Yum! Corporate Governance

Ethically managing the Company for profitable, long-term growth is our priority. The Company has policies and practices that align management and shareholder interests. We know that these types of governance practices will pay off for our shareholders over time. Our Board of Directors believes that good corporate governance is a critical factor in achieving business success and in fulfilling the Board's responsibilities to shareholders. Some of the more noteworthy aspects of our corporate governance policies include:

Corporate Governance Principles. The Board of Directors has documented its corporate governance in the Yum! Brands, Inc. Corporate Governance Principles.

Guidelines for Business Conduct. Yum!'s Worldwide Code of Conduct was adopted in 1997 when the Company was formed to emphasize the Company's commitment to the highest standards of business conduct. The Code of Conduct also sets forth information and procedures for employees to report ethical or accounting concerns, misconduct or violations of the Code in a confidential manner.

Contacting the Board. Shareholders and others can contact the Board to report any matters of concern.

Private Executive Sessions. Our non-management directors meet at regularly scheduled executive sessions on a bi-monthly basis. These executive sessions are attended only by the non-management directors and are presided over by the Chairperson of our Audit, Compensation and Nominating and Governance Committees, on a rotating basis.

Advance Materials. Information and data important to the directors' understanding of the business or matters to be considered at a Board or Board Committee meeting are, to the extent practical, distributed to the directors sufficiently in advance of the meeting to allow careful review prior to the meeting.

Board and Board Committees Evaluation. The Board has instituted an annual self-evaluation process that is led by the Nominating and Governance Committee. This assessment focuses on the Board's contribution to the Company and emphasizes those areas in which the Board believes a better contribution could be made. In addition, our Audit, Compensation and Nominating and Governance Committees also conduct similar annual self evaluations.

Access to Management and Employees. Directors have full and unrestricted access to the management and employees of the Company. Additionally, key members of management attend Board meetings to present information about the results, plans and operations of the business within their areas of responsibility.

Access to Outside Advisers. The Board and its Committees may retain counsel or consultants without obtaining the approval of any officer of the Company in advance or otherwise. The Audit Committee has the sole authority to retain and terminate the independent auditor. The Nominating and Governance Committee has the sole authority to retain search firms to be used to identify director candidates. The Compensation Committee has the sole authority to retain compensation consultants for advice on executive compensation matters.

Director Equity-Based Compensation. Yum! directors receive a significant portion of their annual compensation in stock. The Company believes that the increased emphasis on the equity component of director compensation serves to further align the directors with the interests of our shareholders.

Stock Ownership Guidelines. The Compensation Committee has adopted formal stock ownership guidelines that set minimum ownership expectations for the 600 most senior executives and managers. The Company has maintained an ownership culture among its executive and senior managers since its formation. All executive officers, and substantially all members of senior management, hold stock well in excess of the guidelines.

In addition, non-management Board members are expected to hold a meaningful number of Yum! shares and not sell their Yum stock received as compensation until at least 12 months following their departure from the Board.