EX-10.32









Exhibit 10.32




PBG




PENSION EQUALIZATION PLAN




(PEP)




2009 Restatement














 


 









 





PEP PENSION EQUALIZATION PLAN




Table of Contents




	 	 	 	 	 
	 	 	Page
	 	 	No.
	ARTICLE I
— History and Purpose
	 	 	1	 
	 
	 	 	 	 
	1.1 History of Plan
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II — Definitions and Construction
	 	 	2	 
	 
	 	 	 	 
	2.1 Definitions
	 	 	2	 
	(a) Actuarial Equivalent
	 	 	2	 
	(b) Annuity
	 	 	2	 
	(c) Code
	 	 	2	 
	(d) Company or PBG
	 	 	2	 
	(e) Compensation Limitation
	 	 	2	 
	(f) Effective Date
	 	 	2	 
	(g) ERISA
	 	 	2	 
	(h) Participant
	 	 	2	 
	(i) PBG Organization
	 	 	3	 
	(j) PEP Pension
	 	 	3	 
	(k) PepsiCo Prior Plan
	 	 	3	 
	(l) Plan
	 	 	3	 
	(m) Plan Administrator
	 	 	3	 
	(n) Plan Year
	 	 	3	 
	(o) Primary Social Security Amount
	 	 	3	 
	(p) Salaried Plan
	 	 	4	 
	(q) Salaried Plan Participant
	 	 	4	 
	(r) Section 409A
	 	 	4	 
	(s) Section 415 Limitation
	 	 	4	 
	(t) Separation from Service
	 	 	4	 
	(u) Single Lump Sum
	 	 	4	 
	(v) Specified Employee
	 	 	4	 
	(w) Vested Pension
	 	 	5	 
	 
	 	 	 	 
	2.2 Construction
	 	 	5	 
	(a) Gender and Number
	 	 	5	 
	(b) Compounds of the Word “Here”
	 	 	5	 
	 
	 	 	 	 
	ARTICLE
III — Participation
	 	 	5	 
	 
	 	 	 	 
	ARTICLE
IV — Amount of Retirement Pension
	 	 	6	 






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	 	 	Page
	 	 	No.
	4.1 PEP Pension
	 	 	6	 
	(a) Same Form as Salaried Plan
	 	 	6	 
	(b) Different Form than Salaried Plan
	 	 	6	 
	 
	 	 	 	 
	4.2 PEP Guarantee
	 	 	7	 
	(a) Eligibility
	 	 	7	 
	(b) PEP Guarantee Formula
	 	 	7	 
	 
	 	 	 	 
	4.3 Certain Adjustments
	 	 	9	 
	(a) Adjustments for Rehired Participants
	 	 	9	 
	(b) Adjustment for Increased Pension Under Other Plans
	 	 	9	 
	 
	 	 	 	 
	4.4 Reemployment of Certain Participants
	 	 	10	 
	 
	 	 	 	 
	4.5 Vesting; Misconduct
	 	 	10	 
	 
	 	 	 	 
	ARTICLE V
— Death Benefits
	 	 	10	 
	 
	 	 	 	 
	5.1 Death Benefits
	 	 	10	 
	 
	 	 	 	 
	ARTICLE
VI — Distributions
	 	 	11	 
	 
	 	 	 	 
	6.1 Form and Timing of Distributions
	 	 	11	 
	(a) Time and Form of Payment of Grandfathered Benefit
	 	 	11	 
	(b) Time and Form of Payment of Non-Grandfathered Benefit
	 	 	11	 
	 
	 	 	 	 
	6.2 Special Rules for Survivor Options
	 	 	12	 
	(a) Effect of Certain Deaths
	 	 	12	 
	(b) Nonspouse Beneficiaries
	 	 	13	 
	 
	 	 	 	 
	6.3 Designation of Beneficiary
	 	 	13	 
	 
	 	 	 	 
	6.4 Determination of Single Lump Sum Amounts
	 	 	13	 
	(a) Vested Pensions
	 	 	13	 
	(b) 2008 Reorganization
	 	 	13	 
	 
	 	 	 	 
	6.5 Section 162(m) Postponement
	 	 	13	 
	 
	 	 	 	 
	ARTICLE
VII — Administration
	 	 	14	 
	 
	 	 	 	 
	7.1 Authority to Administer Plan
	 	 	14	 
	 
	 	 	 	 
	7.2 Facility of Payment
	 	 	14	 
	 
	 	 	 	 
	7.3 Claims Procedure
	 	 	14	 
	 
	 	 	 	 
	7.4 Effect of Specific References
	 	 	15	 
	 
	 	 	 	 
	7.5 Limitations on Actions
	 	 	15	 
	 
	 	 	 	 
	ARTICLE
VIII — Miscellaneous
	 	 	15	 
	 
	 	 	 	 
	8.1 Nonguarantee of Employment
	 	 	15	 






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	 	 	Page
	 	 	No.
	8.2 Nonalienation of Benefits
	 	 	16	 
	 
	 	 	 	 
	8.3 Unfunded Plan
	 	 	16	 
	 
	 	 	 	 
	8.4 Action by the Company
	 	 	16	 
	 
	 	 	 	 
	8.5 Indemnification
	 	 	16	 
	 
	 	 	 	 
	8.6 Applicable Law
	 	 	16	 
	 
	 	 	 	 
	8.7 Withholding
	 	 	16	 
	 
	 	 	 	 
	ARTICLE
IX — Amendment and Termination
	 	 	16	 
	 
	 	 	 	 
	9.1 Continuation of the Plan
	 	 	17	 
	 
	 	 	 	 
	9.2 Amendments
	 	 	17	 
	 
	 	 	 	 
	9.3 Termination
	 	 	17	 
	 
	 	 	 	 
	APPENDIX
	 	 	18	 
	 
	 	 	 	 
	Foreword
	 	 	18	 
	 
	 	 	 	 
	Article IPO — Transferred and Transition Individuals
	 	 	18	 
	 
	 	 	 	 
	Article B — Special Cases
	 	 	19	 
	 
	 	 	 	 
	Article C
— Transfers From/To PepsiCo, Inc.
	 	 	20	 






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ARTICLE I – History and Purpose




     1.1 History of Plan. The Pepsi Bottling Group, Inc. (the “Company”) 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 amended by a First Amendment effective as of May 26, 1999. The
Plan was further amended and completely restated effective January 1, 2006. 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. 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 portion of the Plan that provides
benefits based on limitations imposed by Section 401(a)(17) of the Code 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 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
was amended and completely restated effective as of January 1, 2006. Subsequent to October 3,
2004, the Plan has been administered in accordance with a good faith interpretation of Section 409A
of the Code and IRS regulations and other guidance thereunder.



     The Company now wishes to further amend and completely restate the Plan, effective as of
January 1, 2009 except as otherwise explicitly provided in the Plan, to comply with Section 409A of
the Code.



     NOW, THEREFORE, the PBG Pension Equalization Plan is hereby amended and completely restated
(the “2009 Restatement”) as follows.



     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, 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.



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     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 supersedes the Prior Plan effective January 1, 2009,
with respect to amounts accrued and vested after 2004 by Participants who have not commenced
receiving benefits as of January 1, 2009. The Plan has been administered in accordance with a good
faith interpretation of Section 409A of the Internal Revenue Code and IRS regulations and guidance
thereunder since January 1, 2005. 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.



          (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 or PBG. The Pepsi Bottling Group, Inc., a corporation organized and
existing under the laws of the State of Delaware, or its successor or successors.




          (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) ERISA. Public Law No. 93-406, the Employee Retirement Income Security Act of
1974, as amended from time to time.




          (h) Participant. An Employee participating in the Plan in accordance with the
provisions of Section 3.1.




- 2 -









 








          (i) 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 PBG Organization only during the period it is one of the group of
organizations described in the preceding sentence.




          (j) 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.




          (k) PepsiCo Prior Plan. The PepsiCo Pension Equalization Plan.




          (l) 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.




          (m) Plan Administrator. The Company, which shall have authority to administer the
Plan as provided in Article VII.




          (n) Plan Year. The 12-month period ending on each December 31st.




          (o) 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 Section 4.2, 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.



- 3 -









 






          (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.



          (p) Salaried Plan. The PBG Salaried Employees Retirement Plan, as it may be amended
from time to time. Any references herein to the Salaried Plan for a period that is before the
Effective Date shall mean the PepsiCo Salaried Employees Retirement Plan.




          (q) Salaried Plan Participant. An Employee who is a participant in the Salaried Plan.




          (r) Section 409A. Section 409A of the Code and the applicable regulations and other
guidance issued thereunder.




          (s) 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.




          (t) Separation from Service. A Participant’s separation from service as defined in
Section 409A; provided that for this purpose the term “service recipient” shall include PepsiCo.,
Inc., so long as PepsiCo., Inc. or a member of the PepsiCo., Inc. controlled group maintains an
ownership interest in the Company of at least 20%.




          (u) 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.




          (v) 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.



- 4 -









 





               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), 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.



               (1) 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.



               (2) 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 who have the lowest base salaries on such applicable
determination date shall not be Specified Employees.



          (w) 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.




ARTICLE III – Participation




- 5 -









 








     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 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 Section 4.5, 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 the Compensation Limitation and
the Section 415 Limitation, 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 the Compensation Limitation and
the Section 415 Limitation, 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).



- 6 -









 





     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 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.



     4.2 PEP Guarantee. A Participant who is eligible under subsection (a) below shall be entitled
to a PEP Guarantee benefit determined under subsection (b) below, 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




          (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 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 and the
denominator of which is the years of Credited Service he would



- 7 -









 







     have
earned had he remained in the employ of an Employer 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 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.




          This subparagraph applies only to a Participant who retires on or after his
Early Retirement Date.




          (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 shall apply.




          (C) This clause applies if the Participant will receive his PEP
Guarantee in a form that provides an Eligible Spouse benefit,
continuing for the life of the surviving spouse, that is greater than that



- 8 -









 







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.




          (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. 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 a 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.



     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 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. 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


- 9 -









 







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.




     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. 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 immediately preceding a date on which the Participant 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.




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



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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.




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.



          (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 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



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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 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 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




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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 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.




     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



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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%).



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. The Company, in its capacity as Plan Administrator or in any other capacity, shall not
be a fiduciary of the Plan for purposes of ERISA, and any restrictions that apply to a party in
interest under section 406 of ERISA shall not apply to the Company or otherwise under the Plan.



     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 eligibility for benefits and to
determine the amount of such benefits, and its decisions on such matters are final and conclusive.
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 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;




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          (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




          (d) A description of the Plan’s claim review procedure. 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, and
includes the right to examine pertinent documents and submit issues and comments in writing to the
Plan Administrator, or the designated party. 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, and 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.




          If within a reasonable period of time after the Plan receives the claim asserted by the
Participant, the Plan Administrator, or the designated party, fails to provide a comprehensible
written notice stating that the claim is wholly or partially denied and setting forth the
information described in (a) through (d) above, the claim shall be deemed denied. Once the claim
is deemed denied, the Participant shall be entitled to the claim review procedure described in
subsection (d) above. Such review procedure shall be available upon written request by the
claimant to the Plan Administrator, or the designated party, within 60 days after the claim is
deemed denied. Any claim under the Plan that is reviewed by a court shall be reviewed solely on
the basis of the record before the Plan Administrator at the time it made its determination.




     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 Limitations on Actions. Any claim filed under this Article VII and any action brought in
state or federal court by or on behalf of a Participant or a Beneficiary for the alleged wrongful
denial of Plan benefits or for the alleged interference with ERISA-protected rights must be brought
within three years of the date the Participant’s or Beneficiary’s cause of action first accrues.
Failure to bring any such cause of action within this three-year time frame shall preclude a
Participant or Beneficiary, or any representative of the Participant or Beneficiary, from bringing
the claim or cause of action. Correspondence or other communications following the mandatory
appeals process described in this Article VII shall have no effect on this three-year time frame.



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.



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     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 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 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.



     8.7 Withholding. The Employer shall withhold from amounts due under this Plan the amount
necessary to enable the employer to remit to the appropriate government entity or entities on
behalf of the Participant as may be required by the federal income tax withholding provisions of
the Code, by an applicable state’s income tax, or by an applicable city, county or municipality’s
earnings or income tax act. The Employer may withhold from the compensation of, or collect from, a
Participant
the amount necessary to remit on behalf of the Participant any FICA taxes which may be
required with respect to amounts accrued by a Participant hereunder as determined by the Employer.



ARTICLE IX – Amendment and Termination





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     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.



     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, at any time before the
Participant’s Separation from Service. An Employer (other than the Company) shall not have the
right to amend the Plan. Any amendments made to the Plan shall be subject to any restrictions on
amendment that are applicable to ensure continued compliance under Section 409A.



     9.3 Termination. The Company may terminate the Plan and all other plans aggregated with the
Plan pursuant to Treas. Reg. §1.409A-1(c), subject to the Section 409A distribution timing
provisions and the restrictions on maintaining future deferred compensation arrangements set forth
in Treas. Reg. §1.409A-3(h)(2)(viii) (no new nonqualified plan within three years).



     The Company also may terminate the Plan and distribute all vested accrued benefits in a lump
sum payment within twelve months after a change in control as permitted under Section 409A.



     The Company also may terminate the Plan and distribute all vested accrued benefits in a lump
sum payment as of the date of the corporate dissolution of the Company in a transaction taxable
under Section 331 of the Code or in the event of the bankruptcy of the Company with the approval of
the Bankruptcy Court pursuant to 11 U.S.C. §504(b)(1).



     In addition, the Company may terminate the Plan and distribute all vested benefits as may
otherwise be permitted by the Commissioner of the Internal Revenue Service under Section 409A.



     A termination of the Plan must comply with the provisions of Section 409A, including, but not
limited to, restrictions on the timing of final distributions and the adoption of future deferred
compensation arrangements.



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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.



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.



          (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 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., Tricom 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.



     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 extend 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.



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Article C – Transfers From/To PepsiCo, Inc.




     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.



     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. 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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