Pizza Hut 2014 Annual Report Download - page 71

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Executives who have attained age 55 with 10 years of service who terminate employment may exercise SARs/stock options that were vested
on their date of termination through the expiration dates of the SARs/stock options (generally, the tenth anniversary following the SARs/stock
options grant dates). Vested SARs/stock options of grantees who die may also be exercised by the grantee’s beneficiary through the
expiration dates of the vested SARs/stock options and the grantee’s unvested SARs/stock options expire on the grantee’s date of death. If a
grantee’s employment is terminated due to gross misconduct, the entire award is forfeited. For other employment terminations, all vested or
previously exercisable SARs/stock options as of the last day of employment must be exercised within 90 days following termination of
employment.
(4) The exercise price of the SARs/stock options granted in 2014 equals the closing price of YUM common stock on the grant date, February 5,
2014.
(5) Amounts in this column reflect the full grant date fair value of the PSU awards shown in column (g) and the SARs/stock options shown in
column (i). These amounts reflect the amounts to be recognized by the Company as an accounting expense and do not correspond to the
actual value that will be recognized by the NEOs. The grant date fair value is the amount that the Company is expensing in its financial
statements over the award’s vesting schedule. Beginning in 2013, the Company granted PSU awards with market-based conditions
requiring valuation using a Monte Carlo simulation. For SARs/stock options, fair value of $17.45 was calculated using the Black-Scholes
value on the February 5, 2014 grant date. For additional information regarding valuation assumptions of SARs/stock options, see the
discussion of stock awards and option awards contained in Part II, Item 8, ‘‘Financial Statements and Supplementary Data’’ of the 2014
Annual Report in Notes to Consolidated Financial Statements at Note 14, ‘‘Share-based and Deferred Compensation Plans.’’ There can be
no assurance that the SARs/stock options will ever be exercised or PSU awards paid out (in which case no value will be realized by the
executive) or that the value upon exercise or payout will equal the grant date fair value.
2015 Proxy Statement YUM! BRANDS, INC. 49
EXECUTIVE COMPENSATION
Proxy Statement