Pizza Hut 2012 Annual Report Download - page 84

YUM! BRANDS, INC.-2013Proxy StatementA-2
Proxy Statement
APPENDIX
2.6 Grants of Options and Sars. An Option may but need not
be in tandem with a SAR, and a SAR may but need not be in
tandem with an Option (in either case, regardless of whether
the original award was granted under this Plan or another
plan or arrangement). If an Option is in tandem with a SAR,
the exercise price of both the Option and SAR shall be the
same, and the exercise of the Option or SAR with respect to a
share of Stock shall cancel the corresponding tandem SAR or
Option right with respect to such share. If a SAR is in tandem
with an Option but is granted after the grant of the Option,
or if an Option is in tandem with a SAR but is granted after
the grant of the SAR, the later granted tandem Award shall
have the same exercise price as the earlier granted Award,
but the exercise price for the later granted Award may be
less than the Fair Market Value of the Stock at the time of
such grant; provided, however, that an exercise price below
the Fair Market Value at the time of such grant shall not be
permitted in the case of a 409A Award if this would cause
the award to be subject Code section 409A.
2.7 No Repricing, Cancellation, or Re-Grant of Options. Except
for adjustments pursuant to subsection 4.2(f) (relating to
adjustment of shares), the Exercise Price for any outstanding
Option granted under the Plan may not be decreased after the
date of grant nor may an outstanding Option granted under
the Plan be surrendered to the Company as consideration in
exchange for the grant of a new Option with a lower exercise
price.
Section 3 Other Stock Awards
3.1 Defi nitions.
(a) A “Stock Unit” Award is the grant of a right to receive shares
of Stock in the future.
(b) A “Performance Share” Award is a grant of a right to receive
shares of Stock or Stock Units which is contingent on the
achievement of performance or other objectives during a
specifi ed period.
(c) A “Performance Unit” Award is a grant of a right to receive a
designated dollar value amount of Stock which is contingent
on the achievement of performance or other objectives during
a specifi ed period.
(d) A “Restricted Stock” Award is a grant of shares of Stock,
and a “Restricted Stock Unit” Award is the grant of a right
to receive shares of Stock in the future, with such shares
of Stock or right to future delivery of such shares of Stock
subject to a risk of forfeiture or other restrictions that will
lapse upon the achievement of one or more goals relating
to completion of service by the Participant, or achievement
of performance or other objectives, as determined by the
Committee.
3.2 Restrictions on Awards. Each Stock Unit Award, Restricted
Stock Award, Restricted Stock Unit Award, Performance
Share Award, and Performance Unit Award shall be subject
to the following:
(a) Any such Award shall be subject to such conditions, restrictions
and contingencies as the Committee shall determine.
(b) If the right to become vested in a Restricted Stock Award,
Restricted Stock Unit Award, Performance Share Award or
Performance Unit Award is conditioned on the completion of a
specifi ed period of service with the Company or the Subsidiaries,
without achievement of Performance Measures or other
performance objectives being required as a condition of vesting,
and without it being granted in lieu of other compensation, then
the required period of service for full vesting of the Award shall
be not less than three years (provided that the required period
for full vesting shall, instead, not be less than two years in the
case of annual incentive deferrals payable in restricted shares)
(subject to acceleration of vesting, to the extent permitted by
the Committee, in the event of the Participant’s death, disability,
retirement, change in control or involuntary termination). Awards
to Directors may vest immediately.
(c) The Committee may designate whether any such Award being
granted to any Participant is intended to be “performance-
based compensation” as that term is used in section 162(m)
of the Code. Any such Awards designated as intended to be
“performance-based compensation” shall be conditioned on
the achievement of one or more Performance Measures, to
the extent required by Code section 162(m). The Performance
Measures that may be used by the Committee for such Awards
shall be based on any one or more of the following Company,
Subsidiary, operating unit or division performance measures,
as selected by the Committee: cash fl ow; earnings; earnings
per share; market value added or economic value added;
profi ts; return on assets; return on equity; return on investment;
revenues; stock price; total shareholder return; customer
satisfaction metrics; or restaurant unit development. Each
goal may be expressed on an absolute and/or relative basis,
may be based on or otherwise employ comparisons based
on internal targets, the past performance of the Company
and/or the past or current performance of other companies,
and in the case of earnings-based measures, may use or
employ comparisons relating to capital, shareholders’ equity
and/or shares outstanding, investments or to assets or net
assets. For Awards under this Section 3 intended to be
“performance-based compensation,” the grant of the Awards
and the establishment of the Performance Measures shall be
made during the period required under Code section 162(m).
(d) To the extent an Award is a 409A Award (as defi ned in Section
8) and is subject to a substantial risk of forfeiture within the
meaning of Code section 409A (or will be granted upon the
satisfaction of a condition that constitutes such a substantial
risk of forfeiture), any compensation due under the Award
(or pursuant to a commitment to grant an Award) shall be
provided in full not later than the 60th day following the date
there is no longer such a substantial risk of forfeiture with
respect to the Award, unless the Committee shall clearly
and expressly provide otherwise with respect to the Award
in the Award agreement.