILLIAM H. RUTTER)
/s/ MYRON D. STADLER Chief Accounting Officer March 27, 1997
.........................................
(MYRON D. STADLER)
</TABLE>
10
<PAGE>
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants.......................................................................... F-2
Consolidated Balance Sheet at December 31, 1996, and 1995.................................................. F-3
Consolidated Statement of Operations for the Years Ended December 31, 1996, 1995 and 1994.................. F-4
Consolidated Statement of Cash Flows for the Years Ended December 31, 1996, 1995 and 1994.................. F-5
Consolidated Statement of Changes in Stockholders' Equity for the Years Ended December 31, 1996, 1995 and
1994..................................................................................................... F-6
Notes to Consolidated Financial Statements................................................................. F-7
</TABLE>
No financial statement schedules are required.
F-1
<PAGE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
CABLE CAR BEVERAGE CORPORATION
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of cash flows and of changes in
stockholders' equity present fairly, in all material respects, the financial
position of Cable Car Beverage Corporation and its subsidiaries (the 'Company')
at December 31, 1996 and 1995, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE LLP
Denver, Colorado
March 14, 1997
F-2
<PAGE>
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1996 1995
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...................................................... $ 1,408,729 $ 576,191
Short-term investments......................................................... 195,042
Accounts receivable, net of allowance for doubtful accounts of $100,743 at
December 31, 1996 and $55,949 at December 31, 1995............................ 1,336,094 1,063,040
Inventories.................................................................... 2,430,896 1,808,257
Prepaid expenses and other current assets...................................... 23,582 40,394
Deferred income tax assets..................................................... 394,029 340,389
----------- -----------
Total current assets...................................................... 5,788,372 3,828,271
Property and equipment, net
Property and equipment, less accumulated depreciation of $144,441 at December
31, 1996 and $99,231 at December 31, 1995..................................... 130,778 116,466
Other assets:
Goodwill and other intangibles, less accumulated amortization of $387,168 at
December 31, 1996 and $347,007 at December 31, 1995........................... 591,265 631,426
Investment in AMCON Distributing Company....................................... 99,185 99,185
Other assets................................................................... 58,603 72,498
Deferred income tax assets..................................................... 473,579 612,854
----------- -----------
$ 7,141,782 $ 5,360,700
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities....................................... $ 231,408 $ 380,198
Accrued income taxes........................................................... 146,140 29,142
Other current liabilities...................................................... 782,188 542,979
Current portion of long-term debt.............................................. 5,960
----------- -----------
Total current liabilities................................................. 1,159,736 958,279
----------- -----------
----------- -----------
Commitments: (see Note 8)
Stockholders' equity:
Common stock, $.01 par value; 25,000,000 shares authorized; 8,981,681 issued at
December 31, 1996 and 8,658,349 shares issued at December 31, 1995............ $ 89,817 $ 86,584
Additional paid-in capital..................................................... 9,822,137 9,502,877
Accumulated deficit............................................................ (3,901,273) (5,158,405)
Less -- 76,357 common shares in treasury....................................... (28,635) (28,635)
----------- -----------
5,982,046 4,402,421
----------- -----------
$ 7,141,782 $ 5,360,700
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
F-3
<PAGE>
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
1996 1995 1994
----------- ----------- ----------
<S> <C> <C> <C>
Revenue:
Sales........................................................... $18,872,556 $12,843,620 $8,322,301
Cost and expenses:
Cost of goods sold.............................................. 13,670,934 9,619,160 6,030,547
General and administrative...................................... 1,108,329 811,108 710,920
Selling and distribution........................................ 1,993,580 1,400,222 804,687
Depreciation and amortization................................... 88,460 66,388 57,485
----------- ----------- ----------
16,861,303 11,896,878 7,603,639
----------- ----------- ----------
Income from operations............................................... 2,011,253 946,742 718,662
Other income and (expenses):
Interest income and other....................................... 52,775 51,405 20,479
Interest expense................................................ (350) (1,114) (2,346)
Loss on AMCON stock............................................. (848,342)
----------- ----------- ----------
Income before income taxes........................................... 2,063,678 148,691 736,795
Provision (benefit) for income taxes................................. 806,546 (733,909) 15,100
----------- ----------- ----------
Net income........................................................... $ 1,257,132 $ 882,600 $ 721,695
----------- ----------- ----------
----------- ----------- ----------
Net income per common share.......................................... $ 0.14 $ 0.10 $ 0.09
----------- ----------- ----------
----------- ----------- ----------
Weighted average common and common equivalent shares................. 9,255,479 8,915,666 8,318,909
----------- ----------- ----------
----------- ----------- ----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
F-4
<PAGE>
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------
1996 1995 1994
---------- ---------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net Income.......................................................... $1,257,132 $ 882,600 $ 721,695
Adjustment to reconcile net income to net cash from operating
activities:
Loss on investment in AMCON.................................... 848,342
Depreciation and amortization.................................. 88,460 66,388 57,486
Provision for loss on accounts receivable...................... 44,794 (3,662) 32,111
Deferred income tax assets..................................... 85,635 (953,243)
Change in current assets and liabilities:
Accounts receivable............................................ (317,848) (401,554) (163,477)
Inventories.................................................... (622,639) (1,209,320) (99,703)
Prepaid expenses and other current assets...................... 16,812 (8,020) (21,359)
Other assets................................................... 13,895 (68,677) 10,246
Accounts payable and accrued liabilities....................... (148,790) 276,714 (269,146)
Accrued income taxes........................................... 116,998 26,042 3,100
Other current liabilities...................................... 239,209 160,266 69,316
---------- ---------- ---------
Net cash from (used in) operating activities.............. 773,658 (384,124) 340,269
Cash flows from investing activities:
Cash paid for short-term investments................................ (195,042) (151,876)
Proceeds from short-term investments................................ 151,876
Equipment acquisitions.............................................. (62,611) (97,872) (24,276)
Other............................................................... (40,000) (12,500)
---------- ---------- ---------
Net cash from (used in) investing activities.............. (257,653) 14,004 (188,652)
---------- ---------- ---------
Cash flows from financing activities:
Principal payments on debt.......................................... (5,960) (8,796) (11,339)
Proceeds from issuance of stock..................................... 182,498 374,449 67,197
Tax benefit associated stock options................................ 139,995
---------- ---------- ---------
Net cash from financing activities........................ 316,533 365,653 55,858
---------- ---------- ---------
Net increase (decrease) in cash and cash equivalents..................... 832,538 (4,467) 207,475
Cash and cash equivalents at beginning of period......................... 576,191 580,658 373,183
---------- ---------- ---------
Cash and cash equivalents at end of period............................... $1,408,729 $ 576,191 $ 580,658
---------- ---------- ---------
---------- ---------- ---------
Supplemental disclosure of non-cash financing and investing activities:
Property dividend of investment in AMCON stock...................... $ 799,407
Conversion of debt to equity........................................ $ 59,000
Capital lease obligations........................................... $ 7,000
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
F-5
<PAGE>
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
COMMON STOCK TREASURY STOCK
-------------------- ADDITIONAL ---------------------
NUMBER OF PAID IN ACCUMULATED NUMBER OF
SHARES AMOUNT CAPITAL DEFICIT SHARES AMOUNT
--------- ------- ---------- ----------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1993........... 7,873,156 $78,732 $9,010,082 (5,963,293) 76,357 $(28,635)
Exercise of stock options and
warrants, net...................... 131,462 1,315 65,882
Conversion of debt to equity......... 100,000 1,000 58,000
Issuance of stock to retire
warrants........................... 50,000 500 (500)
Net income........................... 721,695
--------- ------- ---------- ----------- --------- --------
Balance, December 31, 1994........... 8,154,618 81,547 9,133,464 (5,241,598) 76,357 (28,635)
Exercise of stock options and
warrants, net...................... 503,731 5,037 369,413
Dividend of AMCON stock.............. (799,407)
Net income........................... 882,600
--------- ------- ---------- ----------- --------- --------
Balance, December 31, 1995........... 8,658,349 86,584 9,502,877 (5,158,405) 76,357 (28,635)
Exercise of stock options............ 323,332 3,233 179,265
Tax benefit associated stock
options............................ 139,995
Net income........................... 1,257,132
--------- ------- ---------- ----------- --------- --------
Balance, December 31, 1996........... 8,981,681 $89,817 $9,822,137 $(3,901,273) $ 76,357 $(28,635)
--------- ------- ---------- ----------- --------- --------
--------- ------- ---------- ----------- --------- --------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
F-6
<PAGE>
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -- ORGANIZATION AND OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:
ORGANIZATION AND OPERATIONS -- Cable Car Beverage Corporation (the 'Company'),
formerly Great Eastern International, Inc., was incorporated under the laws of
Delaware on April 1, 1968. Since 1987, the Company's primary business has been
the marketing and distribution of beverages and it has been engaged in the food
and beverage business since 1986.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Principles of Consolidation -- The Company's consolidated financial
statements include the accounts of its wholly-owned subsidiaries Old San
Francisco Seltzer, Inc. ('SFS') and Fountain Classics, Inc. ('FCI'). All
significant intercompany accounts and transactions have been eliminated.
Revenue Recognition -- Revenue from beverage finished product and
concentrate sales are recorded at the time of receipt and acceptance by the
customer.
Concentration of Credit Risk -- The Company's customers consist primarily
of beverage distributors. Financial instruments which potentially subject the
Company to concentrations of credit risk are primarily accounts receivable,
short-term investments and cash equivalents. The Company performs ongoing credit
evaluations of its customers' financial condition and generally requires no
collateral from its customers. The Company's sales to major customers are
discussed in Note 9.
Inventories -- Inventories are recorded at the lower of cost or market.
Cost is determined using the first-in, first-out (FIFO) method.
Property and Equipment -- Property and equipment, primarily consisting of
furniture and office equipment, is stated at cost and is generally depreciated
on a straight-line method over the estimated useful lives of the respective
depreciable assets of three to five years. Maintenance and repairs are expensed
as incurred and improvements are capitalized.
Goodwill -- Goodwill is recorded for the excess of the purchase price over
the fair value of net tangible assets acquired. Goodwill is amortized on a
straight-line basis over a 25-year period. The recoverability of goodwill is
assessed quarterly, based on undiscounted projected cash flows. Impairment is
recognized when a permanent diminution in value occurs.
Net Income Per Common Share -- Net income per common share is computed
under the treasury stock method using the weighted average number of common
shares and dilutive common stock equivalent shares outstanding during the year.
Cash Equivalents -- Generally, only highly liquid investments purchased
with original maturities of three months or less are considered to be cash
equivalents. Cash equivalents included in cash and cash equivalents at December
31, 1996 and 1995 are certificates of deposit which aggregated approximately
$135,429 and $318,694, respectively. Cash equivalents are carried at cost which
approximates fair value. The Company has a cash investment policy which
generally restricts investments to ensure preservation of principal and
maintenance of liquidity.
Short-term Investments -- Short-term investments are stated at an amortized
cost of $195,042 which, at December 31, 1996, approximates market value.
Significant Estimates -- Certain estimates and assumptions that affect the
reported amounts of assets and liabilities, and the reported amounts of revenue
and expenses are made by management in the preparation of financial statements
in conformity with generally accepted accounting principles. Actual results
could differ from these estimates.
NOTE 2 -- MERGER OF SHEYA BROTHERS SPECIALTY BEVERAGES, INC. AND INVESTMENT IN
AMCON STOCK:
On June 7, 1993, the Company merged its wholly-owned subsidiary, Sheya
Brothers Specialty Beverages, Inc. ('SBSB'), into AMCON Distributing Company
('AMCON'), a then privately held,
F-7
<PAGE>
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Omaha-based wholesale distributor. In exchange for the net assets of SBSB, the
Company received 12.5% of the issued and outstanding common stock of AMCON. As
part of the transaction, the Company agreed to distribute a minimum of
two-thirds of the AMCON shares to its shareholders, representing approximately
an 8% ownership interest in AMCON.
During the third quarter of 1995, the Company wrote-down its investment in
the market price of AMCON common stock as reported by NASDAQ on August 4, 1995,
the date upon which the stock was initially included on NASDAQ, which resulted
in a charge of $848,342. The Company then distributed 266,469 shares of AMCON
common stock as a dividend to the Company's shareholders of record as of July 5,
1995. This distribution of 266,469 shares of AMCON represented 87% of the
Company's holdings in AMCON. At December 31, 1996, the Company continued to hold
39,674 shares of AMCON common stock.
NOTE 3 -- INVENTORIES:
Inventories consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1996 1995
---------- ----------
<S> <C> <C>
Finished Goods.................................................... $1,330,990 $1,009,223
Raw Materials..................................................... 1,099,906 799,034
---------- ----------
$2,430,896 $1,808,257
---------- ----------
---------- ----------
</TABLE>
NOTE 4 -- OTHER CURRENT LIABILITIES:
Other current liabilities consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1996 1995
-------- --------
<S> <C> <C>
Commitments for marketing and promotional programs.................... $397,474 $218,621
Unbilled inventory receipts........................................... 64,521 106,808
Bonuses............................................................... 141,800 75,000
Travel and entertainment.............................................. 36,186 53,500
Other, individually not material...................................... 142,207 89,050
-------- --------
$782,188 $542,979
-------- --------
-------- --------
</TABLE>
NOTE 5 -- LINE OF CREDIT:
During 1996, the Company extended for one year its $500,000 revolving line
of credit collateralized by the Company's accounts receivable and inventory. No
borrowings were outstanding under the line as of December 31, 1996. Borrowings
made under the agreement bear interest at a variable rate of one point over
prime. The line of credit agreement also includes certain financial and other
covenants. The agreement is currently scheduled to expire in June 1997.
F-8
<PAGE>
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 6 -- INCOME TAXES:
The Company's net deferred income tax asset consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1996 1995
-------- --------
<S> <C> <C>
Net operating loss carryforwards...................................... $621,000 $742,000
Accrued liabilities and reserves...................................... 170,000 145,000
Other, net............................................................ 39,000 45,000
Allowance for doubtful accounts....................................... 38,000 21,000
-------- --------
$868,000 $953,000
-------- --------
-------- --------
</TABLE>
The net operating loss carryforwards are subject to certain annual
utilization limits. Previously, the Company had recorded a valuation allowance
equal to the deferred income tax assets due to management's uncertainty about
the likelihood that the Company would fully utilize these benefits. However, it
was determined by the Company during 1995 that, based upon the Company's recent
and expected future operating results, it was then more likely than not that the
Company would realize its future income tax benefits. Based on this
determination, the Company released the valuation allowance and provided an
income tax benefit of $936,440 during 1995. As of December 31, 1996, the Company
has net operating loss carryforwards of approximately $1,634,000 which expire
from 2000 through 2005. Pursuant to Section 382 of the Internal Revenue Code,
the Company is limited in the amount of net operating loss carryforwards it may
use each year to offset taxable income. The Company's consolidated Section 382
annual limitation is approximately $343,000.
The provision (benefit) for income taxes is comprised of the following:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1996 1995 1994
-------- --------- -------
<S> <C> <C> <C>
Current............................................................. $721,000 $ 219,000 $15,100
Deferred............................................................ 86,000 (953,000) 0
-------- --------- -------
$807,000 $(734,000) $15,100
-------- --------- -------
-------- --------- -------
</TABLE>
The provision for income taxes differs from the amount computed by applying
the U.S. federal income tax rate of 34% to pretax earnings as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------
1996 1995 1994
---------- ----------- ---------
<S> <C> <C> <C>
Income before income taxes.................................... $2,063,678 $ 148,691 $ 737,000
U.S. federal income tax at statutory rate..................... $ 702,000 $ 50,600 $ 251,000
Differences:
State income taxes, net of federal tax benefit........... 43,000 5,200
Loss on dividend of AMCON stock............................... 318,100
Increase (decrease) in unrecognized net operating losses and
future deductions........................................... (1,139,000) (271,000)
Non-deductible items and other, net........................... 62,000 31,100 35,100
---------- ----------- ---------
Provision for income taxes.................................... $ 807,000 $ (734,000) $ 15,100
---------- ----------- ---------
---------- ----------- ---------
</TABLE>
NOTE 7 -- STOCK OPTIONS:
The Company, on a discretionary basis, grants non-qualified stock options
to directors, key employees, and consultants to purchase common stock of the
Company. Stock options are granted at an exercise price not less than the fair
market value of the common stock on the date of grant and generally vest over
four or five years. The expiration period generally occurs between three to six
years.
F-9
<PAGE>
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table summarizes stock option activity for 1994, 1995 and
1996:
<TABLE>
<CAPTION>
WEIGHTED AVERAGE
SHARES EXERCISE PRICE
--------- ----------------
<S> <C> <C>
Outstanding at December 31, 1993.............................. 1,224,996 $ .85
Granted during 1994...................................... 100,000 .75
Exercised during 1994.................................... (110,000) .45
Forfeited during 1994.................................... (15,000) .75
--------- ------
Outstanding at December 31, 1994.............................. 1,199,996 .88
Granted during 1995...................................... 312,500 1.23
Exercised during 1995.................................... (101,666) .70
Forfeited during 1995.................................... (275,000) .75
--------- ------
Outstanding at December 31, 1995.............................. 1,135,830 1.02
Granted during 1996...................................... 190,000 2.00
Exercised during 1996.................................... (323,332) .56
Forfeited during 1996.................................... (99,998) 2.37
--------- ------
Outstanding at December 31, 1996.............................. 902,500 $1.24
--------- ------
--------- ------
</TABLE>
The weighted average fair values of options granted during 1996 and 1995
were $.448 and $.685, respectively.
The following table summarizes information about stock options as of
December 31, 1996:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
-------------------------- ------------------------
WEIGHTED
AVERAGE WEIGHTED
REMAINING AVERAGE
NUMBER CONTRACTUAL NUMBER EXERCISE
RANGE OF EXERCISE PRICES OUTSTANDING LIFE EXERCISABLE PRICE
- ------------------------------------------ ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
$0.70 - 0.75.............................. 215,000 2.86 years 215,000 0.70
$1.10..................................... 225,000 3.08 years 205,800 1.10
$1.25..................................... 272,500 3.65 years 184,300 1.25
$2.00..................................... 190,000 4.31 years
----------- ----------- ----------- ---------
902,500 3.46 years 605,100 1.00
----------- ----------- ----------- ---------
----------- ----------- ----------- ---------
</TABLE>
The Company applies APB 25 in accounting for its stock compensation plans,
and no compensation expense has been recognized in the financial statements for
options granted to employees and directors. Had compensation expense for the
Company's stock option plan been determined based on the fair values at the
grant dates for awards under the plan consistent with the method of accounting
prescribed by FASB Statement 123, the Company's net income and income per share
would have been decreased to the pro forma amounts indicated below for the years
ended December 31:
<TABLE>
<CAPTION>
1996 1995
---------- --------
<S> <C> <C>
Net income:
As reported.................................................... $1,257,132 $882,600
Pro forma...................................................... 1,221,278 805,378
Net income per share:
As reported.................................................... $ 0.14 $ 0.10
Pro forma...................................................... 0.13 0.09
</TABLE>
In accordance with the guidance provided under SFAS 123, the fair value of
each option grant is estimated using the Black-Scholes option-pricing model with
the following weighted-average assumptions: dividend yield of zero; expected
volatility of 47% in 1996 and 36% in 1995; risk-free interest rate of 5.83% in
1996 and 5.59% in 1995; and an expected term of five years. The risk-free
interest rate used
F-10
<PAGE>
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
in the calculation in the yield on the grant date of the U.S. Treasury Strip
with a maturity equal to the expected term of the option.
NOTE 8 -- COMMITMENTS:
The Company has commitments to lease office space through September 30,
1997. Rental expense of $41,339, $39,139 and $37,901 has been recognized for the
years ended December 31, 1996, 1995 and 1994, respectively. At December 31,
1996, the minimum annual rental commitments under noncancellable operating
leases were approximately $28,350 through September 1997.
The Company has outstanding commitments to purchase raw materials
(primarily glass) which aggregate approximately $2.6 million at December 31,
1996.
The Company has a licensing agreement with Stewart's Restaurants, Inc.
which provides for a sliding-scale royalty with a minimum annual royalty of
$50,000.
NOTE 9 -- MAJOR CUSTOMERS:
Two customers accounted for approximately 18% and 14% individually of the
Company's net sales for the year ended December 31, 1996. Two customers each
accounted for approximately 20% of net sales for the years ended December 31,
1995 and 1994.
NOTE 10 -- QUARTERLY INFORMATION (UNAUDITED)(1):
The following interim financial information represents the 1996 and 1995
consolidated results of operations on a quarterly basis:
<TABLE>
<CAPTION>
PER
COMMON
PRETAX SHARE
GROSS INCOME NET NET
QUARTER ENDED REVENUE PROFIT (LOSS) INCOME INCOME
- --------------------------------------- ---------- ---------- --------- -------- ------
<S> <C> <C> <C> <C> <C>
December 31, 1996...................... $4,275,088 $1,153,903 $ 339,092 $208,610 $.02
September 30, 1996..................... 5,664,924 1,579,016 758,762 445,115 .05
June 30, 1996.......................... 5,249,735 1,482,795 675,506 430,051 .05
March 31, 1996......................... 3,682,809 985,908 290,318 173,356 .02
December 31, 1995...................... $3,214,852 $ 699,116 $ 120,515 $102,054 $.01
September 30, 1995..................... 4,286,294 1,060,199 (502,320) 355,763 .04
June 30, 1995.......................... 3,453,111 957,094 397,313 322,001 .04
March 31, 1995......................... 1,889,363 508,051 133,182 102,782 .01
</TABLE>
- ------------
(1) The Unaudited Quarterly Information for 1995 was not reviewed by the
Company's independent accountants in accordance with standards established
for such reviews.
F-11
<PAGE>
<PAGE>
APPENDIX A-2
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K/A
AMENDMENT NO. 1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________________ TO __________________
COMMISSION FILE NUMBER 0-14784
------------------------
CABLE CAR BEVERAGE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
DELAWARE 52-0880815
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
717 17TH STREET, SUITE 1475, DENVER, COLORADO 80202
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (303) 298-9038
------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
------------------- ----------------
None None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $.01 Par Value
(TITLE OF CLASS)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes __X__ No ______
The aggregate market value of equity securities held by non-affiliates of
the Registrant on April 23, 1997 was approximately $17,035,000.
As of April 23, 1997 there were 8,905,324 shares of common stock
outstanding.
================================================================================
<PAGE>
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Directors and Executive Officers
The executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
YEAR BECAME
NAME AGE DIRECTOR POSITION
- ------------------------------------ --- ----------- --------------------------
<S> <C> <C> <C>
Samuel M. Simpson................... 44 1986 President, Director
James P. McCloskey.................. 46 1992 Director
William H. Rutter................... 45 1995 Director
Myron D. Stadler.................... 30 N/A Chief Accounting Officer
</TABLE>
Set forth below is certain information regarding the directors and
executive officers:
Samuel M. Simpson has been President, Chief Executive Officer and a
director of the Company since 1986. He has served as Chairman of the Board
since 1992. He was employed as a consultant to reorganize the Company
during 1983 prior to joining the Company first as its Vice President in
1984 and later as its President and Chief Executive Officer in 1986. From
1979 to 1984 Mr. Simpson was President of Energy Prospects, Inc. a Denver
based privately owned oil and gas company.
James P. McCloskey is Chief Financial Officer of Red Robin
International, Inc. in Denver, Colorado and has been a director of the
Company since 1992. From April 1994 to February 1996, Mr. McCloskey was the
Chief Financial Officer for Avalon Software Company, in Tucson, Arizona.
From 1988 until April 1994, he was Chief Financial Officer of the Famous
Amos Chocolate Chip Cookie Corporation, San Francisco, California. From
1985 to 1988 he was Chief Financial Officer and President, respectively, of
the William J. Ash Corporation and The James P. McCloskey Corporation,
Denver, Colorado, both privately owned real estate development companies.
Mr. McCloskey is a certified public accountant.
William H. Rutter is a private investor and has been a director of the
Company since 1995. From 1991 to 1993, Mr. Rutter was the president of
Capstone Management Corporation which owns and operates restaurants in the
Denver area. From 1984 to 1990, he was a partner in Sherman & Howard, a
Denver, Colorado law firm.
Myron D. Stadler has been employed by the Company since 1992 and was
elected Chief Accounting Officer and Secretary in 1995. Prior to 1992, Mr.
Stadler was a financial analyst for the City and County of Denver at
Stapleton International Airport.
ITEM 11. EXECUTIVE COMPENSATION.
The following table provides summary information concerning compensation
paid to or earned by the Company's Chief Executive Officer for the years ended
December 31, 1996, 1995 and 1994.
2
<PAGE>
<PAGE>
SUMMARY COMPENSATION
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------ ------------------- ----------------------
NAME & OTHER ANNUAL RESTRICTED LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(2) STOCK OPTIONS #PAYOUTS COMPENSATION
- ----------------------------- ---- -------- -------- --------------- ---------- ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Samuel M. Simpson(1)
President & Chairman
of the Board............... 1996 $150,000 $140,000 $ 170,266 $0 0 $0 $0
1995 120,000 75,000 0 0 0 0 0
1994 115,137 40,000 0 0 0 0 0
</TABLE>
- ------------
(1) As permitted by Commission rules, no amounts are shown for certain
perquisites, where such amounts do not exceed the lesser of 10% of bonus
plus salary or $50,000.
(2) The amounts under 'Other Annual Compensation' represent the value realized
from the exercise of stock options.
The following table provides information with respect to the named officers
concerning unexercised stock options held as of December 31, 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN THE MONEY OPTIONS
SHARES DECEMBER 31, 1996(#) AT DECEMBER 31, 1996($)(1)
ACQUIRED ON VALUE ---------------------------- ---------------------------------
NAME EXERCISE(#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- ----------- -------- ----------- ------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Samuel M. Simpson
President & Chairman
of the Board............ 166,666 170,266 135,000 75,000 140,250 18,750
Myron D. Stadler
Chief Accounting
Officer & Secretary..... 25,000 20,428 27,200 42,800 31,980 28,520
</TABLE>
- ------------
(1) Based on the closing bid price of the Company's common stock at December 31,
1996 as reported by the NASDAQ system.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
INDIVIDUAL GRANTS STOCK
----------------------------------------------------- PRICE
% OF TOTAL OPTIONS APPRECIATION FOR
NUMBER OF SECURITIES GRANTED TO EXERCISE OR OPTION TERM(1)
UNDERLYING OPTIONS EMPLOYEES IN BASE PRICE ----------------
NAME GRANTED (#)(2) FISCAL YEAR ($/SH) EXPIRATION DATE 5% 10%
- ----------------------- -------------------- ------------------ ----------- ----------------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
McCloskey, James P..... 37,500 20% $2.00 December 31, 2000 11,822 24,825
Rutter, William H...... 37,500 20% $2.00 December 31, 2000 11,822 24,825
Simpson, Samuel M...... 75,000 39% $2.00 December 31, 2000 23,644 49,650
Stadler, Myron......... 20,000 11% $2.00 December 31, 2003 3,370 7,262
</TABLE>
- ------------
(1) The potential realizable value is based on the term of the option at the
date of grant. It is calculated by assuming that the stock price on the date
of grant appreciates at the indicated annual rate, compounded annually for
the entire term, and that the option is exercised and sold on the last day
of the option term for the appreciated stock price. These amounts represent
certain assumed rates of
(footnotes continued on next page)
3
<PAGE>
<PAGE>
(footnotes continued from previous page)
appreciation only, in accordance with the rules of the Commission, and do
not reflect the Company's estimate or projection of future stock price
performance. Actual gains, if any, are dependent on the actual future
performance of the Common Stock. There can be no assurance that the amounts
reflected in this table will be achieved.
(2) These options become exercisable December 31, 1997 through December 31,
2000.
COMPENSATION PURSUANT TO PLANS
The Company presently has no proposed compensation plans such as pension,
profit sharing, retirement plans, or other similar forms of executive
compensation.
EMPLOYMENT AGREEMENT
The Company's President and Chief Executive Officer, Samuel M. Simpson, has
an employment agreement with the Company which currently runs through December
31, 1999. Mr. Simpson's agreement provides for an annual base salary of $175,000
plus an annual bonus which is based on the Company achieving certain financial
performance levels.
DIRECTORS
The Company compensates outside directors at the rate of $1,000 per quarter
and reimburses direct expenses associated with attending meetings. The Board of
Directors does not have committees.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The table below sets forth information as of April 23, 1997 with respect to
beneficial ownership of the Common Stock by all directors and officers, both
individually and as a group, and by each person known by the Company to be the
beneficial owner of more than five percent of the outstanding shares of the
Common Stock. As of April 23, 1997 the Company had 8,905,324 shares of common
stock outstanding.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME BENEFICIAL OWNERSHIP(1) CLASS OWNED
-------- -------------------------- -----------
<S> <C> <C>
OFFICERS & DIRECTORS
Samuel M. Simpson........................................ 1,314,877 14.3%
James P. McCloskey....................................... 143,625 1.57%
William H. Rutter........................................ 761,232 8.39%
Myron D. Stadler......................................... 95,000 1.05%
Officers and Directors as a Group (4 persons)....... 2,314,734 24.4%
</TABLE>
5% SHAREHOLDERS
None
- ------------
(1) Includes presently outstanding options to purchase shares of the Company's
Common Stock held by each of the foregoing.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On May 1, 1996, the Company loaned $75,000 to Samuel M. Simpson, the
Company's President and CEO. The loan proceeds were used by Mr. Simpson to
exercise 166,666 stock options in the Company. This loan was evidenced by a
promissory note bearing interest of 8% per annum, with interest and principal
due and payable on January 31, 1997. Mr. Simpson pledged 268,644 shares of
common stock of the Company as security for this loan. The largest aggregate
amount of indebtedness during 1996 was $79,016.39 which included $4,016.39 of
accrued interest. The entire amount of the loan including interest was repaid on
December 31, 1996.
4
<PAGE>
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this report:
FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The financial statements and financial statement schedules filed with this
report are listed in the Index to Financial Statements appearing on page F1.
EXHIBITS
The documents listed below have been filed as exhibits to this report:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBITS
- --------- ---------------------------------------------------------------------------------------------------------
<S> <C>
(3)(a) -- Certificate of Incorporation, as amended (Filed as Exhibit (3) with and incorporated by reference from
Form 10-K dated October 9, 1987)
(3)(b) -- Certificate of Amendment -- July 20, 1989, changing name*
(3)(c) -- Bylaws, as amended (Filed as Exhibit (3) with and incorporated by reference from Form 10-K dated
October 9, 1987)
(10)(g) -- Stewart's Master Agreement -- Stewart's Restaurants, Inc. as amended by Addendum, dated April 11, 1994
and incorporated by reference from Form 10-K dated May 4, 1994
(10)(s) -- Employment Agreement with executive, Samuel M. Simpson and incorporated by reference from Form 10-K
dated April 14, 1995
(10)(t) -- Addendum to Employment Agreement with executive, Samuel M. Simpson
(21) -- Subsidiaries of the Company (Filed as Exhibit (22) with and incorporated by reference to the current
Form 10-K, Note 1 to the Consolidated Financial Statements)
</TABLE>
- ------------
* Incorporated by reference to Form S-1 filed September 25, 1989, SEC file
#33-30480.
(b) Reports on Form 8-K
None.
5
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Cable Car Beverage Corporation has duly caused this report
to be signed on its behalf by the undersigned, hereunto duly authorized.
CABLE CAR BEVERAGE CORPORATION
(Registrant)
By /S/ SAMUEL M. SIMPSON
.........................
SAMUEL M. SIMPSON
PRESIDENT AND CHIEF
EXECUTIVE OFFICER
Date: April 23, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- ------------------------------------------ -------------------------------------------- -------------------
<C> <S> <C>
/s/ SAMUEL M. SIMPSON Chairman of the Board and President April 23, 1997
.........................................
(SAMUEL M. SIMPSON)
/s/ MYRON D. STADLER Chief Accounting Officer April 23, 1997
.........................................
(MYRON D. STADLER)
</TABLE>
6
<PAGE>
<PAGE>
APPENDIX A-3
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _________ TO _________
COMMISSION FILE NUMBER 0-14784
------------------------
CABLE CAR BEVERAGE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
DELAWARE 52-0880815
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
717 17TH STREET, SUITE 1475, DENVER, COLORADO 80202-3314
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(303) 298-9038
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
REPORT)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes __X__ No _______
The Registrant had 8,948,324 shares of its $.01 par value common stock
outstanding as of August 8, 1997.
================================================================================
<PAGE>
<PAGE>
FORM 10-Q
2ND QUARTER
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Part I -- Financial Information
Item 1. Consolidated Financial Statements:
Consolidated balance sheet at June 30, 1997 (Unaudited) and at December 31, 1996...................... 3
Consolidated statement of operations for the six-month and three-month periods ended June 30, 1997 and
June 30, 1996 (Unaudited)............................................................................ 4
Consolidated statement of cash flows for the six-month periods ended June 30, 1997 and June 30, 1996
(Unaudited).......................................................................................... 5
Consolidated statement of changes in stockholders' equity (Unaudited)................................. 6
Notes to unaudited consolidated financial statements for the six-month period ended June 30, 1997..... 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.............. 7
Part II -- Other Information............................................................................... 9
</TABLE>
2
<PAGE>
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
----------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...................................................... $ 1,229,406 $ 1,408,729
Short-term investments......................................................... 195,042
Accounts receivable, net of allowance for doubtful accounts of $143,025 at June
30, 1997 and $100,743 at December 31, 1996.................................... 2,694,410 1,336,094
Inventories, net............................................................... 3,246,493 2,430,896
Prepaid expenses and other current assets...................................... 86,012 23,582
Deferred income tax assets..................................................... 519,950 394,029
----------- ------------
Total current assets...................................................... 7,776,271 5,788,372
Property and equipment, net
Property and equipment less accumulated depreciation of $173,896 at June 30,
1997 and $144,441 at December 31, 1996........................................ 127,945 130,778
Other assets:
Goodwill and other intangibles, less accumulated amortization of $414,842 at
June 30, 1997 and $387,168 at December 31, 1996............................... 763,649 591,265
Investment in AMCON Distributing Co............................................ 99,185 99,185
Other assets................................................................... 1,312 58,603
Deferred income tax assets..................................................... 404,541 473,579
----------- ------------
$ 9,172,903 $ 7,141,782
----------- ------------
----------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities....................................... $ 795,227 $ 231,408
Accrued income taxes........................................................... 66,360 146,140
Other current liabilities...................................................... 1,559,292 782,188
----------- ------------
Total current liabilities................................................. 2,420,879 1,159,736
----------- ------------
Stockholders' equity:
Common stock, $.01 par value; 25,000,000 shares authorized; 9,024,681 shares
issued at June 30, 1997 and 8,981,681 issued at December 31, 1996............. 90,247 89,817
Additional paid-in capital..................................................... 9,898,687 9,822,137
Accumulated deficit............................................................ (3,208,275) (3,901,273)
Less -- 76,357 common shares in treasury....................................... (28,635) (28,635)
----------- ------------
6,752,024 5,982,046
----------- ------------
$ 9,172,903 $ 7,141,782
----------- ------------
----------- ------------
</TABLE>
See notes to unaudited consolidated financial statements
3
<PAGE>
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------ -------------------------
1997 1996 1997 1996
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Revenue:
Sales.............................................. $7,388,832 $5,249,735 $12,746,696 $8,932,544
Cost and expenses:
Cost of goods sold................................. 5,283,393 3,766,940 9,123,558 6,463,841
General and administrative......................... 668,652 273,375 940,373 515,129
Selling and distribution........................... 735,603 521,183 1,385,775 965,331
Depreciation and amortization...................... 33,410 22,277 57,129 42,084
---------- ---------- ----------- ----------
6,721,058 4,583,775 11,506,835 7,986,385
---------- ---------- ----------- ----------
Income from operations.................................. 667,774 665,960 1,239,861 946,159
Other income and (expenses):
Interest income and other non-operating income..... 15,220 9,629 31,344 19,893
Interest expense................................... (83) (228)
---------- ---------- ----------- ----------
Income before income taxes.............................. 682,994 675,506 1,271,205 965,824
Provision for income taxes.............................. 340,988 245,455 578,207 362,417
---------- ---------- ----------- ----------
Net income.............................................. $ 342,006 $ 430,051 $ 692,998 $ 603,407
---------- ---------- ----------- ----------
Net income per common share............................. $ .04 $ .05 $ .07 $ .07
---------- ---------- ----------- ----------
---------- ---------- ----------- ----------
Weighted average common and common equivalent shares.... 9,687,764 9,050,647 9,602,700 9,022,000
---------- ---------- ----------- ----------
---------- ---------- ----------- ----------
</TABLE>
See notes to unaudited consolidated financial statements
4
<PAGE>
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30,
-------------------------
1997 1996
----------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income..................................................................... $ 692,998 $ 603,407
Adjustment to reconcile net income to net cash from operating activities:
Depreciation and amortization............................................. 57,129 42,084
Provision for loss on accounts receivable................................. 42,282 21,332
Change in assets and liabilities:
Accounts receivable....................................................... (1,492,886) (845,677)
Inventories............................................................... (815,597) (545,604)
Prepaid expenses and other current assets................................. (62,430) (14,749)
Other assets.............................................................. 57,291 (72,161)
Deferred income tax assets................................................ (56,883) 44,363
Accounts payable and accrued liabilities.................................. 563,819 597,424
Accrued income taxes...................................................... (79,780) 220,753
Other current liabilities................................................. 777,104 193,353
----------- ---------
Net cash from (used in) operating activities......................... (316,953) 244,525
----------- ---------
Cash flows from investing activities:
Proceeds from short-term investments........................................... 195,042
Cash paid to reacquire certain distribution rights............................. (30,790)
Property and equipment acquisitions............................................ (26,622) (39,141)
----------- ---------
Net cash from (used in) investing activities......................... 137,630 (39,141)
----------- ---------
Cash flows from financing activities:
Principal payments on debt..................................................... (4,389)
Proceeds from issuance of stock................................................ 134,998
----------- ---------
Net cash from financing activities................................... 130,609
----------- ---------
Net increase (decrease) in cash and cash equivalents................................ (179,323) 335,993
Cash and cash equivalents at beginning of period.................................... 1,408,729 576,191
----------- ---------
Cash and cash equivalents at end of period.......................................... $ 1,229,406 $ 912,184
----------- ---------
----------- ---------
Supplemental disclosure of non-cash financing and investing activities
Issuance of stock to reacquire certain distribution rights..................... $ 76,980
Forgiveness of accounts receivable to reacquire certain distribution rights.... 92,288
</TABLE>
See notes to unaudited consolidated financial statements
5
<PAGE>
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TREASURY STOCK
-------------------- PAID-IN ACCUMULATED ------------------
SHARES AMOUNT CAPITAL DEFICIT SHARES AMOUNT
--------- ------- ---------- ----------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1996............. 8,981,681 $89,817 $9,822,137 $(3,901,273) 76,357 $(28,635)
Stock issued to reacquire certain
distribution rights.................. 43,000 430 76,550
Net Income............................. 692,998
--------- ------- ---------- ----------- ------ --------
Balance June 30, 1997.................. 9,024,681 $90,247 $9,898,687 $(3,208,275) 76,357 $(28,635)
--------- ------- ---------- ----------- ------ --------
--------- ------- ---------- ----------- ------ --------
</TABLE>
See notes to unaudited consolidated financial statements
6
<PAGE>
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -- FINANCIAL STATEMENTS PRESENTATION
The consolidated interim financial statements of Cable Car Beverage
Corporation (the 'Company') at June 30, 1997, and for the six-month and
three-month periods ended June 30, 1997, and June 30, 1996 are unaudited. In the
opinion of management, all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the consolidated financial position,
results of operations and cash flows for all periods presented have been made.
The Company's consolidated interim financial statements include the
accounts of its wholly-owned subsidiaries, Old San Francisco Seltzer, Inc. and
Fountain Classics, Inc.
Certain information and substantially all footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been omitted. It is suggested that these financial
statements be read in conjunction with the fiscal year ended Company's
consolidated financial statements, filed in Form 10-K for December 31, 1996. The
results of operations for the period ended June 30, 1997 are not necessarily
indicative of the operating results for the full year.
Certain reclassifications have been reflected in the prior period financial
statements to conform to the current year presentations.
NOTE 2 -- NET INCOME PER COMMON SHARE
Net income per common share was computed under the treasury stock method
using the weighted average number of common shares and dilutive common stock
equivalent shares outstanding during the period. In February 1997, the FASB
issued SFAS No. 128, 'Earnings per Share,' which is effective for periods ending
after December 15, 1997 and requires changes in the computation, presentation
and disclosure of earnings per share. Earnings per share for all prior periods
must be restated to conform with computation provisions of SFAS No. 128. The
adoption of SFAS No. 128 for the year ended December 31, 1997 will not have a
material impact on the Company's reported financial results.
NOTE 3 -- INVENTORIES
Inventories consisted of:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
---------- ------------
<S> <C> <C>
Finished Goods................................................... $1,519,816 $1,330,990
Raw Materials.................................................... 1,726,677 1,099,906
---------- ------------
$3,246,493 $2,430,896
---------- ------------
---------- ------------
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Certain statements in the following discussions regarding the Company's
future product and business plans, financial results, performance and events are
forward-looking statements and are based on current expectations. Actual results
may differ materially due to a number of risks and uncertainties.
CURRENT DEVELOPMENTS
During the second quarter, the Company reacquired territorial marketing and
distribution rights from certain of its distributors located in the northeastern
United States. The cost to reacquire these territorial distribution rights
totaled $200,058, of which $30,790 was paid in cash, $92,288 was accounts
receivable forgiven, and the remainder was paid through the issuance of the
Company's common stock.
7
<PAGE>
<PAGE>
RESULTS OF OPERATIONS
COMPARISON OF THE SIX-MONTH PERIODS ENDED JUNE 30, 1997 AND JUNE 30, 1996
Revenue for the six-months ended June 30, 1997 was $12,746,696 versus
revenue of $8,932,544 for the six-months ended June 30, 1996. This increase of
$3,814,152, or 43%, was primarily due to increased sales of Stewart's brand
products.
Cost of goods sold increased by $2,659,717 for the comparative six-months
ended June 30, 1997 and June 30, 1996. As a percentage of sales, cost of goods
sold decreased to 71.6% for the six-months ended June 30, 1997 from 72.4% for
the six-months ended June 30, 1996. The improved gross margin was primarily due
to favorable sweetener costs compared with the six months ended June 30, 1996.
General and administrative expenses increased by $425,244 for the
six-months ended June 30, 1997 compared to the six-months ended June 30, 1996.
General and administrative costs also increased as a percentage of sales to 7.4%
from 5.8% for the six-months ended June 30, 1997 and 1996, respectively. This
increase is primarily the result of approximately $313,000 of expenses related
to the proposed merger with Triarc Companies, Inc. (see Part II, Item 5, below).
These expenses are non-recurring and are not related to ongoing operations of
the Company. Excluding these merger related expenses, general and administrative
expenses would have been $627,557 or 4.9% of sales.
Selling and distribution expenses increased $420,444 for the comparative
six-months ended June 30, 1997 from June 30, 1996, primarily due to increased
promotional spending on the Stewart's brand products. As a percentage of sales,
selling expenses were relatively constant at 11%.
Pre-tax income rose $305,381, or 32%, to $1,271,205 for the six-months
ended June 30, 1997 from $965,824 for the six-months ended June 30, 1996. Net
income rose $89,591, or 15%, to $692,998 from $603,407 for the comparative
periods ending June 30, 1997 and 1996, respectively. Excluding merger related
costs, pre-tax income would have risen 64% to $1,584,021 and net income would
have increased 57% to $949,522 for the six-month period compared to the prior
year period.
COMPARISON OF THE THREE-MONTH PERIODS ENDED JUNE 30, 1997 AND JUNE 30, 1996
Revenue for the three-months ended June 30, 1997 was $7,388,832 versus
revenue of $5,249,735 for the three-months ended June 30, 1996. This increase of
$2,139,097, or 41%, was primarily due to increased sales of Stewart's brand
products.
Cost of goods sold increased by $1,516,453 for the comparative three-months
ended June 30, 1997 and June 30, 1996. As a percentage of sales, cost of goods
sold remained relatively constant at 72% for the comparative three-months ended
June 30, 1997 and 1996.
General and administrative expenses increased by $395,277 for the
three-months ended June 30, 1997 compared to the three-months ended June 30,
1996. General and administrative costs also increased as a percentage of sales
to 9% from 5.2% for the three-months ended June 30, 1997 and 1996, respectively.
This increase is primarily the result of approximately $313,000 of expenses
related to the proposed merger with Triarc Companies, Inc. (see Part II, Item 5,
below). These expenses are non-recurring and are not related to ongoing
operations of the Company. Excluding these merger related expenses, general and
administrative expenses would have been $355,836 or 4.8% of sales.
Selling and distribution expenses increased $214,420 for the comparative
three-months ended June 30, 1997 from June 30, 1996, primarily due to increased
promotional spending on the Stewart's brand products. As a percentage of sales,
selling expenses were relatively constant at 10%.
Pre-tax income rose $7,488, or 1%, to $682,994 for the three-months ended
June 30, 1997 from $675,506 for the three-months ended June 30, 1996. Net income
declined $88,045, or 20%, to $342,006 from $430,051 for the comparative
three-month periods ended June 30, 1997 and 1996, respectively. Excluding merger
related costs, pre-tax income would have rose 47% to $995,810 and net income
would have increased 39% to $598,530 for the three-month period compared to the
prior year period.
Because the Triarc merger related expenses are not deductible for tax
purposes, the Company's annual effective tax rate for 1997 is expected to be
45%. The effective tax rate of 50% and 45% for the
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three-months and six-months ended June 30, 1997, respectively, reflect the
impact of the nondeductible merger expenses.
LIQUIDITY AND CAPITAL RESOURCES
The Company's current ratio at June 30, 1997 was 3.21 as compared to 5.0 at
December 31, 1996. Working capital at June 30, 1997 was $5,355,392 as compared
to $4,628,636 at December 31, 1996. For the six-months ended June 30, 1997, cash
decreased by $179,323. The principal use of cash during this period was for
operating activities. Inventories and accounts receivable increased
significantly as a result of increased sales. Net income adjusted for
depreciation, amortization and other provisions generated approximately $792,000
in cash. Accounts receivable and inventories increased by a total of
approximately $2,308,000, and accounts payable and other current liabilities
increased approximately $1,341,000. Investing activities provided cash of
approximately $138,000, primarily from the proceeds from short-term investments.
The Company intends to utilize cash from operations to meet its ongoing
obligations. The Company also maintains a bank line of credit in the amount of
$500,000 which it may utilize from time to time to meet seasonal cash needs.
Management does not expect liquidity problems for the next twelve months
assuming the Company can maintain or exceed its current sales volume, and
expenses as a percentage of sales remain relatively constant.
FORWARD-LOOKING STATEMENTS
This Quarterly Report of Form 10-Q contains certain statements, including
statements under 'Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations,' that constitute 'forward-looking
statements' within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results of the
Company to be materially different from any future results implied by such
forward-looking statements. Such factors include, but are not limited to general
economic and business conditions; the costs of raw materials, the ability of the
Company to maintain margins; continued or new relationships with distributors
and brand support, changes in consumer preferences; government regulations and
other factors. The Company undertakes no obligation to revise any
forward-looking statements in order to reflect events or circumstances that may
arise after the date of this report.
PART II -- OTHER INFORMATION
ITEM 5. OTHER INFORMATION
MERGER AGREEMENT -- TRIARC COMPANIES, INC.
On June 24, 1997 the Company entered into a definitive agreement with
Triarc Companies, Inc. (NYSE:TRY) whereby the Company agreed to be merged with a
wholly-owned subsidiary of Triarc (the 'Merger Agreement'). Approval of the
Merger Agreement and the proposed merger (the 'Merger') requires the affirmative
vote of a majority of the outstanding shares of the Company's common stock.
Pursuant to the proposed Merger, each share of the Company's Common Stock
issued and outstanding immediately prior to the effective time of the Merger
(other than treasury shares and shares held by Triarc and its subsidiaries and
subsidiaries of the Company, all of which will be canceled, and shares with
respect to which the holder has exercised appraisal rights under Delaware law)
will be converted into the right to receive 0.1722 of a share (the 'Conversion
Price') of Class A common stock, par value $.10 per share, of Triarc (the
'Triarc Common Stock'), subject to the adjustment described below, and any cash
to be paid in lieu of fractional shares of Triarc Common Stock. The Conversion
Price is subject to adjustment as follows: (i) if the Average Triarc Share Price
(based on the average closing price for 15 consecutive trading days immediately
preceding closing) is less than $18.875, then the Conversion Price shall be
adjusted to equal the quotient obtained by dividing $3.25 by such Average Triarc
Share Price, and (ii) if the Average Triarc Share Price is greater than $24.50,
then the Conversion
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Price shall be adjusted to equal the quotient obtained by dividing $4.22 by such
Average Triarc Share Price.
Triarc is a holding company which, through its subsidiaries, is engaged in
the following businesses: beverages, restaurants, dyes and specialty chemicals
and liquefied petroleum gas. The beverage operations are conducted by the Triarc
Beverage Group through Royal Crown Company, Inc., Mistic Brands, Inc. and, since
its acquisition on may 22, 1997, Snapple Beverage Corp.; the restaurant
operations are conducted by the Triarc Restaurant Group through Arby's, Inc.;
the dyes and specialty chemical operations are conducted through C.H. Patrick &
Co., Inc.; and the liquefied petroleum gas operations are conducted through
National Propane Corporation, the managing general partner of National propane
Partners, L.P., and its operating subsidiary partnership, National Propane, L.P.
CHANGE OF CONTROL
As a condition to its entering into the Merger Agreement, Triarc required
Samuel M. Simpson, the President and Chief Executive Officer of the Company,
Susan L. Neff, Mr. Simpson's wife, William H. Rutter, a director of the Company,
and Susan L. Fralick, Mr. Rutter's wife (collectively, the 'Subject
Stockholders'), to enter into a Stockholders Agreement, as amended (the
'Stockholders Agreement'). The Subject Stockholders own an aggregate of
1,766,409 shares of the Company's Common Stock, or approximately 19.7% of the
shares of the Company's Common Stock, which are subject to the terms of the
Stockholders Agreement (such amount does not include 12,200 shares owned by them
but not subject to the Stockholders Agreement). Each Subject Stockholder has
agreed that at any meeting of the holders of the Company's Common Stock, he or
she will, until the effective time or the termination of the Merger Agreement,
vote or cause to be voted such Cable Car Common Stock and any of the Company's
Common Stock acquired by them after the date of the Stockholders Agreement in
favor of approval of the Merger Agreement and the merger and against certain
other actions. Moreover, each Subject Stockholder has also granted Triarc an
irrevocable proxy to vote his or her shares of stock as specified above in the
event that such Subject Stockholder fails to so vote his or her stock in the
agreed upon manner.
In addition, pursuant to the Stockholders Agreement, each Subject
Stockholder has granted to Triarc an exclusive and irrevocable option to
purchase his or her stock in whole but not in part under certain circumstances
at a price per share in cash equal to the product obtained by multiplying 0.1722
(the 'Option Conversion Price') times the average (without rounding) of the
closing prices per share of Triarc Common Stock on the NYSE on the NYSE
Composite Tape for the 15 consecutive NYSE trading days ending on the NYSE
trading day immediately preceding the date of the closing of the exercise of the
option (the 'Option Average Share Price'), subject to the following adjustment:
if the Option Average Share Price is less than $18.875, then the Option
Conversion Price will be adjusted to equal the quotient obtained by dividing
$3.25 by the Option Average Share Price, and if the Option Average Share Price
is greater than $24.50, then the Option Conversion Price will be adjusted to
equal the quotient obtained by dividing $4.22 by the Option Average Share Price.
AGREEMENTS WITH STEWART'S
On June 24, 1997 the Company entered into agreements with Stewart's
Restaurants, Inc. ('Stewart's Restaurants') amending and modifying its licensing
agreements with Stewart's Restaurants (the 'Stewart's Master Agreement') as
further amended on August 11, 1997. Among other things, these amendments (i)
gave the Company ownership of the formulas for and manufacturing rights to
concentrates used to make Stewart's soft drinks; (ii) provide that the Company
is permitted to use the Stewart's trademark on any other product of any type;
and (iii) granted to the Company the perpetual exclusive worldwide license to
manufacture, distribute and sell post-mix syrups and premixes for Stewart's
beverages throughout the world (fountain-type beverages), subject to certain
rights retained by Stewart's Restaurants. As consideration for these amendments,
the Company agreed to issue to Stewart's Restaurants an aggregate of 150,000
shares of the Company's Common Stock and to pay Stewart's Restaurants $400,000
in cash, of which $250,000 is payable on March 31, 1998 and $150,000 is payable
on March 31, 1999.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(2)-1 Agreement and Plan of Merger -- Triarc Company, Inc.***
3 (i) Certificate of Incorporation*
3 (ii) Certificate of Amendment (Changing Name)**
3 (iii) By-Laws*
(10)-V Agreement -- Stewart's Restaurants, Inc.***
(10)-W Agreement -- Stewart's Restaurants, Inc.***
(10)-X Stockholders Agreement -- Samuel M. Simpson and
William H. Rutter***
* Incorporated by reference to Form 10-K dated 10/09/87
** Incorporated by reference to Form S-1 filed 09/25/89 (SEC #33-30480)
*** Incorporated by reference to Form 8-K filed July 2, 1997 (SEC #0-14784)
(b) Reports on Form 8-K
The Registrant filed a Report on Form 8-K on July 2, 1997 relating to
the proposed merger with Triarc, the Stockholders' Agreement with Triarc
and the agreements with Stewart's Restaurants, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
Date: August 13, 1997
CABLE CAR BEVERAGE CORPORATION
(registrant)
By: /s/ SAMUEL M. SIMPSON
...................................
(SAMUEL M. SIMPSON)
PRESIDENT
By: /s/ MYRON D. STADLER
..................................
(MYRON D. STADLER)
CHIEF ACCOUNTING OFFICER
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APPENDIX B-1
================================================================================
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
CABLE CAR BEVERAGE CORPORATION,
TRIARC COMPANIES, INC.
AND
CCB MERGER CORPORATION
-----------------------
Dated: June 24, 1997
-----------------------
================================================================================
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TABLE OF CONTENTS
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ARTICLE I
THE MERGER
SECTION 1.1 The Merger............................................................................... 1
SECTION 1.2 Closing.................................................................................. 1
SECTION 1.3 Certificate of Incorporation............................................................. 2
SECTION 1.4 By-laws.................................................................................. 2
SECTION 1.5 Board of Directors and Officers.......................................................... 2
SECTION 1.6 Meeting of Company Stockholders.......................................................... 2
SECTION 1.7 SEC Filings.............................................................................. 3
SECTION 1.8 Effective Time of the Merger............................................................. 3
ARTICLE II
CONVERSION OF SHARES
SECTION 2.1 Conversion of Shares..................................................................... 3
SECTION 2.2 No Further Transfers..................................................................... 5
SECTION 2.3 Exchange of Shares of Company Common Stock............................................... 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.1 Organization and Good Standing........................................................... 6
SECTION 3.2 Corporate Authorization; Validity of Agreement; Company Action........................... 6
SECTION 3.3 Capitalization........................................................................... 7
SECTION 3.4 Reports and Financial Statements......................................................... 7
SECTION 3.5 Absence of Certain Changes............................................................... 8
SECTION 3.6 Consents and Approvals; No Violations.................................................... 8
SECTION 3.7 No Undisclosed Liabilities............................................................... 8
SECTION 3.8 Registration Statement................................................................... 8
SECTION 3.9 Litigation; Compliance with Law.......................................................... 8
SECTION 3.10 Taxes.................................................................................... 9
SECTION 3.11 No Default............................................................................... 10
SECTION 3.12 Contracts................................................................................ 10
SECTION 3.13 Intellectual Property.................................................................... 10
SECTION 3.14 Employee Benefit Plans................................................................... 11
SECTION 3.15 Inventory and Supplies................................................................... 12
SECTION 3.16 Receivables.............................................................................. 12
SECTION 3.17 Case Sales............................................................................... 12
SECTION 3.18 Transactions with Affiliates............................................................. 12
SECTION 3.19 State Takeover Statutes.................................................................. 12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARENT AND MERGERCO
SECTION 4.1 Organization and Good Standing........................................................... 12
SECTION 4.2 Corporate Authorization; Validity of Agreement........................................... 12
SECTION 4.3 Capitalization........................................................................... 13
SECTION 4.4 Reports and Financial Statements......................................................... 13
SECTION 4.5 Absence of Certain Changes............................................................... 13
SECTION 4.6 Consents and Approvals; No Violations.................................................... 14
SECTION 4.7 Registration Statement................................................................... 14
SECTION 4.8 Tax Representations...................................................................... 14
ARTICLE V
COVENANTS
SECTION 5.1 Interim Operations of the Company........................................................ 15
SECTION 5.2 Access to Information.................................................................... 16
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SECTION 5.3 Consents and Approvals................................................................... 16
SECTION 5.4 No Solicitation.......................................................................... 17
SECTION 5.5 Additional Agreements.................................................................... 17
SECTION 5.6 Notification of Certain Matters.......................................................... 18
SECTION 5.7 Indemnification of Directors and Officers................................................ 18
SECTION 5.8 Rule 145 Affiliates...................................................................... 18
SECTION 5.9 Stock Exchange Listing................................................................... 18
SECTION 5.10 Tax-Free Reorganization.................................................................. 18
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1 Conditions to the Obligations of Each Party.............................................. 18
SECTION 6.2 Conditions to the Obligations of the Parent and Mergerco................................. 19
SECTION 6.3 Conditions to the Obligations of the Company............................................. 20
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.............................................................................. 20
SECTION 7.2 Effect of Termination.................................................................... 22
ARTICLE VIII
GENERAL AGREEMENTS
SECTION 8.1 Definitions.............................................................................. 22
SECTION 8.2 Survival of Representations, Warranties and Agreements................................... 25
SECTION 8.3 Expenses................................................................................. 25
SECTION 8.4 Notice................................................................................... 25
SECTION 8.5 Amendments............................................................................... 26
SECTION 8.6 Waiver................................................................................... 26
SECTION 8.7 Brokers.................................................................................. 26
SECTION 8.8 Publicity................................................................................ 26
SECTION 8.9 Headings................................................................................. 26
SECTION 8.10 Non-Assignability........................................................................ 26
SECTION 8.11 Entire Agreement; No Third Party Beneficiaries; Rights of Ownership...................... 27
SECTION 8.12 Specific Performance..................................................................... 27
SECTION 8.13 Counterparts............................................................................. 27
SECTION 8.14 Governing Law............................................................................ 27
SECTION 8.15 Consent to Jurisdiction.................................................................. 27
SECTION 8.16 Waiver of Jury Trial..................................................................... 27
SECTION 8.17 Disclosure Schedule...................................................................... 27
</TABLE>
Exhibit:
A -- Form of Restated Certificate of Incorporation.
B -- Form of Affiliate Agreement.
Schedule:
I -- Disclosure Schedule.
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EXHIBIT A TO AGREEMENT AND PLAN OF MERGER
FORM OF RESTATED CERTIFICATE OF INCORPORATION
CERTIFICATE OF INCORPORATION
OF
CABLE CAR BEVERAGE CORPORATION
1. Name. The name of the corporation is 'CABLE CAR BEVERAGE CORPORATION'
(the 'Corporation').
2. Address; Registered Office and Agent. The address of the Corporation's
registered office is 1013 Centre Road, City of Wilmington, County of New Castle,
State of Delaware 19805; and its registered agent at such address is The
Prentice-Hall Corporation, Inc.
3. Purposes. The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law.
4. Number of Shares. The total number of shares of stock that the
Corporation shall have authority to issue is: One Thousand (1,000), all of which
shall be shares of Common Stock of the par value of One Dollar ($1.00) each.
5. Election of Directors. Members of the Board of Directors of the
Corporation (the 'Board') may be elected either by written ballot or by voice
vote.
6. Limitation of Liability. No director of the Corporation shall be
personally liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, provided that this provision shall
not eliminate or limit the liability of a director (a) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (b) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) under Section 174 of the General Corporation Law
or (d) for any transaction from which the director derived any improper personal
benefits.
Any repeal or modification of the foregoing provision shall not adversely
affect any right or protection of a director of the Corporation existing at the
time of such repeal or modification.
7. Indemnification.
7.1 To the extent not prohibited by law, the Corporation shall indemnify
any person who is or was made, or threatened to be made, a party to any
threatened, pending or completed action, suit or proceeding (a 'Proceeding'),
whether civil, criminal, administrative or investigative, including, without
limitation, an action by or in the right of the Corporation to procure a
judgment in its favor, by reason of the fact that such person, or a person of
whom such person is the legal representative, is or was a director or officer of
the Corporation, or, at the request of the Corporation, is or was serving as a
director or officer of any other corporation or in a capacity with comparable
authority or responsibilities for any partnership, joint venture, trust,
employee benefit plan or other enterprise (an 'Other Entity'), against
judgments, fines, penalties, excise taxes, amounts paid in settlement and costs,
charges and expenses (including attorneys' fees, disbursements and other
charges). Persons who are not directors or officers of the Corporation (or
otherwise entitled to indemnification pursuant to the preceding sentence) may be
similarly indemnified in respect of service to the Corporation or to an Other
Entity at the request of the Corporation to the extent the Board at any time
specifies that such persons are entitled to the benefits of this Section 7.
7.2 (a) The Corporation shall, from time to time, advance to any director
or officer or other person entitled to indemnification hereunder the funds
necessary for payment of expenses, including attorneys' fees and disbursements,
incurred in connection with any Proceeding, in advance of the final disposition
of such Proceeding; provided, however, that, if required by the General
Corporation Law, such expenses incurred by or on behalf of any director or
officer or other person may be paid in advance of the final disposition of a
Proceeding only upon receipt by the Corporation of an undertaking, by or on
behalf of such director or officer (or other person indemnified hereunder), to
repay any such amount so advanced if it shall ultimately be determined by final
judicial decision from which there is no further right of
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appeal that such director, officer or other person is not entitled to be
indemnified for such expenses; and provided, further, that such expenses
incurred by or on behalf of any director or officer or other person shall not be
paid in advance of the final disposition of a Proceeding if, in the reasonable
judgment of the Board, it would not be proper for the Company to advance such
expenses.
(b) In addition to any advances made pursuant to Section 7.2(a), the
Corporation may, from time to time, reimburse any director or officer or other
person entitled to indemnification hereunder the funds necessary for payment of
expenses, including attorneys' fees and disbursements, incurred in connection
with any Proceeding, in advance of the final disposition of such Proceeding;
provided, however, that, if required by the General Corporation Law, such
expenses incurred by or on behalf of any director or officer or other person may
be reimbursed in advance of the final disposition of a Proceeding only upon
receipt by the Corporation of an undertaking, by or on behalf of such director
or officer (or other person indemnified hereunder), to repay any such amount so
reimbursed if it shall ultimately be determined by final judicial decision from
which there is no further right of appeal that such director, officer or other
person is not entitled to be indemnified for such expenses.
7.3 The rights to indemnification and reimbursement or advancement of
expenses provided by, or granted pursuant to, this Section 7 shall not be deemed
exclusive of any other rights to which a person seeking indemnification or
reimbursement or advancement of expenses may have or hereafter be entitled under
any statute, this Certificate of Incorporation, the By-laws of the Corporation
(the 'By-laws'), any agreement, any vote of stockholders or disinterested
directors or otherwise, both as to action in his or her official capacity and as
to action in another capacity while holding such office.
7.4 The rights to indemnification and reimbursement or advancement of
expenses provided by, or granted pursuant to, this Section 7 shall continue as
to a person who has ceased to be a director or officer (or other person
indemnified hereunder) and shall inure to the benefit of the executors,
administrators, legatees and distributees of such person.
7.5 The Corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of an Other Entity, against any liability
asserted against such person and incurred by such person in any such capacity,
or arising out of such person's status as such, whether or not the Corporation
would have the power to indemnify such person against such liability under the
provisions of this Section 7, the By-laws or under Section 145 of the General
Corporation Law or any other provision of law.
7.6 The provisions of this Section 7 shall be a contract between the
Corporation, on the one hand, and each director and officer who serves in such
capacity at any time while this Section 7 is in effect and any other person
entitled to indemnification hereunder, on the other hand, pursuant to which the
Corporation and each such director, officer, or other person intend to be, and
shall be, legally bound. No repeal or modification of this Section 7 shall
affect any rights or obligations with respect to any state of facts then or
theretofore existing or there after arising or any proceeding theretofore or
thereafter brought or threatened based in whole or in part upon any such state
of facts.
7.7 The rights to indemnification and reimbursement or advancement of
expenses provided by, or granted pursuant to, this Section 7 shall be
enforceable by any person entitled to such indemnification or reimbursement or
advancement of expenses in any court of competent jurisdiction. The burden of
proving that such indemnification or reimbursement or advancement of expenses is
not appropriate shall be on the Corporation. Neither the failure of the
Corporation (including its Board, its independent legal counsel and its
stockholders) to have made a determination prior to the commencement of such
action that such indemnification or reimbursement or advancement of expenses is
proper in the circumstances nor an actual determination by the Corporation
(including its Board, its independent legal counsel and its stockholders) that
such person is not entitled to such indemnification or reimbursement or
advancement of expenses shall constitute a defense to the action or create a
presumption that such person is not so entitled. Such a person shall also be
indemnified for any expenses incurred in connection with successfully
establishing his or her right to such indemnification or reimbursement or
advancement of expenses, in whole or in part, in any such proceeding.
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7.8 Any director or officer of the Corporation serving in any capacity of
(a) another corporation of which a majority of the shares entitled to vote in
the election of its directors is held, directly or indirectly, by the
Corporation or (b) any employee benefit plan of the Corporation or any
corporation referred to in clause (a) shall be deemed to be doing so at the
request of the Corporation.
7.9 Any person entitled to be indemnified or to reimbursement or
advancement of expenses as a matter of right pursuant to this Section 7 may
elect to have the right to indemnification or reimbursement or advancement of
expenses interpreted on the basis of the applicable law in effect at the time of
the occurrence of the event or events giving rise to the applicable Proceeding,
to the extent permitted by law, or on the basis of the applicable law in effect
at the time such indemnification or reimbursement or advancement of expenses is
sought. Such election shall be made, by a notice in writing to the Corporation,
at the time indemnification or reimbursement or advancement of expenses is
sought; provided, however, that if no such notice is given, the right to
indemnification or reimbursement or advancement of expenses shall be determined
by the law in effect at the time indemnification or reimbursement or advancement
of expenses is sought.
8. Adoption, Amendment and/or Repeal of By-Laws. The Board may from time to
time adopt, amend or repeal the By-laws of the Corporation; provided, however,
that any By-laws adopted or amended by the Board may be amended or repealed, and
any By-laws may be adopted, by the stockholders of the Corporation by vote of a
majority of the holders of shares of stock of the Corporation entitled to vote
in the election of directors of the Corporation.
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated June 24, 1997 (this 'Agreement'), by and
among Cable Car Beverage Corporation, a Delaware corporation (the 'Company'),
Triarc Companies, Inc., a Delaware corporation (the 'Parent'), and CCB Merger
Corporation, a Delaware corporation and a wholly owned subsidiary of the Parent
('Mergerco').
The Boards of Directors of the Parent, Mergerco and the Company have
approved, and deem it advisable and in the best interests of their respective
stockholders to consummate, the merger of Mergerco with and into the Company
(the 'Merger') upon the terms and subject to the conditions set forth herein and
in accordance with the General Corporation Law of the State of Delaware (the
'DGCL').
The Parent and Mergerco are unwilling to enter into this agreement unless
certain stockholders of the Company enter into a stockholders agreement (the
'Stockholders Agreement') among the Parent, Mergerco and such stockholders
providing for, among other things, the granting to the Parent and Mergerco of
the right to vote shares of Company Common Stock owned by such stockholders
under the circumstances set forth in such agreement and the granting to Parent
and Mergerco of an option to purchase such shares of Company Common Stock owned
by such stockholders under the circumstances and at the price set forth in such
agreement, and the Board of Directors of the Company has approved the Parent and
Mergerco entering into the Stockholders Agreement.
The Board of Directors of the Company, having received advice from
Montgomery Securities, its investment advisor, and an opinion from such firm to
the effect that the consideration to be received by the stockholders of the
Company pursuant to the Merger is fair to such stockholders from a financial
point of view (the 'Company Fairness Opinion'), has approved the transactions
contemplated by this Agreement and the Stockholders Agreement (the 'Contemplated
Transactions') in accordance with the provisions of Section 203 of the DGCL
('Section 203') and has resolved to recommend the approval of the Merger by the
holders of shares of the Common Stock, par value $.01 per share, of the Company
(the 'Company Common Stock').
For United States federal income tax purposes, it is intended that the
Merger provided for herein shall qualify as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as amended (the 'Code').
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows (capitalized terms used herein have the meanings
ascribed to them in Section 8.1):
ARTICLE I
THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to the conditions hereof
and in accordance with the provisions of the DGCL, at the Effective Time,
Mergerco and the Company shall consummate the Merger pursuant to which Mergerco
shall be merged with and into the Company in accordance with the applicable
provisions of the DGCL and the separate existence of Mergerco shall thereupon
cease, and the Company, as the surviving corporation in the Merger (the
'Surviving Corporation'), shall continue its corporate existence under the laws
of the State of Delaware as a wholly owned subsidiary of the Parent. The Merger
shall have the effects set forth in Section 259 of the DGCL.
SECTION 1.2 Closing. The closing of the Merger (the 'Closing') shall take
place at the offices of Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of
the Americas, New York, New York 10019-6064 on a date to be specified by the
parties, which shall be no later than five (5) Business Days after all of the
conditions set forth in Article VI hereof shall be fulfilled or waived in
accordance with this Agreement and applicable law or at such other time, date
and/or place as the Company, the Parent and Mergerco may agree (the 'Closing
Date'). Subject to the provisions of Article VII hereof, failure to consummate
the Merger on the date and time and at the place determined pursuant to this
Section 1.2 shall not result in the termination of this Agreement and will not
relieve any party of any obligations hereunder.
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SECTION 1.3 Certificate of Incorporation. The certificate of incorporation
of the Company as in effect immediately prior to the Effective Time (the
'Certificate of Incorporation') shall be amended in its entirety as set forth in
Exhibit A hereto, and such Certificate of Incorporation, as so amended at the
Effective Time, shall be the certificate of incorporation of the Surviving
Corporation, until thereafter further changed or amended as provided therein or
by applicable law.
SECTION 1.4 By-laws. The by-laws of Mergerco as in effect immediately prior
to the Effective Time shall be the by-laws of the Surviving Corporation until
thereafter changed or amended as provided therein or as otherwise permitted or
required by the Surviving Corporation's certificate of incorporation or by
applicable law, except that at the Effective Time, the name in the heading
thereof shall be changed to 'Cable Car Beverage Corporation.'
SECTION 1.5 Board of Directors and Officers.
(a) The directors of Mergerco immediately prior to the Effective Time shall
be the initial directors of the Surviving Corporation and shall serve until
their respective successors are duly elected or appointed and qualify in the
manner provided in the certificate of incorporation and by-laws of the Surviving
Corporation, or as otherwise provided by applicable law.
(b) The officers of Mergerco immediately prior to the Effective Time shall
be the initial officers of the Surviving Corporation and shall serve until their
respective successors are duly elected or appointed and qualify in the manner
provided in the certificate of incorporation and by-laws of the Surviving
Corporation, or as otherwise provided by applicable law.
SECTION 1.6 Meeting of Company Stockholders.
(a) Subject to the provisions of Section 1.6(b) below, the Company shall
take all necessary action in accordance with applicable law to convene a meeting
of its stockholders (a 'Meeting') to consider and vote upon the Merger and this
Agreement and shall use its best efforts to hold such Meeting as promptly as
practicable after the date the Registration Statement becomes effective. Subject
to the provisions of Section 1.6(b) below, the Company agrees that the Board of
Directors of the Company shall recommend that the Company's stockholders vote in
favor of the Merger and the approval and adoption of this Agreement. The Parent
agrees that it shall vote, or cause to be voted, in favor of the Merger and the
adoption and approval of this Agreement any shares of Company Common Stock held
by it or by any of its Subsidiaries on the record date set by the Company for
determining shares of Company Common Stock entitled to vote at the Meeting.
(b) Nothing in Section 1.6(a) shall prevent the Board of Directors of the
Company from withdrawing, amending or modifying its unanimous recommendation in
favor of the Merger if (i) an unsolicited bona fide written Acquisition Proposal
is submitted to the Company and is not withdrawn, (ii) the Board of Directors of
the Company concludes in good faith, based upon the advice of its financial
advisor, that such Acquisition Proposal would result in a transaction that is
more favorable from a financial point of view to the Company's stockholders than
the Merger, (iii) neither the Company nor any of its Representatives shall
violate any of the restrictions set forth in Section 5.4(a), and (iv) the Board
of Directors of the Company concludes in good faith, after consultation with its
outside legal counsel, that the withdrawal, amendment or modification of such
recommendation is required in connection with such Acquisition Proposal in order
for the Board of Directors of the Company to comply with its fiduciary
obligations to the Company's stockholders under applicable law. Nothing in
Section 1.6(a) or in Section 5.4(a) shall prevent the Board of Directors of the
Company from recommending that its stockholders accept an unsolicited tender
offer or exchange offer commenced by a third party with respect to shares of
Company Common Stock if (1) such tender offer or exchange offer constitutes an
Acquisition Proposal, (2) the Board of Directors of the Company shall have
withdrawn its recommendation in favor of the Merger in accordance with and as
permitted by the preceding sentence, (3) the Board of Directors of the Company
shall have concluded in good faith, based upon the advice of its financial
advisor, that such tender offer or exchange offer is more favorable from a
financial point of view to the Company's stockholders than the Merger, (4)
neither the Company nor any of its Representatives shall have violated any of
the restrictions set forth in Section 5.4, and (5) the Board of Directors of the
Company shall have concluded in good faith, after consultation with its outside
legal counsel, that the recommendation in favor of acceptance of such tender
offer or exchange
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offer is required in order for the Board of Directors of the Company to comply
with its fiduciary obligations to the Company's stockholders under applicable
law. Nothing contained in this Section 1.6 shall limit the Company's obligation
to hold and convene the Meeting, it being understood that the Company shall be
required to hold and convene the Meeting in accordance with this Section 1.6
unless the holding of such Meeting would constitute a violation of any
applicable court order or statute. The Company shall use all reasonable efforts
to ensure that the holding of the Meeting will not constitute a violation of any
applicable court order or statute.
SECTION 1.7 SEC Filings.
(a) As soon as practicable after the date hereof, the Parent shall prepare
and file with the SEC the Registration Statement on Form S-4 (such registration
statement at the time it becomes effective, together with all amendments duly
filed and mailed is referred to as the 'Registration Statement') under the
Securities Act, which registers the Parent Class A Common Stock to be issued to
the Company's stockholders pursuant to the Merger and in which the prospectus
(the 'Prospectus') will be in the form of a proxy statement. The Company shall
prepare and provide the Parent with information concerning the Company required
to be included in the Registration Statement. Such information prepared and
provided by the Company shall comply in all material respects with all
applicable requirements of law.
(b) Each of the Company and the Parent, as applicable, shall use its
reasonable best efforts to (i) respond to any comments of the SEC, (ii) have the
Registration Statement declared effective under the Securities Act as promptly
as practicable after such filing and to keep the Registration Statement
effective as long as is necessary to consummate the Merger and (iii) cause the
Prospectus to be mailed to the stockholders of the Company as promptly as
practicable after the Registration Statement is declared effective under the
Securities Act. Each of the Parent and the Company shall notify the other
promptly of the receipt of any comments from the SEC and of any request by the
SEC for amendments or supplements to the Registration Statement or for
additional information and will supply the other with copies of all
correspondence between such party or any of its representatives and the SEC,
with respect to the Registration Statement. The Registration Statement shall
comply in all material respects with all applicable requirements of law. The
Parent shall take any action required to be taken under state blue sky or
securities laws in connection with the Merger and the issuance of the Merger
Consideration in connection therewith.
(c) No amendment or supplement to the Registration Statement will be made
without the approval of the Company, which approval will not be unreasonably
withheld or delayed. The Parent will advise the Company, promptly after it
receives notice thereof, of the time when the Registration Statement or any
amendment thereto has become effective or any amendment thereto, or the issuance
of any stop order, or the suspension of the qualification of the Parent Class A
Common Stock to be issued in the Merger for offering or sale in any jurisdiction
or of any request by the NYSE for amendment of the Registration Statement.
SECTION 1.8 Effective Time of the Merger. As soon as practicable following
the satisfaction or waiver of the conditions set forth in Article VI hereof, a
Certificate of Merger shall be duly executed by the Company and shall be duly
filed with the Secretary of State of the State of Delaware in accordance with
the DGCL. The Merger shall become effective on the date on which such
Certificate of Merger is so filed with the Secretary of State of the State of
Delaware.
ARTICLE II
CONVERSION OF SHARES
SECTION 2.1 Conversion of Shares. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder thereof:
(a) Each share of Company Common Stock owned by the Parent or Mergerco or
by any direct or indirect Subsidiary of the Parent immediately prior to the
Effective Time, and each share of Company Common Stock held in the treasury of
the Company or by any direct or indirect Subsidiary of the Company immediately
prior to the Effective Time (each of the foregoing shares being an 'Excluded
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Share'), shall, by virtue of the Merger, and without any action on the Company
or the holder thereof, be cancelled.
(b) Each share of Company Common Stock issued and outstanding immediately
prior to the Effective Time (other than the Excluded Shares and other than the
Dissenting Shares) shall be by virtue of the Merger, and without any action on
the part of the holder thereof, cancelled and converted solely into the right to
receive, upon the surrender of the certificate formerly representing such share
of Company Common Stock in accordance with Section 2.3 hereof, 0.1722 (the
'Conversion Price') of a validly issued, fully paid and non-assessable share of
the Parent Class A Common Stock, without interest; provided, that (i) if the
Average Parent Share Price shall be less than $18.875, then the Conversion Price
shall be adjusted so that it shall equal the quotient obtained by dividing (A)
$3.25 by (B) the Average Parent Share Price, and (ii) if the Average Parent
Share Price shall be greater than $24.50, then the Conversion Price shall be
adjusted so that it shall equal the quotient obtained by dividing (x) $4.22 by
(y) the Average Parent Share Price (the Conversion Price to reflect such
adjustment, if any, is hereinafter referred to as the 'Adjusted Conversion
Price').
(c) Each share of Mergerco Common Stock issued and outstanding immediately
prior to the Effective Time shall be converted into one validly issued, fully
paid and non-assessable share of common stock, par value $1.00 per share, of the
Surviving Corporation.
(d) (i) Each Company Stock Option that is outstanding immediately prior to
the Effective Time, whether or not then vested or exercisable, shall,
effective as of the Effective Time, and without any action on the part of
the holder thereof, be assumed by the Parent and become and represent an
option exercisable for shares of Parent Class A Common Stock (a 'Substitute
Option') with the same vesting schedules, if any, and expiration dates as
such Company Stock Option immediately prior to the Effective Time (but
taking into account any acceleration of the vesting of such Company Stock
Option as a result of the consummation of the Merger), with (A) the new
exercise price thereof being determined by dividing the exercise price of
such Company Stock Option by the Adjusted Conversion Price (with the result
of such calculation rounded to the nearest whole cent) and (B) the number of
shares issuable upon exercise being determined by multiplying the number of
shares to be issued upon exercise of such Company Stock Option by the
Adjusted Conversion Price (with the result of such calculation rounded to
the nearest whole number).
(ii) The Parent shall take all corporate action necessary to reserve
for issuance a sufficient number of the shares of Parent Class A Common
Stock for delivery upon exercise of the Substitute Options. As soon as
practicable after the Effective Time, but in no event later than 45 days
after the Effective Time, the Parent shall file one or more registration
statements on Form S-8 (or any successor or appropriate form (including a
shelf registration statement on Form S-3 if Form S-8 is not available))
with respect to the shares of Parent Class A Common Stock subject to such
Substitute Options and shall maintain the effectiveness of such
registration statement or registration statements (and maintain the current
status of the prospectus or prospectuses referred to therein) for so long
as such Substitute Options remain outstanding.
(e) Each share of Company Common Stock issued and outstanding immediately
prior to the Effective Time and held by a stockholder of the Company who does
not vote in favor of the Merger and who complies with all of the relevant
provisions of Section 262 (each such share being a 'Dissenting Share') shall not
be converted into the right to receive the Merger Consideration pursuant to the
Merger, but instead the holders of Dissenting Shares shall be entitled to
receive such consideration as shall be determined in accordance with the
provisions of Section 262; provided, however, that (i) if any such holder of
Dissenting Shares shall have failed to establish its entitlement to appraisal
rights as provided in Section 262 or (ii) if any such holder of Dissenting
Shares shall have effectively withdrawn its demand for appraisal of such shares
of Company Common Stock, or lost its right to appraisal and payment as provided
in Section 262, or (iii) if neither any holder of Dissenting Shares nor the
Surviving Corporation shall have filed a petition demanding a determination of
the value of all Dissenting Shares within the time period provided in Section
262, such holder or holders (as the case may be) shall forfeit the right to the
appraisal of such shares of Company Common Stock and each such share of Company
Common Stock shall thereupon be deemed to have been converted, as of the
Effective Time, into and represent the right to receive the Merger Consideration
upon surrender of the certificate or certificates
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formerly representing such shares of Company Common Stock in accordance with
Section 2.3 hereof. The Company shall not, except with the prior written consent
of the Parent, voluntarily make or agree to make any payment with respect to, or
settle or offer to settle, any such demands for payment.
SECTION 2.2 No Further Transfers. At the Effective Time, the Company Common
Stock transfer books shall be closed and no further transfer of shares of
Company Common Stock shall be made thereafter. If, after the Effective Time, any
certificate previously representing shares of Company Common Stock is presented
for transfer, it shall be forwarded to the Exchange Agent (as defined in Section
2.3 hereof) for cancellation and exchange in accordance with Section 2.3 hereof.
SECTION 2.3 Exchange of Shares of Company Common Stock.
(a) Prior to the Effective Time, the Parent shall designate, subject to the
approval of the Company which shall not be unreasonably withheld, a bank or
trust company to act as exchange agent (the 'Exchange Agent') for the Merger.
Immediately prior to the Effective Time, the Parent will instruct the transfer
agent of the shares of the Parent Class A Common Stock to countersign and
deliver to the Exchange Agent certificates representing an aggregate number of
shares of the Parent Class A Common Stock as nearly as practicable equal to the
product of the Adjusted Conversion Price and the number of shares of Company
Common Stock to be converted into the Parent Class A Common Stock pursuant to
Section 2.1(b) so as to allow for the issuance and delivery of the Merger
Consideration on a timely basis. The Parent shall pay all reasonable charges or
expenses, including those of the Exchange Agent, in connection with the exchange
of the shares of Company Common Stock for the Merger Consideration.
(b) As soon as practicable after the Effective Time, the Parent shall cause
the Exchange Agent to mail and/or make available to each holder of a Certificate
(other than holders of Certificates theretofore representing Excluded Shares) (a
'Stockholder') a notice and letter of transmittal advising such holder of the
effectiveness of the Merger and the procedure for surrendering to the Exchange
Agent such Certificate or Certificates for exchange for the Merger Consideration
multiplied by the number of shares of Company Common Stock represented by such
Certificate or Certificates. Upon the surrender to the Exchange Agent of such
Certificate or Certificates, together with a letter of transmittal, duly
executed and completed in accordance with the instructions thereon, the
Stockholder shall be entitled to receive the Merger Consideration. From and
after the Effective Time, until surrendered in accordance with the provisions of
this Section 2.3, each Certificate evidencing shares of Company Common Stock
(other than Certificates representing Excluded Shares and Dissenting Shares)
shall represent for all purposes only the right to receive the Merger
Consideration, without any interest thereon. Any portion of the Merger
Consideration that shall not have been paid to Stockholders pursuant to this
Section 2.3 prior to the second anniversary of the Effective Time (including any
cash payable pursuant to Section 2.3(e) hereof) shall be paid to the Parent and
any Stockholder who has not theretofore complied with this Section 2.3
thereafter shall look, subject to escheat and other similar laws, solely to the
Parent for payment of the Merger Consideration to which they are entitled under
this Agreement.
(c) No dividends or other distributions that are otherwise payable on the
shares of the Parent Class A Common Stock constituting any of the Merger
Consideration shall be paid to the holder of any unsurrendered Certificate until
such Certificate is properly surrendered as provided herein, but (i) upon such
surrender, there shall be paid to the Person in whose name the shares of the
Parent Class A Common Stock constituting any of the Merger Consideration shall
be issued the amount of any dividends which shall have become payable with
respect to such shares between the Effective Time and the time of such surrender
and (ii) at the appropriate payment date or as soon thereafter as practicable,
there shall be paid to such Person the amount of any dividends on such shares of
the Parent Class A Common Stock which shall have a record or due date prior to
such surrender and a payment date after such surrender, subject in each such
case to (x) deduction therefrom of any amount required by applicable law to be
withheld, and (y) any applicable escheat laws or unclaimed property laws. On
surrender of a Certificate, no interest shall be payable with respect to the
payment of such dividends and no interest shall be payable with respect to the
amount of any cash payable in lieu of a fractional share of the Parent Class A
Common Stock pursuant to Section 2.3(e).
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(d) If any cash is to be paid pursuant to Section 2.3(e), or certif icates
representing shares of the Parent Class A Common Stock are to be issued, to a
Person other than the Person in whose name the Certificate so surrendered in
exchange therefor is registered, it shall be a condition of the payment or
issuance thereof that the Certificate so surrendered shall be properly endorsed
and otherwise in proper form for transfer and that the Person requesting such
exchange shall pay to the Exchange Agent any transfer or other taxes required by
reason of the payment of cash to a Person other than, or if the issuance of
certificates representing the shares of the Parent Class A Common Stock in any
name other than that of, the registered holder of the Certificate surrendered,
or otherwise required, or shall establish to the satisfaction of the Exchange
Agent that such tax has been paid or is not payable.
(e) Shares of the Parent Class A Common Stock shall be issued only in whole
shares. A Stockholder will not be entitled to receive Fractional Shares but,
instead, will be entitled to receive promptly from the Exchange Agent a cash
payment in lieu of Fractional Shares in an amount equal to such Stockholder's
proportionate interest in the net proceeds from the sale or sales in the open
market by the Exchange Agent, on behalf of all such Stockholders, of the
aggregate Fractional Shares. Such sales shall be made promptly after the
Effective Time, or in the case of Dissenting Shares which become exchangeable
for the Merger Consideration pursuant to Section 2.1(e) hereof, promptly after
such change in status of such Dissenting Shares. Such cash payments will be made
to each such Stockholder only upon proper surrender of such Stockholder's
Certificates, together with a properly completed and duly executed transmittal
form and any other required documents.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Parent and Mergerco as follows:
SECTION 3.1 Organization and Good Standing. Each of the Company and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, and has all
requisite corporate or other power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its business
as now being conducted, except where the failure to be so organized, existing
and in good standing or to have such power, authority and governmental approvals
would not have a Material Adverse Effect on the Company and its Subsidiaries
taken as a whole. Section 3.1 of the Disclosure Schedule sets forth a complete
list of the Company's Subsidiaries, their state of incorporation and each state
in which they are qualified to do business.
SECTION 3.2 Corporate Authorization; Validity of Agreement; Company Action.
(a) The Company has full corporate power and authority to execute and deliver
this Agreement and, subject to obtaining any necessary approval of its
stockholders as contemplated by Section 1.6 hereof with respect to the Merger,
to consummate the Contemplated Transactions. The execution, delivery and
performance by the Company of this Agreement, and the consummation by it of the
Contemplated Transactions, have been duly and validly authorized by its Board of
Directors and, except for obtaining the approval of its stockholders as
contemplated by Section 1.6 hereof with respect to the Merger, no other
corporate action or proceedings on the part of the Company is necessary to
authorize the execution and delivery by the Company of this Agreement, and the
consummation by it of the Contemplated Transactions. This Agreement has been
duly executed and delivered by the Company and, assuming this Agreement
constitutes a valid and binding obligation of the Parent and Mergerco,
constitutes a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except that (i) such enforcement may
be subject to applicable bankruptcy, insolvency or other similar laws, now or
hereafter in effect, affecting creditors' rights generally, and (ii) the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
(b) The affirmative vote of the holders of a majority of the shares of
Company Common Stock outstanding (the 'Required Stockholder Vote') is the only
vote of the holders of any class or series of Company capital stock necessary to
approve the Merger.
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SECTION 3.3 Capitalization. (a) The authorized capital stock of the Company
consists of 25,000,000 shares of Company Common Stock. As of the date hereof,
(i) 9,024,681 shares of Company Common Stock are issued, of which 8,948,324
shares are outstanding and 76,357 shares are held in treasury and (ii) options
to acquire an aggregate of 902,500 shares of Company Common Stock have been
issued pursuant to Company Stock Options. The Company has previously delivered
to the Parent a true and correct list of all outstanding Company Stock Options
setting forth in each case the name of the optionholder, the number of shares of
Company Common Stock subject thereto, the exercise price, the vesting schedule
and the expiration date. All the outstanding shares of the Company's capital
stock are duly authorized, validly issued, fully paid and non-assessable. There
is no Voting Debt of the Company or any of its Subsidiaries issued and
outstanding. Except as set forth above, as set forth in Section 3.3(a) of the
Disclosure Schedule, and for the Contemplated Transactions, (i) there are no
shares of capital stock of the Company authorized, issued or outstanding and
(ii) there are no existing options, warrants, calls, pre-emptive rights,
subscriptions or other rights, convertible securities, agreements, arrangements
or commitments of any character, relating to the issued or unissued capital
stock of the Company or any of its Subsidiaries, obligating the Company or any
of its Subsidiaries to issue, transfer or sell or cause to be issued,
transferred or sold any shares of capital stock or Voting Debt of, or other
equity interest in, the Company or any of its Subsidiaries or securities
convertible into or exchangeable for such shares or equity interests or
obligations of the Company or any of its Subsidiaries to grant, extend or enter
into any such option, warrant, call, subscription or other right, convertible
security, agreement, arrangement or commitment. Except as set forth in Section
3.3(a) of the Disclosure Schedule, there are no outstanding contractual
obligations of the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of the capital stock of the Company or any
Subsidiary or affiliate of the Company or to provide funds to make any
investment (in the form of a loan, capital contribution or otherwise) in any
Subsidiary or any other entity. Following the Merger neither the Company nor any
of its Subsidiaries will have any obligation to issue, transfer or sell any
shares of its capital stock.
(b) All of the outstanding shares of capital stock of each of the
Subsidiaries are directly owned by the Company, and all such shares have been
validly issued and are fully paid and non-assessable and are owned by either the
Company or one of its Subsidiaries free and clear of all liens, charges,
security interests, options, claims or encum brances of any nature whatsoever.
(c) Except as set forth in Section 3.3(c) of the Disclosure Schedule, there
are no voting trusts or other agreements or understandings to which the Company
or any of its Subsidiaries is a party with respect to the voting of the capital
stock of the Company or any of the Subsidiaries. None of the Company or its
Subsidiaries is required to redeem, repurchase or otherwise acquire shares of
capital stock of the Company, or any of its Subsidiaries, respectively, as a
result of the Contemplated Transactions.
SECTION 3.4 Reports and Financial Statements. The Company has filed with
the SEC, and has heretofore made available to the Parent true and complete
copies of, all forms, reports, schedules, statements and other documents
required to be filed by it and its Subsidiaries since December 31, 1993 under
the Exchange Act and the Securities Act (as such documents have been amended
since the time of their filing, collectively, the 'Company SEC Documents'). As
of their respective dates or, if amended, as of the date of the last such
amendment, the Company SEC Documents, including, without limitation, any
financial statements or schedules included therein (a) did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading and (b) complied
in all material respects with the applicable requirements of the Exchange Act
and the Securities Act, as the case may be, and the applicable rules and
regulations of the SEC thereunder. Each of the consolidated financial statements
included in the Company SEC Documents have been prepared from, and are in
accordance with, the books and records of the Company and/or its consolidated
Subsidiaries, comply in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present in all material respects the con solidated
financial position and the consolidated results of operations and cash flows
(and changes in financial position, if any) of the Company and its consolidated
Subsidiaries as at the dates thereof or for the periods
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presented therein (subject, in the case of unaudited interim financial
statements, to normal year end adjustments).
SECTION 3.5 Absence of Certain Changes. Except as disclosed in the Company
SEC Documents or as set forth in Section 3.5 of the Disclosure Schedule, since
December 31, 1996, the Company and its Subsidiaries have conducted their
respective businesses and operations in the ordinary course of business
consistent with past practice. Since December 31, 1996, there has not occurred
(i) any event, change or effect (including the incurrence of any liabilities of
any nature, whether or not accrued, contingent or otherwise) having or, which
would be reasonably likely to have, in the aggregate, a Material Adverse Effect
on the Company and its Subsidiaries taken as a whole; (ii) any declaration,
setting aside or payment of any dividend or other distribution (whether in cash,
stock or property) with respect to the equity interests of the Company or of any
of its Subsidiaries, other than regular quarterly cash dividends or dividends
paid by its Subsidiaries; or (iii) any change by the Company or any of its
Subsidiaries in accounting principles or methods, except insofar as may be
required by a change in GAAP.
SECTION 3.6 Consents and Approvals; No Violations. Except as set forth in
Section 3.6 of the Disclosure Schedule and for (a) the filing of a pre-merger
notification and report form by the Company under the HSR Act and the expiration
or termination of the applicable waiting period thereunder, (b) the filing of a
Certificate of Merger with the Secretary of State of the State of Delaware in
accordance with the DGCL, (c) filings with the SEC and any applicable national
securities exchanges or Nasdaq, (d) filings under state securities, 'Blue Sky'
or anti-takeover laws, (e) any applicable filings required under the laws of
foreign jurisdictions and (f) filings, authorizations, consents or approvals
relating to matters which, in the aggregate, are not material to the Company and
its Subsidiaries taken as a whole, neither the execution, delivery or
performance of this Agreement nor the consummation by the Company of the
Contemplated Transactions nor compliance by the Company with any of the
provisions hereof will (i) conflict with or result in any breach of any
provision of the certificate of incorporation or by-laws or similar
organizational documents of the Company or of any of its Subsidiaries, (ii)
require any material filing with, or permit, authorization, consent or approval
of, any Governmental Authority, (iii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, amendment, cancellation or acceleration)
under, any of the terms, conditions or provisions of any material Company
Agreement or (iv) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Company, any of its Subsidiaries or any of their
properties or assets.
SECTION 3.7 No Undisclosed Liabilities. Except (a) as disclosed in Section
3.7 of the Disclosure Schedule, (b) to the extent disclosed in the Company SEC
Documents filed prior to the date of this Agreement and (c) for liabilities and
obligations incurred in the ordinary course of business consistent with past
practice, since December 31, 1996, neither the Company nor any of its
Subsidiaries has incurred any liabilities or obligations of any nature, whether
or not accrued, contingent or otherwise. Section 3.7 of the Disclosure Schedule
sets forth each instrument evidencing indebtedness of the Company and its
Subsidiaries which will accelerate or become due or payable, or result in a
right of redemption or repurchase on the part of the holder of such
indebtedness, or with respect to which any other payment or amount will become
due or payable, in any such case with or without due notice or lapse of time, as
a result of this Agreement, the Merger or the other Contemplated Transactions.
SECTION 3.8 Registration Statement. None of the information provided by the
Company for inclusion in the Registration Statement will be false or misleading
with respect to any material fact or will omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
SECTION 3.9 Litigation; Compliance with Law. (a) Except (i) as disclosed in
Section 3.9(a) of the Disclosure Schedule or (ii) to the extent disclosed in the
Company SEC Documents filed prior to the date of this Agreement, there is no
suit, claim, action, proceeding, review or investigation pending or, to the
knowledge of the Company, threatened against or affecting, the Company or any of
its Subsidiaries.
(b) The Company and its Subsidiaries have complied in all material respects
with all laws, statutes, regulations, rules, ordinances, and judgments, decrees,
orders, writs and injunctions, of any court or Governmental Authority relating
to any of the property owned, leased or used by them, or applicable
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to their business, including, but not limited to, equal employment opportunity,
discrimination, occupational safety and health, environmental, insurance
regulatory, antitrust laws, ERISA and laws relating to Taxes (as defined in
Section 3.10).
SECTION 3.10 Taxes. (a) All material federal, state, county, local,
foreign, and other taxes (including, without limitation, income, profits,
premium, estimated, excise, sales, use, occupancy, gross receipts, franchise, ad
valorem, severance, capital levy, production, transfer, license, stamp,
environmental, withholding, employment, unemployment compensation, payroll
related and property taxes, import duties, and other governmental charges and
assessments), whether or not measured in whole or in part by net income, and
including deficiencies, interest, additions to tax or interest, and penalties
with respect thereto (hereinafter 'Taxes' or, individually, a 'Tax'), required
to be paid on or before the date hereof by or with respect to the Company or any
of its Subsidiaries, including amounts, other than amounts being contested in
good faith and for payment of which adequate reserves are reflected in the
Company's financial statements included in its Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 1997, required to be paid on or before the
date hereof with respect to Taxes as a result of any tax sharing agreement or
similar arrangement ('Tax Sharing Agreement Amounts') of the Company or any of
its Subsidiaries, have been timely paid.
(b) All material returns and reports required to be filed by or with
respect to the Company or any of its Subsidiaries with respect to Taxes
(hereinafter 'Tax Returns' or, individually, a 'Tax Return') on or before the
date hereof have been timely filed. No penalties or other charges in a material
amount are or will become due with respect to the late filing of any Tax Return
of the Company or any of its Subsidiaries or payment of any Tax of the Company
or any of its Subsidiaries required to be filed or paid on or before the date
hereof.
(c) With respect to all Tax Returns filed by or with respect to the Company
or any its Subsidiaries, (i) Section 3.10(c) of the Disclosure Schedule sets
forth the periods for which the statute of limitations for the assessment of
federal Taxes have expired; (ii) except as set forth in Section 3.10(c) of the
Disclosure Schedule, no audit is in progress and no extension of time has been
executed with respect to any date on which any Tax Return was or is to be filed
and no waiver or agreement has been executed for the extension of time for the
assessment or payment of any Tax; and (iii) except as set forth in Section
3.10(c) of the Disclosure Schedule, there is no material unassessed deficiency
proposed or threatened against the Company or any of its Subsidiaries.
(d) Except as set forth in Section 3.10(d) of the Disclosure Schedule,
neither the Company nor any of its Subsidiaries has not been and is not a party
to any tax sharing agreement, tax indemnification agreement or similar
arrangement.
(e) Section 3.10(e) of the Disclosure Schedule identifies (i) the common
parent of each group of affiliated corporations that filed a consolidated
federal income tax return, and the period to which such returns related, that
included the Company or any of its Subsidiaries since 1987 and (ii) all material
Tax liabilities or issues that have been asserted or proposed by a taxing
authority with respect to any such return and all claims with respect to Taxes
in a material amount that have been asserted against the Company or any of its
Subsidiaries.
(f) With regard to any assets or property held or acquired by the Company
or any of its Subsidiaries, the Company or such Subsidiary has not filed a
consent to the application of Section 341(f) of the Code, or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset
(as such term is defined in Section 341(f)(4) of the Code) owned by the Company
or such Subsidiary.
(g) The Company and its Subsidiaries have not agreed, and are not required
to make, any adjustment under Section 481(a) of the Code by reason of a change
in accounting method or otherwise, and there is no application to change any
accounting method by the Company or any of its Subsidiaries pending with any
taxing authority. The Internal Revenue Service has not proposed any such
adjustment or change in method.
(h) Reserves and provisions for Taxes reflected in the Company's financial
statements included in its Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1997 are adequate.
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(i) The Company and its Subsidiaries have not been and are not in violation
(or with notice or lapse of time or both, would be in violation) of any
applicable law relating to the payment or withholding of Taxes relating to
employment and have duly and timely withheld from employee salaries, wages and
other compensation and timely paid over to the appropriate taxing authorities
all amounts required to be so withheld and paid over for all periods under all
applicable laws.
(j) There are no liens or encumbrances of any kind with respect to Taxes
upon any of the assets of the Company and its Subsidiaries (except for liens for
Taxes not yet due) or on the capital stock of the Company or any of its
Subsidiaries.
SECTION 3.11 No Default. Except as disclosed in the Company SEC Documents,
the business of the Company and each of its Subsidiaries is not being conducted
in default or violation of any term, condition or provision of (a) its
respective certificate of incorporation or by-laws or similar organizational
documents, or (b) any Company Agreement, excluding from the foregoing clause
(b), defaults or violations that would not have a Material Adverse Effect on the
Company and its Subsidiaries taken as a whole or would not, or would not be
reasonably likely to, materially impair the ability of the Company to consummate
the Merger or the other Contemplated Transactions.
SECTION 3.12 Contracts. (a) The Company has previously delivered to the
Parent true and complete copies of all material Company Agreements and true and
correct summaries of all material oral agreements to which the Company or any of
its Subsidiaries is a party. Each material Company Agreement is valid, binding
and enforceable and in full force and effect in accordance with its terms.
Neither the Company nor any of its Subsidiaries is in default in any material
respect under any such Company Agreement, nor does any condition exist that with
notice or lapse of time or both would constitute such a material default
thereunder. To the knowledge of the Company or any of the Subsidiaries, no other
party to any such Company Agreement is in default thereunder in any material
respect, nor does any condition exist that with notice or lapse of time or both
would constitute such a material default thereunder, nor is any such material
default threatened.
(b) Except as set forth in Section 3.12(b) of the Disclosure Schedule,
neither the Company nor any Subsidiary is a party to any Company Agreement that
(i) includes any 'change of control' or similar provision which, as a result of
the Merger or any other Contemplated Transaction, would result in a violation or
breach of, or default (with or without due notice or lapse of time or both)
under, such Company Agreement, or give rise to a right to accelerate the terms
of payment or the provision of benefits, or enhance the amount of payment or the
provision of benefits, thereunder, or (ii) expressly and materially limits the
ability of the Company or any of its Subsidiaries to compete in or conduct any
line of business or compete with any person or in any geographic area or during
any period of time.
(c) The Company (i) has satisfied the sales requirements under paragraph 3
of the Stewart's Master Agreement such that the territory subject to the
Stewart's Master Agreement is worldwide and (ii) has not failed to achieve the
sales requirements under said paragraph 3 which would permit Stewart's to
terminate the Stewart's Master Agreement with respect to any territory.
SECTION 3.13 Intellectual Property.
(a) Section 3.13(a) of the Disclosure Schedule lists (i) all Copyrights,
Patents, Trademarks and formulae and processes (other than unregistered
Trademarks for which no application for registration is pending) (collectively,
the 'Intellectual Property') owned by the Company or any of its Subsidiaries,
specifying as to each such item, as applicable: (A) the category of Intellectual
Property; (B) the owner of the item; (C) the jurisdictions in which the item is
issued or registered or in which any applica tion for issuance or registration
has been filed, including the respective issuance, registration or application
number; (D) the date of application, issuance or registration and the expiration
date of the item; and (E) with respect to any Trademarks, the class or classes
of goods or services on which each such Trademark is or is intended to be used;
(ii) all material licenses, sublicenses and other agreements ('IP Licenses')
under which the Company or any of its Subsidiaries is either a licensor or
licensee of any Intellectual Property; and (iii) all agreements involving
Intellectual Property that are currently in negotiation or proposed by the
Company or any of its Subsidiaries. Neither the Company nor any of its
Subsidiaries owns any Copyrights or Patents or is a party to any license for a
Copyright or Patent either as a licensor or as a licensee. The Company has
previously delivered to the Parent true and complete
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copies of all material documents evidencing Intellectual Property and IP
Licenses (including all modifications, amendments and supplements).
(b) Except as set forth in Section 3.13(b) of the Disclosure Schedule, the
Company and its Subsidiaries own or have a license for all the Intellectual
Property that is material to the business of the Company and its Subsidiaries as
presently conducted or being developed, free and clear of any liens.
(c) None of the Company or its Subsidiaries or, to the knowledge of the
Company, any other party is in breach of or default under any IP License. Each
IP License is now, and immediately following the consummation of the
Contemplated Transactions will be, valid and in full force and effect.
(d) No Claim is pending or, to the knowledge of the Company, threatened,
that challenges the validity, enforceability, ownership of or right to use,
sell, license or dispose of any Intellectual Property, nor does the Company know
of any valid grounds for any such Claim.
(e) To the knowledge of the Company, neither the Company nor any of its
Subsidiaries has infringed upon or otherwise violated the intellectual property
rights of third parties or has received or has been the subject of any Claim,
charge or notice alleging any such infringement or other violation, and the
Company knows of no basis for any such Claim. To the knowledge of the Company,
the continued use of the Intellectual Property by the Company or the relevant
Subsidiary after the Effective Time will not infringe upon or otherwise violate
any intellectual property rights of third parties as a result of the continued
operation of the businesses of the Company and its Subsidiaries as presently
conducted.
(f) To the knowledge of the Company, no third party is infringing upon or
otherwise violating the Intellectual Property rights of the Company or any of
its Subsidiaries.
(g) All registered Trademarks held by the Company or any of its
Subsidiaries are valid and subsisting. The Company and its Subsidiaries have
taken all necessary action to maintain and protect each item of Intellectual
Property owned or used by the Company or any of its Subsidiaries.
(h) To the knowledge of the Company, no Patent, statute, rule, regulation,
code or standard is pending or proposed that would have a material adverse
effect on the validity, enforceability, ownership of or right to use, sell,
license or dispose of any Intellectual Property.
(i) None of the material formulae and processes of the Company or any of
its Subsidiaries has been disclosed to any Person other than its bottlers,
suppliers and consultants and Stewart's.
SECTION 3.14 Employee Benefit Plans.
(a) With respect to each Company Benefit Plan, the Company has previously
provided to the Parent true and complete copies of (i) all plan texts and
agreements and related trust agreements, if any, (ii) all summary plan
descriptions, if any, (iii) the most recent annual report (including all
schedules thereto), if any, (iv) the most recent annual audited financial
statement, if any, (v) if the plan is intended to qualify under Code Section
401(a) or 403(a), the most recent determination letter, if any, received from
the IRS and (vi) all material communications with any Governmental Authority
(including, without limitation, the PBGC and the IRS).
(b) There are no Company Benefit Plans that provide retiree medical or life
or pension coverage (other than coverage mandated by law) or that are subject to
any of Code Section 412, ERISA Section 302 or Title IV of ERISA.
(c) Each Company Benefit Plan conforms in all material respects to, and its
administration is in all material respects in compliance with, all applicable
laws and regulations, except for such failures to conform or comply that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect with respect to the Company and its Subsidiaries taken
as a whole.
(d) Except as disclosed in the Company SEC Documents or as set forth in
Section 3.14(d) of the Disclosure Schedule, the consummation of the Contemplated
Transactions will not (a) entitle any current or former Company Employee to
severance pay, unemployment compensation or any similar payment or (b)
accelerate the time of payment or vesting, or increase the amount of any
compensation due to, any current or former Company Employee.
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SECTION 3.15 Inventory and Supplies. Except as set forth on Section 3.15 of
the Disclosure Schedule, the inventory of each of the Company and its
Subsidiaries is in good and merchantable condition, and suitable and usable or
salable in the ordinary course of business for the purposes for which it is
intended and none of such inventory is obsolete, damaged, or defective, subject
to an inventory reserve computed in a manner consistent with past practice and
reasonably estimated to reflect inventory values. Section 3.15 of the Disclosure
Schedule sets forth the location of all of the inventory of the Company and its
Subsidiaries. The Company has no knowledge of any adverse condition affecting
the supply of materials available to the Company and its Subsidiaries.
SECTION 3.16 Receivables. All accounts and notes receivable of the Company
and its Subsidiaries (a) have arisen in the ordinary course of business of the
Company and its Subsidiaries and (b) subject only to a reserve for bad debts
computed in a manner consistent with past practice and reasonably estimated to
reflect the probable results of collection, have been collected or are
collectible in the ordinary course of business of the Company and its
Subsidiaries in the aggregate recorded amounts thereof in accordance with their
terms.
SECTION 3.17 Case Sales. Section 3.17 of the Disclosure Schedule sets forth
the true and correct amount of the Company's aggregate sales of cases of soft
drinks under the 'Stewart's' trademark for the eighteen (18) months ended
December 31, 1991, each of fiscal years 1992, 1993, 1994, 1995 and 1996 and the
first five (5) months of 1997.
SECTION 3.18 Transactions with Affiliates. Except to the extent disclosed
in the Company SEC Documents filed prior to the date of this Agreement, since
December 31, 1996, there have been no material transactions, agreements,
arrangements or understandings between the Company or its Subsidiaries, on the
one hand, and the Company's affiliates (other than wholly owned Subsidiaries of
the Company) or any other Person, on the other hand, that would be required to
be disclosed under Item 404 of Regulation S-K under the Securities Act.
SECTION 3.19 State Takeover Statutes. The Board of Directors of the Company
has approved the Merger and this Agreement, and the entering into, and
performance, by the Parent and Mergerco of the Stockholders Agreement. Such
approval is sufficient to render inapplicable to the Merger, this Agreement and
the entering into, and performance, by the Parent and Mergerco of the
Stockholders Agreement and any other transactions contemplated by this Agreement
and the Stockholders Agreement, the restrictions on business combinations
provided for in Section 203. Other than Section 203, no state takeover statute
or similar statute or regulation applies or purports to apply to the Merger,
this Agreement or the Stockholders Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE PARENT AND MERGERCO
The Parent and Mergerco, jointly and severally, represent and warrant to
the Company as follows:
SECTION 4.1 Organization and Good Standing. Each of the Parent and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, and has all
requisite corporate or other power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its business
as now being conducted, except where the failure to be so organized, existing
and in good standing or to have such power, authority and governmental approvals
would not have a Material Adverse Effect on the Parent and its Subsidiaries
taken as a whole. Each of the Parent and its Subsidiaries is duly qualified or
licensed to do business and in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification or licensing necessary, except where the failure
to be so duly qualified or licensed and in good standing would not have a
Material Adverse Effect on the Parent and its Subsidiaries taken as a whole.
Mergerco has not heretofore conducted any business other than in connection with
this Agreement and the Contemplated Transactions.
SECTION 4.2 Corporate Authorization; Validity of Agreement; Necessary
Action. Each of the Parent and Mergerco has full corporate power and authority
to execute and deliver this Agreement and to
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consummate the Contemplated Transactions. The execution, delivery and
performance by the Parent and Mergerco of this Agreement and the consummation by
the Parent and Mergerco of the Contemplated Transactions have been duly and
validly authorized by their respective Boards of Directors and no other
corporate action or proceedings on the part of the Parent and Mergerco is
necessary to authorize the execution and delivery by the Parent and Mergerco of
this Agreement, and the consummation by the Parent and Mergerco of the
Contemplated Transactions. This Agreement has been duly executed and delivered
by the Parent and Mergerco, and assuming this Agreement constitutes a valid and
binding obligation of the Company, constitutes a valid and binding obligation of
each of the Parent and Mergerco, enforceable against each of them in accordance
with its terms, except that (i) such enforcement may be subject to applicable
bankruptcy, insolvency or other similar laws, now or hereafter in effect,
affecting creditors rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
SECTION 4.3 Capitalization. (a) The authorized capital stock of the Parent
consists of 60,000,000 shares of Parent Class A Common Stock, 16,000,000 shares
of Parent Class B Common Stock, par value $.10 per share, 25,000,000 shares of
Preferred Stock, of which 5,982,866 shares have been designated Redeemable
Preferred Stock. As of June 17, 1997, 23,998,221 shares of Parent Class A Common
Stock and 5,997,662 shares of Parent Class B Common Stock were issued and
outstanding, and no shares of Preferred Stock were issued or outstanding. As of
March 31, 1997, options to acquire an aggregate of 8,849,499 shares of Parent
Class A Common Stock had been issued. The authorized capital stock of Mergerco
consists solely of 1,000 shares of Mergerco Common Stock, all of which, as of
the date hereof, are issued and outstanding and held by the Parent. All of the
outstanding shares of capital stock of the Parent and Mergerco (including
Mergerco) have been duly authorized and validly issued and are fully paid and
non-assessable.
(b) The shares of the Parent Class A Common Stock to be issued pursuant to
the Merger will be duly authorized, validly issued, fully paid and
non-assessable and not subject to preemptive rights.
SECTION 4.4 Reports and Financial Statements. The Parent has filed with the
SEC, and has heretofore made available to the Company true and complete copies
of, all forms, reports, schedules, statements and other documents required to be
filed by it and its Subsidiaries since December 31, 1993 under the Exchange Act
or the Securities Act (as such documents have been amended since the time of
their filing, collectively, the 'Parent SEC Documents'). As of their respective
dates or, if amended, as of the date of the last such amendment, the Parent SEC
Documents, including, without limitation, any financial statements or schedules
included therein (a) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading and (b) complied in all material respects with
the applicable requirements of the Exchange Act and the Securities Act, as the
case may be, and the applicable rules and regulations of the SEC thereunder.
Each of the consolidated financial statements included in the Parent SEC
Documents have been prepared from, and are in accordance with, the books and
records of the Parent and/or its consolidated Subsidiaries, comply in all
material respects with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with GAAP applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly present in all
material respects the consolidated financial position and the consolidated
results of operations and cash flows (and changes in financial position, if any)
of the Parent and its consolidated Subsidiaries as at the dates thereof or for
the periods presented therein (subject, in the case of unaudited interim
financial statements, to normal year end adjustments).
SECTION 4.5 Absence of Certain Changes. Except to the extent set forth in
the Parent SEC Documents filed prior to the date of this Agreement, since
December 31, 1996, the Parent and its Subsidiaries have conducted their
respective businesses in the ordinary course of business consistent with past
practice. Since December 31, 1996, there has not occurred (a) any event, change
or effect (including the incurrence of any liabilities of any nature, whether or
not accrued, contingent or otherwise) having or, which would be reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
the Parent and its Subsidiaries taken as a whole; (b) any declaration, setting
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aside or payment of any dividend or other distribution (whether in cash, stock
or property) with respect to the equity interests of the Parent or of any of its
Subsidiaries other than regular quarterly cash dividends or dividends paid by
wholly owned Subsidiaries; or (c) any change by the Parent or any of its
Subsidiaries in accounting principles or methods, except insofar as may be
required by a change in GAAP.
SECTION 4.6 Consents and Approvals; No Violations. Except for (a) the
filing of a pre-merger notification and report form by the Parent under the HSR
Act, and the expiration or termination of the applicable waiting period
thereunder, (b) the filing of a Certificate of Merger with the Secretary of the
State of the State of Delaware in accordance with the DGCL, (c) filings with the
SEC and any applicable national securities exchanges, (d) filings under state
securities, 'Blue Sky' or antitakeover laws, (e) any applicable filings required
under the laws of foreign jurisdictions and (f) filings, authorizations,
consents or approvals relating to matters which, in the aggregate, are not
material to the Parent and its Subsidiaries (including Mergerco but excluding
the Company and its Subsidiaries) taken as a whole, neither the execution,
delivery or performance of this Agreement by the Parent and Mergerco nor the
consummation by the Parent and Mergerco of the Contemplated Trans actions nor
compliance by the Parent and Mergerco with any of the provisions hereof will (i)
conflict with or result in any breach of any provision of the certificate of
incorporation or by-laws of the Parent and any of its Subsidiaries, (ii) require
any filing with, or permit, authorization, consent or approval of, any
Governmental Authority (except where the failure to obtain such permits,
authorizations, consents or approvals or to make such filings would not have a
Material Adverse Effect on the Parent and its Subsidiaries taken as a whole or
would not, or would not be reasonably likely to, materially impair the ability
of the Parent and Mergerco to consummate the Merger or the other Contemplated
Transactions), (iii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, amendment, cancellation or acceleration) under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture,
guarantee, other evidence of indebtedness, lease, license, contract, agreement
or other in strument or obligation to which the Parent or any of its
Subsidiaries is a party or by which any of them or any of their properties or
assets may be bound or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Parent, any of its Subsidiaries or
any of their properties or assets, except in the case of clauses (iii) and (iv)
for violations, breaches or defaults which would not have a Material Adverse
Effect on the Parent and its Subsidiaries taken as a whole or would not, or
would not be reasonably likely to, materially impair the ability of the Parent
or Mergerco to consummate the Merger or the other Contemplated Transactions.
SECTION 4.7 Registration Statement. The Registration Statement (and any
amendment thereof or supplement thereto), at the date it becomes effective and
at the time of the Meeting, will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading; provided, however, that no
representation is made by the Parent or Mergerco with respect to statements made
therein based on information supplied by the Company for inclusion in the
Registration Statement. Subject to the proviso set forth in the preceding
sentence, the Registration Statement will comply in all material respects with
the provisions of the Securities Act and the rules and regulations thereunder.
SECTION 4.8 Tax Representations. (a) Mergerco is a wholly owned subsidiary
of the Parent organized for the purpose of consummating the Merger and has no
assets other than (i) Parent Class A Common Stock, if any, and (ii) assets
permitted under Treasury Regulation 1.368-2(j)(3)(iii).
(b) The Parent has no plan or intention not to (i) continue at least a
principal historic business line of the Company or (ii) use at least a
significant portion of the Company's historical assets in a business of the
Parent, in each case within the meaning of Treasury Regulation 1.368-1(d).
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ARTICLE V
COVENANTS
SECTION 5.1 Interim Operations of the Company. The Company covenants and
agrees that, except (i) as expressly provided in this Agreement, (ii) with the
prior written consent of the Parent or (iii) as set forth on Section 5.1 of the
Disclosure Schedule, after the date hereof and prior to the Effective Time:
(a) the business of the Company and its Subsidiaries, including,
without limitation, investment practices and policies, shall be conducted
only in the ordinary course of business consistent with past practice and,
each of the Company and its Subsidiaries shall use all reasonable efforts
to preserve its business organization intact and maintain its existing
relations with material customers, distributors, suppliers, employees,
creditors and business partners;
(b) the Company will not, directly or indirectly, split, combine or
reclassify the outstanding Company Common Stock, or any outstanding capital
stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall (i) amend
its certificate of incorporation or by-laws or similar organizational
documents; (ii) declare, set aside or pay any dividend or other
distribution payable in cash, stock or property with respect to its capital
stock other than dividends paid by the Company's wholly owned Subsidiaries
to the Company; (iii) issue, sell, transfer, pledge, dispose of or encumber
any additional shares of, or securities convertible into or exchangeable
for, or options, warrants, calls, commitments or rights of any kind to
acquire, any shares of capital stock of any class of the Company or its
Subsidiaries, other than issuances pursuant to exercise of stock options
outstanding on the date hereof as disclosed in Section 3.3 hereof; (iv)
transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber
any assets that are material to the Company and its Subsidiaries taken as a
whole other than sales of investment assets in the ordinary course of
business consistent with past practice; or (v) redeem, purchase or
otherwise acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall (i) grant
any increase in the compensation payable or to become payable by the
Company or any of its Subsidiaries to any officer or employee other than
scheduled annual increases in the ordinary course of business consistent
with past practice in an amount not to exceed five percent (5%) for any
individual; (ii) adopt any new, or amend or otherwise increase, or
accelerate the payment or vesting of the amounts payable or to become
payable under any Company Benefit Plan; (iii) enter into any, or amend any
existing, employment, consulting or severance agreement with or, except in
accordance with the existing written policies of the Company, grant any
severance or termination pay to any officer, director or employee of the
Company or any of its Subsidiaries; (iv) make any additional contributions
to any grantor trust created by the Company to provide funding for
non-tax-qualified employee benefits or compensation; or (v) provide any
severance program to any Subsidiary which does not have a severance program
as of the date of this Agreement;
(e) neither the Company nor any of its Subsidiaries shall modify,
amend or terminate any of the material Company Agreements or waive, release
or assign any material rights or claims, except in the ordinary course of
business consistent with past practice;
(f) neither the Company nor any of its Subsidiaries shall permit any
material insurance policy naming it as a beneficiary or a loss payable
payee to be cancelled or terminated, except in the ordinary course of
business consistent with past practice;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur
or assume any debt except for borrowings under its existing credit facility
in an amount exceeding $100,000 without the written consent of the Parent,
which consent shall not be unreasonably withheld, provided that the Company
may extend the term of its existing credit facility for a period not to
exceed one (1) year so long as the commitment thereunder is not increased;
(ii) assume, guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the obligations of any
other Person; (iii) make any loans, advances or capital contributions to,
or
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investments in, any other Person (other than to wholly owned Subsidiaries
of the Company, or customary loans or advances to employees in accordance
with past practice not to exceed $25,000 in the aggregate); or (iv) enter
into any material commitment (including, but not limited to, any capital
expenditure, 'take-or-pay' contract or purchase of assets) in excess of
$100,000, provided that the Company may (x) purchase inventory in the
ordinary course of business consistent with past practice (without any
'take-or-pay' commitment) and (y) enter into a lease for office space in
the greater Denver, Colorado area not to exceed 4,500 square feet, at a
cost per square foot per year not to exceed $17.00 and for a term not to
exceed three (3) years;
(h) neither the Company nor any of its Subsidiaries shall change any
of the accounting principles used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall pay,
discharge or satisfy any material claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction of any such claims, liabilities
or obligations, (x) reflected or reserved against in, or contemplated by,
the consolidated financial statements (or the notes thereto) of the Company
and its consolidated Subsidiaries, (y) incurred in the ordinary course of
business consistent with past practice or (z) which are legally required to
be paid, discharged or satisfied;
(j) neither the Company nor any of its Subsidiaries will adopt a plan
of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other material reorganization of the
Company or any of its Subsidiaries or any agreement relating to a
Acquisition Proposal (other than the Merger);
(k) neither the Company nor any of its Subsidiaries will engage in any
transaction with, or enter into any agreement, arrangement, or
understanding with, directly or indirectly, any of the Company's
affiliates, including, without limitation, any transactions, agreements,
arrangements or understandings with any affiliate or other Person covered
under Item 404 of Regulation S-K under the Securities Act that would be
required to be disclosed under such Item 404 other than such transactions
of the same general nature, scope and magnitude as are disclosed in the
Company SEC Documents;
(l) except upon the prior written consent of the Parent, the Company
shall not make any Tax election that would have a Material Adverse Effect
on the Company or any of its Subsidiaries; and
(m) neither the Company nor any of its Subsidiaries will enter into an
agreement, contract, commitment or arrangement to do any of the foregoing,
or to authorize, recommend, propose or announce an intention to do any of
the foregoing.
SECTION 5.2 Access to Information. The Company shall (and shall cause each
of its Subsidiaries to) afford to the officers, employees, accountants, counsel,
financing sources and other representatives of the Parent, reasonable access,
during normal business hours, during the period prior to the Effective Time, to
all of its and its Subsidiaries' properties, books, contracts, commitments and
records (including any Tax Returns or other Tax related information pertaining
to the Company and its Subsidiaries) and, during such period, the Company shall
(and shall cause each of its Subsidiaries to) furnish promptly to the Parent (a)
a copy of each report, schedule, registration statement and other document filed
or received by it during such period pursuant to the requirements of the federal
securities laws or any insurance regulatory laws and (b) all other information
concerning its business, properties and personnel as the Parent may reasonably
request (including any Tax Returns or other Tax related information pertaining
to the Company and its Subsidiaries). The Parent will hold any such information
which is nonpublic in confidence in accordance with the provisions of the
Confidentiality Agreement.
SECTION 5.3 Consents and Approvals. Each of the Company, the Parent and
Mergerco will take all reasonable actions necessary to comply promptly with all
legal requirements which may be imposed on it with respect to this Agreement and
the Contemplated Transactions which actions shall include, without limitation,
furnishing all information in connection with approvals of or filings with any
Governmental Authority, including, without limitation, any schedule, or reports
required to be filed with the SEC, and will promptly cooperate with and furnish
information to each other in connection with any such requirements imposed upon
any of them or any of their Subsidiaries in connection with
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this Agreement and the Contemplated Transactions. Each of the Company, the
Parent and Mergerco will, and will cause its Subsidiaries to, take all
reasonable actions necessary to obtain any consent, authorization, order or
approval of, or any exemption by, any Governmental Authority or other public or
private third party, required to be obtained or made by the Parent, Mergerco,
the Company or any of their Subsidiaries in connection with the Merger or the
taking of any action contemplated thereby or by this Agreement.
SECTION 5.4 No Solicitation.
(a) The Company shall not directly or indirectly, and shall not authorize
or permit any of its Subsidiaries or any officer, director, employee, agent,
investment banker, financial advisor, attorney, accountant, broker, finder or
other representative (collectively, 'Representatives') of any of the Company or
any of its Subsidiaries (collectively, the 'Acquired Corporations') directly or
indirectly to, (i) solicit, initiate, encourage or induce the making, submission
or announcement of any Acquisition Proposal or take any action that could
reasonably be expected to lead to an Acquisition Proposal, (ii) furnish any
nonpublic information regarding any of the Acquired Corporations to any Person
in connection with or in response to an Acquisition Proposal, (iii) engage in
discussions with any Person with respect to any Acquisition Proposal, (iv)
approve, endorse or recommend (or agree to approve, endorse or recommend) any
Acquisition Proposal or (v) enter into any letter of intent or similar document
or any agreement contemplating or otherwise relating to any Acquisition
Proposal; provided, however, that this Section 5.4(a) shall not prohibit the
Company from furnishing nonpublic information regarding the Acquired
Corporations to, or entering into discussions with, any Person in response to an
unsolicited bona fide written Acquisition Proposal submitted (and not withdrawn)
by such Person if (1) the Board of Directors of the Company concludes in good
faith, based upon the advice of its financial advisor, that such Acquisition
Proposal would result in a transaction that is more favorable from a financial
point of view to the Company's stockholders than the Merger, (2) the Board of
Directors from the Company concludes in good faith, after consultation with
outside legal counsel, that such action is required in order for the Board of
Directors of the Company to comply with its fiduciary obligations to the
Company's stockholders under applicable law, (3) prior to furnishing any such
nonpublic information to, or entering into discussions with, such Person, the
Company gives the Parent written notice of the identity of such Person and of
the Company's intention to furnish nonpublic information to, or enter into
discussions with, such Person, and the Company receives from such Person an
executed confidentiality agreement containing customary limitations on the use
and disclosure of all nonpublic written and oral information furnished to such
Person by or on behalf of the Company, and (4) prior to furnishing any such
nonpublic information to such Person, the Company furnishes such nonpublic
information to the Parent (to the extent such nonpublic information has not been
previously furnished by the Company to the Parent).
(b) The Company shall promptly advise the Parent orally and in writing of
any Acquisition Proposal (including the identify of the Person making or
submitting such Acquisition Proposal and the terms thereof) that is made or
submitted by any Person (such Notification referred to as a 'Transaction
Notice'). The Company agrees that it will not furnish confidential information
to any Person or enter into negotiations with any Person with respect to an
Acquisition Proposal until it has delivered to the Parent a Transaction Notice
and forty-eight (48) hours have passed since the Parent's receipt of such
Transaction Notice.
(c) As of the date of this Agreement, the Company shall immediately cease
and cause to be terminated any existing discussions with any Person that relate
to any Acquisition Proposal.
(d) Notwithstanding anything to the contrary contained in this Agreement,
the Company may give a copy of this Section 5.4 to any Person who submits an
unsolicited bona fide written Acquisition Proposal to the Company if, prior to
giving a copy of this Section 5.4 to such Person, the Company gives the Parent
written notice that the Company intends to give copy of this Section 5.4 to such
Person.
SECTION 5.5 Additional Agreements. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use its best efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable, whether under applicable laws and
regulations or otherwise, or to remove any injunctions or other impediments or
delays, legal or otherwise, to consummate and make effective the Merger and the
other Contemplated Transactions. In
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case at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of the Company, the Parent and Mergerco shall use their best efforts
to take, or cause to be taken, all such necessary actions.
SECTION 5.6 Notification of Certain Matters. The Company shall give prompt
notice to the Parent, and the Parent shall give prompt notice to the Company, of
(a) the occurrence, or non-occurrence of any event the occurrence or
non-occurrence of which would cause any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect at or prior to
the Effective Time and (b) any material failure of the Company or the Parent, as
the case may be, to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it hereunder; provided, however, that the
delivery of any notice pursuant to this Section 5.6 shall not limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
SECTION 5.7 Indemnification of Directors and Officers. The certificate of
incorporation and by-laws of the Surviving Corporation and each of its
Subsidiaries shall contain provisions no less favorable with respect to
indemnification of directors, officers, agents and employees and other
individuals than those set forth in the certification of incorporation and
by-laws of the Company and its Subsidiaries as in effect on the date hereof,
which provisions shall not be amended, repealed or otherwise modified for a
period of five (5) years after the Effective Time in any manner that would
adversely affect the rights thereunder of individuals who at or prior to the
Effective Time were directors, officers, agents or employees of the Company or
any of its Subsidiaries or who were otherwise entitled to indemnification
pursuant to the certificate of incorporation and by-laws (or equivalent
governing instruments) of the Company or any of its Subsidiaries; provided, that
if the Surviving Corporation or any of its subsidiaries shall not have the
financial resources to satisfy its indemnification obligations to such
directors, officers, agents or employees or other individuals as provided under
its certificate of incorporation and by-laws in accordance with this Section
5.7, the Parent agrees that it shall provide such indemnification of such
Persons to the extent set forth in such certificate of incorporation and by-laws
in accordance with this Section 5.7.
SECTION 5.8 Rule 145 Affiliates. At least 30 days prior to the Closing
Date, the Company shall deliver to the Parent a letter identifying, to the best
of the Company's knowledge, all Persons who are, at the time of the Meeting,
deemed to be 'affiliates' of the Company for purposes of Rule 145 under the
Securities Act (the 'Company Affiliates'). The Company shall use all reasonable
efforts to cause each Person who is identified as a Company Affiliate to deliver
to the Parent prior to the Closing Date an agreement substantially in the form
of Exhibit B to this Agreement.
SECTION 5.9 Stock Exchange Listing. The Parent shall use all reasonable
efforts to cause the shares of the Parent Class A Common Stock issued in the
Merger and the shares of the Parent Class A Common Stock to be reserved for
issuance upon exercise of the Substitute Options to be approved for listing on
the NYSE prior to the Closing Date.
SECTION 5.10 Tax-Free Reorganization. The Company shall not intentionally
take or cause to be taken any action before the Effective Time which would
disqualify the Merger as a 'reorganization' within the meaning of Section 368(a)
of the Code.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1 Conditions to the Obligations of Each Party. The obligations of
the Company, on the one hand, and the Parent, and Mergerco on the other hand, to
consummate the Merger are subject to the satisfaction (or, if permissible,
waiver by the party for whose benefit such conditions exist) of the following
conditions at or prior to the Effective Time:
(a) this Agreement and the Merger shall have been approved and adopted
by the Required Stockholder Vote in accordance with the DGCL;
(b) no court, arbitrator or governmental body, agency or official
shall have issued any order, decree or ruling and there shall not be any
statute, rule or regulation, restraining, enjoining or prohibiting the
consummation of the Merger;
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(c) the Registration Statement shall have become effective under the
Securities Act and no stop order suspending effectiveness of the
Registration Statement shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the SEC;
(d) any waiting period applicable to the Merger under the HSR Act
shall have expired or been terminated;
(e) all actions by or in respect of or filing with any Governmental
Authority required to permit the consummation of the Merger shall have been
obtained and such approval shall be in full force and effect; and
(f) the shares of Parent Class A Common Stock to be issued in the
Merger shall have been approved for listing on the NYSE, subject to
official notice of issuance.
SECTION 6.2 Conditions to the Obligations of the Parent and Mergerco. The
obligations of the Parent and Mergerco to consummate the Merger are subject to
the satisfaction (or waiver by the Parent) of the following further conditions:
(a) the representations and warranties of the Company shall have been
true and accurate in all material respects as of the Effective Time as if
made at and as of such time (except for those representations and
warranties that address matters only as of a particular date or only with
respect to a specific period of time which need only be true and accurate
as of such date or with respect to such period);
(b) the Company shall have performed in all material respects its
obligations hereunder required to be performed by it at or prior to the
Effective Time;
(c) since December 31, 1996, except as set forth in Section 3.5 of the
Disclosure Schedule, there shall not have occurred any event, change or
effect having, or which would be reasonably likely to have, in the
aggregate, a Material Adverse Effect on the Company and its Subsidiaries,
taken as a whole;
(d) the Parent shall have received a certificate signed by an
executive officer of the Company to the effect of Sections 6.2(a), (b) and
(c); (e) there shall not have been any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction
enacted, entered, enforced, promulgated, amended, issued or deemed
applicable to the Merger by any domestic legislative body, court,
government or governmental, administrative or regulatory authority or
agency (i) restraining or preventing the carrying out of the Contemplated
Transactions, (ii) prohibiting the Parent's ownership or operation of all
or any material portion of its or the Company's businesses or assets, or
compelling the Parent to dispose of or hold separate all or any material
portion of the Parent's or the Company's businesses or assets as a result
of the Contemplated Transactions; (iii) making acquisition of the shares of
Company Common Stock pursuant to the Merger illegal; (iv) prohibiting the
Parent effectively from acquiring or holding or exercising full rights of
ownership of the shares of Company Common Stock, including, without
limitation, the right to vote the shares of Company Common Stock acquired
by it pursuant to the Merger on all matters properly presented to the
stockholders of the Company; (v) prohibiting the Parent or any of its
Subsidiaries or affiliates from effectively controlling in any material
respect the businesses or operations of the Company, the Parent or their
respective subsidiaries; or (vi) which would impose any condition which
would materially adversely affect the business of the Company or (as a
condition of consummating the Contemplated Transactions) the business of
the Parent and its Subsidiaries taken as a whole;
(f) the Company's Board of Directors shall not have withdrawn or
modified its position with respect to the Merger;
(g) the Parent shall have received an opinion of Krys Boyle Freedman
Scott & Sawyer, P.C. in scope and substance substantially in the form
agreed to by the Company and the Parent prior to the date hereof;
(h) the Average Parent Share Price shall not be less than $15.00 per
share;
(i) the holders of no greater than seven and one-half percent (7.5%)
of the shares of Company Common Stock outstanding on the record date for
the Meeting (x) shall have demanded their
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appraisal rights with respect to their shares of Company Common Stock
pursuant to, and otherwise complied with the provisions of, subsection (d)
of Section 262, and (y) shall not have voted in favor of or consented to
the Merger; or
(j) no suit, claim, action or proceeding with respect to the Merger or
the other Contemplated Transactions, or the Company or any of its
Subsidiaries or any of their properties or assets, shall have been
instituted or threatened which could reasonably be expected to have a
Material Adverse Effect on the Company and its Subsidiaries taken as a
whole or would, or would be reasonably likely to, materially impair the
ability of the Company to consummate the Merger or the other Contemplated
Transactions.
SECTION 6.3 Conditions to the Obligations of the Company. The obligations
of the Company to consummate the Merger are subject to the satisfaction (or
waiver by the Company) of the following further conditions:
(a) the representations and warranties of the Parent and Mergerco
shall be true and accurate in all material respects as of the Effective
Time as if made at and as of such time (except for those representations
and warranties that address matters only as of a particular date or only
with respect to a specific period of time which need only be true and
accurate as of such date or with respect to such period);
(b) each of the Parent and Mergerco shall have performed in all
material respects all of the respective obligations hereunder required to
be performed by the Parent or Mergerco, as the case may be, at or prior to
the Effective Time;
(c) since December 31, 1996, there shall not have occurred any event,
change or effect having, or which would be reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on the Parent
and its Subsidiaries taken as a whole;
(d) the Company shall have received a certificate signed by an
executive officer of the Parent as to Sections 6.3(a), (b) and (c);
(e) the Company shall have received an opinion of Paul, Weiss,
Rifkind, Wharton & Garrison in scope and substance substantially in the
form agreed to by the Parent and the Company prior to the date hereof;
(f) the Company shall have received an opinion of Sherman & Howard
L.L.C. to the effect that the Merger will qualify as a 'reorganization'
within the meaning of Section 368 of the Code; and
(g) no suit, claim, action or proceeding with respect to the Merger or
the other Contemplated Transactions, or the Parent or any of its
Subsidiaries or any of their properties or assets, shall have been
instituted which could reasonably be expected to have a Material Adverse
Effect on the Parent and its Subsidiaries taken as a whole, or would be
reasonably likely to materially impair the ability of the Parent to
consummate the Merger or the other Contemplated Transactions.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and the Merger contemplated
herein may be abandoned at any time prior to the Effective Time, whether before
or after stockholder approval thereof:
(a) By the mutual consent of the Board of Directors of the Parent and
the Board of Directors of the Company;
(b) By either of the Board of Directors of the Company or the Board of
Directors of the Parent:
(i) if the Merger shall not have occurred on or prior to December
31, 1997; provided, however, that the right to terminate this Agreement
under this Section 7.1(b)(i) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Merger to occur on or prior
to such date;
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(ii) if a complete Registration Statement shall not have been filed
with the SEC on or before October 1, 1997; or
(iii) if any Governmental Authority shall have issued an order,
decree or ruling or taken any other action (which order, decree, ruling
or other action the parties hereto shall use their best efforts to
lift), in each case permanently restraining, enjoining or otherwise
prohibiting the Contemplated Transactions and such order, decree, ruling
or other action shall have become final and non-appealable;
(c) By the Board of Directors of the Company:
(i) if the Parent or Mergerco (x) breaches or fails in any material
respect to perform or comply with any of its material covenants and
agreements contained herein or (y) breaches its representations and
warranties in any material respect and such breach would have or would
be reasonably likely to have a Material Adverse Effect on the Parent and
its Subsidiaries taken as a whole, in each case such that the conditions
set forth in Section 6.1 or Section 6.3 would not be satisfied;
provided, however, that if any such breach is curable by the breaching
party through the exercise of the breaching party's best efforts and for
so long as the breaching party shall be so using its best efforts to
cure such breach, the Company may not terminate this Agreement pursuant
to this Section 7.1(c)(i);
(ii) if the Board of Directors of the Company determines in good
faith, after consultation with (x) outside legal counsel, that
termination of the Agreement is required for the Board of Directors of
the Company to satisfy its fiduciary obligations to the Company's
stockholders under applicable law by reason of an unsolicited bona fide
Acquisition Proposal having been made and (y) its financial advisor that
such Acquisition Proposal would result in a transaction that is more
favorable than the Merger from a financial point of view to the
Company's stockholders; provided that the Company shall have complied
with the provisions of Section 5.4 and shall notify the Parent at least
five (5) days in advance of its intention to terminate this Agreement
pursuant to this Section 7.1(c)(ii) or to enter into a definitive
agreement with respect to such Acquisition Proposal; and provided,
further, that within such five (5) day period the Parent has not made a
competing proposal which is at least as favorable to the Company's
stockholders from a financial point of view as such Acquisition
Proposal;
(iii) if the Company fails to obtain the Required Stockholder Vote
at the Meeting.
(d) By the Board of Directors of the Parent:
(i) if the Company (x) breaches or fails in any material respect to
perform or comply with any of its material covenants and agreements
contained herein or (y) breaches its representations and warranties in
any material respect and such breach would have or would be reasonably
likely to have a Material Adverse Effect on the Company and its
Subsidiaries taken as a whole, in each case such that the conditions set
forth in Section 6.1 or Section 6.2 would not be satisfied; provided,
however, that if any such breach is curable by the Company through the
exercise of the Company's best efforts and for so long as the Company
shall be so using its best efforts to cure such breach, the Parent may
not terminate this Agreement pursuant to this Section 7.1(d)(i);
(ii) if (A) the Board of Directors of the Company shall have
withdrawn, or modified or changed in a manner adverse to the Parent or
Mergerco its approval or recommendation of this Agreement or the Merger
or shall have recommended an Acquisition Proposal or other business
combination, (B) the Company shall have received a bona fide written
Acquisition Proposal which has not been rejected by the Board of
Directors of the Company within fourteen (14) days after receipt
thereof, or (C) prior to the certification of the vote of the Company's
stockholders to approve the Merger at the Meeting, it shall have been
publicly disclosed or the Parent or Mergerco shall have learned that any
person, entity or 'group' (as that term is defined in Section 13(d)(3)
of the Exchange Act) (an 'Acquiring Person'), other than the Parent or
its Subsidiaries or any of their affiliates or the stockholders of the
Company party to the Stockholders Agreement, shall have acquired
beneficial ownership (determined pursuant to Rule 13d-3 promulgated
under the Exchange Act) of more than 20% of any class
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or series of capital stock of the Company (including the Shares),
through the acquisition of stock, the formation of a group or otherwise,
or shall have been granted any option, right or warrant, conditional or
otherwise, to acquire beneficial ownership of more than 20% of any class
or series of capital stock of the Company (including the Shares) other
than as disclosed in a Schedule 13D on file with the SEC on the date
hereof;
(iii) if the Company fails to obtain the Required Stockholder Vote
at the Meeting; or
(iv) the condition set forth in 6.2(h) is not fulfilled.
SECTION 7.2 Effect of Termination. In the event of the termination of this
Agreement as provided in Section 7.1, written notice thereof shall forthwith be
given to the other party or parties specifying the provision hereof pursuant to
which such termination is made, and this Agreement shall forthwith become null
and void, and there shall be no liability on the part of the Parent, Mergerco or
the Company except (A) for fraud or for willful breach of this Agreement and (B)
as set forth in Section 8.3 hereof and in the last sentence of Section 5.2.
ARTICLE VIII
GENERAL AGREEMENTS
SECTION 8.1 Definitions. For the purposes of this Agreement, the following
terms have the meanings ascribed to them in this Section 8.1:
'Agreement' has the meaning specified in the recitals hereto.
'Acquired Corporations' has the meaning specified in Section 5.4(a).
'Acquiring Person' has the meaning specified in Section 7.1(d)(ii).
'Acquisition Proposal' means any tender or exchange offer involving the
capital stock of the Company, any proposal for a merger, consolidation or other
business combination involving the Company or any of its Subsidiaries, any
proposal or offer to acquire in any manner a substantial equity interest in, or
a substantial portion of the business or assets of, the Company or any of its
Subsidiaries, any proposal or offer with respect to any recapitalization or
restructuring with respect to the Company or any of its Subsidiaries or any
proposal or offer with respect to any other transaction similar to any of the
foregoing with respect to the Company or any of its Subsidiaries, other than
pursuant to the transactions to be effected pursuant to this Agreement or any
other transaction with the Parent or a Subsidiary of the Parent.
'Adjusted Conversion Price' has the meaning specified in Section 2.1(b).
'Average Parent Share Price' means the average (without rounding) of the
closing prices per share of Parent Class A Common Stock on the NYSE on the NYSE
Composite Tape for the fifteen (15) consecutive NYSE trading days ending on the
NYSE trading day immediately preceding the Closing Date.
'Business Day' means any day that is not a Saturday or Sunday or a day on
which banks located in New York City are authorized or required to be closed.
'Certificate' means a stock certificate which immediately prior to the
Effective Time represents shares of the Company Common Stock.
'Certificate of Incorporation' has the meaning specified in Section 1.3.
'Claims' means any actions, causes of action, suits, claims, complaints,
demands, litigations or legal, administrative or arbitral proceedings or
investigations.
'Closing' has the meaning specified in Section 1.2.
'Closing Date' has the meaning specified in Section 1.2.
'Code' has the meaning specified in the recitals.
'Company' means Cable Car Beverage Corporation, a Delaware corporation.
'Company Affiliates' has the meaning specified in Section 5.8.
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'Company Agreement' means any note, bond, mortgage, indenture, guarantee,
other evidence of indebtedness, lease, license, contract, agreement or other
instrument or obligation to which the Company or any of its Subsidiaries is a
party or by which any of them or any of their properties or assets may be bound.
'Company Benefit Plan' means any material employee benefit plan,
arrangement, policy or commitment, including, without limitation, any
employment, consulting, severance or deferred compensation agreement, executive
compensation, bonus, incentive, pension, profit-sharing, savings, retirement,
stock option, stock purchase or severance pay plan, any life, health, disability
or accidental death and dismemberment insurance plan, any holiday or vacation
practice or any other employee benefit plan within the meaning of section 3(3)
of ERISA, that is maintained, administered or contributed to by the Company or
any of its affiliates for the benefit of their current or former employees.
'Company Common Stock' has the meaning specified in the recitals hereto.
'Company Employee' means any individual employed by the Company or any of
its Subsidiaries.
'Company Fairness Opinion' has the meaning specified in the recitals
hereto.
'Company SEC Documents' has the meaning specified in Section 3.4.
'Company Stock Option' means an option issued by the Company that is
exercisable for Company Common Stock.
'Confidentiality Agreement' means the confidentiality agreement between the
Company and the Parent, dated April 23, 1997, as amended or modified from time
to time.
'Contemplated Transactions' has the meaning specified in the recitals
hereto.
'Conversion Price' has the meaning specified in Section 2.1(b).
'Copyrights' means any foreign or United States copyright registrations and
applications for registration thereof, and any non-registered copyrights.
'DGCL' has the meaning specified in the recitals hereto.
'Disclosure Schedule' means the disclosure schedule delivered by the
Company to the Parent prior to the date hereof.
'Dissenting Share' has the meaning specified in Section 2.1(e).
'Effective Time' means the time and date at which the Certificate of Merger
is filed with the Secretary of State of the State of Delaware pursuant to
Section 1.8.
'ERISA' means the Employee Retirement Income Security Act of 1974, as
amended, together with the rules and regulations promulgated thereunder.
'Exchange Act' means the Securities and Exchange Act of 1934, as amended.
'Exchange Agent' has the meaning specified in Section 2.3(a).
'Excluded Share' has the meaning specified in Section 2.1(a).
'Fractional Shares' means fractional shares of Parent Class A Common Stock.
'GAAP' means United States generally accepted accounting principles as in
effect from time to time.
'Governmental Authority' means any nation or government, any state or other
political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
'HSR Act' means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.
'Intellectual Property' has the meaning specified in Section 3.13(a).
'IP Licenses' has the meaning specified in Section 3.13(a).
'IRS' means the United States Internal Revenue Service.
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'Material Adverse Effect' means, with respect to any Person (or group of
Persons taken as a whole), such event, change or effect, in the aggregate with
such other events, changes or effects, which is materially adverse to the
condition (financial or otherwise), business, results of operations or prospects
of such Person.
'Meeting' has the meaning specified in Section 1.6(a).
'Merger' has the meaning specified in the recitals hereto.
'Merger Consideration' means the shares of Parent Class A Common Stock to
be issued pursuant to the Merger in exchange for Certificates, together with any
cash to be received pursuant to Section 2.3(e) in lieu of issuing Fractional
Shares.
'Mergerco' means CCB Merger Corporation, a Delaware corporation.
'Mergerco Common Stock' means the Common Stock, par value $1.00 per share,
of Mergerco.
'NYSE' means the New York Stock Exchange.
'Order' means any order, judgment, injunction, award, decree or writ of any
Governmental Authority.
'Parent' means Triarc Companies, Inc., as Delaware corporation.
'Parent Class A Common Stock' means the Class A Common Stock, par value
$.10 per share, of Parent.
'Parent Class B Common Stock' means the Class B Common Stock, par value
$.10 per share, of Parent.
'Parent Disclosure Schedule' means the disclosure schedule delivered by the
Parent to the Company on or prior to the date hereof.
'Parent SEC Documents' has the meaning specified in Section 4.4.
'Patents' means any foreign or United States patents and patent
applications including any divisions, continuations, continuations-in-part,
substitutions or reissues thereof, whether or not patents are issued on such
applications and whether or not such applications are modified, withdrawn or
resubmitted.
'PBGC' means the Pension Benefit Guaranty Corporation.
'Person' means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization or other entity or
Governmental Entity.
'Prospectus' has the meaning specified in Section 1.7(a).
'Registration Statement' has the meaning specified in Section 1.7(a).
'Representatives' has the meaning specified in Section 5.4(a).
'Required Stockholder Vote' has the meaning specified in Section 3.2(b).
'SEC' means the Securities and Exchange Commission.
'Section 203' has the meaning specified in the recitals hereto.
'Section 262' shall mean Section 262 of the DGCL.
'Securities Act' means the Securities Act of 1933, as amended.
'Software' means any computer software programs, source code, object code,
data and documentation.
'Stewart's' means Stewart's Restaurants Inc.
'Stewart's Master Agreement' means the Stewart's Master Agreement, dated
July 11, 1989, between Stewart's and the Company, as amended.
'Stockholder' has the meaning specified in Section 2.3(b).
'Stockholders Agreement' has the meaning specified in the recitals thereto.
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'Subsidiary' means, with respect to any Person, any corporation 50% or more
of the outstanding voting power of which, or any partnership, joint venture,
limited liability company or other entity 50% or more of the total equity
interest of which, is directly or indirectly owned by such Person.
'Substitute Option' has the meaning specified in Section 2.1(d)(i).
'Surviving Corporation' has the meaning specified in Section 1.1.
'Tax' has the meaning specified in Section 3.10(a).
'Tax Return' has the meaning specified in Section 3.10(b).
'Tax Sharing Agreement Amounts' has the meaning specified in Section
3.10(a).
'Trademarks' means any foreign or United States trademarks, service marks,
trade dress, trade names, brand names, designs and logos, corporate names,
product or service identifiers, whether registered or unregistered, and all
registrations and applications for registration thereof.
'Transaction Notice' has the meaning specified in Section 5.4(b).
'Voting Debt' means bonds, debentures, notes or other indebtedness having
voting rights (or convertible into securities having such rights).
SECTION 8.2 Survival of Representations, Warranties and Agreements. All
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time.
SECTION 8.3 Expenses. (a) Except as set forth in Section 8.3(b), whether or
not the Merger is consummated, all costs and expenses incurred in connection
with this Agreement and the Contemplated Transactions shall be paid by the party
incurring such costs and expenses.
(b) If the Board of Directors of the Parent shall terminate this Agreement
pursuant to Section 7.1(d)(iv) in respect of the condition set forth in Section
6.2(h), then the Parent shall reimburse the Company for its reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) incurred in connection with this Agreement and the Contemplated
Transactions in an amount not to exceed $225,000 in the aggregate.
SECTION 8.4 Notice. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered by
messenger, transmitted by telecopier, telex or telegram or mailed by registered
or certified mail, postage prepaid, as follows:
(a) If to the Parent or Mergerco, to:
Triarc Companies, Inc.
280 Park Avenue
New York, New York 10017
Attention: Brian L. Schorr, Esq.
Telecopy No.: (212) 451-3216
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Neale M. Albert, Esq.
Telecopy No.: (212) 373-2315
(b) If to the Company, to:
Cable Car Beverage Corporation
717 17th Street, Suite 1475
Denver, Colorado 80202
Attention: Samuel M. Simpson
Telecopy No.: (303) 298-1150
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with a copy to:
Krys Boyle Freedman Scott & Sawyer, P.C.
Dominion Plaza
600 Seventeenth Street
Suite 2700 South Tower
Denver, Colorado 80202
Attention: Thomas Boyle, Esq.
Telecopy No.: (303) 893-2882
Except as otherwise specified herein, all notices and other communications
shall be considered to have been duly given on the first to occur of (a) the
date of delivery if delivered personally on a Business Day during normal
business hours, and if not, on the next occurring Business Day, (b) five (5)
days following posting if transmitted by mail, (c) the date of transmission with
confirmed answer-back if transmitted by telex on a Business Day during normal
business hours, and if not, on the next occurring Business Day, or (d) the date
of receipt if transmitted by telecopier or facsimile on a Business Day during
normal business hours, and if not, on the next occurring Business Day. Any party
may change his or its address for purposes hereof by notice to the other party
given as provided in this Section 8.4.
SECTION 8.5 Amendments. Subject to applicable law, this Agreement may be
amended by the parties hereto, by action taken by their respective Boards of
Directors, at any time prior to the Effective Time, provided, however, that
after approval of this Agreement by the stockholders of the Company, no
amendment or modification shall (a) alter or change the amount or kind of
shares, securities, cash, property and/or rights to be received in exchange for
or on conversion of all or any of the shares of any class or series thereof of
the Company, (b) alter or change any term of the certificate of incorporation of
the Surviving Corporation to be effected by the Merger, or (c) alter or change
any of the terms and conditions of this Agreement if such alteration or change
would adversely affect the holders of any class or series of capital stock of
the Company. This Agreement may not be amended, modified or supplemented except
by written agreement of the parties hereto.
SECTION 8.6 Waiver. At any time prior to the Effective Time, the parties
hereto by action taken by their respective Boards of Directors may (a) extend
the time for the performance of any of the obligations or other acts of the
other parties hereto, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto, and
(c) waive compliance with any of the agreements or conditions contained herein.
Any agreement on the part of a party hereto to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party.
SECTION 8.7 Brokers. The Company represents and warrants that no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the Merger based upon arrangements made by or
on behalf of the Company other than the fee payable to Montgomery Securities in
connection with its providing financial advice to the Company and the Company's
Board of Directors and delivery of the Company Fairness Opinion. The Parent and
Mergerco represent and warrant that no broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the Merger based upon arrangements made by or on behalf of the Parent and
Mergerco.
SECTION 8.8 Publicity. So long as this Agreement is in effect, neither the
Company nor the Parent nor any of their respective affiliates shall issue or
cause the publication of any press release or other public statement or
announcement with respect to this Agreement or the Contemplated Transaction
without prior consultation with the other party, except as may be required by
law or by obligations pursuant to any listing agreement with a national
securities exchange or Nasdaq, provided that the Company and the Parent may
include this Agreement and the Stockholders Agreement as exhibits to a report on
Form 8-K filed with the SEC, and in each such case shall use all reasonable
efforts to consult with the other party prior to such release or announcement
being issued or such filing being made.
SECTION 8.9 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 8.10 Non-Assignability. This Agreement shall not be assigned by
operation of law or otherwise, except that at the election of the Parent, any
direct or indirect wholly owned Subsidiary of
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the Parent may be substituted for Mergerco in the Merger for all purposes of
this Agreement (including, but not limited to, the representations and
warranties of Mergerco herein).
SECTION 8.11 Entire Agreement; No Third Party Beneficiaries; Rights of
Ownership. This Agreement and the Confidentiality Agreement (including the
exhibits hereto and the documents and the instruments referred to herein and
therein): (a) constitute the entire agreement and supersede all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof, and (b) except as provided in Section 5.7 with respect to
the obligations of the Parent thereunder, are not intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder.
SECTION 8.12 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to the remedy of specific performance of the terms hereof, in addition
to any other remedy at law or equity.
SECTION 8.13 Counterparts. This Agreement may be executed in two or more
counterparts each of which shall be deemed to constitute an original and shall
become effective when one or more counterparts have been signed by each of the
parties hereto and delivered to the other parties.
SECTION 8.14 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed wholly within such state except to the extent
the provisions of the DGCL apply.
SECTION 8.15 Consent to Jurisdiction. Any action or proceeding seeking to
enforce any provision of, or based on any right arising out of, this Agreement
may be brought against any of the parties in the courts of the State of New
York, County of New York, or, if it has or can acquire jurisdiction, in the
United States District Court for the Southern District of New York, and each of
the parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.
SECTION 8.16 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, THE MERGER OR ANY OTHER CONTEMPLATED
TRANSACTIONS.
SECTION 8.17 Disclosure Schedule. The Disclosure Schedule is a part of this
Agreement as if fully set forth herein and all references to this Agreement
shall be deemed to include the Disclosure Schedule.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective duly authorized officers as of the date first above written.
CABLE CAR BEVERAGE CORPORATION
By: /s/ SAMUEL M. SIMPSON
...................................
Name: Samuel M. Simpson
Title: President
TRIARC COMPANIES, INC.
By: /s/ BRIAN L. SCHORR
...................................
Name: Brian L. Schorr
Title: Executive Vice President
CCB MERGER CORPORATION
By: /s/ BRIAN L. SCHORR
...................................
Name: Brian L. Schorr
Title: Executive Vice President
28
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EXHIBIT B TO AGREEMENT AND PLAN OF MERGER
FORM OF AFFILIATE AGREEMENT
, 1997
Triarc Companies, Inc.
280 Park Avenue
New York, NY 10017
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be deemed to
be an 'affiliate' of Cable Car Beverage Corporation, a Delaware corporation (the
'Company'), as the term 'affiliate' is defined for purposes of paragraphs (c)
and (d) of Rule 145 of the rules and regulations (the 'Rules and Regulations')
of the Securities and Exchange Commission (the 'Commission') under the
Securities Act of 1933, as amended (the 'Act'). Pursuant to the terms of the
Agreement and Plan of Merger, dated June 24, 1997 (the 'Agreement'), by and
among the Company, Triarc Companies, Inc., a Delaware corporation (the
'Parent'), and CCB Merger Corporation, a Delaware corporation and a wholly owned
subsidiary of the Parent ('Mergerco'), the Company will be merged with and into
Mergerco (the 'Merger').
As a result of the Merger, I will receive shares of Class A Common Stock,
par value $.10 per share, of the Parent (the 'Parent Stock') in exchange for
shares owned by me of Common Stock, $.01 par value per share, of the Company.
I represent, warrant, and covenant to the Parent that in the event I
receive any Parent Stock as a result of the Merger:
A. I shall not make any sale, transfer, or other disposition of the
Parent Stock in violation of the Act or the Rules and Regulations.
B. I have carefully read this letter and the Agreement and discussed
the requirements of such documents and other applicable limitations upon my
ability to sell, transfer, or otherwise dispose of the Parent Stock to the
extent I felt necessary, with my counsel or counsel for the Company.
C. I have been advised that the issuance of the Parent Stock to me
pursuant to the Merger has been registered with the Commission under the
Act on a Registration Statement on Form S-4. However, I have also been
advised that, since at the time the Merger was submitted for a vote of the
stockholders of the Company, I may be deemed to have been an affiliate of
the Company and the distribution by me of the Parent Stock has not been
registered under the Act, I may not sell, transfer or otherwise dispose of
the Parent Stock issued to me in the Merger unless (i) such sale, transfer,
or other disposition has been registered under the Act, (ii) such sale,
transfer, or other disposition is made in conformity with Rule 145
promulgated by the Commission under the Act, or (iii) in the opinion of
counsel reasonably acceptable to the Parent, or a 'no action' letter
obtained by the undersigned from the staff of the Commission, such sale,
transfer, or other disposition is otherwise exempt from registration under
the Act.
D. I understand that the Parent is under no obligation to register the
sale, transfer, or other disposition of the Parent Stock by me or on my
behalf under the Act or to take any other action necessary in order to make
compliance with an exemption from such registration available.
E. I also understand that stop transfer instructions will be given to
the Parent's transfer agent with respect to the Parent Stock and that there
will be placed on the certificates for the Parent Stock issued to me, or
any substitutions therefor, a legend stating in substance:
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF
1933 APPLIES. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE
TRANSFERRED IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT DATED
BETWEEN THE REGISTERED HOLDER HEREOF
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AND , A COPY OF WHICH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICES OF TRIARC COMPANIES, INC.
F. I also understand that unless the transfer by me of my Parent Stock
has been registered under the Act or is a sale made in conformity with the
provisions of Rule 145, the Parent reserves the right to put the following
legend on the certificates issued to my transferee:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED FROM A PERSON WHO
RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH RULE 145 PROMULGATED
UNDER THE SECURITIES ACT OF 1933 APPLIES. THE SHARES HAVE BEEN ACQUIRED
BY THE HOLDER NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY
DISTRIBUTION THEREOF WITHIN THE MEANING OF THE SECURITIES ACT OF 1933
AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933.
It is understood and agreed that the legends set forth in paragraphs E and
F above shall be removed by delivery of substitute certificates without such
legend if such legend is not required for purposes of the Act or the Agreement,
including sales under Rule 145(d). It is also understood and agreed that such
legends and the stop orders referred to above will be removed if (i) one (1)
year shall have elapsed from the date the undersigned became the beneficial
owner of the Parent Stock received in the Merger and the provisions of Rule
145(d)(2) are then available to the undersigned, (ii) two (2) years shall have
elapsed from the date the undersigned became the beneficial owner of the Parent
Stock received in the Merger and the provisions of Rule 145(d)(3) are then
applicable to the undersigned, or (iii) Parent has received either an opinion of
counsel, which opinion of counsel shall be reasonably satisfactory to the
Parent, or a 'no action' letter obtained by the undersigned from the staff of
the Commission, to the effect that the restrictions imposed by Rule 145 under
the Act no longer apply to the undersigned.
Execution of this letter should not be considered an admission on my part
that I am an 'affiliate' of the Company as described in the first paragraph of
this letter or as a waiver of any rights I may have to object to any claim that
I am such an affiliate on or after the date of this letter.
Very truly yours,
.....................................
Accepted this day of
, 1997 by
By:
..................................
Name:
Title:
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AMENDMENT NO. 1
TO
AGREEMENT AND PLAN OF MERGER
Amendment No. 1, dated as of September 30, 1997 ('Amendment'), by and among
Cable Car Beverage Corporation, a Delaware corporation (the 'Company'), Triarc
Companies, Inc., a Delaware corporation (the 'Parent'), and CCB Merger
Corporation, a Delaware corporation ('Mergerco'), to the Agreement and Plan of
Merger, dated June 24, 1997 (the 'Agreement'), by and among the Company, the
Parent and Mergerco.
Each of the parties to the Agreement have determined that it would be in
its best interest to amend the terms thereof to the extent set forth in this
Amendment.
Capitalized terms used in this Amendment and not otherwise defined herein
shall have the meanings ascribed to them in the Agreement.
Accordingly, the parties hereto agree as follows:
1. Amendments to the Agreement. The Agreement is hereby amended as
follows:
(a) Clause (y) of the second proviso contained in Section 5.1(g) of
the Agreement is hereby amended and restated in its entirety to read as
follows:
'(y) enter into a lease for office space in the greater Denver,
Colorado area not to exceed 4,500 square feet, at a cost per
square foot not to exceed $17.50 and for a term not to exceed four
(4) years;'
(b) Section 6.2 (i) of the Agreement is hereby amended by deleting
the phrase 'seven and one-half percent (7.5%)' appearing therein and
substituting in lieu thereof the phrase 'six percent (6%).'
2. Effective Date. Upon the execution and delivery hereof by each
party hereto, this Amendment shall have effect as and from the date on
which the Agreement was executed and delivered.
3. Confirmation of the Agreement. Except to the extent amended
specifically by this Amendment, the provisions of the Agreement are hereby
confirmed and shall remain in full force and effect. This Amendment is
limited as written and shall not be deemed (a) to be a consent under or a
waiver of any other term or condition of the Agreement or any of the
documents referred to therein or (b) to prejudice any right or rights which
any of the parties to the Agreement now has or may have in the future under
or in connection with the Agreement or any of the documents referred to
therein. Each reference to the 'Agreement' in the Agreement shall be a
reference to the Agreement as amended hereby.
4. Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their permitted successors
and assigns.
5. Representations and Warranties. Each party represents and warrants
to the others as follows: Such party has full corporate power and authority
to execute and deliver this Amendment. This Amendment has been duly
executed and delivered by such party and, assuming this Amendment
constitutes a valid and binding obligation of the other parties hereto,
constitutes a valid and binding obligation of such party enforceable
against such party in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency or other
similar laws, now or hereafter in effect, affecting creditors' rights
generally, and (ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought.
6. Governing Law. This Amendment, including, without limitation, the
validity hereof and the right and obligations of the parties hereunder,
shall be governed by and construed in accordance with the laws of the State
of New York applicable to contracts made and to be performed wholly within
such state except to the extent the provisions of the DGCL apply.
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7. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
CABLE CAR BEVERAGE CORPORATION
By: /S/ SAMUEL M. SIMPSON
..................................
Name: Samuel M. Simpson
Title: President
TRIARC COMPANIES, INC.
By: /S/ BRIAN L. SCHORR
..................................
Name: Brian L. Schorr
Title: Executive Vice President
CCB MERGER CORPORATION
By: /S/ BRIAN L. SCHORR
..................................
Name: Brian L. Schorr
Title: Executive Vice President
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APPENDIX B-2
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated June 24, 1997 (this 'Agreement'), by and
among Triarc Companies, Inc., a Delaware corporation (the 'Parent') and each of
the other parties signatory hereto (each, a 'Stockholder' and, collectively, the
'Stockholders').
RECITALS
A. Concurrently herewith, the Parent, CCB Merger Corporation, a Delaware
corporation and wholly owned subsidiary of the Parent ('Mergerco'), and Cable
Car Beverage Corporation, a Delaware corporation (the 'Company'), are entering
into an Agreement and Plan of Merger (as amended or modified from time to time,
the 'Merger Agreement'; capitalized terms used herein without definition shall
have the respective meanings ascribed to them in the Merger Agreement) pursuant
to which Mergerco will be merged with and into the Company (the 'Merger').
B. As of the date hereof, each of the Stockholders Beneficially Owns (as
defined below) the number of shares of the Common Stock, par value $.01 per
share, of the Company ('Company Common Stock') set forth opposite such
Stockholder's name on Schedule I hereto.
C. As an inducement and a condition to entering into the Merger Agreement,
the Parent has required that the Stockholders agree, and the Stockholders have
agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual premises,
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
1. Provisions Concerning Company Common Stock. Each Stockholder hereby
agrees that during the period commencing on the date hereof and continuing until
the first to occur of (i) the Effective Time and (ii) the termination of the
Merger Agreement in accordance with Section 7.1 thereof, at any meeting of the
holders of Company Common Stock, however called, or in connection with any
written consent of the holders of Company Common Stock, such Stockholder shall
vote (or cause to be voted) the Company Common Stock held of record or
Beneficially Owned by such Stockholder (but excluding the Company Common Stock
identified as Excluded Shares on Schedule I hereto), whether heretofore owned or
hereafter acquired (collectively, the 'Shares'), (i) in favor of approval of the
Merger Agreement and the transactions contemplated thereby (the 'Contemplated
Transactions'), including, without limitation, the Merger, and any actions
required in furtherance thereof; (ii) against any action or agreement that would
result in a breach in any respect of any covenant, representation or warranty or
any other obligation or agreement of the Company under the Merger Agreement or
the Contemplated Transactions; and (iii) except as otherwise agreed to in
writing in advance by the Parent, against the following actions (other than the
Merger and the other Contemplated Transactions): (A) any Acquisition Proposal;
or (B) (1) any change in a majority of the Stockholders who constitute the board
of directors of the Company; (2) any change in the present capitalization of the
Company or any amendment of the Company's certificate of incorporation or
by-laws; (3) any other material change in the Company's corporate structure or
business; or (4) any other action which is intended, or could reasonably be
expected, to prevent, or delay beyond the date specified in Section 7.1(b)(1) of
the Merger Agreement, the Merger or the Contemplated Transactions. Such
Stockholder shall not enter into any agreement or understanding with any Person
the effect of which would be inconsistent or violative of the provisions and
agreements contained in Section 1 or 3 hereof.
For purposes of this Agreement, 'Beneficially Own' or 'Beneficial
Ownership' with respect to any securities shall mean having 'beneficial
ownership' of such securities (as determined pursuant to Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the 'Exchange Act')), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing. Without duplicative counting of the same securities by the same holder,
securities Beneficially Owned by a Person shall include securities Beneficially
Owned by all other Persons with whom such Person would constitute a 'group' as
within the meanings of Section 13(d)(3) of the Exchange Act. For the purposes of
this Agreement, 'Person' means any individual, corporation (including any
non-profit corporation),
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general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization or other entity or Governmental
Authority.
2. Irrevocable Proxy. In the event the Stockholder shall fail to comply
with the provisions of Section 1, the Stockholder hereby agrees that such
failure shall result, without any further action by the Stockholder, in the
irrevocable appointment of the Parent and each of its officers, as its attorney
and proxy pursuant to the provisions of Section 212 of the General Corporation
Law of the State of Delaware, with full power of substitution, to vote and
otherwise act (by written consent or otherwise) with respect to the Shares which
the Stockholder is entitled to vote at any meeting of the holders of Company
Common Stock (whether annual or special and whether or not an adjourned or
postponed meeting) or consent in lieu of any such meeting or otherwise, on the
matters and in the manner specified in Section 1 (the 'Proxy'). This Proxy and
power of attorney is irrevocable and coupled with an interest. The Stockholder
hereby revokes all other proxies and powers of attorney with respect to such
Shares that it may have heretofore appointed or granted, and no subsequent proxy
or power of attorney shall be given or written consent executed (and if given or
executed, shall not be effective) by the Stockholder with respect thereto. All
obligations of the Stockholder under this Agreement shall be binding upon the
heirs, personal representatives, successors and/or assigns of the Stockholder.
3. Grant of Option. Each Stockholder severally grants to the Parent an
exclusive and irrevocable option (an 'Option') to purchase such Stockholder's
Shares in whole but not in part, subject to the provisions of Section 4 hereof,
at the Option Price (as defined below) at any time after the Company shall have
(a) delivered to the Parent a Transaction Notice or (b) shall have furnished
confidential information to any Person or entered into negotiations with any
Person with respect to an Acquisition Proposal; provided, that if the Merger
Agreement is terminated pursuant to Section 7.1(c)(iii), 7.1(d)(i) or
7.1(d)(iii) of the Merger Agreement and this Agreement does not terminate in
accordance with Section 5 hereof, then the Options granted hereunder shall
expire at 5:00 p.m. (New York City time) on the tenth (10th) Business Day
following such termination of the Merger Agreement unless the Parent shall have
delivered a written notice to each Stockholder of its exercise of the Options in
accordance with Section 4 hereof. For purposes of this Agreement, the 'Option
Price' with respect to each share of Company Common Stock to be purchased by the
exercise of any Option shall be an amount in cash equal to the product obtained
by multiplying (a) 0.1722 (the 'Option Conversion Price') times (b) the Option
Average Parent Share Price (as defined below); provided, that (i) if the Option
Average Parent Share Price shall be less than $18.875, then the Option
Conversion Price shall be adjusted so that it shall equal the quotient obtained
by dividing (A) $3.25 by (B) the Option Average Parent Share Price, and (ii) if
the Option Average Parent Share Price shall be greater than $24.50, then the
Option Conversion Price shall be adjusted so that it shall equal the quotient
obtained by dividing (x) $4.22 by (y) the Option Average Share Price. For the
purposes of this Section 3, 'Option Average Share Price' means the average
(without rounding) of the closing prices per share of Parent Class A Common
Stock on the NYSE on the NYSE Composite Tape for the fifteen (15) consecutive
trading days ending on the NYSE trading day immediately preceding the date of
the closing of the exercise of the Option.
4. Exercise of Option. The Parent shall exercise each and every Option
granted hereunder simultaneously. In the event the Parent wishes to exercise the
Options, the Parent shall send a written notice to each Stockholder specifying
the place (which shall be either Denver, Colorado or New York, New York), time
and date (which, to the extent practicable in the reasonable judgment of the
Parent, shall be no earlier than forty-eight (48) hours after the delivery of
such notice) for the closing of such purchase. At the closing for the exercise
of the Options:
(a) the Parent shall deliver to each Stockholder a certified or bank
check or checks payable to or upon the order of such Stockholder in an
amount equal to the aggregate Option Price of the Shares being purchased
from such Stockholder; and
(b) each Stockholder shall deliver to the Parent a duly executed
certificate or certificates representing the number of Shares being
purchased duly endorsed in blank or accompanied by appropriate stock powers
duly endorsed in blank.
5. Termination. This Agreement, including the Options granted hereunder,
shall terminate on the earlier to occur of (a) the Effective Time; (b) the
termination of the Merger Agreement pursuant to the following provisions of the
Merger Agreement: Section 7.1(a), 7.1(b), 7.1(c)(i) or 7.1(d)(iv), or Section
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7.1(c)(iii), 7.1(d)(i) or 7.1(d)(iii), provided that in the case of a
termination of the Merger Agreement pursuant to Section 7.1(c)(iii), 7.1(d)(i)
or 7.1(d)(iii) of the Merger Agreement, this Agreement shall terminate only if
the Company or its stockholders shall not have received an Acquisition Proposal,
and the Board of Directors of the Company shall not have withdrawn, or modified
or changed in a manner adverse to the Parent or Mergerco, its approval or
recommendation of the Merger Agreement or the Merger; and (c) the date that is
31 days after the date set forth in Section 7.1(b)(i) of the Merger Agreement,
as such date as set forth in Section 7.1(b)(i) of the Merger Agreement may be
extended, modified or waived from time to time in accordance with the provisions
of the Merger Agreement.
6. Representations and Warranties. Each Stockholder hereby represents and
warrants to the Parent and Mergerco as follows:
(a) Ownership of Company Common Stock. Such Stockholder is, as of the
date hereof, the record and Beneficial Owner of the number of shares of
Company Common Stock set forth opposite such Stockholder's name on Schedule
I hereto. On the date hereof, the Company Common Stock set forth opposite
such Stockholder's name on Schedule I hereto constitutes all of the Company
Common Stock owned of record or Beneficially Owned by such Stockholder.
Such Stockholder has good and valid title, and sole voting power and sole
power to issue instructions with respect to the matters set forth in
Section 1 hereof, sole power of disposition, sole power of conversion, sole
power to demand appraisal rights and sole power to agree to all of the
matters set forth in this Agreement (including, without limitation, to
execute and deliver the Proxy), in each case with respect to all of the
Company Common Stock set forth opposite such Stockholder's name on Schedule
I hereto, with no limitations, qualifications, encumbrances or restrictions
on such rights (other than those created under this Agreement) except as
set forth on Schedule I hereto.
(b) Power, Binding Agreement. Such Stockholder has the legal capacity,
power and authority to enter into and perform all of such Stockholder's
obligations under this Agreement. The execution, delivery and performance
of this Agreement by such Stockholder will not violate any other agreement
to which such Stockholder is a party. This Agreement has been duly and
validly executed and delivered by such Stockholder and constitutes a valid
and binding agreement of such Stockholder, enforceable against such
Stockholder in accordance with its terms, except that (i) such enforcement
may be subject to applicable bankruptcy, insolvency or other similar laws,
now or hereafter in effect, affecting creditors' rights generally, and (ii)
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought. There is
no beneficiary or holder of a voting trust certificate or other interest of
any trust of which such Stockholder is trustee who is not a party to this
Agreement and whose consent is required for the execution and delivery of
this Agreement or the consummation by such Stockholder of the transactions
contemplated hereby. The Stockholder has not entered into any voting
agreement or trust or other stockholder agreement with respect to any
Company Common Stock Beneficially Owned or held of record by such
Stockholder or granted to any Person any proxy (revocable or irrevocable)
or power-of-attorney with respect to such Company Common Stock other than
the Proxy expressly contemplated hereby. If such Stockholder is married and
such Stockholder's Company Common Stock constitutes community property,
this Agreement has been duly authorized, executed and delivered by, and
constitutes a valid and binding agreement of, such Stockholder's spouse.
(c) No Conflicts. (i) Other than the filing of Forms 13-D pursuant to
the Securities Exchange Act of 1934, as amended, and such other filings,
consents, authorizations and approvals as are contemplated by the Merger
Agreement, no filing with, and no permit, authorization, consent or
approval of, any Governmental Authority is necessary for the execution of
this Agreement by such Stockholder and the consummation by such Stockholder
of the transactions contemplated hereby.
(ii) None of the execution and delivery of this Agreement by such
Stockholder, the consummation by such Stockholder of the transactions
contemplated hereby or compliance by such Stockholder with any of the
provisions hereof shall (A) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms,
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conditions or provisions of its governing documents (as applicable) or any
note, bond, mortgage, indenture, license, contract, commitment,
arrangement, understanding, agreement or other instrument or obligation of
any kind to which such Stockholder is a party or by which such Stockholder
or any of such Stockholder's properties or assets may be bound, or (B)
violate any order, writ, injunction, decree, judgment, order, statute, rule
or regulation applicable to such Stockholder or any of such Stockholder's
properties or assets.
(d) As of the date hereof, there is (i) no suit, claim, action,
proceeding, review or investigation pending, or to the knowledge of such
Stockholder, threatened against the Stockholder, and (ii) no judgment,
decree, order, writ or injunction of any Governmental Authority to which
the Stockholder or his or her assets are subject, that could materially
impair the ability of the Stockholder to perform his or her obligations
hereunder or to consummate the transactions contemplated hereby.
(e) No Finder's Fees. No broker, investment banker, financial advisor
or other Stockholder is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the Merger
or the other Contemplated Transactions based upon arrangements made by or
on behalf of such Stockholder or any of his or her affiliates or, to the
knowledge of such Stockholder, the Company or any of its affiliates, other
than the fee payable to Montgomery Securities in connection with its
providing financial advice to the Company and the Company's Board of
Directors and delivery of the Company Fairness Opinion.
(f) Reliance by the Parent. Such Stockholder understands and
acknowledges that the Parent is entering into the Merger Agreement in
reliance upon such Stockholder's execution and delivery of this Agreement.
7. Covenants.
(a) Other Potential Acquirors. Such Stockholder (i) shall immediately cease
any existing discussions or negotiations, if any, with any parties conducted
heretofore with respect to any potential Acquisition Proposal, in his or her
capacity as such, and (ii) from and after the date hereof shall not, in such
capacity, directly or indirectly, initiate, solicit or encourage (including by
way of furnishing non-public information or assistance), engage in any
discussions or negotiations with respect to, or take any other action to
facilitate, any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, an Acquisition Proposal, or agree to or
endorse any Acquisition Proposal, or authorize or permit any of such
Stockholder's agents to do so, and such Stockholder shall promptly notify the
Parent of any offers, proposals, inquiries or Acquisition Proposals and shall
provide a copy of any such written proposal and a summary of any oral proposal
to the Parent immediately after receipt thereof (and shall specify the material
terms and conditions of such proposal and identify the Person making such
proposal) and thereafter keep the Parent promptly advised of any developments
with respect thereto.
(b) Restriction on Transfer, Proxies and Non-Interference. Such Stockholder
shall not, directly or indirectly, except as contemplated by the Merger
Agreement and this Agreement: (i) offer for sale, sell, transfer, tender,
pledge, encumber, assign or otherwise dispose of, or enter into any contract,
option or other arrangement or understanding with respect to or consent to the
offer for sale, sale, transfer, tender, pledge, encumbrance, assignment or other
disposition of, any or all of such Stockholder's Shares or any interest therein;
(ii) grant any proxies or powers of attorney, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any Shares; or (iii) take
any action that would make any representation or warrant of such Stockholder
contained herein untrue or incorrect or have the effect of preventing or
disabling such Stockholder from performing such Stockholder's obligations under
this Agreement.
8. Further Assurances. From time to time, at the Parent's request and
without further consideration, each Stockholder shall execute and deliver such
additional documents and take all such further lawful action as may be
reasonably necessary or desirable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement.
9. Stop Transfer. Each Stockholder agrees with, and covenants to, the
Parent that such Stockholder shall not request that the Company register the
transfer (book-entry or otherwise) of any certificate or
4
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<PAGE>
uncertificated interest representing any of such Stockholder's Shares, unless
such transfer is made in compliance with this Agreement. In the event of a stock
dividend or distribution, or any change in the Company Common Stock by reason of
any stock dividend, split-up, recapitalization, combination, exchange of Company
Common Stock or the like, the term 'Company Common Stock' shall be deemed to
refer to and include the Company Common Stock as well as all such stock
dividends and distributions and any Company Common Stock into which or for which
any or all of the Company Common Stock may be changed or exchanged.
10. Disclosure. Each Stockholder hereby agrees to permit the Parent to
publish and disclose in the S-4 and the Proxy Statement (including all documents
and schedules filed with the SEC), and any press release or other disclosure
document which the Parent, in its sole discretion, determines to be necessary or
desirable in connection with the Merger and any transactions related thereto,
such Person's identity and ownership of Company Common Stock and the nature of
his or her commitments, arrangements and understandings under this Agreement.
11. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire agreement among
the parties with respect to the subject matter hereof and supersedes all other
prior agreements and understandings, both written and oral, between the parties
with respect to the subject matter hereof.
(b) Certain Events. Each Stockholder agrees that this Agreement and the
obligations hereunder shall attach to such Stockholder's Shares and shall be
binding upon any person or entity to which legal or beneficial ownership of such
Shares shall pass, whether by operation of law or otherwise, including, without
limitation, such Stockholder's heirs, guardians, administrators or successors.
Notwithstanding any transfer of his or her Shares, the transferor shall remain
liable for the performance of all obligations under this Agreement of the
transferor.
(c) Assignment. This Agreement shall not be assigned by the Company or any
Stockholder by operation of law or otherwise without the prior written consent
of the other party. The Parent may assign, in its sole discretion, its rights
and obligations hereunder to any direct or indirect wholly owned subsidiary of
the Parent.
(d) Amendments, Waivers, Etc. This Agreement may not be amended, changed,
supplemented, waived or otherwise modified or, except as expressly provided
herein, terminated, with respect to any Stockholder, except upon the execution
and delivery of a written agreement executed by such Stockholder and the Parent;
provided that Schedule I hereto may be supplemented by the Parent by adding the
name and other relevant information concerning any Stockholder of the Company
who agrees to be bound by the terms of this Agreement without the agreement of
any other party hereto, and thereafter such added Stockholder shall be treated
as a 'Stockholder' for all purposes of this Agreement.
(e) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered by messenger,
transmitted by telecopier, telex or telegram or mailed by registered or
certified mail, postage prepaid, as follows:
If to any Stockholder: At the addresses set forth on Schedule I hereto
with a copy to: Krys Boyle Freedman Scott & Sawyer, P.C.
Dominion Plaza
600 Seventeenth Street
Suite 2700, South Tower
Denver, Colorado 80202
Attention: Thomas Boyle, Esq.
Telecopy: (303) 893-2882
If to the Parent: Triarc Companies, Inc.
280 Park Avenue
New York, New York 10017
Attention: Brian L. Schorr, Esq.
Telecopy: (212) 451-3216
5
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<PAGE>
with a copy to: Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Neale M. Albert, Esq.
Telecopy: (212) 373-2315
Except as otherwise specified herein, all notices and other communications
shall be considered to have been duly given on the first to occur of (a) the
date of delivery if delivered personally on a Business Day during normal
business hours, and if not, on the next occurring Business Day, (b) five (5)
days following posting if transmitted by mail, (c) the date of transmission with
confirmed answer-back if transmitted by telex on a Business Day during normal
business hours, and if not, on the next occurring Business Day, or (d) the date
of receipt if transmitted by telecopier or facsimile on a Business Day during
normal business hours, and if not, on the next occurring Business Day. Any party
may change his, her or its address for purposes hereof by notice to the other
party given as provided in this Section 9(e).
(f) Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
(g) Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach, the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
(h) Remedies Cumulative. All rights, powers and remedies provided under
this Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise of any thereof by any
party shall not preclude the simultaneous or later exercise of any other such
right, power or remedy by such party.
(i) No Waiver. The failure of any party hereto to exercise any right, power
or remedy provided under this Agreement or otherwise available in respect hereof
at law or in equity, or to insist upon compliance by any other party hereto with
his, her or its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by such party
of his, her or its right to exercise any such or other right, power or remedy or
to demand such compliance.
(j) No Third Party Beneficiaries. This Agreement is not intended to be for
the benefit of, and shall not be enforceable by, any person or entity who or
which is not a party hereto.
(k) Descriptive Headings. The descriptive headings used herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
(l) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which, taken together shall
constitute one and the same Agreement.
(m) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF, EXCEPT TO THE EXTENT THAT THE GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE APPLY.
(N) NO LIMITATION OF FIDUCIARY DUTIES. THE PARTIES HERETO ACKNOWLEDGE AND
AGREE THAT NONE OF THE PROVISIONS HEREIN SHALL BE DEEMED TO RESTRICT OR LIMIT
ANY FIDUCIARY DUTY ANY OF THE STOCKHOLDERS MAY HAVE AS A MEMBER OF THE BOARD OF
DIRECTORS OF THE COMPANY; PROVIDED, THAT
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NO SUCH DUTY SHALL EXCUSE ANY OF THE STOCKHOLDERS FROM HIS OBLIGATIONS AS A
STOCKHOLDER TO VOTE THE SHARES OF THE COMPANY COMMON STOCK AS HEREIN PROVIDED,
AND TO OTHERWISE COMPLY WITH EACH OF THE TERMS AND CONDITIONS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the Parent and each Stockholder have caused this
Agreement to be duly executed as of the day and year first above written.
TRIARC COMPANIES, INC.
By: /s/ BRIAN L. SCHORR
...................................
Name: Brian L. Schorr
Title: Executive Vice President
STOCKHOLDERS:
/s/ SAMUEL M. SIMPSON
.....................................
Samuel M. Simpson
/s/ SUSAN L. NEFF
.....................................
Susan L. Neff
/s/ WILLIAM H. RUTTER
.....................................
William H. Rutter
/s/ SUSAN L. FRALICK
.....................................
Susan L. Fralick
ACKNOWLEDGMENT:
The undersigned hereby acknowledges the terms and provisions of Section 9
of this Agreement.
CABLE CAR BEVERAGE CORPORATION
By: /s/ SAMUEL M. SIMPSON
...................................
Name: Samuel M. Simpson
Title: President
7
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<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
SHARES OF
COMPANY EXCLUDED
STOCKHOLDER NAME AND ADDRESS COMMON STOCK SHARES SHARES
- ----------------------------------------------------------------------- ------------ ---------- -------
<S> <C> <C> <C>
Samuel M. Simpson ..................................................... 723,643 0 723,643(1)
3005 Cherry Ridge Road
Cherry Hills Village, CO 80110
Susan L. Neff ......................................................... 381,234 0 381,234
3005 Cherry Ridge Road
Cherry Hills Village, CO 80110
William H. Rutter ..................................................... 666,532 10,000(2) 656,532
1868 South Highland Drive
Moab, UT 84532
Susan L. Fralick ...................................................... 7,200 5,000(3) 2,200
1868 South Highland Drive
Moab, UT 84532
</TABLE>
- ------------
(1) 60,000 of Mr. Simpson's Shares have been pledged to William H. Rutter as
security.
(2) Mr. Rutter's Excluded Shares are comprised of 10,000 shares in a trust for
his benefit, for which Cynthia S. Rutter is trustee.
(3) Ms. Fralick's Excluded Shares are comprised of 5,000 shares in an IRA
account.
<PAGE>
<PAGE>
AMENDMENT NO. 1 TO STOCKHOLDERS AGREEMENT
AMENDMENT NO. 1, dated as of July 9, 1997 (this 'Amendment'), to
Stockholders Agreement, dated June 24, 1997 (the 'Stockholders Agreement'), by
and among Triarc Companies, Inc., a Delaware corporation (the 'Parent'), and
Samuel M. Simpson, Susan L. Neff, William H. Rutter and Susan L. Fralick
(collectively, the 'Stockholders').
The Parent and each of the Stockholders desire to amend and restate
Schedule I to the Stockholders Agreement to correct an inadvertent error therein
and hereby agree as follows:
1. Amendment. Schedule I to the Stockholders Agreement is hereby amended
and restated in its entirety in the the form attached hereto as Exhibit A.
2. Entire Agreement. This Agreement sets forth the entire understanding and
agreement of the parties hereto in relation to the subject matter hereof. None
of the terms or conditions of this Amendment may be changed, modified, waived or
canceled except by a writing signed by all parties hereto.
3. Full Force and Effect. Except as hereby specifically amended, the
Stockholders Agreement is hereby confirmed and ratified in all respects and
shall remain in full force and effect according to its terms. All references in
the Stockholders Agreement to the 'Agreement' shall mean the Stockholders
Agreement as amended hereby.
4. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together constitute one and the same instrument.
5. Governing Law. This Amendment shall be construed in accordance with and
governed by the laws of the State of New York without giving effect to its
principles of conflicts of law.
IN WITNESS WHEREOF, the Parent and each Stockholder have caused this
Amendment No. 1 to be duly executed as of the day and year first above written.
TRIARC COMPANIES, INC.
By: /s/ BRIAN L. SCHORR
.................................
Name: Brian L. Schorr
Title: Executive Vice President
STOCKHOLDERS:
/s/ SAMUEL M. SIMPSON
.....................................
Samuel M. Simpson
/s/ SUSAN L. NEFF
.....................................
Susan L. Neff
/s/ WILLIAM H. RUTTER
.....................................
William H. Rutter
/s/ SUSAN L. FRALICK
.....................................
Susan L. Fralick
<PAGE>
<PAGE>
EXHIBIT A
SCHEDULE I
<TABLE>
<CAPTION>
SHARES OF
COMPANY EXCLUDED
STOCKHOLDER NAME AND ADDRESS COMMON STOCK SHARES SHARES
- ----------------------------------------------------------------------- ------------ ---------- -------
<S> <C> <C> <C>
Samuel M. Simpson ..................................................... 723,643 0 723,643(1)
3005 Cherry Ridge Road
Cherry Hills Village, CO 80110
Susan L. Neff ......................................................... 381,234 0 381,234
3005 Cherry Ridge Road
Cherry Hills Village, CO 80110
William H. Rutter ..................................................... 666,532 10,000(2) 656,532
1868 South Highland Drive
Moab, UT 84532
Susan L. Fralick ...................................................... 7,200 2,200(3) 5,000
1868 South Highland Drive
Moab, UT 84532
</TABLE>
- ------------
(1) 60,000 of Mr. Simpson's Shares have been pledged to William H. Rutter as
security.
(2) Mr. Rutter's Excluded Shares are comprised of 10,000 shares in a trust for
his benefit, for which Cynthia S. Rutter is trustee.
(3) Ms. Fralick's Excluded Shares are comprised of 2,200 shares in an IRA
account.
<PAGE>
<PAGE>
APPENDIX C
[LETTERHEAD OF MONTGOMERY SECURITIES]
June 24, 1997
Board of Directors
Cable Car Beverage Corporation
717 17th Street, Suite 1475
Denver, Colorado 80202
Gentlemen:
We understand that Cable Car Beverage Corporation, a Delaware corporation
('Seller'), and Triarc Companies, Inc., a Delaware corporation ('Buyer'), have
entered into a Merger Agreement dated June 24, 1997 (the 'Merger Agreement'),
pursuant to which Seller will be merged with and into Buyer, which will be the
surviving entity (the 'Merger'). Pursuant to the Merger, as more fully described
in the Merger Agreement and as further described to us by management of Seller,
we understand that each outstanding share of the common stock, $.01 par value
per share ('Seller Common Stock'), of Seller will be converted into and
exchangeable for 0.1722 shares of the Class A common stock, $.10 par value per
share ('Buyer Common Stock'), of Buyer, subject to certain adjustments (the
'Consideration'). The terms and conditions of the Merger are set forth in more
detail in the Merger Agreement.
You have asked for our opinion as investment bankers as to whether the
Consideration to be received by the stockholders of Seller pursuant to the
Merger is fair to such stockholders from a financial point of view, as of the
date hereof. In connection with this assignment, on June 19, 1997 we presented
to the Board of Directors of Seller a summary of our financial analysis and our
oral opinion as to the matters set forth in this letter. As you are aware, we
were not retained to nor did we advise Seller with respect to alternatives to
the Merger or Seller's underlying decision to proceed with or effect the Merger.
Further, we were not requested to nor did we solicit or assist Seller in
soliciting indications of interest from third parties for all or any part of
Seller.
In connection with our opinion, we have, among other things: (i) reviewed
certain publicly available financial and other data with respect to Seller and
Buyer, including the consolidated financial statements for recent years and
interim periods to March 31, 1997 and certain other relevant financial and
operating data relating to Seller and Buyer made available to us from published
sources and from the internal records of Seller and Buyer, (ii) reviewed the
financial terms and conditions of the Merger Agreement; (iii) reviewed certain
publicly available information concerning the trading of, and the trading market
for, Seller Common Stock and Buyer Common Stock; (iv) compared Seller and Buyer
from a financial point of view with certain other companies in the beverage
industry which we deemed to be relevant; (v) considered the financial terms, to
the extent publicly available, of selected recent business combinations of
companies in the beverage industry which we deemed to be comparable, in whole or
in part, to the Merger; (vi) reviewed and discussed with representatives of the
management of Seller and Buyer certain information of a business and financial
nature regarding Seller and Buyer, furnished to us by them, including financial
forecasts and related assumptions of Seller and Buyer; (vii) made inquiries
regarding and discussed the Merger and the Merger Agreement and other matters
related thereto with Seller's counsel; and (viii) performed such other analyses
and examinations as we have deemed appropriate.
In connection with our review, we have not assumed any obligation
independently to verify the foregoing information and have relied on its being
accurate and complete in all material respects. With respect to the financial
forecasts for Seller and Buyer provided to us by their respective managements,
upon their advice and with your consent we have assumed for purposes of our
opinion that the forecasts (including the assumptions regarding the recent
acquisition of Snapple Beverage Corp. by Buyer) have been reasonably prepared on
bases reflecting the best available estimates and judgments of their respective
managements at the time through the date hereof as to the future financial
performance of Seller and Buyer and that they provide a reasonable basis upon
which we can form our opinion. We
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have also assumed that there have been no material changes in Seller's or
Buyer's assets, financial condition, results of operations, business or
prospects since the respective dates of their last financial statements made
available to us. We have relied on advice of the counsel and the independent
accountants to Seller as to all legal and financial reporting matters with
respect to Seller, the Merger and the Merger Agreement. We have assumed that the
Merger will be consummated in a manner that complies in all respects with the
applicable provisions of the Securities Act of 1933, as amended (the 'Securities
Act'), the Securities Exchange Act of 1934 and all other applicable federal and
state statutes, rules and regulations. In addition, we have not assumed
responsibility for making an independent evaluation, appraisal or physical
inspection of any of the assets or liabilities (contingent or otherwise) of
Seller or Buyer, nor have we been furnished with any such appraisals. Finally,
our opinion is based on economic, monetary and market and other conditions as in
effect on, and the information made available to us as of, the date hereof.
Accordingly, although subsequent developments may affect this opinion, we have
not assumed any obligation to update, revise or reaffirm this opinion.
We have further assumed with your consent that the Merger will be
consummated in accordance with the terms described in the Merger Agreement,
without any further amendments thereto, and without waiver by Seller of any of
the conditions to its obligations thereunder.
Based upon the foregoing and in reliance thereon, it is our opinion as
investment bankers that the Consideration to be received by the stockholders of
Seller pursuant to the Merger is fair to such stockholders from a financial
point of view, as of the date hereof.
We are not expressing (and cannot express) an opinion regarding the price
at which the Buyer Common Stock may trade at any future time. The Consideration
to be received by the stockholders of Seller pursuant to the Merger is based
upon a fixed exchange ratio (subject to a collar) and, accordingly, the market
value of the Consideration may vary significantly from what such stockholder
would receive if the Merger were completed today. Additionally, the market value
of the Consideration received in the Merger can be expected to change after
consummation of the Merger as the trading price of Buyer's Securities changes in
the ordinary course (or otherwise) of purchases and sales in the open market.
This opinion is directed to the Board of Directors of Seller in its
consideration of the Merger and is not a recommendation to any stockholder as to
how such stockholder should vote with respect to the Merger. Further, this
opinion addresses only the financial fairness of the Consideration to the
stockholders and does not address any other aspect of the Merger including,
without limitation, the relative merits of the Merger, any alternatives to the
Merger or Seller's underlying decision to proceed with or effect the Merger.
This opinion may not be used or referred to by Seller, or quoted or disclosed to
any person in any manner, without our prior written consent, which consent is
hereby given to the inclusion of this opinion in any proxy statement or
prospectus filed with the Securities and Exchange Commission in connection with
the Merger. In furnishing this opinion, we do not admit that we are experts
within the meaning of the term 'experts' as used in the Securities Act and the
rules and regulations promulgated thereunder, nor do we admit that this opinion
constitutes a report or valuation within the meaning of Section 11 of the
Securities Act.
Very truly yours,
MONTGOMERY SECURITIES
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APPENDIX D
APPRAISAL RIGHTS
PROVISIONS OF THE
DELAWARE GENERAL CORPORATION LAW
Section 262. Appraisal Rights.
(a) Any stockholder of a corporation of this State who holds shares of
stock on the date of the making of a demand pursuant to subsection (d) of this
section with respect to such shares, who continuously holds such shares through
the effective date of the merger or consolidation, who has otherwise complied
with subsection (d) of this section and who has neither voted in favor of the
merger or consolidation nor consented thereto in writing pursuant to sec. 228 of
this title shall be entitled to an appraisal by the Court of Chancery of the
fair value of his shares of stock under the circumstances described in
subsections (b) and (c) of this section. As used in this section, the word
'stockholder' means a holder of record of stock in a stock corporation and also
a member of record of a nonstock corporation; the words 'stock' and 'share' mean
and include what is ordinarily meant by those words and also membership or
membership interest of a member of a nonstock corporation; and the words
'depository receipt' mean a receipt or other instrument issued by a depository
representing an interest in one or more shares, or fractions thereof, solely of
stock of a corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to sec. 251 (other than a merger effected pursuant to
subsection (g) of sec. 251), 252, 254, 257, 258, 263 or 264 of this title:
(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which
stock, or depository receipt in respect thereof, at the record date fixed
to determine the stockholders entitled to receive notice of and to vote at
the meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of sec. 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to sec.
251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock
anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock (or depository receipts in
respect thereof) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national securities
exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph;
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this
paragraph.
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(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under sec. 253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a
meeting of stockholders, the corporation, not less than 20 days prior to
the meeting, shall notify each of its stockholders who was such on the
record date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsection (b) or (c) hereof that
appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of his shares
shall deliver to the corporation, before the taking of the vote on the
merger or consolidation, a written demand for appraisal of his shares. Such
demand will be sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends thereby to
demand the appraisal of his shares. A proxy or vote against the merger or
consolidation shall not constitute such a demand. A stockholder electing to
take such action must do so by a separate written demand as herein
provided. Within 10 days after the effective date of such merger or
consolidation, the surviving or resulting corporation shall notify each
stockholder of each constituent corporation who has complied with this
subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become
effective; or
(2) If the merger or consolidation was approved pursuant to 'SS' 228
or 'SS' 253 of this title, each constituent corporation, either before the
effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal rights
of the approval of the merger or consolidation and that appraisal rights
are available for any or all shares of such class or series of stock of
such constituent corporation, and shall include in such notice a copy of
this section; provided that, if the notice is given on or after the
effective date of the merger or consolidation, such notice shall be given
by the surviving or resulting corporation to all such holders of any class
or series of stock of a constituent corporation that are entitled to
appraisal rights. Such notice may, and, if given on or after the effective
date of the merger or consolidation, shall, also notify such stockholders
of the effective date of the merger or consolidation. Any stockholder
entitled to appraisal rights may, within twenty days after the date of
mailing of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of such holder's shares. If such notice did not notify
stockholders of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of the holders
of any class or series of stock of such constituent corporation that are
entitled to appraisal rights of the effective date of the merger or
consolidation or (ii) the surviving or resulting corporation shall send
such a second notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is sent more
than 20 days following the sending of the first notice, such second notice
need only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in accordance with
this subsection. An affidavit of the secretary or assistant secretary or of
the transfer agent of the corporation that is required to give either
notice that such notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice, each
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constituent corporation may fix, in advance, a record date that shall be
not more than 10 days prior to the date the notice is given; provided that,
if the notice is given on or after the effective date of the merger or
consolidation, the record date shall be such effective date. If no record
date is fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next preceding the
day on which the notice is given.
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who has
complied with subsections (a) and (d) hereof and who is otherwise entitled to
appraisal rights, may file a petition in the Court of Chancery demanding a
determination of the value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any stockholder shall have the right to
withdraw his demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the merger
or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not voted
in favor of the merger or consolidation and with respect to which demands for
appraisal have been received and the aggregate number of holders of such shares.
Such written statement shall be mailed to the stockholder within 10 days after
his written request for such a statement is received by the surviving or
resulting corporation or within 10 days after expiration of the period for
delivery of demands for appraisal under subsection (d) hereof, whichever is
later.
(f) Upon the filing of any such petition by a stockholder, service of a
copy thereof shall be made upon the surviving or resulting corporation, which
shall within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the addresses
therein stated. Such notice shall also be given by 1 or more publications at
least 1 week before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington, Delaware, or such publication
as the Court deems advisable. The forms of the notices by mail and by
publication shall be approved by the Court, and the costs thereof shall be borne
by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has submitted his
certificates of stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally determined that he is
not entitled to appraisal rights under this section.
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(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertified stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded his appraisal rights as provided in subsection (d)
of this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation); provided,
however, that if no petition for an appraisal shall be filed within the time
provided in subsection (e) of this section, or if such stockholder shall deliver
to the surviving or resulting corporation a written withdrawal of his demand for
an appraisal and an acceptance of the merger or consolidation, either within 60
days after the effective date of the merger or consolidation as provided in
subsection (e) of this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal shall cease.
Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery
shall be dismissed as to any stockholder without the approval of the Court, and
such approval may be conditioned upon such terms as the Court deems just.
(1) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.
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