Pizza Hut 2009 Annual Report Download - page 42

21MAR201012032
ITEM 3: SHAREHOLDER PROPOSAL RELATING TO RIGHT TO CALL
SPECIAL SHAREOWNER MEETINGS
(Item 3 on the Proxy Card)
What am I voting on?
Richard R. Treumann has advised us that he intends to present the following shareholder proposal at
the Annual Meeting. We will furnish the address and share ownership of the proponent upon request.
RESOLVED, Shareowners ask our board to take the steps necessary to amend our bylaws and each
appropriate governing document to give holders of 10% of our outstanding common stock (or the lowest
percentage allowed by law above 10%) the power to call special shareowner meetings. This includes that a
large number of small shareowners can combine their holdings to equal the above 10% of holders. This
includes that such bylaw and/or charter text will not have any exception or exclusion conditions (to the
fullest extent permitted by state law) that apply only to shareowners but not to management and/or the
board.
Supporting Statement
Special meetings allow shareowners to vote on important matters, such as electing new directors, that
can arise between annual meetings. If shareowners cannot call special meetings investor returns may
suffer. Shareowners should have the ability to call a special meeting when a matter merits prompt
attention. This proposal does not impact our board’s current power to call a special meeting.
This proposal topic also won more than 60% support at the following companies in 2009: CVS
Caremark (CVS) Sprint Nextel (S), Safeway (SWY), Motorola (MOT) and R. R. Donnelley (RRD). The
Council of Institutional Investors www.cii.org recommends that management adopt shareholder proposals
after receiving their first majority vote.
Please encourage our board to respond positively to this proposal: Special Shareowner Meetings
MANAGEMENT STATEMENT IN OPPOSITION
TO SHAREHOLDER PROPOSAL
Proxy Statement
What is the recommendation of the Board of Directors?
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THIS PROPOSAL.
What is the Company’s position regarding this proposal?
The Board of Directors believes that it would be costly, burdensome and disruptive to permit holders
of as little as 10% of the Company’s outstanding shares to call special meetings of the Company’s
shareholders. Furthermore, the proponent requests the right to call such special meetings for any reason,
at any time and as often as such shareholders wish, a request that is both excessive and without convincing
benefit to the other shareholders.
Why does the Company oppose this proposal?
YUM has hundreds of thousands of shareholders. The preparation and distribution of proxy
materials, together with the solicitation and tabulation of votes, are costly and time consuming. When one
or more shareholders comprising a group of only 10% of the Company’s shareholders are permitted to call
a special meeting, the Board is concerned that such a small percentage will not accurately reflect the
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