SEC Form 4 · accession 0001140361-16-086884
Yum China Holdings, Inc. · YUMC
Statement of changes in beneficial ownership, as filed. Original on EDGAR ↗
Reporting owner
Fred Hu
Director
Period of report
Nov 11, 2016
Accepted (ET)
Nov 15, 2016 · 9:00 pm EST
Rule 10b5-1 plan
unknown — predates the checkbox
Issuer CIK
0001673358
Table I — non-derivative securities
| Security | Date | Code | Shares | Price | A/D | Owned after | D/I | Nature of ownership |
|---|---|---|---|---|---|---|---|---|
| Common Stock, par value $0.01 | Nov 11, 2016 | A | 8,710 | $0.00 | A | 8,710 | D | |
| Common Stock, par value $0.01F1,F2 | holding | — | — | — | 17,064,173 | I | See Footnote |
Table II — derivative securities
| Security | Conv. / exercise price | Date | Code | Shares | A/D | Exercisable | Expires | Underlying | Underlying shares | Owned after | D/I |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Common Stock AdjustmentF1,F2 | $0.01 | holding | — | — | — | — | — | Common Stock, par value $0.01 per share | 3,199,532 | 3,199,532 | I |
| Warrant IF5,F2,F3,F4 | $31.339 | holding | — | — | — | — | Nov 1, 2021 | Common Stock, par value $0.01 per share | 7,339,429 | 7,339,429 | I |
| Warrant I AdjustmentF5,F2,F3 | — | holding | — | — | — | — | — | Common Stock, par value $0.01 per share | 139,767 | 139,767 | I |
| Warrant 2F7,F2,F6,F4 | $39.174 | holding | — | — | — | — | Nov 1, 2021 | Common Stock, par value $0.01 per share | 7,339,429 | 7,339,429 | I |
| Warrant 2 AdjustmentF7,F2,F6 | — | holding | — | — | — | — | — | Common Stock, par value $0.01 per share | 139,767 | 139,767 | I |
Explanation of responses
- F1Up to 2,326,932.642 shares of common stock held by Pollos Investment L.P. ("Pollos Investment") are subject to return to Yum China Holdings, Inc. (the "Company") for the par value thereof in a post-closing adjustment as set forth in Section 2.4(b) of the Investment Agreement dated September 1, 2016 among YUM! Brands, Inc., the Company and Pollos Investment, filed as Exhibit 10.11 to the Company's Amended Form 10 filed on September 16, 2016 (the "Investment Agreement") if the Company's Adjusted VWAP Price Per Share (as defined in the Investment Agreement) during the period December 2, 2016 through December 31, 2016 (the "Measurement Period") exceeds $24.027 per share (the "Closing Price"). Pollos Investment may be issued up to 3,199,532.395 additional shares of common stock at par value through post-closing adjustments as set forth in Section 2.4(c) of the Investment Agreement if the Company's Adjusted VWAP Price Per Share during the Measurement Period is less than the Closing Price.
- F2These securities are held directly by Pollos Investment, the limited partnership interests of which are ultimately owned by a private fund ("Fund") for which an affiliate of the Reporting Person is special limited partner ("Special Limited Partner") and has a contingent right to receive a performance fee. The Reporting Person is a shareholder of the Special Limited Partner's parent company (the "Parent Company") and may be deemed to have pecuniary interest through his indirect entitlement to receive a share of any Fund performance fee. The Reporting Person disclaims beneficial ownership of the securities and derivative instruments held directly by Pollos Investment, except to the extent of his pecuniary interest, if any, in such securities or instruments as a result of his interest in the Parent Company, and the inclusion of these in this form shall not otherwise be deemed an admission of beneficial ownership for purposes of Section 16 of the 1934 Act or for any other purpose.
- F3The exercise price per share of common stock pursuant Warrant 1 (as defined in the Investment Agreement) is equal to $12,000,000,000 divided by the number of shares of common stock of the Company outstanding as of November 1, 2016, as adjusted to reflect the adjustments pursuant to Sections 2.4(b) and 2.4(c) of both the Investment Agreement and the Investment Agreement dated September 1, 2016 among YUM! Brands, Inc., the Company and API (Hong Kong) Investment Limited ("API"), filed as Exhibit 10.12 to the Company's Amended Form 10 filed on September 16, 2016 (the "API Investment Agreement"). Accordingly, such exercise price is subject to downward adjustment to the extent that additional shares of common stock are issued under the Section 2.4(c) of each of the Investment Agreement and the API Investment Agreement. As adjusted, the exercise price will be between $31.048 and $31.555 per share.
- F4The warrants are exercisable immediately upon issuance. The warrants will be issued within ten business days of the end of the Measurement Period (no later than January 13, 2017).
- F5The number of shares of common stock issuable under Warrant 1 is subject to a post-closing increase within ten business days of the end of the Measurement Period of up to 139,767.266 shares or a post-closing decrease of up to 100,803.314 shares as set forth in Section 2.4(d) of the Investment Agreement based on the changes to the number of shares of common stock issued by the Company after giving effect to the adjustments in shares of common stock issued to Pollos Investment, as described in Sections 2.4(b) and 2.4(c) of the Investment Agreement, and to API , as described in Sections 2.4(b) and 2.4(c) of the "API Investment Agreement.
- F6The exercise price per share of common stock pursuant to Warrant 2 (as defined in the Investment Agreement) is equal to $15,000,000,000 divided by the number of shares of common stock of the Company outstanding as of November 1, 2016, as adjusted to reflect the adjustments pursuant to Sections 2.4(b) and 2.4(c) of both the Investment Agreement and the API Investment Agreement. Accordingly, such exercise price is subject to downward adjustment to the extent that additional shares of common stock are issued under the Section 2.4(c).
- F7The number of shares of common stock issuable under Warrant 2 is subject to a post-closing increase within ten business days of the end of the Measurement Period of up to 139,767.266 shares or a post-closing decrease of up to 100,803.314 shares as set forth in Section 2.4(d) of the Investment Agreement based on the changes to the number of shares of common stock issued by the Company after giving effect to the adjustments in shares of common stock issued to Pollos Investment, as described in Sections 2.4(b) and 2.4(c) of the Investment Agreement, and to API, as described in Sections 2.4(b) and 2.4(c) of the API Investment Agreement.
Remarks
File three copies of this Form, one of which must be manually signed. If space is insufficient, See Instruction 6 for procedure. Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB number.