Triarc Companies, Inc.
280 Park Avenue
New York, New York  10017
 

 
December 13, 2007
 

Mr. Francis T. McCarron
280 Park Avenue
New York, New York  10017

Re:           Separation of Employment

Dear Mr. McCarron:
 
This letter agreement (the “Letter Agreement”) confirms the arrangement between
you and Triarc Companies, Inc., a Delaware corporation (collectively with its
subsidiaries, “Triarc” or the “Company”), regarding the termination of your
employment by Triarc as a result of its decision to close its New York
headquarters.  Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Severance Agreement dated April 28, 2006 between you
and Triarc, (collectively with all amendments and related agreements, including
the Agreement dated December 21, 2006 between you and Triarc and the Amendment
dated January 29, 2007 between you and Triarc, the “Severance Agreement”).
 
1.  
Your separation of employment will be treated as a termination by you for Good
Reason under the terms of the Severance Agreement, as modified by this
Agreement.  Parties agree that (i) your asserted grounds for “Good Reason”
include the Company’s decision to replace you as Chief Financial Officer and the
Company’s requirement that the Chief Financial Officer have a primary place of
employment outside of Manhattan, New York in Atlanta and (ii) the Company failed
to cure such asserted “Good Reason” events with thirty (30) days after you gave
written notice of Good Reason.  You agree that (i) you shall no longer serve as
an officer of the Company effective December 29, 2007 and (ii) your last date of
employment shall be January, 1 2008 (the “Termination Date”) and through the
Termination Date you shall continue to receive your Base Salary and benefits as
currently provided by the Company and in accordance with regular payroll
practices.

 
2.  
You and the Company agree that, conditioned on your compliance with the terms of
the Severance Agreement regarding your post-termination obligations, the
payments arising under the Severance Agreement shall be paid (less the aggregate
amount required by law to be withheld under federal, state and local withholding
requirements) as follows on the first business day following the expiration of
six months from the Consulting Termination Date, as defined in the Consulting
Agreement dated December 13, 2007 (“Consulting Agreement”), (the “Payment
Commencement Date”):

 
(a)  
a lump sum payment equal to the sum of (i) $4,482,000 (representing seventy-five
percent (75%) of the product of 2 ½ and the sum of the your Base Salary of
$575,000 and 2006 Bonus Amount of $1,815,400)(such amount plus the amount
provided for in subparagraph (b) below the “Severance Amount”), (ii) interest on
the amount of $4,482,000 for a period of 4.5 months calculated, per annum, at
the simple rate of LIBOR plus 450 bp, (iii) $2,000,000 (representing the parties
agreement as to your “2007 Bonus Amount”); and (iv) interest on the amount of
$2,000,000 for a period of 6.5 months calculated, per annum, at the simple rate
of LIBOR plus 450 bp;

 
(b)  
commencing as of the Payment Commencement Date, three equal monthly installments
of $498,000, (aggregating $1,494,000 and representing the remaining 25% of the
Severance Amount).  The first installment payment shall be paid at the same time
as the lump sum payment described above, the second installment payment shall be
paid on November 1, 2008, and the final installment payment shall be paid on
December 1, 2008;

 
(c)  
in no event shall the sum of (a) the Severance Amount and (b) the 2007 Bonus
Amount, in each case excluding interest, be either less than or exceed
$7,976,000.  The sum of the Severance Amount and the 2007 Bonus Amount plus
interest thereon to the extent actually paid by the Company to you shall be
referred to as the “Payment Amount”.  All payments shall be made by the end of
calendar year 2008.

 
3.  
Except as provided for herein, or in the Severance Agreement (as modified by
this Agreement), or with respect to any vested rights under any plans or
arrangements maintained by the Company or its affiliates or under the terms of
the Consulting Agreement, you shall not be entitled to any further payments,
bonuses, compensation, severance or other incentive payments with respect to
your service with the Company or the termination of such service.

 
4.  
If you die prior to the Payment Commencement Date, any payment due on account of
your Severance Agreement (as modified by this Agreement) shall be made to the
legal guardian of your estate on the first business day of the month following
the month of your death, as follows:

 
(a)  
a lump sum payment equal to (i) the product of (1) the number of full months you
were alive during calendar year 2008 (“Living Months”) multiplied by (2)
$498,000 (“Payment on Account of Death”); (ii) interest on the Payment on
Account of Death for a period of half the Living Months calculated, per annum,
at the simple rate of LIBOR plus 450 bp; (iii)  $2,000,000 (representing the
parties agreement as to your 2007 Bonus Amount); and (iv) interest on the amount
of $2,000,000, in the event you live past March 31, 2008,  for a period of the
number of Living Months less two and one half (2.5) calculated, per annum, at
the simple rate of LIBOR plus 450 bp.  If you die during the first three (3)
Living Months, you will not receive interest on the 2007 Bonus Amount;

 
(b)  
monthly installment payments of $498,000 on the first day of each month during
calendar year 2008 beginning on the first day of the month following the month
during which the Payment on Account of Death was made.  Notwithstanding the
foregoing, the first monthly installment payment shall equal $1,494,000
(representing the sum of (a) the payment due for the month you die; (b) the
first monthly installment payment; and (c) the monthly payment attributable to
the month in which the Payment on Account of Death is made as in accordance with
subclause (a) above;

 
(c)  
in no event shall the Payment Amount, in each case excluding interest, be either
less than or exceed $7,976,000  All payments shall be made by the end of
calendar year 2008.

 
5.  
The parties agree that the obligation of the Company to make the Severance
Payments hereunder shall not be affected or diminished in any manner by the
failure of you to perform under the Consulting Agreement.

 
6.  
All non-vested equity awards (whether issued by the Company or a subsidiary of
the Company) shall vest immediately upon the Termination Date and your stock
options or other stock based awards which include an exercisability feature
shall remain exercisable until the earliest of (i) two years from the Consulting
Termination Date, as defined in the Consulting Agreement, (ii) their respective
stated expiration dates or (iii) ten years from the date of grant, in each case
subject to your compliance with your post-termination obligations under the
Severance Agreement.

 
7.  
All Class B Units of Triarc Deerfield Holdings, LLC and all Class B Units of
Jurl Holdings, LLC held by you on the Termination Date are fully vested and
non-forfeitable effective as of the Termination Date.

 
8.  
You agree that if, at any time during calendar year 2008 you accept fulltime
employment with Trian Fund Management L.P. (“Trian”), the Payment Amount shall
be reduced by twelve and one-half percent (12.5%)  (the “2008 Repayment
Obligation”).   If, at any time during calendar year 2009 you accept fulltime
employment with Trian, the Payment Amount shall be reduced by six and
one-quarter percent (6.25%) (the “2009 Repayment Obligation” and collectively
with the 2008 Repayment Obligation the “Repayment Obligation”), but in all cases
you shall have no repayment obligation with respect to any payments made under
the Consulting Agreement.  You agree that the Company may reduce any remaining
payments of the Payment Amount  owed to you by the Company by the Repayment
Obligation on a ratable basis (i.e. the Repayment Obligation shall be allocated
pro-rata against the remaining payments).  In the event the remaining payments
of the Payment Amount  do not fully offset the Repayment Obligation, you shall
remain liable for the payment to the Company of any deficiency.  In the event
you repay any Repayment Obligation the Company will file amended W-2 forms.

 
9.  
You shall be entitled to receive the welfare benefits provided for in subclause
(ii) of the third full paragraph of Section 1 of the Severance Agreement
(“Sub-clause (ii)”) subject to the following:

 
(a)  
Annex A sets forth all the welfare benefits falling within Sub-clause (ii).

 
(b)  
You shall continue to participate in, or be reimbursed for the cost of, Annex A,
Para 1 benefits through June 30, 2010 (the “Coverage Period”).

 
(c)  
You shall continue to participate in, or be reimbursed for the cost of, Annex A,
Para 2 benefits for the maximum period provided for under Section
1.409A-1(b)(9)(v)(B) of the Final Regulations under Section 409A of the Internal
Revenue Code (the “409A Regulations”), and thereafter as provided for under
1.409A-3(i)(1)(iv) of the 409A Regulations through the Coverage Period.

 
(d)  
You shall continue to participate in, or be reimbursed for the cost of, Annex A,
Para 3 benefits as provided for under 1.409A-3(i)(1)(iv) of the 409A Regulations
through June 30, 2010. In particular, in connection with such benefits (or any
benefits under sub-paragraph (c) above falling under such section of the 409A
Regulations) the amount of any expenses eligible for reimbursement or the
in-kind benefits to be provided during your taxable year shall not affect the
expenses eligible for reimbursement or in-kind benefits to be provided in any
other taxable year, reimbursements of any eligible expenses shall be made on or
before the last day of your taxable year following the taxable year in which the
expense was incurred and your right to reimbursement or in-kind benefits is not
subject to liquidation or exchange for another benefit.

 
(e)  
Notwithstanding anything herein to the contrary, to the extent you may no longer
be eligible to receive any in-kind benefits (or reimbursements with respect to
such benefits) as a result of any prospective termination or discontinuation by
the Company of any benefit plan or otherwise, the parties shall negotiate the
payment to you of a lump sum amount representing the after-tax cost of
acquiring, on a non-group basis for the remaining coverage period (i.e., the
time period from the proposed termination through June 30, 2010), those benefits
lost to you and/or to your family; providedthat the determination and payment of
such lump sum payment shall be in accordance with the transition relief under
Section 409A as provided in IRS Notice 2006-79 and IRS Notice 2007-86.

 
(f)  
 In the event that the insurance coverage provided for in paragraphs 1 and 2 of
Annex A is no longer provided by the Company during the Coverage Period (or at
the level provided for in the Severance Agreement), you may direct the Company
to pay premiums for non-group insurance coverage of a comparable nature for you
and your dependents for the remainder of the Coverage Period.  The benefits
provided for in paragraph 3 of Annex A shall commence on the Payment
Commencement Date, at which time you shall receive a lump sum payment equal to
the aggregate value of the accrued benefits provided for in paragraph 3
(calculated from the Termination Date) with interest on such amount for a period
of six (6) months calculated, per annum, at the simple rate of LIBOR plus 450
bp.

 
(g)  
All tax gross-up payments to which you are entitled under the Severance
Agreement in connection with the foregoing benefits shall be paid no later than
the end of your taxable year next following your taxable year in which you remit
the related taxes (including any income tax associated with providing premiums).

 
(h)  
The purpose of this Section 9 is to provide you with the level of benefits as
provided for in Sub-clause (ii), as in existence as of the date hereof, in a
manner that complies with Section 409A.

 
(i)  
In the event of your death, benefits arising under Sub-clause (ii) shall be
provided to your spouse and dependents for the remainder of the Coverage Period,
as provided for in the Separation Agreement.

 
10.  
The intent of the parties is that payments and benefits under this Agreement
comply with Section 409A of the Internal Revenue Code of 1986, as amended and
the regulations and guidance promulgated thereunder and, accordingly, in the
event of any interpretive issues, this Agreement shall be interpreted and
construed in compliance with Section 409A.

 
11.  
The Company agrees to indemnify you, against any claims related to your
employment by the Company including any claims related to the Severance
Agreement or this Agreement, including all costs, charges and expenses incurred
or sustained by you in connection with any action, suit or proceeding to which
you may be made a party by reason of your being an officer, director or employee
of the Company or of any subsidiary or affiliate of the Company to the maximum
extent permitted by law and the Company’s indemnification documents. For the
avoidance of doubt, any indemnity provisions, D&O insurance and fiduciary
insurance coverage related to your employment by the Company and your provision
of services under the Consulting Agreement shall continue in full force and
effect, subject, in the case of any such outside insurance coverage that such
coverage or comparable coverage be maintained through the sixth anniversary of
the date you cease to provide services as provided for in the Consulting
Agreement, to the extent such coverage remains available at a commercially
reasonable rate.  Notwithstanding anything herein, you shall be entitled, to the
maximum extent permitted by law and the Company’s indemnification documents, to
all rights to indemnification and contribution under the certificate of
incorporation, bylaws or similar charter documents of, or any agreement with,
Triarc or any of its subsidiaries  or affiliates.  The Company hereby fully
releases you from any and all claims against you based on facts known to Messrs.
Nelson Peltz, Peter May, Edward Garden, Brian Schorr or any current executive
officers of the Company as of the Termination Date provided that the foregoing
release shall not include any claims relating to willful gross misconduct which
results in substantial damage to the Company. For purposes of this Letter
Agreement, “willful” shall have the same meaning set forth in Section 16 of the
Severance Agreement.

 
12.  
The payment of any amount or the provision of any benefits provided in this
Agreement are subject to your prior execution and delivery to the Company of a
release substantially in the form set forth in Exhibit A of the Severance
Agreement and non-revocation of such release.

 
13.  
The Company acknowledges your right to file for unemployment insurance as a
result of its decision to close its New York headquarters which resulted in the
termination of your employment.  The Company will cooperate with any claims
filed by you.

 
14.  
Unless modified herein, the terms and provisions of the Severance Agreement
shall continue in full force and effect, including without limitation Section 7,
Section 9 (Certain Additional Payments by the Company) (provided that any
“Gross-Up Payment” arising under such section shall be paid to the you prior to
the end of your taxable year next following the taxable year in which you remit
the “Excise Tax” covered by such section), Section 10
(Noncompete/Nonsolicitation/Employee No-Hire), Section 12 (Inventions), Section
13 (Confidentiality) and Section 14 (Indemnification) (provided that any
reimbursement the Company pays to you under such section shall be paid prior to
the end of your taxable year next following the taxable year in which the
action, suit or proceeding is completed).

 

* * * * *

 
Agreed on December 13, 2007:

 
TRIARC COMPANIES, INC.

 
By: /s/ DAVID E. SCHWAB II                     

 
Name:  David E. Schwab II  

   Title:   Chairman of the Special Committee

 

 
/s/ FRANCIS T. MCCARRON                    

 
Francis T. McCarron

 
 
 

--------------------------------------------------------------------------------

 

Annex A- Expenses Eligible for Reimbursement/In-Kind Benefits

 
 
1.
1.409A-1(a)(5) Benefits—Life (Unicare), Short-Term Disability (Unicare)* / Long
Term Disability (Sun Life)

 
 
 
2.
1.409A-1(b)(9)(v)(B) Medical Benefits—Medical (Unicare)* / Dental (Unicare)*/
Prescription Drugs (Unicare)* / Vision (First Rehabilitation)* / Executive
Medical Reimbursement Plan (First Rehabilitation)*

 
 
 
3.
1.409A-3(i)(iv) Benefits—Travel Accident Insurance (American Home) /
Transitchek's vouchers and metro cards ($110/month for 2007, $115/month for
2008) / Commuter Parking ($215/month)/Seven percent (7%) of the maximum 401(k)
contribution limit (e.g., $1,085 for calendar year 2008 (representing the
product of seven percent (7%) and the 2008 maximum 401(k) contribution limit of
$15,500) to be paid on or before December 31, 2008; seven percent (7%) of the
maximum 401(k) contribution limit for 2009 to be paid on or before December 31,
2009; and one-half (1/2) of seven percent (7%) of the maximum 401(k)
contribution limit for 2010 to be paid on or before June 30, 2010) / Annual
Financial Assistance Payments of no less than $7,500

 
*  Dependent eligibility – Spouse and Dependent child through age 19 and 25 if
full-time student