Document:

EXHIBIT 10.1

 

STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT (the “Agreement”), dated as of June 2, 2015, by and between THE WENDY’S COMPANY, a Delaware corporation (the “Company”) and the persons listed on Schedule I hereto (collectively, the “Sellers”).

R E C I T A L S

WHEREAS, the Company intends, but has not made any public announcement of such intention, to conduct a public modified Dutch auction self-tender offer for up to $639.0 million in consideration (the “Total Consideration”) of shares of its common stock, par value $0.10 per share (“Common Stock”), at prices ranging from $11.05 to $12.25 per share (the “Price Range”), subject to the other terms and conditions thereof which shall be determined by the Company’s board of directors (or a designated committee thereof) (the “Board of Directors” and such offer, as it may be adopted or amended from time to time, the “Tender Offer”);

WHEREAS, as of May 29, 2015, the Sellers beneficially owned, in the aggregate, 90,180,457 shares of Common Stock, which constitutes approximately 24.8% of the issued and outstanding shares of Common Stock as of May 29, 2015;

WHEREAS, upon the request of the Company, in order to maximize liquidity for other shareholders, not impact the purchase price received by shareholders participating in the Tender Offer and provide full transparency and certainty regarding the Sellers’ participation in the Company’s stock repurchase program, Sellers have determined not to exercise their right to tender any of their shares of Common Stock pursuant to the Tender Offer; and

WHEREAS, the Company wishes to purchase from the Sellers, and the Sellers wish to sell to the Company, the Shares (as hereinafter defined), on the terms and subject to the conditions set forth in this Agreement.

NOW THEREFORE, in consideration of the covenants and promises set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

SECTION 1

PURCHASE AND SALE OF THE SHARES; THE CLOSING

1.1 Purchase and Sale of Common Stock. Subject to the completion of the Tender Offer and the other terms and conditions of this Agreement, and on the basis of the representations, warranties and covenants set forth herein, the Sellers agree to sell to the Company, and the Company agrees to purchase from the Sellers, such aggregate number of shares of Common Stock (rounded to the nearest whole number of shares) equal to 90,180,457 (representing the outstanding shares of Common Stock beneficially owned by the Sellers as of May 29, 2015) multiplied by a fraction, the numerator of which is the aggregate number of shares of Common Stock purchased by the Company in the Tender Offer and the denominator of which is 273,278,285 (representing the outstanding shares of Common Stock held of record by all stockholders of the Company other than the Sellers, as of May 29, 2015). The shares of Common Stock to be purchased from the Sellers by the Company pursuant to this Section 1.1 is herein referred to as the “Shares.”  The number of Shares to be sold by each Seller under this Agreement shall be equal to the aggregate number of Shares being sold hereunder multiplied by the percentage set forth next to the Seller’s name on Schedule I hereto (subject to adjustments to eliminate any fractional Shares 

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as the Sellers in their discretion shall make), and the Sellers’ obligations under this Section 1 are several and not joint.

1.2 Purchase Price. The “Per Share Purchase Price” for the Shares shall be equal to the price per share paid by the Company for the shares of Common Stock tendered by the holders of Common Stock in the Tender Offer. The “Purchase Price” for each Seller shall equal the Per Share Purchase Price specified in Section 1.2 multiplied by the number of Shares purchased by the Company from each such Seller pursuant to Section 1.1 of this Agreement.

1.3 The Closing. Subject to the terms and conditions hereof, the purchase and sale of the Shares contemplated by this Agreement (the “Closing”) will take place at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, New York 10019 at 10:00 a.m., New York City time on the eleventh business day following the expiration date of the Tender Offer, or at such other later date or place as the parties shall mutually agree. At the Closing, (a) the Sellers will deliver to the Company the Shares to be purchased by the Company (such delivery to be made in such form as reasonably determined by the Company as necessary to effect the transfer of such Shares), and (b) the Company shall deliver the Purchase Price to each Seller by wire transfer of immediately available funds to one or more accounts specified by the Sellers at least one business day prior to the Closing.

SECTION 2

REPRESENTATIONS AND WARRANTIES OF SELLERS

In order to induce the Company to enter into this Agreement, each Seller, severally and not jointly, hereby represents and warrants to the Company as follows:

2.1 Ownership of Shares. As of the date of this Agreement, such Seller owns the number of issued and outstanding shares of Common Stock set forth opposite its name on Schedule I hereto (including options to acquire shares of Common Stock that are currently exercisable, but excluding restricted shares of Common Stock issued by the Company on June 1, 2015 to Nelson Peltz, Peter W. May and Edward P. Garden). At the Closing, such Seller shall own the Shares to be sold to the Company by such Seller and such Shares, when delivered by such Seller to the Company, shall be free and clear of any liens, claims or encumbrances, including rights of first refusal and similar claims, except for restrictions of applicable state and federal securities laws. There are no restrictions on the transfer of the Shares to be sold to the Company by such Seller imposed by any shareholder or similar agreement or any law, regulation or order, other than applicable state and federal securities laws.

2.2 Authorization. Such Seller has full right, power and authority to execute, deliver and perform this Agreement and to sell, assign and deliver the Shares to be sold by it to the Company. This Agreement is the legal, valid and, assuming due execution and delivery by the other parties hereto, binding obligation of such Seller, enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, relating to or affecting the rights of creditors or creditors’ rights generally or by general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity).

2.3 No Violation; No Consent. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby by such Seller (a) will not constitute a breach or violation of or default under any judgment, decree or order or any agreement or instrument of such Seller or to which such Seller is subject, (b) will not result in the creation or imposition of any lien upon 

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the Shares to be sold by such Seller, and (c) will not require the consent of or notice to any governmental entity or any party to any contract, agreement or arrangement with such Seller.

 

SECTION 3

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

In order to induce the Sellers to enter into this Agreement, the Company hereby represents and warrants as follows:

3.1 Organization and Corporate Power; Authorization. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. The Company has the requisite power and authority to execute, deliver and perform this Agreement and to acquire the Shares. As of the Closing, the Company will have sufficient capital to purchase the Shares hereunder. The execution, delivery and performance of this Agreement and the consummation by the Company of the transactions contemplated hereby have been approved by a majority of the disinterested directors on the Board of Directors and have been otherwise duly authorized by all requisite action on the part of the Company. This Agreement and any other agreements, instruments, or documents entered into by the Company pursuant to this Agreement have been duly executed and delivered by the Company and are the legal, valid and, assuming due execution by the other parties hereto, binding obligations of the Company, enforceable against the Company in accordance with their terms except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, relating to or affecting the rights of creditors or creditors’ rights generally or by general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity).

3.2 Capital Stock. The authorized capital stock of the Company consists of (a) 1,500,000,000 shares of Common Stock, of which 363,458,742 shares were issued and outstanding as of May 29, 2015, and (b) 100,000,000 shares of preferred stock, of which none were issued and outstanding as of May 29, 2015.

3.3 No Violation; No Consent. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby by the Company (a) will not constitute a breach or violation of or default under any judgment, decree or order or any agreement or instrument of the Company or to which the Company is subject, and (b) will not require the consent of or notice to any governmental entity or any party to any contract, agreement or arrangement with the Company.

SECTION 4

CONDITIONS TO THE COMPANY’S OBLIGATIONS

The obligations of the Company under Section 1 to purchase the Shares at the Closing from the Sellers are subject to the fulfillment as of the Closing of each of the following conditions unless waived by the Company in accordance with Section 8.9:

4.1 Representations and Warranties. The representations and warranties of the Sellers contained in Section 2 shall be true and correct in all material respects on and as of the date of the Closing with the same effect as though such representations and warranties had been made on and as of the date of the Closing.

 

4.2 Performance. The Sellers shall have performed and complied in all material respects with all agreements, obligations, and conditions contained in this Agreement that are required to be performed or complied with by it on or before the date of the Closing.

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4.3 Tender Offer. The expiration of the Tender Offer shall have occurred and the Company shall have purchased shares of Common Stock pursuant thereto in accordance with the terms thereof.

4.4 Delivery of Shares. The Sellers shall have delivered all of the Shares to be sold by them at the Closing, free and clear of any liens, claims or encumbrances, along with all documents or other instruments necessary for a valid transfer.

4.5 Further Assurances. No governmental authority shall have advised or notified the Company that the consummation of the transactions contemplated hereunder would constitute a material violation of any applicable laws or regulations, which notification or advice shall not have been withdrawn after the exhaustion of the Company’s good faith efforts to cause such withdrawal.

SECTION 5

CONDITIONS TO SELLERS’ OBLIGATIONS

The obligations of the Sellers under Section 1 to sell the Shares at the Closing are subject to the fulfillment as of the Closing of each of the following conditions unless waived by the Sellers in accordance with Section 8.9:

5.1 Representations and Warranties. The representations and warranties of the Company contained in Section 3 shall be true and correct in all material respects as of the date of the Closing with the same effect as though such representations and warranties had been made on and as of the date of the Closing.

5.2 Performance. The Company shall have performed and complied in all material respects with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the date of the Closing.

5.3 Tender Offer. (a) The expiration of the Tender Offer shall have occurred and (b) the Company shall have purchased shares of Common Stock pursuant thereto in accordance with the terms thereof.

5.4 Further Assurances. No governmental authority shall have advised or notified the Sellers that the consummation of the transactions contemplated hereunder would constitute a material violation of any applicable laws or regulations, which notification or advice shall not have been withdrawn after the exhaustion of the Sellers’ good faith efforts to cause such withdrawal.

 

SECTION 6

COVENANTS

6.1 No Purchase of Common Stock. Until eleven business days following the expiration date of the Tender Offer, the Sellers agree that they and their affiliates will not, directly or indirectly, purchase any shares of Common Stock.

6.2 No Sale of Common Stock in the Tender Offer. The Sellers agree that they, directly or indirectly, will not tender any shares of Common Stock, or sell any shares of Common Stock, in the Tender Offer.

6.3 Tender Offer.  The Company shall not reduce the Price Range or the Total Consideration in the Tender Offer without the prior written consent of the Sellers.

6.4 Closing Conditions. The Sellers and the Company shall use their commercially reasonable 

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efforts to ensure that each of the conditions to Closing is satisfied.

6.5 Withholding.

(a)            The Purchase Price shall be paid to each Seller free and clear of any and all U.S. federal, state, local or foreign income, backup withholding or withholding taxes; provided, (i) such Seller provides a properly completed Internal Revenue Service (“IRS”) Form W-9 or an appropriate IRS Form W-8, as applicable, and (ii) in the case of a Seller that is not a United States person (within the meaning of Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended (the “Code”)), such Seller provides documentation substantially in the form of Exhibit A hereto to the Company certifying that such Seller meets at least one of the “complete termination,” “substantially disproportionate” or “not essentially equivalent to a dividend” tests under Section 302 of the Code (the “Section 302 Certification”).

(b)             If a Seller that is not a United States person fails to provide the Section 302 Certification at the time the Purchase Price is otherwise to be paid to such Seller hereunder, the Company agrees, pursuant to Treasury Regulations Section 1.1441-3T(d)(1), to hold in escrow 30% of the Purchase Price payable to such Seller, or, if such Seller has provided a properly completed IRS Form W-8IMY, 30% of the portion of the Purchase Price payable to such Seller that is attributable to any beneficial owner that is not a United States person, until the earliest of (i) such Seller delivering the Section 302 Certification, (ii) such Seller notifying the Company that it will be unable to deliver the Section 302 Certification and (iii) December 31, 2015.

(c)            In the event a Seller delivers the Section 302 Certification in accordance with Section 6.5(b)(i), the Company shall promptly pay to such Seller the amount withheld in accordance with Section 6.5(b). In the event that such Seller delivers the notification provided for in Section 6.5(b)(ii), or upon the expiration of the period referred to in Section 6.5(b)(iii), the Company shall pay the required amount to the appropriate taxing authority, and such remittance shall be treated for purposes of this Agreement as a payment of a portion of the Purchase Price to the Sellers. In the event that, as a result of the application of Section 6.5(d) or otherwise, the amount required to be paid to the appropriate taxing authority is less than the full amount withheld pursuant to Section 6.5(b), any excess shall be promptly paid to such Seller at such time.

(d)            If the Company reasonably determines, pursuant to Section 302(d) of the Code, that the sale of Shares by such Seller hereunder is properly treated as a “distribution” subject to Section 301 of the Code, then, subject to the foregoing provisions of this Section 6.5, the Company shall withhold an amount therefrom, such amount to be calculated based on the Company’s reasonable estimate of the Company’s current and accumulated earnings and profits for the year in which the Closing occurs, as determined in accordance with Treasury Regulation Section 1.1441-3(c)(2)(ii); provided that if such Seller certifies as to its eligibility for a reduced rate of withholding pursuant to an income tax treaty on IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, provided to the Company by such Seller, any such withholding shall be made at such reduced rate.

(e)            Upon the reasonable request of any Seller, the Company shall promptly provide to such Seller any information that is reasonably required by such Seller to (i) determine the tax consequences of the sale of Shares hereunder, including consequences resulting from other sales of shares of Common Stock which are taken into account in the Section 302 Certification, or (ii) complete the Section 302 Certification, including the number of shares of the Company issued and outstanding at the time of the request or an earlier time.

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SECTION 7

SURVIVAL OF REPRESENTATIONS AND WARRANTIES; LIMITATION ON LIABILITY

7.1 Survival. All representations and warranties hereunder shall survive the Closing except that the representations and warranties in Sections 2.3 and 3.3 shall only survive the Closing until the second anniversary of the Closing.

7.2 Limitation on Liability. Notwithstanding the foregoing, in no event shall any Seller’s liability for breach of the representations, warranties and covenants exceed the Purchase Price to be paid by the Company to such Seller. The obligations of each Seller under this Agreement are several and not joint and no Seller shall have any liability hereunder for the breach of the representations, warranties and covenants of any other Seller hereunder.

SECTION 8

MISCELLANEOUS

8.1 Adjustments. Wherever a particular number is specified herein, including, without limitation, number of shares or price per share, such number shall be adjusted to reflect any stock dividends, stock-splits, reverse stock-splits, combinations or other reclassifications of stock or any similar transactions and appropriate adjustments shall be made with respect to the relevant provisions of this Agreement so as to fairly and equitably preserve, as far as practicable, the original rights and obligations of the Company and the Sellers under this Agreement.

8.2 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successor and assigns of the parties hereto.

8.3 Entire Agreement; Amendment. This Agreement contains all the terms agreed upon among the parties with respect to the subject matter hereof and supersedes all prior agreements, arrangements and communications, whether oral or written with respect to such subject matter. Neither this Agreement nor any provision hereof may be amended, changed or waived other than by a written instrument signed by the party against who enforcement of any such amendment, change or waiver is sought.

8.4 Cooperation. The Company and the Sellers shall, from and after the date hereof, cooperate in a reasonable manner to effect the purposes of this Agreement.

8.5 Termination. The Company or the Sellers may terminate this Agreement if (a) the Tender Offer is not commenced by June 17, 2015, (b) the Tender Offer is terminated without the purchase of any shares of Common Stock or (c) if the Tender Offer is not consummated by August 14, 2015; provided that the Company may not terminate this Agreement under this clause (c) unless the Tender Offer is terminated. Upon termination of this Agreement pursuant to this Section 8.5, none of the parties hereto shall have any liability hereunder except for breaches of such party’s representations, warranties or covenants occurring prior to the date of such termination.

8.6 Notices. All notices and all other communications hereunder shall be in writing and shall be deemed given if delivered personally or sent by registered or certified mail, postage prepaid (return receipt requested), sent by facsimile (receipt of which is confirmed) or sent by a nationally recognized overnight courier (receipt of which is confirmed) to a party at the following address (or at such other address for a party as shall be specified by like notice):

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If to the Sellers:

Trian Fund Management, L.P.

280 Park Avenue, 41st Floor

New York, New York 10017

Attn: Chief Legal Officer

Facsimile: (212) 451-3216

 

If to the Company:

The Wendy’s Company

One Dave Thomas Blvd.

Dublin, Ohio 43017

Attn: General Counsel

Facsimile: (614) 764-3243

Each such notice or other communication shall be effective at the time of receipt if delivered personally or sent by facsimile (with receipt confirmed) or nationally recognized overnight courier (with receipt confirmed), or three (3) business days after being mailed, registered or certified mail, postage prepaid, return receipt requested.

8.7 Severability. If any provision of this Agreement shall be judicially determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

8.8 GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any legal action or other legal proceeding relating to this Agreement or the enforcement of any provision of this Agreement will be brought or otherwise commenced in any state or federal court sitting in the Borough of Manhattan of the City of New York. Each party hereto agrees to the entry of an order to enforce any resolution, settlement, order or award made pursuant to this Section 8.8 by the state and federal courts sitting in the Borough of Manhattan of the City of New York and in connection therewith hereby irrevocably waives, and agrees not to assert by way of motion, defense, or otherwise, in any such action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action or proceeding is brought in an inconvenient forum, that the venue of the action is improper, or that this Agreement or the transactions contemplated by this Agreement may not be enforced in or by any of the above-named courts.

 

8.9 Delays or Omissions. It is agreed that no delay or omission to exercise any right, power or remedy accruing to any party upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach or default, or any acquiescence therein, or of any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character of any breach or default under this Agreement, or any waiver of any provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in writing, and that all remedies, either under this Agreement, by law or otherwise, shall be cumulative and not alternative.

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8.10 Consents. Any permission, consent, or approval of any kind or character under this Agreement shall be in writing and shall be effective only to the extent specifically set forth in such writing.

8.11 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 an injunction or injunctions to prevent or cure breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in addition to any other remedy to which they are entitled at law or in equity, and any party sued for breach of this Agreement expressly waives any defense that a remedy in damages would be adequate.

8.12 Payment of Fees and Expenses. Each party shall be responsible for paying its own fees, costs and expenses in connection with this Agreement and the transactions herein contemplated.

8.13 Construction of Agreement. No provision of this Agreement shall be construed against either party as the drafter thereof. The titles of the Sections of this Agreement are for convenience of reference only and in no way define, limit, extend, or describe the scope of this Agreement or the intent of any of its provisions.

8.14 Counterparts. This Agreement may be executed in any number of counterparts, including via facsimile, each of which shall be an original, but all of which together shall constitute one instrument.

[Signatures follow on next page]

 

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IN WITNESS WHEREOF, the parties have caused this Stock Purchase Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first written above.

 

		
THE WENDY’S COMPANY

	 
		 	 	 
		
By:

	
/s/ Todd A. Penegor

	 
		
Name:

	
Todd A. Penegor

	 
		
Title:

	
Executive Vice President, Chief Financial Officer and International

	 
		 	 	 
		 	 	 
		
NELSON PELTZ

	 
		 	 	 
		
By:

	
/s/ Nelson Peltz

	 
		
Name:

	
Nelson Peltz

	 
		 	 	 
		 	 	 
		
NELSON AND CLAUDIA PELTZ FAMILY FOUNDATION

	 
		 	 	 
		
By:

	
/s/ Nelson Peltz

	 
		
Name:

	
Nelson Peltz

	 
		
Title:

	
Trustee

	 
		 	 	 
		
By:

	
/s/ Claudia Peltz

	 
		
Name:

	
Claudia Peltz

	 
		
Title:

	
Trustee

	 
		 	 	 
		
By:

	
/s/ Mathew Peltz

	 
		
Name:

	
Mathew Peltz

	 
		
Title:

	
Trustee

	 
		 	 	 
		
By:

	
/s/ Neale Albert

	 
		
Name:

	
Neale Albert

	 
		
Title:

	
Trustee

	 
		 	 	 
		 	 	 
		
CLAUDIA PELTZ

	 
		 	 	 
		
By:

	
/s/ Claudia Peltz

	 
		
Name:

	
Claudia Peltz

	 
		 	 	 
		 	 	 

 

[Purchase Agreement]

9

 

		
CLAUDIA PELTZ, as custodian for DARREN PELTZ, under the New York Uniform Transfers to Minors Act

	 
		 	 	 
		
By:

	
/s/ Claudia Peltz

	 
		
Name:

	
Claudia Peltz

	 
		
Title:

	
Custodian

	 
		 	 	 
		 	 	 
		
CLAUDIA PELTZ, as custodian for NICOLA PELTZ, under the New York Uniform Transfers to Minors Act

	 
		 	 	 
		
By:

	
/s/ Claudia Peltz

	 
		
Name:

	
Claudia Peltz

	 
		
Title:

	
Custodian

	 
		 	 	 
		 	 	 
		
CLAUDIA PELTZ, as custodian for GREGORY PELTZ, under the New York Uniform Transfers to Minors Act

	 
		 	 	 
		
By:

	
/s/ Claudia Peltz

	 
		
Name:

	
Claudia Peltz

	 
		
Title:

	
Custodian

	 
		 	 	 
		 	 	 
		
CLAUDIA PELTZ, as custodian for ZACHARY PELTZ, under the New York Uniform Transfers to Minors Act

	 
		 	 	 
		
By:

	
/s/ Claudia Peltz

	 
		
Name:

	
Claudia Peltz

	 
		
Title:

	
Custodian

	 
		 	 	 
		 	 	 
		
PELTZ 2009 FAMILY TRUST

	 
		 	 	 
		
By:

	
/s/ Claudia Peltz

	 
		
Name:

	
Claudia Peltz

	 
		
Title:

	
Trustee

	 
		 	 	 
		
By:

	
/s/ Mathew Peltz

	 
		
Name:

	
Mathew Peltz

	 
		
Title:

	
Trustee

	 
		 	 	 
		
By:

	
/s/ Neale Albert

	 
		
Name:

	
Neale Albert

	 
		
Title:

	
Trustee

	 
		 	 	 
		 	 	 

 

[Purchase Agreement]

10

 

		
PETER W. MAY

	 
		 	 	 
		
By:

	
/s/ Peter W. May

	 
		
Name:

	
Peter W. May

	 
		 	 	 
		 	 	 
		
THE LENI & PETER MAY FAMILY FOUNDATION

	 
		 	 	 
		
By:

	
/s/ Peter W. May

	 
		
Name:

	
Peter W. May

	 
		
Title:

	
Director

	 
		 	 	 
		
By:

	
/s/ Leni May

	 
		
Name:

	
Leni May

	 
		
Title:

	
Director

	 
		 	 	 
		 	 	 
		
EDWARD P. GARDEN

	 
		 	 	 
		
By:

	
/s/ Edward P. Garden

	 
		
Name:

	
Edward P. Garden

	 
		 	 	 
		 	 	 
		
TRIAN PARTNERS, L.P.

	 
		 	 	 
		
By:

	
Trian Partners GP, L.P.,

its general partner

	 
		
 

	 
		 	 	 
		
By:

	
Trian Partners General Partner, LLC,

	 
		 	
its general partner

	 
		 	 	 
		
By:

	
/s/ Peter W. May

	 
		
Name:

	
Peter W. May

	 
		
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/ Peter W. May

	 
		
Name:

	
Peter W. May

	 
		
Title:

	
Member

	 
		 	 	 

 

[Purchase Agreement]

11

 

		
TRIAN PARTNERS PARALLEL FUND I, L.P.

	 
		 	 	 
		
By:

	
Trian Partners Parallel Fund I  General Partner, LLC,

	 
		 	
its general partner

	 
		 	 	 
		
By:

	
/s/ Peter W. May

	 
		
Name:

	
Peter W. May

	 
		
Title:

	
Member

	 
		 	 	 
		 	 	 
		
TRIAN PARTNERS GP, L.P.

	 
		 	 	 
		
By:

	
Trian Partners General Partner, LLC,

	 
		 	
its general partner

	 
		 	 	 
		
By:

	
/s/ Peter W. May

	 
		
Name:

	
Peter W. May

	 
		
Title:

	
Member

	 
		 	 	 
		 	 	 
		
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/ Peter W. May

	 
		
Name:

	
Peter W. May

	 
		
Title:

	
Member

	 
		 	 	 
		 	 	 

[Purchase Agreement]

12

Schedule I

	
Name of Seller

	

Number of Shares of 

Common Stock Owned

	

Percentage of Aggregate Shares 

to be Sold by Each Seller

	
Nelson Peltz

	
15,674,815

	
17.38%

	
Nelson & Claudia Peltz Family Foundation

	
311,724

	
0.35%

	
Claudia Peltz

	
70,650

	
0.08%

	
Darren Peltz

	
300

	
0.0003%

	
Nicola Peltz

	
300

	
0.0003%

	
Gregory Peltz

	
64,102

	
0.07%

	
Zachary Peltz

	
64,102

	
0.07%

	
Peltz 2009 Family Trust

	
209,611

	
0.23%

	
Peter W. May

	
8,330,940

	
9.24%

	
The Leni & Peter May Family Foundation

	
276,149

	
0.31%

	
Edward P. Garden

	
377,519

	
0.42%

	
Trian Partners, L.P.

	
18,415,979

	
20.42%

	
Trian Partners Master Fund, L.P.

	
39,523,894

	
43.83%

	
Trian Partners Parallel Fund I, L.P.

	
1,861,851

	
2.06%

	
Trian Partners GP, L.P.

	
19,769

	
0.02%

	
Trian Partners Strategic Investment Fund, L.P.

	
4,978,752

	
5.52%

 

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Exhibit A

 

Redemption Payment – Section 302 Certification

The Wendy’s Company (the “Company”) has repurchased for cash, pursuant to the Stock Purchase Agreement, by and among the Company and the sellers thereto, dated as of June 2, 2015 (the “Stock Repurchase”), a total of _______________ shares of its stock. The Company, in a related transaction, has repurchased for cash, in a modified “Dutch auction” tender offer that expired on , 2015 (the “Tender Offer”), upon the terms and subject to the conditions described in the Offer to Purchase (the “Offer to Purchase”), a total of _______________ shares of its stock.

_________________________________________________ (herein “Investor”) is a member of the Trian Group (as defined in the Offer to Purchase), and as such has participated in the Stock Repurchase and has also sold stock of the Company in the open market and/or privately negotiated transactions during the pendency of or after consummation of the Stock Repurchase and Tender Offer (such transactions, together the Stock Repurchase and the Tender Offer, the “Transactions”) as part of an integrated plan to reduce the Investor’s interest in the Company such that, as to the Investor, the Stock Repurchase is treated as an exchange for U.S. federal, state and local income tax purposes and not a distribution, all as set forth in the Offer to Purchase and Amendment No. 44 to the Schedule 13D filed by certain members of the Trian Group on June 3, 2015.

The Investor understands that the Company may be required to impose withholding tax of up to 30% of the proceeds of the Stock Repurchase paid to the Investor in accordance with applicable U.S. federal income tax provisions unless the Stock Repurchase is treated as an exchange within the meaning of Section 302(b) of the Internal Revenue Code of 1986, as amended (the “Code”).

The Investor acknowledges that the Company will rely upon the Investor’s representations in carrying out the Company’s duties under applicable U.S. federal income tax provisions. The Investor hereby represents and certifies that it has independently (or with the advice of a tax advisor) determined the tax treatment of the Stock Repurchase under Section 302 of the Code, taking into account shares considered to be owned by the Investor pursuant to the attribution rules of Section 318 of the Code, as well as the appropriate withholding tax treatment (as stated below). Accordingly, if the box below for representation (A) or (B) is checked, the Investor certifies that, as to the Investor, the Stock Repurchase is an exchange under Section 302 of the Code and therefore the Investor is entitled to receive payment of the full amount of the Stock Repurchase proceeds free of U.S. withholding tax under Sections 1441 and 1442 of the Code.

In addition, the Investor agrees to release, indemnify and hold harmless the Company, all affiliates of the Company, and any and all of the Company’s and its affiliates’ respective successors, assigns, officers, directors, and employees from any and all losses, claims, damages, expenses (including attorneys' fees and expenses) and liabilities directly or indirectly arising from or related to the Company’s payment of the Stock Purchase proceeds to the Investor without collecting U.S. withholding tax due to the Company’s reliance on the Investor’s representations herein.

 

 

14

 

CERTIFICATION OF TREATMENT OF TENDER PAYMENT FROM THE COMPANY

Pursuant to the Stock Repurchase, the undersigned shareholder (the “Investor”) received a gross amount $_________ in cash for each share sold by the Investor to the Company (including any amounts withheld by the Company), or $________ in the aggregate (the “Payment”). All share ownership amounts and percentages listed below for the Investor take into account the attribution rule of Section 318 of the Code.

CHECK THE APPLICABLE BOX (check one box only and read instructions, attached)

 

	A.	☐	
Reduction in Proportionate Interest -- Qualifying for Sale or Exchange Treatment

	 	 	
The Payment should be treated as a payment in exchange for the Investor's shares because the Investor's proportionate interest in the Company, taking into account shares considered to be owned by the Investor pursuant to the attribution rules of Section 318 of the Code, has been reduced, for the following reasons:

	 		
	 	 	
Step 1: Immediately before the commencement of the Transactions, the Investor owned _______________ shares of the Company. The Investor's percentage ownership in the Company (based on _______________ shares outstanding as of June 3, 2015) was ________%.

	 		
	 	 	
Step 2: Immediately after the completion of the Transactions, the Investor owned _______________ shares of the Company. The Investor's percentage ownership in the Company (based on _______________ shares outstanding as of  __, 2015) was __________ %.

	 	 	 
	 	
 

	
OR

	 		
	
B.

	
☐

	
Complete Termination of Interest

	 	 	
The Payment should be treated as a payment in exchange for the Investor’s shares because the Investor completely terminated its interest in the Company pursuant to the Transactions.

	 	 	 
	 	
 

	
OR

	 		
	
C.

	
☐

	
Dividend

	 	 	
The Payment should be treated as a dividend.

Under penalties of perjury, I declare that I have examined the herein representations and to the best of my knowledge and belief they are true, correct, and complete in all material respects. I further certify under penalty of perjury that I am the beneficial owner (or authorized to sign for the beneficial owner) of the Payment. Furthermore, I agree to the above release and indemnity.

	
Name of Investor:

	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
Sign Here:

	 	 	 	 	 	 
	 	
Signature of beneficial owner (or person authorized to sign for beneficial owner)

	 	
Date

	 	
Capacity in which acting

 

 

 

15FY16 Q1 Exhibit 10.1

Exhibit 10.1

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT ("Agreement"), dated as of July 26, 2010 (the "Execution Date), is made between STERLING JEWELERS INC., a Delaware corporation (the "Company"), and STEVEN J. BECKER (the "Executive").

WHEREAS, the Company is engaged in the business of operating a chain of retail jewelry stores in the United States (the "Business");

WHEREAS, the Executive is presently employed by the Company as its
Senior Vice President of Human Resources;

WHEREAS, the Company and the Executive previously entered into an Employment Agreement on August 31, 2006 (the "Prior Agreement") as amended on September 1, 2007 and December 6, 2007;

WHEREAS, the Company hereby desires to continue the employment of the Executive and to amend the Prior Agreement in its entirety; and

WHEREAS, the Executive desires to accept such continued employment subject to the terms and provisions of this Agreement;

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and obligations hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows:

1.  Employment and Term.

(a)  The Company hereby employs the Executive, and the Executive hereby accepts continued employment by the Company, in the capacities and on the terms and subject to the conditions set forth herein from the Execution Date until the date this Agreement is terminated by the Company or by the Executive pursuant to the terms of this Agreement (the "Term of Employment").

(b)  The Company may terminate this Agreement for any reason, other than for Cause or by reason of the Executive's death or disability (as described in Section 4(a)), at any time by notifying the Executive in writing.   In the event the Company terminates this Agreement pursuant to this Section l(b), the Company shall be obligated to (i) pay the Executive his Base Salary (as defined in Section 3 below) to the effective date of such termination, to the extent not already paid, (ii) pay the Executive for any Annual Bonus (as defined in Section 3 below) (which amount shall be paid during the period commencing on the 15th of April and ending on the 31st of May following the end of the applicable fiscal year of Signet Jewelers Limited (the parent of the Company, "Signet"))  and/or Long Term Bonus (as defined below in Section 3 below) (which amount shall be paid in accordance with the long term incentive plan for executive officers then in effect, as approved by the Compensation Committee of Signet of its designee) earned by Executive for a completed fiscal year (or, in the case of the Long Term Bonus, a completed performance period) prior to the effective date of such termination but which remains unpaid as of the date of termination, (iii) pay the Executive the pro-rata portion of the Annual Bonus he would have been entitled to receive had he remained in employment through the end of the fiscal year during which such termination occurred, based on the portion of the fiscal year that has elapsed prior to such termination (which amount shall be paid during the period commencing on the 15th  of April and ending on the 31st of May following the end of the applicable fiscal year of Signet), (iv) continue to pay to the Executive his Base Salary in effect on the last date of Executive's employment  for twelve (12) months following such last date of employment, in accordance with the Company's standard payroll practices for executive officers, with each such payment hereby designated a separate payment, and (v) provide the Executive with a lump-sum payment equal to the cost of the COBRA premium for twelve (12) months of coverage at the same level as in effect 

Exhibit 10.1

immediately  prior to the date of termination in order to support the Executive's transition.   The Executive shall continue to have the obligations provided for in Sections 6 and 7 hereof.

(c)  The Term of Employment may also be terminated by the Executive at any time upon three hundred sixty (360) days' prior written notice to the Company. Upon such termination, the Company shall have no further obligations hereunder except to (i) pay the Executive his Base Salary to the effective date of such termination, to the extent not already paid, with each such payment hereby designated a separate payment, (ii) pay the Executive for any Annual Bonus (as defined in Section 3 below) (which amount shall be paid during the period commencing on the 15th of April and ending on the 31st of May following the end of the applicable fiscal year of Signet) and/or Long Term Bonus (as defined below in Section 3 below) (which amount shall be paid in accordance with the long term incentive plan for executive officers then in effect, as approved by the Compensation  Committee  of Signet or its designee) earned by the Executive for a completed fiscal year (or, in the case of the Long Term Bonus, a completed performance period) prior to the effective date of such termination but which remains unpaid as of the date of termination, and (iii) provide the Executive any other benefits to which he is entitled upon such termination. The Executive shall continue to have the obligations provided in Sections 6 and 7 hereof.

2.  Duties.  During the Term of Employment, the Executive shall serve as Senior Vice President of Human Resources of the Company.  The Executive shall report to the Chief Executive Officer of the Company or such other officer of the Company as determined by the Chief Executive Officer of the Company in the sole discretion of the Chief Executive Officer of the Company.  The Executive shall serve the Company faithfully and to the best of his ability in such capacity, as determined by the Chief Executive Officer of the Company, devoting substantially all of his business time, attention, knowledge, energy and skills to such employment.  In addition, if elected, the Executive shall also serve during any part of the Term of Employment as any other officer or a director of the Company or any subsidiary corporation or parent corporation of the Company, without any compensation therefor other than as specified in this Agreement.

3.  Compensation  and Benefits.  As full and complete compensation to the Executive for his execution and delivery of this Agreement and performance of the services required hereunder, the Company shall pay, grant or provide to the Executive, and the Executive agrees to accept:

(a) (i) a base salary, payable in accordance with the Company's standard payroll practices for executive officers, of $380,000 per annum ("Base Salary"); (ii) an annual bonus (the "Annual  Bonus") of up to 70% of Base Salary, in accordance with the bonus plan then in effect for executive officers of the Company, as approved by the Compensation Committee  of Signet or its designee, which Annual Bonus shall be paid during the period commencing on the 15th of April and ending on the 31st of May following the end of the applicable fiscal year of Signet; (iii) a long term incentive bonus, payable in accordance with the long term incentive plan for executive officers then in effect as approved by the Compensation  Committee of Signet or its designee (which amount shall be paid in accordance  with the long term incentive plan for executive officers then in effect, as approved by the Compensation  Committee of  Signet or its designee) (the "Long Term Bonus"),  and (iv) options, restricted stock or other stock­ based awards, if any, as determined in the sole discretion of the Compensation
Committee of Signet or designee, in accordance with the Signet Jewelers Limited Omnibus Incentive Plan or the equity incentive plan then in effect; provided, however, that on or prior to each May 1 of each year, the Board of Directors of the Company, the Compensation Committee of Signet or its designee shall review the amount of the Executive's Base Salary then in effect and, in the absolute discretion of the Board, such committee or its designee, the Base Salary may be increased, but not decreased, from such amount, based upon the performance of the Executive and other factors as may be considered by the Board, such committee or its designee to be relevant from time to time;

(b) medical/dental, long term disability and life insurance benefits made available generally from time to time by the Company to executive officers that are comparable with, but no less favorable to the Executive than, those benefits in effect as of the date of this Agreement  with respect to the Executive;

Exhibit 10.1

(c) such deferred compensation  benefits as may be made available generally from time to time by the Company to executive officers of the Company upon the authorization and approval of the Compensation  Committee of Signet; and

(d) such other perquisites and benefits as may be made available generally from time to time by the Company to executive officers of the Company.

No reimbursement or in-kind benefits provided under this Section 3 in respect of one taxable year shall affect the amounts payable in any other taxable year or shall be subject to liquidation or exchange for another benefit.  Any reimbursements made to the Executive pursuant to this Agreement or otherwise shall be paid no later than the last day of the year following the year in which the expense was incurred.
4.  Termination.

(a)  Disability.  In the event of any physical or mental disability during the Term of Employment which renders the Executive incapable of performing the services required of him for any period or periods aggregating six months during any twelve­ month period, the Company shall have the right, upon written notice to the Executive, to terminate the Executive's employment hereunder, effective upon the giving of such notice (or such later date as shall be specified in such notice).  Upon such termination, the Company shall have no further obligations hereunder, except to (i) pay the Executive his Base Salary to the effective date of such termination, to the extent not already paid, with each such payment hereby designated a separate payment, (ii) pay the Executive for any Annual Bonus (which amount shall be paid during the period commencing on the 15th of April and ending on the 31st of May following the end of the applicable fiscal year of Signet) and/or Long Term Bonus earned by Executive for a completed fiscal year (or, in the case of the Long Term Bonus, a completed performance period) prior to the effective date of such termination but which remains unpaid as of the date of termination, (iii) pay the Executive the pro-rata portion of the Annual Bonus he would have been entitled to receive had he remained in employment through the end of the fiscal year during which such termination occurred, based on the portion of the fiscal year that has elapsed prior to such termination (which amount shall be paid during the period commencing on the 15th  of April and ending on the 31st of May following the end of the applicable fiscal year of Signet), and (iv) provide the Executive any other benefits to which the Executive is entitled. For purposes of this Section 4(a), the Executive's physical or mental disability shall be determined in accordance with any disability plan of or applicable to the Company that is then in effect.  The Executive shall continue to have the obligations provided for in Sections 6 and 7 hereof.

(b)  Death.  In the event of the death of the Executive during the Term of Employment, the Executive's employment and this Agreement shall automatically terminate and the Company shall have no further obligations hereunder, except to (i) pay the Executive's estate the Base Salary to the effective date of termination, to the extent not already paid, and for six (6) months following such date, payable in accordance with the Company's standard payroll practices for executive officers, with each such payment hereby designated a separate payment, (ii) pay the Executive's estate for any Annual Bonus (which amount shall be paid during the period commencing on the 15th of April and ending on the 31st of May following the end of the applicable fiscal year of Signet) and/or Long Term Bonus earned by Executive for a completed fiscal year (or, in the case of the Long Term Bonus, a completed performance period) prior to the date of death but which remains unpaid as of the date of death, (iii) pay the Executive's estate the pro-rata portion of the Annual Bonus the Executive would have been entitled to receive had he remained in employment  through the end of the fiscal year during which such termination upon death occurred, based on the portion of the fiscal year that has elapsed prior to such
termination (which amount shall be paid during the period commencing on the 15th of  April and ending on the 31st of May following the end of the applicable fiscal year of Signet), and (iv) provide the Executive any other benefits to which the Executive is entitled.

(c)  Cause.  The Company shall have the right, upon written notice to the Executive, to terminate the Executive's employment under this Agreement for Cause (as hereinafter defined), effective upon the giving of such notice (or such later date as shall be specified in such notice), and the Company shall have no further obligations hereunder, except to pay the Executive his Base Salary to the effective date of termination, to the 

Exhibit 10.1

extent not already paid, and the Executive shall continue to have the obligations provided in Sections 6 and 7 hereof.

For purposes of this Agreement, "Cause" means:  (i)  fraud, embezzlement, gross insubordination on the part of the Executive or any act of moral turpitude or misconduct  (which misconduct adversely affects the business or reputation of the Company) by the Executive;  (ii)  conviction of or the entry of a plea of nolo contendere by the Executive for any felony; or (iii)  a material breach of, or the willful
failure or refusal by the Executive to perform and discharge, his duties, responsibilities or
obligations under this Agreement.

5.  Resignation upon Termination.  Upon the termination of the Executive's  employment  hereunder for any reason, the Executive shall immediately be deemed to resign, and shall resign, from all offices and directorships held by him in the Company or any of its subsidiaries  or affiliates and shall execute any and all documents reasonably necessary to effect such resignations as requested by the Company.

6.  Confidentiality; Ownership of Developments.

(a)  During the Term of Employment and for any time thereafter, the Executive shall keep secret and retain in strictest confidence and not divulge, disclose, discuss, copy or otherwise use or suffer to be used in any manner, except in good faith in connection with the Business of the Company and of any of the subsidiaries or affiliates of the Company, any trade secrets, confidential or proprietary information  and documents or materials owned, developed  or possessed by the Company or any of the subsidiaries or affiliates of the Company pertaining to the Business of the Company or any of the subsidiaries or affiliates of the Company, or any business the Company or any of its subsidiaries or affiliates is planning to conduct;  provided, however, that such information referred to in this Section 6(a) shall not include information that is or has become generally known to the public or the jewelry trade without violation of this Section 6.

(b)  The Executive acknowledges that all developments, including, without limitation, inventions (patentable or otherwise), discoveries, improvements, patents, trade secrets, designs, reports, computer software, flow charts and diagrams, data, documentation,  writings and applications thereof relating to the Business or planned business of the Company or any of the subsidiaries or affiliates of the Company that, alone or jointly with others, the Executive may create, make, develop or acquire during the Term of Employment  (collectively, the "Developments") are works made for hire and shall remain the sole and exclusive property of the Company and the Executive hereby assigns to the Company all of his right, title and interest in and to all such Developments.

(c)  The provisions of this Section 6 shall, without any limitation as to time, survive the expiration or termination of the Executive's employment hereunder, irrespective of the reason for any termination.

7.  Covenants Not to Solicit and Not to Compete.  The Executive agrees that during the Term of Employment and for a period of one year commencing upon the last date of Executive's employment (the "Non-Competition Period"), the Executive shall not, directly or indirectly, without the prior written consent of the Company:

(a) solicit, entice, persuade or induce any employee, consultant, agent or independent contractor of the Company or of any of the subsidiaries or affiliates of the Company to terminate his or her employment or engagement with the Company or such subsidiary or affiliate, to become employed by any person, firm or corporation other than the Company or such subsidiary or affiliate or approach any such employee, consultant, agent or independent contractor for any of the foregoing purposes; or

(b) directly or indirectly own, manage, control, invest or participate in any way in, consult with or render services to or for any person or entity (other than for the Company or any of the subsidiaries  or affiliates of the Company) which is engaged in the retail jewelry business; provided, however, that the restrictions of this Section 7(b) shall not extend to the ownership, management or control of a retail jewelry business by the 

Exhibit 10.1

Executive following the termination of his employment with the Company provided that such activity is no less than sixty (60) miles distant from any retail jewelry store of the Company at the time of such termination of employment and provided, further, however, that the restrictions of this Section 7(b) shall not extend to the ownership of publicly traded securities in a company engaged in the retail jewelry business, provided that such ownership does not exceed I% of the outstanding voting securities of such company.

Notwithstanding anything to the contrary contained herein, in the event Executive terminates his employment  upon less than three hundred sixty (360) days notice to the Company as required by Section  l(c), the Non-Competition Period shall be extended by an amount of time equal to three hundred sixty (360) days less the amount of notice actually given by the Executive to the Company; provided, however, if such termination by Executive upon less than three hundred sixty (360) days notice is within sixty (60) days following a Change in Control (as defined below), Executive's obligations pursuant to clause (b) above shall continue for the Non-Competition Period without giving effect to the extension of time provided for herein.  For purposes of this Agreement, a "Change in Control" shall mean: (i) the consummation  of a merger or consolidation of the Company with or into another entity or any other corporate reorganization (other than Signet or an affiliate of Signet or the Company), if persons who were not shareholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization more than fifty percent (50%) of the voting power of the outstanding securities of each of (A) the continuing or surviving entity and (B) any direct or indirect parent corporation  of such continuing or surviving entity or (ii) any person or group of related persons (other than Signet or an affiliate of Signet or the Company) shall acquire beneficial ownership of more than fifty percent (50%) of the voting power of all classes of stock of the Company. A transaction shall not constitute a "Change in Control" if its sole purpose is to change the state of the Company's incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company's securities immediately before such transaction.

8.  Specific Performance.  The Executive acknowledges that the services to be rendered by the Executive are of a special, unique and extraordinary character and, in connection with such services, the Executive will have access to confidential information vital to the Company's Business and the subsidiaries and affiliates of the Company.  By reason of this, the Executive consents and agrees that if the Executive violates any of the provisions of Section 6 or 7 hereof, the Company and the subsidiaries and affiliates of the Company would sustain irreparable injury and that monetary damages will not provide adequate remedy to the Company and that the Company shall be entitled to have Section 6 or 7 specifically enforced by any court having equity jurisdiction.  Nothing contained herein shall be construed as prohibiting the Company or any of the subsidiaries or affiliates of the Company from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of damages from the Executive.  The provisions of this Section 8 shall survive the expiration or termination of the Executive's employment hereunder, irrespective of the reason for any termination.

9.  Entire Agreement.  This Agreement embodies the entire agreement of the parties with respect to the Executive's employment and supersedes any other prior oral or written agreements, arrangements or understandings between the Executive and the Company.  Subject to Section 14, this Agreement may not be changed or terminated orally but only by an agreement in writing signed by the parties hereto.

10.  Governing Law; Jurisdiction.

(a)  This Agreement shall be subject to, and governed by, the laws of the
State of Ohio applicable to contracts made and to be performed therein.

(b)  Any action to enforce any of the provisions of this Agreement shall be brought in a court of the State of Ohio located in Summit County or in a Federal court located in Cleveland, Ohio.  The parties consent to the jurisdiction of such courts and to the service of process in any manner provided by Ohio law.  Each party irrevocably waives any objection which it may now or hereafter have to the venue of any such suit, action or proceeding brought in such court and any claim that such suit, action or proceeding has been brought in an inconvenient forum.

Exhibit 10.1

(c)  The predominantly prevailing party in any action to enforce any of the provisions of this Agreement shall be entitled to reimbursement from the other party for its or his reasonable costs and expenses (including attorneys fees and expenses) incurred in connection with such action.

11.  Assignability.  The obligations of the Executive may not be delegated and the Executive may not, without the Company's written consent thereto, assign, transfer, convey, pledge, encumber, hypothecate or otherwise dispose of this Agreement or any interest herein.  Any such attempted delegation or disposition shall be null and void and without effect.  The Company and the Executive agree that this Agreement and all of the Company's rights and obligations hereunder may be assigned or transferred by the Company to any successor to or affiliate of the Company.

12.  Severability.   If any provision of this Agreement or any part thereof, including, without limitation, Sections 6 and 7, as applied to either party or to any circumstances shall be adjudged by a court of competent jurisdiction to be void or unenforceable, the same shall in no way affect any other provision of this Agreement or remaining part thereof, which shall be given full effect without regard to the invalid or unenforceable part thereof, or the validity or enforceability of this Agreement.

If any court construes any of the provisions of Section 6 or 7, or any part thereof, to be unreasonable  because of the duration of such provision or the geographic scope thereof, such court may reduce the duration or restrict or redefine the geographic scope of such provision and enforce such provision as so reduced, restricted or redefined.

13.   Notices.  All notices to the Company or the Executive permitted or required hereunder shall be in writing and shall be delivered personally, by telecopier or by courier service providing for next-day delivery or sent by registered or certified mail, return receipt requested, to the following addresses:

The Company:
Sterling Jewelers Inc.
375 Ghent Road
Akron, Ohio  44333
Fax:  (330) 668-5191
Attn: Chief Financial Officer

with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Fax:   (212) 310-8007
Attn:  Amy Rubin

The Executive:
Steven J. Becker
Sterling Jewelers Inc.
375 Ghent Road
Akron, Ohio  44333

Either party may change the address to which notices shall be sent by sending written notice of such change of address to the other party.  Any such notice shall be deemed given, if delivered personally, upon receipt; if telecopied, when telecopied; if sent by courier service providing for next-day delivery, the next business day following deposit with such courier service; and if sent by certified or registered mail, three days after deposit (postage prepaid) with the U.S. mail service.

Exhibit 10.1

14.  Compliance with Code Section 409A.  To the extent applicable, this Agreement shall be interpreted in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"),  and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Execution Date.  A termination of employment shall not be deemed to have occurred for purposes of this Agreement providing for the payment of any amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon or following a termination of employment, unless such termination is also a "separation from service" within the meaning of Section 409A and the payment thereof prior to a "separation from service" would violate Section 409A.  For purposes of any such provision of this Agreement relating to any such payments or benefits, references to a "termination," "termination of employment" or like terms shall mean "separation from service."  Notwithstanding  any provision of the Agreement to the contrary, (i) if at the time of the Executive's termination of employment  with the Company the Executive is a "specified  employee" as defined in Section 409A Code and related Department of Treasury guidance and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination  of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company shall defer the commencement  of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to the Executive) until the date that is six months and one day following the Executive's termination of employment with the Company (or the earliest date as is permitted under Section 409A of the Code) and (ii) if any other payments of money or other benefits due to the Executive hereunder could cause the application  of an accelerated or additional tax under Section 409A of the Code, the Company may (a) adopt such amendments to the Agreement, including amendments with retroactive effect, that the Company determines necessary or appropriate to preserve the intended tax treatment of the benefits provided by the Agreement and/or (b) take such other actions as the Company determines necessary or appropriate to comply with the requirements of Section 409A of the Code and related Department of Treasury guidance.  The Company shall consult with the Executive in good faith regarding the implementation of this Section 14; provided that neither the Company nor any of its employees or representatives shall have any liability to the Executive with respect thereto.

15.  Withholding  Taxes.  The Company may withhold from any amounts payable under this Agreement such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.
16.  Paragraph Headings.  The paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

17.  Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same instrument.

Exhibit 10.1

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first written above.

                                	
			
	STERLING JEWELERS INC.

	By:
	 
	/s/ Mark S. Light

	Name:
	 
	Mark S. Light

	Title:
	 
	President & CEO

	 
	 
	 

	 
	 
	/s/ Steven J. Becker

	 
	 
	STEVEN J. BECKER

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