Wendy's International (WEN)

Roland Smith

The term of Mr. Smith’s employment has been extended for three years and will be automatically renewed for additional one-year periods unless either party delivers a notice of non-renewal at least 120 days prior to the expiration of the then current term. Mr. Smith’s base annual salary was increased to $1,150,000 and his target bonus percentage was increased to 150%.

Upon a termination without Cause or by Mr. Smith due to a Triggering Event (each as defined in Mr. Smith’s Agreement), Mr. Smith will receive (i) a lump sum amount equal to two times the sum of (a) his annual base salary and (b) his annual target bonus (as in effect for the year prior to the year of termination), (ii) a pro rata bonus for the year of termination, payable at the same time bonuses are generally paid, and (iii) a lump sum cash amount of $25,000 (which will increase by 10% on the second anniversary of the date of the Agreement).  In addition, all of his stock options and restricted stock will be fully vested.

A failure by the Company to renew Mr. Smith's Agreement will be treated as a termination due to a Triggering Event.

All of Mr. Smith's stock options and restricted stock will vest upon termination of his employment by the Company as a result of his death or disability.

The severance payments hereunder are conditioned on Mr. Smith’s execution of a waiver and general release of claims in favor of the Company, their subsidiaries and affiliates and other related parties.

Mr. Smith’s Agreement also contains restrictive covenants, including non-competition and non-solicitation covenants for 18 to 24 months following termination of employment depending on the circumstances of such termination.

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restricted shares will have performance vesting targets and 50% will have time vesting targets. The specific targets are to be agreed upon within 90 days of the Effective Date; provided that if no agreement is reached within that time frame, in lieu of restricted shares, options having a Black-Scholes value equal to the market price of such number of restricted shares on April 17, 2006 will be granted to Mr. Smith. ARG is responsible for certain costs relating to Mr. Smith's relocation from California to the Atlanta, GA metropolitan area.

      In the event Mr. Smith's employment is terminated by ARG without “cause” (as defined in the agreement) or by Mr. Smith for certain specified reasons (including the occurrence of a “Special Termination Event,” as defined below) the agreement provides that Mr. Smith will be entitled to receive, among other things, (i) an amount equal to 1.5 times Mr. Smith's then current base salary, payable in a lump sum within 30 days of the date of termination, provided that if it is required in order to comply with Section 409A of the Code, and any regulations or guidance thereunder, such amount will be paid in full on the six-month anniversary of the date of termination and (ii) a pro-rata bonus for the year of termination, based on Mr. Smith's target annual bonus, payable at such time as the bonus would otherwise have been payable to Mr. Smith had he remained employed, provided that if required to comply with Section 409A of the Code, such amount will be paid on the six-month anniversary of the termination of his employment. The agreement also provides that in the event that Mr. Smith's employment is terminated without “cause” by ARG or by Mr. Smith for certain specified reasons (including the occurrence of a Special Termination Event) (i) all non-vested stock options granted to Mr. Smith by the Company that would have vested had he remained employed through the later of the third anniversary of the agreement and two years will vest immediately and will remain exercisable until the earlier of one year following termination or the award's stated expiration date and (ii) Mr. Smith will automatically vest in 50% of the outstanding unvested shares of restricted stock granted to him by the Company. A “Special Termination Event” shall occur if within the 30-day period commencing 270 days following a “Change of Control” (as defined in the agreement), Mr. Smith delivers notice to ARG of his intention to terminate his employment, which termination must be effective within the time period specified in the agreement.

      If it is determined (as provided in the agreement) that any payment by ARG to Mr. Smith or for his benefit in connection with a Special Termination Event from and after a Change of Control, would be subject to the excise tax imposed by Section 4999 of the Code or to any similar tax imposed by state or local law, or any interest or penalties with respect to such excise tax, then ARG will indemnify Mr. Smith so that after payment of such taxes, interest and penalties, Mr. Smith will be in the same after-tax position as if no excise tax had been imposed.