YUM! CHANGE IN CONTROL SEVERANCE AGREEMENT
409A Addendum

 
THIS AGREEMENT, dated December 31, 2008, (the "409A Agreement") is made by and
between YUM! Brands Inc., a North Carolina corporation (the Company"), and
___________________ (the "Executive").
WHEREAS, the Company and the Executive have previously entered into a change in
control severance agreement (the “Severance Agreement”); and
WHEREAS, the Company and the Executive wish to ensure that the Severance
Agreement complies to the extent necessary with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), and thereby to avoid adverse tax
consequences to the Executive (including avoiding an additional tax of 20% on
compensation payable under the Severance Agreement); and
WHEREAS, ensuring Code Section 409A compliance requires the addition of certain
provisions to the Severance Agreement;
NOW, THEREFORE, in consideration of the pre­mises and the mutual covenants
herein contained, the Company and the Executive hereby agree as follows:
1.           The provisions of this 409A Agreement supplement the provisions of
the Severance Agreement.  At all times, this 409A Agreement and the Severance
Agreement shall be construed together so as to permit full compliance with Code
Section 409A of any compensation subject to Code Section 409A that is provided
by the Severance Agreement.
2.           With respect to salary, compensation and benefits provided by the
Severance Agreement in the event the Executive fails to perform the Executive's
full-time duties with the Company as a result of incapacity due to physical or
mental illness, to the extent these items constitute deferred compensation that
is subject to Section 409A, the payment of such salary, compensation and
benefits shall occur upon Executive’s "disability" or "separation from service",
in each case as defined in Section 409A, whichever occurs earlier (but subject
to Section 16(A)).  In this case, the rate of payment shall be based on the
normal rules for the salary, compensation or benefit in question, with a lump
sum catch up for any amounts that would have been paid previously under such
rules.

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3.           With respect to the Company’s payment of the Execu­tive's full
salary to the Executive through the Date of Termination (as defined in the
Severance Agreement) in the event the Executive's employment shall be terminated
for any reason following a Change in Control (as defined in the Severance
Agreement) and during the term of the Severance Agreement, to the extent any
resulting salary, compensation and benefits constitute deferred compensation
that is subject to Section 409A, the payment of such salary, compensation and
benefits shall occur upon Executive’s "separation from service", as defined in
Section 409A, but subject to Section 16(A).  In this case, the rate of payment
shall be based on the normal rules for the salary, compensation or benefit in
question, with a lump sum catch up for any amounts that would have been paid
previously under such rules.
4.           In the event that Severance Payments (as defined in the Severance
Agreement) shall be reduced pursuant to the terms of the Severance Agreement,
then Severance Payments shall be reduced in the order that the Severance
Payments are described in the Severance Agreement (but disregarding for this
purpose any Severance Payments that would not be considered “parachute payments”
under the provisions and procedures of the Severance Agreement) and to the
extent necessary so that no portion of the Total Payments will be subject to the
Excise Tax (as these capitalized terms are defined in the Severance Agreement).
5.           To the extent the Company pays to the Executive, pursuant to the
Severance Agreement, an estimate of the minimum amount of pay­ments to which the
Executive is entitled and the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess shall be repaid to
the Company promptly thereafter (together with interest at 120% of the rate
provided in section 1274(b)(2)(B) of the Code).  Each payment required to be
made by the Company to the Executive hereunder that relates to the Excise Tax
and each repayment required to be made by the Executive to the Company in
accordance with the preceding sentence shall in no event be paid later than the
end of the calendar year next following the calendar year in which the Executive
(or the Company on the Executive’s behalf) remits the corresponding taxes to the
Internal Revenue Service or other taxing authority.

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6.           To the extent the Company is to pay the Execu­tive for legal fees
and expenses incurred by the Execu­tive (i) in disputing in good faith any issue
under the Severance Agreement relating to the termination of the Executive's
employ­ment, or (ii) in seeking in good faith to obtain or enforce any benefit
or right provided by the Severance Agreement, or (iii) in connec­tion with any
tax audit or proceeding to the extent attributable to the application of section
4999 of the Code to any payment or benefit provided hereunder (the “Legal
Expenses”), such  Legal Expenses must be incurred during the period (A)
beginning on the commencement date of the Severance Agreement and, (B) ending on
the date that is five years after the Date of Termination of the Executive.  The
amount of Legal Expenses that are eligible for reimbursement during an
Executive’s taxable year may not affect the Legal Expenses eligible for
reimbursement in any other taxable year.   Such payments shall be made within
ten (10) business days after delivery of the Executive's written requests for
payment accompanied with such evidence of fees and ex­penses incurred as the
Company reasonably may require; provided, however, that in no event will the
reimbursement of any Legal Expenses be made after the last day of the
Executive’s taxable year following the Executive’s taxable year in which the
Legal Expense in question was incurred.  The right to reimbursement of Legal
Expenses provided hereunder is not subject to liquidation or exchange for
another benefit.
7.           If a pur­ported termination occurs following a Change in Control
and during the term of the Severance Agreement and the Executive provides the
Company with a Dispute Notification (as defined in the Severance
Agreement),  subject to providing all payments in compliance with Code Section
409A and avoiding all duplication of payment, the Company shall act within
fifteen (15) days to restore fully the disputed benefits (so that all benefits
are provided as of such date as would have been provided had there been no delay
in providing such benefits) and to continue to provide such benefits as
contemplated by this Agreement thereafter, but subject to termination and
recapture from the Executive of these disputed benefits in accordance with the
terms of a mutual written agreement of the parties, a binding arbitration award,
or a final judgment, order or decree of a court of competent jurisdiction (which
is not appealable or with respect to which the time for appeal therefrom has
expired and no appeal has been perfected).

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8.           Notwithstanding any other provision of this 409A Agreement or the
Severance Agreement, to the extent the Company determines in good faith that (i)
one or more payments or benefits received or to be received by the Executive
pursuant to the Severance Agreement (including but not limited to the Gross-Up
Payment) would constitute deferred compensation subject to the rules of Code
Section 409A, and (b) that the Executive is a "specified employee" under Code
Section 409A, then only to the extent required to avoid the Executive’s
incurrence of any additional tax or interest under Section 409A, such payment or
benefit will be delayed until the date that is six (6) months after the
Executive’s "separation from service" within the meaning of Section 409A.  Any
amounts that are postponed pursuant to this Section 8 will be paid in a lump sum
payment within 10 days after the end of the six-month period.  If the Executive
dies during the six-month period, prior to the payment of the delayed amount,
the amounts delayed on account of this Section 8 will be paid to the Executive’s
estate.  In addition, to the extent the Company determines in good faith that
one or more payments or benefits received or to be received by an Executive upon
a termination of employment pursuant to the Agreement would constitute deferred
compensation subject to the rules of Code Section 409A then in determining the
time of payment of such deferred compensation a termination of employment shall
be deemed to occur only if such termination of employment constitutes a
"separation from service" as defined in Code Section 409A, as determined by the
Company in accordance with such rules and policies adopted by it from time to
time.  Further, in this case, the Date of Termination shall be the date of such
separation from service.
9.           This 409A Agreement shall be delivered to the Executive in advance
of December 31, 2008. To permit timely and sufficient documentary compliance
with Code Section 409A, the provisions of this 409A Agreement shall
automatically apply to amend the Severance Agreement unless the Executive
expressly rejects the application of these provisions in writing.   However, to
provide an enhanced record of documentary compliance with Code Section 409A, the
Company requests that the Executive sign and return a copy of this Agreement to
the Company at his/her earliest convenience.

 
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YUM! BRANDS, INC.
     
By:
   
Name:
John P. Daly
 
Title:
Corporate Counsel and Assistant Secretary
         
[name]

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