Amended and Restated Wendys International, Inc. Supplemental Executive Retirement Plan No. 2

 

1.1

ACCOUNT means a notional account established for each Participant equal to the sum of the following: (a) all supplemental contributions and interest credited under Section 3.1, (b) all supplemental target contributions and interest credited under Section 3.2, and (c) all supplemental profit sharing contributions and interest credited under Section 3.3.

 

1.2

ACTIVE PARTICIPANT means a Covered Employee who becomes a Participant and continues to participate in the SERP pursuant to Article II.

 

1.3

BENEFICIARY means any person or persons designated by a Participant to receive any death benefits that may become payable under Article IV after the death of such Participant.

 

1.4

BOARD means the Board of Directors of the Company, or a committee thereof.

 

1.5

CAUSE means the termination of a Participant’s employment by reason of the Board’s good faith determination that the Participant (a) willfully and continually failed to substantially perform his or her duties with the Company or Participating Employer (other than a failure resulting from the

 

Participant’s incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Participant by the Board which specifically identifies the manner in which the Board believes that the Participant has not substantially performed his or her duties and such failure substantially to perform continues for at least fourteen (14) days, or (b) has willfully engaged in conduct which is demonstrably and materially injurious to the Company or Participating Employer, monetarily or otherwise, or (c) has otherwise materially breached the terms of his or her employment agreement with the Company or Participating Employer, if applicable (each, an “Employment Agreement”) (including, without limitation, a voluntary termination of the Participant’s employment by the Participant during the term of such Employment Agreement).  No act, nor failure to act, on the Participant’s part, shall be considered “willful” unless he or she has acted, or failed to act, with an absence of good faith and without a reasonable belief that his or her action or failure to act was in the best interest of the Company.  Notwithstanding the foregoing, the Participant’s employment shall not be deemed to have been terminated for Cause unless and until (1) there shall have been delivered to the Participant a copy of a written notice setting forth that the Participant was guilty of conduct set forth above in clause (a), (b) or (c) of the first sentence of this definition and specifying the particulars thereof in detail, and (2) the Participant shall have been provided an opportunity to be heard by the Board (with the assistance of Participant’s counsel).

 

1.6

CHANGE IN CONTROL means the occurrence during the Plan Year of:

 

a)

An acquisition (other than directly from the Company) of any common stock or other voting securities of the Company entitled to vote generally for the election of directors (the "Voting Securities") by any "Person" (as the term person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), immediately after which such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty percent (30%) or more of the then outstanding shares of the Company's common stock or the combined voting power of the Company's then outstanding Voting Securities; provided, however, in determining whether a Change in Control has occurred, Voting Securities which are acquired in a "Non-Control Acquisition" (as hereinafter defined) shall not constitute an acquisition which would cause a Change in Control.  A "Non-Control Acquisition" shall mean an acquisition by (i) an employee benefit plan (or a trust forming a part thereof) maintained by (A) the Company or (B) any corporation or other Person of which a majority of its voting power or its voting equity securities or equity interest is owned, directly or indirectly, by the Company (for purposes of this definition, a "Subsidiary") (ii) the Company or its Subsidiaries, or (iii) any Person in connection with a "Non-Control Transaction" (as hereinafter defined);

 

b)

The individuals who, as of January 1, 2003, are members of the Board (the "Incumbent Board"), cease for any reason to constitute at least seventy percent (70%) of the members of the Board; provided, however, that if the election, or nomination for election by the Company's common stockholders, of any new director was approved by a vote of at least two-thirds of the Incumbent Board, such new director shall, for purposes of this SERP, be considered as a member of the Incumbent Board; provided further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of an actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board (a "Proxy Contest") including by reason of any agreement intended to avoid or settle any Proxy Contest; or

 

c)

The consummation of:

 

1)

A merger, consolidation or reorganization with or into the Company, or in which securities of the Company are issued (a "Merger"), unless such Merger is a "Non-Control Transaction."  A "Non-Control Transaction" shall mean a Merger if:

 

A)

the stockholders of the Company, immediately before such Merger own directly or indirectly immediately following such Merger at least seventy percent (70%) of the combined voting power of the outstanding voting securities of the corporation resulting from such Merger (the "Surviving Company") in substantially the same proportion as their ownership of the Voting Securities immediately before such Merger,

 

B)

the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such Merger constitute at least two-thirds of the members of the board of directors of the Surviving Company, or a corporation beneficially directly or indirectly owning a majority of the Voting Securities of the Surviving Company, and

 

C)

no Person other than (i) the Company, (ii) any Subsidiary, (iii) any employee benefit plan (or any trust forming a part thereof) that, immediately prior to such Merger was maintained by the Company or any Subsidiary, or (iv) any Person who, immediately prior to such Merger had Beneficial Ownership of thirty percent (30%) or more of the then outstanding Voting Securities or common stock of the Company, has Beneficial Ownership of thirty percent (30%) or more of the combined voting power of the Surviving Company then outstanding voting securities or its common stock;

 

2)

A complete liquidation or dissolution of the Company; or

 

3)

The sale or other disposition of all or substantially all of the assets of the Company to any Person (other than a transfer to a Subsidiary).

 

1.7

CODE means the Internal Revenue Code of 1986, as amended from time to time.

 

1.8

COMMITTEE means the Administrative Committee established in Article V.

 

1.9

COMPANY means , prior to January 1, 2010, Wendy's International, Inc.  Effective January 1, 2010, Company means Wendy’s/Arby’s Group, Inc.

 

1.10

COMPENSATION means a Participant's annual Compensation, as that term is defined in the WAG 401(k) Plan, except that there shall be no maximum amount of Compensation considered.  Compensation paid by the Company or any of its Subsidiaries after January 1, 2010 for services performed by a legacy Wendy’s brand employee, shall be treated as Compensation even though it is not paid by a Participating Employer.

 

1.11

CONTRIBUTIONS means the amounts credited to a Participant's Account during a Plan Year, other than interest, pursuant to Article III.

 

1.12

COVERED EMPLOYEE means an Employee who, on or before October 26, 2006 has been appointed to serve as an officer:

 

a)

For Wendy’s International, Inc., with the title of "Vice President" or above; or

 

b)

For any Participating Employer, with such titles as may be designated for that Participating Employer by the Board or a committee thereof.

 

1.13

EFFECTIVE DATE means January 1, 2010, the effective date of this SERP.

 

1.14

EMPLOYEE means a person employed by the Company or a Participating Employer who is a United States citizen or resident alien.

 

1.15

FINAL AVERAGE COMPENSATION shall mean a Participant's average annual Compensation over the five (5) consecutive calendar years while a Covered Employee (or the total number of completed calendar years while a Covered Employee if less than five (5)) out of the last ten (10) completed calendar years while a Covered Employee preceding the Participant's attainment of age sixty (60) which will provide him with the highest annual average Compensation.

 

1.16

GRANDFATHER ELIGIBLE PARTICIPANT shall mean a Participant who was an Active Participant in the Wendy’s International, Inc. Supplemental Executive Retirement Plan on January 1, 2003, and who had attained age 55 and completed at least five (5) Years of Service as of that date.

 

1.17

INACTIVE PARTICIPANT means a former Active Participant who is no longer a Covered Employee but who has an Account remaining in the SERP.

 

1.18

NORMAL RETIREMENT DATE and NORMAL RETIREMENT AGE both mean the first of the month coincident with or next following a Participant's sixty-fifth birthday.

 

1.19

PARTICIPANT means an Active Participant or an Inactive Participant

 

1.20

PARTICIPATING EMPLOYER means an Affiliate, as defined in the WAG 401(k) Plan, that has been authorized to participate in the SERP by the Board or a committee thereof.

 

1.21

PENSION PLAN means the Wendy's International, Inc. Pension Plan.

 

1.22

PROFIT SHARING AND SAVINGS PLAN means the Wendy's International, Inc. Profit Sharing and Savings Plan.

 

1.23

PLAN YEAR means the calendar year.

 

1.24

SERP means the Wendy's International, Inc. Supplemental Executive Retirement Plan No. 2.

 

1.25

TOTAL AND PERMANENT DISABILITY means a physical or mental condition which qualifies a Participant for Social Security disability benefits or which qualifies such Participant to continue to receive benefits under the Company's disability plan, after having received such benefits for twelve (12) months.

 

1.26

WAG 401(k) PLAN means the Wendy's/Arby’s Group, Inc. 401(k) Retirement Plan.

 

1.27

YEAR OF SERVICE means any Plan Year during which an Employee is credited with a Year of Service under the WAG 401(k) Plan.

 

2.1

 

2.2

 

3.1

 

a)

On the last day of each Plan Year commencing after December 31, 2002, for each Active Participant who remains employed as a Covered Employee by the Company or a Participating Employer on the last day of the Plan Year, or who dies, becomes disabled or attains Normal Retirement Age during the Plan Year while actively employed, the Company shall credit to the Supplemental Account of such Active Participant an amount determined as follows:

 

1)

For each Active Participant described above who is not a Grandfather Eligible Participant, on the last day of each Plan Year commencing after December 31, 2002 but before January 1, 2007, an amount equal to the net supplemental credit described in (b) below.

 

2)

For each Active Participant described above who is not a Grandfather Eligible Participant, on the last day of each Plan Year

 

commencing after December 31, 2006, an amount equal to the net supplemental credit described in (c) below.

 

3)

For each Active Participant described above who is not a Grandfather Eligible Participant, on the last day of each Plan Year commencing after December 31, 2009, an amount equal to the net supplemental credit described in (d) below.

 

4)

For each Grandfather Eligible Participant described above, an amount equal to the greater of the net supplemental credit described in (b), (c) or (d) below, as applicable, and the target credit which would have been credited to such Participant for such Plan Year under Section 3.2(b).

 

b)

Net Supplemental Credit.  For Plan Years beginning after December 31, 2004 but before December 31, 2006, the difference between the gross supplemental credit amount determined under the table in paragraph (1) below and the offsets set forth in paragraph (2) below.

 

1)

Gross Supplemental Credit.

Participant's Age Plus Years of Service as of the first day of the Plan Year

Supplemental Credits as a percentage of prior year Compensation

Less than 40

5%

40-49

8%

50-59

11%

60-69

14%

70 or more

18%

 

2)

Offsets.  The aggregate of (A) the amounts credited during the prior Plan Year to such Participant pursuant to Section 1.1(c) of the Pension Plan, (B) the amounts that would have been credited during the prior Plan Year to such Participant pursuant to Section 3.5 of the Profit Sharing and Savings Plan had the Participant elected to make Deferred Income Contributions to receive the maximum available Company Safe Harbor Matching Contribution, (C) any Company Contributions credited to such Participant during the prior Plan Year pursuant to Section 3.1 of the Profit Sharing and Savings Plan, and (D) that portion of all "social security" employment (FICA) taxes paid during the prior Plan Year by the Company or Participating Employer pursuant to Code section 3111(a).

 

c)

Net Supplemental Credit.  For Plan Years beginning after December 31, 2006 but before December 31, 2009, the difference between the gross supplemental credit amount determined under the table in paragraph (1) below and the offsets set forth in paragraph (2) below.

 

1)

Gross Supplemental Credit.

Participant's Age Plus Years of Service as of the first day of the Plan Year

Supplemental Credits as a percentage of prior year Compensation

Less than 40

2.5%

40-49

5%

50-59

7.5%

60 or more

10%

 

2)

Offsets.  The aggregate of (A) the amounts that would have been credited during the prior Plan Year to such Participant pursuant to Section 3.5 of the Profit Sharing and Savings Plan had the Participant elected to make Deferred Income Contributions to receive the maximum available Company Safe Harbor Matching Contribution, (B) any Company Contributions credited to such Participant during the prior Plan Year pursuant to Section 3.1 of the Profit Sharing and Savings Plan, and (C) that portion of all "social security" employment (FICA) taxes paid during the prior Plan Year by the Company or Participating Employer pursuant to Code section 3111(a).

 

d)

Net Supplemental Credit.  For Plan Years beginning after December 31, 2009, the difference between the gross supplemental credit amount determined under the table in paragraph (1) below and the offsets set forth in paragraph (2) below.

 

1)

Gross Supplemental Credit.

Participant's Age Plus Years of Service as of the first day of the Plan Year

Supplemental Credits as a percentage of prior year Compensation

Less than 40

2.5%

40-49

5%

50-59

7.5%

60 or more

10%

 

2)

Offsets.  The aggregate of (A) the amounts that would have been credited during the prior Plan Year to such Participant pursuant to Section 4.4 of the WAG 401(k) Plan had the Participant elected to make Deferred Income Contributions to receive the maximum available Company Safe Harbor Matching Contribution, (B) any Company Contributions credited to such Participant during the prior Plan Year pursuant to Section 4.1 of the WAG 401(k) Plan, and (C) that portion of all "social security" employment (FICA) taxes paid during the prior Plan Year by the Company or Participating Employer pursuant to Code section 3111(a).

 

e)

Interest.  On the last day of each Plan Year, interest shall be credited to the Supplemental Account as of that date but before crediting the allocation for that Plan Year (if any) under this Section, for each Participant at a rate equal to:

 

1)

From the Effective Date to December 31, 2007, the interest rate applied for that Plan Year to the Account Balance Benefit under the Pension Plan.

 

2)

From January 1, 2008, the 30 year Constant Maturity Treasury Rate (or the next longest US government bond rate then available) as of November 30th.

 

3.2

 

a)

Except as provided in Section 3.4 below, prior to January 1, 2003, the Company shall credit to the Supplemental Target Account for each eligible Participant the amounts described below and after January 1, 2003, the Company shall credit to the Supplemental Target Account the interest credits described in (c) below :

 

(1)

For each eligible and Active Participant who remains employed by the Company on the last day of the Plan Year, the amounts described in (b) below calculated as of the last day of the prior Plan Year and the amount described in (c) below calculated as of the last day of the Plan Year.

 

(2)

For each eligible and Active Participant who dies or becomes disabled during the Plan Year while actively employed, the amount described in (b) below calculated as of the last day of the prior Plan Year.  For each eligible and Active Participant who died or became disabled during a Plan Year while actively employed and who has not yet received payment of his SERP benefits, the amount described in (c) below calculated as of the earlier of the last day of the Plan Year or the date as of which benefits are paid under the SERP.

 

 

(3)

For each eligible and Active Participant who attained Normal Retirement Age during the Plan Year while actively employed, the amount described in (b) below calculated as of such Participant's Normal Retirement Date and the amount described in (c) below calculated from the Normal Retirement Date to the earlier of the last day of the Plan Year or the date as of which benefits are paid under the SERP.

 

b)

An amount which will provide each Participant with a targeted annual benefit payable as a life annuity at his Normal Retirement Date equal to the amount obtained, if any, when the sum of (2), (3), (4) and (5) below is subtracted from (1) below:

 

(1)

Fifty percent (50%) of the Participant's Final Average Compensation (determined without salary projection) multiplied by a fraction, not exceeding one (1), the numerator of which is the number of the Participant's expected Years of Service at his Normal Retirement Date and the denominator of which is fifteen (15).

 

(2)

The Participant’s expected Accrued Benefit Derived from Company Contributions at his Normal Retirement Date under the Pension Plan, assuming that the Participant had elected to make Participant Contributions to the Plan in each Plan Year such contributions as were permitted and that interest credited to the Account Balance Benefit for future years will be at the rate of 7.5%, including the Prior Plan Benefit and the Minimum Benefit.

 

(3)

With regard to the WAG 401(k) Plan, the sum of the Participant’s:

 

(i)

Company Matched Contribution Account;

 

(ii)

Company Contribution Account;

 

(iii)

Company Safe Harbor Matching Contribution Account calculated as if the Participant had elected to make Deferred Income Contributions to receive the maximum available Company Safe Harbor Matching Contribution and as if such contributions had earned interest at an annual rate of 7.5%;

 

(iv)

any prior distributions from such Accounts; and

 

(v)

future expected Company Safe Harbor Matching Contributions for each Plan Year until the Participant’s Normal Retirement Date equal to the Company Safe Harbor Matching Contribution deemed to have been received by the Participant for that Plan Year.

 

(4)

The Participant's Supplemental Profit Sharing Account projected and converted to a life annuity payable at his Normal Retirement Date in the same manner as the WAG 401(k) Plan Accounts in (3) above.

 

(5)

The amount of the retirement income the Participant is entitled to receive pursuant to the Supplemental Retirement Agreement under the Nonqualified Plan.

 

c)

An amount equal to the interest rate described below applied to the amount in the Participant's Supplemental Target Account as of the last day of the Plan Year or, for purposes of Section 3.2(a)(3), as of the Participant's Normal Retirement Date.

 

1)

From the Effective Date to December 31, 2007, the interest rate applied for that Plan Year to the Account Balance Benefit under the Pension Plan; and

 

2)

From January 1, 2008, the 30 year Constant Maturity Treasury Rate (or the next longest US government bond rate then available) as of November 30th.

 

3.3

 

a)

For each Plan Year prior to January 1, 2003 during which the Participant is an Active Participant in the Profit Sharing and Savings Plan, the amount by which:

 

(1)

The amount of Company Contributions which the Company would have allocated to the Active Participant’s Accounts under the Profit Sharing and Savings Plan without regard to the maximum annual limitations imposed by Section 415 of the Code or the limitation on compensation imposed by Section 401(a)(17) of the Code; exceeds

 

(2)

The actual amount of Company Contributions which the Company allocates to the Active Participant’s Accounts under the Profit Sharing and Savings Plan.

 

 

former Participant in the Profit Sharing and Savings Plan, an amount equal to the net gain (or net loss) that would have been credited (or charged) had the amounts allocated to the Participant's Supplemental Plan Accounts been invested in a manner similar to the investment of his Accounts under the Profit Sharing and Savings Plan during a similar time frame.

 

c)

On the last day of each Plan Year commencing after December 31, 2006, interest shall be credited to the Participant’s Supplemental Profit Sharing Account as of the last day of the Plan Year at a rate equal to:

 

1)

For the Plan Year commencing January 1, 2007, the interest rate applied for that Plan Year to the Account Balance Benefit under the Pension Plan; and

 

2)

For Plan Years commencing after December 31, 2007, the 30 year Constant Maturity Treasury Rate (or the next longest US government bond rate then available) as of November 30th.

 

3.4

 

3.5

 

4.1

 

a)

Normal Form.  Unless a Participant elects one of the distribution alternatives described in Section 4.1(b) in the manner set forth in Section 4.1(c), upon the Participant’s Termination (other than for death, Total and Permanent Disability or a Termination described in Section 7.3 or 7.5), the Participant will receive the distribution of his or her Accounts in a single lump sum on, or as soon as practicable after, the six month anniversary of the date of such Termination.

 

b)

Alternative Form.  In the alternative, a Participant may elect to receive his or her Accounts in quarterly installments payable over no less than two years and no more than fifteen (15) years commencing on, or as soon as practicable after, the six-month anniversary of the date of such Termination, with the amount of each installment equal to the amount of the Account on the Valuation Date immediately prior to the payment of such installment divided by the number of installments remaining to be paid.

 

c)

Timing and Manner of Distribution Elections.  Distribution elections shall be made in such manner as may be designated by the Plan Administrator and communicated to Participants.  Any election made within twelve months of the date payment would otherwise commence (unless made within 30 days of becoming a Participant) shall be disregarded and benefits shall be paid in accordance with the preceding distribution election, if any, selected by such Participant or, if no such distribution election has been made, in accordance with Section 4.1.  Effective January 1, 2006, any distribution election made more than 30 days after the Participant became an Eligible Individual shall delay the commencement of distributions to such Participant by five years from the date payments would have commenced in accordance with the preceding distribution election, if any, selected by such Participant or, if no such distribution election has been made, in accordance with Section 4.1.

 

4.2

 

b)

If there is no surviving spouse, to the executor or other personal representative of the Participant to be distributed in accordance with the Participant’s will, or if he has no valid will, in accordance with applicable state law.

 

5.1

 

a)

The Company shall be the Plan Administrator.  The Company shall appoint a Committee to act as its agent or delegate in carrying out its administrative duties.

 

b)

The Committee shall consist of not fewer than three (3) members who shall be appointed by the Company and may include individuals who are not Participants in the Plan.  The Company may remove or replace any member at any time in its sole discretion, and any member may resign by delivering a written resignation to the Company, which resignation shall become effective at its delivery or at any later date specified therein.

 

5.2

 

5.3

 

a)

The Committee shall hold meetings upon such notice and at such times and places as its members may from time to time deem appropriate, and may adopt from time to time such bylaws and regulations for the conduct and transaction of its business and affairs consistent with the terms of the Plan and the delegation of duties and powers by the Company.  A majority of its members at the relevant time shall constitute a quorum for the transaction of business.  All action taken by the Committee shall be by vote of the majority of its members present at such meeting, except that the Committee also may act without a meeting by a written consent signed by a majority of its members.  A member shall not be disqualified from acting because of any personal interest, benefit or advantage, inasmuch as a member may be a director of the Company, an Employee or a Participant, but no member shall vote or act in connection with an action of the Committee relating exclusively to himself.

 

b)

The Committee may allocate among its members such specific responsibilities, obligations, powers or duties as shall be deemed appropriate.

 

5.4

 

6.1

 

a)

The specific reason or reasons for any denial of benefits;

 

b)

The specific SERP provisions on which any denial is based;

 

c)

A description of any further material or information which is necessary for the claimant to perfect his claim and an explanation of why the material or information is needed; and

 

d)

An explanation of the SERP's claim appeals procedure.

 

7.1

 

7.6