Pizza Hut 2012 Annual Report Download - page 85

YUM! BRANDS, INC.-2013Proxy Statement A-3
Proxy Statement
APPENDIX
Section 4 Operation and Administration
4.1 Effective Date. The Plan shall be effective as of May 20, 1999
(the “Effective Date”). The Plan shall be unlimited in duration
and, in the event of Plan termination, shall remain in effect
as long as any Awards under it are outstanding; provided,
however, that no Awards may be granted under the Plan on
or after the ten-year anniversary of May 15, 2008, the date
on which the Plan was amended by the Third Amendment.
4.2 The shares of Stock for which Awards may be granted under
the Plan shall be subject to the following:
(a) The shares of Stock with respect to which Awards may be
made under the Plan shall be shares currently authorized
but unissued or currently held or subsequently acquired by
the Company as treasury shares (to the extent permitted by
law), including shares purchased in the open market or in
private transactions.
(b) Subject to the following provisions of this subsection 4.2, the
maximum number of shares of Stock that may be delivered
to Participants and their benefi ciaries under the Plan shall
be 70,600,000 (which number includes all shares delivered
under the Plan since its establishment in 1999, determined
in accordance with the terms of the Plan); and for purposes
of applying the limitations of this paragraph (b), each share
of Stock delivered pursuant to Section 3 (relating to Other
Stock Awards) shall be counted as covering two shares
of Stock, and shall reduce the number of shares of Stock
available for delivery under this paragraph (b) by two shares
except, however, in the case of restricted shares or restricted
units delivered pursuant to the settlement of earned annual
incentives or base salary, each share of Stock shall be counted
as covering one share of Stock and shall reduce the number
of shares of Stock available for delivery by one share.
(c) To the extent provided by the Committee, any Award may be
settled in cash rather than Stock. To the extent any shares of
Stock covered by an Award are not delivered to a Participant
or benefi ciary because the Award is forfeited or canceled, or
the shares of Stock are not delivered because the Award is
settled in cash or used to satisfy the applicable tax withholding
obligation, such shares shall not be deemed to have been
delivered for purposes of determining the maximum number
of shares of Stock available for delivery under the Plan.
(d) If the exercise price of any stock option granted under the
Plan is satisfi ed by tendering shares of Stock to the Company
(by either actual delivery or by attestation), only the number of
shares of Stock issued net of the shares of Stock tendered
shall be deemed delivered for purposes of determining the
maximum number of shares of Stock available for delivery
under the Plan.
(e) Subject to paragraph 4.2(f), the following additional maximums
are imposed under the Plan.
(i) The maximum number of shares that may be covered by
Awards granted to any one individual pursuant to Section
2 (relating to Options and SARs) shall be 9,000,000
shares during any fi ve calendar-year period. If an Option
is in tandem with a SAR, such that the exercise of the
Option or SAR with respect to a share of Stock cancels
the tandem SAR or Option right, respectively, with respect
to such share, the tandem Option and SAR rights with
respect to each share of Stock shall be counted as
covering one share of Stock for purposes of applying
the limitations of this paragraph (i).
(ii) For Stock Unit Awards, Restricted Stock Awards,
Restricted Stock Unit Awards and Performance Share
Awards that are intended to be “performance-based
compensation” (as that term is used for purposes of
Code section 162(m)), no more than 3,000,000 shares
of Stock may be subject to such Awards granted to
any one individual during any fi ve-calendar-year period
(regardless of when such shares are deliverable). If, after
shares have been earned, the delivery is deferred, any
additional shares attributable to dividends during the
deferred period shall be disregarded.
(iii) The maximum number of shares of Stock that may be
issued in conjunction with Awards granted pursuant
to Section 3 (relating to Other Stock Awards) shall be
12,000,000 shares except that Stock Units or Restricted
Shares granted with respect to the deferral of annual
cash incentive awards under the Company’s deferral
plan will not count towards this maximum.
(iv) For Performance Unit Awards that are intended to be
“performance-based compensation” (as that term is used
for purposes of Code section 162(m)), no more than
$10,000,000 may be subject to such Awards granted to
any one individual during any one-calendar-year period
(regardless of when such amounts are deliverable). If, after
amounts have been earned with respect to Performance
Unit Awards, the delivery of such amounts is deferred,
any additional amounts attributable to earnings during
the deferral period shall be disregarded.
(f) If any change in corporate capitalization, such as a stock
split, reverse stock split, or stock dividend; or any corporate
transaction such as a reorganization, reclassifi cation, merger
or consolidation or separation, including a spin-off, of the
Company or sale or other disposition by the Company of all
or a portion of its assets, any other change in the Company’s
corporate structure, or any distribution to shareholders (other
than a cash dividend that is not an extraordinary cash dividend)
results in the outstanding shares of Stock, or any securities
exchanged therefor or received in their place, being exchanged
for a different number or class of shares or other securities of
the Company, or for shares of stock or other securities of any
other corporation (or new, different or additional shares or other
securities of the Company or of any other corporation being
received by the holders of outstanding shares of Stock), or a
material change in the market value of the outstanding shares
of Stock as a result of the change, transaction or distribution,
then equitable adjustments shall be made by the Committee,
as it determines are necessary and appropriate, in:
(i) the number and type of Shares (or other property) with
respect to which Awards may be granted;