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EXHIBIT 10.11
PBG STOCK INCENTIVE PLAN
1. Purposes. The principal purposes of the PBG Stock Incentive Plan
(the "Plan") are: (a) to improve individual employee performance by providing
long-term incentives and rewards to employees of the Company; (b) to assist the
Company in attracting, retaining and motivating employees with experience and
ability; and (c) to associate the interests of such employees with those of
PBG's shareholders.
2. Definitions. Unless the context clearly indicates otherwise, the
following terms, when used in this Plan, shall have the meanings set forth
below:
(a) "Award" means the grant of an Option, Restricted Stock or
Share Award, or any or all of them.
(b) "Board" means the Board of Directors of The Pepsi Bottling
Group, Inc.
(c) "Committee" means the Executive Development and
Compensation Committee of the Board, as appointed from time to time by
the Board, consisting of two 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 to the Committee, participated in the Plan;
provided, however, that prior to the date PBG becomes a separately held
public company, the Compensation Committee of the Board of Directors of
PepsiCo, Inc. shall serve as the Committee for purposes of this Plan.
(d) "Common Stock" or "Stock" means PBG Common Stock, par
value $0.01 per share.
(e) "Company" means The Pepsi Bottling Group, Inc., its
divisions, direct and indirect subsidiaries and affiliates.
(f) "Fair Market Value" means an amount equal to the average
of the high and low sales prices for 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 Stock were made on
said Exchange on such date, on the next preceding day on which sales
were made on such Exchange), except that such average price shall be
rounded up to the nearest one-fourth.
(g) "Grant Date" means the date an Award is granted under the
Plan. The date of grant of an Award shall be the date as of which the
Committee determines that such Award shall become effective.
(h) "Grantee" means an eligible employee of the Company who
has been granted Restricted Stock or a Share Award under the Plan.
(i) "Option" or "Stock Option" means a right granted under the
Plan to an Optionee to purchase a share of Common Stock at a fixed
price for a specified period of time.
(j) "Option Exercise Price" means the price at which a share
of Common Stock covered by an Option granted hereunder may be
purchased.
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(k) "Optionee" means an eligible employee of the Company who
has received a Stock Option granted under the Plan.
(l) "PBG" means The Pepsi Bottling Group, Inc., a Delaware
corporation.
(m) "Restricted Stock" means Stock issued to an eligible
employee pursuant to Section 7 of this Plan.
(n) "Retirement" means a termination of employment with the
Company after the employee has (i) fulfilled the requirements for
either a normal, early or disability retirement pension (as defined
under the Company's retirement program applicable to such employee at
the date of termination of employment) and (ii) affirmatively elected
to retire from employment.
(o) "Share Award" means Stock issued to an eligible employee
pursuant to Section 8 of this Plan.
(p) "Totally Disabled" shall have the meaning set forth in the
Company's long-term disability program applicable to such employee.
3. Administration. The Plan shall be administered by the Committee,
which 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 as the Committee deems necessary or advisable.
The Committee's powers include, but are not limited to (subject to the specific
limitations described herein), authority to determine the employees to be
granted Awards under the Plan, to determine the size and applicable terms and
conditions of grants to be made to such employees, to determine the time when
Awards will be granted and to authorize grants to eligible employees. The
Committee's interpretations of the Plan, and all actions taken and
determinations made by the Committee concerning any matter arising under or with
respect to the Plan or any Awards granted hereunder, shall be final, binding and
conclusive on all interested parties, including PBG, its shareholders and all
former, present and future employees of the Company. The Committee may delegate
some or all of its power and authority hereunder to the Chief Executive Officer
of PBG, such delegation to be subject to such terms and conditions as the
Committee in its discretion shall determine. The Committee may as to all
questions of accounting rely conclusively upon any determinations made by the
independent public accountants of PBG.
4. Stock Available for Awards. The shares that may be delivered or
purchased under the Plan shall not exceed an aggregate number of shares of
Common Stock to be determined from time to time by the Committee, subject to any
adjustments which may be made pursuant to Section 12 hereof. Shares of Stock
used for purposes of the Plan may be either shares of authorized but unissued
Common Stock or treasury shares or both. Stock covered by Awards which have
terminated or expired prior to exercise or have been surrendered or canceled
shall be available for further grants of Awards hereunder.
5. Eligibility. All those employees of the Company who shall be
determined from time to time by the Committee to be eligible shall participate
in the Plan; provided, however, that no employee may be granted Awards in the
aggregate which, if exercised, would result in that employee receiving more than
10% of the maximum number of shares available for issuance under the Plan.
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6. Options. Each Option granted hereunder shall be in writing and shall
contain such terms and conditions as the Committee may determine, subject to the
following:
(a) Option Exercise Price. The Option Exercise Price shall be
equal to the Fair Market Value of a share of Common Stock on the Grant
Date; provided, however, that the Option Exercise Price of Options
granted to eligible employees as of the date PBG becomes a separate
publicly held company shall be the price per share at which Stock is
initially offered for sale to the public.
(b) Term and Exercise Dates. Options granted hereunder shall
have a term of no longer than ten (10) years from the Grant Date and
shall become exercisable in accordance with the terms of their grant. A
grant of Options may become exercisable in installments. To the extent
that Stock Options are not exercised when they become initially
exercisable, they shall be carried forward and be exercisable until the
expiration of the term of such Stock Options, subject to the provisions
of Sections 6(e) and (f) hereof.
(c) Exercise of Option. To exercise an Option, the holder
thereof shall give notice of his or her exercise to PBG, or its agent,
specifying the number of shares of Common Stock to be purchased and
identifying the specific Options that are being exercised. The
Committee may, from time to time, establish procedures relating to
effecting such exercises. Stock Options must be exercised for full
shares of Common Stock; no fractional shares shall be issued as a
result of exercising an Option. Notwithstanding anything to the
contrary herein, an employee of the Company shall be permitted to
exercise his or her Options only if he or she is: (i) actively at work;
(ii) on vacation; (iii) receiving disability benefits; (iv) receiving
benefits from a severance plan which explicitly provides for the
exercise of options; (v) on layoff; or (vi) on medical (including leave
under the Family and Medical Leave Act), child care/parental, funeral,
military or jury duty leave. An Option is exercisable during an
Optionee's lifetime only by the Optionee; provided, however, that in
the event the Optionee is incapacitated and unable to exercise Options,
such Options may be exercised by such Optionee's legal guardian, legal
representative, fiduciary or other representative who the Committee
deems appropriate based on applicable facts and circumstances.
(d) Payment of Option Exercise Price. The Option Exercise
Price for the Options being exercised must be paid in full at time of
issuance of the Common Stock.
(e) Effect of Termination of Employment, Disability or Death.
Unless the Committee shall determine otherwise, no Option may be
exercised by an Optionee after the termination of his or her employment
with the Company, except that: (i) if such termination occurs by reason
of the Optionee's death, all Options then held by the Optionee shall
become immediately exercisable as of the date of death and may be
exercised by such Optionee's executor (or, if none, his or her legal
representative) until the expiration of such Options in accordance with
their terms; (ii) if such termination occurs by reason of the
Optionee's becoming Totally Disabled, all Options then held by the
Optionee shall continue to become exercisable and shall be able to be
exercised by the Optionee (or his or her legal representative) in
accordance with their terms; (iii) if such termination occurs by reason
of the Optionee's Retirement, all Options then held by the Optionee
shall become immediately exercisable as of the date of such Retirement
and may be exercised by the Optionee until the expiration of such
Options in accordance with their terms; and (iv) if such termination is
voluntary by the employee or is by action of the Company (except as
described in Section 6(f) hereof), all Options then held by the
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Optionee which are exercisable at the date of termination shall
continue to be exercisable by the Optionee until the earlier of ninety
(90) calendar days after such date or the expiration of such Options in
accordance with their terms. Unless the Committee shall determine
otherwise, all Options which are not exercisable as of the date of the
Optionee's termination of employment shall automatically terminate and
lapse ninety (90) calendar days after such date of termination and
shall not be permitted to vest during such ninety-day period, unless
the registered owner is re-employed by the Company prior to the date on
which such Options terminate and lapse.
(f) Misconduct. In the event that an Optionee has (i) used for
profit or disclosed to unauthorized persons, confidential information
or trade secrets of the Company, (ii) breached any contract with or
violated any fiduciary obligation to the Company, (iii) engaged in
unlawful trading in the securities of PBG or of another company based
on information gained as a result of that Optionee's employment with
the Company, or (iv) committed a felony or other serious crime, then
that Optionee shall forfeit all rights to any unexercised Options
granted under the Plan and all of that Optionee's outstanding Options
shall automatically terminate and lapse, unless the Committee shall
determine otherwise.
(g) Nontransferability of Options. During an Optionee's
lifetime, his or her Options shall not be transferable and shall only
be exercisable by the Optionee (or his or her legal representative) and
any purported transfer shall be null and void. No Option shall be
transferable other than by will or the laws of descent and
distribution.
(h) Buy Out of Option Gains. At any time after any Stock
Option becomes exercisable, the Committee shall have the right to
elect, in its sole discretion and without the consent of the holder
thereof, to cancel such Option and to cause PBG to pay to the Optionee
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 at
the date the Committee provides written notice (the "Buy Out Notice")
of its intention to exercise such right. Buy outs pursuant to this
provision shall be effected by PBG as promptly as possible after the
date of the Buy Out Notice. Payments of buy out amounts may be made in
cash, in shares of Common Stock, or partly in cash and partly in Common
Stock, as determined by the Committee in its discretion. To the extent
payment is made in shares of Common Stock, the number of shares shall
be 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. In no event shall PBG be required to deliver a fractional share
of Common Stock in satisfaction of this buy out provision. Payments of
any such buy out amount shall be made net of any applicable foreign,
federal (including FICA), state and local withholding taxes.
(i) Employment by the Company. To the extent the vesting,
exercise, or term of any stock option award is conditioned on
employment by the Company, an award recipient whose Company employment
terminates through a Company-approved transfer to an allied
organization: (i) shall vest in and be entitled to exercise any stock
option award immediately prior to the transfer, (ii) shall have
employment with the allied organization treated as employment by the
Company in determining the term of such award and the period for
exercise, and (iii) shall have the allied organization considered part
of the Company for purposes of applying the misconduct provisions of
subsection (f) above. The Chief Personnel Officer shall specify the
entities that are considered allied organizations as of any time. This
subsection shall be given effect in applying the fourth sentence of
subsection (c) above and notwithstanding subsection (e) above.
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7. Restricted Stock. Each Award of Restricted Stock granted hereunder
shall be in writing and shall contain such terms and conditions as the Committee
may determine, subject to the following:
(a) Rights of Grantee. Shares of Restricted Stock granted
hereunder shall be issued in the name of the Grantee as soon as
reasonably practicable after the Award is granted provided that the
Grantee has executed any and all documents which the Committee may, in
its discretion, require as a condition to the issuance of Stock (e.g.,
an Award agreement, blank stock powers or an escrow agreement). At the
discretion of the Committee, Stock issued in connection with a
Restricted Stock Award shall be deposited together with the stock
powers with an escrow agent (which may be the Company) designated by
the Committee. Unless the Committee determines otherwise, upon delivery
of the Stock to the escrow agent, the Grantee shall have all of the
rights of a stockholder with respect to such Stock, including the right
to vote the Stock and to receive all dividends or other distributions
paid or made with respect to the Stock.
(b) Non-Transferability. Until all restrictions upon the
Restricted Stock awarded to a Grantee have lapsed in the manner set
forth in Section 7(c), such Stock shall not be sold, transferred or
otherwise disposed of and shall not be pledged or otherwise
hypothecated.
(c) Lapse of Restrictions. Restrictions upon Restricted Stock
shall lapse at such time or times and on such terms and conditions as
the Committee may determine. The written terms and conditions governing
the Award shall set forth any such restrictions. Unless the Committee
shall determine otherwise, such terms and conditions shall provide that
upon a Grantee's termination of employment (including Retirement), all
Restricted Stock held by the Grantee which remains subject to
restrictions as of the date of termination shall be returned to, or
canceled by, the Company and shall be deemed to have been forfeited by
the Grantee, except that: (i) if such termination occurs by reason of
the Grantee's death, all restrictions on such Restricted Stock shall
lapse on the date of death; and (ii) if such termination occurs by
reason of the Grantee's becoming Totally Disabled, all restrictions on
such Restricted Stock shall continue to lapse in accordance with their
terms.
(d) Dividends. At the time an Award of Restricted Stock is
granted, the Committee may, in its discretion, determine that the
payment to the Grantee of dividends declared or paid on such Stock by
the Company shall be (i) deferred until the lapsing of the restrictions
imposed upon such Restricted Stock and (ii) held by the Company for the
account of the Grantee until such time. In the event that dividends are
to be deferred, the Committee shall determine whether such dividends
are to be reinvested in Stock (which shall be held as additional shares
of Restricted Stock) or held in cash. If deferred dividends are to be
held in cash, there may be credited periodically interest on the amount
of the account at a rate per annum as the Committee, in its discretion,
may determine. Payment of deferred dividends in respect of shares of
Restricted Stock (whether in cash or additional Stock), together with
interest accrued thereon, if any, shall be made upon the lapsing of
restrictions imposed on the Restricted Stock in respect of which the
deferred dividends were paid, and any dividends deferred (together with
any interest accrued thereon) in respect of any Restricted Stock shall
be forfeited upon the forfeiture of such Restricted Stock.
(e) Delivery of Shares. Upon the lapse of restrictions on
Restricted Stock, the Committee shall cause a stock certificate to be
delivered to the Grantee with respect to such Stock, free of all
restrictions hereunder.
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8. Share Awards. The Committee may grant a Share Award to any eligible
employee on such terms and conditions as the Committee may determine in its sole
discretion. Share Awards may be made as additional compensation for services
rendered by the eligible employee or may be in lieu of cash or other
compensation to which the eligible employee is entitled from the Company.
9. Amendment. The Committee may, at any time, amend, suspend or
terminate the Plan, in whole or in part, provided that no such action shall
adversely affect any rights or obligations with respect to any Awards granted
under the Plan prior to such action. The Committee may amend the terms and
conditions of outstanding Awards; provided, however, that (i) no such amendment
shall be adverse to the holders of the Awards, (ii) no such amendment shall
extend the period for exercise of an Option, and (iii) the amended terms of the
Award would be permitted under this Plan.
10. Foreign Employees. Without amending the Plan, the Committee may
grant Awards to eligible employees who are foreign nationals on such terms and
conditions different from those specified in this 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 the Company operates or has employees.
11. Registration, Listing and Qualification of Shares. Each Award shall
be subject to the requirement that, if at any time the Committee shall determine
that the registration, listing or qualification of the shares 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 necessary or
desirable as a condition of, or in connection with, the granting of such Award
or the purchase of shares thereunder, no such Award may be exercised or sold
unless and until such registration, listing, qualification, consent or approval
shall have been effected or obtained free of any condition not acceptable to the
Committee. Any person exercising an Option shall 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.
12. Adjustment for Change in Stock Subject to Plan. In the event of any
change in the outstanding shares of Common Stock by reason of any stock split,
stock dividend, recapitalization, spin-off, merger, consolidation, combination
or exchange of shares or other similar corporate change, such equitable
adjustments may be made in the Plan and the Awards granted hereunder as the
Committee determines are necessary or appropriate, including, if necessary, an
adjustment in the number of shares applicable to Awards then outstanding, the
Option Exercise Prices applicable to Options then outstanding and the number of
shares which are reserved for issuance under the Plan. Any such adjustment shall
be conclusive and binding for all purposes of the Plan.
13. No Rights to Awards or Employment. No employee or other person
shall have any claim or right to be granted an Award under the Plan. Having
received an Award under the Plan shall not give an employee any right to receive
any other grant under the Plan. No person who has received an Award shall have
any rights to or interest in any Award except as set forth herein. Neither the
Plan nor any action taken hereunder shall be construed as giving any person any
right to be retained in the employ of the Company.
14. Withholding. In order to enable the Company to meet any applicable
foreign, federal (including FICA), state and local withholding tax requirements,
an Optionee or Grantee shall be required to pay the amount of tax to be withheld
at the time such Optionee or Grantee recognizes taxable income
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in connection with the receipt of Stock or cash hereunder. No share of Stock
shall be delivered to any Optionee or Grantee until all such amounts have been
paid.
15. Rights as Shareholder. No Optionee or Grantee shall have any rights
as a holder of Common Stock with respect to Awards granted hereunder, unless and
until certificates for shares of Common Stock are issued to such Optionee or
Grantee.
16. Other Actions. This Plan shall not restrict the authority of the
Committee or of PBG, for proper corporate purposes, to grant or assume stock
options, other than under the Plan, to or with respect to any employee or other
person.
17. Costs and Expenses. Except as provided in Sections 6 and 14 hereof
with respect to taxes and except for certain other fees and commissions related
to the exercise of Options, the costs and expenses of administering the Plan
shall be borne by PBG and shall not be charged to any Award nor to any Optionee
or Grantee.
18. Plan Unfunded. The Plan shall be unfunded. Except for reserving a
sufficient number of authorized shares to the extent required by law to meet the
requirements of the Plan, PBG shall not be required to establish any special or
separate fund or to make any other segregation of assets to assure the delivery
of Common Stock pursuant to an Award granted under the Plan.
19. Governing Law. This Plan shall be governed by and construed in
accordance with the laws of the State of Delaware.
20. Effectiveness and Duration of the Plan. This Plan is effective as
of March 30, 1999. No Award shall be granted hereunder after April 1, 2009.
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