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This excerpt taken from the WEN 10-K filed Mar 4, 2010. Share-Based
Compensation
The
Company measures the cost of employee services received in exchange for an award
of equity instruments, including grants of employee stock options and restricted
stock, based on the fair value of the award at the date of grant. The Company
recognizes share-based compensation expense net of estimated forfeitures,
determined based on historical experience. The Company uses (1) the
Black-Scholes-Merton option pricing model (the “Black-Scholes Model”) for
purposes of determining the fair value of stock options granted and (2)
recognizes compensation costs ratably over the requisite service period for each
separately vesting portion of the award.
These excerpts taken from the WEN 10-K filed Mar 13, 2009. Share-Based
Compensation
Effective
January 2, 2006, the Company adopted SFAS No. 123 (revised 2004), “Share-Based
Payment” (“SFAS 123(R)”), which revised SFAS No. 123, “Accounting for
Stock-Based Compensation” (“SFAS 123”). As a result, the Company now
measures the cost of employee services received in exchange for an award of
equity instruments, including grants of employee stock options and restricted
stock, based on the fair value of the award at the date of grant. The
Company previously used the intrinsic value method. Under the intrinsic value
method, compensation cost for the Company’s stock options was measured as the
excess, if any, of the market price of the Company’s Class A common stock (the
“Class A Common Stock” or “Class A Common Shares”), and/or Class B common stock,
series 1 (the “Class B Common Stock” or “Class B Common Shares”), as applicable,
at the date of grant, or at any subsequent measurement date as a result of
certain types of modifications to the terms of its stock options, over the
amount an employee must pay to acquire the stock. The Company is using the
modified prospective application method under SFAS 123(R) and has elected not to
use retrospective application. Thus, amortization of the fair value
of all nonvested grants as of January 2, 2006, as determined under the previous
pro forma disclosure provisions of SFAS 123, except as adjusted for estimated
forfeitures, is included in the Company’s results of operations commencing
January 2, 2006. As required under SFAS 123(R), the Company reversed the
unamortized “Unearned compensation” component of “Stockholders’ equity” with an
equal offsetting reduction of “Additional paid-in capital” as of January 2, 2006
and is now recognizing compensation expense during the year determined in
accordance with SFAS 123(R) as disclosed herein with an equal offsetting
increase in “Additional paid-in capital.” Additionally, effective
with the adoption of SFAS 123(R), the Company recognizes share-based
compensation expense net of estimated forfeitures, determined based on
historical experience. Previously, forfeitures were recognized as
incurred. Under SFAS 123(R), the Company has chosen (1) the
Black-Scholes-Merton option pricing model (the “Black-Scholes Model”) for
purposes of determining the fair value of stock options granted commencing
January 2, 2006 and (2) to continue recognizing compensation costs ratably over
the requisite service period for each separately vesting portion of the
award.
As
permitted under the Financial Accounting Standards Board (the “FASB”) Staff
Position No. FAS 123(R)-3, “Transition Election Related to Accounting for the
Tax Effects of Share-Based Payment Awards,” the Company elected the specified
“short-cut” method to calculate its beginning hypothetical pool of additional
paid-in capital (the “APIC Pool”) representing excess tax
benefits - 81
-
WENDY’S/ARBY’S
GROUP, INC. AND SUBSIDIARIES
(FORMERLY
TRIARC COMPANIES, INC.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED
(In
Thousands Except Per Share Amounts )
available
to absorb tax deficiencies, if any, recognized subsequent to the adoption of
SFAS 123(R) both determined in connection with and as of the dates of the
exercises of share-based awards. Such “short-cut” method provides a
simplified approach to calculating the APIC Pool based on the cumulative annual
net increases or decreases in excess tax benefits rather than an award-by-award
analysis since the effective date of SFAS 123 in 1995. This
accounting policy election had no effect on the Company’s consolidated financial
position or results of operations in any of the years presented since the
exercises of share-based awards in those years resulted in excess tax benefits
which could not be currently recognized.
Share-Based Compensation Effective January 2, 2006, the Company adopted SFAS No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123(R)”), which revised SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”). As a result, the Company now measures the cost of employee services received in exchange for an award of equity instruments, including grants of employee stock options and restricted stock, based on the fair value of the award at the date of grant. The Company previously used the intrinsic value method. Under the intrinsic value method, compensation cost for the Company’s stock options was measured as the excess, if any, of the market price of the Company’s Class A common stock (the “Class A Common Stock” or “Class A Common Shares”), and/or Class B common stock, series 1 (the “Class B Common Stock” or “Class B Common Shares”), as applicable, at the date of grant, or at any subsequent measurement date as a result of certain types of modifications to the terms of its stock options, over the amount an employee must pay to acquire the stock. The Company is using the modified prospective application method under SFAS 123(R) and has elected not to use retrospective application. Thus, amortization of the fair value of all nonvested grants as of January 2, 2006, as determined under the previous pro forma disclosure provisions of SFAS 123, except as adjusted for estimated forfeitures, is included in the Company’s results of operations commencing January 2, 2006. As required under SFAS 123(R), the Company reversed the unamortized “Unearned compensation” component of “Stockholders’ equity” with an equal offsetting reduction of “Additional paid-in capital” as of January 2, 2006 and is now recognizing compensation expense during the year determined in accordance with SFAS 123(R) as disclosed herein with an equal offsetting increase in “Additional paid-in capital.” Additionally, effective with the adoption of SFAS 123(R), the Company recognizes share-based compensation expense net of estimated forfeitures, determined based on historical experience. Previously, forfeitures were recognized as incurred. Under SFAS 123(R), the Company has chosen (1) the Black-Scholes-Merton option pricing model (the “Black-Scholes Model”) for purposes of determining the fair value of stock options granted commencing January 2, 2006 and (2) to continue recognizing compensation costs ratably over the requisite service period for each separately vesting portion of the award. As permitted under the Financial Accounting Standards Board (the “FASB”) Staff Position No. FAS 123(R)-3, “Transition Election Related to Accounting for the Tax Effects of Share-Based Payment Awards,” the Company elected the specified “short-cut” method to calculate its beginning hypothetical pool of additional paid-in capital (the “APIC Pool”) representing excess tax benefits - 81 - - WENDY’S/ARBY’S GROUP, INC. AND SUBSIDIARIES (FORMERLY TRIARC COMPANIES, INC.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (In Thousands Except Per Share Amounts ) available to absorb tax deficiencies, if any, recognized subsequent to the adoption of SFAS 123(R) both determined in connection with and as of the dates of the exercises of share-based awards. Such “short-cut” method provides a simplified approach to calculating the APIC Pool based on the cumulative annual net increases or decreases in excess tax benefits rather than an award-by-award analysis since the effective date of SFAS 123 in 1995. This accounting policy election had no effect on the Company’s consolidated financial position or results of operations in any of the years presented since the exercises of share-based awards in those years resulted in excess tax benefits which could not be currently recognized. | EXCERPTS ON THIS PAGE:
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