Wendy's International (WEN)

CORPORATE GOVERNANCE MATTERS—ACTIVITIES OF
THE COMPENSATION COMMITTEE

Scope of Authority of the Compensation Committee

The Compensation Committee (“Compensation Committee”) of the Company’s Board of Directors discharges the responsibility of the Board of Directors on compensation matters relating to the Company’s directors and executive officers.

The Compensation Committee has responsibility for reviewing and approving the goals and objectives for compensating the Company’s Chief Executive Officer (the Company’s “CEO”) and for evaluating the performance of the Company’s CEO and determining and approving the compensation level of the Company’s CEO based on such evaluation. The Compensation Committee also reviews and approves the compensation of other executive officers of the Company, considering the performance of such executive officers. The Compensation Committee reviews and approves the overall compensation policy for the Company’s executive officers, including the use of employment agreements, severance plans and arrangements, deferred compensation plans and other executive benefits and perquisites, incentive programs and equity based plans. The Compensation Committee also has the authority to review and approve the “Compensation Discussion and Analysis” (which is referred to as the “CD&A”) prepared by management and to determine whether to recommend to the Board of Directors that it be included in the Company’s annual report and proxy statement.

The Compensation Committee also reviews and makes recommendations to the Board of Directors with respect to directors’ compensation and perquisites.

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The Compensation Committee, as a whole, consists of five directors (Messrs. Schwab (Chairman), Chajet, Levato, Lewis and Wasserman), all of whom the Board of Directors has determined are “independent” for purposes of the New York Stock Exchange rules.

The Compensation Committee has a Performance Compensation Subcommittee (which is referred to as the “Performance Committee”) whose purpose is to administer those Company compensation plans that are intended to meet the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended (which is referred to as the “Code”). The members of the Performance Committee are Messrs. Schwab (Chairman), Chajet, Lewis and Wasserman. Apart from matters within the responsibility of the Performance Committee, the Compensation Committee may not delegate its authority to any other persons.

The Compensation Committee and Performance Committee meet as needed. The meetings are chaired by the Chairman, and the Compensation Committee and Performance Committee, often in consultation with management, set their own meeting agendas. In 2008, the Compensation Committee and the Performance Committee met jointly seven times, and in addition, the Performance Committee met separately three additional times.

Each year, with respect to its administration and implementation of the 1999 Executive Bonus Plan, as discussed further in the CD&A below, the Performance Committee determines those employees that are eligible to receive awards under the plan, evaluates the achievement of the goals and objectives under such plan for the previously completed fiscal year and also establishes the financial goals and objectives for the current year.

Throughout the year the Compensation Committee or Performance Committee (as the case may be) also takes under consideration various compensation related proposals from senior management and takes action with respect to its own initiatives and its responsibilities under various compensation and benefit plans.

The Compensation Committee also makes recommendations to the Board with respect to director compensation, works with senior management to formulate succession plans, and annually reviews and reassesses the adequacy of its charter, proposing changes as necessary to the Board for approval. A current copy of the Joint Charter of the Compensation Committee and of the Performance Compensation Subcommittee is available at the Company’s website ( www.wendysarbys.com). The Compensation Committee is subject to the Company’s Corporate Governance Guidelines, a current copy of which is also available at the Company’s website.

In the course of its activities, and where appropriate for purposes under Section 162(m) of the Code, the Performance Committee may act with respect to other particular tasks relating to performance based compensation for the Company’s executives.

Compensation Consultants and Outside Counsel

To help it fulfill its mission, the Compensation Committee periodically evaluates the competitiveness of the Company’s executive compensation programs, using information drawn from a variety of sources, including information supplied by consultants and its own experience in recruiting and retaining executives. The Compensation Committee has the authority to retain outside advisors and consultants in connection with its activities, and has the sole authority to approve any such advisors’ and consultants’ fees. Funding for such fees is provided by the Company at a level determined by the Compensation Committee.

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In March 2008, the Compensation Committee engaged Towers Perrin (the “Compensation Consultant”) as its outside compensation consultant. The Compensation Consultant has over the years provided compensation advice with respect to Arby’s and Wendy’s and is familiar with both the operations of Arby’s and Wendy’s and compensation matters in the restaurant industry. The Compensation Consultant reports directly to the Compensation Committee and provides assistance to the Compensation Committee in developing the Company’s executive compensation programs, executive pay levels, and non-management director pay levels and generally provides advice to the Compensation Committee on executive compensation matters. Outside of the services performed for the Compensation Committee, the Compensation Consultant may perform additional consulting services for the Company, subject to prior notification to, and the approval of, the Chairman of the Compensation Committee in the case of services for senior management or services with respect to Company matters that require any material expenditures (e.g., projects exceeding $50,000).

Role of Executives in Compensation Decisions

The Company’s executives play a variety of roles in assisting the Compensation Committee on compensation matters. At the commencement of the fiscal year, the CEO and Chief Financial Officer (the Company’s “CFO”) provide the Performance Committee with proposed performance goals and objectives for that year with respect to the 1999 Executive Bonus Plan and proposed participants eligible to receive performance goal bonus awards under the plan for that year and, following the completion of the year, provide the Performance Committee with proposed bonuses calculated under the plan’s terms. Under the terms of the 1999 Executive Bonus Plan, the Performance Committee may exercise negative discretion and determine to reduce any such proposed bonuses, notwithstanding the fulfillment of any or all of the performance goals. The Company’s CFO provides the Performance Committee with a certificate attesting to the satisfaction of various financial performance elements under the 1999 Executive Bonus Plan with respect to the recently completed fiscal year and the proposed compensation attributable to such performance. The Company’s senior management also proposes discretionary performance bonuses for other executives who do not participate in the 1999 Executive Bonus Plan.

The CEO and members of the Company’s senior management with expertise in compensation, benefits, human resource and legal matters make recommendations to the Compensation Committee relating to proposed forms of employment, severance and other compensatory arrangements and compensation matters generally and present information regarding the Company’s financial and operating goals and actual performance, legal developments affecting the Compensation Committee’s duties and the Company’s compensation plans, and information and proposals regarding employee compensation and benefits.

Upon invitation of the Compensation Committee, certain members of senior management and outside counsel to the Company attend portions of Compensation Committee and Performance Committee meetings which are not conducted in executive session.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee consists of five non-management directors (Messrs. Schwab, Chajet, Levato, Lewis and Wasserman). None of these directors has ever served as an officer or employee of the Company, except that from 1993 to 1996 Mr. Levato served as Executive Vice President and Chief Financial Officer of the Company.

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