EXHIBIT 10.1

 

PEPSICO, INC.

2007 LONG-TERM INCENTIVE PLAN

(as amended and restated March 13, 2014)

 

1.                                      Purposes.

 

The purposes of the Plan are to provide long-term incentives to those persons
with significant responsibility for the success and growth of PepsiCo and its
subsidiaries, divisions and affiliated businesses, to associate the interests of
such persons with those of PepsiCo’s shareholders, to assist PepsiCo in
recruiting, retaining and motivating a diverse group of employees and outside
directors on a competitive basis, and to ensure a pay-for-performance linkage
for such employees and outside directors.

 

2.                                      Definitions.

 

For purposes of the Plan, the following capitalized terms shall have the
meanings specified below:

 

(a)                                 “Award” means a grant of Options, Stock
Appreciation Rights, Restricted Shares, Restricted Stock Units, Performance
Shares, Performance Units, Stock Awards, or any or all of them (but a Stock
Award may not be granted to employees or officers).

 

(b)                                 “Board” means the Board of Directors of
PepsiCo.

 

(c)                                  “Cause” has the meaning set forth in
Section 11(b)(ii).

 

(d)                                 “Change in Control” has the meaning set
forth in Section 11(b)(i).

 

(e)                                  “Change-in-Control Treatment” has the
meaning set forth in Section 11(a)(ii).

 

(f)                                   “Code” means the Internal Revenue Code of
1986, as amended.  Any reference to a section of the Code shall also be a
reference to any successor section of the Code (or a successor code).

 

(g)                                  “Committee” means, with respect to any
matter relating to Section 8 of the Plan, the Board, and with respect to all
other matters under the Plan, the Compensation Committee of the Board. The
Compensation Committee shall be appointed by the Board and shall consist of two
or more independent, outside members of the Board. In the judgment of the Board,
the Compensation Committee shall be qualified to administer the Plan as
contemplated by (a) Rule 16b-3 of the Exchange Act, (b) Code Section 162(m) and
the regulations thereunder, and (c) any rules and regulations of a stock
exchange on which Common Stock is traded. Any member of the Compensation
Committee of the Board who does not satisfy the qualifications set out in the
preceding sentence may recuse himself or herself from any vote or

 

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other action taken by the Compensation Committee of the Board.

 

(h)                                 “Common Stock” means the common stock, par
value 1-2/3 cents per share, of PepsiCo.

 

(i)                                     “Company” means PepsiCo, its
subsidiaries, divisions and affiliated businesses.

 

(j)                                    “Covered Employee” means any PepsiCo
employee for whom PepsiCo is subject to the deductibility limitation imposed by
Code Section 162(m).

 

(k)                                 “Director Deferral Program” means the
PepsiCo Director Deferral Program, as amended from time to time, and any
successor program.

 

(l)                                     “Effective Date” means the date on which
the Plan as amended and restated as of March 12, 2010 is approved by PepsiCo’s
shareholders.

 

(m)                             “Eligible Person” means any of the following
individuals who is designated by the Committee as eligible to receive Awards,
subject to the conditions set forth in the Plan: (i) any employee of the Company
(including any officer of the Company and any Employee Director) provided that
the term employee does not include any individual who is not, as of the grant
date of an Award, classified by the Company as an employee on its corporate
books and records even if that individual is later reclassified (by the Company,
any court, any governmental agency or otherwise) as an employee as of the grant
date; (ii) any consultant or advisor of the Company; and (iii) any Non-Employee
Director who is eligible to receive an Award in accordance with Section 8
hereof.

 

(n)                                 “Employee Director” means a member of the
Board who is also an employee of the Company.

 

(o)                                 “Exchange Act” means the Securities Exchange
Act of 1934, as amended from time to time, and any successor thereto.

 

(p)                                 “Fair Market Value” on any date means the
average of the high and low market prices at which a share of Common Stock shall
have been sold on such date, or the immediately preceding trading day if such
date was not a trading day, as reported on the New York Stock Exchange Composite
Transactions Listing and, in the case of an ISO, means fair market value as
determined by the Committee in accordance with Code Section 422 and, in the case
of an Option or SAR that is intended to be exempt from Code Section 409A, fair
market value as determined by the Committee in accordance with Code
Section 409A.

 

(q)                                 “Full-Value Award” means any Restricted
Shares, Restricted Stock Units, Performance Shares, Performance Units or Stock
Awards.

 

(r)                                    “Good Reason” has the meaning set forth
in Section 11(b)(iii).

 

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(s)                                   “Initial Grant” has the meaning set forth
in Section 8(b).

 

(t)                                    “ISO” means an Option satisfying the
requirements of Code Section 422 and designated as an ISO by the Committee.

 

(u)                                 “Non-Employee Director” means a member of
the Board who is not an employee of the Company.

 

(v)                                 “NQSO” or “Non-Qualified Stock Option” means
an Option that does not satisfy the requirements of Code Section 422 or that is
not designated as an ISO by the Committee.

 

(w)                               “Option Exercise Price” means the purchase
price per share of Common Stock covered by an Option granted pursuant to the
Plan.

 

(x)                                 “Options” means the right to purchase shares
of Common Stock at a specified price for a specified period of time.

 

(y)                                 “Participant” means an Eligible Person who
has received an Award under the Plan.

 

(z)                                  “Payment Shares” has the meaning set forth
in Section 8(d).

 

(aa)                          “PepsiCo” means PepsiCo, Inc., a North Carolina
corporation, and its successors and assigns.

 

(bb)                          “Performance Awards” means an Award of Options,
Performance Shares, Performance Units, Restricted Shares, Restricted Stock Units
or SARs conditioned on the achievement of Performance Goals during a Performance
Period.

 

(cc)                            “Performance-Based Exception” means the
performance-based exception to the deductibility limitations of Code
Section 162(m), as set forth in Code Section 162(m)(4)(C).

 

(dd)                          “Performance Goals” means the goals established by
the Committee under Section 7(d).

 

(ee)                            “Performance Measures” means the criteria set
out in Section 7(d) that may be used by the Committee as the basis for a
Performance Goal.

 

(ff)                              “Performance Period” means the period
established by the Committee during which the achievement of Performance Goals
is assessed in order to determine whether and to what extent an Award that is
conditioned on attaining Performance Goals has been earned.

 

(gg)                            “Performance Shares” means an Award of shares of
Common Stock awarded to a

 

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Participant based on the achievement of Performance Goals during a Performance
Period.

 

(hh)                          “Performance Units” means an Award denominated in
shares of Common Stock, cash or a combination thereof, as determined by the
Committee, awarded to a Participant based on the achievement of Performance
Goals during a Performance Period.

 

(ii)                                  “Plan” means this PepsiCo, Inc. 2007
Long-Term Incentive Plan, as amended and restated from time to time.

 

(jj)                                “Prior Plans” means the PepsiCo, Inc. 2003
Long-Term Incentive Plan, the PepsiCo, Inc. 1994 Long-Term Incentive Plan, the
PepsiCo, Inc. 1995 Stock Option Incentive Plan, the PepsiCo SharePower Stock
Option Plan, the Director Stock Plan, the PepsiCo 1987 Incentive Plan, PBG 2004
Long Term Incentive Plan, PBG 2002 Long Term Incentive Plan, PBG Long Term
Incentive Plan, The Pepsi Bottling Group, Inc. 1999 Long Term Incentive Plan,
PBG Directors’ Stock Plan, PBG Stock Incentive Plan, PepsiAmericas, Inc. 2000
Stock Incentive Plan, Quaker Long Term Incentive Plan of 1990, Quaker Long Term
Incentive Plan of 1999 and Quaker Stock Compensation Plan for Outside Directors,
each as amended and restated from time to time.

 

(kk)                          “Restricted Shares” means shares of Common Stock
that are subject to such restrictions and such other terms and conditions as the
Committee may establish.

 

(ll)                                  “Restricted Stock Units” means the right,
as described in Section 7(c), to receive an amount, payable in either cash,
shares of Common Stock or a combination thereof, equal to the value of a
specified number of shares of Common Stock, subject to such terms and conditions
as the Committee may establish.

 

(mm)                  “Restriction Period” means, with respect to Options, SARS,
Performance Shares, Performance Units, Restricted Shares, Restricted Stock Units
or Stock Awards, the period during which any risk of forfeiture or other
restrictions set by the Committee remain in effect. Such restrictions remain in
effect until such time as they have lapsed under the terms and conditions of the
Options, SARS, Performance Shares, Performance Units, Restricted Shares or
Restricted Stock Units or as otherwise determined by the Committee.

 

(nn)                          “Stock Appreciation Rights” or “SARs” means the
right to receive a payment equal to the excess of the Fair Market Value of a
share of Common Stock on the date the Stock Appreciation Rights are exercised
over the exercise price per share of Common Stock established for those Stock
Appreciation Rights at the time of grant, multiplied by the number of shares of
Common Stock with respect to which the Stock Appreciation Rights are exercised.

 

(oo)                          “Stock Award” means an Award of shares of Common
Stock, including Payment

 

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Shares, that are subject to such terms, conditions and restrictions (if any) as
determined by the Committee in accordance with Section 7(e).

 

3.                                      Administration of the Plan.

 

(a)                                 Authority of Committee.    The Plan shall be
administered by the Committee, which shall have all the powers vested in it by
the terms of the Plan, such powers to include the authority (within the
limitations described in the Plan):

 

·                                          to select the persons to be granted
Awards under the Plan;

 

·                                          to determine the type, size and terms
of Awards to be made to each Participant;

 

·                                          to determine the time when Awards are
to be granted and any conditions that must be satisfied before an Award is
granted;

 

·                                          to establish objectives and
conditions for earning Awards;

 

·                                          to determine whether an Award shall
be evidenced by an agreement and, if so, to determine the terms and conditions
of such agreement (which shall not be inconsistent with the Plan) and who must
sign such agreement;

 

·                                          to determine whether the conditions
for earning an Award have been met and whether an Award will be paid at the end
of an applicable Performance Period;

 

·                                          except as otherwise provided in
Section 7(d) and Section 13(b), to modify the terms of Awards made under the
Plan;

 

·                                          to determine if, when and under what
conditions payment of all or any part of an Award may be deferred;

 

·                                          to determine whether the amount or
payment of an Award should be reduced or eliminated;

 

·                                          to determine the guidelines and/or
procedures for the payment or exercise of Awards; and

 

·                                          to determine whether an Award should
qualify, regardless of its amount, as deductible in its entirety for federal
income tax purposes, including whether any Awards granted to Covered Employees
or any other employee should comply with the Performance-Based Exception.

 

(b)                                 Interpretation of Plan.    The Committee
shall have full power and authority to administer and interpret the Plan and to
adopt or establish such rules, regulations,

 

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agreements, guidelines, procedures and instruments, which are not contrary to
the terms of the Plan and which, in its opinion, may be necessary or advisable
for the administration and operation of the Plan. The Committee’s
interpretations of the Plan, and all actions taken and determinations made by
the Committee pursuant to the powers vested in it hereunder, shall be conclusive
and binding on all parties concerned, including PepsiCo, its shareholders and
all Eligible Persons and Participants.

 

(c)                                  Delegation of Authority.    To the extent
not prohibited by law, the Committee (i) may delegate its authority hereunder to
one or more of its members or other persons (except that no such delegation
shall be permitted with respect to Awards to Eligible Persons who are subject to
Section 16 of the Exchange Act and Awards intended to comply with the
Performance-Based Exception) and (ii) may grant authority to employees or
designate employees of the Company to execute documents on behalf of the
Committee or to otherwise assist the Committee in the administration and
operation of the Plan.

 

4.                                      Eligibility.

 

(a)                                 General.    Subject to the terms and
conditions of the Plan, the Committee may, from time to time, select from all
Eligible Persons those to whom Awards shall be granted under Section 7 and shall
determine the nature and amount of each Award. Non-Employee Directors shall be
eligible to receive Awards only pursuant to Section 8.

 

(b)                                 International
Participants.    Notwithstanding any provision of the Plan to the contrary, in
order to foster and promote achievement of the purposes of the Plan or to comply
with provisions of the laws in countries outside the United States in which the
Company operates or has employees, the Committee, in its sole discretion, shall
have the power and authority to (i) determine which Eligible Persons (if any)
employed by the Company outside the United States should participate in the
Plan, (ii) modify the terms and conditions of any Awards made to such Eligible
Persons, and (iii) establish sub-plans, modified Option exercise procedures and
other Award terms, conditions and procedures to the extent such actions may be
necessary or advisable to comply with provisions of the laws in such countries
outside the United States in order to assure the lawfulness, validity and
effectiveness of Awards granted under the Plan and to the extent such actions
are consistent with the Committee’s authority to amend the Plan absent
shareholder approval pursuant to Section 13(b).

 

5.                                      Shares of Common Stock Subject to the
Plan.

 

(a)                                 Authorized Number of Shares.    Unless
otherwise authorized by PepsiCo’s shareholders and subject to the provisions of
this Section 5 and Section 10, the maximum aggregate number of shares of Common
Stock available for issuance under the Plan shall be the total of (i) 195
million shares plus (ii) the total number

 

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of shares of Common Stock underlying awards under the Prior Plans that are
cancelled or expire after May 2, 2007 without delivery of shares.

 

(b)                                 Share Counting.    The following rules shall
apply in determining the number of shares of Common Stock remaining available
for grant under the Plan:

 

 

(i)

Any shares of Common Stock subject to (A) Options or SARs, whether granted
before or after the Effective Date or (B) Full-Value Awards granted before the
Effective Date shall be counted against the maximum share limitation of
Section 5(a) as one (1) share of Common Stock for every share of Common Stock
subject thereto.  Any shares of Common Stock subject to Full-Value Awards
granted on or after the Effective Date shall be counted against the maximum
share limitation of Section 5(a) as three (3) shares of Common Stock for every
share of Common Stock subject thereto.  Awards that by their terms do not permit
settlement in shares of Common Stock shall not reduce the number of shares of
Common Stock available for issuance under the Plan.

 

 

 

 

(ii)

(A)

To the extent that any Award of Options or SARs, whether granted before, on or
after the Effective Date, is forfeited, cancelled, settled in cash rather than
shares (pursuant to the terms of an Award that permits but does not require cash
settlement), returned to the Company for failure to satisfy vesting requirements
or other conditions of the Award, or otherwise terminates without an issuance of
shares of Common Stock being made thereunder, the maximum share limitation of
Section 5(a) shall be credited with one (1) share of Common Stock for each share
of Common Stock subject to such Award of Options or SARs, and such number of
credited shares of Common Stock may again be made subject to Awards under the
Plan, subject to the foregoing maximum share limitation.

 

 

 

 

 

 

(B)

To the extent that any Full-Value Award granted on or after the Effective Date
is forfeited, cancelled, settled in cash rather than shares (pursuant to the
terms of an Award that permits but does not require cash settlement), returned
to the Company for failure to satisfy vesting requirements or other conditions
of the Award, or otherwise terminates without an issuance of shares of Common
Stock being made thereunder, the maximum share limitation of Section 5(a) shall
be credited with three (3) shares of Common Stock for each share of Common Stock
subject to such Full-Value Award and such number of credited shares of Common
Stock may again be made subject to Awards under the Plan, subject to the
foregoing maximum share limitation.

 

 

 

 

 

 

(C)

To the extent that any Full-Value Award granted before the Effective Date is
forfeited, cancelled, settled in cash rather than shares

 

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(pursuant to the terms of an Award that permits but does not require cash
settlement), returned to the Company for failure to satisfy vesting requirements
or other conditions of the Award, or otherwise terminates without an issuance of
shares of Common Stock being made thereunder, the maximum share limitation of
Section 5(a) shall be credited with one (1) share of Common Stock for each share
of Common Stock subject to such Full-Value Award, and such number of credited
shares of Common Stock may again be made subject to Awards under the Plan
subject to the foregoing maximum share limitation.

 

(iii)          Any shares of Common Stock that are tendered by a Participant or
withheld as full or partial payment of withholding or other taxes or as payment
for the exercise or conversion price of an Award under the Plan shall not be
added back to the number of shares of Common Stock available for issuance under
the Plan. Upon exercise of a stock-settled Stock Appreciation Right, the number
of shares subject to the Award that are then being exercised shall be counted
against the maximum aggregate number of shares of Common Stock that may be
issued under the Plan as provided above, on the basis of one share for every
share subject thereto, regardless of the actual number of shares used to settle
the Stock Appreciation Right upon exercise.

 

(iv)          Any shares of Common Stock underlying Awards granted through the
assumption of, or in substitution for, outstanding awards previously granted to
individuals who become employees of the Company as a result of a merger,
consolidation, acquisition or other corporate transaction involving the Company
shall not, unless required by law or regulation, count against the reserve of
available shares of Common Stock under the Plan.

 

(c)                                  Share Limitation.  No more than five
percent (5%) of the shares of Common Stock authorized under Section 5(a) may be
issued in connection with the following Awards whether granted before or after
the Effective Date:

 

(i)            Restricted Shares or Restricted Stock Units having a time-based
Restriction Period less than three years (but in no event less than one year),
subject to (A) pro rata vesting prior to the expiration of any Restriction
Period and (B) acceleration due to the Participant’s death, total disability or
retirement;

 

(ii)           Restricted Shares or Restricted Stock Units having a time-based
Restriction Period that is actually accelerated due to a Participant’s transfer
to an affiliated business; or

 

(iii)          Stock Awards having a Restriction Period of less than three
(3) years (not including transfers to satisfy required tax withholding or
intra-family transfers permitted by the Committee), subject to acceleration due
to the

 

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Participant’s death or total disability,

 

in each case described in (i), (ii) or (iii) above, as specified in the
applicable Award agreement; provided that such limitations shall not be
applicable to Payment Shares to Non-Employee Directors.

 

(d)                                 Shares to be Delivered.    The source of
shares of Common Stock to be delivered by the Company under the Plan shall be
determined by the Company and may consist in whole or in part of authorized but
unissued shares or repurchased shares.

 

6.                                      Award Limitations.

 

The maximum number of shares of Common Stock subject to Options and SARs that
can be granted to any Eligible Person during a single calendar year shall not
exceed two (2) million shares. The maximum amount of Awards other than Options
and SARs that can be granted to any Eligible Person during a single calendar
year shall not exceed $15 million; provided that the foregoing limitation shall
be applied to an Award that is denominated in shares of Common Stock on the
basis of the Fair Market Value of such shares on the date the Award is granted.
Notwithstanding the limitation set forth in the preceding sentence, the maximum
Award that may be granted to any Eligible Person for a Performance Period longer
than one calendar year shall not exceed the foregoing annual maximum multiplied
by the number of full calendar years in the Performance Period.

 

7.                                      Awards to Eligible Persons.

 

(a)                                 Options.

 

(i)                                     Grants.    Subject to the terms and
conditions of the Plan, Options may be granted to Eligible Persons. Options may
consist of ISOs or NQSOs, as the Committee shall determine. Options may be
granted alone or in tandem with SARs. With respect to Options granted in tandem
with SARs, the exercise of either such Options or such SARs will result in the
simultaneous cancellation of the same number of tandem SARs or Options, as the
case may be.

 

(ii)                                  Option Exercise Price.    The Option
Exercise Price shall be equal to or, at the Committee’s discretion, greater than
the Fair Market Value on the date the Option is granted, unless the Option was
granted through the assumption of, or in substitution for, outstanding awards
previously granted to individuals who became employees of the Company as a
result of a merger, consolidation, acquisition or other corporate transaction
involving the Company (in which case the assumption or substitution shall be
accomplished in a manner that permits the Option to be exempt from Code
Section 409A).

 

(iii)                               Term.    The term of Options shall be
determined by the Committee in its

 

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sole discretion, but in no event shall the term exceed ten (10) years from the
date of grant; provided, however, that Awards of NQSOs and SARs covering up to
five (5) million shares of Common Stock, in the aggregate, may be issued with a
term of up to fifteen (15) years.

 

(iv)                              ISO Limits.    ISOs may be granted only to
Eligible Persons who are employees of PepsiCo or of any parent or subsidiary
corporation (within the meaning of Code Section 424) on the date of grant, and
may only be granted to an employee who, at the time the Option is granted, does
not own stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of PepsiCo or of any parent or subsidiary
corporation (within the meaning of Code Section 424). The aggregate Fair Market
Value of all shares of Common Stock with respect to which ISOs are exercisable
by a Participant for the first time during any calendar year (under all plans of
the Company) shall not exceed $100,000 or such other amount as may subsequently
be specified by the Code and/or applicable regulations. The aggregate Fair
Market Value of such shares shall be determined at the time the Option is
granted. ISOs shall contain such other provisions as the Committee shall deem
advisable but shall in all events be consistent with and contain or be deemed to
contain all provisions required in order to qualify as incentive stock options
under Code Section 422.  No more than 195 million of the shares of Common Stock
authorized for issuance under the Plan may be issued in the form of ISOs.

 

(v)                                 No Repricing.    Subject to the
anti-dilution adjustment provisions set forth in Section 10, without the
approval of PepsiCo’s shareholders, (A) the Option Exercise Price for any
outstanding Option granted under the Plan may not be decreased after the date of
grant, (B) no outstanding Option granted under the Plan may be surrendered to
the Company as consideration for the grant of a new Option with a lower Option
Exercise Price, (C) no outstanding Option granted under the Plan with an Option
Exercise Price above the then-current Fair Market Value may be cancelled in
exchange for a payment in cash or other securities and (D) no other
modifications to any outstanding Option may be made that would be treated as a
“repricing” under the then applicable rules, regulations or listing requirements
adopted by the New York Stock Exchange.

 

(vi)                              Form of Payment.    The Option Exercise Price
shall be paid to the Company at the time of such exercise, subject to any
applicable rules or regulations adopted by the Committee:

 

(A)                               to the extent permitted by applicable law,
pursuant to cashless exercise procedures that are, from time to time, approved
by the Committee;

 

(B)                               through the tender of shares of Common Stock
owned by the

 

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Participant (or by delivering a certification or attestation of ownership of
such shares) valued at their Fair Market Value on the date of exercise;

 

(C)                               in cash or its equivalent; or

 

(D)                               by any combination of (A), (B), and (C) above.

 

(vii)                           No Dividend Equivalents.    No dividends or
dividend equivalents may be paid on Options. Except as otherwise provided
herein, a Participant shall have no rights as a holder of Common Stock with
respect to shares of Common Stock covered by an Option unless and until such
shares of Common Stock have been registered to the Participant as the owner.

 

(viii)                        Minimum Vesting Period.     With respect to any
Options granted on or after March 13, 2014, any time-based Restriction Period
shall be for a minimum of three years (subject to (A) pro rata vesting prior to
the expiration of any Restriction Period and (B) acceleration due to the
Participant’s death, total disability or retirement, in each case as specified
in the applicable Award agreement).

 

(b)                                 Stock Appreciation Rights.

 

(i)                                     Grants.    Subject to the terms and
provisions of the Plan, SARs may be granted to Eligible Persons. SARs may be
granted alone or in tandem with Options. With respect to SARs granted in tandem
with Options, the exercise of either such Options or such SARs will result in
the simultaneous cancellation of the same number of tandem SARs or Options, as
the case may be.

 

(ii)                                  Exercise Price.    The exercise price per
share of Common Stock covered by a SAR granted pursuant to the Plan shall be
equal to or, at the Committee’s discretion, greater than Fair Market Value on
the date the SAR is granted, unless the SAR was granted through the assumption
of, or in substitution for, outstanding awards previously granted to individuals
who became employees of the Company as a result of a merger, consolidation,
acquisition or other corporate transaction involving the Company (in which case
the assumption or substitution shall be accomplished in a manner that permits
the SAR to be exempt from Code Section 409A).

 

(iii)                               Term.    The term of a SAR shall be
determined by the Committee in its sole discretion, but, subject to
Section 7(a)(iii), in no event shall the term exceed ten (10) years from the
date of grant.

 

(iv)                              No Repricing.  Except for anti-dilution
adjustments made pursuant to Section 10, without the approval of PepsiCo’s
shareholders, (A) the exercise

 

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price for any outstanding SAR granted under the Plan may not be decreased after
the date of grant, (B) no outstanding SAR granted under the Plan may be
surrendered to the Company as consideration for the grant of a new SAR with a
lower exercise price, (C) no outstanding SAR granted under the Plan with an
exercise price above the then-current Fair Market Value may be cancelled in
exchange for a payment in cash or other securities and (D)  no other
modifications to any outstanding SAR may be made that would be treated as a
“repricing” under the then applicable rules, regulations or listing requirements
adopted by the New York Stock Exchange.

 

(v)                                 Form of Payment.    The Committee may
authorize payment of a SAR in the form of cash, Common Stock valued at its Fair
Market Value on the date of the exercise, a combination thereof, or by any other
method as the Committee may determine.

 

(vi)                              No Dividend Equivalents.    No dividends or
dividend equivalents may be paid on SARs.

 

(vii)                           Minimum Vesting Period.     With respect to any
SARs granted on or after March 13, 2014, any time-based Restriction Period shall
be for a minimum of three years (subject to (A) pro rata vesting prior to the
expiration of any Restriction Period and (B) acceleration due to the
Participant’s death, total disability or retirement, in each case as specified
in the applicable Award agreement).

 

(c)                                  Restricted Shares / Restricted Stock Units.

 

(i)                                     Grants.    Subject to the terms and
provisions of the Plan, Restricted Shares or Restricted Stock Units may be
granted to Eligible Persons.

 

(ii)                                  Restrictions.    The Committee shall
impose such terms, conditions and/or restrictions on any Restricted Shares or
Restricted Stock Units granted pursuant to the Plan as it may deem advisable
including, without limitation: a requirement that Participants pay a stipulated
purchase price for each Restricted Share or each Restricted Stock Unit;
forfeiture conditions; transfer restrictions; restrictions based upon the
achievement of specific performance goals (Company-wide, divisional, and/or
individual); time-based restrictions on vesting; and/or restrictions under
applicable federal or state securities laws.  Except in the case of Awards
covered by Section 5(c), any time-based Restriction Period shall be for a
minimum of three years (subject to (A) pro rata vesting prior to the expiration
of any Restriction Period and (B) acceleration due to the Participant’s death,
total disability or retirement, in each case as specified in the applicable
Award agreement).  To the extent the Restricted Shares or Restricted Stock Units
are intended to be deductible under Code Section 162(m), the applicable
restrictions shall be based on the achievement of Performance Goals over a
Performance

 

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Period, as described in Section 7(d) below.

 

(iii)                               Payment of Restricted Stock
Units.    Restricted Stock Units that become payable in accordance with their
terms and conditions shall be settled in cash, shares of Common Stock, or a
combination of cash and shares, as determined by the Committee. Any person who
holds Restricted Stock Units shall have no ownership interest in the shares of
Common Stock to which the Restricted Stock Units relate unless and until payment
with respect to such Restricted Stock Units is actually made in shares of Common
Stock. The payment date shall be as soon as practicable after the earliest of
(A) any vesting date that can be pre-determined at grant under the terms of an
Award agreement, and (B) the occurrence date of an applicable vesting event
(e.g., death, total disability, approved transfer or retirement) specified in
the applicable Award agreement.

 

(iv)                              Transfer Restrictions.    During the
Restriction Period, Restricted Shares may not be sold, assigned, transferred or
otherwise disposed of, or mortgaged, pledged or otherwise encumbered. In order
to enforce the limitations imposed upon the Restricted Shares, the Committee may
(A) cause a legend or legends to be placed on any certificates evidencing such
Restricted Shares, and/or (B) cause “stop transfer” instructions to be issued,
as it deems necessary or appropriate. Restricted Stock Units may not be sold,
assigned, transferred or otherwise disposed of, or mortgaged, pledged, or
otherwise encumbered at any time.

 

(v)                                 Dividend and Voting Rights.    Unless
otherwise determined by the Committee, during the Restriction Period,
Participants who hold Restricted Shares shall have the right to receive
dividends in cash or other property or other distribution or rights in respect
of such shares and shall have the right to vote such shares as the record owners
thereof; provided that, unless otherwise determined by the Committee, any
dividends or other property payable to a Participant during the Restriction
Period shall be distributed to the Participant only if and when the restrictions
imposed on the applicable Restricted Shares lapse. Unless otherwise determined
by the Committee, during the Restriction Period, Participants who hold
Restricted Stock Units shall be credited with dividend equivalents in respect of
such Restricted Stock Units; provided that, unless otherwise determined by the
Committee, such dividend equivalents shall be distributed (without interest) to
the Participant only if and when the restrictions imposed on the applicable
Restricted Stock Units lapse.

 

(vi)                              Ownership of Restricted Shares.    Restricted
Shares issued under the Plan shall be registered in the name of the Participant
on the books and records of the Company or its designee (or by one or more
physical certificates if physical certificates are issued with respect to such
Restricted Shares) subject to the applicable restrictions imposed by the Plan.
If a Restricted

 

13

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Share is forfeited in accordance with the restrictions that apply to such
Restricted Shares, such interest or certificate, as the case may be, shall be
cancelled. At the end of the Restriction Period that applies to Restricted
Shares, the number of shares to which the Participant is then entitled shall be
delivered to the Participant free and clear of the restrictions, either in
certificated or uncertificated form. No shares of Common Stock shall be
registered in the name of the Participant with respect to a Restricted Stock
Unit unless and until such unit is paid in shares of Common Stock.

 

(d)                                 Performance Awards.

 

(i)                                     Grants.    Subject to the provisions of
the Plan, Performance Awards may be granted to Eligible Persons. Performance
Awards may be granted either alone or in addition to other Awards made under the
Plan.

 

(ii)                                  Performance Goals.    Unless otherwise
determined by the Committee, Performance Awards shall be conditioned on the
achievement of Performance Goals (which shall be based on one or more
Performance Measures, as determined by the Committee) over a Performance Period.
The Performance Period shall be one year, unless otherwise determined by the
Committee, provided that the Restriction Period for Performance Awards (not
including Options, SARs or Awards covered by Section 5(c)) shall be for a
minimum of three years, subject to (A) pro rata vesting prior to the expiration
of any Restriction Period and (B) acceleration due to the Participant’s death or
total disability, in each case as specified in the applicable Award agreement.

 

(iii)                               Performance Measures.    The Performance
Measure(s) to be used for purposes of Performance Awards may be described in
terms of objectives that are related to the individual Participant or objectives
that are Company-wide or related to a subsidiary, division, department, region,
function or business unit of the Company, and may consist of one or more or any
combination of the following criteria: stock price, market share, sales revenue,
cash flow, sales volume, earnings per share, return on equity, return on assets,
return on sales, return on invested capital, economic value added, net earnings,
total shareholder return, gross margin, costs, productivity, brand contribution,
product quality, portfolio transformation, productivity improvement, corporate
value measures (such as compliance, safety, environmental and personnel
matters), or goals related to corporate initiatives, such as acquisitions,
dispositions or customer satisfaction. The Performance Goals based on these
Performance Measures may be expressed in absolute terms or relative to the
performance of other entities.

 

(iv)                              Negative Discretion.    Notwithstanding the
achievement of any Performance Goal established under the Plan, the Committee
has the discretion to reduce, but not increase, some or all of a Performance
Award

 

14

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that would otherwise be paid to a Participant.

 

(v)                                 Extraordinary Events.    At, or at any time
after, the time an Award is granted, and to the extent permitted under Code
Section 162(m) and the regulations thereunder without adversely affecting the
treatment of the Award under the Performance-Based Exception, the Committee, in
its sole discretion, may provide for the manner in which performance will be
measured against the Performance Goals (or may adjust the Performance Goals) to
reflect the impact of specific corporate transactions, accounting or tax law
changes and other extraordinary and nonrecurring events.

 

(vi)                              Performance-Based Exception.    With respect
to any Award that is intended to satisfy the conditions for the
Performance-Based Exception under Code Section 162(m): (A) the Committee shall
interpret the Plan and this Section 7(d) in light of Code Section 162(m) and the
regulations thereunder; (B) the Committee shall not amend the Award in any way
that would adversely affect the treatment of the Award under Code
Section 162(m) and the regulations thereunder; and (C) such Award shall not be
paid until the Committee shall first have certified that the Performance Goals
have been achieved.

 

(e)                                  Stock Awards.

 

(i)                                     Grants.    Subject to the provisions of
the Plan, Stock Awards consisting of shares of Common Stock may be granted
pursuant to this Section 7(e) only to Eligible Persons who are consultants or
advisors to the Company and may not be granted to employees of the Company
(including Employee Directors). Non-Employee Directors are eligible to receive
Stock Awards only pursuant to Section 8. Stock Awards may be granted either
alone or in addition to other Awards made under the Plan.

 

(ii)                                  Terms and Conditions.    The shares of
Common Stock subject to a Stock Award shall be immediately vested at the time of
grant and nonforfeitable at all times but shall be subject to such other terms
and conditions, including restrictions on transferability, as determined by the
Committee in its discretion subject to Section 5(c) and the other provisions of
the Plan. The shares of Common Stock subject to a Stock Award shall be
registered in the name of the Participant.

 

8.                                      Awards to Non-Employee Directors.

 

(a)                                 Sole Awards.    Notwithstanding anything in
the other sections of the Plan to the contrary, Non-Employee Directors are
eligible to receive only Awards authorized by this Section 8. The terms
applicable under Section 7 for each such category of Award shall apply under
this Section 8 to the extent not inconsistent with the

 

15

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provisions of this Section 8. The Committee retains the discretion to change the
amount and terms of the Initial Grant or the types of Awards to Non-Employee
Directors notwithstanding paragraphs (a), (b) and (c) of this Section 8.

 

(b)                                 Initial Grants.    Each newly appointed
Non-Employee Director shall, as soon as practicable after initially becoming a
member of the Board, be granted an Award (the “Initial Grant”) of a Stock Award
consisting of 1,000 shares of Common Stock subject to the transfer restrictions
in Section 8(c)(i) below.

 

(c)                                  Terms of Initial Grants to Non-Employee
Directors.

 

(i)                                     Shares of Common Stock subject to a
Stock Award granted to a Non-Employee Director shall be immediately vested at
the time of grant and nonforfeitable at all times. However, such shares of
Common Stock may not be sold, assigned, transferred or otherwise disposed of, or
mortgaged, pledged or otherwise encumbered, until the date the Non-Employee
Director’s membership on the Board ceases (except that this transfer restriction
shall not prohibit: (A) PepsiCo’s retaining shares to satisfy any required tax
withholding under Section 12(e) to the extent applicable, and (B) intra-family
transfers permitted by the Committee). In order to enforce the limitations
imposed upon such shares of Common Stock, the Committee may (a) cause a legend
or legends to be placed on any certificates evidencing such shares, and/or
(b) cause “stop transfer” instructions to be issued, as it deems necessary or
appropriate.

 

(ii)                                  Non-Employee Directors who hold shares of
Common Stock pursuant to a Stock Award granted under this Section 8 shall have
the right to receive dividends in cash or other property and shall have the
right to vote such shares as the record owners thereof; provided that any
securities of the Company that are distributed to a Non-Employee Director shall
be subject to the same transfer restrictions that apply to such shares of Common
Stock.

 

(d)                                 Payment Shares.    A current or former
Non-Employee Director’s interest in phantom shares of Common Stock under the
Director Deferral Program, which results from an elective or mandatory deferral
of cash payments, shall be paid in shares of Common Stock (“Payment Shares”)
pursuant to the Plan while the Plan remains in effect, to the extent the
Director Deferral Program provides for the stock settlement of such phantom
shares.  The number of Payment Shares a current or former Non-Employee Director
is entitled to receive shall be equal to the number of the Non-Employee
Director’s phantom shares of Common Stock under the Director Deferral Program on
the applicable distribution valuation date, and such Payment Shares shall be
distributed on the same date such Non-Employee Director would otherwise be
entitled to receive the cash payment under the Director Deferral Program in lieu
of which the Payment Shares are being distributed.

 

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9.                                      Deferred Payments.

 

Subject to the terms of the Plan, the Committee may determine that all or a
portion of any Award to a Participant, whether it is to be paid in cash, shares
of Common Stock or a combination thereof, shall be deferred or may, in its sole
discretion, approve deferral elections made by Participants. Deferrals shall be
for such periods and upon such terms as the Committee may determine in its sole
discretion, which terms shall be designed to comply with Code Section 409A.

 

10.                               Dilution and Other Adjustments.

 

In the event of any merger, reorganization, consolidation, recapitalization,
stock dividend, stock split, combination or exchange of shares or other change
in corporate structure affecting any class of Common Stock, the Committee shall
make such adjustments in the class and aggregate number of shares which may be
delivered under the Plan as described in Section 5, the individual award
maximums under Section 6, the class, number, and Option Exercise Price of
outstanding Options, the class number and exercise price of outstanding SARs and
the class and number of shares subject to any other Awards granted under the
Plan (provided the number of shares of any class subject to any Award shall
always be a whole number), as may be, and to such extent (if any), determined to
be appropriate and equitable by the Committee, and any such adjustment may, in
the sole discretion of the Committee, take the form of Options covering more
than one class of Common Stock. Such adjustment shall be conclusive and binding
for all purposes of the Plan. Any adjustment of an Option or SAR under this
Section 10 shall be accomplished in a manner that permits the Option or SAR to
be exempt from Code Section 409A.

 

11.                               Change in Control.

 

(a)                                 Impact of Event.    Notwithstanding any
other provision of the Plan to the contrary, in the event of a Change in
Control, the following provisions of this Section 11 shall apply except to the
extent an Award agreement provides for a different treatment (in which case the
Award agreement shall govern and this Section 11 shall not be applicable):

 

(i)                                     If and to the extent that outstanding
Awards under the Plan (A) are assumed by the successor corporation (or affiliate
thereto) or continued or (B) are replaced with equity awards that preserve the
existing value of the Awards at the time of the Change in Control and provide
for subsequent payout in accordance with a vesting schedule and Performance
Goals, as applicable, that are the same or more favorable to the Participants
than the vesting schedule and Performance Goals applicable to the Awards, then
all such Awards or such substitutes thereof shall remain outstanding and be
governed by their respective terms and the provisions of the Plan subject to
Section 11(a)(iv) below.

 

(ii)                                  If and to the extent that outstanding
Awards under the Plan are not assumed, continued or replaced in accordance with
Section 11(a)(i) above, then upon the Change in Control the following treatment
(referred to as “Change-in-Control Treatment”) shall apply to such Awards:
(A) outstanding Options

 

17

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and SARs shall immediately vest and become exercisable; (B) the restrictions and
other conditions applicable to outstanding Restricted Shares, Restricted Stock
Units and Stock Awards, including vesting requirements, shall immediately lapse;
such Awards shall be free of all restrictions and fully vested; and, with
respect to Restricted Stock Units, shall be payable immediately in accordance
with their terms or, if later, as of the earliest permissible date under Code
Section 409A; and (C) outstanding Performance Awards granted under the Plan
shall immediately vest and shall become immediately payable in accordance with
their terms as if the Performance Goals have been achieved at the target
performance level.

 

(iii)                               If and to the extent that outstanding Awards
under the Plan are not assumed, continued or replaced in accordance with
Section 11(a)(i) above, then in connection with the application of the
Change-in-Control Treatment set forth in Section 11(a)(ii) above, the Board may,
in its sole discretion, provide for cancellation of such outstanding Awards at
the time of the Change in Control in which case a payment of cash, property or a
combination thereof shall be made to each such Participant upon the consummation
of the Change in Control that is determined by the Board in its sole discretion
and that is at least equal to the excess (if any) of the value of the
consideration that would be received in such Change in Control by the holders of
PepsiCo’s securities relating to such Awards over the exercise or purchase price
(if any) for such Awards (except that, in the case of an Option or SAR, such
payment shall be limited as necessary to prevent the Option or SAR from being
subject to Code Section 409A).

 

(iv)                              If and to the extent that (A) outstanding
Awards are assumed, continued or replaced in accordance with
Section 11(a)(i) above and (B) a Participant’s employment with, or performance
of services for, the Company is terminated by the Company for any reasons other
than Cause or by such Participant for Good Reason, in each case, within the
two-year period commencing on the Change in Control, then, as of the date of
such Participant’s termination, the Change-in-Control Treatment set forth in
Section 11(a)(ii) above shall apply to all assumed or replaced Awards of such
Participant then outstanding.

 

(v)                                 Outstanding Options or SARs that are
assumed, continued or replaced in accordance with Section 11(a)(i) may be
exercised by the Participant in accordance with the applicable terms and
conditions of such Award as set forth in the applicable Award agreement or
elsewhere; provided, however, that Options or SARs that become exercisable in
accordance with Section 11(a)(iv) may be exercised until the expiration of the
original full term of such Option or SAR notwithstanding the other original
terms and conditions of such Award.

 

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(b)                                 Definitions.

 

(i)                                     For purposes of this Section 11, “Change
in Control” means the occurrence of any of the following events:

 

(A)                               acquisition of 20% or more of the outstanding
voting securities of PepsiCo by another entity or group; excluding, however, the
following (1) any acquisition by PepsiCo or (2) any acquisition by an employee
benefit plan or related trust sponsored or maintained by PepsiCo;

 

(B)                               during any consecutive two-year period,
persons who constitute the Board at the beginning of the period cease to
constitute at least 50% of the Board (unless the election of each new Board
member was approved by a majority of directors who began the two-year period);

 

(C)                               (1) with respect to Awards granted prior to
September 11, 2008, PepsiCo shareholders approve a merger or consolidation of
PepsiCo with another company, and PepsiCo is not the surviving company; or, if
after such transaction, the other entity owns, directly or indirectly, 50% or
more of the outstanding voting securities of PepsiCo and (2) with respect to
Awards granted on or after September 11, 2008, consummation of a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting shares of the surviving
entity) more than 50% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation;

 

(D)                               PepsiCo shareholders approve a plan of
complete liquidation of PepsiCo or the sale or disposition of all or
substantially all of PepsiCo’s assets; or

 

(E)                                any other event, circumstance, offer or
proposal occurs or is made, which is intended to effect a change in the control
of PepsiCo, and which results in the occurrence of one or more of the events set
forth in clauses (A) through (D) of this Section 11(b)(i).

 

(ii)                                  For purposes of this Section 11, “Cause”
means with respect to any Participant, unless otherwise provided in the
applicable Award agreement, (A) the Participant’s willful misconduct that
materially injures the Company; (B) the Participant’s conviction of a felony or
a plea of nolo contendere by Participant with respect to a felony; or (C) the
Participant’s

 

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continued failure to substantially perform his or her duties with the Company
(other than by reason of the Participant’s disability) after written demand by
the Company that identifies the manner in which the Company believes that the
Participant has not performed his or her duties. A termination for Cause must be
communicated to the Participant by written notice that specifies the event or
events claimed to provide a basis for termination for Cause.

 

(iii)                               For purposes of this Section 11, “Good
Reason” means with respect to any Participant, unless otherwise provided in the
applicable Award agreement, without the Participant’s written consent, (A) the
Company’s requiring a material change in the Participant’s principal place of
employment as it existed immediately prior to the Change in Control, except for
reasonably required travel on the Company’s business that is not materially
greater than such travel requirements prior to the Change in Control (for this
purpose, a change of 35 or fewer miles shall not be considered a material change
in the Participant’s principal place of employment); (B) a material reduction in
the Participant’s compensation (within the meaning of Treasury Regulation §
1.409A-1(n)(2)(ii)(A)(2)) as in effect immediately prior to the Change in
Control; or (C) a material reduction in the Participant’s job responsibilities,
authority or duties with the Company as in effect immediately prior to the
Change in Control. A termination for Good Reason must be communicated by the
Participant to the Company by written notice that specifies the event or events
claimed to provide a basis for termination for Good Reason; provided that the
Participant’s written notice must be tendered within ninety (90) days of the
occurrence of such event or events and provided further that the Company shall
have failed to remedy such act or omission within thirty (30) days following its
receipt of such notice.  A Participant’s continued employment shall not
constitute consent to, or a waiver of rights with respect to, any act or failure
to act constituting Good Reason hereunder if the Participant actually terminates
employment within fourteen (14) days after the Company’s failure to timely
remedy or, if earlier, prior to the second anniversary of the Change in Control.

 

12.                               Miscellaneous Provisions.

 

(a)                                 Misconduct.

 

(i)                                     Except as otherwise provided in
agreements covering Awards hereunder, a Participant shall forfeit all rights in
his or her outstanding Awards under the Plan, and all such outstanding Awards
shall automatically terminate and lapse, if the Committee determines that such
Participant has (A) used for profit or disclosed to unauthorized persons,
confidential information or trade secrets of the Company, (B) breached any
contract with or violated any obligation to the Company, including without
limitation, a violation of any Company code of conduct, (C) engaged in unlawful
trading in the securities

 

20

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of PepsiCo or of another company based on information gained as a result of that
Participant’s employment or other relationship with the Company, (D) committed a
felony or other serious crime or engaged in any activity which constitutes gross
misconduct, (E) breached the non-compete, non-solicitation or other restrictive
covenants as provided in the applicable Award agreement, or (F) violated any
PepsiCo compensation clawback policy applicable to the Participant.

 

(ii)                                  In addition, to the extent provided in the
applicable Award agreement, in the event any accounting adjustment is required
to be made to the Company’s financial results and the Committee determines that
an Executive Officer’s gross negligence or misconduct caused or contributed to
the need for the accounting adjustment, the Committee may, to the extent
determined appropriate by the Committee in its sole discretion to reflect the
impact of the accounting adjustment on the Company’s financial results,
(A) require such Executive Officer to reimburse the Company for all or a portion
of any Award previously paid to such Executive Officer, (B) cause the
cancellation of all or a portion of any outstanding Awards held by such
Executive Officer or payable to such Executive Officer, and/or (C) require such
Executive Officer to reimburse the Company for all or a portion of the gains
from the exercise of the Executive Officer’s Options or settlement of any of the
Executive Officer’s other Awards realized during the twelve (12)-month period
following the first issuance or filing of the financial results required to be
adjusted.  For purposes of this Section 12(a)(ii), “Executive Officer” means an
executive officer of the Company for purposes of Section 16 of the Exchange Act.

 

(iii)          The remedies set forth in this Section 12(a) are in addition to
any other remedies available under applicable law in the event of misconduct
described above.

 

(b)                                 Rights as Shareholder.    Except as
otherwise provided herein, a Participant shall have no rights as a holder of
Common Stock with respect to Awards hereunder, unless and until the shares of
Common Stock have been registered to the Participant as the owner.

 

(c)                                  No Loans.    No loans from the Company to
Participants shall be permitted in connection with the Plan.

 

(d)                                 Assignment or Transfer.    Except as
otherwise provided under the Plan, no Award under the Plan or any rights or
interests therein shall be transferable other than by will or the laws of
descent and distribution. The Committee may, in its discretion, provide that an
Award (other than an ISO) is transferable without the payment of any
consideration to a Participant’s family member, whether directly or by means of
a trust or otherwise, subject to such terms and conditions as the Committee may
impose. For this purpose, “family member” has the meaning given to such term in

 

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the General Instructions to the Form S-8 registration statement under the
Securities Act of 1933. All Awards under the Plan shall be exercisable, during
the Participant’s lifetime, only by the Participant or a person who is a
permitted transferee pursuant to this Section 12(d). Once awarded, the shares of
Common Stock (other than Restricted Shares) received by Participants may be
freely transferred, assigned, pledged or otherwise subjected to lien, subject
to: (i) the transfer restrictions in Sections 7(e)(ii) and 8(c)(i) above; and
(ii) the restrictions imposed by the Securities Act of 1933, Section 16 of the
Exchange Act and PepsiCo’s Insider Trading Policy, each as amended from time to
time.

 

(e)                                  Withholding Taxes.    PepsiCo shall have
the right to deduct from all Awards paid in cash to a Participant any taxes
required by law to be withheld with respect to such Awards. All statutory
minimum applicable withholding taxes arising with respect to Awards paid in
shares of Common Stock to a Participant shall be satisfied by PepsiCo retaining
shares of Common Stock having a Fair Market Value on the date the tax is to be
determined that is equal to the amount of such statutory minimum applicable
withholding tax (rounded, if necessary, to the next highest whole number of
shares of Common Stock); provided, however, that, subject to any restrictions or
limitations that the Committee deems appropriate, a Participant may elect to
satisfy such statutory minimum applicable withholding tax through cash or cash
proceeds.

 

(f)                                   Currency and Other Restrictions.    The
obligations of the Company to make delivery of Awards in cash or Common Stock
shall be subject to currency or other restrictions imposed by any governmental
authority or regulatory body having jurisdiction over such Awards.

 

(g)                                  No Rights to Awards.    Neither the Plan
nor any action taken hereunder shall be construed as giving any person any right
to be retained in the employ or service of the Company, and the Plan shall not
interfere with or limit in any way the right of the Company to terminate any
person’s employment or service at any time. Except as set forth herein, no
employee or other person shall have any claim or right to be granted an Award
under the Plan. By accepting an Award, the Participant acknowledges and agrees
that (i) the Award will be exclusively governed by the terms of the Plan,
including the right reserved by the Company to amend or cancel the Plan at any
time without the Company incurring liability to the Participant (except, to the
extent the terms of the Award so provide, for Awards already granted under the
Plan), (ii) Awards are not a constituent part of salary and the Participant is
not entitled, under the terms and conditions of employment, or by accepting or
being granted Awards under the Plan to require Awards to be granted to him or
her in the future under the Plan or any other plan, (iii) the value of Awards
received under the Plan shall be excluded from the calculation of termination
indemnities or other severance payments or benefits, and (iv) the Participant
shall seek all necessary approval under, make all required notifications under,
and comply with all laws, rules and regulations applicable to the ownership of
Options and shares of Common Stock and the exercise of Options, including,
without limitation, currency and exchange laws, rules and regulations.

 

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(h)                                 Beneficiary Designation.    To the extent
allowed by the Committee, each Participant under the Plan may, from time to
time, name any beneficiary or beneficiaries (who may be named on a contingent or
successive basis) to whom any benefit under the Plan is to be paid in case of
his or her death before he or she receives any or all of such benefit. Unless
the Committee determines otherwise, each such designation shall revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Committee, and shall be effective only when filed by the Participant in writing
with the Company during the Participant’s lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participant’s death shall be paid
to the Participant’s estate.

 

(i)                                     Costs and Expenses.    The cost and
expenses of administering the Plan shall be borne by PepsiCo and not charged to
any Award or to any Participant.

 

(j)                                    Fractional Shares.    Fractional shares
of Common Stock shall not be issued or transferred under an Award, but the
Committee may direct that cash be paid in lieu of fractional shares or may round
off fractional shares, in its discretion.

 

(k)                                 Funding of Plan.    The Plan shall be
unfunded and any benefits under the Plan shall represent an unsecured promise to
pay by the Company. PepsiCo shall not be required to establish or fund any
special or separate account or to make any other segregation of assets to assure
the payment of any Award under the Plan and the existence of any such account or
other segregation of assets shall be consistent with the “unfunded” status of
the Plan.

 

(l)                                     Indemnification.    Provisions for the
indemnification of officers and directors of the Company in connection with the
administration of the Plan shall be as set forth in PepsiCo’s Certificate of
Incorporation and Bylaws as in effect from time to time.

 

(m)                             Successors.    All obligations of PepsiCo under
the Plan with respect to Awards granted hereunder shall be binding on any
successor to PepsiCo, whether the existence of such successor is the result of a
direct or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of PepsiCo.

 

(n)                                 Compliance with Code Section 409A.    The
Plan is intended to satisfy the requirements of Code Section 409A and any
regulations or guidance that may be adopted thereunder from time to time,
including any transition relief available under applicable guidance related to
Code Section 409A.  Accordingly, to ensure the exemption from Code Section 409A
of potentially exempt Awards and the compliance with Code Section 409A of other
Awards, any payment that under the terms of the Plan or an agreement is to be
made as soon as practicable relative to a date shall be made not later than 60
days after such date, and the Participant may not determine the time of
payment.  Pursuant to Section 13(b), the Plan may be amended or interpreted by
the Committee as it determines necessary or appropriate

 

23

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in accordance with Code Section 409A and to avoid a plan failure under Code
Section 409A(a)(1). If a Participant is a “specified employee” as defined in
Code Section 409A at the time of the Participant’s separation from service with
the Company, then solely to the extent necessary to avoid the imposition of any
additional tax under Code Section 409A, the commencement of any payments or
benefits under an Award shall be deferred until the date that is six months
following the Participant’s separation from service (or such other period as
required to comply with Code Section 409A).

 

13.                               Effective Date, Governing Law, Amendments and
Termination.

 

(a)                                 Effective Date.    The Plan in its original
form became effective on May 2, 2007, the date on which it was initially
approved by PepsiCo’s shareholders, and was subsequently amended by the Board on
September 13, 2007 and September 12, 2008.  The Plan as amended and restated
herein was approved by the Board on March 12, 2010, became effective in its
amended form upon its approval by PepsiCo’s shareholders on May 5, 2010, and was
subsequently amended by the Committee on March 13, 2014.

 

(b)                                 Amendments.    The Committee or the Board
may at any time terminate or from time to time amend the Plan in whole or in
part, but no such action shall adversely affect any rights or obligations with
respect to any Awards granted prior to the date of such termination or amendment
without the consent of the affected Participant except to the extent that the
Committee reasonably determines that such termination or amendment is necessary
or appropriate to comply with applicable law (including the provisions of Code
Section 409A and the regulations thereunder pertaining to the deferral of
compensation) or the rules and regulations of any stock exchange on which Common
Stock is listed or quoted. Notwithstanding the foregoing, unless PepsiCo’s
shareholders shall have first approved the amendment, no amendment of the Plan
shall be effective if the amendment would (i) increase the maximum number of
shares of Common Stock that may be delivered under the Plan or to any one
individual (except to the extent such amendment is made pursuant to Section 10
hereof), (ii) extend the maximum period during which Awards may be granted under
the Plan, (iii) add to the types of awards that can be made under the Plan,
(iv) change the Performance Measures pursuant to which Performance Awards are
earned, (v) modify the requirements as to eligibility for participation in the
Plan, (vi) decrease the grant or exercise price of any Option or SAR to less
than the Fair Market Value on the date of grant except for anti-dilution
adjustments made pursuant to Section 10; or (vii) require shareholder approval
pursuant to the Plan or applicable law or the rules of the principal securities
exchange on which shares of Common Stock are traded in order to be effective.

 

(c)                                  Governing Law.    Except as otherwise
provided in agreements covering Awards hereunder, all questions pertaining to
the construction, interpretation, regulation, validity and effect of the
provisions of the Plan shall be determined in accordance with the laws of the
State of North Carolina without giving effect to conflict of laws

 

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principles.

 

(d)                                 Termination.    No Awards shall be made
under the Plan after the tenth anniversary of the date on which PepsiCo’s
shareholders initially approve the Plan.

 

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