- -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q/A (Amendment No. 1) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 29, 1997 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________________ to_________________ Commission file number: 1-2207 TRIARC COMPANIES, INC. (Exact name of registrant as specified in its charter) Delaware 38-0471180 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 280 Park Avenue, New York, New York 10017 (Address of principal executive offices) (Zip Code) (212) 451-3000 (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes (X) No ( ) There were 24,026,654 shares of the registrant's Class A Common Stock and 5,997,622 shares of the registrant's Class B Common Stock outstanding as of August 31, 1997. - -------------------------------------------------------------------------------- This Form 10-Q/A of Triarc Companies, Inc. ("Triarc") constitutes Amendment No. 1 to Triarc's Quarterly Report on Form 10-Q which was filed with the Securities and Exchange Commission on August 13, 1997. This amendment updates the information required to be filed pursuant to Item 1 of the Form, furnishes the information required to be filed pursuant to Item 4 of the Form and includes for filing certain agreements and documents relating to Triarc and its subsidiaries. ITEM 1. LEGAL PROCEEDINGS As reported in the 10-K and in Triarc's Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 1997 (the "10-Q"), on June 27, 1996, three former directors of Triarc commenced an action against Nelson Peltz, Victor Posner and Steven Posner. On May 20, 1997, plaintiffs filed a purported amended complaint asserting additional claims against each of the defendants. The amended complaint alleges, among other things, that the defendants conspired to mislead the United States District Court for the Northern District of Ohio in connection with the change of control of Triarc in 1993 and the termination of the consent decree pursuant to which plaintiffs were initially named to Triarc's Board of Directors. The amended complaint also alleges that Mr. Peltz and Steven Posner conspired to frustrate collection of amounts owed by Steven Posner to the United States. The amended complaint seeks, among other relief, damages against Mr. Peltz and Steven Posner in an amount not less than $4.5 million; an order stating that plaintiffs must be returned to Triarc's Board of Directors; and rescission of the 1993 change of control transaction. Mr. Peltz's time to respond to the amended complaint has not yet expired. In July 1997, plaintiffs voluntarily dismissed their claims against Victor Posner without prejudice. As more fully described in the 10-K, as of December 31, 1996, Triarc was a party to three litigation proceedings involving Victor Posner ("Posner") and entities owned or controlled by Posner (collective, the "Posner Actions"): (1) an action commenced by Triarc in October 1995 in the Southern District of New York against Posner and a related entity (the "New York Action"); (2) an adversary proceeding (the "APL Litigation") brought against Triarc and Chesapeake in connection with the bankruptcy proceeding of APL Corporation (the "APL Bankruptcy Proceeding"); and (3) an adversary proceeding brought by Triarc and Chesapeake in the APL Bankruptcy Proceeding against Posner and two affiliated entities under Section 1144 of the Bankruptcy Code (the "1144 Proceeding"). In addition, Triarc and Chesapeake asserted claims against the debtor in the APL Bankruptcy Proceeding (the "APL Bankruptcy Claims"). Triarc had previously been a party to an action (the "Granada Action") in which Posner had asserted certain claims against it. On June 6, 1997, Triarc entered into a settlement agreement (the "Settlement Agreement") with Posner and two affiliated entities (including APL). Pursuant to the Settlement Agreement, among other things, (1) Posner and an affiliated entity paid a total of $2.5 million to Triarc and Chesapeake; (2) the parties dismissed with prejudice each of the Posner Actions; (3) Triarc and Chesapeake waived the APL Bankruptcy Claims; and (4) the parties entered into releases with respect to the claims asserted in the Posner Actions, the Granada Action, and the APL Bankruptcy Proceeding. As reported in the 10-K and the 10-Q, in January 1997 the bankruptcy trustee appointed in the case of Prime Capital Corporation ("Prime") (formerly known as Intercapital Funding Resources, Inc.) commenced avoidance actions against SEPSCO and Chesapeake Insurance Company Limited ("Chesapeake") (as well as actions against certain current and former officers of Triarc or their spouses with respect to payments made directly to them), claiming certain payments to them were preferences or fraudulent transfers. Discovery is ongoing and the court has adjourned the trial date from July 28, 1997 to October 27, 1997. Snapple Beverage Corp. ("Snapple") and The Quaker Oats Company ("Quaker") are defendants in a breach of contract case filed on April 16, 1997 in Rhode Island Superior Court by Rhode Island Beverage Packing Company, L.P. ("RIB"), prior to Triarc's acquisition of Snapple. RIB and Snapple disagree as to whether the co-packing agreement between them had been amended to a) change the end of the term from December 30, 1997 to December 30, 1999 and b) more than double Snapple's take or pay obligations thereunder. RIB sets forth various causes of action in its complaint: (1) that Snapple materially breached the agreement; (2) that the agreement was reformed; (3) that Snapple as 50% owner of RIB had a fiduciary duty, which it breached; (4) that the alleged amendment was relied upon and therefore should be enforced; (5) that Snapple breached the RIB Partnership Agreement; (6) that the defendants tortiously interfered with RIB's contractual relation with its lender and with other prospective contractual relations; and (7) that Quaker is liable for the actions of Snapple. RIB seeks reformation of the contract, compliance with promises, consequential damages including lost profits, attorney's fees and punitive damages. On June 16, 1997, Snapple and Quaker filed an answer to the complaint in which they denied all liability to RIB, denied the material allegations of the complaint, and raised various affirmative defenses. Snapple has established a reserve to cover future potential payments relating to outstanding litigations and claims, including the RIB litigation described above. The litigations and claims consist primarily of lawsuits filed by distributors and co-packers and to a lesser extent, product liability, commercial and labor related claims. It is the opinion of management of Triarc and Snapple that the outcome of such matters will not have a material adverse affect on Triarc's consolidated financial condition or results of operations. On June 3, 1997, ZuZu, Inc. ("ZuZu") and its subsidiary, ZuZu Franchising Corporation ("ZFC") commenced an action against Arby's, Inc. ("Arby's") and Triarc in the District Court of Dallas County, Texas. Plaintiffs allege that Arby's and Triarc conspired to steal the ZuZu Speedy Tortilla concept and convert it to their own use. ZuZu seeks actual damages in excess of $70.0 million and punitive damages of not less than $200.0 million against Triarc for its alleged appropriation of trade secrets, conversion and unfair competition. Additionally, plaintiffs seek injunctive relief against Arby's and Triarc enjoining them from disclosing or using ZuZu's trade secrets. ZFC also made a demand for arbitration with the Dallas, Texas office of the American Arbitration Association ("AAA") against Arby's alleging that Arby's had breached a Master Franchise Agreement between ZFC and Arby's. Arby's and Triarc have moved to dismiss or, in the alternative, abate the Texas court action on the ground that a Stock Purchase Agreement between Triarc and ZuZu required that disputes be subject to mediation in Wilmington, Delaware and that any litigation be brought in the Delaware courts. On July 16, 1997, Arby's and Triarc commenced a declaratory judgment action against ZuZu and ZFC in Delaware Chancery Court for New Castle County seeking a declaration that the claims in both the litigation and the arbitration must be subject to mediation in Wilmington, Delaware. In the arbitration proceeding, Arby's has asserted counterclaims against ZuZu for unjust enrichment, breach of contract and breach of the duty of good faith and fair dealing and has successfully moved to transfer the proceeding to the Atlanta, Georgia office of the AAA. Arby's and Triarc are vigorously contesting plaintiffs' claims in both the litigation and the arbitration and believe that plaintiffs' various claims are without merit. On August 13, 1997, Ruth LeWinter and Calvin Shapiro commenced a purported class and derivative action (the "Original LeWinter Action") against certain current and former directors of the Company (and naming the Company as a nominal defendant) in the United States District Court for the Southern District of New York. The complaint alleges that the June 1994 award of stock options (the "Performance Options") to Messrs. Peltz and May was invalid because the shareholder approval of the awards was secured by a proxy statement which misrepresented or omitted material facts, and that the terms of the 1994 compensation arrangements with Messrs. Peltz and May were violated by awarding additional compensation of options and cash to Messrs. Peltz and May. The suit also claims that members of the Board breached their duty of loyalty to Triarc and its shareholders by acting fraudulently and/or in bad faith to deceive Triarc shareholders into approving the 1994 grants through material misrepresentations and omissions in the 1994 Proxy Statement and that the directors breached their fiduciary duties by failing to disclose material facts to the shareholders while seeking their approval. The suit further alleges that the Board of Directors breached the fiduciary duty of care owed to the Company and shareholders by approving the issuance of a materially false and misleading proxy statement. In addition, the suit alleges that the Compensation Committee of Triarc's Board of Directors (the "Compensation Committee") intentionally or recklessly approved substantial awards of cash and options to Messrs. Peltz and May contrary to the 1994 Proxy Statement and that the Compensation Committee had a duty to either refrain from approving these awards or seek shareholder approval of them, and that the failure to do so breached the duties of care, loyalty, good faith, and fair dealing owed to the Company and its shareholders. The complaint seeks, among other remedies, rescission of the 1994 option grants and all grants of options made to Messrs. Peltz and May subsequent to June 9, 1994 and repayment by Messrs. Peltz and May of all cash bonuses they received subsequent to June 9, 1994. On September 11, 1997, the plaintiffs amended their complaint in the Original LeWinter Action to drop a current and a former director as defendants. The amended complaint also alleges that defendants fraudulently and in bad faith misrepresented the terms and the value of the Performance Options, and that defendants acted improperly in awarding to Messrs. Peltz and May certain other items of compensation. The amended complaint also seeks additional relief, including repayment by Messrs. Peltz and May of all compensation paid to them after June 9, 1994 and the amount by which the alleged value of the Performance Options exceeded their value as set forth in the 1994 Proxy Statement. The defendants have not yet responded to the complaint or the amended complaint. Three other purported class and derivative actions have been filed in the Delaware Court of Chancery, New Castle County, naming as defendants certain current directors and certain former directors of the Company (and naming the Company as a nominal defendant). The Delaware actions assert substantially similar claims and seek substantially similar relief as the Original LeWinter Action. Defendants have not yet responded to the Delaware complaints. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS On June 4, 1997, Triarc held its Annual Meeting of Stockholders. At the Annual Meeting,Nelson Peltz, Peter W. May, Hugh L. Carey, Clive Chajet, Stanley R. Jaffe, Joseph A. Levato, David E. Schwab II, Raymond S. Troubh and Gerald Tsai, Jr. were elected to serve as Directors. At the Annual Meeting, the stockholders also approved proposal 2, amending Triarc's certificate of incorporation to change the minimum number of directors to seven (7) and the maximum number of directors to fifteen (15), and proposal 3, ratifying the appointment of Deloitte & Touche, LLP as Triarc's independent certified public accountants. The voting on the above matters is set forth below: NOMINEE VOTES FOR VOTES WITHHELD Nelson Peltz 21,522,973 32,219 Peter W. May 21,522,973 32,219 Hugh L. Carey 21,518,033 37,159 Clive Chajet 21,523,107 32,085 Stanley R. Jaffe 21,523,107 32,085 Joseph A. Levato 21,523,107 32,085 David E. Schwab II 21,523,107 32,085 Raymond S. Troubh 21,520,407 34,785 Gerald Tsai, Jr. 21,521,607 33,585 Proposal 2 - There were 21,446,924 votes for, 83,779 votes against and 24,489 abstentions. Proposal 3 - There were 21,528,402 votes for, 14,745 votes against and 12,045 abstentions. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (c) Exhibits 10.1 -Amended and Restated Credit Agreement dated as of August 15, 1997 among Mistic Brands, Inc., Snapple Beverage Corp. and Triarc Beverage Holdings Corp., as the Borrowers, Various Financial Institutions, as the Lenders, Donaldson, Lufkin & Jenrette Securities Corporation, as the arranger for the Lenders, Morgan Stanley Senior Funding, Inc. as co-arranger and as the Documentation Agent for the Lenders, DLJ Capital Funding, Inc., as the Syndication Agent for the Lenders, and The Bank of New York, as Administrative Agent for the Lenders. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed by the undersigned hereunto duly authorized. Date: September 29, 1997 TRIARC COMPANIES, INC. By: __________________________ John L. Barnes, Jr. Senior Vice President and Chief Financial Officer Exhibit Index Exhibit No. Description Page No. 10.1 - Amended and Restated Credit Agreement dated as of August 15, 1997 among Mistic Brands, Inc., Snapple Beverage Corp. and Triarc Beverage Holdings Corp., as the Borrowers, Various Financial Institutions, as the Lenders, Donaldson, Lufkin & Jenrette Securities Corporation, as the arranger for the Lenders, Morgan Stanley Senior Funding, Inc. as co- arranger and as the Documentation Agent for the Lenders, DLJ Capital Funding, Inc., as the Syndication Agent for the Lenders, and The Bank of New York, as Administrative Agent