Pizza Hut 2014 Annual Report Download - page 80

15MAR201511093851
Potential Payments Upon Termination or Change in
Control
The information below describes and quantifies certain executive and appreciation on these deferred amounts (see
compensation that would become payable under existing page 55 for discussion of investment alternatives available
plans and arrangements if the NEO’s employment had under the EID). In Mr. Novak’s case, over 80% of his
terminated on December 31, 2014, given the NEO’s balance is invested in Company RSUs, which he will receive
compensation and service levels as of such date and, if in the form of Company stock following his retirement. The
applicable, based on the Company’s closing stock price on other NEOs’ EID balances are invested primarily in RSUs.
that date. These benefits are in addition to benefits available Thus, Mr. Novak and the other NEOs’ EID account balances
generally to salaried employees, such as distributions under represent deferred bonuses (earned in prior years) and
the Company’s 401(k) Plan, retiree medical benefits, appreciation of their accounts based primarily on the
disability benefits and accrued vacation pay. performance of the Company’s stock.
Due to the number of factors that affect the nature and Leadership Retirement Plan. Under the LRP, participants
amount of any benefits provided upon the events discussed age 55 are entitled to a lump sum distribution of their
below, any actual amounts paid or distributed may be account balance following their termination of employment.
different. Factors that could affect these amounts include Participants under age 55 who terminate with more than five
the timing during the year of any such event, the Company’s years of service will receive their account balance at their
stock price and the executive’s age. 55th birthday. In case of termination of employment as of
December 31, 2014, Mr. Novak would have received
Stock Options and SAR Awards. If one or more NEOs $30,344,910. Mr. Grismer would receive $687,778 when he
terminated employment for any reason other than attains age 55 and Mr. Bergren would have received
retirement, death, disability or following a change in control $3,826,087.
as of December 31, 2014, they could exercise the stock
options and SARs that were exercisable on that date as Third Country National Plan. Under the TCN, participants
shown at the Outstanding Equity Awards at Year-End table age 55 or older are entitled to a lump sum distribution of
on page 50, otherwise all options and SARs, pursuant to their account balance in the quarter following their
their terms, would have been forfeited and cancelled after termination of employment. Participants under age 55 who
that date. If the NEO had retired, died or become disabled terminate will receive interest annually and their account
as of December 31, 2014, exercisable stock options and balance will be distributed in the quarter following their
SARs would remain exercisable through the term of the 55th birthday. In case of termination of employment as of
award. Except in the case of a change in control, no stock December 31, 2014, Mr. Creed would have received
options or SARs become exercisable on an accelerated $1,235,066.
basis. Benefits a NEO may receive on a change of control Performance Share Unit Awards. If one or more NEOs
are discussed below. terminated employment for any reason other than
Executive Income Deferral Program. As described in retirement or death or following a change in control and prior
more detail beginning at page 55, the NEOs participate in to achievement of the performance criteria and vesting
the EID Program, which permits the deferral of salary and period, then the award would be cancelled and forfeited. If
annual incentive compensation. The last column of the the NEO had retired, or died as of December 31, 2014, the
Nonqualified Deferred Compensation Table on page 57 PSU award would be paid out based on actual performance
includes each NEO’s aggregate balance at December 31, for the performance period, subject to a pro rata reduction
2014. The NEOs are entitled to receive their vested amount reflecting the portion of the performance period not worked
under the EID Program in case of voluntary termination of by the NEO. If any of these terminations had occurred on
employment. In the case of involuntary termination of December 31, 2014, Messrs. Novak, Grismer, Su, Creed
employment, they are entitled to receive their vested benefit and Bergren would have been entitled to $2,212,622,
and the amount of the unvested benefit that corresponds to $234,374, $493,299, $313,610 and $260,138, respectively,
their deferral. In the case of death, disability or retirement assuming target performance.
after age 65, they or their beneficiaries are entitled to their Pension Benefits. The Pension Benefits Table on page 53
entire account balance as shown in the last column of the describes the general terms of each pension plan in which
Nonqualified Deferred Compensation table on page 57. the NEOs participate, the years of credited service and the
In the case of an involuntary termination of employment as present value of the annuity payable to each NEO assuming
of December 31, 2014, each NEO would receive the termination of employment as of December 31, 2014. The
following: Mr. Novak $202,267,298; Mr. Grismer table on page 54 provides the present value of the lump sum
$2,201,021; Mr. Su $4,350,845; Mr. Creed $8,036,363; and benefit payable to each NEO when they attain eligibility for
Mr. Bergren $5,996,863. As discussed at page 57, these Early Retirement (i.e., age 55 with 10 years of service)
amounts reflect bonuses previously deferred by the under the plans.
58 YUM! BRANDS, INC. 2015 Proxy Statement
EXECUTIVE COMPENSATION
Proxy Statement