Pizza Hut 2012 Annual Report Download - page 73

YUM! BRANDS, INC.-2013Proxy Statement 55
Proxy Statement
EXECUTIVE COMPENSATION
Potential Payments Upon Termination or Change in Control
The information below describes and quantifi es certain compensation
that would become payable under existing plans and arrangements
if the Named Executive Offi cer’s employment had terminated
on December31,2012, given the Named Executive Offi cer’s
compensation and service levels as of such date and, if applicable,
based on the Company’s closing stock price on that date. These
benefi ts are in addition to benefi ts available generally to salaried
employees, such as distributions under the Company’s 401(k) Plan,
retiree medical benefi ts, disability benefi ts and accrued vacation pay.
Due to the number of factors that affect the nature and amount
of any benefi ts provided upon the events discussed below, any
actual amounts paid or distributed may be different. Factors that
could affect these amounts include the timing during the year of any
such event, the Company’s stock price and the executive’s age.
Stock Options and SAR Awards. If one or more Named Executive
Offi cers terminated employment for any reason other than
retirement, death, disability or following a change in control as
of December31,2012, they could exercise the stock options
and SARs that were exercisable on that date as shown at the
Outstanding Equity Awards at Fiscal Year-End table on page 48 ,
otherwise all options and SARs, pursuant to their terms, would
have been forfeited and cancelled after that date. If the Named
Executive Offi cer had retired, died or become disabled as of
December31,2012, exercisable stock options and SARs would
remain exercisable through the term of the award. Except in the
case of a change in control, described below, no stock options
or SARs become exercisable on an accelerated basis. Benefi ts
a Named Executive Offi cer may receive on a change of control
are discussed below.
Deferred Compensation. As described in more detail beginning at
page 53 , the Named Executive Offi cers participate in the EID Program,
which permits the deferral of salary and annual incentive compensation.
The last column of the Nonqualifi ed Deferred Compensation Table on
page 54 reports each Named Executive Offi cer’s aggregate balance
at December31,2012. The Named Executive Offi cers are entitled to
receive their vested amount under the EID Program in case of voluntary
termination of employment. In the case of involuntary termination of
employment, they are entitled to receive their vested benefi t and the
amount of the unvested benefi t that corresponds to their deferral. In
the case of death, disability or retirement after age 65, they or their
benefi ciaries are entitled to their entire account balance as shown
in the last column of the Nonqualifi ed Deferred Compensation table
on page 54 .
The amounts they would have been entitled to in case of a voluntary or involuntary termination as of December31,2012 are as follows:
Voluntary Termination
($)
Involuntary Termination
($)
Novak 169,819,580 169,819,580
Grismer — 441,090
Su 7,646,877 7,646,877
Carucci 15,509,055 15,509,055
Pant 6,334,147 6,334,147
Payouts to the executive under the EID Program would occur in
accordance with the executive’s elections. In the case of amounts
deferred after 2002, such payments deferred until termination
of employment or retirement will not begin prior to six months
following the executive’s termination of employment. Executives
may receive their benefi t in a lump sum payment or in installment
payments for up to 20years. Each of the Named Executive Offi cers
has elected to receive payments in a lump sum.
Leadership Retirement Plan. Under the LRP, participants age 55
are entitled to a lump sum distribution of their account balance
following their termination of employment. Participants under age
55 who terminate with more than fi ve years of service will receive
their account balance at their 55th birthday. In case of termination
of employment as of December 31, 2012, Mr. Grismer would
receive $393,730 when he attains age 55 and Mr. Pant would
have received $1,548,564.
Performance Share Unit Awards. If one or more Named Executive
Offi cers terminated employment for any reason other than retirement,
death, disability or following a change in control and prior to
achievement of the performance criteria and vesting period,
then the award would be cancelled and forfeited. If the Named
Executive Offi cer had retired, become disabled or had died as
of December31,2012, the PSU award will be paid out based
on actual performance for the performance period, subject to
a pro rata reduction refl ecting the portion of the performance
period not worked by the Named Executive Offi cer. If any of these
terminations had occurred on December31,2012, Messrs.Novak,
Su, Carucci and Pant would have been entitled to $1,250,912,
$546,784, $390,748 and $302,920, respectively, assuming target
performance. As described under footnote (2) of the Summary
Compensation Table, Mr.Grismer did not receive a performance
share unit award for 2012.
Pension Benefi ts. The Pension Benefi ts Table on page 51 describes
the general terms of each pension plan in which the Named
Executive Offi cers participate, the years of credited service and the
present value of the annuity payable to each Named Executive Offi cer
assuming termination of employment as of December31,2012.
The table on page 52 provides the present value of the lump
sum benefi t payable to each Named Executive Offi cer when they
attain eligibility for Early Retirement (i.e., age 55 with 10years of
service) under the plans.