Pizza Hut 2015 Annual Report Download - page 98

YUM! BRANDS, INC.-2016Proxy Statement84
Proxy Statement
APPENDIX A
2.4 Exercise Price. The “Exercise Price” of each Option or
SAR granted under this Section 2 shall be established
by the Committee or shall be determined by a method
established by the Committee at the time the Option
or SAR is granted; except that the Exercise Price
shall not be less than the Fair Market Value of a share
of Stock on the date of grant. Notwithstanding the
foregoing, Options and SARs granted under the Plan in
replacement for awards under plans and arrangements
of YUM! or a Subsidiary that are assumed in business
combinations may provide for Exercise Prices that are
less than the Fair Market Value of the Stock at the time
of the replacement grants, if the Committee determines
that such Exercise Price is appropriate to preserve the
economic benefit of the award.
2.5 Exercise. An Option or SAR shall be exercisable in
accordance with such terms and conditions and during
such periods as may be established by the Committee.
In no event shall an Option or SAR be exercisable later
than the ten-year anniversary of the date on which
the Option or SAR is granted (or such shorter period
required by law or the rules of any stock exchange on
which the Stock is listed).
2.6 Payment of Option Exercise Price. The payment
of the Exercise Price of an Option granted under this
Section 2 shall be subject to the following:
(a) Subject to the following provisions of this subsection
2.6, the full Exercise Price for shares of Stock purchased
upon the exercise of any Option shall be paid at the
time of such exercise (except that, in the case of an
exercise arrangement approved by the Committee and
described in paragraph 2.6(c), payment may be made
as soon as practicable after the exercise).
(b) The Exercise Price shall be payable in cash or by
tendering (including by way of a net exercise), by either
actual delivery of shares or by attestation, shares of
Stock acceptable to the Committee, and valued at
Fair Market Value as of the day of exercise, or in any
combination thereof, as determined by the Committee.
(c) The Committee may permit a Participant to elect to
pay the Exercise Price upon the exercise of an Option
by irrevocably authorizing a third party to sell shares of
Stock (or a sufficient portion of the shares) acquired upon
exercise of the Option and remit to YUM! a sufficient
portion of the sale proceeds to pay the entire Exercise
Price and any tax withholding resulting from such
exercise.
2.7 Tandem Grants of Options and SARS. An Option
may but need not be in tandem with an SAR, and an
SAR may but need not be in tandem with an Option
(in either case, regardless of whether the original
award was granted under this Plan or another plan or
arrangement). If an Option is in tandem with an SAR,
the Exercise Price of both the Option and SAR shall
be the same, and the exercise of the corresponding
tandem SAR or Option shall cancel the corresponding
tandem SAR or Option with respect to such share. If
an SAR is in tandem with an Option but is granted after
the grant of the Option, or if an Option is in tandem
with an SAR but is granted after the grant of the SAR,
the later granted tandem Award shall have the same
Exercise Price as the earlier granted Award, but in no
event less than the Fair Market Value of a share of
Stock at the time of such grant.
2.8 No Repricing. Except for either adjustments pursuant
to subsection 4.2 (relating to the adjustment of shares),
or reductions of the Exercise Price approved by YUM!’s
shareholders, the Exercise Price for any outstanding
Option or SAR may not be decreased after the date of
grant nor may an outstanding Option or SAR granted
under the Plan be surrendered to YUM! as consideration
for the grant of a replacement Option or SAR with a
lower Exercise Price or a Full Value Award. Except as
approved by YUM!’s shareholders, in no event shall any
Option or SAR granted under the Plan be surrendered
to YUM! in consideration for a cash payment if, at the
time of such surrender, the Exercise Price of the Option
or SAR is greater than the then current Fair Market
Value of a share of Stock.
Section 3 Full Value Awards
3.1 Definition. A “Full Value Award” is a grant of one
or more shares of Stock or a right to receive one or
more shares of Stock in the future (including restricted
stock, restricted stock units, performance shares, and
performance units) which is contingent on continuing
service, the achievement of performance objectives
during a specified period performance, or other
restrictions as determined by the Committee. The
grant of Full Value Awards may also be subject to
such other conditions, restrictions and contingencies,
as determined by the Committee, including provisions
relating to dividend or dividend equivalent rights and
deferred payment or settlement. Notwithstanding the
foregoing, no dividends or dividend equivalent rights
will be paid or settled on Full Value Awards that have
not been earned or vested.