Yum! Brands (YUM)

WHEREAS:

        Nearly two-thirds of corporate executives worldwide surveyed by McKinsey & Company said "their companies face a rising level of risk to their ability to supply customers with goods and services cost effectively." Yet, the survey found

[f]ew executives are confident that their companies can manage these risks successfully and businesses are making surprisingly little use of some well-known analytical tools and simple best practices that could help.

The McKinsey Quarterly 2007 Number 1, pages 10-12.

        The global food production system faces numerous challenges:

•

Severe droughts and increasing water scarcity in key agricultural regions linked to global warming;



•

Rising prices for oil and petroleum-based agricultural inputs; and



•

Competing use of food crops for bio-fuels.

        Several dramatic events have undermined consumer confidence by highlighting weaknesses in the food safety system:

•

Closure of Topps Meat Co., the largest U.S. manufacturer of frozen hamburger, following recall of 21.7 million pounds of hamburger contaminated with e-coli.



•

Nationwide recall of spinach from California, which produces 74% of the U.S. spinach crop, due to e-coli contamination.



•

Contamination of the long-grain rice supply in the southern United States with genetically engineered rice not approved for human consumption, leading Japan to ban imports of U.S. long grain rice and the EU to require testing of all U.S. rice shipments.



•

Sale of poisoned pet food, tainted seafood and other products from China containing toxic ingredients

        According to a Consumer Reports survey, 92% of Americans want to know the country of origin for their food. http://greenerchoices.org/products.efm?product=crfood&pcat=food

        Pesticide residues on imported fruits and vegetables, which account for about one-third of U.S. consumption of these products, are "major and growing" contributors to dietary risk. While U.S. farmers have adopted lower-risk use patterns, growers outside the U.S. continue using older, higher-risk pesticides. Impacts of the Food Quality Protection Act on Children's Exposures to Pesticides, pages 10-11 (2006). http://www.organiccenter.org/reportfiles/7452_ Landrigan _AAAS%20Paper.pdf

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Table of Contents

        The UN Food and Agriculture Organization (FAO) warned that increasing industrialization of pig and poultry production "could lead to a higher risk of disease transmission from animals to humans." The large quantities of animal waste contain many pathogens and the movement of the animals in international trade increases the likelihood pathogen transfers. The FAO cited the "recent emergence of contagious human diseases from animals" such as Nipah in 1999, SAKS in 2002 and the current epidemic of Highly Pathogenic Avian Influenza (HPAI). Industrial Livestock Production and Global Health Risks (June 2007). http://www.fao.org/ag/againfo/projects/en/pplpi/docarc/rep-hpa i_industrialisationrisks.pdf

        RESOLVED: Shareholders request that the Board of Directors report to shareholders by December, 2009 on measures taken to ensure the long-term sustainability and security of our company's product supply chain, including:

•

Strategies to significantly reduce waste, energy and water use throughout the supply chain;



•

Resource conservation programs and pollution prevention measures for the full product life-cycle;



•

Labeling products for country of origin and presence of genetically modified ingredients; and



•

Safety testing and systems to ensure identity preservation and traceability "from farm to fork."

MANAGEMENT STATEMENT IN OPPOSITION
TO SHAREHOLDER PROPOSAL

What is the recommendation of the Board of Directors?

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THIS PROPOSAL.

WHEREAS:

        Nearly two-thirds of corporate executives worldwide surveyed by McKinsey & Company said "their companies face a rising level of risk to their ability to supply customers with goods and services cost effectively." Yet, the survey found

[f]ew executives are confident that their companies can manage these risks successfully and businesses are making surprisingly little use of some well-known analytical tools and simple best practices that could help.

The McKinsey Quarterly 2007 Number 1, pages 10-11.

        The global food production system faces numerous challenges:

•

Severe droughts and increasing water scarcity in key agricultural regions linked to global warming;



•

Rising prices for oil and petroleum-based agricultural inputs; and



•

Competing use of food crops for bio-fuels.

        Several dramatic events have undermined consumer confidence by highlighting weaknesses in the food safety system:

•

Closure of Topps Meat Co., the largest U.S. manufacturer of frozen hamburger, following recall of 21.7 million pounds of hamburger contaminated with e-coli.



•

Nationwide recall of spinach from California, which produces 74% of the U.S. spinach crop, due to e-coli contamination.



•

Contamination of the long-grain rice supply in the southern United States with genetically engineered rice not approved for human consumption, leading Japan to ban imports of U.S. long-grain rice and the EU to require testing of all U.S. rice shipments.



•

Sale of poisoned pet food, tainted seafood and other products from China containing toxic ingredients.

        According to a Consumer Reports survey, 92% of Americans want to know the country of origin for their food. http://greenerchoices.org/products.cfm?product=crfood&pcat=food

        Pesticide residues on imported fruits and vegetables, which account for about one-third of U.S. consumption of these products, are "major and growing" contributors to dietary risk. While U.S. farmers have adopted lower-risk use patterns, growers outside the U.S. continue using older, higher-risk pesticides. Impacts of the Food Quality Protection Act on Children's Exposures to Pesticides, pages 10-11 (2006). http://www.organiccenter.org/reportfiles/7452_Landrigan_AAAS%20Paper.pdf

        The UN Food and Agriculture Organization (FAO) warned that increasing industrialization of pig and poultry production "could lead to a higher risk of disease transmission from animals to humans." The large

39

quantities of animal waste contain many pathogens and the movement of the animals in international trade increases the likelihood pathogen transfers. The FAO cited the "recent emergence of contagious human diseases from animals" such as Nipah in 1999, SARS in 2002 and the current epidemic of Highly Pathogenic Avian Influenza (HPAI). Industrial Livestock Production and Global Health Risks (June 2007). http://www.fao.org/ag/againfo/projects/en/pplpi/docarc/rep-hpai_ industrialisationrisks.pdf

        RESOLVED:    Shareholders request that the Board of Directors report to shareholders by December, 2008 on measures taken to ensure the long-term sustainability and security of our company's product supply chain including:

•

Strategies to significantly reduce waste, energy and water use throughout the supply chain;



•

Resource conservation programs and pollution prevention measures for the full product life-cycle;



•

Labeling products for country of origin and presence of genetically modified ingredients; and



•

Safety testing and systems to ensure identity preservation and traceability "from farm to fork."

MANAGEMENT STATEMENT IN OPPOSITION
TO SHAREHOLDER PROPOSAL

What is the recommendation of the Board of Directors?

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THIS PROPOSAL.

Whereas:

Our company’s Long John Silver’s, the world’s most popular quick-service Seafood chain, serves finfish as well as shrimp, clams, crab cakes and langostino lobster bites. With more than 1,200 restaurants worldwide, the chain serves nearly four million customers each week.

While our Company’s Web site states that YUM! Brands works to influence the way animals it procures, specifically poultry, are cared for and handled, it does not indicate if there are policies in place to ensure that all our fish and seafood are caught or raised in an environmentally sustainable manner.

Several scientific studies have warned of the destruction of critical ocean habitats, loss of marine bio-diversity and dangerous depletion of global fish stocks.

The latest such study, which analyzed 64 marine ecosystems that provide 83% of the world’s seafood catch, concluded that a “total collapse of all world fisheries” could happen by 2048 “unless we fundamentally change” the way we manage marine resources. (Science 11/2/06)

Since 1950, industrial fishing fleets have emptied the seas of 90% of all large predators such as tuna, marlin, swordfish, cod, halibut, and flounders “not just in some areas, not just for some stocks, but for entire communities of these large fish species from the tropics to the poles.”  (Science 5/15/03)

Bottom trawling, the practice of dragging nets along the Sea floor to catch large volumes of fish, not only destroys habitats, it endangers marine mammals, sea turtles, birds and non-commercial fish that are also captured. This destructive practice wreaks havoc on marine ecosystems and disrupts the food webs on which marine life depends.

As wild fish catches have declined, fish farming (aquaculture) has grown exponentially: from 1992 to 2002, global production of farmed finfish and shellfish almost tripled in weight (FAO 2003). Commercial farms now produce about 40% of all fish directly consumed by humans worldwide. http:/www.frontiersinecology.org/specialissue/articles/Goldburg.pdf

However, aquaculture raises ecological concerns. Most farmed fish are carnivores that essentially are fed wild fish. Two to five pounds of wild prey fish are required to create one pound of farmed sa1mon and nearly 15% of the global seafood catch is converted into fishmeal to feed farmed fish annually. Fishmeal can concentrate lead, mercury, cadmium and toxins, like PCBs, that bio-accumulate in fish and humans.

1.     Increasing the representation of individuals from underrepresented religious groups in the workforce including managerial, supervisory, administrative, clerical and technical jobs.

2.     Adequate security for the protection of minority employees both at the workplace and while traveling to and from work.

3.     The banning of provocative religious or political emblems from the workplace.

4.     All job openings should be publicly advertised and special recruitment efforts should be made to attract applicants from underrepresented religious groups.

5.     Layoff, recall, and termination procedures should not in practice, favor particular religious groupings.

6.     The abolition of job reservations, apprenticeship restrictions and differential employment criteria, which discriminate on the basis of religion or ethnic origin.

7.     The development of training programs that will prepare substantial numbers of current minority employees for skilled jobs, including the expansion of existing programs and the creation of new programs to train, upgrade, and improve the skills of minority employees.

8.     The establishment of procedures to assess, identify and actively recruit minority employees with potential for further advancement.

9.     The appointment of a senior management staff member to oversee the company’s affirmative action efforts and the setting up of timetables to carry out affirmative action principles.

RESOLVED, Shareholders request the Board of Directors to:

1.     Make all possible lawful efforts to implement and/or increase activity on each of the nine MacBride Principles.

1.     Increasing the representation of individuals from underrepresented religious groups in the workforce including managerial, supervisory, administrative, clerical and technical jobs.

2.     Adequate security for the protection of minority employees both at the workplace and while traveling to and from work.

3.     The banning of provocative religious or political emblems from the workplace.

4.     All job openings should be publicly advertised and special recruitment efforts should be made to attract applicants from underrepresented religious groups.

5.     Layoff, recall, and termination procedures should not in practice, favor particular religious groupings.

6.     The abolition of job reservations, apprenticeship restrictions, and differential employment criteria, which discriminate on the basis of religion or ethnic origin.

7.     The development of training programs that will prepare substantial numbers of current minority employees for skilled jobs, including the expansion of existing programs and the creation of new programs to train, upgrade, and improve the skills of minority employees.

8.     The establishment of procedures to assess, identify and actively recruit minority employees with potential for further advancement.

9.     The appointment of a senior management staff member to oversee the company’s affirmative action efforts and the setting up of timetables to carry out affirmative action principles.

RESOLVED: Shareholders request the Board of Directors to:

To urge Yum Brands’ franchise holders in Northern Ireland to take all possible lawful efforts to implement and/or increase activity on each of the nine MacBride Principles.

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