EXHIBIT 10.2

PEPSICO
PENSION EQUALIZATION PLAN
(PEP)

Plan Document for the Section 409A Program
April 1, 2016 Restatement

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PEPSICO PENSION EQUALIZATION PLAN
Table of Contents
 
 
Page No.
ARTICLE I
FOREWORD
1
ARTICLE II
DEFINITIONS AND CONSTRUCTION
3
2.1
Definitions
3
 
Accrued Benefit
3
 
Actuarial Equivalent
3
 
Annuity
5
 
Annuity Start Date
5
 
Cashout Limit
5
 
Code
5
 
Company
5
 
Covered Compensation
5
 
Credited Service
5
 
Disability Retirement Pension
5
 
Early 409A Retirement Pension
6
 
Elapsed Time Service
6
 
Eligible Domestic Partner
6
 
Eligible Spouse
9
 
Employee
9
 
Employer
9
 
ERISA
9
 
FICA Amount
10
 
Guiding Principles Regarding Benefit Plan Committee Appointments
10
 
409A Program
10
 
Highest Average Monthly Earnings
10
 
Key Employee
10
 
Late Retirement Date
15
 
Late 409A Retirement Pension
15
 
Normal Retirement Age
15
 
Normal Retirement Date
15
 
Normal 409A Retirement Pension
15
 
Participant
16
 
Pension
16
 
PepsiCo Administration Committee or PAC
16
 
PepsiCo Organization
17
 
Plan
17
 
Plan Administrator
17
 
Plan Year
17
 
Pre-409A Program
17

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Pre-Retirement Domestic Partner's Pension
17
 
Pre-Retirement Spouse's Pension
18
 
Primary Social Security Amount
18
 
Prohibited Misconduct
20
 
Qualified Joint and Survivor Annuity
22
 
Retirement
22
 
Retirement Date
22
 
Retirement Pension
22
 
Salaried Plan
23
 
Section 409A
23
 
Separation from Service
23
 
Service
25
 
Single Life Annuity
25
 
Single Lump Sum
25
 
Social Security Act
25
 
Taxable Wage Base
26
 
Vested Pension
26
2.2
Construction
26
ARTICLE III
PARTICIPATION AND SERVICE
28
3.1
Participation
28
3.2
Service
28
3.3
Credited Service
29
ARTICLE IV
REQUIREMENTS FOR BENEFITS
30
4.1
Normal 409A Retirement Pension
30
4.2
Early 409A Retirement Pension
30
4.3
409A Vested Pension
30
4.4
Late 409A Retirement Pension
30
4.5
409A Disability Pension
31
4.6
Pre-Retirement Spouse’s 409A Pension
31
4.7
Vesting
33
4.8
Time of Payment
33
4.9
Cashout Distributions
34
4.10
Reemployment of Certain Participants
37
4.11
Forfeiture of Benefits
37
4.12
Pre-Retirement Domestic Partner’s 409A Pension
37
ARTICLE V
AMOUNT OF RETIREMENT PENSION
40
5.1
Participant’s 409A Pension
40

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5.2
PEP Guarantee
41
5.3
Amount of Pre-Retirement Spouse’s 409A Pension
47
5.4
Certain Adjustments
50
5.5
Excludable Employment
52
5.6
Pre-409A Pension
52
5.7
Offset
53
5.8
Amount of Pre-Retirement Domestic Partner’s Pension
53
ARTICLE VI
DISTRIBUTION OF BENEFITS
57
6.1
Form and Timing of Distributions
57
6.2
Available Forms of Payment
60
6.3
Procedures for Elections
64
6.4
Special Rules for Survivor Options
66
6.5
Designation of Beneficiary
67
6.6
Required Delay for Key Employees
68
6.7
Payment of FICA and Related Income Taxes
69
ARTICLE VII
ADMINISTRATION
71
7.1
Authority to Administer Plan
71
7.2
Facility of Payment
71
7.3
Claims Procedure
72
7.4
Effect of Specific References
74
7.5
Claimant Must Exhaust the Plan’s Claims Procedures Before Filing in Court
74
7.6
Limitations on Actions
77
7.7
Restriction on Venue
78
ARTICLE VIII
MISCELLANEOUS
79
8.1
Nonguarantee of Employment
79
8.2
Nonalienation of Benefits
79
8.3
Unfunded Plan
79
8.4
Action by the Company
80
8.5
Indemnification
80
8.6
Compliance with Section 409A
80
8.7
Section 457A
81
8.8
Authorized Transfers
82

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ARTICLE IX
AMENDMENT AND TERMINATION
83
9.1
Continuation of the Plan
83
9.2
Amendments
83
9.3
Termination
83
9.4
Change in Control
84
ARTICLE X
ERISA PLAN STRUCTURE
85
ARTICLE XI
APPLICABLE LAW
88
ARTICLE XII
SIGNATURE
89
APPENDIX
 
90
 
APPENDIX ARTICLE A - Transition Provisions
91
 
APPENDIX ARTICLE B - Computation of Earnings and Service During Certain
Severance Windows
106
 
APPENDIX ARTICLE C - International Transfer Participants
109
 
APPENDIX ARTICLE D - Band 4 or Higher Rehired Yum Participants
113
 
APPENDIX ARTICLE E - Time and Form of Payment for Benefits Paid During Severance
Windows
114
 
APPENDIX ARTICLE F - U.K. Supplementary Appendix Participants with U.S. Service
120
 
APPENDIX ARTICLE PBG
126
 
ARTICLE I - HISTORY AND PURPOSE
126
 
ARTICLE II - DEFINITIONS AND CONSTRUCTION
128
 
ARTICLE III - PARTICIPATION
141
 
ARTICLE IV - AMOUNT OF RETIREMENT PENSION
141
 
ARTICLE V - DEATH BENEFITS
153
 
ARTICLE VI - DISTRIBUTIONS
153
 
APPENDIX TO ARTICLE PBG - Foreword
159
 
Article A (Article IPO) – Transferred and Transition Individuals
159
 
Article B – Special Cases
161
 
Article C – Transfers From/To PepsiCo, Inc
162
ARTICLE PAC -
Guiding Principles Regarding Benefit Plan Committee Appointments
164

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ARTICLE I
Foreword
The PepsiCo Pension Equalization Plan (“PEP” or “Plan”) has been established by
PepsiCo for the benefit of salaried employees of the PepsiCo Organization who
participate in the PepsiCo Salaried Employees Retirement Plan (“Salaried Plan”).
PEP provides benefits for eligible employees whose pension benefits under the
Salaried Plan are limited by the provisions of the Internal Revenue Code of
1986, as amended. In addition, PEP provides benefits for certain eligible
employees based on the pre-1989 Salaried Plan formula (see, for example, Part B
thereof).
1989 Restatement. The Plan was amended and restated in its entirety in 1989.
409A Program Document 2005 Restatement. The Plan was last amended and restated
in its entirety effective as of January 1, 2005. The 2005 restatement sets forth
the terms of the Plan that are applicable to benefits that are subject to
Section 409A, i.e., generally, benefits that are earned or vested after December
31, 2004 or materially modified within the meaning of Treas. Reg. §
1.409A-6(a)(4) (the “409A Program”).
Amendments to the 2005 Restatement. The 2005 restatement was amended to reflect
the merger into this Plan of the PBG Pension Equalization Plan (“PBG PEP”),
effective at the end of the day on December 31, 2011. The PBG PEP document that
was in effect on April 1, 2009, as amended through January 1, 2011 (the “409A
PBG PEP Document”) is attached hereto as Appendix Article PBG 409A and shall
continue to govern PBG PEP benefits that were subject to the 409A PBG PEP
Document prior to the Plan merger, except for certain administrative provisions
that are now governed by the main portion of the 409A PepsiCo PEP Document as is

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explained in Appendix Article PBG 409A. There has been no change to the time or
form of payment of benefits that are subject to Internal Revenue Code Section
409A (“Section 409A”) under either the PepsiCo PEP or PBG PEP Documents as a
result of the merger or the revisions to the 409A PepsiCo PEP Document and 409A
PBG PEP Document.
2016 Restatement. This restatement of the 409A Program Document is effective as
of April 1, 2016.
Interplay of this 409A Program and Pre-409A Program. All benefits under the Plan
that are not subject to the 409A Program (i.e., generally, benefits that are
earned or vested before January 1, 2005 and not materially modified thereafter
within the meaning of Treas. Reg. § 1.409A-6(a)(4)) shall be governed by the
Plan Document for the Pre-Section 409 Program (the “Pre-409A Program”).
Together, this document and the document for the Pre‑409A Program describe the
terms of a single plan. However, amounts subject to the terms of this 409A
Program and amounts subject to the terms of the Pre-409A Program shall be
tracked separately at all times. The preservation of the terms of the Pre-409A
Program, without material modification, and the separation between the 409A
Program amounts and the Pre-409A Program amounts are intended to be sufficient
to permit the pre-409A Program to remain exempt from Section 409A as
grandfathered benefits.

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ARTICLE II
Definitions and Construction
2.1    Definitions: This section provides definitions for certain words and
phrases listed below. Where the following words and phrases, in boldface and
underlined, appear in this Plan document (including the Foreword) with initial
capitals they shall have the meaning set forth below, unless a different meaning
is plainly required by the context.
Accrued Benefit: The Pension payable at Normal Retirement Date determined in
accordance with Article V, based on the Participant’s Highest Average Monthly
Earnings and Credited Service at the date of determination.
Actuarial Equivalent: Except as otherwise specifically set forth in the Plan or
any Appendix to the Plan with respect to a specific benefit determination, a
benefit of equivalent value computed on the basis of the factors set forth
below. The application of the following assumptions to the computation of
benefits payable under the Plan shall be done in a uniform and consistent
manner. In the event the Plan is amended to provide new rights, features or
benefits, the following actuarial factors shall not apply to these new elements
unless specifically adopted by the amendment.
(1)    Annuities and Inflation Protection: To determine the amount of a Pension
payable in the form of a Qualified Joint and Survivor Annuity or optional form
of survivor annuity, as an annuity with inflation protection, or as a period
certain and life annuity, the Plan Administrator shall select the factors that
are to be used. Effective January 1, 2009, the initial factors selected by the
Plan Administrator are set forth in Schedule 1, below

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(prior factors appear in the Appendix). Thereafter, the Plan Administrator shall
review such initial factors from time to time and shall amend such factors in
its discretion. A Participant shall have no right to have any of the actuarial
factors specified under the Plan from time to time applied to his benefit (or
any portion thereof), except to the extent that a particular factor is currently
in effect at the time it is to be applied under the Plan. For the avoidance of
doubt, it is expressly intended and binding upon Participants that any actuarial
factors selected by the Plan Administrator from time-to-time may be applied
retroactively to already accrued benefits, and without regard to the actuarial
factors that may have applied previously for such purpose.
SCHEDULE 1

Date
Mortality Table Factors
Interest Rate
Factor
January 1, 2009
to Present
GAR 94
5%

(2)    Lump Sums: To determine the lump sum value of a Pension, a Pre-Retirement
Spouse’s Pension under Section 4.6, or a Pre-Retirement Domestic Partner’s
Pension under Section 4.12, the lump sum equivalent factors currently applicable
to lump sum distributions under the Salaried Plan shall apply (disregarding
transition factors).
(3)    Other Cases: To determine the adjustment to be made in the Pension
payable to or on behalf of a Participant in other cases, the factors are those
applicable for such purpose under the Salaried Plan.

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Annuity: A Pension payable as a series of monthly payments for at least the life
of the Participant.
Annuity Starting Date: The Annuity Starting Date shall be the first day of the
first period for which an amount is payable under this Plan as an annuity or in
any other form. A Participant who: (1) is reemployed after his initial Annuity
Starting Date, and (2) is entitled to benefits hereunder after his reemployment,
shall have a subsequent Annuity Starting Date for such benefits only to the
extent provided in Section 6.3(b).
Cashout Limit: The annual dollar limit on elective deferrals under Code section
402(g)(1)(B), as in effect from time to time.
Code: The Internal Revenue Code of 1986, as amended from time to time. All
references herein to particular Code Sections shall also refer to any successor
provisions and shall include all related regulations, interpretations and other
guidance.
Company: PepsiCo, Inc., a corporation organized and existing under the laws of
the State of North Carolina or its successor or successors.
Covered Compensation: “Covered Compensation” as that term is defined in Part B
of the Salaried Plan.
Credited Service: The period of a Participant’s employment, calculated in
accordance with Section 3.3, which is counted for purposes of determining the
amount of benefits payable to, or on behalf of, the Participant.
Disability Retirement Pension: The Retirement Pension available to a Participant
under Section 4.5.

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Early 409A Retirement Pension: The 409A Retirement Pension available to a
Participant under Section 4.2.
Elapsed Time Service: The period of time beginning with a Participant’s first
date of employment with the PepsiCo Organization and ending with the
Participant’s Final Separation from Service, irrespective of any breaks in
service between those two dates. By way of illustration, if a Participant began
employment with the PepsiCo Organization on January 1, 2000, left the employment
of the PepsiCo Organization from January 1, 2001 until December 31, 2004, and
was then reemployed by the PepsiCo Organization on January 1, 2005 until he had
a Final Separation from Service on December 31, 2008, the Participant would have
eight years of Elapsed Time Service as of his Final Separation from Service.
Eligible Domestic Partner: Paragraph (1) is effective for applicable dates (as
defined in Paragraph (6) below) on and after January 1, 2016. Paragraphs (2),
(3) and (4) are effective for earlier applicable dates. Paragraph (5) includes
general rules. Paragraph (6) sets forth defined terms. The definition of
Eligible Domestic Partner applies solely to a Participant who was actively
employed by or on an Authorized Leave of Absence from a member of the PepsiCo
Organization on or after January 1, 2013 and before January 1, 2016.
(1)    On-Going Provisions. For applicable dates on or after January 1, 2016,
“Eligible Domestic Partner” status is not recognized under the Plan, in light of
the Supreme Court’s 2015 decision that the Constitution guarantees the right to
same-sex marriage.

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(a)    Limited Exception for 2016 Plan Year. Notwithstanding the foregoing, and
solely for applicable dates in 2016, in the case of a Participant who (i) has a
relationship with an individual on December 31, 2015 that is recognized as an
eligible domestic partner or civil union relationship under paragraph (2) below
and (ii) on any date during the 2015 Plan Year, is either an Employee who is
actively employed or on an Authorized Leave of Absence from the PepsiCo
Organization or a Participant, Eligible Domestic Partner means the individual
with whom the Participant has entered into such an arrangement that was valid on
the applicable date.
(2)    June 26, 2013 through December 31, 2015 Provisions.
(a)    Civil Unions. If on the applicable date the Participant resides in a
state that does not permit same-sex marriage and the Participant has entered
into a same-sex civil union that is valid on the applicable date in the state in
which it was entered into, the Participant’s Eligible Domestic Partner (if any)
is the individual with whom the Participant has entered into such a same-sex
civil union. If the Participant resides in a state that does not permit same-sex
marriage but does permit same-sex civil unions, the Participant is not eligible
to have an Eligible Domestic Partner unless the Participant is in a valid
same-sex civil union.
(b)    State of Residence Allows Neither Civil Unions Nor Marriage. If the
Participant does not have an Eligible Domestic Partner (and is

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not ineligible to have one) pursuant to subsection (a) above, the Participant’s
Eligible Domestic Partner (if any) is the individual with whom the Participant
has executed a legally binding same-sex domestic partner agreement that meets
the requirements set forth in writing by the Company with respect to eligibility
for domestic partner benefits that is in effect on the applicable date. If such
Participant has not entered into such an agreement, the Participant is not
eligible to have an “Eligible Domestic Partner.”
(3)    January 1, 2013 through June 25, 2013 Provisions. For applicable dates
from January 1, 2013 through June 25, 2013, Eligible Domestic Partner means an
individual described in paragraph (2) above, and also includes the following: If
on the applicable date the Participant has entered into a same-sex marriage that
is valid on the applicable date in the state in which it was entered into, the
Participant’s Eligible Domestic Partner (if any) is the Participant’s spouse
pursuant to such same-sex marriage. If the Participant resides in a state that
permits same-sex marriage, the Participant is not eligible to have an Eligible
Domestic Partner unless either (a) the Participant is in a valid same-sex
marriage or (b) such state did not start to permit same-sex marriages until less
than 12 months before the applicable date.
(4)    Pre-2013 Provisions: For applicable dates before January 1, 2013,
“Eligible Domestic Partner” status was not available in the Plan.
(5)    Additional Rules. This paragraph (5) applies notwithstanding any
provisions in the remainder of this definition of “Eligible

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Domestic Partner” to the contrary. The term “Eligible Domestic Partner” does not
apply to a Participant’s Eligible Spouse or to an individual who is of the
opposite sex of the Participant. A Participant who lives in a state that permits
same-sex marriage is not permitted to have an Eligible Domestic Partner. In the
case of applicable dates prior to January 1, 2016, if the Participant’s state
started to permit same-sex marriage or same-sex civil unions less than 12 months
before the applicable date, the Participant is treated as residing in a state
that does not permit same-sex marriage or same-sex civil unions, as the case may
be, for purposes of this definition of Eligible Domestic Partner.
Eligible Spouse: The spouse of a Participant to whom the Participant is
considered lawfully married for purposes of Federal tax law on the earlier of
the Participant’s Annuity Starting Date or the date of the Participant’s death
and who, solely for periods before September 16, 2013, is of the opposite sex.
Employee: An individual who qualifies as an “Employee” as that term is defined
in Part B of the Salaried Plan.
Employer: An entity that qualifies as an “Employer” as that term is defined in
Part B of the Salaried Plan.
ERISA: Public Law No. 93-406, the Employee Retirement Income Security Act of
1974, including any amendments thereto, any similar subsequent federal laws, and
any rules and regulations from time to time in effect under any of such laws.

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FICA Amount: The Participant’s share of the Federal Insurance Contributions Act
(FICA) tax imposed on the 409A Pension and Pre-409A Pension of the Participant
under Code Sections 3101, 3121(a) and 3121(v)(2).
Guiding Principles Regarding Benefit Plan Committee Appointments: The guiding
principles as set forth in Common Appendix Article PAC to be applied by the
Chair of the PAC when selecting the members of the PAC.
409A Program: The program described in this document. The term “409A Program” is
used to identify the portion of the Plan that is subject to Section 409A.
Highest Average Monthly Earnings: “Highest Average Monthly Earnings” as that
term is defined in the Part B of the Salaried Plan, but without regard to the
limitation imposed by section 401(a)(17) of the Code (as such limitation is
interpreted and applied under the Salaried Plan). Notwithstanding the foregoing,
to the extent that a Participant receives, during a leave of absence, earnings
that would be counted as Highest Average Monthly Earnings if they were received
during a period of active service, but that will be received after the
Participant’s Separation from Service, the Plan Administrator may provide for
determining the Participant’s 409A Pension at Separation from Service by
projecting the benefit the Participant would have if all such earnings were
taken into account under the Plan.
Key Employee:
The individuals identified in accordance with the following paragraphs.

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(1)    In General. Any Participant who at any time during the applicable year
is:
(i)    An officer of any member of the PepsiCo Organization having annual
compensation greater than $130,000 (as adjusted for the applicable year under
Code Section 416(i)(1));
(ii)    A 5-percent owner of any member of the PepsiCo Organization; or
(iii)    A 1-percent owner of any member of the PepsiCo Organization having
annual compensation of more than $150,000.
For purposes of subparagraph (i) above, no more than 50 employees identified in
the order of their annual compensation shall be treated as officers. For
purposes of this Section, annual compensation means compensation as defined in
Treas. Reg. §1.415(c)-2(a), without regard to Treas. Reg. §§1.415(c)-2(d),
1.415(c)-2(e), and 1.415(c)-2(g). The Plan Administrator shall determine who is
a Key Employee in accordance with Code Section 416(i) (provided, that Code
Section 416(i)(5) shall not apply in making such determination), and provided
further than the applicable year shall be determined in accordance with Section
409A and that any modification of the foregoing definition that applies under
Section 409A shall be taken into account.
(2)    Applicable Year. Effective from and after December 31, 2007, the Plan
Administrator shall determine Key Employees effective as of the last day of each
calendar year, based on compensation for such year, and such

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designation shall be effective for purposes of this Plan for the twelve-month
period commencing on April 1st of the next following calendar year (e.g., the
Key Employee determination by the Plan Administrator as of December 31, 2008
shall apply to the period from April 1, 2009 to March 31, 2010).
(3)    Rule of Administrative Convenience. Effective from and after December 31,
2007, in addition to the foregoing, the Plan Administrator shall treat all other
employees classified as Band IV and above on the applicable determination date
prescribed in paragraph (2) (i.e., the period commencing on April 1st of the
next following calendar year) as Key Employees for purposes of the Plan for the
twelve-month period commencing on April 1st of the next following calendar year;
provided that if this would result in counting more than 200 individuals as Key
Employees as of any such determination date, then the number treated as Key
Employees will be reduced to 200 by eliminating from consideration those
employees otherwise added by this paragraph (3) in order by their base
compensation, from the lowest to the highest.
(4)    Identification of Key Employees Between February 26, 2010 and March 31,
2010. Notwithstanding the foregoing, for the period between February 26, 2010
and March 31 2010, Key Employees shall be identified by combining the lists of
Key Employees of all members of the PepsiCo Organization as in effect
immediately prior to February 26, 2010. The foregoing method of identifying Key
Employees is intended to comply with Treas. Reg. § 1.409A-1(i)(6)(i), which
authorizes the use of an alternative

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method of identifying specified employees that complies with Treas. Reg.
§§ 1.409A-1(i)(5) and -1(i)(8) and Section VII.C.4.d of the Preamble to the
Final Regulations under Section 409A of the Code, which permits “service
recipients to simply combine the pre-transaction separate lists of specified
employees where it is determined that such treatment would be administratively
less burdensome.”
(5)    Identification of Key Employees On and After April 1, 2010.
Notwithstanding the foregoing, for the periods on after April 1, 2010, Key
Employees shall be identified as follows:
(i)    For the period that begins on April 1, 2010, and ends on March 31, 2011,
an employee shall be a Key Employee (subject to subparagraph (iii) below) if he
was classified as at least a Band IV or its equivalent on December 31, 2009. For
this purpose, an employee shall be considered to be at least a Band IV or its
equivalent as of a date if the employee is classified as one of the following
types of employees in the PepsiCo Organization on that date: (i) a Band IV
employee or above in a PepsiCo Business, (ii) a Level E7 employee or above in a
PBG Business, or (iii) a Salary Grade 19 employee or above at a PAS Business.
(ii)    For the twelve-month period that begins on April 1, 2011, and for each
twelve-month period that begins on April 1 in subsequent years, an employee
shall be a Key Employee (subject to subparagraph (iii) below) if the employee
was an employee of the

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PepsiCo Organization who was classified as Band IV or above on the December 31
that immediately precedes such April 1.
(iii)    Notwithstanding the rule of administrative convenience in paragraph (3)
above, an employee shall be a Key Employee for the 12-month period that begins
on any April 1, if as of the preceding December 31 the employee would be a
specified employee, within the meaning of Treasury Regulation 1.409A-1(i), or
any successor, by applying as of such December 31 the default rules that apply
under such regulation for determining the minimum number of a service
recipient’s specified employees. If the preceding sentence and the methods for
identifying Key Employees set forth in subparagraph (i) or (ii) above, taken
together, would result in more than 200 individuals being counted as Key
Employees as of any December 31 determination date, then the number of
individuals treated as Key Employees pursuant to subparagraph (i) or (ii), who
are not described in the first sentence of this subparagraph (iii), shall be
reduced to 200 by eliminating from consideration those employees otherwise added
by such subparagraph in order of their base compensation, from the lowest base
compensation to the highest.
(iv)    For purposes of this paragraph (5), “PAS Business” means each employer,
division of an employer or other organizational subdivision of an employer that
the Company classifies as part of the PAS

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business; “PBG Business” means each employer, division of an employer or other
organizational subdivision of an employer that the Company classifies as part of
the PBG business; and “PepsiCo Business” means each employer, division of an
employer or other organizational subdivision of an employer that the Company
classifies as part of the PepsiCo business.
The method for identifying Key Employees set forth in this definition is
intended as an alternative method of identifying Key Employees under Treas. Reg.
§ 1.409A-1(i)(5), and is adopted herein and shall be interpreted and applied
consistently with the rules applicable to such alternative arrangements.
Late Retirement Date: The Late Retirement Date shall be the first day of the
month coincident with or immediately following a Participant’s actual Retirement
Date occurring after his Normal Retirement Age.
Late 409A Retirement Pension: The 409A Retirement Pension available to a
Participant under Section 4.4.
Normal Retirement Age: The Normal Retirement Age under the Plan is age 65 or, if
later, the age at which a Participant first has 5 Years of Elapsed Time Service.
Normal Retirement Date: A Participant’s Normal Retirement Date shall be the
first day of the month coincident with or immediately following a Participant’s
Normal Retirement Age.
Normal 409A Retirement Pension: The Retirement Pension available to a
Participant under Section 4.1.

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Participant: An Employee participating in the Plan in accordance with the
provisions of Section 3.1.
Pension: One or more payments that are payable by the Plan to a person who is
entitled to receive benefits under the Plan. The term “409A Pension” shall be
used to refer to the portion of a Pension that is derived from the 409A Program.
The term “Pre-409A Pension” shall be used to refer to the portion of a Pension
that is derived from the Pre-409A Program.
PepsiCo Administration Committee or PAC: The committee that has the
responsibility for the administration and operation of the Plan, as set forth in
the Plan, as well as any other duties set forth therein.  As of any time, the
Chair of the PAC shall be the person who is then the Company’s Senior Vice
President, Total Rewards, but if such position is vacant or eliminated, the
Chair shall be the person who is acting to fulfill the majority of the duties of
the position (or plurality of the duties, if no one is fulfilling a majority),
as such duties existed immediately prior to the vacancy or the position
elimination.  The Chair shall appoint the other members of the PAC, applying the
principles set forth in the Guiding Principles Regarding Benefit Plan Committee
Appointments and acting promptly from time to time to ensure that there are four
other members of the PAC, each of whom shall have experience and expertise
relevant to the responsibilities of the PAC.  At least two times each year, the
PAC shall prepare a written report of its significant activities that shall be
available to any U.S.-based executive of the Company who is at least a senior
vice president.

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PepsiCo Organization: The controlled group of organizations of which the Company
is a part, as defined by Code section 414 and regulations issued thereunder. An
entity shall be considered a member of the PepsiCo Organization only during the
period it is one of the group of organizations described in the preceding
sentence.
Plan: The PepsiCo Pension Equalization Plan, the Plan set forth herein and in
the Pre-409A Program document(s), as the Plan may be amended from time to time
(subject to the limitations on amendment that are applicable hereunder and under
the Pre-409A Program). The Plan is also sometimes referred to as PEP, or as the
PepsiCo Pension Benefit Equalization Plan.
Plan Administrator: The PAC, or its delegate or delegates. The Plan
Administrator shall have authority to administer the Plan as provided in Article
VII.
Plan Year: The 12-month period commencing on January 1 and ending on December
31.
Pre-409A Program: The portion of the Plan that governs deferrals that are not
subject to Section 409A. The terms of the Pre-409A Program are set forth in a
separate document (or separate set of documents).
Pre-Retirement Domestic Partner’s Pension: The Pension available to an Eligible
Domestic Partner under the Plan. The term “Pre-Retirement Domestic Partner’s
409A Pension” shall be used to refer to the Pension available to an Eligible
Domestic Partner under Section 4.12 of this document.

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Pre-Retirement Spouse’s Pension: The Pension available to an Eligible Spouse
under the Plan. The term “Pre-Retirement Spouse’s 409A Pension” shall be used to
refer to the Pension available to an Eligible Spouse under Section 4.6 of this
document.
Primary Social Security Amount: In determining Pension amounts, Primary Social
Security Amount shall mean:
(1)    For purposes of determining the amount of a Retirement, Vested,
Pre-Retirement Spouse’s Pension or Pre-Retirement Domestic Partner’s Pension,
the Primary Social Security Amount shall be the estimated monthly amount that
may be payable to a Participant commencing at age 65 as an old-age insurance
benefit under the provisions of Title II of the Social Security Act, as amended.
Such estimates of the old-age insurance benefit to which a Participant would be
entitled at age 65 shall be based upon the following assumptions:
(i)    That the Participant’s social security wages in any year prior to
Retirement or Separation from Service are equal to the Taxable Wage Base in such
year, and
(ii)    That he will not receive any social security wages after Retirement or
Separation from Service.
However, in computing a Vested Pension under Formula A of Section 5.2, the
estimate of the old-age insurance benefit to which a Participant would be
entitled at age 65 shall be based upon the assumption that he continued to

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receive social security wages until age 65 at the same rate as the Taxable Wage
Base in effect at his Separation from Service. For purposes of this subsection,
“social security wages” shall mean wages within the meaning of the Social
Security Act.
(2)    For purposes of determining the amount of a Disability Pension, the
Primary Social Security Amount shall be (except as provided in the next
sentence) the initial monthly amount actually received by the disabled
Participant as a disability insurance benefit under the provisions of Title II
of the Social Security Act, as amended and in effect at the time of the
Participant’s Retirement due to disability. Notwithstanding the preceding
sentence, for any period that a Participant receives a Disability Pension before
receiving a disability insurance benefit under the provisions of Title II of the
Social Security Act, then the Participant’s Primary Social Security Amount for
such period shall be determined pursuant to paragraph (1) above.
(3)    For purposes of paragraphs (1) and (2), the Primary Social Security
Amount shall exclude amounts that may be available because of the spouse or any
dependent of the Participant or any amounts payable on account of the
Participant’s death. Estimates of Primary Social Security Amounts shall be made
on the basis of the Social Security Act as in effect at the Participant’s
Separation from Service, without regard to any increases in the social security
wage base or benefit levels provided by such Act which take effect thereafter.

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Prohibited Misconduct: Any of the following activities engaged in, directly or
indirectly, by a Participant shall constitute Prohibited Misconduct:
(1)    The Participant accepting any employment, assignment, position or
responsibility, or acquiring any ownership interest, which involves the
Participant’s “Participation” (as defined below) in a business entity that
markets, sells, distributes or produces “Covered Products” (as defined below),
unless such business entity makes retail sales or consumes Covered Products
without in any way competing with the PepsiCo Organization.
(2)    The Participant, directly or indirectly (including through someone else
acting on the Participant’s recommendation, suggestion, identification or
advice), soliciting any PepsiCo Organization employee to leave the PepsiCo
Organization’s employment or to accept any position with any other entity.
(3)    The Participant using or disclosing to anyone any confidential
information regarding the PepsiCo Organization other than as necessary in his or
her position with the PepsiCo Organization. Such confidential information shall
include all non-public information the Participant acquired as a result of his
or her positions with the PepsiCo Organization. Examples of such confidential
information include non-public information about the PepsiCo Organization’s
customers, suppliers, distributors and potential acquisition targets; its
business operations and structure; its product lines,

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formulas and pricing; its processes, machines and inventions; its research and
know-how; its financial data; and its plans and strategies.
(4)    The Participant engaging in any acts that are considered to be contrary
to the PepsiCo Organization’s best interests, including violating the Company’s
Code of Conduct, engaging in unlawful trading in the securities of the Company
or of any other company based on information gained as a result of his or her
employment with the PepsiCo Organization, or engaging in any other activity
which constitutes gross misconduct.
(5)    The Participant engaging in any activity that constitutes fraud.
Notwithstanding the foregoing and for the avoidance of doubt, nothing in this
Plan shall prohibit the Participant from communicating with government
authorities concerning any possible legal violations.  The Company nonetheless
asserts and does not waive its attorney-client privilege over any information
appropriately protected by the privilege.
For purposes of this subsection, “Participation” shall be construed broadly to
include: (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. For purposes of this subsection, “Covered Products” shall mean any
product that falls into one or more of the following categories, so long as the
PepsiCo Organization is producing, marketing, selling or licensing such product
anywhere in the world – beverages, including without limitation carbonated

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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 syrups; value-added
pasta products; ready-to-eat cereals; dry pasta products; or any product or
service that the Participant had reason to know was under development by the
PepsiCo Organization during the Participant’s employment with the PepsiCo
Organization.
Qualified Joint and Survivor Annuity: An Annuity which is payable to the
Participant for life with 50 percent of the amount of such Annuity payable after
the Participant’s death to his surviving Eligible Spouse for life. If the
Eligible Spouse predeceases the Participant, no survivor benefit under a
Qualified Joint and Survivor Annuity shall be payable to any person. The amount
of a Participant’s monthly payment under a Qualified Joint and Survivor Annuity
shall be reduced to the extent provided in Sections 5.1 and 5.2, as applicable.
Retirement: Separation from Service for reasons other than death after a
Participant has fulfilled the requirements for either a Normal, Early, Late, or
Disability Retirement Pension under Article IV.
Retirement Date: The date immediately following the Participant’s Retirement.
Retirement Pension: The Pension payable to a Participant upon Retirement under
the Plan. The term “409A Retirement Pension” shall be used to refer to the
portion of a Retirement Pension that is derived from the 409A Program. The

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term “Pre-409A Retirement Pension” shall be used to refer to the portion of a
Retirement Pension that is derived from the Pre-409A Program.
Salaried Plan: The PepsiCo Salaried Employees Retirement Plan, as it may be
amended from time to time; provided that a Participant’s benefit under this Plan
shall be determined solely by reference to Parts A and B of the PepsiCo Salaried
Employees Retirement Plan document without regard to the other Parts of that
Plan, as if Parts A and B were a separate plan (except as otherwise provided in
Appendix Article PBG hereto).
Section 409A: Section 409A of the Code.
Separation from Service: A Participant’s separation from service with the
PepsiCo Organization, within the meaning of Section 409A(a)(2)(A)(i). The term
may also be used as a verb (i.e., “Separates from Service”) with no change in
meaning. Notwithstanding the preceding sentence, a Participant’s transfer to an
entity owned 20% or more by the Company will not constitute a Separation of
Service to the extent permitted by Section 409A. A Participant’s “Final
Separation from Service” is the date of his Separation from Service that most
recently precedes his Annuity Starting Date; provided, however, that to the
extent a Participant is reemployed after an Annuity Starting Date, he will have
a new Final Separation from Service with respect to any benefits to which he
becomes entitled as a result of his reemployment. The following principles shall
generally apply in determining when a Separation from Service occurs:
(1)    A Participant separates from service with the Company if the Employee
dies, retires, or otherwise has a termination of employment with

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the Company. Whether a termination of employment has occurred is determined
based on whether the facts and circumstance indicate that the Company and the
Employee reasonably anticipated that no further services would be performed
after a certain date or that the level of bona fide services the Employee would
perform after such date (as an employee or independent contractor) would
permanently decrease to no more than 20 percent of the average level of bona
fide services performed over the immediately preceding 36-month period (or the
full period in which the Employee provided services to the Company if the
Employee has been providing services for less than 36 months).
(2)    An Employee will not be deemed to have experienced a Separation from
Service if such Employee is on military leave, sick leave, or other bona fide
leave of absence, to the extent such leave does not exceed a period of six
months or, if longer, such longer period of time during which a right to
re-employment is protected by either statute or contract. If the period of leave
exceeds six months and the individual does not retain a right to re-employment
under an applicable statute or by contract, the employment relationship is
deemed to terminate on the first date immediately following such six-month
period. Notwithstanding the foregoing, where a leave of absence is due to any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than six months, where such impairment causes

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the Employee to be unable to perform the duties of his or her position of
employment or any substantially similar position of employment, a 29-month
period of absence may be substituted for such six-month period.
(3)    If an Employee provides services both an as employee and as a member of
the Board of Directors of the Company, the services provided as a Director are
generally not taken into account in determining whether the Employee has
Separated from Service as an Employee for purposes of the Plan, in accordance
with final regulations under Section 409A.
Service: The period of a Participant’s employment calculated in accordance with
Section 3.2 for purposes of determining his entitlement to benefits under the
Plan.
Single Life Annuity: A level monthly Annuity payable to a Participant for his
life only, with no survivor benefits to his Eligible Spouse or any other person.
Single Lump Sum: The distribution of a Participant’s total 409A Pension in the
form of a single payment, which payment shall be the Actuarial Equivalent of the
Participant’s 409A Pension as of the Participant’s Normal Retirement Date (or
Late Retirement Date, if applicable), but not less than the Actuarial Equivalent
of the Participant’s 409A Pension as of the Participant’s Early Retirement Date,
in the case of a Participant who is entitled to an immediate Early 409A
Retirement Pension.
Social Security Act: The Social Security Act of the United States, as amended,
an enactment providing governmental benefits in connection with events such as
old age, death and disability. Any reference herein to the Social Security Act
(or

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any of the benefits provided thereunder) shall be taken as a reference to any
comparable governmental program of another country, as determined by the Plan
Administrator, but only to the extent the Plan Administrator judges the
computation of those benefits to be administratively feasible.
Taxable Wage Base: The contribution and benefit base (as determined under
section 230 of the Social Security Act) in effect for the Plan Year.
Vested Pension: The Pension available to a Participant under Section 4.3. The
term “409A Vested Pension” shall be used to refer to the portion of a Vested
Pension that is derived from the 409A Program. The term “Pre-409A Vested
Pension” shall be used to refer to the portion of a Vested Pension that is
derived from the Pre-409A Program.
2.2    Construction: The terms of the Plan shall be construed in accordance with
this section.
(a)    Gender and Number: The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender, and the singular may include the
plural, unless the context clearly indicates to the contrary.
(b)    Compounds of the Word “Here”: The words “hereof”, “hereunder” and other
similar compounds of the word “here” shall mean and refer to the entire Plan,
not to any particular provision or section.
(c)    Examples: Whenever an example is provided or the text uses the term
“including” followed by a specific item or items, or there is a passage having a
similar effect, such passages of the Plan shall be construed as if the phrase
“without

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limitation” followed such example or term (or otherwise applied to such passage
in a manner that avoids limits on its breadth of application).
(d)    Subdivisions of the Plan Document: This Plan document is divided and
subdivided using the following progression: articles, sections, subsections,
paragraphs, subparagraphs, clauses, and sub-clauses. Articles are designated by
capital roman numerals. Sections are designated by Arabic numerals containing a
decimal point. Subsections are designated by lower-case letters in parentheses.
Paragraphs are designated by Arabic numerals in parentheses. Subparagraphs are
designated by lower-case roman numerals in parentheses. Clauses are designated
by upper-case letters in parentheses. Sub-clauses are designated by upper-case
roman numerals in parentheses. Any reference in a section to a subsection (with
no accompanying section reference) shall be read as a reference to the
subsection with the specified designation contained in that same section. A
similar rule shall apply with respect to paragraph references within a
subsection and subparagraph references within a paragraph.

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ARTICLE III
Participation and Service
3.1    Participation: An Employee shall be a Participant in the Plan during the
period:
(a)    When he would be currently entitled to receive a Pension under the Plan
if his employment terminated at such time, or
(b)    When he would be so entitled but for the vesting requirement of
Section 4.7.
It is expressly contemplated that an Employee, who is entitled to receive a
Pension under the Plan as of a particular time, may subsequently cease to be
entitled to receive a Pension under the Plan.
3.2    Service: A Participant’s entitlement to a Pension or, in the event the
Participant dies before commencing a benefit hereunder, either a Pre-Retirement
Spouse’s Pension for his Eligible Spouse or a Pre-Retirement Domestic Partner’s
Pension for his Eligible Domestic Partner, shall be determined under Article IV
based upon his period of Service. A Participant’s period of Service shall be
determined under Article III of Part B of the Salaried Plan, except that any
Salaried Plan provision which results in disregarding for certain purposes the
pre-transfer Service of certain inpats who transfer to the United States, shall
not apply to this Plan before January 1, 2015, unless such earlier application
avoids duplication of benefits. If a Participant’s period of Service (as so
determined) would extend beyond the Participant’s Separation from Service date
because of a leave of absence, the Plan Administrator may provide for
determining the Participant’s 409A Pension at Separation from Service by
projecting

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the benefit the Participant would have if all such Service were taken into
account under the Plan.
3.3    Credited Service: Subject to the next two sentences, the amount of a
Participant’s Pension, Pre-Retirement Spouse’s Pension or Pre-Retirement
Domestic Partner’s Pension shall be based upon the Participant’s period of
Credited Service, as determined under Article III of Part B of the Salaried
Plan.
(a)    Inpats. Any provision in Section 3.5 of Part B of the Salaried Plan which
resulted in disregarding the pre-transfer Credited Service of certain inpats who
transferred to the United States shall not apply under this Plan in the case of
such inpats who transfer to the United States before October 1, 2014, unless
such earlier application avoids duplication of benefits under the Salaried Plan.
(b)    Leaves of Absence. If a Participant’s period of Credited Service (as so
determined) would extend beyond the Participant’s Separation from Service date
because of a leave of absence, the Plan Administrator may provide for
determining the Participant’s 409A Pension at Separation from Service by
projecting the benefit the Participant would have if all such Service were taken
into account under the Plan.

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ARTICLE IV
Requirements for Benefits
A Participant shall be eligible to receive a Pension and a surviving Eligible
Spouse shall be eligible for certain survivor benefits as provided in this
Article. The amount of any such Pension or survivor benefit shall be determined
in accordance with Article V.
4.1    Normal 409A Retirement Pension: A Participant shall be eligible for a
Normal 409A Retirement Pension if he Separates from Service after attaining
Normal Retirement Age.
4.2    Early 409A Retirement Pension: A Participant shall be eligible for an
Early 409A Retirement Pension if he Separates from Service prior to attaining
Normal Retirement Age but after attaining at least age 55 and completing 10 or
more years of Elapsed Time Service.
4.3    409A Vested Pension: A Participant who is vested under Section 4.7 shall
be eligible to receive a 409A Vested Pension if he Separates from Service before
he is eligible for a Normal 409A Retirement Pension or an Early 409A Retirement
Pension. A Participant who terminates employment prior to satisfying the vesting
requirement in Section 4.7 shall not be eligible to receive a Pension under this
Plan.
4.4    Late 409A Retirement Pension: A Participant who continues without a
Separation from Service after his Normal Retirement Age shall not receive a
Pension until his Late Retirement Date. Thereafter, a Participant shall be
eligible for a Late Retirement Pension determined in accordance with Section 4.4
of Part B of the Salaried Plan (but without regard to

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any requirement for notice of suspension under ERISA section 203(a)(3)(B) or any
adjustment as under Section 5.7(d) of Part B of the Salaried Plan).
4.5    409A Disability Pension: A Participant shall be eligible for a 409A
Disability Pension if he meets the requirements for a Disability Pension under
Part B of the Salaried Plan. A Participant’s 409A Disability Pension, if any,
shall generally be comprised of two parts. The first part shall represent the
benefits with respect to a disabled Participant’s Credited Service through the
day of the Participant’s Separation from Service (i.e., the Participant’s
“Pre-Separation Accruals”). In the event the disabled Participant continues to
receive Credited Service related to the disability after such Separation from
Service, the Participant’s 409A Disability Pension shall have a second part,
which shall represent all benefits accrued with respect to Credited Service from
the date immediately following the Participant’s Separation from Service until
the earliest of the Participant’s (i) attainment of age 65, (ii) benefit
commencement date under Part B of the Salaried Plan or (iii) recovery from the
disability (i.e., the Participant’s “Post-LTD Accruals”).
4.6    Pre-Retirement Spouse’s 409A Pension: A Pre-Retirement Spouse’s 409A
Pension is payable under this section only in the event the Participant dies
prior to his Annuity Starting Date. Any Pre-Retirement Spouse’s 409A Pension
payable on behalf of a Participant shall commence as of the first day of the
month following the later of (i) the Participant’s death and, (ii) the date the
Participant attains or would have attained age 55. Subject to Section 4.9, any
Pre-Retirement Spouse’s 409A Pension shall continue monthly for the life of the
Eligible Spouse.

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(a)    Active, Disabled and Retired Employees: A Pre-Retirement Spouse’s 409A
Pension shall be payable under this subsection to a Participant’s Eligible
Spouse (if any) who is entitled under Part B of the Salaried Plan to the
pre-retirement spouse’s pension for survivors of active, disabled and retired
employees. The amount (if any) of such Pension shall be determined in accordance
with the provisions of Section 5.3 (with the 409A Pension, if any, determined
after application of Section 5.6).
(b)    Vested Employees: A Pre-Retirement Spouse’s 409A Pension shall be payable
under this subsection to a Participant’s Eligible Spouse (if any) who is
entitled under Part B the Salaried Plan to the pre-retirement spouse’s pension
for survivors of vested terminated Employees. The amount (if any) of such
Pension shall be determined in accordance with the provisions of Section 5.3
(with the 409A Pension, if any, determined after application of Section 5.6). If
pursuant to this Section 4.6(b) a Participant has Pre-Retirement Spouse’s
coverage in effect for his Eligible Spouse, any Pension calculated for the
Participant under Section 5.2(b) shall be reduced for each year such coverage is
in effect by the applicable percentage set forth below (based on the
Participant’s age at the time the coverage is in effect) with a pro rata
reduction for any portion of a year. No reduction shall be made for coverage in
effect within the 90‑day period following a Participant’s termination of
employment.

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Attained Age
Annual Charge
 
 
Up to 35
.0%
35 – 39
.075%
40 – 44
.1%
45 – 49
.175%
50 – 54
.3%
55 – 59
.5%
60 – 64
.5%

4.7    Vesting: Subject to Section 8.7 (Section 457A), a Participant shall be
fully vested in, and have a nonforfeitable right to, his Accrued Benefit at the
time he becomes fully vested in his accrued benefit under Part B of the Salaried
Plan.
4.8    Time of Payment: The distribution of a Participant’s 409A Pension shall
commence as of the time specified in Section 6.1, subject to Section 6.6. Any
increase in a Participant’s 409A Pension or Pre-409A Pension for interest due to
a delay in payment, by application of Section 3.1(e) of Part A of the Salaried
Plan (delay in payment) when calculating either portion of the Participant’s
Pension, shall accrue entirely under the 409A Program and be paid (subject to
the last sentence of this Section) at the same time and in the same form that
the Participant’s 409A Pension is paid. Accordingly, if a Participant is
entitled to an interest adjustment for a delay in payment of his Pre-409A
Pension, such interest adjustment shall be limited to that which may be paid as
part of the Participant’s 409A Pension, consistent with 409A’ s payment rules
and the limitation in the next sentence. Notwithstanding any provision of the
Salaried Plan to the contrary, including such Section 3.1(e) of Part A, a
Participant shall not receive interest for any delay in payment of his 409A
Pension or Pre-409A Pension to the extent the delay is caused by the Participant
or interest is prohibited by the terms of an Internal Revenue Service correction
program regarding compliance with Code section 409A.

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4.9    Cashout Distributions: Notwithstanding the availability or applicability
of a different form of payment under Article VI, the following rules shall apply
in the case of certain small benefit Annuity payments:
(a)    Distribution of Participant’s 409A Pension: If at a Participant’s Annuity
Starting Date the Actuarial Equivalent lump sum value of the Participant’s 409A
Pension is equal to or less than the Cashout Limit, the Plan Administrator shall
distribute to the Participant such lump sum value of the Participant’s 409A
Pension. Notwithstanding the preceding sentence, for Annuity Starting Dates
prior to December 1, 2012, a Participant shall be cashed out under this
subsection if, at the Participant’s Annuity Starting Date, the Actuarial
Equivalent lump sum value of the Participant’s PEP Pension is equal to or less
than $15,000.
(b)    Distribution of Pre-Retirement Spouse’s 409A Pension: If at the time
payments are to commence to an Eligible Spouse under Section 4.6, the Actuarial
Equivalent lump sum value of the PEP Pre-Retirement Spouse’s 409A Pension to be
paid is equal to or less than the Cashout Limit, the Plan Administrator shall
distribute to the Eligible Spouse such lump sum value of the PEP Pre-Retirement
Spouse’s Pension that is subject to Section 409A. Notwithstanding the preceding
sentence, for Annuity Starting Dates prior to December 1, 2012, an Eligible
Spouse shall be cashed out under this subsection if the Actuarial Equivalent
lump sum value of the Eligible Spouse’s PEP Pre-Retirement Spouse’s Pension is
equal to or less than $15,000.
(c)    Special Cashout of 409A Vested Pensions: Notwithstanding subsection (a)
above, the Plan Administrator shall have discretion under this subsection

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to cash out a 409A Vested Pension in a single lump sum prior to the date that
would apply under subsection (a).
(1)    The Plan Administrator shall have discretion under this subsection to
cash out in a single lump sum any 409A Vested Pension that, as of December 1,
2012 – (i) has not otherwise had its Annuity Starting Date occur, (ii) has an
Actuarial Equivalent lump sum value that is equal to or less than the Cashout
Limit as of such date, and (iii) is practicable to calculate and distribute (as
determined pursuant to the exercise of the Plan Administrator’s discretion),
with such cashout being made on December 1, 2012.
(2)    The Plan Administrator shall also have discretion under this subsection
to cash out in a single lump sum any 409A Vested Pension that, as of the first
day of any month in 2013 or 2014 specified by the Plan Administrator pursuant to
the exercise of its discretion – (i) has not otherwise had its Annuity Starting
Date occur, (ii) has an Actuarial Equivalent lump sum value that is equal to or
less than the Cashout Limit as of such date, and (iii) is practicable to
calculate and distribute (as determined pursuant to the exercise of the Plan
Administrator’s discretion), with such cashout being made on the first day of
the month specified.
Not later than November 30, the Plan Administrator shall memorialize in writing
the exercise of its discretion under this subsection to select Vested Pensions
for cashout on December 1, 2012, through the creation of a written list (in
either hard copy or electronic form) of Participants with 409A Vested Pensions
who will be cashed out. In

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addition, not later than the day before the date specified pursuant to paragraph
(2) above, the Plan Administrator shall memorialize in writing the exercise of
its discretion under this subsection to select Vested Pensions for cashout on
the specified date, through the creation of a written list (in either hard copy
or electronic form) of Participants with 409A Vested Pensions who will be cashed
out.
(d)    Distribution of Pre-Retirement Domestic Partner’s Pension Benefit. If at
the time payments are to commence to an Eligible Domestic Partner under Section
4.12, the Actuarial Equivalent lump sum value of the Pre-Retirement Domestic
Partner’s 409A Pension to be paid is equal to or less than the Cashout Limit,
the Plan Administrator shall distribute to the Eligible Domestic Partner such
Actuarial Equivalent lump sum value of the Pre-Retirement Domestic Partner’s
Pension that is subject to Section 409A.
Any lump sum distributed under this section shall be in lieu of the Pension that
otherwise would be distributable to the Participant, Eligible Spouse or Eligible
Domestic Partner hereunder. The cashout provisions described in subsections (a)
through (d) above are intended to be “limited cashout” features within the
meaning of Treasury Regulation § 1.409A-3(j)(4)(v), and they shall be
interpreted and applied consistently with this regulation. Accordingly, in
determining if an applicable dollar limit is satisfied, a Participant’s entire
benefit under this Plan that is subject to Section 409A and all benefits subject
to Section 409A under all other nonaccount balance plans (within the meaning of
Treasury Regulation § 1.409A-1(c)(2)(i)(C)) shall be taken into account (the
“accountable benefit”), and a Participant’s entire accountable benefit must be
cashed out as of the time in question as a condition to any payout under this

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Section. In addition, a cashout under this Section shall not cause an
accountable benefit to be paid out before completing any applicable six-month
delay (see, e.g., Section 6.6). No Participant, Eligible Spouse or Eligible
Domestic Partner shall be given a direct or indirect election with respect to
whether the Participant’s Vested Pension, Pre-Retirement Spouse’s 409A Pension
or Eligible Domestic Partner’s 409A Pension will be cashed out under this
section.
4.10    Reemployment of Certain Participants: In the case of a current or former
Participant who is receiving his Pension as an Annuity under Section 6.1(b), and
who is reemployed and is eligible to re-participate in Part B of the Salaried
Plan after his Annuity Starting Date, payment of his 409A Pension will continue
to be paid in the same form as it was paid prior to his reemployment. Any
additional 409A Pension that is earned by the Participant shall be paid based on
the Separation from Service that follows the Participant’s re-employment.
4.11    Forfeiture of Benefits: Effective beginning with benefits accrued after
December 31, 2008 (“Post-2008 Accruals”), and notwithstanding any other
provision of this Plan to the contrary, if the Plan Administrator determines
that a Participant has engaged in Prohibited Misconduct at any time prior to the
second anniversary of his or her Separation from Service, the Participant shall
forfeit all Post-2008 Accruals (whether paid previously, being paid currently or
payable in the future), and his or her 409A Pension shall be adjusted to reflect
such forfeiture and previously paid Post-2008 Accruals shall be recovered.
4.12    Pre-Retirement Domestic Partner’s 409A Pension: A Pre-Retirement
Domestic Partner’s 409A Pension is payable under this section only in the event
the Participant dies prior to his Annuity Starting Date under either the 409A
Program or the Pre-409A Program.

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Any Pre-Retirement Domestic Partner’s 409A Pension payable on behalf of a
Participant shall commence on the first day of the month following the later of
(i) the Participant’s death and, (ii) the date the Participant attains or would
have attained age 55. Subject to Section 4.9, any Pre-Retirement Domestic
Partner’s 409A Pension shall continue monthly for the life of the Eligible
Domestic Partner.
(a)    Active, Disabled and Retired Employees: A Pre-Retirement Domestic
Partner’s 409A Pension shall be payable under this subsection to a Participant’s
Eligible Domestic Partner (if any) who is entitled under Part B of the Salaried
Plan to the pre-retirement domestic partner’s pension for survivors of active,
disabled and retired employees. The amount (if any) of such Pension shall be
determined in accordance with the provisions of Section 5.8 (with the 409A
Pension, if any, determined after application of Section 5.6).
(b)    Vested Employees: A Pre-Retirement Domestic Partner’s 409A Pension shall
be payable under this subsection to a Participant’s Eligible Domestic Partner
(if any) who is entitled under Part B of the Salaried Plan to the pre-retirement
domestic partner’s pension for survivors of vested terminated Employees. The
amount (if any) of such Pension shall be determined in accordance with the
provisions of Section 5.8 (with the 409A Pension, if any, determined after
application of Section 5.6). If, pursuant to this Section 4.12(b), a Participant
has Pre-Retirement Domestic Partner’s Pension coverage in effect for his
Eligible Domestic Partner, any Pension calculated for the Participant under
Section 5.2(b) shall be reduced for each year such coverage is in effect by the
applicable percentage set forth below (based on the Participant’s age at

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the time the coverage is in effect) with a pro rata reduction for any portion of
a year. No reduction shall be made for coverage in effect within the 180-day
period following a Participant’s termination of employment.

Attained Age
Annual Charge
Up to 35
.0%
35 – 39
.075%
40 – 44
.1%
45 – 49
.175%
50 – 54
.3%
55 – 59
.5%
60 – 64
.5%

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ARTICLE V
Amount of Retirement Pension
When a 409A Pension becomes payable to or on behalf of a Participant under this
Plan, the amount of such 409A Pension shall be determined under Section 5.1 or
5.3 (whichever is applicable), subject to any adjustments required under
Sections 4.6(b) and 5.4.
5.1    Participant’s 409A Pension: Subject to Section 8.7 (Section 457A), a
Participant’s 409A Pension shall be determined as follows –
(a)    Calculating the 409A Pension: A Participant’s 409A Pension shall be
calculated as follows (on the basis specified in subsection (b) below and using
the definitions appearing in subsection (c) below):
(1)    His Total Pension, reduced by
(2)    His Salaried Plan Pension, and then further reduced by (but not below
zero)
(3)    His Pre-409A Pension.
(b)    Basis for Determining: The 409A Pension Benefit amount in subsection (a)
above shall be determined on a basis that takes into account applicable
reductions for early commencement and that reflects, as applicable, the relative
value of forms of payment.
(c)    Definitions: The following definitions apply for purposes of this
section.
(1)    A Participant’s “Total Pension” means the greater of:

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(i)    The amount of the Participant’s pension determined under the terms of
Part B of the Salaried Plan, but without regard to: (A) the limitations imposed
by sections 401(a)(17) and 415 of the Code (as such limitations are interpreted
and applied under the Salaried Plan), and (B) the actuarial adjustment under
Section 5.7(d) of Part B of the Salaried Plan (relating to benefits that are
deferred beyond the Participant’s Normal Retirement Date); or
(ii)    The amount (if any) of the Participant’s PEP Guarantee determined under
Section 5.2.
As necessary to ensure the Participant’s receipt of a “greater of” benefit, the
foregoing comparison shall be made by reflecting, as applicable, the relative
value of forms of payment.
(2)    A Participant’s “Salaried Plan Pension” means the amount of the
Participant’s pension determined under the terms of Part B of the Salaried Plan.
(3)    A Participant’s “Pre-409A Pension” means the amount of the Participant’s
pension determined under Section 5.6.
5.2    PEP Guarantee: A Participant who is eligible under subsection (a) below
shall be entitled to a PEP Guarantee benefit determined under subsection (b)
below. In the case of other Participants, the PEP Guarantee shall not apply.
(a)    Eligibility: A Participant shall be covered by this section if the
Participant has 1988 pensionable earnings from an Employer of at least $75,000.
For

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purposes of this section, “1988 pensionable earnings” means the Participant’s
remuneration for the 1988 calendar year, within the meaning of the Salaried Plan
as in effect in 1988. “1988 pensionable earnings” does not include remuneration
from an entity attributable to any period when that entity was not an Employer.
(b)    PEP Guarantee Formula: The amount of a Participant’s PEP Guarantee shall
be determined under the applicable formula in paragraph (1), subject to the
special rules in paragraph (2).
(1)    Formulas: The amount of a Participant’s Pension under this paragraph
shall be determined in accordance with subparagraph (i) below. However, if the
Participant was actively employed by the PepsiCo Organization in a
classification eligible for the Salaried Plan prior to July 1, 1975, the amount
of his Pension under this paragraph shall be the greater of the amounts
determined under subparagraphs (i) and (ii), provided that subparagraph (ii)(B)
shall not apply in determining the amount of a Vested Pension.
(i)    Formula A: The Pension amount under this subparagraph shall be:
(A)    3 percent of the Participant’s Highest Average Monthly Earnings for the
first 10 years of Credited Service, plus
(B)    1 percent of the Participant’s Highest Average Monthly Earnings for each
year of Credited Service in excess of 10 years, less

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(C)    1-2/3 percent of the Participant’s Primary Social Security Amount
multiplied by years of Credited Service not in excess of 30 years.
In determining the amount of a Vested Pension under this Formula A, the Pension
shall first be calculated on the basis of (I) the Credited Service the
Participant would have earned had he remained in the employ of the Employer
until his Normal Retirement Age, and (II) his Highest Average Monthly Earnings
and Primary Social Security Amount at his Separation from Service, and then
shall be reduced by multiplying the resulting amount by a fraction, the
numerator of which is the Participant’s actual years of Credited Service on his
Separation from Service and the denominator of which is the years of Credited
Service he would have earned had he remained in the employ of an Employer until
his Normal Retirement Age.
(ii)    Formula B: The Pension amount under this subparagraph shall be the
greater of (A) or (B) below:
(A)    1-1/2 percent of Highest Average Monthly Earnings times the number of
years of Credited Service, less 50 percent of the Participant’s Primary Social
Security Amount, or
(B)    3 percent of Highest Average Monthly Earnings times the number of years
of Credited Service up to 15

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years, less 50 percent of the Participant’s Primary Social Security Amount.
In determining the amount of a Disability Pension under Formula A or B above,
the Pension shall be calculated on the basis of the Participant’s Credited
Service (determined in accordance with Section 3.3(c)(3) of Part B of the
Salaried Plan), and his Highest Average Monthly Earnings and Primary Social
Security Amount at the date of disability.
(2)    Calculation: The amount of the PEP Guarantee shall be determined pursuant
to paragraph (1) above, subject to the following special rules:
(i)    Surviving Eligible Spouse’s or Eligible Domestic Partner’s
Annuity:    Subject to subparagraph (iii) below and the last sentence of this
subparagraph, if the Participant has an Eligible Spouse or Eligible Domestic
Partner, the Participant’s Eligible Spouse or Eligible Domestic Partner shall be
entitled to receive a survivor annuity equal to 50 percent of the Participant’s
Annuity under this section, with no corresponding reduction in such Annuity for
the Participant. Annuity payments to a surviving Eligible Spouse or Eligible
Domestic Partner shall begin on the first day of the month coincident with or
following the Participant’s death and shall end with the last monthly payment
due prior to the Eligible Spouse’s or Eligible Domestic Partner’s death. If the
Eligible Spouse or Eligible Domestic Partner is more than 10 years

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younger than the Participant, the survivor benefit payable under this
subparagraph shall be adjusted as provided below.
(A)    For each full year more than 10 but less than 21 that the surviving
Eligible Spouse or Eligible Domestic Partner is younger than the Participant,
the survivor benefit payable to such spouse shall be reduced by 0.8 percent.
(B)    For each full year more than 20 that the surviving Eligible Spouse or
Eligible Domestic Partner is younger than the Participant, the survivor benefit
payable to such spouse shall be reduced by an additional 0.4 percent.
(ii)    Reductions: The following reductions shall apply in determining a
Participant’s PEP Guarantee.
(A)    If the Participant will receive an Early Retirement Pension, the payment
amount shall be reduced by 3/12ths of 1 percent for each month by which the
benefit commencement date precedes the date the Participant would attain his
Normal Retirement Date.
(B)    If the Participant is entitled to a Vested Pension, the payment amount
shall be reduced to the actuarial equivalent of the amount payable at his Normal
Retirement Date (if payment commences before such date), and the Section 4.6(b)
reductions for any Pre­ Retirement Spouse’s coverage and Section

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4.12(b) reductions for any Pre-Retirement Domestic Partner’s coverage shall
apply.
(C)    This clause applies if the Participant will receive his Pension in a form
that provides an Eligible Spouse or Eligible Domestic Partner benefit,
continuing for the life of the surviving spouse or surviving domestic partner,
that is greater than that provided under subparagraph (i). In this instance, the
Participant’s Pension under this section shall be reduced so that the total
value of the benefit payable on the Participant’s behalf is the actuarial
equivalent of the Pension otherwise payable under the foregoing provisions of
this section.
(D)    This clause applies if the Participant will receive his Pension in a form
that provides a survivor annuity for a beneficiary who is not his Eligible
Spouse or Eligible Domestic Partner. In this instance, the Participant’s Pension
under this section shall be reduced so that the total value of the benefit
payable on the Participant’s behalf is the actuarial equivalent of a Single Life
Annuity for the Participant’s life.
(E)    This clause applies if the Participant will receive his Pension in an
Annuity form that includes inflation protection described in Section 6.2(b). In
this instance, the Participant’s Pension under this section shall be reduced so
that

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the total value of the benefit payable on the Participant’s behalf is the
actuarial equivalent of the elected Annuity without such protection.
(iii)    Lump Sum Conversion: The amount of the Retirement Pension determined
under this section for a Participant whose Retirement Pension will be
distributed in the form of a lump sum shall be the actuarial equivalent of the
Participant’s PEP Guarantee determined under this section, taking into account
the value of any survivor benefit under subparagraph (i) above and any early
retirement reductions under subparagraph (ii)(A) above.
For purposes of this paragraph (2), actuarial equivalence shall be determined
taking into account the PEP Guarantee’s purpose to preserve substantially the
value of a benefit under the pre-1989 terms of the Plan and the 409A Plan’s
design that offers alternative annuities that are considered actuarial
equivalent for purposes of Section 409A (taking into account, without
limitation, the special rule for subsidized joint and survivor annuities in
Treasury Regulation § 1.409A-3(b)(ii)(C)).
5.3    Amount of Pre-Retirement Spouse’s 409A Pension: The monthly amount of the
Pre-Retirement Spouse’s 409A Pension payable to a surviving Eligible Spouse
under Section 4.6 shall be determined under subsection (a) below.
(a)    Calculation: An Eligible Spouse’s Pre-Retirement Spouse’s 409A Pension
shall be equal to:

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(1)    The Eligible Spouse’s Total Pre-Retirement Spouse’s Pension, reduced by
(2)    The Eligible Spouse’s Salaried Plan Pre-Retirement Spouse’s Pension, and
then further reduced by (but not below zero)
(3)    The Eligible Spouse’s Pre-Retirement Spouse’s Pension derived from the
Pre-409A Program.
(b)    Definitions: The following definitions apply for purposes of this
section.
(1)    An Eligible Spouse’s “Total Pre-Retirement Spouse’s Pension” means the
greater of:
(i)    The amount of the Eligible Spouse’s pre-retirement spouse’s pension
determined under the terms of Part B of the Salaried Plan, but without regard
to: (A) the limitations imposed by sections 401(a)(17) and 415 of the Code (as
such limitations are interpreted and applied under the Salaried Plan), and (B)
the actuarial adjustment under Section 5.7(d) of Part B of the Salaried Plan; or
(ii)    The amount (if any) of the Eligible Spouse’s PEP Guarantee
Pre-Retirement Spouse’s Pension determined under subsection (c).
In making this comparison, the benefits in subparagraphs (i) and (ii) above
shall be calculated as if payable as of what would be the Normal Retirement Date
of the Participant related to the Eligible Spouse.

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(2)    An “Eligible Spouse’s Salaried Plan Pre-Retirement Spouse’s Pension”
means the Pre-Retirement Spouse’s Pension that would be payable to the Eligible
Spouse under the terms of the Salaried Plan.
(3)    An “Eligible Spouse’s Pre-Retirement Spouse’s Pension derived from the
Pre-409A Program” means the Pre-Retirement Spouse’s Pension that would be
payable to the Eligible Spouse under the terms of the Pre-409A Program.
(c)    PEP Guarantee Pre-Retirement Spouse’s Pension: An Eligible Spouse’s PEP
Guarantee Pre-Retirement Spouse’s Pension shall be determined in accordance with
paragraph (1) or (2) below, whichever is applicable, with reference to the PEP
Guarantee (if any) that would have been available to the Participant under
Section 5.2.
(1)    Normal Rule: The Pre-Retirement Spouse’s Pension payable under this
paragraph shall be equal to the amount that would be payable as a survivor
annuity, under a Qualified Joint and Survivor Annuity, if the Participant had:
(i)    Separated from Service on the date of death (or, if earlier, his actual
Separation from Service);
(ii)    Commenced a Qualified Joint and Survivor Annuity on the same date
payments of the Qualified Pre-Retirement Spouse’s Pension are to commence; and

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(iii)    Died on the day immediately following such commencement.
(2)    Special Rule for Active and Disabled Employees: Notwithstanding paragraph
(1) above, the Pre‑Retirement Spouse’s Pension paid on behalf of a Participant
described in Section 4.6(a) shall not be less than an amount equal to 25 percent
of such Participant’s PEP Guarantee determined under Section 5.2. For this
purpose, Credited Service shall be determined as provided in Section 3.3(c)(2)
of Part B the Salaried Plan, and the deceased Participant’s Highest Average
Monthly Earnings, Primary Social Security Amount and Covered Compensation shall
be determined as of his date of death. A Pre-Retirement Spouse’s Pension under
this paragraph is not reduced for early commencement.
Principles similar to those applicable under – (i) Section 5.1(b), and (ii) the
last sentence of Section 5.2(b)(2) shall apply in determining the Pre-Retirement
Spouse’s 409A Pension under this section.
5.4    Certain Adjustments: Pensions determined under the foregoing sections of
this Article are subject to adjustment as provided in this section. For purposes
of this section, “specified plan” shall mean the Salaried Plan or a nonqualified
pension plan similar to this Plan. A nonqualified pension plan is similar to
this Plan if it is sponsored by a member of the PepsiCo Organization and if its
benefits are not based on participant pay deferrals.
(a)    Adjustments for Rehired Participants: This subsection shall apply to a
current or former Participant who is reemployed after his Annuity Starting Date
and

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whose benefit under the Salaried Plan is recalculated based on an additional
period of Credited Service. In the event of any such recalculation, the
Participant’s PEP Pension shall also be recalculated hereunder to the maximum
extent permissible under Section 409A. For this purpose and to the maximum
extent permissible under Section 409A, the PEP Guarantee under Section 5.2 is
adjusted for in-service distributions and prior distributions in the same manner
as benefits are adjusted under the Salaried Plan, but by taking into account
benefits under this Plan and any specified plans.
(b)    Adjustment for Increased Pension Under Other Plans: If the benefit paid
under a specified plan on behalf of a Participant is increased after PEP
benefits on his behalf have been determined (whether the increase is by order of
a court, by agreement of the plan administrator of the specified plan, or
otherwise), then the PEP benefit for the Participant shall be recalculated to
the maximum extent permissible under Section 409A. If the recalculation
identifies an overpayment hereunder, the Plan Administrator shall take such
steps as it deems advisable to recover the overpayment. It is specifically
intended that there shall be no duplication of payments under this Plan and any
specified plans to the maximum extent permissible under Section 409A.
(c)    No Benefit Offsets That Would Violate Section 409A. Effective as of
January 1, 2009, if a Participant has earned a benefit under a plan maintained
by a member of the PepsiCo Organization that is a “qualifying plan” for purposes
of the “Non-Duplication” rule in Section 3.8 of Part A of the Salaried Plan and
the “Transfers and Non-Duplication” rule in Section 3.5 of Part B of the
Salaried Plan, such Transfers

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and Non-Duplication rules shall apply when calculating the Participant’s Total
Pension under Section 5.1(c)(1) above only to the extent the application of such
rule to the Participant’s 409A Pension will not result in a change in the time
or form of payment of such pension that is prohibited by Section 409A. For
purposes of the limit on offsets in the preceding sentence, it is the Company’s
intent to undertake to make special arrangements with respect to the payment of
the benefit under the qualifying plan that are legally permissible under the
qualifying plan and compliant with Section 409A, in order to avoid such a change
in time or form of payment to the maximum extent possible; to the extent that
Section 409A compliant special arrangements are timely put into effect in a
particular situation, the limit on offsets in the prior sentence will not apply.
5.5    Excludable Employment: An executive who has signed a written agreement
with the Company pursuant to which the individual either (i) waives eligibility
under the Plan (even if the individual otherwise meets the definition of
Employee under the Plan), or (ii) agrees not to participate in the Plan, shall
not thereafter become entitled to a benefit or to any increase in benefits in
connection with such employment (whichever applies). Written agreements may be
entered into either before or after the executive becomes eligible for or begins
participation in the Plan, and such written agreement may take any form that is
deemed effective by the Company. This Section 5.5 shall apply with respect to
agreements that are entered into on or after January 1, 2009.
5.6    Pre-409A Pension: A Participant’s Pre-409A Pension is the portion of the
Participant’s Pension that is grandfathered under Treasury Regulation §
1.409A-6(a)(3)(i) and

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(iv). Principles similar to those applicable under – (i) Section 5.1(b), and
(ii) the last sentence of Section 5.2(b)(2) shall apply in determining the
Pre-409A Pension under this section.
5.7    Offset: Notwithstanding any other provision of the Plan, the Company may
reduce the amount of any payment or benefit that is or would be payable to or on
behalf of a Participant by the amount of any obligation of the Participant to
the Company that is or becomes due and payable, provided that (1) the obligation
of the Participant to the Company was incurred during the employment
relationship, (2) the reduction during any Plan Year may not exceed the amount
allowed under Code Section 409A and (3) the reduction is made at the same time
and in the same amount as the obligation otherwise would have been due and
collectable from the Participant.
5.8    Amount of Pre-Retirement Domestic Partner’s Pension: The monthly amount
of the Pre-Retirement Domestic Partner’s 409A Pension payable to a surviving
Eligible Domestic Partner under Section 4.12 shall be determined under
subsection (a) below.
(a)    Calculation: An Eligible Domestic Partner’s Pre-Retirement Domestic
Partner’s 409A Pension shall be equal to:
(1)    The Eligible Domestic Partner’s Total Pre-Retirement Domestic Partner’s
Pension, reduced by
(2)    Each of the following that applies:
(i)    The Eligible Domestic Partner’s Salaried Plan Pre‑Retirement Domestic
Partner’s Pension, and
(ii)    If the Participant’s Annuity Starting Date occurred with respect to his
409A Pension prior to death, but not with respect to

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his Pre-409A Pension (or vice versa), the Eligible Domestic Partner’s
Pre-Retirement Domestic Partner’s Pension that would have been payable if the
Participant’s Annuity Starting Date for such benefit had not already occurred.
(b)    Definitions: The following definitions apply for purposes of this
section:
(1)    An Eligible Domestic Partner’s “Total Pre-Retirement Domestic Partner’s
Pension” means the greater of:
(i)    The amount of the Eligible Domestic Partner’s pre‑retirement domestic
partner’s pension determined under the terms of the Salaried Plan, but without
regard to: (A) the limitations imposed by sections 401(a)(17) and 415 of the
Code (as such limitations are interpreted and applied under the Salaried Plan),
and (B) the actuarial adjustment under Section 5.7(d) of Part B of the Salaried
Plan, or
(ii)    The amount (if any) of the Eligible Domestic Partner’s PEP Guarantee
Pre-Retirement Domestic Partner’s 409A Pension determined under subsection (c).
In making this comparison, the benefits in subparagraphs (i) and (ii) above
shall be calculated as if payable as of what would be the Normal Retirement Date
of the Participant related to the Eligible Domestic Partner.
(2)    An “Eligible Domestic Partner’s Salaried Plan Pre- Retirement Domestic
Partner’s Pension” means the Pre-Retirement Domestic

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Partner’s Pension that would be payable to the Eligible Domestic Partner under
the terms of the Salaried Plan; provided that if such Salaried Plan benefit
commenced prior to the date of commencement under this Plan, the amount of such
pension shall be increased actuarially by the Plan Administrator to the date of
commencement under this Plan.
(c)    PEP Guarantee Pre-Retirement Domestic Partner’s Pension: An Eligible
Domestic Partner’s PEP Guarantee Pre-Retirement Domestic Partner’s 409A Pension
shall be determined in accordance with paragraph (1) or (2) below, whichever is
applicable, with reference to the PEP Guarantee (if any) that would have been
available to the Participant under Section 5.2.
(1)    Normal Rule:The Pre-Retirement Domestic Partner’s 409A Pension payable
under this paragraph shall be equal to the amount that would be payable as a
survivor annuity, under a Qualified Joint and Survivor Annuity, if the
Participant had:
(i)    Separated from Service on the date of death (or, if earlier, his actual
Separation from Service);
(ii)    Commenced a Qualified Joint and Survivor Annuity on the same date
payments of the Qualified Pre­ Retirement Domestic Partner’s Pension are to
commence; and
(iii)    Died on the day immediately following such commencement.

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(2)    Special Rule for Active and Disabled Employees: Notwithstanding paragraph
(1) above, the Pre-Retirement Domestic Partner’s 409A Pension paid on behalf of
a Participant described in Section 4.6(a) shall not be less than an amount equal
to 25 percent of such Participant’s PEP Guarantee determined under Section 5.2.
For this purpose, Credited Service shall be determined as provided in Section
3.3(d)(2) of the Salaried Plan, and the deceased Participant’s Highest Average
Monthly Earnings, Primary Social Security Amount and Covered Compensation shall
be determined as of his date of death. A Pre-Retirement Domestic Partner’s 409A
Pension under this paragraph is not reduced for early commencement.
Principles similar to those applicable under (i) Section 5.1(b), and (ii) the
last sentence of Section 5.2(b)(2) shall apply in determining the Pre-Retirement
Domestic Partner’s 409A Pension under this section.

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ARTICLE VI
Distribution of Benefits
The terms of this Article govern (i) the distribution of benefits to a
Participant who becomes entitled to a 409A Pension, and (ii) the continuation of
benefits (if any) to such Participant’s beneficiary following the Participant’s
death. A Pre-Retirement Spouse’s Pension or Pre-Retirement Domestic Partner’s
Pension derived from the 409A Program shall be payable as an Annuity for the
life of the Eligible Spouse or Eligible Domestic Partner, as applicable, in all
cases, subject to Section 4.9 (cashout distributions). The distribution of a
Pre-409A Pension is governed by the terms of the Pre-409A Program.
6.1    Form and Timing of Distributions: Benefits under the 409A Program shall
be distributed as follows:
(a)    409A Retirement Pension: The following rules govern the distribution of a
Participant’s 409A Retirement Pension:
(1)    Generally: A Participant’s 409A Retirement Pension shall be distributed
as a Single Lump Sum on the first day of the month that is coincident with or
next follows the Participant’s Retirement Date, subject to paragraph (2) and
Section 6.6 (delay for Key Employees).
(2)    Prior Payment Election: Notwithstanding paragraph (1), a Participant who
is entitled to a 409A Retirement Pension and who made an election (i) up to and
including December 31, 2007, and (ii) at least six months prior to and in a
calendar year prior to the Participant’s Annuity Starting Date shall receive his
benefit in accordance with such payment election. A payment

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election allowed a Participant to choose either (i) to receive a distribution of
his benefit in an Annuity form, (ii) to commence distribution of his benefit at
a time other than as provided in paragraph 6.1(a)(1), or both (i) and (ii). A
payment election made by a Participant who is only eligible to receive a Vested
Pension on his Separation from Service shall be disregarded. Subject to Section
4.9 (cashouts), a Participant who has validly elected to receive an Annuity
shall receive his benefit as a Qualified Joint and Survivor Annuity if he is
married or as a Single Life Annuity if he is unmarried, unless he elects one of
the optional forms of payment described in Section 6.2 in accordance with the
election procedures in Section 6.3(a). A Participant shall be considered married
if he is married on his Annuity Starting Date (with such Annuity Starting Date
determined taking into account any election applicable under this subsection).
To the extent a Participant’s benefit commences later than it would under
paragraph 6.1(a)(1) as a result of an election under this paragraph 6.1(a)(2),
the Participant’s benefit will be increased for earnings at the interest rate
used to compute the Actuarial Equivalent lump sum value through the date the
check for payment is prepared, which interest shall be paid at the time elected
by the Participant under this paragraph 6.1(a)(2).
(b)    409A Vested Pension: Subject to Section 4.9, Section 6.6 and subsection
(c) below, a Participant’s 409A Vested Pension shall be distributed in
accordance with paragraph (1) or (2) below, unless, in the case of a Participant
who is married (as determined under the standards in paragraph 6.1(a)(2), above)
or has an

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Eligible Domestic Partner on his Annuity Starting Date, he elects one of the
optional forms of payment distributions in Section 6.2 in accordance with the
election procedures in Section 6.3(a):
(1)    Separation Prior to Age 55: In the case of a Participant who Separates
from Service with at least five years of Service prior to attaining age 55, the
Participant’s 409A Vested Pension shall be distributed as an Annuity commencing
on the first of the month that is coincident with or immediately follows the
date he attains age 55, which shall be the Annuity Starting Date of his 409A
Vested Pension. A distribution under this subsection shall be in the form of a
Qualified Joint and Survivor Annuity if the Participant is married or as a
Single Life Annuity if he is not married; provided that an unmarried Participant
who has an Eligible Domestic Partner may elect a 50% Survivor Annuity or 75%
Survivor Annuity with his Eligible Domestic Partner as his beneficiary as
provided in Section 6.2. A Participant shall be considered married or to have a
domestic partner for purposes of this paragraph if he is married or has an
Eligible Domestic Partner on the Annuity Starting Date of his 409A Vested
Pension.
(2)    Separation at Ages 55 Through 64: In the case of a Participant who
Separates from Service with at least five years but less than ten years of
Service and on or after attaining age 55 but prior to attaining age 65, the
Participant’s 409A Vested Pension shall be distributed as an Annuity (as
provided

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in paragraph (1) above) commencing on the first of the month that follows his
Separation from Service.
(c)    Disability Pension: The portion of a Participant’s 409A Disability
Pension representing Pre-Separation Accruals shall be paid on the first day of
the month following the later of (i) the Participant’s attainment of age 55 and
(ii) the Participant’s Separation from Service. The available forms of payment
for the portion of a Participant’s 409A Disability Pension representing
Pre-Separation Accruals (as defined in Section 4.5) shall be those forms
available to a Participant who is entitled to a Vested Pension or a Retirement
Pension, as set forth in Section 6.2, below (including, to the extent
applicable, the different forms available to a married Participant / Participant
with a domestic partner versus a single Participant). The portion of a
Participant’s 409A Disability Pension representing Post-LTD Accruals shall be
paid on the first day of the month following the Participant’s attainment of age
65 in a lump sum.
6.2    Available Forms of Payment: This section sets forth the payment options
available to a Participant who is entitled to a Retirement Pension under
paragraph 6.1(a)(2) above or a Vested Pension under subsection 6.1(b) above.
(a)    Basic Forms: A Participant who is entitled to a Retirement Pension may
choose one of the following optional forms of payment by making a valid election
in accordance with the election procedures in Section 6.3(a). A Participant who
is entitled to a Vested Pension and who is married on his Annuity Starting Date
may choose one of the optional forms of payment available under paragraph (1),
(2)(ii) or (2)(iii) below with his Eligible Spouse as his beneficiary (and no
other optional form of

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payment available under this subsection (a) shall be permitted to such a
Participant). A Participant who is entitled to a Vested Pension, who is not
married and who has an Eligible Domestic Partner on his Annuity Starting Date
may choose one of the optional forms available under paragraph (2)(ii) or
(2)(iii) below with his Eligible Domestic Partner as his beneficiary (and no
other optional forms of payment available under this subsection shall be
permitted to such a Participant). A Participant who is entitled to a Vested
Pension and who is not married and does not have an Eligible Domestic Partner on
his Annuity Starting Date shall receive a Single Life Annuity. Each optional
annuity is the actuarial equivalent of the Single Life Annuity:
(1)    Single Life Annuity Option: A Participant may receive his 409A Pension in
the form of a Single Life Annuity, which provides monthly payments ending with
the last payment due prior to his death.
(2)    Survivor Options: A Participant may receive his 409A Pension in
accordance with one of the following survivor options:
(i)    100 Percent Survivor Option: The Participant shall receive a reduced 409A
Pension payable for life, ending with the last monthly payment due prior to his
death. Payments in the same reduced amount shall continue after the
Participant’s death to his beneficiary for life, beginning on the first day of
the month coincident with or following the Participant’s death and ending with
the last monthly payment due prior to the beneficiary’s death.

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(ii)    75 Percent Survivor Option: The Participant shall receive a reduced 409A
Pension payable for life, ending with the last monthly payment due prior to his
death. Payments in the amount of 75 percent of such reduced 409A Pension shall
be continued after the Participant’s death to his beneficiary for life,
beginning on the first day of the month coincident with or following the
Participant’s death and ending with the last monthly payment due prior to the
beneficiary’s death.
(iii)    50 Percent Survivor Option: The Participant shall receive a reduced
409A Pension payable for life, ending with the last monthly payment due prior to
his death. Payments in the amount of 50 percent of such reduced 409A Pension
shall be continued after the Participant’s death to his beneficiary for life,
beginning on the first day of the month coincident with or following the
Participant’s death and ending with the last monthly payment due prior to the
beneficiary’s death. A 50 percent survivor option under this paragraph shall be
a Qualified Joint and Survivor Annuity if the Participant’s beneficiary is his
Eligible Spouse.
(iv)    Ten Years Certain and Life Option: The Participant shall receive a
reduced 409A Pension which shall be payable monthly for his lifetime but for not
less than 120 months. If the retired Participant dies before 120 payments have
been made, the monthly 409A Pension

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amount shall be paid for the remainder of the 120 month period to the
Participant’s primary beneficiary (or if the primary beneficiary has predeceased
the Participant, the Participant’s contingent beneficiary).
(b)    Inflation Protection: The following levels of inflation protection may be
provided to any Participant who elects to receive all or a part of his 409A
Retirement Pension as an Annuity:
(1)    5 Percent Inflation Protection: A Participant’s monthly benefit shall be
initially reduced, but thereafter shall be increased if inflation in the prior
year exceeds 5 percent. The amount of the increase shall be the difference
between inflation in the prior year and 5 percent.
(2)    7 Percent Inflation Protection: A Participant’s monthly benefit shall be
initially reduced, but thereafter shall be increased if inflation in the prior
year exceeds 7 percent. The amount of the increase shall be the difference
between inflation in the prior year and 7 percent.
Benefits shall be subject to increase in accordance with this subsection each
January 1, beginning with the second January 1 following the Participant’s
Annuity Starting Date. The amount of inflation in the prior year shall be
determined based on inflation in the 12-month period ending on September 30 of
such year, with inflation measured in the same manner as applies on the
Effective Date for adjusting Social Security benefits for changes in the cost of
living. Inflation protection that is in effect shall carry over to any survivor
benefit payable on behalf of a Participant, and shall increase the otherwise

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applicable survivor benefit as provided above. Any election by a Participant to
receive inflation protection shall be irrevocable by such Participant or his
surviving beneficiary.
6.3    Procedures for Elections: This section sets forth the procedures for
making Annuity Starting Date elections (i.e., elections under Section 6.2).
Subsection (a) sets forth the procedures for making a valid election of an
optional form of payment under Section 6.2 and subsection (b) includes special
rules for Participants with multiple Annuity Starting Dates. An election under
this Article VI shall be treated as received on a particular day if it is: (i)
postmarked that day, or (ii) actually received by the Plan Administrator on that
day. Receipt under (ii) must occur by the close of business on the date in
question, which time is to be determined by the Plan Administrator. Spousal
consent is not required for an election to be valid.
(a)    Election of an Optional Form of Payment: To be valid, an election of an
optional form of Annuity under Section 6.2, for (i) a Participant’s 409A
Retirement Pension (if a proper election was made under paragraph 6.1(a)(2)) or
(ii) a Participant’s 409A Vested Terminated Pension, must be in writing, signed
by the Participant, and received by the Plan Administrator at least one day
prior to the Annuity Starting Date that applies to the Participant’s Pension in
accordance with Section 6.1. In addition, an election under this subsection must
specify one of the optional forms of payment available under Section 6.2 and a
beneficiary, if applicable, in accordance with Section 6.5 below. To the extent
permitted by the Plan Administrator, an election made through electronic media
shall be considered to satisfy the requirement for a written

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election, and an electronic affirmation of such an election shall be considered
to satisfy the requirement for a signed election.
(b)    Multiple Annuity Starting Dates: When amounts become payable to a
Participant in accordance with Article IV, they shall be payable as of the
Participant’s Annuity Starting Date and the election procedures (in this section
and Sections 6.1 and 6.5) shall apply to all of the Participant’s unpaid
accruals as of such Annuity Starting Date, with the following exception. In the
case of a Participant who is rehired after his initial Annuity Starting Date and
who (i) is currently receiving an Annuity that remained in pay status upon
rehire, or (ii) was previously paid a lump sum distribution (other than a
cashout distribution described in Section 4.9(a)), the Participant’s subsequent
Annuity Starting Date (as a result of his subsequent Separation from Service),
and the election procedures at such subsequent Annuity Starting Date, shall
apply only to the portion of his benefit that accrues after his rehire. Any
prior accruals that remain to be paid as of the Participant’s subsequent Annuity
Starting Date shall continue to be payable in accordance with the elections made
at his initial Annuity Starting Date.
(c)    Determination of Marital Status. Effective January 1, 2014, in any case
in which the form of payment of a Participant’s 409A Pension is determined by
his marital status on his Annuity Starting Date, the Plan Administrator shall
assume the Participant is unmarried on his Annuity Starting Date unless the
Participant provides notice to the Plan prior to his Annuity Starting Date,
which is deemed sufficient and satisfactory by the Plan Administrator, that he
is married. The Participant shall give such

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notification to the Plan Administrator when he makes the election described in
subsection (a) above or in accordance with such other procedures that are
established by the Plan Administrator for this purpose (if any). Notwithstanding
the two prior sentences, the Plan Administrator may adopt rules that provide for
a different outcome than specified above.
6.4    Special Rules for Survivor Options: The following special rules shall
apply for the survivor options available under Section 6.2.
(a)    Effect of Certain Deaths: If a Participant makes an election under
Section 6.3(a) to receive his 409A Retirement Pension in the form of an optional
Annuity that includes a benefit for a surviving beneficiary under Section 6.2
and the Participant or his beneficiary (beneficiaries in the case of the
optional form of payment in Section 6.2(a)(2)(iv)) dies prior to the Annuity
Starting Date of such Annuity, the election shall be disregarded. If the
Participant dies after this Annuity Starting Date but before his 409A Retirement
Pension actually commences, the election shall be given effect and the amount
payable to his surviving Eligible Spouse or other beneficiary shall commence on
the first day of the month following his death (any back payments due the
Participant shall be payable to his estate). In the case of a Participant who
has elected the form of payment described in Section 6.2(a)(2)(iv), if such
Participant: (i) dies after his Annuity Starting Date, (ii) without a surviving
primary or contingent beneficiary, and (iii) before receiving 120 payments under
the form of payment, then the remaining payments due under such form of payment
shall be paid to the Participant’s estate. If payments have commenced under such
form of payment to a Participant’s primary or contingent

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beneficiary and such beneficiary dies before payments are completed, then the
remaining payments due under such form of payment shall be paid to such
beneficiary’s estate.
(b)    Non-Spouse Beneficiaries: If a Participant’s beneficiary is not his
Eligible Spouse, he may not elect:
(1)    The 100 percent survivor option described in Section 6.2(a)(2)(i) if his
Eligible Domestic Partner or other non-spouse beneficiary is more than 10 years
younger than he is, or
(2)    The 75 percent survivor option described in Section 6.2(a)(2)(ii) if his
Eligible Domestic Partner or other non-spouse beneficiary is more than 19 years
younger than he is.
6.5    Designation of Beneficiary: A Participant who has elected under Section
6.2 to receive all or part of his Retirement Pension in a form of payment that
includes a survivor option shall designate a beneficiary who will be entitled to
any amounts payable on his death. Such designation shall be made on the election
form used to choose such optional form of payment or an approved election form
filed under the Salaried Plan, whichever is applicable. In the case of the
survivor option described in Section 6.2(a)(2)(iv), the Participant shall be
entitled to name both a primary beneficiary and a contingent beneficiary. A
Participant (whether active or former) shall have the right to change or revoke
his beneficiary designation at any time prior to his Annuity Starting Date. The
designation of any beneficiary, and any change or revocation thereof, shall be
made in accordance with rules adopted by the Plan Administrator. A beneficiary
designation shall not be effective unless and until filed with the

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Plan Administrator. If no beneficiary is properly designated and a Participant’s
elects a survivor’s option described in Section 6.2(a)(2), the Participant’s
beneficiary shall be his Eligible Spouse or Eligible Domestic Partner, as
applicable. A Participant entitled to a Vested Pension does not have the right
or ability to name a beneficiary; if the Participant is permitted under Section
6.2 to elect an optional form of payment, then his beneficiary shall be his
Eligible Spouse or Eligible Domestic Partner, as applicable, on his Annuity
Starting Date.
6.6    Required Delay for Key Employees: Notwithstanding Section 6.1 above, if a
Participant is classified as a Key Employee upon his Separation from Service (or
at such other time for determining Key Employee status as may apply under
Section 409A), then distributions to the Participant shall commence as follows:
(a)    Distribution of a Retirement Pension: In the case of a Key Employee
Participant who is entitled to a 409A Retirement Pension, distributions shall
commence on the earliest first of the month that is at least six months after
the date the Participant Separates from Service (or, if earlier, the
Participant’s death). For periods before 2009, commencement of distributions,
however, shall not be delayed under the preceding sentence if the Participant’s
409A Retirement Pension commences at the same time as his pension under the
Salaried Plan in accordance with Section 6.1(b)(3)(i).
(b)    Distribution of a Vested Pension. In the case of a Participant who is
entitled to a 409A Vested Pension, distributions shall commence as provided in
Section 6.1(b), or if later, on the earliest first of the month that is at least
six months after the Participant’s Separation from Service (or, if earlier, the
Participant’s death). For periods before 2009, commencement of distributions,
however, shall not be delayed

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under the preceding sentence if the Participant’s 409A Vested Pension commences
at the same time as his pension under the Salaried Plan in accordance with
Section 6.1(b)(3)(i).
(c)    Interest Paid for Delay. Any payments to the Participant that are delayed
in accordance with the provisions of this Section 6.6 shall be increased for
earnings at the interest rate used to compute the Actuarial Equivalent lump sum
value through the date the check for payment is prepared, with such delayed
payment and accumulated interest paid as a lump sum payment to the Participant
on the date payment occurs in accordance with subsection (a) or (b) above,
whichever is applicable. If a Participant’s beneficiary or estate is paid under
subsection (a) or (b) above as a result of his death, then any payments that
would have been made to the Participant and that were delayed in accordance with
the provisions of this Section 6.6 shall be paid as otherwise provided in the
Plan, with interest at the rate specified in the preceding sentence through the
date the check for payment is prepared.
6.7    Payment of FICA and Related Income Taxes: As provided in subsections (a)
through (c) below, a portion of a Participant’s 409A Pension shall be paid as a
single lump sum and remitted directly to the Internal Revenue Service (“IRS”) in
satisfaction of the Participant’s FICA Amount and the related withholding of
income tax at source on wages (imposed under Code Section 3401 or the
corresponding withholding provisions of the applicable state, local or foreign
tax laws as a result of the payment of the FICA Amount) and the additional
withholding of income tax at source on wages that is attributable to the
pyramiding of wages and taxes.

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(a)    Timing of Payment: As of the date that the Participant’s FICA Amount and
related income tax withholding are due to be deposited with the IRS, a lump sum
payment equal to the Participant’s FICA Amount and any related income tax
withholding shall be paid from the Participant’s 409A Pension and remitted to
the IRS (or other applicable tax authority) in satisfaction of such FICA Amount
and income tax withholding related to such FICA Amount. The classification of a
Participant as a Key Employee (as defined in Section 2.1) shall have no effect
on the timing of the lump sum payment under this subsection (a).
(b)    Reduction of 409A Pension. To reflect the payment of a Participant’s FICA
Amount and any related income tax liability, the Participant’s 409A Pension
shall be reduced, effective as of the date for payment of the lump sum in
accordance with subsection (a) above, with such reduction being the Actuarial
Equivalent of the lump sum payment used to satisfy the Participant’s FICA Amount
and related income tax withholding. It is expressly contemplated that this
reduction may occur effective as of a date that is after the date payment of a
Participant’s 409A Pension commences.
(A)    No Effect on Commencement of 409A Pension. The Participant’s 409A Pension
shall commence in accordance with the terms of this Plan. The lump sum payment
to satisfy the Participant’s FICA Amount and related income tax withholding
shall not affect the time of payment of the Participant’s actuarially reduced
409A Pension, including not affecting any required delay in payment to a
Participant who is classified as a Key Employee.

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ARTICLE VII
Administration
7.1    Authority to Administer Plan: The Plan shall be administered by the Plan
Administrator, which shall have the authority to interpret the Plan and issue
such regulations as it deems appropriate. The Plan Administrator shall maintain
Plan records and make benefit calculations, and may rely upon information
furnished it by the Participant in writing, including the Participant’s current
mailing address, age and marital status. The Plan Administrator’s
interpretations, determinations, regulations and calculations shall be final and
binding on all persons and parties concerned. Neither the Company nor the Plan
Administrator shall be a fiduciary of the Plan, and any restrictions that might
apply to a party in interest under section 406 of ERISA shall not apply under
the Plan, including with respect to the Company or the Plan Administrator.
7.2    Facility of Payment: Whenever, in the Plan Administrator’s opinion, a
person entitled to receive any payment of a benefit or installment thereof
hereunder is under a legal disability or is incapacitated in any way so as to be
unable to manage his financial affairs, the Plan Administrator may make payments
to such person or to the legal representative of such person for his benefit, or
the Plan Administrator may apply the payment for the benefit of such person in
such manner as it considers advisable. Any payment of a benefit or installment
thereof in accordance with the provisions of this section shall be a complete
discharge of any liability for the making of such payment under the provisions
of the Plan.

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7.3    Claims Procedure: The Plan Administrator shall have the exclusive
discretionary authority to construe and to interpret the Plan, to decide all
questions of eligibility for benefits and to determine the amount of such
benefits, and its decisions on such matters are final and conclusive. As a
result, benefits under this Plan will be paid only if the Plan Administrator
decides in its discretion that the person claiming such benefits is entitled to
them. This discretionary authority is intended to be absolute, and in any case
where the extent of this discretion is in question, the Plan Administrator is to
be accorded the maximum discretion possible. Any exercise of this discretionary
authority shall be reviewed by a court, arbitrator or other tribunal under the
arbitrary and capricious standard (i.e., the abuse of discretion standard). If,
pursuant to this discretionary authority, an assertion of any right to a benefit
by or on behalf of a Participant or beneficiary (a “claimant”) is wholly or
partially denied, the Plan Administrator, or a party designated by the Plan
Administrator, will provide such claimant within the 90-day period following the
receipt of the claim by the Plan Administrator, a comprehensible written notice
setting forth:
(a)    The specific reason or reasons for such denial;
(b)    Specific reference to pertinent Plan provisions on which the denial is
based;
(c)    A description of any additional material or information necessary for the
claimant to submit to perfect the claim and an explanation of why such material
or information is necessary; and

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(d)    A description of the Plan’s claim review procedure (including the time
limits applicable to such process and a statement of the claimant’s right to
bring a civil action under ERISA following a further denial on review).
If the Plan Administrator determines that special circumstances require an
extension of time for processing the claim it may extend the response period
from 90 to 180 days. If this occurs, the Plan Administrator will notify the
claimant before the end of the initial 90-day period, indicating the special
circumstances requiring the extension and the date by which the Plan Committee
expects to make the final decision. The claim review procedure is available upon
written request by the claimant to the Plan Administrator, or the designated
party, within 60 days after receipt by the claimant of written notice of the
denial of the claim. Upon review, the Plan Administrator shall provide the
claimant a full and fair review of the claim, including the opportunity to
submit to the Plan Administrator comments, document, records and other
information relevant to the claim and the Plan Administrator’s review shall take
into account such comments, documents, records and information regardless of
whether it was submitted or considered at the initial determination. The
decision on review will be made within 60 days after receipt of the request for
review, unless circumstances warrant an extension of time not to exceed an
additional 60 days. If this occurs, notice of the extension will be furnished to
the claimant before the end of the initial 60-day period, indicating the special
circumstances requiring the extension and the date by which the Plan
Administrator expects to make the final decision. The final decision shall be in
writing and drafted in a manner calculated to be understood by the claimant;
include specific reasons for the decision with references to the specific Plan
provisions on which the decision is based; and provide that the claimant is
entitled

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to receive, upon request ad free of charge, reasonable access to, and copies of,
all documents, records, and other information relevant to his or her claim for
benefits.
Any claim under the Plan that is reviewed by a court, arbitrator or any other
tribunal shall be reviewed solely on the basis of the record before the Plan
Administrator at the time it made its determination. In addition, any such
review shall be conditioned on the claimant’s having fully exhausted all rights
under this section as is more fully explained in Section 7.5. Any notice or
other notification that is required to be sent to a claimant under this section
may be sent pursuant to any method approved under Department of Labor Regulation
Section 2520.104b-1 or other applicable guidance.
7.4    Effect of Specific References: Specific references in the Plan to the
Plan Administrator’s discretion shall create no inference that the Plan
Administrator’s discretion in any other respect, or in connection with any other
provision, is less complete or broad.
7.5    Claimant Must Exhaust the Plan’s Claims Procedures Before Filing in
Court: Before filing any Claim (including a suit or other action) in court or in
another tribunal, a Claimant must first fully exhaust all of the Claimant’s
rights under the claims procedures of Section 7.3.
(a)    Upon review by any court or other tribunal, the exhaustion requirement of
this Section 7.5 is intended to be interpreted to require exhaustion in as many
circumstances as possible (and any steps necessary to clarify or effect this
intent may be taken).
(b)    In any action or consideration of a Claim in court or in another tribunal
following exhaustion of the Plan’s claims procedure as described in this Section

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7.5, the subsequent action or consideration shall be limited, to the maximum
extent permissible, to the record that was before Plan Administrator in the
claims procedure.
(c)    The exhaustion requirement of this Section 7.5 shall apply: (i)
regardless of whether other Disputes that are not Claims (including those that a
court might consider at the same time) are of greater significance or relevance,
(ii) to any rights the Plan Administrator may choose to provide in connection
with novel Disputes or in particular situations, (iii) regardless of whether the
rights are actual or potential and (iv) even if the Plan Administrator has not
previously defined or established specific claims procedures that directly apply
to the submission and consideration of such Claim (in which case the Plan
Administrator (upon notice of the Claim) shall either promptly establish such
claims procedures or shall apply (or act by analogy to) the claims procedures of
Section 7.5 that apply to claims for benefits).
(d)    The Plan Administrator may make special arrangements to consider a Claim
on a class basis or to address unusual conflicts concerns, and such minimum
arrangements in these respects shall be made as are necessary to maximize the
extent to which exhaustion is required.
(e)    For purposes of this Section 7.5, the following definitions apply.
(i)    A “Dispute” is any claim, dispute, issue, action or other matter.
(ii)    A “Claim” is any Dispute that implicates in whole or in part any one or
more of the following –
(A)    The interpretation of the Plan

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(B)    The interpretation of any term or condition of the Plan
(C)    The interpretation of the Plan (or any of its terms or conditions) in
light of applicable law;
(D)    Whether the Plan or any term or condition under the Plan has been validly
adopted or put into effect;
(E)    The administration of the Plan;
(F)    Whether the Plan, in whole or in part, has violated any terms, conditions
or requirements of ERISA or other applicable law or regulation, regardless of
whether such terms, conditions or requirements are, in whole or in part,
incorporated into the terms, conditions or requirements of the Plan;
(G)    A request for Plan benefits or an attempt to recover Plan benefits;
(H)    An assertion that any entity or individual has breached any fiduciary
duty; or
(I)    Any Claim that: (i) is deemed similar to any of the foregoing by the Plan
Administrator, or (ii) relates to the Plan in any way.
(iii)    A “Claimant” is any Employee, former Employee, Participant, former
Participant, Beneficiary (or the spouse, former spouse, estate, heir or
representative of any of the foregoing individuals),

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or any other individual, person, entity with a relationship to any of the
foregoing individuals or the Plan, as well as any group of one or more of the
foregoing, who has a Claim.
7.6    Limitations on Actions: Effective for claims and actions filed on or
after January 1, 2011, any claim filed under Article VII and any action filed in
state or federal court by or on behalf of a former or current Employee,
Participant, beneficiary or any other individual, person or entity
(collectively, a “Petitioner”) for the alleged wrongful denial of Plan benefits
or for the alleged interference with or violation of ERISA-protected rights must
be brought within two years of the date the Petitioner’s cause of action first
accrues. For purposes of this subsection, a cause of action with respect to a
Petitioner’s benefits under the Plan shall be deemed to accrue not later than
the earliest of (i) when the Petitioner has received the calculation of the
benefits that are the subject of the claim or legal action (ii) the date
identified to the Petitioner by the Plan Administrator on which payments shall
commence, or (iii) when the Petitioner has actual or constructive knowledge of
the facts that are the basis of his claim. For purposes of this subsection, a
cause of action with respect to the alleged interference with ERISA-protected
rights shall be deemed to accrue when the claimant has actual or constructive
knowledge of the acts that are alleged to interfere with ERISA-protected rights.
Failure to bring any such claim or cause of action within this two-year time
frame shall preclude a Petitioner, or any representative of the Petitioner, from
filing the claim or cause of action. Correspondence or other communications
following the mandatory appeals process described in Section 7.3 shall have no
effect on this two-year time frame.

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7.7    Restriction on Venue: Any claim or action filed in court or any other
tribunal in connection with the Plan by or on behalf of a Petitioner (as defined
in Section 7.6 above) shall only be brought or filed in the United States
District Court for the Southern District of New York, effective for claims or
actions filed on or after January 1, 2011.

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ARTICLE VIII
Miscellaneous
8.1    Nonguarantee of Employment: Nothing contained in this Plan shall be
construed as a contract of employment between an Employer and any Employee, or
as a right of any Employee to be continued in the employment of an Employer, or
as a limitation of the right of an Employer to discharge any of its Employees,
with or without cause.
8.2    Nonalienation of Benefits: Benefits payable under the Plan or the right
to receive future benefits under the Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution, or levy of any kind, either voluntary or
involuntary, and any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, charge or otherwise dispose of any right to benefits payable
hereunder, including any assignment or alienation in connection with a divorce,
separation, child support or similar arrangement, shall be null and void and not
binding on the Company. The Company shall not in any manner be liable for, or
subject to, the debts, contracts, liabilities, engagements or torts of any
person entitled to benefits hereunder.
8.3    Unfunded Plan: The Company’s obligations under the Plan shall not be
funded, but shall constitute liabilities by the Company payable when due out of
the Company’s general funds. To the extent the Participant or any other person
acquires a right to receive benefits under this Plan, such right shall be no
greater than the rights of any unsecured general creditor of the Company.

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8.4    Action by the Company: Any action by the Company under this Plan may be
made by the Board of Directors of the Company or by the Compensation Committee
of the Board of Directors, with a report of any actions taken by it to the Board
of Directors. In addition, such action may be made by any other person or
persons duly authorized by resolution of said Board to take such action.
8.5    Indemnification: Unless the Board of Directors of the Company shall
determine otherwise, the Company shall indemnify, to the full extent permitted
by law, any employee acting in good faith within the scope of his employment in
carrying out the administration of the Plan.
8.6    Compliance with Section 409A:
(a)    General: It is the intention of the Company that the Plan shall be
construed in accordance with the applicable requirements of Section 409A.
Further, in the event that the Plan shall be deemed not to comply with Section
409A, then neither the Company, the Board of Directors, the Plan Administrator
nor its or their designees or agents shall be liable to any Participant or other
person for actions, decisions or determinations made in good faith.
(b)    Non-duplication of benefits: In the interest of clarity, and to determine
benefits in compliance with the requirements of Section 409A, provisions have
been included in this 409A Document describing the calculation of benefits under
certain specific circumstances, for example, provisions relating to the
inclusion of salary continuation during certain window severance programs in the
calculation of Highest Average Monthly Earnings, as specified in Appendix C.
Notwithstanding this or any

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similar provision, no duplication of benefits may at any time occur under the
Plan. Therefore, to the extent that a specific provision of the Plan provides
for recognizing a benefit determining element (such as pensionable earnings or
service) and this same element is or could be recognized in some other way under
the Plan, the specific provision of the Plan shall govern and there shall be
absolutely no duplicate recognition of such element under any other provision of
the Plan, or pursuant to the Plan’s integration with the Salaried Plan. This
provision shall govern over any contrary provision of the Plan that might be
interpreted to support duplication of benefits.
8.7    Section 457A: To avoid the application of Code section 457A
(“Section 457A”) to a Participant’s Pension, the following shall apply to a
Participant who transfers to a work location outside of the United States to
provide services to a member of the PepsiCo Organization that is neither a
United States corporation nor a pass-through entity that is wholly owned by a
United States corporation (“Covered Transfer”):
(a)    The Participant shall automatically vest in his or her Pension as of the
last business day before the Covered Transfer;
(b)    From and after the Covered Transfer, any benefit accruals or other
increases or enhancements to the Participant’s Pension relating to –
(1)    Service, or
(2)    The attainment of a specified age while in the employment of the PepsiCo
Organization (“age attainment”),
(collectively, “Benefit Enhancement”) will not be credited to the Participant
until the last day of the Plan Year in which the Participant renders the Service
or has the age

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attainment that results in such Benefit Enhancement, and then only to the extent
permissible under subsection (c) below at that time; and
(c)    The Participant shall have no legal right to (and the Participant shall
not receive) any Benefit Enhancement that relates to Service or age attainment
from and after the Covered Transfer to the extent such Benefit Enhancement would
constitute compensation that is includable in income under Section 457A.
Notwithstanding the foregoing, subsection (a) above shall not apply to a
Participant who has a Covered Transfer if, prior to the Covered Transfer, the
Company provides a written communication (either to the Participant
individually, to a group of similar Participants, to Participants generally, or
in any other way that causes the communication to apply to the Participant –
i.e., an “applicable communication”) that these subsections do not apply to the
Covered Transfer in question. Subsection (b) shall cease to apply as of the
earlier of – (i) the date the Participant returns to service for a member of the
PepsiCo Organization that is a United States corporation or a pass-through
entity that is wholly owned by a United States corporation, or (ii) the
effective date for such cessation that is stated in an applicable communication.
8.8    Authorized Transfers: If a Participant transfers to an entity that is not
part of the PepsiCo Organization, the liability for any benefits accrued while
the Participant was employed by the PepsiCo Organization shall remain with the
Company.

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ARTICLE IX
Amendment and Termination
This Article governs the Company’s right to amend and or terminate the Plan. The
Company’s amendment and termination powers under this Article shall be subject,
in all cases, to the restrictions on amendment and termination in Section 409A
and shall be exercised in accordance with such restrictions to ensure continued
compliance with Section 409A.
9.1    Continuation of the Plan: While the Company and the Employers intend to
continue the Plan indefinitely, they assume no contractual obligation as to its
continuance. In accordance with Section 8.4, the Company hereby reserves the
right, in its sole discretion, to amend, terminate, or partially terminate the
Plan at any time provided, however, that no such amendment or termination shall
adversely affect the amount of benefit to which a Participant or his beneficiary
is entitled under Article IV on the date of such amendment or termination,
unless the Participant becomes entitled to an amount equal to such benefit under
another plan or practice adopted by the Company (except as necessary to comply
with Section 409A). Specific forms of payment are not protected under the
preceding sentence.
9.2    Amendments: The Company may, in its sole discretion, make any amendment
or amendments to this Plan from time to time, with or without retroactive
effect, including any amendment necessary to ensure continued compliance with
Section 409A. An Employer (other than the Company) shall not have the right to
amend the Plan.
9.3    Termination: The Company may terminate the Plan, either as to its
participation or as to the participation of one or more Employers. If the Plan
is terminated with

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respect to fewer than all of the Employers, the Plan shall continue in effect
for the benefit of the Employees of the remaining Employers. Upon termination,
the distribution of Participants’ 409A Pensions shall be subject to restrictions
applicable under Section 409A.
9.4    Change in Control: The Company intends to have the maximum discretionary
authority to terminate the Plan and make distributions in connection with a
Change in Control (defined as provided in Section 409A), and the maximum
flexibility with respect to how and to what extent to carry this out following a
Change in Control as is permissible under Section 409A. The previous sentence
contains the exclusive terms under which a distribution shall be made in
connection with any Change in Control in the case of benefits that are derived
from this 409A Program.

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ARTICLE X
ERISA Plan Structure
This Plan document in conjunction with the plan document(s) for the Pre-409A
Program encompasses three separate plans within the meaning of ERISA, as are set
forth in subsections (a), (b) and (c). This division into separate plans became
effective as of July 1, 1996; previously the plans set forth in subsections (b)
and (c) were a single plan within the meaning of ERISA.
(a)    Excess Benefit Plan: An excess benefit plan within the meaning of section
3(36) of ERISA, maintained solely for the purpose of providing benefits for
Salaried Plan participants in excess of the limitations on benefits imposed by
section 415 of the Code.
(b)    Excess Compensation Top Hat Plan: A plan maintained by the Company
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees within the meaning of sections
201(2) and 401(a)(1) of ERISA. The plan provides benefits for Salaried Plan
participants in excess of the limitations imposed by section 401(a)(17) of the
Code on benefits under the Salaried Plan (after taking into account any benefits
under the Excess Benefit Plan). For ERISA reporting purposes, this portion of
PEP may be referred to as the PepsiCo Pension Equalization Plan I.
(c)    Preservation Top Hat Plan: A plan maintained by the Company primarily for
the purpose of providing deferred compensation for a select group of management
or highly compensated employees within the meaning of sections 201(2)

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and 401(a)(1) of ERISA. The plan provides preserves benefits for those Salaried
Plan participants described in section 5.2(a) hereof, by preserving for them the
pre-1989 level of benefit accrual that was in effect before the Salaried Plan’s
amendment effective January 1, 1989 (after taking into account any benefits
under the Excess Benefit Plan and Excess Compensation Top Hat Plan). For ERISA
reporting purposes, this portion of PEP shall be referred to as the PepsiCo
Pension Equalization Plan II.
Benefits under this Plan shall be allocated first to the Excess Benefit Plan, to
the extent of benefits paid for the purpose indicated in (a) above; then any
remaining benefits shall be allocated to the Excess Compensation Top Hat Plan,
to the extent of benefits paid for the purpose indicated in (b) above; then any
remaining benefits shall be allocated to the Preservation Top Hat Plan. These
three plans are severable for any and all purposes as directed by the Company.
In addition to the above, to the extent that lump sum termination benefits are
paid under this Plan in connection with a severed employee’s Special Early
Retirement (as defined in Appendix Article D) under a temporary severance
program sponsored by the Company, this portion of the Plan shall be a component
of the Company’s unfunded severance plan that includes the temporary program of
severance benefits in question. As a component of a severance plan, the lump sum
termination benefits are welfare benefits, and this portion is part of a
“welfare benefit plan” under ERISA section 3(1). This severance plan component
shall exist solely (i) for the duration of the temporary severance program in
question, and (ii) for the purpose of paying severance benefits. As a portion of
an ERISA welfare plan, any such

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temporary severance benefits hereunder shall not be subject to the reporting
requirements for top hat plans under ERISA or any of the ERISA requirements for
pension plans.

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ARTICLE XI
Applicable Law
All questions pertaining to the construction, validity and effect of the Plan
shall be determined in accordance with the provisions of ERISA. In the event
ERISA is not applicable or does not preempt state law, the laws of the state of
New York shall govern.
If any provision of this Plan is, or is hereafter declared to be, void,
voidable, invalid or otherwise unlawful, the remainder of the Plan shall not be
affected thereby.

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ARTICLE XII
Signature
The above Plan is hereby adopted and approved, to be effective as of April 1,
2016, this 1st day of April, 2016.

 
 
 
 
PEPSICO, INC.
 
 
 
 
By:
/s/ Cynthia M. Trudell
 
 
Cynthia M. Trudell
 
 
Executive Vice President, Human Resources
Chief Human Resources Officer

 
 
APPROVED
 
 
By:
/s/ Stacy DeWalt Grindal
 
Stacy DeWalt Grindal
 
Senior Legal Director, Employee Benefits Counsel
Law Department
 
 
 
 
 
 
By:
/s/ Christine Griff
 
Christine Griff
 
Vice President, Tax Counsel
Tax Department

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APPENDIX
The following Appendix articles modify particular terms of the Plan. Except as
specifically modified in the Appendix, the foregoing main provisions of the Plan
shall fully apply in determining the rights and benefits of Participants and
beneficiaries (and of any other individual claiming a benefit through or under
the foregoing). In the event of a conflict between the Appendix and the
foregoing main provision of the Plan, the Appendix shall govern.

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APPENDIX ARTICLE A -
Transition Provisions
A.1
Scope.

This Article A provides the transition rules for the Plan that were effective at
some time during the period beginning January 1, 2005 and ending December 31,
2008 (the “Transition Period”). The time period during which each provision in
this Article A was effective is set forth below.
A.2
Transition Rules for Article II (Definitions).

(a)    Actuarial Equivalent. In addition to the provisions provided in Article
II for determining actuarial equivalence under the Plan, for the duration of the
Transition Period, to determine the amount of a Pension payable in the form of a
Qualified Joint and Survivor Annuity or optional form of survivor annuity, as an
annuity with inflation protection, or as a Single Life Annuity, the Plan
Administrator used the actuarial factors under the Salaried Plan.
(b)    Key Employee. In addition to the provisions provided in Article II for
identifying Key Employees, the following operating rules were in effect for the
indicated time periods –
(1)    Operating Rules for 2005. To ensure that the Company did not fail to
identify any Key Employees, in the case of Separation from Service distributions
during the 2005 Plan Year, the Company treated as Key Employees all Participants
(and former Participants) classified (or grandfathered) for any portion of the
2005 Plan Year as Band IV and above.

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(2)    Operating Rules for 2006 and 2007. To ensure that the Company did not
fail to identify any Key Employees, in the case of Separation from Service
distributions during the 2006 Plan Year and 2007 Plan Year, the Company treated
as Key Employees for such applicable Plan Year of their Separation from Service
those individuals who met the provisions of (3) or (4) below (or both).
(3)    The Company shall treat as Key Employees all Participants (and former
Participants) who are classified (or grandfathered) as Band IV and above for any
portion of the Plan Year prior to the Plan Year of their Separation from
Service; and
(4)    The Company shall treat as a Key Employee any Participant who would be a
Key Employee as of his or her Separation from Service date based on the
standards in this paragraph (4). For purposes of this paragraph (4), the Company
shall determine Key Employees based on compensation (as defined in Code Section
415(c)(3)) that is taken into account as follows:
(A)    If the determination is in connection with a Separation from Service in
the first calendar quarter of a Plan Year, the determination shall be made using
compensation earned in the calendar year that is two years prior to the current
calendar year (e.g., for a determination made in the first quarter of 2006,
compensation earned in the 2004 calendar year shall be used); and
(B)    If the determination is in connection with a Separation from Service in
the second, third or fourth calendar quarter of a Plan

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Year, the determination shall be made using the compensation earned in the prior
calendar year (e.g., for a determination made in the second quarter of 2006,
compensation earned in the 2005 calendar year shall be used).
A.3
Transition Rules for Article VI (Distributions):

409A Pensions that would have been paid out during the Transition Period under
the provisions set forth in the main body of the Plan (but for the application
of permissible transition rules under Section 409A) shall be paid out on March
1, 2009.
A.4
Transition Rules for Article VII (Administration):

Effective during the Transition Period, the language of Section 8.6(a) shall be
replaced in its entirety with the following language:
“8.6(a)    Compliance with Section 409A:
At all times during each Plan Year, this Plan shall be operated (i) in
accordance with the requirements of Section 409A, and (ii) to preserve the
status of deferrals under the Pre-409A Program as being exempt from Section
409A, i.e., to preserve the grandfathered status of the Pre-409A Program. Any
action that may be taken (and, to the extent possible, any action actually
taken) by the Plan Administrator or the Company shall not be taken (or shall be
void and without effect), if such action violates the requirements of Section
409A or if such action would adversely affect the grandfather of the Pre-409A
Program. If the failure to take an action under the Plan would violate Section
409A, then to the extent it is possible thereby to avoid a violation of Section
409A, the rights and effects under the Plan shall be altered to avoid such

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violation. A corresponding rule shall apply with respect to a failure to take an
action that would adversely affect the grandfather of the Pre-409A Program. Any
provision in this Plan document that is determined to violate the requirements
of Section 409A or to adversely affect the grandfather of the Pre-409A Program
shall be void and without effect. In addition, any provision that is required to
appear in this Plan document to satisfy the requirements of Section 409A, but
that is not expressly set forth, shall be deemed to be set forth herein, and the
Plan shall be administered in all respects as if such provision were expressly
set forth. A corresponding rule shall apply with respect to a provision that is
required to preserve the grandfather of the Pre-409A Program. In all cases, the
provisions of this Section shall apply notwithstanding any contrary provision of
the Plan that is not contained in this Section.”
A.5
Transition Rules for Severance Benefits.

Effective during the Transition Period, the following provisions shall apply
according to their specified terms.
(a)    Definitions:
(1)    Where the following words and phrases, in boldface and underlined, appear
in this Section A.5 with initial capitals they shall have the meaning set forth
below, unless a different meaning is plainly required by the context. Any terms
used in this Article A of the Appendix with initial capitals and not defined
herein shall have the same meaning as in the main Plan, unless a different
meaning is plainly required by the context.

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(2)    “Special Early Retirement” shall mean the Participant’s attainment of at
least age 50 but less than age 55 with 10 years of Elapsed Time Service as of
the date of his Retirement, provided, however, that with respect to the 2008
Severance at Section A.5(d), for purposes of determining whether a Participant
has met the age and service requirements, a Participant’s age and years of
Elapsed Time Service are rounded up to the nearest whole year.
(b)    2005 Severance:
(1)    Non-Retirement Eligible Employees: With respect to any Participant who
terminated in 2005 as a result of a severance window program and who was not
eligible for Retirement as of the date of his Separation from Service, the
Participant’s 409A Pension shall be paid as a Vested Pension under Section
6.1(b) of the Plan document, provided, however, that the Participant’s 409A
Pension will be paid at the same time as his Salaried Plan benefit. The
available forms of payment shall be those forms available to a Participant who
is entitled to a Vested Pension, as set forth in Section 6.2 of the Plan
document.
(2)    Non-Retirement Eligible Employees with Payments in 2007: With respect to
any Participant who terminated in 2005 as a result of a severance window
program, who was not eligible for Retirement as of the date of his Separation
from Service, and whose 409A Pension Payment would otherwise be paid during
2007, the Participant’s 409A Pension shall be paid as a Vested Pension under
Section 6.1(b) of the Plan document, provided, however, that the Participant’s
409A Pension will be paid at the later of (i) January 1, 2007 or (ii)

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when the Participant attained age 55. The available forms of payment shall be
those forms available to a Participant who is entitled to a Vested Pension, as
set forth in Section 6.2 of the Plan document.
(3)    Retirement Eligible Employees: With respect to any Participant who
terminated in 2005 as a result of a severance window program and who fulfilled
the requirements for either a Normal or Early Retirement Pension under Article
IV of the Plan document as of February 5, 2006, the Participant’s 409A Pension
shall be paid on the first day of the month following the Participant’s
Separation from Service in a lump sum.
(4)    Retirement Eligible Employees (With Credit): With respect to any
Participant who terminated in 2005 as a result of a severance window program and
who fulfilled the requirements for either a Normal or Early Retirement Pension
under Article IV of the Plan document as of his Separation from Service as a
result of being provided additional Credited Service time by the Company, the
Participant’s 409A Pension shall be paid on the first day of the month following
the Participant’s Separation from Service in a lump sum.
(5)    Special Early Retirement Eligible: With respect to any Participant who
terminated in 2005 as a result of a severance window program and who fulfilled
the requirements to be eligible for Special Early Retirement as of his
Separation from Service, the Participant’s 409A Pension shall be paid on the
first day of the month following the Participant’s Separation from Service in a
lump sum.

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(c)    2007 Severance:
(1)    Non-Retirement Eligible Employees: With respect to any Participant who
terminated in 2007 as a result of a severance window program and who was not
eligible for Retirement as of the date of his Separation from Service, the
Participant’s 409A Pension shall be paid as a Vested Pension under Section
6.1(b) of the Plan document. The available forms of payment shall be those forms
available to a Participant who is entitled to a Vested Pension, as set forth in
Section 6.2 of the Plan document.
(2)    Retirement Eligible Employees: With respect to any Participant who
terminated in 2007 as a result of a severance window program and who fulfilled
the requirements for either a Normal or Early Retirement Pension under Article
IV of the Plan document as of his Separation from Service, the Participant’s
409A Pension shall be paid on the first day of the month following the
Participant’s Separation from Service in a lump sum; provided, however, that if
a Participant made a valid Prior Payment Election under Section 6.1(a)(2) of the
Plan document, his 409A Pension shall be paid according to such election.
(3)    Employee Who Become Retirement Eligible:
(i)    409A Pension: With respect to any Participant who terminated in 2007 as a
result of a severance window program and who fulfilled the requirements for
either a Normal or Early Retirement Pension under Article IV of the Plan
document between his Separation from Service and the last day of his paid leave
of absence (if any), the

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Participant’s 409A Pension shall be paid on the first day of the month following
the later of (i) Participant’s attainment of age 55 and (ii) his Separation from
Service; the 409A Pension shall be paid as a Vested Pension under Section 6.1(b)
of the Plan document. The available forms of payment shall be those forms
available to a Participant who is entitled to a Vested Pension, as set forth in
Section 6.2 of the Plan document.
(ii)    PEP Kicker: Any amount paid to a Participant otherwise described under
this paragraph (3) as a replacement for benefits that the Participant could have
earned under the Plan but for his Separation from Service shall be paid as a
single lump sum, provided, however, that if a Participant made a valid Prior
Payment Election under Section 6.1(a)(2) of the Plan document, the amounts
described in this subparagraph (ii) shall be paid according to such election.
All amounts to be paid shall be paid on the first day of the month following the
later of (i) the Participant’s attainment of age 55 or (ii) the Participant’s
Separation from Service.
(4)    Special Retirement Eligible Employees:
(i)    409A Pension: With respect to any Participant who terminated in 2007 as a
result of a severance window program and who fulfilled the requirements to be
eligible for Special Early Retirement as of his Separation from Service, the
Participant’s 409A Pension shall be paid on the first day of the month following
the Participant’s attainment of age 55 as a Vested Pension under Section 6.1(b)
of the Plan document.

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The available forms of payment shall be those forms available to a Participant
who is entitled to a Vested Pension, as set forth in Section 6.2 of the Plan
document.
(ii)    PEP Kicker: Any amount paid to a Participant otherwise described under
this paragraph (4) as a replacement for benefits that the Participant could have
earned under the Plan but for his Separation from Service shall be paid as a
single lump sum, provided, however, that if a Participant made a valid Prior
Payment Election under Section 6.1(a)(2) of the Plan document, the amounts
described in this subparagraph (ii) shall be paid according to such election.
All amounts to be paid shall be paid on the first day of the month following the
Participant’s attainment of age 55.
(5)    Employees Who Become Special Retirement Eligible:
(i)    409A Pension: With respect to any Participant who terminated in 2007 as a
result of a severance window program and who fulfilled the requirements to be
eligible for Special Early Retirement during the period between his Separation
from Service and the last day of his paid leave of absence (if any), the
Participant’s 409A Pension shall be paid on the first day of the month following
the Participant’s attainment of age 55 as a Vested Pension under Section 6.1(b)
of the Plan document. The available forms of payment shall be those forms
available to a

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Participant who is entitled to a Vested Pension, as set forth in Section 6.2 of
the Plan document.
(ii)    PEP Kicker: Any amount paid to a Participant otherwise described under
this paragraph (5) as a replacement for benefits that the Participant could have
earned under the Plan but for his Separation from Service shall be paid as a
single lump sum, provided, however, that if a Participant made a valid Prior
Payment Election under Section 6.1(a)(2) of the Plan document, the amounts
described in this subparagraph (ii) shall be paid according to such election.
All amounts to be paid shall be paid on the first day of the month following the
Participant’s attainment of age 55.
(d)    2008 Severance:
(1)    Non-Retirement Eligible Employees: With respect to any Participant who
terminated in 2008 as a result of a severance window program and who was not
eligible for Retirement as of the date of his Separation from Service, the
Participant’s 409A Pension shall be paid as a Vested Pension under Section
6.1(b) of the Plan document. The available forms of payment shall be those forms
available to a Participant who is entitled to a Vested Pension, as set forth in
Section 6.2 of the Plan document.
(2)    Retirement Eligible Employees: With respect to any Participant who
terminated in 2008 as a result of a severance window program and who fulfilled
the requirements for either a Normal or Early Retirement Pension under

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Article IV of the Plan document as of his Separation from Service, the
Participant’s 409A Pension shall be paid on the first day of the month following
the Participant’s Separation from Service in a lump sum; provided, however, that
if a Participant made a valid Prior Payment Election under Section 6.1(a)(2) of
the Plan document, his 409A Pension shall be paid according to such election.
(3)    Employee Who Become Retirement Eligible:
(i)    409A Pension: With respect to any Participant who terminated in 2008 as a
result of a severance window program and who fulfilled the requirements for
either a Normal or Early Retirement Pension under Article IV of the Plan
document between his Separation from Service and the last day of his paid leave
of absence (if any), the Participant’s 409A Pension shall be paid on the first
day of the month following the later of (i) Participant’s attainment of age 55
and (ii) his Separation from Service; the 409A Pension shall be paid as a Vested
Pension under Section 6.1(b) of the Plan document. The available forms of
payment shall be those forms available to a Participant who is entitled to a
Vested Pension, as set forth in Section 6.2 of the Plan document.
(ii)    PEP Kicker: Any amount paid to a Participant otherwise described under
this paragraph (3) as a replacement for benefits that the Participant could have
earned under the Plan but for his Separation from Service shall be paid as a
single lump sum, provided, however, that if a Participant made a valid Prior
Payment Election under Section 6.1(a)(2) of

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the Plan document, the amounts described in this subparagraph (ii) shall be paid
according to such election. All amounts to be paid shall be paid on the first
day of the month following the later of (i) Participant’s attainment of age 55
or (ii) the Participant’s Separation from Service.
(4)    Employees Who Are or Become Special Retirement Eligible:
(i)    409A Pension: With respect to any Participant who terminated in 2008 as a
result of a severance window program and who fulfilled the requirements to be
eligible for Special Early Retirement as of his Separation from Service or
during the period between his Separation from Service and the last day of his
paid leave of absence (if any), the Participant’s 409A Pension shall be paid on
the first day of the month following the Participant’s attainment of age 55 as a
Vested Pension under Section 6.1(b) of the Plan document. The available forms of
payment shall be those forms available to a Participant who is entitled to a
Vested Pension, as set forth in Section 6.2 of the Plan document.
(ii)    PEP Kicker: Any amount paid to a Participant otherwise described under
this paragraph (4) as a replacement for benefits that the Participant could have
earned under the Plan but for his Separation from Service shall be paid as a
single lump sum, provided, however, that if a Participant made a valid Prior
Payment Election under Section 6.1(a)(2) of the Plan document, the amounts
described in this subparagraph (ii) shall be paid according to such election.
All amounts to be paid shall be paid

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on the first day of the month following the Participant’s attainment of age 55.
(e)    Delay for Key Employees: To the extent that a Participant is a Key
Employee (as defined in Section A.2(b), above) with respect to any payment
provided under this Section A.5, and to the extent that payment of his 409A
Pension is on account of his Separation from Service, his 409A Pension shall be
subject to the delay in payment provided under Section 6.6 of the main Plan
document.
(f)    Compliance with 19(c): All payments that are to be made under this
Section A.5 were scheduled to made during the calendar year in which the
Participant terminated employment, with payments to be made as provided herein.
All elections made by the Company with respect to such payments were made in
compliance with Notice 2005-1 and other provisions of Code Section 409A.
A.6
Certain Participants

The following transition rules shall apply only with respect to the following
described Participants:
(a)    A Participant’s PEP Credited Service shall be deemed to be five years if
the Participant terminates employment in 2005 while classified as Band VI (or
equivalent), and his employment with an Employer was for a limited duration
assignment of less than five years. A Participant shall be deemed to be vested
for purposes of this Plan if the Participant terminates employment in 2005 while
classified as Band VI (or equivalent), and his employment with an Employer was
for a limited duration assignment of less than five years.

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(b)    In the case of a Participant who on October 9, 2007 selects an Annuity
Starting Date of November 1, 2007 for the Participant’s Pension under the
Salaried Plan which is payable in a single lump sum (after taking into account
the special rule in Section 6.3(a)(2), if necessary), the portion of the
Participant’s benefit under the Plan that is not subject to Section 409A of the
Code shall be paid in a single lump sum six months after the Participant’s
Annuity Starting Date under the Salaried Plan.
(c)    In the case of a Participant who on September 3, 2004 selects a fixed
date of payment of February 1, 2005 for the Participant’s Pension under the
Plan, the following provisions shall apply:
(1)    Such fixed date shall be the commencement date for the Participant’s
benefit under the Plan, and
(2)    The calculation of the Participant’s benefit under the Plan shall be made
taking into account service to be performed during any period for which the
Participant is to provide consulting services to the Company, even if such
services are to be performed after the payment date specified in paragraph (1).
A.7
Transition Rules for Article VI (409A Disability Pension Pre-Separation
Accruals):

(a)    Distribution: The portion of a Participant’s 409A Disability Pension
representing Pre-Separation Accruals that would have been paid out during the
Transition Period under the provisions set forth in the main body of the Plan
(but for the application of permissible transition rules under Section 409A)
shall commence on March 1, 2009. The available forms of payment of a
Participant’s 409A Disability Pension representing Pre-Separation Accruals shall
be those forms available to a

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Participant who is entitled to a Vested Pension, as set forth in Section 6.2 of
the Plan (including the different forms available to a married versus an
unmarried Participant).
(b)    Additional Benefit: If a Participant who is paid the Pre-Separation
Accruals of his 409A Disability Pension under the provisions of subsection
A.7(a) of this Appendix Article A dies prior to his expected mortality date
(based on the mortality table specified by Schedule 1 of Section 2.1(b)
(Actuarial Equivalent) of the Plan document as of January 1, 2009), his
beneficiary shall be paid the lump sum actuarial equivalent of the annuity
payments that would have been made from the date of the Participant’s death
until his expected mortality date (had the Participant not died). The payment to
the beneficiary shall be made within 30 days following the Participant’s death.
Notwithstanding anything else in Section 6.5 of the Plan, a Participant subject
to this subsection shall be permitted to name a beneficiary (in a form and
manner acceptable to the Plan Administrator) for purposes of receiving the
additional benefit described in this subsection. If the Participant fails to
name a beneficiary for this purpose, his beneficiary shall be the beneficiary
selected under Section 6.5 of the Plan, or if none, then his Eligible Spouse. If
the Participant does not have an Eligible Spouse as of the date of his death,
then his beneficiary shall be his estate.

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APPENDIX ARTICLE B -
Computation of Earnings and Service During Certain Severance Windows
B.1
Definitions:

Where the following words and phrases, in boldface and underlined, appear in
this Appendix C with initial capitals they shall have the meaning set forth
below, unless a different meaning is plainly required by the context. Any terms
used in this Article B of the Appendix with initial capitals and not defined
herein shall have the same meaning as in the main Plan, unless a different
meaning is plainly required by the context.
(a)    “Severance Program” shall mean a program providing certain severance
benefits that are paid while the program’s participants are on a severance leave
of absence that is determined by the Plan Administrator to qualify for
recognition as Service under Section B.3 and Credited Service under Section B.4
of Article B.
(b)    “Eligible Bonus” shall mean an annual incentive payment that is payable
to the Participant under the Severance Program and that is identified under the
terms of the Severance Program as eligible for inclusion in determining the
Participant’s Highest Average Monthly Earnings.
B.2
Inclusion of Salary and Eligible Bonus:

The Plan Administrator may specify that, pursuant to a Participant’s
participation in a severance window program provided by the Company, if a
Participant receives a severance benefit pursuant to a Severance Program, all
salary continuation and any Eligible Bonus earned or to be earned during the
first 12 months of a leave of absence period provided to the Participant under
such Severance Program will be counted toward the Participant’s Highest

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Average Monthly Earnings, even if such salary or other earnings are to be
received after a Participant’s Separation from Service. In particular, if
payment of a Participant’s 409A Pension is to be made at Separation from Service
and prior to the Participant’s receipt of all of the salary continuation or
Eligible Bonus that is payable to the Participant from the Severance Program,
the Participant’s Highest Average Monthly Earnings shall be determined by taking
into account the full salary continuation and eligible bonus that is projected
to be payable to the Participant during the first 12 months of a period of leave
of absence that is granted to the Participant under the Severance Program.
B.3
Inclusion of Credited Service:

The Plan Administrator may specify that, pursuant to a Participant’s
participation in a severance window program provided by the Company, if a
Participant receives a severance benefit under a Severance Program, all Credited
Service earned or to be earned during the first 12 months of the period of
severance will be counted toward the Participant’s Credited Service for purposes
of determining the Participant’s Pension and a Pre-Retirement Spouse’s Pension,
even if the period of time counted as Credited Service under the Severance
Program occurs after a Participant’s Separation from Service.
B.4
Inclusion of Service:

The Plan Administrator may specify that, pursuant to a Participant’s
participation in a severance window program provided by the Company, if a
Participant receives a severance benefit under a Severance Program, all Service
earned or to be earned during the first 12 months of the period of severance
will be counted toward the Participant’s Service for purposes of determining the
Participant’s Pension and a Pre-Retirement Spouse’s Pension, even

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if the period of time counted as Service under the Severance Program occurs
after a Participant’s Separation from Service.
B.5
Reduction to Reflect Early Payment:

If the Participant receives either (1) additional Credited Service or (2)
additional earnings that are included in Highest Average Monthly Earnings under
Sections B.2 or B.3 of this Article B, as a result of a severance benefit
provided under a Severance Program and such additional Credited Service or
earnings are included in the calculation of the Participant’s Pension prior to
the time that the Credited Service is actually performed by the Participant, or
the earnings are actually paid to the Participant, the Pension paid to the
Participant shall be adjusted actuarially to reflect the receipt of the portion
of the Pension attributable to such Credited Service or earnings received on
account of the Severance Program prior to the time such Credited Service is
performed or such earnings are actually paid to the Participant. For purposes of
determining the adjustment to be made, the Plan shall use the rate provided
under the Salaried Plan for early payment of benefits.

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APPENDIX ARTICLE C -
International Transfer Participants
C.1
Scope:

This Article provides special rules for calculating the benefit of an individual
who is an “International Transfer Participant” under Section C.2 below. The
benefit of an International Transfer Participant shall be determined under
Section C.3 below, subject to Section C.4 below. Once a benefit is determined
for an International Transfer Participant under this Article, such benefit shall
be subject to the Plan’s normal conditions and shall be paid in accordance with
the Plan’s normal terms. All benefits paid under this Article are subject to
Code section 409A, including those accrued prior to January 1, 2005. This
Article is effective April 1, 2007.
C.2
International Transfer Participants:

An International Transfer Participant is a Participant who is:
(a)    General Rule: An individual who, following a transfer to an April 2007
Foreign Subsidiary (as defined in paragraph (5) of the Employer definition in
Section 2.1 of Part B of the Salaried Plan, as in effect on January 1, 2014)),
would qualify as an Employee within the meaning of paragraph (2)(vi) of the
Employee definition in Section 2.1 of Part B of the Salaried Plan, as in effect
on January 1, 2014 (U.S. citizen or resident alien on qualifying temporary
international assignment) but for the fact that his assignment with the April
2007 Foreign Subsidiary is in a position of employment that is classified as
Band 4 (or its equivalent) or higher; or
(b)    Special Rule for Certain Permanent Assignments to Mexico: Notwithstanding
subsection (a) above, an International Transfer Participant also

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includes an individual who was transferred to an April 2007 Foreign Subsidiary
based in Mexico, and who would qualify as an Employee within the meaning of
paragraph (2)(vi) of the Employee definition in Section 2.1 of Part B of the
Salaried Plan, as in effect on January 1, 2014 (U.S. citizen or resident alien
on qualifying temporary international assignment) but for the fact that:
(1)    His assignment with the April 2007 Foreign Subsidiary is in a position
that is classified as Band 4 (or its equivalent) or higher;
(2)    Mexico is his home country on the records of the Expat Centre for
Excellence group or its successor (in accordance with such paragraph (2)(vi));
and
(3)    The duration of his assignment with the April 2007 Foreign Subsidiary in
Mexico is not limited to 5 years or less.
An individual described in subsection (a) or (b) above may still qualify as an
International Transfer Participant if his transfer to an April 2007 Foreign
Subsidiary occurred prior to April 1, 2007 (the effective date of this Article),
provided he satisfied the terms of subsection (a) or (b) above on the date of
his transfer.
C.3
Benefit Formula for International Transfer Participants:

Except as provided in this Section C.3, an International Transfer Participant’s
benefit under the Plan shall be determined using a calculation methodology that
is substantially similar to that which applies under Section 5.1 of the Plan.
(a)    Total Pension for International Transfer Participant: Notwithstanding the
preceding sentence, an International Transfer Participant’s “Total Pension” (as
defined in Section 5.1(c)(1) of the Plan) shall be calculated as if he continued
to receive Credited

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Service and Earnings under the Salaried Plan while working for the April 2007
Foreign Subsidiary to which he transferred following his employment with an
Employer based in the United States, without regard to the actual date on which
he ceased receiving Credited Service and Earnings under the Salaried Plan.
However, the Total Pension of an International Transfer Participant whose
transfer to an April 2007 Foreign Subsidiary occurred prior to 1992 shall not
take into account Credited Service and Earnings for employment with the April
2007 Foreign Subsidiary prior to 1992.
(b)    Calculation of International Transfer Participant’s Benefit: The
International Transfer Participant’s benefit under the Plan shall be calculated
by reducing his Total Pension as determined under subsection (a) above
(expressed as a lump sum as of his benefit commencement date under the Plan) by
the following amounts:
(1)    The amount of his actual benefit under the Salaried Plan (expressed as a
lump sum amount on his benefit commencement date), and
(2)    Any amounts paid to him from a “qualifying plan” as that term is defined
under Section 3.6(c)(4) of the Salaried Plan (Transfers and Non-Duplication)
with respect to his assignment with the April 2007 Foreign Subsidiary (with such
amounts expressed as a lump sum on his benefit commencement date under this
Plan).
C.4
Alternative Arrangements Permitted:

Notwithstanding any provision of this Article or the Plan to the contrary, the
Company and a Participant who would qualify as an International Transfer
Participant under Section C.2

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above may agree in writing to disregard the provisions of this Article in favor
of another mutually agreed upon benefit arrangement under the Plan, in which
case this Article shall not apply.

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APPENDIX ARTICLE D
Band 4 or Higher Rehired Yum Participants
D.1
Scope:

Effective May 1, 2009, this Article provides special rules for calculating the
benefit of a transferred Participant whose transfer would be an Eligible
Transfer under Section TRI.2(e) of the Part B of the Salaried Plan but for the
fact that such individual is reemployed by the Company on or after May 1, 2009,
into a position that is classified as Band 4 (or its equivalent) or higher. For
purposes of determining such Participant’s Total Pension within the meaning of
Section 5.1(c)(1), but not for purposes of determining such Participant’s
Salaried Plan Pension within the meaning of Section 5.1(c)(2), such
Participant’s position on reemployment will be deemed to be classified as below
Band 4 (or its equivalent), so that the Participant’s transfer is eligible to be
treated as an Eligible Transfer (subject to the other conditions thereof) and
the Participant is eligible for the imputed service provisions of Section
TRI.4(b) and (c). Such Participant’s benefit otherwise shall be subject to the
Plan’s usual conditions and shall be paid in accordance with the Plan’s usual
terms. All benefits paid under this Article are subject to Code section 409A.

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APPENDIX ARTICLE E -
Time and Form of Payment for Benefits Paid During Severance Windows
E.1
Scope.

This Article E sets forth the time and form of payment provisions that apply to
benefits under the Plan that are paid to a Covered Participant (as defined in
Section E.2 below). This Article is effective for Participants who are
terminated in a Severance Program or under circumstances that qualify them for
an Individual Severance Agreement (each as defined in Section E.2 below) on or
after January 1, 2009 (or in the case of Participants covered by Appendix
Article PBG, on or after January 1, 2012). Nothing in this Article E shall make
any of the additional benefits that are made available under the Plan in any
Severance Program or pursuant to any Individual Severance Agreement a permanent
feature of the Plan.
E.2
Definitions:

Where the following words and phrases appear in this Appendix E with initial
capitals, they shall have the meaning set forth below unless a different meaning
is plainly required by the context. Any terms used in this Article E of the
Appendix with initial capitals and not defined herein shall have the same
meaning as in the main Plan, unless a different meaning is plainly required by
the context.
(a)    “Applicable Summary Plan Description” means the summary plan description
that sets forth the terms and conditions of a particular Severance Program.
(b)    “Covered Participant” means a Participant whose employment with the
Company is terminated and who is eligible for Special Early Retirement either
(i) under a

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Severance Program and pursuant to the terms of the Applicable Summary Plan
Description, or (ii) pursuant to the terms of an Individual Severance Agreement.
(c)    “Individual Severance Agreement” means an agreement between the Company
and a Covered Participant that – (i) sets forth the terms and conditions of the
Covered Participant’s termination of employment and (ii) expressly provides that
the termination qualifies the Covered Participant for Special Early Retirement
under PEP.
(d)    “Kicker” means the Special Early Retirement benefit that is provided to a
Covered Participant pursuant to the terms of an Applicable Summary Plan
Description or an Individual Severance Agreement and that is equal to the
following: (i) the Participant’s benefit under the Salaried Plan and this Plan
as of his Termination Date, determined based on the benefit formulas and early
retirement reduction factors for Early Retirement Pensions under each plan,
minus (ii) the Participant’s Vested Pension under the Salaried Plan and this
Plan as of the Termination Date, determined based on the benefit formulas and
reduction factors for Vested Pensions under each plan. The Kicker shall be
divided into the following components:
(1)    The “PEP Kicker,” which is the portion of the Kicker paid under the Plan
as a replacement for benefits that the Participant could have earned under the
Plan but for his Separation from Service (either in a Severance Program or
pursuant to the terms of an Individual Severance Agreement) prior to attaining
Normal or Early Retirement under the Plan; and
(2)    The “Qualified Kicker,” which is the portion of the Kicker paid under the
Plan as a replacement for benefits that the Participant could have

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earned under the Salaried Plan but for his termination of employment (either in
a Severance Program or pursuant to the terms of an Individual Severance
Agreement) prior to attaining Normal or Early Retirement under the Salaried
Plan.
In determining the early retirement reduction factors for ages before 55, the
monthly rate of reduction applicable between age 56 and age 55 unless (i) in the
case of a Participant who is eligible for Special Early Retirement under a
Severance Program, a different factor is used in the Salaried Plan for employees
covered by the same Severance Program in which case such other factor shall be
used, and (ii) in the case of a Participant who is eligible for Special Early
Retirement pursuant to the terms of an Individual Severance Agreement, a
different factor is called for therein, in which case such other factor shall be
used.
(e)    “Severance Program” has the same meaning that applies to that term under
Appendix Section ERW.2(f) of Part B of the Salaried Plan (legacy PepsiCo
Appendix).
(f)    “Special Early Retirement” means a retirement from the Company that
either – (i) satisfies all of the conditions for receiving special early
retirement benefits that are set forth in an Applicable Summary Plan
Description, or (ii) is expressly recognized as qualifying for special early
retirement benefits pursuant to the terms of an Individual Severance Agreement.
(g)    “Termination Date” means the later of – (i) the Covered Participant’s
Separation from Service, or (ii) date as of which the Covered Participant’s
severance

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leave of absence (if any) is projected to terminate under the terms of the
Applicable Summary Plan Description or the Individual Severance Agreement, as
applicable. If clause (ii) of the preceding sentence applies, then a
Participant’s Termination Date shall be determined as of the date of the
Participant’s Separation from Service using the formulas for calculating the
severance leave of absence, as such formulas are in effect under the Applicable
Summary Plan Description or the Individual Severance Agreement when the legally
binding right to special early retirement benefits arises in connection with the
Severance Program or pursuant to the Individual Severance Agreement. A
Participant’s Termination Date, once set in accordance with the prior two
sentences, shall not change based on any circumstances or events that follow the
date of the Participant’s Separation from Service.
E.3
Time and Form of Payment for 409A Pension:

A Covered Participant’s 409A Pension (calculated without regard to the Kicker
for purposes of this Section E.3) shall be paid as follows:
(a)    Non-Retirement Eligible Participants: If a Covered Participant is not
eligible for Retirement as of his Separation from Service, the Participant’s
409A Pension shall be paid as a Vested Pension under Section 6.1(b) according to
the form of payment provisions applicable to Vested Pensions under Section 6.2.
(b)    Retirement Eligible Participants:
(1)    If the Covered Participant is eligible for a Normal, Early or Late
Retirement Pension under Article IV as of his Separation from Service, the
Participant’s 409A Pension shall be paid as a Retirement Pension under Section

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6.1(a)(1); provided, however, that if the Participant made a valid prior payment
election under Section 6.1(a)(2), his 409A Pension shall be paid as a Retirement
Pension in accordance with such election.
(2)    If the Covered Participant becomes eligible for a Normal or Early
Retirement Pension after his Separation from Service, including during the
period between his Separation from Service and the last day of his paid leave of
absence (if any), the Participant’s 409A Pension shall be paid as a Vested
Pension under Section 6.1(b) according to the form of payment provisions
applicable to Vested Pensions under Section 6.2.
(c)    Special Early Retirement Eligible Participants: If a Covered Participant
is eligible for Special Early Retirement as of his Separation from Service or
becomes so eligible during the period between his Separation from Service and
the last day of his paid leave of absence (if any), the Participant’s 409A
Pension shall be paid as a Vested Pension under Section 6.1(b) according to the
form of payment provisions applicable to Vested Pensions under Section 6.2.
E.4
Time and Form of Payment of Kicker Benefits:

A Covered Participant’s PEP Kicker and Qualified Kicker shall be paid as
follows:
(a)    PEP Kicker: A Participant’s PEP Kicker shall be paid as a single lump sum
on the first day of the month following the later of (i) the Participant’s 55th
birthday, or (ii) the Participant’s Separation from Service; provided, however,
that if the Participant made a valid Prior Payment Election under Section
6.1(a)(2), the Participant’s PEP Kicker

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shall be paid according to such election (even in cases where the Participant’s
409A Pension is paid according to Section E.3(b)(2) above).
(b)    Qualified Kicker: A Participant’s Qualified Kicker shall be paid based on
his Separation from Service as a single lump sum on the first day of the month
coincident or next following his Termination Date; provided, however, that if
the Applicable Summary Plan Description or Individual Severance Agreement that
creates the Participant’s legally binding right to the Qualified Kicker
expressly provides for a different time and/or form of payment, the provisions
of this subsection (b) shall not apply, and the Participant’s Qualified Kicker
shall be paid as provided in the Applicable Summary Plan Description or
Individual Severance Agreement, as applicable.
E.5
Delay for Key Employees:

Notwithstanding any provision of this Appendix E to the contrary, if a
Participant is determined to be a Key Employee, any payment under this Article E
that is made on account of his Separation from Service shall be subject to the
required delay in payment for Key Employees under Section 6.6, except to the
extent that the payment qualifies for an exemption from the application of
Section 409A.

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APPENDIX ARTICLE F -
U.K. Supplementary Appendix Participants with U.S. Service
F.1
Scope:

This Article applies to “Covered U.K. Employees” as defined in Section F.2
below. The benefit of a Covered U.K. Employee shall be determined as provided in
Section F.3 below. Once a benefit is determined for a Covered U.K. Employee
under this Article, it shall be paid in accordance with the Plan’s normal terms
regarding the time and form of payment. All benefits payable under this Article
are subject to Code section 409A. This Article has been restated effective
January 1, 2016 (the original version of this Article was effective January 1,
2011, and it applied, in accordance with its prior terms, to periods of service
before January 1, 2016).
F.2
“Covered U.K. Employee” Defined:

A “Covered U.K. Employee” is a participant in the PepsiCo U.K. Pension Plan
(“U.K. Participant”) who – (i) becomes subject to United States income taxes,
e.g., by transferring to a position with the Company in the United States or
otherwise (hereinafter referenced as “Engages in U.S. Service”), (ii) continues
to accrue benefits under the PepsiCo U.K. Pension Plan after he Engages in U.S.
Service, (iii) would have also accrued a benefit under the U.K. Supplementary
Pension Appendix for such period following when he Engages in U.S. Service
(except for the unavailability of accruals under such Appendix for the period a
U.K. Participant Engages in U.S. Service), (iv) subsequently either – (A) is
localized in the United States as an employee of the PepsiCo Organization, or
(B) terminates employment with the PepsiCo Organization (provided this occurs
before the date the U.K. Participant commences an assignment with the PepsiCo
Organization that is located outside the United States, as defined

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in the Code), and (v) only after fully satisfying all of the preceding clauses,
is then designated by the Company (in its completely unfettered discretion) as a
Covered U.K. Employee and thereby granted a legally binding right to a benefit
under this Article F at the time of the designation. The period that a U.K.
Participant Engages in U.S. Service shall begin on the first day that he becomes
subject to United States income taxes (his “U.S. Commencement Date”), and it
shall end on the date he is no longer subject to U.S. income taxes or, if
earlier, the date his Plan benefits under this Article F commence (his “U.S.
Cessation Date”).
F.3
Benefit for Covered U.K. Employees:

A Covered U.K. Employee’s benefit under the Plan shall be determined by
calculating, as of his Modified U.S. Cessation Date, his “Total U.K.
Supplementary Benefit” and then subtracting from this amount his “Frozen U.K.
Supplementary Benefit.” For this purpose, a Covered U.K. Employee’s—
(a)    “Modifed U.S. Cessation Date” is the earliest of the following – (i) the
date he is no longer subject to U.S. income taxes, (ii) the date he first
satisfies clause (iv) of Section F.2, (iii) the date he commences an assignment
with the PepsiCo Organization that is located outside the United States (as
defined in the Code), or (iv) the date his Plan benefits under this Article F
commence.
(b)    “Total U.K. Supplementary Benefit” is equal to the total benefit that he
would have under the terms of the U.K. Supplementary Pension Appendix,
calculated based on all service and compensation with the Company through his
Modified U.S. Cessation Date that is counted in the calculation of his benefit
under the PepsiCo
U.K. Pension Plan (or that would be counted but for a limitation applicable to
the plan under

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U.K. law), and with such total benefit expressed in the form of a single lump
sum that is payable as of the date his benefits under this Article F commence,
and
(c)    “Frozen U.K. Supplementary Benefit” is equal to the total benefit that he
had under the terms of the U.K. Supplementary Pension Appendix as of immediately
before his U.S. Commencement Date, and with such total benefit expressed in the
form of a single lump sum that is payable as of the date his benefits under this
Article F commence.
The calculation provided for in the preceding sentence shall be made in
accordance with the operating rules set forth in Section F.4 below.
F.4
Operating Rules:

The following operating rules apply to the calculation in Section F.3. above.
(a)    In general, accruals under the PepsiCo U.K. Pension Plan for the period
after a Covered U.K. Employee’s U.S. Cessation Date shall not reduce the benefit
under this Article F determined under Section F.3. Notwithstanding the prior
sentence and anything in Section F.3 to the contrary, to the extent a Covered
U.K. Employee’s accruals under the PepsiCo U.K. Pension Plan for the period
after a Covered U.K. Employee’s U.S. Cessation Date have more than fully offset
the Covered U.K. Employee’s accruals under the U.K. Supplementary Pension
Appendix (and the excess would have been offset against the benefit under this
Article F had such benefit accrued under the U.K. Supplementary Appendix), then
any such excess as of the date benefits under this Article F commence (expressed
as a lump sum as of such date) shall be offset against the

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benefits under this Article F to the extent such offset would not violate Code
Section 409A.
(b)    In determining the value of a lump sum under this Article F, the
actuarial assumptions that are used shall be actuarial assumptions that comply
with Section 417(e) of the Code and, specifically, are the Code Section 417(e)
assumptions that would be used under the PepsiCo Salaried Employees Retirement
Plan to pay a retirement lump sum as of the date applicable that the lump sum in
question is to be determined under this Article F.
(c)    A Covered U.K. Employee’s Frozen U.K. Supplementary Benefit shall be
determined on the basis of assuming that the Covered U.K. employee voluntarily
terminated employment and any other service relationship with the PepsiCo
Organization as of immediately before his U.S. Commencement Date.
(d)    This subsection applies if the terms of the PepsiCo U.K. Pension Plan or
the U.K. Supplementary Pension Appendix are amended during a year in a way that
would change the results under the Section F.3 calculation, and such amendment
otherwise applies earlier than the immediately following year. In this case, to
the extent that doing is necessary to comply with Code Section 409A, the
calculation in Section F.3 shall be made by delaying the application of the
amendment so that it is prospectively effective starting with the immediately
following year.
(e)    In the event a Covered U.K. Employee (i) has earned a benefit under this
Article F, (ii) has reached his U.S. Cessation Date, and (iii) then again
Engages in U.S. Service and meets all of the requirements to be a Covered U.K.
Employee when he again

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Engages in U.S. Service, the foregoing terms shall be applied again to determine
if he earns a benefit for the new period that he Engages in U.S. Service, except
that any resulting benefit from this new period shall be reduced by the lump sum
value of any prior benefit under this Article F (as necessary to completely
avoid any duplication of benefits).
(f)    In the event a Covered U.K. Employee (i) has earned a benefit under this
Article F, (ii) has reached his U.S. Cessation Date, and (iii) then is employed
by the PepsiCo Organization in a classification that would be eligible for an
accrual under the provisions of the Plan other than this Article F (the “Other
Provisions”), then the Other Provisions shall be applied to determine if he
earns a benefit under the Other Provisions for the new period of service, except
that any resulting benefit from this new period of service shall be reduced by
the lump sum value of any prior benefit under this Article F (as necessary to
completely avoid any duplication of benefits).
F.5
No Other Benefits:

A Covered U.K. Employee shall not be entitled to any other benefits under this
Plan or the Salaried Plan while he is a Covered U.K. Employee (or while he would
be a Covered U.K. Employee if clauses (iv) and (v) of Section F.2. were not
included in the definition of Covered U.K. Employee). In addition, prior to the
time that an individual has satisfied all of the requirements to be considered a
Covered U.K. Employee, the individual has no legally binding right to a benefit
under this Article F. Accordingly, for the avoidance of doubt, at any point
before such time, the Company may take action that prevents the individual from
becoming entitled to a benefit under this Article F (e.g., by deciding that it
will not designate the

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individual as a Covered U.K. Employee, in an unfettered exercise of the
Company’s discretion), regardless of the services performed or other actions
taken by the individual through this point in time, and regardless of any other
factor.

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APPENDIX ARTICLE PBG
Effective as of the end of the day on December 31, 2011, the PBG PEP is hereby
merged with and into the PepsiCo PEP, with the PepsiCo PEP as the surviving plan
after the merger. The following Appendix Article PBG governs PBG PEP benefits
that were subject to the 409A PBG PEP Document prior to the merger, except as
follows: Articles VII (Administration), VIII (Miscellaneous), IX (Amendment and
Termination), X (ERISA Plan Structure) and XI (Applicable Law) of the main
section of this document shall govern PBG PEP benefits that were subject to the
409A PBG PEP Document. There shall be no change to the time or form of payment
of benefits that are subject to Code section 409A under either the PepsiCo PEP
or PBG PEP Document as a result of the plan merger or the revisions made to the
409A PBG PEP Document when it was incorporated into this Appendix.
ARTICLE I - HISTORY AND PURPOSE
1.1    History of Plan. The Pepsi Bottling Group, Inc. (“PBG”) established the
PBG Pension Equalization Plan (“PEP” or “Plan”) effective April 6, 1999 for the
benefit of salaried employees of the PBG Organization who participate in the PBG
Salaried Employees Retirement Plan (“Salaried Plan”). The Plan was initially
established as a successor plan to the PepsiCo Pension Equalization Plan, due to
PBG’s April 6, 1999 initial public offering, and the Plan included historical
PepsiCo provisions which are relevant for eligibility and benefit determinations
under the Plan. The Plan provides benefits for eligible employees whose pension
benefits under the Salaried Plan are limited by the provisions of the Internal
Revenue Code of 1986, as amended. In addition, the Plan provides benefits for
certain eligible employees based on the pre-1989 Salaried Plan formula.
Effective April 1, 2009, the Plan also provides benefits for employees

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whose eligible pay under the Salaried Plan is reduced due to the employees’
elective deferrals under the PBG Executive Income Deferral Program and for
certain executives who would be “Grandfathered Participants” under the Salaried
Plan but for their classification as salary band E3-E8 or MP (or its equivalent,
for periods on and after the Effective Time). The Plan is intended as a
nonqualified unfunded deferred compensation plan for federal income tax
purposes. For purposes of the Employee Retirement Income Security Act of 1974
(“ERISA”), the Plan is structured as two plans. The portion of the Plan that
provides benefits based on limitations imposed by Section 415 of the Internal
Revenue Code (the “Code”) is intended to be an “excess benefit plan” as
described in Section 4(b)(5) of ERISA. The remainder of the Plan is intended to
be a plan described in Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA
providing benefits to a select group of management or highly-compensated
employees.
The Plan has been amended from time to time, most recently in the form of an
amendment and complete restatement effective as of April 1, 2009 (“2009
Restatement”). PBG further amended the Plan as a result of the merger of PBG
with and into Pepsi-Cola Metropolitan Bottling Company, Inc., a wholly-owned
subsidiary of PepsiCo, Inc. (the “Company”), pursuant to the Agreement and Plan
of Merger dated as of August 3, 2009 among PBG, the Company and Pepsi-Cola
Metropolitan Company, Inc., and to facilitate the Company’s assumption of PBG’s
role as the Plan’s sponsor.
1.2    Effect of Amendment and Restatement. The Plan as in effect on October 3,
2004 is referred to herein as the Prior Plan.
Except as otherwise explicitly provided in Section 6.1(b)(3) of this Plan, a
Participant’s benefit (including death benefits), determined under the terms of
the Plan as in effect on October 3,

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2004 as if the Participant had terminated employment on December 31, 2004,
without regard to any compensation paid or services rendered after 2004, or any
other events affecting the amount of or the entitlement to benefits (other than
the Participant’s survival or the Participant’s election under the terms of the
Plan with respect to the time or form of benefit) (the “Grandfathered Benefit”)
shall be paid at the time and in the form provided by the terms of the Plan as
in effect on October 3, 2004.
The benefit of a Participant accrued under this Plan based on all compensation
and services taken into account by the Prior Plan and this Plan, less the
Participant’s Grandfathered Benefit, shall be paid in the times and in the form
as provided in this Plan. Except as otherwise explicitly provided in this Plan,
this Plan superseded the Prior Plan effective January 1, 2009, with respect to
amounts accrued and vested after 2004 by Participants who had not commenced
receiving benefits as of January 1, 2009. The Plan was administered in
accordance with a good faith interpretation of Section 409A of the Internal
Revenue Code and IRS regulations and guidance thereunder from January 1, 2005
through December 31, 2008. Amounts accrued under this Plan after 2004 shall be
treated as payable under a separate Plan for purposes of Section 409A of the
Internal Revenue Code.
ARTICLE II - DEFINITIONS AND CONSTRUCTION
2.1    Definitions. The following words and phrases, when used in this Plan,
shall have the meaning set forth below unless the context clearly indicates
otherwise. Unless otherwise expressly qualified by the terms or the context of
this Plan, the terms used in this Plan shall have the same meaning as those
terms in the Salaried Plan.

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(a)    Actuarial Equivalent. Except as otherwise specifically set forth in the
Plan or any Appendix to the Plan with respect to a specific benefit
determination, a benefit of equivalent value computed on the basis of the
factors applicable for such purposes under the Salaried Plan.
(b)    Annuity. A Pension payable as a series of monthly payments for at least
the life of the Participant.
(c)    Code. The Internal Revenue Code of 1986, as amended from time to time.
(d)    Company. PepsiCo, Inc., a corporation organized and existing under the
laws of the State of North Carolina or its successor or successors. For periods
prior to the Effective Time, “Company” means The Pepsi Bottling Group, Inc.”.
(e)    Compensation Limitation. Benefits not payable under the Salaried Plan
because of the limitations on the maximum amount of compensation which may be
considered in determining the annual benefit of the Salaried Plan Participant
under Section 401(a)(17) of the Code.
(f)    Effective Date. The date upon which this Plan was effective, which is
April 6, 1999 (except as otherwise provided herein).
(g)    Effective Time. February 26, 2010.
(h)    EID. The PBG Executive Income Deferral Program, as amended from time to
time.
(i)    Eligible Domestic Partner. Paragraph (1) is effective for applicable
dates (as defined in Paragraph (6) below) on and after January 1, 2016.
Paragraphs (2), (3)

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and (4) are effective for earlier applicable dates. Paragraph (5) includes
general rules. Paragraph (6) sets forth defined terms. The definition of
Eligible Domestic Partner applies solely to a Participant who was actively
employed by or on an Authorized Leave of Absence from a member of the PepsiCo
Organization on or after January 1, 2013 and before January 1, 2016.
(1)    On-Going Provisions. For applicable dates on or after January 1, 2016,
“Eligible Domestic Partner” status is not recognized under the Plan, in light of
the Supreme Court’s 2015 decision that the Constitution guarantees the right to
same-sex marriage.
(a) Limited Exception for 2016 Plan Year. Notwithstanding the foregoing, and
solely for applicable dates in 2016, in the case of a Participant who (i) has a
relationship with an individual on December 31, 2015 that is recognized as an
eligible domestic partner or civil union relationship under paragraph (2) below
and (ii) on any date during the 2015 Plan Year, is either an Employee who is
actively employed or on an Authorized Leave of Absence from the PepsiCo
Organization or a Participant, Eligible Domestic Partner means the individual
with whom the Participant has entered into such an arrangement that was valid on
the applicable date.
(2)    June 26, 2013 through December 31, 2015 Provisions.
(a)    Civil Unions. If on the applicable date the Participant resides in a
state that does not permit same-sex marriage and the

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Participant has entered into a same-sex civil union that is valid on the
applicable date in the state in which it was entered into, the Participant’s
Eligible Domestic Partner (if any) is the individual with whom the Participant
has entered into such a same-sex civil union. If the Participant resides in a
state that does not permit same-sex marriage but does permit same-sex civil
unions, the Participant is not eligible to have an Eligible Domestic Partner
unless the Participant is in a valid same-sex civil union.
(b)    State of Residence Allows Neither Civil Unions Nor Marriage. If the
Participant does not have an Eligible Domestic Partner (and is not ineligible to
have one) pursuant to subsection (a) above, the Participant’s Eligible Domestic
Partner (if any) is the individual with whom the Participant has executed a
legally binding same-sex domestic partner agreement that meets the requirements
set forth in writing by the Company with respect to eligibility for domestic
partner benefits that is in effect on the applicable date. If such Participant
has not entered into such an agreement, the Participant is not eligible to have
an “Eligible Domestic Partner.”
(3)    January 1, 2013 through June 25, 2013 Provisions. For applicable dates
from January 1, 2013 through June 25, 2013, Eligible Domestic Partner means an
individual described in paragraph (2) above, and also includes the following: If
on the applicable date the Participant has entered into a same-sex

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marriage that is valid on the applicable date in the state in which it was
entered into, the Participant’s Eligible Domestic Partner (if any) is the
Participant’s spouse pursuant to such same-sex marriage. If the Participant
resides in a state that permits same-sex marriage, the Participant is not
eligible to have an Eligible Domestic Partner unless either (a) the Participant
is in a valid same-sex marriage or (b) such state did not start to permit
same-sex marriages until less than 12 months before the applicable date.
(4)    Pre-2013 Provisions: For applicable dates before January 1, 2013,
“Eligible Domestic Partner” status was not available in the Plan.
(5)    Additional Rules. This paragraph (5) applies notwithstanding any
provisions in the remainder of this definition of “Eligible Domestic Partner” to
the contrary. The term “Eligible Domestic Partner” does not apply to a
Participant’s Eligible Spouse or to an individual who is of the opposite sex of
the Participant. A Participant who lives in a state that permits same-sex
marriage is not permitted to have an Eligible Domestic Partner. In the case of
applicable dates prior to January 1, 2016, if the Participant’s state started to
permit same-sex marriage or same-sex civil unions less than 12 months before the
applicable date, the Participant is treated as residing in a state that does not
permit same-sex marriage or same-sex civil unions, as the case may be, for
purposes of this definition of Eligible Domestic Partner.
(j)    Employee. An individual who qualifies as an “Employee” as that term is
defined in the Salaried Plan.

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(k)    Employer. An entity that qualifies as an “Employer” as that term is
defined in the Salaried Plan.
(l)    ERISA. Public Law No. 93-406, the Employee Retirement Income Security Act
of 1974, as amended from time to time.
(m)    Participant. An Employee participating in the Plan in accordance with the
provisions of Section 3.1.
(n)    PepsiCo/PBG Organization. The controlled group of organizations of which
the Company is a part, as defined by Section 414 of the Code and the regulations
issued thereunder. An entity shall be considered a member of the PepsiCo/PBG
Organization only during the period it is one of the group of organizations
described in the preceding sentence. The application of this definition for
periods prior to the Effective Time shall take into account the different
definition of “Company” that applies before the Effective Time.
(o)    PEP Pension. One or more payments that are payable to a person who is
entitled to receive benefits under the Plan. The term “Grandfather Benefit”
shall be used to refer to the portion of a PEP Pension that is payable in
accordance with the Plan as in effect October 3, 2004 and is not subject to
Section 409A.
(p)    PepsiCo Prior Plan. The PepsiCo Pension Equalization Plan.
(q)    Plan. Effective January 1, 2012, Appendix Article PBG to the PepsiCo
Pension Equalization Plan, as set forth herein, and as amended from time to
time. Prior to January 1, 2012, the PBG Pension Equalization Plan, as amended
from time to time.

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In these documents, the Plan is also sometimes referred to as PEP. For periods
before April 6, 1999, references to the Plan refer to the PepsiCo Prior Plan.
(r)    Plan Administrator. The PepsiCo Administration Committee (PAC), which
shall have authority to administer the Plan as provided in Article VII of the
main portion of the document.
(s)    Plan Year. The 12-month period ending on each December 31st.
(t)    Primary Social Security Amount. In determining Pension amounts, Primary
Social Security Amount shall mean:
(1)    For purposes of determining the amount of a Retirement, Vested,
Pre-Retirement Spouse’s Pension, or Pre-Retirement Domestic Partner’s Pension,
the Primary Social Security Amount shall be the estimated monthly amount that
may be payable to a Participant commencing at age 65 as an old-age insurance
benefit under the provisions of Title II of the Social Security Act, as amended.
Such estimates of the old-age insurance benefit to which a Participant would be
entitled at age 65 shall be based upon the following assumptions:
(i)    That the Participant’s social security wages in any year prior to
Retirement or severance are equal to the Taxable Wage Base in such year, and
(ii)    That he will not receive any social security wages after Retirement or
severance.
However, in computing a Vested Pension under Section 4.2, the estimate of the
old-age insurance benefit to which a Participant would be entitled at age

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65 shall be based upon the assumption that he continued to receive social
security wages until age 65 at the same rate as the Taxable Wage Base in effect
at the earlier of his severance from employment or the date such participant
ceased to accrue benefits under both the Salaried Plan and this Plan. For
purposes of this subsection, “social security wages” shall mean wages within the
meaning of the Social Security Act.
(2)    For purposes of paragraph (1), the Primary Social Security Amount shall
exclude amounts that may be available because of the spouse or any dependent of
the Participant or any amounts payable on account of the Participant’s death.
Estimates of Primary Social Security Amounts shall be made on the basis of the
Social Security Act as in effect at the Participant’s Severance from Service
Date, without regard to any increases in the social security wage base or
benefit levels provided by such Act which take effect thereafter.
(u)    Salaried Plan. The PepsiCo Salaried Employees Retirement Plan; as it may
be amended from time to time; provided that a Participant’s benefit under this
Plan shall be determined solely by reference to Part C of the Salaried Plan.
(v)    Salaried Plan Participant. An Employee who is a participant in the
Salaried Plan.
(w)    Section 409A. Section 409A of the Code and the applicable regulations and
other guidance issued thereunder.

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(x)    Section 415 Limitation. Benefits not payable under the Salaried Plan
because of the limitations imposed on the annual benefit of a Salaried Plan
Participant by Section 415 of the Code.
(y)    Separation from Service. A Participant’s separation from service as
defined in Section 409A.
(z)    Single Lump Sum. The distribution of a Participant’s total PEP Pension in
excess of the Participant’s Grandfathered Benefit in the form of a single
payment.
(aa)    Specified Employee. The individuals identified in accordance with
principles set forth below.
(1)    General. Any Participant who at any time during the applicable year is:
(i)    An officer of any member of the PBG Organization having annual
compensation greater than $130,000 (as adjusted under Section 416(i)(1) of the
Code);
(ii)    A 5-percent owner of any member of the PBG Organization; or
(iii)    A 1-percent owner of any member of the PBG Organization having annual
compensation of more than $150,000.
For purposes of (i) above, no more than 50 employees identified in the order of
their annual compensation shall be treated as officers. For purposes of this
section, annual compensation means compensation as defined in Treas. Reg. §
1.415(c)-2(a), without regard to Treasury Reg. §§ 1.415(c)-2(d), 1.415(c)-2(e),

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and 1.415(c)-2(g). The Plan Administrator shall determine who is a Specified
Employee in accordance with Section 416(i) of the Code and the applicable
regulations and other guidance of general applicability issued thereunder or in
connection therewith, and provided further that the applicable year shall be
determined in accordance with Section 409A and that any modification of the
foregoing definition that applies under Section 409A shall be taken into
account.
(2)    Applicable Year. Except as otherwise required by Section 409A, the Plan
Administrator shall determine Specified Employees as of the last day of each
calendar year, based on compensation for such year, and such designation shall
be effective for purposes of this Plan for the twelve month period commencing on
April 1st of the next following calendar year.
(3)    Rule of Administrative Convenience. In addition to the foregoing, the
Plan Administrator shall treat all other Employees classified as E5 and above on
the applicable determination date prescribed in subsection (2) (i.e., the last
day of each calendar year) as a Specified Employee for purposes of the Plan for
the twelve-month period commencing of the applicable April 1st date. However, if
there are at least 200 Specified Employees without regard to this provision,
then it shall not apply. If there are less than 200 Specified Employees without
regard to this provision, but full application of this provision would cause
there to be more than 200 Specified Employees, then (to the extent necessary to
avoid exceeding 200 Specified Employees) those Employees classified as E5 and
above

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who have the lowest base salaries on such applicable determination date shall
not be Specified Employees.
(4)    Identification of Specified Employees Between February 26, 2010 and March
31, 2010. Notwithstanding the foregoing, for the period between February 26,
2010 and March 31, 2010, Specified Employees shall be identified by combining
the lists of Specified Employees of all Employers as in effect immediately prior
to the Effective Time. The foregoing method of identifying Specified Employees
is intended to comply with Treas. Reg. § 1.409A-1(i)(6)(i), which authorizes the
use of an alternative method of identifying Specified Employees that complies
with Treas. Reg. §§ 1.409A-1(i)(5) and -1(i)(8) and Section VII.C.4.d of the
Preamble to the Final Regulations under Section 409A of the Code, which permits
“service recipients to simply combine the pre-transaction separate lists of
specified employees where it is determined that such treatment would be
administratively less burdensome.”
(5)     Identification of Specified Employees on and After April 1, 2010.
Notwithstanding the foregoing, for the periods on after April 1, 2010, Key
Employees shall be identified as follows:
(i)     For the period that begins on April 1, 2010, and ends on March 31, 2011,
an employee shall be a Specified Employee (subject to subparagraph (iii) below)
if he was classified as at least a Band IV or its equivalent on December 31,
2009. For this purpose, an employee shall be considered to be at least a Band IV
or its equivalent as of a date if the

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employee is classified as one of the following types of employees in the PepsiCo
Organization on that date: (i) a Band IV employee or above in a PepsiCo
Business, (ii) a Level E7 employee or above in a PBG Business, or (iii) a Salary
Grade 19 employee or above at a PAS Business.
(ii)    For the twelve-month period that begins on April 1, 2011, and for each
twelve-month period that begins on April 1 in subsequent years, an employee
shall be a Specified Employee (subject to subparagraph (iii) below) if the
employee was an employee of the PepsiCo Organization who was classified as Band
IV or above on the December 31 that immediately precedes such April 1.
(iii)    Notwithstanding the rule of administrative convenience in paragraph (3)
above, an employee shall be a Specified Employee for the 12-month period that
begins on any April 1, if as of the preceding December 31 the employee would be
a specified employee, within the meaning of Treasury Regulation 1.409A-1(i), or
any successor, by applying as of such December 31 the default rules that apply
under such regulation for determining the minimum number of a service
recipient’s specified employees. If the preceding sentence and the methods for
identifying Specified Employees set forth in subparagraph (i) or (ii) above,
taken together, would result in more than 200 individuals being counted as
Specified Employees as of any December 31 determination date, then the number of
individuals treated as Specified Employees pursuant to subparagraph (i) or (ii),
who are not described in the first sentence of this subparagraph (iii), shall be
reduced to 200 by eliminating from consideration those employees otherwise added
by such subparagraph in order of their base compensation, from the lowest base
compensation to the highest.
                

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(iv)    For purposes of this paragraph (5), “PAS Business” means each employer,
division of an employer or other organizational subdivision of an employer that
the Company classifies as part of the PAS business; “PBG Business” means each
employer, division of an employer or other organizational subdivision of an
employer that the Company classifies as part of the PBG business; and “PepsiCo
Business” means each employer, division of an employer or other organizational
subdivision of an employer that the Company classifies as part of the PepsiCo
business.
The method for identifying Specified Employees set forth in this definition is
intended as an alternative method of identifying Specified Employees under
Treas. Reg. § 1.409A-1(i)(5), and is adopted herein and shall be interpreted and
applied consistently with the rules applicable to such alternative arrangements.
(bb)    Vested Pension. The PEP Pension available to a Participant who has a
vested PEP Pension and is not eligible for a Retirement Pension.
2.2    Construction. The terms of the Plan shall be construed in accordance with
this section.
(a)    Gender and Number. The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender, and the singular may include the
plural, unless the context clearly indicates to the contrary.
(b)    Compounds of the Word “Here”. The words “hereof”, “hereunder” and other
similar compounds of the word “here” shall mean and refer to the entire Plan,
not to any particular provision or section.

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ARTICLE III - PARTICIPATION
3.1    Each Salaried Plan Participant whose benefit under the Salaried Plan is
curtailed by the Compensation Limitation or the Section 415 Limitation, or both,
and each other Salaried Plan Participant (i) who is a Grandfathered Employee as
defined in Section 3.7 of the Salaried Plan and who made elective deferrals to
the EID on or after April 1, 2009 and before January 1, 2011 (inclusively); (ii)
who would have been considered a Grandfathered Participant as defined in Section
3.7 of the Salaried Plan during the period April 1, 2009 through December 31,
2010 if the Participant had not been classified by the Employer as salary band
E3-E8 or MP on March 31, 2009; or (iii) whose 1988 pensionable “earnings” under
the Salaried Plan, as described in Section 4.2(a), were $75,000 or more, shall
participate in this Plan.
ARTICLE IV - AMOUNT OF RETIREMENT PENSION
4.1    PEP Pension. Subject to Sections 4.5 and 8.7, a Participant’s PEP Pension
shall equal the amount determined under (a) or (b) of this Section 4.1,
whichever is applicable. Such amount shall be determined as of the date of the
Participant’s Separation from Service.
(a)    Same Form as Salaried Plan. If a Participant’s PEP Pension will be paid
in the same form and will commence as of the same time as his pension under the
Salaried Plan, then his monthly PEP Pension shall be equal to the excess of:
(1)    The greater of:
(i)    the monthly pension benefit which would have been payable to such
Participant under the Salaried Plan without regard to (I) the Compensation
Limitation; (II) the Section 415 Limitation; (III) the exclusion from Earnings
of amounts deferred at the election of the

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Participant under the EID on or after April 1, 2009 and before January 1, 2011;
and (IV) the April 1, 2009 through December 31, 2010 exclusion from the Salaried
Plan definition of a Grandfathered Participant of a Participant who, as of March
31, 2009, was classified as salary band E3-E8 or MP and had attained age 50 and
completed five years of Service or whose sum of his age and years of Service was
at least 65; and
(ii)    if applicable, the amount determined in accordance with Section 4.2,
expressed in such form and payable as of such time; over
(2)    The amount of the monthly pension benefit that is in fact payable to such
Salaried Plan Participant under the Salaried Plan, expressed in such form and
payable as of such time.
The amount of the monthly pension benefit so determined, less the portion of
such benefit that is the Participant’s Grandfathered Benefit, shall be payable
as provided in Section 6.2.
(b)    Different Form than Salaried Plan. If a Participant’s PEP Pension will be
paid in a different form (whether in whole or in part) or will commence as of a
different time than his pension benefit under the Salaried Plan, his PEP Pension
shall be the product of:
(1)    The greater of:
(i)    the monthly pension benefit which would have been payable to such
Participant under the Salaried Plan without regard to (I) the Compensation
Limitation; (II) the Section 415 Limitation; (III) the

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exclusion from Earnings of amounts deferred at the election of the Participant
under the EID on or after April 1, 2009 and before January 1, 2011; and (IV) the
March 31, 2009 through December 31, 2010 exclusion from the Salaried Plan
definition of a Grandfathered Participant of a Participant who, as of such date,
was classified as salary band E3-E8 or MP and had attained age 50 and completed
five years of Service or whose sum of his age and years of Service was at least
65; and
(ii)    if applicable, the amount determined in accordance with Section 4.2,
expressed in the form and payable as of such time as applies to his PEP Pension
under this Plan, multiplied by
(2)    A fraction, the numerator of which is the value of the amount determined
in Section 4.1(b)(1), reduced by the value of his pension under the Salaried
Plan, and the denominator of which is the value of the amount determined in
Section 4.1(b)(1) (with value determined on a reasonable and consistent basis,
in the discretion of the Plan Administrator, with respect to similarly situated
employees).
The amount of the monthly pension benefit so determined, less the portion of
such benefit that is the Participant’s Grandfathered Benefit, shall be payable
as provided in Section 6.2.
Notwithstanding the above, in the event any portion of the accrued benefit of a
Participant under this Plan or the Salaried Plan is awarded to an alternate
payee pursuant to a qualified domestic relations order, as such terms are
defined in Section

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414(p) of the Code, the Participant’s total PEP Pension shall be adjusted, as
the Plan Administrator shall determine, so that the combined benefit payable to
the Participant and the alternate payee from this Plan and the Salaried Plan is
the amount determined pursuant to subsections 4.1(a) and (b) above, as
applicable.
4.2    PEP Guarantee. Subject to Section 8.7, a Participant who is eligible
under subsection (a) below shall be entitled to a PEP Guarantee benefit
determined under subsection (b) below, if any.
(a)    Eligibility. A Participant shall be covered by this section if the
Participant has 1988 pensionable earnings from an Employer of at least $75,000.
For purposes of this section, “1988 pensionable earnings” means the
Participant’s remuneration for the 1988 calendar year that was recognized for
benefit accrual received under the Salaried Plan as in effect in 1988. “1988
pensionable earnings” does not include remuneration from an entity attributable
to any period when that entity was not an Employer.
(b)    PEP Guarantee Formula. The amount of a Participant’s PEP Guarantee shall
be determined under paragraph (1), subject to the special rules in paragraph
(2).
(1)    Formula. The amount of a Participant’s PEP Guarantee under this paragraph
shall be determined as follows:
(i)    Three percent of the Participant’s Highest Average Monthly Earnings for
the first 10 years of Credited Service, plus
(ii)    One percent of the Participant’s Highest Average Monthly Earnings for
each year of Credited Service in excess of 10 years, less

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(iii)    One and two-thirds percent of the Participant’s Primary Social Security
Amount multiplied by years of Credited Service not in excess of 30 years.
In determining the amount of a Vested Pension, the PEP Guarantee shall first be
calculated on the basis of (I) the Credited Service the Participant would have
earned had he continued to accrue Credited Service until his Normal Retirement
Age, and (II) his Highest Average Monthly Earnings and Primary Social Security
Amount at the earlier of his Severance from Service Date or the date such
Participant ceased to accrue additional benefits under both the Salaried Plan
and this Plan, and then shall be reduced by multiplying the resulting amount by
a fraction, the numerator of which is the Participant’s actual years of Credited
Service on the earlier of his Severance from Service Date or the date such
Participant ceased to accrue additional benefits under both the Salaried Plan
and this Plan and the denominator of which is the years of Credited Service he
would have earned had he continued to accrue Credited Service until his Normal
Retirement Age.
(2)    Calculation. The amount of the PEP Guarantee shall be determined pursuant
to paragraph (1) above, subject to the following special rules:
(i)    Surviving Eligible Spouse’s or Eligible Domestic Partner’s Annuity:
Subject to subparagraph (iii) below and the last sentence of this subparagraph,
if the Participant has an Eligible Spouse or Eligible

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Domestic Partner and has commenced receipt of an Annuity under this section, the
Participant’s Eligible Spouse or Eligible Domestic Partner shall be entitled to
receive a survivor annuity equal to 50 percent of the Participant’s Annuity
under this section, with no corresponding reduction in such Annuity for the
Participant. Annuity payments to a surviving Eligible Spouse or Eligible
Domestic Partner shall begin on the first day of the month coincident with or
following the Participant’s death and shall end with the last monthly payment
due prior to the Eligible Spouse’s or Eligible Domestic Partner’s death. If the
Eligible Spouse or Eligible Domestic Partner is more than 10 years younger than
the Participant, the survivor benefit payable under this subparagraph shall be
adjusted as provided below.
(A)    For each full year more than 10 but less than 21 that the surviving
Eligible Spouse or Eligible Domestic Partner is younger than the Participant,
the survivor benefit payable to such spouse shall be reduced by 0.8 percent.
(B)    For each full year more than 20 that the surviving Eligible Spouse or
Eligible Domestic Partner is younger than the Participant, the survivor benefit
payable to such spouse shall be reduced by an additional 0.4 percent.
This subparagraph applies only to a Participant who retires on or after his
Early Retirement Date.

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(ii)    Reductions. The following reductions shall apply in determining a
Participant’s PEP Guarantee.
(A)    If the Participant will receive an Early Retirement Pension, the payment
amount shall be reduced by 3/12ths of 1 percent for each month by which the
benefit commencement date precedes the date the Participant would attain his
Normal Retirement Date.
(B)    If the Participant is entitled to a Vested Pension, the payment amount
shall be reduced to the Actuarial Equivalent of the amount payable at his Normal
Retirement Date (if payment commences before such date), and the reductions set
forth in the Salaried Plan for any Pre-Retirement Spouse’s coverage or
Pre-Retirement Domestic Partner’s coverage shall apply.
(C)    This clause applies if the Participant will receive his PEP Guarantee in
a form that provides an Eligible Spouse or Eligible Domestic Partner benefit,
continuing for the life of the surviving spouse or surviving domestic partner,
that is greater than that provided under subparagraph (i). In this instance, the
Participant’s PEP Guarantee under this section shall be reduced so that the
total value of the benefit payable on the Participant’s behalf is the Actuarial
Equivalent of the PEP Guarantee otherwise payable under the foregoing provisions
of this section.

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(D)    This clause applies if the Participant will receive his PEP Guarantee in
a form that provides a survivor annuity for a beneficiary who is not his
Eligible Spouse or Eligible Domestic Partner. In this instance, the
Participant’s PEP Guarantee under this section shall be reduced so that the
total value of the benefit payable on the Participant’s behalf is the Actuarial
Equivalent of a Single Life Annuity for the Participant’s life.
(E)    This clause applies if the Participant will receive his PEP Guarantee in
an Annuity form that includes inflation protection described in the Salaried
Plan. In this instance, the Participant’s PEP Guarantee under this section shall
be reduced so that the total value of the benefit payable on the Participant’s
behalf is the Actuarial Equivalent of the elected Annuity without such
protection.
(iii)    Lump Sum Conversion. The amount of the PEP Guarantee determined under
this section for a Participant whose Retirement Pension will be distributed in
the form of a lump sum shall be the Actuarial Equivalent of the Participant’s
PEP Guarantee determined under this section, taking into account the value of
any survivor benefit under subparagraph (i) above and any early retirement
reductions under subparagraph (ii)(A) above.
(iv)    April 1, 2009 Salaried Plan Changes.
(A)    The amount of the PEP Guarantee determined under this section for a
Participant who, as of March 31, 2009, was classified as

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salary band E3-E8 or MP and who had attained age 50 and completed five years of
Service or (inclusively) whose sum of his age and years of Service was at least
65 shall be determined as if such Participant were a Grandfathered Participant
in the Salaried Plan on April 1, 2009 (so that Earnings and Credited Service
were not frozen as of March 31, 2009 for the period April 1, 2009 through
December 31, 2010).
(B)    Highest Average Monthly Earnings shall be determined without regard to
the exclusion from Earnings under the Salaried Plan of amounts deferred at the
election of the Participant under the EID on or after April 1, 2009 and before
January 1, 2011.
4.3    Certain Adjustments. Pensions determined under the foregoing sections of
this Article are subject to adjustment as provided in this section. For purposes
of this section, “specified plan” shall mean the Salaried Plan or a nonqualified
pension plan similar to this Plan. A nonqualified pension plan is similar to
this Plan if it is sponsored by a member of the PBG Organization and if its
benefits are not based on participant pay deferrals (this category of similar
plans includes the PepsiCo Prior Plan).
(a)    Adjustments for Rehired Participants. This subsection shall apply to a
current or former Participant who is reemployed after his Annuity Starting Date
and (i) whose benefit under the Salaried Plan is recalculated based on an
additional period of Credited Service, or (ii) whose benefit under the Salaried
Plan would have been recalculated, based on an additional period of Credited
Service if the Participant would have been considered a Grandfathered
Participant as defined in Section 3.7 of the

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Salaried Plan if the Participant was not classified by the Employer as salary
band E3-E8 or MP. In such event, the Participant’s PEP Pension shall be
recalculated hereunder. For this purpose, the PEP Guarantee under Section 4.2 is
adjusted for in-service distributions and prior distributions in the same manner
as benefits are adjusted under the Salaried Plan, but by taking into account
benefits under this Plan and any specified plans.
(b)    Adjustment for Increased Pension Under Other Plans. If the benefit paid
under a specified plan on behalf of a Participant is increased after PEP
benefits on his behalf have been determined (whether the increase is by order of
a court, by agreement of the plan administrator of the specified plan, or
otherwise), the PEP benefit for the Participant shall be recalculated. If the
recalculation identifies an overpayment hereunder, the Plan Administrator shall
take such steps as it deems advisable to recover the overpayment. It is
specifically intended that there shall be no duplication of payments under this
Plan and any specified plans.
(c)    No Benefit Offsets That Would Violate Section 409A. If a Participant has
earned a benefit under a plan maintained by a member of the PepsiCo/PBG
Organization that is a “qualifying plan” for purposes of the “Non-Duplication”
rule in Section 3.8 of Part A of the Salaried Plan and the “Transfers and
Non-Duplication” rule in Section 3.6 of Part C of the Salaried Plan, such
Transfers and Non-Duplication rules shall apply when calculating the amount
determined under Section 4.1(a)(1) or 4.1(b)(1) above (as applicable) only to
the extent the application of such rule will not result in a change in the time
or form of payment of such pension that is prohibited by Section

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409A. For purposes of the limit on offsets in the preceding sentence, it is the
Company’s intent to undertake to make special arrangements with respect to the
payment of the benefit under the qualifying plan that are legally permissible
under the qualifying plan, and compliant with Section 409A, in order to avoid
such a change in time or form of payment to the maximum extent possible; to the
extent that Section 409A compliant special arrangements are timely put into
effect in a particular situation, the limit on offsets in the prior sentence
will not apply.
4.4    Reemployment of Certain Participants. In the case of a current or former
Participant who is reemployed and is eligible to reparticipate in the Salaried
Plan after his Annuity Starting Date, payment of his non-Grandfathered PEP
Pension will not be suspended. If such Participant accrues an additional PEP
Pension for service after such reemployment, his PEP Pension on his subsequent
Separation from Service shall be reduced by the present value of PEP benefits
previously distributed to such Participant, as determined by the Plan
Administrator.
4.5    Vesting; Misconduct. Subject to Section 8.7, a Participant shall be fully
vested in his Accrued Benefit at the time he becomes fully vested in his accrued
benefit under the Salaried Plan. Notwithstanding the preceding, or any other
provision of the Plan to the contrary, a Participant shall forfeit his or her
entire PEP Pension if the Plan Administrator determines that such Participant
has engaged in “Misconduct” as defined below, determined without regard to
whether the Misconduct occurred before or after the Participant’s Severance from
Service. The Plan Administrator may, in its sole discretion, require the
Participant to pay to the Employer any PEP Pension paid to the Participant
within the twelve month period

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immediately preceding a date on which the Participant has engaged in such
Misconduct, as determined by the Plan Administrator.
“Misconduct” means any of the following, as determined by the Plan Administrator
in good faith: (i) violation of any agreement between the Company or Employer
and the Participant, including but not limited to a violation relating to the
disclosure of confidential information or trade secrets, the solicitation of
employees, customers, suppliers, licensors or contractors, or the performance of
competitive services, (ii) violation of any duty to the Company or Employer,
including but not limited to violation of the Company’s Code of Conduct; (iii)
making, or causing or attempting to cause any other person to make, any
statement (whether written, oral or electronic), or conveying any information
about the Company or Employer which is disparaging or which in any way reflects
negatively upon the Company or Employer unless required by law or pursuant to a
Company or Employer policy; (iv) improperly disclosing or otherwise misusing any
confidential information regarding the Company or Employer; (v) unlawful trading
in the securities of the Company or of another company based on information
garnered as a result of that Participant’s employment or other relationship with
the Company; (vi) engaging in any act which is considered to be contrary to the
best interests of the Company or Employer, including but not limited to
recruiting or soliciting employees of the Employer; or (vii) commission of a
felony or other serious crime or engaging in any activity which constitutes
gross misconduct. Notwithstanding the foregoing and for the avoidance of doubt,
nothing in this Plan shall prohibit the Participant from communicating with
government authorities concerning any possible legal violations.  The Company
nonetheless asserts and

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does not waive its attorney-client privilege over any information appropriately
protected by the privilege.
ARTICLE V - DEATH BENEFITS
5.1    Death Benefits. Each Participant entitled to a PEP Pension under this
Plan who dies before his Annuity Starting Date shall be entitled to a death
benefit equal in amount to the additional death benefit to which the Participant
would have been entitled under the Salaried Plan if the PEP Pension as
determined under Article IV was payable under the Salaried Plan instead of this
Plan. The death benefit with respect to a Participant’s PEP Pension in excess of
the Grandfathered Benefit shall become payable on the Participant’s date of
death in a Single Lump Sum payment.
Payment of any death benefit of a Participant who dies before his Annuity
Starting Date under the Plan shall be made to the persons and in the proportions
to which any death benefit under the Salaried Plan is or would be paid
(including to a Participant’s Eligible Domestic Partner to whom pre-retirement
death benefits are payable under the Salaried Plan, if any, with respect to
deaths occurring on or after January 1, 2013).
ARTICLE VI - DISTRIBUTIONS
The terms of this Article govern the distribution of benefits to a Participant
who becomes entitled to payment of a PEP Pension under the Plan.
6.1    Form and Timing of Distributions. Subject to Section 6.5, this Section
shall govern the form and timing of PEP Pensions.

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(a)    Time and Form of Payment of Grandfathered Benefit. The Grandfathered
Benefit of a Participant shall be paid in the form and at the time or times
provided by the terms of the Plan as in effect on October 3, 2004.
(b)    Time and Form of Payment of Non-Grandfathered Benefit. Except as provided
below, the PEP Pension payable to a Participant in excess of the Grandfathered
Benefit shall be become payable in a Single Lump Sum on the Separation from
Service of the Participant.
(1)    Certain Vested Pensions. A Participant (i) who incurred a Separation from
Service during the period January 1, 2005 through December 31, 2008 (other than
a Participant described in (3) below); and (ii) whose Annuity Starting Date has
not occurred as of January 1, 2009, shall receive his PEP Pension in excess of
his Grandfathered Benefit in a Single Lump Sum which shall become payable on
January 1, 2009.
(2)    Annuity Election. A Participant who (i) attained age 50 on or before
January 1, 2009, (ii) on or before December 31, 2008 irrevocably elected to
receive a Single Life Annuity, a 50%, 75% or 100% Joint and Survivor Annuity, or
a 10 Year Certain and Life Annuity; and (iii) incurs a Termination of Employment
on or after July 1, 2009 after either attainment of age 55 and the tenth
anniversary of the Participant’s initial employment date or attainment of age 65
and the fifth anniversary of the Participant’s initial employment date, shall
receive his PEP Pension in excess of his Grandfathered Benefit in the form
elected commencing on the first day of the month coincident with or next

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following his Separation from Service. If such Participant Separates from
Service prior to July 1, 2009 or prior to attainment of age 55 and the tenth
anniversary of the Participant’s employment date, or prior to attainment of age
65 and the fifth anniversary of the Participant’s employment, the Participant’s
PEP Pension in excess of his Grandfathered Pension shall be payable in a Single
Lump Sum on the Participant’s Separation from Service.
(3)    2008 Reorganization. The entire PEP Pension of a Participant who (i) was
involuntarily Separated from Service on or after November 1, 2008 and on or
before December 19, 2008; (ii) at the time of Separation from Service had
attained age 50 and had not attained age 55, and had 10 or more years of
Service; and (iii) is eligible for special retirement benefits as described in
the letter agreement executed and not revoked by the Participant, shall become
payable in a Single Lump Sum on the last day of the Participant’s “Transition
Period” as defined in the letter agreement.
(4)    Specified Employees. If a Participant is classified as a Specified
Employee at the time of the Participant’s Separation from Service (or at such
other time for determining Specified Employee status as may apply under Section
409A), then no amount shall be payable pursuant to this Section 6.1(b) until at
least six (6) months after such a Separation from Service. Any payment otherwise
due in such six month period shall be suspended and become payable at the end of
such six month period, with interest at the applicable interest rates

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used for computing a Single Lump Sum payment on the date of Separation from
Service.
(5)    Actual Date of Payment. An amount payable on a date specified in this
Article VI or in Article V shall be paid as soon as administratively feasible
after such date; but no later than the later of (a) the end of the calendar year
in which the specified date occurs; or (b) the 15th day of the third calendar
month following such specified date and the Participant (or Beneficiary) is not
permitted to designate the taxable year of the payment. The payment date may be
postponed further if calculation of the amount of the payment is not
administratively practicable due to events beyond the control of the Participant
(or Beneficiary), and the payment is made in the first calendar year in which
the calculation of the amount of the payment is administratively practicable.
6.2    Special Rules for Survivor Options.
(a)    Effect of Certain Deaths. If a Participant makes an Annuity election
described in Section 6.1(b)(2) and the Participant dies before his Separation
from Service, the election shall be disregarded. Such a Participant may change
his coannuitant of a Joint and Survivor Annuity at any time prior to his
Separation from Service, and may change his beneficiary of a Ten Years Certain
and Life Annuity at any time. If the Participant dies after such election
becomes effective but before his non-Grandfathered PEP Pension actually
commences, the election shall be given effect and the amount payable to his
surviving Eligible Spouse or other beneficiary shall commence on the first day
of

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the month following his death (any back payments due the Participant shall be
payable to his estate). In the case of a Participant who elected a 10 Year
Certain and Life Annuity, if such Participant dies: (i) after benefits have
commenced; (ii) without a surviving primary or contingent beneficiary, and (iii)
before receiving 120 payments under the form of payment, then the remaining
payments due under such form of payment shall be paid to the Participant’s
estate. If payments have commenced under such form of payment to a Participant’s
primary or contingent beneficiary and such beneficiary dies before payments are
completed, then the remaining payments due under such form of payment shall be
paid to such beneficiary’s estate.
(b)    Nonspouse Beneficiaries. If a Participant’s beneficiary is not his
Eligible Spouse, he may not elect:
(1)    The 100 percent survivor option described in Section 6.1(b)(2) with a
nonspouse beneficiary more than 10 years younger than he is, or
(2)    The 75 percent survivor option described in Section 6.1(b)(2) with a
nonspouse beneficiary more than 19 years younger than he is.
6.3    Designation of Beneficiary. A Participant who has elected to receive all
or part of his pension in a form of payment that includes a survivor option
shall designate a beneficiary who will be entitled to any amounts payable on his
death. Such designation shall be made on a PEP Election Form. A Participant
shall have the right to change or revoke his beneficiary designation at any time
prior to when his election is finally effective. The designation of any
beneficiary, and any change or revocation thereof, shall be made in accordance
with rules

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adopted by the Plan Administrator. A beneficiary designation shall not be
effective unless and until filed with the Plan Administrator.
6.4    Determination of Single Lump Sum Amounts. Except as otherwise provided
below, a Single Lump Sum payable under Article V or Section 6.1 shall be
determined in the same manner as the single lump sum payment option prescribed
in Section 6.1(b)(3) of the Salaried Plan.
(a)    Vested Pensions. If on the date of Separation from Service of a
Participant such Participant is not entitled to retire with an immediate pension
under the Salaried Plan, the Single Lump Sum payable to the Participant under
Section 6.1 shall be determined in the same manner as the single lump sum
payment option prescribed in Section 6.1(b)(3) of the Salaried Plan but
substituting (for Plan Years beginning before 2012) the applicable segment rates
for the blended 30 year Treasury and segment rates that would otherwise be
applicable.
(b)    2008 Reorganization. Notwithstanding subsection (a) above, the Single
Lump Sum payment for a Participant whose employment was involuntarily terminated
as a result of the 2008 Reorganization on or after November 1, 2008 and on or
before December 19, 2008 shall be determined based on the applicable interest
rates and mortality used by the Salaried Plan for optional lump sum
distributions in December 2008, provided that in no event shall such Single Lump
Sum payment be less than the Single Lump Sum determined based on the applicable
interest rates and mortality used by the Salaried Plan for lump sum
distributions for the month in which the Single Lump Sum is distributed to the
Participant.

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6.5    Section 162(m) Postponement. Notwithstanding any other provision of this
Plan to the contrary, no PEP Pension shall be paid to any Participant prior to
the earliest date on which the Company’s federal income tax deduction for such
payment is not precluded by Section 162(m) of the Code. In the event any payment
is delayed solely as a result of the preceding restriction, such payment shall
be made as soon as administratively feasible following the first date as of
which Section 162(m) of the Code no longer precludes the deduction by the
Company of such payment. Amounts deferred because of the Section 162(m)
deduction limitation shall be increased by simple interest for the period of
delay at the annual rate of six percent (6%).
APPENDIX TO ARTICLE PBG
Foreword
This Appendix sets forth additional provisions applicable to individuals
specified in the Articles of this Appendix. In any case where there is a
conflict between the Appendix and the main text of the Plan, the Appendix shall
govern.
Article A (Article IPO) – Transferred and Transition Individuals
IPO.1    Scope. This Article supplements the main portion of the Plan document
with respect to the rights and benefits of Transferred and Transition
Individuals following the spinoff of this Plan from the PepsiCo Prior Plan.
IPO.2    Definitions. This section provides definitions for the following words
or phrases in boldface and underlined. Where they appear in this Article with
initial capitals they shall

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have the meaning set forth below. Except as otherwise provided in this Article,
all defined terms shall have the meaning given to them in Section 2.1 of the
Plan.    
(a)    Agreement. The 1999 Employee Programs Agreement between PepsiCo, Inc. and
The Pepsi Bottling Group, Inc.
(b)    Close of the Distribution Date. This term shall take the definition given
it in the Agreement.
(c)    Transferred Individual. This term shall take the definition given it in
the Agreement.
(d)    Transition Individual. This term shall take the definition given it in
the Agreement.
IPO.3    Rights of Transferred and Transition Individuals. All Transferred
Individuals who participated in the PepsiCo Prior Plan immediately prior to the
Effective Date shall be Participants in this Plan as of the Effective Date. The
spinoff of this Plan from the PepsiCo Prior Plan shall not result in a break in
the Service or Credited Service of Transferred Individuals or Transition
Individuals. Notwithstanding anything in the Plan to the contrary, and as
provided in Section 2.04 of the Agreement, all service, all compensation, and
all other benefit-affecting determinations for Transferred Individuals that, as
of the Close of the Distribution Date, were recognized under the PepsiCo Prior
Plan for periods immediately before such date, shall as of the Effective Date
continue to receive full recognition, credit and validity and shall be taken
into account under this Plan as if such items occurred under this Plan, except
to the extent that duplication of benefits would result. Similarly,
notwithstanding anything to the contrary in the

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Plan, the benefits of Transition Individuals shall be determined in accordance
with section 8.02 of the Agreement.

Article B – Special Cases
B.1    This Article B of the Appendix supplements the main portion of the Plan
document and is effective as of January 28, 2002.
B.2    This Article shall apply to certain highly compensated management
individuals who were (i) hired as a Band IV on or about January 28, 2002 and
(ii) designated by the Senior Vice President of Human Resources as eligible to
receive a supplemental retirement benefit (the “Participant”).
B.3    Notwithstanding Article IV of the Plan, the amount of the total PEP
Pension under this Plan shall be equal to the excess of (1) the monthly pension
benefit which would have been payable to such individual under the Salaried Plan
without regard to the Compensation Limitation and the Section 415 Limitation,
determined as if such individual’s employment commencement date with the Company
were September 10, 1990; (2) the sum of (i) the amount of the monthly pension
benefit that is in fact payable under the Salaried Plan; and (ii) the monthly
amount of such individual’s deferred, vested benefit under any qualified or
nonqualified defined benefit pension plan maintained by PepsiCo., Inc. or any
affiliate of PepsiCo., Inc., Tricon or YUM!, as determined by the administrator
using reasonable assumptions to adjust for different commencement dates so that
the total benefit of such individual does not exceed the amount described in (1)
above.

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B.4    In the event of the death of such individual while employed by the
Company, the individual’s beneficiary shall be entitled to a death benefit as
provided in Article V, determined based on the formula for the total benefit
described above, and reduced by the survivor benefits payable by the Salaried
Plan and the other plans described above. The net amount so determined shall be
payable in a Single Lump Sum as prescribed in Article V.
B.5    The Plan Administrator shall, in its sole discretion, adjust any benefit
determined pursuant to this Article B to the extent necessary or appropriate to
ensure that such individual’s benefit in the aggregate does not exceed the
Company’s intent to ensure overall pension benefits equal to the benefits that
would be applicable if such individual had been continuously employed by the
Company for the period commencing September 10, 1990 to the date of Separation
from Service.
Article C – Transfers From/To PepsiCo, Inc.
The provisions of this Article C shall only apply to transfers that occur before
February 26, 2010 and shall not apply to any transfer to PepsiCo, Inc. or from
PepsiCo, Inc. that occurs on or after such date.
C.1    This Article supplements and overrides the main portion of the Plan with
respect to Participants who (i) transfer from the Company to PepsiCo, Inc.; and
(ii) transfer from PepsiCo, Inc. to the Company.
C.2    Notwithstanding Article IV of the Plan, the PEP Pension of a Participant
who (i) transfers from the Company to PepsiCo., Inc. or (ii) transfers to
PepsiCo, Inc. from the Company shall be determined as set forth below.

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C.3    Transfers to PepsiCo, Inc. The PEP Pension of a Participant who transfers
to PepsiCo, Inc. shall be determined as of the date of such transfer in the
manner described in Article IV, including the Salaried Plan offset regardless of
whether such benefit under the Salaried Plan is transferred to a qualified plan
of PepsiCo, Inc. On such Participant’s Separation from Service, the PEP Pension
so determined shall become payable in accordance with Article VI.
C.4    Transfers from PepsiCo., Inc. The PEP Pension of a Participant who
transfers from PepsiCo, Inc. shall be determined as of the date of the
Participant’s Separation from Service in the manner described in Article IV and
shall be reduced by any benefit accrued by the Participant under any qualified
or nonqualified plan maintained by PepsiCo, Inc. that is based on credited
service included in the determination of the Participant’s benefit under this
Plan so that the total benefit from all plans does not exceed the benefit the
Participant would have received had the Participant been solely employed by the
Company. Notwithstanding the preceding, effective for transfers on or after
January 1, 2005, in no event shall such benefit be less than the benefit the
Participant would have received based solely on the Participant’s employment by
the Company. The Plan Administrator shall make such adjustments as the Plan
Administrator deems appropriate to effectuate the intent of this Section C.4.

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ARTICLE PAC
Guiding Principles Regarding Benefit Plan Committee Appointments
PAC.1 Scope. This Article PAC supplements the PepsiCo Pension Equalization Plan
document with respect to the appointment of the members of the PAC.
PAC.2 General Guidelines. To be a member of the PAC, an individual must:
(a)    Be an employee of the PepsiCo Organization at a Band 1 or above level,
(b)    Be able to give adequate time to committee duties, and
(c)    Have the character and temperament to act prudently and diligently in the
exclusive interest of the Plan’s participants and beneficiaries.
PAC.3 PAC Guidelines. In addition to satisfying the requirements set forth in
Section PAC.2, the following guidelines will also apply to the PAC membership:
(a)    Each member of the PAC should have experience with benefit plan
administration or other experience that can readily translate to a role
concerning ERISA plan administration,
(b)    The membership of the PAC as a whole should have experience and expertise
with respect to the administration of ERISA health and welfare and retirement
plans, and
(c)    Each member of the PAC should be capable of prudently evaluating the
reasonableness of expenses that are charged to the Plan.
PAC.4 Additional Information. The Chair of the PAC may seek information from
Company personnel, including the Controller, CFO and CHRO, in connection with
his identification of well qualified candidates for committee membership.

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PAC.5 Role of the Guidelines. The foregoing guidelines in this Article PAC are
intended to guide the Chair of the PAC in the selection of committee members;
however, they neither diminish nor enlarge the legal standard applicable under
ERISA.

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PEPSICO
PENSION EQUALIZATION PLAN
(PEP)
Plan Document for the Pre-Section 409A Program
April 1, 2016 Restatement

--------------------------------------------------------------------------------

PEPSICO PENSION EQUALIZATION PLAN
Table of Contents
 
 
Page No.
ARTICLE I.
FOREWORD
1
ARTICLE II.
DEFINITIONS AND CONSTRUCTION
4
2.1
Definitions
4
 
Accrued Benefit
4
 
Actuarial Equivalent
4
 
Advance Election
6
 
Annuity
6
 
Annuity Start Date
6
 
Authorized Leave of Absence
6
 
Cashout Limit
6
 
Code
6
 
Company
6
 
Covered Compensation
7
 
Credited Service
7
 
Disability Retirement Pension
7
 
Early Retirement Pension
7
 
Effective Date
7
 
Eligible Spouse
7
 
Employee
7
 
Employer
7
 
ERISA
7
 
FICA Amount
8
 
409A Program
8
 
Guiding Principles Regarding Benefit Plan Committee Appointments
8
 
Highest Average Monthly Earnings
8
 
Late Retirement Date
8
 
Late Retirement Pension
8
 
Normal Retirement Age
8
 
Normal Retirement Date
9
 
Normal Retirement Pension
9
 
Participant
9
 
PBGC
9
 
PBGC Rate
9
 
Pension
9
 
PEP Election
9
 
PepsiCo Administration Committee or PAC
10
 
PepsiCo Organization
10
 
Plan
10

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Plan Administrator
11
 
Plan Year
11
 
Post-2004 Participant
11
 
Pre-409A Program
11
 
Pre-Retirement Spouse's Pension
11
 
Pre-2005 Participant
11
 
Primary Social Security Amount
11
 
Qualified Joint and Survivor Annuity
13
 
Retirement
14
 
Retirement Date
14
 
Retirement Pension
14
 
Salaried Plan
14
 
Section 409A
14
 
Service
14
 
75 Percent Survivor Annuity
15
 
Severance from Service Date
15
 
Single Life Annuity
15
 
Single Lump Sum
15
 
Social Security Act
15
 
Taxable Wage Base
16
 
Vested Pension
16
2.2
Construction
16
ARTICLE III.
Participation and Service
18
3.1
Participation
18
3.2
Service
18
3.3
Credited Service
18
ARTICLE IV.
Requirements for Benefits
19
4.1
Normal Pre-409A Retirement Pension
19
4.2
Early Pre-409A Retirement Pension
19
4.3
Pre-409A Vested Pension
19
4.4
Late Pre-409A Retirement Pension
20
4.5
Pre-409A Disability Retirement Pension
20
4.6
Pre-Retirement Spouse’s Pre-409A Pension
21
4.7
Vesting
22
4.8
Time of Payment
22
4.9
Cashout Distributions
23
4.10
Reemployment of Certain Participants
27
ARTICLE V.
Amount of Retirement Pension
29

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5.1
Participant’s Pre-409A Pension
29
5.2
PEP Guarantee
32
5.3
Amount of Pre-Retirement Spouse’s Pre-409A Pension
37
5.4
Certain Adjustments
40
5.5
Excludable Employment
41
ARTICLE VI.
Distribution Options
43
6.1
Form and Timing of Distributions
43
6.2
Available Forms of Payment
46
6.3
Procedures for Elections
50
6.4
Special Rules for Survivor Options
53
6.5
Designation of Beneficiary
54
6.6
Payment of FICA and Related Income Taxes
55
ARTICLE VII.
Administration
57
7.1
Authority to Administer Plan
57
7.2
Facility of Payment
57
7.3
Claims Procedure
57
7.4
Effect of Specific References
60
7.5
Claimant Must Exhaust the Plan’s Claims Procedures Before Filing in Court
60
7.6
Limitations on Actions
63
7.7
Restriction on Venue
63
ARTICLE VIII.
MISCELLANEOUS
65
8.1
No guarantee of Employment
65
8.2
Nonalienation of Benefits
65
8.3
Unfunded Plan
65
8.4
Action by the Company
65
8.5
Indemnification
66
8.6
Code Section 409A
66
8.7
Authorized Transfers
66
ARTICLE IX.
Amendment and Termination
67
9.1
Continuation of the Plan
67
9.2
Amendments
67
9.3
Termination
68

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ARTICLE X.
ERISA Plan Structure
69
ARTICLE XI.
Applicable Law
71
ARTICLE XII.
Signature
72
APPENDIX
Foreword
73
 
ARTICLE A Accruals for 1993 and 1994
74
 
ARTICLE B Plan Document Applicable to Pre-2005 Participants
77
 
ARTICLE PFS PFS Special Retirement Benefit
88
 
ARTICLE PBG PBG Pre-409A
90
 
ARTICLE I - Foreword
91
 
ARTICLE II - Definitions and Construction
91
 
ARTICLE III - Participation and Service
101
 
ARTICLE IV - Requirements for Service
102
 
ARTICLE V - Amount of Retirement Pension
107
 
ARTICLE VI - Distribution Options
118
 
APPENDIX Foreword
129
 
ARTICLE A - 1993 Accruals
129
 
ARTICLE P98 - PepsiCo Special Early Retirement Benefit
131
 
Article IPO - Transferred and Transition Individuals
133
ARTICLE PAC
Guiding Principles Regarding Benefit Plan Committee Appointments
135

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ARTICLE I.

Foreword
The PepsiCo Pension Equalization Plan (“PEP” or “Plan”) has been established by
PepsiCo for the benefit of salaried employees of the PepsiCo Organization who
participate in the PepsiCo Salaried Employees Retirement Plan (“Salaried Plan”).
PEP provides benefits for eligible employees whose pension benefits under the
Salaried Plan are limited by the provisions of the Internal Revenue Code of
1986, as amended. In addition, PEP provides benefits for certain eligible
employees based on the pre-1989 Salaried Plan formula.
1989 Document. The Plan was amended and restated in its entirety effective as of
January 1, 1989. The provisions of the Plan in effect prior to January 1, 1989
govern the rights and benefits of employees whose Credited Service ended before
that date (and as necessary, before the effective date of any provision with a
different pre-1989 effective date).
2005 Document. This document (the “Pre-409A PepsiCo PEP Document”) was first
effective as of January 1, 2005 (the “Effective Date”) and was restated to
reflect amendments through December 31, 2008. It generally retained without
modification the provisions of the 1989 restatement. However, it was clarified
to reflect that it set forth the terms of the Plan applicable to benefits that
were grandfathered under Section 409A, i.e., generally, benefits that were both
earned and vested on or before December 31, 2004 (the “Pre-409A Program”).
2016 Restatement. This restatement of the Pre-409A PepsiCo PEP Document is
effective as of April 1, 2016. There have been no material modifications made to
the Pre-409A PepsiCo PEP Document as a result of the 2016 restatement. The
Pre-409A PepsiCo PEP

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Document continues generally to retain without modification the provisions of
the 1989 restatement.
This restatement reflects amendments through April 1, 2016, including amendments
to reflect the merger into this Plan of the PBG Pension Equalization Plan (“PBG
PEP”), effective at the end of the day on December 31, 2011. The PBG PEP
document that was in effect on October 3, 2004 as amended through January 1,
2011 (“Pre-409A PBG PEP Document”) and as subsequently amended from time to time
is attached hereto as Appendix Article PBG Pre-409A; it continues to govern PBG
PEP benefits that were grandfathered under Section 409A and that were subject to
the Pre-409A PBG PEP Document prior to the Plan merger, except for certain
administrative provisions now governed by the main portion of the Pre-409A
PepsiCo PEP Document as is explained in Appendix Article PBG Pre-409A. There has
been no change to the time or form of payment of benefits that are subject to
Section 409A under either the PepsiCo PEP Program or the PBG PEP Program that
would constitute a material modification within the meaning of Treas.
Reg.§ 1.409A-6(a)(4) as a result of the merger or the revisions to the Pre-409A
PepsiCo PEP Document and Pre-409A PBG PEP document.
409A Program. All benefits under the Plan that are earned or vested after
January 1, 1989 shall be governed by the Plan Document for the Section 409A
Program (the “409A Program”). Together, this document (the Pre-409A PepsiCo PEP
Document) and the Plan Document for the Section 409A Program describe the terms
of a single plan.
Preservation of Pre-409A Program Within PEP Plan. This document (the Pre-409A
PepsiCo PEP Document) has been modified to clarify (without any material
modification) the integration of the Pre-409A Program with the 409A Program.
However, amounts subject to

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the terms of this Pre-409A Program and amounts subject to the terms of the 409A
Program shall be tracked separately at all times. The preservation of the terms
of the Pre-409A Program, without material modification, and the separation
between the 409A Program amounts and the Pre-409A Program amounts are intended
to be sufficient to permit the Pre-409A Program to remain exempt from Section
409A as a program of grandfathered benefits.

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ARTICLE II.
Definitions and Construction    
2.1    Definitions: This section provides definitions for certain words and
phrases. Where the following words and phrases, in boldface and underlined,
appear in this Plan with initial capitals they shall have the meaning set forth
below, unless a different meaning is plainly required by the context.
Accrued Benefit: The Pension payable at Normal Retirement Date determined in
accordance with Article V, based on the Participant’s Highest Average Monthly
Earnings and Credited Service at the date of determination.
Actuarial Equivalent: Except as otherwise specifically set forth in the Plan or
any Appendix to the Plan with respect to a specific benefit determination, a
benefit of equivalent value computed on the basis of the factors set forth
below. The application of the following assumptions to the computation of
benefits payable under the Plan shall be done in a uniform and consistent
manner. In the event the Plan is amended to provide new rights, features or
benefits, the following actuarial factors shall not apply to these new elements
unless specifically adopted by the amendment.
(1) Annuities and Inflation Protection: To determine the amount of a Pension
payable in the form of a Qualified Joint and Survivor Annuity or optional form
of survivor annuity, or as an annuity with inflation protection, the factors
applicable for such purposes under the Salaried Plan shall apply. However, in
determining a Pre-409A Pension, no change occurring on or after the Effective
Date in the basis for determining the amount of an annuity

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form of payment from that in effect as of December 31, 2004 shall be taken into
account to the extent it would result in a larger annuity (but this sentence
shall not apply for purposes of Section 5.1(b)(3), relating to the “Limit on the
Pre-409A Pension Benefit”).
(2) Lump Sums: To determine the lump sum value of a Pension, or a Pre-Retirement
Spouse’s Pension under Section 4.6, the factors applicable for such purposes
under the Salaried Plan shall apply, except that when the term “PBGC Rate” is
used in the Salaried Plan in this context it shall mean “PBGC Rate” as defined
in this Plan. However, in determining a Pre-409A Pension, no change occurring on
or after the Effective Date in the basis for determining lump sums from that in
effect as of December 31, 2004 shall be taken into account to the extent that
doing so would result in a different lump sum (or prior to January 1, 2015, a
larger lump sum), but this sentence shall not apply for purposes of Section
5.1(b)(3), relating to the “Limit on the Pre-409A Pension Benefit.”
(3) Other Cases: To determine the adjustment to be made in the Pension payable
to or on behalf of a Participant in other cases, the factors are those
applicable for such purpose under the Salaried Plan. However, in determining a
Pre-409A Pension, no change occurring on or after the Effective Date in such
factors from those in effect as of December 31, 2004 shall be taken into account
to the extent that it would result in a larger pension (but this

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--------------------------------------------------------------------------------

sentence shall not apply for purposes of Section 5.1(b)(3), relating to the
“Limit on the Pre-409A Pension Benefit”).
Advance Election: A Participant’s election to receive his Pre-409A Retirement
Pension as a Single Lump Sum or an Annuity, made in compliance with the
requirements of Section 6.3.
Annuity: A Pension payable as a series of monthly payments for at least the life
of the Participant.
Annuity Starting Date: The Annuity Starting Date shall be the first day of the
first period for which an amount is payable under this Plan as an annuity or in
any other form. A Participant who: (1) is reemployed after his initial Annuity
Starting Date, and (2) is entitled to benefits hereunder after his reemployment,
shall have a subsequent Annuity Starting Date for such benefits only to the
extent provided in Section 6.3(d).
Authorized Leave of Absence: Any absence authorized by an Employer under the
Employer’s standard personnel practices, whether paid or unpaid.
Cashout Limit: The annual dollar limit on elective deferrals under Code section
402(g)(1)(B), as in effect from time to time.
Code: The Internal Revenue Code of 1986, as amended from time to time. All
references herein to particular Code Sections shall also refer to any successor
provisions and shall include all related regulations, interpretations and other
guidance.
Company: PepsiCo, Inc., a corporation organized and existing under the laws of
the State of North Carolina or its successor or successors.

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Covered Compensation: “Covered Compensation” as that term is defined in the
Salaried Plan.
Credited Service: The period of a Participant’s employment, calculated in
accordance with Section 3.3, which is counted for purposes of determining the
amount of benefits payable to, or on behalf of, the Participant.
Disability Retirement Pension: The Retirement Pension available to a Participant
under Section 4.5.
Early Retirement Pension: The Retirement Pension available to a Participant
under Section 4.2.
Effective Date: The date upon which this document for the Pre-409A Program is
generally effective, January 1, 2005. Certain identified provisions of the Plan
may be effective on different dates, to the extent noted herein.
Eligible Spouse: The spouse of a Participant to whom the Participant is married
on the earlier of the Participant’s Annuity Starting Date or the date of the
Participant’s death.
Employee: An individual who qualifies as an “Employee” as that term is defined
in the Salaried Plan.
Employer: An entity that qualifies as an “Employer” as that term is defined in
the Salaried Plan.
ERISA: Public Law No. 93-406, the Employee Retirement Income Security Act of
1974, as amended from time to time.

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FICA Amount: The Participant’s share of the Federal Insurance Contributions Act
(FICA) tax imposed on the 409A Pension and Pre-409A Pension of the Participant
under Code Sections 3101, 3121(a) and 3121(v)(2).
409A Program: The portion of the Plan that governs deferrals that are subject to
Section 409A. The terms of the 409A Program are set forth in a separate document
(or separate set of documents).
Guiding Principles Regarding Benefit Plan Committee Appointments: The guiding
principles as set forth in Common Appendix Article PAC to be applied by the
Chair of the PAC when selecting the members of the PAC.
Highest Average Monthly Earnings: “Highest Average Monthly Earnings” as that
term is defined in the Salaried Plan, but without regard to the limitation
imposed by section 401(a)(17) of the Code (as such limitation is interpreted and
applied under the Salaried Plan).
Late Retirement Date: The Late Retirement Date shall be the first day of the
month coincident with or immediately following a Participant’s actual Retirement
Date occurring after his Normal Retirement Age.
Late Retirement Pension: The Retirement Pension available to a Participant under
Section 4.4.
Normal Retirement Age: The Normal Retirement Age under the Plan is age 65 or, if
later, the age at which a Participant first has 5 Years of Service.

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Normal Retirement Date: A Participant’s Normal Retirement Date shall be the
first day of the month coincident with or immediately following a Participant’s
Normal Retirement Age.
Normal Retirement Pension: The Retirement Pension available to a Participant
under Section 4.1.
Participant: An Employee participating in the Plan in accordance with the
provisions of Section 3.1.
PBGC: The Pension Benefit Guaranty Corporation, a body corporate within the
Department of Labor established under the provisions of Title IV of ERISA.
PBGC Rate: The PBGC Rate is 120 percent of the interest rate, determined on the
Participant’s Annuity Starting Date, that would be used by the PBGC for purposes
of determining the present value of a lump sum distribution on plan termination.
Pension: One or more payments that are payable to a person who is entitled to
receive benefits under the Plan. The term “Pre-409A Pension” shall be used to
refer to the portion of a Pension that is derived from the Pre-409A Program. The
term “409A Pension” shall be used to refer to the portion of a Pension that is
derived from the 409A Program.
PEP Election: A Participant’s election to receive his Pre-409A Retirement
Pension in one of the Annuity forms available under Section 6.2, made in
compliance with the requirements of Sections 6.3 and 6.4.

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PepsiCo Administration Committee or PAC: The committee that has the
responsibility for administration and operation of the Plan, as set forth in the
Plan, as well as any other duties set forth therein. As of any time, the Chair
of the PAC shall be the person who is then the Company’s Senior Vice President,
Total Rewards, but if such position is vacant or eliminated, the Chair shall be
the person who is acting to fulfill the majority of the duties of the position
(or plurality of the duties, if no one is fulfilling a majority), as such duties
existed immediately prior to the vacancy or the position elimination.  The Chair
shall appoint the other members of the PAC, applying the principles set forth in
the Guiding Principles Regarding Benefit Plan Committee Appointments and acting
promptly from time to time to ensure that there are four other members of the
PAC, each of whom shall have experience and expertise relevant to the
responsibilities of the PAC.  At least two times each year, the PAC shall
prepare a written report of its significant activities that shall be available
to any U.S.-based executive of the Company who is at least a senior vice
president.
PepsiCo Organization: The controlled group of organizations of which the Company
is a part, as defined by Code section 414 and regulations issued thereunder. An
entity shall be considered a member of the PepsiCo Organization only during the
period it is one of the group of organizations described in the preceding
sentence.
Plan: The PepsiCo Pension Equalization Plan, the Plan set forth herein and in
the 409A Program document(s), as the Plan may be amended from time to time
(subject to the limitations on amendment that are applicable hereunder and under
the

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409A Program). The Plan is also sometimes referred to as PEP, or as the PepsiCo
Pension Benefit Equalization Plan.
Plan Administrator: The PAC, or its delegate or delegates. The Plan
Administrator shall have authority to administer the Plan as provided in Article
VII.
Plan Year: The 12-month period commencing on January 1 and ending on December
31.
Post-2004 Participant: Any Participant who is not a Pre-2005 Participant.
Pre-409A Program: The program described in this document (and as necessary,
predecessor documents to this document that are described in the Foreword). The
term “Pre-409A Program” is used to identify the portion of the Plan that is not
subject to Section 409A.
Pre-Retirement Spouse’s Pension: The Pension available to an Eligible Spouse
under the Plan. The term “Pre-Retirement Spouse’s Pre-409A Pension” shall be
used to refer to the Pension available to an Eligible Spouse under Section 4.6
of this document.
Pre-2005 Participant: A Participant who is not employed by the PepsiCo
Organization after December 31, 2004, and whose rights to a Pension are solely
based on the legally binding rights (i) that he had on (or before) December 31,
2004, and (ii) that were not materially modified after October 3, 2004.
Primary Social Security Amount: In determining Pension amounts, Primary Social
Security Amount shall mean:

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(1) For purposes of determining the amount of a Retirement, Vested or
Pre-Retirement Spouse’s Pension, the Primary Social Security Amount shall be the
estimated monthly amount that may be payable to a Participant commencing at age
65 as an old-age insurance benefit under the provisions of Title II of the
Social Security Act, as amended. Such estimates of the old-age insurance benefit
to which a Participant would be entitled at age 65 shall be based upon the
following assumptions:
(i) That the Participant’s social security wages in any year prior to Retirement
or severance are equal to the Taxable Wage Base in such year, and
(ii) That he will not receive any social security wages after Retirement or
severance.
However, in computing a Vested Pension under Formula A of Section 5.2, the
estimate of the old-age insurance benefit to which a Participant would be
entitled at age 65 shall be based upon the assumption that he continued to
receive social security wages until age 65 at the same rate as the Taxable Wage
Base in effect at his severance from employment. For purposes of this
subsection, “social security wages” shall mean wages within the meaning of the
Social Security Act.
(2) For purposes of determining the amount of a Disability Pension, the Primary
Social Security Amount shall be (except as provided in the next sentence) the
initial monthly amount actually received by the disabled

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Participant as a disability insurance benefit under the provisions of Title II
of the Social Security Act, as amended and in effect at the time of the
Participant’s retirement due to disability. Notwithstanding the preceding
sentence, for any period that a Participant receives a Disability Pension before
receiving a disability insurance benefit under the provisions of Title II of the
Social Security Act, then the Participant’s Primary Social Security Amount for
such period shall be determined pursuant to paragraph (1) above.
(3) For purposes of paragraphs (1) and (2), the Primary Social Security Amount
shall exclude amounts that may be available because of the spouse or any
dependent of the Participant or any amounts payable on account of the
Participant’s death. Estimates of Primary Social Security Amounts shall be made
on the basis of the Social Security Act as in effect at the Participant’s
Severance from Service Date, without regard to any increases in the social
security wage base or benefit levels provided by such Act which take effect
thereafter.
Qualified Joint and Survivor Annuity: An Annuity which is payable to the
Participant for life with 50 percent of the amount of such Annuity payable after
the Participant’s death to his surviving Eligible Spouse for life. If the
Eligible Spouse predeceases the Participant, no survivor benefit under a
Qualified Joint and Survivor Annuity shall be payable to any person. The amount
of a Participant’s monthly payment under a Qualified Joint and Survivor Annuity
shall be reduced to the extent provided in sections 5.1 and 5.2, as applicable.

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Retirement: Termination of employment for reasons other than death after a
Participant has fulfilled the requirements for either a Normal, Early, Late, or
Disability Retirement Pension under Article IV.
Retirement Date: The date on which a Participant’s Retirement is considered to
commence. Retirement shall be considered to commence on the day immediately
following: (i) a Participant’s last day of employment, or (ii) the last day of
an Authorized Leave of Absence, if later. Notwithstanding the preceding
sentence, in the case of a Disability Pre-409A Retirement Pension, Retirement
shall be considered as commencing on the Participant’s retirement date
applicable for such purpose under the Salaried Plan.
Retirement Pension: The Pension payable to a Participant upon Retirement under
the Plan. The term “Pre-409A Retirement Pension” shall be used to refer to the
portion of a Retirement Pension that is derived from the Pre-409A Program. The
term “409A Retirement Pension” shall be used to refer to the portion of a
Retirement Pension that is derived from the 409A Program.
Salaried Plan: The PepsiCo Salaried Employees Retirement Plan, as it may be
amended from time to time.
Section 409A: Section 409A of the Code.
Service: The period of a Participant’s employment calculated in accordance with
Section 3.2 for purposes of determining his entitlement to benefits under the
Plan.

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75 Percent Survivor Annuity: An Annuity which is payable to the Participant for
life with 75 percent of the amount of such Annuity payable after the
Participant’s death to his surviving Eligible Spouse for life. If the Eligible
Spouse predeceases the Participant, no survivor benefit under a 75 Percent
Survivor Annuity shall be payable to any person. The amount of a Participant’s
monthly payment under a 75 Percent Survivor Annuity shall be reduced to the
extent provided in sections 5.1 and 5.2, as applicable.
Severance from Service Date: The date on which an Employee’s period of service
is deemed to end, determined in accordance with Article III of Part B of the
Salaried Plan.
Single Life Annuity: A level monthly Annuity payable to a Participant for his
life only, with no survivor benefits to his Eligible Spouse or any other person.
Single Lump Sum: The distribution of a Participant’s total Pre-409A Pension in
the form of a single payment.
Social Security Act: The Social Security Act of the United States, as amended,
an enactment providing governmental benefits in connection with events such as
old age, death and disability. Any reference herein to the Social Security Act
(or any of the benefits provided thereunder) shall be taken as a reference to
any comparable governmental program of another country, as determined by the
Plan Administrator, but only to the extent the Plan Administrator judges the
computation of those benefits to be administratively feasible.

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Taxable Wage Base: The contribution and benefit base (as determined under
section 230 of the Social Security Act) in effect for the Plan Year.
Vested Pension: The Pension available to a Participant under Section 4.3. The
term “Pre-409A Vested Pension” shall be used to refer to the portion of a Vested
Pension that is derived from the Pre-409A Program. The term “409A Vested
Pension” shall be used to refer to the portion of a Vested Pension that is
derived from the 409A Program.
2.2    Construction: The terms of the Plan shall be construed in accordance with
this section.
(a)    Gender and Number: The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender, and the singular may include the
plural, unless the context clearly indicates to the contrary.
(b)    Compounds of the Word “Here”: The words “hereof”, “hereunder” and other
similar compounds of the word “here” shall mean and refer to the entire Plan,
not to any particular provision or section.
(c)    Examples: Whenever an example is provided or the text uses the term
“including” followed by a specific item or items, or there is a passage having a
similar effect, such passages of the Plan shall be construed as if the phrase
“without limitation” followed such example or term (or otherwise applied to such
passage in a manner that avoids limits on its breadth of application).
(d)    Subdivisions of the Plan Document: This Plan document is divided and
subdivided using the following progression: articles, sections, subsections,

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--------------------------------------------------------------------------------

paragraphs, subparagraphs, and clauses, and sub-clauses. Articles are designated
by capital roman numerals. Sections are designated by Arabic numerals containing
a decimal point. Subsections are designated by lower-case letters in
parentheses. Paragraphs are designated by Arabic numerals in parentheses.
Subparagraphs are designated by lower-case roman numerals in parentheses.
Clauses are designated by upper-case letters in parentheses. Sub-clauses are
designated by upper-case roman numerals in parentheses. Any reference in a
section to a subsection (with no accompanying section reference) shall be read
as a reference to the subsection with the specified designation contained in
that same section. A similar rule shall apply with respect to paragraph
references within a subsection and subparagraph references within a paragraph.

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ARTICLE III.
Participation and Service
3.1    Participation: An Employee shall be a Participant in the Plan during the
period:
(a)    When he would be currently entitled to receive a Pension under the Plan
if his employment terminated at such time, or
(b)    When he would be so entitled but for the vesting requirement of
Section 4.7.
It is expressly contemplated that an Employee, who is entitled to receive a
Pension under the Plan as of a particular time, may subsequently cease to be
entitled to receive a Pension under the Plan.
3.2    Service: A Participant’s entitlement to a Pension and to a Pre-Retirement
Spouse’s Pension for his Eligible Spouse shall be determined under Article IV
based upon his period of Service. A Participant’s period of Service shall be
determined under Article III of Part B of the Salaried Plan.
3.3    Credited Service: The amount of a Participant’s Pension and a
Pre-Retirement Spouse’s Pension shall be based upon the Participant’s period of
Credited Service, as determined under Article III of Part B of the Salaried
Plan.

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ARTICLE IV.
Requirements for Benefits
A Participant shall be entitled to receive a Pre-409A Pension and a surviving
Eligible Spouse shall be entitled to certain survivor benefits as provided in
this Article. The amount of any such Pre-409A Pension or survivor benefit shall
be determined in accordance with Article V.
4.1    Normal Pre-409A Retirement Pension: A Participant shall be eligible for a
Normal Pre-409A Retirement Pension if he meets the requirements for a Normal
Retirement Pension in Section 4.1 of Part B of the Salaried Plan (except that no
change occurring on or after the Effective Date in such requirements, from those
in effect as of December 31, 2004, shall be taken into account). In determining
the amount (but not the form and time of payment) of a Participant’s Pre-409A
Pension, the Participant’s status under this Section 4.1 shall be fixed as of
December 31, 2004.
4.2    Early Pre-409A Retirement Pension: A Participant shall be eligible for an
Early Pre-409A Retirement Pension if he meets the requirements for an Early
Retirement Pension in Section 4.2 of Part B of the Salaried Plan (except that no
change occurring on or after the Effective Date in such requirements, from those
in effect as of December 31, 2004, shall be taken into account). In determining
the amount (but not the form and time of payment) of a Participant’s Pre-409A
Pension, the Participant’s status under this Section 4.2 shall be fixed as of
December 31, 2004.
4.3    Pre-409A Vested Pension: A Participant who is vested under Section 4.7
shall be eligible to receive a Pre-409A Vested Pension if his employment in an
eligible

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classification under Part B of the Salaried Plan is terminated before he is
eligible for a Normal Pre-409A Retirement Pension or an Early Pre-409A
Retirement Pension (except that no change occurring on or after the Effective
Date in such requirements, from those in effect as of December 31, 2004, shall
be taken into account). A Participant who terminates employment prior to
satisfying the vesting requirement in Section 4.7 shall not be eligible to
receive a Pension under this Plan. In determining the amount (but not the form
and time of payment) of a Participant’s Pre-409A Pension, the Participant’s
status under this Section 4.3 shall be fixed as of December 31, 2004.
4.4    Late Pre-409A Retirement Pension: A Participant who continues employment
after his Normal Retirement Age shall not receive a Pension until his Late
Retirement Date. Thereafter, a Participant shall be eligible for a Late Pre-409A
Retirement Pension determined in accordance with Section 4.4 of Part B of the
Salaried Plan (except that the following shall not be taken into account – (i)
any change occurring on or after the Effective Date in the requirements of such
section from those in effect as of December 31, 2004, (ii) any requirement for
notice of suspension under ERISA section 203(a)(3)(B), or (iii) any adjustment
as under Section 5.7(d) of Part B of the Salaried Plan). In determining the
amount (but not the form and time of payment) of a Participant’s Pre-409A
Pension, the Participant’s status under this Section 4.4 shall be fixed as of
December 31, 2004.
4.5    Pre-409A Disability Retirement Pension: A Participant shall be eligible
for a Pre-409A Disability Retirement Pension if he meets the requirements for a
Disability Retirement Pension under the Part B of the Salaried Plan (except that
no change occurring on or after the Effective Date in such requirements, from
those in effect as of December 31, 2004,

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shall be taken into account). In determining the amount (but not the form and
time of payment) of a Participant’s Pre-409A Disability Retirement Pension under
this Section 4.5, the Participant’s status under this Section 4.5 shall be fixed
as of December 31, 2004.
4.6    Pre-Retirement Spouse’s Pre-409A Pension: A Pre-Retirement Spouse’s
Pre-409A Pension is payable under this section only in the event the Participant
dies prior to his Annuity Starting Date. Any Pre-Retirement Spouse’s Pre-409A
Pension payable under this section shall commence as of the same time as the
corresponding pre-retirement spouse’s pension under the Salaried Plan (except
that no change occurring on or after the Effective Date in the Salaried Plan’s
requirements for such pension, from those in effect as of December 31, 2004,
shall be taken into account), subject to Section 4.9.
(a) Active, Disabled and Retired Employees: A Pre-Retirement Spouse’s Pre-409A
Pension shall be payable under this subsection to a Participant’s Eligible
Spouse (if any) who is entitled under the Salaried Plan to a pre-retirement
spouse’s pension for survivors of active, disabled and retired employees (but if
the Participant dies after December 31, 2004, this subsection shall only apply
if the Participant had met the eligibility requirements for a Retirement Pension
on December 31, 2004). The amount of such Pension shall be determined in
accordance with the provisions of Section 5.3.
(b) Vested Employees: A Pre-Retirement Spouse’s Pre-409A Pension shall be
payable under this subsection to a Participant’s Eligible Spouse (if any) who is
entitled under the Salaried Plan to the pre-retirement spouse’s pension for
survivors of vested terminated Employees (but if the Participant dies after
December 31, 2004, this

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subsection shall apply if the Participant had met the requirements for a Vested
Pension, but not those for a Retirement Pension, on December 31, 2004). The
amount (if any) of such Pension shall be determined in accordance with the
provisions of Section 5.3. If pursuant to this Section 4.6(b) a Participant has
Pre-Retirement Spouse’s coverage in effect for his Eligible Spouse, any Pension
calculated for the Participant under Section 5.2(b) shall be reduced for each
year such coverage is in effect by the applicable percentage set forth below
(based on the Participant’s age at the time the coverage is in effect) with a
pro rata reduction for any portion of a year. No reduction shall be made for
coverage in effect within the 90‑day period following a Participant’s
termination of employment.
Attained Age
Annual Charge
 
 
Up to 35
.0%
35 – 39
.075%
40 – 44
.1%
45 – 49
.175%
50 – 54
.3%
55 – 59
.5%
60 – 64
.5%

4.7    Vesting: A Participant shall be fully vested in, and have a
nonforfeitable right to, his Accrued Benefit at the time he becomes fully vested
in his accrued benefit under the Salaried Plan.
4.8    Time of Payment: The distribution of a Participant’s Pre-409A Pension
shall commence as of the time specified in Section 6.1. Any increase in a
Participant’s Pre-409A Pension for interest due to a delay in payment, by
application of Section 3.1(e) of Part A of the Salaried Plan when calculating
the Participant’s Pre-409A Pension, shall accrue entirely under

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the 409A Program and be paid (subject to the last sentence of this Section) at
the same time and in the same form that the Participant’s 409A Pension is paid.
Accordingly, if a Participant is entitled to an interest adjustment for a delay
in payment of his Pre-409A Pension, the amount of such interest adjustment shall
be limited to that which may be paid as part of the Participant’s 409A Pension,
consistent with Section 409A’s payment rules and the limitation in the next
sentence. Notwithstanding any provision of the Salaried Plan to the contrary,
including Section 4.8(e), a Participant shall not receive interest for a delay
in payment of his 409A Pension or Pre-409A Pension to the extent the delay is
caused by the Participant.
4.9    Cashout Distributions: Notwithstanding the availability or applicability
of a different form of payment under Article VI, the following rules shall apply
in the case of certain small benefit Annuity payments:
(a)    Distribution of Participant’s Pre-409A Pension: If on the applicable
benefit commencement date the Actuarial Equivalent lump sum value of the
Participant’s Pre-409A Pension is equal to or less than the Cashout Limit, the
Plan Administrator shall distribute to the Participant such lump sum value of
the Participant’s Pre-409A Pension. Notwithstanding the preceding sentence, for
commencement dates prior to December 1, 2012, a Participant shall be cashed out
under this subsection if, at the Participant’s commencement date, the Actuarial
Equivalent lump sum value of the Participant’s PEP Pension is equal to or less
than $15,000 ($10,000 in the case of a Pre-2005 Participant). Such lump sum (or
portion thereof) representing the Participant’s Pre-409A Pension shall be paid
pursuant to the terms of this Pre-409A Program. The applicable benefit
commencement date shall be:

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(1)    Prior to December 1, 2012, the commencement date of any 409A Pension to
which the Participant is entitled or, in the event the Participant is not
entitled to a 409A Pension, the first of the month following the Participant’s
termination of employment date (however, if the lump sum value as of that date
is too great to make the distribution, but the lump sum value is not too great
as of his Annuity Starting Date under the terms of this Pre-409A Program, such
Annuity Starting Date shall be the applicable commencement date); and
(2)     Beginning as of December 1, 2012, the first of the month following the
Participant’s termination of employment date (however, if the lump sum value as
of that date is too great to make the distribution, but the lump sum value is
not too great as of his Annuity Starting Date under the terms of this Pre-409A
Program, such Annuity Starting Date shall be the applicable commencement date).
(b)    Distribution of Pre-Retirement Spouse’s Pre-409A Pension Benefit: If on
the Eligible Spouse’s applicable benefit commencement date, the Actuarial
Equivalent lump sum value of the PEP Pre-Retirement Spouse’s Pre-409A Pension to
be paid is equal to or less than the Cashout Limit, the Plan Administrator shall
distribute to the Eligible Spouse such lump sum value of the PEP Pre-Retirement
Spouse’s Pre-409A Pension. Notwithstanding the preceding sentence, for
commencement dates prior to December 1, 2012, an Eligible Spouse shall be cashed
out under this subsection if the Actuarial Equivalent lump sum value of the
Eligible Spouse’s

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PEP Pre-Retirement Spouse’s Pension is equal to or less than $15,000 ($10,000 in
the case of a Pre-2005 Participant). Such lump sum (or portion thereof)
representing the Eligible Spouse’s Pre-Retirement Spouse’s Pre-409A Pension
shall be paid pursuant to the terms of this Pre-409A Program. The applicable
benefit commencement date shall be:
(1)     Prior to December 1, 2012, the commencement date of any Pre-Retirement
Spouse’s 409A Pension to which the Eligible Spouse is entitled or, in the event
the Eligible Spouse is not entitled to a Pre­ Retirement Spouse’s 409A Pension,
the first of the month following the Participant’s death (however, if the lump
sum value as of that date is too great to make the distribution, but the lump
sum value is not too great as of the date that would be the Eligible Spouse’s
benefit commencement date under the terms of this Pre-409A Program, such benefit
commencement date shall be the applicable commencement date); and
(2)     Beginning as of December 1, 2012, the first of the month following the
Participant’s death (however, if the lump sum value as of that date is too great
to make the distribution, but the lump sum value is not too great as of the date
that would be the Eligible Spouse’s benefit commencement date under the terms of
this Pre-409A Program, such benefit commencement date shall be the applicable
commencement date).
(c)    Special Cashout of Pre-409A Vested Pensions: Notwithstanding subsection
(a) above, the Plan Administrator shall have discretion under this subsection

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to cash out a Pre-409A Vested Pension in a single lump sum prior to the date
that would apply under subsection (a).
(1)    The Plan Administrator shall have discretion under this subsection to
cash out in a single lump sum any Pre-409A Vested Pension that, as of December
1, 2012 – (i) has not otherwise had its Annuity Starting Date occur, (ii) has an
Actuarial Equivalent lump sum value that is equal to or less than the Cashout
Limit as of such date, and (iii) is practicable to calculate and distribute (as
determined pursuant to the exercise of the Plan Administrator’s discretion),
with such cashout being made on December 1, 2012.
(2)    The Plan Administrator shall also have discretion under this subsection
to cash out in a single lump sum any Pre-409A Vested Pension that, as of the
first day of any month in 2013 or 2014 specified by the Plan Administrator
pursuant to the exercise of its discretion – (i) has not otherwise had its
Annuity Starting Date occur, (ii) has an Actuarial Equivalent lump sum value
that is equal to or less than the Cashout Limit as of such date, and (iii) is
practicable to calculate and distribute (as determined pursuant to the exercise
of the Plan Administrator’s discretion), with such cashout being made on the
first day of the month specified.
Not later than November 30, the Plan Administrator shall memorialize in writing
the exercise of its discretion under this subsection to select Vested Pensions
for cashout on December 1, 2012, through the creation of a written list (in
either hard copy or electronic form) of Participants with Pre-409A Vested
Pensions who will be cashed out.

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In addition, not later than the day before the date specified pursuant to
paragraph (2) above, the Plan Administrator shall memorialize in writing the
exercise of its discretion under this subsection to select Vested Pensions for
cashout on the specified date, through the creation of a written list (in either
hard copy or electronic form) of Participants with Pre-409A Vested Pensions who
will be cashed out.
Any lump sum distributed under this section shall be in lieu of the Pension that
otherwise would be distributable to the Participant or Eligible Spouse
hereunder. To the extent necessary to preserve the grandfathered status of
Pre-409A Pensions, the cashout provisions described in subsections (a) through
(c) above are intended to operate in conformance with the rules for “limited
cashout” features within the meaning of Treasury Regulation sections
1.409A-3(j)(4)(v) and 1.409A-6(a)(4)(i)(E), and they shall be interpreted and
applied consistently with this regulation. No Participant or Eligible Spouse
shall be given a direct or indirect election with respect to whether the
Participant’s Vested Pension or the Pre-Retirement Spouse’s Pension will be
cashed out under this section.
4.10    Reemployment of Certain Participants: In the case of a current or former
Participant who is reemployed and is eligible to reparticipate in the Salaried
Plan after his Annuity Starting Date, payment of his Pre-409A Pension will be
suspended if payment of his Salaried Plan pension is suspended (or if payment
would have been suspended pursuant to such provisions if (i) it were already in
pay status, and (ii) changes in the Salaried Plan terms that occur after
December 31, 2004 were disregarded). Thereafter, his Pre-409A Pension shall
recommence at the time determined under Section 6.1 (even if the suspension of
his Salaried Plan pension ceases earlier).

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ARTICLE V.
Amount of Retirement Pension
When a Pension becomes payable to or on behalf of a Post-2004 Participant under
this Plan, the amount of such Pre-409A Pension shall be determined under
Section 5.1 or 5.3 (whichever is applicable), subject to any adjustments
required under Sections 4.6(b), 5.4 and 5.5. In the case of a Pre-2005
Participant, the amount of such Participant’s Pre-409A Pension (or a
Pre-Retirement Spouse’s Pre-409A Pension payable on his behalf) shall be
determined as provided in Article B of the Appendix.
5.1    Participant’s Pre-409A Pension
(a) Calculating the Pre-409A Pension: In the case of a Post-2004 Participant,
such Participant’s Pre-409A Pension shall be calculated as follows (on the basis
specified in subsection (b) below and using the definitions appearing in
subsection (c) below):
(1)     His Total Pension, reduced by
(2)     His Salaried Plan Pension.
(b) Basis for Determining: The Pre-409A Pension Benefit amount in subsection (a)
above shall be the greater of the amount determined on the basis set forth in
paragraph (1) or (2) below, but never more than the limitation specified in
paragraph (3) below:
(1)    Present Value Method: The Pre-409A Pension Benefit amount under this
paragraph shall be determined initially as a present value of the Participant’s
benefit under subsection (a) as of December 31, 2004

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(determined as if the Participant voluntarily terminated on that date without
cause, received a payment on the earliest possible commencement date (“Earliest
Date”) thereafter, and such payment was in the form with the maximum value
available to the Participant in connection with a termination at such time),
using the Actuarial Equivalent lump sum factors in effect on such date (“2004
Lump Sum Factors”) to determine the present value. Such present value amount
shall then be increased, if the Participant had not yet attained the
Participant’s Earliest Date as of December 31, 2004, for both interest and
survivorship through such Earliest Date, using the 2004 Lump Sum Factors.
(2)     Accrued Benefit Method: The Pre-409A Pension Benefit amount under this
paragraph shall be based on the Participant’s Accrued Benefit as of December 31,
2004, but with such Accrued Benefit amount reduced for early commencement (where
applicable based on the Participant’s actual Annuity Starting Date for his
Pre-409A Pension), based upon the reduction factors for early commencement
applicable to the Participant’s status as eligible for a retirement benefit
(under Section 4.2) or a vested benefit (under Section 4.3), whichever applies.
(3)    Limit on the Pre-409A Pension Benefit: Notwithstanding paragraph (1) or
(2) above, a Participant’s Pre-409A Pension Benefit amount shall never exceed
the Participant’s Total Pension reduced by his Salaried Plan Pension, with each
calculated as of the actual Annuity Starting Date of Participant’s Pre-409A
Pension. For purposes of this paragraph (3), the

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provisions of Article IV that freeze the Participant’s status as of December 31,
2004 (or consider only the status on such date), and the provisions of this
document that bar taking into account Plan changes that are effective after
December 31, 2004 shall not be taken into account.
(c) Definitions: The following definitions apply for purposes of this section.
(1) A Participant’s “Total Pension” means the greater of:
(i) The amount of the Participant’s pension determined under the terms of the
Salaried Plan, but without regard to: (A) the limitations imposed by sections
401(a)(17) and 415 of the Code (as such limitations are interpreted and applied
under the Salaried Plan), and (B) the actuarial adjustment under Section 5.7(d)
of Part B of the Salaried Plan (relating to benefits that are deferred beyond
the Participant’s Normal Retirement Date); or
(ii) The amount (if any) of the Participant’s PEP Guarantee under Section 5.2.
For purposes of subsection (b)(1) and (2), the determination in clause (i) and
(ii) above shall be made (except, in the case of subsection (b)(2), with respect
to early commencement reductions, which shall be made as of the Annuity Starting
Date) as of December 31, 2004, and (except to the extent the provisions of the
Plan specifically authorize taking into account subsequent changes) shall be
made on the basis of the terms of the Salaried Plan without taking into account
changes after December 31, 2004. As necessary to ensure the Participant’s
receipt of a

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“greater of” benefit, the foregoing comparison between clause (i) and clause
(ii) shall be made by reflecting, as applicable, the relative value of forms of
payment.
(2) A Participant’s “Salaried Plan Pension” means the amount of the
Participant’s pension determined under the terms of the Salaried Plan. For
purposes of subsection (b)(1) and (2), the determination of a Participant’s
Salaried Plan Pension shall be made (except, in the case of subsection (b)(2),
with respect to early commencement reductions, which shall be made as of the
Annuity Starting Date) as of December 31, 2004, and (except to the extent the
provisions of the Plan specifically authorize taking into account subsequent
changes) shall be made on the basis of the terms of the Salaried Plan without
taking into account changes after December 31, 2004.
5.2    PEP Guarantee: A Post-2004 Participant who is eligible under subsection
(a) below shall be entitled to a PEP Guarantee benefit determined under
subsection (b) below. In the case of Participants who are not eligible under
subsection (a), the PEP Guarantee shall not apply.
(a) Eligibility: A Participant shall be covered by this section if the
Participant has 1988 pensionable earnings from an Employer of at least $75,000.
For purposes of this section, “1988 pensionable earnings” means the
Participant’s remuneration for the 1988 calendar year, within the meaning of the
Salaried Plan as in effect in 1988. “1988 pensionable earnings” does not include
remuneration from an entity attributable to any period when that entity was not
an Employer.

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(b) PEP Guarantee Formula: The amount of a Participant’s PEP Guarantee shall be
determined under the applicable formula in paragraph (1), subject to the special
rules in paragraph (2).
(1) Formulas: The amount of a Participant’s Pension under this paragraph shall
be determined in accordance with subparagraph (i) below. However, if the
Participant was actively employed by the PepsiCo Organization in a
classification eligible for the Salaried Plan prior to July 1, 1975, the amount
of his Pension under this paragraph shall be the greater of the amounts
determined under subparagraphs (i) and (ii), provided that subparagraph (ii)(B)
shall not apply in determining the amount of a Vested Pension.
(i) Formula A: The Pension amount under this subparagraph shall be:
(A) 3 percent of the Participant’s Highest Average Monthly Earnings for the
first 10 years of Credited Service, plus
(B) 1 percent of the Participant’s Highest Average Monthly Earnings for each
year of Credited Service in excess of 10 years, less
(C) 1-2/3 percent of the Participant’s Primary Social Security Amount multiplied
by years of Credited Service not in excess of 30 years.

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In determining the amount of a Vested Pension under this Formula A, the Pension
shall first be calculated on the basis of (I) the Credited Service the
Participant would have earned had he remained in the employ of the Employer
until his Normal Retirement Age, and (II) his Highest Average Monthly Earnings
and Primary Social Security Amount at his Severance from Service Date, and then
shall be reduced by multiplying the resulting amount by a fraction, the
numerator of which is the Participant’s actual years of Credited Service on his
Severance from Service Date (or December 31, 2004, if earlier) and the
denominator of which is the years of Credited Service he would have earned had
he remained in the employ of an Employer until his Normal Retirement Age.
(ii)    Formula B: The Pension amount under this subparagraph shall be the
greater of (A) or (B) below:
(A)    1-1/2 percent of Highest Average Monthly Earnings times the number of
years of Credited Service, less 50 percent of the Participant’s Primary Social
Security Amount, or
(B)    3 percent of Highest Average Monthly Earnings times the number of years
of Credited Service up to 15 years, less 50 percent of the Participant’s Primary
Social Security Amount.
In determining the amount of a Disability Pension under Formula A or B above,
the Pension shall be calculated on the basis of the Participant’s Credited
Service (determined in accordance with Section 3.3(d)(3) of the Salaried Plan,
as in effect

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on December 31, 2004), and his Highest Average Monthly Earnings and Primary
Social Security Amount at the date of disability (or as of such earlier date as
may apply under Section 5.1(b)).
(2) Calculation: The amount of the PEP Guarantee shall be determined pursuant to
paragraph (1) above, subject to the following special rules:
(i) Surviving Eligible Spouse’s Annuity: Subject to subparagraph (iii) below and
the last sentence of this subparagraph, if the Participant has an Eligible
Spouse, the Participant’s Eligible Spouse shall be entitled to receive a
survivor annuity equal to 50 percent of the Participant’s Annuity under this
section, with no corresponding reduction in such Annuity for the Participant.
Annuity payments to a surviving Eligible Spouse shall begin on the first day of
the month coincident with or following the Participant’s death and shall end
with the last monthly payment due prior to the Eligible Spouse’s death. If the
Eligible Spouse is more than 10 years younger than the Participant, the survivor
benefit payable under this subparagraph shall be adjusted as provided below.
(A) For each full year more than 10 but less than 21 that the surviving Eligible
Spouse is younger than the Participant, the survivor benefit payable to such
spouse shall be reduced by 0.8 percent.
(B) For each full year more than 20 that the surviving Eligible Spouse is
younger than the Participant, the survivor

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benefit payable to such spouse shall be reduced by an additional 0.4 percent.
(ii) Reductions: The following reductions shall apply in determining a
Participant’s PEP Guarantee.
(A) If the Participant will receive an Early Retirement Pension, the payment
amount shall be reduced by 3/12ths of 1 percent for each month by which the
benefit commencement date precedes the date the Participant would attain his
Normal Retirement Date.
(B) If the Participant is entitled to a Vested Pension, the payment amount shall
be reduced to the Actuarial Equivalent of the amount payable at his Normal
Retirement Date (if payment commences before such date), and the Section 4.6(b)
reductions for any Pre-Retirement Spouse’s coverage shall apply.
(C) This clause applies if the Participant will receive his Pension in a form
that provides an Eligible Spouse benefit, continuing for the life of the
surviving spouse, that is greater than that provided under subparagraph (i). In
this instance, the Participant’s Pension under this section shall be reduced so
that the total value of the benefit payable on the Participant’s behalf is the
Actuarial Equivalent of the Pension otherwise payable under the foregoing
provisions of this section.

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(D) This clause applies if the Participant will receive his Pension in a form
that provides a survivor annuity for a beneficiary who is not his Eligible
Spouse. In this instance, the Participant’s Pension under this section shall be
reduced so that the total value of the benefit payable on the Participant’s
behalf is the Actuarial Equivalent of a Single Life Annuity for the
Participant’s life.
(E) This clause applies if the Participant will receive his Pension in an
Annuity form that includes inflation protection described in Section 6.2(b). In
this instance, the Participant’s Pension under this section shall be reduced so
that the total value of the benefit payable on the Participant’s behalf is the
Actuarial Equivalent of the elected Annuity without such protection.
(iii) Lump Sum Conversion: The amount of the Retirement Pension determined under
this section for a Participant whose Retirement Pension will be distributed in
the form of a lump sum shall be the Actuarial Equivalent of the Participant’s
PEP Guarantee determined under this section, taking into account the value of
any survivor benefit under subparagraph (i) above and any early retirement
reductions under subparagraph (ii)(A) above.
5.3    Amount of Pre-Retirement Spouse’s Pre-409A Pension: The monthly amount of
the Pre-Retirement Spouse’s Pre-409A Pension payable to a surviving Eligible
Spouse of a Post-2004 Participant under Section 4.6 shall be determined under
subsection (a) below.

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(a) Calculation: An Eligible Spouse’s Pre-Retirement Spouse’s Pre-409A Pension
shall be equal to:
(1)     The Eligible Spouse’s Total Pre-Retirement Spouse’s Pension, reduced by
(2)     The Eligible Spouse’s Salaried Plan Pre-Retirement Spouse’s Pension.
(b) Definitions: The following definitions apply for purposes of this section.
(1) An Eligible Spouse’s “Total Pre-Retirement Spouse’s Pension” means the
greater of:
(i) The amount of the Eligible Spouse’s pre-retirement spouse’s pension
determined under the principles and limitations of Section 5.1(b) and under the
terms of the Salaried Plan in effect on December 31, 2004 (except as otherwise
applicable under Section 5.1(b)), but without regard to: (A) the limitations
imposed by sections 401(a)(17) and 415 of the Code (as such limitations are
interpreted and applied under the Salaried Plan), and (B) the actuarial
adjustment under Section 5.7(d) of the Salaried Plan (relating to benefits that
are deferred beyond the Participant’s Normal Retirement Date); or
(ii) The amount (if any) of the Eligible Spouse’s PEP Guarantee Pre-Retirement
Spouse’s Pension determined under the principles and limitations of Section
5.1(b) and under subsection (c).

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In making this comparison, the benefits in subparagraphs (i) and (ii) above
shall be calculated with reference to the specific time of payment applicable to
the Eligible Spouse.
(2)    An “Eligible Spouse’s Salaried Plan Pre-Retirement Spouse’s Pension”
means the Pre-Retirement Spouse’s Pension that would be payable to the Eligible
Spouse under the principles and limitations of Section 5.1(b) under the terms of
the Salaried Plan in effect on December 31, 2004 (except as otherwise applicable
under Section 5.1(b)).
(c) PEP Guarantee Pre-Retirement Spouse’s Pension: An Eligible Spouse’s PEP
Guarantee Pre-Retirement Spouse’s Pension shall be determined in accordance with
paragraph (1) or (2) below, whichever is applicable, with reference to the PEP
Guarantee (if any) that would have been available to the Participant under
Section 5.2.
(1) Normal Rule: The Pre-Retirement Spouse’s Pension payable under this
paragraph shall be equal to the amount that would be payable as a survivor
annuity, under a Qualified Joint and Survivor Annuity, if the Participant had:
(i) Separated from service on the earliest of the date of death, his actual
Severance from Service Date;
(ii) Commenced a Qualified Joint and Survivor Annuity on the same date payments
of the Qualified Pre-Retirement Spouse’s Pension are to commence; and

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(iii) Died on the day immediately following such commencement.
If payment of a Pre-Retirement Spouse’s Pension under this paragraph commences
or is deemed to commence prior to the date which would have been the
Participant’s Normal Retirement Date, appropriate reductions for early
commencement shall be applied to the Qualified Joint and Survivor Annuity upon
which the Pre-Retirement Spouse’s Pension is based.
(2) Special Rule for Active and Disabled Employees: Notwithstanding paragraph
(1) above, the Pre‑Retirement Spouse’s Pension paid on behalf of a Participant
described in Section 4.6(a) shall not be less than an amount equal to 25 percent
of such Participant’s PEP Guarantee determined under Section 5.2 in accordance
with the principles and limitations of Section 5.1(b) (if a comparable 25
percent benefit is available on behalf of the Participant under the Salaried
Plan). A Pre-Retirement Spouse’s Pension under this paragraph is not reduced for
early commencement.
5.4    Certain Adjustments: Pensions determined under the foregoing sections of
this Article are subject to adjustment as provided in this section. For purposes
of this section, “specified plan” shall mean the Salaried Plan or a nonqualified
pension plan similar to this Plan. A nonqualified pension plan is similar to
this Plan if it is sponsored by a member of the PepsiCo Organization and if its
benefits are not based on participant pay deferrals.
(a) Adjustments for Rehired Participants: This subsection shall apply to a
current or former Participant who is reemployed after his Annuity Starting Date
and

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whose benefit under the Salaried Plan is recalculated based on an additional
period of Credited Service. In the event of any such recalculation, the
Participant’s Pre-409A Pension shall also be recalculated hereunder. For this
purpose, the PEP Guarantee under Section 5.2 is adjusted for in-service
distributions and prior distributions in the same manner as benefits are
adjusted under the Salaried Plan, but by taking into account benefits under this
Plan and any specified plans.
(b) Adjustment for Increased Pension Under Other Plans: If the benefit paid
under a specified plan on behalf of a Participant is increased after PEP
benefits on his behalf have been determined (whether the increase is by order of
a court, by agreement of the plan administrator of the specified plan, or
otherwise), the PEP benefit for the Participant shall be recalculated. If the
recalculation identifies an overpayment hereunder, the Plan Administrator shall
take such steps as it deems advisable to recover the overpayment. It is
specifically intended that there shall be no duplication of payments under this
Plan and any specified plans.
5.5    Excludable Employment: Effective for periods of employment on or after
June 30, 1997, an executive classified as level 22 or above (or the equivalent)
whose employment by an Employer is for a limited duration assignment shall not
become entitled to a benefit or to any increase in benefits in connection with
such employment. In addition, in the case of agreements entered into after
January 1, 2009, an executive who has signed a written agreement with the
Company pursuant to which the individual either (i) waives eligibility under the
Plan (even if the individual otherwise meets the definition of Employee under
the Plan), or (ii) agrees not to participate in the Plan, shall not thereafter
becomes entitled to a benefit or to

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any increase in benefits in connection with such employment (whichever applies).
Written agreements may be entered into either before or after the executive
becomes eligible for or begins participation in the Plan, and such written
agreement may take any form that is deemed effective by the Company. All written
agreements under this section 5.5 shall be irrevocable by the individual once
executed.

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ARTICLE VI.
Distribution Options
The terms of this Article govern (i) the distribution of benefits to a
Participant who becomes entitled to a Pre-409A Pension, and (ii) the
continuation of benefits (if any) to such Participant’s beneficiary following
the Participant’s death. Other than as set forth in section 4.9 (cashout
distributions), a Pre-Retirement Spouse’s Pension derived from the Pre-409A
Program shall be payable as an Annuity for the life of the Eligible Spouse
(except as provided in Article VI of Part B of the Salaried Plan). The
distribution of a 409A Pension is governed by the terms of the 409A Program.
6.1    Form and Timing of Distributions: This section shall govern the form and
timing of distributions of Pre-409A Pensions that begin on or after March 1,
1992. Plan distributions that begin before that date shall be governed by the
prior terms of the Plan. The provisions of this Section 6.1 are in all cases
subject to the cashout rules set forth in Section 4.9.
(a) No Advance Election: This subsection shall apply to a Participant: (i) who
does not have an Advance Election in effect as of the close of business on the
day before his Retirement Date, or (ii) who terminates employment prior to
Retirement. Subject to the next sentence, a Participant described in this
subsection shall be paid his Pre-409A Pension in the same form and at the same
time as he is paid his Pension under the Salaried Plan. If a Participant’s
Salaried Plan Annuity Starting Date occurs while he is still an employee of the
PepsiCo Organization (because of the time of payment provisions in Code section
401(a)(9)), payment under the Plan shall not begin until the first of the month
next following the Participant’s Severance from Service Date. In this

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instance, the form of payment under this Plan shall remain that applicable under
the Salaried Plan. If the Participant will be paid his pension under the
Salaried Plan in a form of payment that is not available to the Participant
under this Pre-409A Program (e.g., because the Participant attains Retirement
status under the Salaried Plan but does not attain Retirement status under this
Pre-409A Program, based on applying the terms of the Salaried Plan in effect on
December 31, 2004), the principles of subsection (b)(2) below will govern the
determination of the Participant’s form of payment.
(b) Advance Election in Effect: This subsection shall apply to a Participant who
has an Advance Election in effect as of the close of business on the day before
his Retirement Date. To be in effect, an Advance Election must meet the advance
receipt and other requirements of Section 6.3(b).
(1) Lump Sum Election: If a Participant covered by this subsection has an
Advance Election to receive a Single Lump Sum in effect as of the close of
business on the day before his Retirement Date, the Participant’s Pre-409A
Retirement Pension under the Plan shall be paid as a Single Lump Sum as of the
first of the month coincident with or next following his Retirement Date.
(2) Annuity Election: If a Participant covered by this subsection has an Advance
Election to receive an Annuity in effect as of the close of business on the day
before his Retirement Date, the Participant’s Pre-409A Retirement Pension under
the Plan shall be paid in an Annuity beginning on the first of the month
coincident with or next following his Retirement Date. The

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following provisions of this paragraph govern the form of Annuity payable in the
case of a Participant described in this paragraph.
(i) Salaried Plan Election: A Participant who has a qualifying Salaried Plan
election shall receive his distribution in the same form of Annuity the
Participant selected in such qualifying Salaried Plan election. For this
purpose, a “qualifying Salaried Plan election” is a written election of a form
of payment by the Participant that: (A) is currently in effect under the
Salaried Plan as of the close of business on the day before the Participant’s
Retirement Date, and (B) specifies an Annuity as the form of payment for all or
part of the Participant’s Retirement Pension under the Salaried Plan. For
purposes of the preceding sentence, a Participant who elects a combination lump
sum and Annuity under the Salaried Plan is considered to have specified an
Annuity for part of his Salaried Plan Pension.
(ii) PEP Election: A Participant who is not covered by subparagraph (i) and who
has a PEP Election in effect as of the close of business on the day before his
Retirement Date shall receive his distribution in the form of Annuity the
Participant selects in such PEP Election.
(iii) No PEP Election: A Participant who is not covered by subparagraph (i) or
(ii) above shall receive his distribution in the form of a Qualified Joint and
Survivor Annuity if he is married, or in the form of

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a Single Life Annuity if he is not married. For purposes of this subparagraph
(iii), a Participant shall be considered married if he is married on the day
before his Retirement Date.
6.2    Available Forms of Payment: The forms of payment set forth in subsections
(a) and (b) may be provided to any Participant who is entitled to a Pre-409A
Retirement Pension. The forms of payment for other Participants are set forth in
subsection (c) below. The provisions of this section are effective for Annuity
Starting Dates after 1989 and earlier distributions shall be governed by prior
terms of the Plan.
(a) Basic Forms of Payment: A Participant’s Pre-409A Retirement Pension shall be
distributed in one of the forms of payment listed in this subsection. The
particular form of payment applicable to a Participant shall be determined in
accordance with Section 6.1. Payments shall commence on the date specified in
Section 6.1 and shall end on the date specified in this subsection.
(1) Single Life Annuity Option: A Participant may receive his Pre-409A Pension
in the form of a Single Life Annuity, which provides monthly payments ending
with the last payment due prior to his death.
(2) Survivor Options: A Participant may receive his Pre-409A Pension in
accordance with one of the following survivor options:
(i) 100 Percent Survivor Option: The Participant shall receive a reduced
Pre-409A Pension payable for life, ending with the last monthly payment due
prior to his death. Payments in the same reduced amount shall continue after the
Participant’s death to his

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beneficiary for life, beginning on the first day of the month coincident with or
following the Participant’s death and ending with the last monthly payment due
prior to the beneficiary’s death.
(ii) 75 Percent Survivor Option: The Participant shall receive a reduced
Pre-409A Pension payable for life, ending with the last monthly payment due
prior to his death. Payments in the amount of 75 percent of such reduced
Pre-409A Pension shall be continued after the Participant’s death to his
beneficiary for life, beginning on the first day of the month coincident with or
following the Participant’s death and ending with the last monthly payment due
prior to the beneficiary’s death.
(iii) 50 Percent Survivor Option: The Participant shall receive a reduced
Pre-409A Pension payable for life, ending with the last monthly payment due
prior to his death. Payments in the amount of 50 percent of such reduced
Pre-409A Pension shall be continued after the Participant’s death to his
beneficiary for life, beginning on the first day of the month coincident with or
following the Participant’s death and ending with the last monthly payment due
prior to the beneficiary’s death. A 50 percent survivor option under this
paragraph shall be a Qualified Joint and Survivor Annuity if the Participant’s
beneficiary is his Eligible Spouse.

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(iv) Ten Years Certain and Life Option: The Participant shall receive a reduced
Pre-409A Pension which shall be payable monthly for his lifetime but for not
less than 120 months. If the retired Participant dies before 120 payments have
been made, the monthly Pension amount shall be paid for the remainder of the 120
month period to the Participant’s primary beneficiary (or if the primary
beneficiary has predeceased the Participant, the Participant’s contingent
beneficiary).
(3) Single Lump Sum Payment Option: A Participant may receive payment of his
Pre-409A Pension in the form of a Single Lump Sum payment.
(4) Combination Lump Sum/Monthly Benefit Option: A Participant who does not have
an Advance Election in effect may receive a portion of his Pre-409A Pension in
the form of a lump sum payment, and the remaining portion in the form of one of
the monthly benefits described in paragraphs (1) and (2) above. The Pre-409A
Pension is divided between the two forms of payment based on the whole number
percentages designated by the Participant on a form provided for this purpose by
the Plan Administrator. For the election to be effective, the sum of the two
percentages designated by the Participant must equal 100 percent.
(i) The amount of the Pre-409A Pension paid in the form of a lump sum is
determined by multiplying: (A) the amount that would be payable to the
Participant as a Single Lump Sum payment if the

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Participant’s entire benefit were payable in that form, by (B) the percentage
that the Participant has designated for receipt in the form of a lump sum.
(ii) The amount of the Pre-409A Pension paid in the form of a monthly benefit is
determined by multiplying: (A) the amount of the monthly benefit elected by the
Participant, determined in accordance with paragraph (1) or (2) above (whichever
applies), by (B) the percentage that the Participant has designated for receipt
in the form of a monthly benefit.
(b) Inflation Protection: The following levels of inflation protection may be
provided to any Participant who is entitled to a Pre-409A Retirement Pension
(except to the extent such Pre-409A Pension is paid as a lump sum).
(1) 5 Percent Inflation Protection: A Participant’s monthly benefit shall be
initially reduced, but thereafter shall be increased if inflation in the prior
year exceeds 5 percent. The amount of the increase shall be the difference
between inflation in the prior year and 5 percent.
(2) 7 Percent Inflation Protection: A Participant’s monthly benefit shall be
initially reduced, but thereafter shall be increased if inflation in the prior
year exceeds 7 percent. The amount of the increase shall be the difference
between inflation in the prior year and 7 percent.
Benefits shall be subject to increase in accordance with this subsection each
January 1, beginning with the second January 1 following the Participant’s
Annuity Starting Date.

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The amount of inflation in the prior year shall be determined based on inflation
in the 12-month period ending on September 30 of such year, with inflation
measured in the same manner as applies on the Effective Date for adjusting
Social Security benefits for changes in the cost of living. Inflation protection
that is in effect shall carry over to any survivor benefit payable on behalf of
a Participant, and shall increase the otherwise applicable survivor benefit as
provided above. Any election by a Participant to receive inflation protection
shall be irrevocable by such Participant or his surviving beneficiary.
(c) Available Options for Vested Benefits: The forms of payment available for a
Participant with a Pre-409A Vested Pension are a Qualified Joint and Survivor
Annuity or a 75 Percent Survivor Annuity for married Participants, and a Single
Life Annuity for both married and unmarried Participants. The applicable form of
payment shall be determined in accordance with Section 6.1(a).
6.3    Procedures for Elections: This section sets forth the procedures for
making Advance Elections and PEP Elections.
(a) In General: To qualify as an Advance Election or PEP Election for purposes
of Section 6.1, an election must be made in writing, on the form designated by
the Plan Administrator, and must be signed by the Participant. These
requirements also apply to any revocations of such elections. Spousal consent is
not required for any election (or revocation of election) under the Plan.
(b) Advance Election: To qualify as an Advance Election, an election must be
made on or after July 15, 1993 and meet the following requirements.

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(1) Election: The Participant shall designate on the Advance Election form
whether the Participant elects to take his Pre-409A Pension in the form of an
Annuity or a Single Lump Sum.
(2) Receipt by Plan Administrator: The Advance Election must be received by the
Plan Administrator before the start of the calendar year containing the
Participant’s Retirement Date, and at least 6 months before that Retirement
Date. An election that meets the foregoing requirements shall remain effective
until it is changed or revoked.
(3) Change or Revocation of Election: A Plan Participant may change an Advance
Election by filing a new Election that meets the foregoing requirements. A Plan
Participant may revoke an Advance Election only by filing a revocation that is
received by the Plan Administrator before the start of the calendar year
containing the Plan Participant’s Retirement Date, and at least 6 months before
that Retirement Date.
Any Advance Election by a Participant shall be void if the Participant is not
entitled to a Pre-409A Retirement Pension.
(c) PEP Election: A PEP Election may only be made by a Participant who has an
Advance Election to receive an Annuity in effect at the time his PEP Election is
received by the Plan Administrator. In determining whether an Advance Election
is in effect for this purpose, the advance receipt requirement of subsection
(b)(2) shall be considered met if it will be met by the Participant’s proposed
Retirement Date.

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(1) Election: The Participant shall designate on the PEP Election form the
Annuity form of benefit the Participant selects from those described in
Section 6.2, including the Participant’s choice of inflation protection, subject
to the provisions of this Article VI. The forms of payment described in
Section 6.2(a)(3) and (4) are not available pursuant to a PEP Election.
(2) Receipt by the Plan Administrator: The PEP Election must be received by the
Plan Administrator no earlier than 180 days (90 days prior to January 1, 2007)
before the Participant’s Retirement Date, and no later than the close of
business on the day before the Participant’s Retirement Date. The Participant
shall furnish proof of the age of his beneficiary (including his Eligible Spouse
if applicable), to the Plan Administrator by the day before the Participant’s
Retirement Date, for any form of payment which is subject to reduction in
accordance with subsection 6.2(c) above.
A Participant may change his PEP Election by filing a new Election with the Plan
Administrator that meets the foregoing requirements. The Participant’s PEP
Election shall become effective at the close of business on the day before the
Participant’s Retirement Date. Any PEP Election by a Participant shall be void
if the Participant does not have an Advance Election in effect at such time.
(d) Elections Rules for Annuity Starting Dates: When amounts become payable to a
Participant in accordance with Article IV, they shall be payable as of the
Participant’s Annuity Starting Date and the election procedures (in this section
and Sections 6.1 and 6.5) shall apply to all of the Participant’s unpaid
accruals under this Pre-

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409A Program as of such Annuity Starting Date, with the following exception. In
the case of a Participant who is rehired after his initial Annuity Starting Date
and who (i) is currently receiving an Annuity that remained in pay status upon
rehire, or (ii) was previously paid a lump sum distribution (other than a
cashout distribution described in Section 4.9(a)), the Participant’s subsequent
Annuity Starting Date (as a result of his termination of reemployment), and the
election procedures at such subsequent Annuity Starting Date, shall apply only
to the portion of his benefit that accrues after his rehire. Any prior accruals
that remain to be paid as of the Participant’s subsequent Annuity Starting Date
shall continue to be payable in accordance with the elections made at his
initial Annuity Starting Date under this Pre-409A Program.
For purposes of this section, an election shall be treated as received on a
particular day if it is: (A) postmarked that day, or (B) actually received by
the Plan Administrator on that day. Delivery under clause (B) must be made by
the close of business, which time is to be determined by the Plan Administrator.
6.4    Special Rules for Survivor Options    :
(a) Effect of Certain Deaths: If a Participant makes a PEP Election for a form
of payment described in Section 6.2(a)(2) and the Participant or his beneficiary
(beneficiaries in the case of Section 6.2(a)(2)(iv)) dies before the PEP
Election becomes effective, the election shall be disregarded. If the
Participant dies after such PEP Election becomes effective but before his
Pre-409A Retirement Pension actually commences, the election shall be given
effect and the amount payable to his surviving Eligible Spouse or other
beneficiary shall commence on the first day of the month

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following his death (any back payments due the Participant shall be payable to
his estate). In the case of a Participant who has elected the form of payment
described in Section 6.2(a)(2)(iv), if such Participant dies: (i) after the PEP
Election has become effective, (ii) without a surviving primary or contingent
beneficiary, and (iii) before receiving 120 payments under the form of payment,
then the remaining payments due under such form of payment shall be paid to the
Participant’s estate. If payments have commenced under such form of payment to a
Participant’s primary or contingent beneficiary and such beneficiary dies before
payments are completed, then the remaining payments due under such form of
payment shall be paid to such beneficiary’s estate.
(b) Nonspouse Beneficiaries: If a Participant’s beneficiary is not his Eligible
Spouse, he may not elect:
(i) The 100 percent survivor option described in Section 6.2(a)(2)(i) if his
nonspouse beneficiary is more than 10 years younger than he is, or
(ii) The 75 percent survivor option described in Section 6.2(a)(2)(ii) if his
nonspouse beneficiary is more than 19 years younger than he is.
6.5    Designation of Beneficiary: A Participant who has elected to receive all
or part of his pension in a form of payment that includes a survivor option
shall designate a beneficiary who will be entitled to any amounts payable on his
death. Such designation shall be made on a PEP Election Form or an approved
election form filed under the Salaried Plan,

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whichever is applicable. In the case of the survivor option described in
Section 6.2(a)(2)(iv), the Participant shall be entitled to name both a primary
beneficiary and a contingent beneficiary. A Participant (whether active or
former) shall have the right to change or revoke his beneficiary designation at
any time prior to when his election is finally effective. The designation of any
beneficiary, and any change or revocation thereof, shall be made in accordance
with rules adopted by the Plan Administrator. A beneficiary designation shall
not be effective unless and until filed with the Plan Administrator. If no
beneficiary is properly designated, then a Participant’s election of a
survivor’s option described in Section 6.2(a)(2) shall not be given effect. A
Participant entitled to a Pre-409A Vested Pension does not have the right or
ability to name a beneficiary; if the Participant is permitted under Section 6.2
to elect an optional form of payment, then his beneficiary shall be his Eligible
Spouse on his Annuity Starting Date.
6.6    Payment of FICA and Related Income Taxes: As provided in section 6.7 of
the Plan Document for the Section 409A Program, a portion of a Participant’s
409A Pension, if any, shall be paid as a single lump sum and remitted directly
to the Internal Revenue Service (“IRS”) or other applicable tax authority in
satisfaction of the Participant’s FICA Amount and the related withholding of
income tax at source on wages (imposed under Code Section 3401 or the
corresponding withholding provisions of the applicable state, local or foreign
tax laws as a result of the payment of the FICA Amount) and the additional
withholding of income tax at source on wages that is attributable to the
pyramiding of wages and taxes (all such amounts due are referred to collectively
as “Employment Taxes”). To the extent that a Participant’s 409A Pension, if any,
is insufficient to pay the Employment Taxes when due (including if the
Participant’s 409A Pension has not commenced at the time the Employment Taxes
are due), a

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portion of the Participant’s Pre-409A Pension, if any, shall be paid as a single
lump sum and remitted directly to the applicable tax authority in satisfaction
of any amounts necessary to satisfy fully the Employment Taxes.

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ARTICLE VII.
Administration
7.1    Authority to Administer Plan: The Plan shall be administered by the Plan
Administrator, which shall have the authority to interpret the Plan and issue
such regulations as it deems appropriate. The Plan Administrator shall maintain
Plan records and make benefit calculations, and may rely upon information
furnished it by the Participant in writing, including the Participant’s current
mailing address, age and marital status. The Plan Administrator’s
interpretations, determinations, regulations and calculations shall be final and
binding on all persons and parties concerned. Neither the Company nor the Plan
Administrator shall be a fiduciary of the Plan, and any restrictions that might
apply to a party in interest under section 406 of ERISA shall not apply under
the Plan, including with respect to the Company or the Plan Administrator.
7.2    Facility of Payment: Whenever, in the Plan Administrator’s opinion, a
person entitled to receive any payment of a benefit or installment thereof
hereunder is under a legal disability or is incapacitated in any way so as to be
unable to manage his financial affairs, the Plan Administrator may make payments
to such person or to the legal representative of such person for his benefit, or
the Plan Administrator may apply the payment for the benefit of such person in
such manner as it considers advisable. Any payment of a benefit or installment
thereof in accordance with the provisions of this section shall be a complete
discharge of any liability for the making of such payment under the provisions
of the Plan.
7.3    Claims Procedure: The Plan Administrator shall have the exclusive
discretionary authority to construe and to interpret the Plan, to decide all
questions of

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eligibility for benefits and to determine the amount of such benefits, and its
decisions on such matters are final and conclusive. As a result, benefits under
this Plan will be paid only if the Plan Administrator decides in its discretion
that the person claiming such benefits is entitled to them. This discretionary
authority is intended to be absolute, and in any case where the extent of this
discretion is in question, the Plan Administrator is to be accorded the maximum
discretion possible. Any exercise of this discretionary authority shall be
reviewed by a court, arbitrator or other tribunal under the arbitrary and
capricious standard (i.e., the abuse of discretion standard). If, pursuant to
this discretionary authority, an assertion of any right to a benefit by or on
behalf of a Participant or beneficiary (a “claimant”) is wholly or partially
denied, the Plan Administrator, or a party designated by the Plan Administrator,
will provide such claimant the claims review process described in this Section.
The Plan Administrator has the discretionary right to modify the claims process
described in this Section in any manner so long as the claims review process, as
modified, includes the steps described below. Within a 90-day response period
following the receipt of the claim by the Plan Administrator, the Plan
Administrator will notice the claimant of:
(a) The specific reason or reasons for the denial;
(b) Specific reference to pertinent Plan provisions on which the denial is
based;
(c) A description of any additional material or information necessary for the
claimant to submit to perfect the claim and an explanation of why such material
or information is necessary; and

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(d) A description of the Plan’s claim review procedure (including the time
limits applicable to such process and a statement of the claimant’s right to
bring a civil action under ERISA following a further denial on review).
If the Plan Administrator determines that special circumstances required an
extension of time for processing the claim it may extend the response period
from 90 to 180 days. If this occurs, the Plan Administrator will notify the
claimant before the end of the initial 90-day period, indicating the special
circumstances requiring the extension and the date by which the Plan
Administrator expects to make the final decision. Further review of a claim is
available upon written request by the claimant to the Plan Administrator within
60 days after the claimant receives written notice of the denial of the claim.
Upon review, the Plan Administrator shall provide the claimant a full and fair
review of the claim, including the opportunity to submit to the Plan
Administrator comments, documents, records and other information relevant to the
claim and the Plan Administrator’s review shall take into account such comments,
documents, records and information regardless of whether it was submitted or
considered at the initial determination. The decision on review will be made
within 60 days after receipt of the request for review, unless circumstances
warrant an extension of time not to exceed an additional 60 days. If this
occurs, notice of the extension will be furnished to the claimant before the end
of the initial 60-day period, indicating the special circumstances requiring the
extension and the date by which the Plan Administrator expects to make the final
decisions. The final decision shall be in writing and drafted in a manner
calculated to be understood by the claimant and include specific reasons for the
decision with references to the specific Plan provisions on which the decision
is based.

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Any claim under the Plan that is reviewed by a court, arbitrator, or any other
tribunal shall be reviewed solely on the basis of the record before the Plan
Administrator at the time it made its determination. In addition, any such
review shall be conditioned on the claimant’s having fully exhausted all rights
under this Section as is more fully explained in Section 7.5. Any notice or
other notification that is required to be sent to a claimant under this Section
may be sent pursuant to any method approved under Department of Labor Regulation
Section 2520.104b-1 or other applicable guidance.
7.4    Effect of Specific References: Specific references in the Plan to the
Plan Administrator’s discretion shall create no inference that the Plan
Administrator’s discretion in any other respect, or in connection with any other
provision, is less complete or broad.
7.5    Claimant Must Exhaust the Plan’s Claims Procedures Before Filing in
Court. Before filing any Claim (including a suit or other action) in court or in
another tribunal, a Claimant must first fully exhaust all of the Claimant’s
rights under the claims procedures of Section 7.3.
(a)    Upon review by any court or other tribunal, the exhaustion requirement of
this Section 7.5 is intended to be interpreted to require exhaustion in as many
circumstances as possible (and any steps necessary to clarify or effect this
intent may be taken).
(b)    In any action or consideration of a Claim in court or in another tribunal
following exhaustion of the Plan’s claims procedure as described in this
Section 7.5, the subsequent action or consideration shall be limited, to the
maximum

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extent permissible, to the record that was before the Plan Administrator in the
claims procedure.
(c)    The exhaustion requirement of this Section 7.5 shall apply: (i)
regardless of whether other Disputes that are not Claims (including those that a
court might consider at the same time) are of greater significance or relevance,
(ii) to any rights the Plan Administrator may choose to provide in connection
with novel Disputes or in particular situations, (iii) regardless of whether the
rights are actual or potential and (iv) even if the Plan Administrator has not
previously defined or established specific claims procedures that directly apply
to the submission and consideration of such Claim (in which case the Plan
Administrator (upon notice of the Claim) shall either promptly establish such
claims procedures or shall apply (or act by analogy to) the claims procedures of
Section 7.5 that apply to claims for benefits).
(d)    The Plan Administrator may make special arrangements to consider a Claim
on a class basis or to address unusual conflicts concerns, and such minimum
arrangements in these respects shall be made as are necessary to maximize the
extent to which exhaustion is required.
(e)    For purposes of this Section 7.5, the following definitions apply.
(i)    A “Dispute” is any claim, dispute, issue, action or other matter.
(ii)    A “Claim” is any Dispute that implicates in whole or in part any one or
more of the following –
(A)    The interpretation of the Plan;

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(B)    The interpretation of any term or condition of the Plan;
(C)     The interpretation of the Plan (or any of its terms or conditions) in
light of applicable law;
(D)    Whether the Plan or any term or condition under the Plan has been validly
adopted or put into effect;
(E)    The administration of the Plan;
(F)    Whether the Plan, in whole or in part, has violated any terms, conditions
or requirements of ERISA or other applicable law or regulation, regardless of
whether such terms, conditions or requirements are, in whole or in part,
incorporated into the terms, conditions or requirements of the Plan;
(G)    A request for Plan benefits or an attempt to recover Plan benefits;
(H)    An assertion that any entity or individual has breached any fiduciary
duty; or
(I)    Any Claim that: (i) is deemed similar to any of the foregoing by the Plan
Administrator, or (ii) relates to the Plan in any way.
(iii)    A “Claimant” is any Employee, former Employee, Participant, former
Participant, Beneficiary (or the spouse, former spouse, estate, heir or
representative of any of the foregoing individuals), or any other individual,
person, entity with a relationship to any of the foregoing individuals

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or the Plan, as well as any group of one or more of the foregoing, who has a
Claim.
7.6    Limitations on Actions. Effective for claims and actions filed on or
after January 1, 2011, any claim filed under Article VII and any action filed in
state or federal court by or on behalf of a former or current Employee,
Participant, beneficiary or any other individual, person or entity
(collectively, a “Petitioner”) for the alleged wrongful denial of Plan benefits
or for the alleged interference with or violation of ERISA-protected rights must
be brought within two years of the date the Petitioner’s cause of action first
accrues. For purposes of this subsection, a cause of action with respect to a
Petitioner’s benefits under the Plan shall be deemed to accrue not later than
the earliest of (i) when the Petitioner has received the calculation of the
benefits that are the subject of the claim or legal action, (ii) the date
identified to the Petitioner by the Plan Administrator on which payments shall
commence, or (iii) when the Petitioner has actual or constructive knowledge of
the facts that are the basis of his claim. For purposes of this subsection, a
cause of action with respect to the alleged interference with ERISA-protected
rights shall be deemed to accrue when the claimant has actual or constructive
knowledge of the acts that are alleged to interfere with ERISA-protected rights.
Failure to bring any such claim or cause of action within this two-year time
frame shall preclude a Petitioner, or any representative of the Petitioner, from
filing the claim or cause of action. Correspondence or other communications
following the mandatory appeals process described in Section 7.3 shall have no
effect on this two-year time frame.
7.7    Restriction on Venue. Any claim or action filed in court or any other
tribunal in connection with the Plan by or on behalf of a Petitioner (as defined
in Section 7.6

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above) shall only be brought or filed in the United States District Court for
the Southern District of New York, effective for claims or actions filed on or
after January 1, 2011.

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ARTICLE VIII.
Miscellaneous
8.1    No guarantee of Employment: Nothing contained in this Plan shall be
construed as a contract of employment between an Employer and any Employee, or
as a right of any Employee to be continued in the employment of an Employer, or
as a limitation of the right of an Employer to discharge any of its Employees,
with or without cause.
8.2    Nonalienation of Benefits: Benefits payable under the Plan or the right
to receive future benefits under the Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution, or levy of any kind, either voluntary or
involuntary, and any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, charge or otherwise dispose of any right to benefits payable
hereunder, including any assignment or alienation in connection with a divorce,
separation, child support or similar arrangement, shall be null and void and not
binding on the Company. The Company shall not in any manner be liable for, or
subject to, the debts, contracts, liabilities, engagements or torts of any
person entitled to benefits hereunder.
8.3    Unfunded Plan: The Company’s obligations under the Plan shall not be
funded, but shall constitute liabilities by the Company payable when due out of
the Company’s general funds. To the extent the Participant or any other person
acquires a right to receive benefits under this Plan, such right shall be no
greater than the rights of any unsecured general creditor of the Company.
8.4    Action by the Company: Any action by the Company under this Plan,
including any amendment authorized to be made under Section 9.2, may be made by
the Board

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of Directors of the Company. In addition, any person or persons authorized
(directly or indirectly) by the Board may take such action on behalf of the
Company.
8.5    Indemnification: Unless the Board of Directors of the Company shall
determine otherwise, the Company shall indemnify, to the full extent permitted
by law, any employee acting in good faith within the scope of his employment in
carrying out the administration of the Plan.
8.6    Code Section 409A: At all times, this Plan shall be operated to preserve
the status of benefits under this Pre-409A Program as being exempt from Section
409A, i.e., to preserve the grandfathered status of this Pre-409A Program. In
all cases, the provision of the prior sentence shall apply notwithstanding any
contrary provision of the Plan. Accordingly, in determining rights and benefits
under this Pre-409A Program, changes in the Salaried Plan that are effective
after December 31, 2004 shall be disregarded to the extent necessary to avoid a
modification of this Pre-409A Program that would constitute a material
modification for purposes of Section 409A.
8.7    Authorized Transfers: If a Participant transfers to an entity that is not
part of the PepsiCo Organization, the liability for any benefits accrued while
the Participant was employed by the PepsiCo Organization shall remain with the
Company.

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ARTICLE IX.
Amendment and Termination
This Article governs the Company’s right to amend and or terminate the Plan. The
Company’s amendment and termination powers under this Article shall be subject,
in all cases, to the restrictions on amendment and termination in Section 409A
and shall be exercised in accordance with such restrictions to ensure continued
exemption from Section 409A in accordance with Section 8.6.
9.1    Continuation of the Plan: While the Company and the Employers intend to
continue the Plan indefinitely, they assume no contractual obligation as to its
continuance. In accordance with Section 8.4, the Company hereby reserves the
right, in its sole discretion, to amend, terminate, or partially terminate the
Plan at any time provided, however, that no such amendment or termination shall
adversely affect the amount of benefit to which a Participant or his beneficiary
is entitled under Article IV on the date of such amendment or termination,
unless the Participant becomes entitled to an amount equal to such benefit under
another plan or practice adopted by the Company (except as necessary to preserve
the exemption from Section 409A of this Pre-409A Program). Specific forms of
payment are not protected under the preceding sentence.
9.2    Amendments: The Company may, in its sole discretion, make any amendment
or amendments to this Plan from time to time, with or without retroactive
effect, including any amendment or amendments to eliminate available
distribution options under Article VI hereof at any time before the earlier of
the Participant’s Annuity Starting Date under this Plan or under the Salaried
Plan; provided, however, that no amendment of the Plan shall be

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effective to the extent that the amendment would be considered a “material
modification” (as that term is defined in Section 409A) of the Pre-409A Program
and would, as a result, cause the Pre-409A Program to be subject to Section
409A. An Employer (other than the Company) shall not have the right to amend the
Plan.
9.3    Termination: The Company may terminate the Plan, either as to its
participation or as to the participation of one or more Employers. If the Plan
is terminated with respect to fewer than all of the Employers, the Plan shall
continue in effect for the benefit of the Employees of the remaining Employers.

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ARTICLE X.
ERISA Plan Structure
This Plan document in conjunction with the plan document(s) for the 409A Program
encompasses three separate plans within the meaning of ERISA, as are set forth
in subsections (a), (b) and (c). This division into separate plans shall be
effective as of July 1, 1996; previously the plans set forth in subsections (b)
and (c) were a single plan within the meaning of ERISA.
(a) Excess Benefit Plan: An excess benefit plan within the meaning of section
3(36) of ERISA, maintained solely for the purpose of providing benefits for
Salaried Plan participants in excess of the limitations on benefits imposed by
section 415 of the Code.
(b) Excess Compensation Top Hat Plan: A plan maintained by the Company primarily
for the purpose of providing deferred compensation for a select group of
management or highly compensated employees within the meaning of sections 201(2)
and 401(a)(1) of ERISA. The plan provides benefits for Salaried Plan
participants in excess of the limitations imposed by section 401(a)(17) of the
Code on benefits under the Salaried Plan (after taking into account any benefits
under the excess benefit plan). For ERISA reporting purposes, this portion of
PEP may be referred to as the PepsiCo Pension Equalization Plan I.
(c) Preservation Top Hat Plan: A plan maintained by the Company primarily for
the purpose of providing deferred compensation for a select group of management
or highly compensated employees within the meaning of sections 201(2)

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and 401(a)(1) of ERISA. The plan provides grandfather benefits to those Salaried
Plan participants described in section 5.2(a) hereof, by preserving for them the
pre-1989 level of benefit accrual that was in effect before the Salaried Plan’s
amendment effective January 1, 1989 (after taking into account any benefits
under the Excess Benefit Plan and Excess Compensation Top Hat Plan). For ERISA
reporting purposes, this portion of PEP may be referred to as the PepsiCo
Pension Equalization Plan II.
Benefits under this Plan shall be allocated first to the Excess Benefit Plan, to
the extent of benefits paid for the purpose indicated in (a) above; then any
remaining benefits shall be allocated to the Excess Compensation Top Hat Plan,
to the extent of benefits paid for the purpose indicated in (b) above; then any
remaining benefits shall be allocated to the Preservation Top Hat Plan. These
three plans are severable for any and all purposes as directed by the Company.

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ARTICLE XI.
Applicable Law
All questions pertaining to the construction, validity and effect of the Plan
shall be determined in accordance with the provisions of ERISA. In the event
ERISA is not applicable or does not preempt state law, the laws of the state of
New York shall govern.
If any provision of this Plan is, or is hereafter declared to be, void,
voidable, invalid or otherwise unlawful, the remainder of the Plan shall not be
affected thereby.

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ARTICLE XII.
Signature
This amended and restated Plan is hereby adopted and approved, to be effective
as of April 1, 2016, this 1st day of April, 2016.

 
 
 
 
PEPSICO, INC.
 
 
 
 
By:
/s/ Cynthia M. Trudell
 
 
Cynthia M. Trudell
 
 
Executive Vice President, Human Resources
Chief Human Resources Officer

 
 
APPROVED
 
 
By:
/s/ Stacy DeWalt Grindal
 
Stacy DeWalt Grindal
 
Senior Legal Director, Employee Benefits Counsel
Law Department
 
 
 
 
 
 
By:
/s/ Christine Griff
 
Christine Griff
 
Vice President, Tax Counsel
Tax Department

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APPENDIX
Foreword
This Appendix sets forth additional provisions applicable to individuals
specified in the Articles of this Appendix. In any case where there is a
conflict between the Appendix and the main text of the Plan, the Appendix shall
govern.

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ARTICLE A
Accruals for 1993 and 1994
This Article A of the Appendix shall be effective on the date the Plan is
adopted.
A.1 Accruals for 1993 and 1994: This section shall apply to any individual:
(i) who is a Salaried Plan Participant and employed by the PepsiCo Organization
on
December 31, 1993, (ii) whose Salaried Plan Pension is vested during 1993 (or
would become vested in 1994 if his Service included the assumed period of
continued service specified in (a)(1) below), and (iii) whose minimum 1993
Pension in subsection (a) below is not derived solely from that portion of the
Plan described in (c) of Article X. In determining the amount of the 1993 and
1994 Pension amounts for any such individual, the provisions set forth in
subsections (a) and (b) below shall apply.
(a) Minimum 1993 Pension: Any individual who is covered by this section shall
accrue a minimum 1993 Pension as of December 31, 1993. In determining the amount
of such individual’s minimum 1993 Pension, the following shall apply.
(1) An individual’s Service and Credited Service as of the end of 1993 shall be
assumed to equal the respective Service and Credited Service he would have if
his Service continued through December 31, 1994. Notwithstanding the preceding
sentence, the assumed period of continued Service shall be less to the extent
the Corporation’s human resource records on December 31, 1993 reflect a
scheduled termination date in 1994 for such individual. In this case, the
individual’s assumed period of continued service shall be the portion of 1994
that ends with such scheduled termination date.

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(2) An individual’s Highest Average Monthly Earnings as of the end of 1993 shall
be adjusted by the actuary’s salary scale assumption which is used under the
Salaried Plan, so that they equal the amount such scale projects for the
individual as of the end of 1994. Notwithstanding the preceding sentence, the
following special rules shall apply.
(i) A higher salary scale assumption shall be used for anyone whose projected
1994 earnings as reflected on the “Special PEP Salary Scale” of the PepsiCo
Benefits Department on December 31, 1993 are higher than would be assumed under
the first sentence of this paragraph. In this case, the individual’s 1993
earnings shall be adjusted using such higher salary scale.
(ii) In the case of an individual whose assumed period of service under
paragraph (1) above is less than all of 1994, the salary adjustment under the
preceding provisions of this paragraph shall be reduced to the amount that would
apply if the individual had no earnings after his scheduled termination date.
(3) An individual’s attained age as of the end of 1993 shall be assumed to be
the age he would have at the end of the assumed period of continued service
applicable under paragraph (1) above.
Any individual who is covered by this section, and who is not otherwise vested
as of December 31, 1993, shall be vested as of such date in both his Pension
(determined without regard to this subsection) and his minimum 1993 Pension. For
purposes of this

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subsection, Code section 401(a)(17) shall be applied in 1993 by giving effect to
the amendments to such Code section made by the Omnibus Budget Reconciliation
Amendments of 1993.
(b) Determination of 1994 Accrual: If a participant in the Salaried Plan accrues
a minimum 1993 Pension under subsection (a) above, the amount of any PEP Pension
for 1994 that accrues shall be only the amount by which the PEP Pension that
would otherwise accrue for 1994 exceeds his minimum 1993 Pension under
subsection (a).

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ARTICLE B
Plan Document Applicable to Pre-2005 Participants
B.1 Scope: This Article supplements the main portion of the Pre-409A PepsiCo PEP
Document with respect to the rights and benefits of Pre-2005 Participants.
B.2 Definitions: Words or phrases appearing in this Article with initial
capitals shall have the meaning set forth in the main body of the Plan.
B.3 Applicability of Plan Document: Except as set forth in subsection B.4 below,
the provisions of the Plan shall apply in all respects to Pre-2005 Participants.
B.4 Determination of Pre-2005 Participant Benefit: If a Pension becomes payable
to or on behalf of a Pre-2005 Participant, the following Sections 5.1, 5.2 and
5.3 contained in this Section B.4 shall replace Sections 5.1, 5.2 and 5.3 of the
main Pre-409A PepsiCo PEP Document, and the amount of the Pre-2005 Participant’s
Pension shall be determined under Section 5.1, 5.2 or 5.3 below (whichever is
applicable), subject to any adjustments required under Sections 4.6(b), 5.4 and
5.5 of the main Pre-409A PepsiCo PEP Document :
“5.1 PEP Pension:
(a) Same Form as Salaried Plan: If a Pre-2005 Participant’s Pension will be paid
in the same form and will commence as of the same time as his pension under the
Salaried Plan, then his Pension hereunder shall be the difference between:
(1) His Total Pension expressed in such form and payable as of such time, minus

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(2) His Salaried Plan Pension expressed in such form and payable as of such
time.
(b) Different Form than Salaried Plan: If a Pre-2005 Participant’s Pension will
be paid in a different form (whether in whole or in part) or will commence as of
a different time than his pension under the Salaried Plan, his Pension shall be
the product of:
(1) The amount of the Pre-2005 Participant’s Total Pension expressed in the form
and payable as of such time as applies to his Pension under this Plan,
multiplied by
(2) A fraction, the numerator of which is the value of his Total Pension reduced
by the value of his Salaried Plan Pension, and the denominator of which is the
value of his Total Pension (with value determined on a reasonable and consistent
basis, in the discretion of the Plan Administrator, with respect to similarly
situated employees).
(c) Definitions: The following definitions apply for purposes of this section.
(1) A Pre-2005 Participant’s “Total Pension” means the greater of:
(i) The amount of the Pre-2005 Participant’s pension determined under the terms
of the Salaried Plan, but without regard to: (A) the limitations imposed by
sections 401(a)(17) and 415 of the Code (as such limitations are interpreted and
applied under the Salaried

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Plan), and (B) the actuarial adjustment under Section 5.7(d) of the Salaried
Plan; or
(ii) The amount (if any) of the Pre-2005 Participant’s PEP Guarantee determined
under Section 5.2.
In making this comparison, the benefits in subparagraphs (i) and (ii) above
shall be calculated with reference to the specific form and time of payment that
is applicable. If the applicable form of payment is a lump sum, the Actuarial
Equivalent factors in section (2) of the definition of Actuarial Equivalent
shall apply for purposes of subparagraph (i) in lieu of those in the Salaried
Plan.
(2) A Pre-2005 Participant’s “Salaried Plan Pension” means the amount of the
Pre-2005 Participant’s pension determined under the terms of the Salaried Plan.
5.2 PEP Guarantee: A Pre-2005 Participant who is eligible under subsection (a)
below shall be entitled to a PEP Guarantee benefit determined under subsection
(b) below. In the case of other Pre-2005 Participants, the PEP Guarantee shall
not apply.
(a) Eligibility: A Pre-2005 Participant shall be covered by this section if the
Pre-2005 Participant has 1988 pensionable earnings from an Employer of at least
$75,000. For purposes of this section, “1988 pensionable earnings” means the
Pre-2005 Participant’s remuneration for the 1988 calendar year, within the
meaning of the Salaried Plan as in effect in 1988. “1988 pensionable earnings”
does not include remuneration from an entity attributable to any period when
that entity was not an Employer.

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(b) PEP Guarantee Formula: The amount of a Pre-2005 Participant’s PEP Guarantee
shall be determined under the applicable formula in paragraph (1), subject to
the special rules in paragraph (2).
(1) Formulas: The amount of a Pre-2005 Participant’s Pension under this
paragraph shall be determined in accordance with subparagraph (i) below.
However, if the Pre-2005 Participant was actively employed by the PepsiCo
Organization in a classification eligible for the Salaried Plan prior to July 1,
1975, the amount of his Pension under this paragraph shall be the greater of the
amounts determined under subparagraphs (i) and (ii), provided that subparagraph
(ii)(B) shall not apply in determining the amount of a Vested Pension.
(i) Formula A: The Pension amount under this subparagraph shall be:
(A) 3 percent of the Pre-2005 Participant’s Highest Average Monthly Earnings for
the first 10 years of Credited Service, plus
(B) 1 percent of the Pre-2005 Participant’s Highest Average Monthly Earnings for
each year of Credited Service in excess of 10 years, less
(C) 1-2/3 percent of the Pre-2005 Participant’s Primary Social Security Amount
multiplied by years of Credited Service not in excess of 30 years.

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In determining the amount of a Vested Pension under this Formula A, the Pension
shall first be calculated on the basis of (I) the Credited Service the Pre-2005
Participant would have earned had he remained in the employ of the Employer
until his Normal Retirement Age, and (II) his Highest Average Monthly Earnings
and Primary Social Security Amount at his Severance from Service Date, and then
shall be reduced by multiplying the resulting amount by a fraction, the
numerator of which is the Pre-2005 Participant’s actual years of Credited
Service on his Severance from Service Date and the denominator of which is the
years of Credited Service he would have earned had he remained in the employ of
an Employer until his Normal Retirement Age.
(ii)    Formula B: The Pension amount under this subparagraph shall be the
greater of (A) or (B) below:
(A)    1-1/2 percent of Highest Average Monthly Earnings times the number of
years of Credited Service, less 50 percent of the Pre-2005 Participant’s Primary
Social Security Amount, or
(B)    3 percent of Highest Average Monthly Earnings times the number of years
of Credited Service up to 15 years, less 50 percent of the Pre-2005
Participant’s Primary Social Security Amount.

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In determining the amount of a Disability Pension under Formula A or B above,
the Pension shall be calculated on the basis of the Pre-2005 Participant’s
Credited Service (determined in accordance with Section 3.3(d)(3) of the
Salaried Plan), and his Highest Average Monthly Earnings and Primary Social
Security Amount at the date of disability.
(2) Calculation: The amount of the PEP Guarantee shall be determined pursuant to
paragraph (1) above, subject to the following special rules:
(i) Surviving Eligible Spouse’s Annuity: Subject to subparagraph (iii) below and
the last sentence of this subparagraph, if the Pre-2005 Participant has an
Eligible Spouse, the Pre-2005 Participant’s Eligible Spouse shall be entitled to
receive a survivor annuity equal to 50 percent of the Pre-2005 Participant’s
Annuity under this section, with no corresponding reduction in such Annuity for
the Pre-2005 Participant. Annuity payments to a surviving Eligible Spouse shall
begin on the first day of the month coincident with or following the Pre-2005
Participant’s death and shall end with the last monthly payment due prior to the
Eligible Spouse’s death. If the Eligible Spouse is more than 10 years younger
than the Pre-2005 Participant, the survivor benefit payable under this
subparagraph shall be adjusted as provided below.

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(A) For each full year more than 10 but less than 21 that the surviving Eligible
Spouse is younger than the Pre-2005 Participant, the survivor benefit payable to
such spouse shall be reduced by 0.8 percent.
(B) For each full year more than 20 that the surviving Eligible Spouse is
younger than the Pre-2005 Participant, the survivor benefit payable to such
spouse shall be reduced by an additional 0.4 percent.
(ii) Reductions: The following reductions shall apply in determining a Pre-2005
Participant’s PEP Guarantee.
(A) If the Pre-2005 Participant will receive an Early Retirement Pension, the
payment amount shall be reduced by 3/12ths of 1 percent for each month by which
the benefit commencement date precedes the date the Pre-2005 Participant would
attain his Normal Retirement Date.
(B) If the Pre-2005 Participant is entitled to a Vested Pension, the payment
amount shall be reduced to the Actuarial Equivalent of the amount payable at his
Normal Retirement Date (if payment commences before such date), and the
Section 4.6(b) reductions for any Pre-Retirement Spouse’s coverage shall apply.

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(C) This clause applies if the Pre-2005 Participant will receive his Pension in
a form that provides an Eligible Spouse benefit, continuing for the life of the
surviving spouse, that is greater than that provided under subparagraph (i). In
this instance, the Pre-2005 Participant’s Pension under this section shall be
reduced so that the total value of the benefit payable on the Pre-2005
Participant’s behalf is the Actuarial Equivalent of the Pension otherwise
payable under the foregoing provisions of this section.
(D) This clause applies if the Pre-2005 Participant will receive his Pension in
a form that provides a survivor annuity for a beneficiary who is not his
Eligible Spouse. In this instance, the Pre-2005 Participant’s Pension under this
section shall be reduced so that the total value of the benefit payable on the
Pre-2005 Participant’s behalf is the Actuarial Equivalent of a Single Life
Annuity for the Pre-2005 Participant’s life.
(E) This clause applies if the Pre-2005 Participant will receive his Pension in
an Annuity form that includes inflation protection described in Section 6.2(b).
In this instance, the Pre-2005 Participant’s Pension under this section shall be
reduced so that the total value of the benefit payable on the Pre-2005

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Participant’s behalf is the Actuarial Equivalent of the elected Annuity without
such protection.
(iii) Lump Sum Conversion: The amount of the Retirement Pension determined under
this section for a Pre-2005 Participant whose Retirement Pension will be
distributed in the form of a lump sum shall be the Actuarial Equivalent of the
Pre-2005 Participant’s PEP Guarantee determined under this section, taking into
account the value of any survivor benefit under subparagraph (i) above and any
early retirement reductions under subparagraph (ii)(A) above.
5.3 Amount of Pre-Retirement Spouse’s Pension: The monthly amount of the
Pre-Retirement Spouse’s Pension payable to a surviving Eligible Spouse under
Section 4.6 shall be determined under subsection (a) below.
(a) Calculation: An Eligible Spouse’s Pre-Retirement Spouse’s Pension shall be
the difference between:
(1) The Eligible Spouse’s Total Pre-Retirement Spouse’s Pension, minus
(2) The Eligible Spouse’s Salaried Plan Pre-Retirement Spouse’s Pension.
(b) Definitions: The following definitions apply for purposes of this section.
(1) An Eligible Spouse’s “Total Pre-Retirement Spouse’s Pension” means the
greater of:

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(i) The amount of the Eligible Spouse’s pre-retirement spouse’s pension
determined under the terms of the Salaried Plan, but without regard to: (A) the
limitations imposed by sections 401(a)(17) and 415 of the Code (as such
limitations are interpreted and applied under the Salaried Plan), and (B) the
actuarial adjustment under Section 5.7(d) of the Salaried Plan; or
(ii) The amount (if any) of the Eligible Spouse’s PEP Guarantee Pre-Retirement
Spouse’s Pension determined under
subsection (c).
In making this comparison, the benefits in subparagraphs (i) and (ii) above
shall be calculated with reference to the specific time of payment applicable to
the Eligible Spouse.
(c) PEP Guarantee Pre-Retirement Spouse’s Pension: An Eligible Spouse’s PEP
Guarantee Pre-Retirement Spouse’s Pension shall be determined in accordance with
paragraph (1) or (2) below, whichever is applicable, with reference to the PEP
Guarantee (if any) that would have been available to the Pre-2005 Participant
under Section 5.2.
(1) Normal Rule: The Pre-Retirement Spouse’s Pension payable under this
paragraph shall be equal to the amount that would be payable as a survivor
annuity, under a Qualified Joint and Survivor Annuity, if the Pre-2005
Participant had:

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(i) Separated from service on the date of death (or, if earlier, his actual
Severance from Service Date);
(ii) Commenced a Qualified Joint and Survivor Annuity on the same date payments
of the Qualified Pre-Retirement Spouse’s Pension are to commence; and
(iii) Died on the day immediately following such commencement.
If payment of a Pre-Retirement Spouse’s Pension under this paragraph commences
prior to the date which would have been the Pre-2005 Participant’s Normal
Retirement Date, appropriate reductions for early commencement shall be applied
to the Qualified Joint and Survivor Annuity upon which the Pre-Retirement
Spouse’s Pension is based.
(2) Special Rule for Active and Disabled Employees Who Die Prior to June 1,
2009: Notwithstanding paragraph (1) above, the Pre‑Retirement Spouse’s Pension
paid on behalf of a Pre-2005 Participant described in Section 4.6(a) who dies
prior to June 1, 2009 shall not be less than an amount equal to 25 percent of
such Pre-2005 Participant’s PEP Guarantee determined under Section 5.2. For this
purpose, Credited Service shall be determined as provided in Section 3.3(d)(2)
of the Salaried Plan, and the deceased Pre-2005 Participant’s Highest Average
Monthly Earnings, Primary Social Security Amount and Covered Compensation shall
be determined as of his date of death. A Pre-Retirement Spouse’s Pension under
this paragraph is not reduced for early commencement.”

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ARTICLE PFS
PFS Special Early Retirement Benefit
PFS.1 Scope: This Article supplements the main portion of the Plan document with
respect to the rights and benefits of Covered Employees on and after the
Effective Date.
PFS.2 Definitions: This section provides definitions for the following words or
phrases in boldface and underlined. Where they appear in this Article with
initial capitals they shall have the meaning set forth below. Except as
otherwise provided in this Article, all defined terms shall have the meaning
given to them in Section 2.1 of the Plan.
(a) Article: This Article PFS of the Appendix to the Plan.
(b) Covered Employee: An Employee who does not meet the eligibility requirements
for the Salaried Plan Early Retirement Benefit solely because he is a highly
compensated employee within the meaning of Section PFS.11(c) of the Salaried
Plan Appendix.
(c) Effective Date: The date the provisions of this Article are effective, which
shall be July 11, 1997.
(d) Salaried Plan Special Early Retirement Benefit: The special early retirement
benefit for certain PFS employees described in Section PFS.11 of the Salaried
Plan Appendix.
(e) Severance Date: The involuntary termination of employment described in
Section PFS.11(a) of the Salaried Plan Appendix that qualifies an Employee for
status as a Covered Employee.

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(f) PFS: PepsiCo Foods Systems, a division of PepsiCo, Inc. prior to the
Effective Date.
PFS.3 Special Early Retirement Benefit: In addition to any benefits he would
otherwise be entitled to under this Plan, a Covered Employee shall receive a
single lump sum benefit as soon as administratively practical following his
Severance Date. The amount of such lump sum shall be the excess of:
(a) The Actuarial Equivalent present value (determined under subsection (2) of
the definition of Actuarial Equivalent in Article II) of the Covered Employee’s
Total Pension under this Plan, for this purpose treating the Covered Employee as
eligible for the Salaried Plan Special Early Retirement Benefit, over
(b) The Actuarial Equivalent present value (determined under subsection (2) of
the definition of Actuarial Equivalent in Article II) of the Covered Employee’s
Total Pension under this Plan determined without regard to this Appendix.
Such calculation shall be made as of the Covered Employee’s Severance Date.
Except as specifically modified by this Article, the Early Retirement Pension
provided by this section is subject to all the usual limitations and provisions
set forth in the Plan.

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ARTICLE PBG
PBG Pre-409A
Effective as of the end of the day on December 31, 2011, the PBG Pension
Equalization Plan (“PBG PEP”) was merged with and into the PepsiCo PEP, with the
PepsiCo PEP as the surviving plan after the Plan merger. This Appendix Article
PBG is effective as of the end of the day on December 31, 2011. This Appendix
PBG, as it is amended from time to time, shall govern PBG PEP benefits that were
grandfathered under Section 409A and subject to the Pre-409A PBG PEP Document
(as described below) prior to the Plan merger.
This Appendix PBG contains the PBG PEP document that was in effect on October 3,
2004 as amended through January 1, 2011 (“Pre-409A PBG PEP Document”), except
that it does not include Articles VII (Administration), VIII (Miscellaneous), IX
(Amendment and Termination), X (ERISA Plan Structure) and XI (Applicable Law)
thereof. Instead, the corresponding Articles of the main portion of this
document (that is, the PepsiCo Pre-409A PEP) shall apply to PBG PEP benefits
governed by this Appendix Article PBG, and references in this Appendix PBG to
Articles VII through XI shall be treated as references to the corresponding
Articles of the main portion of this document.
There shall be no change to the time or form of payment of benefits that are
subject to Section 409A under either the PepsiCo PEP or PBG PEP Document that
would constitute a material modification within the meaning of Treas. Reg. §
1.409A-6(a)(4) as a result of the plan merger or the revisions made to this
document or the Pre-409A PBG PEP Document when it was incorporated into this
Appendix.

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ARTICLE I – Foreword

The PEP Pension Equalization Plan (“PEP” or “Plan”) has been established by PBG
for the benefit of salaried employees of the PBG Organization who participate in
the PBG Salaried Employees Retirement Plan (“Salaried Plan”). PEP provides
benefits for eligible employees whose pension benefits under the Salaried Plan
are limited by the provisions of the Internal Revenue Code of 1986, as amended.
In addition, PEP provides benefits for certain eligible employees based on the
pre-1989 Salaried Plan formula.
This Plan is first effective April 6, 1999. The Plan is a successor plan to the
PepsiCo Pension Equalization Plan, which was last restated effective as of
January 1, 1989. The PepsiCo Pension Equalization Plan covers eligible employees
at the various divisions of PepsiCo, Inc., including eligible employees who are
employed at various Pepsi-Cola Company facilities. On April 6, 1999, when this
Plan became effective, PBG had its initial public offering. PBG employs many of
the individuals employed at Pepsi-Cola Company facilities who were covered under
the PepsiCo Pension Equalization Plan. This initial Plan document closely
mirrors the PepsiCo Pension Equalization Plan document, including its historical
provisions which are relevant for eligibility and benefit determinations under
this Plan.
ARTICLE II – Definitions and Construction
2.1    Definitions: This section provides definitions for certain words and
phrases listed below. Where the following words and phrases, underlined and set
out at the beginning of each lettered subsection, appear in this Plan with
initial capitals they shall have the meaning set forth below, unless a different
meaning is plainly required by the context.

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Accrued Benefit: The Pension payable at Normal Retirement Date determined in
accordance with Article V, based on the Participant’s Highest Average Monthly
Earnings and Credited Service at the date of determination.
Actuarial Equivalent: Except as otherwise specifically set forth in the Plan or
any Appendix to the Plan with respect to a specific benefit determination, a
benefit of equivalent value computed on the basis of the factors set forth
below. The application of the following assumptions to the computation of
benefits payable under the Plan shall be done in a uniform and consistent
manner. In the event the Plan is amended to provide new rights, features or
benefits, the following actuarial factors shall not apply to these new elements
unless specifically adopted by the amendment.
(1)    Annuities and Inflation Protection: To determine the amount of a Pension
payable in the form of a Qualified Joint and Survivor Annuity or optional form
of survivor annuity, or as an annuity with inflation protection, the factors
applicable for such purposes under the Salaried Plan shall apply.
(2)    Lump Sums: To determine the lump sum value of a Pension, or a
Pre-Retirement Spouse’s Pension under Section 4.6, the factors applicable for
such purposes under the Salaried Plan shall apply, except that when the term
“PBGC Rate” is used in the Salaried Plan in this context it shall mean “PBGC
Rate” as defined in this Plan.
(3)    Other Cases: To determine the adjustment to be made in the Pension
payable to or on behalf of a Participant in other cases, the factors are those
applicable for such purpose under the Salaried Plan.

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Advance Election: A Participant’s election to receive his PEP Retirement Pension
as a Single Lump Sum or an Annuity, made in compliance with the requirements of
Section 6.3.
Annuity: A Pension payable as a series of monthly payments for at least the life
of the Participant.
Annuity Starting Date: The Annuity Starting Date shall be the first day of the
first period for which an amount is payable under this Plan as an annuity or in
any other form. A Participant who: (1) is reemployed after his initial Annuity
Starting Date, and (2) is entitled to benefits hereunder after his reemployment,
shall have a subsequent Annuity Starting Date for such benefits only to the
extent provided in Section 6.3(d).
Authorized Leave of Absence: Any absence authorized by an Employer under the
Employer’s standard personnel practices, whether paid or unpaid.
Cashout Limit: The annual dollar limit on elective deferrals under code section
402(g)(1)(B), as in effect from time to time.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Company : PepsiCo, Inc., an organization organized and existing under the laws
of the State of North Carolina, or its successor or successors. For periods
before between April 6, 1999 and February 26, 2010, the Company was The Pepsi
Bottling Group, Inc., (“PBG”) a corporation organized and existing under the
laws of the State of New York, or its successor or successors. For periods
before April 6, 1999, the Company was PepsiCo, Inc.
Covered Compensation: “Covered Compensation” as that term is defined in the
Salaried Plan.

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Credited Service: The period of a Participant’s employment, calculated in
accordance with Section 3.3, which is counted for purposes of determining the
amount of benefits payable to, or on behalf of, the Participant.
Disability Retirement Pension: The Retirement Pension available to a Participant
under Section 4.5.
Early Retirement Pension: The Retirement Pension available to a Participant
under Section 4.2.
Effective Date: The date upon which this Plan is effective, which is April 6,
1999 (except as otherwise provided herein).
Eligible Spouse: The spouse of a Participant to whom the Participant is married
on the earlier of the Participant’s Annuity Starting Date or the date of the
Participant’s death.
Employee: An individual who qualifies as an “Employee” as that term is defined
in the Salaried Plan.
Employer: An entity that qualifies as an “Employer” as that term is defined in
the Salaried Plan.
ERISA: Public Law No. 93-406, the Employee Retirement Income Security Act of
1974, as amended from time to time.
Highest Average Monthly Earnings: “Highest Average Monthly Earnings” as that
term is defined in the Salaried Plan, but without regard to the limitation
imposed by section 401(a)(17) of the Code (as such limitation is interpreted and
applied under the Salaried Plan).

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Late Retirement Date: The Late Retirement Date shall be the first day of the
month coincident with or immediately following a Participant’s actual Retirement
Date occurring after his Normal Retirement Age.
Late Retirement Pension: The Retirement Pension available to a Participant under
Section 4.4.
Normal Retirement Age: The Normal Retirement Age under the Plan is age 65 or, if
later, the age at which a Participant first has 5 Years of Service.
Normal Retirement Date: A Participant’s Normal Retirement Date shall be the
first day of the month coincident with or immediately following a Participant’s
Normal Retirement Age.
Normal Retirement Pension: The Retirement Pension available to a Participant
under Section 4.1.
Participant: An Employee participating in the Plan in accordance with the
provisions of Section 3.1.
PepsiCo/PBG Organization: The controlled group of organizations of which the
Company is a part, as defined by Code section 414 and regulations issued
thereunder. An entity shall be considered a member of the PepsiCo/PBG
Organization only during the period it is one of the group of organizations
described in the preceding sentence. The application of this definition for
periods prior to February 26, 2010 shall take into account the different
definition of “Company” that applies prior to February 26, 2010.
PBGC: The Pension Benefit Guaranty Corporation, a body corporate within the
Department of Labor established under the provisions of Title IV of ERISA.

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PBGC Rate: The PBGC Rate is 120 percent of the interest rate, determined on the
Participant’s Annuity Starting Date, that would be used by the PBGC for purposes
of determining the present value of a lump sum distribution on plan termination.
Pension: One or more payments that are payable to a person who is entitled to
receive benefits under the Plan.
PEP Election: A Participant’s election to receive his PEP Retirement Pension in
one of the Annuity forms available under Section 6.2, made in compliance with
the requirements of Sections 6.3 and 6.4.
PepsiCo Prior Plan: The PepsiCo Pension Equalization Plan.
Plan: The PBG Pension Equalization Plan, the Plan set forth herein, as it may be
amended from time to time. The Plan is also sometimes referred to as PEP. For
periods before April 6, 1999, references to the Plan refer to the PepsiCo Prior
Plan.
Plan Administrator: The PepsiCo Administration Committee, or its delegate or
delegates, which shall authority to administer the Plan as provided in Article
VII. For periods prior to February 26, 2010, the Company, which shall have
authority to administer the Plan as provided in Article VII.
Plan Year: The initial Plan Year shall be a short Plan Year beginning on the
Effective Date and ending on December 31, 1999. Thereafter, the Plan Year shall
be the 12‑month period commencing on January 1 and ending on the next December
31.
Pre-Retirement Spouse’s Pension: The Pension available to an Eligible Spouse
under Section 4.6.

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Primary Social Security Amount: In determining Pension amounts, Primary Social
Security Amount shall mean:
(1)    For purposes of determining the amount of a Retirement, Vested or
Pre-Retirement Spouse’s Pension, the Primary Social Security Amount shall be the
estimated monthly amount that may be payable to a Participant commencing at age
65 as an old-age insurance benefit under the provisions of Title II of the
Social Security Act, as amended. Such estimates of the old-age insurance benefit
to which a Participant would be entitled at age 65 shall be based upon the
following assumptions:
(i)    That the Participant’s social security wages in any year prior to
Retirement or severance are equal to the Taxable Wage Base in such year, and
(ii)    That he will not receive any social security wages after Retirement or
severance.
However, in computing a Vested Pension under Formula A of Section 5.2, the
estimate of the old-age insurance benefit to which a Participant would be
entitled at age 65 shall be based upon the assumption that he continued to
receive social security wages until age 65 at the same rate as the Taxable Wage
Base in effect at his severance from employment. For purposes of this
subsection, “social security wages” shall mean wages within the meaning of the
Social Security Act.
(2)    For purposes of determining the amount of a Disability Pension, the
Primary Social Security Amount shall be (except as provided in the next
sentence) the initial monthly amount actually received by the disabled
Participant as a disability

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insurance benefit under the provisions of Title II of the Social Security Act,
as amended and in effect at the time of the Participant’s retirement due to
disability. Notwithstanding the preceding sentence, for any period that a
Participant receives a Disability Pension before receiving a disability
insurance benefit under the provisions of Title II of the Social Security Act,
then the Participant’s Primary Social Security Amount for such period shall be
determined pursuant to paragraph (1) above.
(3)    For purposes of paragraphs (1) and (2), the Primary Social Security
Amount shall exclude amounts that may be available because of the spouse or any
dependent of the Participant or any amounts payable on account of the
Participant’s death. Estimates of Primary Social Security Amounts shall be made
on the basis of the Social Security Act as in effect at the Participant’s
Severance from Service Date, without regard to any increases in the social
security wage base or benefit levels provided by such Act which take effect
thereafter.
Qualified Joint and Survivor Annuity: An Annuity which is payable to the
Participant for life with 50 percent of the amount of such Annuity payable after
the Participant’s death to his surviving Eligible Spouse for life. If the
Eligible Spouse predeceases the Participant, no survivor benefit under a
Qualified Joint and Survivor Annuity shall be payable to any person. The amount
of a Participant’s monthly payment under a Qualified Joint and Survivor Annuity
shall be reduced to the extent provided in sections 5.1 and 5.2, as applicable.

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Retirement: Termination of employment for reasons other than death after a
Participant has fulfilled the requirements for either a Normal, Early, Late, or
Disability Retirement Pension under Article IV.
Retirement Date: The date on which a Participant’s Retirement is considered to
commence. Retirement shall be considered to commence on the day immediately
following: (i) a Participant’s last day of employment, or (ii) the last day of
an Authorized Leave of Absence, if later. Notwithstanding the preceding
sentence, in the case of a Disability Retirement Pension, Retirement shall be
considered as commencing on the Participant’s retirement date applicable for
such purpose under the Salaried Plan.
Retirement Pension: The Pension payable to a Participant upon Retirement under
the Plan.
Salaried Plan: For the period beginning June 14, 2010, the PepsiCo Salaried
Employees Retirement Plan. For the period between April 6, 1999 and June 14,
2010, the PBG Salaried Employees Retirement Plan, as it may be amended from time
to time. For the period before April 6, 1999, the PepsiCo Salaried Employees
Retirement Plan.
Service: The period of a Participant’s employment calculated in accordance with
Section 3.2 for purposes of determining his entitlement to benefits under the
Plan.
Severance from Service Date: The date on which an Employee’s period of service
is deemed to end, determined in accordance with Article III of Part C of the
Salaried Plan.
Single Life Annuity: A level monthly Annuity payable to a Participant for his
life only, with no survivor benefits to his Eligible Spouse or any other person.

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Single Lump Sum: The distribution of a Participant’s total Pension in the form
of a single payment.
Social Security Act: The Social Security Act of the United States, as amended,
an enactment providing governmental benefits in connection with events such as
old age, death and disability. Any reference herein to the Social Security Act
(or any of the benefits provided thereunder) shall be taken as a reference to
any comparable governmental program of another country, as determined by the
Plan Administrator, but only to the extent the Plan Administrator judges the
computation of those benefits to be administratively feasible.
Taxable Wage Base: The contribution and benefit base (as determined under
section 230 of the Social Security Act) in effect for the Plan Year.
Vested Pension: The Pension available to a Participant under Section 4.3.
2.2    Construction: The terms of the Plan shall be construed in accordance with
this section.
(a)    Gender and Number: The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender, and the singular may include the
plural, unless the context clearly indicates to the contrary.
(b)    Compounds of the Word “Here”: The words “hereof”, “hereunder” and other
similar compounds of the word “here” shall mean and refer to the entire Plan,
not to any particular provision or section.
(c)    Examples: Whenever an example is provided or the text uses the term
“including” followed by a specific item or items, or there is a passage having a
similar effect, such passages of the Plan shall be construed as if the phrase
“without limitation” followed such

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example or term (or otherwise applied to such passage in a manner that avoids
limits on its breadth of application).
(d)    Subdivisions of the Plan Document: This Plan document is divided and
subdivided using the following progression: articles, sections, subsections,
paragraphs, subparagraphs, and clauses. Articles are designated by capital roman
numerals. Sections are designated by Arabic numerals containing a decimal point.
Subsections are designated by lower-case letters in parentheses. Paragraphs are
designated by Arabic numerals in parentheses. Subparagraphs are designated by
lower-case roman numerals in parentheses. Clauses are designated by upper-case
letters in parentheses. Any reference in a section to a subsection (with no
accompanying section reference) shall be read as a reference to the subsection
with the specified designation contained in that same section. A similar rule
shall apply with respect to paragraph references within a subsection and
subparagraph references within a paragraph.
ARTICLE III – Participation and Service
3.1    Participation: An Employee shall be a Participant in the Plan during the
period:
(a)    When he would be currently entitled to receive a Pension under the Plan
if his employment terminated at such time, or
(b)    When he would be so entitled but for the vesting requirement of Section
4.7.
3.2    Service. A Participant’s entitlement to a Pension and to a Pre-Retirement
Spouse’s Pension for his Eligible Spouse shall be determined under Article IV
based upon his

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period of Service. A Participant’s period of Service shall be determined under
Article III of Part C of the Salaried Plan.
3.3    Credited Service. The amount of a Participant’s Pension and a
Pre-Retirement Spouse’s Pension shall be based upon the Participant’s period of
Credited Service, as determined under Article III of Part C of the Salaried
Plan.
ARTICLE IV – Requirements for Benefits
A Participant shall be entitled to receive a Pension and a surviving Eligible
Spouse shall be entitled to certain survivor benefits as provided in this
Article. The amount of any such Pension or survivor benefit shall be determined
in accordance with Article V.
4.1    Normal Retirement Pension: A Participant shall be eligible for a Normal
Retirement Pension if he meets the requirements for a Normal Retirement Pension
in Section 4.1 of Part C of the Salaried Plan.
4.2    Early Retirement Pension: A Participant shall be eligible for an Early
Retirement Pension if he meets the requirements for an Early Retirement Pension
in Section 4.2 of Part C of the Salaried Plan.
4.3    Vested Pension: A Participant who is vested under Section 4.7 shall be
eligible to receive a Vested Pension if his employment in an eligible
classification under the Salaried Plan is terminated before he is eligible for a
Normal Retirement Pension or an Early Retirement Pension. A Participant who
terminates employment prior to satisfying the vesting requirement in Section 4.7
shall not be eligible to receive a Pension under this Plan.
4.4    Late Retirement Pension: A Participant who continues employment after his
Normal Retirement Age shall not receive a Pension until his Late Retirement
Date. Thereafter,

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a Participant shall be eligible for a Late Retirement Pension determined in
accordance with Section 4.4 of Part C of the Salaried Plan (but without regard
to any requirement for notice of suspension under ERISA section 203(a)(3)(B) or
any adjustment as under Section 5.6(d) of Part C of the Salaried Plan).
4.5    Disability Pension: A Participant shall be eligible for a Disability
Pension if he meets the requirements for a Disability Pension under the Salaried
Plan.
4.6    Pre-Retirement Spouse’s Pension. Any Pre-Retirement Spouse’s Pension
payable under this section shall commence as of the same time as the
corresponding pre-retirement spouse’s pension under the Salaried Plan and,
subject to Section 4.9, shall continue monthly for the life of the Eligible
Spouse.
(a)    Active, Disabled and Retired Employees: A Pre-Retirement Spouse’s Pension
shall be payable under this subsection to a Participant’s Eligible Spouse (if
any) who is entitled under the Salaried Plan to the special pre-retirement
spouse’s pension for survivors of active, disabled and retired employees. The
amount of such Pension shall be determined in accordance with the provisions of
Section 5.3.
(b)    Vested Employees: A Pre-Retirement Spouse’s Pension shall be payable
under this subsection to a Participant’s Eligible Spouse (if any) who is
entitled under the Salaried Plan to the pre-retirement spouse’s pension for
survivors of vested terminated Employees. The amount of such Pension shall be
determined in accordance with the provisions of Section 5.3. If pursuant to this
Section 4.6(b) a Participant has Pre-Retirement Spouse’s coverage in effect for
his Eligible Spouse, any Pension calculated for the Participant under Section
5.2(b) shall be reduced for each year such coverage is in effect by the
applicable

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percentage set forth below (based on the Participant’s age at the time the
coverage is in effect) with a pro rata reduction for any portion of a year. No
reduction shall be made for coverage in effect within the 90‑day period
following a Participant’s termination of employment.

Attained Age
Annual Charge
Up to 35
0%
35 – 39
.075%
40 – 44
.1%
45 – 49
.175%
50 – 54
.3%
55 – 59
.5%
60 – 64
.5%

4.7    Vesting. A Participant shall be fully vested in, and have a
nonforfeitable right to, his Accrued Benefit at the time he becomes fully vested
in his accrued benefit under the Salaried Plan.
4.8    Time of Payment. The distribution of a Participant’s Pre-409A Pension
shall commence as of the time specified in Section 6.1.
4.9    Cashout Distributions. Notwithstanding the availability or applicability
of a different form of payment under Article VI, the following rules shall apply
in the case of certain small benefit Annuity payments:
(a)     Distribution of Participant’s Pension: If at a Participant’s Annuity
Starting Date the Actuarial Equivalent lump sum value of the portion of the
Participant’s PEP Pension that is not subject to 409A is equal to or less than
the Cashout Limit, the Plan Administrator shall distribute to the Participant
such lump sum value of the Participant’s Pre-409A Pension. Notwithstanding the
preceding sentence, for Annuity Starting Dates prior to December 1, 2012, a
Participant’s Pre-409A Pension shall be cashed out under this subsection if,

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at the Participant’s Annuity Starting Date, the Actuarial Equivalent lump sum
value of the Participant’s Pre-409A Pension is equal to or less than $10,000.
(b)     Distribution of Pre-Retirement Spouse’s Pension Benefit: If at the time
payments under the Salaried Plan commence to an Eligible Spouse the Actuarial
Equivalent lump sum value of the Pre-409A Pre-Retirement Spouse’s Pension to be
paid is equal to or less than the Cashout Limit, the Plan Administrator shall
distribute to the Eligible Spouse such lump sum value of the Pre-409A
Pre-Retirement Spouse’s Pension. Notwithstanding the preceding sentence, for
Annuity Starting Dates prior to December 1, 2012, an Eligible Spouse shall be
cashed out under this subsection if the Actuarial Equivalent lump sum value of
the Eligible Spouse’s Pre-409A Pre­ Retirement Spouse’s Pension is equal to or
less than $10,000.
(c)     Special Cashout of Vested Pensions: Notwithstanding subsection (a)
above, the Plan Administrator shall have discretion under this subsection to
cash out a Pre-409A Vested Pension in a single lump sum prior to the date that
would apply under subsection (a).
(1)    The Plan Administrator shall have discretion under this subsection to
cash out in a single lump sum any Vested Pension that, as of December 1,
2012 - (i) has not otherwise had its Annuity Starting Date occur, (ii) has an
Actuarial Equivalent lump sum value that is equal to or less than the Cashout
Limit as of such date, and (iii) is practicable to calculate and distribute (as
determined pursuant to the exercise of the Plan Administrator’s discretion),
with such cashout being made on December 1, 2012.
(2)    The Plan Administrator shall also have discretion under this subsection
to cash out in a single lump sum any Vested Pension that, as of the first day

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of any month in 2013 or 2014 specified by the Plan Administrator pursuant to the
exercise of its discretion - (i) has not otherwise had its Annuity Starting Date
occur, (ii) has an Actuarial Equivalent lump sum value that is equal to or less
than the Cashout Limit as of such date, and (iii) is practicable to calculate
and distribute (as determined pursuant to the exercise of the Plan
Administrator’s discretion), with such cashout being made on the first day of
the month specified.
(3)    Not later than November 30, the Plan Administrator shall memorialize in
writing the exercise of its discretion under this subsection (c) to select
Vested Pensions for cashout on December 1, 2012, through the creation of a
written list (in either hard copy or electronic form) of Participants with
Vested Pensions who will be cashed out. In addition, not later than the day
before the date specified pursuant to paragraph (2) above, the Plan
Administrator shall memorialize in writing the exercise of its discretion under
this subsection to select Vested Pensions for cashout on the specified date,
through the creation of a written list (in either hard copy or electronic form)
of Participants with Vested Pensions who will be cashed out.
Any lump sum distributed under this Section 4.9 shall be in lieu of the Pension
that otherwise would be distributable to the Participant or Eligible Spouse
hereunder. To the extent necessary to preserve the grandfathered status of
Pre-409A Pensions, the cashout provisions described in subsections (a) through
(c) above are intended to operate in conformance with the rules for “limited
cashout” features within the meaning of Treasury Regulation § 1.409A-3(j)(4)(v)
and 1.409A-6(a)(4)(i)(E), and they shall be interpreted and applied consistently
with this regulation. No Participant or Eligible Spouse shall be given a direct
or indirect election with

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respect to whether the Participant’s Vested Pension or the Pre­ Retirement
Spouse’s Pension will be cashed out under this section.
4.10    Coordination with Long Term Disability Plan. The terms of this section
apply notwithstanding the preceding provisions of this Article. At any time
prior to April 14, 1991, a Participant shall not be eligible to receive a
Normal, Early, Vested or Disability Pension for any month or period of time for
which he is eligible for, and receiving, benefits under a long term disability
plan maintained by an Employer. However, a Participant’s Eligible Spouse shall
not be ineligible for a Pre-Retirement Spouse’s Pension or benefits under a
Qualified Joint and Survivor Annuity because the Participant was receiving
benefits under a long term disability plan at the date of his death.
4.11    Reemployment of Certain Participants. In the case of a current or former
Participant who is reemployed and is eligible to reparticipate in the Salaried
Plan after his Annuity Starting Date, payment of his Pension will be suspended
if payment of his Salaried Plan pension is suspended (or would have been if it
were already in pay status). Thereafter, his Pension shall recommence at the
time determined under Section 6.1 (even if the suspension of his Salaried Plan
pension ceases earlier).
ARTICLE V – Amount of Retirement Pension
When a Pension becomes payable to or on behalf of a Participant under this Plan,
the amount of such Pension shall be determined under Section 5.1, 5.2 or 5.3
(whichever is applicable), subject to any adjustments required under Sections
4.6(b), 5.4 and 5.5.
5.1    PEP Pension:

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(a)    Same Form as Salaried Plan: If a Participant’s Pension will be paid in
the same form and will commence as of the same time as his pension under the
Salaried Plan, then his Pension hereunder shall be the difference between:
(1)    His Total Pension expressed in such form and payable as of such time,
minus
(2)    His Salaried Plan Pension expressed in such form and payable as of such
time.
(b)    Different Form than Salaried Plan: If a Participant’s Pension will be
paid in a different form (whether in whole or in part) or will commence as of a
different time than his pension under the Salaried Plan, his Pension shall be
the product of:
(1)    The amount of the Participant’s Total Pension expressed in the form and
payable as of such time as applies to his Pension under this Plan, multiplied by
(2)    A fraction, the numerator of which is the value of his Total Pension
reduced by the value of his Salaried Plan Pension, and the denominator of which
is the value of his Total Pension (with value determined on a reasonable and
consistent basis, in the discretion of the Plan Administrator, with respect to
similarly situated employees).
(c)    Definitions: The following definitions apply for purposes of this
section.
(3)    A Participant’s “Total Pension” means the greater of:
(i)    The amount of the Participant’s pension determined under the terms of the
Salaried Plan, but without regard to: (A) the limitations imposed by sections
401(a)(17) and 415 of the Code (as such limitations

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are interpreted and applied under the Salaried Plan), and (B) the actuarial
adjustment under Section 5.6(d) of Part C of the Salaried Plan; or
(ii)    The amount (if any) of the Participant’s PEP Guarantee determined under
Section 5.2.
In making this comparison, the benefits in subparagraphs (i) and (ii) above
shall be calculated with reference to the specific form and time of payment that
is applicable. If the applicable form of payment is a lump sum, the Actuarial
Equivalent factors in section (2) of the definition of Actuarial Equivalent in
Article II shall apply for purposes of subparagraph (i) in lieu of those in the
Salaried Plan.
(4)    A Participant’s “Salaried Plan Pension” means the amount of the
Participant’s pension determined under the terms of the Salaried Plan.
5.2    PEP Guarantee: A Participant who is eligible under subsection (a) below
shall be entitled to a PEP Guarantee benefit determined under subsection (b)
below. In the case of other Participants, the PEP Guarantee shall not apply.
(a)    Eligibility: A Participant shall be covered by this section if the
Participant has 1988 pensionable earnings from an Employer of at least $75,000.
For purposes of this section, “1988 pensionable earnings” means the
Participant’s remuneration for the 1988 calendar year that was recognized for
benefits received under the Salaried Plan as in effect in 1988. “1988
pensionable earnings” does not include remuneration from an entity attributable
to any period when that entity was not an Employer.

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(b)    PEP Guarantee Formula: The amount of a Participant’s PEP Guarantee shall
be determined under the applicable formula in paragraph (1), subject to the
special rules in paragraph (2).
(1)    Formulas: The amount of a Participant’s Pension under this paragraph
shall be determined in accordance with subparagraph (i) below. However, if the
Participant was actively employed in a classification eligible for the Salaried
Plan prior to July 1, 1975, the amount of his Pension under this paragraph shall
be the greater of the amounts determined under subparagraphs (i) and (ii),
provided that subparagraph (ii)(B) shall not apply in determining the amount of
a Vested Pension.
(i)    Formula A: The Pension amount under this subparagraph shall be:
(A)    3 percent of the Participant’s Highest Average Monthly Earnings for the
first 10 years of Credited Service, plus
(B)    1 percent of the Participant’s Highest Average Monthly Earnings for each
year of Credited Service in excess of 10 years, less
(C)    1-2/3 percent of the Participant’s Primary Social Security Amount
multiplied by years of Credited Service not in excess of 30 years.
In determining the amount of a Vested Pension under this Formula A, the Pension
shall first be calculated on the basis of (I) the Credited Service the
Participant would have earned had he remained in

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the employ of the Employer until his Normal Retirement Age, and (II) his Highest
Average Monthly Earnings and Primary Social Security Amount at his Severance
from Service Date, and then shall be reduced by multiplying the resulting amount
by a fraction, the numerator of which is the Participant’s actual years of
Credited Service on his Severance from Service Date and the denominator of which
is the years of Credited Service he would have earned had he remained in the
employ of an Employer until his Normal Retirement Age.
(ii)    Formula B: The Pension amount under this subparagraph shall be the
greater of (A) or (B) below:
(A)    1-1/2 percent of Highest Average Monthly Earnings times the number of
years of Credited Service, less 50 percent of the Participant’s Primary Social
Security Amount, or
(B)    3 percent of Highest Average Monthly Earnings times the number of years
of Credited Service up to 15 years, less 50 percent of the Participant’s Primary
Social Security Amount.
In determining the amount of a Disability Pension under Formula A or B above,
the Pension shall be calculated on the basis of the Participant’s Credited
Service (determined in accordance with Section 3.3(d)(3) of Part C of the
Salaried Plan), and his Highest Average Monthly Earnings and Primary Social
Security Amount at the date of disability.

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(2)    Calculation: The amount of the PEP Guarantee shall be determined pursuant
to paragraph (1) above, subject to the following special rules:
(i)    Surviving Eligible Spouse’s Annuity: Subject to subparagraph (iii) below
and the last sentence of this subparagraph, if the Participant has an Eligible
Spouse and has commenced receipt of an Annuity under this section, the
Participant’s Eligible Spouse shall be entitled to receive a survivor annuity
equal to 50 percent of the Participant’s Annuity under this section, with no
corresponding reduction in such Annuity for the Participant. Annuity payments to
a surviving Eligible Spouse shall begin on the first day of the month coincident
with or following the Participant’s death and shall end with the last monthly
payment due prior to the Eligible Spouse’s death. If the Eligible Spouse is more
than 10 years younger than the Participant, the survivor benefit payable under
this subparagraph shall be adjusted as provided below.
(A)    For each full year more than 10 but less than 21 that the surviving
Eligible Spouse is younger than the Participant, the survivor benefit payable to
such spouse shall be reduced by 0.8 percent.
(B)    For each full year more than 20 that the surviving Eligible Spouse is
younger than the Participant, the survivor benefit payable to such spouse shall
be reduced by an additional 0.4 percent.
(ii)    Reductions: The following reductions shall apply in determining a
Participant’s PEP Guarantee.

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(A)    If the Participant will receive an Early Retirement Pension, the payment
amount shall be reduced by 3/12ths of 1 percent for each month by which the
benefit commencement date precedes the date the Participant would attain his
Normal Retirement Date.
(B)    If the Participant is entitled to a Vested Pension, the payment amount
shall be reduced to the Actuarial Equivalent of the amount payable at his Normal
Retirement Date (if payment commences before such date), and the Section 4.6(b)
reductions for any Pre-Retirement Spouse’s coverage shall apply.
(C)    This clause applies if the Participant will receive his Pension in a form
that provides an Eligible Spouse benefit, continuing for the life of the
surviving spouse, that is greater than that provided under subparagraph (i). In
this instance, the Participant’s Pension under this section shall be reduced so
that the total value of the benefit payable on the Participant’s behalf is the
Actuarial Equivalent of the Pension otherwise payable under the foregoing
provisions of this section.
(D)    This clause applies if the Participant will receive his Pension in a form
that provides a survivor annuity for a beneficiary who is not his Eligible
Spouse. In this instance, the Participant’s Pension under this section shall be
reduced so that the total value of the benefit payable on the Participant’s
behalf is the Actuarial Equivalent of a Single Life Annuity for the
Participant’s life.

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(E)    This clause applies if the Participant will receive his Pension in an
Annuity form that includes inflation protection described in Section 6.2(b). In
this instance, the Participant’s Pension under this section shall be reduced so
that the total value of the benefit payable on the Participant’s behalf is the
Actuarial Equivalent of the elected Annuity without such protection.
(iii)    Lump Sum Conversion: The amount of the Retirement Pension determined
under this section for a Participant whose Retirement Pension will be
distributed in the form of a lump sum shall be the Actuarial Equivalent of the
Participant’s PEP Guarantee determined under this section, taking into account
the value of any survivor benefit under subparagraph (i) above and any early
retirement reductions under subparagraph (ii)(A) above.
5.3    Amount of Pre-Retirement Spouse’s Pension: The monthly amount of the
Pre-Retirement Spouse’s Pension payable to a surviving Eligible Spouse under
Section 4.6 shall be determined under subsection (a) below.
(a)    Calculation: An Eligible Spouse’s Pre-Retirement Spouse’s Pension shall
be the difference between:
(1)    The Eligible Spouse’s Total Pre-Retirement Spouse’s Pension, minus
(2)    The Eligible Spouse’s Salaried Plan Pre-Retirement Spouse’s Pension.
(b)    Definitions: The following definitions apply for purposes of this
section.

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(1)    An Eligible Spouse’s “Total Pre-Retirement Spouse’s Pension” means the
greater of:
(i)    The amount of the Eligible Spouse’s pre-retirement spouse’s pension
determined under the terms of the Salaried Plan, but without regard to: (A) the
limitations imposed by sections 401(a)(17) and 415 of the Code (as such
limitations are interpreted and applied under the Salaried Plan), and (B) the
actuarial adjustment under Section 5.6(d) of Part C of the Salaried Plan; or
(ii)    The amount (if any) of the Eligible Spouse’s PEP Guarantee
Pre-Retirement Spouse’s Pension determined under subsection (c).
In making this comparison, the benefits in subparagraphs (i) and (ii) above
shall be calculated with reference to the specific time of payment applicable to
the Eligible Spouse.
(c)    PEP Guarantee Pre-Retirement Spouse’s Pension: An Eligible Spouse’s PEP
Guarantee Pre-Retirement Spouse’s Pension shall be determined in accordance with
paragraph (1) or (2) below, whichever is applicable, with reference to the PEP
Guarantee (if any) that would have been available to the Participant under
Section 5.2.
(1)    Normal Rule: The Pre-Retirement Spouse’s Pension payable under this
paragraph shall be equal to the amount that would be payable as a survivor
annuity, under a Qualified Joint and Survivor Annuity, if the Participant had:
(i)    Separated from service on the date of death (or, if earlier, his actual
Severance from Service Date);

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(ii)    Commenced a Qualified Joint and Survivor Annuity on the same date
payments of the Qualified Pre-Retirement Spouse’s Pension are to commence; and
(iii)    Died on the day immediately following such commencement.
If payment of a Pre-Retirement Spouse’s Pension under this paragraph commences
prior to the date which would have been the Participant’s Normal Retirement
Date, appropriate reductions for early commencement shall be applied to the
Qualified Joint and Survivor Annuity upon which the Pre-Retirement Spouse’s
Pension is based.
(2)    Special Rule for Active and Disabled Employees: Notwithstanding paragraph
(1) above, the Pre-Retirement Spouse’s Pension paid on behalf of a Participant
described in Section 4.6(a) shall not be less than an amount equal to 25 percent
of such Participant’s PEP Guarantee determined under Section 5.2. For this
purpose, Credited Service shall be determined as provided in Section 3.3(d)(2)
of Part C of the Salaried Plan, and the deceased Participant’s Highest Average
Monthly Earnings, Primary Social Security Amount and Covered Compensation shall
be determined as of his date of death. A Pre-Retirement Spouse’s Pension under
this paragraph is not reduced for early commencement.
5.4    Certain Adjustments: Pensions determined under the foregoing sections of
this Article are subject to adjustment as provided in this section. For purposes
of this section, “specified plan” shall mean the Salaried Plan or a nonqualified
pension plan similar to this Plan. A nonqualified pension plan is similar to
this Plan if it is sponsored by a member of the PBG

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Organization and if its benefits are not based on participant pay deferrals
(this category of similar plans includes the PepsiCo Prior Plan).
(a)    Adjustments for Rehired Participants: This subsection shall apply to a
current or former Participant who is reemployed after his Annuity Starting Date
and whose benefit under the Salaried Plan is recalculated based on an additional
period of Credited Service. In the event of any such recalculation, the
Participant’s Pre-409A Pension shall also be recalculated hereunder. For this
purpose, the PEP Guarantee under Section 5.2 is adjusted for in-service
distributions and prior distributions in the same manner as benefits are
adjusted under the Salaried Plan, but by taking into account benefits under this
Plan and any specified plans.
(b)    Adjustment for Increased Pension Under Other Plans: If the benefit paid
under a specified plan on behalf of a Participant is increased after PEP
benefits on his behalf have been determined (whether the increase is by order of
a court, by agreement of the plan administrator of the specified plan, or
otherwise), the PEP benefit for the Participant shall be recalculated. If the
recalculation identifies an overpayment hereunder, the Plan Administrator shall
take such steps as it deems advisable to recover the overpayment. It is
specifically intended that there shall be no duplication of payments under this
Plan and any specified plans.
5.5    Excludable Employment: Effective for periods of employment on or after
June 30, 1997, an executive classified as level 22 or above whose employment by
an Employer is for a limited duration assignment shall not become entitled to a
benefit or to any increase in benefits in connection with such employment.

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ARTICLE VI – Distribution Options
The terms of this Article govern the distribution of benefits to a Participant
who becomes entitled to payment of a Pension under the Plan.
6.1    Form and Timing of Distributions: This section shall govern the form and
timing of distributions of Pre-409A Pensions that begin on or after March 1,
1992. Plan distributions that begin before that date shall be governed by Prior
Plan as in effect at the time of the distribution. The provisions of this
Section 6.1 are in all cases subject to the cashout rules set forth in Section
4.9.
(a)    No Advance Election: This subsection shall apply to a Participant: (i)
who does not have an Advance Election in effect as of the close of business on
the day before his Retirement Date, or (ii) who terminates employment prior to
Retirement. Subject to the next sentence, a Participant described in this
subsection shall be paid his Pre-409A Pension in the same form and at the same
time as he is paid his Pension under the Salaried Plan. If a Participant’s
Salaried Plan Annuity Starting Date occurs while he is still an employee of the
PBG Organization (because of the time of payment provisions in Code section
401(a)(9)), payment under the Plan shall not begin until the first of the month
next following the Participant’s Severance from Service Date. In this instance,
the form of payment under this Plan shall remain that applicable under the
Salaried Plan.
(b)    Advance Election in Effect: This subsection shall apply to a Participant:
(i) who has an Advance Election in effect as of the close of business on the day
before his Retirement Date, and (ii) whose Retirement Date is after 1993. To be
in effect, an Advance Election must meet the advance receipt and other
requirements of Section 6.3(b).

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(1)    Lump Sum Election: If a Participant covered by this subsection has an
Advance Election to receive a Single Lump Sum in effect as of the close of
business on the day before his Retirement Date, the Participant’s Retirement
Pension under the Plan shall be paid as a Single Lump Sum as of the first of the
month coincident with or next following his Retirement Date.
(2)    Annuity Election: If a Participant covered by this subsection has an
Advance Election to receive an Annuity in effect as of the close of business on
the day before his Retirement Date, the Participant’s Retirement Pension under
the Plan shall be paid in an Annuity beginning on the first of the month
coincident with or next following his Retirement Date. The following provisions
of this paragraph govern the form of Annuity payable in the case of a
Participant described in this paragraph.
(i)    Salaried Plan Election: A Participant who has a qualifying Salaried Plan
election shall receive his distribution in the same form of Annuity the
Participant selected in such qualifying Salaried Plan election. For this
purpose, a “qualifying Salaried Plan election” is a written election of a form
of payment by the Participant that: (A) is currently in effect under the
Salaried Plan as of the close of business on the day before the Participant’s
Retirement Date, and (B) specifies an Annuity as the form of payment for all or
part of the Participant’s Retirement Pension under the Salaried Plan. For
purposes of the preceding sentence, a Participant who elects a combination lump
sum and Annuity under the Salaried Plan is considered to have specified an
Annuity for part of his Salaried Plan Pension.

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(ii)    PEP Election: A Participant who is not covered by subparagraph (i) and
who has a PEP Election in effect as of the close of business on the day before
his Retirement Date shall receive his distribution in the form of Annuity the
Participant selects in such PEP Election.
(iii)    No PEP Election: A Participant who is not covered by subparagraph (i)
or (ii) above shall receive his distribution in the form of a Qualified Joint
and Survivor Annuity if he is married, or in the form of a Single Life Annuity
if he is not married. For purposes of this subparagraph (iii), a Participant
shall be considered married if he is married on the day before his Retirement
Date.
6.2    Available Forms of Payment: The forms of payment set forth in subsections
(a) and (b) may be provided to any Participant who is entitled to a Retirement
Pension. The forms of payment for other Participants are set forth in subsection
(c) below. The provisions of this section are effective for Annuity Starting
Dates after 1989 and earlier distributions shall be governed by the Prior Plan
as in effect at the time of distribution.
(a)    Basic Forms of Payment: A Participant’s Retirement Pension shall be
distributed in one of the forms of payment listed in this subsection. The
particular form of payment applicable to a Participant shall be determined in
accordance with Section 6.1. Payments shall commence on the date specified in
Section 6.1 and shall end on the date specified in this subsection.

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(1)    Single Life Annuity Option: A Participant may receive his Pension in the
form of a Single Life Annuity, which provides monthly payments ending with the
last payment due prior to his death.
(2)    Survivor Options: A Participant may receive his Pension in accordance
with one of the following survivor options:
(i)    100 percent Survivor Option: The Participant shall receive a reduced
Pension payable for life, ending with the last monthly payment due prior to his
death. Payments in the same reduced amount shall continue after the
Participant’s death to his beneficiary for life, beginning on the first day of
the month coincident with or following the Participant’s death and ending with
the last monthly payment due prior to the beneficiary’s death.
(ii)    75 percent Survivor Option: The Participant shall receive a reduced
Pension payable for life, ending with the last monthly payment due prior to his
death. Payments in the amount of 75 percent of such reduced Pension shall be
continued after the Participant’s death to his beneficiary for life, beginning
on the first day of the month coincident with or following the Participant’s
death and ending with the last monthly payment due prior to the beneficiary’s
death.
(iii)    50 percent Survivor Option: The Participant shall receive a reduced
Pension payable for life, ending with the last monthly payment due prior to his
death. Payments in the amount of 50 percent of such reduced Pension shall be
continued after the Participant’s death to his beneficiary for life,

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beginning on the first day of the month coincident with or following the
Participant’s death and ending with the last monthly payment due prior to the
beneficiary’s death. A 50 percent survivor option under this paragraph shall be
a Qualified Joint and Survivor Annuity if the Participant’s beneficiary is his
Eligible Spouse.
(iv)    Ten Years Certain and Life Option: The Participant shall receive a
reduced Pension which shall be payable monthly for his lifetime but for not less
than 120 months. If the retired Participant dies before 120 payments have been
made, the monthly Pension amount shall be paid for the remainder of the 120
month period to the Participant’s primary beneficiary (or if the primary
beneficiary has predeceased the Participant, the Participant’s contingent
beneficiary).
(3)    Single Lump Sum Payment Option: A Participant may receive payment of his
Pension in the form of a Single Lump Sum payment.
(4)    Combination Lump Sum/Monthly Benefit Option: A Participant who does not
have an Advance Election in effect may receive a portion of his Pension in the
form of a lump sum payment, and the remaining portion in the form of one of the
monthly benefits described in paragraphs (1) and (2) above. The Pension is
divided between the two forms of payment based on the whole number percentages
designated by the Participant on a form provided for this purpose by the Plan
Administrator. For the election to be effective, the sum of the two percentages
designated by the Participant must equal 100 percent.

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(i)    The amount of the Pension paid in the form of a lump sum is determined by
multiplying: (A) the amount that would be payable to the Participant as a Single
Lump Sum payment if the Participant’s entire benefit were payable in that form,
by (B) the percentage that the Participant has designated for receipt in the
form of a lump sum.
(ii)    The amount of the Pension paid in the form of a monthly benefit is
determined by multiplying: (A) the amount of the monthly benefit elected by the
Participant, determined in accordance with paragraph (1) or (2) above (whichever
applies), by (B) the percentage that the Participant has designated for receipt
in the form of a monthly benefit.
(b)    Inflation Protection: The following levels of inflation protection may be
provided to any Participant who is entitled to a Retirement Pension (except to
the extent such Pension is paid as a lump sum).
(1)    5 percent Inflation Protection: A Participant’s monthly benefit shall be
initially reduced, but thereafter shall be increased if inflation in the prior
year exceeds 5 percent. The amount of the increase shall be the difference
between inflation in the prior year and 5 percent.
(2)    7 percent Inflation Protection: A Participant’s monthly benefit shall be
initially reduced, but thereafter shall be increased if inflation in the prior
year exceeds 7 percent. The amount of the increase shall be the difference
between inflation in the prior year and 7 percent.

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Benefits shall be subject to increase in accordance with this subsection each
January 1, beginning with the second January 1 following the Participant’s
Annuity Starting Date. The amount of inflation in the prior year shall be
determined based on inflation in the 12 month period ending on September 30 of
such year, with inflation measured in the same manner as applies on January 1,
1989 for adjusting Social Security benefits for changes in the cost of living.
Inflation protection that is in effect shall carry over to any survivor benefit
payable on behalf of a Participant, and shall increase the otherwise applicable
survivor benefit as provided above. Any election by a Participant to receive
inflation protection shall be irrevocable by such Participant or his surviving
beneficiary.
(c)    Available Options for Vested Benefits: The forms of payment available for
a Participant with a Vested Pension are a Qualified Joint and Survivor Annuity
for married Participants and a Single Life Annuity for both married and
unmarried Participants. The applicable form of payment shall be determined in
accordance with Section 6.1(a).
6.3    Procedures for Elections: This section sets forth the procedures for
making Advance Elections and PEP Elections.
(a)    In General: To qualify as an Advance Election or PEP Election for
purposes of Section 6.1, an election must be made in writing, on the form
designated by the Plan Administrator, and must be signed by the Participant.
These requirements also apply to any revocations of such elections. Spousal
consent is not required for any election (or revocation of election) under the
Plan.
(b)    Advance Election: To qualify as an Advance Election, an election must be
made under this Plan on or after July 15, 1993 and meet the following
requirements.

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(1)    Election: The Participant shall designate on the Advance Election form
whether the Participant elects to take his Pension in the form of an Annuity or
a Single Lump Sum.
(2)    Receipt by Plan Administrator: The Advance Election must be received by
the Plan Administrator before the start of the calendar year containing the
Participant’s Retirement Date, and at least 6 months before that Retirement
Date. An election that meets the foregoing requirements shall remain effective
until it is changed or revoked.
(3)    Change or Revocation of Election: A Plan Participant may change an
Advance Election by filing a new Election that meets the foregoing requirements.
A Plan Participant may revoke an Advance Election only by filing a revocation
that is received by the Plan Administrator before the start of the calendar year
containing the Plan Participant’s Retirement Date, and at least 6 months before
that Retirement Date.
Any Advance Election by a Participant shall be void if the Participant is not
entitled to a Retirement Pension.
(c)    PEP Election: A PEP Election may only be made by a Participant who has an
Advance Election to receive an Annuity in effect at the time his PEP Election is
received by the Plan Administrator. In determining whether an Advance Election
is in effect for this purpose, the advance receipt requirement of subsection
(b)(2) shall be considered met if it will be met by the Participant’s proposed
Retirement Date.
(1)    Election: The Participant shall designate on the PEP Election form the
Annuity form of benefit the Participant selects from those described in Section
6.2,

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including the Participant’s choice of inflation protection, subject to the
provisions of this Article VI. The forms of payment described in Section
6.2(a)(3) and (4) are not available pursuant to a PEP Election.
(2)    Receipt by the Plan Administrator: The PEP Election must be received by
the Plan Administrator no earlier than 90 days before the Participant’s
Retirement Date, and no later than the close of business on the day before the
Participant’s Retirement Date. The Participant shall furnish proof of the age of
his beneficiary (including his Eligible Spouse if applicable), to the Plan
Administrator by the day before the Participant’s Retirement Date, for any form
of payment which is subject to reduction in accordance with subsection 6.2(c)
above.
A Participant may change his PEP Election by filing a new Election with the Plan
Administrator that meets the foregoing requirements. The Participant’s PEP
Election shall become effective at the close of business on the day before the
Participant’s Retirement Date. Any PEP Election by a Participant shall be void
if the Participant does not have an Advance Election in effect at such time.
(d)    Elections Rules for Annuity Starting Dates: When amounts become payable
to a Participant in accordance with Article IV, they shall be payable as of the
Participant’s Annuity Starting Date and the election procedures (in this section
and Sections 6.1 and 6.5) shall apply to all of the Participant’s unpaid
accruals as of such Annuity Starting Date, with the following exception. In the
case of a Participant who is rehired after his initial Annuity Starting Date and
who (i) is currently receiving an Annuity that remained in pay status upon
rehire, or (ii) was previously paid a lump sum distribution (other than a
cashout distribution

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described in Section 4.9(a)), the Participant’s subsequent Annuity Starting Date
(as a result of his termination of reemployment), and the election procedures at
such subsequent Annuity Starting Date, shall apply only to the portion of his
benefit that accrues after his rehire. Any prior accruals that remain to be paid
as of the Participant’s subsequent Annuity Starting Date shall continue to be
payable in accordance with the elections made at his initial Annuity Starting
Date.
For purposes of this section, an election shall be treated as received on a
particular day if it is: (A) postmarked that day, or (B) actually received by
the Plan Administrator on that day. Delivery under clause (B) must be made by
the close of business, which time is to be determined by the Plan Administrator.
6.4    Special Rules for Survivor Options:
(a)    Effect of Certain Deaths: If a Participant makes a PEP Election for a
form of payment described in Section 6.2(a)(2) and the Participant or his
beneficiary (beneficiaries in the case of Section 6.2(a)(2)(iv)) dies before the
PEP Election becomes effective, the election shall be disregarded. If the
Participant dies after such PEP Election becomes effective but before his
Retirement Pension actually commences, the election shall be given effect and
the amount payable to his surviving Eligible Spouse or other beneficiary shall
commence on the first day of the month following his death (any back payments
due the Participant shall be payable to his estate). In the case of a
Participant who has elected the form of payment described in Section
6.2(a)(2)(iv), if such Participant dies: (i) after the PEP Election has become
effective, (ii) without a surviving primary or contingent beneficiary, and (iii)
before receiving 120 payments under the form of payment, then the remaining
payments due under such form of payment

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shall be paid to the Participant’s estate. If payments have commenced under such
form of payment to a Participant’s primary or contingent beneficiary and such
beneficiary dies before payments are completed, then the remaining payments due
under such form of payment shall be paid to such beneficiary’s estate.
(b)    Nonspouse Beneficiaries: If a Participant’s beneficiary is not his
Eligible Spouse, he may not elect:
(1)    The 100 percent survivor option described in Section 6.2(a)(2)(i) if his
nonspouse beneficiary is more than 10 years younger than he is, or
(2)    The 75 percent survivor option described in Section 6.2(a)(2)(ii) if his
nonspouse beneficiary is more than 19 years younger than he is.
6.5    Designation of Beneficiary: A Participant who has elected to receive all
or part of his pension in a form of payment that includes a survivor option
shall designate a beneficiary who will be entitled to any amounts payable on his
death. Such designation shall be made on a PEP Election Form or an approved
election form filed under the Salaried Plan, whichever is applicable. In the
case of the survivor option described in Section 6.2(a)(2)(iv), the Participant
shall be entitled to name both a primary beneficiary and a contingent
beneficiary. A Participant (whether active or former) shall have the right to
change or revoke his beneficiary designation at any time prior to when his
election is finally effective. The designation of any beneficiary, and any
change or revocation thereof, shall be made in accordance with rules adopted by
the Plan Administrator. A beneficiary designation shall not be effective unless
and until filed with the Plan Administrator (or for periods before the Effective
Date, the Plan Administrator under the Prior Plan). If no beneficiary is
properly designated, then a

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Participant’s election of a survivor’s option described in Section 6.2(a)(2)
shall not be given effect.
APPENDIX
Foreword
This Appendix sets forth additional provisions applicable to individuals
specified in the Articles of this Appendix. In any case where there is a
conflict between the Appendix and the main text of the Plan, the Appendix shall
govern.
ARTICLE A – 1993 Accruals
This Article A of the Appendix shall be effective on the date the Plan is
adopted.
A.1    1993 Accruals: This section shall apply to any individual: (i) who was a
Salaried Plan Participant and employed by the PBG Organization on December 31,
1993, (ii) whose Salaried Plan Pension was vested during 1993 (or would have
become vested in 1994 if his Service after 1993 included the assumed period of
continued service specified in (a)(1) below), and (iii) whose minimum 1993
Pension in subsection (a) below is not derived solely from that portion of the
Plan described in (c) of Article X of the main portion of this Plan document. In
determining the amount of the 1993 and 1994 Pension amounts for any such
individual, the provisions set forth in subsections (a) and (b) below shall
apply.
(a)    Minimum 1993 Pension: Any individual who is covered by this section shall
accrue a minimum 1993 Pension as of December 31, 1993. In determining the amount
of such individual’s minimum 1993 Pension, the following shall apply.
(1)    An individual’s Service and Credited Service as of the end of 1993 shall
be assumed to equal the respective Service and Credited Service he would have if

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his Service continued through December 31, 1994. Notwithstanding the preceding
sentence, the assumed period of continued Service shall be less to the extent
PepsiCo, Inc.’s human resource records on December 31, 1993 reflected a
scheduled termination date in 1994 for such individual. In this case, the
individual’s assumed period of continued service shall be the portion of 1994
that ends with such scheduled termination date.
(2)    An individual’s Highest Average Monthly Earnings as of the end of 1993
shall be adjusted by the actuary’s salary scale assumption which is used under
the Salaried Plan, so that they equal the amount such scale projects for the
individual as of the end of 1994. Notwithstanding the preceding sentence, the
following special rules shall apply.
(i)    A higher salary scale assumption shall be used for anyone whose projected
1994 earnings as reflected on the “Special PEP Salary Scale” of the PBG Benefits
Department on December 31, 1993 were higher than would be assumed under the
first sentence of this paragraph. In this case, the individual’s 1993 earnings
shall be adjusted using such higher salary scale.
(ii)    In the case of an individual whose assumed period of service under
paragraph (1) above is less than all of 1994, the salary adjustment under the
preceding provisions of this paragraph shall be reduced to the amount that would
apply if the individual had no earnings after his scheduled termination date.

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(3)    An individual’s attained age as of the end of 1993 shall be assumed to be
the age he would have at the end of the assumed period of continued service
applicable under paragraph (1) above.
Any individual who is covered by this section, and who is not otherwise vested
as of December 31, 1993, shall be vested as of such date in both his Pension
(determined without regard to this subsection) and his minimum 1993 Pension. For
purposes of this subsection, Code section 401(a)(17) shall be applied in 1993 by
giving effect to the amendments to such Code section made by the Omnibus Budget
Reconciliation Amendments of 1993.
(b)    Determination of Later Accruals: If a participant in the Salaried Plan
accrues a minimum 1993 Pension under subsection (a) above, the amount of any
Pre-409A Pension that accrues thereafter shall be only the amount by which the
Pre-409A Pension that would otherwise accrue for years after 1993 exceeds his
minimum 1993 Pension under subsection (a).
ARTICLE P98 – PepsiCo Special Early Retirement Benefit
P98.1    Scope: This Article supplements the main portion of the Plan document
with respect to the rights and benefits of Covered Employees on and after the
Effective Date.
P98.2    Definitions: This section provides definitions for the following words
or phrases in boldface and underlined. Where they appear in this Article with
initial capitals they shall have the meaning set forth below. Except as
otherwise provided in this Article, all defined terms shall have the meaning
given to them in Section 2.1 of the Plan.
(a)    Article: This Article P98 of the Appendix to the Plan.

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(b)    Covered Employee: An Employee who does not meet the eligibility
requirements for the Salaried Plan Early Retirement Benefit as of his Severance
Date solely because he is a highly compensated employee within the meaning of
Article S and Section S.3(a)(4) of the Appendix to the Legacy PBG Salaried
Employees Retirement Plan in Part C of the Salaried Plan document.
(c)    Effective Date: The date the provisions of this Article are effective,
which shall be February 1, 1998.
(d)    Salaried Plan Special Early Retirement Benefit: The special early
retirement benefit for certain Company employees referred to in Section S.3(b)
of the Appendix to the Legacy PBG Salaried Employees Retirement Plan in Part C
of the Salaried Plan document.
(e)    Severance Date: The involuntary termination of employment referred to in
Section S.2(b)(1) of the Appendix to the Legacy PBG Salaried Employees
Retirement Plan in Part C of the Salaried Plan document, that qualifies an
eligible Employee for status as a Covered Employee.
P98.3    Amount and Form of Retirement Pension: In lieu of any benefits he would
otherwise be entitled to under this Plan, a Covered Employee shall receive a
single lump sum benefit as soon as administratively practical following his
Severance Date. No other benefits under this Plan are payable to a Participant
who is entitled to a benefit under this section. The amount of such lump sum
shall be the excess of:
(a)    The Actuarial Equivalent present value of the Covered Employee’s Total
Pension (as defined in Section 5.1(c)) determined as of his Severance Date, for
this purpose

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treating the Covered Employee as eligible for the Salaried Plan Special Early
Retirement Benefit, and treating the benefit as commencing on his Severance
Date; over
(b)    The Actuarial Equivalent present value of the Covered Employee’s Salaried
Plan Pension (as defined in Section 5.1(c)) determined as of his Severance Date,
for this purpose determining the benefit without regard to this Appendix, and
treating the benefit as commencing on his Normal Retirement Date.
For purposes of this calculation, amounts shall be determined as of the
Participant’s Severance Date, “Actuarial Equivalent” shall be based on the
factors in effect on such date using the definition in section (2) of Actuarial
Equivalent for lump sums conversions, and the Participant shall be treated as
taking his Total Pension in the form of a Single Life Annuity. In the case of a
Covered Employee who is eligible for a PEP Guarantee (as defined in Section
5.2), and for purposes of subsection (a) only, the reduction factors for early
commencement of a PEP Guarantee under Section 5.2 of this Plan shall apply in
lieu of those in the Salaried Plan Special Early Retirement Benefit formula if
they provide a greater PEP benefit.
Article IPO – Transferred and Transition Individuals
IPO.1    Scope: This Article supplements the main portion of the Plan document
with respect to the rights and benefits of Transferred and Transition
Individuals following the spinoff of this Plan from the PepsiCo Prior Plan.
IPO.2    Definitions: This section provides definitions for the following words
or phrases in boldface and underlined. Where they appear in this Article with
initial capitals they shall have the meaning set forth below. Except as
otherwise provided in this Article, all defined terms shall have the meaning
given to them in Section 2.1 of the Plan.

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(a)    Agreement: The 1999 Employee Programs Agreement between PepsiCo, Inc. and
The Pepsi Bottling Group, Inc.
(b)    Close of the Distribution Date: This term shall take the definition given
it in the Agreement.
(c)    Transferred Individual: This term shall take the definition given it in
the Agreement.
(d)    Transition Individual: This term shall take the definition given it in
the Agreement.
IPO.3    Rights of Transferred and Transition Individuals: All Transferred
Individuals who participated in the PepsiCo Prior Plan immediately prior to the
Effective Date shall be Participants in this Plan as of the Effective Date. The
spinoff of this Plan from the PepsiCo Prior Plan shall not result in a break in
the Service or Credited Service of Transferred Individuals or Transition
Individuals. Notwithstanding anything in the Plan to the contrary, and as
provided in Section 2.04 of the Agreement, all service, all compensation, and
all other benefit-affecting determinations for Transferred Individuals that, as
of the Close of the Distribution Date, were recognized under the PepsiCo Prior
Plan for periods immediately before such date, shall as of the Effective Date
continue to receive full recognition, credit and validity and shall be taken
into account under this Plan as if such items occurred under this Plan, except
to the extent that duplication of benefits would result. Similarly,
notwithstanding anything to the contrary in the Plan, the benefits of Transition
Individuals shall be determined in accordance with section 8.02 of the
Agreement.

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ARTICLE PAC
Guiding Principles Regarding Benefit Plan Committee Appointments
PAC.1 Scope. This Article PAC supplements the PepsiCo Pension Equalization Plan
document with respect to the appointment of the members of the PAC.
PAC.2 General Guidelines. To be a member of the PAC, an individual must:
(a)    Be an employee of the PepsiCo Organization at a Band 1 or above level,
(b)    Be able to give adequate time to committee duties, and
(c)    Have the character and temperament to act prudently and diligently in the
exclusive interest of the Plan’s participants and beneficiaries.
PAC.3 PAC Guidelines. In addition to satisfying the requirements set forth in
Section PAC.2, the following guidelines will also apply to the PAC membership:
(a)    Each member of the PAC should have experience with benefit plan
administration or other experience that can readily translate to a role
concerning ERISA plan administration,
(b)    The membership of the PAC as a whole should have experience and expertise
with respect to the administration of ERISA health and welfare and retirement
plans, and
(c)    Each member of the PAC should be capable of prudently evaluating the
reasonableness of expenses that are charged to the Plan.
PAC.4 Additional Information. The Chair of the PAC may seek information from
Company personnel, including the Controller, CFO and CHRO, in connection with
his identification of well qualified candidates for committee membership.

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PAC.5 Role of the Guidelines. The foregoing guidelines in this Article PAC are
intended to guide the Chair of the PAC in the selection of committee members;
however, they neither diminish nor enlarge the legal standard applicable under
ERISA.

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