Pizza Hut 2015 Annual Report Download - page 40

YUM! BRANDS, INC.-2016Proxy Statement26
Proxy Statement
MATTERS REQUIRING SHAREHOLDER ACTION
shareholder concerns in their continuing evaluation of the
Company’s compensation program. Unless the Board of
Directors modifies its policy on the frequency of this advisory
vote, the next advisory vote on executive compensation
will be held at the 2017 Annual Meeting of Shareholders.
What is the recommendation of the Board of Directors?
The Board of Directors recommends that you vote FOR approval of this proposal.
ITEM 4 Proposal to Approve The Company’s
Long Term Incentive Plan As Amended
(Item 4 on the Proxy Card)
What am I voting on?
We are requesting that shareholders approve the Long
Term Incentive Plan as amended (the “Plan”). We established
the Plan to attract and retain persons who are eligible to
participate in the Plan, to motivate the Plan participants,
by means of appropriate incentives, to achieve long-range
goals, to provide incentive compensation opportunities that
are competitive with those of other similar companies, and
to align the interests of the Plan participants with our
shareholders.
Key Changes to the Plan
The Board approved an amendment and restatement of
the Plan on March 4, 2016. The following are the most
significant changes to the Plan included in the amendment
and restatement:
•Net Share increase of 13 million.
–Share increase. We will increase the number of shares
available for issuance under the Plan by 22 million shares;
– Shares cancelled. Upon shareholder approval of the
Plan, we will cancel approximately 9 million shares
representing the remaining shares available for issuance
under the YUM! Brands, Inc. Restaurant General Manager
Stock Plan (the “YumBucks Plan”), the YUM! Brands,
Inc. SharePower Plan (the “SharePower Plan”), and the
YUM! Brands 1997 Long Term Incentive Plan (the “1997
Plan”), as described in greater detail below;
– Net Share increase. This represents a net increase of
shares available for issuance of approximately 13 million
shares.
– We have modified the provisions relating to treatment of
awards in connection with a change in control because
our awards no longer provide for “single trigger” vesting;
• We clarified the requirements with respect to awards that
are intended to be qualified as performance-based
compensation (within the meaning of Section 162(m) of
the Internal Revenue Code of 1986, as amended
(the “Code”) and the regulations thereunder, (“Performance-
Based Compensation”);
•
We have expanded the restrictions on repricing of stock
options and stock appreciation rights (“SARs”);
•
We updated the maximum shares or value that can be
subject to awards made under the Plan, including adding
a limit on awards to our directors who are not employees
of us or our subsidiaries (“Outside Directors”);
•
We have added a limitation on the number of shares
under the Plan that may be awarded in the form of incentive
stock options (“ISOs”);
•
We have added more broad provisions relating to
clawbacks and compensation recovery policies;
•
We have modified the Plan to provide that dividend rights
and dividend equivalent rights may not be granted with
respect to stock options or SARs and any such features
applicable to other awards under the Plan must be subject
to the same vesting and payment restrictions as apply to
the underlying award; and
•We made other technical and conforming changes.