Kentucky Fried Chicken 2015 Annual Report Download

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01
YUM! BRANDS 2015 ANNUAL REPORT

Table of contents

  • Page 1
    YUM! BRANDS 2015 ANNUAL REPORT 01

  • Page 2
    ... and creating long-term shareholder value. 02 DEAR STAKEHOLDERS 04 CHINA DIVISION 06 KFC DIVISION 07 PIZZA HUT DIVISION 08 TACO BELL DIVISION 09 HUGE HEART 10 CONCLUSION $6.2 BILLION OF INCREMENTAL CAPITAL RETURN PRIOR TO CHINA BUSINESS SPIN-OFF COMPLETION Please see our Safe Harbor Statement in...

  • Page 3
    ... three of our brand divisions, with Taco Bell at 5%, KFC at 3% and Pizza Hut at 1%. China's same-store sales declined 4% in 2015 but we have plans to return both KFC China and Pizza Hut Casual Dining to positive growth in 2016. We opened 2,365 new restaurants globally in 2015. This year we expect to...

  • Page 4
    ... to development balances our continued, strong belief in China's long-term growth potential and strong cash paybacks on new restaurants with current market realities. In 2016 we plan to open 600 more restaurants in China. This reï¬,ects the opportunities we see across our brands to enter new trade...

  • Page 5
    ... to improve results. We know there is substantial runway for PIZZA HUT CASUAL new units and same-store DINING'S LEAD IN sales growth for China's RESTAURANT COUNT OVER NEAREST leading Western Casual WESTERN CASUAL DINING COMPETITOR Dining brand. 259 NET-NEW PIZZA HUT CASUAL DINING UNITS IN 2015 05

  • Page 6
    ... to see KFC's "Always Original" positioning gaining momentum and being adopted globally, which I believe will lend further strength to the brand. Franchisees opened 85% of our 705 new international restaurants in 2015. Total system sales grew 11% in emerging markets for the year, with particular...

  • Page 7
    ... now generating positive momentum with same-store sales growth. At Pizza Hut Equally significant, we reached an important agreement with our U.S. franchisees. Starting in January, we and our franchisees began an overhaul of Pizza Hut's assets, NEW INTERNATIONAL RESTAURANT OPENINGS replacing ovens...

  • Page 8
    ... in 2015 and expect to build upon this in 2016. I'm particularly excited that we're starting to get some traction expanding this great brand internationally. We know this process will take time, but we're making real progress here. In 2016 we expect to open at least 300 global new restaurants and...

  • Page 9
    ... you to know I am proud of the way our three iconic brands come together to show we're a company with a Huge Heart - opening doors, growing people and truly caring about the world. Making responsible decisions as we build brands people trust and champion is core to us being a good corporate citizen...

  • Page 10
    ...thank our Board of Directors, employees and franchisees around the globe, whose contributions are truly inspiring and who are helping Yum! Feed The World. "We have three iconic brands and are making them even stronger. " FEED THE WORLD Cheers, GREG CREED CHIEF EXECUTIVE OFFICER YUM! BRANDS, INC...

  • Page 11
    ... Chief Executive Officer Important Notice Regarding the Availability of Proxy Materials for the Shareholders Meeting to Be Held on May 20, 2016-this notice and the proxy statement are available at www.yum.com/investors/investor_materials.asp. The Annual Report on Form 10-K is available at www.yum...

  • Page 12

  • Page 13
    ... year ending December 31, 2016. (3) To consider and hold an advisory vote on executive compensation. (4) To approve the Company's Long Term Incentive Plan As Amended. (5) To consider and vote on one (1) shareholder proposal, if properly presented at the meeting. (6) To transact such other business...

  • Page 14
    ... and Stock Vested...67 Pension Benefits ...67 Nonqualified Deferred Compensation ...69 Potential Payments Upon Termination or Change in Control ...72 DIRECTOR COMPENSATION EQUITY COMPENSATION PLAN INFORMATION AUDIT COMMITTEE REPORT ADDITIONAL INFORMATION APPENDIX A: YUM! BRANDS, INC. LONG TERM...

  • Page 15
    ... Louisville, Kentucky 40213 PROXY STATEMENT For Annual Meeting of Shareholders To Be Held On May 20, 2016 The Board of Directors (the "Board of Directors" or the "Board") of YUM! Brands, Inc., a North Carolina corporation ("YUM" or the "Company"), solicits the enclosed proxy for use at the Annual...

  • Page 16
    ... December 31, 2016; • An advisory vote on executive compensation; • The approval of the Company's Long Term Incentive Plan As Amended; and • One (1) shareholder proposal. We will also consider other business that properly comes before the meeting. 2 YUM! BRANDS, INC. - 2016 Proxy Statement

  • Page 17
    ... nominees named in this proxy statement for election to the Board; • FOR the ratification of the selection of KPMG LLP as our independent auditors; • FOR the proposal regarding an advisory vote on executive compensation; • FOR the proposal to approve the Company's Long Term Incentive Plan; and...

  • Page 18
    ...for the fiscal year 2016 (Item 2); • FOR the proposal regarding an advisory vote on executive compensation (Item 3); • FOR the proposal to approve the Company's Long Term Incentive Plan As Amended (Item 4); and • AGAINST the shareholder proposal (Item 5). Proxy Statement What does it mean if...

  • Page 19
    ... Annual Meeting on a Current Report on Form 8-K filed within four business days of the Annual Meeting. Proxy Statement What if other matters are presented for consideration at the Annual Meeting? The Company knows of no other matters to be submitted to the shareholders at the Annual Meeting, other...

  • Page 20
    ... OF THE COMPANY The business and affairs of YUM are managed under the direction of the Board of Directors. The Board believes that good corporate governance is a critical factor in achieving business success and in fulfilling the Board's responsibilities to shareholders. The Board believes that...

  • Page 21
    ... director attendance at the Annual Meeting of Shareholders? The Board of Director's policy is that all directors should attend the Annual Meeting and all 12 directors on the Board during the 2015 Annual Meeting were in attendance. How does the Board select nominees for the Board? Proxy Statement...

  • Page 22
    ... over operations. In 2015, while serving as Executive Chairman, Mr. Novak was responsible for supporting the CEO on corporate strategy, innovative business and brand building ideas, and leadership development. The Board created the Lead Director position in August 2012, after its annual review which...

  • Page 23
    ... for employees to report ethical or accounting concerns, misconduct or violations of the Code of Conduct in a confidential manner. The Code of Conduct applies to the Board of Directors and all employees of the Company, including the principal executive officer, the principal financial officer and...

  • Page 24
    ...reward performance by designing pay programs that incorporate team and individual performance, customer satisfaction and shareholder return; emphasize long-term incentives; drive ownership mentality; and require executives to personally invest in Company stock. In early 2016, the Management Planning...

  • Page 25
    ... concluded the following policies and practices of the Company's cash and equity incentive programs serve to reduce the likelihood of excessive risk taking: • Our compensation system is balanced, rewarding both short-term and long-term performance • Long-term Company performance is emphasized...

  • Page 26
    ...shareholders relating to Management Planning and Development Committee matters are referred to the Chair of the Management Planning and Development Committee. Proxy Statement What are the Company's policies on reporting of concerns regarding accounting? The Audit Committee has established policies...

  • Page 27
    ... compensation of the chief executive officer and other senior executive officers • Reviews management succession planning Number of Meetings in Fiscal 2015 4 The Board has determined that all of the members of the Management Planning and Development Committee are independent within the meaning...

  • Page 28
    ... the powers of the Board in the management of the business and affairs of the Company consistent with applicable law while the Board is not in session Number of Meetings in Fiscal 2015 - How are directors compensated? Proxy Statement Employee Directors. Employee directors do not receive additional...

  • Page 29
    ... The Board of Directors expects non-management directors to hold a meaningful number of shares of Company common stock and expects non-management directors to retain shares acquired as compensation as a director until at least 12 months following their departure from the Board. YUM directors receive...

  • Page 30
    ... we value their significant experience on other public company boards of directors and board committees. There are no family relationships among any of the directors and executive officers of the Company. Director ages are as of the date of this proxy statement. Proxy Statement 16 YUM! BRANDS, INC...

  • Page 31
    ... from 2012 until 2014. From 2010 to 2012, he was the Chief Executive Officer of JPMorgan Chase & Co.'s Treasury & Securities Services business, one of the world's largest cash management providers and a leading global custodian. From 2004 to 2010, Mr. Cavanagh was Chief Financial Officer of JPMorgan...

  • Page 32
    ... Operating and management experience, including as chief executive officer of Taco Bell • Expertise in strategic planning, global branding, franchising, and corporate leadership • Public company directorship and committee experience Greg Creed Age 58 Director since 2014 Chief Executive Officer...

  • Page 33
    ... Statement SPECIFIC QUALIFICATIONS, EXPERIENCE, SKILLS AND EXPERTISE: • Operating and management experience, including as president and chief executive officer of global travel-related services company • Expertise in finance, marketing and international business development • Public company...

  • Page 34
    ...finance, strategic planning, business development and retail business • Public company directorship and committee experience • Independent of Company Age 53 Director Since 2006 Chairman, Chief Executive Officer and President, National Gypsum Company 20 YUM! BRANDS, INC. - 2016 Proxy Statement

  • Page 35
    ...branding, marketing, sales, strategic planning and international business development • Independent of Company P. Justin Skala Age 56 Director since January 28, 2016 Chief Operating Officer of North America, Europe, Africa/Eurasia and Global Sustainability for the Colgate - Palmolive Company YUM...

  • Page 36
    ...: • Global operating and management experience, including as group president of a consumer products company • Expertise in branding, marketing, sales, strategic planning and international business development Elane B. Stock • Independent of Company Age 51 Director Since 2014 Group President...

  • Page 37
    ... of the aforementioned nominees will serve as directors and hold office until the 2017 Annual Meeting of Shareholders and until their respective successors have been elected and qualified. What is the recommendation of the Board of Directors? The Board of Directors recommends that you vote FOR the...

  • Page 38
    ... of the effectiveness of the Company's internal controls over financial reporting, statutory audits and services rendered in connection with the Company's securities offerings. (2) Audit-related fees include audits of financial statements of certain employee benefit plans, agreed upon procedures and...

  • Page 39
    ... competitive market for talent, while maximizing shareholder returns. This approach has made our management team a key driver in the Company's strong performance over both the long and short term. We believe that our compensation program has attracted and retained strong leaders, and is closely...

  • Page 40
    ... executive compensation will be held at the 2017 Annual Meeting of Shareholders. What is the recommendation of the Board of Directors? The Board of Directors recommends that you vote FOR approval of this proposal. ITEM 4 Proposal to Approve The Company's Long Term Incentive Plan As Amended (Item...

  • Page 41
    ... Selected Plan Data The following table includes information regarding outstanding equity awards and shares available for future awards under the Company's equity plans as of December 31, 2015 (and without giving effect to approval of the amended Plan under this Proposal): The Plan Total shares...

  • Page 42
    ... to the settlement of earned annual incentives, each share shall be counted as covering 1 share. To the extent any shares of stock covered by an award are not delivered to a participant or beneficiary because the award is forfeited or canceled, or used to satisfy the applicable tax withholding...

  • Page 43
    ... under the Plan and the limitations on the number of shares (or dollar amount) that can be subject to awards granted to certain individuals or within a specified time period; and (e) the terms, conditions or restrictions of outstanding awards and/or award agreements. In the case of any stock option...

  • Page 44
    ...dividend equivalents, including converting such credits into deferred Stock equivalents. Performance-Based Compensation In general, Code Section 162(m) limits our compensation deduction to $1,000,000 paid in any tax year to any "covered employee" as defined under Code Section 162(m). This deduction...

  • Page 45
    ...following performance measures: cash flow; earnings; earnings per share; market value added or economic value added; profits; return on assets; return on equity; return on investment; revenues; stock price; total shareholder return; customer satisfaction metrics; or restaurant unit development. Each...

  • Page 46
    ...Committee, any awards under the Plan and any shares of stock issued pursuant to the Plan shall be subject to our compensation recovery, clawback, and recoupment policies as in effect from time to time. If the Committee determines that a present or former employee has (a) used for profit or disclosed...

  • Page 47
    ...as that term is defined in the Code). The excess of the fair market value of the shares of common stock at the time of the exercise of an ISO over the exercise price is an adjustment that is included in the calculation of the participant's alternative minimum taxable income for the tax year in which...

  • Page 48
    ...(excluding executive officers) Number of Shares Covered by Awards 1,932,141 608,590 10,025,299 1,224,407 524,738 2,841,882 23,433,780 240,715 15,281,891 Proxy Statement 34 What is the Company's position regarding this proposal? The Board of Directors recommends approval of the Company's Long Term...

  • Page 49
    ... make informed choices with respect to the brands available that will enhance the appreciation and marketability of the product. Proxy Statement 2. Management Statement in Opposition to Shareholder Proposal What is the Company's position regarding this proposal? Our Board of Directors unanimously...

  • Page 50
    ... vote of a majority of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting. What is the recommendation of the Board of Directors? The Board of Directors recommends that you vote AGAINST this proposal. 36 YUM! BRANDS, INC. - 2016 Proxy Statement

  • Page 51
    ...of 0 shares. Proxy Statement How much YUM common stock is owned by our directors and executive officers? This table shows the beneficial ownership of YUM common stock as of December 31, 2015 by • each of our directors, • each of the executive officers named in the Summary Compensation Table on...

  • Page 52
    ... held in deferred compensation accounts for each of the named persons under our Director Deferred Compensation Plan or our Executive Income Deferral Program. Amounts payable under these plans will be paid in shares of YUM common stock at termination of directorship/employment or within 60 days if so...

  • Page 53
    ... Changes for 2015 ...42 C. Relationship between Company Pay and Performance ...43 III. Elements of Executive Compensation Program ...45 A. Base Salary ...45 B. Annual Performance-Based Cash Bonuses ...45 C. Long-Term Equity Performance-Based Incentives ...48 IV. 2015 Named Executive Officer Total...

  • Page 54
    ... international development occurring in emerging markets. Proxy Statement • The China Division grew system sales 2%, and operating profit 8% with impressive cost management partially offsetting weaker than originally anticipated sales results. • The KFC Division grew system sales 7%, same-store...

  • Page 55
    ... of our shareholders. Performance Share Unit (''PSU'') awards reward for superior relative performance as compared to the S&P 500. Base Salary âœ" âœ" âœ" âœ" âœ" âœ" Proxy Statement Drive ownership mentality-We require executives to personally invest in the Company's success by owning...

  • Page 56
    ... individual performance and future potential in setting compensation. Prior to this change the Committee 2015 CEO Pay Base $1,100,000

  • Page 57
    ... price must increase and, in the case of PSUs, we must attain certain performance thresholds before our executives realize any value. As shown below, our 2012 PSU award under our Performance Share Plan did not pay out to our NEOs in 2015 since the Company's YUM! BRANDS, INC. - 2016 Proxy Statement...

  • Page 58
    ...Target 4% Creed Target 3% 2 5% 0% -5 (9%) 9% 0 2013 Base Salary 2014 Bonus 2015 EPS -10% CEO Total Direct Compensation reflects Performance Similarly with cash compensation, our CEO's actual direct compensation (comprised of base salary, bonus and annual long-term incentive value at grant date...

  • Page 59
    ...estimates based on the Company's current TSR ranking. Proxy Statement III. Elements of Executive Compensation Program Our annual executive compensation program has three primary pay components: base salary, annual performance-based cash bonuses and long-term equity performance-based incentives. We...

  • Page 60
    ... objectives. The performance objectives were developed through the Company's annual financial planning process, which takes into account Division growth strategies, historical performance, and the expected future operating environment. These projections included profit growth to achieve our EPS...

  • Page 61
    ... of restaurants. KFC's standard operating profit growth rate target is 10% year-over-year. For 2015, the actual operating growth target was adjusted as shown above for the impact of certain non-recurring costs and other items distortive of brand performance primarily in the US and UK markets. YUM...

  • Page 62
    EXECUTIVE COMPENSATION C. Long-Term Equity Performance-Based Incentives based on the closing market price of the underlying YUM common stock on the date of grant. Therefore, SARs/Options awards will only have value if our NEOs are successful in increasing share price above the awards' exercise ...

  • Page 63
    ... direct compensation: 2015 TOTAL DIRECT COMPENSATION Stock Appreciation Rights $3,108,013 Variable Compensation Performance Shares $1,075,016 Annual Incentive Award $787,050 Total Long-Term Equity Compensation Fixed Compensation Total Annual Cash Compensation Base Salary $1,104,615 YUM! BRANDS...

  • Page 64
    ... date from the Company. Variable Compensation Stock Appreciation Rights $1,680,012 Total Long-Term Equity Compensation Performance Shares $420,070 Annual Incentive Award $445,200 Total Annual Cash Compensation Fixed Compensation Base Salary $790,192 50 YUM! BRANDS, INC. - 2016 Proxy Statement

  • Page 65
    ...: 2015 TOTAL DIRECT COMPENSATION Stock Appreciation Rights $2,168,382 Variable Compensation Performance Shares $750,020 Annual Incentive Award $530,000 Total Long-Term Equity Compensation Proxy Statement Fixed Compensation Total Annual Cash Compensation Base Salary $1,005,192 YUM! BRANDS...

  • Page 66
    ... Peer Group. Fixed Compensation Variable Compensation Stock Appreciation Rights $1,419,011 Total Long-Term Equity Compensation Performance Shares $355,012 Annual Incentive Award $1,473,548 Total Annual Cash Compensation Base Salary $849,038 52 YUM! BRANDS, INC. - 2016 Proxy Statement

  • Page 67
    ...: 2015 TOTAL DIRECT COMPENSATION Stock Appreciation Rights $2,091,503 Total Long-Term Equity Compensation Proxy Statement Variable Compensation Performance Shares $250,031 Annual Incentive Award $1,512,000 Total Annual Cash Compensation Fixed Compensation Base Salary $697,688 YUM! BRANDS...

  • Page 68
    ...$1.9 million in tax equalization benefits received prior to his retirement during 2015). Variable Compensation Total Long-Term Equity Compensation Performance Shares $459,031 Annual Incentive Award $468,683 Fixed Compensation Total Annual Cash Compensation Base Salary $1,100,000 54 YUM! BRANDS...

  • Page 69
    ... Revenue Service limitations on amounts of includible compensation and maximum benefits. The TCN is an unfunded, unsecured account-based retirement plan that provides an annual contribution floor of 7.5% of salary and target bonus and an annual earnings credit of 5% on the balance. The Company...

  • Page 70
    ... between the bonus and long-term incentive plan Shareholder feedback further influenced the changes to our compensation program for 2015 described above. The Company and the Committee appreciate the feedback from our shareholders and plan to continue these engagement efforts. Proxy Statement Role...

  • Page 71
    EXECUTIVE COMPENSATION COMMITTEE ANNUAL COMPENSATION PROCESS • Reviews competitive analysis/benchmarking for CEO and direct reports • Reviews bonus and performance share plan metrics, targets, and leverage recommendations for the following year • Evaluates feedback from shareholders and proxy...

  • Page 72
    ... corporate-reported revenues and system-wide sales. Competitive Positioning and Setting Compensation At the beginning of 2015, the Committee considered Executive Peer Group compensation data as a frame of reference for establishing compensation targets for base salary, annual bonus and long-term...

  • Page 73
    ...receive a benefit of two times salary and bonus. The terms of these change-incontrol agreements are described beginning on page 72. In 2013, the Company eliminated tax gross-ups for executives, including the NEOs, for any excise tax due under Section 4999 of the Internal Revenue Code and implemented...

  • Page 74
    ... Company stock is also prohibited. Deductibility of Executive Compensation The provisions of Section 162(m) of the Internal Revenue Code limit the tax deduction for compensation in excess of $1 million paid to certain NEOs. Performance-based compensation is excluded from the limit, however, so long...

  • Page 75
    EXECUTIVE COMPENSATION Management Planning and Development Committee Report The Management Planning and Development Committee of the Board of Directors reports that it has reviewed and discussed with management the section of this proxy statement titled "Compensation Discussion and Analysis" and, ...

  • Page 76
    ... receipt of salary into the Executive Income Deferral ("EID") Program or into the Company's 401(k) Plan. (2) Amounts shown in this column represent the grant date fair values for performance share units (PSUs) granted in 2015, 2014 and 2013. Further information regarding the 2015 awards is included...

  • Page 77
    ... Other Compensation Table and footnotes to that table, which follows. (7) Mr. Niccol became a NEO in 2015. No amounts are reported for Mr. Niccol for 2013 and 2014 since he was not a NEO for those years. (8) Mr. Su was Vice Chairman and Chairman and Chief Executive Officer of Yum Restaurants China...

  • Page 78
    ... of the performance period following the change in control. (3) Amounts in this column reflect the number of SARs and stock options granted to executives during the Company's 2015 fiscal year. SARs allow the grantee to receive the number of shares of YUM common stock that is equal in value to the...

  • Page 79
    ... Statements and Supplementary Data" of the 2015 Annual Report in Notes to Consolidated Financial Statements at Note 14, "Share-based and Deferred Compensation Plans." Outstanding Equity Awards at Year-End The following table shows the number of shares covered by exercisable and unexercisable stock...

  • Page 80
    ... The market value of these awards are calculated by multiplying the number of shares covered by the award by $73.05, the closing price of YUM stock on the NYSE on December 31, 2015. (4) The awards reflected in this column are unvested performance-based PSU awards with three-year performance periods...

  • Page 81
    ..."), and the YUM! Brands International Retirement Plan ("YIRP") determined using interest rate and mortality rate assumptions consistent with those used in the Company's financial statements. 2015 FISCAL YEAR PENSION BENEFITS TABLE Number of Years of Present Value of Payments During Credited Service...

  • Page 82
    ...subject to the limits under Internal Revenue Code Section 401(a)(17)) and service under the plan. Upon termination of employment, a participant's normal retirement benefit from the plan is equal to A. 3% of Final Average Earnings times Projected Service up to 10 years of service, plus B. 1% of Final...

  • Page 83
    ... sum is paid from the plan, it is calculated based on actuarial assumptions for lump sums required by Internal Revenue Code Section 417(e)(3). Proxy Statement Benefits are payable under the same terms and conditions as the Retirement Plan without regard to Internal Revenue Service limitations on...

  • Page 84
    ... provide market rate returns and do not provide for preferential earnings. The S&P 500 index fund, bond market index fund and stable value fund are designed to track the investment return of like-named funds offered under the Company's 401(k) Plan. The YUM! Stock Fund and YUM! Matching Stock Fund...

  • Page 85
    ...of each year. Under the LRP, Mr. Novak receives an annual earnings credit equal to 120% of the applicable federal interest rate. Mr. Grismer, Mr. Niccol and Mr. Pant receive an annual earnings credit equal to 5%. The Company's contribution ("Employer Credit") for 2015 is equal to 9.5% of salary plus...

  • Page 86
    ... if the NEO's employment had terminated on December 31, 2015, given the NEO's compensation and service levels as of such date and, if applicable, based on the Company's closing stock price on that date. These benefits are in addition to benefits available generally to salaried employees, such as...

  • Page 87
    ... under the bonus plan or, if higher, assuming continued achievement of actual Company performance until date of termination, • a severance payment equal to two times the sum of the executive's base salary and the target bonus or, if higher, the actual bonus for the year preceding the change in...

  • Page 88
    ... RSUs under the Company's EID Program held by the executive will automatically vest. • All PSU awards under the Company's Performance Share Plan awarded in the year in which the change in control occurs will be paid out at target assuming a target level performance had been achieved for the entire...

  • Page 89
    ... used to value the awards, see the discussion of stock awards and option awards contained in Part II, Item 8, "Financial Statements and Supplementary Data" of the 2015 Annual Report in Notes to Consolidated Financial Statements at Note 14, "Share-based and Deferred Compensation Plans." YUM! BRANDS...

  • Page 90
    ... Management Planning and Development Committee (Mr. Walter in 2015) receives an additional $15,000 stock retainer annually. These retainers were paid in November 2014 for 2015. Initial Stock Grant upon Joining Board. Non-employee directors also receive a one-time stock grant with a fair market value...

  • Page 91
    ..., 2015, the equity compensation plans under which we may issue shares of stock to our directors, officers and employees under the Long Term Incentive Plan (the "1999 Plan"), the 1997 Long Term Incentive Plan (the "1997 Plan"), the SharePower Plan and the Restaurant General Manager Stock Option Plan...

  • Page 92
    ... to Area Coaches, Franchise Business Leaders and other supervisory field operation positions that support RGMs and have profit and loss responsibilities within a defined region or area. While all non-executive officer employees are eligible to receive awards under the RGM plan, all awards granted...

  • Page 93
    ... material conformity with U.S. generally accepted accounting principles and for auditing the effectiveness of the Company's internal control over financial reporting. The Committee's responsibility is to monitor and review the Company's financial reporting YUM! BRANDS, INC. - 2016 Proxy Statement 79

  • Page 94
    ... the limitations on the Committee's role and responsibilities referred to above and in the Audit Committee Charter, the Committee recommended to the Board of Directors that it include the audited consolidated financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended...

  • Page 95
    ... and discontinue my receipt of paper copies? YUM shareholders with shares registered directly in their name who received shareholder materials in the mail may elect to receive future annual reports and proxy statements from us and to vote their shares through the Internet instead of receiving copies...

  • Page 96
    ... us to include a proposal in our proxy statement and proxy card for presentation at our 2017 Annual Meeting of Shareholders, the proposal must be received by us at our principal executive offices at YUM! Brands, Inc., 1441 Gardiner Lane, Louisville, Kentucky 40213 by December 10, 2016. The proposal...

  • Page 97
    ...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...

  • Page 98
    ... 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...

  • Page 99
    ... by an Award are not delivered to a Participant or beneficiary because the Award is forfeited or canceled, or the shares of Stock are not delivered because the Award is settled in cash or used to satisfy the applicable tax withholding obligation, such YUM! BRANDS, INC. - 2016 Proxy Statement 85

  • Page 100
    ... or Exercise Price with respect to outstanding Awards; (d) the limitations set forth in subsection 4.1 (including the limitations set forth in paragraph 4.1(g)); and (e) the terms, conditions or restrictions of outstanding Awards and/or Award Agreements; The maximum number of shares of Stock that...

  • Page 101
    ... provided in the Plan or the Award Agreement reflecting the applicable Award, if a Change in Control occurs prior to the date on which an Award is vested and prior to the Participant's separation from service and if the Participant's employment is involuntarily terminated by the Company (other than...

  • Page 102
    ... may use available shares of Stock as the form of payment for compensation, grants or rights earned or due under any other compensation plans or arrangements of YUM! or a Subsidiary, including the plans and arrangements of YUM! or a Subsidiary assumed in business combinations. 6.5. Settlement and...

  • Page 103
    ... the Plan is final and binding on all persons. (e) In controlling and managing the operation and administration of the Plan, the Committee shall take action in a manner that conforms to the articles and by-laws of YUM!, and applicable state corporate law. YUM! BRANDS, INC. - 2016 Proxy Statement 89

  • Page 104
    ... and restatement of the Plan. (b) Award. The term "Award" shall mean any award or benefit granted under the Plan, including, without limitation, the grant of Options, SARs, or Full Value Awards. (c) Board. The term "Board" shall mean the Board of Directors of YUM!. (d) Change in Control. Except as...

  • Page 105
    ...: cash flow; earnings; earnings per share; market value added or economic value added; profits; return on assets; return on equity; return on investment; revenues; stock price; total shareholder return; customer satisfaction metrics; or restaurant unit development. Each goal may be Proxy Statement...

  • Page 106
    ... past performance of YUM! and/or the past or current performance of other companies, and in the case of earnings-based measures, may use or employ comparisons relating to capital, shareholders' equity and/or shares outstanding, investments or to assets or net assets. (j) Potential Change in Control...

  • Page 107
    ...file number 1-13163 YUM! BRANDS, INC. (Exact name of registrant as specified in its charter) North Carolina 13-3951308 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 1441 Gardiner Lane, Louisville, Kentucky 40213 (Address of principal executive...

  • Page 108
    ...About Market Risk Financial Statements and Supplementary Data Changes In and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information 13 13 15 16 32 33 65 65 66 PART III ITEM 10 ITEM 11 ITEM 12 ITEM 13 ITEM 14 Directors, Executive Officers and...

  • Page 109
    ..., without limitation, statements regarding the intended capital return to shareholders as well as the related borrowing required to fund such capital return, the planned separation of the Yum! Brands and Yum! China businesses, the timing of any such separation, the future earnings and performance as...

  • Page 110
    ... through the three concepts of KFC, Pizza Hut and Taco Bell (the "Concepts"), the Company develops, operates, franchises and licenses a worldwide system of restaurants which prepare, package and sell a menu of competitively priced food items. Units are operated by a Concept or by independent...

  • Page 111
    ... franchise unit was opened. Today, Pizza Hut is the largest restaurant chain in the world specializing in the sale of ready-to-eat pizza products. • Pizza Hut operates in 95 countries and territories throughout the world. As of year end 2015, Pizza Hut had 1,903 units in China, 432 units in India...

  • Page 112
    ... Company's KFC, Pizza Hut and Taco Bell franchisee groups, are members of Restaurant Supply Chain Solutions, LLC ("RSCS"), which is responsible for purchasing certain restaurant products and equipment. The core mission of RSCS is to provide the lowest possible sustainable storedelivered prices for...

  • Page 113
    ... areas is incorporated herein by reference from the related Consolidated Financial Statements in Part II, Item 8. Available Information The Company makes available through the Investor Relations section of its internet website at http://yum.com its annual report on Form 10-K, quarterly reports...

  • Page 114
    ... of operations, financial condition or cash flows. products and supplies that meet our specifications at competitive prices. Shortages or interruptions in the supply of food items and other supplies to our restaurants could adversely affect the availability, quality and cost of items we use and...

  • Page 115
    ...the value of our brands as well as consumer demand for our products, which would likely result in lower revenues and profits. Additionally, our corporate reputation could suffer from a real or perceived failure of corporate governance or misconduct by a company officer or representative. Changes in...

  • Page 116
    ...income, the price of gasoline, stock market performance and consumer confidence. These and other macroeconomic factors could have an adverse effect on our sales, profitability or development plans, which could harm our financial condition and operating results. Tax matters, including changes in tax...

  • Page 117
    ...the Company's operational and financial profile and the composition of the Company's revenue will change materially. There can be no assurance that these changes will yield the benefits currently expected or intended or that the combined value of the common stock of the two publicly-traded companies...

  • Page 118
    ... our shares of common stock with any remaining amount being taxed as a capital gain. At the time of the spin-off, we will enter into a Tax Matters Agreement with the new China entity. The Tax Matters Agreement will address which company, YUM or the new China entity, will be responsible for any taxes...

  • Page 119
    ..., suppliers, employees, customers and others related to operational, contractual or employment issues as well as claims that the Company has infringed on third party intellectual property rights. In addition, the ITEM 4 Not applicable Mine Safety Disclosures YUM! BRANDS, INC. - 2015 Form 10...

  • Page 120
    ... of Taco Bell U.S. from October 2011 to April 2013. Prior to this position, he served as General Manager of Pizza Hut U.S. from February 2011 to September 2011. From September 2007 to January 2011 he was Chief Marketing Officer of Pizza Hut U.S. Muktesh Pant, 61, is Chief Executive Officer of YUM...

  • Page 121
    ... targets, and will continue to target subsequent to the planned spin-off of our China business, an annual dividend payout ratio of 45% to 50% of net income. As of February 9, 2016, there were 55,462 registered holders of record of the Company's Common Stock. YUM! BRANDS, INC. - 2015 Form 10-K 13

  • Page 122
    ... Stock to the cumulative total return of the S&P 500 Stock Index and the S&P 500 Consumer Discretionary Sector, a peer group that includes YUM, for the period from December 23, 2010 to December 24, 2015, the last trading day of our 2015 fiscal year. The graph assumes that the value of the investment...

  • Page 123
    ...BRANDS, INC. AND SUBSIDIARIES 2015 2014 Fiscal Year 2013 2012 2011(g) (in millions, except per share and unit amounts) Income Statement Data Revenues Company sales Franchise and license fees and income Total Closures and impairment income (expenses)(a) Refranchising gain (loss)(b) Operating Profit...

  • Page 124
    ...-Looking Statements and the Risk Factors set forth in Item 1A. YUM! Brands, Inc. ("YUM" or the "Company") operates, franchises or licenses a worldwide system of over 42,000 restaurants in more than 130 countries and territories operating primarily under the KFC, Pizza Hut or Taco Bell (collectively...

  • Page 125
    ...includes contributions from both Operating Profit and financial strategies such as share repurchases. YUM's 15% total shareholder return includes ongoing Operating Profit growth targets of 10% for our KFC Division, 8% for our Pizza Hut Division and 6% for our Taco Bell Division, which are consistent...

  • Page 126
    ... 26 (2) 3 4 Company sales Franchise and license fees and income Total Revenues Restaurant Profit Restaurant Margin % Operating Profit Interest expense, net Income tax provision Net Income - including noncontrolling interests Net Income (loss) - noncontrolling interests Net Income - YUM! Brands, Inc...

  • Page 127
    ... to the planned spin-off of our China business into an independent publicly-traded company and our recapitalization plan. (b) The refranchising gains in 2015 and 2013 were primarily due to gains on sales of Taco Bell restaurants. (c) Other Special Items Income (Expense) in 2013 primarily includes...

  • Page 128
    ... the development of Pizza Hut Home Service (home delivery). For 2015, China Division targeted mid-single-digit same-store sales growth, moderate margin improvement, at least 700 new unit openings and Operating Profit growth of at least 15%. % B/(W) % B/(W) 2015 2014 2013 Reported Ex FX Reported Ex...

  • Page 129
    ... translation, was driven by same-store sales declines, higher restaurant operating costs and higher G&A expenses, partially offset by net new unit growth and increased Other income due to an insurance recovery related to the 2012 poultry supply incident. YUM! BRANDS, INC. - 2015 Form 10-K 21

  • Page 130
    ...Form 10-K Franchise & License Company-owned Total Company Sales and Restaurant Profit The changes in Company sales and Restaurant profit were as follows: 2015 vs. 2014 Store Portfolio 2014 Actions Other $ 2,320 $ 54 $ 65 (809) (25) 2 (552) (8) (16) (651) (16) (6) $ 308 $ 5 $ 45 2014 vs. 2013 Store...

  • Page 131
    ... in same-store sales and international net new units, partially offset by higher restaurant operating costs in international markets. Pizza Hut Division The Pizza Hut Division has 13,728 units, approximately 60% of which are located in the U.S. The Pizza Hut Division operates as one brand that uses...

  • Page 132
    ... 2015 12,969 759 13,728 2014 12,814 788 13,602 Franchise & License Company-owned Total Company Sales and Restaurant Profit The changes in Company sales and Restaurant profit were as follows: 2015 vs. 2014 Store Portfolio Actions Other $ 24 $ (4) (7) 12 (6) (2) (9) (1) $ 2 $ 5 2014 vs. 2013 Store...

  • Page 133
    ...Franchise & License Company-owned Total Franchise & License Company-owned Total Form 10-K Company Sales and Restaurant Profit The changes in Company sales and Restaurant profit were as follows: 2015 vs. 2014 Store Portfolio Actions Other $ 38 $ 51 (10) 20 (12) (1) (11) (6) $ 5 $ 64 2014 vs. 2013...

  • Page 134
    ...to our consolidated results, this change negatively impacted India's 2014 System Sales Growth, reported and excluding FX, by 10% and 11%, respectively. This change negatively impacted India's 2014 Total revenues by 2% and Operating Profit (loss) by $1 million. 26 YUM! BRANDS, INC. - 2015 Form 10-K

  • Page 135
    ... contributions. In 2014, net cash provided by operating activities was $2,049 million compared to $2,139 million in 2013. The decrease was primarily driven by higher income taxes paid. Net cash used in investing activities was $682 million in 2015 compared to $936 million in 2014. The decrease...

  • Page 136
    ... with a balance sheet more consistent with highly-levered peer restaurant franchise companies. As part of our intention to return up to $6.2 billion to shareholders, we began increasing our rate of share repurchases in October, 2015. In December, 2015 we entered into a $1.5 billion short-term credit...

  • Page 137
    ... total of approximately $125 million through 2017 primarily to fund new back-of-house equipment for franchisees and to provide incentives to accelerate franchisee store remodels, of which $72 million was invested in 2015. Form 10-K Off-Balance Sheet Arrangements See the Lease Guarantees, Franchise...

  • Page 138
    ... Pizza Hut and Taco Bell Divisions and individual brands in our China and India Divisions. Fair value is the price a willing buyer would pay for the reporting unit, and is generally estimated using discounted expected future after-tax cash flows from Company-owned restaurant operations and franchise...

  • Page 139
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations During 2015, the Company's reporting units with the most significant refranchising activity and recorded goodwill were KFC India, Taco Bell U.S. and KFC China. Within KFC India, 86 restaurants were...

  • Page 140
    ... of market risk associated with commodity prices. Our ability to recover increased costs through higher pricing is, at times, limited by the competitive environment in which we operate. We manage our exposure to this risk primarily through pricing agreements with our vendors. 32 YUM! BRANDS, INC...

  • Page 141
    ... Data ITEM 8 Financial Statements and Supplementary Data Index to Financial Information Page Reference Consolidated Financial Statements Report of Independent Registered Public Accounting Firm Consolidated Statements of Income for the fiscal years ended December 26, 2015, December 27, 2014...

  • Page 142
    ... II ITEM 8 Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm The Board of Directors and Shareholders YUM! Brands, Inc.: We have audited the accompanying consolidated balance sheets of YUM! Brands, Inc. and subsidiaries (YUM) as of December 26, 2015...

  • Page 143
    ... per share data) 2015 $ 11,145 1,960 13,105 2014 $ 11,324 1,955 13,279 2013 $ 11,184 1,900 13,084 Revenues Company sales Franchise and license fees and income Total revenues Costs and Expenses, Net Company restaurants Food and paper Payroll and employee benefits Occupancy and other operating...

  • Page 144
    ... Data Consolidated Statements of Comprehensive Income YUM! BRANDS, INC. AND SUBSIDIARIES FISCAL YEARS ENDED DECEMBER 26, 2015, DECEMBER 27, 2014 AND DECEMBER 28, 2013 (in millions) Net income - including noncontrolling interests Other comprehensive income (loss), net of tax: Translation...

  • Page 145
    ... II ITEM 8 Financial Statements and Supplementary Data Consolidated Statements of Cash Flows YUM! BRANDS, INC. AND SUBSIDIARIES FISCAL YEARS ENDED DECEMBER 26, 2015, DECEMBER 27, 2014 AND DECEMBER 28, 2013 (in millions) 2015 2014 2013 Cash Flows - Operating Activities Net Income - including...

  • Page 146
    ... Assets Property, plant and equipment, net Goodwill Intangible assets, net Investments in unconsolidated affiliates Other assets Deferred income taxes Total Assets LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable and other current liabilities Income taxes payable Short-term...

  • Page 147
    ... SUBSIDIARIES FISCAL YEARS ENDED DECEMBER 26, 2015, DECEMBER 27, 2014 AND DECEMBER 28, 2013 Yum! Brands, Inc. Issued Common Total Redeemable Accumulated Other Stock Retained Comprehensive Noncontrolling Shareholders' Noncontrolling Interests Equity Interest Shares Amount Earnings Income (Loss) 451...

  • Page 148
    ...to public listing and applicable securities laws, and other terms and conditions as may be determined by the Board of Directors. YUM! Brands, Inc. and Subsidiaries (collectively referred to herein as "YUM" or the "Company") comprise primarily the worldwide operations of KFC, Pizza Hut and Taco Bell...

  • Page 149
    ... items in the Consolidated Financial Statements for prior periods to be comparable with the classification for the fiscal year ended December 26, 2015. These reclassifications had no effect on previously reported Net Income - YUM! Brands, Inc. Franchise and License Operations. We execute franchise...

  • Page 150
    ... the financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years...

  • Page 151
    ...we have temporarily invested (with original maturities not exceeding three months), including short-term, highly liquid debt securities. Cash and overdraft balances that meet the criteria for right of setoff are presented net on our Consolidated Balance Sheet. YUM! BRANDS, INC. - 2015 Form 10-K 43

  • Page 152
    ... reporting unit's fair value is compared to its carrying value. Fair value is the price a willing buyer would pay for a reporting unit, and is generally estimated using discounted expected future after-tax cash flows from Company-owned restaurant operations and franchise royalties. The discount rate...

  • Page 153
    ... other comprehensive income (loss). The net periodic benefit costs associated with the Company's defined benefit pension and post-retirement medical plans are determined using assumptions regarding the projected benefit obligation and, for funded plans, the market-related value of plan assets as of...

  • Page 154
    .... Refranchising (gain) loss 2015 2014 2013 $ (13) $ (17) $ (5) 30 (18) (8) 55 4 (3) (65) (4) (84) 3 2 - $ 10 $ (33) $ (100) China KFC Division(a) Pizza Hut Division(a)(b) Taco Bell Division India Worldwide (a) In 2010 we refranchised our then-remaining Company-operated restaurants in Mexico. To...

  • Page 155
    ...China $ (1) 31 $ 30 $ $ KFC (1) 4 3 $ India - 2 $ 2 Worldwide $ (5) 41 $ 36 (a) Store closure (income) costs include the net gain or loss on sales of real estate on which we formerly operated a Company-owned restaurant that was closed, lease reserves established when we cease using a property...

  • Page 156
    ...The loss associated with this planned sale reflects the shortfall of the expected proceeds, less any selling costs, over the carrying value of the aircraft. NOTE 8 Supplemental Balance Sheet Information $ 2015 41 28 173 242 $ 2014 55 14 185 254 Prepaid Expenses and Other Current Assets Income tax...

  • Page 157
    PART II ITEM 8 Financial Statements and Supplementary Data NOTE 9 Goodwill and Intangible Assets The changes in the carrying amount of goodwill are as follows: China Balance as of December 28, 2013 Goodwill, gross Accumulated impairment losses(a) Goodwill, net Acquisitions Impairment Losses(a) ...

  • Page 158
    PART II ITEM 8 Financial Statements and Supplementary Data NOTE 10 Short-term Borrowings and Long-term Debt 2015 2014 $ 264 3 - - 267 Short-term Borrowings Current maturities of long-term debt Current portion of fair value hedge accounting adjustment Unsecured Short-Term Loan Credit Facility, ...

  • Page 159
    ...Thereafter Total $ 909 701 325 250 350 1,275 $ 3,810 Interest expense on short-term borrowings and long-term debt was $155 million, $152 million and $270 million in 2015, 2014 and 2013, respectively. 2013 included $118 million in losses recorded in Interest expense, net as a result of premiums paid...

  • Page 160
    ... benefit plans covering certain full-time salaried and hourly U.S. employees. The qualified plan meets the requirements of certain sections of the Internal Revenue Code and provides benefits to a broad group of employees with restrictions on discriminating in favor of highly compensated employees...

  • Page 161
    ... Service cost Interest cost Plan amendments Curtailments Special termination benefits Benefits paid Settlements(a) Actuarial (gain) loss Administrative expense Benefit obligation at end of year Change in plan assets Fair value of plan assets at beginning of year Actual return on plan assets Employer...

  • Page 162
    ...used to determine the net periodic benefit cost for fiscal years: Discount rate Long-term rate of return on plan assets Rate of compensation increase 2015 4.30% 6.75% 3.75% 2014 5.40% 6.90% 3.75% 2013 4.40% 7.25% 3.75% 2015 4.90% 3.75% 2014 4.30% 3.75% Our estimated long-term rate of return on plan...

  • Page 163
    ... market prices or net asset values. A mutual fund held as an investment by the Plan includes shares of YUM Common Stock valued at $0.5 million at both December 26, 2015 and December 27, 2014 (less than 1% of total plan assets in each instance). Benefit Payments The benefits expected to be paid...

  • Page 164
    ... Data NOTE 14 Overview Share-based and Deferred Compensation Plans At year end 2015, we had four stock award plans in effect: the YUM! Brands, Inc. Long-Term Incentive Plan and the 1997 Long-Term Incentive Plan (collectively the "LTIPs"), the YUM! Brands, Inc. Restaurant General Manager Stock...

  • Page 165
    ...on Net Income The components of share-based compensation expense and the related income tax benefits are shown in the following table: 2015 50 4 3 57 18 1 2014 48 6 1 $ 55 $ 17 $ 8 $ 2013 44 6 (1) $ 49 $ 15 $ 11 $ Form 10-K Options and SARs Restricted Stock Units Performance Share Units Total Share...

  • Page 166
    ...Adjustments to reserves and prior years Change in valuation allowances Other, net Effective income tax rate $ $ $ $ 2014 500 35.0% 8 0.6 (168) (11.7) (5) (0.3) 35 2.4 36 2.5 406 28.5% $ $ 2013 543 35.0% 3 0.2 (177) (11.4) 49 3.1 23 1.5 46 3.0 487 31.4% 58 YUM! BRANDS, INC. - 2015 Form 10-K

  • Page 167
    ... equipment Other Gross deferred tax liabilities Net deferred tax assets (liabilities) Reported in Consolidated Balance Sheets as: Deferred income taxes Other liabilities and deferred credits We have investments in foreign subsidiaries where the carrying values for financial reporting exceed the tax...

  • Page 168
    ... interest and penalties $ $ During 2015, 2014 and 2013, a net expense of $5 million, $11 million and $18 million, respectively, for interest and penalties was recognized in our Consolidated Statements of Income as components of its income tax provision. 60 YUM! BRANDS, INC. - 2015 Form 10-K

  • Page 169
    PART II ITEM 8 Financial Statements and Supplementary Data NOTE 17 Reportable Operating Segments See Note 1 for a description of our operating segments. Revenues 2014 $ 6,934 3,193 1,148 1,863 141 $ 13,279 China KFC Division(a) Pizza Hut Division(a) Taco Bell Division(a) India 2015 $ 6,909 2,...

  • Page 170
    ... other costs related to the extinguishment of debt. See Note 4. China includes investments in 4 unconsolidated affiliates totaling $61 million and $52 million for 2015 and 2014, respectively. Primarily includes cash, deferred tax assets and property, plant and equipment, net, related to our office...

  • Page 171
    ... or financial condition and instead alleged that, during the Class Period, defendants purportedly omitted information about the Company's supply chain in China, thereby inflating the prices at which the Company's securities traded. On October 4, 2013, the Company and individual defendants filed...

  • Page 172
    ... Financial Statements cannot be made at this time. On May 16, 2013, a putative class action styled Bernardina Rodriguez v. Taco Bell Corp. was filed in California Superior Court. The plaintiff seeks to represent a class of current and former California hourly restaurant employees alleging...

  • Page 173
    ...362 0.83 0.81 - First Quarter Revenues: Company sales Franchise and license fees and income Total revenues Restaurant profit Operating Profit(b) Net Income - YUM! Brands, Inc. Basic earnings per common share Diluted earnings per common share Dividends declared per common share $ 2,292 432 2,724 441...

  • Page 174
    ...the Company's internal control over financial reporting or in other factors that materially affected, or are reasonably likely to materially affect, internal control over financial reporting during the quarter ended December 26, 2015. ITEM 9B Other Information None. Form 10-K 66 YUM! BRANDS, INC...

  • Page 175
    ... proxy statement which will be filed with the Securities and Exchange Commission no later than 120 days after December 26, 2015. Information regarding executive officers of the Company is included in Part I. ITEM 11 Executive Compensation Information regarding executive and director compensation...

  • Page 176
    ... Exhibits and Financial Statement Schedules (3) Financial Statements: Consolidated Financial Statements filed as part of this report are listed under Part II, Item 8 of this Form 10-K. Financial Statement Schedules: No schedules are required because either the required information is not present...

  • Page 177
    ... Executive Officer (principal executive officer) Chief Financial Officer (principal financial officer) Vice President, Finance and Corporate Controller (principal accounting officer) Director Director Director Director Director Director Director Director Director Director Director Director...

  • Page 178
    ... Report on Form 10-Q for the quarter ended June 13, 2009. YUM 1997 Long Term Incentive Plan, as effective October 7, 1997, which is incorporated herein by reference from Exhibit 10.8 to YUM's Annual Report on Form 10-K for the fiscal year ended December 27, 1997. YUM Executive Incentive Compensation...

  • Page 179
    ... March 23, 2013. Form of YUM 1999 Long Term Incentive Plan Award Agreement (2015) (Stock Options), which is incorporated herein by reference from Exhibit 10.15.2 to YUM's Annual Report on Form 10-K for the fiscal year ended December 27, 2014. YUM! Brands, Inc. International Retirement Plan, as in...

  • Page 180
    ...Description of Exhibits YUM! Brands, Inc. Compensation Recovery Policy, Amended and Restated January 1, 2015, which is incorporated herein by reference from Exhibit 10.28 to YUM's Annual Report on Form 10-K for the fiscal year ended December 27, 2014. Retirement Agreement and General Release, dated...

  • Page 181
    ... names of other companies and organizations, and these brand names, trademarks, service marks and trade names are the property of their respective owners. Market and Industry Data. Unless we indicate otherwise, we base the information concerning our industry contained in this report on our general...

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  • Page 184
    ... YUM account number if you know it. REGISTERED SHAREHOLDERS can access their accounts and complete the following functions online at the website of American Stock Transfer & Trust Company ("AST"): www.amstock.com. • Access account balance and other general account information • Change an account...

  • Page 185
    ...-0535 STOCK TRADING SYMBOL-YUM The New York Stock Exchange is the principal market for YUM Common Stock, which trades under the symbol YUM. Franchise Inquiries ONLINE FRANCHISE INFORMATION Information about potential franchise opportunities is available at www.yumfranchises.com YUM's Annual Report...

  • Page 186
    ... Executive Officer, Pizza Hut Marc L. Kesselman 44 Chief Legal Officer, General Counsel and Corporate Secretary, Yum! Brands, Inc. Brian Niccol 41 Chief Executive Officer, Taco Bell Muktesh ("Micky") Pant 61 Chief Executive Officer, Yum! Restaurants China David E. Russell 46 Interim Chief Financial...