Wendy's International (WEN)

      The Company's Executive Compensation Program is designed to motivate executives to achieve the Company's business objectives with particular emphasis on building the value of the Company. Key components of the Executive Compensation Program consist of base salaries, a formula-based performance cash bonus plan, a nonformula-based performance cash bonus plan, equity-based compensation plans, deferred compensation plans and discretionary bonuses. As discussed further below, in 2005 the Compensation Committee also adopted equity participation plans with respect to D&C and the Company's minority investment in Jurlique International Pty. Ltd. (“Jurlique”), a privately held Australian skin and beauty products company.

      To fulfill its principal function, the Compensation Committee reviews and approves each of the elements of the Executive Compensation Program and assesses the effectiveness of the Executive Compensation Program as a whole. This includes reviewing the design of the Company's various incentive plans for executive officers and assessing the competitiveness of the overall Executive Compensation Program with comparable companies. From time to time, the Company retains external compensation consultants and counsel to advise it with respect to competitive pay levels and the development and design of compensation plans. In reviewing certain aspects of compensation for Fiscal Year 2005, the Compensation Committee and the Subcommittee jointly retained independent counsel and an independent compensation consulting firm, the representatives of which met with the Compensation Committee and Subcommittee on numerous occasions.

      The Company provides its executive officers with a total compensation package that—at expected levels of performance and consistent with each executive's area of responsibility—is generally intended to be highly competitive with compensation packages provided to similarly situated executives in the consumer products, restaurant and food industries and in asset management and private equity/investment banking fields. The Company periodically assesses an executive's competitive level of compensation based on comparable information drawn from a variety of sources, including proxy statements, compensation surveys and external compensation consultants. In addition, such compensation takes into account the various roles and combinations of responsibilities undertaken by the Company's executive officers, as well as their individual performance and contribution to the success of the Company.

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      Over the years, and as reflected in its reports for those years, the Compensation Committee considered the possibility of providing its senior executives with equity or “profit” interests in subsidiaries of the Company (“equity participation plans”), where to do so would assist the Company in attracting and retaining highly skilled executives whose compensation opportunities in the fields of asset management, private equity or investment banking would customarily include such forms of compensation. In the past, in connection with its acquisition and operation of the Snapple Beverage Group, the Company has provided its senior management with equity participation at the operating company level, and the Compensation Committee believes that such action increases the ability of the Company to attract and retain management talent necessary to increase shareholder value. Thus, throughout much of 2005 the Compensation Committee reviewed the terms of a proposed equity participation plan in its asset management segment holding company that would provide members of the Company's senior management the opportunity to participate in the profits and appreciation of D&C. As adopted by the Compensation Committee in November, 2005, this equity participation plan is designed to provide members of the Company's senior executive team with the opportunity to acquire private equity-type participation interests with respect to the profits and appreciation of D&C, in the form of interests with vesting and other features comparable to the characteristics associated with “carried interests” plans in the private equity arena. A substantially similar arrangement was also adopted by the Compensation Committee in November 2005 with respect to the Company's minority interest in Jurlique.

      Before describing the Committee's actions relating to fiscal 2005, the Committee believes that it is useful to take note of a range of activities by senior management that resulted in important changes in the Company's present and future operations. Highlights included the acquisition of the RTM Restaurant Group (the Company's largest franchisee of Arby's restaurants) and the refinancing of more than $600 million of debt of ARG and RTM; the laying of the foundation pursuant to which, during the first full year of its ownership of D&C, D&C achieved a significant increase in its assets under management, including the facilitation of the public offering of Deerfield Triarc Capital Corp., a public real estate investment trust (“REIT”) managed by a subsidiary of D&C; and continued exploration by the Company's senior management of a possible restructuring that may involve the spin-off to the Company's shareholders (or other disposition) of the Company's interest in D&C.

      Given these significant events over the past year, and further anticipated developments in fiscal 2006 and beyond relating to possible restructurings, the Compensation Committee's determinations for fiscal 2005 continued to apply prior practice while at the same time taking into account new developments and opportunities. First, the Committee continued to recognize that the Company functions both in the manner of an acquisition vehicle/private equity firm involved in the acquisition of undervalued businesses and as a manager of companies in various business sectors (such as ARG's restaurant business and D&C's asset management operations). As a result, in the opinion of the Compensation Committee and its advisors, there are relatively few companies that might provide comparable compensation models. Second, the Compensation Committee also recognizes that the Company has traditionally relied upon compensation packages built upon annual salaries, annual incentive compensation (i.e., bonuses), and longer-term incentive compensation (i.e., stock options or other equity-based securities). Third, the Compensation Committee views the D&C and Jurlique equity participation plans entered into in 2005 as additional compensation components for senior management, consistent with compensation opportunities in investment banking and private equity firms, and as such, the Compensation Committee believes it is appropriate to evaluate these equity participation plans as one part of an integrated, overall compensation structure applicable to those executive officers most

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responsible for enhancing shareholder value, and more traditional forms of compensation may be affected accordingly. Fourth, as a result of tax and accounting planning opportunities available to the Company in fiscal 2005, the Performance Committee approved action relating to the accelerated vesting of previously granted options to members of senior management and the accelerated delivery of certain previously deferred shares and cash dividends to Messrs. Peltz and May, all of which were designed to eliminate unfavorable accounting and tax treatment to the Company that would or might otherwise arise in the future.

      The Company's Executive Compensation Program is designed to motivate executives to achieve the Company's business objectives with particular emphasis on building the value of the Company. Key components of the Executive Compensation Program consist of base salaries, formula-based cash bonus plans, performance-based cash bonus plans, stock-based compensation plans, deferred compensation plans and discretionary bonuses.

      To fulfill its principal function, the Compensation Committee reviews and approves each of the elements of the Executive Compensation Program and assesses the effectiveness of the Executive Compensation Program as a whole. This includes reviewing the design of the Company's various incentive plans for executive officers and assessing the competitiveness of the overall Executive Compensation Program. From time to time, the Company retains external compensation consultants and legal counsel to advise it with respect to competitive pay levels and the development and design of compensation plans. In reviewing certain aspects of compensation for Fiscal Year 2004, the Compensation Committee and the Subcommittee jointly retained an independent employment and compensation consulting firm and independent legal counsel, the representatives of which met with the Compensation Committee and Subcommittee.

      The Company provides its executive officers with a total compensation package that—at expected levels of performance and consistent with each executive's area of responsibility—is generally intended to be highly competitive with compensation packages provided to similarly situated executives in the consumer products, restaurant and food industries and in asset management and private equity/investment banking. The Company periodically assesses an executive's competitive level of compensation based on comparable information drawn from a variety of sources, including proxy statements, compensation surveys and external compensation consultants. In addition, such compensation takes into account the various roles and combinations of responsibilities undertaken by the Company's executive officers, as well as their individual performance and contribution to the success of the Company. The Compensation Committee believes that highly competitive compensation levels serve the interests of the Company and its stockholders by attracting and retaining the highest caliber of management talent, and that the Company's management talent has been and will continue to be a competitive advantage for the Company.

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      Consistent with the Compensation Committee's action in prior years and as reflected in its reports for those years, the Compensation Committee has continued to consider the possibility of awarding the Company's senior executives with equity or “profit” interests in subsidiaries (or other equity holdings) of the Company (“equity participation plans”), where to do so would assist the Company in attracting and retaining highly skilled executives whose compensation opportunities in the fields of asset management, private equity or investment banking would customarily include such forms of compensation. In the past, in connection with its acquisition and operation of the Snapple Beverage Group, the Company provided its senior management with equity participation at the operating company level, and the Committee believes that such action increased the ability of the Company to attract and retain management talent necessary to increase shareholder value.

      During Fiscal Year 2004, the Company acquired a controlling interest in Deerfield & Company LLC, an alternative asset manager, and a minority interest in Jurlique International Pty. Ltd., an Australian-based skin and health care products company. While no compensatory plan or arrangement has been adopted with respect to those companies during Fiscal Year 2004, the Committee is considering the implementation of equity participation plans in respect of these acquisitions.

      Before describing the Committee's actions relating to Fiscal Year 2004, the Committee believes that it is useful to provide some observations on the development of compensation policies for Fiscal Year 2005 and beyond. First, the Committee recognizes that the Company functions both in the manner of companies that acquire, nurture and grow undervalued businesses, on the one hand, and companies that manage companies in various business sectors, on the other hand. As a result, in the opinion of the Committee and its advisors, there are relatively few companies that provide comparable compensation models. Second, the Committee also recognizes that the Company has traditionally relied upon compensation packages built upon annual salaries, annual incentive compensation (i.e., bonuses), and longer-term incentive compensation (i.e., stock options). Third, as the demand for management talent continues to increase, the Committee believes that the availability of equity participation plans for select senior management is an additional compensation component which the Company could use to attract, retain, and reward highly skilled executives, and is consistent with compensation opportunities in investment banking and private equity firms. Fourth, in the event that such plans are adopted in 2005 or future years, the Committee believes it is appropriate to evaluate such plans as one part of an integrated, overall compensation structure applicable to those executive officers most responsible for enhancing shareholder value, and more traditional forms of compensation may be affected accordingly.