PEPSICO ANNUAL LONG-TERM INCENTIVE AWARD STOCK OPTION / RESTRICTED STOCK UNITS TERMS AND CONDITIONS
Exhibit 10.1
PEPSICO ANNUAL LONG-TERM INCENTIVE AWARD
STOCK OPTION / RESTRICTED STOCK UNITS TERMS AND CONDITIONS
These Terms and Conditions, along with the PepsiCo Annual Long-Term Incentive Award Summary
(the “Award Summary”) delivered herewith and signed by the individual named on the Award Summary
(the “Participant”) shall constitute an Agreement made as of the Grant Date (as indicated on the
Award Summary), by and between PepsiCo, Inc., a North Carolina corporation having its principal
office at 000 Xxxxxxxx Xxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 (“PepsiCo,” and with its divisions and
direct and indirect subsidiaries, the “Company”), and the Participant.
WITNESSETH:
WHEREAS, the Board of Directors and shareholders of PepsiCo have approved the PepsiCo, Inc.
2007 Long-Term Incentive Plan (the “Plan”), for the purposes and subject to the provisions set
forth in the Plan; and
WHEREAS, pursuant to the authority granted to it in the Plan, the Compensation Committee of
the Board of Directors of PepsiCo (the “Committee”), by resolution duly adopted at a meeting held
on or prior to the Grant Date, authorized the grant to the Participant of the stock options and/or
restricted stock units set forth on the Award Summary; and
WHEREAS, awards granted under the Plan are to be evidenced by an Agreement in such form and
containing such terms and conditions as the Committee shall determine.
NOW, THEREFORE, it is mutually agreed as follows:
A. Terms and Conditions Applicable to Stock Options. These terms and conditions shall
apply with respect to the stock options, if any, granted to the Participant as indicated on the
Award Summary.
1. Grant. In consideration of the Participant remaining in the employ of the Company
and agreeing to be bound by the covenants of Paragraph C, PepsiCo hereby grants to the Participant,
on the terms and conditions set forth herein, the right and option to purchase the number of shares
of PepsiCo Common Stock, par value $.0167 per share, indicated on the Award Summary, at the
Grant/Exercise Price per share indicated on the Award Summary (the “Option Exercise Price”), which
was the Fair Market Value (as defined below) of PepsiCo Common Stock on the Grant Date, rounded up
to the nearest one-fourth. The right to purchase each such share is referred to herein as an
“Option.” All Options granted hereunder shall be “Non-Qualified Stock Options” as defined in the
Plan.
2. Vesting and Exercisability. Subject to the terms and conditions set forth herein,
the Options shall become fully vested on the vesting date set forth in the Award Summary (the
“Vesting Date”) and shall be exercisable from the Vesting Date through the expiration date set
forth in the Award Summary (the “Expiration Date”). Options may vest only while the Participant is
actively employed by the Company. Once vested and exercisable, and until terminated, all or any
portion of the Options may be exercised from time to time and at any time under procedures that the
Committee or its delegate shall establish from time to time, including, without limitation,
procedures regarding the frequency of exercise and the minimum number of Options which may be
exercised at any time.
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3. Exercise Procedure. Subject to terms and conditions set forth herein, Options may
be exercised by giving written notice of exercise to PepsiCo in the manner specified from time to
time by PepsiCo. The aggregate Option Exercise Price for the shares being purchased, together with
any amount which the Company may be required to withhold upon such exercise in respect of
applicable foreign, federal (including FICA), state and local taxes, must be paid in full at the
time of issuance of such shares.
4. Effect of Termination of Employment, Death, Retirement and Total Disability.
(a) Termination of Employment. Options may vest only while the Participant is actively
employed by the Company. Thus, no vesting shall occur following the termination of the
Participant’s active employment with the Company, and all unvested Options shall automatically be
forfeited and cancelled upon the date that the Participant’s active employment with the Company
terminates. Only vested Options may be exercised. Subject to subparagraphs 4(b), 4(c) and 4(d),
vested Options shall be exercisable until, and shall automatically be forfeited and cancelled upon,
the earlier of the Expiration Date and the date that is the last trading day on the New York Stock
Exchange during the 90-calendar day period after the date the Participant’s employment with the
Company terminates. It is intended that an authorized severance leave of absence may extend
employment for purposes of determining the period when vested Options may be exercised. However, an
authorized severance leave of absence will not be treated as active employment, and, as a result,
vesting of unvested Options will not be extended by any such period.
(b) Retirement Prior to Age 62. If the Participant’s employment terminates prior to
the Vesting Date, by reason of the Participant’s Retirement (as defined below) prior to attaining
at least age 62, then: (i) a portion of the Options shall vest on the Participant’s last day of
active employment with the Company, with such portion determined in proportion to the Participant’s
active service (measured in calendar days) during the period commencing on the Grant Date and
ending on the Vesting Date; (ii) the Options shall continue to become exercisable in accordance
with Paragraph A.2 of this Agreement, with no change in the earliest date of exercise as a result
of the vesting provided by this subparagraph 4(b); and (iii) the Options may be exercised by the
Participant prior to the Expiration Date in accordance with this Agreement.
(c) Death, Total Disability, or Retirement on or After Age 62. If the Participant’s
employment terminates by reason of the Participant’s death, Total Disability (as defined below), or
Retirement after attaining at least age 62, then: (i) the Options shall become fully vested on the
Participant’s last day of active employment with the Company (which, for purposes of Total
Disability, means the effective date of Total Disability); (ii) the Options shall continue to
become exercisable in accordance with Paragraph A.2 of this Agreement, with no change in the
earliest date of exercise as a result of the vesting provided by this subparagraph 4(c); and (iii)
the Options may be exercised by the Participant’s legal representative (or any person to whom the
Options may be transferred by will or the applicable laws of descent and distribution), in the
event of death, or the Participant, in the event of Retirement or Total Disability, prior to the
Expiration Date in accordance with this Agreement.
(d) Transfers to a Related Entity. In the event the Participant transfers to a Related
Entity (as defined below) as a result of actions by PepsiCo, the Options shall continue to vest and
to become exercisable after such transfer and shall remain outstanding and be exercisable in
accordance with this Agreement by treating the Participant’s employment with the Related Entity as
employment with the Company for purposes of this Agreement.
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5. Buy-Out of Option Gains. Except as provided in Paragraph D.2, at any time after any
Option becomes exercisable, the Committee shall have the right, in its sole discretion and without
the consent of the Participant, to cancel such Option and to cause PepsiCo to pay to the
Participant the excess of the Fair Market Value of the shares of Common Stock covered by such
Option over the Option Exercise Price of such Option as of the date the Committee provides written
notice (the “Buy Out Notice”) of its intention to exercise such right. Payments of such buy out
amounts pursuant to this provision shall be effected by PepsiCo as promptly as possible after the
date of the Buy Out Notice and shall be made in shares of Common Stock. The number of shares shall
be the greatest number of whole shares determined by dividing the amount of the payment to be made
by the Fair Market Value of a share of Common Stock at the date of the Buy Out Notice. Payments of
any such buy out amounts shall be made net of the minimum applicable foreign, federal (including
FICA), state and local withholding taxes, if any.
6. No Rights as Shareholder. The Participant shall have no rights as a holder of
PepsiCo Common Stock with respect to the Options granted hereunder unless and until such Options
are exercised and the shares have been registered in the Participant’s name as owner.
B. Terms and Conditions Applicable to Restricted Stock Units. These terms and
conditions shall apply with respect to the restricted stock units, if any, granted to the
Participant as indicated on the Award Summary.
1. Grant. In consideration of the Participant remaining in the employ of the Company
and agreeing to be bound by the covenants of Paragraph C, PepsiCo hereby grants to the Participant,
on the terms and conditions set forth herein, the number of restricted stock units indicated on the
Award Summary (the “Restricted Stock Units”).
2. Vesting. Subject to the terms and conditions set forth herein and subparagraphs
2(a) and (b) below, the Restricted Stock Units shall become fully vested on the Vesting Date and
shall be paid as soon as practicable after that date. Restricted Stock Units may vest only while
the Participant is actively employed by the Company. The Restricted Stock Units payable pursuant to
the preceding sentence shall be reduced by any Restricted Stock Units that are paid pursuant to
subparagraphs (a) and (b) below.
(a) Eligibility for Retirement Prior to Age 62. A Participant shall be vested in 33%
of his Restricted Stock Units on the first February 1 that follows the Grant Date if on such
February 1 the Participant: (i) is eligible for Retirement, (ii) is not yet age 62, and (iii) has
been actively employed by the Company continuously since the Grant Date. This vested portion shall
be paid as soon as practicable after this February 1. A Participant shall be vested in 66% of his
Restricted Stock Units on the second February 1 that follows the Grant Date if on such February 1
the conditions in (i), (ii) and (iii) of this Paragraph B.2(a) are satisfied. This vested portion
shall be paid as soon as practicable after this second February 1 (net of any Restricted Stock
Units previously paid out).
(b) Eligibility for Retirement on or After Age 62. A Participant shall be fully vested
in his Restricted Stock Units on the first February 1 that follows the Grant Date if on such
February 1 the Participant: (i) is eligible for Retirement, (ii) is at least age 62, and (iii) has
been actively employed by the Company continuously since the Grant Date. The Participant’s
Restricted Stock Units shall be paid as soon as practicable after this February 1. A Participant
shall be fully vested in his Restricted Stock Units on the second February 1 that follows the Grant
Date if on such February 1 the conditions in (i), (ii) and (iii) of this Paragraph B.2(b) are
satisfied. The
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Participant’s Restricted Stock Units shall be paid as soon as practicable after this second
February 1 (net of any Restricted Stock Units previously paid out).
3. Payment. Restricted Stock Units that vest and become payable shall be settled in
shares of PepsiCo Common Stock with the Participant receiving one share of PepsiCo Common Stock for
each vested Restricted Stock Unit. No fractional shares shall be delivered under this Agreement,
and so any fractional share that may be payable shall be rounded to the nearest whole share. Any
amount that the Company may be required to withhold upon the settlement of Restricted Stock Units
and/or the payment of dividend equivalents (see Paragraph B.5 below) in respect of applicable
foreign, federal (including FICA), state and local taxes, must be paid in full at the time of the
issuance of shares or payment of cash. Unless the Participant makes other arrangements to satisfy
this withholding obligation in accordance with procedures approved by the Company in its
discretion, the Company shall withhold shares to satisfy the required withholding obligation
related to the settlement of Restricted Stock Units.
4. Effect of Termination of Employment, Death, Retirement and Total Disability.
(a) Termination of Employment. Restricted Stock Units may vest and become payable only
while the Participant is actively employed by the Company. Thus, vesting ceases upon the
termination of the Participant’s active employment with the Company. Subject to subparagraphs 4(b),
4(c) and 4(d), all unvested Restricted Stock Units shall automatically be forfeited and canceled
upon the date that the Participant’s active employment with the Company terminates. An authorized
severance leave of absence will not be treated as active employment, and, as a result, the vesting
of Restricted Stock Units will not be extended by any such period.
(b) Retirement Prior to Age 62. If the Participant’s employment terminates prior to
the Vesting Date, by reason of the Participant’s Retirement prior to attaining age 62, then a whole
number of Restricted Stock Units shall vest on the Participant’s last day of active employment with
the Company, with such number determined in proportion to the Participant’s active service
(measured in calendar days) during the period commencing on the Grant Date and ending on the
Vesting Date, and shall be paid as soon as practicable after that date (net of any Restricted Stock
Units previously paid out).
(c) Death, Total Disability, or Retirement on or After Age 62. If the Participant’s
employment terminates by reason of the Participant’s death, Total Disability (as defined below), or
Retirement after attaining at least age 62, then the Restricted Stock Units shall become fully
vested on the Participant’s last day of active employment with the Company (which, for purposes of
Total Disability, means the effective date of Total Disability) and will be paid as soon as
practicable after that date (net of any Restricted Stock Units previously paid out).
(d) Transfers to a Related Entity. In the event the Participant transfers to a Related
Entity (as defined below) as a result of actions by PepsiCo, the Restricted Stock Units shall
continue to vest (and their time of payment shall be determined) after such transfer by treating
the Participant’s employment with the Related Entity as employment with the Company for purposes of
this Agreement.
5. Dividend Equivalents. During the vesting period, the Participant shall accumulate
dividend equivalents with respect to the Restricted Stock Units, which dividend equivalents shall
be paid in cash (without interest) to the Participant only if and when the applicable Restricted
Stock Units vest and become payable. Dividend equivalents shall equal the dividends actually
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paid with respect to PepsiCo Common Stock during the vesting period while (and to the extent)
the Restricted Stock Units remain outstanding and unpaid.
6. No Rights as Shareholder. The Participant shall have no rights as a holder of
PepsiCo Common Stock with respect to the Restricted Stock Units granted hereunder unless and until
such Restricted Stock Units have been settled in shares of Common Stock that have been registered
in the Participant’s name as owner.
C. Prohibited Conduct.
In consideration of the Company disclosing and providing access to Confidential Information,
as more fully described in Paragraph C.2 below, after the date hereof, the grant by the Company of
the Options and Restricted Stock Units, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Participant and the Company, intending to be
legally bound, hereby agree as follows.
1. Non-Competition and Non-Solicitation. The Participant hereby covenants and agrees
that at all times during his or her employment with the Company and for a period of twelve months
after the termination of the Participant’s employment with the Company for any reason whatsoever
(including a termination due to the Participant’s Retirement or Total Disability), he or she will
not, without the prior written consent of PepsiCo’s chief personnel officer or chief legal officer,
either directly or indirectly, for himself/herself or on behalf of or in conjunction with any other
person, partnership, corporation or other entity, engage in any activities prohibited in the
following Paragraphs C.1(a) through (c):
(a) The Participant shall not, in any country in which the Company operates, accept any
employment, assignment, position or responsibility, or provide services in any capacity or acquire
any ownership interest which involves the Participant’s Participation in an entity that markets,
sells, distributes or produces Covered Products, unless such entity makes retail sales or consumes
Covered Products without in any way competing with the Company;
(b) With respect to Covered Products, the Participant shall not directly or indirectly solicit
for competitive business purposes any customer or Prospective Customer of the Company called on,
serviced by, or contacted by the Participant in any capacity during his or her employment; or
(c) The Participant shall not in any way, directly or indirectly (including through someone
else acting on the Participant’s recommendation, suggestion, identification or advice), solicit any
Company employee to leave the Company’s employment or to accept any position with any other entity.
2. Non-Disclosure. In order to assist the Participant with his or her duties, the
Company shall continue to provide the Participant with access to confidential and proprietary
operational information and other confidential information which is either information not known by
actual or potential competitors, customers and third parties of the Company or is proprietary
information of the Company (“Confidential Information”). Such Confidential Information shall
include all non-public information the Participant acquired as a result of his or her positions
with the Company which might be of any value to a competitor of the Company, or which might cause
any economic loss or substantial embarrassment to the Company or its customers, bottlers,
distributors or suppliers if used or disclosed. Examples of such Confidential Information include,
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without limitation, non-public information about the Company’s customers, suppliers,
distributors and potential acquisition targets; its business operations, structure and methods of
operation; its product lines, formulae and pricing; its processes, machines and inventions; its
research and know-how; its production techniques; its financial data; its advertising and
promotional ideas and strategy; information maintained in its computer systems; devices, processes,
compilations of information and records; and its plans and strategies. The Participant agrees that
such Confidential Information remains confidential even if committed to the Participant’s memory.
The Participant agrees, during the term of his or her employment and at all times thereafter, not
to use, divulge, or furnish or make accessible to any third party, company, corporation or other
organization (including but not limited to, customers, competitors, or governmental agencies),
without the Company’s prior written consent, any Confidential Information of the Company, except as
necessary in his or her position with the Company.
3. Return of Confidential Information and Company Property. The Participant agrees
that whenever the Participant’s employment with the Company ends for any reason, (a) all documents
containing or referring to the Company’s Confidential Information as may be in the Participant’s
possession, or over which the Participant may have control, and all other property of the Company
provided to the Participant by the Company during the course of the Participant’s employment with
the Company will be returned by the Participant to the Company immediately, with no request being
required; and (b) all Company computer and computer-related equipment and software, and all Company
property, files, records, documents, drawings, specifications, lists, equipment, and similar items
relating to the business of the Company, whether prepared by the Participant or otherwise, coming
into the Participant’s possession or control during the course of his employment shall remain the
exclusive property of the Company, and shall be delivered by the Participant to the Company
immediately, with no request being required.
4. Misconduct. The Participant shall not engage in any of the following acts that are
considered to be contrary to the Company’s best interests during the term of his or her employment
with the Company: (a) violating the Company’s Code of Conduct, Xxxxxxx Xxxxxxx Policy or any other
written policies of the Company, (b) unlawfully trading in the securities of PepsiCo or of any
other company based on information gained as a result of his or her employment with the Company, or
(c) engaging in any activity which constitutes gross misconduct.
5. Reasonableness of Provisions. The Participant agrees that: (a) the terms and
provisions of this Agreement are reasonable and constitute an otherwise enforceable agreement to
which the terms and provisions of this Paragraph C are ancillary or a part of; (b) the
consideration provided by the Company under this Agreement is not illusory; (c) the restrictions
contained in this Paragraph C are necessary and reasonable for the protection of the legitimate
business interests and goodwill of the Company; and (d) the consideration given by the Company
under this Agreement, including, without limitation, the provision by the Company of Confidential
Information to the Participant, gives rise to the Company’s interest in the covenants set forth in
this Paragraph C.
6. Repayment and Forfeiture. The Participant specifically recognizes and affirms that
each of the covenants contained in Paragraphs C.1 through C.4 of this Agreement is a material and
important term of this Agreement which has induced the Company to provide for the award of the
Options and/or Restricted Stock Units granted hereunder, the disclosure of Confidential Information
referenced herein, and the other promises made by the Company herein. The Participant further
agrees that in the event that (i) the Company determines that the Participant
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has breached any term of Paragraphs C.1 through C.4 or (ii) all or any part of Paragraph C
is held or found invalid or unenforceable for any reason whatsoever by a court of competent
jurisdiction in an action between the Participant and the Company, in addition to any other
remedies at law or in equity the Company may have available to it, the Company may in its sole
discretion:
(a) Cancel any unexercised Options or unpaid Restricted Stock Units granted hereunder;
(b) Require the Participant to pay to the Company all gains realized from the exercise of any
Options granted hereunder; and/or
(c) Require the Participant to pay to the Company the value (determined as of the Payment
Date) of any Restricted Stock Units granted hereunder that have been paid out.
7. Equitable Relief. In the event the Company determines that the Participant has
breached or attempted or threatened to breach any term of Paragraph C, in addition to any other
remedies at law or in equity the Company may have available to it, it is agreed that the Company
shall be entitled, upon application to any court of proper jurisdiction, to a temporary restraining
order or preliminary injunction (without the necessity of (a) proving irreparable harm, (b)
establishing that monetary damages are inadequate or (c) posting any bond with respect thereto)
against the Participant prohibiting such breach or attempted or threatened breach by proving only
the existence of such breach or attempted or threatened breach.
8. Extension of Restrictive Period. The Participant agrees that the period during
which the covenants contained in this Paragraph C shall be effective shall be computed by excluding
from such computation any time during which the Participant is in violation of any provision of
Paragraph C.
9. Acknowledgments. The Company and the Participant agree that it was their intent to
enter into a valid and enforceable agreement. The Participant and the Company thereby acknowledge
the reasonableness of the restrictions set forth in Paragraph C, including the reasonableness of
the geographic area, duration as to time and scope of activity restrained. The Participant further
acknowledges that his or her skills are such that he or she can be gainfully employed in
noncompetitive employment and that the agreement not to compete will not prevent him or her from
earning a living. The Participant agrees that if any covenant contained in Paragraph C of this
Agreement is found by a court of competent jurisdiction to contain limitations as to time,
geographical area, or scope of activity that are not reasonable and impose a greater restraint than
is necessary to protect the goodwill or other business interest of the Company, then the court
shall reform the covenant to the extent necessary to cause the limitations contained in the
covenant as to time, geographical area, and scope of activity to be restrained to be reasonable and
to impose a restraint that is not greater than necessary to protect the goodwill and other business
interests of the Company and to enforce the covenants as reformed.
10. Provisions Independent. The covenants on the part of the Participant in this
Paragraph C shall be construed as an agreement independent of any other agreement, including any
employee benefit agreement, and independent of any other provision of this Agreement, and the
existence of any claim or cause of action of the Participant against the Company, whether
predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement by
the Company of such covenants.
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11. Notification of Subsequent Employer. The Participant agrees that the Company may
notify any person or entity employing the Participant or evidencing an intention of employing the
Participant of the existence and provisions of this Agreement.
12. Transfers to a Related Entity. In the event the Participant transfers to a Related
Entity (as defined below) as a result of actions by PepsiCo, any reference to “Company” in this
Paragraph C shall be deemed to refer to such Related Entity in addition to the Company.
D. Additional Terms and Conditions.
1. Adjustment for Change in Common Stock. In the event of any change in the
outstanding shares of PepsiCo Common Stock by reason of any stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, combination or exchange of shares,
spin-off or other similar corporate change, (a) the number and type of shares which the Participant
may purchase pursuant to the Options and the Option Exercise Price at which the Participant may
purchase such shares shall be adjusted, and (b) the number and type of shares to which the
Restricted Stock Units held by the Participant relate shall be adjusted, in the case of (a) and
(b), as may be, and to such extent (if any), determined to be appropriate and equitable by the
Committee.
2. Effect of Change in Control. In the event of a Change in Control (as defined in the
Plan), the following provisions shall apply:
(a) If the successor corporation (or affiliate thereto) (1) assumes the outstanding Options
and Restricted Stock Units granted hereunder or (2) replaces the outstanding Options and Restricted
Stock Units with equity awards that preserve the existing value of such Options and Restricted
Stock Units at the time of the Change in Control and provide for subsequent payout in accordance
with a vesting schedule that is the same or more favorable to the Participant than the vesting
schedule applicable to such Options and Restricted Stock Units, then the outstanding Options and
Restricted Stock Units or such substitutes thereof shall remain outstanding and be governed by
their respective terms and the provisions of the Plan, subject to Paragraph D.2(c) below.
(b) If the outstanding Options and Restricted Stock Units granted hereunder are not assumed or
replaced in accordance with Paragraph D.2(a) above, then upon the Change in Control, (1) the
outstanding Options granted hereunder shall immediately vest and become exercisable and shall
remain outstanding in accordance with their terms and the outstanding Restricted Stock Units
granted hereunder shall immediately vest and shall be paid immediately in accordance with their
terms or, if later, as of the earliest permissible date under Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”) and (2), notwithstanding Paragraph D.2(b)(1) but after taking
into account the accelerated vesting set forth therein, the Board may, in its sole discretion,
provide for cancellation of the outstanding Options and Restricted Stock Units at the time of the
Change in Control in which case a payment of cash, property or a combination thereof shall be made
to the Participant that is determined by the Board in its sole discretion and that, in the case of
the Restricted Stock Units, is at least equal to the value of the consideration that would be
received in such Change in Control by the holders of PepsiCo’s securities relating to such awards
and, in the case of the outstanding Options, is at least equal to the excess, if any, of the value
of such consideration over the Option Exercise Price for such Options.
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(c) If the outstanding Options and Restricted Stock Units granted hereunder are assumed or
replaced in accordance with Paragraph D.2(a) and the Participant’s employment with the
Company (or, if applicable, a successor corporation) is terminated by the Company or such
successor for any reasons other than Cause or by the Participant for Good Reason, in each case,
within the two-year period commencing on the Change in Control, then, as of the date of the
Participant’s termination, (1) the outstanding Options granted hereunder shall immediately vest and
become exercisable and shall remain outstanding until the Expiration Date and (2) the outstanding
Restricted Stock Units granted hereunder shall immediately vest and shall be paid immediately in
accordance with their terms or, if later, as of the earliest permissible date under Code Section
409A. For purposes of this Paragraph D.2, “Cause” and “Good Reason” are defined in the Plan and a
termination for Cause or Good Reason is subject to the terms and conditions set forth in the Plan.
3. Nontransferability. Unless the Committee specifically determines otherwise: (a) the
Options and Restricted Stock Units are personal to the Participant and, with respect to Options,
during the Participant’s lifetime, such Options may be exercised only by the Participant, and (b)
the Options and Restricted Stock Units shall not be transferable or assignable, other than in the
case of the Participant’s death by will, the laws of descent and distribution, and any such
purported transfer or assignment shall be null and void.
4. Definitions. As used in this Agreement, the following terms shall have the meanings
set forth below:
(a) “Covered Products” means any product which falls into one or more of the following
categories, so long as the Company is producing, marketing, selling or licensing such product
anywhere in the world: beverages, including without limitation carbonated soft drinks, tea, water,
juice drinks, sports drinks, coffee drinks, and value added dairy drinks; juices and juice
products; snacks, including salty snacks, sweet snacks, meat snacks, granola and cereal bars, and
cookies; hot cereals; pancake mixes; value-added rice products; pancake syrup; value-added pasta
products; ready-to-eat cereals; dry pasta products; or any product or service which the Participant
had reason to know was under development by the Company during the Participant’s employment with
the Company.
(b) “Fair Market Value” of a share of PepsiCo Common Stock on any date shall mean an amount
equal to the mean of the high and low sales prices for a share of PepsiCo Common Stock as reported
on the composite tape for securities listed on The New York Stock Exchange, Inc. on the date in
question (or if no sales of Common Stock were made on said Exchange on such date, on the next
preceding day on which sales were made on such Exchange).
(c) “Participation” shall be construed broadly to include, without limitation: (i) serving as
a director, officer, employee, consultant or contractor with respect to such a business entity;
(ii) providing input, advice, guidance or suggestions to such a business entity; or (iii) providing
a recommendation or testimonial on behalf of such a business entity or one or more products it
produces.
(d) “Prospective Customer” shall mean any individual or entity of which the Participant has
gained knowledge as a result of the Participant’s employment with the Company and with which the
Participant dealt with or had contact with during the six (6) months preceding his or her
termination of employment with the Company.
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(e) “Related Entity” shall mean any entity as to which the Company directly or indirectly owns
20% or more of the entity’s voting securities, general partnership interests, or other voting or
management rights at the relevant time.
(f) “Retirement” shall mean (i) early, normal or late retirement under the U.S. pension plan
of the Company in which the Participant participates (if any), (ii) retirement as explicitly set
out in an individual agreement between the Company and the Participant for this purpose in effect
on the Grant Date, (iii) termination of employment after attaining at least age 55 with at least 10
years of service with the Company (or, if earlier, after attaining at least age 65 and completing
at least five years of service with the Company), or (iv) retirement as otherwise determined by the
Committee.
(g) “Total Disability” shall mean becoming totally and permanently disabled, as determined for
purposes of the Company’s Long Term Disability Plan (or in the absence of such Disability Plan
being applicable to the Participant, as determined by the Committee in its sole discretion).
5. Notices. Any notice to be given to PepsiCo in connection with the terms of this
Agreement shall be addressed to PepsiCo at 000 Xxxxxxxx Xxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000, Attention: Vice President,
Compensation, or such other address as PepsiCo may hereafter designate to the Participant. Any such
notice shall be deemed to have been duly given when personally delivered, addressed as aforesaid,
or when enclosed in a properly sealed envelope or wrapper, addressed as aforesaid, and deposited,
postage prepaid, with the federal postal service.
6. Binding Effect.
(a) This Agreement shall be binding upon and inure to the benefit of any assignee or successor
in interest to PepsiCo, whether by merger, consolidation or the sale of all or substantially all of
PepsiCo’s assets. PepsiCo will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business and/or assets of
PepsiCo expressly to assume and agree to perform this Agreement in the same manner and to the same
extent that PepsiCo would be required to perform it if no such succession had taken place.
(b) This Agreement shall be binding upon and inure to the benefit of the Participant or his or
her legal representative and any person to whom the Options and Restricted Stock Units may be
transferred by will or the applicable laws of descent and distribution.
7. No Contract of Employment; Agreement’s Survival. This Agreement is not a contract
of employment. This Agreement does not impose on the Company any obligation to retain the
Participant in its employ and shall not interfere with the ability of the Company to terminate the
Participant’s employment relationship at any time. This Agreement shall survive the termination of
the Participant’s employment for any reason.
8. Registration, Listing and Qualification of Shares. The Committee may require that
the Participant make such representations and agreements and furnish such information as the
Committee deems appropriate to assure compliance with or exemption from the requirements of any
securities exchange, any foreign, federal, state or local law, any governmental regulatory body, or
any other applicable legal requirement, and PepsiCo Common Stock shall not be issued
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unless and until the Participant makes such representations and agreements and furnished such
information as the Committee deems appropriate.
9. Amendment; Waiver. The terms and conditions of this Agreement may be amended in
writing by the chief personnel officer or chief legal officer of PepsiCo (or either of their
delegates), provided, however, that (i) no such amendment shall be adverse to the Participant
without the Participant’s written consent (except to the extent the Committee reasonably determines
that such amendment is necessary or appropriate to comply with applicable law, including the
provisions of Code Section 409A and the regulations thereunder pertaining to the deferral of
compensation, or the rules and regulations of any stock exchange on which PepsiCo Common Stock is
listed or quoted); and (ii) the amendment must be permitted under the Plan. The Company’s failure
to insist upon strict compliance with any provision of this Agreement or failure to exercise, or
any delay in exercising, any right, power or remedy under this Agreement shall not be deemed to be
a waiver of such provision or any such right, power or remedy which the Board, the Committee or the
Company has under this Agreement.
10. Severability or Reform by Court. In the event that any provision of this Agreement
is deemed by a court to be broader than permitted by applicable law, then such provision shall be
reformed (or otherwise revised or narrowed) so that it is enforceable to the fullest extent
permitted by applicable law. If any provision of this Agreement shall be declared by a court to be
invalid or unenforceable to any extent, the validity or enforceability of the remaining provisions
of this Agreement shall not be affected.
11. Plan Controls. The Options, Restricted Stock Units and the terms and conditions
set forth herein are subject in all respects to the terms and conditions of the Plan and any
guidelines, policies or regulations which govern administration of the Plan, which shall be
controlling. The Committee reserves its rights to amend or terminate the Plan at any time without
the consent of the Participant; provided, however, that Options and Restricted Stock Units
outstanding under the Plan at the time of such action shall not, without the Participant’s written
consent, be adversely affected thereby (except to the extent the Committee reasonably determines
that such amendment or termination is necessary or appropriate to comply with applicable law,
including the provisions of Code Section 409A and the regulations thereunder pertaining to the
deferral of compensation, or the rules and regulations of any stock exchange on which PepsiCo
Common Stock is listed or quoted). All interpretations or determinations of the Committee or its
delegate shall be final, binding and conclusive upon the Participant (and his or her legal
representatives and any recipient of a transfer of the Options or Restricted Stock Units permitted
by this Agreement) on any question arising hereunder or under the Plan or other guidelines,
policies or regulations which govern administration of the Plan.
12. Participant Acknowledgements. By entering into this Agreement, the Participant
acknowledges and agrees that:
(a) the Option and/or Restricted Stock Unit grant will be exclusively governed by the terms of
the Plan, including the right reserved by the Company to amend or cancel the Plan at any time
without the Company incurring liability to the Participant (except for Options and Restricted Stock
Units already granted under the Plan);
(b) the Participant has been provided a copy of PepsiCo’s Prospectus relating to the Plan, the
Options and the shares covered thereby, and the Restricted Stock Units;
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(c) stock options and restricted stock units are not a constituent part of the Participant’s
salary and that the Participant is not entitled, under the terms and conditions of his/her
employment, or by accepting or being awarded the Options and/or Restricted Stock Units pursuant to
this Agreement to require options, restricted stock units or other awards to be granted to him/her
in the future under the Plan or any other plan;
(d) upon exercise of the Options or vesting of Restricted Stock Units the Participant will
arrange for payment to the Company an estimated amount to cover employee payroll taxes resulting
from the exercise and/or, to the extent necessary, any balance may be withheld from the
Participant’s wages;
(e) benefits received under the Plan will be excluded from the calculation of termination
indemnities or other severance payments;
(f) in the event of termination of the Participant’s employment, a severance or notice period
to which the Participant may be entitled under local law and which follows the date of termination
specified in a notice of termination or other document evidencing the termination of the
Participant’s employment will not be treated as active employment for purposes of this Agreement
and, as a result, vesting of unvested Options or Restricted Stock Units will not be extended by any
such period;
(g) the Participant will seek all necessary approval under, make all required notifications
under and comply with all laws, rules and regulations applicable to the ownership of stock options
and stock and the exercise of stock options, including, without limitation, currency and exchange
laws, rules and regulations; and, in the event that any of the Participant’s Options or Restricted
Stock Units, including any such awards previously granted, become subject to the Indian fringe
benefit tax (“FBT”), the Participant will be responsible for the FBT imposed on such awards and
consents to provide payment to the Company of the applicable FBT at the time such FBT is due in
accordance with the procedures specified from time to time by the Company; and
(h) this Agreement will be interpreted and applied so that the Options and Restricted Stock
Units will not be subject to Code Section 409A. If, notwithstanding the preceding sentence, the
Options or Restricted Stock Units become subject to Code Section 409A, this Agreement will be
modified to the extent the Committee reasonably determines that is necessary or appropriate for
such Options or Restricted Stock Units to comply with Code Section 409A.
13. Right of Set-Off. The Participant agrees, in the event that the Company in its
reasonable judgment determines that the Participant owes the Company or any Related Entity any
amount due to any loan, note, obligation or indebtedness, including but not limited to amounts owed
to the Company pursuant to the Company’s tax equalization program or the Company’s policies with
respect to travel and business expenses, and if the Participant has not satisfied such
obligation(s), then the Company may instruct the plan administrator to withhold and/or sell shares
of PepsiCo Common Stock acquired by the Participant upon exercise of his or her Options or
settlement of the Restricted Stock Units, or the Company may deduct funds equal to the amount of
such obligation from other funds due to the Participant from the Company.
14. Electronic Delivery and Acceptance. The Participant hereby consents and agrees to
electronic delivery of any Plan documents, proxy materials, annual reports and other related
documents. The Participant hereby consents to any and all procedures that the Company has
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established or may establish for an electronic signature system for delivery and acceptance of
Plan documents (including documents relating to any programs adopted under the Plan), and agrees
that his or her electronic signature is the same as, and shall have the same force and effect as,
his or her manual signature. Participant consents and agrees that any such procedures and delivery
may be effected by a third party engaged by the Company to provide administrative services related
to the Plan, including any program adopted under the Plan.
15. Data Privacy. Participant hereby acknowledges and consents to the collection, use,
processing and transfer of personal data as described in this Paragraph D.15. Participant is not
obliged to consent to such collection, use, processing and transfer of personal data. However,
failure to provide the consent may affect Participant’s ability to participate in the Plan. The
Company and Participant’s employer hold certain personal information about Participant, that may
include his/her name, home address and telephone number, date of birth, social security number or
other employee identification number, salary grade, hire data, salary, nationality, job title, any
shares of PepsiCo Common Stock, or details of all options, restricted stock units or any other
entitlement to shares of stock awarded, canceled, purchased, vested, or unvested, for the purpose
of managing and administering the Plan (“Data”). PepsiCo and/or its subsidiaries will transfer
Data amongst themselves as necessary for the purpose of implementation, administration and
management of Participant’s participation in the Plan, and PepsiCo and/or any of its subsidiaries
may each further transfer Data to any third parties assisting PepsiCo in the implementation,
administration and management of the Plan. These recipients may be located throughout the world,
including the United States. Participant’s authorizes them to receive, possess, use, retain and
transfer the Data, in electronic or other form, for the purposes of implementing, administering and
managing Participant’s participation in the Plan, including any requisite transfer of such Data as
may be required for the administration of the Plan and/or the subsequent holding of shares of stock
on Participant’s behalf to a broker or other third party with whom Participant may elect to deposit
any shares of stock acquired pursuant to the Plan. Participant may, at any time, review Data,
require any necessary amendments to it or withdraw the consents herein in writing by contacting the
Company; however, withdrawing consent may affect Participant’s ability to participate in the Plan.
16. Stock Ownership / Exercise & Hold Guidelines. The Participant agrees as a
condition of this grant that, in the event that the Participant is subject to the Company’s Stock
Ownership or Exercise & Hold Guidelines, the Participant shall not sell any shares obtained upon
exercise of the Options or settlement of the Restricted Stock Units unless such sale complies with
the Stock Ownership and Exercise & Hold Guidelines as in effect from time to time.
17. Governing Law. Notwithstanding the provisions of Paragraphs D.11 and D.12, this
Agreement shall be governed, construed and enforced in accordance with the laws of the State of New
York, without giving effect to conflict of law rules or principles.
18. Choice of Venue. Notwithstanding the provisions of Paragraphs D.11 and D.12, any
action or proceeding seeking to enforce any provision of or based on any right arising out of this
Agreement may be brought against the Participant or the Company only in the courts of the State of
New York or, if it has or can acquire jurisdiction, in the United States District Court for the
Southern District of New York, and the Participant and the Company consents to the jurisdiction of
such courts (and of the appropriate appellate courts) in any such action or proceeding and waives
any objection to venue laid therein.
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19. Entire Agreement. This Agreement contains all the understanding and agreements
between the Participant and the Company regarding the subject matter hereof.
14
PepsiCo Annual Long-Term Incentive Award Summary
Executive Name:
Grant Date:
Xxxxx Xxxxx: $
Xxxxx Xxxxx: $
CORE ANNUAL AWARD
Restricted Stock Units:
Stock Options:
Stock Options:
CORE ANNUAL AWARD DETAILS
RESTRICTED STOCK UNITS AWARD
US Dollar Value Core Annual Award:
Percentage RSU:
Restricted Stock Unit Award Value:
Xxxxx Xxxxx: $
Number of Restricted Stock Units Granted:
Vesting Date*:
Percentage RSU:
Restricted Stock Unit Award Value:
Xxxxx Xxxxx: $
Number of Restricted Stock Units Granted:
Vesting Date*:
STOCK OPTIONS AWARD
US Dollar Value Core Annual Award:
Percentage Stock Options:
Stock Option Award Value:
Conversion Factor: 4x
Stock Option Award Face Value:
Option Exercise (Grant) Price: $
Number of Options Granted:
Vesting Date*:
Expiration Date:
Percentage Stock Options:
Stock Option Award Value:
Conversion Factor: 4x
Stock Option Award Face Value:
Option Exercise (Grant) Price: $
Number of Options Granted:
Vesting Date*:
Expiration Date:
| * | Vesting and exercisability are subject to the terms and conditions of the award |
AWARD ACCEPTANCE
This PepsiCo Annual Long-Term Incentive Award (“Award”) is not considered valid unless you accept
it on or before [insert date 180 days after notification]. At the bottom of this Award Summary,
you can indicate that you either “Accept” or “Reject” the Award. By pressing the “Accept” button
below and accepting your Award, you acknowledge having received and read this Award Summary, the
Terms and Conditions document and the Plan under which this Award was granted and you agree to
comply with, and be bound by, the terms and conditions of the Plan, this Award Summary and the
Terms and Conditions document. If you “Reject” this Award, the Award will be null and void and
will NOT become yours. Likewise, if you do not either “Accept” or “Reject” this Award on or before
[insert date 180 days after notification], the Award will be null and void and will NOT become
yours.
| ACCEPT | REJECT |
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