Pizza Hut 2013 Annual Report Download - page 76

YUM! BRANDS, INC.-2014Proxy Statement54
Proxy Statement
EXECUTIVE COMPENSATION
Distributions under EID Program. When participants elect
to defer amounts into the EID Program, they also select
when the amounts ultimately will be distributed to them.
Distributions may either be made in a specific year—whether
or not employment has then ended—or at a time that
begins at or after the executive’s retirement, separation or
termination of employment.
Distributions can be made in a lump sum or up to 20 annual
installments. Initial deferrals are subject to a minimum two year
deferral. In general, with respect to amounts deferred after
2005 or not fully vested as of January 1, 2005, participants
may change their distribution schedule, provided the new
elections satisfy the requirements of Section 409A of the
Internal Revenue Code. In general, Section 409A requires that:
• Distribution schedules cannot be accelerated (other than
for a hardship)
•To delay a previously scheduled distribution,
– A participant must make an election at least one year
before the distribution otherwise would be made, and
– The new distribution cannot begin earlier than five years
after it would have begun without the election to re-defer.
With respect to amounts deferred prior to 2005, to delay a
distribution the new distribution cannot begin until two years
after it would have begun without the election to re-defer.
Investments in the YUM! Stock Fund and YUM! Matching
Stock Fund are only distributed in shares of Company stock.
LRP
LRP Account Returns. The LRP provides an annual earnings
credit to each participant’s account based on the value of
participant’s account at the end of each year. Under the
LRP, Mr. Novak receives an annual earnings credit equal
to 120% of the applicable federal interest rate. Mr. Grismer
and Mr. Pant each receive an annual earnings credit equal
to 5%. The Company’s contribution (“Employer Credit”)
for 2013 is equal to 9.5% of salary plus target bonus for
Mr.Novak and Mr. Grismer and 20% for Mr. Pant.
Distributions under LRP. Under the LRP, participants age 55
or older with a balance of $15,000 or more, are entitled to a
lump sum distribution of their account balance in the quarter
following their separation of employment. Participants under
age 55 who separate from the Company will receive interest
annually and their account balance will be distributed in the
quarter following their 55
th
birthday. The benefit is monitored
each quarter to determine if any distribution provisions apply.
TCN
TCN Account Returns. The TCN provides an annual earnings
credit to each to each participant’s account based on the
value of participant’s account at the end of each year. Under
the TCN, Mr. Creed receives an annual earnings credit equal
to 5%. For Mr. Creed, the Employer Credit for 2013 is equal
to 15% of his salary plus target bonus.
Distributions under TCN. Under the TCN, participants age
55 or older with a balance of $15,000 or more, are entitled
to a lump sum distribution of their account balance in the
quarter following their separation of employment. Participants
under age 55 who separate employment with the Company
will receive interest annually and their account balance will
be distributed in the quarter following their 55
th
birthday.
The benefit is monitored each quarter to determine if any
distribution provisions apply.