PEPSICO, INC
1987 Incentive Plan
(as amended and restated, effective October 1, 1999)
1. Purpose.
The purposes of the 1987 Incentive Plan (the "Plan") are to provide
long-term incentives and rewards to those employees largely responsible for the
success and growth of PepsiCo, Inc. and its subsidiaries and divisions
("PepsiCo"), to assist PepsiCo in attracting and retaining executives with
experience and ability on a basis competitive with industry practices, and to
associate the interests of such employees with those of PepsiCo's shareholders.
2. Effective Date.
The Plan shall become effective on the date it is approved by the
holders of a majority of the Capital Stock of PepsiCo ("Capital Stock").
3. Administration of the Plan.
The Plan shall be administered by the Compensation Committee of the
Board of Directors of PepsiCo (the "Committee"). The Committee shall be
appointed by the Board of Directors and shall consist of three or more members
of the Board who are not eligible to participate in the Plan and who have not,
within one year prior to their appointment, participated in the Plan, any stock
option plan or the 1979 Incentive Plan of PepsiCo.
The Committee shall have all the powers vested in it by the terms of
the Plan, such powers to include exclusive authority (within the limitations
described herein) to select the employees to be granted awards under the Plan,
to determine the type, size and terms of awards to be made to each employee
selected, to determine the time when awards will be granted and to establish
objectives and conditions for earning awards and whether awards will be paid at
the end of the award period. The Committee shall have full power and authority
to administer and interpret the Plan and to adopt such rules, regulations,
agreements, guidelines and instruments for the administration of the Plan and
for the conduct of its business as the Committee deems necessary or advisable.
The Committee's interpretations of the Plan, and all actions taken and
determinations made by the Committee pursuant to the powers vested in it
hereunder, shall be conclusive and binding on all parties concerned, including
PepsiCo, its shareholders and any employee of PepsiCo.
4. Awards.
(a) Types. Awards under the Plan may include, but need not be limited
to, stock options, performance shares, incentive stock rights and stock
appreciation rights. The Committee may make any other type of award which it
shall determine is consistent with the objectives and limitations of the Plan.
(b) Guidelines. The Committee may adopt from time to time written
policies for its implementation of the Plan. Such policies may include, but need
not be limited to, the type, size and term of awards to be made to eligible
employees and the conditions for payment of such awards.
(c) Maximum Awards. An employee may be granted multiple awards under
the Plan but no one employee may be granted, in the aggregate, awards which
would result in his receiving more than 10% of the maximum number of shares
available for award under the Plan.
5. Shares of Stock Subject to the Plan.
The shares that may be delivered or purchased under the Plan shall not
exceed an aggregate of 18,000,000 shares of Capital Stock. Shares to be
delivered or purchased under the Plan may be either shares of authorized but
unissued Capital Stock or treasury shares.
6. Deferred Payments.
The Committee may determine that all or a portion of a payment to a
participant under the Plan, whether it is to be made in cash, shares of Capital
Stock or a combination thereof, shall be deferred. Deferrals shall be for such
periods and upon such terms as the Committee may determine in its sole
discretion.
7. Dilution and Other Adjustments.
In the event of any change in the outstanding shares of Capital Stock
by reason of any split, stock dividend, recapitalization, merger, consolidation,
combination or exchange of shares or other similar corporate change, such
equitable adjustments shall be made in the Plan and the awards thereunder as the
Committee determines are necessary and appropriate, including, if necessary, an
adjustment in the maximum number or kind of shares subject to the Plan or which
may be or have been awarded to any participant. Such adjustment shall be
conclusive and binding for all purposes of the Plan.
8. Change in Control.
At the date of a "Change in Control" (as defined below), all
outstanding and unvested stock options granted under the Plan shall immediately
vest and become exercisable, and all stock options then outstanding under the
Plan shall remain outstanding in accordance with their terms. In the event that
any stock option granted under the Plan becomes unexercisable during its term on
or after a Change in Control because: (i) the individual who holds such option
is involuntarily terminated (other than for cause) within two (2) years after
the Change in Control; (ii) such option is terminated or adversely modified; or
(iii) PepsiCo Capital Stock is no longer issued and outstanding, or no longer
traded on a national securities exchange, then the holder of such option shall
immediately be entitled to receive a lump sum cash payment equal to the greater
of (x) the gain on such option or (y) the Black-Scholes value of such option (as
determined by a nationally recognized independent investment banker chosen by
PepsiCo), in either case calculated on the date such option becomes
unexercisable. For purposes of the preceding sentence, the gain on a stock
option shall be calculated as the difference between the closing price per share
of PepsiCo Capital Stock as of the date such option becomes unexercisable less
the exercise price per share of such option.
Any amount required to be paid pursuant to this Section 8 shall be paid
within twenty (20) days after the date such amount becomes payable.
"Change in Control" means the occurrence of any of the following
events: (i) acquisition of 20% or more of the outstanding voting securities of
PepsiCo, Inc. by another entity or group; excluding, however, the following (A)
any acquisition by PepsiCo, Inc., or (B) any acquisition by an employee benefit
plan or related trust sponsored or maintained by PepsiCo, Inc.; (ii) during any
consecutive two-year period, persons who constitute the Board of Directors of
PepsiCo, Inc. (the "Board") at the beginning of the period cease to constitute
at least 50% of the Board (unless the election of each new Board member was
approved by a majority of directors who began the two-year period); (iii)
PepsiCo, Inc. shareholders approve a merger or consolidation of PepsiCo, Inc.
with another company, and PepsiCo, Inc. is not the surviving company; or, if
after such transaction, the other entity owns, directly or indirectly, 50% or
more of the outstanding voting securities of PepsiCo, Inc.; (iv) PepsiCo, Inc.
shareholders approve a plan of complete liquidation of PepsiCo, Inc. or the sale
or disposition of all or substantially all of PepsiCo, Inc.'s assets; or (v) any
other event, circumstance, offer or proposal occurs or is made, which is
intended to effect a change in the control of PepsiCo, Inc., and which results
in the occurrence of one or more of the events set forth in clauses (i) through
(iv) of this paragraph.
9. Miscellaneous Provisions.
(a) Misconduct. If the Committee determines that a present or former
employee has (i) used for profit or disclosed to unauthorized persons,
confidential information or trade secrets of PepsiCo, or (ii) breached any
contract with or violated any fiduciary obligation to PepsiCo, that employee
shall forfeit all unpaid or undelivered portions of any awards under the Plan.
(b) Rights as Shareholder. A participant under the Plan shall have no
rights as a holder of Capital Stock with respect to awards hereunder, unless and
until certificates for shares of Capital Stock are issued to the participant.
(c) Assignment or Transfer. No awards under the Plan or any rights or
interests therein shall be assignable or transferable by a participant except by
will or the laws of descent and distribution. During the lifetime of a
participant, awards hereunder are exercisable only by, and payable only to, the
participant.
(d) Agreements. All awards granted under the Plan shall be evidenced by
agreements in such form and containing such terms and conditions (not
inconsistent with the Plan) as the Committee shall adopt.
(e) Requirements for Transfer. No shares of Capital Stock shall be
issued or transferred under the Plan until all legal requirements applicable to
the issuance or transfer of such shares have been complied with to the
satisfaction of the Committee. The Committee shall have the right to condition
any issuance of shares of Capital Stock made to any participant upon such
participant's written undertaking to comply with such restrictions on his
subsequent disposition of such shares as the Committee or PepsiCo shall deem
necessary or advisable as a result of any applicable law, regulation or official
interpretation thereof, and certificates representing such shares may be
legended to reflect any such restrictions.
(f) Withholding Taxes. PepsiCo shall have the right to deduct from all
awards hereunder paid in cash any federal, state, local or foreign taxes
required by law to be withheld with respect to such awards and, with respect to
awards paid in stock or upon exercise of stock options, to require the payment
(through withholding from the participant's salary or otherwise) of any such
taxes. The obligation of PepsiCo to make delivery of awards in cash or Capital
Stock shall be subject to currency or other restrictions imposed by any
government.
(g) No Rights to Awards. No employee or other person shall have any
claim or right to be granted an award under the Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any employee any right to be
retained in the employ of PepsiCo.
(h) Costs and Expenses. The cost and expenses of administering the Plan
shall be borne by PepsiCo and not charged to any award nor to any employee
receiving an award.
(i) Funding of Plan. The Plan shall be unfunded. PepsiCo shall 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.
10. Amendments and Termination.
(a) Amendments. The Committee may at any time terminate or from time to
time amend the Plan in whole or in part, but no such action shall adversely
affect any rights or obligations with respect to any awards theretofore made
under the Plan.
Unless the holders of at least a majority of the outstanding shares of
Capital Stock of PepsiCo shall have first approved thereof, no amendment of the
Plan shall be effective which would increase the maximum number of shares which
may be delivered under the Plan or to any one individual or extend the maximum
period during which awards may be granted under the Plan.
With the consent of the employee affected, the Committee may amend
outstanding agreements evidencing awards under the Plan in a manner not
inconsistent with the terms of the Plan.
(b) Termination. No awards shall be made under the Plan after December
31, 1997.