Wendy's International (WEN)

      In December 2005, the Compensation Committee approved measures relating to Messrs. Peltz and May which action was in response to tax planning measures proposed by the Company, in consideration of possible corporate restructurings in future years. On December 29, 2005, the Subcommittee accelerated the delivery of certain deferred shares of Company common stock and related cash dividends to Messrs. Peltz and May that had been deferred in prior years and held in a deferral trust, resulting in additional income tax and withholding payment obligations for Messrs. Peltz and May in 2005. In connection with the accelerated delivery, the Subcommittee also granted certain new stock option awards to, and entered into certain new agreements with, Messrs. Peltz and May. Specifically, (i) additional stock options were granted to Messrs. Peltz and May in connection with the withholding of shares of Company common stock to satisfy the minimum statutory withholding taxes relating to this accelerated delivery of shares of Company common stock; (ii) Messrs. Peltz and May exercised certain stock options held by them (see the table entitled “Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values” below); (iii) additional stock options were granted to Messrs. Peltz and May on the exercise of (and in consideration of) the options referenced in the preceding clause (ii) (corresponding to the payment of the exercise price and minimum statutory withholding taxes arising in respect of such exercised stock options with shares of Company common stock) (see the table entitled “Option Grants in Last Fiscal Year” below); and (iv) Messrs. Peltz and May each entered into a new agreement with the Company that provides that if, as described in each of their employment agreements, compensation that would be due either Mr. Peltz or Mr. May in the future would be subject to the golden parachute excise tax under Section 280G of the Code, Mr. Peltz would agree to forfeit up to $8.0 million of compensation, and Mr. May would agree to forfeit up to $4.0 million of compensation, if and solely to the extent any such forfeiture would eliminate the affected individual's liability for the excise tax.

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      In approving the foregoing transactions by year-end 2005, the Compensation Committee reviewed with the Company's management the significant tax benefits resulting from such actions, including increasing the Company's net operating loss for tax purposes (“NOL”) by approximately $100 million, which would be available to offset taxable gain on any disposition (including a spin-off) of Deerfield, the deferred gain on the disposition of the Company's former propane distribution business, taxable earnings from operations or other gains, if any, resulting from the possible corporate restructuring.

      In addition, in approving the foregoing transactions, the Compensation Committee considered the likelihood that the Company would engage in restructurings in the future and the potential benefits that would result should the Company engage in further restructurings. For example, if a corporate restructuring were to occur that involved a transaction that would be considered a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, for purposes of Section 280G of the Code (regarding so-called “golden parachute payments”), certain payments and benefits could become due to Messrs. Peltz and May pursuant to their employment agreements that would be deemed “excess parachute payments” for purposes of Sections 280G and 4999 of the Code. This would cause (i) a loss of the Company's tax deduction for those payments and in respect of those benefits and (ii) the imposition of an excise tax payable by Messrs. Peltz and May for which the Company is required, pursuant to their employment agreements, to indemnify them so that after payment of such excise taxes, Messrs. Peltz and May will be in the same after-tax position as if no excise tax had been imposed (a “gross up”). The actions described above were approved by the Compensation Committee based on its determination that they would mitigate against this potential loss of deduction and obligation of the Company to pay excise taxes on a grossed-up basis.

      In accordance with the procedures adopted in November 2002 by the Performance Committee, Messrs. Peltz and May elected to defer receipt of the shares issuable to them upon exercise of their stock options that were to expire on March 1, 2004, April 21, 2004 and November 30, 2004. Thus, on February 27, 2004, each of Messrs. Peltz and May exercised options that were to expire on March 1, 2004 and, in connection with such deferral elections, 27,549 shares of Class A Common Stock and 55,089 shares of Class B Common Stock were credited to a deferred compensation account on the Company's books pending their future delivery to Mr. Peltz, and 18,366 shares of Class A Common Stock and 36,726 shares of Class B Common Stock were credited to a deferred compensation account on the Company's books pending their future delivery to Mr. May. In addition, on April 20, 2004, each of Messrs. Peltz and May exercised options that were to expire on April 21, 2004 and, in connection with such deferral elections, 600,921 shares of Class A Common Stock and 1,201,843 shares of Class B Common Stock were credited to a deferred compensation account on the Company's books pending their future delivery to Mr. Peltz, and 400,614 shares of Class A Common Stock and 801,229 shares of Class B Common Stock were credited to a deferred compensation account on the Company's books pending their future delivery to Mr. May. Moreover, on November 29, 2004, each of Messrs. Peltz and May exercised options that were to expire on November 30, 2004 and, in connection with such deferral elections, 172,124 shares of Class A Common Stock and 344,246 shares of Class B Common Stock were credited to a deferred compensation account on the Company's books pending their future delivery to Mr. Peltz, and 114,749 shares of Class A Common Stock and 229,497 shares of Class B Common Stock were credited to a deferred compensation account on the Company's books pending their future delivery to Mr. May.