Pizza Hut 2014 Annual Report Download - page 81

Life Insurance Benefits. For a description of the (ii) if a majority of the directors as of the date of the
supplemental life insurance plans that provide coverage to agreement are replaced other than in specific
the NEOs, see the All Other Compensation Table on circumstances; or
page 47. If the NEOs had died on December 31, 2014, the (iii) upon the consummation of a merger of the Company or
survivors of Messrs. Novak, Grismer, Su, Creed and any subsidiary of the Company other than (a) a merger
Bergren would have received Company-paid life insurance where the Company’s directors immediately before the
of $3,360,000; $1,430,000; $2,365,000; $1,500,000; and change in control constitute a majority of the directors
$1,450,000, respectively, under this arrangement. of the resulting organization, or (b) a merger effected to
Executives and all other salaried employees can purchase implement a recapitalization of the Company in which
additional life insurance benefits up to a maximum no person is or becomes the beneficial owner of
combined company paid and additional life insurance of securities of the Company representing 20% or more of
$3.5 million. This additional benefit is not paid or subsidized the combined voting power of the Company’s
by the Company and, therefore, is not shown here. then-outstanding securities.
Change in Control. Change in control severance In addition to the payments described above, upon a
agreements are in effect between YUM and certain key change in control:
executives (including Messrs. Novak, Grismer, Su, Creed
and Bergren). These agreements are general obligations of All stock options and SARs granted prior to 2013 and held
YUM, and provide, generally, that if, within two years by the executive will automatically vest and become
subsequent to a change in control of YUM, the employment exercisable. For all stock options and SARs granted
of the executive is terminated (other than for cause, or for beginning in 2013, outstanding awards will fully and
other limited reasons specified in the change in control immediately vest following a change in control if the
severance agreements) or the executive terminates executive is employed on the date of the change in
employment for Good Reason (defined in the change in control of the Company and is involuntarily terminated
control severance agreements to include a diminution of (other than by the Company for cause) on or within two
duties and responsibilities or benefits), the executive will be years following the change in control. See Company’s
entitled to receive the following: CD&A on page 43 for more detail.
a proportionate annual incentive assuming achievement All RSUs under the Company’s EID Program held by the
of target performance goals under the bonus plan or, if executive will automatically vest.
higher, assuming continued achievement of actual All PSU awards under the Company’s Performance
Company performance until date of termination, Share Plan awarded in the year in which the change in
a severance payment equal to two times the sum of the control occurs will be paid out at target assuming a target
executive’s base salary and the target bonus or, if higher, level performance had been achieved for the entire
the actual bonus for the year preceding the change in performance period, subject to a pro rata reduction to
control of the Company, and reflect the portion of the performance period after the
change in control. All PSUs awarded for performance
outplacement services for up to one year following periods that began before the year in which the change in
termination. control occurs will be paid out assuming performance
In March 2013, the Company eliminated excise tax achieved for the performance period was at the greater of
gross-ups and implemented a best net after-tax method. target level performance or projected level of
See the Company’s CD&A on page 43 for more detail. performance at the time of the change in control, subject
to pro rata reduction to reflect the portion of the
The change in control severance agreements have a performance period after the change in control, except
three-year term and are automatically renewable each that for PSU awards granted beginning in 2013,
January 1 for another three-year term. An executive whose executives must be employed with the Company on the
employment is not terminated within two years of a change date of the change in control and involuntarily terminated
in control will not be entitled to receive any severance upon or following the change in control and during the
payments under the change in control severance performance period. See Company’s CD&A on page 43
agreements. for more detail.
Generally, pursuant to the agreements, a change in control
is deemed to occur:
(i) if any person acquires 20% or more of the Company’s
voting securities (other than securities acquired directly
from the Company or its affiliates);
2015 Proxy Statement YUM! BRANDS, INC. 59
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EXECUTIVE COMPENSATION
Proxy Statement