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.
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
determi
