Document:

exv10w1

Exhibit 10.1

AMENDMENT TO 

SECOND AMENDED AND RESTATED 

EMPLOYMENT AGREEMENT

          This AMENDMENT (this “Amendment”) is made and entered into as of November 29,
2011, by and between CVR Energy, Inc., a Delaware corporation (the “Company”) and Edward
Morgan (the “Executive”).

          WHEREAS, the Company and the Executive are parties to a Second Amended and Restated
Employment Agreement dated as of January 1, 2011 (the “Employment Agreement”);

          WHEREAS, Section 8.1 of the Employment Agreement permits the Employment Agreement to be
amended by written agreement of the parties thereto;

          WHEREAS, the parties hereto desire to amend the Employment Agreement as provided herein; and

          WHEREAS, capitalized terms used and not defined herein shall have the meaning ascribed to them
in the Agreement.

          NOW, THEREFORE, in consideration of the foregoing, it is mutually agreed that the Employment
Agreement is amended as of the date set forth above, in the following particulars:

	 	1.	 	Section 1.1 of the Employment Agreement is hereby deleted in its entirety and replaced
with the following:
	 
	 	 	 	“Term. The Company agrees to employ the Executive, and the Executive agrees to
be employed by the Company, in each case pursuant to this Employment
Agreement, for a period commencing on January 1, 2011 (the “Commencement Date”) and
ending on the earlier of (i) December 31, 2012 and (ii) the termination or resignation of
the Executive’s employment in accordance with Section 3 hereof (the “Term”). Upon
written agreement between the Company and the Executive made no later than December 1, 2012,
the Term shall be extended on such terms and conditions as the Company and the Executive
mutually agree.”
	 
	 	2.	 	Section 1.2 of the Employment Agreement is hereby deleted in its entirety and replaced
with the following:
	 
	 	 	 	“During the Term, the Executive shall serve as Chief Financial Officer and Treasurer of
the Company (“CFO”) until the date (the “Transition Date”) that is 120 days
(or such earlier date as the Company in its discretion may determine) after the date that
the Company has named a successor to the Executive as Chief Financial Officer and Treasurer
(the “Successor CFO”), at which time the Executive shall serve as Executive Vice
President of Investor Relations of the Company (“EVP of IR”). The Executive shall
also serve in such other or additional positions as an officer or director of the Company,
and of such direct or indirect affiliates of the Company (“Affiliates”), as the
Executive and the board of directors of the Company (the “Board”) or its designee
shall mutually

 

 

	 	 	 	agree from time to time. In such positions, the Executive shall perform such
duties, functions and responsibilities during the Term commensurate with the Executive’s
positions as reasonably directed by the Chief Executive Officer of the Company or the Board
or, during the period in which he serves as the EVP of IR, the Successor CFO.”
	 
	 	3.	 	Section 2.1 of the Employment Agreement is hereby deleted in its entirety and replaced
with the following:
	 
	 	 	 	“As compensation for the performance of the Executive’s services hereunder, during the
Term, the Company shall pay to the Executive a salary at an annual rate of (i) during the
period that the Executive is serving as CFO, $335,000 and (ii) during the period that the
Executive is serving as EVP of IR, $275,000, which shall be prorated for any partial year at
the end of the Term and shall accrue and be payable in accordance with the Company’s
standard payroll policies, as such salary may be adjusted upward by the Compensation
Committee of the Board in its discretion (as adjusted, the “Base Salary”).”
	 
	 	4.	 	Section 2.2 of the Employment Agreement is hereby deleted in its entirety and replaced
with the following:
	 
	 	 	 	“Annual Bonus. For each completed fiscal year occurring during the Term, the
Executive shall be eligible to receive an annual cash bonus (the “Annual Bonus”).
For fiscal year 2011, the target Annual Bonus shall be 120% of the Executive’s Base Salary
as in effect at the beginning of fiscal year 2011. For fiscal year 2012, the target Annual
Bonus shall be equal to (i) 120% of the Executive’s Base Salary of $335,000, prorated for
the portion of the year that the Executive served as CFO and (ii) 40% of the Executive’s
Base Salary of $275,000, prorated for the portion of the year that the Executive served as
EVP of IR, in each case such proration based on the number of days that the Executive served
in each position. The actual Annual Bonus paid for any fiscal year shall be paid pursuant
to the Company’s Performance Incentive Plan.”
	 
	 	5.	 	Section 3.2(a) of the Employment Agreement is hereby deleted in its entirety and
replaced with the following:
	 
	 	 	 	“(a)(1) Termination by the Company Other than For Cause or Disability; Resignation by
the Executive for Good Reason. If during the Term (except during the Window Period (as
defined in Section 3.2(a)(2) below)) (i) the Executive’s employment is terminated by the
Company other than for Cause or Disability or (ii) the Executive resigns for Good Reason,
then in addition to the Accrued Amounts the Executive shall be entitled to the following
payments and benefits: (x) the continuation of Executive’s Base Salary at the rate in
effect immediately prior to the date of termination or resignation (or, in the case of a
resignation for Good Reason, at the rate in effect immediately prior to the occurrence of
the event constituting Good Reason, if greater) for a period of twelve (12) months (or, if
earlier, until and including the month in which the Executive attains age 70) (the
“Severance Period”) and (y) a Pro-Rata Bonus and (z) to the extent permitted
pursuant to the applicable plans, the continuation on the same terms as an active employee
(including, where applicable, coverage for the Executive and the Executive’s dependents)

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	 	 	 	of medical, dental, vision and life insurance benefits (“Welfare Benefits”) the
Executive would otherwise be eligible to receive as an active employee of the Company for
twelve (12) months or, if earlier, until such time as the Executive becomes eligible for
Welfare Benefits from a subsequent employer (the “Welfare Benefit Continuation
Period”) (such payments, collectively, the “Severance Payments”). If the
Executive is not permitted to continue participation in the Company’s Welfare Benefit plans
pursuant to the terms of such plans or pursuant to a determination by the Company’s
insurance providers or such continued participation in the plan would result in the
imposition of an excise tax to the Company pursuant to Section 4980D of the Code, the
Company shall use reasonable efforts to obtain individual insurance policies providing the
Welfare Benefits to the Executive during the Welfare Benefit Continuation Period and, if
applicable, the Additional Welfare Benefit Continuation Period (as defined below), but shall
only be required to pay for such policies an amount equal to the amount the Company would
have paid had the Executive continued participation in the Company’s Welfare Benefits plans;
provided, that, if such coverage cannot be obtained, the Company shall pay
to the Executive monthly during the Welfare Benefit Continuation Period and, if applicable,
the Additional Welfare Benefit Continuation Period, an amount equal to the amount the
Company would have paid had the Executive continued participation in the Company’s Welfare
Benefits plans. The Company’s obligations to make the Severance Payments shall be
conditioned upon: (i) the Executive’s continued compliance with Executive’s obligations
under Section 4 of this Employment Agreement and (ii) the Executive’s execution, delivery
and non-revocation of a valid and enforceable release of claims arising in connection with
the Executive’s employment and termination or resignation of employment with the Company
(the “Release”) in a form reasonably acceptable to the Company and the Executive
that becomes effective not later than forty-five (45) days after the date of such
termination or resignation of employment. In the event that the Executive breaches any of
the covenants set forth in Section 4 of this Employment Agreement, the Executive will
immediately return to the Company any portion of the Severance Payments that have been paid
to the Executive pursuant to this Section 3.2(a)(1). Subject to the foregoing and Section
3.2(e), the Severance Payments will commence to be paid to the Executive on the forty-fifth
(45th) day following the Executive’s termination of employment, except that the
Pro-Rata Bonus shall be paid at the time when annual bonuses are paid generally to the
Company’s senior executives for the year in which the Executive’s termination of employment
occurs.”
	 
	 	(2)	 	“Window Period Severance. If, during the period commencing on the Transition
Date and ending on December 31, 2012 (the “Window Period”), (i) the Executive
resigns for any reason or (ii) the Executive’s employment is terminated by the Company other
than for Cause or Disability, in addition to the Accrued Amounts and in lieu of any payments
and benefits to which the Executive may have otherwise become entitled pursuant to Section
3.2(a)(1) of this Agreement, the Executive shall be entitled to (A) the accelerated vesting
of any unvested shares of restricted common stock of the Company held by the Executive at
such time, including, but not limited to any restricted stock awards made in December 2011
(the “Accelerated Vesting”), (B) a Pro-Rata Bonus and (C) solely if such termination
is pursuant to clause (ii) of this Section 3.2(a)(2), the continuation of Executive’s Base
Salary at the rate in effect immediately prior to the date of termination

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	 	 	 	until December 31,
2012 (the “Base Salary Continuation”). If, during the Window Period, (I) the
Executive’s employment is terminated by the Company other than for Cause or Disability, or
the Executive resigns for Good Reason, in either case within the one (1) year period
following a Change in Control, or (II) the Executive’s termination or resignation is a
Change in Control Related Termination, then, in addition to the payments described above,
the Executive shall be entitled to a payment in an amount equal to $9,167 for each month
during the twelve (12) month period following such termination (pro-rated for any partial
months) (the “Target Bonus Continuation”). The Executive’s entitlement to each of
the payments and benefits set forth in this Section 3.2(a)(2) shall be conditioned upon: (x)
the Executive’s continued compliance with Executive’s obligations under Section 4 of this
Employment Agreement and (y) the Executive’s execution, delivery and non-revocation of a
valid and enforceable Release in a form reasonably acceptable to the Company and the
Executive that becomes effective not later than forty-five (45) days after the date of such
termination or resignation of employment. Subject to Section 3.2(e) hereof, (i) if
applicable, the Base Salary Continuation and the Target Bonus Continuation shall commence to
be paid to the Executive on the forty-fifth (45th) day
following the Executive’s termination of employment, provided, that, the
first such payment shall include payment in respect of all periods subsequent to the
Executive’s termination until the payroll period in respect of which such payment is being
made; (ii) the Accelerated Vesting shall occur on the date that the Release has become
effective and irrevocable and (iii) the Pro-Rata Bonus shall be paid at the time when annual
bonuses are paid generally to the Company’s senior executives for the year 2012. The
parties agree that income and employment taxes will be due and owing with respect to
restricted common stock of the Company held by the Executive as of the earlier of the date
that the restricted stock vests pursuant to this Section 3.2(a)(2) or the date that the
restricted stock vests pursuant to the terms of the applicable restricted stock agreement.
The parties further agree that unless the Executive shall satisfy income and employment tax
withholding obligations by a payment to the Company in cash, the Company shall withhold
delivery of a number of shares of restricted stock with a fair market value as of the
vesting date equal to the income and employment taxes owing in satisfaction of the
Executive’s income and employment tax obligations thereon.”
	 
	 	6.	 	Section 3.2(b) of the Employment Agreement is hereby deleted in its entirety and
replaced with the following:
	 
	 	 	 	“[Reserved].”
	 
	 	7.	 	The reference to Section 3.2(b) in Section 3.2(c) of the Employment Agreement is hereby
replaced with a reference to Section 3.2(c).
	 
	 	8.	 	The clause in the proviso to Section 3.2(d)(2) of the Employment Agreement that reads
“the payments and benefits set forth in Section 3.2(a) and, to the extent either or both
are applicable, Section 3.2(b) and Section 3.2(c)” shall be replaced with “the payments and
benefits set forth in Section 3.2(a) and, to the extent applicable, Section 3.2(c)”.

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	 	9.	 	Solely for purposes of Section 4.2 of the Employment Agreement, the “Restriction
Period” shall be revised to mean the period “during the Term and for a period of thirty
(30) days thereafter.” The length of the Restriction Period for purposes of any other
Section or subsection of the Employment Agreement shall not be changed.
	 
	 	10.	 	The Employment Agreement is amended by adding a new Section 4.8 to provide as follows,
and renumbering the remaining subsections of Section 4 accordingly:
	 
	 	 	 	Non-Disparagement. From and after the date hereof, the Executive shall not make or
publish any untruthful, derogatory or disparaging statements (whether written or oral)
regarding the Company or any of its Affiliates, employees officers or directors, or
otherwise malign the business or reputation of any of them.
	 
	 	11.	 	The reference to Section 3.2(b) in Section 8.13 of the Employment Agreement is hereby
replaced with a reference to Section 3.2(c).
	 
	 	12.	 	The Executive acknowledges and agrees that Good Reason shall not exist at any time by
reason of the Executive’s ceasing to serve as CFO, the reduction of the Executive’s Base
Salary from $335,000 to $275,000, the reduction of the Executive’s target Annual Bonus from
120% of Base Salary to 40% of Base Salary or any of the other changes to the Employment
Agreement set forth in this Amendment.
	 
	 	13.	 	Effective as of the last payroll date of the year 2011, the Company shall grant the
Executive a number of shares of restricted common stock of the Company with a fair market
value on the grant date equal to $165,000, subject to the terms of a restricted stock
agreement between the Executive and the Company.
	 
	 	14.	 	With the exception of the modifications set forth in this Amendment, all other
provisions of the Employment Agreement shall remain unchanged, and shall continue in full
force and effect.

[signature page follows]

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     IN WITNESS WHEREOF, the parties have executed this Amendment as of the date set forth
below.

	 	 	 	 	 
	 	CVR ENERGY, INC.

 	 
	 	By:  	/s/ John J. Lipinski
 	 
	 	 	Name:  	John J. Lipinski 	 
		 	Title:  	CEO and President
 	 
	 	 	Date:  	November 29, 2011 	 
	 

	 	 	 	 	 
	 	EXECUTIVE:

 	 
	 	/s/ Edward Morgan
 	 
	 	Name:  	Edward Morgan 	 
		Date:  	November 29, 2011  	 
	 

[Signature Page for Amendment to Edward Morgan Second Amended and Restated Employment Agreement]eh1100869_ex1001.htm

EXHIBIT 10.1

 

AGREEMENT

 

THIS AGREEMENT, dated as of this 1st day of December, 2011 (the “Agreement”), is by and among The Wendy’s Company, a Delaware corporation (the “Company”), and Trian Partners, L.P., a Delaware limited partnership, Trian Partners Master Fund, L.P., a Cayman Islands limited partnership, Trian Partners Parallel Fund I, L.P., a Delaware limited partnership, and Trian Partners GP, L.P., a Delaware limited partnership (collectively, the “Stockholders”), Trian Fund Management, L.P., a Delaware limited partnership (the “Management Company”), the general partner of which is Trian Fund Management GP, LLC, a Delaware limited liability company (“Trian GP”), Nelson Peltz, Peter W. May and Edward P. Garden, who, together with Nelson Peltz and Peter W. May, are the controlling members of Trian GP (the “Members”), and Trian Partners Strategic Investment Fund, L.P., a Delaware limited partnership, and Trian Partners Strategic Investment Fund-A, L.P., a Delaware limited partnership (collectively, the “New Funds”) (the Stockholders, the Management Company, Trian GP, the Members, the New Funds and their respective controlled Affiliates and Associates (as hereinafter defined) are hereinafter referred to collectively as the “Trian Group” and each individually as a “member of the Trian Group”).

 

WHEREAS, certain members of the Trian Group and the Company are parties to an agreement dated as of November 5, 2008, as amended (as so amended, the “Original Agreement”), certain provisions of which terminated on November 5, 2011;

 

WHEREAS, the Trian Group, as of the date of this Agreement, Beneficially Owns (as hereinafter defined) 26.15% of the Combined Voting Power (as hereinafter defined) of Company Voting Securities (as hereinafter defined);

 

WHEREAS, the Trian Group has expressed a desire to increase its ownership stake in the Company through additional purchases of shares of common stock of the Company (the “Common Stock”) or through the purchase of options to acquire Common Stock, or cash settled call options or other derivative securities, contracts or instruments related to the price of shares of the Common Stock (collectively, “Derivative Securities”);

 

WHEREAS, the Board of Directors of the Company and the Independent Directors (as hereinafter defined) have agreed, at the recommendation of the Audit Committee of the Board of Directors of the Company (the “Audit Committee”), to grant the prior approval of the Board of Directors pursuant to Section 203(a)(1) of the General Corporation Law of the State of Delaware (the “DGCL”), such that the acquisition by the Trian Group or any Affiliate or Associate of the Trian Group of Beneficial Ownership of up to, but not more than, the Maximum Percentage (as hereinafter defined) of the Combined Voting Power of Company Voting Securities, shall not be subject to the restrictions set forth in Section 203 of the DGCL, subject to the terms and conditions of this Agreement;

 

WHEREAS, the Board of Directors and the Independent Directors have approved the transactions contemplated by this Agreement upon the terms and conditions contained herein; and

 

 

 

  

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WHEREAS, the parties hereto believe that it is desirable to establish certain provisions with respect to the shares of Common Stock that may be acquired by, or that are currently held by, the Trian Group.

 

NOW, THEREFORE, in consideration of the mutual covenants and premises contained herein and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:

 

	
Section 1.

	
Definitions.

 

Capitalized terms used herein shall have the following meanings:

 

“13D/G Group” shall mean two or more persons acting together for the purpose of acquiring, holding, voting or disposing of Company Voting Securities, which persons would be required under the Exchange Act to file a statement on Schedule 13D or 13G with the SEC as a “person” within the meaning of Section 13(d)(3) of the Exchange Act if such person beneficially owned sufficient securities to require such a filing under the Exchange Act.

 

“Additional Shares” shall mean any and all Company Voting Securities acquired after the date hereof Beneficially Owned by the Trian Group in excess of 101,774,443 shares (i.e., the number of Company Voting Securities Beneficially Owned by the Trian Group as of the date of this Agreement), as such number may be equitably adjusted to reflect the effect of any stock split, split-up, reverse stock split, stock dividend or similar change with respect to the Common Stock after the date hereof.

 

“Affiliate” of any person shall mean any person directly or indirectly controlling, or controlled by such person or under common control with such person.  For purposes of this Agreement, members of the Trian Group, on the one hand, and the Company (and its Affiliates other than members of the Trian Group), on the other, shall not be deemed to be Affiliates of each other.

 

“Associate” shall mean, with respect to any Person, (i) any corporation, partnership, unincorporated association or other entity of which such Person is a director, officer or partner or is, directly or indirectly, the owner of 20% or more of any class of voting stock; (ii) any trust or other estate in which such Person has at least a 20% beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity; and (iii) any relative or spouse of such Person, or any relative of such spouse, who has the same residence as such Person.  Notwithstanding the foregoing, no corporation or other entity in which a fund or account managed by the Management Company has an investment shall be deemed an “Associate” of any member of the Trian Group unless the aggregate investment by all such funds and accounts represents not less than 20% of any class of voting stock of such corporation or other entity.

 

“Audit Committee” shall have the meaning set forth in the Recitals.

 

“Beneficial Ownership” shall have the meaning ascribed to such term pursuant to Regulation 13D-G of the Exchange Act.

 

 

 

 

 

  

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“Beneficially Own” shall mean, with respect to any security, having direct or indirect (including through any subsidiary or affiliate) “beneficial ownership” of such security, as determined pursuant to Rule 13d-3 under the Exchange Act and “Beneficially Owned” shall have a corresponding meaning.  For purposes of any calculation hereunder of Beneficial Ownership or ownership of Common Stock, the Trian Group may rely upon information contained in the Company’s most recent Quarterly Report on Form 10-Q, Annual Report on Form 10-K or any Current Report on Form 8-K or definitive Proxy Statement of the Company that is filed subsequent thereto with the Securities and Exchange Commission.

 

“Combined Voting Power” shall mean, at any measurement date, the total number of votes of Company Voting Securities that could have been cast in an election of directors of the Company had a meeting of the stockholders of the Company been duly held based upon a record date as of the measurement date if all Company Voting Securities then outstanding and entitled to vote at such meeting were present and voted to the fullest extent possible at such meeting.

 

“Common Stock” shall have the meaning set forth in the Recitals.

 

“Company” shall have the meaning set forth in the Recitals.

 

“Company Voting Securities” shall mean, collectively, Common Stock, any preferred stock of the Company that is entitled to vote generally for the election of directors, any other class or series of Company securities that is entitled to vote generally for the election of directors and any other securities, warrants or options or rights of any nature (whether or not issued by the Company) that are convertible into, exchangeable for, or exercisable for the purchase of, or otherwise give the holder thereof any rights in respect of, Common Stock, or any other class or series of Company securities that is entitled to vote generally for the election of directors.

 

“Derivative Securities” shall have the meaning set forth in the Recitals.

 

“DGCL” shall have the meaning set forth in the Recitals.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Group” shall mean a “group” as such term is used in Section 13(d)(3) of the Exchange Act.

 

“Independent Director” shall mean a director of the Company who (i) is not an employee of the Company and (ii) is not an Affiliate or Associate of the Trian Group.  Without limiting the foregoing, a director that is nominated by the Nominating and Corporate Governance Committee of the Company’s Board of Directors that is not an Affiliate or Associate of the Trian Group and that would be deemed “independent” under the applicable rules of the national securities exchange upon which the Company’s Common Stock shall then be listed shall be deemed to be an Independent Director.

 

 

 

 

  

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“Management Company” shall have the meaning set forth in the Recitals.

 

“Maximum Percentage” shall mean 32.5% of the Combined Voting Power of Company Voting Securities, plus that number of shares that may be owned or acquired by the Trian Group as a result of the application of the first sentence of Section 2.2(e) of this Agreement or the exceptions set forth in Section 203(b)(3) through (7) of the DGCL.

 

“Members” shall have the meaning set forth in the Recitals.

 

“New Funds” shall have the meaning set forth in the Recitals.

 

“Person” shall mean any individual, corporation, partnership, limited partnership, limited liability company, joint venture, trust, unincorporated organization, other form of business, or legal entity or government authority.

 

“Pledge Agreement” shall mean certain Pledge and Security Agreements entered into by each of Messrs. Peltz and May in favor of Bank of America, N.A., as the same may be amended, replaced or supplemented from time to time.

 

“Pledged Shares” shall mean up to a maximum aggregate of 23,406,123 shares of Common Stock (as such number may be equitably adjusted to reflect the effect of any stock split, split-up, reverse stock split, stock dividend or similar change with respect to the Common Stock) pledged pursuant to the Pledge Agreement.

 

“SEC” shall mean the Securities and Exchange Commission.

 

“Stockholders” shall have the meaning set forth in the Recitals.

 

“Subject Shares” means all Company Voting Securities owned by any member of the Trian Group.

 

“Trian GP” shall have the meaning set forth in the Recitals.

 

“Trian Group” shall have the meaning set forth in the Recitals.

 

“203 Approval” shall have the meaning set forth in Section 2.2(d).

 

“Unaffiliated Shares” shall mean all Company Voting Securities that are not Subject Shares.

 

	
Section 2.

	
Representations and Warranties.

 

2.1.           The applicable members of the Trian Group represent and warrant to the Company as follows:

 

  (a)           Each of the Stockholders, the New Funds and the Management Company is a validly existing limited partnership under the laws of its jurisdiction of organization and has the full legal right, power and authority to enter into this Agreement and perform its obligations hereunder.

 

 

  

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  (b)           Each of the Members is an individual having the full legal right, power and authority to enter into this Agreement and perform his respective obligations hereunder.

 

  (c)           This Agreement has been duly authorized, executed and delivered by each of the Stockholders, the New Funds, the Management Company and the Members and constitutes the legally valid and binding agreement of each of the Stockholders, the New Funds, the Management Company and the Members, enforceable against each of them in accordance with the terms hereof.

 

  (d)           Neither the execution and delivery of this Agreement by each of the Stockholders, the New Funds, the Management Company and the Members nor the performance of their respective obligations hereunder will conflict with or result in a breach of or constitute a default under any law, rule, regulation, judgment, order or decree of any court, arbitrator or governmental agency or instrumentality, or of any agreement or instrument to which any of the Stockholders, the New Funds, the Management Company or the Members is bound or affected or of any organizational documents of each of them.

 

  (e)           Except for 101,774,443 shares of Common Stock Beneficially Owned by the Trian Group as of the date of this Agreement, no shares of Company Voting Securities are Beneficially Owned by any member of the Trian Group.

 

  (f)           Other than this Agreement, the Pledge Agreement, the Voting Agreement between Mr. Peltz and Mr. May, dated as of July 23, 2004, and the other agreements contemplated hereby, no member of the Trian Group has any agreement, arrangement or understanding with any other Person or Group who is not a member of the Trian Group or an Affiliate or Associate of a member of the Trian Group with respect to acquiring, voting or disposing of Company Voting Securities.

 

2.2.           The Company represents and warrants to the Trian Group as follows:

 

  (a)           The Company is a validly existing corporation under the laws of the State of Delaware and has the power and authority to enter into this Agreement and perform its obligations hereunder.  

 

  (b)           This Agreement has been duly authorized, executed and delivered by the Company and constitutes the legally valid and binding agreement of the Company, enforceable against the Company in accordance with the terms hereof.

 

  (c)           Neither the execution and delivery of this Agreement nor the performance of its obligations hereunder will conflict with or result in a breach of or constitute a default under, any law, rule, regulation, judgment, order or decree of any court, arbitrator or governmental agency or instrumentality, or of any agreement or instrument to which the Company is bound or affected or of any organizational documents of the Company.

 

 

 

 

  

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  (d)           Subject to the Trian Group entering into and becoming bound by this Agreement, the Independent Directors and the Board of Directors of the Company have approved, for the purposes of Section 203(a)(1) of the DGCL, from and after the date hereof, the members of the Trian Group and their respective Affiliates and Associates becoming the owner(s) (as such term is defined under Section 203(c)(9) of the DGCL) of Common Stock and/or acquiring Common Stock through additional purchases of shares of Common Stock or through the purchase or exercise of Derivative Securities, up to, but not more than, the Maximum Percentage of the Combined Voting Power of Company Voting Securities, such that no member of the Trian Group or any of their respective Affiliates or Associates shall be subject to the restrictions set forth in Section 203 of the DGCL  solely as a result of such ownership (such approval, together with this Agreement, the “203 Approval”).  The Company further represents, warrants, acknowledges and irrevocably agrees that the 203 Approval is irrevocable and cannot be reduced or otherwise modified without the Trian Group’s prior written consent, and the Company and the  Board of Directors shall not at any time attempt to reduce or otherwise modify the 203 Approval, including, but not limited to, modifying the Maximum Percentage of the Combined Voting Power of Company Voting Securities that may be owned or acquired by the Trian Group and any Affiliate or Associate of the Trian Group, without the Trian Group’s prior written consent.  Notwithstanding anything to the contrary set forth in Sections 2.2(d) or 2.2(e) of this Agreement, from and after such time as the Trian Group and their respective Affiliates and Associates no longer are the owner(s) (as such term is defined under Section 203(c)(9) of the DGCL) of at least 15% of the Combined Voting Power of Company Voting Securities, the 203 Approval  shall not be applicable to any subsequent acquisitions of Company Voting Securities by the members of the Trian Group and their respective Affiliates and Associates that would result in such Persons becoming the owner(s)  of 15% or more of the Combined Voting Power of Company Voting Securities.  Subject to Section 2.2(e) of this Agreement, the Trian Group acknowledges that the 203 Approval is limited as set forth in this Section 2.2(d) and is effective only to the extent of such limitation.

 

  (e)           Notwithstanding anything herein to the contrary, the 203 Approval shall remain in full force and effect to the extent that the Beneficial Ownership of the Trian Group and its Affiliates and Associates is or will be increased above the Maximum Percentage of the Combined Voting Power of Company Voting Securities that may be owned or acquired by the Trian Group solely as a result of (A) a repurchase, redemption or other acquisition of any Company Voting Securities by the Company or any of its subsidiaries or (B) any acquisition of Company Voting Securities by any member of the Trian Group or any of its Affiliates or Associates directly from the Company (including pursuant to the grant or exercise of stock options, rights, subscription rights or standby purchase obligations in connection with rights offerings by the Company or pursuant to any election to receive director fees and/or retainers in stock or other securities), provided in the case of an acquisition under clause (B) of this Section 2.2(e), such acquisition of Voting Securities from the Company is approved by a majority of the Independent Directors or is pursuant to an equity participation plan currently in effect or approved by the Board (including a majority of the Independent Directors).  The Company acknowledges that the Trian Group is and shall be entitled to rely on the exceptions set forth in Section 203(b)(3) through (7) of the DGCL (it being understood 

 

 

 

 

 

  

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that for this purpose, references in the definition of “interested stockholder” contained in Section 203 of the DGCL to “15%” shall be read to be references to “32.5%”).

 

	
Section 3.

	
Covenants with Respect to Company Voting Securities.

 

3.1.           Acquisition of Company Voting Securities.  Each member of the Trian Group covenants and agrees that it will not purchase or cause to be purchased, or otherwise acquire, Beneficial Ownership of Company Voting Securities that would increase the aggregate Beneficial Ownership of Company Voting Securities by the Trian Group to such number of Company Voting Securities that represents or possesses greater than the Maximum Percentage of the Combined Voting Power of Company Voting Securities.  Notwithstanding the foregoing Maximum Percentage limitation, (A) no member of the Trian Group shall be obligated to dispose of any Company Voting Securities Beneficially Owned in violation of such Maximum Percentage limitation to the extent that, its Beneficial Ownership is or will be increased solely as a result of a repurchase, redemption or other acquisition of any Company Voting Securities by the Company or any of its subsidiaries or any acquisition of Company Voting Securities permitted by clause (B) of this paragraph, and (B) the foregoing Maximum Percentage limitation shall not prohibit any acquisition of Company Voting Securities by any member of the Trian Group directly from the Company (including pursuant to the grant or exercise of stock options, rights, subscription rights or standby purchase obligations in connection with rights offerings by the Company or pursuant to any election to receive director fees and/or retainers in stock  or other securities), provided that such acquisition is approved by a majority of the Independent Directors or is pursuant to an equity participation plan currently in effect or approved by the Board (including a majority of the Independent Directors).

 

3.2.           Proxy Solicitations, etc.  For so long as the Company shall have a class of equity securities that is listed for trading on the New York Stock Exchange or any other national securities exchange, no member of the Trian Group shall solicit proxies, assist, encourage or participate with any other person in any way, directly or indirectly, in the solicitation of proxies, become a “participant” in a “solicitation,” or assist any “participant” in, a “solicitation” (as such terms are defined in Rule 14a-1 of Regulation 14A under the Exchange Act), or submit any proposal for the vote of stockholders of the Company, or recommend or request or induce or attempt to induce any other person to take any such actions, or seek to advise, encourage or influence any other person with respect to the voting of Company Voting Securities, in each case, if the result of any such proposal or solicitation would be to cause the Board of Directors of the Company to be comprised of less than a majority of Independent Directors.  For the avoidance of doubt, the foregoing shall not prohibit any member of the Trian Group from (i) exercising his or her rights or responsibilities as a member of the Board of Directors, including with respect to any vote in favor of the nomination of any person approved by the Nominating and Corporate Governance Committee of the Board of Directors, (ii) voting its shares of Company Voting Securities in favor of the election of any person nominated by the Board of Directors for election to the Board of Directors or (iii) exercising any other rights to vote or transfer its shares of Common Stock and Derivative Securities set forth in this Agreement.

 

 

 

 

 

 

 

  

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3.3.           Affiliate Transactions.  For so long as the Company shall have a class of equity securities that is listed for trading on the New York Stock Exchange or any other national securities exchange, no member of the Trian Group shall, without the prior approval of a majority of the Audit Committee or other committee comprised entirely of Independent Directors, engage in any transaction with the Company that, if consummated, would be required to be disclosed by the Company in its annual report pursuant to Item 404 of Regulation S-K; provided that the foregoing provision shall not apply to transactions contemplated by any other agreement as in effect on the date hereof.

 

3.4.           Voting Agreement.

 

(a)           Each member of the Trian Group shall, at each meeting of the stockholders of the Company, whether an annual meeting or a special meeting, however called, and at each adjournment or postponement of any such meeting (a “Stockholders’ Meeting”), and in all other circumstances upon which a vote, consent or other approval (including, without limitation, by written consent) is sought by or from the stockholders of the Company (any such vote, consent or approval, a “Stockholders’ Consent”), appear at such Stockholders’ Meeting or otherwise cause all the Additional Shares Beneficially Owned by it and all other Subject Shares (other than the Pledged Shares) Beneficially Owned by it to be counted as present for the purposes of establishing a quorum.

 

(b)           At each Stockholders’ Meeting and in connection with the execution of each Stockholders’ Consent presented to the Company, each member of the Trian Group, at its sole option, vote or cause to be voted all Additional Shares Beneficially Owned by it on all matters proposed (x) as recommended by the Board of Directors or (y) in the same proportion as Unaffiliated Shares are actually voted (it being understood that, in connection with any action by written consent, shares not consenting shall be treated as shares voted against such action).

 

3.5.           Irrevocable Proxy.

 

(a)           Upon a failure by a member of the Trian Group to comply with its obligations under Section 3.4 of this Agreement with respect to a specific Stockholder Consent at least 24 hours prior to the applicable meeting date or effective date, as the case may be, then such member of the Trian Group hereby irrevocably constitutes and appoints the Company’s CEO, CFO, General Counsel or such other person so designated by the Board of Directors of the Company (the “Board”) from time to time, upon the terms and conditions set forth herein, as its attorney and proxy in accordance with the DGCL, with full power of substitution and re-substitution, to cause the Subject Shares that are subject to Section 3.4(a) that it holds of record to be counted as present at any Stockholders’ Meeting where such Stockholders’ Consent  is being sought (but without any obligation to vote any other Subject Shares) and to vote the Additional Shares (but without any obligation to vote any other Subject Shares) at any such Stockholders’ Meeting with respect to a specific Stockholder Consent, and to execute any such specific Stockholders’ Consent presented to such member of the Trian Group in respect of Additional Shares (but without any obligation with respect to any 

 

 

 

 

 

 

  

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other Subject Shares), as and to the extent provided in clause (x) of Section 3.4(b) of this Agreement.  The powers granted in this Section 3.5 shall also entitle the Company to give instructions with respect to such specific Stockholders’ Consent to any nominee through whom the Trian Group may hold Subject Shares that are subject to the provisions of Section 3.4 of this Agreement.  The Trian Group shall from time to time provide the Company with any nominee information that the Company may require to exercise its rights hereunder.

 

(b)           Each member of the Trian Group affirms that its proxy granted in this Section 3.5 is given to secure the performance of its duties under Section 3.4 of this Agreement.  Each member of the Trian Group further affirms that its proxy is coupled with an interest and, except as set forth in this Agreement, is intended to be irrevocable with respect to each applicable specific Stockholders’ Consent.

 

(c)           The provisions of Section 3.4 and the proxy granted under this Section 3.5 shall bind members of the Trian Group and shall immediately terminate and be of no further force or effect with respect to any Subject Shares or Additional Shares, as the case may be, that are transferred to a Person that is not a member of the Trian Group, provided that such transfer did not violate the terms of this Agreement.  Prior to the termination of this Agreement, the proxy granted in Section 3.5 (a) shall not be terminated prior to the adjournment of the applicable Stockholders’ Meeting by any action of a member of the Trian Group or by operation of law, whether by the dissolution or entrance into bankruptcy or foreclosure of any member of the Trian Group or by the occurrence of any other event or events, it being understood that actions taken by the Company hereunder shall be and remain valid as if such dissolution, entry into bankruptcy or foreclosure or other event or events had not occurred, regardless of whether the Company has received notice of the same; provided, however, that the proxy granted under this Section 3.5 and, for the avoidance of doubt, the provisions of Section 3.4, shall in any event terminate and be of no further force or effect with respect to any Pledged Shares that are foreclosed upon pursuant to the Pledge Agreement.

 

3.6.           No Other Proxies with Respect to Additional Shares.  Each member of the Trian Group agrees not to, directly or indirectly, grant any proxy with respect to the voting of any Additional Shares (other than the proxy granted to the Company pursuant to Section 3.5 or in accordance with the solicitation of proxies by the Board of Directors of the Company) to any other Person other than a member of the Trian Group bound by this Agreement or to enter into any voting trust or other agreement or arrangement with respect to the voting of any Additional Shares other than with a member of the Trian Group bound by this Agreement.

 

3.7.           Waiver of Requirements.  Notwithstanding anything in this Section 3 to the contrary, any of the terms of Subsections 3.1 through Subsection 3.7 may be waived, in whole or in part and as to particular transactions or matters or as to one or more members of the Trian Group, if (a) in the case of a waiver of an obligation of a member of the Trian Group, a majority of the Independent Directors shall have approved such waiver or (b) in the case of a waiver of an obligation of the Company provided for 

 

 

 

 

 

  

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the benefit of a member of the Trian Group, such member of the Trian Group shall have consented in writing to such waiver.

 

	
Section 4.

	
Effectiveness of Agreement; Term; Effect of Certain Waivers.

 

This Agreement (other than (i) Sections 2.2(d) and (e) and (ii) Sections 6.1 through 6.11, each of which shall survive termination of this Agreement) shall terminate on the earliest to occur of (i) such time as the Trian Group beneficially owns, in the aggregate, less than 25% of the Combined Voting Power of Company Voting Securities; (ii) December 1, 2014; (iii) such time as Common Stock of the Company is no longer listed on a national securities exchange; and (iv) such time as any Person that is not an Affiliate or Associate of, or member of a 13D/G Group with, the Trian Group shall (x) make an offer to purchase an amount of shares which when added to the shares already beneficially owned by such Person and its Affiliates and Associates equals or exceeds 50% or more of the Combined Voting Power of Company Voting Securities (whether by way of tender offer, merger, consolidation, recapitalization or otherwise) or all or substantially all of the Company’s assets or (y) commence or announce an intention to commence a solicitation of proxies, become a “participant” in a “solicitation” or assist any “participant” in, a “solicitation” as such terms are defined in Rule 14a-1 of Regulation 14A under the Exchange Act), or submit any proposal for the vote of stockholders of the Company, or recommend or request or induce or attempt to induce any other person to take any such actions, or to seek to advise, encourage or influence any other person with respect to the voting of Company Voting Securities, in each case, if the result of any such proposal or solicitation would be to change a majority of the persons serving as directors on the Board of Directors of the Company.

 

	
Section 5.

	
Remedies.

 

Each respective member of the Trian Group and the Company acknowledge and agree that (i) the provisions of this Agreement are reasonable and necessary to protect the proper and legitimate interests of the parties hereto, and (ii) the parties would be irreparably damaged in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the parties shall be entitled to preliminary and permanent injunctive relief to prevent breaches of the provisions of this Agreement by the other parties without the necessity of proving actual damages or of posting any bond, and to enforce specifically the terms and provisions hereof, which rights shall be cumulative and in addition to any other remedy to which the parties may be entitled hereunder or at law or equity.

 

	
Section 6.

	
General Provisions.

 

6.1.           Choice of Law; Forum Selection.  This Agreement shall be construed, interpreted and the rights of the parties determined in accordance with the laws of the State of Delaware without reference to the choice of laws provisions thereof.  Each of the parties to this Agreement hereby irrevocably and unconditionally (i) agrees to be subject to, and hereby consents and submits to, the jurisdiction of the Court of Chancery 

 

 

 

 

  

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of the State of Delaware for any litigation arising out of or relating to this Agreement, (ii) waives any objection to the laying of venue of any such litigation in the Court of Chancery of the State of Delaware, and (iii) agrees not to plead or claim in the Court of Chancery of the State of Delaware that such litigation brought therein has been brought in an inconvenient forum.  The Company hereby appoints RL&F Service Corp., One Rodney Square, 10th and King Streets, P.O. Box 551, Wilmington, DE 19899, and each of the Stockholders, the Management Company and the Members hereby appoints Corporation Service Company, 2711 Centerville Road, Wilmington, DE 19808, as its agent for service of process in the State of Delaware and agrees to service of process in any litigation arising out of or relating to this Agreement by service upon such agent or by certified mail, return receipt requested, postage prepaid to it at its address for notice as provided in this Agreement.

 

6.2.           Additional Parties; Joint and Several Obligations.  All of the obligations of each member of the Trian Group hereunder shall be several and not joint, except that the Management Company shall be jointly and severally responsible with respect to the obligations hereunder of all other members of the Trian Group.  Each controlled affiliate of a member of the Trian Group that shall become or have the right to become the beneficial owner, within the meaning and scope of Section 3 hereof, of Company Voting Securities shall, promptly upon becoming such owner or holder, execute and deliver to the Company a joinder agreement, agreeing to be legally bound by this Agreement as an original signatory as a member of the Trian Group; provided that failure to execute such agreement shall not excuse such person's non-compliance with any provision of this Agreement.  No member of the Trian Group shall transfer Company Voting Securities to any of its affiliates not already a party hereto unless the transferee shall agree to be bound by this Agreement in the manner specified above in this Section 6.2.

 

6.3.           Notices.  All notices, consents, requests, instructions, approvals and other communications provided for herein and all legal process in regard hereto shall be in writing and shall be decreed to be validly given, made or served when delivered personally, transmitted by telex or telecopier, or deposited in the U.S. mail, postage prepaid, for delivery by express, registered or certified mail, or delivered to a recognized overnight courier service, addressed as follows:

 

If to the Company:

 

1155 Perimeter Center West

Atlanta, Georgia 30338

Attention: General Counsel

 

With a copy to:

 

Proskauer Rose LLP

11 Times Square

New York, New York 10036

Attention: Julie M. Allen, Esq.

 

 

  

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If to the Stockholders or any other member of the Trian Group:

 

c/o Trian Fund Management, L.P.

280 Park Avenue

New York, New York 10017

Attention: Brian L. Schorr

Chief Legal Officer

 

or to such other address as may be specified in a notice given pursuant to this Section 6.3.  All such notices and communications shall be deemed to have been duly given:  At the time delivered by hand, if personally delivered; five (5) business days after being deposited in the mail, postage prepaid, if mailed; when answered back if telexed; when receipt acknowledged, if telecopied; and the next business day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.  The parties may change the address to which notices are to be given by giving five (5) days' prior notice of such change in accordance herewith.

 

6.4.           Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

 

6.5.           Amendments, Waivers.  Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed by each party hereto; provided that no such amendment or waiver by the Company shall be effective without the approval of a majority of the Independent Directors.  No failure or delay by any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

 

6.6.           Descriptive Headings.  Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement.  References in this Agreement to Sections or Subsections are to Sections of Subsections of this Agreement.  All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the identity of the applicable person or persons may require.

 

6.7.           Entire Agreement: Amendment.  This Agreement and the other instruments and agreements referred to herein embody the entire agreement of the parties hereto with respect to the subject matter hereof and supersede all prior agreements with respect thereto, including, without limitation, the Original Agreement.

 

 

 

  

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6.8.           Counterparts.  This Agreement shall become binding when one or more counterparts hereof, individually or taken together, bears the signatures of each of the parties hereto.  This Agreement may be executed in any number of counterparts, each of which shall be an original as against the party whose signature appears thereon, or on whose behalf such counterpart is executed, but all of which taken together shall be one and the same agreement.

 

6.9.           No Partnership.  No partnership, joint venture or joint undertaking is intended to be, or is, formed between the parties hereto or any of them by reason of this Agreement or the transactions contemplated herein.

 

6.10.           Successors and Assigns; No Third-Party Beneficiaries.  This Agreement is solely for the benefit of the parties hereto, and their respective successors and assigns, and, except for Affiliates and Associates of the Trian Group who shall be entitled to rely on Sections 2.2(d), 2.2(e) and 3.7 hereof as if they were parties hereto, no other parties (including, without limitation, any other stockholder or creditor of the Company, or any director, officer or employee of the Company) are intended to be benefitted by, or entitled to enforce, this Agreement.

 

 [SIGNATURE PAGE FOLLOWS]

 

 

 

 

 

 

 

 

 

  

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IN WITNESS WHEREOF, the parties hereto intending to be legally bound have duly executed this Agreement, all as of the day and year first above written.

 

 

	 	
STOCKHOLDERS

	 	 
	 	TRIAN PARTNERS, L.P.
	 	 
	 	By: Trian Partners GP, L.P., 

its general partner

	 	 
	 	
By: Trian Partners General Partner, 

LLC, its general partner

	 	 
	 	By:     /s/ Edward P. Garden                            
	 	Name: Edward P. Garden
	 	Title: Member

 

 

	 	TRIAN PARTNERS MASTER FUND, L.P.
	 	 
	 	
By: Trian Partners GP, L.P., its 

general partner 

	 	 
	 	
By: Trian Partners General Partner, 

LLC, its general partner 

	 	 
	 	By:     /s/ Edward P. Garden                            
	 	Name: Edward P. Garden 
	 	Title: Member 
	 	 

 

 

 

 

 

  

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TRIAN PARTNERS PARALLEL 

FUND I, L.P.

	 	 
	 	
By: Trian Partners Parallel Fund I 

General Partner LLC, its general 

partner

	 	 
	 	By:     /s/ Edward P. Garden                            
	 	Name: Edward P. Garden 
	 	Title: Member 

 

 

	 	
TRIAN PARTNERS GP, L.P.

	 	 
	 	
By:  Trian Partners General Partner, 

LLC, General Partner

	 	 
	 	By:     /s/ Edward P. Garden                            
	 	Name: Edward P. Garden 
	 	Title: Member 

 

 

	 	

NEW FUNDS

	 	 
	 	
TRIAN PARTNERS STRATEGIC 

INVESTMENT FUND, L.P.

	 	 
	 	
By:  Trian Partners Strategic 

Investment Fund, GP, L.P., its 

general partner

	 	 
	 	

By:  Trian Partners Strategic 

Investment Fund, General Partner 

LLC, its general partner

	 	 
	 	By:     /s/ Edward P. Garden                            
	 	Name: Edward P. Garden
	 	Title: Member

 

 

	 	
TRIAN PARTNERS STRATEGIC 

INVESTMENT FUND-A, L.P.

	 	 
	 	
By:  Trian Partners Strategic 

Investment Fund-A, GP, L.P., its 

general partner

 

 

  

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By:  Trian Partners Strategic 

Investment Fund-A, General Partner 

LLC, its general partner 

	 	 
	 	By:     /s/ Edward P. Garden                            
	 	Name: Edward P. Garden 
	 	Title: Member 

 

 

	 	

MANAGEMENT COMPANY

	 	 
	 	
TRIAN FUND MANAGEMENT, 

L.P.

	 	 
	 	
By: Trian Fund Management GP, 

L.P., its general partner

	 	 
	 	By:     /s/ Edward P. Garden                            
	 	Name: Edward P. Garden
	 	Title: Member

 

 

	 	

MEMBERS

	 	 
	 	/s/ Nelson Peltz                                                  
	 	Nelson Peltz 
	 	
 

	 	/s/ Edward P. Garden                                        
	 	Edward P. Garden 
	 	 
	 	/s/ Peter W. May                                               
	 	Peter W. May 

 

	 	

COMPANY

	 	THE WENDY’S COMPANY 
	 	 
	 	 
	 	By:    /s/ Nils H. Okeson                                   
	 	
Name:  Nils H. Okeson

	 	
Title:  Senior Vice President, 

General Counsel and Secretary 

 

 

 

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