You are receiving the enclosed prospectus because youhold stock options, stock appreciation rights or certainother awards granted under equity compensationprograms of Yum! Brands, Inc. (‘‘Yum’’) that have beenconverted into adjusted awards representing the right toacquire common stock of Yum China in connection withthe separation of Yum China from Yum on October 31,2016. This prospectus includes or incorporates byreference a description of the Yum China business andthe risks of an investment in Yum China. If you alsoowned shares of Yum! Brands, Inc. common stock as ofOctober 19, 2016, you have separately been sent a copyof or link to the information statement that was filed onForm 10 with the U.S. Securities and ExchangeCommission. These documents are for your informationand reference only. No action is required.

MEMORANDUM

YUM CHINA HOLDINGS, INC.

Shares of Common Stock (par value $.01 per share)

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YUM CHINA HOLDINGS, INC. LONG TERM INCENTIVE PLAN __________________

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS

COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

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The prospectus relates to 45,000,00,000 shares of common stock, par value $.01 per share, of Yum China Holdings, Inc., a company organized under the laws of Delaware (“Yum China”), reserved for issuance under the Yum China Holdings, Inc. Long Term Incentive Plan, effective as of October 31, 2016 (the “Plan”).

__________________ NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THE PROSPECTUS IS TRUTHFUL AND COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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Neither delivery of this document (and the documents required to be delivered pursuant to Rule 428(b)(2) under the Securities Act of 1933, as amended) nor any sale made under the prospectus will, under any circumstances, create any implication that there has been no change in the affairs of Yum China since the date of the prospectus or the dates as of which information is set forth herein. No person has been authorized to give any information or to make any representations, other than as contained in the prospectus or in the documents incorporated by reference herein, in connection with the offer contained in the prospectus, and, if given or made, such information or representations must not be relied upon as having been authorized by Yum China. The prospectus does not constitute an offer to sell or a solicitation of an offer to buy the securities to which it relates in any state or other jurisdiction in which, or to any person to whom, it is unlawful to make such offer or solicitation.

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THE DATE OF THIS PROSPECTUS IS October 31, 2016

INTRODUCTORY STATEMENT This prospectus summarizes certain provisions of the Yum China Holdings, Inc. Long Term Incentive Plan, which in this prospectus we refer to as the “Plan,” and provides important information about Yum China Holdings, Inc. This prospectus relates to awards that may be granted under the Plan. You should refer to the relevant award agreement that applies to any awards that you may hold under the Plan for the terms of those awards. We encourage you to keep this prospectus and all other documentation relating to your Plan awards, including the award agreement which provides specific details regarding your awards, for future reference. Throughout this prospectus, we will refer to Yum China Holdings, Inc. as “us,” “we,” the “Company” or “Yum China”. When we refer to the “Board,” we mean the board of directors of Yum China. Similarly, when we refer to the “Committee,” we mean the Compensation Committee of the Board which administers the Plan, unless otherwise specified. When we refer to “Common Stock,” we mean Yum China common stock, par value $.01 per share, which is traded on the New York Stock Exchange under trading symbol “YUMC”. As noted above, the following information is intended as a summary of the material provisions of the Plan. Further, the summary set forth below is qualified in its entirety by the complete text of the Plan and your award agreement. If there is a discrepancy between the summary in this prospectus, and the Plan document and your award agreement, the Plan document and your award agreement will govern. A copy of the Plan may be obtained upon request to Yum China Holdings, Inc. 7100 Corporate Drive, Plano, Texas 75024 or 3 Hongqiao Road, Shanghai 2000030, The People’s Republic of China or by phone at (888) 298-6986.

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IMPORTANT INFORMATION ABOUT THE COMPANY

An important part of your participation in the Plan is understanding Yum China, its operations and financial condition. Like any shareholder of the Company, you can keep yourself informed about Yum China by reviewing proxy statements, reports to shareholders and other documents that we prepare for our shareholders and the general public. If you become a shareholder of the Company, you will be entitled to attend shareholder meetings and to vote in the election of directors and on other matters brought before the shareholders.

The U.S. federal securities laws require the Company to provide information about

its business and financial status in annual reports, commonly known as “10-Ks,” quarterly reports, commonly known as “10-Qs,” and current reports relating to important corporate events during the year, commonly known as “8-Ks.” These reports are filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company also prepares and files with the SEC a proxy statement in connection with its annual meeting of shareholders. The proxy statement provides further information about the Company and its officers, directors and major shareholders. From time to time, the Company may also file other documents with the SEC as required by Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The following documents we filed with the SEC are incorporated by reference into

this document, which constitutes the prospectus for the Plan:

� The Company’s latest annual report on Form 10-K filed pursuant to Sections 13(a) or 15(d) of the Exchange Act, containing audited financial statements for the Company’s latest fiscal year;

� All other reports filed pursuant to Sections 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by the document referred to above;

� All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this prospectus and prior to the filing of a post-effective amendment; and

� The description of the Common Stock contained in its Registration Statement on Form 8-A filed under the Exchange Act, including any amendment or report filed for the purpose of updating such description.

For a copy of these documents, all of which are available without charge and upon

written or oral request, please contact Yum China Holdings, Inc., 7100 Corporate Drive, Plano, Texas 75024 or 3 Hongqiao Road, Shanghai 2000030, The People’s Republic of China, Attention: Shareholder Coordinator or by phone at (888) 298-6986. Alternatively, you can obtain, on the SEC’s website at http://www.sec.gov, copies of these documents and other information regarding the Company that was filed electronically.

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If you are already a shareholder of the Company, you should receive copies of the Company’s proxy statement, reports to shareholders and other shareholder communications.

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GENERAL INFORMATION ABOUT THE PLAN

1. What is the Plan? The Plan provides for the grant of certain equity and equity-based awards as described herein. Awards under the Plan may be made to eligible employees of Yum China and its eligible subsidiaries and non-employee members of the Board. The purpose of the Plan is to:

� attract and retain eligible individuals; � motivate Plan participants to achieve long-range Yum China goals; � provide long-term incentive compensation opportunities that are competitive with

other similar companies; and � align the interests of Plan participants with those of Yum China’s shareholders.

In addition, awards will be made under the Plan to individuals who are entitled to awards with respect to Common Stock pursuant to the Employee Matters Agreement between the Company and Yum! Brands, Inc. (“Yum!”) dated October 31, 2016 (relating to employee and employee benefit matters in connection the separation of the Company from Yum! and the distribution of stock of the Company to Yum!’s shareholders, the “Employee Matters Agreement”) . These awards are sometimes referred to as “EMA Awards”.

2. When did the Plan become effective? The Plan became effective on October 31, 2016 and was approved by the sole shareholder of Yum China on October 5, 2016.

3. How long will the Plan be in effect? The Plan is unlimited in duration but no awards may be granted after October 31, 2026, unless the Plan is earlier terminated by the Board. If the Plan is terminated, it will remain in effect as long as any awards under the Plan are outstanding.

4. Who administers the Plan? The Plan is administered and interpreted by the Committee. The Committee has full power and authority to administer, interpret the Plan, select from among the eligible individuals the persons who will receive awards under the Plan (and the terms and conditions thereof), and to adopt such rules, regulations, agreements, guidelines and instruments for the administration of the Plan and for the conduct of their business as the Committee deems desirable, subject to the terms and conditions of the Plan. The Committee also has authority to delegate various aspects of the Plan’s administration to any of its members or other persons selected by it, including Yum China management. The Committee may revoke any delegation at any time. Interpretations of the Plan by the Committee or its delegate, and all actions taken and determinations made by the Committee or its delegate concerning any matter relating to the Plan or awards thereunder, will be

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final, binding and conclusive on all parties concerned, including, without limitation, recipients of such awards and their beneficiaries, employees of Yum China and its subsidiaries, Yum China and Yum China shareholders. Additional information about the administration of the Plan may be obtained from Yum China Holdings, Inc., 7100 Corporate Drive, Plano, Texas 75024 or 3 Hongqiao Road, Shanghai 2000030, The People’s Republic of China, Attention: Compensation Department, or by phone at (888) 298-6986.

5. Is the Plan subject to ERISA or tax-qualified under Code Section 401(a)?

The Plan is not a retirement plan or welfare benefit plan and, therefore, is not subject to the Employee Retirement Income Security Act of 1974, as amended, or qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”).

6. What types of awards are available under the Plan?

Stock Options, Stock Appreciation Rights (“SARs”), Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares and Cash Incentive Awards may be granted under the Plan. EMA Awards will also be granted under the Plan.

7. Who bears the costs of administering the Plan? The cost and expenses of administering the Plan will be borne by Yum China and its subsidiaries and will not be charged to any award or to any award recipient. The Plan will be unfunded. Except for reserving a sufficient number of shares of Common Stock to meet the requirements of the Plan, Yum China will not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any award under the Plan.

8. Can the Plan be amended without my consent? Yes. The Board may terminate or amend the Plan, in whole or part, at any time, except that, without the consent of affected participants, no such action will adversely affect any rights of participants with respect to any awards previously granted under the Plan. In addition, unless the shareholders of Yum China have first approved it, no amendment of the Plan will be effective that would: (i) increase the maximum number of shares that may be delivered under the Plan or to any one person (except to the extent that such amendment is made in connection with the provisions of the Plan relating to adjustments in the event of certain corporate transactions or reorganizations), (ii) extend the maximum period during which awards may be granted under the Plan, (iii) decrease the exercise price or any Stock Option or SAR (or modify the provisions of the Plan prohibiting repricing), (iv) modify the requirements as to eligibility for participation under the Plan, or (v) result in accelerated income or the imposition of a tax under certain Code provisions.

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With the consent of the employee or director affected, the Committee may amend outstanding agreements evidencing awards under the Plan in a manner that is not inconsistent with the terms of the Plan or that adversely affects the applicable employee or director.

9. Are there limits on the number of shares of Common Stock issuable under the Plan?

Yes. The maximum number of shares of Common Stock that may be issued under the Plan is 45,000,000. Each share of Common Stock delivered pursuant to Full Value Awards under the Plan will reduce the number of shares of Common Stock available for delivery under the Plan by two shares (other than shares of Restricted Stock, Restricted Stock Units, Performance Stock Units or other Full Value Awards delivered pursuant to the settlement of EMA Awards which will reduce the number of shares available for delivery by only one share). Shares subject to Stock Options and SARs will reduce the number of shares available for issuance only by one share. To the extent provided by the Committee, any Award may be settled in cash rather than shares of Common Stock. To the extent any shares of Common Stock covered by an award are not delivered to a Participant or beneficiary because the award is forfeited or canceled, or the shares of Common Stock are not delivered because the award is settled in cash or used to satisfy the applicable tax withholding obligation, such shares will not be deemed to have been delivered for purposes of determining the maximum number of shares of Common Stock available for delivery under the Plan. If the exercise price of any Stock Option granted under the Plan is satisfied by tendering shares of Common Stock to the Company (by either actual delivery or by attestation), only the number of shares of Common Stock issued net of the shares of Common Stock tendered will be deemed delivered for purposes of determining the maximum number of shares of Common Stock available for delivery under the Plan. Substitute Awards (which are awards granted or shares of Common Stock issued by the Company in assumption of, or in substitution or exchange for, an award previously granted, or the right or obligation to make a future award, by a company acquired by the Company or any subsidiary) are not counted against the shares reserved for issuance under the Plan (or the individual limits discussed in Item 10).

10. Are there any limitations on the number of shares of Common Stock or the amount of cash that may be granted under an award to a participant?

Yes, the following limitations apply:

�� No more than 9,000,000 shares may be covered by Stock Options and SARs granted to one individual during any five calendar year period;

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�� No more than 3,000,000 shares may be covered by Stock Units, Restricted

Stock, Restricted Stock Units, and Performance Shares that are intended to be “performance-based compensation” (as that term is used for purposes of Code section 162(m)) granted to any one individual during any five calendar year period;

� No more than $10,000,000 in Performance Unit Awards that are intended

to be “performance-based compensation” (as that term is used for purposes of Code section 162(m)) may be subject to awards granted to one individual during any one calendar year period (regardless of when such amounts are deliverable). If, after amount have been earned with respect to Performance Unit Awards, the delivery of such amounts is deferred, any additional amounts attributable to earnings during the deferral period will be disregarded.

� In the case of Cash Incentive Awards that are intended to be performance-based compensation, the maximum amount payable to any participant with respect to any twelve month performance period shall equal $10,000,000 (pro -rated for performance periods that are greater or lesser than twelve months).

� In the case of any award to a non-employee director, in no event shall the

dollar value of the award granted to the director for any calendar year (determined as of the date of grant) exceed $1,500,000.

These limitations, as well as other adjustments to the shares of Common Stock

reserved and the terms of awards may be adjusted by the Committee to reflect certain changes to the capitalization of Yum China, as discussed below.

11. What is the source of shares of Common Stock distributed under the Plan?

Shares of Common Stock distributed under the Plan may be authorized but unissued shares of Common Stock or currently held or subsequently acquired by the Company as treasury shares, including shares purchased in the open market or in private transactions.

12. Will I have rights as a shareholder with respect to shares of Common Stock covered by an award?

Generally, a participant will not have shareholder rights with respect to shares of Common Stock covered by an award, including the right to vote or receive dividends, until the award vests (and, if applicable, is exercised) and the participant becomes the record owner of such shares. A Full Value Award under the Plan may provide the Participant with the right to receive dividend payments or dividend equivalent payments with respect to Common Stock subject to the award (both before and after the Common Stock subject to the award is earned, vested, or acquired), which payments may be either made currently

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or credited to an account for the participant, and may be settled in cash or Common Stock, as determined by the Committee. No dividends or dividend equivalent payments can be paid or settled with respect to Full Value Awards that have not been earned or vested.

13. Who is eligible to receive awards under the Plan? Employees of Yum China and its eligible subsidiaries and non-employee members of the Board are eligible to be selected by the Committee to participate in the Plan. Eligible persons who are granted awards under the Plan are referred to as “participants.” In addition, an individual who is entitled to an EMA Award or who is otherwise entitled to receive a share of Common Stock under the Employee Matters Agreement is eligible to receive awards under the Plan in accordance with the Employee Matters Agreement.

14. Will I receive the same benefits each year or the same benefits that other participants receive each year?

No. Awards are determined by the Committee, in its discretion, and may or may not be the same for each participant. Awards made to individual participants for any year may or may not be the same in subsequent years, and might not be made to the same group of participants in subsequent years. Nothing in this document or any statement made by a representative of Yum China or by a third party administrator will be construed as a promise or guarantee of current or future awards or benefits or of any level or amount of awards or benefits under the Plan or any other plan offered by Yum China.

15. Will I receive a certificate evidencing shares of Common Stock when such shares are issued under an award?

Yum China generally will not deliver to a participant certificates evidencing shares of Common Stock that are issued upon vesting, settlement or exercise of awards unless required by applicable law or regulatory authority (including any stock exchange on which the Common Stock is listed). Instead, the shares of Common Stock will be recorded in the books of Yum China (or, as applicable, its transfer agent or stock plan administrator). The following question applies only if you are a national of the People's Republic of China (“PRC”) residing in the PRC, unless otherwise determined by Yum China or required by the State Administration of Foreign Exchange (“SAFE”).

16. Am I free to hold shares of Common Stock acquired under the Plan in the event of my termination of service with Yum China or any subsidiary?

No. To ensure compliance with the exchange control laws in China, any shares of

Common Stock issued pursuant to an award granted under the Plan and held by you at the time of your termination of service must be sold immediately upon such termination of service. Any shares that are not sold by you will be sold on your behalf as soon as practicable after your termination of service and in no event more than six months after your termination of service. The designated broker is under no obligation to arrange for

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the sale of the shares at any particular price. Upon the sale of the shares, Yum China will pay the cash proceeds from the sale of the shares, less any brokerage fees and commissions and subject to any obligation on Yum China or your employer to satisfy any applicable taxes.

17. Can I sell or otherwise dispose of shares of Common Stock received pursuant to awards granted under the Plan?

The shares of Common Stock acquired under the Plan are generally freely

transferable, subject to the limits described below and Yum China's ownership guidelines. Shares of Restricted Stock and Performance Shares are not transferable until the restrictions lapse (and the shares are earned) and the shares are vested .

The freedom to sell shares of Common Stock is restricted while a person is in possession of material non-public information about Yum China. In such instances, you should refrain from selling the shares of Common Stock until the information either is made public or is no longer relevant.

In addition, if you are an executive officer or director, you should be aware of the special rules that apply with respect to the sale of shares of Common Stock, such as limitations on the amount you can sell in Rule 144 promulgated under the Securities Act and the restrictions on timing of purchases and sales in Section 16 of the Exchange Act. Yum China will notify those participants it believes to be impacted by Rule 144 and Section 16. Each such participant is encouraged to discuss his or her individual situation with a qualified legal advisor before offering for sale any shares of Common Stock acquired under the Plan.

Finally, if you are a national of the PRC residing in the PRC or otherwise determined by Yum China or SAFE to be subject to the exchange control requirements imposed by SAFE, any shares of Common Stock acquired by you under the Plan must be maintained in an account with Merrill Lynch or such other broker as may be designated by Yum China until the shares are sold through that broker. Pursuant to exchange control laws in China, when shares of Common Stock acquired under the Plan are sold, whether immediately or any time thereafter, including on your behalf after termination of service (as described in Question 16), you will be required to immediately repatriate the cash proceeds from the sale of shares any cash dividends paid on such shares to China. Under local law, the repatriation will need to be effected through a special exchange control account established in China by Yum China or any subsidiary, and any proceeds from the sale of shares will be transferred to such special account prior to delivery to you. Unless Yum China in its sole discretion decides otherwise, the proceeds will be paid to you in local currency. Yum China is under no obligation to secure any exchange conversion rate, and Yum China may face delays in converting the proceeds into local currency due to exchange control restrictions in China.

18. Can I assign, transfer, or otherwise dispose of awards?

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Unless otherwise permitted by the Committee, no award may be assigned, transferred or otherwise disposed of by a participant or made subject to execution, attachment or similar procedures, except by will or the laws of descent and distribution.

19. What other restrictions apply to the awards?

Yum China will have no liability to deliver any shares of Common Stock under the Plan or make any other distribution of benefits under the Plan unless such delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act of 1933), and the applicable requirements of any securities exchange or similar entity. Each award grant is subject to the restriction that if at any time the registration, listing, qualification or exemption of the shares of Common Stock covered thereby upon any securities exchange or under any foreign, federal, state or local law, or the consent or approval of any governmental regulatory body, is determined to be necessary or desirable in connection with the grant of the award or the purchase of shares thereunder, no such award may be delivered or settled, unless and until such registration, listing, qualification, exemption, consent or approval will have been effected or obtained free of any condition not acceptable to the Committee. Any person holding an award will make such representations and agreements and furnish such information as the Committee may request to assure compliance with the foregoing or any other applicable legal requirements.

20. What happens in the event of a “Change in Control” or other changes in capitalization?

In the event of any change in the outstanding shares of Common Stock by reason

of any stock split, stock dividend, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, such equitable adjustment will be made in the Plan and the awards thereunder as the Committee determines is necessary and appropriate, in the maximum number of number of shares of Common Stock available for issuance under the Plan or which may be awarded to any one person under the Plan, the exercise price of a Stock Option or SAR, the number of shares (or other property) subject to outstanding awards and the terms and conditions of awards.

If there is a Change in Control, the treatment of awards will be determined by the

Committee. Generally, a “Change in Control” is defined generally as (i) the acquisition of 20 percent of Common Stock by a person or group, pursuant to a tender offer or otherwise, (ii) a change in a majority of the Board (other than a change approved by the existing Board), or (iii) under certain circumstances a merger, liquidation, dissolution or sale of all, or substantially all of, the assets of Yum China. For the complete definition of events constituting a Change in Control, refer to the Plan.

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RESTRICTED STOCK UNITS, RESTRICTED STOCK, PERFORMANCE SHARES, AND PERFORMANCE UNITS

21. What are Restricted Stock Units, Restricted Stock Awards, Performance Shares, and Performance Units?

Awards of Restricted Stock Units, Restricted Stock, Performance Shares and Performance Share Units are sometimes collectively referred to as “Full Value Awards”. A “Restricted Stock Unit” is an award that entitles the holder to an equivalent number of shares of Common Stock on a date(s) in the future if certain conditions are met. Unless otherwise set forth in the award agreement, Restricted Stock Units will be paid in the form of shares of Common Stock. Restricted Stock Units are subject to restrictions on their sale, assignment, pledge or other transfer until they are vested. A “Performance Unit” is an award that entitles the holder to a designated dollar value amount of Common Stock in the future if performance or other objectives are satisfied during a specified period. Performance Units are also subject to restrictions on their sale, assignment, pledge or other transfer until they are vested (and earned).

A grant of “Restricted Stock” is an award of shares of Common Stock with such shares of Common Stock subject to a risk of forfeiture or other restrictions that will lapse upon the achievement of one or more goals relating to completion of service by the Participant, or achievement of performance or other objectives, as determined by the Committee.

A grant of a “Performance Share” is an award grant of a right to receive shares of Common Stock which is contingent on the achievement of performance or other objectives during a specified period. The Committee is authorized to determine the eligible persons to whom grants of Full Value Awards will be made, the number of shares of Common Stock subject to such awards, the vesting conditions (including performance conditions) that must be satisfied for entitlement to the underlying shares of Common Stock, the date on which the underlying shares of Common Stock will be paid in settlement of the award, and all other terms and conditions of the grants, subject to the terms and conditions of the Plan. The terms and conditions specific to any grant of any Full Value Award are set forth in the applicable award agreement.

22. Do I have to pay for the shares of Common Stock I receive upon vesting of my Full Value Awards? You are not required to make any payment for Full Value Awards (other than

applicable taxes; please see the U.S. Federal Income Tax Consequences section of this prospectus).

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23. What type of vesting conditions may apply to Full Value Awards? The Committee determines the vesting provisions of Full Value Awards at the time of grant. If, however, the right to become vested in an Full Value Award is conditioned on the completion of a specified period of service with the Company or the subsidiaries, without achievement of performance measures or other performance objectives being required as a condition of vesting, and without it being granted in lieu of other compensation, then the required period of service for full vesting of the award will be not less than three years (provided that the required period for full vesting will, instead, not be less than two years in the case of annual incentive deferrals payable in restricted shares) (subject to acceleration of vesting, to the extent permitted by the Committee, in the event of the participant’s death, disability, retirement, change in control or involuntary termination). Full Value Awards made to directors may vest immediately.

24. What happens to my Full Value Awards if my service with Yum China or an employing subsidiary terminates? Generally, Full Value Awards will terminate and be forfeited if a participant does

not remain employed through the applicable vesting date. In certain cases, however, special rules may apply if the participant retires, dies, or is terminated without cause prior to the vesting date. The award agreement will set forth any special vesting terms that may apply upon termination of employment.

STOCK OPTIONS AND SARS

25. What are Stock Options and SARs?

The grant of a “Stock Option” entitles the participant to purchase shares of Common Stock at an exercise price and during a specified time established by the Committee. Any Stock Option granted under the Plan may be either a non-qualified option (an “NQO”) or an incentive stock option (an “ISO”), as determined in the discretion of the Committee. An “NQO” is an Option that is not intended to be an “incentive stock option” as that term is described in section 422(b) of the Code. An “ISO” is an Option that is intended to satisfy the requirements applicable to an “incentive stock option” described in section 422(b) of the Code.

An SAR entitles the Participant to receive, in cash or Common Stock as determined by the Committee, value equal to (or otherwise based on) the excess of: (a) the fair market value of a specified number of shares of Common Stock at the time of exercise; over (b) an exercise price established by the Committee.

The “exercise price” of each Option and SAR granted is established by the Committee or a method established by the Committee at the time the Option or SAR is granted, except that the exercise price will not be less than the fair market value of share of Common Stock on the date of grant (as determined by the Committee in accordance with the Plan).

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26. How are Stock Options and SARs exercised?

A Stock Option or an SAR will be exercisable in accordance with such terms and conditions and during such periods as may be established by the Committee; provided, however, that the term of a Stock Option or SAR cannot exceed ten years after the date of grant.

In the case of a Stock Option, the full exercise price for shares of Common Stock purchased upon the exercise must be paid at the time of such exercise (except that, in the case of an third party cashless exercise arrangement approved by the Committee, payment may be made as soon as practicable after the exercise). The exercise price will be payable in cash or by tendering, by either actual delivery of shares or by attestation, shares of Common Stock acceptable to the Committee, and valued at fair market value as of the day of exercise, or in any combination thereof, as determined by the Committee.

27. Can the exercise price of a Stock Option or SAR be lowered after the award is granted?

Except for adjustments in connection with corporate transactions as described above, the exercise price for any outstanding Option or SAR granted under the Plan may not be decreased after the date of grant nor may an outstanding Option granted under the Plan be surrendered to the Company or its subsidiaries as consideration in exchange for the grant of a new Option with a lower exercise price.

CASH INCENTIVE AWARDS

28. What is a Cash Incentive Award?

A “Cash Incentive Award” under the Plan is the grant of a right to receive a payment of cash (or, in the discretion of the Committee, shares of Common Stock having a value equivalent to the cash otherwise payable) that is contingent on achievement of performance objectives over a specified period established by the Committee. Cash Incentive Awards may also be subject to such other conditions, restrictions and contingencies as determined by the Committee, including vesting provisions and deferred payment provisions. The Committee will also determine the treatment of Cash Incentive Awards in the event of a participant’s termination of employment.

EMA AWARDS

29. If I receive an EMA Award under the Plan, what will the terms and conditions of the EMA Award be?

The terms of an EMA Award generally will be same as the terms and conditions that applied to the corresponding Yum! award to which the EMA Award relates. For example, an EMA Award will be subject to the same vesting provisions, the same exercise terms and the same payment terms as the corresponding Yum! award. The number of shares of Common Stock subject to an EMA Award and, if applicable, the exercise price of stock

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options and SARs, will be adjusted so that, when combined with any retained Yum! award (which will also be adjusted), you will retain the same value, on an aggregate basis, that you had immediately prior to the adjustments (subject to certain differences due to rounding). The actual method for adjustment of the Yum! awards and the method for determining the number of shares of Common Stock subject to an EMA Award (and, if applicable, the exercise price) is described in greater detail in the Employee Matters Agreement.

OTHER CONSIDERATIONS RELATED TO PLAN PARTICIPATION

30. How will the specific terms and conditions of a Plan award be documented?

Awards under the Plan will be evidenced by an award agreement between Yum China and you in such form and containing such terms and conditions as the Committee determines, subject to the terms and conditions of the Plan. You will be notified separately about any EMA Awards.

31. Does participation in the Plan affect my employment? No. Participation in the Plan is no guarantee of employment or other service relationship with Yum China and its subsidiaries, nor does it limit the right of Yum China or its subsidiaries to terminate a participant’s service at any time.

32. Will taxes be withheld from awards under the Plan? Participants are required to pay all taxes owed as a result of their participation in the Plan. To the extent the Company or employing subsidiary is responsible for withholding such taxes from the participant, it is entitled to do so by any of the means set forth in the Plan and/or your award agreement, including by withholding from your pay or any other amounts payable to you by the Company or any subsidiary, withholding of shares of Common Stock, or arranging for the sale of shares of Common Stock issuable or payable in connection with the awards under the Plan.

33. Can awards be offered to foreign employees?

Yes. The Committee may grant awards to eligible employees who are foreign nationals on such terms and conditions different from those specified in the Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the purposes of the Plan, and in furtherance of such purposes, the Committee may make such modifications, amendments, procedures, subplans and the like as may be necessary or advisable to comply with provisions of laws in other countries in which Yum China or its subsidiaries operate or have employees.

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34. What are the consequences of a participant’s misconduct or a material restatement to the awards?

If the Committee determines that a present or former employee has (i) used for profit or disclosed to unauthorized persons, confidential or trade secrets of Yum China; (ii) breached any contract with or violated any fiduciary obligation to Yum China; or (iii) engaged in any conduct which the Committee determines is injurious to Yum China or its affiliates, the Committee may cause that employee to forfeit his or her outstanding awards under the Plan, subject to certain limitations set forth in the Plan.

In addition, unless otherwise specified by the Committee, any awards under the Plan and any shares of Common Stock issued pursuant to the Plan shall be subject to the Company’s compensation recovery, clawback, and recoupment policies as in effect from time to time.

FEDERAL INCOME TAX CONSEQUENCES

The brief discussion which follows is not intended to be a complete statement of the U.S. federal income tax consequences related to awards granted under the Plan or to the disposal of shares of Common Stock received under the Plan. This summary does not discuss state or local tax laws, nor does it apply to participants who are subject to tax in a jurisdiction outside of the U.S. You are encouraged to consult your own tax advisor prior to vesting of your awards and sale of any shares acquired under the Plan. Section 409A. It is intended that Stock Options, SARs and Restricted Stock Awards be exempt from the requirements of Section 409A of the Code. Section 409A of the Code may apply to other awards under the Plan (and Stock Options, SARs and Restricted Stock Awards if the requirements of Section 409A are not satisfied) if compensation related to the award is paid in a year subsequent to the year in which it is considered vested for tax purposes. If 409A is applicable, among other requirements, certain requirements related to the time and form of payment of the award must be met. Failure to satisfy these requirements may result in the imposition of potentially significant penalties to the participant. Although Section 409A may apply to certain awards under the Plan, including Restricted Stock Units and Performance Units, it is Yum China’s intention to structure these and other awards in a manner that would avoid any of the above described tax penalties under Section 409A. Yum China, however, makes no guarantee of the tax treatment of any awards under the Plan. Restricted Stock Units/Performance Units. In the case of an award of Restricted Stock Units or Performance Units, a participant generally will not have taxable income upon the grant of the award provided that there are restrictions on such awards that constitute a substantial risk of forfeiture under applicable Code rules. Participants will generally recognize ordinary income when the restrictions on awards lapse, on the date of grant if

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there are no such restrictions or, in certain cases, when the award is settled. At that time, the participant will recognize taxable income equal to the cash or the then fair market value of the shares issuable in payment of such award, and such amount will be the tax basis for any shares received. In the case of an award which does not constitute property at the time of grant (such as an award of units), the participant will generally recognize ordinary income when the award is paid or settled. Yum China is entitled to a deduction at the time the participant recognizes income although Yum! may be entitled to the deduction with respect to EMA Awards. Restricted Stock/Performance Shares. In the case of a Restricted Stock or Performance Share award, the participant may elect to recognize compensation income (i.e., ordinary income) at the time the grant is made by filing an election with the IRS at that time. The amount of ordinary income would be equal to the fair market value of the shares of Common Stock subject to the award on the grant date (computed without regard to the adverse effect on market value of the restriction). In this case, the participant’s holding period begins on the grant date, and any appreciation after the grant date is capital gain. The participant’s tax basis is equal to the income recognized. If this election is not made, the participant does not recognize ordinary income until the award is no longer subject to a substantial risk of forfeiture (generally the vesting date). The income recognized without an election is equal to the fair market value of the vested stock at the time the restriction lapses, and this becomes the participant’s tax basis and is the beginning of his or her holding period. In either case, Yum China is entitled to a deduction for the participant’s ordinary income at the time it is recognized by the participant although Yum! may be entitled to the deduction with respect to EMA Awards. SARs. Under the Code, a participant will not be deemed to have received any income upon the grant of a SAR. Generally, when a SAR is exercised, the excess of the market price of Common Stock on the date of exercise over the exercise price will be taxable to a participant as ordinary income. Yum China is entitled to a deduction in the year of exercise equal to the amount of income taxable to the individual although Yum! may be entitled to the deduction with respect to EMA Awards. The holding period for long-term capital gains treatment of any acquired shares begins on the exercise of the SAR, and the participant’s tax basis in the shares is equal to the market price of the acquired shares on the date of exercise. Stock Options. The tax treatment of a Stock Option depends on whether the option is a an NQO or an ISO. The grant of an NQO will not result in taxable income to the participant. Except as described below, the participant will realize ordinary income at the time of exercise in an amount equal to the excess of the fair market value of the shares of stock acquired over the exercise price for those shares of Common Stock, and Yum China will be entitled to a corresponding deduction although Yum! may be entitled to the deduction with respect to EMA Awards. Gains or losses realized by the participant upon disposition of such shares of Common Stock will be treated as capital gains and losses, with the basis in such shares

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of Common Stock equal to the fair market value of the shares of Common Stock at the time of exercise. The grant of an ISO will not result in taxable income to the participant. The exercise of an ISO will not result in taxable income to the participant provided that the participant was, without a break in service, an employee of the Company and its corporate subsidiaries (determined under tax rules) during the period beginning on the date of the grant of the ISO and ending on the date three months prior to the date of exercise (one year prior to the date of exercise if the participant is disabled, as that term is defined in the Code). The excess of the fair market value of the shares of Common Stock at the time of the exercise of an ISO over the exercise price is an adjustment that is included in the calculation of the participant’s alternative minimum taxable income for the tax year in which the ISO is exercised. For purposes of determining the participant’s alternative minimum tax liability for the year of disposition of the shares of Common Stock acquired pursuant to the ISO exercise, the participant will have a basis in those shares of Common Stock equal to the fair market value of the shares of Common Stock at the time of exercise. If the participant does not sell or otherwise dispose of the shares of Common Stock within two years from the date of the grant of the ISO or within one year after receiving the transfer of such shares of Common Stock, then, upon disposition of such shares of Common Stock, any amount realized in excess of the exercise price will be taxed to the participant as capital gain, and Yum China will not be entitled to any deduction for Federal income tax purposes (and, in the case of EMA Awards, Yum! will not be entitled to any deduction for Federal income tax purposes). A capital loss will be recognized to the extent that the amount realized is less than the exercise price. If the foregoing holding period requirements are not met, the participant will generally realize ordinary income, and a corresponding deduction will be allowed to Yum China (or Yum! with respect to EMA Awards), at the time of the disposition of the shares of Common Stock, in an amount equal to the lesser of (a) the excess of the fair market value of the shares of Common Stock on the date of exercise over the exercise price, or (b) the excess, if any, of the amount realized upon disposition of the shares of Common Stock over the exercise price. If the amount realized exceeds the value of the shares of Common Stock on the date of exercise, any additional amount will be capital gain. If the amount realized is less than the exercise price, the participant will recognize no income, and a capital loss will be recognized equal to the excess of the exercise price over the amount realized upon the disposition of the shares of Common Stock. Special rules apply if an option is exercised through the through the exchange of previously acquired stock Cash Incentive Awards. The tax treatment of a Cash Incentive Award depends on the terms and conditions of the award. Generally, however, the grant of a Cash Incentive

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Award will not result in taxable income to the participant. The participant generally will recognize ordinary income at the time the Cash Incentive Award is paid in an amount equal to the total cash payment and Yum China will be entitled to a corresponding deduction.

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