PENSION EQUALIZATION PLAN

The Yum! Brands, Inc. Pension Equalization Plan ("PEP" or "Plan") has been adopted by Yum! Brands, Inc. ("Yum!") for the benefit of certain employees of the Yum! Organization who participate in the Yum! Brands Retirement Plan ("Salaried Plan").  PEP provides benefits for eligible employees whose pension benefits under the Salaried Plan are limited by the provisions of the Internal Revenue Code of 1986, as amended.  In addition, PEP provides benefits for certain eligible employees based on the pre-1989 Salaried Plan formula.

This Plan is first effective on October 7, 1997 in connection with the spinoff of Yum! from PepsiCo, Inc.  This Plan is a successor plan to the PepsiCo Pension Equalization Plan.

This document is effective as of January 1, 2005 (the “Effective Date”).  It sets forth the terms of the Plan that are applicable to benefits that are subject to Section 409A, i.e ., generally, benefits that are earned or vested after December 31, 2004 (the “409A Program”).  All other benefits under the Plan shall be governed by the document referenced in the preceding paragraph, which sets forth the pre-Section 409A terms of the Plan (the “Pre-409A Program”).  Together, this document and the document for the Pre-409A Program describe the terms of a single plan.  However, amounts subject to the terms of this 409A Program and amounts subject to the terms of the Pre-409A Program shall be tracked separately at all times.  The preservation of the terms of the Pre-409A Program, without material modification, and the separation between the 409A Program amounts and the Pre-409A Program amounts are intended to be sufficient to permit the pre-409A Program to remain exempt from Section 409A as grandfathered benefits.

Where the following words and phrases, in boldface and underlined, appear in this Plan (including the Foreword) with initial capitals they shall have the meaning set forth below, unless a different meaning is plainly required by the context.

(a)   Accrued Benefit :  The Pension payable at Normal Retirement Date determined in accordance with Article V, based on the Participant's Highest Average Monthly Earnings and Credited Service at the date of determination.

(b)   Actuarial Equivalent :  Except as otherwise specifically set forth in the Plan or any Appendix to the Plan with respect to a specific benefit determination, a benefit of equivalent value computed on the basis of the factors set forth below.  The application of the following assumptions to the computation of benefits payable under the Plan shall be done in a uniform and consistent manner.  In the event the Plan is amended to provide new rights, features or benefits, the following actuarial factors shall not apply to these new elements unless specifically adopted by the amendment.

(1)   Annuities and Inflation Protection :  To determine the amount of a Pension payable in the form of a Qualified Joint and Survivor Annuity or optional form of survivor annuity, an annuity with inflation protection, or as a period certain and life annuity, the Plan Administrator shall select the factors that are to be used.  Effective January 1, 2009, the initial factors selected by the Plan Administrator are set forth in Schedule 1, below (prior factors appear in the Appendix).  Thereafter, the Plan Administrator shall review such initial factors from time to time and shall amend such factors in its discretion.  A Participant shall have no right to have any of the actuarial factors specified under the Plan from time to time applied to his benefit (or any portion thereof), except to the extent that a particular factor is currently in effect at the time it is to be applied under the Plan.  For the avoidance of doubt, it is expressly intended and binding upon Participants that any actuarial factors selected by the Plan Administrator from time-to-time may be applied retroactively to already accrued benefits, and without regard to the actuarial factors that may have applied previously for such purpose.

(2)   Lump Sums :  To determine the lump sum value of a Pension, or a Pre-Retirement Spouse's Pension under Section 4.6, the factors applicable for such purposes under the Salaried Plan shall apply.

(3)   Other Cases :  To determine the adjustment to be made in the Pension payable to or on behalf of a Participant in other cases, the factors are those applicable for such purpose under the Salaried Plan.

(c)   Annuity :  A Pension payable as a series of monthly payments for at least the life of the Participant.

(d)   Annuity Starting Date :   The Annuity Starting Date shall be the first day of the first period for which an amount is payable under this Plan as an annuity or in any other form.  Notwithstanding anything else in the Plan to the contrary, the Annuity Starting Date shall be determined without regard to any delay that may be applicable to a Participant's Pension, such as the delay required for Key Employees under Section 6.6 or for prior payment elections under Section 6.1(a)(2).  A Participant who: (1) is reemployed after his initial Annuity Starting Date, and (2) is entitled to benefits hereunder after his reemployment, shall have a subsequent Annuity Starting Date for such benefits only to the extent provided in Section 6.3(d).

(e)   Code :  The Internal Revenue Code of 1986, as amended from time to time.  All references herein to particular Code Sections shall also refer to any successor provisions and shall include all related regulations.

(f)   Company :  Yum! Brands, Inc., a corporation organized and existing under the laws of the State of North Carolina or its successor or successors.  For periods before May 16, 2002, the Company was named Tricon Global Restaurants, Inc.  For periods before October 7, 1997, the Company under the Prior Plan was PepsiCo, Inc., a North Carolina corporation.

(g)   Covered Compensation :  "Covered Compensation" as that term is defined in the Salaried Plan.

(h)   Credited Service :  The period of a Participant's employment, calculated in accordance with Section 3.3, which is counted for purposes of determining the amount of benefits payable to, or on behalf of, the Participant.

(i)   Disability Retirement Pension :  The Retirement Pension available to a Participant under Section 4.5.

(j)   Early 409A Retirement Pension :  The 409A Retirement Pension available to a Participant under Section 4.2.

(k)   Effective Date :  The date upon which this document for the 409A Program is effective, January 1, 2005.  Certain identified provisions of the 409A Program or the Plan may be effective on different dates, to the extent noted herein.

(l)   Elapsed Time Service :  The period of time beginning with a Participant’s first date of employment with the Yum! Brands Organization and ending with the Participant’s Final Separation from Service, irrespective of any breaks in service between those two dates.  By way of illustration, if a Participant began employment with the Yum! Brands Organization on January 1, 2000, left the employment of the Yum! Brands Organization from January 1, 2001 until December 31, 2004, and was then reemployed by the Yum! Brands Organization on January 1, 2005 until he had a Final Separation from Service on December 31, 2008, the Participant would have eight years of Elapsed Time Service as of his Final Separation from Service.

(m)   Eligible Spouse :  The spouse of a Participant to whom the Participant is married on the earlier of the Participant's Annuity Starting Date or the date of the Participant's death.

(n)   Employee :  An individual who qualifies as an "Employee" as that term is defined in the Salaried Plan.

(o)   Employer :  An entity that qualifies as an "Employer" as that term is defined in the Salaried Plan.

(p)   ERISA :  Public Law No. 93-406, the Employee Retirement Income Security Act of 1974, including any amendments thereto, any similar subsequent federal laws, and any regulations from time to time in effect under any of such laws.

(q)   Highest Average Monthly Earnings :  "Highest Average Monthly Earnings" as that term is defined in the Salaried Plan, but without regard to the limitation imposed by section 401(a)(17) of the Code (as such limitation is interpreted and applied under the Salaried Plan).  Notwithstanding the foregoing, to the extent that a Participant receives, during a leave of absence, earnings that would be counted as Highest Average Monthly Earnings if they were received during a period of active service, but that will be received after the Participant’s Separation from Service, the Plan Administrator may provide for determining the Participant’s 409A Pension at Separation from Service by projecting the benefit the Participant would have if all such earnings were taken into account under the Plan.

(r)   Key Employee :  The individuals identified in accordance with the following paragraphs.

(1)   In General .  Any Participant who at any time during the applicable year is:

(i)   An officer of any member of the Yum! Brands Organization having annual compensation greater than $130,000 (as adjusted for the applicable year under Code Section 416(i)(1));

(ii)   A 5-percent owner of any member of the Yum! Brands Organization; or

(iii)   A 1-percent owner of any member of the Yum! Brands Organization having annual compensation of more than $150,000.

For purposes of subparagraph (i) above, no more than 50 employees identified in the order of their annual compensation shall be treated as officers.  For purposes of this Section, annual compensation means compensation as defined in Treas. Reg. §1.415(c)-2(a), without regard to Treas. Reg. §§1.415(c)-2(d), 1.415(c)-2(e), and 1.415(c)-2(g).  The Plan Administrator shall determine who is a Key Employee in accordance with Code Section 416(i) (provided, that Code Section 416(i)(5) shall not apply in making such determination), and provided further than the applicable year shall be determined in accordance with Section 409A and that any modification of the foregoing definition that applies under Section 409A shall be taken into account.

(2)   Applicable Year .  Effective from and after December 31, 2007, the Plan Administrator shall determine Key Employees effective as of the last day of each calendar year, based on compensation for such year, and such designation shall be effective for purposes of this Plan for the twelve-month period commencing on April 1 ^st of the next following calendar year ( e.g. , the Key Employee determination by the Plan Administrator as of December 31, 2008 shall apply to the period from April 1, 2009 to March 31, 2010).

(s)   Late Retirement Date :   The Late Retirement Date shall be the first day of the month coincident with or immediately following a Participant's actual Retirement Date occurring after his Normal Retirement Age.

(t)   Late 409A Retirement Pension :  The Retirement Pension available to a Participant under Section 4.4.

(u)   Normal Retirement Age :  The Normal Retirement Age under the Plan is age 65 or, if later, the age at which a Participant first has 5 Years of Elapsed Time Service.

(v)   Normal Retirement Date :  A Participant's Normal Retirement Date shall be the first day of the month coincident with or immediately following a Participant's Normal Retirement Age.

(w)   Normal 409A Retirement Pension :   The Retirement Pension available to a Participant under Section 4.1.

(x)   Participant :  An Employee participating in the Plan in accordance with the provisions of Section 3.1.

(y)   Pension :  One or more payments that are payable by the Plan to a person who is entitled to receive benefits under the Plan.  The term “409A Pension” shall be used to refer to the portion of a Pension that is derived from the 409A Program.  The term “Pre-409A Pension” shall be used to refer to the portion of a Pension that is derived from the Pre-409A Program.

(z)   Plan :   The Yum! Brands, Inc. Pension Equalization Plan, the Plan set forth herein and in the Pre-409A Program documents, as the Plan may be amended from time to time (subject to the limitations on amendment that are applicable hereunder and under the Pre-409A Program).  Prior to September 1, 2004, the Plan was known as the Tricon Pension Equalization Plan.  The Plan is also sometimes referred to as PEP, and it is a successor to the PepsiCo Pension Equalization Plan, which was also known as the PepsiCo Pension Benefit Equalization Plan.

(aa)   Plan Administrator :  The Company, which shall have authority to administer the Plan as provided in Article VII.

(bb)   Plan Year :  The Plan Year shall be the 12-month period commencing on January 1 and ending on December 31.

(cc)   Pre-Retirement Spouse's Pension :  The Pension available to an Eligible Spouse under the Plan.  The term "Pre-Retirement Spouse's 409A Pension" shall be used to refer to the Pension available to an Eligible Spouse under Section 4.6 of this document.

(dd)   Primary Social Security Amount :  In determining Pension amounts, Primary Social Security Amount shall mean:

(1)  For purposes of determining the amount of a Retirement, Vested or Pre-Retirement Spouse's Pension, the Primary Social Security Amount shall be the estimated monthly amount that may be payable to a Participant commencing at age 65 as an old-age insurance benefit under the provisions of Title II of the Social Security Act, as amended.  Such estimates of the old-age insurance benefit to which a Participant would be entitled at age 65 shall be based upon the following assumptions:

(i)  That the Participant's social security wages in any year prior to Retirement or Separation from Service are equal to the Taxable Wage Base in such year, and

(ii)  That he will not receive any social security wages after Retirement or Separation from Service.

However, in computing a Vested Pension under Formula A of Section 5.2, the estimate of the old-age insurance benefit to which a Participant would be entitled at age 65 shall be based upon the assumption that he continued to receive social security wages until age 65 at the same rate as the Taxable Wage Base in effect at his Separation from Service.  For purposes of this subsection, "social security wages" shall mean wages within the meaning of the Social Security Act.

(2)  For purposes of determining the amount of a Disability Pension, the Primary Social Security Amount shall be (except as provided in the next sentence) the initial monthly amount actually received by the disabled Participant as a disabil­ity insurance benefit under the provisions of Title II of the Social Security Act, as amended and in effect at the time of the Participant's Retirement due to disability.  Notwithstanding the preceding sentence, for any period that a Participant receives a Disability Pension before receiv­ing a disability insurance benefit under the pro­visions of Title II of the Social Security Act, then the Participant's Primary Social Security Amount for such period shall be determined pursuant to paragraph (1) above.

(3)  For purposes of paragraphs (1) and (2), the Primary Social Security Amount shall exclude amounts that may be available because of the spouse or any dependent of the Participant or any amounts payable on account of the Participant's death.  Estimates of Primary Social Security Amounts shall be made on the basis of the Social Security Act as in effect at the Participant's Separation from Service Date, without regard to any increases in the social security wage base or benefit levels provided by such Act which take effect thereafter.

(ee)   Prior Plan :   The PepsiCo Pension Equalization Plan.

(ff)   Qualified Joint and Survivor Annuity :  An Annuity which is payable to the Participant for life with 50 percent of the amount of such Annuity payable after the Participant's death to his surviving Eligible Spouse for life.  If the Eligible Spouse predeceases the Participant, no survivor benefit under a Qualified Joint and Survivor Annuity shall be payable to any person.  The amount of a Participant's monthly payment under a Qualified Joint and Survivor Annuity shall be reduced to the extent provided in Sections 5.1 and 5.2, as applicable.

(gg)   Retirement :  Separation from Service for reasons other than death after a Participant has fulfilled the requirements for either a Normal, Early, Late, or Disability Retirement Pension under Article IV.

(hh)   Retirement Date :  The date immediately following the Participant's Retirement.

(ii)   Retirement Pension :  The Pension payable to a Participant upon Retirement under the Plan.  The term “409A Retirement Pension” shall be used to refer to the portion of a Retirement Pension that is derived from the 409A Program.  The term “Pre-409A Retirement Pension” shall be used to refer to the portion of a Retirement Pension that is derived from the Pre-409A Program.

(jj)   Salaried  Plan :   The Yum! Brands Retirement Program for Salaried Employees, the program of retirement benefits set forth in Parts B and D of the Yum! Brands Retirement Plan, as it may be amended from time to time.  Any reference herein to the Salaried Plan for a period that is on or after September 7, 1997 but before December 30, 1998, shall mean the Tricon Salaried Employees Retirement Plan, which was renamed the Tricon Retirement Plan from December 30, 1998 to September 1, 2004.  Any reference herein to the Salaried Plan for a period that is before the September 7, 1997 shall mean the PepsiCo Salaried Employees Retirement Plan.

(kk)   Section 409A :   Section 409A of the Code.

(ll)          Separation from Service :  A Participant’s separation from service with the Yum! Brands Organization, within the meaning of Section 409A(a)(2)(A)(i).  The term may also be used as a verb ( i.e. , “Separates from Service”) with no change in meaning.  Notwithstanding the preceding sentence, a Participant’s transfer to an entity owned 20% or more by the Company will not constitute a Separation of Service to the extent permitted by Section 409A.  A Participant’s “Final Separation from Service” is the date of his Separation from Service that most recently precedes his Annuity Starting Date; provided, however, that to the extent a Participant is reemployed after an Annuity Starting Date, he will have a new Final Separation from Service with respect to any benefits to which he becomes entitled as a result of his reemployment.  The following principles shall generally apply in determining when a Separation from Service occurs:

(1)           A Participant separates from service with the Company if the Employee dies, retires, or otherwise has a termination of employment with the Company.  Whether a termination of employment has occurred is determined based on whether the facts and circumstance indicate that the Company and the Employee reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Employee would perform after such date (as an employee or independent contractor) would permanently decrease to no more than 20 percent of the average level of bona fide services performed over the immediately preceding 36-month period (or the full period in which the Employee provided services to the Company if the Employee has been providing services for less than 36 months).

(2)           An Employee will not be deemed to have experienced a Separation from Service if such Employee is on military leave, sick leave, or other bona fide leave of absence, to the extent such leave does not exceed a period of six months or, if longer, such longer period of time during which a right to re-employment is protected by either statute or contract.  If the period of leave exceeds six months and the individual does not retain a right to re-employment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period.

Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the Employee to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a 29-month period of absence may be substituted for such six-month period.

(3)           If an Employee provides services both an as employee and as a member of the Board of Directors of the Company, the services provided as a Director are generally not taken into account in determining whether the Employee has Separated from Service as an Employee for purposes of the Plan, in accordance with final regulations under Section 409A

(mm)   Service :  The period of a Participant's employment calculated in accordance with Section 3.2 for purposes of determining his entitlement to benefits under the Plan.

(nn)   Single Life Annuity :   A level monthly Annuity payable to a Participant for his life only, with no survivor benefits to his Eligible Spouse or any other person.

(oo)   Single Lump Sum :  The distribution of a Participant's total Pension in the form of a single payment, which payment shall be the Actuarial Equivalent of the Participant’s 409A Pension as of the Participant’s Normal Retirement Date (or Late Retirement Date, if applicable), but not less than the Actuarial Equivalent of the Participant’s 409A Pension as of the Participant’s Early Retirement Date, in the case of a Participant who is entitled to an immediate Early 409A Retirement Pension.

(pp)   Social Security Act :   The Social Security Act of the United States, as amended, an enactment providing governmental benefits in connection with events such as old age, death and disability.  Any reference herein to the Social Security Act (or any of the benefits provided thereunder) shall be taken as a reference to any comparable governmental program of another country, as determined by the Plan Administrator, but only to the extent the Plan Administrator judges the computation of those benefits to be administratively feasible.

(qq)   Taxable Wage Base :   The contribution and benefit base (as determined under section 230 of the Social Security Act) in effect for the Plan Year.

(rr)   Vested Pension :  The Pension available to a Participant under Section 4.3.  The term “409A Vested Pension” shall be used to refer to the portion of a Vested Pension that is derived from the 409A Program.  The term “Pre-409A Vested Pension” shall be used to refer to the portion of a Vested Pension that is derived from the Pre-409A Program.

(ss)   Yum! Brands Organization :   The controlled group of organizations of which the Company is a part, as defined by Code section 414 and regulations issued thereunder.  An entity shall be considered a member of the Yum! Brands Organization only during the period it is one of the group of organizations described in the preceding sentence.

2.2  Construction :  The terms of the Plan shall be construed in accordance with this section.

(a)          Gender and Number :  The masculine gender, where appearing in the Plan, shall be deemed to include the feminine gender, and the singular may include the plural, unless the context clearly indicates to the contrary.

(b)          Compounds of the Word "Here" :  The words "hereof", "hereunder" and other similar compounds of the word "here" shall mean and refer to the entire Plan, not to any particular provision or section.

(c)          Examples :  Whenever an example is provided or the text uses the term "including" followed by a specific item or items, or there is a passage having a similar effect, such passages of the Plan shall be construed as if the phrase "without limitation" followed such example or term (or otherwise applied to such passage in a manner that avoids limits on its breadth of application).

(d)          Subdivisions of the Plan Document :  This Plan document is divided and subdivided using the following progression:  articles, sections, subsections, paragraphs, subparagraphs, clauses and sub-clauses.  Articles are designated by capital roman numerals.  Sections are designated by Arabic numerals containing a decimal point.  Subsections are designated by lower-case letters in parentheses.  Paragraphs are designated by Arabic numerals in parentheses.  Subparagraphs are designated by lower-case roman numerals in parentheses.  Clauses are designated by upper-case letters in parentheses.  Sub-clauses are designated by upper-case roman numerals in parentheses.  Any reference in a section to a subsection (with no accompanying section reference) shall be read as a reference to the subsection with the specified designation contained in that same section.  A similar rule shall apply with respect to paragraph references within a subsection and subparagraph references within a paragraph.

3.1  Participation :  An Employee shall be a Participant in the Plan during the period:

(a)  When he would be currently entitled to receive a Pension under the Plan if his employment terminated at such time, or

(b)  When he would be so entitled but for the vesting requirement of Section 4.7.

It is expressly contemplated that an Employee, who is entitled to receive a Pension under the Plan as of a particular time, may subsequently cease to be entitled to receive a Pension under the Plan.

3.2  Service :  A Participant's entitlement to a Pension and to a Pre-Retirement Spouse's Pension for his Eligible Spouse shall be determined under Article IV based upon his period of Service.  A Participant's period of Service shall be determined under Article III of the Salaried Plan.  If a Participant’s period of Service (as so determined) would extend beyond the Participant’s Separation from Service date because of a leave of absence, the Plan Administrator may provide for determining the Participant’s 409A Pension at Separation from Service by projecting the benefit the Participant would have if all such Service were taken into account under the Plan.

3.3   Credited Service :  The amount of a Participant's Pension and a Pre-Retirement Spouse's Pension shall be based upon the Participant's period of Credited Service, as determined under Article III of the Salaried Plan.  If a Participant’s period of Credited Service (as so determined) would extend beyond the Participant’s Separation from Service date because of a leave of absence, the Plan Administrator may provide for determining the Participant’s 409A Pension at Separation from Service by projecting the benefit the Participant would have if all such Service were taken into account under the Plan.

A Participant shall be eligible to receive a Pension and a surviving Eligible Spouse shall be eligible for certain survivor benefits as provided in this Article.  The amount of any such Pension or survivor benefit shall be determined in accordance with Article V.

4.1  Normal 409A Retirement Pension :  A Participant shall be eligible for a Normal 409A Retirement Pension if he is employed in an eligible classification and Separates from Service after attaining Normal Retirement Age (provided, however, that with respect to  determining the form of payment to which a Participant is entitled under Article VI, the eligible classification requirement shall be ignored).

4.2  Early 409A Retirement Pension :  A Participant shall be eligible for an Early 409A Retirement Pension if he is employed in an eligible classification and Separates from Service prior to attaining Normal Retirement Age but after attaining at least age 55 and completing 10 or more years of Elapsed Time Service (provided, however, that with respect to  determining the form of payment to which a Participant is entitled under Article VI, the eligible classification requirement shall be ignored).

4.3   409A Vested Pension: A Participant who is vested under Section 4.7 shall be eligible to receive a 409A Vested Pension if he is employed in an eligible classification under the Salaried Plan and Separates from Service before he is eligible for a Normal 409A Retirement Pension or an Early 409A Retirement Pension (provided, however, that with respect to  determining the form of payment to which a Participant is entitled under Article VI, the eligible classification requirement shall be ignored).  A Participant who terminates employment prior to satisfying the vesting requirement in Section 4.7 shall not be entitled to receive a Pension under this Plan.

4.4   Late 409A Retirement Pension :  A Participant who continues without a Separation from Service after his Normal Retirement Age shall not receive a Pension until his Late Retirement Date.  Thereafter, a Participant shall be eligible for a Late Retirement Pension determined in accordance with Section 4.4 of the Salaried Plan (but without regard to any requirement for notice of suspension under ERISA section 203(a)(3)(B) or any adjustment as under Section 5.5(d) of the Salaried Plan).

4.5   409A Disability Pension :  A Participant shall be eligible for a 409A Disability Pension if he meets the requirements for a Disability Pension under the Salaried Plan.  A Participant’s 409A Disability Pension, if any, shall generally be comprised of two parts.  The first part shall represent the benefits with respect to a disabled Participant’s Credited Service through the day of the Participant’s Separation from Service ( i.e. , the Participant’s "Pre-Separation Accruals").  In the event the disabled Participant continues to receive Credited Service related to the disability after such Separation from Service, the Participant’s 409A Disability Pension shall have a second part, which shall represent all benefits accrued with respect to Credited Service from the date immediately following the Participant’s Separation from Service until the earliest of the Participant’s (i) attainment of age 65, (ii) benefit commencement date under the Salaried Plan or (iii) recovery from the disability ( i.e. , the Participant’s "Post-LTD Accruals").

4.6   Pre-Retirement Spouse's 409A Pension :  Any Pre-Retirement Spouse's 409A Pension is payable under this section only in the event the Participant dies prior to his Annuity Starting Date.  Any Pre-Retirement Spouse’s 409A Pension payable on behalf of a Participant shall commence as of the first day of the month following the Participant’s death and, subject to Section 4.9, shall be paid as either (a) a lump sum, if the Participant would have been entitled to a 409A Retirement Pension on the date of his death, or (b)  a monthly annuity for the life of the Eligible Spouse, if the Participant would have been entitled to a 409A Vested Pension on the date of his death.

(a)   Active, Disabled and Retired Employees :  A Pre-Retirement Spouse's 409A Pension shall be payable under this subsection to a Participant's Eligible Spouse (if any) who is entitled under the Salaried Plan to the special pre-retirement spouse's pension for survivors of active, disabled and retired employees.  The amount (if any) of such Pension shall be determined in accordance with the provisions of Section 5.3 (with the 409A Pension, if any, determined after application of Section 5.6).

(b)   Vested Employees :  A Pre-Retirement Spouse's 409A Pension shall be payable under this subsection to a Participant's Eligible Spouse (if any) who is entitled under the Salaried Plan to the pre-retirement spouse's pension for survivors of vested terminated Employees.  The amount (if any) of such Pension shall be determined in accordance with the provisions of Section 5.3 (with the 409A Pension, if any determined after application of Section 5.6).  If pursuant to this Section 4.6(b) a Participant has Pre-Retirement Spouse's coverage in effect for his Eligible Spouse, any Pension calculated for the Participant under Section 5.2(b) shall be reduced for each year such coverage is in effect by the applicable percentage set forth below (based on the Participant's age at the time the coverage is in effect) with a pro rata reduc­tion for any portion of a year.  No reduction shall be made for coverage in effect within the 90-day period following a Participant's termination of employment.

4.7   Vesting :  A Participant shall be fully vested in, and have a nonforfeitable right to, his Accrued Benefit at the time he becomes fully vested in his accrued benefit under the Salaried Plan.

4.8   Time of Payment :  The distribution of a Participant's 409A Pension shall commence as of the time specified in Section 6.1, subject to Section 6.6.

4.9   Cashout Distributions

Notwithstanding the availability or applicability of a different form of payment under Article VI, the following rules shall apply in the case of certain small benefit Annuity payments:

(a)   Distribution of Participant's Pension :  If  at a Participant's Annuity Starting Date the Actuarial Equivalent lump sum value of the Participant's PEP Pension is equal to or less than $15,500, the Plan Administrator shall distribute to the Participant such lump sum value of the Participant's PEP Pension.

(b)   Distribution of Pre-Retirement Spouse's Pension Benefit :  If at the time payments are to commence to an Eligible Spouse under Section 4.6, the Actuarial Equivalent lump sum value of the PEP Pre-Retirement Spouse's Pension to be paid is equal to or less than $15,500, the Plan Administrator shall distribute to the Eligible Spouse such lump sum value of the PEP Pre-Retirement Spouse's Pension.

Any lump sum distributed under this section shall be in lieu of the Pension that otherwise would be distributable to the Participant or Eligible Spouse hereunder.

4.10            Reemployment of Certain Participants :  In the case of a current or former Participant who is receiving his Pension as an Annuity under Section 6.1(b), and who is reemployed and is eligible to re-participate in the Salaried Plan after his Annuity Starting Date, payment of his 409A Pension will continue to be paid in the same form as it was paid prior to his reemployment.  Any additional 409A Pension that is earned by the Participant shall be paid based on the Separation from Service that follows the Participant's re-employment.

When a 409A Pension becomes payable to or on behalf of a Participant under this Plan, the amount of such 409A Pension shall be determined under Section 5.1, 5.2 or 5.3 (whichever is applicable), subject to any adjustments required under Sections 4.6(b), 5.4 and 5.5.

5.1   Participant’s 409A Pension

(a)   Calculating the 409A Pension:   A Participant's 409A Pension shall be calculated as follows (on the basis specified in subsection (b) below and using the definitions appearing in subsection (c) below):

(1)  His Total Pension, reduced by

(2)  His Salaried Plan Pension, and then further reduced by (but not below zero)

(3)  His Pre-409A Pension.

(b)   Basis for Determining :  The 409A Pension Benefit amount in subsection (a) above shall be determined on a basis that takes into account applicable reductions for early commencement and that reflects, as applicable, the relative value of forms of payment.

(c)   Definitions :  The following definitions apply for purposes of this section.

(1)  A Participant's "Total Pension" means the greater of:

(i)  The amount of the Participant's pension determined under the terms of the Salaried Plan, but without regard to:  (A) the limitations imposed by sections 401(a)(17) and 415 of the Code (as such limitations are interpreted and applied under the Salaried Plan), and (B) the actuarial adjustment under Section 5.7(d) of the Salaried Plan (relating to benefits that are deferred beyond the Participant’s Normal Retirement Date); or

(ii)  The amount (if any) of the Participant's PEP Guarantee determined under Section 5.2.

As necessary to ensure the Participant’s receipt of a "greater of" benefit, the foregoing comparison shall be made by reflecting, as applicable, the relative value of forms of payment.

(2)  A Participant's "Salaried Plan Pension" means the amount of the Participant's pension determined under the terms of the Salaried Plan.

5.2   PEP Guarantee :  A Participant who is eligible under subsection (a) below shall be entitled to a PEP Guarantee benefit determined under subsection (b) below.  In the case of other Participants, the PEP Guarantee shall not apply.

(a)   Eligibility :  A Participant shall be covered by this section if the Participant has 1988 pensionable earnings from an Employer of at least $75,000.  For purposes of this section, "1988 pensionable earnings" means the Participant's remuneration for the 1988 calendar year, which was recognized for benefit received under the Salaried Plan as in effect in 1988.  "1988 pensionable earnings" does not include remuneration from an entity attributable to any period when that entity was not an Employer.

(b)   PEP Guarantee Formula :  The amount of a Participant's PEP Guarantee shall be determined under the applicable formula in paragraph (1), subject to the special rules in paragraph (2).

(1)   Formulas :  The amount of a Participant's Pension under this paragraph shall be determined in accordance with subparagraph (i) below.  However, if the Participant was actively employed by the Yum! Brands Organization in a classification eligible for the Salaried Plan prior to July 1, 1975, the amount of his Pension under this paragraph shall be the greater of the amounts determined under subparagraphs (i) and (ii), provided that subparagraph (ii)(B) shall not apply in determining the amount of a Vested Pension.

(i)   Formula A :  The Pension amount under this subparagraph shall be:

(A)  3 percent of the Participant's Highest Average Monthly Earnings for the first 10 years of Credited Service, plus

(B)  1 percent of the Participant's Highest Average Monthly Earnings for each year of Credited Service in excess of 10 years, less

(C)  1-2/3 percent of the Participant's Primary Social Security Amount multiplied by years of Credited Service not in excess of 30 years.

In determining the amount of a Vested Pension under this Formula A, the Pension shall first be calculated on the basis of (I) the Credited Service the Participant would have earned had he remained in the

(ii)            Formula B :  The Pension amount under this subparagraph shall be the greater of (A) or (B) below:

(A)           1-1/2 percent of Highest Average Monthly Earnings times the number of years of Credited Service, less 50 percent of the Participant's Primary Social Security Amount, or

(B)           3 percent of Highest Average Monthly Earnings times the number of years of Credited Service up to 15 years, less 50 percent of the Participant's Primary Social Security Amount.

In determining the amount of a Disability Pension under Formula A or B above, the Pension shall be calculated on the basis of the Participant's Credited Service (determined in accordance with Section 3.3(d)(3) of the Salaried Plan), and his Highest Average Monthly Earnings and Primary Social Security Amount at the date of disability.

(2)   Calculation :  The amount of the PEP Guarantee shall be determined pursuant to paragraph (1) above, subject to the following special rules:

(i)   Surviving Eligible Spouse's Annuity :  Subject to subparagraph (iii) below and the last sentence of this subparagraph, if the Participant has an Eligible Spouse and has commenced receipt of an Annuity under this section, the Participant's Eligible Spouse shall be entitled to receive a survivor annuity equal to 50 percent of the Participant's Annuity under this section, with no corresponding reduction in such Annuity for the Participant.  Annuity payments to a surviving Eligible Spouse shall begin on the first day of the month coincident with or following the Participant's death and shall end with the last monthly payment due prior to the Eligible Spouse's death.  If the Eligible Spouse is more than 10 years younger than the Participant, the survivor benefit payable under this subparagraph shall be adjusted as provided below.

(A)  For each full year more than 10 but less than 21 that the surviving Eligible Spouse is younger than the Participant, the survivor benefit payable to such spouse shall be reduced by 0.8 percent.

(B)  For each full year more than 20 that the surviving Eligible Spouse is younger than the Participant, the survivor benefit payable to such spouse shall be reduced by an additional 0.4 percent.

(ii)   Reductions :  The following reductions shall apply in determining a Participant's PEP Guarantee.

(A)  If the Participant will receive an Early Retirement Pension, the payment amount shall be reduced by 3/12ths of 1 percent for each month by which the benefit commencement date precedes the date the Participant would attain his Normal Retirement Date.

(B)  If the Participant is entitled to a Vested Pension, the payment amount shall be reduced to the actuarial equivalent of the amount payable at his Normal Retirement Date (if payment commences before such date), and the Section 4.6(b) reductions for any Pre-Retirement Spouse's coverage shall apply.

(C)  This clause applies if the Participant will receive his Pension in a form that provides an Eligible Spouse benefit, continuing for the life of the surviving spouse, that is greater than that provided under subparagraph (i).  In this instance, the Participant's Pension under this section shall be reduced so that the total value of the benefit payable on the Participant's behalf is the actuarial equivalent of the Pension otherwise payable under the foregoing provisions of this section.

(D)  This clause applies if the Participant will receive his Pension in a form that provides a survivor annuity for a beneficiary who is not his Eligible Spouse.  In this instance, the Participant's Pension under this section shall be reduced so that the total value of the benefit payable on the Participant's behalf is the actuarial equivalent of a Single Life Annuity for the Participant's life.

(E)  This clause applies if the Participant will receive his Pension in a Annuity form that includes inflation protection described in Section 6.2(b).  In this instance, the Participant's Pension under this section shall be reduced so that the total value of the benefit payable on the Participant's behalf is the actuarial equivalent of the elected Annuity without such protection.

(iii)   Lump Sum Conversion :  The amount of the Retirement Pension determined under this section for a Participant whose Retirement Pension will be distributed in the form of a lump sum shall be the actuarial equivalent of the Participant's PEP Guarantee determined under this section, taking into account the value of any survivor benefit under subparagraph (i) above and any early retirement reductions under subparagraph (ii)(A) above.

For purposes of this paragraph (2), actuarial equivalence shall be determined taking into account the PEP Guarantee’s purpose to preserve substantially the value of a benefit under the pre-1989 terms of the Plan and the 409A Plan’s design that offers alternative annuities that are considered actuarial equivalent for purposes of Section 409A (taking into account, without limitation, the special rule for subsidized joint and survivor annuities in Treasury Regulation § 1.409A-3(b)(ii)(C)).

5.3   Amount of Pre-Retirement Spouse's 409A Pension :  The  monthly amount of the Pre-Retirement Spouse's 409A Pension payable to a surviving Eligible Spouse under Section 4.6 shall be determined under subsection (a) below.

(a)   Calculation :  An Eligible Spouse's Pre-Retirement Spouse's 409A Pension shall be the difference between:

(1)  The Eligible Spouse's Total Pre-Retirement Spouse's Pension, reduced by

(2)  The Eligible Spouse's Salaried Plan Pre-Retirement Spouse's Pension, and then further reduced by (but not below zero)

(3)  The Eligible Spouse's Pre-Retirement Spouse's Pension derived from the Pre-409A Program.

(b)   Definitions :  The following definitions apply for purposes of this section.

(1)  An Eligible Spouse's "Total Pre-Retirement Spouse's Pension" means the greater of:

(i)  The amount of the Eligible Spouse's pre-retirement spouse's pension determined under the terms of the Salaried Plan, but without regard to:  (A) the limitations imposed by sections 401(a)(17) and 415 of the Code (as such limitations are interpreted and applied under the Salaried Plan), and (B) the actuarial adjustment under Section 5.5(d) of the Salaried Plan; or

(ii)  The amount (if any) of the Eligible Spouse's PEP Guarantee Pre-Retirement Spouse's Pension determined under subsection (c).

In making this comparison, the benefits in subparagraphs (i) and (ii) above shall be calculated as if payable as of what would be the Normal Retirement Date of the Participant related to the Eligible Spouse.

(2)  An "Eligible Spouse's Salaried Plan Pre-Retirement Spouse’s Pension” means the Pre-Retirement Spouse’s Pension that would be payable to the Eligible Spouse under the terms of the Salaried Plan.

(3)  An “Eligible Spouse’s Pre-Retirement Spouse’s Pension derived from the Pre-409A Program” means the Pre-Retirement Spouse’s Pension that would be payable to the Eligible Spouse under the terms of the Pre-409A Program.

(c)   PEP Guarantee Pre-Retirement Spouse's Pension :  An Eligible Spouse's PEP Guarantee Pre-Retirement Spouse's Pension shall be determined in accordance with paragraph (1) or (2) below, whichever is applicable, with reference to the PEP Guarantee (if any) that would have been available to the Participant under Section 5.2.

(1)   Normal Rule :  The Pre-Retirement Spouse's Pension payable under this paragraph shall be equal to the amount that would be payable as a survivor annuity, under a Qualified Joint and Survivor Annuity, if the Participant had:

(i)  Separated from Service on the date of death (or, if earlier, his actual Separation from Service);

(ii)  Commenced a Qualified Joint and Survivor Annuity on the same date payments of the Qualified Pre-Retirement Spouse's Pension are to commence; and

(iii)  Died on the day immediately following such commencement.

(2)   Special Rule for Active and Disabled Employees :  Notwithstanding paragraph (1) above, the Pre-Retirement Spouse's Pension paid on behalf of a Participant described in Section 4.6(a) shall not be less than an amount equal to 25 percent of such Participant's PEP Guarantee (if any) determined under Section 5.2.  For this purpose, Credited Service shall be determined as provided in Section 3.3(d)(2) of the Salaried Plan, and the deceased Participant's Highest Average Monthly Earnings, Primary Social Secu