REGISTRATION NO. 333-110929
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_________________________
TRIARC COMPANIES, INC.
(Exact name of Registrant as specified in its charter)
_________________________
DELAWARE 38-0471180
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
_________________________
280 PARK AVENUE
NEW YORK, NEW YORK 10017
(212) 451-3000
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
BRIAN L. SCHORR, ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
TRIARC COMPANIES, INC.
280 PARK AVENUE
NEW YORK, NEW YORK 10017
(212) 451-3000
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
_________________________
COPIES TO:
PAUL D. GINSBERG, ESQ.
RAPHAEL M. RUSSO, ESQ.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-6064
(212) 373-3000
_________________________
APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC: From time to time after this
registration statement becomes effective.
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If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [_]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act of 1933,
other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
_________________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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The information in this prospectus is not complete and may be amended. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell nor is it soliciting an offer to buy these securities in any state where
the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED DECEMBER 22, 2003
PROSPECTUS
$2,000,000,000
TRIARC COMPANIES, INC.
Common Stock
Preferred Stock
Debt Securities
Warrants
Offered by
Triarc Companies, Inc.
_________________________
11,965,734 Shares of Class B Common Stock, Series 1,
Offered by Our Securityholders
_________________________
We may offer and sell from time to time:
o shares of common stock, including Class A common stock, par
value $.10 per share, and Class B common stock, par value $.10
per share;
o shares of preferred stock;
o debt securities, which may consist of debentures, notes or
other types of debt; and
o warrants to purchase common stock, preferred stock or debt
securities.
The aggregate offering price of the securities offered by us will not
exceed $2,000,000,000.
Each time we offer securities, we will provide a supplement to this
prospectus that will describe the specific terms of any securities we offer and
the specific manner in which we will offer the securities. The prospectus
supplements may also add, update or change information contained in this
prospectus.
We may sell securities to underwriters, through agents or directly to
other purchasers. The prospectus supplement will include the names of any
underwriter or agent.
YOU SHOULD READ THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT RELATING
TO THE SPECIFIC ISSUE OF OFFERED SECURITIES CAREFULLY BEFORE YOU INVEST IN THOSE
SECURITIES. THIS PROSPECTUS MAY NOT BE USED BY US TO MAKE SALES OF SECURITIES
UNLESS IT IS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT DESCRIBING THE TERMS AND
METHOD OF SALE OF THOSE SECURITIES.
Up to 11,965,734 shares of Class B common stock, Series 1, may be
offered from time to time by the securityholders identified in this prospectus
in transactions involving the exchange of Class B common stock, Series 1, for
Class A common stock. We will not receive any proceeds from these transactions.
Our Class A common stock trades on the New York Stock Exchange under
the symbol "TRY." On December 18, 2003, the last reported sale price of our
Class A common stock was $11.17.
Our Class B common stock, Series 1, trades on the New York Stock
Exchange under the symbol "TRY.B." On December 18, 2003, the last reported sale
price of our Class B common stock, Series 1, was $11.00.
INVESTING IN THE SECURITIES OFFERED BY THIS PROSPECTUS INVOLVES RISKS.
SEE "RISK FACTORS" BEGINNING ON PAGE 5 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION, NOR ANY STATE
SECURITIES COMMISSION, HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED
UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
_________________________
The date of this prospectus is December __, 2003.
TABLE OF CONTENTS
About This Prospectus..........................................................2
Where You Can Find More Information............................................3
Incorporation of Documents by Reference........................................3
Triarc Companies, Inc..........................................................5
Risk Factors...................................................................5
Forward-Looking Statements....................................................14
Ratio of Earnings to Fixed Charges............................................16
Use of Proceeds...............................................................16
Dividend Policy...............................................................16
Description of Common Stock of Triarc.........................................17
Description of Preferred Stock of Triarc......................................24
Description of Debt Securities of Triarc......................................25
Description of Warrants of Triarc.............................................35
Shares Offered by our Securityholders.........................................36
Plan of Distribution..........................................................37
Legal Matters.................................................................38
Experts.......................................................................39
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-3 that we
filed with the Securities and Exchange Commission utilizing a "shelf"
registration process. Under this shelf registration process, we may from time to
time sell any combination of securities described in this prospectus in one or
more offering with a maximum aggregate offering price of $2,000,000,000. This
prospectus provides you with a general description of the securities we may
offer.
This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
the securities being offered. That prospectus supplement may include a
discussion of any risk factors or other special considerations that apply to
those securities. The prospectus supplement may also add, update or change
information contained in this prospectus. If there is any inconsistency between
the information in this prospectus and a prospectus supplement, you should rely
on the information in that prospectus supplement. You should read both this
prospectus and any applicable prospectus supplement together with additional
information described below under the heading "Where You Can Find More
Information."
In addition, certain securityholders identified in this prospectus may
offer from time to time up to 11,965,734 shares of our Class B common stock,
Series 1, under this prospectus in transactions involving the exchange of Class
B common stock, Series 1, for Class A common stock. We will not receive any of
the proceeds from transactions by our securityholders. Such securityholders will
deliver a supplement with this prospectus to the extent necessary to update the
information contained in this prospectus.
When acquiring any securities discussed in this prospectus, you should
rely only on the information provided in this prospectus and any prospectus
supplement delivered with this prospectus, including the information
incorporated by reference. Neither we, nor any underwriters or agents, have
authorized anyone to provide you with different information. We are not offering
the securities in any state where such an offer is prohibited. You should not
assume that the information in this prospectus, any prospectus supplement, or
any document incorporated by reference, is truthful or complete at any date
other than the date mentioned on the cover page of those documents.
As used in this prospectus and any prospectus supplement, "Triarc,"
"we," "our," "ours," "us" and "the Company" refer to Triarc Companies, Inc. and
its subsidiaries.
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WHERE YOU CAN FIND MORE INFORMATION
We have filed a Registration Statement on Form S-3 with the Securities
and Exchange Commission regarding the offering of the securities offered by this
prospectus. This prospectus, which forms part of the registration statement,
does not contain all of the information included in the registration statement.
For further information about us and the securities offered by this prospectus,
you should refer to the registration statement, its exhibits and the documents
incorporated by reference.
We file annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy materials that we have filed with the Securities and Exchange Commission at
the Securities and Exchange Commission public reference room located at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Please call the
Securities and Exchange Commission at 1-800-SEC-0330 for further information on
the public reference room. Our Securities and Exchange Commission filings can
also be read at the New York Stock Exchange, 20 Broad Street, New York, New York
10005. Our Securities and Exchange Commission filings are also available to the
public on the Securities and Exchange Commission's Internet website at
http://www.sec.gov.
Our Class A common stock is listed on New York Stock Exchange under the
symbol "TRY" and our Class B common stock, Series 1, is listed on the New York
Stock Exchange under "TRY.B."
We incorporate by reference into this prospectus the documents listed
below and any future filings we make with the Securities and Exchange Commission
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934,
as amended, including any filings after the date of this prospectus, until all
of the securities to which this prospectus relates are sold or the offering is
otherwise terminated, other than any portions of any such documents that are not
deemed "filed" under the Exchange Act in accordance with the Exchange Act and
applicable SEC rules and regulations. The information incorporated by reference
is an important part of this prospectus. Any statement in a document
incorporated by reference into this prospectus will be deemed to be modified or
superseded to the extent a statement contained in (1) this prospectus or (2) any
other subsequently filed document that is incorporated by reference into this
prospectus modifies or supersedes such statement.
INCORPORATION OF DOCUMENTS BY REFERENCE
We are incorporating by reference into this prospectus the following
documents filed by us with the SEC:
o Annual Report on Form 10-K for the fiscal year ended December
29, 2002, filed on March 28, 2003;
o Quarterly Report on Form 10-Q for the fiscal quarter ended
March 30, 2003, filed on May 12, 2003;
o Quarterly Report on Form 10-Q for the fiscal quarter ended
June 29, 2003, filed on August 13, 2003;
o Quarterly Report on Form 10-Q for the fiscal quarter ended
September 28, 2003, filed on November 12, 2003;
o the description of the Class A common stock contained in the
Registration Statement Form 8-A, filed pursuant to Section 12
of the Exchange Act on November 4, 1993, any amendment or
report filed for the purpose of updating such description;
o the description of the Class B common stock, Series 1,
contained in the Registration Statement on Form 8-A, filed
pursuant to Section 12 of the Exchange Act on August 11, 2003,
any amendment or report filed for the purpose of updating such
description;
o Current Reports on Form 8-K, filed on January 21, 2003, March
27, 2003, May 14, 2003, May 19, 2003, June 3, 2003, August 11,
2003 and November 25, 2003; and
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o all other documents filed pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this prospectus
and prior to the termination of the offering other than any
such documents or portions thereof that are not deemed "filed"
under the Exchange Act in accordance with the Exchange Act and
applicable SEC rules and regulations.
You should rely only on the information contained in this document or
that information to which we have referred you. We have not authorized anyone to
provide you with any additional information.
The documents incorporated by reference into this prospectus are
available from us upon request. We will provide a copy of any and all of the
information that is incorporated by reference in this prospectus to any person,
without charge, upon written or oral request. Requests for such copies should be
directed to the following:
Triarc Companies, Inc.
280 Park Avenue
New York, New York 10017
Attention: Investor Relations
Telephone: (212) 451-3000
EXCEPT AS EXPRESSLY PROVIDED ABOVE, NO OTHER INFORMATION, INCLUDING
INFORMATION ON OUR WEBSITE, IS INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
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TRIARC COMPANIES, INC.
Triarc Companies, Inc. is a holding company and currently operates
solely in the restaurant business through Arby's, Inc. and its subsidiaries, the
franchisor of the Arby's restaurant system, and through Sybra, Inc., an owner
and operator of approximately 240 Arby's restaurants located in the United
States as of September 28, 2003. As the franchisor of the Arby's restaurant
system, we license the owners and operators of independent businesses to use the
Arby's brand name and trademarks in the operation of Arby's restaurants. We
provide franchisees with services designed to increase both the revenue and
profitability of their Arby's restaurants. The more important of these services
are providing strategic leadership for the brand, quality control services,
operational training and counseling regarding, and approval of, site selection.
The key elements of our business strategy include (i) using our
resources to grow our restaurant franchising and operations business, (ii)
evaluating and making various acquisitions and business combinations, whether in
the restaurant industry or otherwise, (iii) building strong operating management
teams for each of our current and future businesses and (iv) providing strategic
leadership and financial resources to enable these management teams to develop
and implement specific, growth-oriented business plans. The implementation of
this business strategy may result in increases in expenditures for, among other
things, acquisitions and, over time, marketing and advertising.
Our cash, cash equivalents and short-term investments (including
restricted cash equivalents) at September 28, 2003 totaled approximately $776
million. At September 28, 2003, our consolidated long term debt, including
current portion, was approximately $527 million. Of this amount, approximately
$242 million is debt issued by subsidiaries of Arby's, and $82 million is debt
issued by Sybra. We have guaranteed approximately $3 million of the debt issued
by our restaurant business subsidiaries. In addition, we have guaranteed
obligations of third parties as described more fully in our annual and quarterly
reports which are incorporated by reference into this prospectus. None of our
cash, cash equivalents and investments (other than approximately $30.5 million
of restricted cash) secure such debt. We are evaluating our options to deploy
our substantial liquidity through, among other things, acquisitions, share
repurchases and investments.
Our corporate predecessor was incorporated in Ohio in 1929. We
reincorporated in Delaware in June 1994. Our principal executive offices are
located at 280 Park Avenue, New York, New York 10017 and our telephone number is
(212) 451-3000. Our website address is: www.triarc.com. Information contained on
our website is not part of this prospectus.
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW AND IN THE
DOCUMENTS INCORPORATED BY REFERENCE IN THIS PROSPECTUS, AS WELL AS ANY RISK
INCLUDED IN ANY PROSPECTUS SUPPLEMENT RELEVANT TO AN OFFERING OF SPECIFIC
SECURITIES BEFORE MAKING AN INVESTMENT DECISION. THE RISKS DESCRIBED BELOW ARE
NOT THE ONLY ONES WE FACE. ADDITIONAL RISKS NOT PRESENTLY KNOWN TO US OR THAT WE
CURRENTLY DEEM IMMATERIAL MAY ALSO IMPAIR OUR BUSINESS OPERATIONS.
THE PROSPECTUS SUPPLEMENT APPLICABLE TO EACH TYPE OR SERIES OF
SECURITIES WE OFFER MAY CONTAIN A DISCUSSION OF RISKS APPLICABLE TO THE
PARTICULAR TYPES OF SECURITIES THAT WE ARE OFFERING UNDER THAT PROSPECTUS
SUPPLEMENT. PRIOR TO MAKING A DECISION ABOUT INVESTING IN OUR SECURITIES, YOU
SHOULD CAREFULLY CONSIDER THE SPECIFIC FACTORS DISCUSSED UNDER THE CAPTION "RISK
FACTORS" IN THE APPLICABLE PROSPECTUS SUPPLEMENT, TOGETHER WITH ALL OF THE OTHER
INFORMATION CONTAINED IN THE PROSPECTUS SUPPLEMENT OR APPEARING OR INCORPORATED
BY REFERENCE IN THIS PROSPECTUS.
OUR BUSINESS, FINANCIAL CONDITION OR RESULTS OF OPERATIONS COULD BE
MATERIALLY ADVERSELY AFFECTED BY ANY OF THESE RISKS. THE TRADING PRICE OF OUR
SECURITIES COULD DECLINE DUE TO ANY OF THESE RISKS, AND YOU MAY LOSE ALL OR PART
OF YOUR INVESTMENT.
THIS PROSPECTUS ALSO CONTAINS, AND ANY PROSPECTUS SUPPLEMENT RELEVANT
TO AN OFFERING OF SPECIFIC SECURITIES MAY ALSO CONTAIN, FORWARD-LOOKING
STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A
RESULT OF CERTAIN FACTORS, INCLUDING THE RISKS FACED BY US DESCRIBED BELOW AND
ELSEWHERE IN THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT.
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RISKS RELATED TO OUR COMPANY
A SUBSTANTIAL AMOUNT OF OUR SHARES OF CLASS A COMMON STOCK AND CLASS B
COMMON, SERIES 1, STOCK ARE CONCENTRATED IN THE HANDS OF CERTAIN STOCKHOLDERS.
DWG Acquisition Group, L.P. owns directly or indirectly approximately
27.1% of our outstanding Class A common stock, 27.1% of our Class B common
stock, Series 1, and 27.1% of our voting power as of November 20, 2003. Messrs.
Peltz and May, as the sole general partners of DWG Acquisition, beneficially own
all of the Class A common stock and Class B common stock, Series 1, owned by DWG
Acquisition. In addition, Messrs. Peltz and May each individually beneficially
own certain additional shares of Class A common stock and Class B common stock,
Series 1, which, when combined with the shares owned through DWG Acquisition,
collectively constituted approximately 45.3% of our Class A common stock, 45.3%
of our Class B common stock, Series 1, and 45.3% of our voting power as of
November 20, 2003.
DWG Acquisition and Messrs. Peltz and May may from time to time acquire
additional shares of Class A common stock, including by exchanging some or all
of their Class B common stock, Series 1, offered by them in this prospectus and
any related prospectus supplement for shares of Class A common stock in
negotiated transactions. Such transactions could result in Messrs. Peltz and May
together beneficially owning more than a majority of our outstanding voting
power. As a result, Messrs. Peltz and May would be able to determine the outcome
of the election of members of our board of directors and the outcome of
corporate actions requiring majority stockholder approval, including mergers,
consolidations and the sale of all or substantially all of our assets. They
would also be in a position to prevent or cause a change in control of us. In
addition, to the extent we issue additional Class B common stock, Series 1, for
acquisitions, financings or compensation purposes, such issuances would not
proportionally dilute the voting power of existing stockholders, including
Messrs. Peltz and May.
OUR SUCCESS DEPENDS SUBSTANTIALLY UPON THE CONTINUED RETENTION OF
CERTAIN KEY PERSONNEL.
We believe that our success has been and will continue to be dependent
to a significant extent upon the efforts and abilities of our senior management
team. The failure by us to retain members of our senior management team could
adversely affect our ability to build on the efforts undertaken by its current
management to increase the efficiency and profitability of its businesses.
Specifically, the loss of Nelson Peltz, our Chairman and Chief Executive
Officer, or Peter May, our President and Chief Operating Officer, other senior
members of our senior management or the senior management of our subsidiaries
could adversely affect us.
WE HAVE BROAD DISCRETION IN THE USE OF OUR SIGNIFICANT CASH, CASH
EQUIVALENTS AND INVESTMENT POSITION.
At September 28, 2003, we had approximately $776 million of cash, cash
equivalents and short term investments, including restricted cash equivalents.
We have not designated any specific use for our significant cash, cash
equivalents and investment position. We are evaluating options to deploy our
substantial liquidity through, among other things, acquisitions, additional
share repurchases and investments.
ACQUISITIONS ARE A KEY ELEMENT OF OUR BUSINESS STRATEGY, BUT WE CANNOT
ASSURE YOU THAT WE WILL BE ABLE TO IDENTIFY APPROPRIATE ACQUISITION TARGETS IN
THE FUTURE AND THAT WE WILL BE ABLE TO SUCCESSFULLY INTEGRATE ANY FUTURE
ACQUISITIONS INTO OUR EXISTING OPERATIONS.
Acquisitions involve numerous risks, including difficulties
assimilating new operations and products. In addition, acquisitions may require
significant management time and capital resources. We cannot assure you that we
will have access to the capital required to finance potential acquisitions on
satisfactory terms, that any acquisition would result in long-term benefits to
us or that management would be able to manage effectively the resulting
business. Future acquisitions are likely to result in the incurrence of
additional indebtedness or the issuance of additional equity securities.
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WE MAY HAVE TO TAKE ACTIONS THAT WE WOULD NOT OTHERWISE TAKE SO AS NOT
TO BE DEEMED AN "INVESTMENT COMPANY."
The Investment Company Act of 1940, as amended (the "1940 Act"),
requires the registration of, and imposes various restrictions on, companies
that do not meet certain financial tests regarding the composition of their
assets and source of income. A company may be deemed to be an investment company
if it owns "investment securities" with a value exceeding 40% of its total
assets (excluding government securities and cash items) on an unconsolidated
basis or if more than 45% of the value of its total assets consists of, or more
than 45% of its net after-tax income/loss is derived from, securities of
companies it does not control. Our acquisition strategy may require us to take
actions that we would not otherwise take so as not to be deemed an "investment
company" under the 1940 Act. Investment companies are subject to registration
under, and compliance with, the 1940 Act unless a particular exclusion or safe
harbor provision applies. Presently, the total amount of investment securities
that we hold is substantially less than 40% of our total assets and
substantially less than 45% of our total assets consist of, and substantially
less than 45% of our net after-tax income/loss is derived from, securities of
companies we do not control. If in the future we were to be deemed an investment
company, we would become subject to the requirements of the 1940 Act. We intend
to make acquisitions and other investments in a manner so as not to be deemed an
investment company. As a result, we may forego investments that we might
otherwise make or retain or dispose of investments or assets that we might
otherwise sell or hold.
IN THE FUTURE WE MAY HAVE TO TAKE ACTIONS THAT WE WOULD NOT OTHERWISE
TAKE SO AS NOT TO BE SUBJECT TO TAX AS A "PERSONAL HOLDING COMPANY."
If at any time during the last half of our taxable year, five or fewer
individuals own or are deemed to own more than 50% of the total value of our
shares and if during such taxable year we receive 60% or more of our gross
income from specified passive sources, we would be classified as a "personal
holding company" for the U.S. federal income tax purposes. If this were the
case, we would be subject to additional taxes at the rate of 15% on a portion of
our income, to the extent this income is not distributed to shareholders. We do
not currently expect to have any liability for tax under the personal holding
company rules in 2003. However, we cannot assure you that we will not become
liable for such tax in the future. Because we do not wish to be classified as a
personal holding company or to incur any personal holding company tax, we may be
required in the future to take actions that we would not otherwise take. These
actions may influence our strategic and business decisions, including causing us
to conduct our business and acquire or dispose of investments differently than
we otherwise would.
OUR SUBSIDIARIES ARE SUBJECT TO VARIOUS RESTRICTIONS, AND SUBSTANTIALLY
ALL OF THEIR ASSETS ARE PLEDGED UNDER CERTAIN DEBT AGREEMENTS.
Under our subsidiaries' debt agreements, substantially all of our
subsidiaries' assets, other than cash, cash equivalents and short-term
investments, are pledged as collateral security. The indenture relating to the
notes issued in the Arby's securitization and the agreements relating to debt
issued by Sybra contain financial covenants that, among other things, require
Arby's Franchise Trust (the borrower in the Arby's securitization) and Sybra, as
applicable, to maintain certain financial ratios and restrict their ability to
incur debt, enter into certain fundamental transactions (including sales of all
or substantially all of their assets and certain mergers and consolidations) and
create or permit liens. If either Arby's Franchise Trust or Sybra is unable to
generate sufficient cash flow or otherwise obtain the funds necessary to make
required payments of interest or principal under, or is unable to comply with
covenants of, its respective debt agreements, it would be in default under the
terms of such agreements which would, under certain circumstances, permit the
insurer of the notes issued in the Arby's securitization or the lenders to
Sybra, as applicable, to accelerate the maturity of the balance of its
indebtedness.
ARBY'S IS DEPENDENT ON RESTAURANT REVENUES AND OPENINGS.
Franchise royalties and fees comprise a significant portion of our
revenues and earnings and the results of our restaurant business are highly
dependent on the gross revenues of Arby's franchisees' restaurants.
Additionally, as a result of the acquisition of Sybra, we derive revenues and
earnings from restaurant operations. Accordingly, the number of Arby's
restaurants that we and Arby's franchisees operate is important to us. It is
possible that interruptions in the distribution of supplies to Arby's
restaurants could adversely affect sales at company-owned restaurants and result
in a decline in royalty fees that we receive from Arby's franchisees.
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THE NUMBER OF ARBY'S RESTAURANTS THAT OPEN MAY NOT MEET EXPECTATIONS.
Numerous factors beyond our control affect restaurant openings. These
factors include the ability of potential restaurant owners to obtain financing,
locate appropriate sites for restaurants and obtain all necessary state and
local construction, occupancy and other permits and approvals. Although as of
September 28, 2003, franchisees had signed commitments to open approximately 524
Arby's restaurants and have made or are required to make non-refundable deposits
of $10,000 per restaurant, we cannot assure you that these commitments will
result in open restaurants. In addition, we cannot assure you that our
franchisees will successfully develop and operate their restaurants in a manner
consistent with our standards.
ARBY'S FRANCHISE REVENUES DEPEND, TO A SIGNIFICANT EXTENT, ON ITS
LARGEST FRANCHISEE AND A DECLINE IN ITS REVENUE MAY INDIRECTLY ADVERSELY AFFECT
US.
During 2002, Arby's received approximately 27% of its royalties and
franchise and related fees from RTM Restaurant Group, Inc. ("RTM") (which as of
September 28, 2003, operated 787 Arby's restaurants). Arby's revenues could
materially decline from their present levels if RTM suffered a significant
decline in its business.
COMPETITION FROM RESTAURANT COMPANIES COULD ADVERSELY AFFECT US.
The business sectors in which owned and franchised Arby's restaurants
compete are highly competitive with respect to, among other things, price, food
quality and presentation, service, location, and the nature and condition of the
financed business unit/location, and are affected by changes in tastes and
eating habits, local, regional and national economic conditions and population
and traffic patterns. Arby's restaurants compete with a variety of locally-owned
restaurants, as well as competitive regional and national chains and franchises.
Moreover, new companies may enter our market areas and target our sales
audience. Such competition may have, among other things, lower operating costs,
lower debt service requirements, better locations, better facilities, better
management, more effective marketing and more efficient operations. All such
competition may adversely affect our revenues and profits and those of our owned
and franchised restaurants and could adversely affect the ability of our
franchisees to make franchise payments to us. Furthermore, we and our
franchisees face competition for competent employees and high levels of employee
turnover, which also can have an adverse effect on our operations and revenues
and those of our franchisees as well as on our franchisees' abilities to make
franchise payments to us. Many of Arby's competitors have substantially greater
financial, marketing, personnel and other resources than Arby's which may give
them a competitive advantage. Accordingly, we cannot assure you that the level
of gross revenues of company-owned restaurants and of restaurants owned by
Arby's franchisees, upon which our royalty fees are dependent, will continue.
CHANGES IN CONSUMER TASTES AND PREFERENCES AND IN SPENDING AND
DEMOGRAPHIC PATTERNS, AS WELL AS HEALTH AND SAFETY CONCERNS ABOUT FOOD QUALITY,
COULD RESULT IN A LOSS OF CUSTOMERS AND REDUCE THE ROYALTIES THAT WE RECEIVE.
The quick service restaurant industry is often affected by changes in
consumer tastes, national, regional and local economic conditions, discretionary
spending priorities, demographic trends, traffic patterns and the type, number
and location of competing restaurants. Consumer preferences could also be
affected by health or safety concerns with respect to the consumption of beef,
french fries or other foods or with respect to the effects of food borne
illnesses. As is generally the case in the restaurant franchise business, we and
our franchisees may, from time to time, be the subject of complaints or
litigation from customers alleging illness, injury or other food quality, health
or operational concerns. Adverse publicity resulting from these allegations may
harm the reputation of Arby's restaurants, even if the allegations are not
valid, we are not found liable or those concerns relate only to a single
restaurant or a limited number of restaurants. Moreover, complaints, litigation
or adverse publicity experienced by one or more of our franchisees could also
adversely affect our business as a whole. If our owned and franchised
restaurants are unable to adapt to changes in consumer preferences and trends,
or we have adverse publicity due to any of these concerns, we and our
franchisees may lose customers and the resulting revenues from company-owned
restaurants and the royalties that Arby's receives from its franchisees may
decline.
8
WE MAY NOT BE ABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY,
WHICH COULD HARM THE VALUE OF OUR BRANDS AND ADVERSELY AFFECT OUR BUSINESS.
Our intellectual property is material to the conduct of our business.
We rely on a combination of trademarks, copyrights, service marks, trade secrets
and similar intellectual property rights to protect our brands and other
intellectual property. The success of our business strategy depends, in part, on
our continued ability to use our existing trademarks and service marks in order
to increase brand awareness and further develop our branded products in both
domestic and international markets. If our efforts to protect our intellectual
property are not adequate, or if any third party misappropriates or infringes on
our intellectual property, either in print or on the Internet, the value of our
brands may be harmed, which could have a material adverse effect on our
business, including the failure of our brands to achieve and maintain market
acceptance.
We franchise our restaurant brands to various franchisees. While we try
to ensure that the quality of our brands is maintained by all of our
franchisees, we cannot assure you that these franchisees will not take actions
that adversely affect the value of our intellectual property or the reputation
of the Arby's restaurant system. We have registered certain trademarks and have
other trademark registrations pending in the U.S. and certain foreign
jurisdictions. The trademarks that we currently use have not been registered in
all of the countries outside of the United States in which we do business and
may never be registered in all of these countries.
We cannot assure you that all of the steps we have taken to protect our
intellectual property in the U.S. and foreign countries will be adequate. In
addition, the laws of some foreign countries do not protect intellectual
property rights to the same extent as the laws of the U.S.
WE, AND SOME OF OUR SUBSIDIARIES, REMAIN CONTINGENTLY LIABLE WITH
RESPECT TO CERTAIN OBLIGATIONS RELATING TO BUSINESSES THAT WE HAVE SOLD.
In 1997 we sold all of our then company-owned Arby's restaurants to
subsidiaries of RTM, Arby's largest franchisee. In connection with the sale, an
aggregate of approximately $55 million of mortgage and equipment notes were
assumed by subsidiaries of RTM, of which approximately $41 million remained
outstanding at September 28, 2003. RTM has guaranteed the payment of these notes
by its subsidiaries. Notwithstanding the assumption of this debt and guaranty,
we remain contingently liable as a guarantor of the notes. In addition, the
subsidiaries of RTM also assumed substantially all of the lease obligations
relating to the purchased restaurants (which aggregate a maximum of
approximately $60 million at September 28, 2003) and RTM has indemnified us for
any losses we might incur with respect to such leases. Notwithstanding such
assumption, Arby's and its subsidiaries remain contingently liable if RTM's
subsidiaries fail to make the required payments under those notes and leases.
In addition, in July 1999, we sold 41.7% of our then remaining 42.7%
interest in National Propane Partners, L.P. and a sub-partnership, National
Propane, L.P. to Columbia Energy Group, and retained less than a 1% special
limited partner interest in AmeriGas Eagle Propane, L.P. (formerly known as
National Propane, L.P. and as Columbia Propane, L.P.). As part of the
transaction, our subsidiary, National Propane Corporation, agreed that while it
remains a special limited partner of AmeriGas, it would indemnify the owner of
AmeriGas for any payments the owner makes under certain debt of AmeriGas
(aggregating approximately $138 million as of September 28, 2003), if AmeriGas
is unable to repay or refinance such debt, but only after recourse to the assets
of AmeriGas. Either National Propane Corporation or AmeriGas Propane, L.P., the
owner of AmeriGas, may require AmeriGas to repurchase the special limited
partner interest. However, we believe it is unlikely that either party would
require repurchase prior to 2009 as either AmeriGas Propane, L.P. would owe us
tax indemnification payments or we would accelerate payment of deferred taxes,
which amount to approximately $40 million as of September 28, 2003, associated
with our sale of the propane business.
Although we believe that it is unlikely that we will be called upon to
make any payments under the guaranty, leases or indemnification described above,
if we were required to make such payments it could have a material adverse
effect on our financial position and results of operations.
9
CHANGES IN GOVERNMENTAL REGULATION MAY ADVERSELY AFFECT OUR ABILITY TO
OPEN NEW RESTAURANTS OR OTHERWISE ADVERSELY AFFECT OUR EXISTING AND FUTURE
OPERATIONS AND RESULTS.
Each Arby's restaurant is subject to licensing and regulation by
health, sanitation, safety and other agencies in the state and/or municipality
in which the restaurant is located. There can be no assurance that we, or our
franchisees, will not experience material difficulties or failures in obtaining
the necessary licenses or approvals for new restaurants which could delay the
opening of such restaurants in the future. In addition, more stringent and
varied requirements of local and tax governmental bodies with respect to zoning,
land use and environmental factors could delay or prevent development of new
restaurants in particular locations. We, and our franchisees, are also subject
to the Fair Labor Standards Act which governs such matters as minimum wages,
overtime and other working conditions, along with the Americans with
Disabilities Act, family leave mandates and a variety of other laws enacted by
the states that govern these and other employment law matters. We cannot predict
the amount of future expenditures which may be required in order to permit our
company owned restaurants to comply with any changes in existing regulations or
to comply with any future regulations that may become applicable to our
business.
Certain of our current and past operations are or have been subject to
federal, state and local environmental laws and regulations concerning the
discharge, storage, handling and disposal of hazardous or toxic substances. Such
laws and regulations provide for significant fines, penalties and liabilities,
in certain cases without regard to whether the owner or operator of the property
knew of, or was responsible for, the release or presence of such hazardous or
toxic substances. In addition, third parties may make claims against owners or
operators of properties for personal injuries and property damage associated
with releases of hazardous or toxic substances. Although we believe that our
operations comply in all material respects with all applicable environmental
laws and regulations, we cannot predict what environmental legislation or
regulations will be enacted in the future or how existing or future laws or
regulations will be administered or interpreted. We cannot predict the amount of
future expenditures which may be required in order to comply with any
environmental laws or regulations or to satisfy any such claims.
OUR CERTIFICATE OF INCORPORATION CONTAINS CERTAIN ANTI-TAKEOVER
PROVISIONS AND PERMITS OUR BOARD OF DIRECTORS TO ISSUE PREFERRED STOCK WITHOUT
SHAREHOLDER APPROVAL.
Certain provisions in our certificate of incorporation are intended to
discourage or delay a hostile takeover of control of us. These are summarized in
detail under the caption "Description of Our Common Stock -- Certain
Anti-Takeover Provisions."
Our certificate of incorporation, authorizes the issuance of shares of
"blank check" preferred stock, which will have such designations, rights and
preferences as may be determined from time to time by our board of directors.
Accordingly, our board of directors is empowered, without stockholder approval,
to issue preferred stock with dividend, liquidation, conversion, voting or other
rights which could adversely affect the voting power and other rights of the
holders of our Class A common stock and Class B common stock. The preferred
stock could be used to discourage, delay or prevent a change in control of us
which is determined by our board of directors to be undesirable. Although we
have no present intention to issue any shares of preferred stock, we cannot
assure you that we will not do so in the future.
RISKS RELATING TO OUR COMMON STOCK, PREFERRED STOCK, DEBT SECURITIES AND
WARRANTS TO PURCHASE OUR SECURITIES
WE ARE A HOLDING COMPANY AND DEPEND ON DIVIDENDS OF AND DISTRIBUTIONS
FROM OUR SUBSIDIARIES AND OUR CASH OR CASH EQUIVALENTS TO MEET OUR OBLIGATIONS.
Because we are a holding company, our ability to service debt and pay
dividends, including dividends on our Class A common stock and Class B common
stock, is dependent upon our cash, cash equivalents and short-term investments
on hand, cash flows from our subsidiaries, including loans, cash dividends and
reimbursement by subsidiaries to us in connection with providing certain
management services and payments by subsidiaries under certain tax sharing
agreements. At September 28, 2003, the cash flow from our subsidiaries is
inadequate to cover all of the expenses of our holding company. Accordingly, we
will need to use our cash and cash equivalents or income from other investments
we may make to pay dividends on our common stock and preferred stock and
interest and principal on our debt securities.
10
Under the terms of the indenture relating to the notes issued in the
Arby's securitization and the agreements relating to debt issued by Sybra, there
are restrictions on the ability of certain of our subsidiaries to pay dividends
and/or make loans or advances to us. The ability of any of our subsidiaries to
pay cash dividends and/or make loans or advances to us is also dependent upon
the respective abilities of such entities to achieve sufficient cash flows after
satisfying their respective cash requirements, including debt service, to enable
the payment of such dividends or the making of such loans or advances. In
addition, in connection with the December 2002 acquisition of Sybra, we agreed
that Sybra would not pay dividends to us for a period of two years from the
closing.
WE CANNOT ASSURE YOU THAT AN ACTIVE TRADING MARKET WILL DEVELOP FOR THE
SECURITIES OFFERED OTHER THAN OUR CLASS A COMMON STOCK AND OUR CLASS B COMMON
STOCK, SERIES 1, OR THAT SUCH A MARKET WILL NOT BE VOLATILE.
There is no established trading market for the securities offered other
than our Class A common stock and our Class B common stock, Series 1, and we may
not apply for listing of the securities (other than our Class A common Stock and
our Class B common stock, Series 1) offered on any national securities exchange
or for quotation of the securities offered on any automated dealer quotation
system. We expect that any underwriters we may select with respect to an
offering of securities issued in connection with this prospectus and any
prospectus supplement would make a market in the securities offered after the
consummation of the applicable offering, although they would be under no
obligation to do so and might discontinue any market-making activities at any
time without any notice. Accordingly, no assurance can be given as to the price
of the securities offered, the liquidity of the trading market for the
securities offered or that an active public trading market for the securities
offered (other than the Class A common stock and the Class B common stock,
Series 1) will develop. If an active public trading market for the securities
offered (other than the Class A common stock and the Class B common stock,
Series 1) does not develop, the market price and liquidity of the securities
offered may be adversely affected. If the securities offered are traded, they
may trade at a discount from their offering price, depending upon prevailing
interest rates, the market for similar securities, our performance and certain
other factors. The liquidity of, and trading markets for, any non-investment
grade debt securities offered may also be adversely affected by general declines
in the market for non-investment grade debt. Such declines may be adversely
affect the liquidity of, and trading markets for, the securities offered,
independent of our financial performance or prospects. Historically, the markets
for non-investment grade debt securities have been subject to disruptions that
have caused substantial price volatility. There can be no assurance that the
market for any non-investment grade debt securities offered will not be subject
to similar disruptions. Any such disruptions may have a material adverse effect
on the value of such securities offered.
THE THEN CURRENT HOLDERS OF OUR COMMON STOCK AND PREFERRED STOCK MAY
EXPERIENCE A DILUTION IN THE VALUE OF THEIR EQUITY INTEREST AS A RESULT OF THE
ISSUANCE AND SALE OF ADDITIONAL SHARES OF OUR COMMON STOCK AND PREFERRED STOCK.
We may decide to raise additional funds through public or private debt
or equity financing to fund our operations. If we raise funds by issuing equity
securities, the percentage ownership of then current securityholders will be
reduced and the new equity securities may have rights senior to those of the
then outstanding common stock and preferred stock. This dilution could be
significant depending upon the type of financing obtained and the terms of such
financing.
SHARES OF OUR COMMON STOCK OR PREFERRED STOCK ELIGIBLE FOR PUBLIC SALE
COULD ADVERSELY AFFECT THE MARKET PRICE OF OUR CLASS A COMMON STOCK AND CLASS B
COMMON STOCK, SERIES 1, AND ANY OTHER OF OUR SECURITIES THAT MAY BE LISTED IN
THE FUTURE.
The market price of our Class A common stock and Class B common stock,
Series 1, and any other of our securities that may be listed in the future could
decline as a result of sales of a large number of shares in the market in the
future or market perception that such sales could occur, including sales or
distributions of shares by one or more of our large securityholders or by our
controlling securityholder. These factors could also make it more difficult for
us to raise funds through offerings of equity securities in the future at a time
and at a price that we deem appropriate. As of October 31, 2003 there were
19,748,609 shares of our Class A common stock and 39,497,218 shares of our Class
B common stock, Series 1, outstanding. All of the shares of Class A common stock
and Class B common stock, Series 1, are freely transferable without restriction
or further registration under the federal securities laws, except for any shares
held by our affiliates, sales of which will be limited by Rule 144 under the
Securities Act absent registration under the Securities Act.
11
WE HAVE OUTSTANDING A SUBSTANTIAL AMOUNT OF STOCK OPTIONS EXERCISABLE
INTO OUR CLASS A COMMON STOCK AND CLASS B COMMON STOCK, SERIES 1.
As of September 28, 2003 we had granted options to purchase 7,772,155
shares of our Class A common stock and 15,544,310 shares of Class B common
stock, Series 1, under our equity participation plans for our directors,
officers, key employees and consultants and had approximately 4,972,791 million
shares of Class A common stock and 9,945,582 shares of Class B common stock,
Series 1, available for future grant. The exercise of outstanding options or the
future issuance of options (and the exercise of such options) or restricted
stock will dilute the beneficial ownership of holders of our Class A common
stock and Class B common stock, Series 1.
THE PRICE OF OUR CLASS A COMMON STOCK AND CLASS B COMMON STOCK, SERIES
1, MAY FLUCTUATE SIGNIFICANTLY.
The price of our Class A common stock and Class B common stock, Series
1, on the New York Stock Exchange constantly changes. We expect that the market
price of our Class A common stock and Class B common stock, Series 1, will
continue to fluctuate. Our stock prices can fluctuate as a result of a variety
of factors, many of which are beyond our control. These factors include:
o significant acquisitions or business combinations, strategic
partnerships, joint ventures or capital commitments by or
involving us or our competitors;
o failure to integrate our acquisitions or realize anticipated
benefits from our acquisitions;
o competition, including pricing pressures, the potential impact
of competitors' new units on sales by Arby's restaurants and
consumers' perceptions of the relative quality, variety and
value of the food products offered;
o market acceptance of new product offerings;
o new product and concept development by competitors;
o changing trends in consumer tastes and preferences (including
changes resulting from health or safety concerns with respect
to the consumption of beef, french fries or other foods or the
effects of food-borne illnesses) and in spending and
demographic patterns;
o the ability of franchisees to open new restaurants in
accordance with their development commitments, including the
ability of franchisees to finance restaurant development;
o delays in opening new restaurants or completing remodels;
o anticipated and unanticipated restaurant closures by us and
our franchisees;
o availability of qualified personnel to us and to our
franchisees;
o changes in government regulations;
o changes in applicable accounting policies and practices; and
o geopolitical conditions such as acts or threats of terrorism
or military conflicts.
General market fluctuations, industry factors and economic conditions,
such as economic slowdowns, recessions or interest rate changes, also could
cause our stock price to fluctuate. See "Forward-Looking Statements."
12
In addition, the stock market in general has experienced extreme
volatility that has often been unrelated to the operating performance of a
particular company. These broad market fluctuations may adversely affect the
market price of our Class A common stock and Class B common stock, Series 1.
13
FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus or incorporated by
reference into this prospectus are "forward-looking statements" that involve
risks, uncertainties and assumptions with respect to us, including some
statements concerning the transactions described in this prospectus, future
results, plans, goals and other events which have not yet occurred. These
statements are intended to qualify for the safe harbors from liability provided
by Section 27A of the Securities Act and Section 21E of the Exchange Act. You
can find many (but not all) of these statements by looking for words like
"will," "may," "believes," "expects," "anticipates," "forecast," "future,"
"intends," "plans" and "estimates" and for similar expressions.
These forward-looking statements are based on our current expectations,
speak only as of the date of this prospectus and are susceptible to a number of
risks, uncertainties and other factors. Our actual results, performance and
achievements may differ materially from any future results, performance or
achievements expressed or implied by such forward-looking statements. For those
statements, we claim the protection of the safe-harbor for forward-looking
statements contained in the Securities Litigation Reform Act of 1995. Many
important factors could affect our future results and could cause those results
to differ materially from those expressed in the forward-looking statements
contained in this prospectus. Such factors include, but are not limited to, the
following:
o Competition, including pricing pressures, the potential impact
of competitors' new units on sales by Arby's restaurants and
consumers' perceptions of the relative quality, variety and
value of the food products offered;
o Success of operating initiatives;
o Development and operating costs;
o Advertising and promotional efforts;
o Brand awareness;
o The existence or absence of positive or adverse publicity;
o Market acceptance of new product offerings;
o New product and concept development by competitors;
o Changing trends in consumer tastes and preferences (including
changes resulting from health or safety concerns with respect
to the consumption of beef, french fries or other foods or the
effects of food-borne illnesses) and in spending and
demographic patterns;
o The business and financial viability of key franchisees;
o Availability, location and terms of sites for restaurant
development by us and our franchisees;
o The ability of franchisees to open new restaurants in
accordance with their development commitments, including the
ability of franchisees to finance restaurant development;
o Delays in opening new restaurants or completing remodels;
o Anticipated and unanticipated restaurant closures by us and
our franchisees;
o The ability to identify, attract and retain potential
franchisees with sufficient experience and financial resources
to develop and operate Arby's restaurants;
14
o Changes in business strategy or development plans;
o Quality of our and our franchisees' management;
o Availability, terms and deployment of capital;
o Business abilities and judgment of our and our franchisees'
personnel;
o Availability of qualified personnel to us and to our
franchisees;
o Labor and employee benefit costs;
o Availability and cost of energy, raw materials, ingredients,
commodities (including beef) and supplies;
o The potential impact that interruptions in the distribution of
supplies of food and other products to Arby's restaurants
could have on sales at our restaurants and the royalties that
we receive from franchisees;
o Availability and cost of workers' compensation and general
liability premiums and claims experience;
o Changes in national, regional and local economic, business or
political conditions in the countries and other territories in
which we and our franchisees operate;
o Changes in government regulations, including franchising laws,
accounting standards, environmental laws, minimum wage rates
and taxation requirements;
o Changes in applicable accounting policies and practices;
o The costs, uncertainties and other effects of legal,
environmental and administrative proceedings;
o The impact of general economic conditions on consumer
spending, including a slower consumer economy, and the effects
of war or terrorist activities;
o Adverse weather conditions;
o Our ability to identify appropriate acquisition targets in the
future and to successfully integrate any future acquisitions
into our existing operations; and
o Other risks and uncertainties referred to in this prospectus
and in our other current and periodic filings with the SEC,
all of which are difficult or impossible to predict accurately
and many of which are beyond our control.
We will not undertake and specifically decline any obligation to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events. In addition, it is our policy generally not to make any specific
projections as to future earnings, and we do not endorse any projections
regarding future performance that may be made by third parties.
15
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges
or the amount by which our earnings were insufficient to cover fixed charges for
the periods indicated:
YEAR ENDED NINE MONTHS ENDED
----------------------------------------------- -------------------
JAN. 3, JAN. 2, DEC. 31, DEC. 30, DEC. 29, SEPT. 29, SEPT. 28,
1999 2000 2000 2001 2002 2002 2003
---- ---- ---- ---- ---- ---- ----
(In thousands except ratios)
Ratios of earnings to
fixed charges.......... 1.51 7.09 1.78 1.55
==== ==== ==== ====
Amount by which earnings
were insufficient to
cover fixed charges.... $16,940 $16,294 $3,055
======= ======= ======
The ratio of earnings to fixed charges is computed by dividing fixed
charges into income (loss) from continuing operations before income taxes and
minority interests, as adjusted, plus fixed charges. Income (loss) from
continuing operations before income taxes and minority interests has been
adjusted to exclude equity in earnings (losses) of equity investees and to
include any distributions of earnings from equity investees. Fixed charges
consist of (i) interest on all indebtedness, including amortization of deferred
financing costs and original issue discount relating to outstanding long-term
debt, and (ii) the interest component of rental payments, which is deemed for
this purpose to be approximately one-third of rent expense.
As of the date of this prospectus, we do not have any preferred stock
outstanding.
USE OF PROCEEDS
Unless we state otherwise in the accompanying prospectus supplement, we
intend to use the net proceeds from the sale of the securities offered by us
under this prospectus and any related prospectus supplement for general
corporate purposes. These purposes may include financing of acquisitions and
capital expenditures, additions to working capital and repayment or redemption
of existing indebtedness.
We will not receive any of the net proceeds of the Class B common
stock, Series 1, offered by our securityholders in this prospectus and any
related prospectus supplement.
DIVIDEND POLICY
We did not pay any dividends on our Class A common stock in 2001 or
2002. On August 11, 2003, our board of directors declared an initial regular
quarterly cash dividend of $0.065 per share on the Class A common stock and
$0.075 per share on the Class B common stock, Series 1, which were paid on
September 25, 2003 to stockholders of record at the close of business on
September 15, 2003. As a result, each stockholder holding one share of Class A
common stock and two shares of Class B common stock, Series 1, on September 15,
2003 received a combined cash dividend of $0.215 on such shares on September 25,
2003. On November 20, 2003, our board of directors declared a regular quarterly
cash dividend of $0.065 per share on the Class A common stock and $0.075 per
share on the Class B common stock, Series 1, which are to be paid on December
16, 2003 to stockholders of record at the close of business on December 2, 2003.
The declaration of future dividends is subject to the discretion of our
board of directors, which may from time to time review whether to declare
dividends in light of all of the then existing relevant facts and circumstances.
While we currently expect that our board of directors will continue to declare
and pay quarterly cash dividends, there can be no assurance that such dividends
will be declared or paid in any subsequent quarters, or of the amount of timing
of such dividends, if any.
16
In addition, under the terms of the indenture relating to the
indebtedness issued in the Arby's securitization and the agreements relating to
debt issued by Sybra, there are restrictions on the ability of certain of our
subsidiaries to pay dividends or advances to us. The ability of any of our
subsidiaries to pay cash dividends or advances to us is also dependent upon the
respective abilities of such entities to achieve sufficient cash flows after
satisfying their respective cash requirements, including debt service, to enable
the payment of such dividends or the making of such loans or advances. See "Risk
Factors -- Risks Relating to Our Common Stock, Preferred Stock, Debt Securities
and Warrants to Purchase Our Securities -- We are a holding company and depend
on dividends of and distributions from our subsidiaries and our cash and cash
equivalents to meet our obligations."
DESCRIPTION OF COMMON STOCK OF TRIARC
For purposes of this section, the terms "we," "our," "us" and "Triarc"
refer only to Triarc Companies, Inc. and not its subsidiaries.
The following is a description of the material terms of our common
stock. Because it is a summary, the following description is not complete and is
subject to and qualified in its entirety by reference to our certificate of
incorporation (the "certificate of incorporation") and our by-laws.
GENERAL
Our authorized capital stock consists of 300,000,000 shares, of which
100,000,000 are shares of Class A common stock, par value $.10 per share,
100,000,000 are shares of Class B common stock, par value $.10 per share, and
100,000,000 are shares of preferred stock, par value $.10 per share. All of the
Class B common stock currently authorized has been designated as Class B common
stock, Series 1.
As of October 31, 2003, there were 19,748,609 shares of Class A common
stock issued and outstanding, 39,497,218 shares of Class B common stock, Series
1, issued and outstanding and no shares of the preferred stock outstanding. As
of September 28, 2003, we had reserved 4,375,000 of Class A common stock and
8,750,000 shares of Class B common stock, Series 1, for delivery to the holders
of outstanding unsecured convertible notes due 2023 upon conversion thereof. As
of September 28, 2003, we had outstanding options to purchase 7,772,155 shares
of our Class A common stock and 15,544,310 shares of our Class B common stock,
Series 1, under our equity participation plans for our directors, officers, key
employees and consultants and had approximately 4,972,791 million shares of
Class A common stock and 9,945,582 shares of Class B common stock, Series 1,
available for future grant.
Our Class A common stock is listed and trades on the NYSE under the
ticker symbol "TRY." Our Class B common stock, Series 1, is listed and trades on
the NYSE under the ticker symbol "TRY.B."
CLASS A COMMON STOCK
Holders of our Class A common stock are entitled to one vote for each
share held of record on all matters on which stockholders are entitled to vote,
including the election of directors. Generally, except as otherwise required by
law, holders of Class A common stock are not entitled to vote on any amendment
to our certificate of incorporation that relates solely to the terms of the
Class B common stock; provided, however, that the number of authorized shares of
Class B common stock may be increased or decreased (but not below the number of
shares then outstanding) by the affirmative majority vote of the holders of a
majority of the Class A common stock without a separate class vote of the
holders of the Class B common stock. Subject to the preferences that may be
applicable from time to time to any outstanding class or series of Class B
common stock or preferred stock, the holders of our shares of Class A common
stock are entitled to receive ratably any dividends lawfully declared from time
to time by our board of directors. The outstanding shares of Class A common
stock are fully paid and nonassessable. Additional authorized but unissued Class
A common stock may be issued by our board of directors without the approval of
our stockholders.
17
CLASS B COMMON STOCK
Our board of directors has the authority, without further action by the
stockholders, to issue up to 100,000,000 shares of Class B common stock, par
value $.10 per share, in one or more series and to fix the designations, powers,
preferences, privileges and relative participation, optional or special rights
and the qualifications, limitations or restrictions thereof, including dividend
rights, conversion rights, voting rights, terms of redemption and liquidation
preferences, any or all of which may be greater than the rights of any existing
class or series of our common stock. Under our certificate of incorporation, the
number of authorized shares of Class B common stock may be increased or
decreased (but not below the number of shares thereof then outstanding) by the
affirmative vote of the holders of a majority of the Class A common stock
without a separate class vote of the holders of the Class B common stock. All of
the Class B common stock currently authorized has been designated as Class B
common stock, Series 1. Under our certificate of incorporation, the number of
shares of Class B common stock designated as Class B common stock, Series 1, may
be increased or decreased (but not below the number of shares thereof then
outstanding) by our board of directors without the approval of our stockholders.
CLASS B COMMON STOCK, SERIES 1
Holders of our Class B common stock, Series 1, are entitled to one
tenth of one vote for each share held on record on all matters on which
stockholders are entitled to vote, including the election of directors.
Generally, except as otherwise required by law, the holders of Class B common
stock, Series 1, are not entitled to vote on any amendment to our certificate of
incorporation that relates solely to the terms of the Class A common stock or
any other outstanding class or series of stock, where the holders of such
affected class or series are entitled, either separately or together as a class
with the holders of one or more other said class or series, to vote thereon by
law or pursuant to our certificate of incorporation (including any certificate
of designation relating to any other series or class of stock). The outstanding
shares of Class B common stock, Series 1, are fully paid and nonassessable.
Additional authorized but unissued Class B common stock, Series 1, may be issued
by our board of directors without the approval of our stockholders.
If and when dividends on our Class A common stock are declared payable
from time to time by our board of directors, whether payable in cash, in
property or in shares of our stock, the holders of our Class B common stock,
Series 1, will be entitled to share equally in such dividends with the holders
of the Class A common stock, on a per share basis, subject to the limitations
described below; provided, however, that with respect to a regular quarterly
cash dividend declared as such by our board of directors, paid by us on the
Class A common stock on or prior to September 4, 2006, the holders of the Class
B common stock, Series 1, will be entitled to receive a dividend in a per share
amount (such amount to be subject to upward or downward rounding at the
discretion of our board of directors) equal to at least 110% of the dividends
paid per share on the Class A common stock. If dividends are declared at any
time on the Class A common stock that are payable in shares of Class A common
stock, such dividends will be payable at the same rate on the Class B common
stock, Series 1, but will be payable to holders of Class B common stock, Series
1, in shares of Class B common stock, Series 1. If we subdivide or combine the
outstanding shares of Class A common stock in any manner, the outstanding shares
of Class B common stock, Series 1, will be proportionally subdivided or combined
in the same manner and on the same basis.
The approval of holders of a majority of the outstanding shares of
Class B common stock, Series 1, voting separately as a class, will be required
for any merger or consolidation of us with another entity (whether or not we are
the surviving entity) unless the holders of shares of Class B common stock,
Series 1, are entitled to receive in such transaction in respect of each share
of Class B common stock, Series 1, the same consideration as the holders of
shares of Class A common stock are entitled to receive in respect of each share
of Class A common stock; provided that, if all or part of the consideration so
received consists of common stock of the surviving entity, the common stock so
issued may differ as to voting rights, liquidation preference and dividend
rights to the same extent that the Class A common stock and Class B common
stock, Series 1, differ.
PRE-EMPTIVE RIGHTS
Under Delaware law, a shareholder is not entitled to pre-emptive rights
to subscribe for additional issuances of Class A common stock, Class B common
stock, Series 1, or any other class or series of common stock or any security
convertible into such stock in proportion to the shares that are owned unless
there is a provision to
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the contrary in the certificate of incorporation. Our certificate of
incorporation does not provide that our stockholders are entitled to pre-emptive
rights.
LIQUIDATION
In the event that we liquidate, dissolve or are wound up, whether
voluntary or involuntary, to the extent assets remain after payment or provision
for payment of our debts and other liabilities and the preferential amounts to
which the holders of any stock ranking senior to our Class B common stock,
Series 1, in the distribution of assets will be entitled upon liquidation, the
holders of Class B common stock, Series 1, will be entitled to receive, prior to
any payment being made to the holders of Class A common stock and any other
stock that ranks junior to the Class B common stock, Series 1, in the event of
liquidation, an amount per share equal to $.01 (as adjusted for stock splits,
combinations, reclassifications and the like). Once the holders of Class A
common stock will then have received an amount per share equal to $.01 (as
adjusted for stock splits, combinations, reclassifications and the like), the
Class A common stock and Class B common stock, Series 1, will thereafter share
pro rata, together with the holders of any other stock ranking on parity
therewith in the distribution of assets upon liquidation, in our remaining
assets according to their respective interests.
CERTAIN ANTI-TAKEOVER PROVISIONS
Certain provisions in our certificate of incorporation are intended to
discourage or delay a hostile takeover of control of us. These provisions, in
general terms, (i) provide that the number of directors shall not be less than
seven nor more than 15, with the exact number to be determined from time to time
by a majority of the board of directors then in office; (ii) provide that
vacancies on the board of directors resulting from an increase in size, removal
of directors or otherwise may be filled only by a majority of the remaining
directors then in office; and (iii) require the affirmative vote of the holders
of shares representing at least 75% of the voting power of the "voting shares"
(as defined below) in order to enter into certain "business combinations" (as
defined below), unless (A) such business combinations are approved by at least a
majority of our entire board of directors, but only if a majority of the
directors acting favorably on the matter are "continuing directors" (as defined
below), or (B) certain minimum price, form of consideration and procedural
requirements are met. The term "voting shares" is defined as any issued and
outstanding shares of our capital stock entitled to vote generally in the
election of directors. Each of the provisions has particular anti-takeover
effects associated with it, and these effects together with a more detailed
description of each provision are set forth below. In addition, the
anti-takeover provisions are interrelated and have cumulative anti-takeover
effects.
The principal purpose of these provisions is to provide a measure of
assurance that a stockholder or group of stockholders owning a controlling
interest in our stock do not exercise their voting power in a manner which our
board of directors believes would be to the detriment of the remaining
stockholders. The provisions are further intended to make it more difficult for
a hostile or unfriendly party to obtain control over us by replacing the board
of directors.
SIZE OF THE BOARD OF DIRECTORS AND FILLING VACANCIES ON THE BOARD OF DIRECTORS
Our certificate of incorporation states that our board of directors
must consist of not less than seven nor more than 15 members; provided, however,
that the maximum number may be increased to reflect the right of holders of
preferred stock to elect directors in certain circumstances. The exact number of
directors is to be fixed by a majority vote of the directors then in office and
such authority of our board of directors is exclusive. Under our certificate of
incorporation, vacancies that may occur between annual meetings, including
vacancies caused by an increase in the number of directors, may be filled only
by a majority of the remaining directors then in office, even if less than a
quorum, subject to the rights of holders of any class or series of preferred
stock to elect directors. In addition, our certificate of incorporation provides
that any new director elected to fill a vacancy on our board of directors will
serve for the remainder of the full term of the director for which the vacancy
occurred and no decrease in the number of directors shall shorten the term of
any incumbent. The purpose of including these provisions with respect to the
size of our board of directors and the filling of vacancies in our certificate
of incorporation is to prevent the elimination of such provisions through an
amendment of our by-laws by a stockholder or group owning or controlling a
substantial voting block that would permit stockholders directly to increase the
size of our board of directors and to fill vacancies resulting therefrom or
otherwise, and thereby enable such stockholder or group of
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stockholders to elect its own nominees to the vacancies. Such an amendment to
our by-laws would be possible because, under Delaware law, stockholders may
amend the by-laws without prior approval of the board of directors, whereas our
certificate of incorporation may be amended only if our board of directors first
approves and recommends such action to stockholders.
BUSINESS COMBINATION PROVISION
Our certificate of incorporation further provides that the approval of
the holders of shares representing at least 75% of the voting power of the
voting shares is required in order to approve certain business combinations if
an "interested stockholder" (as defined below) is a party to the transaction or
its percentage equity interest in us or any of our subsidiaries would be
increased by the transaction. The required 75% approval of any business
combination must include the affirmative vote of the holders of shares
representing at least a majority of the voting power of all of the then
outstanding voting shares exclusive of those shares beneficially owned by any
interested stockholder.
The voting requirements outlined above will not apply, however, if:
o immediately prior to the time the business combination is
consummated, we are the "beneficial owner" (defined below) of
a majority of each class of the outstanding equity securities
of the interested stockholder;
o the business combination was approved by at least a majority
of our board of directors (even though not the entire board of
directors), but only if a majority of the directors acting
favorably upon such matter are continuing directors; or
o the consideration to be received by the holders of each class
of our outstanding voting shares acquired by the interested
stockholder is at least equal to the greater of the highest
per share price (including any brokerage commissions, transfer
taxes and soliciting dealers' fees and with approximate
adjustments for recapitalizations, stock splits, reverse stock
splits and stock dividends) paid by the interested stockholder
for any shares of such class
(1) within the two-year period immediately prior
to the first public announcement of the proposal of the
business combination or
(2) in the transaction in which it became an
interested stockholder, and is in cash or in the same form of
consideration as the interested stockholder paid to acquire
the largest number of voting shares previously acquired by it.
The pricing provision does not guarantee that a stockholder will
receive the highest market price paid for such shares, rather it ensures that a
stockholder will receive the highest price paid for such shares by an interested
stockholder during the prior two years. If either the ownership or form of
consideration requirements set forth in clauses (i) and (iii) above are
satisfied, the business combination will require the approval of the holders of
at least two-thirds of the votes entitled to be cast by the holders of all the
then outstanding voting shares (the "ratification percentage") (and the
additional majority vote described in the previous paragraph).
If our board of directors approves a business combination in accordance
with the requirements set forth in clause (ii) above, the board of directors
may, again in accordance with the voting provisions of such clause (ii),
determine to require a vote of stockholders. If a stockholder vote is required
for such business combination under applicable law (such as, for example, in the
case of a merger or liquidation), our board of directors will require the
affirmative vote of the then outstanding voting shares equal to the higher of:
o the ratification percentage (such affirmative vote shall not
require the additional majority vote), and
o such other percentage as is required by law.
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If a stockholder vote is not required for such business combination
under law, our board may, in its discretion, either decide not to require a
stockholder vote to approve the business combination or require the affirmative
vote of the outstanding voting shares equal to (A) the ratification percentage
(such affirmative vote shall not require the additional majority vote) or (B)
such other percentage as it so determines.
An "interested stockholder" generally is defined under our certificate
of incorporation as the beneficial owner of 10% or more of the voting power of
the outstanding voting shares (other than Triarc, its employee benefit plans, or
its majority owned subsidiaries) excluding, however, DWG Acquisition Group, LP
or any "affiliate" or "associate" (as each term is defined in our certificate of
incorporation). Our board of directors considers that a 10% holding, which
causes a person to be classified as an "insider" under Section 16 of the
Exchange Act, and is double the percentage ownership required to trigger
reporting obligations under Section 13(d) of the Exchange Act, for stockholders
of public companies, is appropriate to define an interested stockholder. At the
present time, we are not aware of the existence of any stockholder or group of
stockholders that would be an interested stockholder.
A "business combination" includes:
o a merger or consolidation involving us or any of our
subsidiaries and an interested stockholder or an affiliate or
associate of an interested stockholder, or an affiliate
thereof,
o a sale, lease or other disposition (in one or a series of
transactions) of a "substantial part" (as defined in our
certificate of incorporation) of our assets or the assets of
any of our subsidiaries to an interested stockholder or an
affiliate or associate of any interested stockholder, or an
affiliate thereof;
o any sale, lease or other disposition (in one or a series of
transactions) to us or any of our subsidiaries of any assets
(excluding any voting shares, but including without limitation
any securities whether outstanding, authorized but unissued or
in treasury, issued by an interested stockholder, or by an
affiliate or associate of an interested stockholder or by an
affiliate thereof) of (a) any interested stockholder or (b) an
affiliate or associate of an interested stockholder, or an
affiliate thereof, if the amount paid therefor constitutes a
substantial part of the assets of Triarc or any subsidiary; or
o an issuance or transfer (or a related series of issuances or
transfers) of our securities or the securities of any of our
subsidiaries (except upon conversion of convertible securities
as a result of a pro rata stock dividend or stock split) to an
interested stockholder or an affiliate or associate of an
interested stockholder or an affiliate thereof, for
consideration aggregating $5,000,000 or more;
o a liquidation, dissolution, spinoff, split up or split off of
us (if as of the record date for the determination of
stockholders entitled to vote with respect thereto or, if no
vote would otherwise be required, the date the transaction is
planned to be consummated, any person is an interested
stockholder);
o a reclassification or recapitalization of securities
(including, without limitation, any combination of shares or
reverse stock split) of us or any of our subsidiaries or a
reorganization, in any case having the effect, directly or
indirectly, of increasing the percentage interest of an
interested stockholder in any class of equity securities of us
or such subsidiary; and
o any agreement, contract or other arrangement providing for any
of the transactions described in this definition of business
combination.
A "continuing director" is defined as one serving as a director whose
election or appointment or recommendation by our board of directors for election
by our stockholders was approved by at least a majority of the continuing
directors then on our board of directors.
The business combination provision described above is intended to
provide safeguards to our stockholders by requiring a higher stockholder vote
than required under Delaware law in the event another person first obtains a
substantial interest in us and then wishes to accomplish a combination of such
person's business with ours, or
21
otherwise eliminate the share holdings of the other stockholders. The federal
securities law and applicable regulations govern the disclosure required to be
made to minority stockholders in such transactions but do not assure to
stockholders the fairness of the terms of the business combination. Moreover,
the statutory right of the remaining stockholders to dissent in connection with
certain business combinations and receive the "fair value" of their shares in
cash may involve significant expense, delay and uncertainty to dissenting
stockholders. Further, the "fair value" of a stockholder's shares, as determined
under this standard, may not be equivalent to the minimum price as determined
pursuant to the provisions.
The business combination provision is to close partially these gaps in
the federal and state laws and to minimize certain of the potential inequities
of those business combinations that involve two or more steps by requiring that
in order to complete a business combination that is not approved by the
continuing directors, such interested stockholder must obtain the affirmative
votes of at least 75% of the voting power of the outstanding voting shares prior
to proposing the business combination (including the affirmative vote of the
holders of shares representing at least a majority of the voting power of the
outstanding voting shares exclusive of those shares beneficially owned by the
interested stockholder), or meet the minimum price and procedural requirements
of the provision and obtain the approval of at least two-thirds of the voting
power of the outstanding voting shares (and the additional majority vote). The
provision also is designed to protect those stockholders who have not tendered
or otherwise sold their shares to a purchaser who is attempting to acquire
control by ensuring that at least the same price and form of consideration are
paid to such stockholders in a business combination as were paid to stockholders
in the initial step of the acquisition. In the absence of the provision, an
interested stockholder who acquired control of us could subsequently, by virtue
of such control, force minority stockholders to sell or exchange their shares at
a price that would not reflect any premium such purchaser may have paid in order
to acquire its controlling interest, but rather at a price set by such
interested stockholder. Such a price might not only be lower than the price paid
by such purchaser in acquiring control, but also could be in a less desirable
form of consideration (E.G., equity or debt securities of the purchaser).
In many situations, the minimum price, form of consideration and
procedural requirements of the provision would require that a purchaser pay
stockholders a higher price for their shares and/or structure the transaction
differently from what would be the case without the provision. Accordingly, to
the extent a business combination were involved as part of a plan to acquire
control of us, this provision would increase the likelihood that a purchaser
would negotiate directly with our board of directors.
We believe that our board of directors normally is in a better position
than the individual stockholders to negotiate effectively on behalf of all
stockholders in that our board of directors is likely to be more knowledgeable
than any individual stockholder in assessing our business and prospects.
Accordingly, we are of the view that negotiations between our board of directors
and the purchaser would increase the likelihood that stockholders ultimately
will receive a higher price for their shares from anyone desiring to obtain
control of us through a business combination or otherwise.
Although not all acquisitions of our capital stock are made with the
objective of acquiring control of us through a subsequent business combination,
a purchaser in many cases desires to have the option to consummate such a
business combination. Assuming that to be the case, the provision would tend to
discourage purchasers whose objective is to seek control of us at a relatively
low price, since acquiring the remaining equity interest may be difficult unless
the minimum price, form of consideration and procedural requirements were
satisfied or a majority of the continuing directors were to approve the
transaction. The provision also should discourage the accumulation of large
blocks of our capital stock, which we believe to be disruptive to our stability,
and which could precipitate a change of control of us on terms unfavorable to
our other stockholders.
AMENDMENT OF CERTIFICATE OF INCORPORATION
Our certificate of incorporation may be amended in accordance with
Delaware law, except that it provides that the business combination provision
described above may not be repealed, altered, changed or amended in any respect
unless such action is approved by the affirmative vote of at least 75% of the
votes entitled to be cast (which 75% must include the affirmative vote of the
holders of shares representing at least a majority of the votes entitled to be
cast exclusive of those of which any interested stockholder is entitled to
cast), unless approved by a vote of a majority of our entire board of directors
(but only if a majority of the directors acting favorably on the matter are
22
continuing directors), in which case the business combination provision may be
amended by the affirmative vote of at least a majority of the votes entitled to
be cast (such affirmative vote does not require the additional majority vote);
and provided, further, that the ratification percentage may be amended, altered,
changed or repealed by the affirmative vote of the holders of at least
two-thirds of the voting power of the voting shares (such affirmative vote does
not require the additional majority vote). Our by-laws may be altered, amended
or repealed, or new by-laws adopted, by (i) in the case of by-laws made or
amended or repealed by the board of directors, by the affirmative vote of
stockholders holding not less than a majority of the shares entitled to vote on
the election of directors, or (ii) the affirmative vote of not less than
two-thirds of the entire board of directors that would then be in office if no
vacancies existed.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
We may indemnify any officer or director who is made a party to any
suit or proceeding on account of being a director, officer or employee of the
corporation against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement reasonably incurred by him/her in connection with the
action, through, among other things, a majority vote of a quorum consisting of
directors who were not parties to the suit or proceeding, if the officer or
director acted in good faith and in a manner he/she reasonably believed to be in
our best interests. In a criminal proceeding, the standard is that the director
or officer had no reasonable cause to believe his/her conduct was unlawful.
Our certificate of incorporation and by-laws provide that we will
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that he
is or was a director or an officer of ours against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding to
the fullest extent and in the manner set forth in and permitted by Delaware law,
and any other applicable law, as from time to time in effect. This right of
indemnification is not exclusive of any other rights to which a director or
officer may be entitled. Any repeal or modification of the applicable provisions
of Delaware law will not affect any rights or obligations then existing with
respect to any state of facts then or theretofore existing or any action, suit
or proceeding theretofore or thereafter brought or threatened based in whole or
in part on any such state of facts.
Our certificate of incorporation provides that each person who was or
is a party to or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, by reason of the fact that such person is
or was a director or an officer of ours or is or was serving at our request as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise, shall be indemnified and held harmless by us against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding to the fullest extent and in the manner set forth in and permitted by
Delaware law, and any other applicable law, as from time to time in effect. We
have the power to purchase and maintain insurance in respect of our
indemnification obligations.
A member of our board of directors, or a member of any committee
designated by our board of directors, will, in the performance of his or her
duties, be fully protected in relying in good faith upon our records and upon
such information, opinions, reports or statements presented to us by any of our
officers or employees, or committees of our board of directors, or by any other
person as to matters the member reasonably believes are within such other
person's professional or expert competence and who has been selected with
reasonable care by us or on our behalf. In discharging their duties, directors
and officers, when acting in good faith, may rely upon our financial statements
represented to them to be correct by the chief financial officer or the
controller or other of our officers having charge of our books or accounts, or
stated in a written report by an independent public or certified public
accountant or firm of such accountants fairly to reflect our financial
condition.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our Class A common stock and Class
B common stock, Series 1, is the American Stock Transfer & Trust Company.
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DESCRIPTION OF PREFERRED STOCK OF TRIARC
For purposes of this section, the terms "we," "our," "us" and "Triarc"
refer only to Triarc Companies, Inc. and not its subsidiaries.
GENERAL
Our board of directors has the authority, without further action by the
stockholders, to issue up to 100,000,000 shares of preferred stock, par value
$.10 per share, in one or more series and to fix the designations, powers,
preferences, privileges and relative participation, optional or special rights
and the qualifications, limitations or restrictions thereof, including dividend
rights, conversion rights, voting rights, terms of redemption and liquidation
preferences, any or all of which may be greater than the rights of our Class A
common stock or Class B common stock, Series 1.
RANK
The shares of preferred stock of any series have the rank set forth in
the relevant certificate of designation and described in the prospectus
supplement relating to the relevant series.
DIVIDENDS
The certificate of designation setting forth the terms of a series of
preferred stock may provide that holders of that series are entitled to receive
dividends, when, as and if authorized by our board of directors out of funds
legally available for dividends, before any declaration or payment of any
dividends on securities ranking junior to such series relating to dividends. The
rates and dates of payment of dividends and any other terms applicable to the
dividends will be set forth in the relevant certificate of designation and
described in the prospectus supplement relating to the relevant series.
Dividends will be payable to holders of record of preferred stock as
they appear on our books on the record dates fixed by the board of directors.
Dividends on any series of preferred stock may be cumulative or noncumulative
and payable in cash or in kind.
CONVERSION AND EXCHANGE
The certificate of designation setting forth the terms of a series of
preferred stock may provide for and the prospectus supplement for the relevant
series of preferred stock may describe the terms, if any, on which shares of
that series are convertible into or exchangeable for shares of our common stock
or common stock of a third party.
REDEMPTION
If so specified in the certificate of designation setting forth the
terms of a series of preferred stock, which will be described in the applicable
prospectus supplement, a series of preferred stock may be redeemable at our or
the holder's option and/or may be mandatorily redeemed partially or in whole.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding
up of us, holders of each series of preferred stock may be entitled to receive
distributions upon liquidation. Those distributions will be made before any
distribution is made on any securities ranking junior to such series relating to
liquidation. The terms and conditions of those distributions will be set forth
in the applicable certificate of designation and described in the relevant
prospectus supplement.
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VOTING RIGHTS
The holders of shares of preferred stock will have the voting rights
provided by the applicable certificate of designation and required by applicable
law. These voting rights will be described in the applicable prospectus
supplement.
DESCRIPTION OF DEBT SECURITIES OF TRIARC
For purposes of this section, the terms "we," "our," "us" and "Triarc"
refer only to Triarc Companies, Inc. and not its subsidiaries.
We may issue senior or subordinated debt securities. The senior debt
securities will constitute part of our senior debt, will be issued under a
senior debt indenture and, unless secured, will rank on a parity with all of our
other unsecured and unsubordinated debt. The subordinated debt securities will
be issued under a subordinated debt indenture and will be subordinate and junior
in right of payment, as set forth in the subordinated debt indenture, to all of
our senior indebtedness. If this prospectus is being delivered in connection
with a series of subordinated debt securities, the accompanying prospectus
supplement or the information we incorporate in this prospectus by reference
will indicate the approximate amount of senior indebtedness outstanding as of
the end of the most recent fiscal quarter for which financial statements are
available. We refer to our senior debt indenture and our subordinated debt
indenture individually as an "indenture" and collectively as the "indentures."
The forms of the indentures are exhibits to the registration statement we filed
with the SEC, of which this prospectus is a part.
We have summarized below the material provisions of the indentures and
the debt securities, or indicated which material provisions will be described in
the related prospectus supplement. These descriptions are only summaries, and
each investor should refer to the applicable indenture, which describes
completely the terms and definitions summarized below and contains additional
information regarding the debt securities. The specific terms of any series of
debt securities will be described in a prospectus supplement. For each series of
debt securities, the applicable prospectus supplement for the series may change
and supplement the summary below. Any reference to particular sections or
defined terms of the applicable indenture in any statement under this heading
qualifies the entire statement and incorporates by reference the applicable
section or definition into that statement.
GENERAL
The indentures do not limit the aggregate principal amount of debt
securities that may be offered under the indentures. We may issue debt
securities at one or more times in one or more series. Each series of debt
securities may have different terms. The terms of any series of debt securities
will be described in, or determined by action taken pursuant to, a resolution of
our board of directors or in a supplement to the indenture relating to that
series.
The prospectus supplement, including any related pricing supplement,
relating to any series of debt securities that we may offer will state the price
or prices at which the debt securities will be offered, and will contain the
specific terms of that series. These terms may include the following:
o the title of the series of debt securities;
o whether the debt securities are senior debt securities or
subordinated debt securities or any combination thereof;
o the purchase price, denomination and any limit on the
aggregate principal amount of the debt securities;
o the date or dates on which principal and premium and other
amounts, if any, on the debt securities will be payable or the
manner of their determination;
o the terms and conditions, if any, under which the debt
securities may be converted into or exchanged for common stock
or other securities;
25
o the rate or rates at which the debt securities will bear
interest, if any, or the method of calculating the rate or
rates of interest, the method of payment of interest, in
particular whether the interest will be paid in kind or
otherwise, the date or dates from which interest will accrue
or the method by which the date or dates will be determined,
the dates on which interest will be payable, and any regular
record date for payment of interest;
o the place or places where the principal of, premium and other
amounts, if any, and interest on the debt securities will be
payable;
o any covenants to which Triarc or its subsidiaries may be
subject with respect to the debt securities;
o the place or places where the debt securities may be exchanged
or transferred;
o the terms and conditions upon which we may redeem the debt
securities, in whole or in part, at our option;
o the terms and conditions upon which we may be obligated to
redeem or purchase the debt securities under any sinking fund
or similar provisions or upon the happening of a specified
event, passage of time or at the option of a holder;
o the denominations in which the debt securities will be
issuable, if other than denominations of $1,000 and any
integral multiple of $1,000;
o if other than U.S. dollars, the currency or currencies,
including the currency unit or units, in which payments of
principal of, premium and other amounts, if any, and interest
on the debt securities will or may be payable, or in which the
debt securities shall be denominated, and any particular
related provisions;
o if we or a holder may elect that payments of principal of,
premium and other amounts, if any, or interest on the debt
securities be made in a currency or currencies, including
currency unit or units, other than that in which the debt
securities are denominated or designated to be payable, the
currency or currencies in which such payments are to be made,
including the terms and conditions applicable to any payments
and the manner in which the exchange rate with respect to such
payments will be determined, and any particular related
provisions;
o if the amount of payments of principal of, premium and other
amounts, if any, and interest on debt securities are
determined with reference to an index, formula or other
method, which may be based, without limitation, on a currency
or currencies other than that in which the debt securities are
denominated or designated to be payable, the index, formula or
other method by which the amounts will be determined;
o if other than the full principal amount, the portion of the
principal amount of the debt securities which will be payable
upon declaration of acceleration of maturity;
o the applicability of the provisions described in "--Defeasance
and Covenant Defeasance" below;
o whether the subordination provisions summarized below or
different subordination provisions will apply to any debt
securities that are subordinated debt securities;
o the events of default;
o any agents for the debt securities, including trustees,
depositories, authenticating, conversion, calculation or
paying agents, transfer agents or registrars;
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o any provisions relating to the satisfaction and discharge of
the debt securities;
o if we will issue the debt securities in whole or in part in
the form of global securities;
o whether the debt securities will be secured;
o whether the debt securities will have the benefits of any
guarantee and, if so, the identity of the guarantors and the
terms and provisions applicable to any such guarantee; and
o any other terms of the debt securities.
The debt securities may be offered and sold at a substantial discount
below their stated principal amount and may be "original issue discount
securities." Alternatively, debt securities may be sold in a package with
another security and the allocation of the offering price between the two
securities may have the effect of offering the debt security at an original
issue discount, in which case the debt security will be an "original issue
discount security." "Original issue discount securities" might bear no interest
or interest at a rate below the prevailing market rate at the time of issuance.
In addition, less than the entire principal amount of these securities may be
payable upon declaration of acceleration of their maturity. We will summarize
material United States federal income tax considerations and other special
considerations that may be applicable to holders of original issue discount
securities in the applicable prospectus supplement.
EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise indicated in the applicable prospectus supplement, the
principal of, premium and other amounts, if any, and interest on the debt
securities will be payable, and the exchange of and the transfer of debt
securities will be registrable, at our office or agency maintained for such
purpose in New York and at any other office or agency maintained for that
purpose to the person in whose name the registered debt security is registered
at the close of business on the regular record date for these payments. We will
pay principal and premium and other amounts on registered debt securities only
against surrender of these debt securities. If we issue debt securities in
bearer form, the prospectus supplement or term sheet will describe where and how
payment will be made. Unless otherwise provided, we will issue the debt
securities in denominations of $1,000 or integral multiples of $1,000. Unless
otherwise provided in the debt securities to be transferred or exchanged, no
service charge will be made for any registration of transfer or exchange of the
debt securities, but we may require payment of a sum sufficient to cover any tax
or other governmental charge imposed because of the transactions.
All money paid by us to a paying agent for the payment of principal of,
premium, or other amounts if any, or interest on any debt security which remains
unclaimed for one year after the principal, premium or other amounts or interest
has become due and payable may be repaid to us, and thereafter the holder of the
debt security may look only to us for payment of those amounts.
Unless otherwise indicated in the applicable prospectus supplement, in
the event of any redemption, we will not be required to
o issue, register the transfer of or exchange the debt
securities of any series during a period beginning 15 days
before the mailing of a notice of redemption of debt
securities of that series to be redeemed or, with respect to
which a holder has exercised an option to require repurchase
of the debt security prior to the stated maturity, and ending
on the date of the mailing; or
o register the transfer of or exchange any debt security, or
portion of a debt security, called for redemption or, with
respect to which a holder has exercised an option to require
repurchase of the debt security, prior to the stated maturity,
except the unredeemed portion or portion not being repurchased
of any debt security being redeemed or repurchased in part.
GLOBAL DEBT SECURITIES AND BOOK-ENTRY SYSTEM
The following provisions will apply to the debt securities of any
series if the prospectus supplement relating to such series so indicates.
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Unless otherwise indicated in the applicable prospectus supplement, the
debt securities of that series will be issued in book-entry form and will be
represented by one or more global securities registered in the name of The
Depository Trust Company, New York, or its nominee. This means that we will not
issue certificates to each holder of a beneficial interest in the debt
securities. Each global security will be issued as fully registered securities
in the name of DTC's nominee. DTC will keep a computerized record of its
participants whose clients have purchased debt securities. Each participant will
then keep a record of its clients who purchased the debt securities. Unless it
is exchanged in whole or in part for a certificate, a global security may not be
transferred, except that DTC, its nominees, and their successors may transfer a
global security as a whole to one another.
Beneficial interests in global securities will be shown on, and
transfers of global securities will be made only through, records maintained by
DTC and its participants. If you are not a participant in DTC, you may
beneficially own debt securities held by DTC only through a participant.
The laws of some states require that certain purchasers of securities
take physical delivery of the securities in definitive form. These limits and
laws may impair the ability to transfer beneficial interests in a global
security.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the United States Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered under the provisions of Section 17A of the Exchange
Act. DTC holds the securities that its participants deposit. DTC also
facilitates the settlement among participants of securities transactions, such
as transfers and pledges, in deposited securities through computerized records
for participants' accounts. This eliminates the need to exchange certificates.
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. The rules that apply to
DTC and its participants are on file with the SEC.
DTC's book-entry system is also used by other organizations such as
securities brokers and dealers, banks and trust companies that work through a
participant.
DTC is owned by a number of its participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, LLC and the National Association of
Securities Dealers, Inc.
We will wire payments of principal, premium and other amounts, if any,
and interest to DTC's nominee. We and the trustee will treat DTC's nominee as
the owner of the global securities for all purposes. Accordingly, we, the
trustee and any paying agent will have no direct responsibility or liability to
pay amounts due on the global securities to owners of beneficial interests in
the global securities.
It is DTC's current practice, upon receipt of any payment of principal
or interest, to credit participants' accounts on the payment date according to
their respective holdings of beneficial interests in the global securities as
shown on DTC's records. In addition, it is DTC's current practice to assign any
consenting or voting rights to participants whose accounts are credited with
debt securities on a record date, by using an omnibus proxy. Payments by
participants to owners of beneficial interests in the global securities, and
voting by participants, will be governed by the customary practices between the
participants and owners of beneficial interests, as is the case with debt
securities held for the account of customers registered in "street name."
However, payments will be the responsibility of the participants and not of DTC,
the trustee or us.
Conveyance of notices and other communications by DTC to participants,
and by participants to holders of beneficial interests in the debt securities,
will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time. Holders of
beneficial interests in the debt securities may wish to take certain steps to
augment transmission to them of notices of significant events with respect to
those debt securities, such as redemptions, tenders, defaults, and proposed
amendments to any security documents. Holders of beneficial interests in the
debt securities may wish to ascertain that the nominee holding the debt
securities for their benefit has agreed to obtain and transmit notices to them,
or in the alternative, such holders may wish to provide their names and
addresses to the registrar and request that copies of the notices be provided
directly to them.
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So long as DTC or its nominee is the registered owner of a global
security, DTC or that nominee, as the case may be, will be considered the sole
owner or holder of the debt securities represented by that global security for
all purposes under the relevant indenture. Except as provided below, owners of
beneficial interests in a global security will not be entitled to have the debt
securities represented by that global security registered in their names, will
not receive or be entitled to receive physical delivery of the debt securities
in definitive form and will not be considered the owners or holders of the debt
securities under the relevant indenture. We will issue debt securities of any
series then represented by global securities in definitive form in exchange for
those global securities if:
o DTC notifies us that it is unwilling or unable to continue as
depositary, or if DTC ceases to be a clearing agency
registered under applicable law and a successor depositary is
not appointed by us within 90 days;
o a default or event of default under the relevant series of
debt securities has occurred and is continuing and the
registrar for those debt securities has received a written
request from DTC to issue certificated debt securities; or
o we determine not to require all of the debt securities of a
series to be represented by a global security.
If we issue debt securities in definitive form in exchange for a global
security, an owner of a beneficial interest in the global security will be
entitled to have debt securities equal in principal amount or accreted value, as
the case may be, to the beneficial interest registered in its name and will be
entitled to physical delivery of those debt securities in definitive form. Debt
securities issued in definitive form will, except as set forth in the applicable
prospectus supplement, be issued in denominations of $1,000 and any multiple of
$1,000 and will be issued in registered form only, without coupons.
INDENTURES
Debt securities that will be senior debt will be issued under a senior
indenture between us and U.S. Bank National Association, as trustee. We call
that indenture, as it may be supplemented from time to time, the "senior debt
indenture." Debt securities that will be subordinated debt will be issued under
a subordinated indenture between us and an institution that will be identified
in the applicable prospectus supplement, as trustee. We call that indenture, as
it may be supplemented from time to time, the "subordinated debt indenture". We
refer to the trustee under each of these indentures as the "senior debt
indenture trustee" or as the "subordinated debt indenture trustee" as the
context may require.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Holders of subordinated debt securities should recognize that
contractual provisions in the subordinated debt indenture may prohibit us from
making payments on these securities. Subordinated debt securities are
subordinate and junior in right of payment, to the extent and in the manner
stated in the subordinated debt indenture, to all of our senior indebtedness.
Unless otherwise provided in the applicable prospectus supplement, the
subordination provisions of the subordinated debt indenture will apply to
subordinated debt securities. The subordinated debt indenture provides that,
unless all principal of and any premium and other amounts and interest on the
senior indebtedness has been paid in full, or provision has been made to make
these payments in full, no payment of principal of, or any premium or other
amounts or interest on, any subordinated debt securities may be made in the
event:
o of any insolvency or bankruptcy proceedings, or any
receivership, liquidation, reorganization or other similar
proceedings involving us or a substantial part of our
property;
o that a default has occurred in the payment of principal, any
premium, interest or other monetary amounts due and payable on
any senior indebtedness or there has occurred any other event
of default concerning senior indebtedness that permits the
holder or holders of the senior indebtedness or a trustee with
respect to senior indebtedness to accelerate the maturity of
the senior indebtedness with
29
notice or passage of time, or both, and that event of default
has continued beyond the applicable grace period, if any, and
that default or event of default has not been cured or waived
or has not ceased to exist and any related acceleration has
been rescinded; or
o that the principal of and accrued interest on any subordinated
debt securities have been declared due and payable upon an
event of default as defined under the subordinated debt
indenture and that declaration has not been rescinded and
annulled as provided under the subordinated debt indenture.
If the trustee under the subordinated debt indenture or any direct
holders of the subordinated debt securities receive any payment or distribution
that is prohibited under the subordination provisions, then the trustee or the
direct holders will have to repay that money to us or the persons making payment
or distributions, as the case may be. Even if the subordination provisions
prevent us from making any payment when due on the subordinated debt securities
of any series, we will be in default on our obligations under that series if we
do not make the payment when due. This means that the trustee under the
subordinated debt indenture and the direct holders of that series can take
action against us, but they will not receive any money until the claims of the
direct holders of senior indebtedness have been fully satisfied.
The prospectus supplement may include a description of additional terms
implementing the subordination feature.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Unless otherwise indicated in the applicable prospectus supplement, we
may not consolidate or merge with or into any other person, whether or not we
are the surviving corporation or entity, or convey, transfer or lease all or
substantially all of our properties and assets as an entirety or substantially
as an entirety to any person or group of affiliated persons unless:
o we are the continuing corporation or the person, if other than
us, formed by such consolidation or with which or into which
we are merged or the person to which all or substantially all
our properties and assets as an entirety or substantially as
an entirety are conveyed, transferred or leased is a
corporation or other entity (or group of affiliated
corporations or entities) organized and existing under the
laws of the United States, any of its States or the District
of Columbia and expressly assumes, by operation of law or by
execution and delivery of a supplemental indenture, our
obligations under the debt securities and each indenture; and
o immediately after giving effect to the transaction or series
of related transactions, there is no default and no event of
default continuing under the relevant indenture.
Notwithstanding the foregoing, we may consolidate with, or merge with
or into, an affiliate incorporated for the purpose of incorporating in another
jurisdiction of the United States of America or any State thereof or the
District of Columbia without complying with the requirement that, immediately
after giving effect to the transaction or series of related transactions, there
is no default and no event of default continuing under the relevant indenture.
Notwithstanding the foregoing (a) we may convey, transfer or lease all
or substantially all of our properties and assets as an entirety to any
subsidiary or subsidiaries, in one transaction or a series of related
transactions and (b) the transfer by us, in a single transaction or series of
transactions, of all or substantially all of our cash, cash equivalents and
marketable securities of non-affiliates for which we receive fair market value,
as determined by our board of directors, will not constitute a sale of all or
substantially all of our assets.
If we consolidate with or merge into any other corporation or entity or
convey, transfer or lease all or substantially all of our property and assets as
described in the preceding paragraph, the successor corporation or entity
succeeds to and is substituted for us, and may exercise our rights and powers
under the indentures, then thereafter, except in the case of a lease, we will be
relieved of all obligations and covenants under the indentures and all
outstanding debt securities.
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EVENTS OF DEFAULT
Unless otherwise specified in the applicable prospectus supplement,
"events of default" under each indenture with respect to debt securities of any
series will include:
o default in the payment of interest or other amounts due from
time to time on any debt security of that series when due that
continues for a period of 30 days;
o default in the payment of principal of or premium on any debt
security of that series when due at final maturity;
o default in the deposit of any sinking fund payment on that
series for five days after it becomes due;
o failure to comply with any of our other agreements contained
in the indenture for a period of 60 days after written notice
to us in accordance with the terms of the indenture;
o certain events of bankruptcy, insolvency or reorganization;
and
o any other events of default specified in the applicable
prospectus supplement.
Unless otherwise indicated in the applicable prospectus supplement, no
event of default with respect to a particular series of debt securities, except
as to certain events involving bankruptcy, insolvency or reorganization with
respect to us, necessarily constitutes an event of default with respect to any
other series of debt securities.
In general, each indenture obligates the trustee to give notice of a
default with respect to a series of debt securities to the holders of that
series. The trustee may withhold notice of any default, except a default in
payment on any debt security or in the deposit of any sinking fund payment with
respect to a debt security, if the trustee determines it is in the best interest
of the holders of that series to do so.
Unless otherwise indicated in the applicable prospectus supplement, if
there is a continuing event of default, other than an event of default involving
an event of bankruptcy, insolvency or reorganization, the trustee or the holders
of at least 25% in aggregate principal amount of the then outstanding debt
securities of an affected series may require us to repay immediately the unpaid
principal, or if the debt securities of that series are original issue discount
securities, the portion of the principal amount as may be specified in the terms
of that series, of and interest on all debt securities of that series. If an
event of default occurs which involves a bankruptcy, insolvency or
reorganization, then all unpaid outstanding principal amounts and accrued
interest on all debt securities of each series will immediately become due and
payable, without any action by the trustee or any holder of debt securities.
Subject to certain conditions and unless otherwise indicated in the applicable
prospectus supplement, the holders of a majority in principal amount of the debt
securities of a series may rescind our obligation to accelerate repayment and
may waive past defaults, except a default in payment of the principal of and
premium and other amounts, if any, and interest on any debt security of that
series and some covenant defaults under the terms of that series.
Under the terms of each indenture, the trustee may refuse to enforce
the indenture or the debt securities unless it first receives satisfactory
security or indemnity from the holders of debt securities. Subject to
limitations specified in each indenture, the holders of a majority in principal
amount of the debt securities of any series will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the trustee or exercising any trust or power conferred on the trustee. The
trustee may decline to follow that direction if it would involve the trustee in
personal liability or would be illegal or unduly prejudicial to holders not
joining in such direction. During a default, the trustee is required to exercise
the standard of care and skill that a prudent person would exercise under the
circumstances in the conduct of his or her own affairs.
If for the purpose of obtaining judgment in any court it is necessary
to convert the sum due in respect of the principal of, or premium, other amounts
or interest, if any, on the debt securities of any series into a currency in
which a judgment will be rendered, the rate of exchange used will be the
prevailing rate on the New York banking day preceding the day on which a final
unappealable judgment is given. We will be discharged of our obligations to
31
make the payments in the applicable currency upon actual receipt by the payee of
the full amount expressed to be payable in such currency.
Notwithstanding the foregoing, the holder of any debt security will
have an absolute and unconditional right to receive payment of the principal of
and premium and other amounts, if any, and interest on the debt security,
subject to, in the case of subordinated debt securities, any applicable
subordination provisions of the subordinated debt indenture and any supplement
thereto, on or after the due dates expressed in the debt security and to
institute suit for the enforcement of any such payment, subject to the
conditions set forth in the applicable indenture.
Unless otherwise indicated in the applicable prospectus supplement,
each indenture requires us to furnish to the trustee annually a certificate as
to our compliance with such indenture. Unless otherwise indicated in the
applicable prospectus supplement, each indenture also requires us to pay and
cause each of our subsidiaries to pay all material taxes, assessments and
governmental levies, except as contested in good faith and for which appropriate
provision has been made. Finally, unless otherwise indicated in the applicable
prospectus supplement, each indenture requires us to do all things necessary to
preserve our corporate existence and the corporate, limited partnership or
limited liability company existence of our subsidiaries, our rights, licenses
and franchises, so long as any such rights, licenses, franchises or corporate,
limited partnership or limited liability company existence of our subsidiaries
are deemed desirable in the conduct of our business.
SATISFACTION AND DISCHARGE
We can discharge or defease our obligations under the indentures as
stated below or as provided in the applicable prospectus supplement.
Unless otherwise provided in the applicable prospectus supplement, we
may discharge obligations to holders of any series of debt securities that have
not already been delivered to the trustee for cancellation and that have either
become due and payable or are by their terms to become due and payable, or are
scheduled for redemption, within one year. Subject to certain other conditions,
we may effect a discharge by irrevocably depositing with the trustee cash or, in
the case of debt securities payable in dollars, United States government
obligations, as trust funds, in an amount certified to be enough to pay when
due, whether at maturity, upon redemption or otherwise, the principal of,
premium and other amounts, if any, and interest on the debt securities and any
mandatory sinking fund payments.
MODIFICATION OF THE INDENTURES
Unless otherwise specified in the applicable prospectus supplement,
each indenture permits us and the relevant trustee to amend the indenture
without the consent of the holders of any of the debt securities:
o to evidence the succession of another corporation and the
assumption of our covenants under such indenture and the debt
securities consistent with the terms of that indenture;
o to add to our covenants or to the events of default or to make
certain other changes which would not adversely affect in any
material respect the holder of any outstanding debt
securities;
o to cure any ambiguity, defect or inconsistency; and
o for other purposes as described in each indenture.
Unless otherwise specified in the applicable prospectus supplement,
each indenture also permits us and the trustee, with the consent of the holders
of a majority in principal amount of the debt securities of each series affected
by the amendment, with each such series voting as a class, to add any provisions
to or change or eliminate any of the provisions of such indenture or any
supplemental indenture or to modify the rights of the holders of debt securities
of each series, provided, however, that, without the consent of the holder of
each debt security so affected, no such amendment may:
32
o change the maturity of the principal of or premium or other
amounts, if any, or any installment of principal or interest
on any debt security;
o reduce the principal amount or accreted value of any debt
security, or the rate of interest or accretions or any premium
or other amounts payable upon the redemption, repurchase or
repayment of any debt security, or change the manner in which
the amount of any of the foregoing is determined;
o reduce the amount of principal or accreted value payable upon
acceleration of maturity;
o change any obligation to maintain an office or agency in the
places and for the purposes set forth in the indenture;
o change the currency or currency unit in which any debt
security or any premium or other amounts or interest on the
debt security is payable;
o reduce the percentage in principal amount of affected debt
securities the consent of whose holders is required for
amendment of the indenture or for waiver of compliance with
some provisions of the indenture or for waiver of some
defaults;
o modify the provisions relating to waiver of some defaults or
any of the provisions relating to amendment of the indenture
except to increase the percentage required for consent or to
provide that some other provisions of the indenture may not be
modified or waived;
o change the conversion ratio, if any, or otherwise impair
conversion rights, if any, except as provided in the relevant
indenture;
o change any of the redemption provisions;
o directly or indirectly release any of the collateral or
security interest or guarantee in respect of the debt
securities;
o impair the right of any holder of a debt security to receive
payment of principal of or premium or other amounts or
interest, if any, on that holder's debt securities on or after
their respective due dates, or to institute a suit for the
enforcement of any payment on or with respect to those debt
securities; or
o change any obligations to pay additional amounts under the
applicable indentures.
The holders of a majority in principal amount of the debt securities of
any series may, on behalf of the holders of all debt securities of that series,
waive, insofar as is applicable to that series, our compliance with some
restrictive provisions of the indentures.
We may not amend the subordinated debt indenture to alter the
subordination of any outstanding subordinated debt securities in a manner
adverse to the holders of senior indebtedness without the written consent of the
requisite portion of holders of senior indebtedness then outstanding under the
terms of such senior indebtedness.
DEFEASANCE AND COVENANT DEFEASANCE
Except as provided in the applicable prospectus supplement, we may
elect either
o to be discharged from all our obligations in respect of debt
securities of any series, except for our obligations to
execute, authenticate, deliver and date debt securities, to
register the transfer or exchange of debt securities, to
replace temporary, destroyed, stolen, lost or mutilated debt
securities, to furnish to the trustee a list of names and
addresses of holders of debt securities of any series, to
maintain paying agencies and to hold in trust monies for
punctual payment of principal and interest of the debt
33
securities of such series to the applicable holders of record
(we will refer to this discharge as "defeasance"), or
o to be released from our obligations to comply with some
restrictive covenants applicable to the debt securities of any
series (we will refer to this release as "covenant
defeasance");
in either case upon the deposit with the trustee, or other qualifying trustee,
in trust, of money and/or U.S. government obligations which will provide money
sufficient to pay all principal of and any premium, other amounts and interest
on the debt securities of that series when due. We may establish such a trust
only if, among other things, we have received an opinion of counsel to the
effect that the holders of debt securities of the series will not recognize
income, gain or loss for federal income tax purposes as a result of the deposit,
defeasance or covenant defeasance and will be subject to federal income tax on
the same amounts, and in the same manner and at the same times as would have
been the case if the deposit, defeasance or covenant defeasance had not
occurred. The opinion, in the case of defeasance under the first bullet point
above, must refer to and be based upon a ruling of the Internal Revenue Service
or a change in applicable federal income tax laws occurring after the date of
the relevant indenture.
We may exercise the defeasance option with respect to debt securities
notwithstanding our prior exercise of the covenant defeasance option. If we
exercise the defeasance option, payment of the debt securities may not be
accelerated because of a default. If we exercise the covenant defeasance option,
payment of the debt securities may not be accelerated by reason of a default
with respect to the covenants to which covenant defeasance is applicable.
However, if the acceleration were to occur by reason of another default, the
realizable value at the acceleration date of the money and U.S. government
obligations in the defeasance trust could be less than the principal and
interest then due on the debt securities, in that the required deposit in the
defeasance trust is based upon scheduled cash flow rather than market value,
which will vary depending upon interest rates and other factors.
CONVERSION RIGHTS
The terms and conditions, if any, on which debt securities being
offered are convertible into common stock or other of our securities will be set
forth in an applicable prospectus supplement. Those terms will include the
conversion price, the conversion period, provisions as to whether conversion
will be at the option of the holder or us, the events requiring an adjustment of
the conversion price and provisions affecting conversion in the event that the
debt securities are redeemed.
REGARDING THE TRUSTEE
The trustees under the senior indenture and the subordinated indenture
and their respective affiliates may engage in, and will be permitted to continue
to engage in, other transactions with us and our affiliates, provided, however,
that if it acquires any conflicting interest as described under the Trust
Indenture Act of 1939, it must eliminate the conflict or resign.
GOVERNING LAW
The indentures will be governed by the laws of the State of New York.
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DESCRIPTION OF WARRANTS OF TRIARC
For purposes of this section, the terms "we," "our," "us" and "Triarc"
refer only to Triarc Companies, Inc. and not its subsidiaries.
We may issue warrants to purchase shares of any class or series of
common stock, preferred stock or debt securities. Warrants may be issued,
subject to regulatory approvals, independently or together with any shares of
common stock, preferred stock or debt securities and may be attached to or
separate from such shares of common stock or preferred stock or debt securities.
Each series of warrants will be issued under a separate warrant agreement (each,
a "Warrant Agreement") to be entered into between us and a warrant agent (each,
a "Warrant Agent"). The Warrant Agent will act solely as an agent of us in
connection with the Warrants of such series and will not assume any obligation
or relationship of agency or trust for or with any holders or beneficial owners
of warrants. The following sets forth some of the general terms and provisions
of the warrants offered by this prospectus. Further terms of the warrants and
the applicable Warrant Agreement will be set forth in the applicable prospectus
supplement. The Warrant Agreement for a particular series of warrants will be
filed as an exhibit to a document incorporated by reference in the registration
statement of which this prospectus forms a part.
The applicable prospectus supplement will describe the following terms
of any warrants in respect of which this prospectus is being delivered:
o the title of the warrants;
o the securities, which may include shares of any class or
series of common stock, preferred stock or debt securities,
for which the warrants are exercisable;
o the price or prices at which the warrants will be issued;
o the periods during which the warrants are exercisable;
o the number of shares of any class or series of common stock or
preferred stock or the amount of debt securities for which
each warrant is exercisable;
o the exercise price for the warrants, including any changes to
or adjustments in the exercise price;
o the currency or currencies, including composite currencies, in
which the exercise price of the warrants may be payable;
o if applicable, the designation and terms of the securities
with which the warrants are issued and the number of warrants
issued with each security or each principal amount of
security;
o if applicable, the date on and after which the warrants and
the related common stock, preferred stock or debt securities
will be separately transferable;
o any listing of the warrants on a securities exchange;
o if applicable, a discussion of material United States federal
income tax consequences and other special considerations with
respect to any warrants; and
o any other terms of the warrants, including terms, procedures
and limitations relating to the transferability, exchange and
exercise of such warrants.
35
SHARES OFFERED BY OUR SECURITYHOLDERS
The following table provides, as of November 20, 2003, information with
respect to each securityholder who is entitled to use this prospectus to offer
shares of Class B common stock, Series 1, for purposes of effecting negotiated
transactions involving the exchange of shares of Class B common stock, Series 1,
for shares of Class A common stock. This information has been obtained from the
securityholders.
SHARES OF CLASS A SHARES OF CLASS B SHARES OF SHARES OF CLASS A SHARES OF CLASS B
COMMON STOCK COMMON STOCK, SERIES CLASS B COMMON STOCK COMMON STOCK, SERIES
BENEFICIALLY OWNED 1, BENEFICIALLY OWNED COMMON BENEFICIALLY OWNED 1, BENEFICIALLY OWNED
PRIOR TO OFFERING PRIOR TO OFFERING STOCK SERIES AFTER OFFERING (1) AFTER OFFERING (1)
----------------- ----------------- 1, OFFERED ------------------ ------------------
NAME NUMBER PERCENT NUMBER PERCENT HEREBY NUMBER PERCENT NUMBER PERCENT
---------------------- ------ ------- ------ ------- ------ ------ ------- ------ -------
DWG Acquisition
Group, L.P. (2) 5,343,662 27.1% 10,687,324 27.1% 10,687,324 16,030,986 81.2% -- --
Nelson Peltz (3) 8,986,168 39.1% 17,972,336 39.1% 11,454,370 20,440,538 89.0% 6,517,966 14.2%
Peter W. May (4) 7,662,810 35.2% 15,325,620 35.2% 11,198,688 18,861,498 86.7% 4,126,932 9.5%
-------------------------
(1) Assumes that each share of Class B common stock offered is exchanged for
one share of Class A common stock. There can be no assurance as to whether
any such shares will be exchanged.
(2) Messrs. Peltz and May are the general partners of DWG Acquisition Group,
L.P. ("DWG"). DWG beneficially owns 5,343,662 shares of Class A common
stock, none of which are offered hereby and 10,687,324 shares of Class B
common stock, Series 1, all of which are offered hereby.
(3) Nelson Peltz is our Chairman and Chief Executive Officer and one of our
directors. Mr. Peltz beneficially owns 8,986,168 shares of Class A common
stock (including 5,343,662 shares of Class A common stock owned by DWG and
3,208,333 shares of Class A common stock issuable upon the exercise of
options which have vested or will vest within 60 days of November 20,
2003), none of which are offered hereby. In addition to the 11,454,370
shares of Class B common stock, Series 1, beneficially owned and offered
hereby by Mr. Peltz (including 10,687,324 shares of Class B common stock,
Series 1, owned by DWG), Mr. Peltz beneficially owns 6,517,966 shares of
Class B common stock, Series 1 (including 6,416,666 shares of Class B
common stock, Series 1, issuable upon the exercise of options which have
vested or will vest within 60 days of November 20, 2003).
(4) Peter May is our President and Chief Operating Officer and one of our
directors. Mr. May beneficially owns 7,662,810 shares of Class A common
stock (including 5,343,662 shares of Class A common stock owned by DWG and
2,016,666 shares of Class A common stock issuable upon the exercise of
options which have vested or will vest within 60 days of November 20,
2003), none of which are offered hereby. In addition to the 11,198,688
shares of Class B common stock, Series 1, beneficially owned and offered
hereby by Mr. May (including 10,687,324 shares of Class B common stock,
Series 1, owned by DWG), Mr. May beneficially owns 4,126,932 shares of
Class B common stock, Series 1 (including 4,033,332 shares of Class B
common stock, Series 1, issuable upon the exercise of options which have
vested or will vest within 60 days of November 20, 2003).
Because the securityholders may offer to exchange all or some portion
of the above-referenced securities under this prospectus or otherwise, no
estimate can be given as to the amount or percentage that will be held by the
securityholders upon completion of any exchange. Information about the
securityholders may change from time to time. Any changed information will be
set forth in prospectus supplements, if required.
Only securityholders identified in the above table who beneficially own
the securities set forth opposite their respective names may offer to exchange
securities under the registration statement of which this prospectus forms a
part. Information about other securityholders will be set forth in prospectus
supplements, if required.
36
PLAN OF DISTRIBUTION
We may sell the securities being offered by us, through agents, through
underwriters, through dealers, and directly to one or more other transferees. We
may designate agents from time to time to solicit offers to purchase these
securities. We will name any such agent, who may be deemed to be an
"underwriter," as that term is defined in the Securities Act, and state any
commissions we are to pay to that agent in the applicable prospectus supplement.
That agent will be acting on a reasonable efforts basis for the period of its
appointment or, if indicated in the applicable prospectus supplement, on a firm
commitment basis.
If we use any underwriters to offer and sell these securities, we will
enter into an underwriting agreement with those underwriters when we and they
determine the offering price of the securities, and we will include the names of
the underwriters and the terms of the transaction in the applicable prospectus
supplement.
If we use a dealer to offer and sell these securities, we will sell the
securities to the dealer, as principal, and will name the dealer in the
applicable prospectus supplement. The dealer may then resell the securities to
the public at varying prices to be determined by that dealer at the time of
resale.
The net proceeds will be the purchase price in the case of sales to a
dealer, the public offering price less discount in the case of sales to an
underwriter or the purchase price less commission in the case of sales through
an agent, in each case, less other expenses attributable to issuance and
distribution. We will include in the prospectus supplement relating to each
offering all the amounts described in the preceding sentence. We will not
receive any of the proceeds from the shares of Class B common stock offered by
our securityholders. We will bear the fees and expenses incurred in connection
with our obligation to register these securities. These fees and expenses
include registration and filing fees, printing and duplication expenses, fee and
disbursement of our counsel. However, the securityholders will pay all agency
fees and commissions, if any, and their own legal expenses.
Sales of shares of Class A common stock, Class B common stock and other
securities also may be effected by us from time to time in one or more types of
transactions (which may include block transactions, special offerings, exchange
distributions, secondary distributions or purchases by a broker or dealer) on
the New York Stock Exchange or any other national securities exchange or
automated trading and quotation system on which the common stock or other
securities are listed, in the over-the-counter market, in transactions otherwise
than on such exchanges and systems or the over-the-counter market, including
negotiated transactions, through options transactions relating to the shares, or
a combination of such methods of sale, at market prices prevailing at the time
of sale, at negotiated prices or at fixed prices. Such transactions may or may
not involve brokers or dealers. Any shares of Class A common stock or Class B
common stock offered under this prospectus will be listed on the New York Stock
Exchange, subject to notice of issuance.
Each issue of preferred stock, warrants and debt securities will be a
new issue of securities with no established trading market, except as indicated
in the applicable prospectus supplement. It has not been established whether the
underwriters, if any, of the securities will make a market in these securities.
If a market in the preferred stock, warrants or debt securities is made by any
such underwriters, such market-making may be discontinued at any time without
notice. We can give no assurance as to the liquidity of the trading market of
these securities.
In order to facilitate the offering of any of the securities offered
under this prospectus, the underwriters with respect to any such offering may
engage in transactions that stabilize, maintain or otherwise affect the price of
the securities or any other securities the prices of which may be used to
determine payments on these securities. Specifically, the underwriters may
over-allot in connection with the offering, creating a short position in these
securities for their own accounts. In addition, to cover over-allotments or to
stabilize the price of these securities or of any other securities, the
underwriters may bid for, and purchase, these securities or any other securities
in the open market. Finally, in any offering of the securities through a
syndicate of underwriters, the underwriting syndicate may reclaim selling
concessions allowed to an underwriter or a dealer for distributing these
securities in the offering, if the syndicate repurchases previously distributed
securities in transactions to cover syndicate short positions, in stabilization
transactions or otherwise. Any of these activities may stabilize or maintain the
market price of these securities above independent market levels. The
underwriters are not required to engage in these activities, and may end any of
these activities at any time.
37
If so indicated in the applicable prospectus supplement, one or more
firms, which we refer to as "remarketing firms," acting as principals for their
own accounts or as agents for us, may offer and sell these securities as part of
a remarketing upon their purchase, in accordance with their terms. We will
identify any remarketing firm, the terms of its agreement, if any, with us and
its compensation in the applicable prospectus supplement.
Remarketing firms, agents, underwriters and dealers may be entitled
under agreements with us to indemnification by us against some civil
liabilities, including liabilities under the Securities Act, and may be
customers of, engage in transactions with or perform services for us in the
ordinary course of business.
If so indicated in the prospectus supplement, we will authorize agents,
underwriters or dealers to solicit offers by some purchasers to purchase offered
securities from us at the public offering price stated in the prospectus
supplement under delayed delivery contracts providing for payment and delivery
on a specified date in the future. These contracts will be subject to only those
conditions described in the prospectus supplement, and the prospectus supplement
will state the commission payable for solicitation of these offers.
Any underwriter, agent or dealer utilized in the initial offering of
securities will not confirm sales to accounts over which it exercises
discretionary authority without the prior specific written approval of its
customer.
Shares of Class B common stock, Series 1, beneficially owned by DWG,
Mr. Peltz and Mr. May may be offered from time to time in negotiated
transactions involving the exchange of shares of Class B common stock, Series 1,
for shares of Class A common stock, although there can be no assurance that any
such exchanges will be consummated. Such exchanges may be effected directly with
transferees or may be conducted with the assistance of agents. Any such agent,
who may be deemed to be an "underwriter" as that term is defined in the
Securities Act, and any commissions paid to such agent, will be described in a
prospectus supplement. In the event that exchanges are consummated in
transactions in which this prospectus is not delivered, such transferees may
distribute the shares received using any of the methods described above.
Any underwriters, broker-dealers or agents participating in the
distribution of the securities offered hereby may be deemed to be "underwriters"
within the meaning of the Securities Act, and any commissions received by any
such underwriters, broker-dealers or agents may be deemed to be underwriting
commissions under the Securities Act. Any person deemed to be an underwriter may
be subject to certain statutory liabilities, including, but not limited to,
Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 of the Exchange Act.
Any person participating in the distribution of securities will be
subject to applicable provisions of the Exchange Act and the rules and
regulations under the Exchange Act, including without limitation, Regulation M,
which may limit the timing of transactions involving the securities offered
hereby. Furthermore, Regulation M may restrict the ability of any person engaged
in the distribution of such securities to engage in market-making activities
with respect to the particular securities being distributed. All of the above
may affect the marketability of the securities offered hereby and the ability of
any person or entity to engage in market-making activities with respect to such
securities.
Under the securities law of various states, the securities offered
hereby may be sold in those states only through registered or licensed brokers
or dealers. In addition, in various states the securities offered hereby may not
be sold unless such securities have been registered or qualified for sale in the
state or an exemption from registration or qualification is available and is
complied with.
The outstanding Class A common stock and Class B common stock, Series
1, trade on the New York Stock Exchange under the symbols "TRY" and "TRY.B,"
respectively.
LEGAL MATTERS
Certain legal matters relating to the validity of the securities will
be passed upon by Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, New
York.
38
EXPERTS
The consolidated financial statements of Triarc incorporated by
reference into this prospectus from our Annual Report on Form 10-K for the year
ended December 29, 2002 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report incorporated herein by reference and have
been so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
Ernst & Young LLP, independent auditors, have audited the consolidated
financial statements of Encore Capital Group, Inc. (formerly, MCM Capital Group,
Inc.) for the year ended December 31, 2000 included as an exhibit to our Annual
Report on Form 10-K for the fiscal year ended December 29, 2002, as set forth in
their report, which is incorporated by reference in this prospectus and
elsewhere in the registration statement. The financial statements of Encore
Capital Group, Inc. for the year ended December 31, 2000 are incorporated by
reference in reliance on Ernst & Young LLP's report, given on their authority as
experts in accounting and auditing.
The consolidated financial statements of Encore Capital Group, Inc.
incorporated by reference in this Prospectus have been audited by BDO Seidman,
LLP, independent auditors, to the extent and for the periods set forth in their
report incorporated herein by reference, and are incorporated herein in reliance
upon such report given upon the authority of said firm as experts in auditing
and accounting.
39
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14 - OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following statement sets forth the expenses to be borne by the
Registrant in connection with the distribution of the offered securities. All
amounts other than the filing fee for the registration statement are estimates.
Filing fee for Registration Statement........................... $ 173,088
Printing fees and expenses...................................... 50,000
Legal fees and expenses......................................... 75,000
Accounting and auditor fees and expenses........................ 20,000
Miscellaneous................................................... $ 11,912
--------------
Total.................................................. $ 330,000
==============
ITEM 15 - INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The certificate of incorporation of Triarc Companies, Inc. (the
"Registrant" or the "Company"), as amended to date (the "Triarc Charter"),
provides indemnification to the extent not prohibited by Delaware law (including
as such law may be amended in the future to be more favorable to directors and
officers). Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") provides that a corporation may indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed civil, criminal, administrative or investigative action, suit or
proceeding (other than an action by or in the right of the corporation, such as
a derivative action) by reason of the fact that he or she is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent for any
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise (an "Other Entity"). The Triarc Charter provides that its officers
and directors, and any person serving in any capacity at the request of the
Company for an Other Entity shall be entitled to such indemnification; however,
the Board of Directors of the Company (the "Triarc Board") may specifically
grant such indemnification to other persons in respect of service to the Company
or an Other Entity. The Triarc Charter specifies that any director or officer of
the Company serving in any capacity with a majority owned subsidiary or any
employee benefit plan of the Company or of any majority owned subsidiary shall
be deemed to be doing so at the request of the Company.
Under Section 145 of the DGCL, depending on the nature of the
proceeding, a corporation may indemnify against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with such action, suit or proceeding if the person so
indemnified acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to believe that
his or her conduct was unlawful. In the case of a derivative action, no
indemnification may be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable to the corporation, unless and
only to the extent that the Delaware Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability, such person is fairly and reasonably entitled to
indemnity for such expenses as such court shall deem proper.
Section 145 further provides that to the extent that a director or
officer of a corporation is successful in the defense of any action, suit or
proceeding referred to above or in the defense of any claim, issue or matter
therein, he or she shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred in connection therewith. However, if such
director or officer is not successful in the defense of any such action, suit or
proceeding, or in the defense of any claim, issue or matter therein, he or she
shall only be indemnified by the corporation as authorized in the specific case
upon a determination that indemnification is proper because he or she met the
applicable standard set forth above as determined by a majority of the
disinterested directors, by independent legal counsel or by the stockholders.
II-1
The Triarc Charter provides that expenses are to be advanced prior to
the final disposition of a proceeding upon the receipt by the Company of an
undertaking, as required by the DGCL, that the director or officer or other
indemnified person will repay such advances if he or she is ultimately found not
to be entitled to indemnification under the DGCL.
The Triarc Charter permits a person entitled to indemnity to bring an
action in court to obtain such indemnity and provides that, in any such action,
the court will not be bound by a decision of the Triarc Board, independent
counsel or stockholders that such person is not entitled to indemnification.
Such person is also indemnified for any expenses incurred in connection with
successfully establishing his or her right to indemnification in any such
proceeding. The Triarc Charter expressly provides that the right to
indemnification thereunder is a contract right and, therefore, cannot be
retroactively eliminated by a later stockholder vote, and is not an exclusive
right and, therefore, the Company may provide other indemnification, if
appropriate.
The Company also enters into indemnification agreements with its
directors and officers indemnifying them against liability they may incur in
their capacity as such. The indemnification agreements do not provide
indemnification to the extent that the indemnitee is indemnified by the Company
under the Triarc Charter, its bylaws, its directors' and officers' liability
insurance, or otherwise. Additionally, the indemnification agreements do not
provide indemnification (i) for the return by the indemnitee of any illegal
remuneration paid to him or her; (ii) for any profits payable by the indemnitee
to the Company pursuant to Section 16(b) of the Exchange Act; (iii) for any
liability resulting from the indemnitee's fraudulent, dishonest or willful
misconduct; (iv) for any amount the payment of which is not permitted by
applicable law; (v) for any liability resulting from conduct producing unlawful
personal benefit; or (vi) if a final court adjudication determines such
indemnification is not lawful.
Determinations as to whether an indemnitee is entitled to be paid under
the indemnification agreements may be made by the majority vote of a quorum of
disinterested directors, independent legal counsel selected by the Triarc Board,
a majority of disinterested Company stockholders or by a final adjudication of a
court of competent jurisdiction. In the event that the Company undergoes a
"Change of Control" (as defined in the indemnification agreements) all such
determinations shall be made by special independent counsel selected by the
indemnitee and approved by the Company, which approval may not be unreasonably
withheld. In certain circumstances, an indemnitee may require the Company to
establish a trust fund to assure that funds will be available to pay any amounts
which may be due such indemnitee under an indemnification agreement.
As permitted by Section 102(b)(7) of the DGCL, the Triarc Charter
includes a provision which eliminates the personal liability of a director to
the Company or its stockholders for monetary damages for breach of fiduciary
duty as a director, other than liability (i) for the breach of a director's duty
of loyalty to the Company and its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the DGCL (relating to unlawful payment of a
dividend and unlawful stock purchase and redemption) or (iv) for any transaction
from which the director derived any improper personal benefit.
Finally, the Triarc Charter authorizes the Company, as permitted by the
DGCL, to purchase directors' and officers' liability insurance. The Company
carries directors' and officers' liability insurance covering losses up to
specified amounts.
The foregoing statements are subject to the detailed provisions of
Sections 145 and 102 of the DGCL, the Triarc Charter and the referenced
indemnification agreements.
ITEM 16 - EXHIBITS.
1.1+ Form of Underwriting Agreement.
4.1.1 Certificate of Incorporation of Triarc Companies, Inc., as
currently in effect, incorporated herein by reference to Exhibit
3.1 to Triarc's Current Report on Form 8-K dated November 12, 2002
(SEC file no. 1-2207).
II-2
4.1.2 Certificate of Designation relating to the Class B Common Stock of
Triarc Companies, Inc., incorporated by reference to Exhibit 3.3 to
Triarc's Current Report on Form 8-K dated August 11, 2003 (SEC file
no. 1-2207).
4.1.3 By-laws of Triarc Companies, Inc., as currently in effect,
incorporated by reference to Exhibit 3.1 to Triarc's Current Report
on Form 8-K dated November 12, 2002 (SEC file no. 1-2207).
4.2.1* Form of Senior Debt Indenture.
4.2.2* Form of Subordinated Debt Indenture.
4.3.3+ Form of Warrant Agreement for Common Stock of Triarc Companies,
Inc. including as an exhibit thereto the form of warrant
certificate.
4.3.4+ Form of Warrant Agreement for Preferred Stock of Triarc Companies,
Inc. including as an exhibit thereto the form of warrant
certificate.
4.3.5+ Form of Warrant Agreement for Debt Securities of Triarc Companies,
Inc. including as an exhibit thereto the form of warrant
certificate.
5.1* Opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP as to the
legality of certain of the securities being registered.
12.1++ Schedule Regarding the Computation of Ratios for Triarc Companies,
Inc.
23.1* Consent of Deloitte & Touche LLP.
23.2* Consent of Ernst & Young LLP
23.3* Consent of BDO Seidman, LLP
23.4 Consent of Paul, Weiss, Rifkind, Wharton & Garrison LLP (included
in Exhibit 5.1).
24.1 Powers of Attorney of certain officers and directors of Triarc
Companies, Inc. (included in signature page).
25.1* Statement of eligibility of trustee on Form T-1.
-------------------------
+ To be filed by amendment or incorporation by reference, subsequent to
the effective date of this registration statement.
++ Previously filed.
* Filed herewith.
ITEM 17 - UNDERTAKINGS.
The Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
II-3
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) hereof do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended, that are incorporated by reference
in this Registration Statement;
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering;
(4) that, for purposes of determining any liability under the
Securities Act of 1933, as amended, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934, as amended, that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; and
(5) to file an application for the purpose of determining the
eligibility of the trustee to act under subsection (a) of Section 310 of the
Trust Indenture Act, as amended, in accordance with the rules and regulations
prescribed by the Commission under Section 305(b)(2) of the Trust Indenture Act,
as amended.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers, and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933, as amended, and will be
governed by the final adjudication of such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Amendment No. 1
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on
December 22, 2003.
TRIARC COMPANIES, INC.
(Registrant)
By: /s/ Nelson Peltz
---------------------------------------
Nelson Peltz
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act, this Amendment No.
1 to the Registration Statement has been signed below on December 22, 2003 by
the following persons in the capacities indicated.
SIGNATURE TITLES
--------- ------
Director
/s/ Nelson Peltz
----------------------------- Chairman and Chief Executive Officer and
Nelson Peltz Director (Principal Executive Officer)
*
----------------------------- President and Chief Operating Officer and
Peter W. May Director (Principal Operating Officer)
*
----------------------------- Senior Vice President and Chief Financial
Francis T. McCarron Officer (Principal Financial Officer)
*
----------------------------- Senior Vice President and Chief Accounting
Fred H. Schaefer Officer (Principal Accounting Officer)
*
----------------------------- Director
Hugh L. Carey
*
----------------------------- Director
Clive Chajet
*
----------------------------- Director
Joseph A. Levato
II-5
*
----------------------------- Director
David E. Schwab II
*
----------------------------- Director
Raymond S. Troubh
*
----------------------------- Director
Gerald Tsai, Jr.
* By: /s/ Nelson Peltz
-----------------------
Nelson Peltz
Attorney-in-fact
II-6
EXHIBIT INDEX
EXHIBIT DESCRIPTION
------- -----------
1.1+ Form of Underwriting Agreement.
4.1.1 Certificate of Incorporation of Triarc Companies, Inc., as
currently in effect, incorporated herein by reference to Exhibit
3.1 to Triarc's Current Report on Form 8-K dated November 12, 2002
(SEC file no. 1-2207).
4.1.2 Certificate of Designation relating to the Class B Common Stock of
Triarc Companies, Inc., incorporated by reference to Exhibit 3.3 to
Triarc's Current Report on Form 8-K dated August 11, 2003 (SEC file
no. 1-2207).
4.1.3 By-laws of Triarc Companies, Inc., as currently in effect,
incorporated by reference to Exhibit 3.1 to Triarc's Current Report
on Form 8-K dated November 12, 2002 (SEC file no. 1-2207).
4.2.1* Form of Senior Debt Indenture.
4.2.2* Form of Subordinated Debt Indenture.
4.3.3+ Form of Warrant Agreement for Common Stock of Triarc Companies,
Inc. including as an exhibit thereto the form of warrant
certificate.
4.3.4+ Form of Warrant Agreement for Preferred Stock of Triarc Companies,
Inc. including as an exhibit thereto the form of warrant
certificate.
4.3.5+ Form of Warrant Agreement for Debt Securities of Triarc Companies,
Inc. including as an exhibit thereto the form of warrant
certificate.
5.1* Opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP as to the
legality of certain of the securities being registered.
12.1++ Schedule Regarding the Computation of Ratios for Triarc Companies,
Inc.
23.1* Consent of Deloitte & Touche LLP.
23.2* Consent of Ernst & Young LLP
23.3* Consent of BDO Seidman, LLP
23.4 Consent of Paul, Weiss, Rifkind, Wharton & Garrison LLP (included
in Exhibit 5.1).
24.1 Powers of Attorney of certain officers and directors of Triarc
Companies, Inc. (included in signature page).
25.1* Statement of eligibility of trustee on Form T-1.
-------------------------
+ To be filed by amendment or incorporation by reference, subsequent to
the effective date of this registration statement.
++ Previously filed.
* Filed herewith.
II-7