E-1
INDEX TO EXHIBITS
Exhibit No. Description Page
4 (a) Restated Articles of Incorporation of *
PepsiCo, Inc., which is incorporated herein
by reference from Exhibit 4(a) to PepsiCo's
Registration Statement on Form S-3
(Registration No. 57181).
(b) By-Laws of PepsiCo, Inc., as amended, which *
is incorporated by reference from Exhibit
3(ii) to PepsiCo's Annual Report on Form 10-K
for the fiscal year ended December 26,
1992.
(c) PepsiCo, Inc. 1995 Stock Option Incentive
Plan.
5 Opinion and consent of Kathleen Allen Luke,
Esq., Vice President and Corporate Division
Counsel of PepsiCo.
15 Letter from KPMG Peat Marwick LLP regarding *
unaudited interim financial information,
incorporated by reference from Exhibit 15 to
PepsiCo's Quarterly Report on Form 10-Q for
the twelve week period ended March 25, 1995
and the twelve and twenty-four week period
ended June 17, 1995.
23 (a) Consent of KPMG Peat Marwick LLP
(b) The consent of Kathleen Allen Luke, Esq. is *
contained in her opinion filed as Exhibit 5.
24 Power of Attorney of PepsiCo, Inc. and *
certain of its officers and directors, filed
as Exhibit 24 to PepsiCo's Annual Report on
Form 10-K for the fiscal year ended December
31, 1994, is incorporated herein by reference.
_______________________________________
*Previously filed or incorporated by reference
PEPSICO, INC.
1995 Stock Option Incentive Plan
1. PURPOSES. The principal purposes of the 1995 Stock
Option Incentive Plan (the "Plan") are to provide long-term
incentives in the form of stock options to those persons
with significant responsibility for the success and growth
of PepsiCo, Inc. and its subsidiaries, affiliates, div-
isions and other businesses in which it has a substantial fi-
nancial interest, to assist the Company in attracting and
retaining key employees on a competitive basis,
and to associate the interests of such employees with those
of PepsiCo'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) "Capital Stock" or "Stock" means PepsiCo Capital
Stock, par value 1-2/3 cents per share.
(b) "Committee" means the Compensation Committee of
the Board of Directors of PepsiCo, as appointed from
time to time by the Board, consisting of two or more
outside, disinterested members of the Board.
(c) "Company" means PepsiCo, Inc., its divisions,
direct and indirect subsidiaries, affiliates and
other businesses in which it has a substantial financial
interest.
(d) "Fair Market Value" means an amount equal to the
mean of the high and low sales prices for Capital Stock
as reported on the composite tape for securities listed
on the New York Stock Exchange, 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), carried out to four decimal
places.
(e) "Grant Date" means the date an Option is granted
under the Plan. The date of grant of an Option shall be
the date as of which the Committee determines that such
Option shall become effective.
(f) "Option" or "Stock Option" means a right granted
under the Plan to purchase a share of PepsiCo Capital
Stock at a fixed price for a specified period of time.
(g) "Option Exercise Price" means the price at which
a share of Capital Stock covered by an Option granted
hereunder may be purchased.
(h) "Optionee" means an eligible employee of the
Company who has received a Stock Option granted under
the Plan.
(i) "PepsiCo" means PepsiCo, Inc., a North Carolina
corporation.
(j) "Retirement" means termination from employment by
the Company for reasons other than death after the
employee has 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.
(k) "Totally Disabled" shall have the meaning set
forth in the Company's long term disability program
applicable to U.S. salaried employees.
3. ADMINISTRATION OF THE PLAN. The Plan shall be
administered by the Committee, which shall have all the
powers vested in it by the terms of the Plan, including, but
not limited to, authority to determine the persons to be
granted Options under the Plan, to determine the size and
applicable terms and conditions of grants to be made to such
persons, to determine the time when Options will be granted
and any conditions which must be satisfied by employees
before an award is made, to determine when Options may be
exercised and whether they may be deferred, to determine
whether an award should be reduced or eliminated, and to
authorize grants to eligible persons.
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 as the Committee deems necessary
or advisable. The Committee's interpretations of the
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Plan, and all actions taken and determinations made by the
Committee concerning any matter arising under or with
respect to the Plan or any Options granted hereunder
shall be final, binding and conclusive on all parties
concerned, including, without limitation, Optionees, the Company,
its employees, PepsiCo and its shareholders.
4. ELIGIBILITY. All Company employees who hold positions
graded at Level 12, 13, 14 or 15, or the equivalent, on a
Grant Date are eligible to be granted Options under the Plan.
To receive a grant the employee must have been nominated for an
award by his or her Division. Employees who are hired at or promoted
to an eligible level after a Grant Date will only be eligible to
receive a grant on the next Grant Date. Notwithstanding the
foregoing, no employee may be granted Options which, if
exercised in the aggregate, would result in that employee
receiving more that 10% of the maximum number of shares
available for issuance under the Plan.
5. AWARDS. Stock Options will be granted annually
in July of each year in amounts determined from time to time
by the Committee. The amounts may vary by grade level. All
Options granted under the Plan shall be evidenced by agreements
containing such terms and conditions (not inconsistent with
the Plan) 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
Capital Stock on the Grant Date.
(b) Term. Unless terminated earlier in accordance
with their terms, Options will expire on July 31 of the
10th year after the date of their grant. For example,
if an Option is granted on July 27, 1995, it will expire
on July 31, 2005
(c) Exercisability. Options shall vest and become
exercisable on August 1 of the calendar year that
immediately succeeds the calendar year in which such
Options were granted. For example, if an Option is
granted on July 27, 1995, it will vest and become
exercisable on August 1, 1996. Once exercisable,
Options may be exercised until the expiration of their
term. Fractional Options may not be exercised and no
fractional shares shall be purchasable or deliverable
under the Plan.
(d) Termination of Employment, Death, Total
Disability or Retirement. All Options shall
automatically expire upon, and no Option may be
exercised after, the termination of the Optionee's
employment with the Company, provided, however, that if
such termination occurs by reason of the Optionee's
death, Total Disability or Retirement, then the
Optionee's designated beneficiary (or, if none, his or
her legal representative), in the event of death, or the
Optionee, in the event of Retirement or Total
Disability, shall be vested with and have the right to
exercise that portion of the Options which is in proportion
to the Optionee's active service during the vesting
period. Such Options may be exercised during the
remaining term of the Options.
(e) Buy-out of Option Gains. The Committee shall
have the right, at any time, in its sole discretion and
without the consent of the holder thereof, to cancel a
Stock Option and pay to the holder the excess of the
Fair Market Value of the shares covered by such Option
over the Option Exercise Price for such Option as of the
date the Committee provides written notice of its
intention to exercise this right. Payments of buy out
amounts may be made in cash, in shares of Capital Stock,
or partly in cash and partly in Capital Stock, as the
Committee deems advisable. Payments of any such buy out
amounts shall be made net of any applicable foreign,
federal (including FICA), state and local withholding
taxes.
(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 PepsiCo 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 may, at the option of the Company, forfeit all
rights to any unexercised Options granted under the Plan
and in such event all of that Optionee's outstanding
Options shall automatically terminate and lapse.
(g) Assignment or Transfer. Unless the Committee
shall specifically determine otherwise, during an
Optionee's lifetime, his or her Options shall not be
transferable and shall only be exercisable by the
Optionee and any purported transfer shall be null and
void.
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No Option, nor any rights or interests therein,
shall be assignable or transferable except by
will or the laws of descent and distribution.
6. FOREIGN EMPLOYEES. Without amending the Plan, the
Committee may grant Options 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.
7. EXERCISING OPTIONS. To exercise an Option, the
holder thereof shall give notice of his or her exercise to
PepsiCo, or its agent, specifying the number of shares of
Capital Stock to be purchased and identifying the specific
Options that are being exercised. From time to time the
Committee may establish procedures relating to effecting
such exercises. 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 whom the Committee deems appropriate
based on applicable facts and circumstances.
8. 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 Capital Stock. In
addition, in order to enable the Company to meet any
applicable foreign, federal (including FICA), state and
local withholding tax requirements, an Optionee shall also
be required to pay the amount of tax to be withheld at the
time of exercise. No share of Stock will be delivered to
any Optionee until all such amounts have been paid. The
obligation of PepsiCo to deliver cash or Capital Stock shall
be subject to currency or other restrictions imposed by any
government.
9. SHARES OF STOCK SUBJECT TO THE PLAN. The shares that
may be delivered or purchased under the Plan shall not
exceed an aggregate of 25,000,000 shares of Capital Stock,
subject to any adjustments which may be made pursuant to
Section 10 hereof. Shares of Stock used for purposes of the
Plan may be either shares of authorized but unissued Capital
Stock or treasury shares or both. Stock covered by Options
which have terminated or expired prior to exercise or have
been surrendered or cancelled shall be available for further
option hereunder.
10. DILUTION AND OTHER ADJUSTMENTS. In the event of any
change in the outstanding shares of Capital Stock by reason
of any stock split, stock dividend, recapitalization,
merger, consolidation, combination or exchange of shares or
other similar corporate change, such equitable adjustments
may be made in the Plan and the Options granted hereunder as
the Committee determines are necessary or appropriate,
including, if necessary, an adjustment in the number of
shares and Option Exercise Prices per share applicable to
Options then outstanding and in 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.
11. REGISTRATION, LISTING AND QUALIFICATION OF SHARES.
Each Option shall be subject to the requirement that if at
any time 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 determined
to be necessary or desirable as a condition of, or in
connection with, the granting of such Option or the purchase
of shares thereunder, no such Option may be delivered or
exercised, as the case may be, 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.
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12. NO RIGHTS TO OPTIONS OR EMPLOYMENT. No employee or
other person shall have any claim or right to be granted an
Option under the Plan. Having received an Option under the
Plan shall not give an employee any right to receive any
other grant under the Plan. An Optionee shall have no
rights to or interest in any Option except as set forth
herein or in the terms and conditions of the Option.
Neither the Plan nor any action taken hereunder shall be
construed as giving any employee any right to be retained in
the employ of the Company.
13. RIGHTS AS SHAREHOLDER. An Optionee under the Plan
shall have no rights as a holder of Capital Stock with
respect to Options granted hereunder, unless and until
certificates for shares of Capital Stock are issued to such
Optionee.
14. COSTS AND EXPENSES. Except as provided in Sections 5
and 8 hereof with respect to taxes, the costs and expenses
of administering the Plan shall be borne by PepsiCo and
shall not be charged to any grant nor to any employee
receiving a grant.
15. 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, PepsiCo shall not be required to establish any special
or separate fund or to make any other segregation of assets
to assure the delivery of PepsiCo Capital Stock upon
exercise of any Option granted under the Plan.
16. 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. With the consent of affected Optionees, the
Committee may amend outstanding agreements evidencing awards
under the Plan in a manner not inconsistent with the terms
of the Plan.
17. OTHER ACTIONS. This Plan shall not restrict the
authority of the Committee or of PepsiCo, 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.
18. GOVERNING LAW. This Plan shall be governed by and
construed in accordance with the laws of the State of North
Carolina.
19. EFFECTIVENESS OF THE PLAN. This Plan shall become
effective on July 27, 1995.
EXHIBIT 5
August 10, 1995
PepsiCo, Inc.
700 Anderson Hill Road
Purchase, New York 19577
Dear Sir or Madam:
As Vice President, Corporate Division Counsel of
PepsiCo, Inc. ("PepsiCo"), I have acted as counsel to
PepsiCo in connection with the Registration Statement on
Form S-8 (the "Registration Statement") being filed today
with the Securities and Exchange Commission in connection
with the registration under the Securities Act of 1933, as
amended (the "Act"), of 4,000,000 shares of PepsiCo Capital
Stock, par value 1-2/3 cents per share (the "Shares"),
pursuant to the PepsiCo 1995 Stock Option Incentive Plan
(the "Plan").
In connection with the opinion set forth below, I have
examined such records and documents and have made such
investigations of law and fact as I have deemed necessary.
Based upon the foregoing, it is my opinion that the
Shares being registered pursuant to the Registration
Statement to which this opinion is an exhibit, when sold in
accordance with the terms of the Plan, will be legally
issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the use of my
name in the Registration Statement under the caption "Legal
Opinion". In giving this consent, I do not admit that I am
in the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/ KATHLEEN ALLEN LUKE
Exhibit 23 (a)
Consent of Independent Auditors
The Board of Directors
PepsiCo, Inc.
We consent to the use of our report dated February 7, 1995
on the consolidated financial statements and schedule of
PepsiCo, Inc. and subsidiaries as of December 31, 1994 and
December 25, 1993 and for each of the years in the three
year period ended December 31, 1994 incorporated herein by
reference in the Registration Statement on Form S-8 of
PepsiCo, Inc. pertaining to the 1995 Stock Option Incentive
Plan and to the reference to our firm under the heading
"Experts" in the Registration Statement.
Our report refers to PepsiCo, Inc.'s adoption of the
Financial Accounting Standards Board's Statement of
Financial Accounting Standards No. 112, "Employers'
Accounting for Postemployment Benefits," and the change in
the method of calculating the market-related value of
pension plan assets used in the determination of pension
expense in 1994, and PepsiCo's adoption of the Financial
Accounting Standards Board's Statements of Financial
Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" and No. 109,
"Accounting for Income Taxes" in 1992. Further, we
acknowledge our awareness of the use therein of our review
reports dated May 2, 1995 and July 25, 1995 related to our
review of interim financial information. Our review reports
refer to PepsiCo, Inc.'s adoption of the Financial
Accounting Standards Board's Statement of Financial
Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits," and the change in the method of
calculating the market-related value of pension plan assets
used in the determination of pension expense in 1994, and
PepsiCo's adoption of the Financial Accounting Standards
Board's Statements of Financial Accounting Standards No.
106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions" and No. 109, "Accounting for Income
Taxes" in 1992.
Pursuant to Rule 436(c) under the Securities Act of 1933,
such review report is not considered a part of a
registration statement prepared or certified by an
accountant or a report prepared or certified by an
accountant within the meaning of sections 7 and 11 of the
Act.
/s/ KPMG Peat Marwick LLP
New York, New York
August 10, 1995