Wendy's International (WEN)

PROPOSAL 6.
AMENDMENT AND RESTATEMENT OF THE COMPANY’S CERTIFICATE
OF INCORPORATION TO REPEAL ARTICLE VI, THE BUSINESS
COMBINATION PROVISION

(Item 6 on the Company’s Proxy Card)

The Company’s stockholders are being asked to approve an amendment and restatement of the Certificate of Incorporation that will repeal Article VI of the Certificate of Incorporation, which imposes super-majority stockholder approval requirements for certain business combination transactions between Wendy’s/Arby’s and an interested stockholder.

The business combination provision contained in Article VI of the Certificate of Incorporation, which is described in more detail below, is intended to provide safeguards to Wendy’s/Arby’s stockholders by requiring a higher stockholder vote than required under Delaware law in the event another person first obtains a substantial interest in Wendy’s/Arby’s and then wishes to accomplish a combination of such person’s business with Wendy’s/Arby’s, or otherwise eliminate the share holdings of the other stockholders.

The Company is proposing the repeal of the business combination provision contained in Article VI of the Certificate of Incorporation because it believes that it has sufficient safeguards in place or readily available to the Company to protect its stockholders against self-dealing transactions between the Company and interested stockholders. The business combination provision contained in Article VI of the Certificate of Incorporation imposes super-majority stockholder approval requirements for business combinations with interested stockholders that, in certain circumstances, unlike other potential takeover defenses, such as a “poison pill” or Section 203 of the Delaware General Corporation Law (the “DGCL”), cannot be exempted by the Board of Directors. Under Article VI, the Board of Directors only has the ability to exempt a business combination with an interested stockholder from the

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super-majority stockholder approval requirements where the business combination does not otherwise require the approval of the Company’s stockholders under law. If the approval of stockholders is otherwise required by law to complete the business combination, for example, in the case of a merger, then notwithstanding board approval of the business combination, super-majority stockholder approval will be required under Article VI of the Certificate of Incorporation. The Company believes that anti-takeover provisions similar to those contained in Article VI that cannot be exempted by board action are unusual for a modern NYSE listed Delaware corporation and that there has been a general trend among Delaware corporations in favor of repealing anti-takeover and other provisions requiring super-majority stockholder approval.

As a NYSE listed company, the Audit Committee of the Company is required to be comprised solely of independent directors and, under its charter, the Audit Committee has the responsibility for the review and approval or ratification of all related party and conflict of interest transactions involving any director, executive officer, nominee for director, any holder of 5% or more of any class of the Company’s common stock or any non-executive officer (or any member of the immediate family of any of the foregoing persons), if such related party or conflict of interest transaction involves more than $10,000, in each case using appropriate specialists and counsel as necessary.

Further, the Certificate of Incorporation authorizes “blank check” preferred stock, a class of unissued shares of preferred stock whose terms and conditions may be expressly determined by the Board of Directors. This would allow Wendy’s/Arby’s to put a “poison pill” in place as a takeover defense in the event of a hostile bid for the Company, which would require a hostile bidder to negotiate with the Board of Directors to acquire control of Wendy’s/Arby’s.

In addition, the Company is subject to the statutory anti-takeover restrictions of Section 203 of the DGCL. While the business combination provision in Article VI is similar in some respects to the statutory anti-takeover provisions contained in Section 203 of the DGCL, Section 203 of the DGCL is more flexible than Article VI because it allows a Board of Directors to exempt its application with respect to a stockholder by approving the transaction by which a stockholder becomes an interested stockholder. Section 203 of the DGCL, unlike Article VI of the certificate of the incorporation, also has a sunset provision whereby its restrictions on business combinations between a subject corporation and an interested stockholder expire three years following the stockholder becoming an interested stockholder. In addition, under Section 203 of the DGCL, super-majority stockholder approval is not required if upon consummation of the transaction that resulted in a person becoming an interested stockholder the person owns at least 85% of the voting stock of the corporation. The business combination provision in the Certificate of Incorporation contains no comparable exceptions.

As a condition to the Board of Directors’ approval of the repeal of the business combination provision, on April 1, 2009, Wendy’s/Arby’s entered into an amendment to its agreement (the “Agreement”), dated November 5, 2008, with Trian Fund Management, L.P. and certain of its affiliates (together, “Trian”), an investment firm whose principals are Nelson Peltz, Peter W. May and Edward P. Garden. Mr. Peltz, Mr. May and Mr. Garden are members of the Board of Directors. Mr. Peltz is non-executive Chairman of the Board of Directors, and Mr. May is non-executive Vice Chairman of the Board of Directors. As of March 31, 2009, Mr. Peltz, Mr. May, Mr. Garden and Trian beneficially owned, in the aggregate, 101,478,333 shares of Class A Common Stock, which represented approximately 22% of the outstanding shares.

The Agreement was entered into in connection with Trian’s tender offer for the Company’s Class A Common Stock as consideration for the granting of prior approval by the Board of Directors

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under Section 203 of the DGCL such that the consummation of the tender offer and the subsequent acquisition by Trian of beneficial ownership of up to 25% of the outstanding shares of the Class A Common Stock would not be subject to the restrictions set forth in Section 203 of the DGCL. The Agreement, among other things, contractually replicates the anti-takeover restrictions of Section 203 of the DGCL for Trian, except that the relevant beneficial ownership percentage that would trigger the DGCL Section 203 restrictions under the Agreement is a percentage in excess of 25%, while it is 15% under the DGCL. The Agreement terminates upon the earliest to occur of (i) Trian beneficially owning less than 15% of the Class A Common Stock, (ii) November 5, 2011 and (iii) at such time as any person not affiliated with Trian makes an offer to purchase an amount of shares of Class A Common Stock which when added to the shares of Class A Common Stock already beneficially owned by such person and its affiliates and associates equals or exceeds 50% or more of the shares of Class A Common Stock or all or substantially all of the Company’s assets or solicits proxies with respect to a majority slate of directors.

The amendment to the Agreement provides that the sections of the Agreement which contractually replicate the provisions of Section 203 of the DGCL for Trian will not automatically terminate, if not earlier terminated, on November 5, 2011. Instead, those provisions of the agreement will terminate on the earliest to occur of the events described in clauses (i) and (iii) above.

For the foregoing reasons, Wendy’s/Arby’s believes that Article VI of the Certificate of Incorporation could unduly restrict a business combination between Wendy’s/Arby’s and an interested stockholder that may, in the judgment of its independent directors and a majority of its stockholders, otherwise be in the best interests of the Company and its stockholders.