Pizza Hut 2014 Annual Report Download - page 78

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RSUs attributable to annual incentive deferrals into the Section 409A of the Internal Revenue Code. In general,
YUM! Matching Stock Fund and matching contributions vest Section 409A requires that:
on the second anniversary of the grant (or upon a change of Distribution schedules cannot be accelerated (other than
control of the Company, if earlier) and are payable as for a hardship)
shares of YUM common stock pursuant to the participant’s
deferral election. Unvested RSUs held in a participant’s To delay a previously scheduled distribution,
YUM! Matching Stock Fund account are forfeited if the A participant must make an election at least one year
participant voluntarily terminates employment with the before the distribution otherwise would be made, and
Company within two years of the deferral date. If a
participant terminates employment involuntarily, the portion The new distribution cannot begin earlier than five
of the account attributable to the matching contributions is years after it would have begun without the election
forfeited and the participant will receive an amount equal to to re-defer.
the amount of the original amount deferred. If a participant With respect to amounts deferred prior to 2005, to delay a
dies or becomes disabled during the restricted period, the distribution the new distribution cannot begin until two years
participant fully vests in the RSUs. Dividend equivalents are after it would have begun without the election to re-defer.
accrued during the restricted period but are only paid if the
RSUs vest. RSUs held by a participant who has attained Investments in the YUM! Stock Fund and YUM! Matching
age 65 with five years of service vest immediately. In the Stock Fund are only distributed in shares of Company stock.
case of a participant who has attained age 55 with 10 years
of service, RSUs attributable to pre-2009 bonus deferrals LRP
into the YUM! Matching Stock Fund vest immediately and LRP Account Returns. The LRP provides an annual
RSUs attributable to the matching contribution vest on a pro earnings credit to each participant’s account based on the
rata basis during the period beginning on the date of grant value of participant’s account at the end of each year. Under
and ending on the first anniversary of the grant and are fully the LRP, Mr. Novak receives an annual earnings credit
vested on the first anniversary. equal to 120% of the applicable federal interest rate.
Distributions under EID Program. When participants elect Mr. Grismer and Mr. Bergren receive an annual earnings
to defer amounts into the EID Program, they also select credit equal to 5%. The Company’s contribution (‘‘Employer
when the amounts ultimately will be distributed to them. Credit’’) for 2014 is equal to 9.5% of salary plus target bonus
Distributions may either be made in a specific year — for Mr. Novak and Mr. Grismer and 28% for Mr. Bergren.
whether or not employment has then ended — or at a time Distributions under LRP. Under the LRP, participants
that begins at or after the executive’s retirement, separation age 55 or older are entitled to a lump sum distribution of
or termination of employment. their account balance in the quarter following their
Distributions can be made in a lump sum or up to 20 annual separation of employment. Participants under age 55 with a
installments. Initial deferrals are subject to a minimum two vested LRP benefit combined with any other deferred
year deferral. In general, with respect to amounts deferred compensation benefits covered under Code Section 409A
after 2005 or not fully vested as of January 1, 2005, exceeds $15,000, will not receive a distribution until the
participants may change their distribution schedule, calendar quarter that follows the participants 55th birthday.
provided the new elections satisfy the requirements of
56 YUM! BRANDS, INC. 2015 Proxy Statement
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EXECUTIVE COMPENSATION
Proxy Statement