Pizza Hut 2012 Annual Report Download - page 83

YUM! BRANDS, INC.-2013Proxy Statement A-1
Proxy Statement
Appendix A YUM! Brands Inc.
LongTermIncentivePlan
(As Amended Through the Fourth Amendment)
Section 1 General
1.1 Purpose. YUM! Brands, Inc. Long Term Incentive Plan
(the “Plan”) has been established by YUM! Brands, Inc.
(the “Company” or “YUM!”) to (i) attract and retain persons
eligible to participate in the Plan; (ii) motivate Participants,
by means of appropriate incentives, to achieve long-range
goals; (iii) provide incentive compensation opportunities
that are competitive with those of other similar companies;
and (iv) align the interests of Participants with those of the
Company’s shareholders.
1.2 Participation. Subject to the terms and conditions of the
Plan, the Committee shall determine and designate, from time
to time, from among the Eligible Individuals, those persons
who will be granted one or more Awards under the Plan,
and thereby become “Participants” in the Plan.
1.3 Operation, Administration, and Defi nitions. The operation
and administration of the Plan, including the Awards made
under the Plan, shall be subject to the provisions of Section
4 (relating to operation and administration). Capitalized terms
in the Plan shall be defi ned as set forth in the Plan (including
the defi nition provisions of Section 8 of the Plan).
Section 2 Options and Sars
2.1 Defi nitions.
(a) The grant of an “Option” entitles the Participant to purchase
shares of Stock at an Exercise Price and during a specifi ed
time established by the Committee. Any Option granted under
this Section 2 may be either a non-qualifi ed option (an “NQO”)
or an incentive stock option (an “ISO”), as determined in the
discretion of the Committee. An “NQO” is an Option that is
not intended to be an “incentive stock option” as that term
is described in section 422(b) of the Code. An “ISO” is an
Option that is intended to satisfy the requirements applicable
to an “incentive stock option” described in section 422(b) of
the Code.
(b) A stock appreciation right (a “SAR”) entitles the Participant to
receive, in cash or Stock (as determined in accordance with
subsection 2.5), value equal to (or otherwise based on) the
excess of: (a) the Fair Market Value of a specifi ed number of
shares of Stock at the time of exercise; over (b) an Exercise
Price established by the Committee.
2.2 Exercise Price. The “Exercise Price” of each Option and
SAR granted under this Section 2 shall be established by the
Committee or shall be determined by a method established
by the Committee at the time the Option or SAR is granted;
except that the Exercise Price shall not be less than the
closing price of a share of Stock on the date of grant as
reported on the composite tape for securities listed on the
New York Stock Exchange (or if no sales of stock were made
on said exchange on such date, on the next preceding day
on which sales were made on such exchange).
2.3 Exercise. An Option and a SAR shall be exercisable in
accordance with such terms and conditions and during such
periods as may be established by the Committee.
2.4 Payment of Option Exercise Price. The payment of the
Exercise Price of an Option granted under this Section 2
shall be subject to the following:
(a) Subject to the following provisions of this subsection 2.4,
the full Exercise Price for shares of Stock purchased upon
the exercise of any Option shall be paid at the time of such
exercise (except that, in the case of an exercise arrangement
approved by the Committee and described in paragraph
2.4(c), payment may be made as soon as practicable after
the exercise).
(b) The Exercise Price shall be payable in cash or by tendering,
by either actual delivery of shares or by attestation, shares
of Stock acceptable to the Committee, and valued at Fair
Market Value as of the day of exercise, or in any combination
thereof, as determined by the Committee.
(c) The Committee may permit a Participant to elect to pay the
Exercise Price upon the exercise of an Option by irrevocably
authorizing a third party to sell shares of Stock (or a suffi cient
portion of the shares) acquired upon exercise of the Option and
remit to the Company a suffi cient portion of the sale proceeds
to pay the entire Exercise Price and any tax withholding
resulting from such exercise.
2.5 Settlement of Award. Settlement of Options and SARs is
subject to subsection 4.7.