Pizza Hut 2014 Annual Report Download - page 76

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Leaders’ Bonus Program. In general, base pay includes vested until he has been credited with at least five years of
salary, vacation pay, sick pay and short term disability vesting service. Upon attaining five years of vesting service,
payments. Extraordinary bonuses and lump sum payments a participant becomes 100% vested. All NEOs eligible for
made in connection with a participant’s termination of the Retirement Plan or YIRP are 100% vested.
employment are not included.
Normal Retirement Eligibility
Vesting A participant is eligible for normal retirement following the
A participant receives a year of vesting service for each year later of age 65 or 5 years of vesting service.
of employment with the Company. A participant is 0%
Early Retirement Eligibility and Reductions
A participant is eligible for early retirement upon reaching age 55 with 10 years of vesting service. A participant who has met the
requirements for early retirement and who elects to begin receiving payments from the plan prior to age 62 will receive a reduction
of 1⁄12 of 4% for each month benefits begin before age 62. Benefits are unreduced at age 62.
The table below shows when each of the NEOs became eligible for early retirement and the estimated lump sum value of the
benefit each participant would receive from YUM plans (both qualified and non-qualified) if he retired from the Company on
December 31, 2014 and received a lump sum payment.
David C. Novak November 1, 2007 1,592,262 — 1,592,262
Jing-Shyh S. Su May 1, 2007 — 20,602,718 20,602,718
Greg Creed August 1, 2012 183,828 — 183,828
Scott O. Bergren April 1, 2006 349,730 167,166 516,896
(1) The Retirement Plan
(2) The YIRP for Mr. Su and the PEP for Mr. Bergren
The estimated lump sum values in the table above are the same terms and conditions as the Retirement Plan
calculated assuming no increase in the participant’s Final (except as noted below) without regard to federal tax
Average Earnings. The lump sums are estimated using the limitations on amounts of includible compensation and
mortality table and interest rate assumptions in the maximum benefits. Benefits paid are reduced by the value
Retirement Plan for participants who would actually of benefits payable under the Retirement Plan.
commence benefits on January 1, 2015. Actual lump sums Participants who earned at least $75,000 during calendar
may be higher or lower depending on the mortality table and year 1989 are eligible to receive benefits calculated under
interest rate in effect at the time of distribution and the the Retirement Plan’s pre-1989 formula, if this calculation
participant’s Final Average Earnings at his date of results in a larger benefit from the PEP. This formula is
retirement. similar to the formula described above under the Retirement
Plan except that part C of the formula is calculated as
Lump Sum Availability follows:
Lump sum payments are available to participants who meet C. 12⁄3% of an estimated primary Social Security
the requirements for early or normal retirement. Participants amount multiplied by Projected Service up to
who leave the Company prior to meeting the requirements 30 years
for Early or Normal Retirement must take their benefits in
the form of a monthly annuity and no lump sum is available. Retirement distributions are always paid in the form of a
When a lump sum is paid from the plan, it is calculated lump sum. In the case of a participant whose benefits are
based on actuarial assumptions for lump sums required by payable based on the pre-1989 formula, the lump sum value
Internal Revenue Code Section 417(e)(3). is calculated as the actuarial equivalent to the participant’s
50% Joint and Survivor Annuity with no reduction for
(2) YUM! Brands, Inc. Pension Equalization Plan survivor coverage. In all other cases, lump sums are
calculated as the actuarial equivalent of the participant’s life
The PEP is an unfunded, non-qualified, defined benefit plan only annuity. Participants who terminate employment prior
that complements the Retirement Plan by providing benefits to meeting eligibility for early or normal retirement must take
that federal tax law bars providing under the Retirement their benefits from this plan in the form of a monthly annuity.
Plan. Benefits are generally determined and payable under
54 YUM! BRANDS, INC. 2015 Proxy Statement
Estimated Lump Estimated Lump
Earliest Retirement Sum from a Sum from a Non- Total Estimated
Name Date Qualified Plan(1) Qualified Plan(2) Lump Sum
EXECUTIVE COMPENSATION
Proxy Statement