===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): December 21, 2006
TRIARC COMPANIES, INC.
-------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE
-------------------------------------------------------------------------------
(State or other jurisdiction
of incorporation)
1-2207 38-0471180
-------------------------------------------------------------------------------
(Commission File Number) (IRS Employer Identification No.)
280 PARK AVENUE
NEW YORK, NY 10017
-------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(212) 451-3000
-------------------------------------------------------------------------------
Registrant's telephone number, including area code:
NOT APPLICABLE
-------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (SEE General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
===============================================================================
ITEM 5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS; COMPENSATORY ARRANGEMENTS OF
CERTAIN OFFICERS.
As previously reported, Triarc Companies, Inc. (the "Company") is
continuing to explore the feasibility of a possible corporate restructuring. In
connection with the foregoing, on December 21, 2006, Brian L. Schorr, the
Company's Executive Vice President and General Counsel, and Francis T.
McCarron, the Company's Executive Vice President and Chief Financial Officer,
exercised certain stock options held by them. In connection with the exercise
of stock options, the Performance Compensation Subcommittee of the Company's
Board of Directors (the "Subcommittee") also granted new stock option awards to
Messrs. Schorr and McCarron to replace certain of the options exercised by
them. In addition, Messrs. Schorr and McCarron entered into agreements with the
Company dated as of December 21, 2006 regarding the reduction of certain future
compensation that may be due to them under their employment and severance
agreements, respectively, if such reduction would eliminate certain excise
taxes. These actions were taken as tax planning measures by the Company.
The transactions with Messrs. Schorr and McCarron involved the
following:
1. On December 21, 2006, Mr. Schorr exercised previously granted and
vested options held by him to acquire 130,557 shares of the
Company's Class A Common Stock and 261,114 shares of the Company's
Class B Common Stock, Series 1, and Mr. McCarron exercised
previously granted and vested options held by him to acquire
215,000 shares of the Company's Class B Common Stock, Series 1.
Messrs. Schorr and McCarron paid the exercise price for the options
through a "net exercise" mechanism previously approved by the
Subcommittee, by the Company's withholding of shares otherwise
issuable in connection with the option exercise having a fair
market value equal to the exercise price. In addition, as
previously approved by the Subcommittee, Messrs. Schorr and
McCarron satisfied required tax withholding in connection with the
option exercise by having the Company withhold shares otherwise
issuable in connection with the option exercise having a fair
market value equal to the minimum statutory withholding obligation.
83,932 shares of Class A Common Stock and 167,864 shares of Class B
Common Stock, Series 1, were withheld from the shares to be
delivered to Mr. Schorr, and 184,654 shares of Class B Common
Stock, Series 1, were withheld from the shares to be delivered to
Mr. McCarron, to satisfy the exercise price and tax withholding
obligations.
2. On December 21, 2006, the Subcommittee granted additional stock
options to each of Messrs. Schorr and McCarron on and in
consideration of the exercise of the options described in paragraph
(1) above to make up for the fact that the shares of Company common
stock withheld from the exercise to pay the
2
exercise to pay the option exercise price and satisfy required tax
withholding put Messrs. Schorr and McCarron at an unintended
economic disadvantage relative to future price appreciation in
shares of Company common stock. Specifically, it granted to Mr.
Schorr under the Company's 2002 Equity Participation Plan (the
"2002 Plan") options to purchase 83,932 shares of Class A Common
Stock and 167,864 shares of Class B Common Stock, Series 1, and
granted to Mr. McCarron under the 2002 Plan options to purchase
184,654 shares of Class B Common Stock, Series 1. These stock
options permit Messrs. Schorr and McCarron to purchase the same
number of shares of Class A Common Stock and Class B Common Stock,
Series 1, as applicable, that were withheld from each of their
option exercise to pay the applicable exercise price and tax
withholding. These new stock options were granted with exercise
prices equal to the closing prices per share of Class A Common
Stock and Class B Common Stock, Series 1, on December 21, 2006
($21.45 and $19.55 per share, respectively), are fully vested and
exercisable at grant, and expire on the same dates and under the
same circumstances as the corresponding exercised options. The
Company will record a non-cash charge of approximately $1.8 million
for the fiscal year ended January 1, 2006 for the estimated
Black-Scholes value of the additional stock options granted to
Messrs. Schorr and McCarron.
3. The Company entered into a new agreement with each of Messrs.
Schorr and McCarron that provides that if the grant of additional
stock options described under paragraph (2) above would cause Mr.
Schorr or Mr. McCarron to be subject to the golden parachute excise
tax under Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"), Mr. Schorr would agree to forfeit up to
$187,500 of compensation, and Mr. McCarron would agree to forfeit
up to $250,000 of compensation, in each case if and as necessary to
avoid any compensation being subject to Section 280G of the Code;
provided that in each case no more compensation will be forfeited
than the amount of any "parachute payment" (as defined in Section
280G of the Code) attributable to the grant of such additional
options. Copies of these agreements are filed as exhibits 10.1 and
10.2 hereto and are incorporated herein by reference.
If a corporate restructuring were to occur that involved a
transaction that would be considered a change in the ownership or effective
control of the Company, or in the ownership of a substantial portion of the
assets of the Company, for purposes of Section 280G of the Code, certain
payments and benefits could become due to Messrs. Schorr and McCarron that
could be deemed "excess parachute payments" for purposes of Sections 280G and
4999 of the Internal Revenue Code. This would cause (i) a loss of the Company's
tax deduction for those payments and in respect of those benefits and (ii) an
excise tax payable by Messrs. Schorr and McCarron for which the Company is
required pursuant to their employment and severance agreements to indemnify
3
them (up to a maximum excise tax of $1 million for Mr. McCarron, subject to the
following sentence) so that after payment of such excise taxes, Messrs. Schorr
and McCarron will be in the same after-tax position as if no excise tax had
been imposed (a "gross-up"). In consideration for Mr. McCarron's agreement to
exercise the stock options described in paragraph (1) above, the Committee is
considering an increase in the amount of excise tax in respect of which Mr.
McCarron will be indemnified from $1 million to $1.5 million. The actions
described above were designed as part of tax planning efforts by the Company to
mitigate against the potential loss of deduction and gross-up obligation
referred to above.
4
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
EXHIBIT NO. DESCRIPTION
----------- -----------
10.1 Agreement, dated as of December 21, 2006,
between Triarc Companies, Inc. and Brian L.
Schorr.
10.2 Agreement, dated as of December 21, 2006,
between Triarc Companies, Inc. and Francis T.
McCarron.
5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, Triarc has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: December 28, 2006
TRIARC COMPANIES, INC.
By: /s/ Stuart I. Rosen
----------------------------------
Name: Stuart I. Rosen
Title: Senior Vice President and
Secretary
6
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
10.1 Agreement, dated as of December 21, 2006,
between Triarc Companies, Inc. and Brian L.
Schorr.
10.2 Agreement, dated as of December 21, 2006,
between Triarc Companies, Inc. and Francis T.
McCarron.
7