Pizza Hut 2008 Annual Report Download - page 87

23MAR200920295069
Early Retirement Eligibility and Reductions
A participant is eligible for Early Retirement following the later of age 55 or 10 years of vesting
service. A participant who has met the requirements for Early Retirement and who elects to begin
receiving payments from the plan prior to age 62 will receive a reduction of 1⁄12 of 4% for each month
benefits begin before age 62. Benefits are unreduced at age 62.
The table below shows when each of the named executive officers will be eligible or became eligible
for Early Retirement and the estimated lump sum value of the benefit each participant would receive from
the YUM plans (both qualified and non-qualified) if he retired from the Company at that time and
received a lump sum payment (except however, in the case of Messrs. Novak and Su, who are already Early
Retirement eligible, the estimated lump sum is calculated as if they retired on December 31, 2008).
Earliest Estimated Lump Sum Estimated Lump Sum Total
Retirement from the from the Estimated
Name Date Qualified Plan(1) Non-Qualified Plan(2) Lump Sum
Novak November 1, 2007 938,096 18,690,385 19,628,481
Carucci July 1, 2012 755,289 3,581,626 4,336,915
Su May 1, 2007 — 6,170,212 6,170,212
Allan May 1, 2010 381,252 2,185,530 2,566,782
Creed August 1, 2012 115,501 104,643 220,144
(1) The YUM! Brands Retirement Plan
(2) Mr. Su’s benefit is paid solely from the YUM! Brands International Retirement Plan. All other
non-qualified benefits are paid from the YUM! Brands Inc. Pension Equalization Plan.
The estimated lump sum values in the table above are calculated assuming no increase in the
participant’s Final Average Earnings. The lump sums are estimated using the mortality table and interest
assumption as used for purposes of financial accounting. Actual lump sums may be higher or lower
depending on the mortality table and interest rate in effect at the time of distribution and the participant’s
Final Average Earnings at his date of retirement.
Proxy Statement
Termination of Employment Prior to Retirement
If a participant terminates employment, either voluntarily or involuntarily, prior to meeting eligibility
for Early or Normal Retirement, benefits will be actuarially reduced from age 65 to his early
commencement date using the mortality rates in the YUM! Brands Retirement Plan and an interest rate
equal to 7% (e.g., this results in a 62.97% reduction at age 55). In addition, the participant may NOT elect
to receive his benefit in the form of a lump sum.
Lump Sum Availability
Lump sum payments are available to participants who meet the requirements for Early or Normal
Retirement. Participants who leave the Company prior to meeting the requirements for Early or Normal
Retirement must take their benefits in the form of a monthly annuity and no lump sum is available. When
a lump sum is paid from the plan, it is calculated based on actuarial assumptions for lump sums required by
Internal Revenue Code Section 417(e)(3) (currently this is the annual 30-year Treasury rate for the
2nd month preceding the date of distribution and the gender blended 1994 Group Annuity Reserving Table
as set forth in Revenue Ruling 2001-62).
(2) YUM! Brands Inc. Pension Equalization Plan
The YUM! Brands Inc. Pension Equalization Plan is an unfunded, non-qualified plan that
complements the YUM! Brands Retirement Plan by providing benefits that federal tax law bars providing
69