Yum! 2010 Annual Report

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Time: 9:00 a.m. on Thursday, May 19, 2011 Place: YUM! Conference Center 1900 Colonel Sanders Lane Louisville, Kentucky 40213 YUM! Brands, Inc. 1441 Gardiner Lane Louisville, Kentucky 40213 Notice of Annual Meeting of Shareholders Items of (1) To elect twelve (12) directors to serve until the 2012 Annual Meeting of Shareholders Business: and until their respective successors are duly elected and qualified. (2) To ratify the selection of KPMG LLP as our independent auditors for the fiscal year ending December 31, 2011. (3) To consider and hold an Advisory Vote on Executive Compensation. (4) To consider and hold an Advisory Vote on the Frequency of the Advisory Vote on Executive Compensation. (5) To approve an Amendment to the Company’s Restated Articles of Incorporation to Permit Shareholders to Call Special Meetings. (6) To transact such other business as may properly come before the meeting. Who Can Vote: You can vote if you were a shareholder of record as of the close of business on March 21, 2011. Annual Report: A copy of our 2010 Annual Report on Form 10-K is included with this proxy statement. Web site: You may also read the Company’s Annual Report and this Notice and proxy statement on our Web site at www.yum.com/annualreport and www.yum.com/investors/ investor_materials.asp. Date of Mailing: This Notice, the proxy statement and the form of proxy are first being mailed to shareholders on or about April 8, 2011. By Order of the Board of Directors Christian L. Campbell Secretary YOUR VOTE IS IMPORTANT 18MAR200923075097 Under a new rule effective last year, brokers can no longer vote on your behalf for the election of directors without your instructions. Whether or not you plan to attend the meeting, please provide your proxy by following the instructions on your Notice or proxy card. On April 8, 2011, we mailed to our shareholders a Notice containing instructions on how to access this proxy statement and our Annual Report and vote online. If you received a Notice by mail, you will not receive a printed copy of the proxy materials in the mail, unless you request a copy. Instead, you should follow the instructions included in the Notice on how to access and review all of the important information contained in the proxy statement and Annual Report. The Notice also instructs you on how you may submit your vote by proxy over the Internet. If you received the proxy statement and Annual Report in the mail, please submit your proxy by marking, dating and signing the proxy card included and returning it promptly in the envelope enclosed. If you are able to attend the meeting and wish to vote your shares personally, you may do so at any time before the proxy is exercised. Proxy Statement 9MAR201101
Proxy Statement 21MAR201012032309 TABLE OF CONTENTS GENERAL INFORMATION ABOUT THE MEETING .............................. 1 GOVERNANCE OF THE COMPANY ........................................... 6 MATTERS REQUIRING SHAREHOLDER ACTION ............................... 15 Item 1: Election of Directors and Director Biographies .............................. 15 Item 2: Ratification of Independent Auditors ...................................... 21 Item 3: Advisory Vote on Executive Compensation ................................. 23 Item 4: Advisory Vote on the Frequency of the Advisory Vote on Executive Compensation .... 24 Item 5: Proposal to Approve an Amendment to the Company’s Articles of Incorporation to Permit Shareholders to Call Special Meetings .................................... 25 STOCK OWNERSHIP INFORMATION .......................................... 27 EXECUTIVE COMPENSATION ............................................... 30 Compensation Discussion and Analysis .......................................... 30 Management Planning and Development Committee Report .......................... 51 Summary Compensation Table ................................................ 52 All Other Compensation Table ................................................ 54 Grants of Plan-Based Awards ................................................. 55 Outstanding Equity Awards at Fiscal Year-End .................................... 57 Option Exercises and Stock Vested ............................................. 59 Pension Benefits .......................................................... 59 Nonqualified Deferred Compensation ........................................... 63 Potential Payments Upon Termination or Change in Control .......................... 66 DIRECTOR COMPENSATION ................................................ 69 EQUITY COMPENSATION PLAN INFORMATION ................................ 71 AUDIT COMMITTEE REPORT ............................................... 73 ADDITIONAL INFORMATION ................................................ 75 Appendix A ............................................................... 77 i
Page 1 and 2: On The Ground Floor of Global Growt
Page 3 and 4: Dear Partners, I’m especially ple
Page 5 and 6: Building dynamic, vibrant brands ev
Page 7 and 8: Our outstanding and experienced loc
Page 9 and 10: Yum! Restaurants International, whi
Page 11 and 12: In the US, we grew same store sales
Page 13: I’d like to thank our franchise p
Page 20 and 21: YUM! BRANDS, INC. 1441 Gardiner Lan
Page 22 and 23: prior to the meeting. Directions su
Page 24 and 25: of the outstanding shares of YUM co
Page 26 and 27: For a shareholder to submit a candi
Page 28 and 29: What access do the Board and Board
Page 30 and 31: Governance Committee copies of all
Page 32 and 33: Name of Committee Number of Meeting
Page 34 and 35: Who are this year’s nominees? MAT
Page 36 and 37: Bonnie G. Hill Bonnie G. Hill is Pr
Page 38 and 39: David C. Novak David C. Novak becam
Page 40 and 41: What am I voting on? ITEM 2: RATIFI
Page 42 and 43: What am I voting on? ITEM 3: ADVISO
Page 44 and 45: ITEM 5: PROPOSAL TO APPROVE AN AMEN
Page 46 and 47: Who are our largest shareholders? S
Page 48 and 49: (7) This amount includes 6,000 shar
Page 50 and 51: eward and retain the talented leade
Page 52 and 53: nondurable consumer products compan
Page 54 and 55: Our Named Executive Officers (NEOs)
Page 56 and 57: Meridian going forward as its indep
Page 58 and 59: 2010 Executive Compensation Decisio
Page 60 and 61: 2010 Annual Incentive Compensation
Page 62 and 63: Long-term Incentive Compensation Th
Page 64 and 65: he should receive a long-term incen
Page 66 and 67: In the case of Mr. Su, he receives
Page 68 and 69:
providing employees with the same o
Page 70 and 71:
MANAGEMENT PLANNING AND DEVELOPMENT
Page 72 and 73:
(3) The amounts shown in this colum
Page 74 and 75:
GRANTS OF PLAN-BASED AWARDS The fol
Page 76 and 77:
OUTSTANDING EQUITY AWARDS AT FISCAL
Page 78 and 79:
OPTION EXERCISES AND STOCK VESTED T
Page 80 and 81:
Early Retirement Eligibility and Re
Page 82 and 83:
NONQUALIFIED DEFERRED COMPENSATION
Page 84 and 85:
(3) All amounts shown were distribu
Page 86 and 87:
actual performance for the performa
Page 88 and 89:
DIRECTOR COMPENSATION As described
Page 90 and 91:
EQUITY COMPENSATION PLAN INFORMATIO
Page 92 and 93:
AUDIT COMMITTEE REPORT Who serves o
Page 94 and 95:
ADDITIONAL INFORMATION Who pays the
Page 96 and 97:
APPENDIX A PROPOSED AMENDMENT TO AR
Page 98 and 99:
UNITED STATES SECURITIES AND EXCHAN
Page 100 and 101:
Item 1. Business. PART I YUM! Brand
Page 102 and 103:
• Traditional KFC restaurants in
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Supply and Distribution The Company
Page 106 and 107:
Research and Development (“R&D”
Page 108 and 109:
Our China operations subject us to
Page 110 and 111:
If our franchisees incur too much d
Page 112 and 113:
We are also subject to increasing e
Page 114 and 115:
Franchising A substantial number of
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Roger Eaton, 50, is Chief Executive
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Issuer Purchases of Equity Securiti
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Item 6. Selected Financial Data. Se
Page 122 and 123:
Item 7. Management’s Discussion a
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Drive Industry-Leading, Long-Term S
Page 126 and 127:
Results of Operations Amount % B/(W
Page 128 and 129:
U.S. Business Transformation Measur
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Under the equity method of accounti
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The following table summarizes the
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Restaurant Unit Activity Unconsolid
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Multibrand restaurants are included
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YRI 2010 vs. 2009 Income / (Expense
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Franchise and license fees and inco
Page 142 and 143:
Worldwide Other (Income) Expense 20
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Unallocated impairment expense in 2
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Other. This item primarily includes
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During the year ended December 25,
Page 150 and 151:
We sponsor noncontributory defined
Page 152 and 153:
Impairment of Goodwill We evaluate
Page 154 and 155:
Self-Insured Property and Casualty
Page 156 and 157:
Income Taxes At December 25, 2010,
Page 158 and 159:
Item 8. Financial Statements and Su
Page 160 and 161:
Consolidated Statements of Income Y
Page 162 and 163:
Consolidated Balance Sheets YUM! Br
Page 164 and 165:
Notes to Consolidated Financial Sta
Page 166 and 167:
We participate in various advertisi
Page 168 and 169:
For purposes of impairment testing
Page 170 and 171:
Fair Value Measurements. Fair value
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If we record goodwill upon acquisit
Page 174 and 175:
Note 4 - Items Affecting Comparabil
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Under the equity method of accounti
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(a) Refranchising (gain) loss is no
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The following table summarizes the
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Note 9 - Goodwill and Intangible As
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Note 10 - Short-term Borrowings and
Page 186 and 187:
The annual maturities of short-term
Page 188 and 189:
Note 12 - Derivative Instruments Th
Page 190 and 191:
The following tables present the fa
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Amounts recognized in the Consolida
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The estimated net loss for the U.S.
Page 196 and 197:
Benefit Payments The benefits expec
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Potential awards to employees and n
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Award Activity Stock Options and SA
Page 202 and 203:
Note 16 - Shareholders’ Equity Un
Page 204 and 205:
In 2008, the benefit was positively
Page 206 and 207:
At December 25, 2010, the Company h
Page 208 and 209:
Note 18 - Reportable Operating Segm
Page 210 and 211:
(e) 2010, 2009 and 2008 include app
Page 212 and 213:
Due to the inherent volatility of a
Page 214 and 215:
On August 4, 2006, a putative class
Page 216 and 217:
On October 14, 2008, a putative cla
Page 218 and 219:
On March 14, 2007, a lawsuit styled
Page 220 and 221:
Note 21 - Subsequent Event Subseque
Page 222 and 223:
Item 9. Changes In and Disagreement
Page 224 and 225:
PART IV Item 15. Exhibits and Finan
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s/ Robert Holland, Jr. Robert Holla
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(viii) 3.875% Senior Notes due Nove
Page 230 and 231:
10.20† Severance Agreement (in th
Page 232 and 233:
Shareholder Information LONG TERM I
Page 234 and 235:
Yum! brands, Inc. 2010 annual custo
Page 236:
Alone we’re delicious. Together w
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Yum! 2010 Annual Report

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