Exhibit 10.4
PEPSICO STOCK OPTION RETENTION AWARD
STOCK OPTION TERMS AND CONDITIONS
     These Terms and Conditions along with the PepsiCo Stock Option Retention
Award Summary (the “Award Summary”) delivered herewith and signed by the
individual named on the Award Summary (the “Participant”) shall constitute an
Agreement made as of the Grant Date (as indicated on the Award Summary) by and
between PepsiCo, Inc., a North Carolina corporation having its principal office
at 700 Anderson Hill Road, Purchase, New York 10577 (“PepsiCo,” and with its
divisions and direct and indirect subsidiaries, the “Company”), and the
Participant.
WITNESSETH:
     WHEREAS, the Board of Directors and shareholders of PepsiCo have approved
the PepsiCo, Inc. 2007 Long-Term Incentive Plan (the “Plan”), for the purposes
and subject to the provisions set forth in the Plan; and
     WHEREAS, pursuant to the authority granted to it in the Plan, the
Compensation Committee of the Board of Directors of PepsiCo (the “Committee”),
by resolution duly adopted at a meeting held on or prior to the Grant Date,
authorized the grant to the Participant of the stock options set forth on the
Award Summary; and
     WHEREAS, awards granted under the Plan are to be evidenced by an Agreement
in such form and containing such terms and conditions as the Committee shall
determine.
     NOW, THEREFORE, it is mutually agreed as follows:
     A. Terms and Conditions Applicable to Stock Options. These terms and
conditions shall apply with respect to the stock options granted to the
Participant as indicated on the Award Summary.
          1. Grant. In consideration of the Participant remaining in the employ
of the Company and agreeing to be bound by the covenants of Paragraph B, PepsiCo
hereby grants to the Participant, on the terms and conditions set forth herein,
the right and option to purchase the number of shares of PepsiCo Common Stock,
par value $.0167 per share, indicated on the Award Summary at the Grant/Exercise
Price per share indicated on the Award Summary (the “Option Exercise Price”),
which was the Fair Market Value (as defined below) of PepsiCo Common Stock on
the Grant Date, rounded up to the nearest one-fourth. The right to purchase each
such share is referred to herein as an “Option.” All Options granted hereunder
shall be “Non-Qualified Stock Options” as defined in the Plan.
          2. Vesting and Exercisability. Subject to the terms and conditions set
forth herein, the number of Options specified in the Award Summary shall become
vested on each vesting date set forth in the Award Summary (“Vesting Date”). The
specified number of Options shall be exercisable from the applicable Vesting
Date through the expiration date set forth in the Award Summary (the “Expiration
Date”). Options may vest only while the Participant is actively employed by the
Company. Once vested and exercisable, and until terminated, all or any portion
of the Options may be exercised from time to time and at any time under
procedures that the Committee or its delegate shall establish from time to time,
including, without limitation, procedures regarding the frequency of exercise
and the minimum number of Options which may be exercised at any time.

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          3. Exercise Procedure. Subject to terms and conditions set forth
herein, Options may be exercised by giving written notice of exercise to PepsiCo
in the manner specified from time to time by PepsiCo. The aggregate Option
Exercise Price for the shares being purchased, together with any amount which
the Company may be required to withhold upon such exercise in respect of
applicable foreign, federal (including FICA), state and local taxes, must be
paid in full at the time of issuance of such shares.
          4. Effect of Termination of Employment, Death, Retirement and Total
Disability.
               (a) Termination of Employment. Options may vest only while the
Participant is actively employed by the Company. Thus, no vesting shall occur
following the termination of the Participant’s active employment with the
Company, and all unvested Options shall automatically be forfeited and cancelled
upon the date that the Participant’s active employment with the Company
terminates. Only vested Options may be exercised. Subject to subparagraphs 4(b),
4(c) and 4(d), vested Options shall be exercisable until, and shall
automatically be forfeited and cancelled upon, the earlier of the Expiration
Date and the date that is the last trading day on the New York Stock Exchange
during the 90-calendar day period after the date the Participant’s employment
with the Company terminates. It is intended that an authorized severance leave
of absence may extend employment for purposes of determining the period when
vested Options may be exercised. However, an authorized severance leave of
absence will not be treated as active employment and, as a result, vesting of
unvested Options will not be extended by any such period.
               (b) Death or Total Disability. If the Participant’s employment
terminates, by reason of the Participant’s death or Total Disability (as defined
below), then: (i) a portion of the Options shall vest on the Participant’s last
day of active employment with the Company (which, for purposes of Total
Disability, means the effective date of Total Disability), with such portion
determined in proportion to the Participant’s active service (measured in
calendar days) during the period commencing on the Grant Date and ending on the
Vesting Date for the Options (determined separately for the specified number of
Options related to each Vesting Date); (ii) the Options (that are vested as
provided above) shall continue to become exercisable on the applicable Vesting
Date in accordance with this Agreement, with no change in the earliest date of
exercise as a result of the vesting provided by this subparagraph 4(b); and
(iii) the Options (that are vested as provided above) may be exercised by the
Participant’s legal representative (or any person to whom the Options may be
transferred by will or the applicable laws of descent and distribution), in the
event of death, or the Participant, in the event of Total Disability, in
accordance with this Agreement.
               (c) Retirement. In the event that, prior to the expiration of the
Options, the Participant ceases to be an employee of the Company by reason of
the Participant’s Retirement (as defined below), then the Participant shall
continue to be vested with and have the right to exercise those Options which
are vested and exercisable as of the Participant’s Retirement Date until the
Expiration Date in accordance with this Agreement. Any Options which are not
vested as of the Participant’s Retirement Date shall automatically expire and
terminate on the Retirement Date.
               (d) Transfers to a Related Entity. In the event the Participant
transfers to a Related Entity (as defined below) as a result of actions by
PepsiCo, the Options shall continue to vest and to become exercisable after such
transfer and shall remain outstanding and be exercisable in accordance with this
Agreement by treating the Participant’s employment with the Related Entity as
employment with the Company for purposes of this Agreement.

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     B. Prohibited Conduct.
          In consideration of the Company disclosing and providing access to
Confidential Information, as more fully described in Paragraph B.2 below, after
the date hereof, the grant by the Company of the Options, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Participant and the Company, intending to be legally bound,
hereby agree as follows.
          1. Non-Competition and Non-Solicitation. The Participant hereby
covenants and agrees that at all times during his or her employment with the
Company and for a period of twelve months after the termination of the
Participant’s employment with the Company for any reason whatsoever (including a
termination due to the Participant’s Retirement or Total Disability), he or she
will not, without the prior written consent of PepsiCo’s chief personnel officer
or chief legal officer, either directly or indirectly, for himself/herself or on
behalf of or in conjunction with any other person, partnership, corporation or
other entity, engage in any activities prohibited in the following Paragraphs
B.1(a) through (c):
               (a) The Participant shall not, in any country in which the
Company operates, accept any employment, assignment, position or responsibility,
or provide services in any capacity or acquire any ownership interest which
involves the Participant’s Participation in an entity that markets, sells,
distributes or produces Covered Products, unless such entity makes retail sales
or consumes Covered Products without in any way competing with the Company;
               (b) With respect to Covered Products, the Participant shall not
directly or indirectly solicit for competitive business purposes any customer or
Prospective Customer of the Company called on, serviced by, or contacted by the
Participant in any capacity during his or her employment; or
               (c) The Participant shall not in any way, directly or indirectly
(including through someone else acting on the Participant’s recommendation,
suggestion, identification or advice), solicit any Company employee to leave the
Company’s employment or to accept any position with any other entity.
          2. Non-Disclosure. In order to assist the Participant with his or her
duties, the Company shall continue to provide the Participant with access to
confidential and proprietary operational information and other confidential
information which is either information not known by actual or potential
competitors, customers and third parties of the Company or is proprietary
information of the Company (“Confidential Information”). Such Confidential
Information shall include all non-public information the Participant acquired as
a result of his or her positions with the Company which might be of any value to
a competitor of the Company, or which might cause any economic loss or
substantial embarrassment to the Company or its customers, bottlers,
distributors or suppliers if used or disclosed. Examples of such Confidential
Information include, without limitation, non-public information about the
Company’s customers, suppliers, distributors and potential acquisition targets;
its business operations, structure and methods of operation; its product lines,
formulae and pricing; its processes, machines and inventions; its research and
know-how; its production techniques; its financial data; its advertising and
promotional ideas and strategy; information maintained in its computer systems;
devices, processes, compilations of information and records; and its plans and
strategies. The Participant agrees that such Confidential Information remains
confidential even if committed to the Participant’s memory. The Participant
agrees, during the term of his or her employment and at all

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times thereafter, not to use, divulge, or furnish or make accessible to any
third party, company, corporation or other organization (including but not
limited to, customers, competitors, or governmental agencies), without the
Company’s prior written consent, any Confidential Information of the Company,
except as necessary in his or her position with the Company.
          3. Return of Confidential Information and Company Property. The
Participant agrees that whenever the Participant’s employment with the Company
ends for any reason, (a) all documents containing or referring to the Company’s
Confidential Information as may be in the Participant’s possession, or over
which the Participant may have control, and all other property of the Company
provided to the Participant by the Company during the course of the
Participant’s employment with the Company will be returned by the Participant to
the Company immediately, with no request being required; and (b) all Company
computer and computer-related equipment and software, and all Company property,
files, records, documents, drawings, specifications, lists, equipment, and
similar items relating to the business of the Company, whether prepared by the
Participant or otherwise, coming into the Participant’s possession or control
during the course of his employment shall remain the exclusive property of the
Company, and shall be delivered by the Participant to the Company immediately,
with no request being required.
          4. Misconduct. The Participant shall not engage in any of the
following acts that are considered to be contrary to the Company’s best
interests during the term of his or her employment with the Company:
(a) violating the Company’s Code of Conduct, Insider Trading Policy or any other
written policies of the Company, (b) unlawfully trading in the securities of
PepsiCo or of any other company based on information gained as a result of his
or her employment with the Company, or (c) engaging in any activity which
constitutes gross misconduct.
          5. Reasonableness of Provisions. The Participant agrees that: (a) the
terms and provisions of this Agreement are reasonable and constitute an
otherwise enforceable agreement to which the terms and provisions of this
Paragraph B are ancillary or a part of; (b) the consideration provided by the
Company under this Agreement is not illusory; (c) the restrictions contained in
this Paragraph B are necessary and reasonable for the protection of the
legitimate business interests and goodwill of the Company; and (d) the
consideration given by the Company under this Agreement, including, without
limitation, the provision by the Company of Confidential Information to the
Participant, gives rise to the Company’s interest in the covenants set forth in
this Paragraph B.
          6. Repayment and Forfeiture. The Participant specifically recognizes
and affirms that each of the covenants contained in Paragraphs B.1 through B.4
of this Agreement is a material and important term of this Agreement which has
induced the Company to provide for the award of the Options granted hereunder,
the disclosure of Confidential Information referenced herein, and the other
promises made by the Company herein. The Participant further agrees that in the
event that (i) the Company determines that the Participant has breached any term
of Paragraphs B.1 through B.4 or (ii) all or any part of Paragraph B is held or
found invalid or unenforceable for any reason whatsoever by a court of competent
jurisdiction in an action between the Participant and the Company, in addition
to any other remedies at law or in equity the Company may have available to it,
the Company may in its sole discretion:
               (a) Cancel any unexercised Options granted hereunder; and

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               (b) Require the Participant to pay to the Company all gains
realized from the exercise of any Options granted hereunder.
          7. Equitable Relief. In the event the Company determines that the
Participant has breached or attempted or threatened to breach any term of
Paragraph B, in addition to any other remedies at law or in equity the Company
may have available to it, it is agreed that the Company shall be entitled, upon
application to any court of proper jurisdiction, to a temporary restraining
order or preliminary injunction (without the necessity of (a) proving
irreparable harm, (b) establishing that monetary damages are inadequate or
(c) posting any bond with respect thereto) against the Participant prohibiting
such breach or attempted or threatened breach by proving only the existence of
such breach or attempted or threatened breach.
          8. Extension of Restrictive Period. The Participant agrees that the
period during which the covenants contained in this Paragraph B shall be
effective shall be computed by excluding from such computation any time during
which the Participant is in violation of any provision of Paragraph B.
          9. Acknowledgments. The Company and the Participant agree that it was
their intent to enter into a valid and enforceable agreement. The Participant
and the Company thereby acknowledge the reasonableness of the restrictions set
forth in Paragraph B, including the reasonableness of the geographic area,
duration as to time and scope of activity restrained. The Participant further
acknowledges that his or her skills are such that he or she can be gainfully
employed in noncompetitive employment and that the agreement not to compete will
not prevent him or her from earning a living. The Participant agrees that if any
covenant contained in Paragraph B of this Agreement is found by a court of
competent jurisdiction to contain limitations as to time, geographical area, or
scope of activity that are not reasonable and impose a greater restraint than is
necessary to protect the goodwill or other business interest of the Company,
then the court shall reform the covenant to the extent necessary to cause the
limitations contained in the covenant as to time, geographical area, and scope
of activity to be restrained to be reasonable and to impose a restraint that is
not greater than necessary to protect the goodwill and other business interests
of the Company and to enforce the covenants as reformed.
          10. Provisions Independent. The covenants on the part of the
Participant in this Paragraph B shall be construed as an agreement independent
of any other agreement, including any employee benefit agreement, and
independent of any other provision of this Agreement, and the existence of any
claim or cause of action of the Participant against the Company, whether
predicated upon this Agreement or otherwise, shall not constitute a defense to
the enforcement by the Company of such covenants.
          11. Notification of Subsequent Employer. The Participant agrees that
the Company may notify any person or entity employing the Participant or
evidencing an intention of employing the Participant of the existence and
provisions of this Agreement.
          12. Transfers to a Related Entity. In the event the Participant
transfers to a Related Entity (as defined below) as a result of actions by
PepsiCo, any reference to “Company” in this Paragraph B shall be deemed to refer
to such Related Entity in addition to the Company.

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     C. Additional Terms and Conditions.
          1. Adjustment for Change in Common Stock. In the event of any change
in the outstanding shares of PepsiCo Common Stock by reason of any stock split,
stock dividend, recapitalization, reorganization, merger, consolidation,
combination or exchange of shares, spin-off or other similar corporate change,
the number and type of shares which the Participant may purchase pursuant to the
Options and the Option Exercise Price at which the Participant may purchase such
shares shall be adjusted as may be, and to such extent (if any), determined to
be appropriate and equitable by the Committee.
          2. Effect of Change in Control. In the event of a Change in Control
(as defined in the Plan), the following provisions shall apply:
               (a) If the successor corporation (or affiliate thereto)
(1) assumes the outstanding Options or (2) replaces the outstanding Options with
equity awards that preserve the existing value of such Options at the time of
the Change in Control and provide for subsequent payout in accordance with a
vesting schedule that is the same or more favorable to the Participant than the
vesting schedule applicable to such Options, then the outstanding Options or
such substitutes thereof shall remain outstanding and be governed by their
respective terms and the provisions of the Plan, subject to Paragraph C.2(c)
below.
               (b) If the outstanding Options granted hereunder are not assumed
or replaced in accordance with Paragraph C.2(a) above, then upon the Change in
Control, (1) the outstanding Options granted hereunder shall immediately vest
and become exercisable and shall remain outstanding in accordance with their
terms and (2) notwithstanding Paragraph C.2(b)(1) but after taking into account
the accelerated vesting set forth therein, the Board may, in its sole
discretion, provide for cancellation of the outstanding Options at the time of
the Change in Control in which case a payment of cash, property or a combination
thereof shall be made to the Participant that is determined by the Board in its
sole discretion and that is at least equal to the excess, if any, of the value
of such consideration over the Option Exercise Price for such Options.
               (c) If the outstanding Options granted hereunder are assumed or
replaced in accordance with Paragraph C.2(a) and the Participant’s employment
with the Company (of, if applicable, a successor corporation) is terminated by
the Company or such successor for any reasons other than Cause or by the
Participant for Good Reason, in each case, within the two-year period commencing
on the Change in Control, then, as of the date of the Participant’s termination,
the outstanding Options granted hereunder shall immediately vest and become
exercisable and shall remain outstanding until the Expiration Date. For purposes
of this Paragraph C.2, “Cause” and “Good Reason” are defined in the Plan and a
termination for Cause or Good Reason is subject to the terms and conditions set
forth in the Plan.
          3. Nontransferability. Unless the Committee specifically determines
otherwise: (a) the Options are personal to the Participant and, during his or
her lifetime, may be exercised only by the Participant, and (b) the Options
shall not be transferable or assignable, other than, in the case of the
Participant’s death, by will or the laws of descent and distribution, and any
such purported transfer or assignment shall be null and void.
          4. Buy-Out of Option Gains. Except as provided in Paragraph C.2, at
any time after any Option becomes exercisable, the Committee shall have the
right, in its sole discretion and without the consent of the Participant, to
cancel such Option and to cause PepsiCo to pay to the

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Participant the excess of the Fair Market Value of the shares of Common Stock
covered by such Option over the Option Exercise Price of such Option as of the
date the Committee provides written notice (the “Buy Out Notice”) of its
intention to exercise such right. Payments of such buy out amounts pursuant to
this provision shall be effected by PepsiCo as promptly as possible after the
date of the Buy Out Notice and shall be made in shares of Common Stock. The
number of shares shall be the greatest number of whole shares determined by
dividing the amount of the payment to be made by the Fair Market Value of a
share of Common Stock at the date of the Buy Out Notice. Payments of any such
buy out amounts shall be made net of the minimum applicable foreign, federal
(including FICA), state and local withholding taxes, if any.
          5. Definitions. As used in this Agreement, the following terms shall
have the meanings set forth below:
               (a) “Covered Products” means any product which falls into one or
more of the following categories, so long as the Company is producing,
marketing, selling or licensing such product anywhere in the world: beverages,
including without limitation carbonated soft drinks, tea, water, juice drinks,
sports drinks, coffee drinks, and value added dairy drinks; juices and juice
products; snacks, including salty snacks, sweet snacks, meat snacks, granola and
cereal bars, and cookies; hot cereals; pancake mixes; value-added rice products;
pancake syrup; value-added pasta products; ready-to-eat cereals; dry pasta
products; or any product or service which the Participant had reason to know was
under development by the Company during the Participant’s employment with the
Company.
               (b) “Fair Market Value” of a share of PepsiCo Common Stock on any
date shall mean an amount equal to the mean of the high and low sales prices for
a share of PepsiCo Common Stock as reported on the composite tape for securities
listed on The New York Stock Exchange, Inc. on the date in question (or if no
sales of Common Stock were made on said Exchange on such date, on the next
preceding day on which sales were made on such Exchange).
               (c) “Participation” shall be construed broadly to include,
without limitation: (i) serving as a director, officer, employee, consultant or
contractor with respect to such a business entity; (ii) providing input, advice,
guidance or suggestions to such a business entity; or (iii) providing a
recommendation or testimonial on behalf of such a business entity or one or more
products it produces.
               (d) “Prospective Customer” shall mean any individual or entity of
which the Participant has gained knowledge as a result of the Participant’s
employment with the Company and with which the Participant dealt with or had
contact with during the six (6) months preceding his or her termination of
employment with the Company.
               (e) “Related Entity” shall mean any entity as to which the
Company directly or indirectly owns 20% or more of the entity’s voting
securities, general partnership interests, or other voting or management rights
at the relevant time.
               (f) “Retirement” shall mean (i) early, normal or late retirement
under the U.S. pension plan of the Company in which the Participant participates
(if any), (ii) retirement as explicitly set out in an individual agreement
between the Company and the Participant for this purpose in effect on the Grant
Date, (iii) termination of employment after attaining at least age 55 with at
least 10 years of service with the Company (or, if earlier, after attaining at
least age 65 and completing

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at least five years of service with the Company), or (iv) retirement as
otherwise determined by the Committee.
               (g) “Retirement Date” shall mean the effective date of
Retirement.
               (h) “Total Disability” shall mean becoming totally and
permanently disabled, as determined for purposes of the Company’s Long Term
Disability Plan (or in the absence of such Disability Plan being applicable to
the Participant, as determined by the Committee in its sole discretion).
          6. Notices. Any notice to be given to PepsiCo in connection with the
terms of this Agreement shall be addressed to PepsiCo at 700 Anderson Hill Road,
Purchase, New York 10577, Attention: Vice President, Compensation, or such other
address as PepsiCo may hereafter designate to the Participant. Any such notice
shall be deemed to have been duly given when personally delivered, addressed as
aforesaid, or when enclosed in a properly sealed envelope or wrapper, addressed
as aforesaid, and deposited, postage prepaid, with the federal postal service.
          7. Binding Effect.
               (a) This Agreement shall be binding upon and inure to the benefit
of any assignee or successor in interest to PepsiCo, whether by merger,
consolidation or the sale of all or substantially all of PepsiCo’s assets.
PepsiCo will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of PepsiCo expressly to assume and agree to perform this Agreement
in the same manner and to the same extent that PepsiCo would be required to
perform it if no such succession had taken place.
               (b) This Agreement shall be binding upon and inure to the benefit
of the Participant or his or her legal representative and any person to whom the
Options may be transferred by will or the applicable laws of descent and
distribution.
          8. No Contract of Employment; Agreement’s Survival. This Agreement is
not a contract of employment. This Agreement does not impose on the Company any
obligation to retain the Participant in its employ and shall not interfere with
the ability of the Company to terminate the Participant’s employment
relationship at any time. This Agreement shall survive the termination of the
Participant’s employment for any reason.
          9. Registration, Listing and Qualification of Shares. The Committee
may require that the Participant make such representations and agreements and
furnish such information as the Committee deems appropriate to assure compliance
with or exemption from the requirements of any securities exchange, any foreign,
federal, state or local law, any governmental regulatory body, or any other
applicable legal requirement, and PepsiCo Common Stock shall not be issued
unless and until the Participant makes such representations and agreements and
furnished such information as the Committee deems appropriate.
          10. Amendment; Waiver. The terms and conditions of this Agreement may
be amended in writing by the chief personnel officer or chief legal officer of
PepsiCo (or either of their delegates), provided, however, that (i) no such
amendment shall be adverse to the Participant without the Participant’s written
consent (except to the extent the Committee reasonably determines that such
amendment is necessary or appropriate to comply with applicable law

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including the provisions of Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”) and the regulations thereunder pertaining to the
deferral of compensation, or the rules and regulations of any stock exchange on
which PepsiCo Common Stock is listed or quoted); and (ii) the amendment must be
permitted under the Plan. The Company’s failure to insist upon strict compliance
with any provision of this Agreement or failure to exercise, or any delay in
exercising, any right, power or remedy under this Agreement shall not be deemed
to be a waiver of such provision or any such right, power or remedy which the
Board, the Committee or the Company has under this Agreement.
          11. Severability or Reform by Court. In the event that any provision
of this Agreement is deemed by a court to be broader than permitted by
applicable law, then such provision shall be reformed (or otherwise revised or
narrowed) so that it is enforceable to the fullest extent permitted by
applicable law. If any provision of this Agreement shall be declared by a court
to be invalid or unenforceable to any extent, the validity or enforceability of
the remaining provisions of this Agreement shall not be affected.
          12. Plan Controls. The Options and the terms and conditions set forth
herein are subject in all respects to the terms and conditions of the Plan and
any guidelines, policies or regulations which govern administration of the Plan,
which shall be controlling. The Committee reserves its rights to amend or
terminate the Plan at any time without the consent of the Participant; provided,
however, that Options outstanding under the Plan at the time of such action
shall not, without the Participant’s written consent, be adversely affected
thereby (except to the extent the Committee reasonably determines that such
amendment or termination is necessary or appropriate to comply with applicable
law, including the provisions of Code Section 409A and the regulations
thereunder pertaining to the deferral of compensation, or the rules and
regulations of any stock exchange on which PepsiCo Common Stock is listed or
quoted). All interpretations or determinations of the Committee or its delegate
shall be final, binding and conclusive upon the Participant (and his or her
legal representatives and any recipient of a transfer of the Options permitted
by this Agreement) on any question arising hereunder or under the Plan or other
guidelines, policies or regulations which govern administration of the Plan.
          13. Participant Acknowledgements. By entering into this Agreement, the
Participant acknowledges and agrees that:
               (a) the Option grant will be exclusively governed by the terms of
the Plan, including the right reserved by the Company to amend or cancel the
Plan at any time without the Company incurring liability to the Participant
(except for Options already granted under the Plan);
               (b) the Participant has been provided a copy of PepsiCo’s
Prospectus relating to the Plan, the Options and the shares covered thereby;
               (c) stock options are not a constituent part of the Participant’s
salary and that the Participant is not entitled, under the terms and conditions
of his/her employment, or by accepting or being awarded the Options pursuant to
this Agreement to require options or other awards to be granted to him/her in
the future under the Plan or any other plan;
               (d) upon exercise of the Options the Participant will arrange for
payment to the Company an estimated amount to cover employee payroll taxes
resulting from the exercise and/or, to the extent necessary, any balance may be
withheld from the Participant’s wages;

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               (e) benefits received under the Plan will be excluded from the
calculation of termination indemnities or other severance payments;
               (f) in the event of termination of the Participant’s employment,
a severance or notice period to which the Participant may be entitled under
local law and which follows the date of termination specified in a notice of
termination or other document evidencing the termination of the Participant’s
employment will not be treated as active employment for purposes of this
Agreement and, as a result, vesting of unvested Options will not be extended by
any such period;
               (g) the Participant will seek all necessary approval under, make
all required notifications under and comply with all laws, rules and regulations
applicable to the ownership of stock options and stock and the exercise of stock
options, including, without limitation, currency and exchange laws, rules and
regulations; and, in the event that any of the Participant’s Options, including
any such awards previously granted, become subject to the Indian fringe benefit
tax (“FBT”), the Participant will be responsible for the FBT imposed on such
awards and consents to provide payment to the Company of the applicable FBT at
the time such FBT is due in accordance with the procedures specified from time
to time by the Company; and
               (h) this Agreement will be interpreted and applied so that the
Options will not be subject to Code Section 409A. If, notwithstanding the
preceding sentence, the Options become subject to Code Section 409A, this
Agreement will be modified to the extent the Committee reasonably determines
that is necessary or appropriate for such Options to comply with Code
Section 409A.
          14. No Rights as Shareholder. The Participant shall have no rights as
a holder of PepsiCo Common Stock with respect to the Options granted hereunder
unless and until such Options are exercised and the shares have been registered
in the Participant’s name as owner.
          15. Right of Set-Off. The Participant agrees, in the event that the
Company in its reasonable judgment determines that the Participant owes the
Company or any Related Entity any amount due to any loan, note, obligation or
indebtedness, including but not limited to amounts owed to the Company pursuant
to the Company’s tax equalization program or the Company’s policies with respect
to travel and business expenses, and if the Participant has not satisfied such
obligation(s), then the Company may instruct the plan administrator to withhold
and/or sell shares of PepsiCo Common Stock acquired by the Participant upon
exercise of his or her Options, or the Company may deduct funds equal to the
amount of such obligation from other funds due to the Participant from the
Company.
          16. Electronic Delivery and Acceptance. The Participant hereby
consents and agrees to electronic delivery of any Plan documents, proxy
materials, annual reports and other related documents. The Participant hereby
consents to any and all procedures that the Company has established or may
establish for an electronic signature system for delivery and acceptance of Plan
documents (including documents relating to any programs adopted under the Plan),
and agrees that his or her electronic signature is the same as, and shall have
the same force and effect as, his or her manual signature. Participant consents
and agrees that any such procedures and delivery may be effected by a third
party engaged by the Company to provide administrative services related to the
Plan, including any program adopted under the Plan.
          17. Data Privacy. Participant hereby acknowledges and consents to the
collection, use, processing and transfer of personal data as described in this
Paragraph C.17. Participant is not obliged to consent to such collection, use,
processing and transfer of personal data. However,

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failure to provide the consent may affect Participant’s ability to participate
in the Plan. The Company and Participant’s employer hold certain personal
information about Participant, that may include his/her name, home address and
telephone number, date of birth, social security number or other employee
identification number, salary grade, hire data, salary, nationality, job title,
any shares of PepsiCo Common Stock, or details of all options, restricted stock
units or any other entitlement to shares of stock awarded, canceled, purchased,
vested, or unvested, for the purpose of managing and administering the Plan
(“Data”). PepsiCo and/or its subsidiaries will transfer Data amongst themselves
as necessary for the purpose of implementation, administration and management of
Participant’s participation in the Plan, and PepsiCo and/or any of its
subsidiaries may each further transfer Data to any third parties assisting
PepsiCo in the implementation, administration and management of the Plan. These
recipients may be located throughout the world, including the United States.
Participant’s authorizes them to receive, possess, use, retain and transfer the
Data, in electronic or other form, for the purposes of implementing,
administering and managing Participant’s participation in the Plan, including
any requisite transfer of such Data as may be required for the administration of
the Plan and/or the subsequent holding of shares of stock on Participant’s
behalf to a broker or other third party with whom Participant may elect to
deposit any shares of stock acquired pursuant to the Plan. Participant may, at
any time, review Data, require any necessary amendments to it or withdraw the
consents herein in writing by contacting the Company; however, withdrawing
consent may affect Participant’s ability to participate in the Plan.
          18. Stock Ownership / Exercise & Hold Guidelines. The Participant
agrees as a condition of this grant that, in the event that the Participant is
subject to the Company’s Stock Ownership or Exercise & Hold Guidelines, the
Participant shall not sell any shares obtained upon exercise of the Options
unless such sale complies with the Stock Ownership and Exercise & Hold
Guidelines as in effect from time to time.
          19. Governing Law. Notwithstanding the provisions of Paragraphs C.12
and C.13, this Agreement shall be governed, construed and enforced in accordance
with the laws of the State of New York, without giving effect to conflict of law
rules or principles.
          20. Choice of Venue. Notwithstanding the provisions of Paragraphs C.12
and C.13, any action or proceeding seeking to enforce any provision of or based
on any right arising out of this Agreement may be brought against the
Participant or the Company only in the courts of the State of New York or, if it
has or can acquire jurisdiction, in the United States District Court for the
Southern District of New York, and the Participant and the Company consents to
the jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
          21. Entire Agreement. This Agreement contains all the understanding
and agreements between the Participant and the Company regarding the subject
matter hereof.

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PepsiCo Stock Option Retention Award Summary
Executive Name:
Grant Date:
AWARD DETAILS
STOCK OPTIONS AWARD
Stock Options Award Face Value: $
Option Exercise (Grant) Price: $
Number of Options Granted:
Vesting Dates*:
          Options shall vest on      
          Options shall vest on      
Expiration Date:
 

*   Vesting and exercisability are subject to the terms and conditions of the
award

AWARD ACCEPTANCE
This PepsiCo Stock Option Retention Award (“Award”) is not considered valid
unless you accept it on or before [insert date 180 days after notification]. At
the bottom of this Award Summary, you can indicate that you either “Accept” or
“Reject” the Award. By pressing the “Accept” button below and accepting your
Award, you acknowledge having received and read this Award Summary, the Terms
and Conditions document and the Plan under which this Award was granted and you
agree to comply with, and be bound by, the terms and conditions of the Plan,
this Award Summary and the Terms and Conditions document. If you “Reject” this
Award, the Award will be null and void and will NOT become yours. Likewise, if
you do not either “Accept” or “Reject” this Award on or before [insert date
180 days after notification], the Award will be null and void and will NOT
become yours.

      ACCEPT   REJECT

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