16525/016/SHAREOFFERING/EDGAR/apr_8k.txt
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
April 10, 2001
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Date of Report (Date of earliest event reported)
PepsiCo, Inc.
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(Exact name of registrant as specified in its charter)
North Carolina
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(State or other jurisdiction of incorporation)
1-1183 13-1584302
(Commission File Number) (IRS Employer Identification No.)
700 Anderson Hill Road, Purchase, New York 10577
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (914) 253-2000
Item 5. Other Information
In connection with its planned merger with The Quaker Oats Company,
PepsiCo, Inc. announced on April 9, 2001 that it agreed to sell 13.2 million
shares of its Capital Stock in an offering underwritten by Merill Lynch & Co.
The Underwriting Agreement and the Terms Agreement, each dated as of April
9, 2001 among PepsiCo, Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, are attached as exhibits 5.1 and 5.2, respectively, hereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
Exhibit Number
5.1 Underwriting Agreement dated as of April 9, 2001 among
PepsiCo, Inc. and Merrill Lynch & Co. and Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
5.2 Terms Agreement dated April 9, 2001 among PepsiCo, Inc.
and Merrill Lynch, Pierce, Fenner & Smith Incorporated.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: April 10, 2001 PepsiCo, Inc.
By: /s/ Lawrence F. Dickie
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Lawrence F. Dickie
Vice President,
Associate General Counsel
and Assistant Secretary
EXHIBIT INDEX
Exhibit Number
5.1 Underwriting Agreement dated as of April 9, 2001 among
PepsiCo, Inc. and Merrill Lynch & Co. and Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
5.2 Terms Agreement dated April 9, 2001 among PepsiCo, Inc.
and Merrill Lynch, Pierce, Fenner & Smith Incorporated.
EXHIBIT 5.1
PEPSICO, INC.
13,200,000 Shares of Capital Stock
UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT, dated as of April 9, 2001, between PepsiCo,
Inc., a corporation organized under the laws of the State of North Carolina
(the "Company"), and Merrill Lynch & Co and Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch").
W I T N E S S E T H:
WHEREAS, the Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3, File No. 333-56302,
relating to the issuance and sale of up to 13,200,000 shares (the "Securities")
of the capital stock, 1 2/3 cents par value per share, of the Company ("Capital
Stock"), from time to time, in or pursuant to one or more offerings on terms to
be determined at the time of sale.
WHEREAS, Merrill Lynch has agreed to participate in the offer and sale of
the Securities to investors on the terms and conditions set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions.
The Company has filed with the Commission a registration statement on Form
S-3 (File No. 333-56302) covering the registration of the Securities under the
Securities Act of 1933, as amended (the "Securities Act"), and the offering
thereof from time to time in accordance with Rule 415 of the rules and
regulations of the Commission under the Securities Act (the "Securities Act
Regulations"). Such registration statement has been declared effective by the
Commission. Such registration statement (as so amended, if applicable),
including the information, if any, deemed to be a part thereof pursuant to Rule
430A(b) of the Securities Act Regulations (the "Rule 430A Information"), is
referred to herein as the "Registration Statement"; and the final prospectus
and the final prospectus supplement relating to the offering of the
Underwritten Securities (as defined below), in the forms first
furnished to the Underwriters (as defined below) by the Company for use in
connection with the offering of the Underwritten Securities, are collectively
referred to herein as the "Prospectus"; provided, that all references to the
"Registration Statement" and the "Prospectus" shall also be deemed to include
all documents incorporated therein by reference which are filed pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the
Securities Act, prior to the execution of the applicable Terms Agreement;
provided, further, that if the Company files a registration statement with the
Commission pursuant to Rule 462(b) of the Securities Act Regulations (the "Rule
462(b) Registration Statement"), then all references to "Registration
Statement" shall also be deemed to include the Rule 462(b) Registration
Statement. A "preliminary prospectus" shall be deemed to refer to (i) any
prospectus used before the Registration Statement became effective and (ii) any
prospectus that omitted, as applicable, the Rule 430A Information or other
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424(b) of the Securities Act Regulations and was
used after such effectiveness and prior to the initial delivery of the
Prospectus to the Underwriters by the Company. For purposes of this
Underwriting Agreement, all references to the Registration Statement,
Prospectus or preliminary prospectus or to any amendment or supplement to any
of the foregoing shall be deemed to include any copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("EDGAR").
All references in this Underwriting Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated"
(or other references of like import) in the Registration Statement, Prospectus
or preliminary prospectus shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, Prospectus or preliminary
prospectus, as the case may be, prior to the execution of the applicable Terms
Agreement; and all references in this Underwriting Agreement to amendments or
supplements to the Registration Statement, Prospectus or preliminary
prospectus shall be deemed to include the filing of any document under the
Exchange Act which is incorporated by reference in the Registration Statement,
Prospectus or preliminary prospectus, as the case may be, after the execution
of the applicable Terms Agreement.
SECTION 2. Purchase and Sale of Securities by the Underwriters.
Whenever the Company determines to make an offering of Securities through
Merrill Lynch, or through an underwriting syndicate managed by Merrill Lynch,
the Company will enter into an agreement (each, a "Terms Agreement")
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providing for the sale of such Securities to, and the purchase and offering
thereof by, Merrill Lynch and such other underwriters, if any, selected by
Merrill Lynch (the "Underwriters", which term shall include Merrill Lynch,
whether acting as sole Underwriter or as a member of an underwriting syndicate,
as well as any Underwriter substituted pursuant to Section 8 hereof). The Terms
Agreement relating to the offering of Securities shall specify the number of
Securities to be issued (the "Underwritten Securities"), the name of each
Underwriter participating in such offering (subject to substitution as provided
in Section 8 hereof) and the name of any Underwriter other than Merrill Lynch
acting as co-manager in connection with such offering, the number of
Underwritten Securities which each such Underwriter severally agrees to
purchase, whether such offering is on a fixed or variable price basis and, if
on a fixed price basis, the initial offering price, the price at which the
Underwritten Securities are to be purchased by the Underwriters, the form,
time, date and place of delivery and payment of the Underwritten Securities and
any other material variable terms of the Underwritten Securities. The Terms
Agreement, which shall be substantially in the form of Exhibit A hereto, may
take the form of an exchange of any standard form of written telecommunication
between the Company and Merrill Lynch, acting for itself and, if applicable, as
representative of any other Underwriters. Each offering of Underwritten
Securities through Merrill Lynch as sole Underwriter or through an underwriting
syndicate managed by Merrill Lynch will be governed by this Underwriting
Agreement, as supplemented by the applicable Terms Agreement.
SECTION 3. Underwriters' Obligation to Purchase Underwritten Securities.
The several commitments of the Underwriters to purchase the Underwritten Securi-
ties pursuant to the applicable Terms Agreement shall be deemed to have been
made on the basis of the representations, warranties and agreements herein
contained and shall be subject to the terms and conditions herein set forth.
SECTION 4. Terms Agreement. No agreement for the purchase of Securities
by the Underwriters will be deemed to exist until the Company and the Under-
writers have executed a Terms Agreement. Each Terms Agreement will incorporate
all applicable terms and provisions of this Underwriting Agreement as fully as
though such terms and provisions were expressly stated therein.
SECTION 5. Delivery of Certain Documents, Certificates, and Opinions. On
each Closing Date (as defined below), the Underwriters have received or will
receive the following documents:
(a) the opinions of Davis, Polk & Wardwell, counsel for the Company,
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and Lawrence F. Dickie, Esq., Associate General Counsel for PepsiCo, Inc or
such other counsel as may be selected by the Company and agreed to by the
Underwriters (Davis, Polk & Wardwell and Mr. Dickie or such other counsel each,
the "Company's Counsel"), dated as of the Closing Date, which together shall be
substantially in the form of Annex A hereto,
(b) the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special
counsel to the Underwriters, or such other counsel as may be selected by the
Under writers and agreed to by the Company (Skadden, Arps, Slate, Meagher &
Flom LLP or such other counsel each, the "Underwriters' Counsel"), dated as of
the Closing Date, in form and substance satisfactory to Merrill Lynch,
(c) a certificate of the Assistant Secretary of the Company, dated as of
the Closing Date, substantially in the form of Annex B hereto, and
(d) a certificate of the Senior Vice President and Chief Financial Officer
and the Senior Vice President and Treasurer of the Company, dated as of the
Closing Date, substantially in the form of Annex C hereto.
SECTION 6. Certain Conditions Precedent to the Underwriters' Obligations.
The Underwriters' obligation to purchase any Underwritten Securities will in
all cases be subject to the accuracy of the representations and warranties of
the Company set forth in Section 7 hereof, to receipt of the opinions and
certificates to be delivered to the Underwriters pursuant to the terms of
Section 5 hereof, to the accuracy of the statements of the Company's officers
made in each certificate to be furnished as provided herein, to the performance
and observance by the Company of all covenants and agreements contained herein
on its part to be performed and observed, in each case at the time the Company
executes a Terms Agreement and as of the Closing Date, and (in each case) to
the following additional conditions precedent, when and as specified:
(a) As of the Closing Time (as defined below) for any Underwritten
Securities, and with respect to the period from the date of the applicable
Terms Agreement to and including the applicable Closing Time:
(i) there shall not have occurred (A) any material adverse change (or
development involving a prospective material adverse change) in the
business, properties, earnings, or financial condition of the Company and
its subsidiaries on a consolidated basis, (B) any suspension or material
limitation of trading in the Company's capital stock by the Commission or
the New York
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Stock Exchange, Inc. (the "NYSE"), or (C) any decrease by Moody's Inves-
tors Services, Inc. or Standard & Poor's Corporation with respect to the
ratings of any of the debt securities issued or guaranteed by the Company
(the events described in the foregoing clauses A through C, the "Company-
Specific Events"), the effect of any of which Company-Specific Events
shall have made it impracticable, in the judgment of Merrill Lynch, to
market such Underwritten Securities, such judgment to be based on relevant
market conditions;
(ii) there shall not have occurred (A) any suspension or material
limitation of trading in securities generally on the NYSE, or the fixing
of minimum or maximum prices for trading, or the requirement for maximum
ranges for prices, by the NYSE, by order of the Commission or any other
governmental authority, (B) a declaration of a general moratorium on com-
mercial banking activities in New York by either Federal or New York State
authorities, or (C) any outbreak or material escalation of hostilities or
other national or international calamity or crisis (the events described
in the foregoing clauses A through C, the "Market Events"), the effect of
any of which Market Events shall have made it impracticable, in the
judgment of Merrill Lynch, to market such Underwritten Securities, such
judgment to be based on relevant market conditions, including, without
limitation, the impact of such Market Event on equity securities having
substantially similar characteristics; and
(iii) there shall not have been issued any stop order suspending the
effectiveness of the Registration Statement nor shall any proceedings for
that purpose have been instituted or threatened.
(b) The Underwriters will receive, upon execution and delivery of any
applicable Terms Agreement, (i) a letter from KPMG LLP ("KPMG"), or such other
independent certified public accountants as may be selected by the Company
(KPMG or such other independent certified public accountants each,
successively, the "Company's Auditors"), containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information of the Company contained in the Registration Statement and the
Prospectus and (ii) a letter from Arthur Andersen LLP, containing statements
and information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and certain
financial information of The Quaker Oats Company ("Quaker") contained in the
Registration Statement and the Prospectus.
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(c) At Closing Time, Merrill Lynch shall have received from (i) the
Company's Auditors a letter, dated as of Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to subsection
(b)(i) of this Section, except that the specified date referred to shall be a
date not more than three business days prior to Closing Time and (ii) Arthur
Andersen LLP a letter, dated as of Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to subsection
(b)(ii) of this Section, except that the specified date referred to shall be a
date not more than three business days prior to Closing Time.
(d) On each Closing Date, the Underwriters shall have received from the
Company such appropriate further information, certificates, and documents as
the Company and the Underwriters shall have agreed, as reflected in the
applicable Terms Agreement.
SECTION 7. Representations and Warranties of the Company. The Company
represents and warrants to Merrill Lynch that, as of the date hereof, and to
each Underwriter named in the applicable Terms Agreement, as of the date
thereof, and as of each Closing Time, the following statements are and shall be
true:
(a) (i) The Registration Statement has become effective and no stop order
suspending the effectiveness of the Registration Statement is in effect nor, to
the Company's knowledge, are any proceedings for such purpose pending before or
threatened by the Commission, (ii) as of the effective date of the Registration
Statement (the "Effective Date"), the Company met the applicable requirements
for use of Form S-3 under the Securities Act with respect to the registration
under the Securities Act of the Securities, and (iii) as of the Effective Date,
the Registration Statement met the requirements set forth in Rule 415(a)(1)(x)
under the Securities Act and complied in all material respects with said Rule.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act or the Securities Act and incorporated or to be incorporated by
reference in the Prospectus complies or will comply, in all material respects,
with the applicable provisions of the Exchange Act or the Securities Act, as
applicable, and the rules and regulations of the Commission thereunder, (ii)
the Registration Statement does not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (iii) the
Registration Statement and the Prospectus comply, in all material respects,
with the Securities Act and the rules and regulations of the Commission
thereunder, and (iv) the Prospectus does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein,
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in light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations and warranties as
to information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with information furnished in
writing to the Company by the Underwriters through Merrill Lynch expressly for
use in the Registration Statement or the Prospectus or any amendment or
supplement thereto.
(c) The Company has been duly incorporated and is validly existing and in
good standing under the laws of the State of North Carolina, has the corporate
power and authority to own its property and to conduct its business as
described in the Prospectus, and is duly qualified to transact business as a
foreign corporation and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or in
good standing would not have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(d) The accountants who certified the financial statements and supporting
schedules included in the Registration Statement are independent public
accountants as required by the Securities Act and the rules and regulations of
the Commission thereunder. The financial statements of the Company included in
the Registration Statement and the Prospectus, together with the related
schedules and notes, as well as those financial statements, schedules and notes
of any other entity included therein, present fairly the financial position of
the Company and its consolidated subsidiaries, or such other entity, as the
case may be, at the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries, or such other entity, as the case may be, for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules, if any, included in
the Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data and the
summary financial information included in the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent with
that of the audited financial statements included in the Registration
Statement. The pro forma financial statements and the related notes thereto
included in the Registration Statement present fairly the information shown
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have been
properly compiled on the bases described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred to
therein.
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(e) This Underwriting Agreement has been duly authorized, executed, and
delivered by the Company.
(f) The applicable Terms Agreement as of the date thereof will have been,
duly authorized, executed and delivered by the Company.
(g) The Securities have been duly authorized for issuance and sale
pursuant to this Underwriting Agreement and such Terms Agreement. Such Under-
written Securities, when issued and delivered by the Company pursuant to this
Underwriting Agreement and such Terms Agreement against payment of the consid-
eration therefor specified in such Terms Agreement, will be validly issued,
fully paid and non-assessable and will not be subject to preemptive or other
similar rights of any securityholder of the Company. No holder of such
Underwritten Securities is or will be subject to personal liability by reason
of being such a holder.
(h) The execution and delivery of and performance by the Company of its
obligations under this Underwriting Agreement, the Securities and any Terms
Agreement, as the case may be, will not contravene any provision of any
applicable law or of the Restated Charter or By-Laws of the Company, or of any
agreement or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its subsidiaries taken as a
whole, or of any judgment, order, or decree of any governmental body, agency,
or court having jurisdiction over the Company or any of its subsidiaries, and
no consent, approval, authorization, or order of or qualification with any
governmental body or agency is, to the Company's knowledge, required for the
performance by the Company of its obligations under this Underwriting
Agreement, the Securities or Terms Agreement, except such as may be required by
Blue Sky laws or other securities laws of the various states in which the
Securities are offered and sold.
(i) There has not been any material adverse change (or development
involving a prospective material adverse change) in the business, properties,
earnings, or financial condition of the Company and its subsidiaries on a
consolidated basis from that set forth in the Company's last periodic report
filed with the Commission under the Exchange Act and the rules and regulations
promulgated thereunder. Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
stated therein, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(j) There are no legal or governmental proceedings pending or, to the
8
Company's knowledge, threatened, to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or any
of its subsidiaries is subject that is required to be described in the
Registration Statement or the Prospectus and is not so described, or any
applicable statute, regulation, contract, or other document that is required to
be described in the Registration Statement or the Prospectus that is not so
described.
SECTION 8. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Time to purchase the Underwritten
Securities which it or they are obligated to purchase under the applicable
Terms Agreement (the "Defaulted Securities"), then Merrill Lynch shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but
not less than all, of the Defaulted Securities in such amounts as may be agreed
upon and upon the terms herein set forth; if, however, Merrill Lynch shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Underwritten Securities to be purchased on such date pursuant to
such Terms Agreement, the non-defaulting Underwriters shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations under such
Terms Agreement bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of Underwritten Securities to be purchased on such date pursuant to such
Terms Agreement, such Terms Agreement shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 8 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
the applicable Terms Agreement, either Merrill Lynch or the Company shall have
the right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or the
Prospectus or in any other documents or arrangements.
SECTION 9. Agreements. The Company and the Underwriters agree as
9
follows:
(a) Prior to the filing by the Company of any amendment to the Registra-
tion Statement or of any prospectus supplement that shall name the
Underwriters, the Company will afford the Underwriters or the Underwriters'
Counsel a reasonable opportunity to review and comment on the same, provided,
however, that the foregoing requirement will not apply to any of the Company's
filings with the Commission required to be filed pursuant to Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act. Subject to the foregoing sentence, the
Company will promptly cause each applicable prospectus supplement to be filed
with or transmitted for filing with the Commission in accordance with Rule
424(b) or 424(c) under the Securities Act or pursuant to such other rule or
regulation of the Commission as then deemed appropriate by the Company. The
Company will promptly advise the Underwriters of (i) the filing and
effectiveness of any amendment to the Registration Statement other than by
virtue of the Company's filing any report required to be filed under the
Exchange Act, (ii) any request by the Commission for any amendment to the
Registration Statement, for any amendment or supplement to the Prospectus, or
for any information from the Company, (iii) the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement or
the institution or threatening of any proceeding for that purpose, and (iv) the
receipt by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The Company will
use reasonable efforts to prevent the issuance of any such stop order or notice
of suspension of qualification and, if issued, to obtain as soon as reasonably
possible the withdrawal thereof.
(b) If, at any time when a Prospectus relating to any Underwritten
Securities is required to be delivered under the Securities Act, any event
occurs or condition exists as a result of which the Prospectus would include an
untrue statement of a material fact, or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary to amend or
supplement the Prospectus in order to comply with the Securities Act, the
Exchange Act, the respective rules and regulations of the Commission
thereunder, or any other applicable law, the Company will promptly notify the
Underwriters, by telephone or by facsimile (in either case with written
confirmation from the Company by mail), to cease use and distribution of the
Prospectus (and all then existing supplements thereto) and to suspend all
efforts to resell the Securities in its capacity as underwriter or dealer, as
the case may be, and the Underwriters will promptly comply with the terms of
such notice. The Company will forthwith prepare and cause to be filed with the
Commission an amendment or
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supplement to the Registration Statement or the Prospectus, as the case may be,
satisfactory in the reasonable judgment of Merrill Lynch to correct such
statement or omission or to effect such compliance, and the Company will supply
Merrill Lynch with one signed copy of such amended Registration Statement and
as many copies of such amended or supplemented Prospectus as the Underwriters
may reasonably request, provided, however, that the expense of preparing,
filing, and supplying copies to the Underwriters of any such amendment or
supplement will be borne by the Company only for the nine-month period
immediately following the purchase of such Underwritten Securities by the
Underwriters and thereafter will be borne by the Underwriters.
(c) The Company will furnish to Merrill Lynch, without charge, one signed
copy of the Registration Statement (including exhibits) and all amendments
thereto that shall become effective, and as many copies of the Prospectus, each
preliminary prospectus, any documents incorporated by reference therein, and
any supplements and amendments thereto as the Underwriters may reasonably
request, in each case within a reasonable period of time following the date on
which this Underwriting Agreement is executed and delivered by the Company and
the Underwriters, or the date on which such document becomes effective, or the
date on which such document is requested by the Underwriters, as applicable.
(d) The Company will, with such assistance from the Underwriters as the
Company may reasonably request, endeavor to qualify the Securities for offer
and sale under the Blue Sky laws or other securities laws of such jurisdictions
as the Underwriters shall reasonably request and will maintain such
qualifications for as long as required with respect to the offer, sale, and
distribution of the Securities.
(e) During a period of 45 days from the date of the applicable Terms
Agreement, the Company will not, without the prior written consent of Merrill
Lynch, directly or indirectly, (i) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant for the sale of, lend or otherwise dispose
of or transfer any share of Capital Stock or any securities convertible into or
exercisable or exchangeable for or repayable with Capital Stock or (ii) enter
into any swap or any other agreement that transfers, in whole or in part, the
economic consequences of ownership of the Capital Stock, whether any such swap
or transaction described in clause (i) or (ii) above is to be settled by
delivery of Capital Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Securities to be sold hereunder,
(B) any shares of Capital Stock issued by the Company upon the exercise of an
option or warrant or the conversion of a security outstanding on the date of
the applicable
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Terms Agreement or issued in connection with the merger (the "Merger") of the
Company with Quaker, (C) any shares of Capital Stock issued or options to
purchase Capital Stock granted pursuant to existing and future employee benefit
plans of the Company, (D) any shares of Capital Stock issued pursuant to any
non-employee director stock plan or dividend reinvestment plan, or (E) any
shares issued in the Merger.
(f) The Company will make generally available to its security holders
earnings statements that satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder.
(g) Each time the Registration Statement or Prospectus is amended or
supplemented by the Company's periodic filings pursuant to the Exchange Act,
the Company will furnish to Merrill Lynch, without charge, one copy of any such
periodic filings.
(h) The Company will use its best efforts to effect the listing of the
Underwritten Securities, prior to the Closing Time, on the New York Stock Ex-
change.
SECTION 10. Fees and Expenses. The Company will pay all costs, fees, and
expenses arising in connection with the sale of any Securities through the
Underwriters and in connection with the performance by the Underwriters of its
related obligations hereunder and under any Terms Agreement, including the
following: (i) expenses incident to the preparation and filing of the
Registration Statement and the Prospectus and all amendments and supplements
thereto, (ii) expenses incident to the issuance and delivery of such
Securities, (iii) the fees and disbursements of the Company's Counsel, the
Company's Auditors and Arthur Andersen LLP, (iv) expenses incident to the
qualification of such Securities under Blue Sky laws and other applicable state
securities laws in accordance with the provisions of Section 9(d) hereof,
including related filing fees and the reasonable fees and disbursements of the
Underwriters' Counsel in connection therewith and in connection with the
preparation of any survey of Blue Sky laws (a "Blue Sky Survey"), (v) expenses
incident to the printing and delivery to the Underwriters, in the quantities
hereinabove stated, of copies of the Registration Statement and all amendments
thereto and of the Prospectus, each preliminary prospectus, and all amendments
and supplements thereto, (vi) expenses incident to the printing and delivery to
the Underwriters, in such quantities as the Underwriters shall reasonably
request, of copies of any Blue Sky Survey, (vii) the fees and expenses, if any,
incurred with respect to any applicable filing with the National Association of
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Securities Dealers and (viii) the fees and expenses incurred in connection with
the listing of the Underwritten Securities on the New York Stock Exchange. The
Company will, upon demand, reimburse the Underwriters for all reasonable
out-of-pocket expenses incurred by the Underwriters in connection with a
purchase by the Underwriters as underwriter that is not consummated as a result
of a material failure by the Company to perform its obligations hereunder,
including, without limitation, a default by the Company with respect to any of
the representations or warranties set forth in Section 7 hereof.
SECTION 11. Inspection; Place of Delivery; Payment.
(a) Inspection. The Company agrees to have available for inspection,
checking, and packaging by Merrill Lynch in The City of New York, the Underwrit-
ten Securities to be sold to the Underwriters hereunder, not later than 1:00
P.M. on the New York Business Day prior to the applicable Closing Date.
(b) Place of Delivery of Documents, Certificates and Opinions. The
documents, certificates and opinions required to be delivered to the
Underwriters pursuant to Sections 5 and 6 of this Underwriting Agreement will
be delivered at the offices of the Underwriters' Counsel, or at such other
location as may be agreed upon by the Company and Merrill Lynch, not later than
the Closing Time.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Underwritten Securities shall be made at the offices of
Underwriters' Counsel, or at such other place as shall be agreed upon by
Merrill Lynch and the Company, at 9:00 A.M. (Eastern time) on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day)
business day after the date of the applicable Terms Agreement (unless postponed
in accordance with the provisions of Section 8 hereof), or such other time not
later than ten business days after such date as shall be agreed upon by Merrill
Lynch and the Company (such time and date of payment and delivery being herein
called the "Closing Time" and the "Closing Date", respectively).
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated in writing by the Company, against
delivery to Merrill Lynch for the respective accounts of the Underwriters of
the Underwritten Securities to be purchased by them. It is understood that each
Underwriter has authorized Merrill Lynch, for its account, to accept delivery
of, receipt for, and make payment of the purchase price for, the Underwritten
Securities which it has severally agreed to purchase. Merrill Lynch,
individually and not as representative of
13
the Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Underwritten Securities to be purchased by any
Underwriter whose funds have not been received by the Closing Time, but such
payment shall not relieve such Underwriter from its obligations hereunder.
SECTION 12. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold each Underwriter and each
person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, harmless
from and against any and all losses, claims, damages, or liabilities to which
such Underwriter come subject under the Securities Act, the Exchange Act, or
any other federal or state law or regulation, at common law or otherwise,
insofar as such losses, claims, damages, or liabilities (and actions in respect
thereof) arise out of, are based upon, or are caused by any untrue statement or
allegedly untrue statement of a material fact contained in the Registration
Statement, any preliminary prospectus or the Prospectus or in any amendment or
supplement thereto, or arise out of, are based upon or are caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
the Company agrees to reimburse each such indemnified party for any reasonable
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the Company will not be liable to the extent that such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of, are based upon, or are caused by any such untrue statement or omission
or allegedly untrue statement or omission included in or omitted from the
Registration Statement, any preliminary prospectus or the Prospectus in
reliance upon and in conformity with information furnished to the Company by
the Underwriters through Merrill Lynch in writing expressly for use in the
Registration Statement or such preliminary prospectus or the Prospectus or any
amendment or supplement thereto, and provided, further, that the Company shall
not be liable to any indemnified party with respect to any preliminary
prospectus (or supplement thereto) if the Prospectus corrected any such untrue
statement or omission, was delivered to such indemnified party (sufficiently
in advance of the Closing Time and in sufficient quantity to allow for
distribution by the Closing Time) and such indemnified party failed to furnish
a copy of the applicable Prospectus in contravention of a requirement of
applicable law at or prior to the written confirmation of the sale of
Underwritten Securities to the applicable purchaser.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement, and
each
14
person, if any, who controls the Company within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to the Underwriters, but only with
respect to such losses, claims, damages, and liabilities (and actions in
respect thereof) that arise out of, are based upon, or are caused by any untrue
statement or omission or allegedly untrue statement or omission included in or
omitted from the Registration Statement, or any preliminary prospectus or the
Prospectus in reliance upon and in conformity with information furnished to the
Company by the Underwriters through Merrill Lynch in writing expressly for use
in the Registration Statement or such preliminary prospectus or the Prospectus
or any amendment or supplement thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either paragraph (a) or (b) of this Section 12, such person
(the "indemnified party") will promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, will retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and will pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party will have the right
to retain its own counsel, but the fees and expenses of such counsel will be
borne by the indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel
or (ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and, in
the judgement of the indemnified party, representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party will not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all such indemnified parties and
that all such reasonable fees and expenses will be reimbursed as they are
incurred. Such firm will be designated in writing by Merrill Lynch (in the case
of parties indemnified pursuant to paragraph (a) of this Section 12) or by the
Company (in the case of parties indemnified pursuant to paragraph (b) of this
Section 12), as the case may be. The indemnifying party will not be liable for
any settlement of any proceeding effected without its written consent, but if
settled with such consent, or if there shall be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. The immediately preceding sentence notwithstanding, if at any time an
indemnified party shall have requested an indemnifying party to
15
reimburse the indemnified party for reasonable fees and expenses of counsel as
contemplated by the third sentence of this paragraph, the indemnifying party
agrees that it will be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party will, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such proceeding.
Any provision of this paragraph (c) to the contrary notwithstanding, no failure
by an indemnified party to notify the indemnifying party as required hereunder
will relieve the indemnifying party from any liability it may have had to an
indemnified party otherwise than under this Section 12 to the extent the
indemnifying party is not materially prejudiced as a result thereof and in any
event shall not relieve it from any liability which it may have otherwise than
on account of this indemnity agreement.
(d) If the indemnification provided for in paragraph (a) or (b) of this
Section 12 is unavailable to an indemnified party or is insufficient in respect
of any losses, claims, damages, or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying the
indemnified party thereunder, will contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages, or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Underwriters, on the
other, from the offering of the Underwritten Securities pursuant to the
applicable Terms Agreement, or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company, on the one hand, and the Underwriters, on
the other, in connection with the statements or omissions that resulted in such
losses, claims, damages, or liabilities, as well as any other relevant
equitable considerations.
The relative benefits received by the Company, on the one hand, and the
Underwriters, on the other, in connection with the offering of the Underwritten
Securities pursuant to the applicable Terms Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
such Underwritten Securities (before deducting expenses) received by the
Company and the total underwriting discount received by the Underwriters, in
each case as set forth
16
on the cover of the Prospectus, bear to the aggregate initial public offering
price of such Underwritten Securities as set forth on such cover.
The relative fault of the Company, on the one hand, and of the
Underwriters, on the other, will be determined by reference to, among other
things, whether the untrue or allegedly untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied or to be supplied by the Company or by the Underwriters
and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission. The Underwriters'
respective obligations to contribute pursuant to this Section 12(d) are several
in proportion to the number of Underwritten Securities set forth opposite their
respective names in the applicable Terms Agreement, and not joint.
(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to paragraph (d) above were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to therein. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages, and
liabilities referred to in paragraph (d) above will be deemed to include,
subject to the limitations set forth above, any reasonable legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Any other provisions of
this Section 12 to the contrary notwithstanding, (i) the Underwriters will not
be required to contribute to the Company any amount in excess of the amount by
which the total price at which the Underwritten Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by reason
of any such untrue or alleged untrue statement or omission or alleged omission
(other than in reliance upon and in conformity with information furnished to
the Company by the Underwriters through Merrill Lynch in writing expressly for
use in the Registration Statement, the preliminary prospectus or the Prospectus
or any amendment or supplement thereto), and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(f) The remedies provided for in this Section 12 are not exclusive and
will not limit any rights or remedies that may otherwise be available to any
indemnified party at law or in equity.
17
SECTION 13. Termination. This Underwriting Agreement will automatically
terminate upon the expiration of the offering to which the Prospectus relates
and may be earlier terminated by the Company or Merrill Lynch upon the giving
of written notice of such termination to the other party hereto in accordance
with the provisions of Section 15 hereof, provided, however, that if the
Company and the Underwriters shall have executed a Terms Agreement for the
purchase of Underwritten Securities by the Underwriters, the applicable Terms
Agreement may not be terminated by the Underwriters prior to delivery of and
payment for such Securities except upon the failure of any of the conditions
precedent described in Section 6 hereof.
SECTION 14. Representations and Indemnities to Survive. The respective
agreements of the Company and the Underwriters set forth in Sections 9(b),
9(f), 10, 12, and 18 hereof, the representations and warranties of the Company
set forth in Section 7 hereof, and the statements and opinions of the Company
and its officers set forth in the documents to be delivered by the Company to
the Underwriters as provided in Sections 5(a), 5(c), 5(d), and 6(d) hereof,
will survive delivery of and payment for any Securities as contemplated
hereunder and will survive termination of this Underwriting Agreement in
accordance with the provisions of Section 13 above.
SECTION 15. Notices. Except as otherwise specifically provided herein, all
communications hereunder will be in writing and will be effective one business
day after having been delivered by hand, mailed via Express Mail, deposited
with Federal Express or any nationally recognized commercial courier service
for "next day" delivery, or telecopied and confirmed in writing (by telecopied
facsimile or otherwise) to the respective addresses or telecopier numbers set
forth on the signature page hereto, or to such other address or telecopier
number as either party may hereafter designate to the other in writing. The
foregoing notwithstanding, copies of any Terms Agreement and of any certificate
or opinion to be delivered by the Company to the Underwriters under paragraphs
5(a), 5(c) or 5(d) hereof will be deemed delivered if executed by all required
signatories and telecopied to the Company and/or the Underwriters, as the case
may be, with receipt confirmed in writing (by telecopied facsimile or
otherwise). In the event that any Terms Agreement or any such certificate or
opinion is delivered via telecopier as contemplated in the preceding sentence,
the parties will use best efforts to ensure that "original" copies of such
documents will be distributed promptly thereafter.
SECTION 16. Successors; Non-Transferability. This Underwriting Agreement
and the applicable Terms Agreement shall each inure to the benefit of and be
18
binding upon the Company, Merrill Lynch and, upon execution of such Terms
Agreement, any other Underwriters and their respective successors, and the
officers, directors, and controlling persons referred to in Section 12 hereof.
No other person will have any right or obligation hereunder. Neither party to
this Underwriting Agreement may assign its rights hereunder without the written
consent of the other party.
SECTION 17. Counterparts. This Underwriting Agreement may be signed in any
number of counterparts, each of which will be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
SECTION 18. Applicable Law. This Underwriting Agreement and any applicable
Terms Agreement will be governed by and construed in accordance with the laws
of the State of New York without regard to principles of conflicts of law.
SECTION 19. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and will not affect the
construc tion of any of the terms or provisions hereof.
19
IN WITNESS WHEREOF, the parties hereto have executed this Underwriting
Agreement as of the ninth day of April, 2001.
PEPSICO, INC.
By
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By
-----------------------------------
Authorized Signatory
20
Exhibit A
PEPSICO, INC.
Capital Stock
TERMS AGREEMENT
_________, 2001
To: PepsiCo, Inc.
700 Anderson Hill Road
Purchase, New York 10577
Ladies and Gentlemen:
We understand that PepsiCo, Inc., a North Carolina corporation (the "Com-
pany"), proposes to issue and sell _________________ shares of its capital
stock, 1 cents par value per share (the "Capital Stock") (such securities also
being hereinafter referred to as the "Underwritten Securities"). Subject to the
terms and conditions set forth or incorporated by reference herein, we [the
underwriters named below (the "Underwriters")] offer to purchase [, severally
and not jointly,] the number of Underwritten Securities [opposite their names
set forth below] at the purchase price set forth below.
Sch A-2
Number
Underwriter of Underwritten Securities
- ----------- --------------------------
Total [$]
====================
The Underwritten Securities shall have the following terms:
Capital Stock
-------------
Number of shares:
Initial public offering price per share: $
Purchase price per share: $
Other terms and conditions:
Sch A-3
IN WITNESS WHEREOF, the parties hereto have executed this Terms Agreement
as of the 9th day of April, 2001.
PEPSICO, INC.
By /s/ Matthew M. McKenna
------------------------------------------
Title: Senior Vice President and Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By /s/ Brian P. Hehir
---------------------------------------
Authorized Signatory
Sch A-4
Annex A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of North Carolina, has
the corporate power and authority to own its properties and to conduct its
business as described in the Prospectus, and is duly qualified to do business
as a foreign corporation in each jurisdiction where the conduct of its
business or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified would not have a
material adverse effect on the financial condition of the Company and its
subsidiaries taken as a whole.
2. The Underwriting Agreement and the applicable Terms Agreement have been
duly authorized, executed and delivered by the Company.
3. The Underwritten Securities have been duly authorized by the Company
for issuance and sale pursuant to the Underwriting Agreement and the applicable
Terms Agreement. The Underwritten Securities, when issued and delivered by the
Company pursuant to the Underwriting Agreement and such Terms Agreement against
payment of the consideration therefor specified in such Terms Agreement, will
be validly issued, fully paid and non-assessable and will not be subject to
preemptive or other similar rights of any securityholder of the Company. No
holder of the Underwritten Securities is or will be subject to personal
liability by reason of being such a holder.
4. The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the Securities Act; any required
filing of the Prospectus pursuant to Rule 424(b) has been made in the manner
and within the time period required by Rule 424(b); and, to the best of [our]
[my] knowledge, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
Securities Act and no proceedings for that purpose have been instituted or are
pending or threatened by the Commission.
5. Based solely upon [my][its] participation in the preparation of the
Registration Statement, and without independent check or verification, [I
am][we are] of the opinion that the Registration Statement, including any Rule
Sch A-5
462(b) Registration Statement and the Rule 430A Information, as applicable, the
Prospectus, excluding the documents incorporated by reference therein, and each
amendment or supplement to the Registration Statement and Prospectus, excluding
the documents incorporated by reference therein, as of their respective
effective or issue dates (other than the financial statements and supporting
schedules and other financial data included therein or omitted therefrom, as to
which [we] [I] need express no opinion) complied as to form in all material
respects with the requirements of the Securities Act and the Securities Act
Regulations.
6. Based solely upon [my][its] participation in the preparation of the
documents included or incorporated by reference in the Registration Statement
and therein, and without independent check or verification, [I am][we are] of
the opinion that the documents incorporated by reference in the Prospectus
(other than the financial statements and supporting schedules and other
financial data included therein or omitted therefrom, as to which [we][I] need
express no opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material respects
with the requirements of the Securities Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder.
7. The execution and delivery of and performance by the Company of its
obligations under the Underwriting Agreement, the applicable Terms Agreement
will not contravene any provision of the Restated Charter or By-Laws of the
Company, or of any agreement or other instrument binding upon the Company or
any of its subsidiaries that is material to the Company and its subsidiaries
taken as a whole, or, to my knowledge after due inquiry, of any judgment,
order, or decree of any governmental body, agency, or court having
jurisdiction over the Company or any of its subsidiaries. No consent, approval,
authorization, or order of or qualification with any governmental body or
agency is required for the performance by the Company of its obligations under
the Underwriting Agreement, the applicable Terms Agreement, except as may be
required by the Blue Sky laws or other securities laws of the various states in
which the Securities may be offered and sold.
8. The information in the Prospectus under "Description of PepsiCo Stock"
and in the Registration Statement under Item 15, to the extent that it consti-
tutes summaries of legal matters, the Company's charter and bylaws or legal pro-
ceedings, or legal conclusions, has been reviewed by [us] [me] and is correct
in all material respects.
9. To [my][our] knowledge after due inquiry, there is no legal or
Sch A-6
governmental proceeding pending or threatened, no statute or regulation, and no
agreement, instrument, or other document to which, in any case, the Company or
any of its subsidiaries is a party, or by which, in any case, any of the
properties of the Company or its subsidiaries is bound, that is required to be
described in the Registration Statement, the Prospectus, or any applicable
Prospectus Supplement, or that is required to be filed as an exhibit to the
Registration Statement, that is not so described or filed.
11. Nothing has come to [our] [my] attention that would lead [us] [me] to
believe that the Registration Statement (including any Rule 462(b) Registration
Statement) (except for financial statements and supporting schedules and other
financial data included therein or omitted therefrom, as to which [we] [I] make
no statement), at the time the Registration Statement (including any Rule
462(b) Registration Statement) became effective or at the date of the
applicable Terms Agreement, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus or any
amendment or supplement thereto (except for financial statements and supporting
schedules and other financial data included therein or omitted therefrom, as to
which [we] [I] make no statement), at the time the Prospectus was issued, at
the time any such amended or supplemented prospectus was issued or at the
Closing Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it
is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
Sch A-7
Annex B
ASSISTANT SECRETARY'S CERTIFICATE
I, Lawrence F. Dickie, the duly qualified, elected, and acting Vice
President, Associate General Counsel and Assistant Secretary of PepsiCo, Inc.,
a company organized under the laws of the State of North Carolina (the
"Company"), hereby certify as follows:
1. Attached hereto as Exhibit A is a true and complete copy of the
Restated Articles of Incorporation of the Company, certified as of April , 2001
by the Secretary of State of the State of North Carolina. No further amendments
or supplements to the Restated Articles of Incorporation have been proposed to
or approved by the Board of Directors or shareholders of the Company.
2. Attached hereto as Exhibit B is a true, correct, and complete copy of
the By-Laws of the Company. Such By-Laws have been in effect at all times since
March 16, 2000.
3. Attached hereto as Exhibit C are true, correct and complete copies of
certain resolutions duly adopted by the Board of Directors of the Company [by
unanimous written consent] on March , 2001. Such resolutions have not been
amended or modified, are in full force and effect in the form adopted and are
the only resolutions adopted by the Board of Directors of the Company or a duly
authorized committee thereof relating to (i) the authorization of the Company's
Registration Statement on Form S-3 (Registration No. 333-56302), as amended by
Amendment No. 1 thereto filed on March 16, 2001, (the "Registration Statement")
filed with the Securities and Exchange Commission (the "Commission") for the
registration of 13,200,000 shares (the "Shares") of the Company's capital
stock, par value 12/3 cents per share (the "Capital Stock"), (ii) the execution
and delivery of the Underwriting Agreement, dated April , 2001 (the
"Underwriting Agreement"), between the Company, Merrill Lynch & Co., and
Merrill Lynch, Pierce, Fenner and Smith Incorporated ("Merrill Lynch"), and
(iii) all other actions relating to the foregoing. Such resolutions have not
been amended, rescinded or modified since their adoption (other than as
expressly set forth in such resolutions) and remain in full force and effect as
of the date of this Certificate.
4. Each person who, as a director or officer of the Company or attorney-
in-fact of such director or officer, signed (i) the Registration Statement,
(ii) the Underwriting Agreement, and (iii) any document delivered prior hereto
or on the date
B-1
of this Certificate in connection with the execution and filing of the
Registration Statement, or the execution and delivery of the Underwriting
Agreement, or the transactions contemplated thereby, or the execution and
delivery of the certificates representing the Shares, was, at the time or the
respective times of such execution and delivery of such documents, and, in the
case of the filing of the Registration Statement with the Commission, duly
elected or appointed, qualified and acting as such director or officer or duly
appointed and acting as such attorney-in-fact and the signatures of such
persons appearing on such documents are their genuine signatures or, in case of
the certificates evidencing the Shares, the true facsimile thereof.
5. The minute book records of the Company relating to proceedings of the
Board of Directors of the Company made available to Skadden, Arps, Slate,
Meagher & Flom LLP, counsel for Merrill Lynch, are true and correct and
constitute all such records in the possession and control of the Company
through and including ______________.
6. The persons named below are duly qualified, elected, and acting
officers of the Company, have been duly elected or appointed to the offices set
forth opposite their respective names, have held such offices at all times
relevant to the preparation of the Registration Statement, and hold such
offices as of the date hereof. The signatures set forth below opposite the
names of such persons are the genuine signatures of such persons.
Name Office Signature
- --------------------------------------------------------------------------------
Indra K. Nooyi Senior Vice President and
Chief Financial Officer --------------------
Matthew M. McKenna Senior Vice President
and Treasurer --------------------
B-2
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of
the Company as of the day of April, 2001.
-------------------------------
Lawrence F. Dickie
Vice President, Associate General
Counsel and Assistant Secretary
I, , a Vice President of the Company, hereby certify
that Lawrence F. Dickie is the duly qualified, elected, and acting Vice
President, Associate General Counsel and Assistant Secretary of the Company,
has been duly elected or appointed to such offices, has held such offices at
all times relevant to the preparation of the Registration Statement, holds such
offices as of the date hereof, and that the signature set forth above is his
genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand as of the ___ day of
April, 2001.
------------------------
Name:
Title: Vice President
B-3
Annex C
OFFICERS' CERTIFICATE
Indra K. Nooyi, Senior Vice President and Chief Financial Officer, and
Matthew M. McKenna, Senior Vice President and Treasurer, of PepsiCo, Inc., a
corporation organized under the laws of the State of North Carolina (the
"Company"), each hereby certifies as follows:
1. I have examined the Company's Registration Statement on Form S-3, File
No. 333-56302 (the "Registration Statement"), as amended by Amendment No. 1
thereto filed on March 16, 2001, filed by the Company with the Securities and
Exchange Commission (the "Commission") on February 28, 2001, including all of
the documents filed as exhibits thereto. Capitalized terms used herein and not
otherwise defined have the meanings ascribed to such terms by the prospectus
filed as part of the Registration Statement (such prospectus hereinafter the
"Prospectus").
2. To the best of my knowledge, no proceedings for the merger, other than
with The Quaker Oats Company, consolidation, liquidation, or dissolution of the
Company or the sale of all or substantially all of its assets are pending or
contemplated.
3. To the best of my knowledge, there has not been any material adverse
change in the financial condition, earnings, business, or operations of the
Company and its subsidiaries, taken as a whole, from that described in the
Registration Statement.
C-1
IN WITNESS WHEREOF, I have hereunto set my hand as of the ___ of April,
2001.
---------------------------------
Name: Indra K. Nooyi
Title: Senior Vice President and
Chief Financial Officer
---------------------------------
Name: Matthew M. McKenna
Title: Senior Vice President and
Treasurer
C-2
EXHIBIT 5.2
PEPSICO, INC.
Capital Stock
TERMS AGREEMENT
April 9, 2001
To: PepsiCo, Inc.
700 Anderson Hill Road
Purchase, New York 10577
Ladies and Gentlemen:
We understand that PepsiCo, Inc., a North Carolina corporation (the
"Company"), proposes to issue and sell 13,200,000 shares of its capital stock,
1 2/3 cents par value per share (such securities also being hereinafter
referred to as the "Underwritten Securities"). Subject to the terms and
conditions set forth or incorpo rated by reference herein, Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch") offers to purchase the
Underwritten Securities at the purchase price and on the other terms set forth
below.
Number of Underwritten Securities: 13,200,000
Type of Offering: Fixed
Purchase price per share: $39.69
Initial public offering price per share: $40.50
Settlement and Trading: Book-Entry Only via DTC.
Closing: 9:00 A.M. on April 16, 2001, at Skadden, Arps, Slate, Meagher &
Flom LLP, 4 Times Square, New York, New York, 10036 in Federal (same day)
funds.
The provisions of the Underwriting Agreement by and between the Company
and Merrill Lynch, dated April 9, 2001 are incorporated herein by reference.
IN WITNESS WHEREOF, the parties hereto have executed this Terms Agreement
as of the 9th day of April, 2001.
PEPSICO, INC.
By /s/ Matthew M. McKenna
-------------------------
Title: Senior Vice President and Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By /s/ Brian P. Hehir
-----------------------------------
Authorized Signatory
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