Exhibit 10.2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is made as of May 1, 1999 (the
"Effective Date"), by and between TRIARC COMPANIES, INC., a Delaware
corporation (the "Corporation"), and Peter W. May (the "Executive").
The Corporation, on behalf of itself and its shareholders, wishes to
continue to retain the Executive as an integral part of the management of the
Corporation.
IT IS, THEREFORE, AGREED:
1. Term of Agreement. This Agreement shall be effective as of the
Effective Date and, subject to Section 6, expire on April 30, 2004 (the
"Employment Period"); provided that the Employment Period shall automatically be
extended for successive one-year periods on May 1 of each year unless, not later
than 180 days preceding the date of any such extension, either party gives the
other party written notice (in accordance with Section 12(b)) of such party's
intention not to further extend the Employment Period.
2. Change of Control. For the purpose of this Agreement, a
"Change of Control" shall be deemed to have taken place if:
A. Individuals who, on the date hereof, constitute the Board
of Directors (the "Board") of the Corporation (the
"Incumbent Directors") cease for any reason to constitute
at least a majority of the Board, provided that any person
becoming a director subsequent to the date hereof, whose
election or nomination for election was approved by a
vote of at least two-thirds of the Incumbent Directors then
on the Board (either by a specific vote or by approval of
the proxy statement of the Corporation in which such
person is named as a nominee for director, without written
objection to such nomination) shall be an Incumbent
Director; provided, however, that no individual initially
elected or nominated as a director of the Corporation as a
result of an actual or threatened election contest with
respect to directors or as a result of any other actual or
threatened solicitation of proxies or consents by or on
behalf of any person other than the Board shall be deemed
to be an Incumbent Director;
B. Any "Person" (as such term is defined in Section 3(a)(9)
of the Securities Exchange Act of 1934 (the "Exchange
Act") and as used in Sections 13(d)(3) and 14(d)(2) of the
Exchange Act) is or becomes a "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Corporation representing
50% or more of the combined voting power of the
Corporation's then outstanding securities eligible to vote
for the election of the Board (the "Voting Securities");
provided, however, that the event described in this
paragraph B. shall not be deemed to be a Change in
Control by virtue of any of the following acquisitions: (i)
by the Corporation or any subsidiary of the Corporation in
which the Corporation owns more than 50% of the
combined voting power of such entity (a "Subsidiary"),
(ii) by any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or any
Subsidiary, (iii) by any underwriter temporarily holding
the Corporation's Voting Securities pursuant to a public
offering of such Voting Securities, (iv) pursuant to a Non-
Qualifying Transaction (as defined in paragraph C
immediately below), (v) pursuant to any acquisition by
Executive or by any Person which is an "affiliate" (within
the meaning of 17 C.F.R.ss.230.405) of Executive, or (vi)
pursuant to any acquisition by any Person as to which
Executive and Nelson Peltz, acting as a "group" (within
the meaning of Section 14(d)(2) of the Exchange Act), are
affiliates (an "Excluded Person");
C. The consummation of a merger, consolidation, statutory
share exchange or similar form of corporate transaction
involving the Corporation or any of its Subsidiaries that
requires the approval of the Corporation's stockholders,
whether for such transaction or the issuance of securities
in the transaction (a "Business Combination"), unless
immediately following such Business Combination: (i)
more than 50% of the total voting power of (A) the
corporation resulting from such Business Combination
(the "Surviving Corporation"), or (B) if applicable, the
ultimate parent corporation that directly or indirectly has
beneficial ownership of 100% of the voting securities
eligible to elect directors of the Surviving Corporation
(the "Parent Corporation"), is represented by the
Corporation's Voting Securities that were outstanding
immediately prior to such Business Combination (or, if
applicable, is represented by shares into which the
Corporation's Voting Securities were converted pursuant to
such Business Combination), and such voting power among the
holders thereof is in substantially the same proportion as the
voting power of the Corporation's Voting Securities among the
holders thereof immediately prior to the Business Combination,
(ii) no Person (other than (A) any employee benefit plan (or
related trust) sponsored or maintained by the Surviving
Corporation or the Parent Corporation or (B) an Excluded
Person) is or becomes the beneficial owner, directly or
indirectly, of 50% or more of the total voting power of the
outstanding voting securities eligible to elect directors of
the Parent Corporation (or, if there is no Parent Corporation,
the Surviving Corporation) and (iii) at least a majority of
the members of the board of directors of the Parent
Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) following the consummation of the
Business Combination were Incumbent Directors at the time of
the Board's approval of the execution of the initial agreement
providing for such Business Combination (any Business
Combination which satisfies all of the criteria specified in
(i), (ii) and (iii) above shall be deemed to be a
"Non-Qualifying Transaction");
D. A sale of all or substantially all of the Corporation's
assets, other than to an Excluded Person;
E. The stockholders of the Corporation approve a plan of
complete liquidation or dissolution of the Corporation; or
F. Such other events as the Board may designate.
Notwithstanding the foregoing, a Change in Control of the Company shall
not be deemed to occur solely because any person acquires beneficial ownership
of more than 50% of the Corporation's Voting Securities as a result of the
acquisition of the Corporation's Voting Securities by the Corporation which
reduces the number of the Corporation's Voting Securities outstanding; provided,
that if after such acquisition by the Corporation such person becomes the
beneficial owner of additional Corporation Voting Securities that increases the
percentage of outstanding Corporation Voting Securities beneficially owned by
such person, a Change in Control of the Corporation shall then occur.
3. Employment Period. The Corporation hereby agrees to continue
Executive in its employ for the Employment Period.
4. Position and Duties.
A. As of the date hereof, Executive is employed as President
and Chief Operating Officer of the Corporation, and as
such Executive is responsible for oversight and
management of all operations and activities of the
Corporation. Executive shall report to the Chief
Executive Officer of the Corporation and the Board.
During the Employment Period, Executive's position
(including status, offices, titles and reporting
requirements), authority, duties and responsibilities shall
be consistent with those of the President and Chief
Operating Officer of a publicly traded corporation.
Executive's services shall be performed primarily at the
executive offices of the Corporation located in New York
City, subject to reasonable travel requirements.
B. Excluding periods of vacation, sick leave and disability to
which Executive is entitled, Executive agrees to devote
reasonable attention and time during normal business
hours to the business and affairs of the Corporation and,
to the extent necessary to discharge the responsibilities
assigned to Executive hereunder, to use Executive's
reasonable best efforts to perform faithfully and efficiently
such responsibilities. Executive may (i) serve on
corporate, civic, educational, philanthropic or charitable
boards or committees, (ii) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (iii)
manage personal investments, so long as such activities do
not significantly interfere with the performance of
Executive's responsibilities hereunder. It is expressly
understood and agreed that to the extent that any such
activities have been conducted by Executive prior to a
Change in Control, the continued conduct of such
activities (or the conduct of activities similar in nature and
scope thereto) subsequent to the Change in Control shall
not thereafter be deemed to interfere with the performance
of Executive's responsibilities to the Corporation.
5. Compensation.
A. Base Salary. During the Employment Period, as
consideration for services rendered, the Corporation shall
pay to Executive a base salary at an annual rate at equal to
$1,200,000 for each year of the Employment Period, as
adjusted as described in the following sentence ("Base
Salary"), payable in accordance with the regular pay policy of
the Corporation. During the Employment Period, Base Salary may
be increased, but not decreased, at the discretion of the
Board or the Compensation Committee thereof. Any increase in
Base Salary shall not serve to limit or reduce any other
obligation to Executive under this Agreement. Executive's Base
Salary may not be reduced after any such increase.
B. Bonus and Incentive Programs. Executive shall (without
duplication) receive an annual bonus in respect of each
fiscal year of the Corporation (a "Fiscal Year") ending
during the Employment Period, at least equal to the bonus
amount actually earned by Executive for such fiscal year
under the Corporation's 1999 Executive Bonus Plan, as it
may hereinafter be amended, modified or superseded or
supplemented by another bonus plan sponsored by the
Corporation or any affiliated company; provided that the
Board (including the Compensation Committee thereof)
may award Executive additional bonus amounts in its
discretion (the aggregate of such bonus amounts being
referred to hereunder as the "Bonus"). In addition to the
Base Salary and Bonus payable as hereinabove provided,
Executive shall be entitled to participate during the
Employment Period in all incentive programs (whether
cash or equity based, or otherwise), savings, pension,
profit sharing and retirement plans and programs
applicable to other key executives of the Corporation. In
no event shall such plans and programs, in the aggregate,
provide Executive following a Change in Control with
compensation, benefits and reward opportunities less
favorable than the most favorable of those provided by the
Corporation and its subsidiaries for Executive under such
plans and programs as in effect at any time during the
ninety-day period immediately preceding the Change in
Control or, if more favorable to Executive, as provided at
any time thereafter with respect to any other key
executive.
C. Welfare Benefit Plans. During the Employment Period,
Executive and/or Executive's family, as the case may be,
shall be eligible for participation in and shall receive all
benefits under each welfare benefit plan of the
Corporation, including, without limitation, all medical,
prescription, dental, disability, salary continuance, life,
accidental death and travel accident insurance plan and
programs of the Corporation and its affiliated companies. In
no event shall such plans and programs, in the aggregate,
provide Executive following a Change in Control with benefits
less favorable than the most favorable of those provided by
the Corporation and its affiliated companies for Executive
under such plans and programs as in effect at any time during
the ninety-day period immediately preceding the Change in
Control or, if more favorable to Executive, as provided at any
time thereafter with respect to any other key executive.
D. Expenses. During the Employment Period, Executive
shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by Executive in the
performance of his duties hereunder, subject to the
submission of such written documentation as the
Corporation may reasonably require in accordance with its
standard expense reimbursement practices and policies.
E. Office and Support Staff. During the Employment Period,
Executive shall be entitled to an office and secretarial and
other assistance consistent with his position. For five
years following a Change in Control, Executive shall be
entitled to an office or offices of a size and with
furnishings and other appointments, and to secretarial and
other assistance, at least equal to those provided to
Executive at any time during the ninety-day period
immediately preceding the Change in Control, or, if more
favorable to Executive, as provided at any time thereafter
with respect to any other key executive.
F. Vacation. During the Employment Period, Executive
shall be entitled to six weeks per year of paid vacation.
G. Perquisites. During the Employment Period, Executive
shall be entitled to (i) be provided a driver of Executive's
choice, at the Corporation's cost, (ii) have a new
automobile of Executive's choice provided to him by the
Corporation at the Corporation's cost (and to have such
automobile replaced with a new one once it is three years
old), and be provided reimbursement for expenses
incurred by Executive in maintaining such automobile,
including parking, gasoline, insurance and maintenance,
(iii) reimbursement for tax, estate, financial planning and
accounting services from entities or individuals selected by
Executive, up to a maximum of $50,000 per year, and (iv) the
use of aircraft owned, rented or leased by the Corporation.
The Corporation shall report the taxable portion of the above
in accordance with applicable rules and regulations of the
Internal Revenue Service. The Corporation acknowledges that it
is making available the use of Corporation aircraft pursuant
to clause (iv) above primarily to ensure the safety and
security of Executive for the benefit of the Corporation, and
the Corporation encourages Executive to use such aircraft when
he travels, irrespective of whether such travel is primarily
for personal or business purposes.
H. Life Insurance. The Executive will cooperate in assisting the
Corporation in obtaining a key man life insurance policy on
the life of Executive, the beneficiary of which shall be named
by the Corporation, including completing all necessary
application materials and submitting to one or more physical
examinations with a physician of the Corporation's choice.
6. Termination. This Agreement shall terminate under the
following circumstances:
A. Death or Disability. This Agreement and the Employment
Period shall terminate automatically upon Executive's
death. The Corporation may terminate this Agreement,
after having established Executive's Disability (pursuant
to the definition of "Disability" set forth below), by giving
to Executive written notice of its intention to terminate
Executive's employment. In such a case, Executive's
employment with the Corporation shall terminate effective
on the 180th day after receipt of such notice (the
"Disability Effective Date"), provided that, within 180
days after such receipt, Executive shall not have returned
to full performance of Executive's duties. For purposes
of this Agreement, "Disability" means personal injury,
illness or other cause which, after the expiration of not
less than 180 days after its commencement, renders
Executive unable to perform his duties with substantially
the same level of quality as immediately prior to such
incident and such disability is determined to be total and
permanent by a physician selected by the Corporation or
its insurers and acceptable to Executive or Executive's legal
representative (such agreement as to acceptability not to be
withheld unreasonably).
B. With or Without Cause. The Corporation may terminate
Executive's employment with or without "Cause." The
Employment Period shall immediately end upon a
termination by the Corporation with Cause. For purposes
of this Agreement, "Cause" means (i) the willful and
continued failure of Executive to perform substantially his
duties with the Corporation (other than any such failure
resulting from Executive's incapacity due to physical or
mental illness or any such failure subsequent to Executive
being delivered a Notice of Termination without Cause by
the Corporation or delivering a Notice of Termination for
Good Reason to the Corporation) after a written demand
for substantial performance is delivered to Executive by
the Board which specifically identifies the manner in
which the Board believes that Executive has not
substantially performed Executive's duties and Executive
has failed to cure such failure to the reasonable
satisfaction of the Board, (ii) the willful engaging by
Executive in gross misconduct which results in substantial
damage to the Corporation or its affiliates, or (iii)
Executive's conviction (by a court of competent
jurisdiction, not subject to further appeal) of, or pleading
guilty to, a felony. For purpose of this paragraph B, no
act or failure to act by Executive shall be considered
"willful" unless done or omitted to be done by Executive
in bad faith and without reasonable belief that Executive's
action or omission was in the best interests of the
Corporation or its affiliates. Any act, or failure to act,
based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel
for the Corporation shall be conclusively presumed to be
done, or omitted to be done, by Executive in good faith
and in the best interests of the Corporation. Cause shall
not exist unless and until the Corporation has delivered to
Executive, along with the Notice of Termination for
Cause, a copy of a resolution duly adopted by three-
quarters (3/4) of the entire Board (excluding Executive if
Executive is a Board member) at a meeting of the Board
called and held for such purpose (after reasonable notice
to Executive and an opportunity for Executive, together
with counsel, to be heard before the Board), finding that
in the good faith opinion of the Board an event set forth in
clauses (i) - (iii) above has occurred and specifying the
particulars thereof in detail. The Board must notify Executive
of any event constituting Cause within ninety (90) days
following the Board's knowledge of its existence or such event
shall not constitute Cause under this Agreement.
C. With or Without Good Reason. Executive's employment
may be terminated by Executive with or without Good
Reason. The Employment Period shall immediately end
upon a termination by Executive without Good Reason.
For purposes of this Agreement, "Good Reason" means:
(i) (a) any change in the duties or responsibilities
(including reporting responsibilities) of Executive
that is inconsistent in any material and adverse
respect with Executive's position(s), duties,
responsibilities or status with the Corporation
immediately prior to the Effective Date (including
any material and adverse diminution of such duties
or responsibilities); provided, however, that Good
Reason shall not be deemed to occur upon a
change in duties or responsibilities (other than
reporting responsibilities) that is solely and directly
a result of the Corporation no longer being a
publicly traded entity and does not involve any
other event set forth in this paragraph C or (b) a
material and adverse change in Executive's titles or
offices (including his position as President and
Chief Operating Officer) with the Corporation;
(ii) any failure by the Corporation to comply with any
of the provisions of Section 5 of this Agreement;
(iii) the Corporation requiring Executive to be based at any
office or location other than that described in Section
4.A. hereof, or requiring Executive to travel in the
performance of his duties significantly more extensively
than the customary travel requirements of Executive as
of the Effective Date;
(iv) any purported termination by the Corporation of
Executive's employment otherwise than as
permitted by this Agreement, it being understood
that any such purported termination shall not be
effective for any purpose of this Agreement; or
(v) any failure by the Corporation to comply with and
satisfy Section 11.C of this Agreement by causing any
successor to the Corporation to expressly assume and
agree to perform this Agreement with Executive, to the
full extent set forth in said Section 11.C;
provided that a termination by Executive with Good Reason shall be effective
only if, within 30 days following the delivery of a Notice of Termination for
Good Reason by Executive to the Corporation, the Corporation has failed to cure
the circumstances giving rise to Good Reason to the reasonable satisfaction of
Executive. For purposes of this Section 6.C, a good faith determination made by
Executive that a "Good Reason" for termination has occurred, and has not been
adequately cured, shall be conclusive and binding. In addition to the above, any
termination by Executive for any reason on or after a Change of Control shall be
deemed to be a termination with Good Reason.
D. Expiration of the Employment Period. This Agreement
shall terminate upon the expiration of the Employment
Period due to the Corporation's giving to Executive a
written notice of intention not to extend the Employment
Period in accordance with Section 1.
E. Notice of Termination. Any termination by the
Corporation with or without Cause or by Executive with
or without Good Reason shall be communicated by Notice
of Termination to the other party hereto given in
accordance with Section 12.B of this Agreement. For
purposes of this Agreement, a "Notice of Termination"
means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii)
sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive's
employment under the provision so indicated and (iii) if
the termination date is other than the date of receipt of
such notice specifies the proposed termination date.
7. Obligations of the Corporation Upon Termination.
A. Death. If Executive's employment is terminated by
reason of Executive's death, the Corporation shall:
a. pay Executive's estate, in a lump sum in cash
within 30 days after the date of death, the amounts
described in clauses a and d of Section 7.D.;
b. pay Executive's estate the amounts described in
clauses b and c of Section 7.D. at the time or times
determined by the Corporation, but in no event
less rapidly than five substantially equal annual
installments beginning no later than 30 days after
the date of death;
c. pay Executive's estate, in a lump sum in cash at the
time Executive would have been entitled to receive his
Bonus for the Fiscal Year in which his death occurs, a
pro-rata Bonus for such Fiscal Year equal to the product
of X * Y (such product referred to below as the
"Pro-Rata Bonus"), where:
X = the greatest of (a) the largest Bonus paid to
Executive in respect of the two Fiscal
Years preceding the date of termination;
provided that the Bonus paid to Executive
in respect of the 1999 Fiscal Year pursuant
to the Corporation's 1999 Executive Bonus
Plan shall be annualized for this purpose
(the "Look-Back Bonus"), (b) the Bonus
which would have been paid to Executive
in respect of the Fiscal Year in which
termination occurs if the Corporation
attained its budgeted financial performance,
and accomplished any other targeted goals,
for such year, as reasonably determined by
the Compensation Committee of the Board
(the "Target Bonus"), or (c) the Bonus
which would have been paid to Executive
in respect of the Fiscal Year in which
termination occurs based on the
Corporation's actual performance, and
actual accomplishment of any other targeted
goals, as reasonably determined by the
Compensation Committee of the Board (the
"Actual Bonus," and the greatest of (a), (b)
and (c) the "Highest Bonus"); and
Y = the number of days elapsed in such year
preceding the date of termination divided by 365;
d. pay Executive's estate, within 30 days after the
date of death, the amount described in clause (iv)
of the first sentence of the second to last paragraph
of Section 7.D.;
e. provide those death benefits to which Executive is
entitled at the date of Executive's death under any
death benefit plans, policies or arrangements of the
Corporation which, following a Change in
Control, shall be at least comparable to those in
effect at any time during the ninety-day period
immediately preceding the Change in Control or, if
more favorable to Executive and/or Executive's
designees, as in effect on the date of Executive's
death with respect to other key executives and their
designees; and
f. provide to Executive's family the welfare benefits, or
payment in lieu of welfare benefits, described in clause
(iii) of the first sentence, and the second sentence, of
the second to last paragraph of Section 7.D.
In addition, upon a termination of Executive in accordance
with this Section 7.A:
g. all non-vested stock options, and any other non-
vested stock or stock-based awards issued by the
Corporation or any subsidiary of the Corporation,
shall immediately become fully vested, non-
forfeitable and exercisable; provided that, in the
case of options or awards granted by Triarc
Beverage Holdings Corp. ("TBHC"), this clause g.
shall not be operative unless and until such vesting
would not constitute a default or an event of
default, or result in a mandatory prepayment
requirement, under the terms of any agreement for
indebtedness for borrowed money (each, a
"Financing Limitation"); and
h. all Executive's stock options (A) granted on or
after February 24, 2000 by the Corporation or any
of its subsidiaries, or (B) granted by the
Corporation before February 24, 2000 (including
those previously vested) if the exercise price
thereof is greater than the closing price of the
Corporation's common stock on the New York
Stock Exchange on February 24, 2000, shall
remain exercisable until the earlier of (i) one year
following termination or (ii) their respective stated
expiration dates; provided that in the case of
options or awards described in subclause (A) of
this clause h. which are granted by TBHC, this
clause h. shall be subject to any applicable
Financing Limitation.
B. Disability. If Executive's employment is terminated by
reason of Executive's disability, the Corporation shall:
a. pay Executive, in a lump sum in cash within 30
days following the Disability Effective Date, the
amounts described in clauses a and d of Section
7.D.;
b. pay Executive's estate the amounts described in
clauses b and c of Section 7.D. at the time or times
determined by the Corporation, but in no event
less rapidly than substantially equal annual
installments beginning no later than 30 days after
the Disability Effective Date;
c. pay Executive the Pro-Rata Bonus for the Fiscal Year in
which the Disability Effective Date occurs, to be paid
to Executive in a lump sum in cash at the time Executive
would have been entitled to receive his Bonus for such
Fiscal Year;
d. pay Executive, within 30 days after the Disability
Effective Date, the amount described in clause (iv)
of the first sentence of the second to last paragraph
of Section 7.D.;
e. provide those disability benefits to which
Executive is entitled at the Disability Effective
Date under any disability benefit plans, policies or
arrangements of the Corporation which, following a
Change in Control, shall be at least comparable to those
in effect at any time during the ninety-day period
immediately preceding the Change in Control or, if more
favorable to Executive and/or Executive's designees, as
in effect on the Disability Effective Date with respect
to other key executives and their designees; and
f. provide to Executive and his family the benefits, or
payment in lieu of benefits, described in clause (iii)
of the first sentence, and the second sentence, of
the second to last paragraph of Section 7.D.
In addition, upon a termination of Executive in accordance
with this Section 7.B:
g. all non-vested stock options, and any other non-
vested stock or stock-based awards issued by the
Corporation or any subsidiary of the Corporation,
shall immediately become fully vested, non-
forfeitable and exercisable; provided that, in the
case of options or awards granted by TBHC, this
clause g. shall be subject to any applicable
Financing Limitation; and
h. all Executive's stock options (A) granted on or
after February 24, 2000 by the Corporation or any
of its subsidiaries, or (B) granted by the
Corporation before February 24, 2000 (including
those previously vested) if the exercise price
thereof is greater than the closing price of the
Corporation's common stock on the New York
Stock Exchange on February 24, 2000, shall
remain exercisable until the earlier of (i) one year
following termination or (ii) their respective stated
expiration dates; provided that in the case of
options or awards described in subclause (A) of
this clause h. which are granted by TBHC, this
clause h. shall be subject to any applicable
Financing Limitation.
C. Cause or Without Good Reason. If Executive's
employment shall be terminated (i) by the Corporation
with Cause, or (ii) by Executive without Good Reason,
the Corporation shall pay Executive his Base Salary through
the date of termination and any accrued vacation pay, and
shall have no further obligations to Executive under this
Agreement.
D. Without Cause or With Good Reason. If Executive's employment
shall be terminated (i) by the Corporation without Cause, or
(ii) by Executive with Good Reason, the Corporation shall pay
to Executive in a lump sum in cash within ten (10) days after
the date of termination the aggregate of the following
amounts:
a. to the extent not theretofore paid, Executive's Base
Salary through the date of termination plus any
Bonus amounts which have become payable and
any accrued vacation pay;
b. Executive's Base Salary for the remainder of the
Employment Period;
c. five times the Highest Bonus; provided that, for
this purpose, the Highest Bonus shall be calculated
using only the Look-Back Bonus and the Target
Bonus; and
d. five times the sum of employer contributions paid or
accrued on Executive's behalf to any qualified or
nonqualified defined contribution retirement plans
during the calendar year immediately preceding
termination.
In addition, upon a termination of Executive in
accordance with this Section 7.D, the Corporation shall (i)
pay Executive the Pro-Rata Bonus for the Fiscal Year in which
the termination date occurs, to be paid to Executive in a lump
sum in cash at the time Executive would have been entitled to
receive his Bonus for such Fiscal Year, (ii) if the Actual
Bonus for the Fiscal Year in which the termination date
occurs, as calculated following the end of such Fiscal Year,
exceeds the Highest Bonus as determined in accordance with
clause c. immediately above, pay Executive five times the
amount by which such Actual Bonus exceeds such Highest Bonus
in a lump sum in cash at the time Executive would have been
entitled to receive his Bonus for such Fiscal Year; (iii)
continue to
provide welfare benefits to Executive and his family for the
remainder of the Employment Period at least equal to those
which were being provided to them in accordance with Section
5.C at any time within the six-month period ending on the date
of termination and (iv) credit Executive with five additional
years of age and service under each qualified and nonqualified
defined benefit pension plan of the Corporation in which
Executive participates at the time of termination; provided
that in the case of a qualified defined benefit pension plan,
the present value of the additional benefit Executive would
have accrued if he had been credited with such additional
years of age and service (computed using the actuarial
assumptions used for purposes of the most recent actuarial
report in respect of such plan) will be paid in a lump sum in
cash within thirty (30) days after the date of termination;
further provided that, in computing such additional benefit,
Executive shall be deemed to earn compensation for such
additional five- year period at the same rate as in the
calendar year immediately preceding such termination. To the
extent that the benefits provided for in clause (iii) are not
permissible after termination of employment under the terms of
the benefit plans of the Corporation then in effect, the
Corporation shall pay to Executive in a lump sum in cash
within thirty (30) days after the date of termination an
amount equal to the after-tax cost to Executive of acquiring
on a non-group basis, for the remainder of the Employment
Period, those benefits lost to Executive and/or Executive's
family as a result of Executive's termination.
In addition, upon a termination of Executive in accordance
with this Section 7.D (including for this purpose a
termination at the end of the Employment Period following
delivery by the Corporation to Executive of a notice not to
extend the Employment Period pursuant to the proviso in
Section 1 hereof):
e. all non-vested stock options, and any other non- vested
stock or stock-based awards issued by the Corporation or
any subsidiary of the Corporation, shall immediately
become fully vested, non- forfeitable and exercisable;
provided that, in the case of options or awards granted
by TBHC, this
clause e. shall be subject to any applicable
Financing Limitation; and
f. all Executive's stock options (A) granted on or
after February 24, 2000 by the Corporation or any
of its subsidiaries, or (B) granted by the
Corporation before February 24, 2000 (including
those previously vested) if the exercise price
thereof is greater than the closing price of the
Corporation's common stock on the New York
Stock Exchange on February 24, 2000, shall
remain exercisable until the earlier of (i) one year
following termination or (ii) their respective stated
expiration dates; provided that in the case of
options or awards described in subclause (A) of
this clause f. which are granted by TBHC, this
clause f. shall be subject to any applicable
Financing Limitation.
8. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or
limit Executive's continuing or future participation in any benefit, bonus,
incentive (whether cash or equity based, or otherwise) or other plan or program
provided by the Corporation or any of its affiliated companies and for which
Executive may qualify, nor shall anything herein limit or otherwise affect such
rights as Executive may have under any stock option or other agreements with the
Corporation or any of its affiliated companies. Amounts which are vested
benefits or which Executive is otherwise entitled to receive under any plan or
program of the Corporation or any of its affiliated companies at or subsequent
to the date on which Executive's employment is terminated shall be payable in
accordance with such plan or program. Anything herein to the contrary
notwithstanding, if Executive becomes entitled to payments pursuant to Section
7.D hereof, the Executive agrees to waive payments under any severance plan or
program of the Corporation.
9. Noncompetition; Nondisclosure; Nonsolicitation.
A. Executive hereby covenants and agrees that, during the
period of Executive's employment with the Corporation
and for one year thereafter (the "Covenant Period"), he
shall not, without the prior written consent of the
Corporation, engage in Competition (as defined below)
with the Corporation. For purposes of this Agreement, if
Executive takes any of the following actions he shall be
engaged in "Competition": engaging in or carrying on,
directly or indirectly, any enterprise, whether as an
advisor, principal, agent, partner, officer, director,
employee, stockholder, associate or consultant to any person,
partnership, corporation or any other business entity, that is
principally engaged in any business operating within the
United States of America, which is involved in business
activities which are the same as, similar to or in competition
with the principal business activities carried on by the
Corporation, or being definitely planned by the Corporation,
at the time of the termination of the Executive's employment;
provided, however, that "Competition" shall not include (i)
the passive ownership of securities in any public enterprise
and exercise of rights appurtenant thereto, so long as such
securities represent no more than five percent of the voting
power of all securities of such enterprise or (ii) the
indirect ownership of securities through ownership of shares
in a registered investment company.
B. Executive shall not, without the Corporation's prior
written consent, disclose or use any non-public
confidential information of or relating to the Corporation,
whether disclosed to or learned by Executive during the
course of his employment or otherwise, so long as such
information is not publicly known or available, except for
such disclosures as are required by law or in connection
with Executive's performance of services to the
Corporation hereunder. Executive further agrees that he
shall not make any statements at any time that disparage
the reputation of the Corporation or any of its affiliates.
For purposes of this Section 9, the term "affiliate" of the
Corporation means the Board, any and all Committees of
the Board (the "Committees") and any and all individual
members of either the Board or any of the Committees, in
their capacity as such, and any employee or officer of the
Corporation.
C. Executive hereby covenants and agrees that, during the
Covenant Period, he shall not attempt to influence,
persuade or induce, or assist any other person in so
influencing, persuading or inducing, (i) any customer of
the Corporation to give up, or to not commence, a
business relationship with the Corporation and (ii) if
Executive's employment was terminated by the
Corporation with Cause or by Executive without Good
Reason, any employee of the Corporation (other than Nelson
Peltz) to cease such employment.
D. Executive agrees that all processes, technologies, designs
and inventions ("Inventions"), including new
contributions, improvements, ideas and discoveries,
whether patentable or not, conceived, developed, invented
or made by him during the Employment Period shall
belong to the Corporation, provided that such Inventions
grew out of Executive's work for the Corporation, are
related in any manner to the business (commercial or
experimental) of the Corporation or are conceived or
made on the Corporation's time or with the use of the
Corporation's facilities or materials. Executive shall
further: (a) promptly disclose such Inventions to the
Corporation; (b) assign to the Corporation, without
additional compensation, all patent and other rights to
such Inventions for the United States and foreign
countries; (c) sign all papers necessary to carry out the
foregoing; and (d) give testimony in support of the status
of Executive as the inventor of such Inventions.
Executive agrees that he will not assert any rights to any
Invention as having been made or acquired by him prior to
the Effective Date, except for Inventions, if any, disclosed
to the Corporation in writing prior to the Effective Date.
E. Executive acknowledges and agrees that the remedy at law
available to the Corporation for breach of any of his
obligations under Section 9.A, B, C or D of this
Agreement would be inadequate, and that damages
flowing from such a breach may not readily be susceptible
to being measured in monetary terms. Accordingly,
Executive acknowledges, consents and agrees that, in
addition to any other rights or remedies which the
Corporation may have at law, in equity or under this
Agreement, upon adequate proof of his violation of any
provision of Section 9 of this Agreement, the Corporation
shall be entitled to immediate injunctive relief and may
obtain a temporary order restraining any threatened or
further breach, without the necessity of proof of actual
damage.
F. Executive acknowledges and agrees that the covenants set
forth in Section 9A, B, C and D of this Agreement are
reasonable and valid in geographical and temporal scope
and in all other respects. If any of such covenants or such
other provisions of this Agreement are found to be invalid
or unenforceable by a final determination of a court of
competent jurisdiction (i) the remaining terms and
provisions hereof shall be unimpaired and (ii) the invalid
or unenforceable term or provision shall be deemed
replaced by a term or provision that is valid and
enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or
provision.
G. Executive understands that the provisions of Section 9A,
B, C and D of this Agreement may limit his ability to earn
a livelihood in a business similar to the business of the
Corporation but he nevertheless agrees and hereby
acknowledges that (i) such provisions do not impose a
greater restraint than is necessary to protect the goodwill
or other business interests of the Corporation, (ii) such
provisions contain reasonable limitations as to time and
scope of activity to be restrained, (iii) such provisions are
not harmful to the general public, (iv) such provisions are
not unduly burdensome to Executive, and (v) the
consideration provided hereunder is sufficient to
compensate Executive for the restrictions contained in
Section 9 of this Agreement. In consideration of the
foregoing and in light of Executive's education, skills and
abilities, Executive agrees that he shall not assert that, and
it should not be considered that, any provisions of Section
9 otherwise are void, voidable or unenforceable or should
be voided or held unenforceable.
H. If Executive violates any of the restrictions contained in
Section 9A, B or C of this Agreement, the restrictive period
shall not run in favor of the Executive from the time of the
commencement of any such violation until such time as such
violation shall be cured by the Executive to the satisfaction
of the Corporation.
10. Certain Additional Payments by the Corporation.
A. If it is determined (as hereafter provided) that any
payment or distribution by the Corporation to or for the
benefit of Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise pursuant to or by reason of any
other agreement, policy, plan, program or arrangement,
including without limitation any stock option, stock
appreciation right or similar right, or the lapse or
termination of any restriction on or the vesting or
exercisability of any of the foregoing (a "Payment"),
would be subject to the excise tax imposed by
Section 4999 of the Code (or any successor provision
thereto) or to any similar tax imposed by state or local
law, or any interest or penalties with respect to such
excise tax (such tax or taxes, together with any such
interest and penalties, are hereafter collectively referred to
as the "Excise Tax"), then Executive will be entitled to
receive an additional payment or payments (a "Gross-Up
Payment") in an amount such that, after payment by
Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including any Excise
Tax, imposed upon the Gross-Up Payment, Executive
retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
B. Subject to the provisions of Section 10.F hereof, all
determinations required to be made under this Section 10,
including whether an Excise Tax is payable by Executive
and the amount of such Excise Tax and whether a Gross-
Up Payment is required and the amount of such Gross-Up
Payment, will be made by a nationally recognized firm of
certified public accountants (the "Accounting Firm")
selected by Executive in his sole discretion. Executive
will direct the Accounting Firm to submit its
determination and detailed supporting calculations to both
the Corporation and Executive within 15 calendar days
after the date of the Change in Control or the date of
Executive's termination of employment, if applicable, and
any other such time or times as may be requested by the
Corporation or Executive. If the Accounting Firm
determines that any Excise Tax is payable by Executive,
the Corporation will pay the required Gross-Up Payment
to Executive within five business days after receipt of such
determination and calculations. If the Accounting Firm
determines that no Excise Tax is payable by Executive, it
will, at the same time as it makes such determination, furnish
Executive with an opinion that he has substantial authority
not to report any Excise Tax on his federal, state, local
income or other tax return. Any determination by the
Accounting Firm as to the amount of the Gross-Up Payment will
be binding upon the Corporation and Executive. As a result of
the uncertainty in the application of Section 4999 of the Code
(or any successor provision thereto) and the possibility of
similar uncertainty regarding applicable state or local tax
law at the time of any determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will
not have been made by the Corporation should have been made
(an "Underpayment"), consistent with the calculations required
to be made hereunder. In the event that the Corporation
exhausts or fails to pursue its remedies pursuant to Section
10.F hereof and Executive thereafter is required to make a
payment of any Excise Tax, Executive will direct the
Accounting Firm to determine the amount of the Underpayment
that has occurred and to submit its determination and detailed
supporting calculations to both the Corporation and Executive
as promptly as possible. Any such Underpayment will be
promptly paid by the Corporation to, or for the benefit of,
Executive within five business days after receipt of such
determination and calculations.
C. The Corporation and Executive will each provide the
Accounting Firm access to and copies of any books,
records and documents in the possession of the
Corporation or Executive, as the case may be, reasonably
requested by the Accounting Firm, and otherwise
cooperate with the Accounting Firm in connection with
the preparation and issuance of the determination
contemplated by Section 10.B hereof.
D. The federal, state and local income or other tax returns filed
by Executive will be prepared and filed on a consistent basis
with the determination of the Accounting Firm with respect to
the Excise Tax payable by Executive. Executive will make
proper payment of the amount of any Excise Tax, and at the
request of the Corporation, provide to the Corporation true
and correct copies (with any
amendments) of his federal income tax return as filed with the
Internal Revenue Service and corresponding state and local tax
returns, if relevant, as filed with the applicable taxing
authority, and such other documents reasonably requested by
the Corporation, evidencing such payment. If prior to the
filing of Executive's federal income tax return, or
corresponding state or local tax return, if relevant, the
Accounting Firm determines that the amount of the Gross-Up
Payment should be reduced, Executive will within five business
days pay to the Corporation the amount of such reduction.
E. The fees and expenses of the Accounting Firm for its
services in connection with the determinations and
calculations contemplated by Sections 10.B and D hereof
will be borne by the Corporation. If such fees and
expenses are initially advanced by Executive, the
Corporation will reimburse Executive the full amount of
such fees and expenses within five business days after
receipt from Executive of a statement therefor and
reasonable evidence of his payment thereof.
F. Executive will notify the Corporation in writing of any
claim by the Internal Revenue Service that, if successful,
would require the payment by the Corporation of a Gross-
Up Payment. Such notification will be given as promptly
as practicable but no later than 10 business days after
Executive actually receives notice of such claim and
Executive will further apprise the Corporation of the
nature of such claim and the date on which such claim is
requested to be paid (in each case, to the extent known by
Executive). Executive will not pay such claim prior to the
earlier of (i) the expiration of the 30-calendar-day period
following the date on which he gives such notice to the
Corporation and (ii) the date that any payment of amount
with respect to such claim is due. If the Corporation
notifies Executive in writing prior to the expiration of
such period that it desires to contest such claim, Executive
will:
(vi) provide the Corporation with any written records or
documents in his possession relating to such claim
reasonably requested by the Corporation;
(vii) take such action in connection with contesting such
claim as the Corporation will reasonably request in
writing from time to time, including without limitation
accepting legal representation with respect to such
claim by an attorney competent in respect of the subject
matter and reasonably selected by the Corporation;
(viii)cooperate with the Corporation in good faith in
order effectively to contest such claim; and
(ix) permit the Corporation to participate in any
proceedings relating to such claim;
provided, however, that the Corporation will bear and pay
directly all costs and expenses (including interest and
penalties) incurred in connection with such contest and will
indemnify and hold harmless Executive, on an after- tax basis,
for and against any Excise Tax or income tax, including
interest and penalties with respect thereto, imposed as a
result of such representation and payment of costs and
expenses. Without limiting the foregoing provisions of this
Section 10.F, the Corporation will control all proceedings
taken in connection with the contest of any claim contemplated
by this Section 10.F and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect
of such claim (provided that Executive may participate therein
at his own cost and expense) and may, at its option, either
direct Executive to pay the tax claimed and sue for a refund
or contest the claim in any permissible manner, and Executive
agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction
and in one or more appellate courts, as the Corporation will
determine; provided, however, that if the Corporation directs
Executive to pay the tax claimed and sue for a refund, the
Corporation will advance the amount of such payment to
Executive on an interest-free basis and will indemnify and
hold Executive harmless, on an after-tax basis, from any
Excise Tax or income tax, including interest or penalties with
respect thereto, imposed with respect to such advance; and
provided further, however, that any extension of the statute
of limitations relating to payment of taxes for the
taxable year of Executive with respect to which the contested
amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Corporation's control of
any such contested claim will be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder
and Executive will be entitled to settle or contest, as the
case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
G. If, after the receipt by Executive of an amount advanced
by the Corporation pursuant to Section 10.F hereof,
Executive receives any refund with respect to such claim,
Executive will (subject to the Corporation's complying
with the requirements of Section 10.F hereof) promptly
pay to the Corporation the amount of such refund
(together with any interest paid or credited thereon after
any taxes applicable thereto). If, after the receipt by
Executive of an amount advanced by the Corporation
pursuant to Section 10.F hereof, a determination is made
that Executive will not be entitled to any refund with
respect to such claim and the Corporation does not notify
Executive in writing of its intent to contest such denial or
refund prior to the expiration of 30 calendar days after
such determination, then such advance will be forgiven
and will not be required to be repaid and the amount of
such advance will offset, to the extent thereof, the amount
of Gross-Up Payment required to be paid pursuant to this
Section 10.
11. Successors.
A. This Agreement is personal to Executive and without the prior
written consent of the Corporation shall not be assignable by
Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and
be enforceable by Executive's legal representatives.
B. This Agreement shall inure to the benefit of and be
binding upon the Corporation and its successors.
C. The Corporation will require any successor (whether
direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or
assets of the Corporation to expressly assume and agree to
perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform it if
no such succession had taken place. As used in this Agreement,
"Corporation" shall mean the Corporation as hereinbefore
defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement
by operation of law, or otherwise.
12. Miscellaneous.
A. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York
without reference to principles of conflict of laws. The
parties hereto agree that exclusive jurisdiction of any
dispute regarding this Agreement shall be the state or
federal courts located in New York, New York. The
Corporation shall directly pay the fees and expenses of
counsel and other experts retained by Executive in
enforcing this Agreement, as they may be incurred,
provided that Executive shall be required to reimburse the
Corporation for any amounts so paid unless at least one
material matter in dispute is decided in favor of
Executive.
B. In the event of any termination of Executive's employment
hereunder, Executive shall be under no obligation to seek
other employment or otherwise mitigate the obligations of
the Corporation under this Agreement, and there shall be
no offset against amounts due Executive under this
Agreement on account of amounts purportedly owing by
Executive to the Corporation. Any amounts due to
Executive under this Agreement upon termination of
employment are considered to be reasonable by the
Corporation and are not in the nature of a penalty.
C. The Corporation will indemnify Executive, to the maximum
extent permitted by applicable law, against all costs, charges
and expenses incurred or sustained by him in connection with
any action, suit or proceeding to which he may be made a party
by reason of his being an officer, director or employee of the
Corporation or of any subsidiary or affiliate of the
Corporation.
D. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
E. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal
representatives.
F. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party
or by registered or certified mail, return receipt requested,
postage prepaid, or by facsimile or nationally recognized
overnight courier service, addressed as follows:
If to Executive:
Peter W. May
895 Park Avenue
New York, New York 10021
Facsimile: (212) 472-9174
If to the Corporation:
Triarc Companies, Inc.
280 Park Avenue
New York, New York 10017
Attention: General Counsel
Facsimile: (212) 451-3216
in either case, with a copy to:
Paul, Weiss, Rifkind, Wharton &
Garrison
1285 Avenue of the Americas
New York, New York 10019
Attention: Neale M. Albert, Esq.
Facsimile: (212) 757-3990
or to such other address as either party shall have furnished
to the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by
the addressee.
G. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
H. The Corporation may withhold from any amounts payable under
this Agreement such Federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or
regulation.
I. This Agreement contains the entire understanding of the
Corporation and Executive with respect to the subject
matter hereof.
IN WITNESS WHEREOF, Executive has hereunto set his hand and the
Corporation has caused this Agreement to be executed in its name on its behalf,
all as of the day and year first above written.
PETER W. MAY
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Peter W. May
TRIARC COMPANIES, INC.
By: BRIAN L. SCHORR
----------------------------------
Name: Brian L. Schorr
Title: Executive Vice President
and General Counsel