Pizza Hut 2015 Annual Report Download - page 97

YUM! BRANDS, INC.-2016Proxy Statement 83
Proxy Statement
Appendix A YUM! Brands, Inc.
LONG TERM INCENTIVE PLAN
(As Amended and Restated Effective as
of May 20, 2016)
Section 1 General
1.1 Purpose. YUM! Brands, Inc. Long Term Incentive Plan
(the “Plan”) has been established by YUM! Brands,
Inc. (“YUM!”) to (i) attract and retain persons eligible to
participate in the Plan; (ii) motivate Participants, by means
of appropriate incentives, to achieve long-range goals;
(iii) provide incentive compensation opportunities that
are competitive with those of other similar companies;
and (iv) align the interests of Participants with those of
YUM!’s shareholders.
1.2 Participation. Subject to the terms and conditions of
the Plan, the Committee shall determine and designate,
from time to time, from among the Eligible Individuals,
those persons who will be granted one or more Awards
under the Plan, and thereby become “Participants” in
the Plan.
1.3 Operation, Administration, and Definitions. The
operation and administration of the Plan shall be vested
in the Committee, as described in Section 7 Capitalized
terms in the Plan shall be defined as set forth in the
Plan (including the definition provisions of Section 9
hereof).
Section 2 Options and SARS
2.1 Definitions.
(a) The grant of an “Option” entitles the Participant to
purchase shares of Stock at an Exercise Price (as defined
in subsection 2.4) and during a specified time established
by the Committee. Any Option granted under this Section
2 may be either a non-qualified option (an “NQO”) or an
incentive stock option (an “ISO”), as determined in the
discretion of the Committee. An “NQO” is an Option
that is not intended to be an “incentive stock option” as
that term is described in Code Section 422(b). An “ISO”
is an Option that is intended to satisfy the requirements
applicable to an “incentive stock option” described in
Code Section 422(b). An Option will be deemed to be
a Non-Qualified Stock Option unless it is specifically
designated by the Committee as an Incentive Stock
Option and/or to the extent that it does not meet the
requirements of an ISO.
(b) A stock appreciation right (an “SAR”) entitles the
Participant to receive, in cash or Stock, value equal to
(or otherwise based on) the excess of: (i) the Fair Market
Value of a specified number of shares of Stock at the
time of exercise; over (ii) an Exercise Price established
by the Committee.
2.2 Eligibility. The Committee shall designate the Participants
to whom Options or SARs are to be granted under this
Section 2 and shall determine the number of shares of
Stock subject to each such Option or SAR and the other
terms and conditions thereof, not inconsistent with the
Plan. Without limiting the generality of the foregoing,
the Committee may not grant dividends or dividend
equivalents (current or deferred) with respect to any
Option or SAR granted under the Plan. ISOs may only
be granted to employees of YUM! or a Subsidiary.
2.3 Limits on ISOs. If the Committee grants ISOs, then to
the extent that the aggregate fair market value of shares
of Stock with respect to which ISOs are exercisable
for the first time by any individual during any calendar
year (under all plans of YUM! and its Subsidiaries )
exceeds $100,000, such Options shall be treated as
NQOs to the extent required by Code Section 422.
Any Option that is intended to constitute an ISO shall
satisfy any other requirements of Code Section 422
and, to the extent such Option does not satisfy such
requirements, the Option shall be treated as a NQO.