Wendy's International (WEN)

Equity Instruments of Subsidiaries

Deerfield granted Profit Interests effective August 20, 2004 to certain of its key employees, which effectively increased the minority interests in any profits of Deerfield subsequent to August 19, 2004 by 2.1% to 38.5% from 36.4% and decreased the Company’s interest in such profits to 61.5% from 63.6%. No payments were required from the employees to acquire the Profit Interests. The estimated fair market value at the date of grant of the Profit Interests was $2,050,000 in accordance with an independent appraisal of their fair market value and represents the probability-weighted present value of estimated future cash flows to those Profit Interests. This estimated fair market value resulted in aggregate unearned compensation of $1,260,000, net of minority interests, being charged to the “Unearned compensation” component of “Stockholders’ equity” with an equal offsetting increase in “Additional paid-in capital” in 2004. The vesting of the Profit Interests varies by employee either vesting ratably in each of the three years ended August 20, 2007, 2008 and 2009 or 100% on August 20, 2007. Accordingly, this unrecognized compensation cost is being recorded as compensation expense as earned over periods of three or five years. Upon adoption of SFAS 123(R) effective January 2, 2006, the Company reversed the related unamortized “Unearned compensation” balance of $743,000, net of minority interests, with an equal offsetting reduction of “Additional paid-in capital” and continues recognizing the remaining fair value of the Profit Interests as compensation expense, less minority interests, ratably over the remaining vesting periods, with an equal offsetting increase in “Additional paid-in capital.”

On November 10, 2005, the Company granted to certain members of its management equity interests (the “Class B Units”) in TDH and Jurl which hold the Company’s respective interests in Deerfield and Jurlique. The Class B Units consist of a capital interest portion reflecting the subscription price paid by each employee, which aggregated $600,000, and a profits interest portion of up to 15% of the equity interest of those subsidiaries in the respective net income of Deerfield and Jurlique and up to 15% of any investment gain derived from the sale of any or all of their equity interests in Deerfield or Jurlique. The grant of the Class B Units resulted in aggregate unearned compensation of $10,880,000, net of minority interests, being charged to the “Unearned compensation” component of “Stockholders’ equity” with an equal offsetting increase in

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Triarc Companies, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
December 31, 2006

“Additional paid-in-capital” in 2005. The unearned compensation represented the excess of the estimated fair market value of the Class B Units as of the date of grant, in accordance with an independent appraisal of their fair value reflecting the probability-weighted present value of estimated future cash flows to the Class B Units, over the $600,000 aggregate subscription price paid by the employees. The profits interest portion of the Class B Units vest or vested ratably on each of February 15, 2006, 2007 and 2008. Accordingly, the unrecognized compensation cost is being recognized ratably as compensation expense over the three-year vesting period which commenced retroactively as of February 15, 2005. Upon adoption of SFAS 123(R) effective January 2, 2006, the Company reversed the related unamortized “Unearned compensation” balance of $5,038,000 with an equal offsetting reduction of “Additional paid-in capital” and continues recognizing the remaining fair value of the Class B Units as compensation expense, less minority interests, ratably over the remaining vesting periods, with an equal offsetting increase in “Additional paid-in capital.”

The aggregate estimated fair value of the Equity Interests which vested during 2006 was $3,633,000 as of the February 15, 2006 vesting date.

Equity Instruments of Subsidiaries

       Deerfield granted Profit Interests effective August 20, 2004 to certain of its key employees, which effectively increased the minority interests in any profits of Deerfield subsequent to August 19, 2004 by 2.1% to 38.5% from 36.4% and decreased the Company's interest in such profits to 61.5% from 63.6%. No payments were required from the employees to acquire the Profit Interests. The estimated market value at the date of grant of the Profit Interests was $2,050,000 in accordance with an independent appraisal of their fair value and represents the probability-weighted present value of estimated future cash flows to those Profit Interests. This estimated market value resulted in aggregate unearned compensation of $1,260,000, net of minority interests, being charged to the “Unearned compensation” component of “Stockholders' equity” with an equal offsetting increase in “Additional paid-in capital” in 2004. The vesting of Profit Interests varies by employee either vesting ratably in each of the three years ended August 20, 2007, 2008 and 2009 or 100% on August 20, 2007. Accordingly, this unearned compensation is being amortized as compensation expense as earned over periods of three or five years.

       On November 10, 2005, the Company granted to certain members of its management equity interests (the “Class B Units”) in TDH and Jurl which hold the Company's respective interests in Deerfield and Jurlique. The Class B Units consist of a capital interest portion reflecting the subscription price paid by each employee, which aggregated $600,000, and a profits interest portion of up to 15% of the equity interest of those subsidiaries in the respective net income of Deerfield and Jurlique and up to 15% of any investment gain derived of equity interest from the sale of any or all of their equity interests in Deerfield or Jurlique. The grant of the Class B Units resulted in aggregate unearned compensation of $10,880,000, net of minority interests, being charged to the “Unearned compensation” component of “Stockholder's equity” with an equal offsetting increase in “Additional paid-in-capital” in 2005. The unearned compensation represents the excess of the estimated market value of the Class B Units as of the date of grant, in accordance with an independent appraisal of their fair value reflecting the probability-weighted present value of estimated future cash flows to the Class B Units, over the $600,000 aggregate subscription price paid by the employees. The profits interest portion of the Class B Units vest ratably on each of February 15, 2006, 2007 and 2008. Accordingly the unearned compensation is being amortized ratably as compensation expense over the three-year vesting period which commenced retroactively as of February 15, 2005.